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Table of Contents

1.0 Executive Summary.....................................................................................................................1


1.1 Objectives....................................................................................................................................2
1.2 Mission...........................................................................................................................................2
1.3 Keys to Success.........................................................................................................................3
Chart: Highlights...........................................................................................................................3
2.0 Company Summary......................................................................................................................4
2.1 Company Ownership................................................................................................................4
2.2 Company Locations and Facilities.......................................................................................4
Table: Past Performance............................................................................................................5
Chart: Past Performance............................................................................................................6
3.0 Services.............................................................................................................................................6
3.1 Service Description...................................................................................................................6
3.2 Competitive Comparison........................................................................................................7
3.3 Fulfillment....................................................................................................................................7
3.4 Technology...................................................................................................................................7
4.0 Market Analysis Summary.........................................................................................................8
4.1 Target Market Segment Strategy.......................................................................................8
4.1.1 Market Trends.....................................................................................................................8
4.1.2 Market Growth....................................................................................................................9
4.2 Market Segmentation..............................................................................................................9
Table: Market Analysis..............................................................................................................10
Chart: Market Analysis (Pie)...................................................................................................10
4.3 Competition and Buying Patterns.....................................................................................10
4.4 Business Participants.............................................................................................................11
5.0 Marketing Strategy.....................................................................................................................11
5.1 Pricing Strategy.......................................................................................................................12
5.2 Promotion Strategy................................................................................................................12
5.3 Marketing Programs...............................................................................................................12
5.4 Strategic Alliances..................................................................................................................13
5.5 Competitive Edge....................................................................................................................13
6.0 Sales Forecast..............................................................................................................................14
Table: Sales Forecast................................................................................................................14
Chart: Sales Monthly.................................................................................................................14
Chart: Sales by Year..................................................................................................................15
7.0 Management Team.....................................................................................................................15
7.1 Personnel Plan..........................................................................................................................16
Table: Personnel..........................................................................................................................16
8.0 Financial Plan................................................................................................................................16
8.0 Financial Plan................................................................................................................................16
8.1 Use of Funds.............................................................................................................................16
Table: Use of Funds...................................................................................................................17
8.2 Important Assumptions........................................................................................................17
Table: General Assumptions...................................................................................................17
8.3 Break-even Analysis...............................................................................................................17

Page 1
Table of Contents

8.3 Break-even Analysis...............................................................................................................17


Table: Break-even Analysis....................................................................................................17
Chart: Break-even Analysis....................................................................................................18
8.4 Projected Profit and Loss.....................................................................................................18
Chart: Gross Margin Yearly.....................................................................................................19
Table: Profit and Loss................................................................................................................20
Chart: Profit Yearly.....................................................................................................................20
Chart: Gross Margin Monthly.................................................................................................21
8.5 Projected Cash Flow...............................................................................................................22
Table: Cash Flow.........................................................................................................................22
Chart: Cash...................................................................................................................................23
8.6 Projected Balance Sheet......................................................................................................24
Table: Balance Sheet.................................................................................................................24
8.7 Business Ratios........................................................................................................................24
8.7 Business Ratios........................................................................................................................24
Table: Ratios.................................................................................................................................25
Table: Sales Forecast..........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: Profit and Loss..........................................................................................................................3
Table: Profit and Loss..........................................................................................................................3
Table: Cash Flow...................................................................................................................................4
Table: Cash Flow...................................................................................................................................4
Table: Balance Sheet...........................................................................................................................5
Table: Balance Sheet...........................................................................................................................5

Page 2
Cellular Providers

1.0 Executive Summary

Introduction
Cellular Providers is taking advantage of an opportunity to become a highly distinguished and
recognized industry leader in the cellular communications industry. It is the goal of our
company to become established as the leading distributor of wireless communications services.

In order to achieve this goal, Cellular Providers' critical success factors will be to identify
emerging trends and integrate them into Cellular Providers' operations, respond quickly to
technology changes/be there early, provide high-quality services, continue to invest time and
money in marketing and advertising, continue to expand into specialty markets, and stay ahead
of the "technology curve."

The Company
The company was initially formed as a sole proprietorship by Jason Sanderson. Mr. Sanderson
capitalized on the growing wireless communications industry to create a niche market for its
services and accessories. Through its research and development, Cellular Providers has
maintained a technological lead in the marketplace and provided the best quality care for the
consumer. Today, revenue sources include a variety of phones, and a full range of accessories
and services.

Cellular Providers' head office is located at 654 Smith Lane, #87, Pullman, WA 23423. Cellular
Providers' leases its 1,000 square feet head office which, has adequate office space to conduct
its operations. At some point in the future, management expects to outgrow this office space.

Cellular Providers has a world class management team with direct knowledge of the industry,
extensive research experience, and unique administrative skills. Its team includes Jason
Sanderson, president; Jerry Tillman, vice president; and Joe Dunn. Together, they have a
combined total of over 10 years experience in the cellular and retail industries. In the future,
Cellular Providers expects to require a highly qualified CFO, HR manager, additional customer
service personnel, additional sales reps, and a public relations manager.

The Services
The company has a developed mix of services targeting both businesses and consumers. At
today's breakneck pace of business, companies need more ways than ever to keep in touch,
and the easier the better.

Cellular Providers' innovative product and service offerings provide the best advantages to
customers, including sleek and innovative cellular phone models, text and numeric paging, data
capability, no roaming or landline connection charges, and much more.

The Market
The ten-year outlook in the wireless communications service is excellent. The number of new
cellular subscribers in the United States increased dramatically from 1992 to 1998, and 1999
saw continuation of that growth. The number of new subscribers exceeded 10 million, with a
record 11.5 million net new subscribers in 1997, for a total of 55.3 million at the end of that
year. By the end of 1999 analysts had that figure reaching 80 million. While projections differ,
the number of cellular and PCS subscribers in the U.S. is expected to have a compound average
growth rate (CAGR) of 12%. With the evolution of new technology, this industry is expected to
generate increased revenues.

Page 1
Cellular Providers

There are a number of trends that are driving this growing industry. The most significant ones
are greater marketing and advertising efforts, rapidly expanding networks, and technological
advances. New services and applications such as advanced messaging, data and video
transmission, location technology, and remote monitoring are in the early stages of what most
analysts predict will be a period of explosive growth.

The company plans to focus on three target markets that will provide us with the greatest
market penetration. This includes the specialty business users, the general business users, and
the personal users. We intend to offer service packages that are priced appropriately for each
segment and will offer the services that best suit each segment's needs.

Cellular Providers' ongoing marketing strategy involves the company maintaining and
expanding a broad base of clients in target territories, establishing alliances with product and
services companies so that it can deliver high quality products, and invoking its own
organization to bring these together and implement total solutions for customers. The company
will move from the traditional product-focused strategy to a total-focus on customer ownership.

Financial Considerations
It is estimated that Cellular Providers will have strong profits based on $10 million in sales by
Year 3. Cellular Providers is currently seeking funding in the amount of $100,000 as a three-
year loan for the purpose of increasing market share, opening up additional retail locations,
hiring additional staff, and effectively advertising and promoting its services.

1.1 Objectives

Business Objectives

 Company growth.
 Become established as the leading distributor of wireless communications services.
 Increase number of retail outlets.

Financial Objectives

 Increase revenue

Marketing Objectives

 Increase marketing efforts.


 Expand market area.
 Expand marketing reach.
 Brand recognition.
 Increase telemarketing efforts.

1.2 Mission

Cellular Providers is committed to continued high levels of customer service and selling cellular
and two way radio service through progressive retail locations and outside sales
representatives.

Cellular Providers is striving to become the nation's leading distributor of cellular service and
accessories. Cellular Providers' vision capitalizes on technologically superior products and
services and is designed to enhance business and personal communication.
Page 2
Cellular Providers

1.3 Keys to Success

Timing is critical in business. Cellular Providers is taking advantage of an opportunity to become


a highly distinguished and recognized industry leader because of certain key advantages:

 The management team has a unique combination of business knowledge and experience in
this market.
 Cellular Providers has combined its expertise to offer services for every type of customer in
this credit-sensitive industry.
 Cellular Providers has established partnering relationships with leading companies in the
industry and customers.

Cellular Providers' critical success factors include funding, marketing, quality sales
professionals, good management, aggressive branding, increasing reach, affiliating with the
right partners, being specific to the needs of businesses and the public, competitive
intelligence, appropriate use of technology, and remaining dynamic to keep pace with evolving
wireless communications business strategies.

Chart: Highlights

Page 3
Cellular Providers

2.0 Company Summary

Cellular Providers is one of the state's leaders in the field of wireless communications services.

Cellular Providers is a distributor of AT&T and Sprint PCS services. The company was formed for
the purpose of selling and distributing wireless communications services. Over the course of its
existence, the professionals at Cellular Providers have been involved in selling cellular service
and accessories. Cellular Providers carries the latest in wireless technology from two of the
major wireless companies in the industry.

The company's management philosophy is based on responsibility and mutual respect. Cellular
Providers maintains an environment and structure that encourages productivity and respect for
customers and fellow employees. Additionally, the environment encourages employees to have
fun by allowing creative independence and providing challenges that are realistic and
rewarding.

2.1 Company Ownership

The legal name of the company is Cellular Providers, LLC. The company was initially formed as
a sole proprietorship by Jason Sanderson.

Cellular Providers was formed as a company committed to being on the cutting edge of wireless
communications services. Cellular Providers was capitalized with financing arranged through
first round investors in the amount of $50,000. These funds were used for acquiring inventory,
developing equipment and a complete product and service line, and creating supportive
marketing materials.

Jason Sanderson capitalized on the growing wireless communications industry to create a niche
market for its services and accessories. Through its research and development, Cellular
Providers has maintained a technological lead in the marketplace and provided the best quality
care for the consumer. Today, revenue sources include the services, a full range of accessories,
and a variety of phones.

2.2 Company Locations and Facilities

Cellular Providers' leases its 1,000 square feet head office which has adequate office space to
conduct its operations. At some point in the future, management expects to outgrow this office
space. Additional office space will be sought at the appropriate time.

Page 4
Cellular Providers

Table: Past Performance

Past Performance
1997 1998 1999
Sales $275,781 $496,406 $893,530
Gross Margin $118,586 $238,275 $464,636
Gross Margin % 43.00% 48.00% 52.00%
Operating Expenses $94,869 $154,879 $278,781
Collection Period (days) 0 0 0
Inventory Turnover 12.00 12.00 24.00

Balance Sheet
1997 1998 1999

Current Assets
Cash $150,000 $200,000 $175,000
Accounts Receivable $55,156 $99,281 $178,706
Inventory $20,000 $24,000 $34,000
Other Current Assets $3,000 $1,500 $3,000
Total Current Assets $228,156 $324,781 $390,706

Long-term Assets
Long-term Assets $20,000 $35,000 $50,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $20,000 $35,000 $50,000

Total Assets $248,156 $359,781 $440,706

Current Liabilities
Accounts Payable $4,700 $12,067 $18,097
Current Borrowing $10,000 $0 $0
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $14,700 $12,067 $18,097

Long-term Liabilities $1,800,000 $1,750,000 $1,650,000


Total Liabilities $1,814,700 $1,762,067 $1,668,097

Paid-in Capital $200,000 $75,000 $0


Retained Earnings ($1,780,261) ($1,510,682) ($1,413,246)
Earnings $13,717 $33,396 $185,855
Total Capital ($1,566,544) ($1,402,286) ($1,227,391)

Total Capital and Liabilities $248,156 $359,781 $440,706

Other Inputs
Payment Days 45 45 45
Sales on Credit $0 $0 $0
Receivables Turnover 0.00 0.00 0.00

Page 5
Cellular Providers

Chart: Past Performance

3.0 Services

The company has a developed mix of services targeting both businesses and consumers. At
today's breakneck pace of business, companies need more ways than ever to keep in touch,
and the easier the better.

Cellular Providers' innovative product and service offerings provide the following advantages to
customers.

 A full range of sleek, modern handsets to choose from.


 Text and numeric paging.
 Data capability.
 A full range of features.
 A national network.
 No roaming or landline connection charges.
 One-second rounding after the first minute.

3.1 Service Description

Cellular Providers has created a niche market as a one-stop shop for wireless services.
Additionally, Cellular Providers has professionals with over 10 years combined experience in the
industry, sophistication, and sales and distribution channels that are successful. Our services
are formulated with ingredients known to increase the quality of communications, enhance
internal business communications, and give users the opportunity to access the latest
technology such as the ability to access the Internet on their handset.

Cellular Providers maintains a number of different services and accessories. Each of these
services and accessories can be placed at the growth phase on the product life cycle curve.

Page 6
Cellular Providers

3.2 Competitive Comparison

Cellular Providers is well positioned as a significant player in the cellular and two-way radio
service marketplace. There are varying degrees of competition in each area, ranging from a
great deal of perceived competition to the very minimal competition in satellite dishes. New
technology research and upgrades will be on the cutting edge to improve our product and
service lines and ensure that Cellular Providers remains a leader in this field. In comparison to
the other key industry players, Cellular Providers offers a greater complement of products and
services that make it a truly one-stop shop for wireless communications services. Significant
differences include these offerings: satellite dishes, specialty markets with a direct need,
services from four different wireless service providers, and residual revenue from service lines.

3.3 Fulfillment

Cellular Providers is required to comply with various rules and regulations among a number of
local, state, and federal agencies. Locally, the company is required to maintain its business
license and comply with local regulations and city codes. From a State level, the company is
required to comply with all State laws concerning employment law, corporate law, and
consumer products regulations. From a Federal level, the company is required to comply with
additional consumer product laws, taxation, etc.

Cellular Providers' accounting policy follows generally accepted accounting principals. Cellular
Providers' financials are turned over to the CPA on a quarterly basis.

Cellular Providers uses Quick Books for its accounting software; Accounting is system based on
the accrual method. The fiscal year is based on year-end. Financial reporting methods include
monthly, quarterly, and annual statements. An annual audit is to be performed by the firm's
CPA firm in January.

Cellular Providers carries insurance for business liability, automobile, and medical coverage.
Additional insurance programs such as worker's compensation and key-man coverage will most
likely be consummated by the close of the second quarter of 2000.

Management has no knowledge of pending lawsuits or threat of legal action directed at either
the company or its officers.

3.4 Technology

Cellular Providers' business tools may be considered to be those assets that keep the business
running smoothly. These tools include computers, software, business forms, standard
agreements, various internal process standards, and other company-specific documentation.

Estimated technological changes in this section concern those changes that would most likely
affect Cellular Providers' ability to compete. As Cellular Providers' management identifies
changing technology, these changes will be studied, analyzed, and evaluated. Of those
technological changes that show significant impact on Cellular Providers' future, funds and
resources will likely be committed to making adjustments to Cellular Providers' business
operations. Actions include expanding sales, customer service, and training in order to meet the
demand of the business community.

Page 7
Cellular Providers

4.0 Market Analysis Summary

Cellular Providers continues to conduct industry analysis to stay current on the nature and
dynamics of the industry. This process helps management develop insight and devise
sustainable business and marketing strategies to assure future success and avoid making
decisions based on blind assumptions. Cellular Providers' business model was developed under
two areas of knowledge: understanding the industry, and by having worked for and observed
successful companies (and their business models) in the wireless communications services
industry.

According to reports published by CNN Financial News from the Commerce Department, the
U.S. economy capped off 1999 at a furious pace, posting its fastest quarter of growth in more
than three years, as demand at home and abroad for U.S.-made goods remained robust and
companies spent more stocking their shelves.

Gross domestic product grew at a 6.9 percent annual rate in the fourth quarter, the Commerce
Department said, above the revised 6.5 percent increase expected by economists and well
ahead of the 5.8 percent pace originally reported a month ago. It was the biggest gain since
the second quarter of 1996, and dwarfed the third-quarter expansion of 5.7 percent.

The GDP price deflator, a key inflation gauge, rose at a 2 percent annual rate, the same rate
initially recorded a month ago and in-line with economists' forecasts of a 2 percent gain. The
price deflator rang in at 1.1 percent in the third quarter. For the entire year, the U.S. economy
grew at a 4.1 percent pace, while the GDP price deflator advanced 1.6 percent. Higher
productivity has allowed businesses to produce more without increasing expenses, keeping the
cost of the final product low.

The U.S. economy's rate of expansion during the past three years has been faster than what
Fed officials have said can be sustained without a renewed inflation threat. Fed officials have
stated at different intervals that a "comfortable" rate of growth is typically around 3 percent.
Small businesses are taking advantage of the opportunities the Internet affords.

International Data Corporation (IDC) estimates that the number of small businesses engaged in
e-commerce will increase 47.1% annually, from 400,000 at the end of 1998 to almost 2.8
million at the end of the year 2003, signaling the broad adoption of the Internet by these small
enterprises. The widespread adoption of the Internet as a purchasing vehicle has created a
wealth of opportunities for businesses that offer products and services to small businesses and
consumers. Simultaneously, it has given both small businesses and consumers a wider variety
of products from which to choose at competitive prices.

4.1 Target Market Segment Strategy

Cellular Providers sources of revenue are derived from the sale of wireless communications
services to businesses and consumers, the sale of accessories, and co-brands (revenue
sharing). In comparison to other start-up companies of recent years, Cellular Providers has
done very well.

4.1.1 Market Trends

The most significant trends are greater marketing and advertising efforts, rapidly expanding
networks, and technological advances. New services and applications such as advanced

Page 8
Cellular Providers

messaging, data and video transmission, location technology, and remote monitoring are in the
early stages of what most analysts predict will be a period of explosive growth.

4.1.2 Market Growth

Current economic conditions driving Cellular Providers' industry sector include a rising GNP,
interest rates edging up gradually, communications economy that is growing, and an increasing
number of consumers with greater amounts of disposable income. The savings rate has begun
to rise as well. Warning signs of change include rising interest rates and inflation. If these begin
to rise sharply, it signals a faltering economy and can have negative effects on all business
including Cellular Providers.

The ten-year outlook in the wireless communications service is excellent. The U.S., Department
of Commerce estimates that billions are invested each year for research and development. The
number of new cellular subscribers in the United States increased dramatically from 1992 to
1998, and 1999 saw continuation of that growth. The number of new subscribers exceeded 10
million, with a record 11.5 million net new subscribers in 1997, for a total of 55.3 million at the
end of that year. By the end of 1999 analysts had that figure reaching 80 million. One analytical
firm believes that 82 percent of U.S. adults from households with an income higher than
$35,000 per year (approximately 90 million people) will be subscribers by 2002. While
projections differ, the number of cellular and PCS subscribers in the U.S. is expected to have a
compound average growth rate (CAGR) of 12%. With the evolution of new technology, this
industry is expected to generate increased revenues.

The explosive growth of the Internet, as a tool for global communications, has enabled millions
of people to interact electronically. IDC estimates that there were 142 million Web users
worldwide at the end of 1998, and expect this number will grow to approximately 502 million
by the end of the year 2003. Rapid acceptance of the Internet as a communications platform by
both businesses and consumers has created the foundation for significant growth in business-
to-business and business-to-consumer e-commerce. The cellular and PCS industries continued
to attract more non-business users largely as a result of a decline in the cost of handsets and
bundled service packages. Additionally, it is seen as fashionable to have a handset while driving
or interacting with others.

4.2 Market Segmentation

According to the Cellular Telecommunications Industry Association, industry investment grew to


$46 billion in 1997, up over 41% from 1996. Dataquest estimates that the average annual
revenue per subscriber for PCS was $576 in 1997, with total revenue for 1997 at $1.03 billion,
over 3% of the combined total for cellular and PCS.

By 2001 there are expected to be about 40 million U.S. PCS subscribers, and total revenue for
the year of $15.9 billion, according to Dataquest. Other predictions vary: Decision Resources
forecasts that PCS will account for only 21.8% (19.5 million) of U.S. mobile voice subscribers,
while cellular will account for the remaining 78.2% (70 million) by the end of 2001, but
estimates total revenues will reach $31.4 billion. On average, however, it is projected that PCS
subscribers will account for 40-45% of subscribers and about half of total service revenues by
2002.

Page 9
Cellular Providers

Table: Market Analysis

Market Analysis
2000 2001 2002 2003 2004
Potential Customers Growth CAGR
Specialty Business Users 0% 226,000 226,000 226,000 226,000 226,000 0.00%
General Business Users 0% 650,000 650,000 650,000 650,000 650,000 0.00%
Personnel Users- 0% 5,987,000 5,987,000 5,987,000 5,987,000 5,987,000 0.00%
Washington State
Total 0.00% 6,863,000 6,863,000 6,863,000 6,863,000 6,863,000 0.00%

Chart: Market Analysis (Pie)

4.3 Competition and Buying Patterns

Effective competitive strategies are built upon understanding what defines and determines if
another company is a competitor. Cellular Providers does not believe that all cellular and two-
way radio service firms compete with it because many of these do not provide the array of
services that it provides. The number of companies selling cellular services continue to grow
and each competes for a share of the market. This translates into escalating advertising costs
especially with larger and established companies. This trend is expected to continue and
intensify over the coming years.

Cellular Providers' outline for competitive strategy includes monitoring competitors for
innovative changes, devising responsive and timely strategies, contingency and implementation
plans, devising marketing strategies, compare pricing by rivals, and remain always watchful of
technology developments and innovation by service providers, and respond accordingly.

Page 10
Cellular Providers

4.4 Business Participants

Within the U.S., there are numerous companies that provide one or more types of
communications services. According to U.S. Trade and Outlook '99, there were more than 1,500
cellular systems operating in 750 U.S. markets. Far fewer provide the depth, breadth, and level
of expertise as that of Cellular Providers. Globally, as in the U.S, there are companies that offer
wireless communications services. Few carry the range of services as that of Cellular Providers.

5.0 Marketing Strategy

Cellular Providers developed its sales and marketing strategy by analyzing its own internal
strengths and then analyzing current market conditions. This process helped Cellular Providers
create its marketing and sales strategy to leverage its competitive advantages with a unique
marketing strategy, thus establishing it as the nation's leading wireless communications service
provider for businesses and consumers.

The company will create momentum through critical mass and brand recognition. Cellular
Providers will monitor the effectiveness of its marketing efforts in order to determine the
advertising return on investment and the commerce generated from the various channels.

Cellular Providers' ongoing marketing strategy involves the company maintaining and
expanding a broad base of clients in target territories, establishing alliances with product and
services companies so that it can deliver high-quality products, and invoking its own
organization to bring these together and implement total solutions for customers. The company
will move from the traditional product-focused strategy to a total-focus on customer ownership.

The overall marketing plan for Cellular Providers' service is based on the following
fundamentals:

 The segment of the market(s) planned to reach.


 Distribution channels planned to be used to reach market segments: retail outlets, sales
representatives, and telemarketing.
 Share of the market expected to capture over a fixed period of time.

Our year 2000 marketing goals include the following:

 Capture 5% market share of businesses in the Idaho and Washington market areas.
 Capture 1% market share of consumers in the Idaho and Washington market areas.
 Develop market share for satellite dishes and equipment.
 Educate businesses and consumers about services provided.
 Substantially increase sales over 1999 levels.
 Position the company as the number one provider of solutions to wireless communications.
 Make a major branding effort emphasizing Cellular Providers' name and array of services.
 Initiate new marketing program with a budget of $240,000.
 Create new collateral marketing materials (brochures, radio ads, video).
 Media placements including magazine, TV, radio, Internet, print, and banner advertising.
 Expand product and service offerings.
 Provide sales reps with free demo systems.

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Cellular Providers

5.1 Pricing Strategy

Cellular Providers' retail prices are competitive and affordable for businesses. The company has
also established a pricing and commissions structure for sales representatives and distributors.
Bulk purchasing enables the company to reduce its cost of goods sold, increase revenue, and
pass on the savings to businesses and consumers.

5.2 Promotion Strategy

Cellular Providers' overall goal is to generate additional retail traffic, increase the business and
consumer base, and create more awareness to the need for this type of service in the
marketplace. Currently, marketing efforts have revolved around sales representatives and
telemarketing.

During 2000, Cellular Providers' marketing goals also include positioning the company for co-
branding alliances with several industry leaders. It is Cellular Providers' belief that the best way
to introduce its services to businesses as well as consumers is through aggressive
telemarketing.

In addition to standard advertisement practices, Cellular Providers will gain considerable


recognition through these additional promotional mediums:

 Press releases sent to major industry publications.


 Television advertising.
 Trade shows.
 Construction.
 Oil and gas journals.

5.3 Marketing Programs

Advertising programs include direct response advertising, public relations program, co-
marketing promotion, relationship building, direct sales efforts, telemarketing, trade shows, ads
in print media and radio and television.

Cellular Providers' marketing propositions are designed to appeal to various target audiences,
regardless of their level of sophistication. Cellular Providers will continually inform businesses
and consumers through press releases and media placements about the service benefits as well
as endorsements from other customers.

These two factors naturally create a curiosity from those not previously exposed to Cellular
Providers services, as well as the public sector seeking improved methods in cellular service
deals. Overall, this is intended to encourage further investigation by businesses and consumers
and is precisely the result Cellular Providers seeks. It is believed that this strategy will draw an
abundance of curiosity from which a substantial market can be developed.

As an extra incentive for customers and potential customers to remember Cellular Providers'
name, the company plans to distribute advertising specialties with the company logo. This will
be an ongoing program for the company, when appropriate and where it is identified as
beneficial.

Page 12
Cellular Providers

The objective of incentives is to portray Cellular Providers' goals and products as an attractive
functionality. It is also to show customers how to use the latest in technology as it relates to
wireless communications services.

5.4 Strategic Alliances

Cellular Providers has strategic partnerships with the leading companies industry. Management
feels that these partnerships will enhance sales and help build critical mass and business
momentum. The partnering companies are given below.

 AT&T;
 Sprint PCS.

When Cellular Providers agrees to accept a new client, it is accepting a new business partner.
Plans are underway to further strengthen relationships and establish other relationships as the
need arises in the future.

5.5 Competitive Edge

Activities contributing to company success include identifying emerging trends and integrate
them into Cellular Providers' operations, respond quickly to technology changes/be there early,
provide high-quality services, continue to invest time and money in marketing and advertising,
continue to expand into specialty markets, and stay ahead of the "technology curve."

Our future is highly dependent upon measuring resources we need in order to execute our
plans and be competitive. Our method includes qualitative and/or quantitative measurements of
competition and by estimating our own company growth, sales, and cash flows.

Our resources are also measured in terms of people, equipment, financial, and critique to see if
the resources fit are adequate for the situation. Resources are available as needed to meet the
technology curve. In general our strengths include business management, accounting and
finance, knowledge of the wireless communications services industry, and experience in running
successful businesses in the past.

Cellular Providers prides itself on its high-quality customer service. Although excellent customer
service is expected, not all provide this. Cellular Providers is available at all times for customer
orders and inquiries.

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Cellular Providers

6.0 Sales Forecast

The following table and chart illustrates the projected sales forecast of Cellular Providers.

Table: Sales Forecast

Sales Forecast
2000 2001 2002
Sales
Personal User Sales $1,734,283 $4,800,000 $8,000,000
Business User Sales $419,800 $960,000 $1,920,000
Total Sales $2,154,083 $5,760,000 $9,920,000

Direct Cost of Sales 2000 2001 2002


Personal User Sales $728,399 $2,030,400 $3,400,000
Business User Sales $188,910 $406,080 $812,160
Subtotal Direct Cost of Sales $917,309 $2,436,480 $4,212,160

Chart: Sales Monthly

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Cellular Providers

Chart: Sales by Year

7.0 Management Team

Cellular Providers has a world class management team with direct knowledge of the industry,
extensive research experience, and unique administrative skills. Its team includes Jason
Sanderson, president; Jerry Tillman, vice president; and Joe Dunn. Together, they have a
combined total of over 10 years experience in the cellular and retail industries.

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Cellular Providers

7.1 Personnel Plan

Future staffing needs require monthly evaluation. Factors determining future staffing include
growth, demand on existing resources, future capabilities needed, and budgeting. In the future,
Cellular Providers will require a highly qualified CFO, HR manager, additional customer service
personnel, additional sales reps, and a public relations manager.

Table: Personnel

Personnel Plan
2000 2001 2002
CEO $0 $150,000 $175,000
CFO $60,000 $95,000 $110,000
HR Manager $49,992 $55,000 $60,000
Regional Manager $45,000 $50,000 $55,000
Office Manager $30,000 $35,000 $40,000
Marketing Staff $69,000 $150,000 $250,000
Retail Staff #1 $54,000 $65,000 $76,000
Retail Staff #2 $34,500 $65,000 $76,000
Retail Staff #3 $18,000 $65,000 $76,000
Retail Staff #4 $0 $65,000 $76,000
Retail Staff #5 $0 $42,500 $76,000
Retail Staff #6 $0 $30,000 $76,000
Retail Staff #7 $0 $0 $32,500
Retail Staff #8 $0 $0 $20,000
Other Personnel $31,166 $84,000 $112,000
Total People 10 16 22

Total Payroll $391,658 $951,500 $1,310,500

8.0 Financial Plan

The following sections outline the financial plan for Cellular Providers.

8.1 Use of Funds

Cellular Providers is currently seeking funding in the amount of $100,000 for the purpose of
increasing market share, opening up additional retail locations, hiring additional staff, and
effectively advertising and promoting its services.

Use and distribution of proceeds: Integrate new services, develop website, and expand into
other markets. Produce media relations package(s); further build the brand name through
marketing, advertising, and promotion; and acquire additional products. Funding proceeds will
also be used to increase Cellular Providers' capabilities, enhance brand name, and extend
Cellular Providers' market area. Funds will also be directed into business relations, television
advertising, press releases, print advertising, Internet advertising, and website development
and maintenance. The initial investment will be used as a "kick off" marketing budget. It is
expected that from this point on the company will self finance its expansion and marketing
programs.

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Cellular Providers

Table: Use of Funds

Use of Funds

Use Amount
Office Furniture and Fixtures $50,000
Marketing $10,000
Inventory $20,000
Miscellaneous (Inventory Control, Service Centers, etc.) $20,000
Total $100,000

8.2 Important Assumptions

Basic assumptions are presented in the table below.

Corporate Tax: Figure is estimated at 30% of profits.

Interest: Figure is estimated at 10% annually.

Table: General Assumptions

General Assumptions
2000 2001 2002
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 0.00% 30.00% 30.00%
Other 0 0 0

8.3 Break-even Analysis

The break-even analysis shows the monthly sales revenues needed to break even.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $165,042

Assumptions:
Average Percent Variable Cost 43%
Estimated Monthly Fixed Cost $94,759

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Cellular Providers

Chart: Break-even Analysis

8.4 Projected Profit and Loss

The financial projections present the company's expected financial position, results of
operations and cash flow for the three years ending December 31, 2004. Accordingly, the
forecast reflects its judgment as of April 4, 2000, the date of this forecast, of the expected
conditions and its expected course of action. There will usually be differences between
forecasted and actual results, because events and circumstances frequently do not occur as
expected, and those differences may be material.

Financial projections are based on sales volume at the levels described in the revenue section
and presents, to the best of management's knowledge and belief, the company's expected
assets, liabilities, capital, revenues, and expenses. Further, the projections reflect
management's judgement of the expected conditions and its expected course of action given
the hypothetical assumptions.

Revenues are derived from sales of wireless communications services, products, and
accessories to businesses and consumers.

Annual Growth: We expect growth to increase by 200% per year on the basis that the
company will be stepping up marketing and sales efforts, as well as initiating new partnerships
and alliances that will foster growth and extensions of our existing markets. These strategies
are aimed to build momentum and critical mass within the company and its overall sales
results.

Cost of Goods: Cellular Providers expects that its products will bear a reasonably high markup,
which translates to a relatively low cost of goods. Our cost of goods includes consideration cost
of products, shipping charges (which may be passed along to the consumer), and sales
commissions.

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Cellular Providers

Marketing/Promotion: We group advertising, promotions, and retail outlet marketing under


this category.

Retail Outlets: We estimate that each retail location will cost $30,000 to set up and we
anticipate opening up 10 new stores.

Other: We estimate that we may need additional funds for other promotions and this is set
aside in a special fund.

Rent: It is assumed that rent will be an average $1,500 per month per store.

Repairs and Maintenance: This is an estimated figure which is expected to grow with the
setup of service centers.

Salary: Figures are estimated based on the national average for similar positions. They assume
however, the hiring of a store manager, a regional manager, a CFO, an HR manager, and
acquiring the services of a marketing company.

Utilities: Figures are estimated. Management estimates that utilities will be at $800 per month
per store.

Chart: Gross Margin Yearly

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Cellular Providers

Table: Profit and Loss

Pro Forma Profit and Loss


2000 2001 2002
Sales $2,154,083 $5,760,000 $9,920,000
Direct Cost of Sales $917,309 $2,436,480 $4,212,160
Other $0 $0 $0
Total Cost of Sales $917,309 $2,436,480 $4,212,160

Gross Margin $1,236,774 $3,323,520 $5,707,840


Gross Margin % 57.42% 57.70% 57.54%

Expenses
Payroll $391,658 $951,500 $1,310,500
Marketing/Promotion $473,712 $917,200 $1,476,200
Depreciation $4,992 $5,000 $5,000
Store Set Up Costs $90,000 $60,000 $90,000
Repairs and Maintenance $6,000 $6,000 $6,000
Utilities $22,400 $57,600 $76,800
Insurance $21,600 $50,000 $66,000
Rent $42,000 $78,000 $134,000
Payroll Taxes $58,749 $142,725 $196,575
Legal/Consultants $6,000 $6,000 $6,000
Inventory Control systems $20,000 $0 $0

Total Operating Expenses $1,137,111 $2,274,025 $3,367,075

Profit Before Interest and Taxes $99,663 $1,049,495 $2,340,765


EBITDA $104,655 $1,054,495 $2,345,765
Interest Expense $166,180 $142,460 $99,140
Taxes Incurred $0 $272,111 $672,488

Net Profit ($66,517) $634,925 $1,569,138


Net Profit/Sales -3.09% 11.02% 15.82%

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Cellular Providers

Chart: Profit Yearly

Chart: Gross Margin Monthly

Page 21
Cellular Providers

8.5 Projected Cash Flow

The following table and chart shows the projected cash flow of Cellular Providers.

Table: Cash Flow

Pro Forma Cash Flow


2000 2001 2002
Cash Received

Cash from Operations


Cash Sales $1,550,940 $4,147,200 $7,142,400
Cash from Receivables $658,468 $1,406,261 $2,539,325
Subtotal Cash from Operations $2,209,408 $5,553,461 $9,681,725

Additional Cash Received


Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $100,000 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $2,309,408 $5,553,461 $9,681,725

Expenditures 2000 2001 2002

Expenditures from Operations


Cash Spending $391,658 $951,500 $1,310,500
Bill Payments $1,702,342 $4,215,061 $7,014,849
Subtotal Spent on Operations $2,094,000 $5,166,561 $8,325,349

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $33,600 $33,600 $32,800
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $125,000 $300,000 $500,000
Purchase Other Current Assets $37,000 $50,000 $100,000
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $2,289,600 $5,550,161 $8,958,149

Net Cash Flow $19,808 $3,300 $723,575


Cash Balance $194,808 $198,108 $921,683

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Cellular Providers

Chart: Cash

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Cellular Providers

8.6 Projected Balance Sheet

The following table is the projected balance sheet.

Table: Balance Sheet

Pro Forma Balance Sheet


2000 2001 2002
Assets

Current Assets
Cash $194,808 $198,108 $921,683
Accounts Receivable $123,381 $329,920 $568,195
Inventory $112,462 $298,712 $516,410
Other Current Assets $40,000 $90,000 $190,000
Total Current Assets $470,651 $916,739 $2,196,288

Long-term Assets
Long-term Assets $50,000 $50,000 $50,000
Accumulated Depreciation $4,992 $9,992 $14,992
Total Long-term Assets $45,008 $40,008 $35,008
Total Assets $515,659 $956,747 $2,231,296

Liabilities and Capital 2000 2001 2002

Current Liabilities
Accounts Payable $218,167 $357,931 $596,142
Current Borrowing $66,400 $32,800 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $284,567 $390,731 $596,142

Long-term Liabilities $1,525,000 $1,225,000 $725,000


Total Liabilities $1,809,567 $1,615,731 $1,321,142

Paid-in Capital $0 $0 $0
Retained Earnings ($1,227,391) ($1,293,908) ($658,983)
Earnings ($66,517) $634,925 $1,569,138
Total Capital ($1,293,908) ($658,983) $910,154
Total Liabilities and Capital $515,659 $956,747 $2,231,296

Net Worth ($1,293,908) ($658,983) $910,154

8.7 Business Ratios

Cellular Providers is a company that is seeking to grow rapidly in order to seize market share in
a dynamic industry. As the company is, on average, in the high growth phase of the product life
cycle for its telecommunications products, the company is experiencing higher leverage of its
assets and a lower ROA than the industry standard.

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Cellular Providers

Table: Ratios

Ratio Analysis
2000 2001 2002 Industry Profile
Sales Growth 141.08% 167.40% 72.22% 4.80%

Percent of Total Assets


Accounts Receivable 23.93% 34.48% 25.46% 14.30%
Inventory 21.81% 31.22% 23.14% 2.50%
Other Current Assets 7.76% 9.41% 8.52% 46.50%
Total Current Assets 91.27% 95.82% 98.43% 63.30%
Long-term Assets 8.73% 4.18% 1.57% 36.70%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 55.19% 40.84% 26.72% 43.60%


Long-term Liabilities 295.74% 128.04% 32.49% 26.30%
Total Liabilities 350.92% 168.88% 59.21% 69.90%
Net Worth -250.92% -68.88% 40.79% 30.10%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 57.42% 57.70% 57.54% 57.80%
Selling, General & Administrative Expenses 58.41% 45.60% 40.45% 35.50%
Advertising Expenses 10.00% 10.00% 10.00% 1.00%
Profit Before Interest and Taxes 4.63% 18.22% 23.60% 1.90%

Main Ratios
Current 1.65 2.35 3.68 1.17
Quick 1.26 1.58 2.82 0.95
Total Debt to Total Assets 350.92% 168.88% 59.21% 69.90%
Pre-tax Return on Net Worth 5.14% -137.64% 246.29% 4.20%
Pre-tax Return on Assets -12.90% 94.80% 100.46% 14.00%

Additional Ratios 2000 2001 2002


Net Profit Margin -3.09% 11.02% 15.82% n.a
Return on Equity 0.00% 0.00% 172.40% n.a

Activity Ratios
Accounts Receivable Turnover 4.89 4.89 4.89 n.a
Collection Days 61 51 59 n.a
Inventory Turnover 10.91 11.85 10.34 n.a
Accounts Payable Turnover 8.72 12.17 12.17 n.a
Payment Days 27 24 24 n.a
Total Asset Turnover 4.18 6.02 4.45 n.a

Debt Ratios
Debt to Net Worth 0.00 0.00 1.45 n.a
Current Liab. to Liab. 0.16 0.24 0.45 n.a

Liquidity Ratios
Net Working Capital $186,084 $526,009 $1,600,146 n.a
Interest Coverage 0.60 7.37 23.61 n.a

Additional Ratios
Assets to Sales 0.24 0.17 0.22 n.a
Current Debt/Total Assets 55% 41% 27% n.a
Acid Test 0.83 0.74 1.86 n.a
Sales/Net Worth 0.00 0.00 10.90 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Page 25
Appendix

Table: Sales Forecast

Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales
Personal User Sales 0% $109,615 $123,643 $139,600 $139,600 $139,600 $139,600 $139,600 $139,600 $139,600 $139,600 $174,712 $209,513
Business User Sales 0% $35,650 $35,650 $35,650 $35,650 $35,650 $35,650 $35,650 $35,650 $35,650 $35,650 $31,650 $31,650
Total Sales $145,265 $159,293 $175,250 $175,250 $175,250 $175,250 $175,250 $175,250 $175,250 $175,250 $206,362 $241,163

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Personal User Sales $46,038 $51,930 $58,632 $58,632 $58,632 $58,632 $58,632 $58,632 $58,632 $58,632 $73,379 $87,995
Business User Sales $16,043 $16,043 $16,043 $16,043 $16,043 $16,043 $16,043 $16,043 $16,043 $16,043 $14,243 $14,243
Subtotal Direct Cost of Sales $62,081 $67,973 $74,675 $74,675 $74,675 $74,675 $74,675 $74,675 $74,675 $74,675 $87,622 $102,238

Page 1
Appendix

Table: Personnel

Personnel Plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
CEO 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
CFO 0% $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
HR Manager 0% $4,166 $4,166 $4,166 $4,166 $4,166 $4,166 $4,166 $4,166 $4,166 $4,166 $4,166 $4,166
Regional Manager 0% $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750
Office Manager 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Marketing Staff 0% $4,000 $4,000 $4,000 $4,000 $4,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000
Retail Staff #1 0% $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500
Retail Staff #2 0% $0 $0 $0 $2,500 $2,500 $2,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500
Retail Staff #3 0% $0 $0 $0 $0 $0 $0 $0 $0 $4,500 $4,500 $4,500 $4,500
Retail Staff #4 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Retail Staff #5 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Retail Staff #6 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Retail Staff #7 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Retail Staff #8 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Personnel 0% $1,167 $1,167 $1,167 $2,333 $2,333 $2,333 $2,333 $2,333 $4,000 $4,000 $4,000 $4,000
Total People 6 6 6 8 8 8 8 8 10 10 10 10

Total Payroll $25,083 $25,083 $25,083 $28,749 $28,749 $31,749 $33,749 $33,749 $39,916 $39,916 $39,916 $39,916

Page 2
Appendix

Table: Profit and Loss

Pro Forma Profit and Loss


Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales $145,265 $159,293 $175,250 $175,250 $175,250 $175,250 $175,250 $175,250 $175,250 $175,250 $206,362 $241,163
Direct Cost of Sales $62,081 $67,973 $74,675 $74,675 $74,675 $74,675 $74,675 $74,675 $74,675 $74,675 $87,622 $102,238
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $62,081 $67,973 $74,675 $74,675 $74,675 $74,675 $74,675 $74,675 $74,675 $74,675 $87,622 $102,238

Gross Margin $83,184 $91,320 $100,576 $100,576 $100,576 $100,576 $100,576 $100,576 $100,576 $100,576 $118,740 $138,925
Gross Margin % 57.26% 57.33% 57.39% 57.39% 57.39% 57.39% 57.39% 57.39% 57.39% 57.39% 57.54% 57.61%

Expenses
Payroll $25,083 $25,083 $25,083 $28,749 $28,749 $31,749 $33,749 $33,749 $39,916 $39,916 $39,916 $39,916
Marketing/Promotion $33,340 $31,444 $33,838 $37,838 $45,838 $37,838 $37,838 $37,838 $37,838 $37,838 $42,504 $59,724
Depreciation $416 $416 $416 $416 $416 $416 $416 $416 $416 $416 $416 $416
Store Set Up Costs $0 $0 $15,000 $15,000 $0 $0 $0 $15,000 $15,000 $0 $15,000 $15,000
Repairs and Maintenance $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Utilities $800 $800 $1,600 $1,600 $1,600 $1,600 $1,600 $2,400 $2,400 $2,400 $2,400 $3,200
Insurance $800 $800 $800 $1,600 $1,600 $1,600 $1,600 $2,400 $2,400 $2,400 $2,400 $3,200
Rent $1,500 $1,500 $3,000 $3,000 $3,000 $3,000 $3,000 $4,500 $4,500 $4,500 $4,500 $6,000
Payroll Taxes 15% $3,762 $3,762 $3,762 $4,312 $4,312 $4,762 $5,062 $5,062 $5,987 $5,987 $5,987 $5,987
Legal/Consultants 15% $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Inventory Control systems $0 $0 $20,000 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $66,701 $64,805 $104,499 $93,515 $86,515 $81,965 $84,265 $102,365 $109,457 $94,457 $114,124 $134,444

Profit Before Interest and Taxes $16,483 $26,515 ($3,923) $7,061 $14,061 $18,611 $16,311 ($1,789) ($8,881) $6,119 $4,617 $4,481
EBITDA $16,899 $26,931 ($3,507) $7,477 $14,477 $19,027 $16,727 ($1,373) ($8,465) $6,535 $5,033 $4,897
Interest Expense $14,435 $14,328 $14,222 $14,115 $14,008 $13,902 $13,795 $13,688 $13,582 $13,475 $13,368 $13,262
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit $2,048 $12,187 ($18,145) ($7,054) $52 $4,709 $2,516 ($15,478) ($22,463) ($7,356) ($8,752) ($8,780)
Net Profit/Sales 1.41% 7.65% -10.35% -4.03% 0.03% 2.69% 1.44% -8.83% -12.82% -4.20% -4.24% -3.64%

Page 3
Appendix

Table: Cash Flow

Pro Forma Cash Flow


Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Received

Cash from Operations


Cash Sales $104,591 $114,691 $126,180 $126,180 $126,180 $126,180 $126,180 $126,180 $126,180 $126,180 $148,581 $173,637
Cash from Receivables $89,353 $90,709 $40,805 $44,751 $49,070 $49,070 $49,070 $49,070 $49,070 $49,070 $49,070 $49,360
Subtotal Cash from Operations $193,944 $205,400 $166,985 $170,931 $175,250 $175,250 $175,250 $175,250 $175,250 $175,250 $197,651 $222,998

Additional Cash Received


Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $100,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $293,944 $205,400 $166,985 $170,931 $175,250 $175,250 $175,250 $175,250 $175,250 $175,250 $197,651 $222,998

Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Expenditures from Operations


Cash Spending $25,083 $25,083 $25,083 $28,749 $28,749 $31,749 $33,749 $33,749 $39,916 $39,916 $39,916 $39,916
Bill Payments $23,164 $151,210 $129,661 $174,531 $152,902 $145,777 $138,382 $139,169 $156,590 $156,878 $143,833 $190,246
Subtotal Spent on Operations $48,247 $176,293 $154,744 $203,280 $181,651 $177,526 $172,131 $172,918 $196,506 $196,794 $183,749 $230,162

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $15,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Purchase Other Current Assets $5,000 $0 $12,000 $0 $0 $0 $0 $0 $0 $0 $20,000 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $71,047 $189,093 $179,544 $216,080 $194,451 $190,326 $184,931 $185,718 $209,306 $209,594 $216,549 $242,962

Net Cash Flow $222,897 $16,307 ($12,559) ($45,149) ($19,201) ($15,076) ($9,681) ($10,468) ($34,056) ($34,344) ($18,898) ($19,964)

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Appendix
Cash Balance $397,897 $414,204 $401,645 $356,497 $337,295 $322,219 $312,537 $302,069 $268,013 $233,670 $214,772 $194,808

Table: Balance Sheet

Pro Forma Balance Sheet


Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Assets Starting Balances

Current Assets
Cash $175,000 $397,897 $414,204 $401,645 $356,497 $337,295 $322,219 $312,537 $302,069 $268,013 $233,670 $214,772 $194,808
Accounts Receivable $178,706 $130,027 $83,920 $92,185 $96,504 $96,504 $96,504 $96,504 $96,504 $96,504 $96,504 $105,216 $123,381
Inventory $34,000 $68,289 $74,770 $82,142 $82,142 $82,142 $82,142 $82,142 $82,142 $82,142 $82,142 $96,384 $112,462
Other Current Assets $3,000 $8,000 $8,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $40,000 $40,000
Total Current Assets $390,706 $604,213 $580,894 $595,973 $555,143 $535,942 $520,865 $511,184 $500,716 $466,660 $432,316 $456,371 $470,651

Long-term Assets
Long-term Assets $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Accumulated Depreciation $0 $416 $832 $1,248 $1,664 $2,080 $2,496 $2,912 $3,328 $3,744 $4,160 $4,576 $4,992
Total Long-term Assets $50,000 $49,584 $49,168 $48,752 $48,336 $47,920 $47,504 $47,088 $46,672 $46,256 $45,840 $45,424 $45,008
Total Assets $440,706 $653,797 $630,062 $644,725 $603,479 $583,862 $568,369 $558,272 $547,388 $512,916 $478,156 $501,795 $515,659

Liabilities and Capital Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Current Liabilities
Accounts Payable $18,097 $146,940 $123,819 $169,426 $148,035 $141,165 $133,763 $133,950 $151,344 $152,135 $137,532 $182,723 $218,167
Current Borrowing $0 $97,200 $94,400 $91,600 $88,800 $86,000 $83,200 $80,400 $77,600 $74,800 $72,000 $69,200 $66,400
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $18,097 $244,140 $218,219 $261,026 $236,835 $227,165 $216,963 $214,350 $228,944 $226,935 $209,532 $251,923 $284,567

Long-term Liabilities $1,650,000 $1,635,000 $1,625,000 $1,615,000 $1,605,000 $1,595,000 $1,585,000 $1,575,000 $1,565,000 $1,555,000 $1,545,000 $1,535,000 $1,525,000
Total Liabilities $1,668,097 $1,879,140 $1,843,219 $1,876,026 $1,841,835 $1,822,165 $1,801,963 $1,789,350 $1,793,944 $1,781,935 $1,754,532 $1,786,923 $1,809,567

Paid-in Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Retained Earnings ($1,413,246) ($1,227,391) ($1,227,391) ($1,227,391) ($1,227,391) ($1,227,391) ($1,227,391) ($1,227,391) ($1,227,391) ($1,227,391) ($1,227,391) ($1,227,391) ($1,227,391)
Earnings $185,855 $2,048 $14,235 ($3,910) ($10,965) ($10,912) ($6,203) ($3,688) ($19,165) ($41,629) ($48,985) ($57,737) ($66,517)
Total Capital ($1,227,391) ($1,225,343) ($1,213,156) ($1,231,301) ($1,238,356) ($1,238,303) ($1,233,594) ($1,231,079) ($1,246,556) ($1,269,019) ($1,276,376) ($1,285,127) ($1,293,908)
Total Liabilities and Capital $440,706 $653,797 $630,062 $644,725 $603,479 $583,862 $568,369 $558,272 $547,388 $512,916 $478,156 $501,795 $515,659

Net Worth ($1,227,391) ($1,225,343) ($1,213,156) ($1,231,301) ($1,238,356) ($1,238,303) ($1,233,594) ($1,231,079) ($1,246,556) ($1,269,019) ($1,276,376) ($1,285,127) ($1,293,908)

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