Aircraft Weighing Systems Business Plan

Financial Plan

The business is expected to grow annually at 100-200%. The growth is self-funding after the initial period gaining Government approval by FAA US. The growth rate is restricted by the need to maintain quality of product.

7.1 Valuation

For an initial investment of $1,000,000, an outside investor will receive 20% of the initial shares of Heaving Lifting, Inc., substantial dividends by 2010, and a buy-out option when the company goes public (in 2010 or 2011). We project a sales-based valuation of the company over $480,000,000 in 2010. This number could be substantially higher if the consumer demand for mandatory weigh bridges on all commercial flights in Asia and Europe matches the likely demand in the U.S. With an ending valuation on the initial outside investment of $96.1 Million, this represents an IRR of 91%.

7.2 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table. They key underlying assumptions are:

• Growth of 100-200% per annum.
• Marketing coup by product uniqueness and speed of entry.
• Limited initial competition. 
• Stable costs.

7.3 Break-even Analysis

In the start-up period we will build up to two (2) Heavy Lifting weigh bridges. The first two (2) units, in CA and Dublin will be used for trial as well as operational purposes. The Heavy Lifting systems will be at:

• San Diego International Airport (1)
• Dublin, Ireland (1)

These two, along with two Heavy Lifting outside-manufactured weigh bridges, will be sold in the first year. The Break-even table, below, reflects the fact that we do not expect to be profitable until the second year.

7.4 Projected Profit and Loss

Profits are expected to be in line with sales forecasts, per annum, after the first year of operations (2 years from start-up). This profit level relies on an expanding market and increasing sales. We are confident that we will meet these high sales goals after the first year, as publicity about our first weigh bridges brings us new customers and initiates a public safety (and international security) debate about aircraft weight laws and enforcement.

Overhead costs for the first year of operations consists of:

• Office space based on current property leasing rates. Office space sufficient for CEO office, Office manager office, Board room, Communications and printing room, Project manager office space, and tea and coffee making facilities.
• CEO salary package including executive health insurance, term life insurance ($250,000) and comprehensive world travel insurance $200,000 plus travel (Flight and rental car), accommodation (Marriott/Hyatt or equivalent hotels and food expenses. Estimate based on two business class flights to San Diego per month, accommodation for up to 10 days per month and food at $100 per day. Domestic travel (Flight and rental car), accommodation Marriott Hotels or equivalent) and food ($100 per day).
• Technical director expenses. Travel (Flight and rental car costs), accommodation (Marriott or equivalent) and food expenses as required. Estimate based on one business class flight between Gold Coast City and San Diego per month, accommodation for up to 10 days per month and food at $100 per day. Domestic business class travel (Flight cost), accommodation costs (Marriott Hotel or equivalent) and food costs (100 per day)  in San Diego estimated at up to 5 days per month. 
• Project director fees charged on a consultant basis at cost plus expenses.
• Legal services director fees charged on an advisory basis at cost plus expenses.
• Research & Development costs for software development.
• Office staff consisting of Office manager based on current salaries in Gold Coast City, $75,000 plus benefits: Medi bank private; parking and pension plan (Over ten years service).
• Software engineer at $100,000/year.
• Office equipment consisting of furniture and furnishings, computer equipment, office equipment including, scanner, copier, printer, facsimile phone system and office computer network.
• Office cubicle space for project management, technical management and software engineer.
• Tea and coffee making facilities.
• Stationery and office supplies sufficient for annual production of reports, letters, papers, power point presentations, regulations library (Digital), technical data library (Digital) and online conferences and presentations.
• Heavy Lifting database server and mass storage equipment including secure backup and power loss system.
• Office security system (Response alarm). 

7.5 Projected Cash Flow

This business plan cash flows positively due to the fact that customers pay 50% of the price in advance. The balance is payable on completion, net 30 days.

As the contractors are paid progress payments for work completed, the cash flow will always remain positive without the need for borrowing.

For those sales subject to finance, a separate business plan is required.

7.6 Projected Balance Sheet

The table below presents the balance sheet for Heavy Lifting, Inc. This table reflects a positive cash position throughout the period of this financial plan and dramatic growth in net worth.

7.7 Business Ratios

The following table outlines some of the more important ratios from the Other Airport Operations industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the NAICS Industry Classification code, 488119.