Tricky Widgets Manufacturing

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Heavy Equipment Maker Business Plan

Company Summary

TWM is a start-up manufacturing firm which will be managed by four executives representing administration, marketing, sales, and finance. These executives bring to the company a large degree of experience in the equipment manufacturing industry. They perceive an opportunity to acquire a significant amount of market share by focusing on the specific needs of the commercial construction industry and by providing greater precision controls to their products than other competitors. The company will be organized as a closely-held corporation with a majority of the shares held by the four principle executives.

The company will be seeking to raise approximately $4.5 million in loans and another $500,000 from private investors for start-up purposes. The company will have one manufacturing facility in Spokane, Washington.

2.1 Company Ownership

The company will be a closely-held corporation with six principle shareholders who will form the Board of Directors. It is anticipated that within the next five years, the company will be instituting a public offering to enlarge its ability to acquire financing. The principle owners will seek to retain the majority of the company's stock for the foreseeable future. The company is incorporated in the state of Delaware as this offers the most advantageous conditions of taxes etc.

2.2 Start-up Summary

The following table and chart illustrates projected initial start-up costs for the firm.

Start-up
Requirements
Start-up Expenses
Legal $4,000
Rent $24,000
Advertising $15,000
Insurance $12,000
Research and Development $250,000
Office setup $10,000
Other $3,000
Total Start-up Expenses $318,000
Start-up Assets
Cash Required $2,000,000
Start-up Inventory $100,000
Other Current Assets $100,000
Long-term Assets $2,500,000
Total Assets $4,700,000
Total Requirements $5,018,000
Start-up Funding
Start-up Expenses to Fund $318,000
Start-up Assets to Fund $4,700,000
Total Funding Required $5,018,000
Assets
Non-cash Assets from Start-up $2,700,000
Cash Requirements from Start-up $2,000,000
Additional Cash Raised $0
Cash Balance on Starting Date $2,000,000
Total Assets $4,700,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $4,500,000
Accounts Payable (Outstanding Bills) $10,000
Other Current Liabilities (interest-free) $0
Total Liabilities $4,510,000
Capital
Planned Investment
Investor 1 $55,000
Investor 2 $43,000
Investor 3 $160,000
Investor 4 $60,000
Investor 5 $120,000
Investor 6 $70,000
Additional Investment Requirement $0
Total Planned Investment $508,000
Loss at Start-up (Start-up Expenses) ($318,000)
Total Capital $190,000
Total Capital and Liabilities $4,700,000
Total Funding $5,018,000