Infotext Strategy Letter

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Newsletter Publishing Business Plan

Appendix

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Newsletter subscriptions 39500% $13,312 $12,522 $8,611 $8,769 $10,566 $11,870 $12,522 $13,173 $14,477 $15,283 $15,591 $14,512
Cancellations -30000% $0 $0 $0 $0 $0 $0 ($300) ($300) ($300) ($300) ($300) ($300)
Total Sales $13,312 $12,522 $8,611 $8,769 $10,566 $11,870 $12,222 $12,873 $14,177 $14,983 $15,291 $14,212
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Outside editing 10% $500 $525 $551 $579 $608 $638 $670 $704 $739 $776 $814 $855
Outside Production 10% $500 $525 $551 $579 $608 $638 $670 $704 $739 $776 $814 $855
Physical Production 10% $750 $788 $827 $868 $912 $957 $1,005 $1,055 $1,108 $1,163 $1,222 $1,283
Other 2% $7,500 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Subtotal Direct Cost of Sales $9,250 $2,038 $2,129 $2,226 $2,327 $2,433 $2,545 $2,662 $2,786 $2,915 $3,051 $3,193
Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Newsletter manager 5% $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500
Editorial 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Secretarial 5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,750 $1,750 $1,750
Other 5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 1 1 1 1 1 1 1 1 1 2 2 2
Total Payroll $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $7,250 $7,250 $7,250
General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
New subscriptions 0 34 32 22 22 27 30 32 33 37 39 39 37
Renewals 1 0 0 0 0 0 0 0 0 0 0 0 0
Cancellations 0 0 0 0 0 0 0 1 1 1 1 1 1
Subscribers 34 65 87 109 136 166 197 229 265 303 341 377
Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $13,312 $12,522 $8,611 $8,769 $10,566 $11,870 $12,222 $12,873 $14,177 $14,983 $15,291 $14,212
Direct Cost of Sales $9,250 $2,038 $2,129 $2,226 $2,327 $2,433 $2,545 $2,662 $2,786 $2,915 $3,051 $3,193
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $9,250 $2,038 $2,129 $2,226 $2,327 $2,433 $2,545 $2,662 $2,786 $2,915 $3,051 $3,193
Gross Margin $4,062 $10,484 $6,482 $6,543 $8,239 $9,436 $9,676 $10,211 $11,391 $12,068 $12,240 $11,019
Gross Margin % 30.51% 83.73% 75.27% 74.62% 77.98% 79.50% 79.17% 79.32% 80.35% 80.55% 80.05% 77.53%
Expenses
Payroll $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $7,250 $7,250 $7,250
Marketing 50% $3,500 $3,500 $3,000 $500 $500 $500 $500 $500 $500 $500 $500 $500
Depreciation 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Leased Equipment 5% $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Insurance 5% $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75
Payroll Taxes 14% $770 $770 $770 $770 $770 $770 $770 $770 $770 $1,015 $1,015 $1,015
Other 5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $9,945 $9,945 $9,445 $6,945 $6,945 $6,945 $6,945 $6,945 $6,945 $8,940 $8,940 $8,940
Profit Before Interest and Taxes ($5,884) $539 ($2,963) ($402) $1,294 $2,491 $2,731 $3,266 $4,446 $3,128 $3,300 $2,079
EBITDA ($5,884) $539 ($2,963) ($402) $1,294 $2,491 $2,731 $3,266 $4,446 $3,128 $3,300 $2,079
Interest Expense $33 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $33
Taxes Incurred ($1,775) $110 ($766) ($125) $299 $598 $658 $791 $1,087 $757 $800 $511
Net Profit ($4,142) $329 ($2,298) ($376) $896 $1,793 $1,973 $2,374 $3,260 $2,271 $2,400 $1,534
Net Profit/Sales -31.11% 2.63% -26.68% -4.29% 8.48% 15.11% 16.15% 18.44% 22.99% 15.16% 15.70% 10.80%
Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash from Operations
Cash Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cash from Receivables $0 $7,099 $12,890 $10,436 $8,695 $9,728 $11,261 $12,057 $12,569 $13,568 $14,607 $15,147
Subtotal Cash from Operations $0 $7,099 $12,890 $10,436 $8,695 $9,728 $11,261 $12,057 $12,569 $13,568 $14,607 $15,147
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 $5,000 $10,000 $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 $5,000 $17,099 $12,890 $10,436 $8,695 $9,728 $11,261 $12,057 $12,569 $13,568 $14,607 $15,147
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $7,250 $7,250 $7,250
Bill Payments $0 $10,360 $7,394 $5,580 $3,880 $4,101 $4,522 $4,725 $4,965 $5,361 $5,456 $5,617
Subtotal Spent on Operations $5,500 $15,860 $12,894 $11,080 $9,380 $9,601 $10,022 $10,225 $10,465 $12,611 $12,706 $12,867
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 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,000
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $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 $5,500 $15,860 $12,894 $11,080 $9,380 $9,601 $10,022 $10,225 $10,465 $12,611 $12,706 $22,867
Net Cash Flow ($500) $1,240 ($4) ($644) ($685) $127 $1,239 $1,832 $2,104 $957 $1,901 ($7,720)
Cash Balance $14,500 $15,740 $15,736 $15,093 $14,407 $14,534 $15,774 $17,606 $19,709 $20,667 $22,567 $14,847
Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $15,000 $14,500 $15,740 $15,736 $15,093 $14,407 $14,534 $15,774 $17,606 $19,709 $20,667 $22,567 $14,847
Accounts Receivable $0 $13,312 $18,734 $14,454 $12,787 $14,658 $16,801 $17,761 $18,577 $20,184 $21,598 $22,283 $21,348
Other Current Assets $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000
Total Current Assets $22,000 $34,812 $41,473 $37,191 $34,880 $36,066 $38,335 $40,534 $43,182 $46,894 $49,265 $51,850 $43,195
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $22,000 $34,812 $41,473 $37,191 $34,880 $36,066 $38,335 $40,534 $43,182 $46,894 $49,265 $51,850 $43,195
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $11,953 $8,286 $6,301 $4,367 $4,657 $5,132 $5,358 $5,632 $6,084 $6,184 $6,369 $6,180
Current Borrowing $0 $5,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $5,000
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $16,953 $23,286 $21,301 $19,367 $19,657 $20,132 $20,358 $20,632 $21,084 $21,184 $21,369 $11,180
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $16,953 $23,286 $21,301 $19,367 $19,657 $20,132 $20,358 $20,632 $21,084 $21,184 $21,369 $11,180
Paid-in Capital $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
Retained Earnings ($28,000) ($28,000) ($28,000) ($28,000) ($28,000) ($28,000) ($28,000) ($28,000) ($28,000) ($28,000) ($28,000) ($28,000) ($28,000)
Earnings $0 ($4,142) ($3,813) ($6,110) ($6,486) ($5,591) ($3,797) ($1,824) $550 $3,810 $6,081 $8,481 $10,015
Total Capital $22,000 $17,858 $18,187 $15,890 $15,514 $16,409 $18,203 $20,176 $22,550 $25,810 $28,081 $30,481 $32,015
Total Liabilities and Capital $22,000 $34,812 $41,473 $37,191 $34,880 $36,066 $38,335 $40,534 $43,182 $46,894 $49,265 $51,850 $43,195
Net Worth $22,000 $17,858 $18,187 $15,890 $15,514 $16,409 $18,203 $20,176 $22,550 $25,810 $28,081 $30,481 $32,015