Online Booking Business Plan

Gigmasters.com

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Financial Plan

The following sections describe the financial position of Gigmasters.

7.1 Important Assumptions

Our basic financial accounting assumptions are outlined below.

General Assumptions
2001 2002 2003
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 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Break-even Analysis

The Break-even Analysis below demonstrates how much Gigmasters needs to sell every month to make a profit.

Break-even Analysis
Monthly Revenue Break-even $12,512
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $12,512

7.3 Projected Profit and Loss

The profit and loss projections in the chart and table below present the key increase in sales, profits, and gross margin.

The company estimates it will not achieve profitability in the first year, especially since we project the need to hire two additional full-time employees late in the year to assist with marketing and administrative responsibilities. Their goals will be to increase overall traffic to the site, increase the percentage of customers who fill out gig requests and increase the percentage of gig requests that result in bookings.

Pro Forma Profit and Loss
2001 2002 2003
Sales $89,017 $470,227 $1,622,858
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $89,017 $470,227 $1,622,858
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $104,796 $224,784 $246,780
Sales and Marketing and Other Expenses $28,388 $93,873 $220,259
Depreciation $0 $0 $0
Rent $16,960 $33,360 $36,000
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $150,144 $352,017 $503,039
Profit Before Interest and Taxes ($61,127) $118,210 $1,119,819
EBITDA ($61,127) $118,210 $1,119,819
Interest Expense $70 $0 $0
Taxes Incurred $0 $29,553 $284,621
Net Profit ($61,197) $88,658 $835,198
Net Profit/Sales -68.75% 18.85% 51.46%

7.4 Projected Cash Flow

The chart and table below show the projected cash flow for the company.

Pro Forma Cash Flow
2001 2002 2003
Cash Received
Cash from Operations
Cash Sales $89,017 $470,227 $1,622,858
Cash from Receivables $1,125 $0 $0
Subtotal Cash from Operations $90,142 $470,227 $1,622,858
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $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 $70,000 $0 $0
Subtotal Cash Received $160,142 $470,227 $1,622,858
Expenditures 2001 2002 2003
Expenditures from Operations
Cash Spending $104,796 $224,784 $246,780
Bill Payments $38,633 $150,684 $509,310
Subtotal Spent on Operations $143,429 $375,468 $756,090
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $4,200 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $5,000 $25,000
Dividends $0 $0 $0
Subtotal Cash Spent $147,629 $380,468 $781,090
Net Cash Flow $12,513 $89,759 $841,768
Cash Balance $28,306 $118,065 $959,832

7.5 Projected Balance Sheet

The following Balance Sheet outlines the key assets and liabilities for Gigmasters.

Pro Forma Balance Sheet
2001 2002 2003
Assets
Current Assets
Cash $28,306 $118,065 $959,832
Accounts Receivable $0 $0 $0
Other Current Assets $0 $0 $0
Total Current Assets $28,306 $118,065 $959,832
Long-term Assets
Long-term Assets $1,510 $6,510 $31,510
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $1,510 $6,510 $31,510
Total Assets $29,816 $124,575 $991,342
Liabilities and Capital 2001 2002 2003
Current Liabilities
Accounts Payable $6,785 $12,886 $44,456
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $6,785 $12,886 $44,456
Long-term Liabilities $0 $0 $0
Total Liabilities $6,785 $12,886 $44,456
Paid-in Capital $85,657 $85,657 $85,657
Retained Earnings ($1,429) ($62,626) $26,031
Earnings ($61,197) $88,658 $835,198
Total Capital $23,031 $111,688 $946,887
Total Liabilities and Capital $29,816 $124,575 $991,342
Net Worth $23,031 $111,688 $946,887

7.6 Business Ratios

The following table presents important business ratios for the business services industry, as determined by the Standard Industry Classification Index (SIC) code 7389, Business Services, NEC.

Ratio Analysis
2001 2002 2003 Industry Profile
Sales Growth 421.59% 428.24% 245.12% 8.20%
Percent of Total Assets
Accounts Receivable 0.00% 0.00% 0.00% 26.30%
Other Current Assets 0.00% 0.00% 0.00% 44.20%
Total Current Assets 94.94% 94.77% 96.82% 74.30%
Long-term Assets 5.06% 5.23% 3.18% 25.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 22.76% 10.34% 4.48% 49.00%
Long-term Liabilities 0.00% 0.00% 0.00% 13.80%
Total Liabilities 22.76% 10.34% 4.48% 62.80%
Net Worth 77.24% 89.66% 95.52% 37.20%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 192.29% 88.32% 50.53% 81.40%
Advertising Expenses 19.98% 16.71% 12.36% 1.70%
Profit Before Interest and Taxes -68.67% 25.14% 69.00% 2.10%
Main Ratios
Current 4.17 9.16 21.59 1.49
Quick 4.17 9.16 21.59 1.17
Total Debt to Total Assets 22.76% 10.34% 4.48% 62.80%
Pre-tax Return on Net Worth -265.72% 105.84% 118.26% 4.20%
Pre-tax Return on Assets -205.25% 94.89% 112.96% 11.30%
Additional Ratios 2001 2002 2003
Net Profit Margin -68.75% 18.85% 51.46% n.a
Return on Equity -265.72% 79.38% 88.20% n.a
Activity Ratios
Accounts Receivable Turnover 0.00 0.00 0.00 n.a
Collection Days 0 0 0 n.a
Accounts Payable Turnover 6.69 12.17 12.17 n.a
Payment Days 27 23 19 n.a
Total Asset Turnover 2.99 3.77 1.64 n.a
Debt Ratios
Debt to Net Worth 0.29 0.12 0.05 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $21,521 $105,178 $915,376 n.a
Interest Coverage -873.24 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.33 0.26 0.61 n.a
Current Debt/Total Assets 23% 10% 4% n.a
Acid Test 4.17 9.16 21.59 n.a
Sales/Net Worth 3.87 4.21 1.71 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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General Assumptions
2001 2002 2003
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 25.42% 25.00% 25.42%
Other 0 0 0
Break-even Analysis
Monthly Revenue Break-even $12,512
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $12,512
Pro Forma Profit and Loss
2001 2002 2003
Sales $89,017 $470,227 $1,622,858
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $89,017 $470,227 $1,622,858
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $104,796 $224,784 $246,780
Sales and Marketing and Other Expenses $28,388 $93,873 $220,259
Depreciation $0 $0 $0
Rent $16,960 $33,360 $36,000
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $150,144 $352,017 $503,039
Profit Before Interest and Taxes ($61,127) $118,210 $1,119,819
EBITDA ($61,127) $118,210 $1,119,819
Interest Expense $70 $0 $0
Taxes Incurred $0 $29,553 $284,621
Net Profit ($61,197) $88,658 $835,198
Net Profit/Sales -68.75% 18.85% 51.46%
Pro Forma Cash Flow
2001 2002 2003
Cash Received
Cash from Operations
Cash Sales $89,017 $470,227 $1,622,858
Cash from Receivables $1,125 $0 $0
Subtotal Cash from Operations $90,142 $470,227 $1,622,858
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $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 $70,000 $0 $0
Subtotal Cash Received $160,142 $470,227 $1,622,858
Expenditures 2001 2002 2003
Expenditures from Operations
Cash Spending $104,796 $224,784 $246,780
Bill Payments $38,633 $150,684 $509,310
Subtotal Spent on Operations $143,429 $375,468 $756,090
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $4,200 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $5,000 $25,000
Dividends $0 $0 $0
Subtotal Cash Spent $147,629 $380,468 $781,090
Net Cash Flow $12,513 $89,759 $841,768
Cash Balance $28,306 $118,065 $959,832
Pro Forma Balance Sheet
2001 2002 2003
Assets
Current Assets
Cash $28,306 $118,065 $959,832
Accounts Receivable $0 $0 $0
Other Current Assets $0 $0 $0
Total Current Assets $28,306 $118,065 $959,832
Long-term Assets
Long-term Assets $1,510 $6,510 $31,510
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $1,510 $6,510 $31,510
Total Assets $29,816 $124,575 $991,342
Liabilities and Capital 2001 2002 2003
Current Liabilities
Accounts Payable $6,785 $12,886 $44,456
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $6,785 $12,886 $44,456
Long-term Liabilities $0 $0 $0
Total Liabilities $6,785 $12,886 $44,456
Paid-in Capital $85,657 $85,657 $85,657
Retained Earnings ($1,429) ($62,626) $26,031
Earnings ($61,197) $88,658 $835,198
Total Capital $23,031 $111,688 $946,887
Total Liabilities and Capital $29,816 $124,575 $991,342
Net Worth $23,031 $111,688 $946,887
Ratio Analysis
2001 2002 2003 Industry Profile
Sales Growth 421.59% 428.24% 245.12% 8.20%
Percent of Total Assets
Accounts Receivable 0.00% 0.00% 0.00% 26.30%
Other Current Assets 0.00% 0.00% 0.00% 44.20%
Total Current Assets 94.94% 94.77% 96.82% 74.30%
Long-term Assets 5.06% 5.23% 3.18% 25.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 22.76% 10.34% 4.48% 49.00%
Long-term Liabilities 0.00% 0.00% 0.00% 13.80%
Total Liabilities 22.76% 10.34% 4.48% 62.80%
Net Worth 77.24% 89.66% 95.52% 37.20%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 192.29% 88.32% 50.53% 81.40%
Advertising Expenses 19.98% 16.71% 12.36% 1.70%
Profit Before Interest and Taxes -68.67% 25.14% 69.00% 2.10%
Main Ratios
Current 4.17 9.16 21.59 1.49
Quick 4.17 9.16 21.59 1.17
Total Debt to Total Assets 22.76% 10.34% 4.48% 62.80%
Pre-tax Return on Net Worth -265.72% 105.84% 118.26% 4.20%
Pre-tax Return on Assets -205.25% 94.89% 112.96% 11.30%
Additional Ratios 2001 2002 2003
Net Profit Margin -68.75% 18.85% 51.46% n.a
Return on Equity -265.72% 79.38% 88.20% n.a
Activity Ratios
Accounts Receivable Turnover 0.00 0.00 0.00 n.a
Collection Days 0 0 0 n.a
Accounts Payable Turnover 6.69 12.17 12.17 n.a
Payment Days 27 23 19 n.a
Total Asset Turnover 2.99 3.77 1.64 n.a
Debt Ratios
Debt to Net Worth 0.29 0.12 0.05 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $21,521 $105,178 $915,376 n.a
Interest Coverage -873.24 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.33 0.26 0.61 n.a
Current Debt/Total Assets 23% 10% 4% n.a
Acid Test 4.17 9.16 21.59 n.a
Sales/Net Worth 3.87 4.21 1.71 n.a
Dividend Payout 0.00 0.00 0.00 n.a