Comgate

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Remodeling Business Plan

Company Summary

After initial losses and several thin profit years of competitively bidding construction projects, Comgate has brought its mission statement into clearer focus. Prior years were characterized by hectic efforts to bid as many jobs as possible. Margins were thin as pricing policy was "flexible" for fear that there would be insufficient work for production staff. Now, the situation has changed. Now there is some fear of accepting too much work. This is a result of the company's newly installed CAD capacity which melds nicely with the needs and realities of present day design professionals. Offering this service helps to channel the work to the company and pricing tends to be less cut-throat. With the increasing business, some long-overdue restructuring needs to be done in the administrative machinery. These changes will free up time so that the office manager can attend to more important administrative matters, and hopefully will assure more accuracy in pricing, billing, and tracking of costs for comparison purposes. Profits are expected to remain in the black and increase.

2.1 Company Ownership

Comgate is a limited liability S corporation wholly-owned by Andrew Comins. It was incorporated in 1996.

2.2 Company History

This chapter includes a standard chart and table of the company's performance over the past few years.

Since a banker may wish to see more in-depth analysis of past performance, a copy of an Excel spreadsheet has been included in Appendix A. Analysis has been provided in five basic areas - Liquidity, Safety, Profitability, Balance Sheet and Operations Management. This compares Comgate's 1999 financials with the results of all similar mill shops responding to a survey (October, 1999) conducted by the Architectural Woodworking Institute (AWI) in Reston, Virginia.

See Chapter 7.2 Key Financial Indicators for further analysis of past financial results.

Note: appendices A - K have been omitted from this sample plan presentation.

Past Performance
1997 1998 1999
Sales $147,481 $367,305 $552,864
Gross Margin $73,591 $218,102 $313,702
Gross Margin % 49.90% 59.38% 56.74%
Operating Expenses $162,547 $195,639 $260,251
Collection Period (days) 0 20 66
Inventory Turnover 4.80 35.10 9.90
Balance Sheet
1997 1998 1999
Current Assets
Cash $25,563 $13,763 $3,988
Accounts Receivable $0 $39,412 $161,313
Inventory $7,949 $14,337 $6,500
Other Current Assets $1,650 $0 $0
Total Current Assets $35,162 $67,512 $171,801
Long-term Assets
Long-term Assets $107,624 $113,484 $140,203
Accumulated Depreciation $50,691 $73,063 $104,893
Total Long-term Assets $56,933 $40,421 $35,310
Total Assets $92,095 $107,933 $207,111
Current Liabilities
Accounts Payable $5,283 $16,058 $58,344
Current Borrowing $9,143 $11,857 $69,477
Other Current Liabilities (interest free) $3,829 $25,288 $10,000
Total Current Liabilities $18,255 $53,203 $137,821
Long-term Liabilities $161,433 $125,720 $99,179
Total Liabilities $179,688 $178,923 $237,000
Paid-in Capital $2,000 $2,000 $2,000
Retained Earnings ($637) ($89,593) ($65,014)
Earnings ($88,956) $16,603 $33,125
Total Capital ($87,593) ($70,990) ($29,889)
Total Capital and Liabilities $92,095 $107,933 $207,111
Other Inputs
Payment Days 30 39 89
Sales on Credit $147,481 $367,305 $552,864
Receivables Turnover 0.00 9.32 3.43

2.3 Company Locations and Facilities

The company is located in New Haven, Ct. in rented facilities. Total area is 2,500 square feet of which about 100 square feet is taken up with administration. Some expansion in the present facilities is possible by renting another 1,600 square feet of adjoining space. This plan assumes that this additional space will be added in January, 2000 at an increase of $2,000 in monthly rent.

A diagram of the production hall showing the location of the various major pieces of machinery is given in Appendix G.

Note: appendices A - K have been omitted from this sample plan presentation.