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FireStarters

Executive Summary

Popular culture is no longer regional. The advent of cable television, syndicated radio programs, and the Internet has created a world where a fashion statement in New York will be on the streets in a small midwestern town in a matter days. The speed of our telecommunication system has increased young customers’ expectations and demands for products that represent their own cultural statement.

FireStarters will offer young customers, in small towns and communities around United States, the youth-oriented products and clothing that are popular nationwide but not available locally.

The difference between FireStarters and other youth-oriented e-commerce websites is that FireStarters is focused only on its small-town America customers. The target customer is a young person, age 11-18, who listens to alternative music and participates in youth sports like skateboarding and snowboarding. Our target customer will look toward alternative clothing trends in large urban areas as their inspiration. FireStarters will exclusively advertise in small communities with populations between 100,000 and 150,000 residents. Communities of this size already have small youth-oriented businesses, like skateboard shops and alternative CD stores, that FireStarters can utilize to promote its product line.

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1.1 Mission

The mission of FireStarters is to offer distinctive youth-oriented fashion and products to small-town America.

1.2 Keys to Success

  • Accessible website that is entertaining to surf. Like a trip to your favorite store where you always find something new that you want.
  • Excellent vendor relationship that will facilitate quick shipment of orders.
  • Establish an effective strategy for advertising in the communities’ youth-oriented businesses.
  • Create a store image that our target customers sees as both attractive and trendy.
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Company Summary

FireStarters will offer youth-oriented products and clothing, online, that are popular nationwide but not available locally. Jill Stranton and Bobbi Hanson, co-owners of FireStarters, will create a cost-effective operation that will quickly ship clothing and product purchases to the customer.

FireStarters will focus on marketing products to its target customers in small cities with populations between 100,000 and 150,000 residents. The key to marketing strategy will be staging events that will increase the visibility of the online store with the target customer base. We will use existing local businesses that serve the same target customer base to co-sponsor these events.

2.1 Company Ownership

Jill Stranton and Bobbi Hanson are the co-owners of FireStarters.

2.2 Start-up Summary

The start-up costs of FireStarters consists of product inventory, creating a promotion campaign and establishing its website. FireStarters is funding start up with owner investments and a long-term business loan.

E-commerce internet business plan, company summary chart image

Start-up Funding
Start-up Expenses to Fund $155,400
Start-up Assets to Fund $194,600
Total Funding Required $350,000
Assets
Non-cash Assets from Start-up $130,000
Cash Requirements from Start-up $64,600
Additional Cash Raised $0
Cash Balance on Starting Date $64,600
Total Assets $194,600
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $150,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $150,000
Capital
Planned Investment
Jill Stranton $100,000
Bobbi Hanson $100,000
Additional Investment Requirement $0
Total Planned Investment $200,000
Loss at Start-up (Start-up Expenses) ($155,400)
Total Capital $44,600
Total Capital and Liabilities $194,600
Total Funding $350,000
Start-up
Requirements
Start-up Expenses
Legal $2,000
Stationery etc. $400
Website Development $30,000
Insurance $1,000
Rent $2,000
Marketing $120,000
Expensed Equipment $0
Other $0
Total Start-up Expenses $155,400
Start-up Assets
Cash Required $64,600
Start-up Inventory $80,000
Other Current Assets $0
Long-term Assets $50,000
Total Assets $194,600
Total Requirements $350,000

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Products

FireStarters will offer young customers the following youth-oriented products and clothing:

  • Shoes.
  • Jackets.
  • Sweaters.
  • Shirts.
  • Pants.
  • Bags.
  • Hats.
  • T-Shirts.
  • Dresses and skirts.
  • Shorts.
  • Eyewear.
  • Time pieces.
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Market Analysis Summary

According to the U.S. Census Bureau the population of teens (age 12-17), in 1999 was 23.4 million, which represents 8.6% of the total U.S. population. Teenagers influence $324 billion in spending annually, have $151 billion in disposable income, spend $24 billion annually, and will spend $1.2 billion online by 2002. Teens spend an average of $82 per week on entertainment, fashion, food, and technology. These young people dubbed “Generation Y” dominate almost all facets of popular culture and are the fastest-growing demographic under age 65. 

Specialty youth clothing and products has grown into a billion dollar niche in the clothing industry. The popularity of the Internet with young people has been well documented and has generated the launching of a number of online stores by companies selling to that market segment. Most of these stores have retail outlets in large urban areas that serve as the promotional vehicles for online shopping.

The Internet is an accessible shopping tool for our target population. 64% of teens nationwide use the Net at home. The majority of teens, 55%, consider using the Internet better than watching TV. Families with teens are more likely to have Internet access than other households.

Online shopping by teenagers between 13 to 18 years in age is expected to total about $300 million this year (2000) and is accelerating at about twice the rate of online shopping by adults. By 2003, teenagers are expected to spend $2 billion annually online. By 2004, a clear majority of young consumers will shop online. The top five purchases made by teens [online], based on sales volume, are CDs/cassette tapes, clothing, books, computer software, toys and clothing.

4.1 Market Segmentation

Over the past ten years, there has been a profound change in population dynamics in the U.S. The non-metropolitan population has been growing at almost the same rate as the urban population. The West Coast, Midwest, and the Northeast have the largest growth rate. Today, there are millions of young people who don’t live near a large urban center that offers the diversity in clothing products that the youth culture demands. This has created a small market niche for businesses to sell clothing and products to young people who live outside the urban areas. This is particularly true in communities with a major college located in the community.

Currently, only regional malls offer access to the fashion and styles that young people want. Unfortunately, the focus of these mall stores is only on the mainstream of the youth market. Alternative clothing and products are rarely available outside the urban area. This is true because the companies that create the clothing and products are small and sell primarily through urban specialty shops.

FireStarters will capitalize on the following characteristics of Generation Y:

  • Subculture Affiliation: Though rebellious, teens also want to blend in and be accepted by peers. They seek a community of peers to welcome them in, as well as help them stand out.
  • Attitude: Teenagers wear attitude like a uniform to give definition to their identity. This extends to clothing, hair style and the type of music listened to in public. They also react to humor, silliness, and irreverence more easily than to other styles.

It is FireStarters’ plan to bring alternative fashion and products to small-town America via the Internet. We will create a business identity that will capitalize on the subculture affiliation and attitude of our target customers.

FireStarters will focus marketing on two type of non-metropolitan communities:

  • Non-metropolitan communities with populations between 100,000 and 150,000 residents.
  • Non-metropolitan communities with a major college and population of at least 80,000.
E-commerce internet business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Communities (100,000 and 150,000) 10% 6,000 6,600 7,260 7,986 8,785 10.00%
Communities/College (>80,000) 10% 3,000 3,300 3,630 3,993 4,392 10.00%
Total 10.00% 9,000 9,900 10,890 11,979 13,177 10.00%

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Strategy and Implementation Summary

FireStarters’ will have a two track strategy.

  1. FireStarters will advertise in alternative magazines that are targeted at our customers and the ad rate is affordable. (For girls: Bust, Candy, Chick, and Girl magazines. For Boys: Thrashers and TransWorld.)
  2. FireStarters will also plan 15 events in select communities to raise its visibility with the target customers. The focus will be initially on the West Coast during the first year of operation. During the second year of operation, FireStarters will plan events in the Midwest and the East Coast. FireStarters will sponsor skateboard competitions and demonstrations. We will assemble groups of boy and girl skateboarders and sponsor them with the FireStarters logo. The groups will be scheduled to tour selected communities. FireStarters will sponsor the events but will also seek local businesses that target the same customer base to share the event’s sponsorship. FireStarters will book local popular alternative bands to play the event. At these events, FireStarters will distribute stickers, caps, t-shirts, and promotional material offering a 20% discount on purchases.

5.1 Competitive Edge

FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.

Another competitive factor is that products for this age group are part of a lifestyle statement. FireStarters is focused on serving youth outside the metropolitan areas. We want to represent their style and life choices. We believe that we will create a loyal customer base that will see Firestarters as part of their lives. To facilitate that connection, our website will have a chat section where our customers can share what is happening in their communities as well as comment on our products and what we should add to our product line in the future.

5.2 Sales Strategy

Sales will be flat for the first 45 days of operation. We anticipate that sales will begin at this point and increase as our marketing campaign progresses.  

5.2.1 Sales Forecast

The following is the sales forecast for three years. First year monthly sales forecast is shown in the appendix.

E-commerce internet business plan, strategy and implementation summary chart image

E-commerce internet business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Clothing $209,000 $280,000 $340,000
Shoes $131,350 $210,000 $250,000
Products $55,300 $120,000 $160,000
Total Sales $395,650 $610,000 $750,000
Direct Cost of Sales Year 1 Year 2 Year 3
Clothing $63,000 $90,000 $110,000
Shoes $25,100 $44,000 $60,000
Products $12,640 $30,000 $40,000
Subtotal Direct Cost of Sales $100,740 $164,000 $210,000

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Management Summary

Jill Stranton will manage the daily operations of FireStarters. Bobbi Hanson will be FireStarters’ buyer and will also be responsible for marketing. Jill and Bobbi have over fifteen years of experience in the retail clothing industry.

Jill has been the manager of Wild Women Clothing for five years. Wild Woman Clothing is a mail-order business that focuses on young urban women ages 18 to 35. She supervised a staff of 10 and was extremely effective in keeping the business cost effective as sales grew 50% over a two year period. Prior to her employment with Wild Woman Clothing, Jill was manager of Atomic Age Fashions, a women’s clothing shop, for three years.

Bobbi has been a buyer for Glamour Imports for the past four years. Glamour Imports sells to over 200 women’s shops nationwide and generated over 10 million in sales last year. In addition to her experience as a buyer, Bobbi was a marketing associate for Gap from 1994-1997.

6.1 Personnel Plan

FireStarters will have a staff of five:

  • Operations manager.
  • Buyer/marketing.
  • Order processor/website manager.
  • Processing staff (2).
Personnel Plan
Year 1 Year 2 Year 3
Manager $42,000 $45,000 $50,000
Buyer/Marketing $42,000 $45,000 $50,000
Order Processor/Website Manager $33,600 $36,600 $40,000
Processing Staff (2) $60,000 $66,000 $72,000
Total People 5 5 5
Total Payroll $177,600 $192,600 $212,000

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Financial Plan

The following is the financial plan for FireStarters.

7.1 Break-even Analysis

The monthly break-even point, based on forecasted monthly expenses and costs, is shown in the table and chart below.

E-commerce internet business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $27,657
Assumptions:
Average Percent Variable Cost 25%
Estimated Monthly Fixed Cost $20,615

7.2 Projected Profit and Loss

The following table and charts present the projected profit and loss for three years. First year monthlies are in the appendix.

E-commerce internet business plan, financial plan chart image

E-commerce internet business plan, financial plan chart image

E-commerce internet business plan, financial plan chart image

E-commerce internet business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $395,650 $610,000 $750,000
Direct Cost of Sales $100,740 $164,000 $210,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $100,740 $164,000 $210,000
Gross Margin $294,910 $446,000 $540,000
Gross Margin % 74.54% 73.11% 72.00%
Expenses
Payroll $177,600 $192,600 $212,000
Sales and Marketing and Other Expenses $0 $130,000 $150,000
Depreciation $7,140 $7,140 $7,140
Leased Equipment $0 $0 $0
Utilities $6,000 $6,000 $6,000
Insurance $6,000 $6,000 $6,000
Rent $24,000 $24,000 $24,000
Payroll Taxes $26,640 $28,890 $31,800
Other $0 $0 $0
Total Operating Expenses $247,380 $394,630 $436,940
Profit Before Interest and Taxes $47,530 $51,370 $103,060
EBITDA $54,670 $58,510 $110,200
Interest Expense $13,830 $12,750 $12,570
Taxes Incurred $10,110 $11,586 $27,147
Net Profit $23,590 $27,034 $63,343
Net Profit/Sales 5.96% 4.43% 8.45%

7.3 Projected Cash Flow

The following table and chart is detail the projected cash flow for three years. The appendices include first year cash flow monthly estimates.

E-commerce internet business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $395,650 $610,000 $750,000
Subtotal Cash from Operations $395,650 $610,000 $750,000
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 $0 $0 $0
Subtotal Cash Received $395,650 $610,000 $750,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $177,600 $192,600 $212,000
Bill Payments $103,957 $364,975 $463,540
Subtotal Spent on Operations $281,557 $557,575 $675,540
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 $21,600 $1,800 $1,800
Purchase Other Current Assets $19,800 $19,800 $19,800
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $322,957 $579,175 $697,140
Net Cash Flow $72,693 $30,825 $52,860
Cash Balance $137,293 $168,118 $220,978

7.4 Projected Balance Sheet

The following table shows the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $137,293 $168,118 $220,978
Inventory $6,270 $10,207 $13,070
Other Current Assets $19,800 $39,600 $59,400
Total Current Assets $163,363 $217,926 $293,448
Long-term Assets
Long-term Assets $50,000 $50,000 $50,000
Accumulated Depreciation $7,140 $14,280 $21,420
Total Long-term Assets $42,860 $35,720 $28,580
Total Assets $206,223 $253,646 $322,028
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $9,633 $31,822 $38,661
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $9,633 $31,822 $38,661
Long-term Liabilities $128,400 $126,600 $124,800
Total Liabilities $138,033 $158,422 $163,461
Paid-in Capital $200,000 $200,000 $200,000
Retained Earnings ($155,400) ($131,810) ($104,776)
Earnings $23,590 $27,034 $63,343
Total Capital $68,190 $95,224 $158,567
Total Liabilities and Capital $206,223 $253,646 $322,028
Net Worth $68,190 $95,224 $158,567

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the NAICS code 454111, Electronic Shopping, a subcategory of the Retail Trade, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 54.18% 22.95% 7.56%
Percent of Total Assets
Inventory 3.04% 4.02% 4.06% 37.60%
Other Current Assets 9.60% 15.61% 18.45% 29.04%
Total Current Assets 79.22% 85.92% 91.13% 78.59%
Long-term Assets 20.78% 14.08% 8.87% 21.41%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 4.67% 12.55% 12.01% 38.50%
Long-term Liabilities 62.26% 49.91% 38.75% 19.42%
Total Liabilities 66.93% 62.46% 50.76% 57.92%
Net Worth 33.07% 37.54% 49.24% 42.08%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 74.54% 73.11% 72.00% 34.85%
Selling, General & Administrative Expenses 68.58% 68.68% 63.55% 16.95%
Advertising Expenses 0.00% 21.31% 20.00% 2.50%
Profit Before Interest and Taxes 12.01% 8.42% 13.74% 1.10%
Main Ratios
Current 16.96 6.85 7.59 1.79
Quick 16.31 6.53 7.25 0.70
Total Debt to Total Assets 66.93% 62.46% 50.76% 65.04%
Pre-tax Return on Net Worth 49.42% 40.56% 57.07% 2.65%
Pre-tax Return on Assets 16.34% 15.23% 28.10% 7.59%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 5.96% 4.43% 8.45% n.a
Return on Equity 34.59% 28.39% 39.95% n.a
Activity Ratios
Inventory Turnover 2.45 19.91 18.04 n.a
Accounts Payable Turnover 11.79 12.17 12.17 n.a
Payment Days 27 20 27 n.a
Total Asset Turnover 1.92 2.40 2.33 n.a
Debt Ratios
Debt to Net Worth 2.02 1.66 1.03 n.a
Current Liab. to Liab. 0.07 0.20 0.24 n.a
Liquidity Ratios
Net Working Capital $153,730 $186,104 $254,787 n.a
Interest Coverage 3.44 4.03 8.20 n.a
Additional Ratios
Assets to Sales 0.52 0.42 0.43 n.a
Current Debt/Total Assets 5% 13% 12% n.a
Acid Test 16.31 6.53 7.25 n.a
Sales/Net Worth 5.80 6.41 4.73 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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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
Clothing 0% $0 $8,000 $10,000 $21,000 $24,000 $26,000 $17,000 $25,000 $30,000 $30,000 $10,000 $8,000
Shoes 0% $0 $3,000 $3,350 $5,000 $8,000 $11,000 $14,000 $16,000 $24,000 $25,000 $10,000 $12,000
Products 0% $0 $1,500 $1,800 $2,000 $4,000 $6,000 $5,000 $7,000 $13,000 $4,000 $5,000 $6,000
Total Sales $0 $12,500 $15,150 $28,000 $36,000 $43,000 $36,000 $48,000 $67,000 $59,000 $25,000 $26,000
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
Clothing $0 $3,000 $4,000 $5,000 $6,000 $7,000 $5,000 $7,000 $10,000 $10,000 $4,000 $2,000
Shoes $0 $1,000 $1,200 $1,000 $1,500 $2,000 $3,000 $4,000 $5,200 $2,000 $2,000 $2,200
Products $0 $400 $500 $600 $1,000 $1,500 $1,250 $1,800 $2,000 $890 $1,200 $1,500
Subtotal Direct Cost of Sales $0 $4,400 $5,700 $6,600 $8,500 $10,500 $9,250 $12,800 $17,200 $12,890 $7,200 $5,700
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
Manager 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Buyer/Marketing 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Order Processor/Website Manager 0% $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800
Processing Staff (2) 0% $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Total People 5 5 5 5 5 5 5 5 5 5 5 5
Total Payroll $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800

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 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
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% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

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 $0 $12,500 $15,150 $28,000 $36,000 $43,000 $36,000 $48,000 $67,000 $59,000 $25,000 $26,000
Direct Cost of Sales $0 $4,400 $5,700 $6,600 $8,500 $10,500 $9,250 $12,800 $17,200 $12,890 $7,200 $5,700
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $4,400 $5,700 $6,600 $8,500 $10,500 $9,250 $12,800 $17,200 $12,890 $7,200 $5,700
Gross Margin $0 $8,100 $9,450 $21,400 $27,500 $32,500 $26,750 $35,200 $49,800 $46,110 $17,800 $20,300
Gross Margin % 0.00% 64.80% 62.38% 76.43% 76.39% 75.58% 74.31% 73.33% 74.33% 78.15% 71.20% 78.08%
Expenses
Payroll $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800
Sales and Marketing and Other Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Depreciation $595 $595 $595 $595 $595 $595 $595 $595 $595 $595 $595 $595
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Insurance $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Payroll Taxes 15% $2,220 $2,220 $2,220 $2,220 $2,220 $2,220 $2,220 $2,220 $2,220 $2,220 $2,220 $2,220
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $20,615 $20,615 $20,615 $20,615 $20,615 $20,615 $20,615 $20,615 $20,615 $20,615 $20,615 $20,615
Profit Before Interest and Taxes ($20,615) ($12,515) ($11,165) $785 $6,885 $11,885 $6,135 $14,585 $29,185 $25,495 ($2,815) ($315)
EBITDA ($20,020) ($11,920) ($10,570) $1,380 $7,480 $12,480 $6,730 $15,180 $29,780 $26,090 ($2,220) $280
Interest Expense $1,235 $1,220 $1,205 $1,190 $1,175 $1,160 $1,145 $1,130 $1,115 $1,100 $1,085 $1,070
Taxes Incurred ($6,555) ($4,121) ($3,711) ($122) $1,713 $3,218 $1,497 $4,037 $8,421 $7,319 ($1,170) ($416)
Net Profit ($15,295) ($9,615) ($8,659) ($284) $3,997 $7,508 $3,493 $9,419 $19,649 $17,077 ($2,730) ($970)
Net Profit/Sales 0.00% -76.92% -57.16% -1.01% 11.10% 17.46% 9.70% 19.62% 29.33% 28.94% -10.92% -3.73%

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 $12,500 $15,150 $28,000 $36,000 $43,000 $36,000 $48,000 $67,000 $59,000 $25,000 $26,000
Subtotal Cash from Operations $0 $12,500 $15,150 $28,000 $36,000 $43,000 $36,000 $48,000 $67,000 $59,000 $25,000 $26,000
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 $0 $0 $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 $0 $12,500 $15,150 $28,000 $36,000 $43,000 $36,000 $48,000 $67,000 $59,000 $25,000 $26,000
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 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800 $14,800
Bill Payments ($100) ($19) $2,333 $2,833 $6,349 $8,158 $9,540 $7,946 $10,994 $28,398 $21,266 $6,259
Subtotal Spent on Operations $14,700 $14,781 $17,133 $17,633 $21,149 $22,958 $24,340 $22,746 $25,794 $43,198 $36,066 $21,059
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 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Purchase Other Current Assets $0 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
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 $16,500 $18,381 $20,733 $21,233 $24,749 $26,558 $27,940 $26,346 $29,394 $46,798 $39,666 $24,659
Net Cash Flow ($16,500) ($5,881) ($5,583) $6,767 $11,251 $16,442 $8,060 $21,654 $37,606 $12,202 ($14,666) $1,341
Cash Balance $48,100 $42,219 $36,637 $43,404 $54,654 $71,097 $79,157 $100,811 $138,416 $150,618 $135,953 $137,293
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 $64,600 $48,100 $42,219 $36,637 $43,404 $54,654 $71,097 $79,157 $100,811 $138,416 $150,618 $135,953 $137,293
Inventory $80,000 $80,000 $75,600 $69,900 $63,300 $54,800 $44,300 $35,050 $22,250 $18,920 $14,179 $7,979 $6,270
Other Current Assets $0 $0 $1,800 $3,600 $5,400 $7,200 $9,000 $10,800 $12,600 $14,400 $16,200 $18,000 $19,800
Total Current Assets $144,600 $128,100 $119,619 $110,137 $112,104 $116,654 $124,397 $125,007 $135,661 $171,736 $180,997 $161,932 $163,363
Long-term Assets
Long-term Assets $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
Accumulated Depreciation $0 $595 $1,190 $1,785 $2,380 $2,975 $3,570 $4,165 $4,760 $5,355 $5,950 $6,545 $7,140
Total Long-term Assets $50,000 $49,405 $48,810 $48,215 $47,620 $47,025 $46,430 $45,835 $45,240 $44,645 $44,050 $43,455 $42,860
Total Assets $194,600 $177,505 $168,429 $158,352 $159,724 $163,679 $170,827 $170,842 $180,901 $216,381 $225,047 $205,387 $206,223
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 $0 $2,339 $2,720 $6,176 $7,934 $9,374 $7,697 $10,137 $27,768 $21,158 $6,027 $9,633
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $0 $2,339 $2,720 $6,176 $7,934 $9,374 $7,697 $10,137 $27,768 $21,158 $6,027 $9,633
Long-term Liabilities $150,000 $148,200 $146,400 $144,600 $142,800 $141,000 $139,200 $137,400 $135,600 $133,800 $132,000 $130,200 $128,400
Total Liabilities $150,000 $148,200 $148,739 $147,320 $148,976 $148,934 $148,574 $145,097 $145,737 $161,568 $153,158 $136,227 $138,033
Paid-in Capital $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000
Retained Earnings ($155,400) ($155,400) ($155,400) ($155,400) ($155,400) ($155,400) ($155,400) ($155,400) ($155,400) ($155,400) ($155,400) ($155,400) ($155,400)
Earnings $0 ($15,295) ($24,910) ($33,569) ($33,852) ($29,855) ($22,348) ($18,855) ($9,436) $10,213 $27,290 $24,560 $23,590
Total Capital $44,600 $29,305 $19,691 $11,032 $10,748 $14,745 $22,253 $25,746 $35,164 $54,813 $71,890 $69,160 $68,190
Total Liabilities and Capital $194,600 $177,505 $168,429 $158,352 $159,724 $163,679 $170,827 $170,842 $180,901 $216,381 $225,047 $205,387 $206,223
Net Worth $44,600 $29,305 $19,691 $11,032 $10,748 $14,745 $22,253 $25,746 $35,164 $54,813 $71,890 $69,160 $68,190

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