Internet Media Advertising Business Plan

The business of Truckbay does not require substantial outlays for inventory and all sales are on a cash basis, so increases in sales will not be accompanied by initial cash-flow deficits. Once the new listing services are put in place, we expect rapid growth through aggressive, proactive selling by our commissioned sales team. Our financial plan is dependent upon a major change in focus and marketing, to switch from a dealer-based network to a retail one. It also relies on increasing our accessibility with a network of 10 related websites, all driving traffic to the main paid listings. With the advice of Mr. Y and Mr. X, we are confident that we can turn around the financial history of the company, to create a very profitable business. The financial projections are as follows.

8.1 Valuation

We understand that an investor’s concern is to recoup his investment with a high profit in a short period of time.  Based on the experience of Company X, and with the help of its founders, we conservatively estimate an earnings-based valuation of $5,500,000 for Truckbay in 2007. For an investor contributing $475,000 now, that works out to an ending valuation of  $1,043,000, with an IRR of 109%. This valuation is based on an exit strategy of selling the company within 3-5 years to a related corporation (such as eBay). Details of the Investment Analysis can be found below.

8.2 Important Assumptions

NOTES FOR PROJECTIONS
All sales projections/assumptions are based on historical data referenced from the first three years of Company X.

Other Assumptions:

1. We can find adequate office space to rent below $11 per square foot – full service in the Atlanta market.
2. We can recruit a highly skilled Web Developer for $78,000 salary plus bonus incentives.
3. The website development is completed by March 1, 2005.
4. Truckbay’s success will be based on the participation level of Mr. Y and Mr. Z.

8.3 Break-even Analysis

The following table shows the break-even analysis for Truckbay’s new websites and sales strategy. The table shows that we need to sell roughly $29,000 of listings each month to break even in the next year. Truckbay will reach its break-even point in April.

8.4 Projected Profit and Loss

The following table and charts shows our projected Profit and Loss for the next three years. Monthly details can be found in the Appendix. Our sales team salaries are counted as part of our direct cost of sales, for the purpose of calculating our gross margin.

8.5 Projected Cash Flow

The cash flow projection shows that provisions for ongoing expenses are adequate to meet the needs of the company as the business generates sufficient cash flow to support operations.  We will collect all fees up front from our customers and pay commissions at the end of each month.

8.6 Projected Balance Sheet

The following table shows our projected Balance Sheet. We plan to repay our current credit card debt within two years. With the help help of Company X’s founders, we should increase the net worth of the business significantly over the next three years.

8.7 Business Ratios

Truckbay’s ratios can be seen in the table below. For comparison, we have included standard business ratios for the Electronic media advertising representatives industry, SIC Code 7313.01.