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Vehicle Rental icon Mopeds Rental Business Plan

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University Mopeds

Executive Summary

There is a possibility for an exciting and profitable new business in Eugene, Oregon. University Mopeds will to rent mopeds to University of Oregon students, as well as anyone who would have a need for efficient, around-town transportation. There is currently no business like this, in Eugene, which caters to this market.

For slightly more than the cost of a monthly cellular phone bill, it is possible for a student to have their own mode of transportation during the school year. Mopeds have many positive advantages over cars: lower operating costs, fuel efficiency, and are less costly to maintain. It is also possible to insure these vehicles for around $30-$50 per year.

The target market for this business would be the approximately 15,000 full-time students. There are also thousands of students who are commuting daily from the Autzen Field area. Parking on campus is hard to find, and the bus offers few options. This is where the economical moped comes into play.

Many students do not have the disposable income that it takes to purchase a moped, but they are in a position to pay $50 per month to rent one. University Mopeds would purchase used mopeds for $400-$700 and lease them out.   The average moped would be paid off in under one year.

In year one, University Moped would attempt to get 1% of all full-time students. This would equate to 150 mopeds rented. We expect the five year growth rate to be at least 15%.

Assuming an average purchase price of $550, and a ten month rental contract at $50 per month, it is possible for University Mopeds to be profitable in year two.

Mopeds rental business plan, executive summary chart image

1.1 Objectives

  1. Rent 150 units in year one.
  2. University Mopeds will be fully self-sufficient and profitable by year three.
  3. Rent at least 199 units by year three and 263 units by year five (15% annual growth rate).

1.2 Mission

University Mopeds will service the student first. At University Mopeds, clients will be able to rent a quality means of transportation at a fair price. University Mopeds will also be a profitable business which will treat employees fairly and provide financially for its owners.

1.3 Keys to Success

  1. Good customer service and value.
  2. Affordable rental prices.
  3. Reaching the target market.
  4. Integrity in serving our customers; resulting in repeat purchases.
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Company Summary

University Mopeds will rent mopeds to University of Oregon students, as well as others who would have a need. There is currently no business like this, in Eugene, which caters to this market. For slightly more than the cost of a monthly cellular phone bill, it is possible for a student to have their own mode of transportation that is fairly inexpensive. The target market for this business would be the approximately 15,000 full-time U of O students.

There are thousands of students who are commuting daily from the Autzen Field area. Parking on campus is hard to find, and the bus offers few options. This is where the economical moped comes into play. Many students do not have the disposable income that it takes to purchase a moped, but they are in a position to pay $50 per month to rent. Assuming an average purchase price of $550, and a ten month rental at $50 per month, it is possible for University Mopeds to be profitable in year two.

2.1 Start-up Summary

This company will be funded by Matthew Cavanaugh. The majority of the funding will come from private savings and local investors, plus loans backed by starting assets. The cost of the start-up, including inventory, legal expenses, and advertising, will total $100,000. We anticipate that this company will start generating immediate cash flow.

Mopeds rental business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Legal $500
Stationery etc. $150
Brochures $0
Consultants $0
Insurance $500
Rent $1,000
Research and development $750
Expensed equipment $1,500
Other $0
Total Start-up Expenses $4,400
Start-up Assets
Cash Required $33,100
Start-up Inventory $82,500
Other Current Assets $50,000
Long-term Assets $300,000
Total Assets $465,600
Total Requirements $470,000
Start-up Funding
Start-up Expenses to Fund $4,400
Start-up Assets to Fund $465,600
Total Funding Required $470,000
Assets
Non-cash Assets from Start-up $432,500
Cash Requirements from Start-up $33,100
Additional Cash Raised $0
Cash Balance on Starting Date $33,100
Total Assets $465,600
Liabilities and Capital
Liabilities
Current Borrowing $40,000
Long-term Liabilities $300,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $340,000
Capital
Planned Investment
Investor 1 $100,000
Investor 2 $10,000
Other $20,000
Additional Investment Requirement $0
Total Planned Investment $130,000
Loss at Start-up (Start-up Expenses) ($4,400)
Total Capital $125,600
Total Capital and Liabilities $465,600
Total Funding $470,000

2.2 Company Ownership

The official name of this company will be University Mopeds, Incorporated. It will be an S corporation. The reason that the company will incorporate will be for tax advantages and to decrease liability.

2.3 Company Locations and Facilities

The company will be located in Eugene, Oregon. This location is ideal because of the need for inexpensive transportation by the large student population. If University Mopeds is successful, which we believe that it will be, other locations will be opened at various other university towns.

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Services

The main service that this company will provide will be to rent mopeds on a monthly basis. In addition to this, the company’s secondary services will include such things as moped safety classes and accessories.

3.1 Competitive Comparison

There are currently no other competitors in this market. The only competition that University Mopeds expects will be from public transportation and automobiles. This is a separate segment and does not offer the freedom and price flexibility that University Mopeds offers.

3.2 Sales Literature

The only sales literature that University Mopeds will distribute will be via newspaper publications. We have no plans for a direct mailing plan, although one is possible in the future.

3.3 Future Services

It is possible for University Mopeds to expand into the electric vehicle market in the future if it becomes a feasible transportation alternative. We believe that this will be positive for us because we already will have an established customer base who is interested in low cost or environment friendly transportation alternatives.

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Market Analysis Summary

We see this market as mainly made up of university students. Since a majority live close to the campus (within five miles) and have a limited budget, this will be a good option for them. We also anticipate getting a small amount of customers that are outside of the university community. These customers would be ones who typically have a shorter commute or want a change of pace.

4.1 Market Segmentation

The following chart and table show the market analysis figures for University Mopeds.

Mopeds rental business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
University of Oregon Students 10% 135 149 164 180 198 10.05%
University Professors and Faculty 10% 10 11 12 13 14 8.78%
Lane County Residents 2% 10 10 10 10 10 0.00%
Total 9.40% 155 170 186 203 222 9.40%

4.2 Market Growth

We anticipate that this market will grow in two ways. First, it will grow will be as gas prices continue to increase. This will make the cost of driving an automobile even more expensive and University Mopeds a more attractive option. Second, it will grow with the University. As the number of students increases, so will the target market and the number of students who are interested in our product.

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Strategy and Implementation Summary

The following sections will outline the Strategy and Implementation plan for University Mopeds.

5.1 Marketing Strategy

The main marketing strategy that we will pursue will be to make potential customers aware of us via campus publications. We will advertise in such things as the Daily Emerald, Register-Guard, UO Student phonebook and the Greek directory.

5.1.1 Distribution Strategy

The method of distribution for this business would be to rent mopeds directly out of the shop. As far as getting the mopeds to Eugene, the main method would be to use a freight shipper such as UPS.

5.1.2 Marketing Programs

In order for University Mopeds to reach both the three and five year goals, one of the things that must happen is to get the idea of a moped as an acceptable means of transportation accepted. People must see others on mopeds around campus as well as the presence of advertising.

5.1.3 Pricing Strategy

We will price our products at a level that is affordable for the student and that provides financial substinence for the company and its owners. The mopeds will be priced at a rate of $50.00 per month. A discount will be offered to those who sign up for a school year lease (10 months). The accessories will be offered above cost, but at a reasonable level.

5.1.4 Promotion Strategy

This business will be successful only if the target market knows about University Mopeds and how affordable a moped rental can be. University Mopeds will advertise in the Daily Emerald. Another good source of advertising, which is also relatively inexpensive, would be in the Greek Directory. We would also try, at some point, some promotions such as free moped rental contests and free safety courses.

5.2 Sales Strategy

Since the main part of the business will come from customers ready to rent, there will not have to be much direct selling. We will use knowledgeable sales people to assist any customers who have doubts regarding renting a moped. The sales staff will know the benefits of the moped and explain this to the potential customer. Some customers will worry about the safety and whether or not they can ride a moped with no experience. We will service this customer with safety and instructional classes.

5.2.1 Sales Forecast

We predict that there will be variation in monthly sales forecasts, but we expect to reach 450 units in the first school year of operation. The variation will be due to lower sales when school is out of session.

Mopeds rental business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Moped Rentals 3,533 4,500 5,000
Moped Accessories 7,066 9,000 10,000
Other 10,599 13,500 15,000
Total Unit Sales 21,198 27,000 30,000
Unit Prices Year 1 Year 2 Year 3
Moped Rentals $50.00 $50.00 $50.00
Moped Accessories $35.00 $35.00 $35.00
Other $5.00 $5.00 $5.00
Sales
Moped Rentals $176,650 $225,000 $250,000
Moped Accessories $247,310 $315,000 $350,000
Other $52,995 $67,500 $75,000
Total Sales $476,955 $607,500 $675,000
Direct Unit Costs Year 1 Year 2 Year 3
Moped Rentals $5.00 $10.00 $11.00
Moped Accessories $11.00 $25.00 $25.00
Other $2.00 $2.00 $2.00
Direct Cost of Sales
Moped Rentals $17,665 $45,000 $55,000
Moped Accessories $77,726 $225,000 $250,000
Other $21,198 $27,000 $30,000
Subtotal Direct Cost of Sales $116,589 $297,000 $335,000

5.3 Milestones

In order for University Mopeds to be successful, we must have attainable goals for the business. When looking to the future and for growing the business, we can look at these goals and milestones as an indicator of where the company has been, is going, and the path that it is taking. They can guide the future of the business. These are detailed in the Milestones section.

Milestones
Milestone Start Date End Date Budget Manager Department
Open Shop For Business 7/1/2001 7/1/2000 $1,500 M. Cavanaugh Management
Rent first moped 8/1/2001 8/1/2001 $50 Owner Management
Average 150 units per month 6/15/2002 6/15/2002 $0 Sales Staff Sales
Be debt free 7/1/2004 7/1/2004 $87,500 M. Cavanaugh Management
Totals $89,050

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Management Summary

As this is a small business, there will be no real management structure except for the owner. He will run the business on a daily basis and oversee all facets of the operation. Assisting him will be various employees who will work the shop. An on-duty mechanic will also be on duty some 20 hours per week.

6.1 Personnel Plan

Our personnel assumptions are based on a shop employee working 40 hours per week at $7.00 per hour. The mechanic will work approximately 20 hours per week at $15.00 per hour. As the number of moped rentals increases, the mechanics weekly hours will increase. The owner will also fill in and oversee the business. The owner salaries with not be drawn until the business is profitable and all investments have been paid back in full.

Personnel Plan
Year 1 Year 2 Year 3
Shop Help $24,000 $26,400 $29,040
Mechanics $18,000 $19,800 $21,780
Management $30,000 $33,000 $36,300
Other $3,000 $3,300 $3,630
Total People 4 4 5
Total Payroll $75,000 $82,500 $90,750

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Financial Plan

All of the monies necessary for the start-up of this business will come from the owners. It will be entirely self-financed. The owners will not draw a salary, but will receive payments for their investments as University Mopeds generates cash flow.

7.1 Important Assumptions

The following table outlines the general assumptions for University Mopeds.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 8.50% 8.50% 8.50%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

7.2 Key Financial Indicators

The following chart gives the benchmarks planned for University Mopeds.

Mopeds rental business plan, financial plan chart image

7.3 Break-even Analysis

The following chart and table outline the Break-even Analysis.

Mopeds rental business plan, financial plan chart image

Break-even Analysis
Monthly Units Break-even 1,053
Monthly Revenue Break-even $23,686
Assumptions:
Average Per-Unit Revenue $22.50
Average Per-Unit Variable Cost $5.50
Estimated Monthly Fixed Cost $17,896

7.4 Projected Profit and Loss

The following table shows the projected Profit and Loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $476,955 $607,500 $675,000
Direct Cost of Sales $116,589 $297,000 $335,000
Other $0 $0 $0
Total Cost of Sales $116,589 $297,000 $335,000
Gross Margin $360,366 $310,500 $340,000
Gross Margin % 75.56% 51.11% 50.37%
Expenses
Payroll $75,000 $82,500 $90,750
Sales and Marketing and Other Expenses $900 $1,100 $1,300
Depreciation $100,000 $100,000 $100,000
Leased Equipment $600 $600 $600
Utilities $600 $650 $700
Insurance $2,400 $2,800 $3,200
Rent $24,000 $28,000 $30,000
Payroll Taxes $11,250 $12,375 $13,613
Other $0 $0 $0
Total Operating Expenses $214,750 $228,025 $240,163
Profit Before Interest and Taxes $145,616 $82,475 $99,838
EBITDA $245,616 $182,475 $199,838
Interest Expense $28,596 $24,876 $21,011
Taxes Incurred $35,106 $17,280 $23,648
Net Profit $81,914 $40,319 $55,178
Net Profit/Sales 17.17% 6.64% 8.17%

7.5 Projected Cash Flow

The following chart and table are the projected Cash Flow.

Mopeds rental business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $476,955 $607,500 $675,000
Subtotal Cash from Operations $476,955 $607,500 $675,000
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 $476,955 $607,500 $675,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $75,000 $82,500 $90,750
Bill Payments $142,534 $360,154 $427,552
Subtotal Spent on Operations $217,534 $442,654 $518,302
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $40,000 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $19,898 $21,941 $21,941
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $100,000 $100,000
Dividends $0 $0 $0
Subtotal Cash Spent $237,432 $604,596 $640,243
Net Cash Flow $239,523 $2,904 $34,757
Cash Balance $272,623 $275,527 $310,285

7.6 Projected Balance Sheet

The Balance Sheet table follows.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $272,623 $275,527 $310,285
Inventory $4,993 $12,719 $14,347
Other Current Assets $50,000 $50,000 $50,000
Total Current Assets $327,616 $338,247 $374,631
Long-term Assets
Long-term Assets $300,000 $400,000 $500,000
Accumulated Depreciation $100,000 $200,000 $300,000
Total Long-term Assets $200,000 $200,000 $200,000
Total Assets $527,616 $538,247 $574,631
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $0 $32,253 $35,400
Current Borrowing $40,000 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $40,000 $32,253 $35,400
Long-term Liabilities $280,102 $258,161 $236,219
Total Liabilities $320,102 $290,413 $271,619
Paid-in Capital $130,000 $130,000 $130,000
Retained Earnings ($4,400) $77,514 $117,833
Earnings $81,914 $40,319 $55,178
Total Capital $207,514 $247,833 $303,012
Total Liabilities and Capital $527,616 $538,247 $574,631
Net Worth $207,514 $247,833 $303,012

7.7 Business Ratios

The standard ratios shown are for SIC code 7359, other nonclassified rental businesses.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 27.37% 11.11% 7.90%
Percent of Total Assets
Inventory 0.95% 2.36% 2.50% 3.40%
Other Current Assets 9.48% 9.29% 8.70% 45.10%
Total Current Assets 62.09% 62.84% 65.20% 74.30%
Long-term Assets 37.91% 37.16% 34.80% 25.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 7.58% 5.99% 6.16% 42.00%
Long-term Liabilities 53.09% 47.96% 41.11% 15.70%
Total Liabilities 60.67% 53.96% 47.27% 57.70%
Net Worth 39.33% 46.04% 52.73% 42.30%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 75.56% 51.11% 50.37% 0.00%
Selling, General & Administrative Expenses 57.15% 44.00% 41.61% 82.90%
Advertising Expenses 0.19% 0.18% 0.19% 1.00%
Profit Before Interest and Taxes 30.53% 13.58% 14.79% 2.60%
Main Ratios
Current 8.19 10.49 10.58 1.68
Quick 8.07 10.09 10.18 1.33
Total Debt to Total Assets 60.67% 53.96% 47.27% 57.70%
Pre-tax Return on Net Worth 56.39% 23.24% 26.01% 4.80%
Pre-tax Return on Assets 22.18% 10.70% 13.72% 11.40%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 17.17% 6.64% 8.17% n.a
Return on Equity 39.47% 16.27% 18.21% n.a
Activity Ratios
Inventory Turnover 3.69 33.54 24.75 n.a
Accounts Payable Turnover 0.00 12.17 12.17 n.a
Payment Days 32 15 29 n.a
Total Asset Turnover 0.90 1.13 1.17 n.a
Debt Ratios
Debt to Net Worth 1.54 1.17 0.90 n.a
Current Liab. to Liab. 0.12 0.11 0.13 n.a
Liquidity Ratios
Net Working Capital $287,616 $305,994 $339,231 n.a
Interest Coverage 5.09 3.32 4.75 n.a
Additional Ratios
Assets to Sales 1.11 0.89 0.85 n.a
Current Debt/Total Assets 8% 6% 6% n.a
Acid Test 8.07 10.09 10.18 n.a
Sales/Net Worth 2.30 2.45 2.23 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
Unit Sales
Moped Rentals 0% 25 285 354 414 436 356 454 376 324 300 161 48
Moped Accessories 0% 50 570 708 828 872 712 908 752 648 600 322 96
Other 0% 75 855 1,062 1,242 1,308 1,068 1,362 1,128 972 900 483 144
Total Unit Sales 150 1,710 2,124 2,484 2,616 2,136 2,724 2,256 1,944 1,800 966 288
Unit Prices Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Moped Rentals $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00
Moped Accessories $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00
Other $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00
Sales
Moped Rentals $1,250 $14,250 $17,700 $20,700 $21,800 $17,800 $22,700 $18,800 $16,200 $15,000 $8,050 $2,400
Moped Accessories $1,750 $19,950 $24,780 $28,980 $30,520 $24,920 $31,780 $26,320 $22,680 $21,000 $11,270 $3,360
Other $375 $4,275 $5,310 $6,210 $6,540 $5,340 $6,810 $5,640 $4,860 $4,500 $2,415 $720
Total Sales $3,375 $38,475 $47,790 $55,890 $58,860 $48,060 $61,290 $50,760 $43,740 $40,500 $21,735 $6,480
Direct Unit Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Moped Rentals 0.00% $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00
Moped Accessories 0.00% $11.00 $11.00 $11.00 $11.00 $11.00 $11.00 $11.00 $11.00 $11.00 $11.00 $11.00 $11.00
Other 0.00% $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00
Direct Cost of Sales
Moped Rentals $125 $1,425 $1,770 $2,070 $2,180 $1,780 $2,270 $1,880 $1,620 $1,500 $805 $240
Moped Accessories $550 $6,270 $7,788 $9,108 $9,592 $7,832 $9,988 $8,272 $7,128 $6,600 $3,542 $1,056
Other $150 $1,710 $2,124 $2,484 $2,616 $2,136 $2,724 $2,256 $1,944 $1,800 $966 $288
Subtotal Direct Cost of Sales $825 $9,405 $11,682 $13,662 $14,388 $11,748 $14,982 $12,408 $10,692 $9,900 $5,313 $1,584
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
Shop Help 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Mechanics 0% $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Management 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Other 0% $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
Total People 4 4 4 4 4 4 4 4 4 4 4 4
Total Payroll $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250

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 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 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%
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 $3,375 $38,475 $47,790 $55,890 $58,860 $48,060 $61,290 $50,760 $43,740 $40,500 $21,735 $6,480
Direct Cost of Sales $825 $9,405 $11,682 $13,662 $14,388 $11,748 $14,982 $12,408 $10,692 $9,900 $5,313 $1,584
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $825 $9,405 $11,682 $13,662 $14,388 $11,748 $14,982 $12,408 $10,692 $9,900 $5,313 $1,584
Gross Margin $2,550 $29,070 $36,108 $42,228 $44,472 $36,312 $46,308 $38,352 $33,048 $30,600 $16,422 $4,896
Gross Margin % 75.56% 75.56% 75.56% 75.56% 75.56% 75.56% 75.56% 75.56% 75.56% 75.56% 75.56% 75.56%
Expenses
Payroll $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250
Sales and Marketing and Other Expenses $500 $200 $200 $0 $0 $0 $0 $0 $0 $0 $0 $0
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $100,000
Leased Equipment $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Utilities $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
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% $938 $938 $938 $938 $938 $938 $938 $938 $938 $938 $938 $938
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $9,988 $9,688 $9,688 $9,488 $9,488 $9,488 $9,488 $9,488 $9,488 $9,488 $9,488 $109,488
Profit Before Interest and Taxes ($7,438) $19,383 $26,421 $32,741 $34,985 $26,825 $36,821 $28,865 $23,561 $21,113 $6,935 ($104,592)
EBITDA ($7,438) $19,383 $26,421 $32,741 $34,985 $26,825 $36,821 $28,865 $23,561 $21,113 $6,935 ($4,592)
Interest Expense $2,447 $2,436 $2,424 $2,413 $2,401 $2,389 $2,378 $2,366 $2,354 $2,342 $2,330 $2,317
Taxes Incurred ($2,965) $5,084 $7,199 $9,098 $9,775 $7,331 $10,333 $7,950 $6,362 $5,631 $1,381 ($32,073)
Net Profit ($6,919) $11,863 $16,797 $21,229 $22,808 $17,105 $24,110 $18,549 $14,845 $13,140 $3,223 ($74,836)
Net Profit/Sales -205.01% 30.83% 35.15% 37.98% 38.75% 35.59% 39.34% 36.54% 33.94% 32.44% 14.83% -1154.88%

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 $3,375 $38,475 $47,790 $55,890 $58,860 $48,060 $61,290 $50,760 $43,740 $40,500 $21,735 $6,480
Subtotal Cash from Operations $3,375 $38,475 $47,790 $55,890 $58,860 $48,060 $61,290 $50,760 $43,740 $40,500 $21,735 $6,480
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 $3,375 $38,475 $47,790 $55,890 $58,860 $48,060 $61,290 $50,760 $43,740 $40,500 $21,735 $6,480
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 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250
Bill Payments $107 $3,477 $11,027 $13,117 $14,771 $15,332 $13,413 $26,504 $23,050 $20,740 $19,830 ($18,834)
Subtotal Spent on Operations $6,357 $9,727 $17,277 $19,367 $21,021 $21,582 $19,663 $32,754 $29,300 $26,990 $26,080 ($12,584)
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 $1,595 $1,606 $1,617 $1,629 $1,640 $1,652 $1,664 $1,675 $1,687 $1,699 $1,711 $1,723
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 $7,952 $11,333 $18,895 $20,996 $22,661 $23,234 $21,326 $34,429 $30,988 $28,690 $27,791 ($10,861)
Net Cash Flow ($4,577) $27,142 $28,895 $34,894 $36,199 $24,826 $39,964 $16,331 $12,752 $11,810 ($6,056) $17,341
Cash Balance $28,523 $55,665 $84,561 $119,455 $155,654 $180,481 $220,444 $236,775 $249,527 $261,338 $255,282 $272,623
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 $33,100 $28,523 $55,665 $84,561 $119,455 $155,654 $180,481 $220,444 $236,775 $249,527 $261,338 $255,282 $272,623
Inventory $82,500 $81,675 $72,270 $60,588 $46,926 $32,538 $20,790 $16,480 $13,649 $11,761 $10,890 $6,577 $4,993
Other Current 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
Total Current Assets $165,600 $160,198 $177,935 $195,149 $216,381 $238,192 $251,271 $286,924 $300,424 $311,289 $322,228 $311,859 $327,616
Long-term Assets
Long-term Assets $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $100,000
Total Long-term Assets $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $200,000
Total Assets $465,600 $460,198 $477,935 $495,149 $516,381 $538,192 $551,271 $586,924 $600,424 $611,289 $622,228 $611,859 $527,616
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 $3,112 $10,592 $12,625 $14,257 $14,900 $12,525 $25,733 $22,358 $20,066 $19,565 $7,684 $0
Current Borrowing $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $40,000 $43,112 $50,592 $52,625 $54,257 $54,900 $52,525 $65,733 $62,358 $60,066 $59,565 $47,684 $40,000
Long-term Liabilities $300,000 $298,405 $296,800 $295,182 $293,554 $291,913 $290,262 $288,598 $286,923 $285,235 $283,536 $281,825 $280,102
Total Liabilities $340,000 $341,517 $347,392 $347,808 $347,811 $346,813 $342,787 $354,331 $349,281 $345,301 $343,101 $329,509 $320,102
Paid-in Capital $130,000 $130,000 $130,000 $130,000 $130,000 $130,000 $130,000 $130,000 $130,000 $130,000 $130,000 $130,000 $130,000
Retained Earnings ($4,400) ($4,400) ($4,400) ($4,400) ($4,400) ($4,400) ($4,400) ($4,400) ($4,400) ($4,400) ($4,400) ($4,400) ($4,400)
Earnings $0 ($6,919) $4,944 $21,741 $42,970 $65,779 $82,884 $106,994 $125,543 $140,387 $153,527 $156,750 $81,914
Total Capital $125,600 $118,681 $130,544 $147,341 $168,570 $191,379 $208,484 $232,594 $251,143 $265,987 $279,127 $282,350 $207,514
Total Liabilities and Capital $465,600 $460,198 $477,935 $495,149 $516,381 $538,192 $551,271 $586,924 $600,424 $611,289 $622,228 $611,859 $527,616
Net Worth $125,600 $118,681 $130,544 $147,341 $168,570 $191,379 $208,484 $232,594 $251,143 $265,987 $279,127 $282,350 $207,514

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