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Bizcomm, Inc

Company Summary

Bizcomm, through a series of ownership changes, has lost touch with the know-how that is needed to consistently achieve profitable response rates through mail order. Inadequate initial working capital has hamstrung the company’s acquisition of these skills by forcing the owner to resort to commercial printing activity. These setbacks are the cause for this business plan, and will be remedied according to Bizcomm’s reconfigured market and sales approach.

2.1 Company History

Bizcomm was sold to its present owner in October of 1998, therefore, comparable financial results will not be available until 1999. However, past financial information indicates there is plenty of room for improvement by the company under its new ownership:

  • The income tax returns for 1996 show gross sales of $722,635 and an operating loss of $76,470.
  • The returns for 1997 show sales of only $476,194 and operating profits of $38,223.
  • Contributing to the bottom line improvement during that period, according to the tax returns, was an increase in the gross profit margin from 42% to 64%, and a $70,000 reduction in depreciation, payroll taxes, utilities, insurance and other expenses.

Considering the company was sold in 1998, the improvements on the 1997 tax return might have included a degree of window dressing to achieve a better sales price.

Bizcomm, through several changes in ownership, has lost continuity in respect to the knowledge and experience gained over the years in direct mail. The company, under its present management, cannot continue to engage in expensive mass mailings with any reasonable expectation of quick success. This business plan will put forth other means to expand the company and give it adequate breathing room to again engage in direct mail in a less-hurried, more professionally researched way.

The table varies somewhat from the auditor’s figures of December 31, 1999. For one thing, the current portion of long term debt was removed from current liabilities to avoid problems arising from assuming that all debt technically classified as “current” would be repaid in the current year. Total long-term debt of $271,874 can be broken down by this table below:

Loan Percent of Interest Amount Owed
Revolving Credit 11% $24,852
Mortgage at 10.5% $141,147
Time Note 11.25% $20,500
Debt to Former Owner 8% $12,500
EDIC Debt 6% $72,875
Total Amount Owed $271,874

Depreciation and amortization have been lumped in together. Capital assets include intangibles of $56,406.

Notes payable to stockholder of $26,912 represent money owed to the owner, Mr. Pullman, and do not accrue interest. To more accurately reflect the equity nature of these funds, and for ease of projecting interest charges, this $26,912 has been placed into the capital stock category.

Online print shop business plan, company summary chart image

Past Performance
1997 1998 1999
Sales $0 $0 $650,546
Gross Margin $0 $0 $489,564
Gross Margin % 0.00% 0.00% 75.25%
Operating Expenses $0 $0 $533,537
Collection Period (days) 0 0 18
Inventory Turnover 0.00 0.00 2.50
Balance Sheet
1997 1998 1999
Current Assets
Cash $0 $0 $16,187
Accounts Receivable $0 $0 $58,721
Inventory $0 $0 $99,430
Other Current Assets $0 $0 $2,000
Total Current Assets $0 $0 $176,338
Long-term Assets
Long-term Assets $0 $0 $226,967
Accumulated Depreciation $0 $0 $43,015
Total Long-term Assets $0 $0 $183,952
Total Assets $0 $0 $360,290
Current Liabilities
Accounts Payable $0 $0 $91,955
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $0 $0 $91,955
Long-term Liabilities $0 $0 $271,874
Total Liabilities $0 $0 $363,829
Paid-in Capital $0 $0 $46,912
Retained Earnings $0 $0 $20,631
Earnings $0 $0 ($71,082)
Total Capital $0 $0 ($3,539)
Total Capital and Liabilities $0 $0 $360,290
Other Inputs
Payment Days 0 0 30
Sales on Credit $0 $0 $585,491
Receivables Turnover 0.00 0.00 9.97

2.2 Company Locations and Facilities

At the present time, Bizcomm’s facilities are all located in Bronxville, New York. The space is much larger than present operations would dictate, especially the office space portion, and plans are in place to move the entire operation to Jefferson (nearer to the owner’s residence) in September, 2000, at the end of the present lease. This planned move is expected to bring a reduction of $1,500 in the monthly rent.

2.3 Company Ownership

Bizcomm is a limited liability corporation that is fully owned by one person, Mr. Pullman. Originally, the corporation was named Eric Rutherford Inc., and was operating under the name Bizcomm, Inc. Recently, the corporate name was changed to Bizcomm, Inc. Mr. Pullman comes from an office supply background. The knowledge, experience, and contacts accumulated during that period have led to changes in the traditional modus operandi of Bizcomm. Commercial printing work and ad specialties have taken an increasing percentage of Bizcomm’s sales.