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Creative Concepts Computer Design

Executive Summary

Introduction
Creative Concepts Computer Design will provide computer and technical consulting to local small businesses as well as home PC users. In doing so the company will focus on marketing, responsiveness, quality, and creating and retaining customer relations.

The Company
Creative Concepts will initially be a sole proprietorship with minimum outside financing. Creative Concepts will be a home office start-up, utilizing one studio room in the owner’s home and serving customers in the local Eugene, Oregon area.

Creative Concepts will be initially owned by Bram Ekstrand. Depending on growth, the company will possibly add additional employees and expand operations.

The Market
Market research indicates an available market niche able to be occupied by additional businesses of this nature. The very nature of the computing industry, with its extraordinary rate of technological development, creates a constant need for businesses skilled in updating and advising customers on computer-related issues. Home PC users will provide the majority of our business revenue. These jobs will typically consist of minor upgrades services and advising. Business Week expects the computing industry to grow at a rate of 12% and the processor speeds to continue to expand for years to come, providing a rich resource for sales.

Creative Concepts has decided to focus mainly on the home PC market for many reasons. These home customers typically request jobs that are easier, faster, and less resource intensive then the opposing small business customer. In addition, this market tends to offer more flexibility for service times allowing a more productive workday.

Our target market will focus on Eugene and the surrounding areas. Market research indicates there is an abundance of business for a small company such as Creative Concepts. If a need exists for increased business, such promotional mediums as radio or print ads will be explored.

There are two main competitors for the computer upgrade business in the greater Eugene/Springfield area. These companies are VOS and Suntech Computers. Both of these companies charge rates in excess of Creative Concepts, therefore we expect to be able to attract the price-sensitive market without much work.

Financial Considerations
Total start-up expenses are modest. Since this is a service business and not product oriented, operational costs should remain low through the start-up process.

Fixed costs have been set at a reasonably accurate monthly level. This should allow for equipment maintenance and purchase or replacement of basic tools used in performing our services. Variable costs have been set per unit to allow for additional expenses such as gas or other travel costs specific to each job.

1.1 Objectives

  1. To provide a service to the community that is in sufficient demand as to generate a profit.
  2. Gain a strong repeat customer base to maximize growth.
  3. Become a positive influence in the community in which we operate.

1.2 Mission

To become a contributing unit of society while delivering a product of exceptional quality, value, and in a timely fashion. We will treat every customer as if they were our only customer.

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1.3 Keys to Success

  • Marketing and Networking (being known to the public).
  • Responsiveness (being an on-call computer paramedic with fast response time).
  • Quality (getting the job done right the first time, offering 100% guarantee).
  • Relationships (developing loyal repeat customers–retainers).
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Company Summary

Creative Concepts will initially be a sole proprietorship.

The goal will be to start the venture as inexpensively as possible, with minimal outside financing.

Creative Concepts will be a home office start-up, utilizing one studio room in the owner’s home.

2.1 Company Ownership

Creative Concepts will be initially owned by Bram Ekstrand as a sole proprietorship. Possibly later adding additional employees and expanding operations as well as clientele.

2.2 Start-up Summary

Total start-up expenses are modest. This is composed of mostly equipment costs along with a few dollars for research of consumer wants and desires and a few pads of stationary. Exact allocations are shown on the table. Since this is a service business and not product oriented, operational costs should remain low through the start-up process.

Soho computer consulting business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Legal $150
Stationery etc. $50
Brochures $0
Consultants $0
Insurance $0
Rent $0
Research and development $20
Expensed equipment $500
Other $0
Total Start-up Expenses $720
Start-up Assets
Cash Required $280
Other Current Assets $0
Long-term Assets $0
Total Assets $280
Total Requirements $1,000
Start-up Funding
Start-up Expenses to Fund $720
Start-up Assets to Fund $280
Total Funding Required $1,000
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $280
Additional Cash Raised $0
Cash Balance on Starting Date $280
Total Assets $280
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Investor 1 $1,000
Investor 2 $0
Other $0
Additional Investment Requirement $0
Total Planned Investment $1,000
Loss at Start-up (Start-up Expenses) ($720)
Total Capital $280
Total Capital and Liabilities $280
Total Funding $1,000

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Services

Creative Concepts will offer computer support and upgrade service to clients of two major categories, home PC users and small office users. These categories will define 95% of our operations.

3.1 Service Description

Our services can be obtained through direct hourly compensation, or if preferred or more applicable, through a contract situation with pre-defined limits.

3.2 Competitive Comparison

Our services are more thorough and precise than any existing competition in the surrounding metro area. Since we have no extravagant overhead we can be focused on delivering exactly what the customer wants, something other computer support providers in this area have a hard time with.

3.3 Technology

Creative Concepts will operate in an environment with technology that is constantly evolving. Keeping up to date will be of vital importance to the profitability of this venture. Keeping this in mind, we will maintain working, as well as functional, knowledge of all the latest software available to the public. Our customers will receive the most current versions of all software and hardware upgrades requested.

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Market Analysis Summary

Creative Concepts Computer Design will provide computer support in both a consulting and technical capacity to home PC users as well as small business owners. Since Creative Concepts is currently a one man operation it will be limited in growth to the capacity of work able to be completed. Personal market research indicates an available market niche able to be occupied by additional businesses of this nature. The very nature of the computing industry, with its extraordinary rate of technological development, creates a constant need for businesses skilled in updating and advising customers on computer-related issues.

4.1 Market Segmentation

The existing computer service market is so extensive categorizing it is a rather difficult task. For our revenue-oriented purposes we will define the market into home PC users and small business clients. Home PC users will provide the majority of our business revenue. These jobs will typically consist of minor upgrades services and advising. The small business market will be defined as customers with five or more computers or a network requiring service or repair.

Soho computer consulting business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Home PC Users 2% 25,000 25,500 26,010 26,530 27,061 2.00%
Small Business Contracts 1% 10,000 10,100 10,201 10,303 10,406 1.00%
Other 0% 0 0 0 0 0 0.00%
Total 1.72% 35,000 35,600 36,211 36,833 37,467 1.72%

4.2 Target Market Segment Strategy

Creative Concepts has decided to focus mainly on the home PC market for many reasons. These home customers typically requests jobs that are easier, faster, and less resource intensive then the opposing small business customer. In addition, this market tends to offer more flexibility for service times allowing a more productive workday.

4.2.1 Market Needs

As reported by ComputingNet magazine, there is a substantial need for individuals capable of performing computer upgrades and repairs in a timely and cost-effective manner in this region. Creative Concepts is directed specifically at that market niche.

Both the software and hardware side of the computer industry continue to turn out new and revised computer components at alarming rates. For Creative Concepts this means job security well into the future.

4.2.3 Market Growth

As reported by the Wall Street Journal, there seems to be no end to the development of the computer market. Business Week expects the computing industry to grow at a rate of 12% and the processor speeds to continue to expand for years to come.

4.3 Service Business Analysis

Secondary market research shows computer service customers tend to be very loyal providers that do good work and satisfy their needs. An analysis of Creative Concepts’ main competitors shows no overwhelming strengths that would be significant barriers to possible success. Likewise, identifying competitor’s weaknesses has illuminated several areas that Creative Concepts can target as marketing strategies.

4.3.1 Main Competitors

There are two main competitors for the computer upgrade business in this area.

  1. VOS. They are a well established provider of computer upgrades and services.
  2. Suntech Computers. Smaller and less known then VOS, Suntech provides many services for residents living in East and South Eugene.

Both of these companies charge rates in excess of Creative Concepts, we will be able to attract the price-sensitive market without much work. Our second main advantage is the accessibility of our services. The time conscientious customer will appreciate our swift work.

4.3.2 Competition and Buying Patterns

As previously noted, there are other providers of similar services in the area. Our services will be second to no one and our prices will be rock bottom. By providing superior service word of mouth alone will bring in many new clients. The satisfaction our consumers find will keep them as our business.

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Strategy and Implementation Summary

A value proposition of timely and practical solutions, at a reasonable rate, coupled with a 100% guarantee.

A competitive edge based on cultivating existing customer relationships. 

Our target market will focus on Eugene and the surrounding areas. Market research indicates there is an abundance of business for a small company such as Creative Concepts. If apparent a need exists for increased business, such promotional mediums as radio or print ad could be explored.

5.1 Competitive Edge

Our competitive advantage will be our ability to quickly take in a request from a customer and complete the requested task in a timely fashion. Typically we will strive for a 48-hour completion of most home PC user requests and slightly longer for small business obligations. In addition we will conduct our services at the going wage or slightly below. Setting marginal revenue to marginal cost until we establish a substantial customer base if not forever. With this strategy we can undercut most competitors and gain local market power.

5.2 Value Proposition

Our business will be simple. Provide quality services at reasonable prices and take care of the customer, for they are your business.

5.3 Sales Strategy

Happy customers will be repeat customers. If the customer feels satisfied he will tell his friends and more business will come in the door.

Sales forecast figures are based on industry figures for the typical growth of a consulting start-up and reflect repeat business generated through meeting customer needs.

5.3.1 Sales Forecast

The sales strategy is a prediction of slow, controllable growth. Since I am the sole employee I will be focusing on quality and attention to detail especially in the beginning to avoid some potential pitfalls encountered by many new businesses. The predicted growth is very moderate in the home PC market and the small business arenas. This should allow for careful examination of variations in demand with regards to season or holidays and still allow enough flexibility to sufficiently compensate.

Soho computer consulting business plan, strategy and implementation summary chart image

Soho computer consulting business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Home PC Unit 396 475 570
Small Business Unit 214 235 259
Other 0 0 0
Total Unit Sales 610 710 829
Unit Prices Year 1 Year 2 Year 3
Home PC Unit $30.00 $33.00 $36.30
Small Business Unit $30.00 $36.00 $43.20
Other $0.00 $0.00 $0.00
Sales
Home PC Unit $11,874 $15,674 $20,690
Small Business Unit $6,415 $8,468 $11,178
Other $0 $0 $0
Total Sales $18,289 $24,142 $31,868
Direct Unit Costs Year 1 Year 2 Year 3
Home PC Unit $5.00 $7.00 $10.00
Small Business Unit $7.00 $10.00 $13.00
Other $0.00 $0.00 $0.00
Direct Cost of Sales
Home PC Unit $1,979 $3,325 $5,700
Small Business Unit $1,497 $2,352 $3,364
Other $0 $0 $0
Subtotal Direct Cost of Sales $3,476 $5,677 $9,063

5.4 Milestones

The milestones, listed in the table below, outline the major events that will promote, as well as insure the success of, Creative Concepts and keep it a going concern well into the future.

Milestones
Milestone Start Date End Date Budget Manager Department
Aquisition of Capital for initial opening 8/1/2002 9/1/2002 $0 BNE Admin
Procurement of materials for opening 9/1/2002 10/1/2002 $500 BNE Admin
Open for Business 10/1/2002 Never $0 BNE Admin
Name me 3/1/1999 4/1/1999 $0 ABC Department
Totals $500

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Management Summary

Since Creative Concepts is a sole proprietorship, this topic is currently not valid. However, if employees are added in the future this will be revised at that time.

6.1 Personnel Plan

The following table shows my expected compensation. Since I am the sole employee I am the only one on the books. I have decided to have my pay directly reflective of the businesses success. Additionally, I have decided to leave a residual amount of income with the company each month. This is intended to allow a means of adaptation or evolution of the business should circumstances dictate expansion or the hiring of additional employees in the future.

Personnel Plan
Year 1 Year 2 Year 3
Owner $8,102 $12,071 $15,934
Other $0 $0 $0
Total People 0 0 0
Total Payroll $8,102 $12,071 $15,934

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Financial Plan

The following sections include the annual estimates for the standard set of financial tables. Detailed monthly pro-forma tables are included in the appendix.

7.1 Important Assumptions

Creative Concepts customer base would fluctuate if there was a recess in the economy or other extenuating circumstances that pertain directly to consumer or industry behavior.

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 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Break-even Analysis

Fixed costs have been set at a reasonably accurate monthly level. This should allow for equipment maintenance and purchase or replacement of basic tools used in performing our services. Variable costs have been set per unit to allow for additional expenses such as gas or other travel costs specific to each job.

Soho computer consulting business plan, financial plan chart image

Break-even Analysis
Monthly Units Break-even 28
Monthly Revenue Break-even $834
Assumptions:
Average Per-Unit Revenue $29.98
Average Per-Unit Variable Cost $5.70
Estimated Monthly Fixed Cost $675

7.3 Projected Profit and Loss

The profit and loss shown for this company is a source of inspiration. For the first year of operation the books show a modest net profit. This should allow for great flexibility and survival in the start-up phase in case of unexpected problems or expenses. The profit margin declines incrementally in the following two years as greater payroll allocations are made. These increased allocations will be contingent upon the continued success of this going concern. Additionally, since this business is operated out of the home, expenses such as rent, utilities, and insurance are sunk costs and not reflective of the business venture.

Soho computer consulting business plan, financial plan chart image

Soho computer consulting business plan, financial plan chart image

Soho computer consulting business plan, financial plan chart image

Soho computer consulting business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $18,289 $24,142 $31,868
Direct Cost of Sales $3,476 $5,677 $9,063
Other $0 $0 $0
Total Cost of Sales $3,476 $5,677 $9,063
Gross Margin $14,814 $18,465 $22,804
Gross Margin % 80.99% 76.48% 71.56%
Expenses
Payroll $8,102 $12,071 $15,934
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $0 $0 $0
Insurance $0 $0 $0
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $8,102 $12,071 $15,934
Profit Before Interest and Taxes $6,711 $6,394 $6,870
EBITDA $6,711 $6,394 $6,870
Interest Expense $0 $0 $0
Taxes Incurred $1,702 $1,598 $1,746
Net Profit $5,009 $4,795 $5,124
Net Profit/Sales 27.39% 19.86% 16.08%

7.4 Projected Cash Flow

This information is presented in the chart and table below.

Soho computer consulting business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $0 $0 $0
Cash from Receivables $12,657 $22,340 $29,488
Subtotal Cash from Operations $12,657 $22,340 $29,488
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 $12,657 $22,340 $29,488
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $8,102 $12,071 $15,934
Bill Payments $4,391 $7,464 $10,519
Subtotal Spent on Operations $12,493 $19,535 $26,453
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 $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $12,493 $19,535 $26,453
Net Cash Flow $164 $2,804 $3,035
Cash Balance $444 $3,248 $6,283

7.5 Projected Balance Sheet

This information is presented in the table below.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $444 $3,248 $6,283
Accounts Receivable $5,633 $7,435 $9,815
Other Current Assets $0 $0 $0
Total Current Assets $6,076 $10,683 $16,098
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $6,076 $10,683 $16,098
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $787 $598 $888
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $787 $598 $888
Long-term Liabilities $0 $0 $0
Total Liabilities $787 $598 $888
Paid-in Capital $1,000 $1,000 $1,000
Retained Earnings ($720) $4,289 $9,085
Earnings $5,009 $4,795 $5,124
Total Capital $5,289 $10,085 $15,209
Total Liabilities and Capital $6,076 $10,683 $16,098
Net Worth $5,289 $10,085 $15,209

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7379, Computer Related Services NEC, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 32.00% 32.00% 7.20%
Percent of Total Assets
Accounts Receivable 92.70% 69.60% 60.97% 21.70%
Other Current Assets 0.00% 0.00% 0.00% 46.70%
Total Current Assets 100.00% 100.00% 100.00% 71.90%
Long-term Assets 0.00% 0.00% 0.00% 28.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 12.95% 5.60% 5.52% 51.40%
Long-term Liabilities 0.00% 0.00% 0.00% 19.10%
Total Liabilities 12.95% 5.60% 5.52% 70.50%
Net Worth 87.05% 94.40% 94.48% 29.50%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 80.99% 76.48% 71.56% 0.00%
Selling, General & Administrative Expenses 38.70% 65.72% 64.96% 80.70%
Advertising Expenses 0.00% 0.00% 0.00% 1.20%
Profit Before Interest and Taxes 36.69% 26.48% 21.56% 1.70%
Main Ratios
Current 7.72 17.86 18.12 1.27
Quick 7.72 17.86 18.12 1.01
Total Debt to Total Assets 12.95% 5.60% 5.52% 70.50%
Pre-tax Return on Net Worth 126.88% 63.40% 45.17% 3.50%
Pre-tax Return on Assets 110.45% 59.85% 42.68% 11.80%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 27.39% 19.86% 16.08% n.a
Return on Equity 94.71% 47.55% 33.69% n.a
Activity Ratios
Accounts Receivable Turnover 3.25 3.25 3.25 n.a
Collection Days 55 99 99 n.a
Accounts Payable Turnover 6.58 12.17 12.17 n.a
Payment Days 27 35 25 n.a
Total Asset Turnover 3.01 2.26 1.98 n.a
Debt Ratios
Debt to Net Worth 0.15 0.06 0.06 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $5,289 $10,085 $15,209 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.33 0.44 0.51 n.a
Current Debt/Total Assets 13% 6% 6% n.a
Acid Test 0.56 5.43 7.07 n.a
Sales/Net Worth 3.46 2.39 2.10 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
Home PC Unit 0% 10 12 14 17 21 25 30 36 43 52 62 74
Small Business Unit 0% 10 11 12 13 15 16 18 19 21 24 26 29
Other 0% 0 0 0 0 0 0 0 0 0 0 0 0
Total Unit Sales 20 23 27 31 35 41 48 55 64 75 88 103
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
Home PC Unit $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00
Small Business Unit $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 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Sales
Home PC Unit $300 $360 $432 $518 $622 $746 $896 $1,075 $1,290 $1,548 $1,858 $2,229
Small Business Unit $300 $330 $363 $399 $439 $483 $531 $585 $643 $707 $778 $856
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $600 $690 $795 $918 $1,061 $1,230 $1,427 $1,660 $1,933 $2,255 $2,636 $3,085
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
Home PC Unit 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
Small Business Unit 0.00% $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00
Other 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Direct Cost of Sales
Home PC Unit $50 $60 $72 $86 $104 $124 $149 $179 $215 $258 $310 $372
Small Business Unit $70 $77 $85 $93 $102 $113 $124 $136 $150 $165 $182 $200
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $120 $137 $157 $180 $206 $237 $273 $316 $365 $423 $491 $571
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
Owner 0% $0 $0 $0 $459 $531 $615 $714 $830 $967 $1,128 $1,318 $1,542
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 0 0 0 0 0 0 0 0 0 0 0 0
Total Payroll $0 $0 $0 $459 $531 $615 $714 $830 $967 $1,128 $1,318 $1,542

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% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
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 $600 $690 $795 $918 $1,061 $1,230 $1,427 $1,660 $1,933 $2,255 $2,636 $3,085
Direct Cost of Sales $120 $137 $157 $180 $206 $237 $273 $316 $365 $423 $491 $571
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $120 $137 $157 $180 $206 $237 $273 $316 $365 $423 $491 $571
Gross Margin $480 $553 $638 $738 $855 $992 $1,154 $1,344 $1,568 $1,832 $2,144 $2,514
Gross Margin % 80.00% 80.14% 80.29% 80.43% 80.57% 80.71% 80.85% 80.98% 81.12% 81.24% 81.37% 81.48%
Expenses
Payroll $0 $0 $0 $459 $531 $615 $714 $830 $967 $1,128 $1,318 $1,542
Sales and Marketing and Other Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Taxes 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $0 $0 $0 $459 $531 $615 $714 $830 $967 $1,128 $1,318 $1,542
Profit Before Interest and Taxes $480 $553 $638 $279 $324 $378 $440 $514 $601 $705 $827 $971
EBITDA $480 $553 $638 $279 $324 $378 $440 $514 $601 $705 $827 $971
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $144 $138 $160 $70 $81 $94 $110 $129 $150 $176 $207 $243
Net Profit $336 $415 $479 $209 $243 $283 $330 $386 $451 $528 $620 $728
Net Profit/Sales 56.00% 60.11% 60.22% 22.82% 22.93% 23.04% 23.14% 23.24% 23.34% 23.43% 23.52% 23.61%

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 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cash from Receivables $0 $20 $603 $694 $799 $922 $1,067 $1,236 $1,435 $1,669 $1,944 $2,268
Subtotal Cash from Operations $0 $20 $603 $694 $799 $922 $1,067 $1,236 $1,435 $1,669 $1,944 $2,268
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 $20 $603 $694 $799 $922 $1,067 $1,236 $1,435 $1,669 $1,944 $2,268
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 $0 $0 $0 $459 $531 $615 $714 $830 $967 $1,128 $1,318 $1,542
Bill Payments $9 $264 $277 $314 $251 $289 $333 $385 $446 $518 $602 $702
Subtotal Spent on Operations $9 $264 $277 $773 $781 $904 $1,047 $1,215 $1,413 $1,646 $1,920 $2,244
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 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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 $9 $264 $277 $773 $781 $904 $1,047 $1,215 $1,413 $1,646 $1,920 $2,244
Net Cash Flow ($9) ($244) $326 ($79) $18 $19 $20 $21 $22 $23 $23 $24
Cash Balance $271 $27 $353 $274 $292 $310 $330 $352 $374 $396 $420 $444
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 $280 $271 $27 $353 $274 $292 $310 $330 $352 $374 $396 $420 $444
Accounts Receivable $0 $600 $1,270 $1,462 $1,686 $1,948 $2,256 $2,616 $3,039 $3,537 $4,124 $4,816 $5,633
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $280 $871 $1,297 $1,815 $1,960 $2,240 $2,566 $2,946 $3,391 $3,911 $4,520 $5,236 $6,076
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $280 $871 $1,297 $1,815 $1,960 $2,240 $2,566 $2,946 $3,391 $3,911 $4,520 $5,236 $6,076
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 $255 $266 $306 $241 $278 $321 $371 $429 $498 $579 $675 $787
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 $255 $266 $306 $241 $278 $321 $371 $429 $498 $579 $675 $787
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $255 $266 $306 $241 $278 $321 $371 $429 $498 $579 $675 $787
Paid-in Capital $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Retained Earnings ($720) ($720) ($720) ($720) ($720) ($720) ($720) ($720) ($720) ($720) ($720) ($720) ($720)
Earnings $0 $336 $751 $1,229 $1,439 $1,682 $1,966 $2,296 $2,681 $3,133 $3,661 $4,281 $5,009
Total Capital $280 $616 $1,031 $1,509 $1,719 $1,962 $2,246 $2,576 $2,961 $3,413 $3,941 $4,561 $5,289
Total Liabilities and Capital $280 $871 $1,297 $1,815 $1,960 $2,240 $2,566 $2,946 $3,391 $3,911 $4,520 $5,236 $6,076
Net Worth $280 $616 $1,031 $1,509 $1,719 $1,962 $2,246 $2,576 $2,961 $3,413 $3,941 $4,561 $5,289

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