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Safe Keeping

Executive Summary

Safe Keeping has been developed through much research to address public concern with protecting their property. Owner John Walter worked in law enforcement for over twenty years, with the last five as a commander for the burglary unit of the Eugene Police Dept. Safe Keeping will go into businesses and private residences and make a video tape record of all the belongings in that business and residence.

We will also act as a consultant in advising people on how they can better protect their property. All videos are strictly confidential and a copy of each will be stored in a vault at our business location. Start up expenses are $4,000 including the cost of a video camera. The start up costs are being financed by John Walter. Safe Keeping’s target market strategy is based on becoming an attractive choice for businesses and private homeowners in the greater Eugene, Springfield area.

Our target markets will be small to large businesses wanting documentation of their belongings for insurance purposes. Private home owners will also be targeted with the same services. We want to provide superior in customer service, security knowledge, and maintain the strictest confidentiality.

There will be a simple but comprehensive website developed by an outside consultant, maintained by John Walter. The website will show what services we have to offer and what the associated costs will be. Owner John Walter will manage all aspects of the business which includes bookkeeping, overseeing one employee Joe Norten. John will be the consultant in advising businesses and homeowners on security issues.

Safe Keeping is looking for a growth rate in sales of 10% for Year 1, to total in excess of $116,000 in total revenues. This is a new niche for the security industry that has not been tapped and Safe Keeping is excited to serve the citizens of the Eugene, Springfield area in the coming year and the future.

Video documentation service business plan, executive summary chart image

1.1 Objectives

  1. Realize an annual growth rate of 10% in Year 2.
  2. Maintain a gross margin of at least 40% each month.
  3. Generate an average of $116,000 in sales the first year.

1.2 Keys to Success

The primary keys to success for the company will be based on the following factors:

  • Sell our services with excellent customer service and support.
  • Continue a supportive relationship with law enforcement agencies.
  • Retain customers to generate repeat purchases of our services.
  • Referrals from our existing customer base.

1.3 Mission

Safe Keeping intends to provide a security service that helps the business and homeowners feel more at ease with the security of their property. Protecting and insuring ones property touches people in a very personal way.

Safe Keeping intends to give quality customer service keeping the clients privacy and feelings at the forefront. Our service will help people protect the belongings that they have worked so hard to acquire, and will advise clients in preventative protection.

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Company Summary

Safe Keeping has been developed through much research and effort to address public concern with property protection. Owner John Walter has developed a unique approach to home security. Having worked in law enforcement for over twenty years, the last five as a commander for the burglary unit of the Eugene Police Department, John understands the need for business and home security.

Safe Keeping will go into homes and businesses to make a video tape record of all the belongings in that business and residence. We will also act as consultants advising people about how they can better protect their property with on-site inspections. Safe Keeping will make a copy of the video for each customer and will have one on file at our business location. Our start up costs will be $4,000.

2.1 Start-up Summary

Our start up expenses come to $4,000 which includes rent for $500, the printing of brochures for initial distribution, and the purchase of a video camera at the cost of $1,000. The start-up costs will be owner-financed by John Walter.

Video documentation service business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Legal $500
Stationery etc. $500
Brochures $1,000
Insurance $500
Rent $500
Expensed Equipment $1,000
Total Start-up Expenses $4,000
Start-up Assets
Cash Required $21,000
Other Current Assets $0
Long-term Assets $0
Total Assets $21,000
Total Requirements $25,000
Start-up Funding
Start-up Expenses to Fund $4,000
Start-up Assets to Fund $21,000
Total Funding Required $25,000
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $21,000
Additional Cash Raised $0
Cash Balance on Starting Date $21,000
Total Assets $21,000
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
John Walter $25,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $25,000
Loss at Start-up (Start-up Expenses) ($4,000)
Total Capital $21,000
Total Capital and Liabilities $21,000
Total Funding $25,000

2.2 Company Ownership

John Walter is the sole proprietor of Safe Keeping Co. John has worked in law enforcement for over twenty years and has spent the last five years with the burglary unit of the Eugene Police Dept. as commander.

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Services

Safe Keeping provides documentation of all personal belongings for both the business and the private sector. We will create a video tape record of the personal property of our customers so, in the event of a theft, these items will be verifiable.

Our company also provides consultation in directing businesses and private homeowners about how they can better secure their properties.

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Market Analysis Summary

The Safe Keeping Co. target market strategy is based on becoming an attractive choice for businesses and private homeowners in the greater Eugene, Springfield area. The target markets that we are going to pursue include small to large businesses wanting documentation of their belongings.

We feel there is a great need for documenting items that have value to these businesses, making it easier to deal with insurance companies in case of a burglary. Private homeowners will be targeted with the same services. Safe Keeping would like to realize a 5% increase of potential customers on a yearly basis.

4.1 Market Segmentation

The profile of our customer consists of the following geographic and demographic information.

Geographics

  • Our immediate geographic market is the greater Eugene, Springfield metropolitan area with a population of 200,000 people.
  • A 100 mile geographic area would want our services as we expand into business.
  • The total target area population is estimated at 500,000 people.

Demographics

  • Male and Female.
  • Married and Single.
  • Combined annual incomes in excess of $50,000.
  • Age range of 25 to 80 years, with a median age of 40.
  • Own their own homes, townhouses and/or condominiums valued at over $150,000.
  • Most work out of the home by choice in a professional/business setting.
  • Belong to one or more business, social and/or athletic organizations, which may include: Downtown Athletic Club, Eugene Country Club, American Woman’s Association, and the Eugene Chamber of Commerce.

We know the following regarding the profile of the typical resident of the greater Eugene, Springfield area:

  • 50% have lived in the area for 10 or more years.
  • 30% are between the ages of 30 and 45 years of age.
  • 40% have completed some college.
  • 28% are professionals and/or business owners, or managers.
  • 55% are married.
  • 60% have children living at home.
  • 52% own their own residence.
Video documentation service business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Business Sector 5% 10,000 10,500 11,025 11,576 12,155 5.00%
Private Sector 5% 50,000 52,500 55,125 57,881 60,775 5.00%
Total 5.00% 60,000 63,000 66,150 69,457 72,930 5.00%

4.2 Target Market Segment Strategy

Our target market is based on becoming a resource of choice for people wanting to document their valuables as well as become educated on protecting their property. Our marketing strategy is based on superior performance in the following areas:

  • Customer service
  • Confidential record keeping
  • Expert consultation

The target markets are separated into two segments; “Business sector,” and the “Private sector.” The primary marketing opportunity is selling to these accessible target market segments that focuses on the security of homes and businesses.

Business Sector – A lot of small, to large business owners need documentation of inventories as well as security tips and information. For insurance purposes it is important to keep up to date records in case of theft or damage to the property.

The types of business customers we will be targeting are small, medium, and large, with no particular industry in mind. As we begin operating our business we will concentrate on businesses that typically have up to a 100 employees. Again we will not concentrate on any particular industry but will look for businesses that meet our criteria.

The business needs to have valued inventory or valuables that they want documented for insurance purposes if we are to offer our video services. Our business customers can take advantage of our consultation to make their property more secure. Most of the businesses we will service have a revenue of at least $50,000 a year, with many exceeding that amount.

Private Sector – Many private homeowners are concerned with adequate property protection. Consultation with the homeowner about properly securing their property is a very viable benefit.

4.3 Service Business Analysis

The security industry continues to be very competitive. Traditionally the security business is about monitoring properties and sending police out if there is a problem. Having a security guard patrol properties is another service typically offered.

Safe Keeping is taking a different approach to business and home security. Expert consultation will be offered on how to properly secure properties with a complete walk through of each property. We will make a video tape record of all valuables that will be kept on file in case of theft or damage to the property. With the steady concern over the growth of crime in our society, and the need to have good records in case of an incident, our service is a truly needed one. All records will be kept strictly confidential.

4.3.1 Competition and Buying Patterns

The security industry typically offers business and home protection through alarm systems and on site patrolling. There are several security businesses in our geographic area. Safe Keeping is taking a different approach to the security business by offering services that are on the industry’s cutting edge.

The consumer who does not feel the need to have a full time security company watching their properties but would like to do something themselves to protect their property will find what we have to offer very attractive.

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Strategy and Implementation Summary

Our marketing strategy is based on becoming a viable resource for people looking for a way to document their valuable possessions and make their place of business and/or residence more secure. Our marketing strategy is based on superior service in the following areas:

  • Expert knowledge;
  • Customer service;
  • Strict confidentiality.

Our marketing strategy will create awareness, interest, and appeal from our target market for the uniqueness of what we have to offer our customers. Once our potential customers are aware of what we have to offer we believe they will take advantage of our services.

5.1 Sales Strategy

The primary sales strategy includes:

  • To offer strict confidentiality;
  • To show value for services rendered;
  • Professional consultation for business and home security.

5.1.1 Sales Forecast

The sales forecast is broken down into two main revenue streams: video recording services and consultation services. The sales forecast for the upcoming year is based on a modest 5% growth rate for sales. Being a start up business we are projecting a modest rate of growth adding one new customer a week for both the video side, and the consultation side.

Video documentation service business plan, strategy and implementation summary chart image

Video documentation service business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Video Recording Services $52,800 $56,000 $60,000
Consultation Services $63,500 $70,000 $78,000
Total Sales $116,300 $126,000 $138,000
Direct Cost of Sales Year 1 Year 2 Year 3
Video Recording Services $3,180 $3,400 $3,800
Consultation Services $2,300 $2,600 $3,000
Subtotal Direct Cost of Sales $5,480 $6,000 $6,800

5.2 Marketing Strategy

Our marketing strategy is based on becoming an option for businesses and homeowners looking for a way to document their valuables for insurance purposes and becoming more educated about securing their property. Our marketing strategy is based on superior performance in the following areas:

  • Customer service;
  • Security knowledge;
  • Strict confidentiality.

5.3 Milestones

The milestone chart below is accompanied by a table which outlines key activities that will be critical to our success in the coming year.

Milestones
Milestone Start Date End Date Budget Manager Department
Business Plan 1/10/2003 1/25/2003 $1,000 John Walter Management
Accounting Plan 2/30/2003 3/25/2003 $500 Jim Dockins Consultant
Marketing and Advertising 5/20/2003 8/21/2003 $1,500 John Walter Management
Website development 9/15/2003 11/15/2003 $1,000 Fred Jones Consultant
Totals $4,000

5.4 Competitive Edge

Safe Keeping’s affordable one time cost package is new to the security market. Traditionally a monthly fee to watch homes or businesses is more than a lot of people want to pay, or they do not feel the need for such comprehensive coverage.

Safe Keeping fills a untapped niche to help businesses and homeowners document valuables, and learn how to better secure their properties against possible theft. With trained law enforcement expertise on staff our company can help businesses and homeowners protect their properties at a minimal cost.

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Web Plan Summary

A simple but comprehensive overview of what services our company offers will be provided on this site. A database will be kept that will help in future marketing endeavors. This will be done with a record kept of all visits to the site and a mailing list will be compiled to contact potential customers through emails.

6.1 Website Marketing Strategy

Our target market is businesses and homeowners in the greater Eugene/Springfield area. With information collected on the site through contact with potential customers we will modify our marketing plan to reach all potential customers. Basic information will be offered on the site listing our services. It is not our intent that the website be the main focus in our marketing plan, but that it is one component.

6.2 Development Requirements

Safe Keeping will use Fred Jones as a consultant to develop the initial website. We will maintain the website ourselves and if any questions or problems come up Fred will be happy to help out. It will take roughly two months to develop the site. The website will feature our services along with associated costs listed.

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Management Summary

Owner, John Walter will oversee and manage all aspects of the operation of Safe Keeping. This includes bookkeeping, overseeing the one employee, and being responsible for the purchase and storage of all video tapes and equipment. John will be the consultant advising businesses and homeowners on security issues.

7.1 Personnel Plan

The personnel plan contains only two people who will work for the company. John Walter the owner of the company will manage every aspect of the company. John’s salary will build as the company grows and John will not draw out more than $4,000 a month.

Joe Norten will be Safe Keeping’s only employee. Joe will work full time and will make $2,000 per month the first year.

Personnel Plan
Year 1 Year 2 Year 3
John Walter $42,000 $50,000 $55,000
Joe Norten, full time employee $24,000 $26,000 $28,000
Total People 2 2 2
Total Payroll $66,000 $76,000 $83,000

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Financial Plan

The financial plan contains these essential factors:

  • A growth rate in sales of 10% for the year 2004, to total in excess of $116,000 in revenues.
  • An average sales per business day (305 days per year) in excess of $500.00.

Difficulties and Risks

  • Slow sales resulting in less-than projected cash flow.
  • Overly aggressive and debilitating actions by competitors.
  • A parallel entry by a new competitor.

8.1 Important Assumptions

The following critical assumptions will determine the potential for future success.

  • A healthy economy that supports a moderate level of growth in our market.
  • Keeping operating expenses low, particularly in the areas of personnel and ongoing monthly expenses.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 9.00% 9.00% 9.00%
Long-term Interest Rate 7.50% 7.50% 7.50%
Tax Rate 28.17% 28.00% 28.17%
Other 0 0 0

8.2 Projected Profit and Loss

The following represents the projected profit and loss for Safe Keeping based on sales and expense projections for 2004 and beyond. With fairly low operating expenses and with the projected growth we are anticipating a increase in our cash flow.

Video documentation service business plan, financial plan chart image

Video documentation service business plan, financial plan chart image

Video documentation service business plan, financial plan chart image

Video documentation service business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $116,300 $126,000 $138,000
Direct Cost of Sales $5,480 $6,000 $6,800
Other Costs of Sales $0 $0 $0
Total Cost of Sales $5,480 $6,000 $6,800
Gross Margin $110,820 $120,000 $131,200
Gross Margin % 95.29% 95.24% 95.07%
Expenses
Payroll $66,000 $76,000 $83,000
Sales and Marketing and Other Expenses $2,400 $3,000 $3,600
Depreciation $0 $0 $0
Rent $6,000 $6,500 $7,000
Utilities $1,200 $1,300 $1,400
Insurance $1,200 $1,350 $1,450
Payroll Taxes $9,900 $11,400 $12,450
Other $3,600 $4,000 $4,400
Total Operating Expenses $90,300 $103,550 $113,300
Profit Before Interest and Taxes $20,520 $16,450 $17,900
EBITDA $20,520 $16,450 $17,900
Interest Expense $0 $0 $0
Taxes Incurred $5,718 $4,606 $5,042
Net Profit $14,802 $11,844 $12,858
Net Profit/Sales 12.73% 9.40% 9.32%

8.3 Break-even Analysis

The following table and chart summarize our break-even analysis.

Video documentation service business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $7,897
Assumptions:
Average Percent Variable Cost 5%
Estimated Monthly Fixed Cost $7,525

8.4 Projected Cash Flow

The cash flow projections are outlined below. These projections are based on our basic assumptions with revenue generation factors carrying the most significant weight regarding the outcome. We are anticipating that we will have a steadily increasing cash flow as the business continues to grow.

Video documentation service business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $116,300 $126,000 $138,000
Subtotal Cash from Operations $116,300 $126,000 $138,000
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 $116,300 $126,000 $138,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $66,000 $76,000 $83,000
Bill Payments $31,201 $39,317 $41,814
Subtotal Spent on Operations $97,201 $115,317 $124,814
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 $2,000 $3,000
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $97,201 $117,317 $127,814
Net Cash Flow $19,099 $8,683 $10,186
Cash Balance $40,099 $48,782 $58,968

8.5 Projected Balance Sheet

Safe Keeping’s balance sheet is outlined below.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $40,099 $48,782 $58,968
Other Current Assets $0 $2,000 $5,000
Total Current Assets $40,099 $50,782 $63,968
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $40,099 $50,782 $63,968
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,297 $3,136 $3,464
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $4,297 $3,136 $3,464
Long-term Liabilities $0 $0 $0
Total Liabilities $4,297 $3,136 $3,464
Paid-in Capital $25,000 $25,000 $25,000
Retained Earnings ($4,000) $10,802 $22,646
Earnings $14,802 $11,844 $12,858
Total Capital $35,802 $47,646 $60,504
Total Liabilities and Capital $40,099 $50,782 $63,968
Net Worth $35,802 $47,646 $60,504

8.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) Code 1731-04, Safety and Security Specialization are shown for comparison.

The following will enable us to keep on track. If we fail in any of these areas, we will need to re-evaluate our business model:

  • Gross margins at or above 50%.
  • Month-to-month annual comparisons indicate an increase of 10% or greater.
  • Do not depend on a credit line to meet cash requirements.
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 8.34% 9.52% 4.52%
Percent of Total Assets
Other Current Assets 0.00% 3.94% 7.82% 28.47%
Total Current Assets 100.00% 100.00% 100.00% 86.49%
Long-term Assets 0.00% 0.00% 0.00% 13.51%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 10.72% 6.18% 5.41% 45.17%
Long-term Liabilities 0.00% 0.00% 0.00% 7.51%
Total Liabilities 10.72% 6.18% 5.41% 52.68%
Net Worth 89.28% 93.82% 94.59% 47.32%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 95.29% 95.24% 95.07% 27.36%
Selling, General & Administrative Expenses 82.58% 85.84% 85.73% 12.94%
Advertising Expenses 0.00% 0.00% 0.00% 0.18%
Profit Before Interest and Taxes 17.64% 13.06% 12.97% 3.92%
Main Ratios
Current 9.33 16.19 18.47 1.78
Quick 9.33 16.19 18.47 1.45
Total Debt to Total Assets 10.72% 6.18% 5.41% 56.35%
Pre-tax Return on Net Worth 57.32% 34.53% 29.58% 10.81%
Pre-tax Return on Assets 51.17% 32.39% 27.98% 24.76%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 12.73% 9.40% 9.32% n.a
Return on Equity 41.34% 24.86% 21.25% n.a
Activity Ratios
Accounts Payable Turnover 8.26 12.17 12.17 n.a
Payment Days 27 36 29 n.a
Total Asset Turnover 2.90 2.48 2.16 n.a
Debt Ratios
Debt to Net Worth 0.12 0.07 0.06 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $35,802 $47,646 $60,504 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.34 0.40 0.46 n.a
Current Debt/Total Assets 11% 6% 5% n.a
Acid Test 9.33 16.19 18.47 n.a
Sales/Net Worth 3.25 2.64 2.28 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
Video Recording Services 0% $2,200 $2,600 $3,000 $3,400 $3,800 $4,200 $4,600 $5,000 $5,400 $5,800 $6,200 $6,600
Consultation Services 0% $3,000 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500 $7,000 $7,500 $8,000
Total Sales $5,200 $5,600 $6,500 $7,400 $8,300 $9,200 $10,100 $11,000 $11,900 $12,800 $13,700 $14,600
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
Video Recording Services $100 $130 $160 $190 $220 $250 $280 $310 $340 $370 $400 $430
Consultation Services $100 $100 $120 $140 $160 $180 $200 $220 $240 $260 $280 $300
Subtotal Direct Cost of Sales $200 $230 $280 $330 $380 $430 $480 $530 $580 $630 $680 $730
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
John Walter 0% $2,500 $2,500 $3,000 $3,000 $3,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Joe Norten, full time employee 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
Total People 2 2 2 2 2 2 2 2 2 2 2 2
Total Payroll $4,500 $4,500 $5,000 $5,000 $5,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000

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 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%
Long-term Interest Rate 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50%
Tax Rate 30.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00%
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 $5,200 $5,600 $6,500 $7,400 $8,300 $9,200 $10,100 $11,000 $11,900 $12,800 $13,700 $14,600
Direct Cost of Sales $200 $230 $280 $330 $380 $430 $480 $530 $580 $630 $680 $730
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $200 $230 $280 $330 $380 $430 $480 $530 $580 $630 $680 $730
Gross Margin $5,000 $5,370 $6,220 $7,070 $7,920 $8,770 $9,620 $10,470 $11,320 $12,170 $13,020 $13,870
Gross Margin % 96.15% 95.89% 95.69% 95.54% 95.42% 95.33% 95.25% 95.18% 95.13% 95.08% 95.04% 95.00%
Expenses
Payroll $4,500 $4,500 $5,000 $5,000 $5,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Sales and Marketing and Other Expenses $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Utilities $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Payroll Taxes 15% $675 $675 $750 $750 $750 $900 $900 $900 $900 $900 $900 $900
Other $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Total Operating Expenses $6,375 $6,375 $6,950 $6,950 $6,950 $8,100 $8,100 $8,100 $8,100 $8,100 $8,100 $8,100
Profit Before Interest and Taxes ($1,375) ($1,005) ($730) $120 $970 $670 $1,520 $2,370 $3,220 $4,070 $4,920 $5,770
EBITDA ($1,375) ($1,005) ($730) $120 $970 $670 $1,520 $2,370 $3,220 $4,070 $4,920 $5,770
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred ($413) ($281) ($204) $34 $272 $188 $426 $664 $902 $1,140 $1,378 $1,616
Net Profit ($963) ($724) ($526) $86 $698 $482 $1,094 $1,706 $2,318 $2,930 $3,542 $4,154
Net Profit/Sales -18.51% -12.92% -8.09% 1.17% 8.41% 5.24% 10.84% 15.51% 19.48% 22.89% 25.86% 28.45%

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 $5,200 $5,600 $6,500 $7,400 $8,300 $9,200 $10,100 $11,000 $11,900 $12,800 $13,700 $14,600
Subtotal Cash from Operations $5,200 $5,600 $6,500 $7,400 $8,300 $9,200 $10,100 $11,000 $11,900 $12,800 $13,700 $14,600
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 $5,200 $5,600 $6,500 $7,400 $8,300 $9,200 $10,100 $11,000 $11,900 $12,800 $13,700 $14,600
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 $4,500 $4,500 $5,000 $5,000 $5,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Bill Payments $55 $1,668 $1,830 $2,035 $2,323 $2,605 $2,727 $3,015 $3,303 $3,591 $3,879 $4,167
Subtotal Spent on Operations $4,555 $6,168 $6,830 $7,035 $7,323 $8,605 $8,727 $9,015 $9,303 $9,591 $9,879 $10,167
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 $4,555 $6,168 $6,830 $7,035 $7,323 $8,605 $8,727 $9,015 $9,303 $9,591 $9,879 $10,167
Net Cash Flow $645 ($568) ($330) $365 $977 $595 $1,373 $1,985 $2,597 $3,209 $3,821 $4,433
Cash Balance $21,645 $21,077 $20,746 $21,111 $22,088 $22,683 $24,055 $26,040 $28,637 $31,846 $35,667 $40,099
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 $21,000 $21,645 $21,077 $20,746 $21,111 $22,088 $22,683 $24,055 $26,040 $28,637 $31,846 $35,667 $40,099
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $21,000 $21,645 $21,077 $20,746 $21,111 $22,088 $22,683 $24,055 $26,040 $28,637 $31,846 $35,667 $40,099
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 $21,000 $21,645 $21,077 $20,746 $21,111 $22,088 $22,683 $24,055 $26,040 $28,637 $31,846 $35,667 $40,099
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 $1,607 $1,763 $1,958 $2,236 $2,515 $2,627 $2,905 $3,184 $3,462 $3,741 $4,019 $4,297
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 $1,607 $1,763 $1,958 $2,236 $2,515 $2,627 $2,905 $3,184 $3,462 $3,741 $4,019 $4,297
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $1,607 $1,763 $1,958 $2,236 $2,515 $2,627 $2,905 $3,184 $3,462 $3,741 $4,019 $4,297
Paid-in Capital $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Retained Earnings ($4,000) ($4,000) ($4,000) ($4,000) ($4,000) ($4,000) ($4,000) ($4,000) ($4,000) ($4,000) ($4,000) ($4,000) ($4,000)
Earnings $0 ($963) ($1,686) ($2,212) ($2,125) ($1,427) ($944) $150 $1,856 $4,175 $7,105 $10,648 $14,802
Total Capital $21,000 $20,038 $19,314 $18,788 $18,875 $19,573 $20,056 $21,150 $22,856 $25,175 $28,105 $31,648 $35,802
Total Liabilities and Capital $21,000 $21,645 $21,077 $20,746 $21,111 $22,088 $22,683 $24,055 $26,040 $28,637 $31,846 $35,667 $40,099
Net Worth $21,000 $20,038 $19,314 $18,788 $18,875 $19,573 $20,055 $21,150 $22,856 $25,175 $28,105 $31,648 $35,802

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