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Wholesale & Distributor icon Wholesale Bicycle Distributor Business Plan

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Wheelie Deals

Executive Summary

Wheelie Deals is a wholesale distributor that serves the retail bicycle industry.  Wheelie Deals will carve out a focused niche within this industry, providing closeouts, last-year models, and seconds.  Currently, most of the large wholesalers will occasionally have a closeout to offer, however, the availability of special deals is spotty.  Wheelie Deals will quickly become the #1 source to provide retail shops with above average margins.

Wheelie Deals is lead by Dan Psycle, MBA, a veteran of the bicycle industry.  Dan has modeled Wheelie Deals off of an already successful wholesale distributor business model and will quickly gain market share.  Profitability will be reached by month eight with comfortable profits by year three.

Wholesale bicycle distributor business plan, executive summary chart image

1.1 Objectives

The objectives for the first three years of operation include:

  • To create a company whose goal is to exceed customer’s expectations.
  • To increase the number of customers served by 20% per year.
  • To develop a sustainable start-up business, surviving off its own cash.

1.2 Mission

Wheelie Deals’ mission is to create the largest selection of closeout bicycle parts.  We exist to attract and maintain customers.  When we adhere to this maxim, everything else will fall into place.  Our services will exceed the expectations of our customers.

1.3 Keys to Success

The key to success is unbeatable selection and outstanding customer service.

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Company Summary

Wheelie Deals is a wholesale distributor of closeout bicycle parts.  The warehouse is based in Albany, Oregon.  Wheelie Deals services the national retail bicycle industry with manufacturer closeouts, seconds, and last-year model bicycle parts and components.

2.1 Start-up Summary

Wheelie Deals will incur the following start-up costs:

  • Pallet racking.
  • Pallets.
  • Pallet truck.
  • Pallet shelving.
  • Forklift (used).
  • Three computer systems including CD-RW, printer, DSL connection, Microsoft Office, and QuickBooks Pro.
  • Three desks and chairs.
  • File cabinets.
  • Three phone lines.

Please note that the following items which are considered assets to be used for more than a year will labeled long-term assets and will be depreciated using G.A.A.P. approved straight-line depreciation method.

Wholesale bicycle distributor business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Legal $1,000
Stationery etc. $100
Brochures $200
Other $0
Total Start-up Expenses $1,300
Start-up Assets
Cash Required $28,950
Start-up Inventory $10,000
Other Current Assets $0
Long-term Assets $24,750
Total Assets $63,700
Total Requirements $65,000
Start-up Funding
Start-up Expenses to Fund $1,300
Start-up Assets to Fund $63,700
Total Funding Required $65,000
Assets
Non-cash Assets from Start-up $34,750
Cash Requirements from Start-up $28,950
Additional Cash Raised $0
Cash Balance on Starting Date $28,950
Total Assets $63,700
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
Dan $15,000
Friends and family $40,000
Other $0
Additional Investment Requirement $10,000
Total Planned Investment $65,000
Loss at Start-up (Start-up Expenses) ($1,300)
Total Capital $63,700
Total Capital and Liabilities $63,700
Total Funding $65,000

2.2 Company Ownership

Wheelie Deals is an privately held Oregon corporation founded and owned by Dan Psycle.

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Products

Wheelie Deals is a wholesale distributor of bicycles and bicycle components.  Wheelie Deals specializes in closeouts, last-year models, and seconds.  A partial list of the manufacturers that Wheelie Deals sells are:

  • Shimano
  • Campagnolo
  • White Industries
  • Syncros
  • Mavic
  • Chris King
  • Tioga
  • Michelin
  • Easton
  • Rock Shox
  • Answer Racing
  • Salsa
  • Race Face
  • Sweet Parts
  • Grip Shift
  • Ritchey
  • Wellgo
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Market Analysis Summary

The retail bicycle market can be broken down into two segments, the independent bicycle shops and the chain bicycle shops.  Most bike shops are independent, however, there is a growing trend of bicycle shops being part of a chain.

4.1 Market Segmentation

The two segments that Wheelie Deals will be targeting are:

  • Independent bicycle shop. The large majority of bicycle retailers are independently owned sole proprietorships.  They are usually owned by one person and range from three to 10 employees, depending on the season.
  • Chain bicycle shops. Although chains are not the predominant business form, most large cities (over 200,000 people) have at least one chain serving the community.  Sometimes the chains are franchises with different owners, other times they are same owners with multiple stores.

The majority of sales will be to the independent bicycle shops, the reason being most of the chains have a very uniformed product offering that does not deviate for specials and closeouts.  The chains tend to value consistency of product offerings at the expense of profit margins.

Wholesale bicycle distributor business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Independant bicycle shops 9% 12,458 13,579 14,801 16,133 17,585 9.00%
Chain bicycle shops 8% 8,045 8,689 9,384 10,135 10,946 8.00%
Other 0% 0 0 0 0 0 0.00%
Total 8.61% 20,503 22,268 24,185 26,268 28,531 8.61%

4.2 Target Market Segment Strategy

Wheelie Deals will target the retail bicycle shops through three means:

  • Trade shows. Wheelie Deals will be visible at the two major industry trade shows.  75% of the retail bicycle shops attend at least one trade show a year.  The shows provide retailers an opportunity to view upcoming products and chat with a spokesman from the company, as well place pre-season orders.
  • Advertisements. Wheelie Deals will be advertising in Bicycle Retailer, the industry magazine.  90% of the bicycle shops in America receive a copy of Bicycle Retailer making the advertising opportunities especially valuable.
  • Website. Wheelie Deals will develop a website that includes a current catalog of their offerings.  This will be the most up-to-date source of product information and availability.  All advertising activities and trade show presence will highlight the website as an indispensable source of information.

4.3 Industry Analysis

Currently the industry is served by 10-15 different wholesalers.  Each wholesaler has their own niche to some degree, but generally they have a fairly wide product offering. Some or most of the wholesalers have a sale or closeout section, but this typically makes up a small percentage of their business.  It is well known that the margins in the retail bicycle industry are small;  30% for bicycles, 75% for components, and 100% for clothing.  Closeouts are a great way to increase store traffic and significantly helps out the shop’s bottom line with higher margins.

4.3.1 Competition and Buying Patterns

The major competitors are:

  • Seattle Bike Supply: this is a national distributor with several warehouses spread out across the country.  Seattle sells closeout products, but they make up a small portion of their business.
  • Quality Bicycle Products: this is a relatively high-end bicycle component distributor that operates on a national scale, however, they only have one warehouse in Minneapolis, MN.
  • Riteway: this is a national wholesaler with multiple warehouses.  Riteway has an extensive product catalog and does offer a decent amount of closeouts, in part due to a minority holding of the GT bicycle company.

Bicycle retailers tend to favor one type of distributor for certain things.  Some variables that influence decision is price, availability, shipping time, and available terms.  The retailers will often use one main wholesaler and aggregate as much as possible into an order to save shipping costs.

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Strategy and Implementation Summary

Wheelie Deals sales and marketing strategy will be based on occupying an unmet niche in the retail bicycle wholesale industry.  Wheelie Deals will be a wholesaler only for closeout items.  This focus will allow Wheelie Deals to stand out relative to the other wholesalers in the industry.

5.1 Competitive Edge

Wheelie Deals’ competitive edge is specializing in the closeout niche.  Currently, there are no wholesalers that are specializing to a large degree.  Everyone carries a fairly wide range of products.  It is a clear advantage to be focused and only concentrate a specific niche.  By focusing on closeouts, retail shops can contact Wheelie Deals and always find products that offer nice margins, uncharacteristic of the bicycle industry. 

The trend of the industry in general is of consolidation.  By offering value-added services such as closeout items which provide the retailer with better than average margins, Wheelie Deals is developing value that creates a steady flow of customers.

5.2 Sales Strategy

The sales strategy will be intertwined with the product offerings.  It is of small value to have great closeouts if there is little demand.  By having a well thought out product selection, Wheelie Deals will significantly increase the chances of turning a prospective customer into a sale.  Wheelie Deals will emphasize the popularity and quick turnover of the items that they stock.  Wheelie Deals will shy away from items that may be a good deal but are a hard sell because they are likely to sit on the retailers shelf. 

Additionally, Wheelie Deals will have constantly changing inventory which will encourage shops to frequently inquire with Wheelie Deals.  Lastly, Wheelie Deals will have an email update service that will be sent to interested shops which is a “hotsheet” that details the current specials.

5.2.1 Sales Forecast

The first month will be used to secure warehouse space, set it up to accept inventory, and hire personnel.  During the first six weeks relationships will be established with many different manufactures of parts.  These relationships will be based on Wheelie Deals willingness to take all of their closeouts.  Typically, the manufacturer will call several distributors and eventually will find someone to take some, or all of their product.  Wheelie Deals increased willingness to take closeouts will create an incentive for the manufacturer to contact Wheelie Deals first.

Month three will mark the first decent month of sales.  It is forecasted that sales will steadily increase after this month. 

Wholesale bicycle distributor business plan, strategy and implementation summary chart image

Wholesale bicycle distributor business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Independent bicycle shops $187,239 $335,458 $365,454
Chain bicycle shops $121,705 $218,048 $237,545
Total Sales $308,944 $553,506 $602,999
Direct Cost of Sales Year 1 Year 2 Year 3
Independent bicycle shops $93,620 $167,729 $182,727
Chain bicycle shops $60,853 $109,024 $118,773
Subtotal Direct Cost of Sales $154,472 $276,753 $301,500

5.3 Milestones

Wheelie Deals will have several milestones early on:

  • Business plan completion.  This will be done as a roadmap for the organization.  This will be an indispensable tool for the ongoing performance and improvement of the company.
  • Warehouse set up.
  • Establishment of vendor relationships.
  • Profitability.
Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2001 2/1/2001 $0 ABC Marketing
Warehouse set up 1/1/2001 2/1/2001 $0 ABC Department
Establishment of vendor relationships 1/1/2001 2/15/2001 $0 ABC Department
Profitability 1/1/2001 9/1/2001 $0 ABC Department
Totals $0

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Management Summary

Dan Psycle received a Bachelor of Arts in philosophy from Washington & Jefferson College. After college he worked in a bicycle shop as a mechanic but quickly moved to sales and finally manager all in a span of a year.  Dan stayed at the shop for two more additional years, learning all of the nuances of the bicycle industry.  By this time, Dan felt he had a comfortable grasp of the bicycle industry and now it was time for more schooling.

Dan moved out to Eugene, OR to pursue a MBA from the University of Oregon. A friend of Dan’s family had a wholesale distribution company for plumbing supplies.  Dan spent a week with this company to gain insight into the wholesale distribution industry in hopes of transferring this information into a distribution business for the bicycling industry.

6.1 Personnel Plan

Dan will be a full-time employee.  Dan will also hire one administrative person to handle billing, payroll, and etc.  Two other full-time employees will be used for taking phone orders.  These two employees will assist a fourth employee with order fulfillment.

Personnel Plan
Year 1 Year 2 Year 3
Dan $36,000 $40,000 $45,000
Full time administrative $17,600 $19,200 $20,544
Full time sales $17,600 $19,200 $20,544
Full time sales $17,600 $19,200 $20,544
Full time order fullfillment $17,600 $19,200 $20,544
Total People 5 5 5
Total Payroll $106,400 $116,800 $127,176

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Financial Plan

The following sections will outline important financial information.

Please note that under the Ratio table, in percentage of sales grouping, there is a bit of discrepancy between Wheelie Deals numbers and the industry average.  This is explained by different accounting procedures for expenses.

7.1 Important Assumptions

The following table details important financial assumptions.

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 30.00% 30.00% 30.00%
Other 0 0 0

7.2 Break-even Analysis

The Break-even Analysis indicates what will be needed in monthly revenue to reach the break-even point.

Wholesale bicycle distributor business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $30,819
Assumptions:
Average Percent Variable Cost 50%
Estimated Monthly Fixed Cost $15,410

7.3 Projected Profit and Loss

The following table will indicate projected profit and loss.

Wholesale bicycle distributor business plan, financial plan chart image

Wholesale bicycle distributor business plan, financial plan chart image

Wholesale bicycle distributor business plan, financial plan chart image

Wholesale bicycle distributor business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $308,944 $553,506 $602,999
Direct Cost of Sales $154,472 $276,753 $301,500
Other Production Expenses $0 $0 $0
Total Cost of Sales $154,472 $276,753 $301,500
Gross Margin $154,472 $276,753 $301,500
Gross Margin % 50.00% 50.00% 50.00%
Expenses
Payroll $106,400 $116,800 $127,176
Sales and Marketing and Other Expenses $2,400 $2,400 $2,400
Depreciation $4,956 $4,956 $4,956
Utilities $3,600 $3,600 $3,600
Insurance $3,600 $3,600 $3,600
Rent $48,000 $48,000 $48,000
Payroll Taxes $15,960 $17,520 $19,076
Other $0 $0 $0
Total Operating Expenses $184,916 $196,876 $208,808
Profit Before Interest and Taxes ($30,444) $79,877 $92,691
EBITDA ($25,488) $84,833 $97,647
Interest Expense $0 $0 $0
Taxes Incurred $0 $23,963 $27,807
Net Profit ($30,444) $55,914 $64,884
Net Profit/Sales -9.85% 10.10% 10.76%

7.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Wholesale bicycle distributor business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $308,944 $553,506 $602,999
Subtotal Cash from Operations $308,944 $553,506 $602,999
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 $308,944 $553,506 $602,999
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $106,400 $116,800 $127,176
Bill Payments $214,461 $380,032 $407,377
Subtotal Spent on Operations $320,861 $496,832 $534,553
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 $320,861 $496,832 $534,553
Net Cash Flow ($11,917) $56,674 $68,446
Cash Balance $17,033 $73,707 $142,153

7.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $17,033 $73,707 $142,153
Inventory $18,253 $32,703 $35,627
Other Current Assets $0 $0 $0
Total Current Assets $35,287 $106,410 $177,781
Long-term Assets
Long-term Assets $24,750 $24,750 $24,750
Accumulated Depreciation $4,956 $9,912 $14,868
Total Long-term Assets $19,794 $14,838 $9,882
Total Assets $55,081 $121,248 $187,663
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $21,824 $32,078 $33,609
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $21,824 $32,078 $33,609
Long-term Liabilities $0 $0 $0
Total Liabilities $21,824 $32,078 $33,609
Paid-in Capital $65,000 $65,000 $65,000
Retained Earnings ($1,300) ($31,744) $24,170
Earnings ($30,444) $55,914 $64,884
Total Capital $33,256 $89,170 $154,054
Total Liabilities and Capital $55,081 $121,248 $187,663
Net Worth $33,256 $89,170 $154,054

7.6 Business Ratios

The following table outlines some of the more important ratios from the Sporting and Recreational Goods and Supplies Merchant Wholesale  industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the NAICS code, 423910.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 79.16% 8.94% 11.50%
Percent of Total Assets
Inventory 33.14% 26.97% 18.98% 28.00%
Other Current Assets 0.00% 0.00% 0.00% 29.00%
Total Current Assets 64.06% 87.76% 94.73% 88.70%
Long-term Assets 35.94% 12.24% 5.27% 11.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 39.62% 26.46% 17.91% 38.00%
Long-term Liabilities 0.00% 0.00% 0.00% 9.00%
Total Liabilities 39.62% 26.46% 17.91% 47.00%
Net Worth 60.38% 73.54% 82.09% 53.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.00% 50.00% 50.00% 23.00%
Selling, General & Administrative Expenses 59.85% 39.90% 39.24% 14.80%
Advertising Expenses 0.39% 0.22% 0.20% 0.70%
Profit Before Interest and Taxes -9.85% 14.43% 15.37% 2.00%
Main Ratios
Current 1.62 3.32 5.29 2.19
Quick 0.78 2.30 4.23 1.22
Total Debt to Total Assets 39.62% 26.46% 17.91% 47.00%
Pre-tax Return on Net Worth -91.54% 89.58% 60.17% 5.30%
Pre-tax Return on Assets -55.27% 65.88% 49.39% 10.10%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -9.85% 10.10% 10.76% n.a
Return on Equity -91.54% 62.70% 42.12% n.a
Activity Ratios
Inventory Turnover 10.08 10.86 8.82 n.a
Accounts Payable Turnover 10.83 12.17 12.17 n.a
Payment Days 27 25 29 n.a
Total Asset Turnover 5.61 4.57 3.21 n.a
Debt Ratios
Debt to Net Worth 0.66 0.36 0.22 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $13,462 $74,332 $144,172 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.18 0.22 0.31 n.a
Current Debt/Total Assets 40% 26% 18% n.a
Acid Test 0.78 2.30 4.23 n.a
Sales/Net Worth 9.29 6.21 3.91 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
Independent bicycle shops 0% $0 $3,455 $8,544 $12,457 $15,478 $17,454 $18,854 $25,855 $22,787 $21,987 $20,254 $20,114
Chain bicycle shops 0% $0 $2,246 $5,554 $8,097 $10,061 $11,345 $12,255 $16,806 $14,812 $14,292 $13,165 $13,074
Total Sales $0 $5,701 $14,098 $20,554 $25,539 $28,799 $31,109 $42,661 $37,599 $36,279 $33,419 $33,188
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
Independent bicycle shops $0 $1,728 $4,272 $6,229 $7,739 $8,727 $9,427 $12,928 $11,394 $10,994 $10,127 $10,057
Chain bicycle shops $0 $1,123 $2,777 $4,049 $5,030 $5,673 $6,128 $8,403 $7,406 $7,146 $6,583 $6,537
Subtotal Direct Cost of Sales $0 $2,850 $7,049 $10,277 $12,769 $14,400 $15,555 $21,330 $18,799 $18,139 $16,710 $16,594
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
Dan 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Full time administrative 0% $0 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Full time sales 0% $0 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Full time sales 0% $0 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Full time order fullfillment 0% $0 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Total People 1 5 5 5 5 5 5 5 5 5 5 5
Total Payroll $3,000 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400

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% 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 $0 $5,701 $14,098 $20,554 $25,539 $28,799 $31,109 $42,661 $37,599 $36,279 $33,419 $33,188
Direct Cost of Sales $0 $2,850 $7,049 $10,277 $12,769 $14,400 $15,555 $21,330 $18,799 $18,139 $16,710 $16,594
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $2,850 $7,049 $10,277 $12,769 $14,400 $15,555 $21,330 $18,799 $18,139 $16,710 $16,594
Gross Margin $0 $2,850 $7,049 $10,277 $12,769 $14,400 $15,555 $21,330 $18,799 $18,139 $16,710 $16,594
Gross Margin % 0.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
Expenses
Payroll $3,000 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400
Sales and Marketing and Other Expenses $100 $700 $100 $100 $100 $100 $100 $100 $100 $700 $100 $100
Depreciation $413 $413 $413 $413 $413 $413 $413 $413 $413 $413 $413 $413
Utilities $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Insurance $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Rent $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Payroll Taxes 15% $450 $1,410 $1,410 $1,410 $1,410 $1,410 $1,410 $1,410 $1,410 $1,410 $1,410 $1,410
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $8,563 $16,523 $15,923 $15,923 $15,923 $15,923 $15,923 $15,923 $15,923 $16,523 $15,923 $15,923
Profit Before Interest and Taxes ($8,563) ($13,673) ($8,874) ($5,646) ($3,154) ($1,523) ($368) $5,407 $2,876 $1,616 $787 $671
EBITDA ($8,150) ($13,260) ($8,461) ($5,233) ($2,741) ($1,110) $45 $5,820 $3,289 $2,029 $1,200 $1,084
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($8,563) ($13,673) ($8,874) ($5,646) ($3,154) ($1,523) ($368) $5,407 $2,876 $1,616 $787 $671
Net Profit/Sales 0.00% -239.84% -62.95% -27.47% -12.35% -5.29% -1.18% 12.68% 7.65% 4.46% 2.35% 2.02%

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 $5,701 $14,098 $20,554 $25,539 $28,799 $31,109 $42,661 $37,599 $36,279 $33,419 $33,188
Subtotal Cash from Operations $0 $5,701 $14,098 $20,554 $25,539 $28,799 $31,109 $42,661 $37,599 $36,279 $33,419 $33,188
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 $5,701 $14,098 $20,554 $25,539 $28,799 $31,109 $42,661 $37,599 $36,279 $33,419 $33,188
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 $3,000 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400 $9,400
Bill Payments $172 $5,202 $6,945 $13,969 $19,994 $21,644 $22,324 $23,297 $33,405 $22,192 $24,027 $21,291
Subtotal Spent on Operations $3,172 $14,602 $16,345 $23,369 $29,394 $31,044 $31,724 $32,697 $42,805 $31,592 $33,427 $30,691
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 $3,172 $14,602 $16,345 $23,369 $29,394 $31,044 $31,724 $32,697 $42,805 $31,592 $33,427 $30,691
Net Cash Flow ($3,172) ($8,901) ($2,247) ($2,815) ($3,855) ($2,245) ($615) $9,964 ($5,206) $4,687 ($8) $2,497
Cash Balance $25,778 $16,877 $14,630 $11,815 $7,959 $5,715 $5,100 $15,064 $9,858 $14,545 $14,536 $17,033
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 $28,950 $25,778 $16,877 $14,630 $11,815 $7,959 $5,715 $5,100 $15,064 $9,858 $14,545 $14,536 $17,033
Inventory $10,000 $10,000 $7,150 $7,754 $11,305 $14,046 $15,840 $17,110 $23,463 $20,679 $19,953 $18,381 $18,253
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $38,950 $35,778 $24,027 $22,383 $23,120 $22,006 $21,554 $22,210 $38,527 $30,537 $34,498 $32,917 $35,287
Long-term Assets
Long-term Assets $24,750 $24,750 $24,750 $24,750 $24,750 $24,750 $24,750 $24,750 $24,750 $24,750 $24,750 $24,750 $24,750
Accumulated Depreciation $0 $413 $826 $1,239 $1,652 $2,065 $2,478 $2,891 $3,304 $3,717 $4,130 $4,543 $4,956
Total Long-term Assets $24,750 $24,337 $23,924 $23,511 $23,098 $22,685 $22,272 $21,859 $21,446 $21,033 $20,620 $20,207 $19,794
Total Assets $63,700 $60,115 $47,951 $45,894 $46,218 $44,691 $43,826 $44,069 $59,973 $51,570 $55,118 $53,124 $55,081
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 $4,978 $6,486 $13,304 $19,273 $20,900 $21,559 $22,171 $32,667 $21,388 $23,319 $20,539 $21,824
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 $4,978 $6,486 $13,304 $19,273 $20,900 $21,559 $22,171 $32,667 $21,388 $23,319 $20,539 $21,824
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $4,978 $6,486 $13,304 $19,273 $20,900 $21,559 $22,171 $32,667 $21,388 $23,319 $20,539 $21,824
Paid-in Capital $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000
Retained Earnings ($1,300) ($1,300) ($1,300) ($1,300) ($1,300) ($1,300) ($1,300) ($1,300) ($1,300) ($1,300) ($1,300) ($1,300) ($1,300)
Earnings $0 ($8,563) ($22,236) ($31,110) ($36,756) ($39,909) ($41,433) ($41,801) ($36,394) ($33,518) ($31,901) ($31,115) ($30,444)
Total Capital $63,700 $55,137 $41,464 $32,590 $26,944 $23,791 $22,267 $21,899 $27,306 $30,182 $31,799 $32,585 $33,256
Total Liabilities and Capital $63,700 $60,115 $47,951 $45,894 $46,218 $44,691 $43,826 $44,069 $59,973 $51,570 $55,118 $53,124 $55,081
Net Worth $63,700 $55,137 $41,464 $32,590 $26,944 $23,791 $22,267 $21,899 $27,306 $30,182 $31,799 $32,585 $33,256

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