December 2001This sample business plan has been made available to users of Business Plan Pro®, business planningsoftware p...
Confidentiality AgreementThe undersigned reader ac knowledges that the information provided by_________________________ in...
Table of Contents1.0 Executive Summary.......................................................................................
Aztec Food Imports1.0 Executive Summary   Aztec Food Imports (Aztec) will offer food product imports from Mexico to meet i...
Aztec Food Imports2.0 Company Summary  Aztec Food Imports will import Mexican food products to the loc al markets of the R...
Aztec Food Imports2.2 Start-up Summary   The start-up cost of Aztec Food Imports will consist primarily of inventory. Raym...
Aztec Food Imports   Table: Start-up   Start-up   Requirements   Start-up Expenses   Legal                                ...
Aztec Food Imports3.0 Products   Aztecs product line is rather extensive amounting to over 200 items:    •   Beverages.   ...
Aztec Food Imports   Table: Market Analysis   Market Analysis                                          2002        2003   ...
Aztec Food Imports4.3 Main Competitors   Currently, Ac me Food Importers loc ated in Wilsonville supplies the Richmond are...
Aztec Food ImportsTable: Sales ForecastSales Forecast                                       2002       2003       2004Sale...
Aztec Food Imports6.0 Management Summary   The two owners will co-manage the business. Raymond Garcia is responsible for t...
Aztec Food Imports7.1 Break-even Analysis   The monthly break-even point is $26,514.   Table: Break-even Analysis   Break-...
Aztec Food Imports7.2 Projected Profit and Loss   The following table and charts will highlight the next three years.     ...
Aztec Food Imports                     Page 12
Aztec Food ImportsTable: Profit and LossPro Forma Profit and Loss                                              2002       ...
Aztec Food Imports7.3 Projected Cash Flow   The following table and chart highlight the projec ted cash flow for three yea...
Aztec Food Imports                     Page 15
Aztec Food Imports7.4 Projected Balance Sheet   The following table highlights the projec ted balance sheet for three year...
Aztec Food ImportsTable: RatiosRatio Analysis                                                       2002       2003       ...
Aztec Food ImportsDividend Payout            0.00        0.00   0.00   n.a                                                ...
AppendixTable: Sales ForecastSales Forecast                                        Jan       Feb       Mar        Apr     ...
AppendixTable: PersonnelPersonnel Plan                            Jan       Feb       Mar        Apr       May       Jun  ...
AppendixTable: General AssumptionsGeneral Assumptions                                    Jan          Feb          Mar    ...
AppendixTable: Profit and LossPro Forma Profit and Loss                                             Jan        Feb        ...
AppendixTable: Cash FlowPro Forma Cash Flow                                                        Jan         Feb       M...
AppendixTable: Balance SheetPro Forma Balance Sheet                                                              Jan      ...
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Astek foodimports

  1. 1. December 2001This sample business plan has been made available to users of Business Plan Pro®, business planningsoftware published by Palo Alto Software, Inc. Names, loc ations and numbers may have beenchanged, and substantial portions of the original plan text may have been omitted to preserveconfidentiality and proprietary information.You are welcome to use this plan as a starting point to create your own, but you do not havepermission to resell, reproduce, publish, distribute or even c opy this plan as it exists here.Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailedto the marketing department of Palo Alto Software at marketing@paloalto.com. For productinformation visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright © Palo Alto Software, Inc., 1995-2008 All rights reserved.
  2. 2. Confidentiality AgreementThe undersigned reader ac knowledges that the information provided by_________________________ in this business plan is confidential; therefore, reader agrees not todisc lose it without the express written permission of _________________________.It is ac knowledged by reader that information to be furnished in this business plan is in all respec tsconfidential in nature, other than information which is in the public domain through other means andthat any disc losure or use of same by reader, may cause serious harm or damage to_________________________.Upon request, this document is to be immediately returned to _________________________.___________________Signature___________________Name (typed or printed)___________________DateThis is a business plan. It does not imply an offering of securities.
  3. 3. Table of Contents1.0 Executive Summary.............................................................................................................................1 1.1 Objectives ...................................................................................................................................1 1.2 Mission........................................................................................................................................1 1.3 Keys to Success ........................................................................................................................12.0 Company Summary.............................................................................................................................2 2.1 Company Ownership .................................................................................................................2 2.2 Start-up Summary ......................................................................................................................3 2.3 Company Locations and Facilities ..........................................................................................43.0 Products ...............................................................................................................................................54.0 Market Analysis Summary..................................................................................................................5 4.1 Market Segmentation ................................................................................................................5 4.2 Target Market Segment Strategy.............................................................................................6 4.3 Main Competitors ......................................................................................................................75.0 Strategy and Implementation Summary ............................................................................................7 5.1 Competitive Edge ......................................................................................................................7 5.2 Sales Strategy............................................................................................................................7 5.2.1 Sales Forecast........................................................................................................................76.0 Management Summary.......................................................................................................................9 6.1 Personnel Plan ...........................................................................................................................97.0 Financial Plan ......................................................................................................................................9 7.1 Break-even Analysis................................................................................................................10 7.2 Projected Profit and Loss .......................................................................................................11 7.3 Projected Cash Flow ...............................................................................................................14 7.4 Projected Balance Sheet ........................................................................................................16 7.5 Business Ratios .......................................................................................................................16 Page 1
  4. 4. Aztec Food Imports1.0 Executive Summary Aztec Food Imports (Aztec) will offer food product imports from Mexico to meet increased demand for these product by the citys growing Hispanic/Latino community in the greater Richmond area. Over the last five years, this community has grown by 70%, and represents half of the Richmond Metro population (250,000). Aztec has been successful over the competition in supplying imported mexican food products to the areas two PriceRight supermarkets. From this base, Aztec will build a successful business serving the areas large and small markets.1.1 Objectives • Establish Aztec Food Imports as the number one importer of mexican food products in Richmond. • Increase the number of mexican food products being carried in loc al markets by 20% over the next two years. • Build solid working relationships with the purchasing agents of the loc al stores serving Richmonds growing Hispanic/Latino population.1.2 Mission Aztecs mission is to supply Mexican food imports to Richmond stores which are currently being poorly served by importers loc ated over 150 miles away. Raymond Garcia, co-owner of Aztec, will utilize his importing bac kground, his experience in the food retail market, as well as his contac ts in Mexico to bring in products that area customers demand.1.3 Keys to Success The keys to success in Aztecs business are: 1. Offering items of a high quality-value relationship which are not available everywhere. This is essential for maintaining the niche market sectors mentioned in the mission statement. 2. Reliable and timely deliveries. Aztec must make good on its delivery promises. Bec ause of the nature of doing business in Mexico, this requires long-range planning in scheduling orders, taking into ac count Mexican business prac tices. 3. A reliable administration that is ready to serve customers, prepare ac curate billing, follow-up on orders and other documentation, and maintain a close watch on expenses and collec tion of ac counts rec eivable. Page 1
  5. 5. Aztec Food Imports2.0 Company Summary Aztec Food Imports will import Mexican food products to the loc al markets of the Richmond Metro area.2.1 Company Ownership Aztecs ownership is shared equally between Raymond Garcia and Jose Arroyo. Raymond has eight years of importing experience. Jose Arroya has 10 years experience in managing imports from Mexico and shipping to the U.S. market. Raymond Garcia is responsible for the daily management, sales, and store deliveries. Jose Arroya is responsible for the quality control and shipping of the goods from Mexico to the U.S. Page 2
  6. 6. Aztec Food Imports2.2 Start-up Summary The start-up cost of Aztec Food Imports will consist primarily of inventory. Raymond Garcia and Jose Arroya will eac h invest $50,000. They will also secure a $100,000 SBA loan. Table: Start-up Funding Start-up Funding Start-up Expenses to Fund $15,300 Start-up Assets to Fund $184,700 Total Funding Required $200,000 Assets Non-cash Assets from Start-up $80,000 Cash Requirements from Start-up $104,700 Additional Cash Raised $0 Cash Balance on Starting Date $104,700 Total Assets $184,700 Liabilities and Capital Liabilities Current Borrowing $0 Long-term Liabilities $100,000 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $100,000 Capital Planned Investment Raymond Garcia $50,000 IJose Arroya $50,000 Other $0 Additional Investment Requirement $0 Total Planned Investment $100,000 Loss at Start-up (Start-up Expenses) ($15,300) Total Capital $84,700 Total Capital and Liabilities $184,700 Total Funding $200,000 Page 3
  7. 7. Aztec Food Imports Table: Start-up Start-up Requirements Start-up Expenses Legal $5,000 Stationery etc. $800 Brochures $2,000 Consultants $0 Insurance $0 Rent $3,000 Expensed Equipment $4,000 Utilities $500 Other $0 Total Start-up Expenses $15,300 Start-up Assets Cash Required $104,700 Start-up Inventory $60,000 Other Current Assets $0 Long-term Assets $20,000 Total Assets $184,700 Total Requirements $200,0002.3 Company Locations and Facilities Aztec Food Imports will have warehouse space loc ated in the Fillmore industrial district. Page 4
  8. 8. Aztec Food Imports3.0 Products Aztecs product line is rather extensive amounting to over 200 items: • Beverages. • Canned foods. • Chile peppers. • Desserts. • Packaged foods. • Salsas. • Snacks. • Spices and herbs. Aztec also carries the popular brands: • Ducal. • Herdez. • Juanitas. • La Costeña. • La Joya. • La Lechonera. • La Sierra. • Pico Pica.4.0 Market Analysis Summary The Hispanic/Latino population in the Richmond Metro area has grown by 10% over the past five years. The current population stands at over 100,000. It is projec ted that the population will continue its growth pattern for the next five years and will eventually reach over 160,000. A majority of these inner-city residents live in family groups of six or more members. The average household income for the area is $32,000. There are four major supermarkets that operate in the area and over 50 smaller food stores that serve the metro communities. Last year, the four major supermarkets grossed over $150,000,000 in sales. There are plans to build additional supermarkets in the Richmond Metro area in 2003 and 2004. Two of the current supermarkets in the Richmond Metro area are part the loc al PriceRight chain. PriceRight is planning a new store in the area in 2004. Though it is difficult to know the exac t sales figures for the small markets in the area, traditionally, the community residents have been supportive of the smaller store if their prices are competitive. Last year, Wilson Foods Imports grossed $1.5 million in sales with smaller markets in the Richmond Metro area.4.1 Market Segmentation Aztec Food Imports will serve all retail food outlets in the Richmond Metro area. These include neighborhood markets and supermarkets. Page 5
  9. 9. Aztec Food Imports Table: Market Analysis Market Analysis 2002 2003 2004 2005 2006 Potential Customers Growth CAGR Supermarkets 20% 4 5 6 7 8 18.92% Neighborhood Markets 20% 50 60 72 86 103 19.80% Other 0% 0 0 0 0 0 0.00% Total 19.74% 54 65 78 93 111 19.74%4.2 Target Market Segment Strategy Aztec Food Imports will have two distinct marketing approaches: • For Neighborhood Markets: Raymond will promote a small group of popular mexican food products that are likely to move fast in smaller stores. These products will be priced to be attrac tive to the small store owner. Once successful, Raymond will expand the product group. • For Supermarkets: Raymond will promote the complete line of products that Aztec can provide. Aztec prices will reflec t a stronger import connec tion in Mexico that will results in lower prices and more product. Page 6
  10. 10. Aztec Food Imports4.3 Main Competitors Currently, Ac me Food Importers loc ated in Wilsonville supplies the Richmond area food stores with imported mexican food products. Wilsonville is 150 miles north of Richmond. Only in the past two years has the demand for these products grown sufficiently to impact Ac mes ability to satisfy demand. Besides the distance, Ac me is plagued with weak import connec tions in Mexico. These fac tors contribute to the high wholesale price of Ac mes imported products.5.0 Strategy and Implementation Summary Aztec Food Imports will foc us on bec oming the leading provider of wholesale imported mexican food product in the Richmond Metro area.5.1 Competitive Edge Raymond Garcia and Jose Arroyo are the competitive edge of Aztec Food Imports. Raymond has worked for both Acme Food Imports and Wilson Food Imports over the past eight years. In his last position with Wilson, Raymond imported mexican food products to numerous markets in the southwest. He generated sales in excess of $2 million annually. His strength is his customer relations and he has been successful in expanding the range of imported mexican food purchased by the markets in his sales region. Jose has been a shipping agent for M. Zegarra Exporting loc ated in Mexico City for the past ten years. The company exported $20 million of products to the U.S last year. Joses responsibility was to eliminate the shipping obstac les and oversee the timely delivery of product to the U.S.5.2 Sales Strategy Aztec Food Imports will have two distinct sales approaches: • For Neighborhood Markets: Raymond will promote a small group of popular mexican food products that are likely to move fast in smaller stores. These items will be pac kaged as a group at an attrac tive price. Raymond will make frequent visits to these stores to build a strong working relationship that will lead to more purchases. • For Supermarkets: Raymond will promote the complete line of products that Aztec can provide. Aztec prices will reflec t a stronger import connec tion in Mexico that will results in lower prices and more product. Raymond will promote new seasonal products and provide assistance on marketing the products to the Hispanic/Latino community.5.2.1 Sales Forecast The following is the sales forec ast for three years. Page 7
  11. 11. Aztec Food ImportsTable: Sales ForecastSales Forecast 2002 2003 2004SalesSupermarkets $209,500 $260,000 $310,000Neighborhood Markets $124,000 $160,000 $200,000Total Sales $333,500 $420,000 $510,000Direct Cost of Sales 2002 2003 2004Supermarkets $85,900 $110,000 $130,000Neighborhood Markets $18,300 $23,000 $24,000Subtotal Direct Cost of Sales $104,200 $133,000 $154,000 Page 8
  12. 12. Aztec Food Imports6.0 Management Summary The two owners will co-manage the business. Raymond Garcia is responsible for the daily management, sales, and store deliveries. Jose Arroyo is responsible for the quality control and shipping of the goods from Mexico to the U.S.6.1 Personnel Plan Aztec Food Imports will have two additional delivery employees and an office manager supervised by Raymond. Table: Personnel Personnel Plan 2002 2003 2004 Raymond Garcia $36,000 $45,000 $50,000 Jose Arroyo $36,000 $45,000 $50,000 Delivery Persons $48,000 $54,000 $60,000 Office Manager $31,200 $34,000 $38,000 Other $0 $0 $0 Total People 5 5 5 Total Payroll $151,200 $178,000 $198,0007.0 Financial Plan The following sections outline conservative estimates of the financial performance of Aztec Food Imports. Page 9
  13. 13. Aztec Food Imports7.1 Break-even Analysis The monthly break-even point is $26,514. Table: Break-even Analysis Break-even Analysis Monthly Revenue Break-even $26,514 Assumptions: Average Percent Variable Cost 31% Estimated Monthly Fixed Cost $18,230 Page 10
  14. 14. Aztec Food Imports7.2 Projected Profit and Loss The following table and charts will highlight the next three years. Page 11
  15. 15. Aztec Food Imports Page 12
  16. 16. Aztec Food ImportsTable: Profit and LossPro Forma Profit and Loss 2002 2003 2004Sales $333,500 $420,000 $510,000Direct Cost of Sales $104,200 $133,000 $154,000Other Production Expenses $0 $0 $0Total Cost of Sales $104,200 $133,000 $154,000Gross Margin $229,300 $287,000 $356,000Gross Margin % 68.76% 68.33% 69.80%ExpensesPayroll $151,200 $178,000 $198,000Sales and Marketing and Other Expenses $0 $0 $0Depreciation $2,880 $2,880 $2,880Leased Equipment $0 $0 $0Utilities $6,000 $6,000 $6,000Insurance $0 $0 $0Rent $36,000 $36,000 $36,000Payroll Taxes $22,680 $26,700 $29,700Other $0 $0 $0Total Operating Expenses $218,760 $249,580 $272,580Profit Before Interest and Taxes $10,540 $37,420 $83,420EBITDA $13,420 $40,300 $86,300 Interest Expense $9,233 $7,876 $6,460 Taxes Incurred $392 $8,863 $23,088Net Profit $915 $20,681 $53,872Net Profit/Sales 0.27% 4.92% 10.56% Page 13
  17. 17. Aztec Food Imports7.3 Projected Cash Flow The following table and chart highlight the projec ted cash flow for three years. Table: Cash Flow Pro Forma Cash Flow 2002 2003 2004 Cash Received Cash from Operations Cash Sales $83,375 $105,000 $127,500 Cash from Receivables $194,775 $300,644 $367,563 Subtotal Cash from Operations $278,150 $405,644 $495,063 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 $278,150 $405,644 $495,063 Expenditures 2002 2003 2004 Expenditures from Operations Cash Spending $151,200 $178,000 $198,000 Bill Payments $110,267 $228,719 $255,535 Subtotal Spent on Operations $261,467 $406,719 $453,535 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 $14,160 $14,160 $14,160 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $275,627 $420,879 $467,695 Net Cash Flow $2,523 ($15,235) $27,368 Cash Balance $107,223 $91,987 $119,355 Page 14
  18. 18. Aztec Food Imports Page 15
  19. 19. Aztec Food Imports7.4 Projected Balance Sheet The following table highlights the projec ted balance sheet for three years. Table: Balance Sheet Pro Forma Balance Sheet 2002 2003 2004 Assets Current Assets Cash $107,223 $91,987 $119,355 Accounts Receivable $55,350 $69,706 $84,643 Inventory $15,950 $20,358 $23,573 Other Current Assets $0 $0 $0 Total Current Assets $178,523 $182,052 $227,571 Long-term Assets Long-term Assets $20,000 $20,000 $20,000 Accumulated Depreciation $2,880 $5,760 $8,640 Total Long-term Assets $17,120 $14,240 $11,360 Total Assets $195,643 $196,292 $238,931 Liabilities and Capital 2002 2003 2004 Current Liabilities Accounts Payable $24,188 $18,316 $21,243 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $24,188 $18,316 $21,243 Long-term Liabilities $85,840 $71,680 $57,520 Total Liabilities $110,028 $89,996 $78,763 Paid-in Capital $100,000 $100,000 $100,000 Retained Earnings ($15,300) ($14,385) $6,296 Earnings $915 $20,681 $53,872 Total Capital $85,615 $106,296 $160,168 Total Liabilities and Capital $195,643 $196,292 $238,931 Net Worth $85,615 $106,296 $160,1687.5 Business Ratios Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5149, Groc eries and Related Products, are shown for comparison. Page 16
  20. 20. Aztec Food ImportsTable: RatiosRatio Analysis 2002 2003 2004 Industry ProfileSales Growth 0.00% 25.94% 21.43% 4.60%Percent of Total AssetsAccounts Receivable 28.29% 35.51% 35.43% 33.30%Inventory 8.15% 10.37% 9.87% 26.00%Other Current Assets 0.00% 0.00% 0.00% 20.90%Total Current Assets 91.25% 92.75% 95.25% 80.20%Long-term Assets 8.75% 7.25% 4.75% 19.80%Total Assets 100.00% 100.00% 100.00% 100.00%Current Liabilities 12.36% 9.33% 8.89% 45.20%Long-term Liabilities 43.88% 36.52% 24.07% 10.00%Total Liabilities 56.24% 45.85% 32.96% 55.20%Net Worth 43.76% 54.15% 67.04% 44.80%Percent of SalesSales 100.00% 100.00% 100.00% 100.00%Gross Margin 68.76% 68.33% 69.80% 44.10%Selling, General & Administrative Expenses 68.48% 63.41% 59.24% 26.70%Advertising Expenses 0.00% 0.00% 0.00% 0.70%Profit Before Interest and Taxes 3.16% 8.91% 16.36% 0.80%Main RatiosCurrent 7.38 9.94 10.71 1.69Quick 6.72 8.83 9.60 1.01Total Debt to Total Assets 56.24% 45.85% 32.96% 55.20%Pre-tax Return on Net Worth 1.53% 27.79% 48.05% 3.60%Pre-tax Return on Assets 0.67% 15.05% 32.21% 8.00%Additional Ratios 2002 2003 2004Net Profit Margin 0.27% 4.92% 10.56% n.aReturn on Equity 1.07% 19.46% 33.63% n.aActivity RatiosAccounts Receivable Turnover 4.52 4.52 4.52 n.aCollection Days 56 72 74 n.aInventory Turnover 3.83 7.33 7.01 n.aAccounts Payable Turnover 5.56 12.17 12.17 n.aPayment Days 27 35 28 n.aTotal Asset Turnover 1.70 2.14 2.13 n.aDebt RatiosDebt to Net Worth 1.29 0.85 0.49 n.aCurrent Liab. to Liab. 0.22 0.20 0.27 n.aLiquidity RatiosNet Working Capital $154,335 $163,736 $206,328 n.aInterest Coverage 1.14 4.75 12.91 n.aAdditional RatiosAssets to Sales 0.59 0.47 0.47 n.aCurrent Debt/Total Assets 12% 9% 9% n.aAcid Test 4.43 5.02 5.62 n.aSales/Net Worth 3.90 3.95 3.18 n.a Page 17
  21. 21. Aztec Food ImportsDividend Payout 0.00 0.00 0.00 n.a Page 18
  22. 22. AppendixTable: Sales ForecastSales Forecast Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSalesSupermarkets 0% $14,000 $14,000 $14,000 $16,000 $16,000 $17,500 $18,000 $18,000 $20,000 $20,000 $20,000 $22,000Neighborhood Markets 0% $5,000 $5,000 $6,000 $6,000 $8,000 $10,000 $12,000 $12,000 $13,000 $14,000 $16,000 $17,000Total Sales $19,000 $19,000 $20,000 $22,000 $24,000 $27,500 $30,000 $30,000 $33,000 $34,000 $36,000 $39,000Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSupermarkets $4,000 $4,000 $4,000 $4,400 $6,000 $6,300 $8,000 $8,200 $9,000 $10,000 $10,000 $12,000Neighborhood Markets $1,000 $1,000 $1,000 $1,080 $1,200 $1,280 $1,700 $1,740 $1,800 $2,000 $2,000 $2,500Subtotal Direct Cost of Sales $5,000 $5,000 $5,000 $5,480 $7,200 $7,580 $9,700 $9,940 $10,800 $12,000 $12,000 $14,500 Page 1
  23. 23. AppendixTable: PersonnelPersonnel Plan Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecRaymond Garcia 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000Jose Arroyo 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000Delivery Persons 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000Office Manager 0% $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total People 5 5 5 5 5 5 5 5 5 5 5 5Total Payroll $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 Page 2
  24. 24. AppendixTable: General AssumptionsGeneral Assumptions Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecPlan Month 1 2 3 4 5 6 7 8 9 10 11 12Current 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 Page 3
  25. 25. AppendixTable: Profit and LossPro Forma Profit and Loss Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSales $19,000 $19,000 $20,000 $22,000 $24,000 $27,500 $30,000 $30,000 $33,000 $34,000 $36,000 $39,000Direct Cost of Sales $5,000 $5,000 $5,000 $5,480 $7,200 $7,580 $9,700 $9,940 $10,800 $12,000 $12,000 $14,500Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Cost of Sales $5,000 $5,000 $5,000 $5,480 $7,200 $7,580 $9,700 $9,940 $10,800 $12,000 $12,000 $14,500Gross Margin $14,000 $14,000 $15,000 $16,520 $16,800 $19,920 $20,300 $20,060 $22,200 $22,000 $24,000 $24,500Gross Margin % 73.68% 73.68% 75.00% 75.09% 70.00% 72.44% 67.67% 66.87% 67.27% 64.71% 66.67% 62.82%ExpensesPayroll $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600Sales and Marketing and Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0ExpensesDepreciation $240 $240 $240 $240 $240 $240 $240 $240 $240 $240 $240 $240Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Utilities $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Rent $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000Payroll Taxes 15% $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Operating Expenses $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230Profit Before Interest and Taxes ($4,230) ($4,230) ($3,230) ($1,710) ($1,430) $1,690 $2,070 $1,830 $3,970 $3,770 $5,770 $6,270EBITDA ($3,990) ($3,990) ($2,990) ($1,470) ($1,190) $1,930 $2,310 $2,070 $4,210 $4,010 $6,010 $6,510 Interest Expense $824 $814 $804 $794 $784 $774 $765 $755 $745 $735 $725 $715 Taxes Incurred ($1,516) ($1,513) ($1,210) ($751) ($664) $275 $392 $323 $968 $911 $1,513 $1,666Net Profit ($3,537) ($3,531) ($2,824) ($1,753) ($1,550) $641 $914 $753 $2,258 $2,125 $3,531 $3,888Net Profit/Sales -18.62% -18.58% -14.12% -7.97% -6.46% 2.33% 3.05% 2.51% 6.84% 6.25% 9.81% 9.97% Page 4
  26. 26. AppendixTable: Cash FlowPro Forma Cash Flow Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecCash ReceivedCash from OperationsCash Sales $4,750 $4,750 $5,000 $5,500 $6,000 $6,875 $7,500 $7,500 $8,250 $8,500 $9,000 $9,750Cash from Receivables $0 $475 $14,250 $14,275 $15,050 $16,550 $18,088 $20,688 $22,500 $22,575 $24,775 $25,550Subtotal Cash from Operations $4,750 $5,225 $19,250 $19,775 $21,050 $23,425 $25,588 $28,188 $30,750 $31,075 $33,775 $35,300Additional Cash ReceivedSales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Received $4,750 $5,225 $19,250 $19,775 $21,050 $23,425 $25,588 $28,188 $30,750 $31,075 $33,775 $35,300Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecExpenditures from OperationsCash Spending $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600Bill Payments $157 $4,697 $4,700 $4,999 $5,435 $5,541 $6,443 $6,738 $12,520 $18,899 $20,331 $19,808Subtotal Spent on Operations $12,757 $17,297 $17,300 $17,599 $18,035 $18,141 $19,043 $19,338 $25,120 $31,499 $32,931 $32,408Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Long-term Liabilities Principal Repayment $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Spent $13,937 $18,477 $18,480 $18,779 $19,215 $19,321 $20,223 $20,518 $26,300 $32,679 $34,111 $33,588Net Cash Flow ($9,187) ($13,252) $770 $996 $1,835 $4,104 $5,365 $7,670 $4,450 ($1,604) ($336) $1,712Cash Balance $95,513 $82,261 $83,031 $84,027 $85,862 $89,966 $95,331 $103,000 $107,451 $105,847 $105,511 $107,223 Page 5
  27. 27. AppendixTable: Balance SheetPro Forma Balance Sheet Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecAssets Starting BalancesCurrent AssetsCash $104,700 $95,513 $82,261 $83,031 $84,027 $85,862 $89,966 $95,331 $103,000 $107,451 $105,847 $105,511 $107,223Accounts Receivable $0 $14,250 $28,025 $28,775 $31,000 $33,950 $38,025 $42,438 $44,250 $46,500 $49,425 $51,650 $55,350Inventory $60,000 $55,000 $50,000 $45,000 $39,520 $32,320 $24,740 $15,040 $10,934 $11,880 $13,200 $13,200 $15,950Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Current Assets $164,700 $164,763 $160,286 $156,806 $154,547 $152,132 $152,731 $152,808 $158,184 $165,831 $168,472 $170,361 $178,523Long-term AssetsLong-term Assets $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000Accumulated Depreciation $0 $240 $480 $720 $960 $1,200 $1,440 $1,680 $1,920 $2,160 $2,400 $2,640 $2,880Total Long-term Assets $20,000 $19,760 $19,520 $19,280 $19,040 $18,800 $18,560 $18,320 $18,080 $17,840 $17,600 $17,360 $17,120Total Assets $184,700 $184,523 $179,806 $176,086 $173,587 $170,932 $171,291 $171,128 $176,264 $183,671 $186,072 $187,721 $195,643Liabilities and Capital Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecCurrent LiabilitiesAccounts Payable $0 $4,541 $4,534 $4,818 $5,252 $5,326 $6,224 $6,328 $11,891 $18,220 $19,677 $18,974 $24,188Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Current Liabilities $0 $4,541 $4,534 $4,818 $5,252 $5,326 $6,224 $6,328 $11,891 $18,220 $19,677 $18,974 $24,188Long-term Liabilities $100,000 $98,820 $97,640 $96,460 $95,280 $94,100 $92,920 $91,740 $90,560 $89,380 $88,200 $87,020 $85,840Total Liabilities $100,000 $103,361 $102,174 $101,278 $100,532 $99,426 $99,144 $98,068 $102,451 $107,600 $107,877 $105,994 $110,028Paid-in Capital $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000Retained Earnings ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300)Earnings $0 ($3,537) ($7,068) ($9,892) ($11,645) ($13,194) ($12,553) ($11,640) ($10,887) ($8,629) ($6,505) ($2,973) $915Total Capital $84,700 $81,163 $77,632 $74,808 $73,056 $71,506 $72,147 $73,060 $73,813 $76,071 $78,195 $81,727 $85,615Total Liabilities and Capital $184,700 $184,523 $179,806 $176,086 $173,587 $170,932 $171,291 $171,128 $176,264 $183,671 $186,072 $187,721 $195,643Net Worth $84,700 $81,163 $77,632 $74,808 $73,056 $71,506 $72,147 $73,060 $73,813 $76,071 $78,195 $81,727 $85,615 Page 6

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