Texxi Business Plan (2005)

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The very first business plan we wrote. Ghosted by Leslie Grant in 2005. THis is the second revision. Note all of the detail about predictive placement and why we chose "Evening Economy" to begin with.

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Texxi Business Plan (2005)

  1. 1. TEXXI TRANSIT EXCHANGE FOR THE XXI CENTURY THE TAXI YOU TEXTTM AN ENERGY EFFICIENT TRANSPORT SYSTEM www.texxi.com Texxi Limited Registered Office: The Old Tavern, Market Square, Petworth, West Sussex, GU28 0AH United Kingdom. +44 (0) 0270 993 2324 +44 (0) 0845 127 5037 eric.masaba@texxi.com Confidentiality AgreementThe undersigned reader acknowledges that the information provided by_________________________ in this business plan is confidential; therefore, reader agreesnot to disclose it without the express written permission of _________________________.It is acknowledged by reader that information to be furnished in this business plan is in allrespects confidential in nature, other than information which is in the public domainthrough other means and that any disclosure or use of same by reader, may cause serious
  2. 2. 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.1. Executive Summary 2 1.1. Objectives 2 1.2. Mission 22. Company Summary 2 2.1. Company Ownership 2 2.2. Company History 23. Services 24. Market Analysis Summary 2 4.1. Market Segmentation 2 4.2. Target Market Segment Strategy2 4.3. Competition and Buying Patterns 2 4.4. Service Business Analysis 25. Strategy and Implementation Summary 2 5.1. Competitive Edge 2 5.2. Milestones 2 5.3. Texxi Franchise Model 26. Management Summary 27. Financial Plan 2 7.1. Important Assumptions 2 7.2. Break-even Analysis 2 7.3. Projected Profit and Loss 2 7.4. Projected Cash Flow 2 7.5. Projected Balance Sheet 2 7.6. Business Ratios 21. Executive Summary Road traffic congestion, parking congestion, CO2 emmissions, noise pollution and road rage have all been created by high traffic levels. Improvements in public transport are frequently claimed to be the best solution to reducing traffic levels. However, the private car is unbeatable in terms of convenience, security and flexibility. Public transport is based on fixed routes and fixed timetables. Question: How can todays public transport be made more attractive so as to compete with the private car? Answer: By eliminating the pre-planning, waiting time, and inflexibility of the itinerary of public transport.
  3. 3. Its 2 oclock on a cold and damp winters night and there are not many free taixs to befound. All the revellers have had a great night out but other than walking for miles, how dothey get home quickly?The police and local authorities are severely stretched and want to speed up the dispersionof large groups at these peak times.Question: How can clubbers get home quickly, safely and economically?Answer: Texxi is the breakthrough that solves late night transport challenges.Texxi is the breakthrough that solves transport problems and traffic congestion.HOW IT WORKS TM TEXXI: The taxi you text 1 Customer (N) texts reservation centre Customer 2 texts CUSTOMER DATABASE Filters: reservation Customer and location identified Texxi Groups Customer 1 centre & order taken according to filters Customer Profiles (luxury vehicle, women only) texts Loyalty schemes reservation centre 2 Customer texts for a taxi Vehicle details, time The system optimises groups and routes based on & pick-up Service Rules point texted to Customer TRIP COMBINING VEHICLE SELECTION Texxi chooses the best vehicle Texxi automatically combines based on cost, fuel efficiency, new trip with existing route driver rankings Customer where feasible confirms 3 acceptance by Trip Optimisation text DISPATCH New or updated route Legend sent to vehicles satellite navigation system Texxi Customer Trip Quality, Billing and Productivity, Administration Customer and Performance Vehicle Ratings Dispatch and Administration SystemsTHE 7 MODES OF TEXXI 1. Evening Economy: Clubbers and pub-goers travel home quickly and safely. Single women a key market for Texxi. 2. Corporate: Virtual Private Travel, enabling executives and clients to have a luxury fleet at their service 3. Commuter: ride-sharing "hub and spoke" transport between a central transit point (train station) and a business district 4. Shopping: on-the-fly, door-to-door budget travel from supermarkets or shopping centres 5. School Run: Virtual Private Travel, enabling children to travel together to their school 6. Large Event: transport solutions for large scale festivals and events, particularly
  4. 4. where parking is limited 7. Tourist: economical transit beyond fixed routes with optional Language Operator filter 1.1. Objectives Texxis objective is to become the branded Demand Responsive Transit (DRT) broker of choice in the world. Following the successful trial of Texxi in Liverpool, England, the objectives for the next three years of operation include: 1. securing additional financing of $10 million for systems development and capacity expansion, network and operation support, TV advertisement production costs, advertising and marketing costs, and franchise business development 2. having 2,500 vehicles operating under the "Night" mode schemes globally 3. operating three franchise agreements in each of three countries 4. Negotiating branding agreements with at least one mobile telephone company, one train operator, and one automobile company 1.2. Mission The mission of Texxi is to provide public transport without fixed routes and timetables. Texxi aims to get people out of their private cars and into shared vehicle services for the majority of their journeys. This will reduce traffic jams, ease parking congestion and reduce air polution and greenhouse gas emissions without governments resorting to large infrastructure transport projects. Texxis mission is also to provide a safe, reliable, community-oriented, inclusive mode of transport for senior citizens, young adults, and late night travellers who otherwise do not have easy access to flexible, safe and economical transport.2. Company Summary Texxi is a UK-registered company which provides Demand Responsive Transit (DRT) brokerage systems, enabling ride-sharing on-the-fly using users mobile phones. Using his experience of credit contagion algorithms in investment banking, the founder (one of the founders???) developed a system to combine people travelling at approximately the same time and direction to a single vehicle. Texxi is a radical departure from existing ride-sharing schemes such as "dial-a-ride", "paratransit" and "airport shuttle" services which are booked up by telephone usually hours or days in advance. With the advent of mobile (cell) phones, text (SMS) facilities, Global Postioning Systems (GPS) and in-car satellite navigation systems, Texxis real-time text-based DRT Brokerage System is the breakthrough solution to transport problems and traffic congestion. 2.1. Company Ownership Texxi was founded in March 2005 as a registered Limited Company with registered offices in Petworth, West Sussex, England and its first operations in Liverpool. It is
  5. 5. owned by the founders, its principal investors and principal operators.2.2. Company History The idea for Texxi came about several years ago when the founder (one of the founders???) realised that he was paying $40 a day for taxis from the train station to his office, despite several other people he knew working in the same vicinity and going to work at the same time. As this annoyance grew, his thought crystallised on the design of a system to make use of these unheeded correlative effects and partnered this with his knowledge of information and mobile (cell) phone technology. Having built the foundations of the Texxi DRT Brokerage System, Texxi ran a trial in Liverpool, England between January and September 2006. A Demand Mapping Exercise was conducted to assess the demographics and opportunites for a Texxi service (see XXXX for more on Demand Mapping Exercises). "Evening Economy" mode was chosen, with the target market being 18-30 year olds, who go clubbing on a Friday and Saturday night. The existing Liverpool taxi infrastructure was not meeting the 100,000-passenger midnight to 4am demand, despite there being 1500 "black cabs" and 20,000 private hire vehicles in Liverpool. It was not uncommon to see young people making their own way home alone on foot at least 2 miles (and in some cases 15 miles). Negotiations were held with the local council and the police to get permission for trial pick-up points and XXX taxi drivers were engaged. A marketing plan was implemented (radio advertising, in-club media, ground force marketing, Texxi website videos, etc). Finally, once the service had been operating for 3 months, performance (revenue passenger mile, average time to pick-up, on-time performance, load factor, average time to pick-up, etc) and costs (per passenger mile, per trip, etc) were measured. So far the trial has provided an experience of: · confirming robustness of hardward and software systems · systems implementation: text processing, driver alerts, administration and billing, Texxi Groups · level of interest from the local council (low) and the police (high) · negotiations with the local council, police, taxi firms, clubs, mobile phone service providers · marketing: local radio, nightclub advertising, street marketers · pricing bands · taxi driver education · getting people to text "to hire", rather than using text only "to communicate" · the degree of resistance to ride-sharing · functionality of user "Groups" for ride-sharing It seemed that: · Most people would not try something new of their own accord--leaders, demonstrators and queue marshals were needed. · Most people were naturally incurious--Texxis message would have to appeal to base human instincts of fear, greed or sex.
  6. 6. · Texxi had to compete with many other media messages--as an innovative service Texxi would need edgey marketing, employing viral marketing methods. FINANCIAL FACTS ETC Following the successful trial in Liverpool, Texxi is now pursuing opportunities to set up operations in other cities in the U.K. and other countries. Texxi is developing a franchise model for rollout as soon as possible.Past Performance FY 2003 FY 2004 FY 2005Sales £0 £0 £0Gross Margin £0 £0 £0Gross Margin % 0.00% 0.00% 0.00%Operating Expenses £0 £0 £0Balance Sheet FY 2003 FY 2004 FY 2005Current AssetsCash £0 £0 £0Other Current Assets £0 £0 £0Total Current Assets £0 £0 £0Fixed AssetsCapital Assets £0 £0 £0Accumulated Depreciation £0 £0 £0Total Fixed Assets £0 £0 £0Total Assets £0 £0 £0Current LiabilitiesAccounts Payable £0 £0 £0Current Borrowing £0 £0 £0Other Current Liabilities £0 £0 £0(interest free)Total Current Liabilities £0 £0 £0Fixed Liabilities £0 £0 £0Total Liabilities £0 £0 £0Paid-in Capital £0 £0 £0Retained Earnings £0 £0 £0Earnings £0 £0 £0Total Capital £0 £0 £0Total Capital and Liabilities £0 £0 £0Other InputsPayment Days 0 0 0
  7. 7. Past Performance £1 £1 £1 £1 £1 Sales £1 Gross £0 Net £0 £0 £0 £0 FY 2003 FY 2004 FY 20053. Services HOW IT WORKS Users text (SMS) their required destination postcode to Texxi. The Texxi comuter system searches its database for a nearby vehicle whose current itinerary is compatible with the passengers itinerary. Within two minutes the passenger is sent a text with the drivers details and boarding point. If the passenger texts back "YES", then another text will be sent to the passenger confirming the arrival of the vehicle (less than 15 minutes). Once the new passenger is picked up and pays (cash or Texxi credit), the driver is directed along the custom route by GPS in-car satellite navigation technology. In essence, a Texxi is likea regular bus, but with a completely flexible, computer-generated route weaving through a sequence of passenger points, rather than along a rigid bus route with fixed stops. Users can create a Texxi Group, an invitation-only online community, designed for those who already have strong connections with one another and choose to travel, as a first choice, with each other. THE 7 MODES OF TEXXI: Evening Economy This scheme provides passengers with shared transport home from bars, restaurants, and nightclubs when transport resources are limited. This scheme usually runs on Friday and Saturday nights, between 10:30pm and 4:00am. This service gets people home more quickly by using vehicles more efficiently. Passengers save money compared to a normal taxi (£5 fare versus £9 fare) and at the same time taxi drivers earn more per journey (e.g. £25 versus £9). Importantly, this scheme provides a safe journey home. In Liverpool, it has not been uncommon to see young women making their way alone on foot at least 2 miles before they can get transport. "NightSafety" groups and the police support this mode because it reduces the numbers of evening-goers milling around the city centre unable to return home promptly.
  8. 8. CorporateThis scheme allows large companies to provide transport to employees at a reduced cost bycombining trips. Staff can rideshare on demand as little as 15 minutes beforehand. Forcorporations with multiple sites, "Corporate" mode can move employees quickly andflexibly between locations.Additionally, under "Corporate" mode, a company can contract for a certain minimumstandard of vehicle to be used and a Virtual Private Travel (VPT) mask can be applied to themode, enabling executives and their clients to have a luxury fleet at their service.Companies with nightshift workers or with employees in the bar and restaurant industrycan provide a safe and reliable way home for their workers, making them an attractiveemployer to work for.A combination of Texxi and public transport (trains, flights, etc) can be formed to create atrip chain by aligning itineraries and timetables.CommuterThis scheme provides "hub and spoke" transport between a central transit point (e.g. trainstation) and a business district, or between a catchment area (e.g. a suburban pick-up point) and a transit point (e.g. a train station). A combination of Texxi and public transport (trains,flights, etc) can be formed to create a trip chain by aligning itineraries and timetables.ShoppingThis scheme provides people who live far from a supermarket or shopping centre withtransport without relying on others or on public transport. This helps to eleviate socialexcusion by providing a flexible service that is cheaper than a regular taxi and by providinga "door to door" service not available from a bus service. Local councils, or indeed shoppingcentre operators, might licence this mode.School RunThis scheme allows children from a particular area to all travel together to their school. Inreverse mode, this scheme allows children with varying aftershool activities to text for a ridehome on demand in as little as 15 minutes beforehand. Parents Associations or schoolboards can contract for a certain minimum standard of vehicle (e.g. Mercedes Viano/RenaultEspace) to be used and a Virtual Private Travel (VPT) mask can be applied to the mode,enabling children to travel in a "virtual school bus".Large EventThis scheme provides organisers of large scale festivals and events (e.g. Creamfields, GlobalGathering, Glastonbury, V2, Gyndebourne, Silverstone, Henley, Cowes, Cartier Polo, BritishOpen, etc) with a transport solution. This mode eleviates significant headaches for local andregional police and provides a solution for the young (and less affluent) who populate theraves and festivals. A fun way to travel would be a Volkswagen Type 2 as a festivalcommuter vehicle. Even better would be one running on sunflower oil of some other
  9. 9. renewable energy. Tourist This scheme provides economical transit beyond fixed routes and can include a Language Operator. This allows visitors to a city to text for a taxi driver who speaks their language. Even if the driver is not a great conversationalist, the basic greetings can make all the difference to tourists. In many capital cities taxi drivers oftern double as tour guides, offering for a fixed fee to drive tourists around the citys landmarks but with no "hop-on, hop-off" option. And many cities have "open-top double decker" tour buses but these services run to a fixed route. "Tourist" mode provides the hop-on hop-off flexibility and economy of the city tour bus, plus it gives the freedom to explore off the beaten path that a regular taxi provides.4. Market Analysis Summary Texxi is faced with the exciting opportunity to be the first-mover in the DRT market using mobile technology. Solutions to the problems of traffic congestion and CO2 emissions are in high demand. Texxi is particularly attractive as it doesnt require any investment in transport infrastructures. Market testing of the Texxi DRT Brokerage Service has been successfully trialled for 6 months in Liverpool, England. Interest has already been expressed by several other local councils in the UK. Currently, expressions of interest are being pursued in Australia, Hong Kong, China and the USA (California). 4.1. Market Segmentation Texxis Total Available Market is the sum of passengers who travel by road. The market segment that Texxi will focus on are those passengers traveling within urban or suburban areas (min. pop. density 2500/km2) because vehicle sharing needs a critical mass of passengers and vehicle density (Texxi vehicles 6/km2) to operate effectively. Texxi is not restricted to journeys within city limits; inter-city operation are practicable. However, Texxis early development will focus on travellers in conurban areas. Initially, Texxi is focusing on the market segment of late-night travellers in cities with a population of 1 million or more. By the end of the three year projections, Texxi expects to be serving all "7 Modes" (Evening Economy, Corporate, Commuter, School Runs, Shopping, Tourist, and Large Events) either directly or via franchise businesses. 4.2. Target Market Segment Strategy Texxis initial focus on late-night travellers will include pub-goers at "closing time" and 18-30 year old clubbers. Texxi will particularly target single women travellers for whom safety is a key concern. GRAPH OF DEMAND ACROSS 10:30pm to 4am needed
  10. 10. The 18-30 year old segment are savvy users of mobile (cell) phone technology and mobile phone ownership is high among this group. They are early adopters of new technologies and services: from blogging, downloading music, to rating videos on YouTube, etc. These young people are relatively cash-poor but spend a large proportion of their disposible income on their nights out. They normally walk home, take a taxi or have a designated driver. They readily form overlapping social networks and can be open and flexible about who they travel with within those networks. Most say that they have experienced the frustration of getting split off from their group on a night out which leads to problems getting home. MARKETING STRATEGY Market Segment Characteristic Texxi Advantage high mobile (cell) phone ownership Texxi operates solely by mobile text (SMS) experienced text (SMS) users Texxi operates solely by text (SMS) Early adopters Texxi breaks the travel mold disposable income spent on nights out willing to pay taxi-like prices danger of walking home alone, especially women Texxi is safe have overlapping social groups create Texxi Groups taxi users cheaper than a taxi spontaneity real-time booking Texxi Group "text to all in group" when group grouping to go home like herding cats ride ready used to queuing for taxi on-the-fly availability designated drivers no need to drive or park 4.3. Competition and Buying Patterns Depending on which of the 7 Texxi modes are being compared, the competition is: car, taxi and/or bus Customers choose between these alternatives based on convenience and price. Factors that makes the most difference are: · trusted sharing: getting into a vehicle with trusted passengers, through Texxi Groups · speed of response: pick-up time of 15 minutes or less · speed of journey: a door-to-door journey that is no more that one and a half times the length of time taken in a car or unshared taxi. (Note Department of Transport statistics show that for truips less than 25 miles, the door-to-door journey time by bus or train is twice as slow as a car.) · cost: less than cost of private car plus parking or cost of unshared taxi 4.4. Service Business Analysis COMPILE STATISTICS ABOUT TAXI REVENUE (PER HOUR OR PER MONTH). SHOW HOW MUCH HIGHER THE MARGINS FOR TEXXI DRIVERS ARE.5. Strategy and Implementation Summary
  11. 11. DEMAND MAPPING EXERCISEWhilst there are numerous quality data gathering exercises and studies undertaken to makedecisions about transport requirements for any given area, there is not yet any analysis thatextends to a DRT scheme. Ensuring that Texxi is applied in the best possible way starts witha client paying for a Texxi Demand Mapping Exercise (DME) in the relevant urban area. TheDME will confirm which modes of Texxi are relevant to the area and establish the basis forimplementation of the scheme, including: · the fare structure · initial location of meeting/muster points · quantity and hours of drivers neededScope of data gather includes: · volumes, flow and clusters of people, hour by hour (real-time footfall) · existing transport capabilities, vehicle sizes, disability coverage and routes · existing bus stops and taxi ranks · existing bus and taxi passenger numbers · current taxi and private hire fares from centre to postcode districts · parking facilities and pricing · key destinations (businesses, clubs, theatres, sports facilities, train stations, etc) · policing and transport initiatives · existing social networking · media survey (local/regional newspapers, radio stations,etc) and demographics · economic survey (disposable income by age and area)IMPLEMENTATION5.1. Competitive Edge The Texxi business is designed as a brokerage system. Texxi does not own the vehicles, navigation systems or mobile phones that are used in order for Texxi transit to take place. In almost all cases the vehicles, navigation systems and mobile phones are all already owned by passenger and Texxi partners. It is a very light business model with franchise scalability. As with all brokerage business Texxi is reliant on network effects to grow and compete. The costing for the yearly licence has been worked out to be about 1/20th of the cost to a council/organisation of supplying the infrastructure of equivalent capacity. There are no techonolgical constraints on where and how Texxi operates. With a minimum of manpower Texxi can serve 100 cities almost as effectively as it can serve 10 locales. DESCRIBE OR HINT AT PROPRIETARY ALGORYTHMS AND INCREMENTAL CODING METHODOLOGY. DESCRIBE PATENT PENDING.
  12. 12. One of Texxis competitive advantages in the UK is simply having the UK phone number 83994 for texting, which spells TEXXI on the users phone, making it easy to remember. "Texxi Groups", where passengers travel with people they know, creates barriers to entry. Texxi can maintain and develop its value over time by developing additional innovations: Texxi Predictive Broking": Text (SMS) users ahead of them needing a vehicle based on their itinerary histories (with opt-in consent); place vehicles in locations ahead of demand. "Texxi-tell": inform loved ones when passenger boards and alights from transport vehicles; tell users when Texxi Group of friends are going in case use wants to join in (with opt-in consent). "Texxi Time-Domain Transit Maps": Manchester may be 30 miles away from Liverpool in the "spatial domain", but is further away in "time domain" at 08:00-10:00 than at 22:00 - 06:00. Texxi Dynamic Parking Solutions: car drivers check ahead and pre-book parking; councils create temporary car parks or dynamic parking zones and allow parking wardens to check enforcement with hand-held cameras (existing Texxi application written). 5.2. Milestones The Texxi team has established some basic milestones to keep the overall business plan priorities in place. Responsibility for implementation falls on the shoulders of Eric Masaba and Matthew Burden. By way of explanation, Texxi has operated the "one-to- many" transit points system in Liverpool, and equally "one-to-one" transit (train station to event drop-off) is obviously a subset of that system and therefore doable. It will be one of Texxis milestones to trial the "many-to-one" transit point system to see if this is feasible, e.g. how operations are effected when passengers say they are ready to be picked up and they are not.MilestonesMilestone Start Date End Date Budget Manager Departme ntLiverpool "Evening 1/1/2006 1/9/2006 £0 Eric XXXEconomy" Pilot MasabeSecure $10 million financing 1/11/2006 1/3/2007 £0 ABC XXX2nd UK city with "Evening 1/1/2007 1/3/2007 £0 ABC XXXEconomy" startedTrial of "many-to-one" point 1/1/2007 1/11/2007 £0 ABC XXXtransport1st non-UK operation 1/1/2007 1/11/2007 £0 ABC XXX
  13. 13. 1st multi-mode franchisee 1/1/2008 1/6/2008 £0 ABC XXX1st country master franchise 1/6/2008 1/12/2008 £0 ABC XXXTotals £0 5.3. Texxi Franchise Model FRANCHISE MODEL FRANCHISE STRUCTURE FRANCHISE FEES AND OUTLAYS6. Management Summary Our company philosophy is based on mutual respect for all contributions made by our founders, investors, consultants, and employees without regard to the position held in the company. The initial management team depends on the founders themselves. As we grow, we will take on the following staff: sales, marketing,..... MANAGEMENT SUMMARY and CREDENTIALS Founders Management Advisors Boards7. Financial Plan The following sections will detail important financial information. REVENUE MODEL AND PRICING 1) INDIVIDUAL OPERATION (like revenue model on website)
  14. 14. 2) FRANCHISE 3) WHOLE OF TEXXI (for investors) 7.1. Important Assumptions The following table highlights some of the important financial assumptions for TEXXI.General Assumptions FY 2006 FY 2007 FY 2008Plan Month 1 2 3Current Interest Rate 10.00% 10.00% 10.00%Long-term Interest Rate 10.00% 10.00% 10.00%Tax Rate 25.42% 25.00% 25.42%Other 0 0 0 7.2. Break-even Analysis Explain the break-even assumptions from the Break-even Analysis table and chart that will normally print right after this topic. Include whatever detail you think is appropriate. You might also cover the implications of the break-even. For a start-up company, you should compare the break-even point with your sales prospects. For an ongoing company, the break-even analysis should show that you are running comfortably above the break-even point. For example: The Break-even Analysis indicates that TEXXI must have $19,500 in revenue to break even.Break-even AnalysisMonthly Revenue Break-even £15,131Assumptions:Average Percent Variable Cost 20%Estimated Monthly Fixed Cost £12,105 Break-even Analysis
  15. 15. £15,000 £10,000 £5,000 £0 (£5,000) (£10,000) (£15,000) £0 £6,000 £12,000 £18,000 £24,000 £30,000 Monthly break-even point Break-even point = where line intersects with 0 7.3. Projected Profit and Loss The following table will indicate projected profit and loss.Pro Forma Profit and Loss FY 2006 FY 2007 FY 2008Sales £168,824 £282,759 £319,748Direct Cost of Sales £33,765 £56,552 £63,950Other £0 £0 £0 ------------ ------------ ------------Total Cost of Sales £33,765 £56,552 £63,950Gross Margin £135,059 £226,207 £255,798Gross Margin % 80.00% 80.00% 80.00%ExpensesPayroll £111,700 £138,900 £138,900Sales and Marketing and £3,100 £3,600 £3,600Other ExpensesDepreciation £504 £498 £498Web site maintenance £600 £600 £600Utilities £1,200 £1,200 £1,200Insurance £5,400 £5,400 £5,400Rent £6,000 £0 £0Payroll Taxes £16,755 £20,835 £20,835Other £0 £0 £0 ------------ ------------ ------------Total Operating Expenses £145,259 £171,033 £171,033Profit Before Interest and (£10,200) £55,174 £84,765TaxesEBITDA (£9,696) £55,672 £85,263
  16. 16. Interest Expense £0 £0 £0Taxes Incurred £0 £13,794 £21,545Net Profit (£10,200) £41,381 £63,221Net Profit/Sales -6.04% 14.63% 19.77% 7.4. Projected Cash Flow The following chart and table will indicate projected cash flow.Pro Forma Cash Flow FY 2006 FY 2007 FY 2008Cash ReceivedCash from OperationsCash Sales £168,824 £282,759 £319,748Subtotal Cash from £168,824 £282,759 £319,748OperationsAdditional Cash ReceivedVAT Received (Output Tax) £29,544 £49,483 £55,956HMRC VAT Repayments £204 £0 £0New Current Borrowing £0 £0 £0New Other Liabilities (interest- £0 £0 £0free)New Fixed Liabilities £0 £0 £0Sales of Other Current Assets £0 £0 £0Sales of Fixed Assets £0 £0 £0New Investment Received £0 £0 £0Subtotal Cash Received £198,572 £332,242 £375,704Expenditures FY 2006 FY 2007 FY 2008Expenditures from OperationsCash Spending £111,700 £138,900 £138,900Bill Payments £57,893 £102,525 £115,884Subtotal Spent on Operations £169,593 £241,425 £254,784Additional Cash SpentVAT Paid Out (Input Tax) £10,285 £13,922 £15,216HMRC VAT Payments £12,362 £42,663 £40,739Principal Repayment of £0 £0 £0Current BorrowingOther Liabilities Principal £0 £0 £0RepaymentFixed Liabilities Principal £0 £0 £0RepaymentPurchase Other Current Assets £0 £0 £0Purchase Fixed Assets £0 £0 £0Dividends £0 £0 £0Subtotal Cash Spent £192,239 £298,010 £310,740Net Cash Flow £6,333 £34,232 £64,964Cash Balance £6,333 £40,565 £105,529
  17. 17. Cash £15,000 £10,000 £5,000 £0 (£5,000) Net Cash Flow (£10,000) Cash Balance (£15,000) (£20,000) (£25,000) (£30,000) Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 7.5. Projected Balance Sheet The following table will indicate the projected balance sheet.Pro Forma Balance Sheet FY 2006 FY 2007 FY 2008AssetsCurrent AssetsCash £6,333 £40,565 £105,529Other Current Assets £0 £0 £0Total Current Assets £6,333 £40,565 £105,529Fixed AssetsFixed Assets £0 £0 £0Accumulated Depreciation £504 £1,002 £1,500Total Fixed Assets (£504) (£1,002) (£1,500)Total Assets £5,829 £39,563 £104,029Liabilities and Capital FY 2006 FY 2007 FY 2008Current LiabilitiesAccounts Payable £8,927 £8,382 £9,627Current Borrowing £0 £0 £0Other Current Liabilities £7,102 £0 £0Subtotal Current Liabilities £16,029 £8,382 £9,627Fixed Liabilities £0 £0 £0Total Liabilities £16,029 £8,382 £9,627Paid-in Capital £0 £0 £0
  18. 18. Retained Earnings £0 (£10,200) £31,181Earnings (£10,200) £41,381 £63,221Total Capital (£10,200) £31,181 £94,402Total Liabilities and Capital £5,829 £39,563 £104,029Net Worth (£10,200) £31,181 £94,402 7.6. Business Ratios The business ratios table below is generated by the planning software using the interconnected tables. Standard industry ratios, based upon Standard Industrial Classification Code (SIC) 4111, Local and Suburban Transit, are shown for comparison.Ratio Analysis FY 2006 FY 2007 FY 2008 Industry ProfileSales Growth 0.00% 67.49% 13.08% 3.70%Percent of Total AssetsOther Current Assets 0.00% 0.00% 0.00% 45.30%Total Current Assets 108.65% 102.53% 101.44% 64.40%Fixed Assets -8.65% -2.53% -1.44% 35.60%Total Assets 100.00% 100.00% 100.00% 100.00%Current Liabilities 274.99% 21.19% 9.25% 31.20%Fixed Liabilities 0.00% 0.00% 0.00% 25.20%Total Liabilities 274.99% 21.19% 9.25% 56.40%Net Worth -174.99% 78.81% 90.75% 43.60%Percent of SalesSales 100.00% 100.00% 100.00% 100.00%Gross Margin 80.00% 80.00% 80.00% 66.70%Selling, General & 86.04% 65.37% 60.12% 46.50%Administrative ExpensesAdvertising Expenses 0.36% 0.21% 0.19% 0.50%Profit Before Interest and -6.04% 19.51% 26.51% 2.90%TaxesMain RatiosCurrent 0.40 4.84 10.96 1.61Quick 0.40 4.84 10.96 1.17Total Debt to Total Assets 274.99% 21.19% 9.25% 56.40%Pre-tax Return on Net Worth 100.00% 176.95% 89.79% 4.60%Pre-tax Return on Assets -174.99% 139.46% 81.48% 10.50%Additional Ratios FY 2006 FY 2007 FY 2008Net Profit Margin -6.04% 14.63% 19.77% n.aReturn on Equity 0.00% 132.71% 66.97% n.aActivity RatiosAccounts Payable Turnover 7.49 12.17 12.17 n.aPayment Days 27 31 28 n.aTotal Asset Turnover 28.96 7.15 3.07 n.aDebt Ratios
  19. 19. Debt to Net Worth 0.00 0.27 0.10 n.aCurrent Liab. to Liab. 1.00 1.00 1.00 n.aLiquidity RatiosNet Working Capital (£9,696) £32,183 £95,902 n.aInterest Coverage 0.00 0.00 0.00 n.aAdditional RatiosAssets to Sales 0.03 0.14 0.33 n.aCurrent Debt/Total Assets 275% 21% 9% n.aAcid Test 0.40 4.84 10.96 n.aSales/Net Worth 0.00 9.07 3.39 n.aDividend Payout 0.00 0.00 0.00 n.aSales Forecast Ma Apr May Jun Jul Aug Sep Oct rSales VAT RateCar users 17.50 £0 £1,57 £1,87 £3,95 £6,64 £7,34 £8,28 £9,25 % 8 4 8 5 5 7 8Clubbers 0.00% £0 £0 £0 £0 £0 £0 £0 £0Shoppers 0.00% £0 £0 £0 £0 £0 £0 £0 £0Commuters 0.00% £0 £0 £0 £0 £0 £0 £0 £0School Runs 0.00% £0 £0 £0 £0 £0 £0 £0 £0Inserted Row 0.00% £0 £0 £0 £0 £0 £0 £0 £0Large Event Organisers 0.00% £0 £0 £0 £0 £0 £0 £0 £0Business travelers 17.50 £0 £1,11 £1,35 £3,22 £4,75 £5,51 £6,95 £8,12 % 4 8 5 4 4 8 5Total Sales £0 £2,69 £3,23 £7,18 £11,3 £12,8 £15,2 £17,3 2 2 3 99 59 45 83Direct Cost of Sales VAT Ma Apr May Jun Jul Aug Sep Oct Rate rIndividuals/families 17.50 £0 £316 £375 £792 £1,32 £1,46 £1,65 £1,85 % 9 9 7 2Business travelers 17.50 £0 £223 £272 £645 £951 £1,10 £1,39 £1,62 % 3 2 5Subtotal Direct Cost of Sales £0 £538 £646 £1,43 £2,28 £2,57 £3,04 £3,47 7 0 2 9 7
  20. 20. Personnel Plan Mar Apr May Jun Jul Aug Sep OctPerson 0% £3,00 £3,00 £3,00 £3,00£3,00 £3,00 £3,00 £3,00 0 0 0 0 0 0 0 0Person 0% £0 £1,50 £1,50 £1,50£1,50 £1,50 £1,50 £1,50 0 0 0 0 0 0 0Person 0% £0 £2,20 £2,20 £1,80£1,80 £1,80 £1,80 £1,80 0 0 0 0 0 0 0Person 0% £0 £2,20 £2,20 £1,80£1,80 £1,80 £1,80 £1,80 0 0 0 0 0 0 0Person 0% £0 £0 £0 £0£1,80 £1,80 £1,80 £1,80 0 0 0 0Person 0% £0 £0 £0 £0 £0 £0 £0 £0Total People 1 4 4 4 5 5 5 5Total Payroll £3,00 £8,90 £8,90 £8,10 £9,90 £9,90 £9,90 £9,90 0 0 0 0 0 0 0 0
  21. 21. General Assumptions Mar Apr May Jun Jul Aug Sep OctPlan Month 1 2 3 4 5 6 7 8Current Interest Rate 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 % % % % % % % %Tax Rate 30.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 % % % % % % % %Other 0 0 0 0 0 0 0 0
  22. 22. Pro Forma Profit and Loss Mar Apr May Jun Jul Aug Sep OctSales VAT £0 £2,692 £3,232 £7,183 £11,39 £12,85 £15,2 £17,3 Rate 9 9 45 83Direct Cost of Sales £0 £538 £646 £1,437 £2,280 £2,572 £3,04 £3,47 9 7Other 17.50 £0 £0 £0 £0 £0 £0 £0 £0 % --------- --------- --------- --------- --------- --------- --------- --------- - --- --- --- --- --- --- --- ---Total Cost of Sales £0 £538 £646 £1,437 £2,280 £2,572 £3,04 £3,47 9 7Gross Margin £0 £2,154 £2,586 £5,746 £9,119 £10,28 £12,1 £13,9 7 96 06Gross Margin % 0.00% 80.00 80.00 80.00 80.00 80.00 80.00 80.00 % % % % % % %Expenses VAT RatePayroll £3,000 £8,900 £8,900 £8,100 £9,900 £9,900 £9,90 £9,90 0 0Sales and Marketing 17.50 £150 £175 £200 £225 £250 £300 £300 £300and Other Expenses %Depreciation £42 £42 £42 £42 £42 £42 £42 £42Web site maintenance 0.00% £50 £50 £50 £50 £50 £50 £50 £50Utilities 0.00% £100 £100 £100 £100 £100 £100 £100 £100Insurance 5.00% £450 £450 £450 £450 £450 £450 £450 £450Rent 17.50 £500 £500 £500 £500 £500 £500 £500 £500 %Payroll Taxes 15.00 £450 £1,335 £1,335 £1,215 £1,485 £1,485 £1,48 £1,48 % 5 5Other 17.50 £0 £0 £0 £0 £0 £0 £0 £0 % --------- --------- --------- --------- --------- --------- --------- --------- - --- --- --- --- --- --- --- ---Total Operating VAT £4,742 £11,55 £11,57 £10,68 £12,77 £12,82 £12,8 £12,8Expenses Rate 2 7 2 7 7 27 27Profit Before Interest (£4,74 (£9,39 (£8,99 (£4,93 (£3,65 (£2,54 (£631) £1,07and Taxes 2) 8) 1) 6) 8) 0) 9EBITDA (£4,70 (£9,35 (£8,94 (£4,89 (£3,61 (£2,49 (£589) £1,12 0) 6) 9) 4) 6) 8) 1Interest Expense £0 £0 £0 £0 £0 £0 £0 £0Taxes Incurred £0 £0 £0 £0 £0 £0 £0 £0Net Profit (£4,74 (£9,39 (£8,99 (£4,93 (£3,65 (£2,54 (£631) £1,07 2) 8) 1) 6) 8) 0) 9Net Profit/Sales 0.00% -349.1 -278.2 -68.71 -32.09 -19.75 -4.14 6.21% 2% 0% % % % %
  23. 23. Pro Forma Cash Flow Mar Apr May Jun Jul Aug Sep OctCash ReceivedCash fromOperationsCash Sales £0 £2,692 £3,232 £7,183 £11,39 £12,85 £15,24 £17,38 £1 9 9 5 3Subtotal Cash £0 £2,692 £3,232 £7,183 £11,39 £12,85 £15,24 £17,38 £1from 9 9 5 3OperationsAdditional Cash VATReceived RateVAT Received £0 £471 £566 £1,257 £1,995 £2,250 £2,668 £3,042 £3(Output Tax)HMRC VAT £0 £204 £0 £0 £0 £0 £0 £0RepaymentsNew Current £0 £0 £0 £0 £0 £0 £0 £0BorrowingNew Other £0 £0 £0 £0 £0 £0 £0 £0Liabilities(interest-free)New Fixed £0 £0 £0 £0 £0 £0 £0 £0LiabilitiesSales of Other 17.50 £0 £0 £0 £0 £0 £0 £0 £0Current Assets %Sales of Fixed 17.50 £0 £0 £0 £0 £0 £0 £0 £0Assets %New £0 £0 £0 £0 £0 £0 £0 £0InvestmentReceivedSubtotal Cash £0 £3,367 £3,798 £8,440 £13,39 £15,10 £17,91 £20,42 £2Received 4 9 3 5Expenditures Mar Apr May Jun Jul Aug Sep OctExpendituresfromOperationsCash Spending £3,000 £8,900 £8,900 £8,100 £9,900 £9,900 £9,900 £9,900 £9Bill Payments £57 £1,748 £3,153 £3,305 £4,015 £5,126 £5,473 £5,948 £6Subtotal Spent £3,057 £10,64 £12,05 £11,40 £13,91 £15,02 £15,37 £15,84 £1on Operations 8 3 5 5 6 3 8Additional Cash VATSpent RateVAT Paid Out £204 £435 £458 £583 £775 £835 £919 £994 £1(Input Tax)HMRC VAT £0 £0 £0 £0 £817 £0 £0 £4,383PaymentsPrincipal £0 £0 £0 £0 £0 £0 £0 £0Repayment ofCurrentBorrowing
  24. 24. Other Liabilities £0 £0 £0 £0 £0 £0 £0 £0PrincipalRepaymentFixed Liabilities £0 £0 £0 £0 £0 £0 £0 £0PrincipalRepaymentPurchase Other 17.50 £0 £0 £0 £0 £0 £0 £0 £0Current Assets %Purchase Fixed 17.50 £0 £0 £0 £0 £0 £0 £0 £0Assets %Dividends £0 £0 £0 £0 £0 £0 £0 £0Subtotal Cash £3,260 £11,08 £12,51 £11,98 £15,50 £15,86 £16,29 £21,22 £1Spent 3 1 8 7 2 2 5Net Cash Flow (£3,26 (£7,717 (£8,714 (£3,548 (£2,113 (£752) £1,621 (£800) £5 0) ) ) ) )Cash Balance (£3,26 (£10,97 (£19,69 (£23,23 (£25,35 (£26,10 (£24,48 (£25,28 (£2 0) 7) 1) 8) 2) 4) 2) 3)
  25. 25. Pro Forma Balance Sheet Mar Apr May Jun Jul Aug Sep Oct NAssets Startin g Bala ncesCurrentAssetsCash £0 (£3,26 (£10,97 (£19,69 (£23,23 (£25,35 (£26,10 (£24,48 (£25,28 (£20 0) 7) 1) 8) 2) 4) 2) 3)Other £0 £204 £0 £0 £0 £0 £0 £0 £0CurrentAssetsTotal Current £0 (£3,05 (£10,97 (£19,69 (£23,23 (£25,35 (£26,10 (£24,48 (£25,28 (£20Assets 7) 7) 1) 8) 2) 4) 2) 3)Fixed AssetsFixed Assets £0 £0 £0 £0 £0 £0 £0 £0 £0Accumulated £0 £42 £84 £126 £168 £210 £252 £294 £336 £3DepreciationTotal Fixed £0 (£42) (£84) (£126) (£168) (£210) (£252) (£294) (£336) (£3AssetsTotal Assets £0 (£3,09 (£11,06 (£19,81 (£23,40 (£25,56 (£26,35 (£24,77 (£25,61 (£20 9) 1) 7) 6) 2) 6) 6) 9)Liabilities Mar Apr May Jun Jul Aug Sep Oct Nand CapitalCurrentLiabilitiesAccounts £0 £1,643 £3,043 £3,172 £3,844 £4,944 £5,275 £5,736 £6,150 £6,4PayableCurrent £0 £0 £0 £0 £0 £0 £0 £0 £0BorrowingOther £0 £0 £36 £143 £817 £1,219 £2,634 £4,383 £2,048 £4,3CurrentLiabilitiesSubtotal £0 £1,643 £3,079 £3,315 £4,661 £6,164 £7,909 £10,12 £8,198 £10Current 0LiabilitiesFixed £0 £0 £0 £0 £0 £0 £0 £0 £0LiabilitiesTotal £0 £1,643 £3,079 £3,315 £4,661 £6,164 £7,909 £10,12 £8,198 £10Liabilities 0Paid-in £0 £0 £0 £0 £0 £0 £0 £0 £0CapitalRetained £0 £0 £0 £0 £0 £0 £0 £0 £0EarningsEarnings £0 (£4,74 (£14,14 (£23,13 (£28,06 (£31,72 (£34,26 (£34,89 (£33,81 (£31 2) 0) 2) 7) 5) 5) 6) 7)Total Capital £0 (£4,74 (£14,14 (£23,13 (£28,06 (£31,72 (£34,26 (£34,89 (£33,81 (£31 2) 0) 2) 7) 5) 5) 6) 7)Total £0 (£3,09 (£11,06 (£19,81 (£23,40 (£25,56 (£26,35 (£24,77 (£25,61 (£20Liabilities 9) 1) 7) 6) 2) 6) 6) 9)and Capital
  26. 26. Net Worth £0 (£4,74 (£14,14 (£23,13 (£28,06 (£31,72 (£34,26 (£34,89 (£33,81 (£31 2) 0) 2) 7) 5) 5) 6) 7)

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