2. Table of Contents
Executive Summary ........................................................................................4
Loan Analysis....................................................................................................5
Financial Highlights.........................................................................................5
StartupSummary
.............................................................................................6
Industry ata Glance.........................................................................................8
ProjectedIndustry Growth.............................................................................9
KeyExternalDrivers......................................................................................
.10
Objectives.........................................................................................................10
SWOTAnalysis..................................................................................................11
Marketing..........................................................................................................
.1
1
ManagementSummary................................................................................
.12
FInancial Indicators.........................................................................................13
Revenue Forecast............................................................................................14
Break-EvenAnalysis......................................................................................
.15
ProfitandLoss Statement............................................................................
.16
Projected Cash Flow.......................................................................................17
ProjectedBalanceSheet...............................................................................
.18
Y
ear1PersonnelForecast..............................................................................19
Y
ear1RevenueForecast.................................................................................19
Y
ear1Profit&Loss.........................................................................................20
Y
ear1BalanceSheet.......................................................................................21
3. Executive Summary
EPlaceSolutions willbeaninnovativeonline e-commerceportal offeringavarietyof products toconsumers throughouttheglobe.
Founded by Mr.John Jones, a seasoned business visionary with an eye towards profit and achievement,the organization is set to
enterthemarketduring 2012.Thetimingofmarketentryis nothing less thanexceptionalas consumersthroughouttheglobe have
begun releasingpent-upspending thatwasheldasaresultoftheglobalrecession.Onlineshoppingis atanall-timehigh withnew
consumermindsetscallingforthemtoshop forthetypesofdealsandbargains thatwillbeso muchapartoftheEPlaceSolutions
business model.While the market has a great deal of potentialand is filled with incredible opportunities, in orderto capitalize on
them,astrong infusionofworkingcapitalmustbeacquired.Working capitalwill beusedinavarietyofareasincludingmarketing,
logistics,insurance,managementaswellasthefinancingofthedaytodayoperationsofabusinessofthistype.Thefounderprojects
needing aworkingcapitalsumof100Kforhisventurewithrepaymentofthissumcomingfromprofitsmadethroughthewebsite.
MarketingforEPlaceSolutionswillbedoneprimarilythroughtheInternet.Thefounderwilldevelopastrongonlinepresencethatis
user-friendly, easy to navigate and encourages consumers toengage in longer stays that increasethe probability of apurchase. In
additiontothehomewebsite,plansalsocallfortheorganizationtodevelopastrongsocialmediapresenceusingFacebook.comand
Twitter.com;theworld’spremiersocialnetworkswithover1billionpersons intheircombinedcommunities.Thesocialmediapages
willbeupdatedonadailybasiswithinformationthatwilldrivethemarketingmessageandallowittoresonatewiththemembersof
thecoreaudience. Long-termplanscallforthefoundertopossiblyexploremassmediamarketingincludingprint,radioandtelevision
butatthis time,those mediumssimply willnot yield anoptimalreturnon investment.For this reason,thefounderhas decidedto
foregothembutdoesreservetherighttorevisitthemastheneedsandresourcesofthebusinessallow.
Financials for EPlaceSolutions arestrong and show patternsof consistent growth overthe course of the next fiveyears.Overhead
costsareextremelylowanddonotinanywaythreatentheprojectedprofitpositionoftheorganizationinanyofthefiveyearsthatare
outlinedinthefinancials. Therearenolargesalariesinvolvedinthefinancialmixasthefounderdoesnotprojecttoimmediatelyneed
tohireastaffofanytypeasthemajorityofthefunctionscanbehandledalone.AllofthesefactorsbodeextremelywellforEPlace
Solutionsastheorganizationlookstobecomeoneoftheonlinecommerce’ssignaturebrandsandatruemarketleader.
4
4. Loan Analysis
Loan Analysis
Interest Rate: 8.50%
Years of Loan: 15
Loan Amount: $100,000.00
Monthly Payment: $984.74
Total Payment: $177,253.12
Total Interest: $77,253.12
TheprojectedloananalysisforEPlaceSolutionsis showninthe
table above. The organization projects to have a monthly loan
payment of $984.74 with a total loan payment of $177,253.12
overthe15yearlifeoftheloan.
Financial Highlights
Thefinancial highlightsforEPlaceSolutions areshowninthechartabove. Theorganization projectstohavestronggrowthtrendsover
thecourseofthenextfiveyears.
Direct Costs
Revenue
Year 3 Year 4
Operating Expenses Net Profit
$2,500,000.00
$2,000,000.00
$1,500,000.00
$1,000,000.00
$500,000.00
$0.00
Year 1 Year 2 Year 5
5
5. Startup Summary
Start-up Assets
Working Capital $10,000
Inventory $12,500
Materials $1,000
Miscellaneous $1,500
Total Start-up Assets $27,100
Total Requirements
Total Start-up Expenses $50,000
Total Start-up Assets $50,000
Total Requirements $100,000
Start-up Investments
IInvestment
Owner $25,000
Investor $0
Total Planned
Investment
$25,000
Start-up Expenses
Payroll $10,000
Rent Deposits $5,000
Permits $6,500
License $3,500
Web Development $25,000
Total Start-up Expenses $50,000 Startup Figures
$50,000 $50,000
$25,000
$0
Expenses Assets Investment CurrentLoans
6
6. Mission Statement
ThemissionofEPlaceSolutionsistoprovideareliableonlinemarketplaceforconsumersthatofferqualityproductsatareasonable
pricethatdrivesprofitsfortheparentcompanywhileaddingvaluetoourbrandconstituents.
Company Ownership
John Jones is the sole owner of EPlace Solutions. There are no other parties with the ability to claim an ownership stake in this
venture.ItshouldhoweverbenotedthatMr.Jonesis currentlysolicitingoffersfrominvestorsorinvestmentgroups thatshareinhis
long-termvisionforprofitandsuccess.
Business Location
EPlaceSolutions willbelocatedin San Diego,Californiawiththeability toserve clientsthroughout theglobe. Long-termplansare
forthistoremainthebaseofoperationsduetothefamiliarityofthefounderwiththeareaandthereachthattheInternetprovides.
Products and Services
EPlace Solutions will offer a security online marketplace for consumers looking to transact purchases for reduced cost items. The
organizationwillhaveadropshippingapproachwhichwillgreatlyenhancetheappealandlowertheoveralloverheadcoststhatare
incurred.
About the Founder
Mr.JohnJonesis thefounderofEPlaceSolutions.Mr.Jonesisaseasonedbusinessprofessionalwiththeabilitytodevelopstrategies
that yield optimal financial results. His background in architecture will be invaluable as he looks to meticulously create a business
modelandapproachthatallowEPlaceSolutionstobecomerecognizedasatruemarketleader.
7
7. Industry at a Glance
KeyStatistics
Snapshot
Revenue AnnualGrowth06-1
1 AnnualGrowth11-16
Profit Wages Business
$186.4bn
$12.7bn
8.4%
$7.8bn
9.4%
50,973
8
Products and services
segmentation (2011)
SOURCE: WWW.IBISWORLD.COM
Everyyear,morethan100millionAmericanspurchasegoodsfrom
theonlineretailmarketplace,oneofthefastest-growingindustries
in the United States. Since the start of the decade, revenue for
the E-Commerce and Online Auctions industry has grown at an
exceptional rate, outperforming most retail industries in the
country.
Despite the brief recession-induced slump in 2008 and 2009,
industryrevenueisexpectedtoincreaseatanaverageannualrate
of8.4%inthefiveyearsto2011,includinga10.0%jumpin2011to
bringrevenueto$186.4billion.Becauseofsteadygrowth,industry
margins havealsoimproved,increasingfromabout5.0% in2006
toanestimated6.8%in201
1
.
Asonlineshoppingbecomesmorepopular,retailersareexpanding
theproductstheycarrytoinclude commonhousehold goodslike
CDs, DVDs, books, clothing,footwear and groceries. Hard-to-find
niche products or products that are no longer being produced
havealso found homesonline.As productranges havegrown,so
has thenumberof industry operators.Thenumberof enterprises
has grown at an average annual rate of 2.4% in the five years to
201
1to50,973.
In thecoming years,continuedeconomicrecoverywillcontribute
to the industry’s strong growth. Increases in per capita income
and employment will improve consumer sentiment, increasing
consumers’ likelihood to buy. Also, broadband internet adoption
will grow in the next five years, boosting online retailers’
accessibility. IBISWorld forecasts that these factors will cause
industry revenue to grow at an average annual rate of 9.4% over
thefiveyearsto2016tototal$291.9billion.
4.5%
Food, beverages
Office equipment
and pet food
and supplies
5.5%
6.5%
Medication and
cosmetics
7.2%
Furniture and
home appliances
13.8%
Sporting goods, toys,
hobby items and games
15%
Clothing, footware,
accessories and jewelry
23.2%
Other merchandise
24.3%
Computers and TVs
8. Inthe10yearsto2016,industryvalueadded,whichmeasurestheE-CommerceandOnlineAuctionsindustry’scontributiontotheUSeconomy,
is expectedtoincreasebyanaverageannualrateof11.0%,whileUSGDPis forecasttorisebyanaverageannualrateof2.0% overthissame
period.Thisindicatesthattheindustryisingrowthphaseofitslifecycle,asitsgrowthrateoutpacesGDPovera10-yearperiod.Risingindustry
participationandnewformsofbusinessesalsoindicateagrowingindustry.
Over the five years to 2011, the number of online retailers and auction sites has increased at an average annual rate of 2.4% to 50,973
businesses. This growth in industry participation can be attributed to an increase in e-commerce demand, mainly driven by the rising
prevalenceof broadband connections and other high-speed internet services. Such services have allowed more consumers to surf the net
and buy products withoutexperiencingany lag time;consequently,moreconsumershavebeenabletomakepurchasesonline withadded
convenience.Furthermore,theindustry’slowbarrierstoentryandskillrequirementshasallowedforcompaniestoentertheindustrywithout
much difficulties, leading to higher participation. In the five years to2016,the number of operators is expected to further rise with higher
demandfore-commercewebsites.Totalnumberofplayersisforecasttoincreaseby2.4%annuallytototal57,428businesses.
Inrecentyears,arelativelynewformofe-commerceknownassocialcommercehasemergedwithintheindustry.Unliketraditionale-tailers,
social commerceinvolves using social media,online media that encourages online interaction and user contribution,to assist in the online
buying and selling of goods. This subset of e-commerce retailers has gained wide acceptance to consumers in the five years to 2011,by
providingengagingcontentanddiscounted(orwholesale)pricesthroughuserinteraction(i.e.sharinginformationandpurchasingasgroups).
IBISWorldexpectsmoreformofsocialmediaornewe-commercebusinessestoariseinthenextfiveyearsto2016,furthercontributingtothe
growthstagedesignationoftheindustry.
Projected Industry Growth
9
9. Objectives
WhatfollowsisalistingofthecoreobjectivesforEPlaceSolutions.
1.Developastrongcustomerbase.Developing astrongcustomerbasewillbethefirstpriority.Toachievethisendthefounderwill
createaneffectivecustomerservicemodelthatadequatelyaddressesalloftheuniqueneedsoftheonlineconsumer.
2.Createabroadmarketplace.Havingabroad marketplacewith avariety of goods will be another of the core objectives. From
furnituretoelectronicstokitchenandfashion,thefounderisintentoncreatingamarketplacethatisasbroadastheconsumerstaste.
3.Onlinesecurity. Astheonlineshoppingindustryhascontinuedtogrow,sotoohastheneedforonlinesecurity. Withthatbeingsaid
thefounderwilllooktodevelopasecureenvironmentthatprotectstheconsumeronalllevels.
4.Driveprofits.Drivingprofits willbethefinalobjectiveforEPlaceSolutionsasthefounder willlooktogrowtherevenueandprofit
streamsexponentiallyoverthecourseofthecomingyears.
1
0
Key External Drivers
Disposable income is a deciding factor in determining the quantity
andqualityofonlinepurchases.Changesinincomecanoccurbecause
of movements in wages, government benefits, unemployment and
tax rates and returns on assets. This driver is expected to increase
over 2011, making it a potential opportunity for industry growth.
The E-Commerce and Online Auctions industry is sensitive to the
penetrationrateofPCs.Iftherateofcomputerownershipincreases,
then a larger proportion of the population has access to e-tailers.
Additionally, increased computer and internet use will likely raise
confidence, leading to greater computer activity and sales. This
driverisexpectedtoincreaseover201
1
.
During periods of low economic growth, consumer sentiment
declines; as a result, consumers limit their expenditure. This factor
subsequently affects demand for products online. This driver is
expected to rise over 2011, but because of high unemployment, it
remains a threat to industry growth. When morehouseholds have
access to broadband internetas opposed to dial-up,they aremore
likelytomakeonlinepurchasesbecauseofthespeedgains derived
from a broadband connection. This driver is expected to increase
over2011.
4
3
2
1
0
%
Change
Per capita disposable income
-1
Year 05 07 09 1
1 13 15 17
85
80
75
70
65
60
%
Percentage of households with at
least one computer
Year 03 05 07 09 1
1 13 15 17
