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Table of Contents
1.0 Executive Summary ..............................................................................................................1
1.1 Mission .........................................................................................................................2
1.2 Keys to Success ...........................................................................................................2
1.3 Objectives ....................................................................................................................2
Chart: Highlights ........................................................................................................2
2.0 Company Summary ..............................................................................................................2
2.1 Start-up Summary ........................................................................................................3
Table: Start-up Funding .............................................................................................4
Chart: Start-up ...........................................................................................................5
Table: Start-up ...........................................................................................................5
2.2 Company Ownership ....................................................................................................5
3.0 Services ................................................................................................................................5
4.0 Market Analysis Summary ....................................................................................................7
4.1 Market Segmentation ...................................................................................................7
Table: Market Analysis ..............................................................................................7
Chart: Market Analysis (Pie) ......................................................................................8
4.2 Target Market Segment Strategy .................................................................................8
4.3 Service Business Analysis ...........................................................................................8
4.3.1 Competition and Buying Patterns .....................................................................9
5.0 Strategy and Implementation Summary ...............................................................................9
5.1 Competitive Edge .........................................................................................................9
5.2 Marketing Strategy .....................................................................................................10
5.3 Sales Strategy ............................................................................................................10
5.3.1 Sales Forecast ................................................................................................11
Table: Sales Forecast .....................................................................................11
Chart: Sales Monthly .......................................................................................11
Chart: Sales by Year .......................................................................................12
5.4 Milestones ..................................................................................................................12
Table: Milestones.....................................................................................................12
Chart: Milestones .....................................................................................................13
6.0 Web Plan Summary ...........................................................................................................14
6.1 Website Marketing Strategy .......................................................................................14
6.2 Development Requirements .......................................................................................14
7.0 Management Summary ......................................................................................................14
7.1 Personnel Plan ...........................................................................................................15
Table: Personnel......................................................................................................15
8.0 Financial Plan .....................................................................................................................15
8.1 Important Assumptions ..............................................................................................15
Table: General Assumptions ...................................................................................15
8.2 Break-even Analysis...................................................................................................15
Chart: Break-even Analysis .....................................................................................16
Table: Break-even Analysis .....................................................................................16
8.3 Projected Profit and Loss ...........................................................................................17
Table: Profit and Loss ..............................................................................................17
Chart: Profit Monthly ................................................................................................18
Chart: Profit Yearly ..................................................................................................18
Chart: Gross Margin Monthly ...................................................................................19
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Table of Contents
Chart: Gross Margin Yearly .....................................................................................19
8.4 Projected Cash Flow ..................................................................................................19
Table: Cash Flow .....................................................................................................20
Chart: Cash..............................................................................................................21
8.5 Projected Balance Sheet ............................................................................................21
Table: Balance Sheet ..............................................................................................22
8.6 Business Ratios .........................................................................................................23
Table: Ratios............................................................................................................23
Table: Sales Forecast .................................................................................................................1
Table: Personnel ........................................................................................................................2
Table: General Assumptions ......................................................................................................3
Table: Profit and Loss.................................................................................................................4
Table: Cash Flow ........................................................................................................................5
Table: Balance Sheet .................................................................................................................6

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Borrow My Tools
1.0 Executive Summary
Borrow My Tools is a start-up company serving the San Mateo, CA community with home
improvement tools for lease or rental. The business has been formed as a California S
Corporation with Josh Taylor as the primary shareholder. Borrow My Tools will offer customers a
range of common home improvement tools with benchmarked levels of customer service.
The Market
San Mateo has two distinct market segments that are Borrow My Tools' most attractive customers.
The first segment is individuals who are undertaking a home improvement project on their
house. While some of these customers know exactly what they need in terms of tools, many of
them are coming to Borrow My Tools specifically for the expertise and guidance for the home
improvement project. The individuals have 54,050 potential group members. The annual growth
rate of this segment is 5%. The second segment of customers are handymen who have been
hired to complete a project for a client. Because the cost of purchasing tools is so high and there
are so many tools to lease available, handymen are attracted to Borrow My Tools because of
their plentiful leasing and rental options. The handymen have 1,200 potential segment member
and a 4% growth rate.
Services
Borrow My Tools leases and rents a variety of tools. The tools have been categorized into three
large groups: wood, exterior, and assorted. All of the tools that Borrow My Tools leases or rents
are of the highest quality and are in outstanding condition. Borrow My Tools has developed a
strategic relationship with a premier leasing company to allow customers to lease tools from
them. Leasing is advantageous in many ways: the customer always has the nicest/newest
version to work with, precious capital is not tied up, lines of credit from banks are not effected by
leases, and certain tax advantages are conferred to the lessee.
Competitive Edge
Josh, a veteran of both the contractor industry and the tool rental/leasing industry is taking his
industry observations and carving out a niche in the industry by emphasizing two competitive
edges that will greatly assist Borrow My Tools in gaining market share:

Highest-quality product offerings: If customers are going to lease or rent tools they
want to use the best products. Borrow My Tools' procurement process only purchases the
finest tools in the respective category, ensuring that customers will be thrilled with the
selection. In addition to starting with the highest quality tools, the products are
meticulously maintained so that they continue to appear as new.
Benchmarked customer service: The function of Borrow My Tools sales assistants is to
help the customer in any way possible. This includes determining which tool is best for the
job, explaining the proper way to use the tool, as well as offering suggestion on how best to
complete the job. Every sales agent is the customer's personal expert. It is Borrow My
Tools' mission to ensure every customer has their expectations exceeded.

Borrow My Tools is an exciting new concept that recognizes the competitor's customer service
short comings and leverages Borrow My Tools' phenomenal customer support to address the
market niche that wants a positive experience and needs assistance with their lease or rental. By
adhering to a comprehensive rental business plan strategy, Borrow My Tools will quickly gain
market share and transform this start-up's business into a profitable venture.
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Borrow My Tools
1.1 Mission
Borrow My Tools' mission is to offer the finest selection of home improvement tools for the San
Mateo Community. Borrow My Tools will support the tools with the finest customer service. All
customers will have their expectations exceeded.

1.2 Keys to Success

Maintain a sufficient inventory of high-quality tools, kept in excellent condition.

Ensure all staff are extremely knowledgeable on all of the offered tools.
Maintain strict inventory and accounting controls, reducing overhead while assuring
availability at the same time.

1.3 Objectives

To have 70% of the tools rented by month seven.

Reach profitability by year two.
Achieve self-sustaining revenue by year two.

2.0 Company Summary

Borrow My Tools is a CA registered S corporation. Registration took place in January of 2004.
The main shareholder is Josh Taylor. Borrow My Tools offers a range of home improvement tools
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Borrow My Tools
which may be rented for intervals of less than one month and leased for intervals of more than a
month. Tools will serve both individuals interested in improving their home as well as handymen.

2.1 Start-up Summary

Borrow My Tools will incur a variety of expenses associate with the start up phase of the
business. Some expenses will be equipment related, for inventory as well as for operations.
Other expenses will be from service providers used to assist in the development of operations.
The following is a partial list:
Service providers

Attorney: Corporate formation.

Accountant: PeachTree set up including inventory module.

Inventory equipment
Assorted range of all the tools that will be rented. For a current complete list of the available
tools please view the Services section.
Computer system

Three workstations with Microsoft Office licenses

PeachTree Accounting with network access
Two laser printers
Broadband Internet connection

Retail space equipment

Assorted shelving units

Three desk-based work areas
Assorted light fixtures

Repair area
Variety of tools for maintenance and repair of the tool inventory.

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Borrow My Tools
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$8,400
$126,600
$135,000

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$60,000
$66,600
$0
$66,600
$126,600

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities

$0
$70,000
$0
$0
$70,000

Capital
Planned Investment
Investor 1
Other
Additional Investment Requirement
Total Planned Investment

$65,000
$0
$0
$65,000

Loss at Start-up (Start-up Expenses)

Total Capital

($8,400)
$56,600

Total Capital and Liabilities

$126,600

Total Funding

$135,000

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Borrow My Tools

Table: Start-up
Start-up
Requirements
Start-up Expenses
Attorney
Accountant
Brochures
Insurance
Rent
Total Start-up Expenses

$3,000
$4,000
$500
$150
$750
$8,400

Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets

$66,600
$0
$0
$60,000
$126,600

Total Requirements

$135,000

2.2 Company Ownership

Borrow My Tools is an S Corp owned primarily by Josh Taylor.

3.0 Services
Borrow My Tools offers the San Mateo community a wide range of tools that can be rented or
leased depending on the length of time needed. Borrow My Tools will offer a bright, cheerful
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Borrow My Tools
showroom. Customers will be greeted when they walk in and offered assistance. While Borrow
My Tools rents tools, the real service is the attention that the customer receives. This takes the
form of assistance in determining what tools are needed. The customer is then shown exactly
how to use the tool and given plenty of tips to make them as proficient as possible.
The tools are available for rent if the borrowing period is less than one month and are available
for lease for periods beyond one month. Tools that will be leased/rented are grouped into three
broad categories:
Wood

Radial arm saw

Drum sander
Sawzall
Router
Lathe
Planer

Assorted

Industrial cordless drill. This unit is rented with several battery packs
Nail gun
Air compressor. For use with the nail gun, paint sprayer, and pressure washer

Exterior products

Pressure washer
Paint sprayer. Also included is a roller attachment
Roto tiller

While this selection may seem eclectic, it touches upon the most demanded tools within a specific
genre. While many different rental facilities have a wider selection, Borrow My Tools believes that
they can better serve their customers by reducing the selection of leases and rentals and offering a
far more knowledgeable and helpful staff regarding the specific tool. As the selection of the tools
increase, staff members knowledge and skill of each individual tool decreases exponentially.
Borrow My Tools provides each customer with an instruction manual for each tool which includes
how best to use it, maintenance instructions, and ideal applications for the tool. While customers
are likely to find this printed information useful, the knowledge communicated by the sales staff
will be even more helpful.
For leasing customers, Borrow My Tools has developed a strategic relationship with a premier
local leasing company that will assist with the financials aspect of leasing. Borrow My Tools is also
able to work with another leasing company if their preferred vendor is not able to assist the
customer. Several leases are available, some that that provide a $1 buyout for the customer at the
end of the term. Others leases keep the buy out price higher, effectively reducing the money
payments. Leasing equipment for many different people is a very useful option. Leasing provides
the following benefits:

Frees up working capital.

Protects line-of-credit. Lease payments do not have an impact on bank credit line.
Eliminates obsolescence. Provides up-to-date equipment.
Gain tax advantages. Lease is tax deductible as a business expense.
Lower monthly payments.

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Borrow My Tools
4.0 Market Analysis Summary
Borrow My Tools has identified two distinct customer segments that will be the most attractive. The
first segment is individuals who will be performing home improvement work themselves. The
second is the handyman who will be performing a job in a client's house and need to use tools
which he/she does not own. The Market Segmentation section provides additional detail about
the market segment including useful demographic data. This section is also supported by a table
with additional detail about the two markets.

4.1 Market Segmentation

Borrow My Tools has identified two segments of the market that are most attractive to the tool
rental/lease business model: individuals and handymen.
Individuals: This market segment is homeowners who are interested in undertaking a home
improvement project but do not have the equipment to compete the project. They may already
possess the skills to complete the job or have the aptitude to learn with a Borrow My Tools' sales
assistant's help.

The individuals have typically owned the home for one to three years, or for more than
ten years.
Ages 30-45
76% have undergraduate schooling
59% perform other forms of home improvements around the house
Only 16% will be coming to Borrow My Tools for their very first home improvement project
43% will be having one of their more experienced friends assisting them with the project on
hand

Handymen: This is the market segment of service providers who perform a wide range of home
improvement services for customers. The average handyman does not have all the tools needed to
complete a job. There are so many different tools out there and the industrial quality ones cost
so much that is often not cost effective for a handyman to own all of the tools that he may need.
Borrow My Tools will serve the handyman market well with high quality, good condition industrial
offerings.

Table: Market Analysis

Market Analysis
Potential Customers
Individuals
Handyman
Total

Growth
5%
4%
4.98%

Year 1

Year 2

Year 3

Year 4

Year 5

54,050
1,200
55,250

56,753
1,248
58,001

59,591
1,298
60,889

62,571
1,350
63,921

65,700
1,404
67,104

CAGR
5.00%
4.00%
4.98%

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Borrow My Tools

4.2 Target Market Segment Strategy

Borrow My Tools has selected these two customer segments because they will provide the most
revenue to Borrow My Tools relative to other customer groups. Individuals will be a significant
revenue driver since they are all home owners who are looking to make improvements in their
home. The unexpected costs of home ownership create a great incentive to pursue improvement
projects themselves as a means of saving money. As long as the individual has the time (often
what weekends are for) and a sense of adventure, they can go to Borrow My Tools, rent or lease
tools, receive instructions on how to use them and complete the home improvement project on
their own, saving significant amounts of money.
Knowledgeable friends and neighbors are often at the disposal of our individuals segment and this
is great for Borrow My Tools' business because it creates incentives for individuals to undertake
projects a bit out of their skill range, feeling the comfort that they will have the help of a neighbor/
friend to guide them through the project. Often the neighbor will tell then to go and rent
a specific tool and that they will show them how to use it.
Handymen are also a great target segment because they are more likely to undertake the
leasing option relative to the individuals. While many handymen have a significant collection of
tools, it is difficult for them to have every tool since there are just so many. From a capital
expenditure standpoint it makes sense not to buy every conceivable tool, but to rent or lease
tools on an as needed basis. The handymen typically already have the skills to operate the tools,
they just are being conservative with their limited capital resources. They will rent or lease the tool
when they have a job that requires it. Having a leasing option significantly decreases overhead.

4.3 Service Business Analysis

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Borrow My Tools
The tool/equipment rental/leasing industry is a large, disperse industry. Some companies only
lease high-end expensive equipment, such as equipment that is in excess of $100K. For lower
priced equipment you see leasing as well as rentals as an option. Most companies in this industry
compete on selection. Their philosophy is the greater the selection, the more competitive they
are. This tends to serve a specific type of customer, someone who knows exactly what they want
or need. When a customer enters the retail space of one of these companies they are shown a long
list of available equipment and are asked to make a choice.
Borrow My Tools has decided to compete on different terms. Selection is not of primarily
importance, but customer service and support are. Through a careful selection of the most
important or used tools, Borrow My Tools has chosen a good selection of popular tools that
are supported with a knowledgeable staff.
The following Competition and Buying Patterns section details the specific competitors that
Borrow My Tools faces in the San Mateo market and provides the pro and cons of the different
competitors.

4.3.1 Competition and Buying Patterns

A-Z Rentals
A large, comprehensive rental company. Selection, not service is key here.

Pros: Rents a wide range of tools and equipment including wood tools, machining tools,
catering supplies, even pianos.
Cons: The staff is not able to provide support for products.

The Tool Shed

A tool leasing company that leases a wide range of tools. The primary customers are contractors.

Pros: Wide selection of high end tools, a lot of leasing options.

Cons: Tool experts need only apply, this company does not hold the hands of beginners.

5.0 Strategy and Implementation Summary

Borrow My Tools will seek to leverage its competitive edges to quickly gain market share. Borrow
My Tools has developed a marketing strategy that will generate visibility for the company regarding
the various services that it offers. The sales campaign will have the goal of converting possible
customers or one-time customers into dedicated, frequent users of Borrow My Tools' services.
The proper implementation of these strategies will be a key element in Borrow My Tools market
penetration and growth into a profitable business.

5.1 Competitive Edge

Borrow My Tools will focus on two key elements which comprise the competitive edge, an
advantage that will assist in fast growth in the market:

High quality products: Borrow My Tools will only rent the highest-quality tools. For so
many customers the decision of who to lease/rent from comes down to the tools that
they have to use. Are the tools high end, industrial quality? What is the condition of the
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Borrow My Tools

tools, have they been well maintained?

Outstanding customer service: Borrow My Tools recognizes that in order to be
competitive, it must support leases and rentals with the highest quality customer service.
All sales agents are trained in the various tools. In fact, the training is supplementary to the
existing knowledge of the tools. The sales agents are hired based on their existing
knowledge. Another component of the customer service is the assistance the agents
provide in terms of offering insight into "best practices" for the given job that the
customer is looking to fulfill.

5.2 Marketing Strategy

Borrow My Tools will use a targeted marketing campaign as a way of developing visibility for the
company. The marketing campaign will concentrate on the following consumer benefits:

A wide range of leasing and rental options.

A good selection of the most popular tools.
All tools are top of the line, meticulously maintained.
Borrow My Tools offers the highest level of customer service. Each customer's hand will
be held through the entire process ensuring that their needs are met. If a customer has
never used a specific tool before, Borrow My Tools will show the customer exactly how to
use it so that they have complete comfort in the operation of the tool.

Several different marketing methods will be used:

Newspaper Advertisements
Borrow My Tools will place newspaper advertisements in the local newspaper to raise awareness
about the various services that it offers.
Yellow Pages
Borrow My Tools will also have a half page advertisement in the Yellow Pages. It expects a
significant amount of business from the Yellow Pages. This is based on the philosophy that when
a person is interested in a service they are not familiar with they will consult the Yellow Pages.

5.3 Sales Strategy

Borrow My Tools' sales strategy is concerned with the need to convert one-time users into frequent
customers. This is especially important because any person that has a home and an
improvement project has many different projects. This also applies to the handymen whose fulltime job is the completion of projects that require specific tools. If Borrow My Tools is able to
impress the handymen then they will make Borrow My Tools their preferred vendor.
The assurance of increased sales, driven on repeat business is quite simple, ensure that
customers always have their expectations exceeded. Additionally, a customer who is happy with
a service provider is will tell friends about their positive experiences. A referral from a personal
friend based on experience are often the strongest recommendations that can be offered.

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Borrow My Tools
5.3.1 Sales Forecast
The sales forecast will be tracked by the different tool categories that Borrow My Tools offers.
The cost of goods sold will be based on the time it takes for the service department to review
each pice of leased/rented equipment and bring it back to like new specifications for the next
customer.
The sales forecast is a conservative prediction of sales. It is broken down by month for year one
and tracks yearly totals for years two and three. Preceding the following table are graphical
representations of the forecast by month as well as year.

Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

Sales
Wood
Assorted
Exterior
Total Sales

$26,550
$23,099
$20,178
$69,827

$81,080
$70,540
$61,621
$213,240

$94,400
$82,128
$71,744
$248,272

Direct Cost of Sales

Wood
Assorted
Exterior
Subtotal Direct Cost of Sales

Year 1
$2,655
$3,927
$3,834
$10,416

Year 2
$8,108
$11,992
$11,708
$31,808

Year 3
$9,440
$13,962
$13,631
$37,033

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Borrow My Tools

5.4 Milestones
Borrow My Tools has identified several milestones that will assist the organization in reaching preidentified goals. Milestones were chosen to be realistic, achievable, yet lofty. The following table
details the specific milestones, what department is responsible and the time frame for
accomplishment.

Table: Milestones
Milestones
Milestone
Business Plan Completion

Start Date
1/1/2004

End Date
2/1/2004

Budget
$0

Manager
Josh

Retail Space Secured

2/1/2004

3/1/2004

$0

Josh

Lease Vendor Relationships

Secured
Open For Business
Totals

3/1/2004

3/15/2004

$0

Josh

3/15/2004

4/1/2004

$0
$0

Josh

Department
Business
Develpment
Business
Develpment
Business
Develpment
Operations

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Borrow My Tools
6.0 Web Plan Summary
A website will be developed to allow customers to view a lease/rental catalog at their
convenience. The site will offer descriptions of the different tools as well as tips on proper use.
When the tool selection changes the site will be updated.

6.1 Website Marketing Strategy

Submission to search engines: The site will be submitted to various search engines so when
someone enters a common keyword into the search engine, Borrow My Tools' site comes up
on the list of "hits."
The Web address will be printed on all forms of literature: This includes all invoices,
advertisements, and other promotional material.

6.2 Development Requirements

Borrow My Tools has informally discussed the production of the website with a local teacher who
does website programming as a side job.

7.0 Management Summary

Josh Taylor received his undergraduate degree in small business management from the
University of California. Following his schooling, Josh worked for seven years for a contractor. Then
he worked at a local tool rental facility and within two years he advanced to the manager's
position.

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Borrow My Tools
7.1 Personnel Plan
The following people/positions will be needed for Borrow My Tools:

Josh: Will play the manager position, but will also be doing a little bit of everything.
Sales: There will be a total of three sales assistants.
Accounting/bookkeeper: This is a part-time position.
Service technicians: There will be two technicians who are responsible for the
maintenance and preparation of the various tools.

Table: Personnel
Personnel Plan
Josh
Sales
Sales
Bookkeeper
Service
Service
Total People

Year 1
$20,000
$14,400
$11,200
$9,000
$16,200
$14,400
6

Year 2
$24,000
$19,200
$19,200
$12,000
$21,600
$21,600
6

Year 3
$30,000
$19,200
$19,200
$12,000
$21,600
$21,600
6

Total Payroll

$85,200

$117,600

$123,600

8.0 Financial Plan

The following sections will outline important financial information.

8.1 Important Assumptions

The following table details important financial assumptions.

Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Year 1
1
10.00%
10.00%
30.00%
0

Year 2
2
10.00%
10.00%
30.00%
0

Year 3
3
10.00%
10.00%
30.00%
0

8.2 Break-even Analysis

The Break-even Analysis table and chart indicate what is needed in monthly revenue to reach the
break even point.

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Borrow My Tools

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$11,869

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

15%
$10,098

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Borrow My Tools
8.3 Projected Profit and Loss
The following table and charts will indicate projected profit and loss.

Table: Profit and Loss

Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales

Year 1
$69,827
$10,416
$0
$10,416

Year 2
$213,240
$31,808
$0
$31,808

Year 3
$248,272
$37,033
$0
$37,033

Gross Margin
Gross Margin %

$59,411
85.08%

$181,433
85.08%

$211,239
85.08%

Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Rent
Utilities
Insurance
Payroll Taxes

$85,200
$0
$12,000
$7,500
$2,200
$1,500
$12,780

$117,600
$0
$12,000
$9,000
$2,640
$1,800
$17,640

$123,600
$0
$16,000
$9,000
$2,640
$1,800
$18,540

Total Operating Expenses

$121,180

$160,680

$171,580

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

($61,769)
($49,769)
$6,394
$0

$20,753
$32,753
$5,317
$4,631

$39,659
$55,659
$4,219
$10,632

Net Profit
Net Profit/Sales

($68,163)
-97.62%

$10,805
5.07%

$24,808
9.99%

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Borrow My Tools

8.4 Projected Cash Flow

The following table and chart will indicate projected cash flow.

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Borrow My Tools
Table: Cash Flow
Pro Forma Cash Flow
Year 1

Year 2

Year 3

Cash from Operations

Cash Sales
Subtotal Cash from Operations

$69,827
$69,827

$213,240
$213,240

$248,272
$248,272

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received

$0
$0
$0
$0
$0
$0
$0
$69,827

$0
$0
$0
$0
$0
$0
$0
$213,240

$0
$0
$0
$0
$0
$0
$0
$248,272

Year 1

Year 2

Year 3

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations

$85,200
$38,101
$123,301

$117,600
$79,195
$196,795

$123,600
$78,378
$201,978

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

$0
$0
$0
$11,359
$0
$0
$0
$134,660

$0
$0
$0
$10,938
$0
$0
$0
$207,733

$0
$0
$0
$11,029
$0
$20,000
$0
$233,007

Net Cash Flow

Cash Balance

($64,833)
$1,767

$5,507
$7,274

$15,265
$22,539

Cash Received

Expenditures

Page 20

Borrow My Tools

8.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

Page 21

Borrow My Tools
Table: Balance Sheet
Pro Forma Balance Sheet
Year 1

Year 2

Year 3

$1,767
$1,683
$0
$3,450

$7,274
$10,372
$0
$17,646

$22,539
$4,604
$0
$27,143

$60,000
$12,000
$48,000
$51,450

$60,000
$24,000
$36,000
$53,646

$80,000
$40,000
$40,000
$67,143

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$4,372
$0
$0
$4,372

$6,701
$0
$0
$6,701

$6,419
$0
$0
$6,419

$58,641
$63,013

$47,703
$54,404

$36,674
$43,093

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$65,000
($8,400)
($68,163)
($11,563)
$51,450

$65,000
($76,563)
$10,805
($758)
$53,646

$65,000
($65,758)
$24,808
$24,050
$67,143

Net Worth

($11,563)

($758)

$24,050

Assets
Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

Long-term Liabilities
Total Liabilities

Page 22

Borrow My Tools
8.6 Business Ratios
The following table represents ratios specific to Borrow My Tools as well as industry average ratios.

Table: Ratios
Ratio Analysis
Year 1
n.a.

Year 2
205.39%

Year 3
16.43%

Industry Profile
7.07%

Percent of Total Assets

Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets

3.27%
0.00%
6.70%
93.30%
100.00%

19.33%
0.00%
32.89%
67.11%
100.00%

6.86%
0.00%
40.43%
59.57%
100.00%

3.96%
44.65%
76.22%
23.78%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

8.50%
113.98%
122.47%
-22.47%

12.49%
88.92%
101.41%
-1.41%

9.56%
54.62%
64.18%
35.82%

33.47%
16.23%
49.70%
50.30%

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes

100.00%
85.08%
182.70%
0.00%
-88.46%

100.00%
85.08%
80.02%
0.00%
9.73%

100.00%
85.08%
75.09%
0.00%
15.97%

100.00%
100.00%
84.88%
1.01%
1.94%

0.79
0.40
122.47%
589.49%
-132.49%

2.63
1.09
101.41%
-2035.50%
28.77%

4.23
3.51
64.18%
147.36%
52.78%

1.73
1.33
3.77%
57.72%
8.92%

Year 1
-97.62%
0.00%

Year 2
5.07%
0.00%

Year 3
9.99%
103.15%

n.a
n.a

Activity Ratios
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover

9.37
9.72
27
1.36

5.28
12.17
25
3.97

4.95
12.17
31
3.70

n.a
n.a
n.a
n.a

Debt Ratios
Debt to Net Worth
Current Liab. to Liab.

0.00
0.07

0.00
0.12

1.79
0.15

n.a
n.a

($922)
-9.66

$10,945
3.90

$20,724
9.40

n.a
n.a

0.74
8%
0.40
0.00
0.00

0.25
12%
1.09
0.00
0.00

0.27
10%
3.51
10.32
0.00

n.a
n.a
n.a
n.a
n.a

Sales Growth

Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios
Net Profit Margin
Return on Equity

Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 23

Appendix
Table: Sales Forecast
Sales Forecast
Sales
Wood
Assorted
Exterior
Total Sales
Direct Cost of Sales
Wood
Assorted
Exterior
Subtotal Direct Cost of Sales

0%
0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$0
$0
$0
$0

$0
$0
$0
$0

$350
$305
$266
$921

$800
$696
$608
$2,104

$1,350
$1,175
$1,026
$3,551

$1,800
$1,566
$1,368
$4,734

$3,100
$2,697
$2,356
$8,153

$3,500
$3,045
$2,660
$9,205

$3,750
$3,263
$2,850
$9,863

$3,900
$3,393
$2,964
$10,257

$4,100
$3,567
$3,116
$10,783

$3,900
$3,393
$2,964
$10,257

Month 1
$0
$0
$0
$0

Month 2
$0
$0
$0
$0

Month 3
$35
$52
$51
$137

Month 4
$80
$118
$116
$314

Month 5
$135
$200
$195
$530

Month 6
$180
$266
$260
$706

Month 7
$310
$458
$448
$1,216

Month 8
$350
$518
$505
$1,373

Month 9
$375
$555
$542
$1,471

Month 10
$390
$577
$563
$1,530

Month 11
$410
$606
$592
$1,608

Month 12
$390
$577
$563
$1,530

Page 1

Appendix
Table: Personnel
Personnel Plan
Josh
Sales
Sales
Bookkeeper
Service
Service
Total People
Total Payroll

0%
0%
0%
0%
0%
0%

Month 1
$0
$0
$0
$0
$0
$0
0

Month 2
$0
$0
$0
$0
$0
$0
0

Month 3
$2,000
$0
$0
$0
$0
$0
1

Month 4
$2,000
$1,600
$0
$1,000
$1,800
$0
4

Month 5
$2,000
$1,600
$0
$1,000
$1,800
$1,800
5

Month 6
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6

Month 7
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6

Month 8
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6

Month 9
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6

Month 10
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6

Month 11
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6

Month 12
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6

$0

$0

$2,000

$6,400

$8,200

$9,800

$9,800

$9,800

$9,800

$9,800

$9,800

$9,800

Page 2

Appendix
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Month 1
1
10.00%
10.00%
30.00%
0

Month 2
2
10.00%
10.00%
30.00%
0

Month 3
3
10.00%
10.00%
30.00%
0

Month 4
4
10.00%
10.00%
30.00%
0

Month 5
5
10.00%
10.00%
30.00%
0

Month 6
6
10.00%
10.00%
30.00%
0

Month 7
7
10.00%
10.00%
30.00%
0

Month 8
8
10.00%
10.00%
30.00%
0

Month 9
9
10.00%
10.00%
30.00%
0

Month 10
10
10.00%
10.00%
30.00%
0

Month 11
11
10.00%
10.00%
30.00%
0

Month 12
12
10.00%
10.00%
30.00%
0

Page 3

Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Month 1
$0
$0
$0
$0

Month 2
$0
$0
$0
$0

Month 3
$921
$137
$0
$137

Month 4
$2,104
$314
$0
$314

Month 5
$3,551
$530
$0
$530

Month 6
$4,734
$706
$0
$706

Month 7
$8,153
$1,216
$0
$1,216

Month 8
$9,205
$1,373
$0
$1,373

Month 9
$9,863
$1,471
$0
$1,471

Month 10
$10,257
$1,530
$0
$1,530

Month 11
$10,783
$1,608
$0
$1,608

Month 12
$10,257
$1,530
$0
$1,530

$0
0.00%

$0
0.00%

$783
85.08%

$1,790
85.08%

$3,021
85.08%

$4,028
85.08%

$6,937
85.08%

$7,832
85.08%

$8,391
85.08%

$8,727
85.08%

$9,175
85.08%

$8,727
85.08%

$0
$0

$0
$0

$2,000
$0

$6,400
$0

$8,200
$0

$9,800
$0

$9,800
$0

$9,800
$0

$9,800
$0

$9,800
$0

$9,800
$0

$9,800
$0

$1,000
$0
$0
$0
$0

$1,000
$0
$0
$0
$0

$1,000
$750
$220
$150
$300

$1,000
$750
$220
$150
$960

$1,000
$750
$220
$150
$1,230

$1,000
$750
$220
$150
$1,470

$1,000
$750
$220
$150
$1,470

$1,000
$750
$220
$150
$1,470

$1,000
$750
$220
$150
$1,470

$1,000
$750
$220
$150
$1,470

$1,000
$750
$220
$150
$1,470

$1,000
$750
$220
$150
$1,470

$1,000

$1,000

$4,420

$9,480

$11,550

$13,390

$13,390

$13,390

$13,390

$13,390

$13,390

$13,390

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

($1,000)
$0
$576
$0

($1,000)
$0
$568
$0

($3,637)
($2,637)
$561
$0

($7,690)
($6,690)
$553
$0

($8,529)
($7,529)
$545
$0

($9,362)
($8,362)
$537
$0

($6,453)
($5,453)
$529
$0

($5,558)
($4,558)
$521
$0

($4,999)
($3,999)
$513
$0

($4,663)
($3,663)
$505
$0

($4,215)
($3,215)
$497
$0

($4,663)
($3,663)
$489
$0

Net Profit
Net Profit/Sales

($1,576)
0.00%

($1,568)
0.00%

($4,197)
-455.99%

($8,243)
-391.76%

($9,074)
-255.57%

($9,899)
-209.11%

($6,982)
-85.64%

($6,079)
-66.04%

($5,512)
-55.89%

($5,168)
-50.39%

($4,712)
-43.70%

($5,152)
-50.23%

Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales
Gross Margin
Gross Margin %

Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Total Operating Expenses

15%
15%

Page 4

Appendix
Table: Cash Flow
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

$0
$0

$0
$0

$921
$921

$2,104
$2,104

$3,551
$3,551

$4,734
$4,734

$8,153
$8,153

$9,205
$9,205

$9,863
$9,863

$10,257
$10,257

$10,783
$10,783

$10,257
$10,257

$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$921

$0
$0
$0
$0
$0
$0
$0
$2,104

$0
$0
$0
$0
$0
$0
$0
$3,551

$0
$0
$0
$0
$0
$0
$0
$4,734

$0
$0
$0
$0
$0
$0
$0
$8,153

$0
$0
$0
$0
$0
$0
$0
$9,205

$0
$0
$0
$0
$0
$0
$0
$9,863

$0
$0
$0
$0
$0
$0
$0
$10,257

$0
$0
$0
$0
$0
$0
$0
$10,783

$0
$0
$0
$0
$0
$0
$0
$10,257

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$0
$19
$19

$0
$576
$576

$2,000
$649
$2,649

$6,400
$2,969
$9,369

$8,200
$2,675
$10,875

$9,800
$3,903
$13,703

$9,800
$4,135
$13,935

$9,800
$4,370
$14,170

$9,800
$4,658
$14,458

$9,800
$4,682
$14,482

$9,800
$4,693
$14,493

$9,800
$4,773
$14,573

$0
$0
$0
$904
$0
$0
$0
$923

$0
$0
$0
$911
$0
$0
$0
$1,487

$0
$0
$0
$919
$0
$0
$0
$3,568

$0
$0
$0
$927
$0
$0
$0
$10,296

$0
$0
$0
$934
$0
$0
$0
$11,809

$0
$0
$0
$942
$0
$0
$0
$14,645

$0
$0
$0
$950
$0
$0
$0
$14,885

$0
$0
$0
$958
$0
$0
$0
$15,128

$0
$0
$0
$966
$0
$0
$0
$15,424

$0
$0
$0
$974
$0
$0
$0
$15,457

$0
$0
$0
$982
$0
$0
$0
$15,475

$0
$0
$0
$990
$0
$0
$0
$15,563

($923)
$65,677

($1,487)
$64,190

($2,647)
$61,543

($8,192)
$53,351

($8,259)
$45,092

($9,911)
$35,181

($6,732)
$28,449

($5,923)
$22,526

($5,561)
$16,965

($5,200)
$11,765

($4,692)
$7,073

($5,306)
$1,767

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance

0.00%

Page 5

Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$66,600
$0
$0
$66,600

$65,677
$0
$0
$65,677

$64,190
$0
$0
$64,190

$61,543
$863
$0
$62,405

$53,351
$549
$0
$53,900

$45,092
$1,019
$0
$46,111

$35,181
$1,313
$0
$36,494

$28,449
$1,338
$0
$29,787

$22,526
$1,510
$0
$24,036

$16,965
$1,618
$0
$18,583

$11,765
$1,683
$0
$13,448

$7,073
$1,769
$0
$8,842

$1,767
$1,683
$0
$3,450

$60,000
$0
$60,000
$126,600

$60,000
$1,000
$59,000
$124,677

$60,000
$2,000
$58,000
$122,190

$60,000
$3,000
$57,000
$119,405

$60,000
$4,000
$56,000
$109,900

$60,000
$5,000
$55,000
$101,111

$60,000
$6,000
$54,000
$90,494

$60,000
$7,000
$53,000
$82,787

$60,000
$8,000
$52,000
$76,036

$60,000
$9,000
$51,000
$69,583

$60,000
$10,000
$50,000
$63,448

$60,000
$11,000
$49,000
$57,842

$60,000
$12,000
$48,000
$51,450

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$0
$0
$0
$0

$557
$0
$0
$557

$549
$0
$0
$549

$2,881
$0
$0
$2,881

$2,545
$0
$0
$2,545

$3,765
$0
$0
$3,765

$3,990
$0
$0
$3,990

$4,215
$0
$0
$4,215

$4,502
$0
$0
$4,502

$4,526
$0
$0
$4,526

$4,533
$0
$0
$4,533

$4,622
$0
$0
$4,622

$4,372
$0
$0
$4,372

$70,000
$70,000

$69,096
$69,653

$68,185
$68,734

$67,265
$70,147

$66,339
$68,884

$65,404
$69,169

$64,462
$68,452

$63,512
$67,727

$62,554
$67,056

$61,588
$66,114

$60,614
$65,147

$59,632
$64,254

$58,641
$63,013

$65,000
($8,400)
$0
$56,600
$126,600

$65,000
($8,400)
($1,576)
$55,024
$124,677

$65,000
($8,400)
($3,144)
$53,456
$122,190

$65,000
($8,400)
($7,341)
$49,259
$119,405

$65,000
($8,400)
($15,584)
$41,016
$109,900

$65,000
($8,400)
($24,658)
$31,942
$101,111

$65,000
($8,400)
($34,557)
$22,043
$90,494

$65,000
($8,400)
($41,540)
$15,060
$82,787

$65,000
($8,400)
($47,619)
$8,981
$76,036

$65,000
($8,400)
($53,131)
$3,469
$69,583

$65,000
($8,400)
($58,299)
($1,699)
$63,448

$65,000
($8,400)
($63,012)
($6,412)
$57,842

$65,000
($8,400)
($68,163)
($11,563)
$51,450

$56,600

$55,024

$53,456

$49,259

$41,016

$31,942

$22,043

$15,060

$8,981

$3,469

($1,699)

($6,412)

($11,563)

Starting Balances

Liabilities and Capital

Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

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