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Cover Page

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Legal Page
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Table of Contents

1.0 Executive Summary...............................................................................................................................1

Chart: Highlights..................................................................................................................................2
1.1 Objectives..........................................................................................................................................2
1.2 Mission...............................................................................................................................................2
2.0 Company Summary...............................................................................................................................2
2.1 Company Ownership.........................................................................................................................3
2.2 Start-up Summary..............................................................................................................................3
Table: Start-up.....................................................................................................................................3
..............................................................................................................................................................3
Table: Start-up Funding.......................................................................................................................4
Chart: Start-up......................................................................................................................................4
3.0 Services..................................................................................................................................................5
4.0 Market Analysis Summary....................................................................................................................5
4.1 Market Segmentation.........................................................................................................................6
Chart: Market Analysis (Pie)...............................................................................................................6
Table: Market Analysis........................................................................................................................6
4.2 Target Market Segment Strategy.......................................................................................................7
4.3 Service Business Analysis.................................................................................................................7
5.0 Strategy and Implementation Summary.................................................................................................7
5.1 Sales Strategy.....................................................................................................................................8
5.1.1 Sales Forecast..............................................................................................................................8
Chart: Sales Monthly.......................................................................................................................8
Table: Sales Forecast.......................................................................................................................9
5.2 Competitive Edge...............................................................................................................................9
5.3 Milestones..........................................................................................................................................9
Table: Milestones.................................................................................................................................9
......................................................................................................................................................................9
6.0 Management Summary........................................................................................................................10
6.1 Personnel Plan..................................................................................................................................10
Table: Personnel.................................................................................................................................10
....................................................................................................................................................................10
7.0 Financial Plan.......................................................................................................................................11
7.1 Important Assumptions....................................................................................................................11
Table: General Assumptions..............................................................................................................11
7.2 Projected Cash Flow........................................................................................................................11
Chart: Cash.........................................................................................................................................11
Table: Cash Flow...............................................................................................................................12
7.3 Break-even Analysis........................................................................................................................13
Table: Break-even Analysis...............................................................................................................13
Chart: Break-even Analysis...............................................................................................................13
7.4 Projected Profit and Loss.................................................................................................................14
Page 1

Table of Contents

Chart: Profit Monthly.........................................................................................................................14

Chart: Profit Yearly............................................................................................................................15
Table: Profit and Loss........................................................................................................................15
Chart: Gross Margin Monthly............................................................................................................16
Chart: Gross Margin Yearly...............................................................................................................16
................................................................................................................................................................16
7.5 Projected Balance Sheet...................................................................................................................17
Table: Balance Sheet..........................................................................................................................17
................................................................................................................................................................17
7.6 Business Ratios................................................................................................................................18
Table: Ratios......................................................................................................................................18
Table: Sales Forecast...................................................................................................................................1
......................................................................................................................................................................1
Table: Personnel...........................................................................................................................................2
......................................................................................................................................................................2
Table: General Assumptions........................................................................................................................3
......................................................................................................................................................................3
Table: Profit and Loss..................................................................................................................................4
......................................................................................................................................................................4
Table: Cash Flow.........................................................................................................................................5
Table: Balance Sheet....................................................................................................................................6

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Advanced Linguistic Pontificators

1.0 Executive Summary

Advanced Linguistic Pontificators is a leading seminar and training program company led by
best-selling author Daug Matisim. Advanced Linguistic Pontificators will be targeting mediumand large-size companies/corporations. Pontificators will quickly reach profitability and achieve
$79,000 of net profit by year two.
Services
Advanced Linguistic Pontificators will provide medium- to large-size companies with training
programs and seminars covering the subjects of advanced reading, stress management, and
time management. The advanced reading course will teach speed reading with increased
comprehension and memory. Stress management will teach techniques to better deal with
stress, and time management will teach methods to become more efficient with the limited
amount of time that we all have. The subjects will be taught in either seminar format or
training program format. The seminar format is a presentation that concentrates on a specific
topic. For the seminars, the audience just observes. A training program is like a seminar except
the attendees participate in the entire process.
Marketing
Advanced Linguistic Pontificators will utilize a three-prong strategy to generate a 15% increase
in clients each year. The first prong is the use of free public seminars. The public seminars are
an excellent method of bringing together a diverse crowd of people that would not have
otherwise heard of Pontificators before. The second prong is the dissemination of printed
material and the promotion of Daug's published books. The last prong is the use of networking
and word of mouth advertising. Daug recognizes the "small universe" of seminars and training
programs and will leverage this element to generate significant business from network contacts.
Management
Daug Matism is the organization and an expert in the field he teaches. He has written two bestselling topical books, "Read Fast, Comprehend More, Remember Lots, and Ignore the Fluff,"
and Efficiency Gains in Time and Stress Management: Why the Snail is Faster than the
Hare." Having published in the area that he teaches gives Daug instant respect and
notoriety. This expert level of knowledge is based on a foundation of a communications degree
as well as a Master in Education. In addition to this incredible C.V., Daug is bubbling with
enthusiasm that is contagious to the various seminar participants.
Advanced Linguistic Pontificators will fully utilize Daug's expert knowledge and notoriety to take
the seminar company to profitability. Pontificators has conservatively forecasted sales of
$181,000 by year two.

Page 1

Advanced Linguistic Pontificators

Chart: Highlights

Highlights
$200,000
$180,000
$160,000
$140,000

Sales

$120,000

Gross Margin

$100,000

Net Profit

$80,000
$60,000
$40,000
$20,000
$0
Year 1

Year 2

Year 3

1.1 Objectives
The objectives for the first three years of operation include:

To create a service-based company whose primary goal is to exceed customer's

expectations.
The utilization of Advanced Linguistic Pontificators in at least five of the top 100 companies
as ranked by Forbes Magazine.
To increase the number of clients by 15% per year.
To develop a sustainable home business, surviving off of its own cash flow.

1.2 Mission
Advanced Linguistic Pontificators' mission is to provide companies with high-quality training
seminars. We exist to attract and maintain customers. When we adhere to this maxim,
everything else will fall into place. Our services will exceed the expectations of our customers.
2.0 Company Summary
Advanced Linguistic Pontificators, based in Portland, OR, offers training programs and seminars
for medium to large corporations. The programs are based on advanced reading, stress
management, and time management. All programs are presented by Daug Matisim, an expert
in those fields. While the office of Advanced Linguistic Pontificators will be located in Daug's
home, the seminars and programs will take place around the country.
The business is expected to reach profitability early on.

Page 2

Advanced Linguistic Pontificators

2.1 Company Ownership

Advanced Linguistic Pontificators will be an Oregon corporation owned by Daug Matisim.
2.2 Start-up Summary
Advanced Linguistic Pontificators will incur the following start-up costs:

Desk, chair, filing cabinet.

Computer (including printer, and CD-RW) with Internet access.
Fax machine, copier.
Pager and cell phone.
Laptop computer.
LCD computer projector.
Microsoft Office Suite and QuickBooks Pro.
Additional land phone line.

Please note that all items that are assets to be used for more than one year will be considered a
long-term asset and will be depreciated using the straight-line method.
Table: Start-up

Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Consultants
Web development costs
Rent
Research and development
Expensed equipment
Other
Total Start-up Expenses

$500
$300
$300
$500
$1,000
$0
$0
$0
$0
$2,600

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

$7,900
$0
$11,500
$19,400

Total Requirements

$22,000

Page 3

Advanced Linguistic Pontificators

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$2,600
$19,400
$22,000

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

$11,500
$7,900
$0
$7,900
$19,400

Liabilities and Capital

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

$0
$0
$0
$0
$0

Capital
Planned Investment
Daug
Investor 2
Other
Additional Investment Requirement
Total Planned Investment

$22,000
$0
$0
$0
$22,000

Loss at Start-up (Start-up Expenses)

Total Capital

($2,600)
$19,400

Total Capital and Liabilities

$19,400

Total Funding

$22,000

Chart: Start-up

Page 4

Advanced Linguistic Pontificators

Start-up

$21,000
$18,000
$15,000
$12,000
$9,000
$6,000
$3,000
$0
Expenses

Assets

Investment

Loans

3.0 Services
Advanced Linguistic Pontificators will provide medium- to large-size companies with training
programs and seminars covering the subjects of advanced reading, stress management, and
time management. The advanced reading course will teach speed reading with increased
comprehension and memory. Stress management will teach techniques to better deal with
stress, and time management will teach methods to become more efficient with the limited
amount of time that we all have.
The subjects will be taught in either seminar format or training program format. The seminar
format is a presentation that concentrates on a specific topic. For the seminars, the audience
just observe. A training program is like a seminar except the attendees participate in the entire
process.
Additionally, Daug will offer seminars to the public. This will not be a targeted segment, but will
be used to increase awareness of Advanced Linguistic Pontificators to drum up future business.
4.0 Market Analysis Summary
Advanced Linguistic Pontificators' market is Corporate America. The Pontificators will be
targeting medium- and large-size companies who typically have a steady need for seminars and
training programs. Advanced Linguistic Pontificators will reach these customers through public
seminars, word-of-mouth referrals, and through recognition of expertise because of publications
on the subject.

Page 5

Advanced Linguistic Pontificators

4.1 Market Segmentation

Advanced Linguistic Pontificators is targeting two separate segments:

Large corporations (100< employees): typically purchases training seminars through

specific divisions in the company. Usually a specific manager will have money in their
budget and they will choose to have their department trained.
Medium size companies (100> employees): typically purchases the training seminars
through the HR manager or the training manager. Medium-size companies will often have
the training applied to the entire organization, not just a certain section of the company.

These segments are good customers because companies of these sizes to have earmarked
money for training. These companies recognize the value that they hold in intellectual capital
and the need for future investments to maintain the intellectual equity. This recognition of
value in training makes them ideal customers. Economic downturns do not seem to effect
business from these sources because of the recognition that it is more cost effective to have
training done by a third party then to try to have a solution crafted in-house.

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Medium size companies

Large corporations
Other

Table: Market Analysis

Market Analysis
Potential Customers

Growth

Medium size companies

Large corporations
Other
Total

10%
9%
0%
9.69%

Year 1

Year 2

Year 3

Year 4

Year 5

5,687
2,654
0
8,341

6,256
2,893
0
9,149

6,882
3,153
0
10,035

7,570
3,437
0
11,007

8,327
3,746
0
12,073

CAGR
10.00%
9.00%
0.00%
9.69%

Page 6

Advanced Linguistic Pontificators

4.2 Target Market Segment Strategy

Advanced Linguistic Pontificators has a three part strategy for targeting the two chosen
segments. The first part is through public seminars. A public seminar is a presentation on a
subject that is offered to the public. They are typically held in a library or some other public
building. While public seminars are not big money makers (and sometimes you will lose
money), they bring together a diverse audience to view the seminar. This is quite valuable
because within the diverse crowd are people that work in companies that would would
otherwise have never heard about Advanced Linguistic Pontificators. It becomes a wonderful
advertising tool.
The second way the Pontificators will reach their target market is through visibility of printed
material, specifically books. Daug has published two books, one on advanced reading, the other
on stress and time management. Having the speaker published adds invaluable amounts of
credibility and authenticity. These books are typically toward managers so it is not unusual that
a manager will have read the book and then become inspired into having the author come and
provide a training session for the the company.
The last method of reaching the target market is word of mouth. Although the industry of
training programs and seminars is large, those that are good and concentrate on certain areas
form a group of well known service providers. This is quite intuitive. The experts in the field rise
to the top and people that are in the "know" are familiar with these people. Word of mouth
marketing is incredibly efficient once you have established yourself as one of the best.
4.3 Service Business Analysis
There are many different competitors in this space:

Seminar production companies that act only as producers of the events, they do not make
the actual presentation. These companies typically have a list of different presenters that
they use.
Independent seminar presenters.
Independent training program presenters.
Both presenter and promoter--just like Advanced Linguistic Pontificators.

The competition is on a national scale. Being local is insignificant in this industry. Companies
will fly in the speaker from wherever they are in the country.
Buying habits are based on word-of-mouth referrals, reputation, topic/skill needed, availability,
etc.
5.0 Strategy and Implementation Summary
Advanced Linguistic Pontificators will win sales by virtue of their service/product, in essence the
product will speak for itself. Daug Matisim is an expert in the field of advanced reading and time
and stress management. This expertise provides Pontificators a competitive advantage.
Prospective customers will be able to get a sampling of Daug's work from him book, from
excerpts of his writing, or excerpts of his presentations via streaming media from his website.

Page 7

Advanced Linguistic Pontificators

5.1 Sales Strategy

Advanced Linguistic Pontificators' sales strategy is relatively straight forward. Let the customer
see part of a presentation in addition to the information contained in Daug's book and the
product/service will sell it self. The customer will see examples of Daug's work through three
avenues.
1. Purchase a copy of Daug's book.
2. Receive an excerpt of the book from Advanced Linguistic Pontificators office.
3. View an example of one of Daug's presentations via streaming media from the Pontificators'
website.
These examples of Daug's work will speak for themselves. Once the customer is interested they
would only need to contact the office and determine availability, and set up an event.
5.1.1 Sales Forecast
The first month will be used to set up the office and schedule public seminars for month two.
There will be some sales activity during months three through seven. Starting with month
eight, things will begin to pick up nicely as word gets out that Daug is on the circuit.

Chart: Sales Monthly

Sales Monthly
$16,000
$14,000
$12,000
$10,000

Medium-size companies

$8,000

Large corporations

$6,000
$4,000
$2,000

Month 12

Month 11

Month 10

Month 9

Month 8

Month 7

Month 6

Month 5

Month 4

Month 3

Month 2

Month 1

$0

Page 8

Advanced Linguistic Pontificators

Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

$49,925
$57,200
$107,125

$84,000
$97,000
$181,000

$90,000
$100,000
$190,000

Year 1
$0
$0
$0

Year 2
$0
$0
$0

Year 3
$0
$0
$0

Sales
Medium-size companies
Large corporations
Total Sales
Direct Cost of Sales
Medium-size companies
Large corporations
Subtotal Direct Cost of Sales

5.2 Competitive Edge

Advanced Linguistic Pontificators' competitive edge is simply expertise. Daug is a nationally
recognized expert in the fields that he presents. Much of the recognition was derived through
the publication of his books. As an expert and an engaging presenter/trainer, Daug is able to
offer presentations and training sessions that leave customers with the feeling that they've
learned a tremendous amount of information and they cannot wait to sign up for another one.
5.3 Milestones
Advanced Linguistic Pontificators will have several milestones early on:
1. Business plan completion. This will be done as a road map for the organization. While we do
not need a business plan to raise capital, it will be an indispensable tool for the ongoing
performance and improvement of the company.
2. Set up office.
3. Finish the fifth public seminar.
4. Finish the tenth seminar/training program.
5. Profit exceeding $50,000.

Table: Milestones

Milestones
Milestone
Business plan completion
Set up office
Finish the fifth public seminar
Finish the tenth seminar/ training
program
Profit exceeding $50,000
Totals

Start Date
1/1/2001
3/1/1999
2/1/2001
2/1/2001

End Date
2/1/2001
2/1/2001
3/1/2001
5/1/2001

Budget
$0
$0
$0
$0

Manager
ABC
ABC
ABC
ABC

Department
Marketing
Department
Department
Department

1/1/2001

3/1/2002

$0
$0

ABC

Department

Page 9

Advanced Linguistic Pontificators

6.0 Management Summary

Advanced Linguistic Pontificators is owned and operated by Daug Matisim. Daug was a degree
in communications from Reed College. Following college, Daug pursued his Master's in
Education from the University of California, Berkeley. Following graduate school Daug moved
back to Oregon to begin working on his first of two books. The first book, "Read Fast,
Comprehend More, Remember Lots, and Ignore the Fluff" was a top seller in the market of
advanced reading for eleven straight months. This book brought Daug notoriety and was the
catalyst for his second book "Efficiency Gains in Time and Stress Management: Why the Snail is
Faster Than the Hare."
After completing the books and spending five months on the road promoting them, Daug
decided he needed a change in his life. He moved down to Costa Rica for two months to
develop a comprehensive seminar and training program offering. Once completed, he began
Advanced Linguistic Pontificators.
6.1 Personnel Plan
Advanced Linguistic Pontificators will be a one man show. Daug will be responsible for arranging
and performing all seminars. Things such as PowerPoint presentations and travel arrangements
will be outsourced and the client will cover the costs of all travel arrangements.
Table: Personnel

Personnel Plan
Year 1

Year 2

Year 3

Daug Matism
Other
Total People

$24,000
$0
0

$36,000
$0
0

$50,000
$0
0

Total Payroll

$24,000

$36,000

$50,000

Page 10

Advanced Linguistic Pontificators

7.0 Financial Plan

The following sections will outline the important financial data.
7.1 Important Assumptions
The following table details important financial assumptions for Advanced Linguistic Pontificators.
Table: General Assumptions

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

Year 1

Year 2

Year 3

1
10.00%
10.00%
25.42%
0

2
10.00%
10.00%
25.00%
0

3
10.00%
10.00%
25.42%
0

7.2 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Chart: Cash

Cash
$70,000
$60,000
$50,000
$40,000

Net Cash Flow

$30,000

Cash Balance

$20,000
$10,000
$0
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10 Month 12

Page 11

Advanced Linguistic Pontificators

Table: Cash Flow

Pro Forma Cash Flow

Year 1

Year 2

Year 3

$107,125
$107,125

$181,000
$181,000

$190,000
$190,000

$0
$0
$0
$0
$0
$0
$0
$107,125

$0
$0
$0
$0
$0
$0
$0
$181,000

$0
$0
$0
$0
$0
$0
$0
$190,000

Year 1

Year 2

Year 3

$24,000
$23,153
$47,153

$36,000
$45,002
$81,002

$50,000
$43,397
$93,397

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
$0
$0
$0
$0
$47,153

$0
$0
$0
$0
$0
$0
$0
$81,002

$0
$0
$0
$0
$0
$0
$0
$93,397

Net Cash Flow

Cash Balance

$59,972
$67,872

$99,998
$167,869

$96,603
$264,473

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

Page 12

Advanced Linguistic Pontificators

7.3 Break-even Analysis

The Break-even Analysis is shown below.
Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$3,211

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

0%
$3,211

Chart: Break-even Analysis

Break-even Analysis
$2,000

$1,000

$0

($1,000)

($2,000)

($3,000)
$0

$1,000
$500

$2,000
$1,500

$3,000
$2,500

$4,000
$3,500

$5,000
$4,500

$5,500

Page 13

Advanced Linguistic Pontificators

7.4 Projected Profit and Loss

The following table will indicate projected profit and loss.

Chart: Profit Monthly

Profit Monthly
$10,000
$8,000
$6,000

$4,000
$2,000
$0
($2,000)
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12

Page 14

Advanced Linguistic Pontificators

Chart: Profit Yearly

Profit Yearly

$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
Year 1

Year 2

Year 3

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales
Direct Cost of Sales
Other
Total Cost of Sales

$107,125
$0
$0
$0

$181,000
$0
$0
$0

$190,000
$0
$0
$0

Gross Margin
Gross Margin %

$107,125
100.00%

$181,000
100.00%

$190,000
100.00%

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

$24,000
$6,800
$3,828
$0
$2,400
$1,500
$0
$0
$0

$36,000
$7,800
$3,828
$0
$2,400
$1,500
$0
$0
$0

$50,000
$7,800
$3,828
$0
$2,400
$1,500
$0
$0
$0

Total Operating Expenses

$38,528

$51,528

$65,528

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

$68,597
$72,425
$0
$17,010

$129,472
$133,300
$0
$32,368

$124,472
$128,300
$0
$31,637

Net Profit
Net Profit/Sales

$51,587
48.16%

$97,104
53.65%

$92,835
48.86%

Expenses

Page 15

Advanced Linguistic Pontificators

Chart: Gross Margin Monthly

Gross Margin Monthly

$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Month 1

Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12

Chart: Gross Margin Yearly

Gross Margin Yearly

$200,000
$180,000
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Year 1

Year 2

Year 3

Page 16

Advanced Linguistic Pontificators

7.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.
Table: Balance Sheet

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

$67,872
$0
$67,872

$167,869
$0
$167,869

$264,473
$0
$264,473

$11,500
$3,828
$7,672
$75,544

$11,500
$7,656
$3,844
$171,713

$11,500
$11,484
$16
$264,489

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$4,556
$0
$0
$4,556

$3,622
$0
$0
$3,622

$3,562
$0
$0
$3,562

Long-term Liabilities
Total Liabilities

$0
$4,556

$0
$3,622

$0
$3,562

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

$22,000
($2,600)
$51,587
$70,987
$75,544

$22,000
$48,987
$97,104
$168,091
$171,713

$22,000
$146,091
$92,835
$260,927
$264,489

Net Worth

$70,987

$168,091

$260,927

Assets
Current Assets
Cash
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities

Page 17

Advanced Linguistic Pontificators

7.6 Business Ratios

The following table outlines some of the more important ratios from the Professional and
Management Development Training industry. The final column, Industry Profile, details specific
ratios based on the industry as it is classified by the NAICS code, 611430.
Table: Ratios

Ratio Analysis
Year 1

Year 2

Year 3

Industry Profile

n.a.

68.96%

4.97%

9.50%

Other Current Assets

Total Current Assets
Long-term Assets
Total Assets

0.00%
89.84%
10.16%
100.00%

0.00%
97.76%
2.24%
100.00%

0.00%
99.99%
0.01%
100.00%

45.60%
62.40%
37.60%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

6.03%
0.00%
6.03%
93.97%

2.11%
0.00%
2.11%
97.89%

1.35%
0.00%
1.35%
98.65%

43.30%
17.30%
60.60%
39.40%

100.00%
100.00%
68.78%
1.68%
64.03%

100.00%
100.00%
56.30%
0.99%
71.53%

100.00%
100.00%
62.71%
0.95%
65.51%

100.00%
0.00%
73.80%
5.00%
3.20%

14.90
14.90
6.03%
96.63%
90.80%

46.35
46.35
2.11%
77.02%
75.40%

74.25
74.25
1.35%
47.70%
47.06%

1.33
1.11
60.60%
5.50%
14.00%

Sales Growth
Percent of Total Assets

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

Return on Equity

48.16%
72.67%

53.65%
57.77%

48.86%
35.58%

n.a
n.a

6.08
34
1.42

12.17
34
1.05

12.17
30
0.72

n.a
n.a
n.a

0.06
1.00

0.02
1.00

0.01
1.00

n.a
n.a

$63,315
0.00

$164,247
0.00

$260,911
0.00

n.a
n.a

0.71
6%
14.90
1.51
0.00

0.95
2%
46.35
1.08
0.00

1.39
1%
74.25
0.73
0.00

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

Activity Ratios
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 18

Advanced Linguistic Pontificators

Page 19

Appendix
Table: Sales Forecast

Sales Forecast
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

$2,000
$2,000
$4,000

$3,500
$4,000
$7,500

$4,000
$5,000
$9,000

$4,100
$4,500
$8,600

$4,200
$4,700
$8,900

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$6,500
$7,500
$14,000

$7,025
$8,000
$15,025

$7,400
$8,500
$15,900

Month 10

Month 11

Month 12

Sales
Medium-size companies
Large corporations
Total Sales
Direct Cost of Sales

0%
0%

$0
$0
$0
Month 1

$0
$0
$0
Month 2

$5,200
$6,000
$11,200
Month 8

$6,000
$7,000
$13,000
Month 9

Medium-size companies

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Large corporations

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Direct Cost of Sales

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Page 1

Appendix
Table: Personnel

Personnel Plan

Daug Matism
Other
Total People
Total Payroll

0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9
$2,000
$0
0

Month
10
$2,000
$0
0

Month
11
$2,000
$0
0

Month
12
$2,000
$0
0

$2,000
$0
0

$2,000
$0
0

$2,000
$0
0

$2,000
$0
0

$2,000
$0
0

$2,000
$0
0

$2,000
$0
0

$2,000
$0
0

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

Page 2

Appendix
Table: General Assumptions

General Assumptions
Plan Month

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

10

11

Month 12
12

Current Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Long-term Interest
Rate
Tax Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

30.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

Other

Page 3

Appendix
Table: Profit and Loss

Pro Forma Profit and

Loss
Month 3

Month 4

Month 5

Month 6

Month 7

Month 10

Month 11

Month 12

Sales

Month 1
$0

$0

$4,000

$7,500

$9,000

$8,600

$8,900

$11,200

$13,000

$14,000

$15,025

$15,900

Direct Cost of Sales

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Cost of Sales

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Gross Margin

Month 2

Month 8

Month 9

$0

$0

$4,000

$7,500

$9,000

$8,600

$8,900

$11,200

$13,000

$14,000

$15,025

$15,900

0.00%

0.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$150

$150

$650

$650

$650

$650

$650

$650

$650

$650

$650

$650

$319

$319

$319

$319

$319

$319

$319

$319

$319

$319

$319

$319

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Utilities

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

Insurance

$125

$125

$125

$125

$125

$125

$125

$125

$125

$125

$125

$125

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$2,794

$2,794

$3,294

$3,294

$3,294

$3,294

$3,294

$3,294

$3,294

$3,294

$3,294

$3,294

($2,794)

($2,794)

$706

$4,206

$5,706

$5,306

$5,606

$7,906

$9,706

$10,706

$11,731

$12,606

($2,475)

($2,475)

$1,025

$4,525

$6,025

$5,625

$5,925

$8,225

$10,025

$11,025

$12,050

$12,925

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$177

$1,052

$1,427

$1,327

$1,402

$1,977

$2,427

$2,677

$2,933

$3,152

Gross Margin %

Expenses
Payroll
Sales and Marketing and
Other Expenses
Depreciation
Leased Equipment

Rent
Payroll Taxes
Other
Total Operating
Expenses
Profit Before Interest and
Taxes
EBITDA
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

15%

$0

$0

($838)

($699)

($1,956)

($2,096)

0.00%

0.00%

$530

$3,155

$4,280

$3,980

$4,205

$5,930

$7,280

$8,030

$8,798

$9,455

13.24%

42.06%

47.55%

46.27%

47.24%

52.94%

56.00%

57.35%

58.56%

59.46%

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

Cash Received
Cash from Operations
Cash Sales

$0

$0

$4,000

$7,500

$9,000

$8,600

$8,900

$11,200

$13,000

$14,000

$15,025

$15,900

Subtotal Cash from Operations

$0

$0

$4,000

$7,500

$9,000

$8,600

$8,900

$11,200

$13,000

$14,000

$15,025

$15,900

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

New Other Liabilities (interestfree)

New Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$0

$0

$4,000

$7,500

$9,000

$8,600

$8,900

$11,200

$13,000

$14,000

$15,025

$15,900

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing

Expenditures

0.00%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month
10

Month
11

Month
12

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$1,181

$2,039

$2,398

$2,304

$2,396

$2,967

$3,410

$3,660

$3,915

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations

($363)

($575)

($178)

$1,637

$1,425

$1,822

$3,181

$4,039

$4,398

$4,304

$4,396

$4,967

$5,410

$5,660

$5,915

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current

Borrowing
Other Liabilities Principal
Repayment
Long-term Liabilities Principal
Repayment
Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$1,637

$1,425

$1,822

$3,181

$4,039

$4,398

$4,304

$4,396

$4,967

$5,410

$5,660

$5,915

Additional Cash Spent

Subtotal Cash Spent

Page 5

Appendix
Net Cash Flow

($1,637)

($1,425)

$2,178

$4,319

$4,961

$4,202

$4,596

$6,804

$8,034

$8,590

$9,365

$9,985

Cash Balance

$6,263

$4,838

$7,015

$11,335

$16,296

$20,498

$25,094

$31,898

$39,931

$48,522

$57,887

$67,872

Month 1

Month 2

Month 3

$7,900
$0
$7,900

$6,263
$0
$6,263

$4,838
$0
$4,838

$7,015
$0
$7,015

$11,335
$0
$11,335

$16,296
$0
$16,296

$20,498
$0
$20,498

$25,094
$0
$25,094

$31,898
$0
$31,898

$39,931
$0
$39,931

$48,522
$0
$48,522

$57,887
$0
$57,887

$67,872
$0
$67,872

$11,500
$0
$11,500
$19,400

$11,500
$319
$11,181
$17,444

$11,500
$638
$10,862
$15,700

$11,500
$957
$10,543
$17,558

$11,500
$1,276
$10,224
$21,559

$11,500
$1,595
$9,905
$26,201

$11,500
$1,914
$9,586
$30,084

$11,500
$2,233
$9,267
$34,361

$11,500
$2,552
$8,948
$40,846

$11,500
$2,871
$8,629
$48,560

$11,500
$3,190
$8,310
$56,832

$11,500
$3,509
$7,991
$65,878

$11,500
$3,828
$7,672
$75,544

Table: Balance Sheet

Pro Forma Balance Sheet

Assets

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Starting
Balances

Month
10

Month
11

Month
12

Current Assets
Cash
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month
10

Month
11

Month
12

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

$0
$0
$0
$0

$0
$0
$0
$0

$351
$0
$0
$351

$1,680
$0
$0
$1,680

$2,526
$0
$0
$2,526

$2,889
$0
$0
$2,889

$2,792
$0
$0
$2,792

$2,864
$0
$0
$2,864

$3,420
$0
$0
$3,420

$3,855
$0
$0
$3,855

$4,097
$0
$0
$4,097

$4,345
$0
$0
$4,345

$4,556
$0
$0
$4,556

Long-term Liabilities
Total Liabilities

$0
$0

$0
$0

$0
$351

$0
$1,680

$0
$2,526

$0
$2,889

$0
$2,792

$0
$2,864

$0
$3,420

$0
$3,855

$0
$4,097

$0
$4,345

$0
$4,556

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

$22,000
($2,600)
$0
$19,400
$19,400

$22,000
($2,600)
($1,956)
$17,444
$17,444

$22,000
($2,600)
($4,051)
$15,349
$15,700

$22,000
($2,600)
($3,522)
$15,878
$17,558

$22,000
($2,600)
($367)
$19,033
$21,559

$22,000
($2,600)
$3,912
$23,312
$26,201

$22,000
($2,600)
$7,892
$27,292
$30,084

$22,000
($2,600)
$12,096
$31,496
$34,361

$22,000
($2,600)
$18,026
$37,426
$40,846

$22,000
($2,600)
$25,305
$44,705
$48,560

$22,000
($2,600)
$33,335
$52,735
$56,832

$22,000
($2,600)
$42,133
$61,533
$65,878

$22,000
($2,600)
$51,587
$70,987
$75,544

Net Worth

$19,400

$17,444

$15,349

$15,878

$19,033

$23,312

$27,292

$31,496

$37,426

$44,705

$52,735

$61,533

$70,987

Page 6