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Table of Contents

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


Chart: Highlights.......................................................................................................................................2
1.1 Objectives................................................................................................................................................2
1.2 Mission....................................................................................................................................................2
1.3 Keys to Success.......................................................................................................................................3
2.0 Company Summary.....................................................................................................................................3
2.1 Company Ownership..............................................................................................................................3
2.2 Start-up Summary...................................................................................................................................3
Table: Start-up...........................................................................................................................................4
Chart: Start-up...........................................................................................................................................5
3.0 Products and Services.................................................................................................................................5
4.0 Market Analysis Summary.........................................................................................................................5
4.1 Market Segmentation..............................................................................................................................7
Chart: Market Analysis (Pie)....................................................................................................................8
Table: Market Analysis.............................................................................................................................8
4.2 Target Market Segment Strategy............................................................................................................8
4.3 Service Business Analysis......................................................................................................................9
4.3.1 Competition and Buying Patterns....................................................................................................9
5.0 Strategy and Implementation Summary...................................................................................................10
5.1 Competitive Edge..................................................................................................................................10
5.2 Marketing Strategy................................................................................................................................10
5.3 Sales Strategy........................................................................................................................................11
5.3.1 Sales Forecast.................................................................................................................................12
Chart: Sales Monthly..........................................................................................................................12
Chart: Sales by Year...........................................................................................................................13
Table: Sales Forecast..........................................................................................................................13
5.4 Milestones.............................................................................................................................................13
Chart: Milestones....................................................................................................................................14
Table: Milestones....................................................................................................................................15
6.0 Web Plan Summary...................................................................................................................................15
7.0 Management Summary.............................................................................................................................15
7.1 Personnel Plan.......................................................................................................................................16
Table: Personnel......................................................................................................................................16
8.0 Financial Plan............................................................................................................................................16
8.1 Start-up Funding...................................................................................................................................16
Table: Start-up Funding..........................................................................................................................17
8.2 Break-even Analysis.............................................................................................................................17
Table: Break-even Analysis....................................................................................................................18
Chart: Break-even Analysis....................................................................................................................18
8.3 Projected Profit and Loss......................................................................................................................18
Chart: Gross Margin Monthly................................................................................................................19
Chart: Gross Margin Yearly...................................................................................................................19
Page 1

Table of Contents

Table: Profit and Loss.............................................................................................................................19


Chart: Profit Monthly..............................................................................................................................21
Chart: Profit Yearly.................................................................................................................................21
8.4 Projected Cash Flow.............................................................................................................................21
Chart: Cash..............................................................................................................................................22
Table: Cash Flow....................................................................................................................................23
.....................................................................................................................................................................23
Table: Balance Sheet...............................................................................................................................24
.....................................................................................................................................................................24
8.6 Business Ratios.....................................................................................................................................25
Table: Ratios...........................................................................................................................................25
Table: Sales Forecast.........................................................................................................................................1
...........................................................................................................................................................................1
Table: Personnel................................................................................................................................................2
...........................................................................................................................................................................2
Table: Profit and Loss.......................................................................................................................................3
...........................................................................................................................................................................4
Table: Cash Flow..............................................................................................................................................5
Table: Balance Sheet.........................................................................................................................................7

Page 2

Phaethon's Chariot Restorations

1.0

Executive Summary
Phaethon's Chariot is a start-up auto restoration shop. The company is engaged in the
restoration of old American cars, and the designing and building of hot rods, and street
rods. Body work and rust repair is the majority of our work. Phaethon's Chariot has recently
rented a new state-of-the-art restoration shop, located at 510 W. 200th Terrace Circle
Boulevard, Centerton, Ohmstate. The company is dedicated to providing the highest quality
workmanship. Phaethon's Chariot keeps up on all the latest tools and techniques of the
trade to perform the highest quality work possible today.
Phaethon's Chariot is located in Centerton, Ohmstate. Our company and employees are
dedicated to doing each job right the first time, and retaining each car owner as a lifetime
customer of our shop.
The company is a state chartered corporation in Ohmstate, owned by Isoroku
Tarnmaclahan. The has owner worked for other shops in the Highland Valley area for the
past 20 years, and is committed to excellence every day. This new space allows the
company retain more work. The office area is comprised of 500 square feet and the shop
area where the day-to-day work on the cars is performed is 5,000 sq.ft.
The population of the seven communities in close proximity to Phaethon's Chariot
Restorations is estimated at 918,279. Roughly, this would mean that this area comprises a
total restoration market in excess of $2.0 million annually. The company's goal is to a
acquire a comfortable minority share of this nearby market.
The marketing research and tailored marketing strategy described in this business plan will
result in modest after-tax profits of in year 1, quadrupling after-tax profits within three
years. It is estimated that by year 3, revenues will reflect a healthy market share of the
local restoration market.
Within the next twelve months it is the objective of the company to market to the local area
to promote our business in the Highland Valley and surrounding areas. Our market
segment will be 30- to 65-year old owners of old American cars. After year three we plan to
expand our business to the Carahge City, Mythtate area. Our studies indicate that
the Carahge area doesn't have a lot of competition for our business.

Page 1

Phaethon's Chariot Restorations

Chart: Highlights
Highlights
$600,000
$500,000
$400,000

Sales
Gross Margin

$300,000

Net Profit
$200,000
$100,000
$0
Year 1

Year 2

Year 3

1.1 Objectives
1. Penetrate the automotive restoration market here in the Highland Valley. Within the next
twelve months, it is the objective of the company to market to the local area to promote
our business in the Highland Valley and surrounding areas, our market segment will be
30 to 65 years old men and women who own old American cars. After year two we plan
to expand our business to the Carahge City, Mythtate area. Our studies indicate that the
Carahge City area doesn't have a lot of competition for our business.
2. Substantially increase profitability. We will encourage price-sensitive jobs to go
elsewhere by normalizing the pricing structure. This will allow for more high-end custom
work to be performed for the less price-sensitive restoration market sector. This pricing
will insure a quadrupling of net profits during the third year.
3. To improve the administrative processes of the company. This will allow a reduction in
the owner's involvement in simple administrative tasks from 50% of his time to 20%,
thereby allowing him more time for sales and marketing tasks.
1.2 Mission
Our mission at Phaethon's Chariot is to always perform the highest quality work at the best
price around.

We can achieve this by only using the best of everything to do our restoration.
We produce high-quality work using the best parts and supplies available in the market
place today.
We only employ the most knowledgeable people to work for our shop.
Page 2

Phaethon's Chariot Restorations

We have a metal fabricator who will build any part that we can't locate for your car.
All of our restoration technicians go through a rigorous application process before we
hire them. We employ only the best people to do our work.

At Phaethon's Chariot Restorations you will get only the best quality work done on your car.
1.3 Keys to Success
Keys to success for the company will include:
1.
2.
3.
4.

Maintaining an untarnished reputation in the community.


Quality care.
Competitive pricing.
Flexible hours.

2.0 Company Summary


Phaethon's Chariot is an auto restoration shop located in Centerton, Ohmstate. The
company is engaged in the restoration of 1970 and earlier American cars, and the building
of custom hot rods. Body work and rust repair is the majority of our work. The total market
for auto restoration in the communities which the company targets is approximately $2.7
million. The share of this market channeled through auto restoration shops and word of
mouth is directly proportional to disposable income.
Phaethon's Chariot Restorations is best suited to serving the high-end customer share of
the auto restoration market because clients of auto restoration can afford expensive
materials and custom solutions. The company is unable to compete with large shops
geared to mass production runs, nor can it's pricing compete with the many "insurance job"
body repair shops. The company is dedicated to providing the highest quality workmanship,
meeting the agreed delivery dates, and executing the custom work exactly in accordance
with the customers concept.
2.1 Company Ownership
The company, Phaethon's Chariot Restorations, is a corporation registered in Ohmstate,
owned by Isoroku Tarnmaclahan.
2.2 Start-up Summary
The company founder, Mr. Isoroku Tarnmaclahan, will manage day-to-day operations of
the business and will work collaboratively with all employees to ensure that this business
venture is a success.
It is estimated that the start-up costs will include legal costs, advertising, one month's rent
and utilities, and related expenses. An additional amount will be required as start-up
assets, including heavy equipment and cash on hand. The owner's existing tools comprise
part of the current assets. Total Start-up Requirements are detailed in the table below.
Page 3

Phaethon's Chariot Restorations

Some of the heavy equipment long-term assets that will be acquired include:

Air Compressor System


Air Filtration System
Air Powered Tools
Car Lift/Hoist
Computerized Engine Diagnostic Equipment
Fixtures
Hand Tools
Jigs and Work Stands
Auto Hand Tools
Spray Painting Equipment

Inventory will consist of restoration materials. Custom panels, parts, seats, fabrics,
instruments, etc. will be purchased either by the car owners, or by Phaethon's Chariot on a
just-in-time, as needed basis.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Logo Design - Artwork
Stationery etc.
Sales Literature
Insurance
Rent
Utilities
Computer Network - Office/Shop
Website Development
Office Furniture
Fixtures
Total Start-up Expenses

$1,000
$3,000
$500
$4,000
$1,500
$1,800
$1,200
$6,000
$700
$3,000
$800
$23,500

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

$10,000
$2,000
$30,000
$100,000
$142,000

Total Requirements

$165,500
Page 4

Phaethon's Chariot Restorations

Chart: Start-up
Start-up

$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Expenses

Assets

Investment

Loans

3.0 Products and Services


Phaethon's Chariot Restorations will sell classic car restoration services to the general
public at a shop rate of $45 per hour. This will include complete frame off restoration work
for all makes of American classic cars and muscle cars. We will perform tasks such as
mechanical repairs on older American cars, body and paint restoration including rust repair,
electrical repair, as well as custom engine building, custom paint and metal fabrication.
We specialize in pre-1970 American cars and trucks, and average frame off restoration will
take 600 hours of labor, therefore our average labor charge for a complete restoration is
approximately $27,000. There are additional charges for any parts that we have to get for
the job. Phaethon's Chariot will perform any kind of work on pre 1970 American
cars including, but not limited to regular mechanical service, and body and paint work.
4.0 Market Analysis Summary
TARGET MARKET
The type of customer who will be interested in the services of Phaethon's Chariot are
predominantly male, and in the age range from 30 to 65 years. The majority will have an
income in the $100,000 and up range. Some customers in the lower income ranges are
interested in specific services, interior restoration, or paint work and parts sales rather than
full restorations.
Page 5

Phaethon's Chariot Restorations

The customers who Phaethon's Chariot plans to target want :


1. Quality full restoration or custom services, including engine, custom body work and
paint.
2. Timely completion of the work on their cars.
3. Competitive rates.
4. Close attention to detail, and commitment to quality.
5. Ability to offer ideas for alternatives and close customer services.
Phaethon's Chariot has the ability to meet all these demands. The owner has a long work
history in this field, and has extremely high standards in regards to the shop's work. The
owner and the foreman will make sure that the shop's employees meet these standards.
The owner also understands that, not only quality work, but the attention and care
bestowed on the customer and their cars will result in a good reputation.
LOCATION
There is no specific geographical location for potential customers. They are located all over
the United States. They send their cars to whom and where they feel will do the best job,
based on reputation. This reputation comes largely from "word of mouth", i.e. seeing the
quality of a car that was restored by Phaethon's Chariot at a show, and referrals by others
in the business. We feel that eventually 50% of Phaethon's Chariot's customers will come
from out of state.
INDUSTRY TRENDS
This is a large market that has seen an upturn in the last few years. All indications are that
this will continue for many years until leveling off at possibly double or triple the
current market. One company in this area, Car Barn Renewals, has a waiting list of three
years. They not taking any new business at this time. The owner of this shop is well
acquainted with the quality of work that will be preformed by Phaethon's Chariot and
has indicated to Mr. Isoroku Tarnmaclahan that he would refer anyone inquiring about new
services to Phaethon's Chariot. This will not only increase the number of potential
customers for Phaethon's Chariot in the start-up phase, but will provide a valuable word-ofmouth reputation for them.
COMPETITION
There are two other companies in the Centerton area that offer services similar to
Phaethon's Chariot's. One has been in business for 40 years and has an extremely high
reputation within the restoration community. They currently have more work than the shop
can handle and has a waiting list of three years. They are not taking any new
customers. They also usually has one or more cars in most shows. The owner of
Phaethon's Chariot worked for them while learning his trade.

Page 6

Phaethon's Chariot Restorations

The other shop has been in business 15 years. They currently have a wait of 160 days for
any new work. However most of their work is new business (first time customers) as their
reputation in the community is not good and they rarely have repeat business.
PRICING
Phaethon's Chariot's labor rates will be $45 per hour. Both of the other shops charge $65
per/hr. Phaethon's Chariot feels that this is a competitive rate and will not impact the bottom
line in a negative manner.
ADVERTISING
Phaethon's Chariot has a modest program of marketing its services that include the
following:
1.
2.
3.
4.
5.
6.
7.
8.

Flyers
Discounts
Newspaper and magazines ads
Press releases and magazines articles
Car shows
Local radio stations
Website
Calendars

Each of these marketing approaches has the advantage of being low cost and creating
service awareness. The company is also considering the possibility of having a grand
opening program that would feature discounts, food, a local radio disc jockey and other
promotional ideas.
We feel that the company website is one of our best marketing strategies. It is linked to City
Search.com and many other classic car restoration oriented websites and portals. The site
has news about our business, answers to FAQ's and pictures of cars we've restored and
the process of the restoration.
4.1 Market Segmentation
The market for auto restoration reflects the buyer's income bracket and standard of living in
much the same way that the restoration market is segmented. Below are listed market
segments based on size of pocketbook and quality of production:
1. Material Outlets. Suppliers of auto body and paint supplies, interior supplies and
mechanical parts.
2. Simple jobs. Simple repair jobs and service are the next level in our sales chain.
3. Paint. Custom paint work such as murals and flames, will provide some income.
4. Restoration. Complete restoration jobs, and complete paint work.
5. Custom Work. Custom body work such as, top chops and channels, this would be
considered our high end of work.
Page 7

Phaethon's Chariot Restorations

The average age of our customers is 30 to 65 years old with an average income is $60,000
per year, with most full restoration customers having incomes of over $100,000. The
gender is predominantly male, with a college education, and coming from Centerton county
and surrounding areas. Some of the more recent trends come from the increasing
coverage of our industry on television, with shows such as American Muscle Car, Dream
Car Garage and the like. These types of shows have helped auto restoration to grow to a
billion dollar a year industry in the United States.

Chart: Market Analysis (Pie)


Market Analysis (Pie)

Males 30 to 65 years old


Other

Table: Market Analysis


Market Analysis
Year 1
Potential
Customers
Males 30 to 65
years old
Other
Total

Year 2

Year 3

Year 4

Year 5

Growth

CAGR

70%

20

34

58

99

168

70.24%

30%
57.58%

10
30

10
44

10
68

13
112

17
185

14.19%
57.58%

4.2 Target Market Segment Strategy


Our target market segment strategy includes the use of local radio and television stations to
convey the word about our business. We also plan on using advertising in publications
Page 8

Phaethon's Chariot Restorations

such as Hot Rod and Super Chevy magazines. These publications are distributed to a wide
variety of people who are all interested in old American cars, and muscle cars. Our strategy
includes using people's emotions to persuade them to restore an old car if they have one.
We're not limited to just a couple of different types of advertising, we also us flyers,
discounts, newspapers, press releases and magazine articles. Our website, which is a well
designed, and cost effective way to tell people about our shop and it's services, Phaethon's
Chariot will use every way within it's means to convey our message to the public.
Our market strategy is to flood the magazines and air waves with our shop's
advertisements, doing radio ads during morning and afternoon drive times. This is due to
the fact that more people listen to the radio during these time frames, so if you have a really
catchy ad during these time it's probable that you will gain some customers from it. The
magazine publications go out to hundreds of thousands of people every month, so all we
need is to convert a small percentage to sales and we'll achieve our success. But we don't
stop there, we are also joining the chamber of commerce to network our business. We will
use flyers at the car shows to promote or shop, and of course business cards.
4.3 Service Business Analysis
In setting a foundation on which to build a suitable market strategy for Phaethon's Chariot,
some of the other local industry players were contacted by phone. These players are
located in the greater Centerton area.
We called Classy Chassis and posed as a potential customer with a 1969 Z/28 Camaro for
a full restoration project, and from this call we discovered that their labor rate runs at $65
per hour, and it would take about 600 hours of labor to restore the car plus parts. The labor
before parts were added worked out to $39,000. This is for a frame off restoration,
rebuilding the entire car from ground up. We also discovered that it would take about 160
days to get the car into their shop to start the project.
We have also talked to Khamm Zhaapht from Car Barn Renewals, and have discovered
that he's running the same shop rates as Classy Chassis, but he has a three year waiting
list for his shop services, Khamm only does the highest quality work, having cars in most of
the shows at one time or another, Car Barn Renewals is very well known both in and out of
Ohmstate.
4.3.1 Competition and Buying Patterns
The general nature of competition in this business, and how the customers seem to choose
one shop over another can be measured by customer loyalty and positive word of mouth.
Customer loyalty and shop preference come from developing a trust between the customer
and the business. To be successful in the automotive restoration business, one must truly
believe in the old American cars and love them. The customer must truly be made to feel
welcome and cared for. The trust that a customer feels, is based upon the business' ability
to recognize what it takes to please a customer, and then is built upon by continuously
delivering to that customer at, or above, the that they expect.
Page 9

Phaethon's Chariot Restorations

The level of attention and care that our staff bestow upon our customers sets us far above
our competition. We also have extremely high standards for professionalism in the shop.
Cleanliness, adherence to all shop rules, and efficiency are constantly applied. Prices are
reasonable, and are perceived as being an exceptional value. Our shop offers the highest
quality restoration work available today, we use only the highest quality parts and supplies
on all of our jobs. All of this can be found in a professional shop environment, and very
comfortable for our customers.
5.0 Strategy and Implementation Summary
Image is a key factor in making inroads into the higher echelons of auto
restoration. Phaethon's Chariot's strategy is to lift its image, through advertising in
prestigious trade publications, networking with a Chamber of Commerce membership, and
actively marketing to a select group of people located in and around the company's target
market area.
5.1 Competitive Edge
The company seeks to establish a competitive edge in its new target market segment by
increasing the level of customer contact and service that other competitors seem to
oftentimes lack. Additionally, Phaethon's Chariot Restorations possesses the necessary
skills to produce the high quality restorations that are needed in this field. The
establishment of the previously mentioned work processes that will ensure greater service
will strengthen the contacts that promote word-of-mouth marketing and networking.
Our competitive edge will come from hard work and customer satisfaction, we will only
produce top quality work that is show ready when it leaves the shop. This will spawn good
word of mouth, which will in turn generate work from past and present customers of our
shop.
5.2 Marketing Strategy
As mentioned in the previous section, it is important to the marketing strategy to develop an
attractive image to the trade. This can be done in a number of ways:
1. Advertising. Most restoration shops interviewed suggested Hemmings Motor News as
the best place to advertise. In the regional telephone directory Yellow Pages two
classification are possible: Auto Restoration--Antique & Classic, or Auto Body Repair &
Paint. These two publications both have directories. In Hemmings, a color 1/4 page ad
would run $1,700 per month for a year if signed by December 1, 2004, which provides a
15% discount. This averages out to $1,411 per insertion, even less for black and white.
A quarter page ad in the Yellow Pages runs $1,200 a year.
2. Join The Chamber of Commerce. The image of Phaethon's Chariot
Restorations would be elevated by joining the Chamber of Commerce. This would cost
only $300 per year. Advertising on their electronic sign alongside the Interstate is free
for 90 days. At present the sign would give 100 impressions per day to the shop. We
Page 10

Phaethon's Chariot Restorations

expect this to increase Phaethon's income by about 10% during that 90-day period.
3. Advertising. Development of a top quality logo and photography which can be used in
ads, brochures, name cards, etc. Not counting printing costs, which vary by quantity and
quality of paper chosen, the design costs for this would run about $1,500. A day's
photography would be an additional $850-$1,600.
4. Participation in Car Shows. Another image-building marketing tactic is participating in
local car shows. These car shows are held just for the fun of it. This would require time
and effort, but not much in the way of money. This should be coordinated to
insure compatibility with the show's concept and our image. If we attend a show out of
the local area, costs would increase due to the expense of food, lodging, and protected
transportation of a finished car to the show. A photo album can never compete with the
real hardware.
In addition to the above-mentioned activities designed to elevate the company's image, it is
essential to market directly to the selected target clients who all go to local car shows.
Success in making inroads into these names would set the stage for entry into the more
prestigious auto restorers guild.
Marketing these prime prospects must be carried out in a thoughtful organized way. Color
literature including the newly designed logo should be completed as a first step. When
marketing these prospects it will be important to present a portfolio of Phaethon's
Chariot's most innovative work. A relaxed face-to-face meeting, resulting in good
communication between Phaethon's Chariot and the project car's owners, should be all
that's needed to generate a first order.
Networking is also very useful. It is important, once the logo and artwork materials have
been completed, for the owner to make a point of introducing herself to important players in
the restoration world surrounding Centerton. Good contacts include hot rod businesses,
parts stores, custom car clubs, suppliers of paint, etc.
5.3 Sales Strategy
The marketing strategy discussed previously in this business plan will generate the desired
sales. These sales will begin with our website, and the Chamber of Commerce. It is a
stated objective to transfer the administrative burden away from the owner, freeing up his
time to meet with clients, to network at car shows and events, and to market the shop to
prospective clients. This means that someone else will be answering the incoming calls.
This person must be carefully trained to recognize who must be called back immediately by
the owner. The shop owner needs--and expects--close contact with the shop foreman.
The shop is under pressure to produce the highest quality work possible, for example, a car
that's going to shows is going to foster sales. The owner must be armed with a cell phone
and a pager. The important caller should be told that the owner will "call right back." The
more successful the marketing strategy is in making inroads into our share of
the restoration market, the more important this communication response will become.
Page 11

Phaethon's Chariot Restorations

In respect to the prospect list of clients, it is essential that a "salesman's" approach be


adopted to insure an organized, orderly approach to each prospect. Notes need to be kept
on each client. Follow-up and persistence will pay off.
5.3.1 Sales Forecast
The Sales Forecast is divided up into the major categories of restoration work, paint work
and service. Unit sales includes the yearly forecast of each per category, based on an
average of 40 labor hours per item and forecasted capacity given the personnel changes
mentioned in the Personnel Section. The category prices reflect the average cost per
category, based on past pricing strategies. Since the company deals with providing custom
services, this can vary wildly between jobs. Due to target market, estimated increase
in category price is reflected in years 2004 and 2005. Direct category costs reflect direct
costs in producing the items but does not including labor.
It is estimated that by FY 2006, revenues will reflect a 10% market share of the local
restoration market, and that we will be completing one full restoration each month. As our
market share becomes established we believe we can raise our shop rates from $45 to $50
and then to $55 per hour in years two and three of this plan. We will still be priced below
the current rate charged by other area shops.

Chart: Sales Monthly


Sales Monthly
$50,000
$45,000
$40,000
$35,000

Restoration Work

$30,000

Paint Work

$25,000

Parts

$20,000

Service

$15,000
$10,000
$5,000
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 12

Phaethon's Chariot Restorations

Chart: Sales by Year


Sales by Year

$600,000
$500,000

Restoration Work

$400,000

Paint Work

$300,000

Parts
Service

$200,000
$100,000
$0
Year 1

Year 2

Year 3

Table: Sales Forecast


Sales Forecast
Sales
Restoration Work
Paint Work
Parts
Service
Total Sales
Direct Cost of Sales
Restoration Work
Paint Work
Parts
Service
Subtotal Direct Cost of Sales

Year 1

Year 2

Year 3

$145,008
$49,236
$72,399
$44,400
$311,044

$250,000
$64,007
$108,599
$48,800
$471,406

$324,000
$83,209
$162,899
$53,600
$623,707

Year 1
$26,717
$9,063
$13,000
$17,760
$66,540

Year 2
$50,000
$12,801
$19,548
$19,520
$101,869

Year 3
$64,800
$16,642
$29,322
$21,440
$132,203

5.4 Milestones
The milestone table is set up as a flow-chart. The milestone table is specific in detail,
allowing for the smooth flow of functions that are necessary to set up the restoration
shop on schedule for the Grand Opening. Each function is timed to coincide with the proper
execution and time needed to complete each task. Each manager has specific duties
Page 13

Phaethon's Chariot Restorations

assigned specifically to his area of expertise. The end of the milestone table also shows the
beginning of the 2005 marketing plan.

Chart: Milestones
Milestones
Company Identity

Business Plan Review

Advertising

Car Show s

Employee Hired

Grand Opening
Q3

Q4

Q1 `05

Q2

Q3

Q4

Q1 `06

Page 14

Phaethon's Chariot Restorations

Table: Milestones
Milestones
Milestone
Company Identity
Business Plan
Review
Advertising
Car Shows
Employee Hired
Grand Opening
Totals

Start Date
7/10/2004
5/1/2004

End Date
9/15/2004
8/1/2004

Budget
$7,500
$0

Manager
Isoroku
Isoroku

Department
Marketing
Finance

12/1/2004
11/1/2004
11/20/2004
8/30/2004

12/1/2005
5/1/2006
11/16/2005
10/15/2004

$42,000
$4,800
$20,800
$1,000
$76,100

Isoroku
Isoroku
Jane
Jane

Marketing
Marketing
HR
Marketing

6.0 Web Plan Summary


Our website, is an opportunity to offer current information on our services, showcase some
of our recent restorations, upcoming car shows, and special events.
Our website will be promoted on all major search engines. We will link to City
Search.com and many other classic car restoration oriented web sites and portals.
Also we promote to all of the blog directories, and on-line malls, and news outlets.
The owner has developed the company website. It offers the customer looking at it news
about our business, and reasons why to restore their old cars, it also tells about the
warranty on our work. The home page is a basic summarization of what our shop is all
about, the overview page contains our mission statement.
The services page will tell you about the services that we offer, our news page will tell you
about upcoming events and car shows. It also tells you about the car shows that we will
sponsor at or shop.
7.0 Management Summary
Phaethon's Chariot Restorations is currently made up of two employees who will put in a
standard 40 hours of work per week, we intend that our shop will use no sub-contractors,
and will hire new people as the volume of work demands.

Page 15

Phaethon's Chariot Restorations

7.1 Personnel Plan


All work is produced by our restoration staff and one shop foreman. All employees put in
full 40-hour weeks. Additional technicians will be added where necessary and in line with
success in penetrating the plan's target market. By the end of March 2005, it is assumed
that increased business volume will require two techs to put in a full 40-hour week. By the
end of June 2005, increased volume will require hiring a new painter / body man working a
30-hour/week, and increasing to 40 hour/week by end of September. By the
end 2006, Phaethon's Chariot Restorations will have five techs working full-time. It is
assumed that a sixth tech will be added in either FY 2007 or 2008, depending on demand
volume.
Table: Personnel
Personnel Plan
Owner
Foreman
Sheet Metal & Body Technician(s)
Automotive Mechanic(s)
Painting Technician
Admin Asst.
Total People

Year 1
$21,000
$17,400
$12,831
$15,162
$6,750
$9,000
6

Year 2
$40,000
$22,400
$45,000
$52,000
$24,000
$20,800
8

Year 3
$45,000
$30,000
$50,000
$58,000
$27,000
$22,800
8

Total Payroll

$82,143

$204,200

$232,800

8.0 Financial Plan


The business of Phaethon's Chariot Restorations does not require substantial outlays for
inventory and virtually all sales are on a cash/credit card basis, so increases in sales will
not be accompanied by initial cash-flow deficits.
8.1 Start-up Funding
The start-up costs are to be financed by the owner's personal investment and by a 7-year
loan.

Page 16

Phaethon's Chariot Restorations

Table: Start-up Funding


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

$23,500
$142,000
$165,500

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

$132,000
$10,000
$0
$10,000
$142,000

Liabilities and Capital


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

$0
$119,000
$6,000
$5,500
$130,500

Capital
Planned Investment
Owner
Investor
Additional Investment Requirement
Total Planned Investment

$35,000
$0
$0
$35,000

Loss at Start-up (Start-up Expenses)


Total Capital

($23,500)
$11,500

Total Capital and Liabilities

$142,000

Total Funding

$165,500

8.2 Break-even Analysis


The Break-even Analysis is based on the average of the first-year figures for total sales and
average cost of sales, and by the averaged annual monthly operating expenses. These
Page 17

Phaethon's Chariot Restorations

conservative assumptions make for a more accurate estimate of real risk, showing that we
need to have the monthly sales shown in the table and chart below.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even

$20,506

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

21%
$16,120

Chart: Break-even Analysis


Break-even Analysis
$9,000
$6,000
$3,000
$0
($3,000)
($6,000)
($9,000)
($12,000)
($15,000)
$0

$6,000
$3,000

$9,000

$12,000
$18,000
$24,000
$30,000
$15,000
$21,000
$27,000
$33,000

8.3 Projected Profit and Loss


As the Profit and Loss table shows, the company expects to continue its steady growth in
profitability over the next three years of operations.

Page 18

Phaethon's Chariot Restorations

Chart: Gross Margin Monthly


Gross Margin Monthly
$40,000
$36,000
$32,000
$28,000
$24,000
$20,000
$16,000
$12,000
$8,000
$4,000
$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

$500,000
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Year 1

Year 2

Year 3

Table: Profit and Loss


Pro Forma Profit and Loss
Page 19

Phaethon's Chariot Restorations

Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales

Year 1
$311,044
$66,540
$0
$66,540

Year 2
$471,406
$101,869
$0
$101,869

Year 3
$623,707
$132,203
$0
$132,203

Gross Margin
Gross Margin %

$244,504
78.61%

$369,537
78.39%

$491,504
78.80%

$82,143
$22,500
$19,992
$21,600
$15,200
$24,000
$0
$8,000

$204,200
$22,500
$20,000
$15,200
$24,000
$0
$0
$0

$232,800
$22,500
$20,000
$24,000
$0
$0
$0
$0

$193,435

$285,900

$299,300

Profit Before Interest and Taxes


EBITDA
Interest Expense
Taxes Incurred

$51,069
$71,061
$6,672
$13,319

$83,637
$103,637
$5,852
$23,335

$192,204
$212,204
$4,720
$56,245

Net Profit
Net Profit/Sales

$31,078
9.99%

$54,449
11.55%

$131,239
21.04%

Expenses
Payroll
Marketing/Promotion
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Fixtures
Total Operating Expenses

Page 20

Phaethon's Chariot Restorations

Chart: Profit Monthly


Profit Monthly
$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: Profit Yearly


Profit Yearly

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

Year 2

Year 3

8.4 Projected Cash Flow


As can be seen from the Cash Flow chart and table below, Phaethon's Chariot
Restorations has a number of advantages that provide for a large amount of growth in the
Page 21

Phaethon's Chariot Restorations

company's cash account. Because it is the company's policy that the clients to provide
the parts for the the restoration, the company has a very low cost of goods sold account
and therefore a high gross margin. Clients can purchase the parts themselves, or if they
prefer to have us make the purchase, we will locate the part, charge the customer's credit
card, and then purchase the part from the supplier/vendor.
Furthermore, the custom nature of the business means that there is no inventory cost to
speak of or accounts payable. With the ability to generate so much cash flow, it is assumed
that the company will seek to use this asset to expand its markets and production capacity
in the near future.

Chart: Cash
Cash
$40,000
$35,000
$30,000
$25,000
$20,000

Net Cash Flow

$15,000

Cash Balance

$10,000
$5,000
$0
($5,000)
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 22

Phaethon's Chariot Restorations

Table: Cash Flow


Pro Forma Cash Flow
Year 1

Year 2

Year 3

Cash from Operations


Cash Sales
Subtotal Cash from Operations

$311,044
$311,044

$471,406
$471,406

$623,707
$623,707

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

$20,716
$5,000
$0
$0
$0
$0
$0
$336,759

$31,396
$7,500
$0
$0
$0
$0
$0
$510,301

$41,539
$5,000
$0
$0
$0
$0
$0
$670,246

Year 1

Year 2

Year 3

Expenditures from Operations


Cash Spending
Bill Payments
Subtotal Spent on Operations

$82,143
$176,173
$258,316

$204,200
$207,975
$412,175

$232,800
$238,889
$471,689

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

$20,716
$3,500
$0
$16,476
$0
$2,400
$9,000
$310,408

$31,396
$6,000
$0
$17,492
$0
$4,000
$0
$471,063

$41,539
$7,500
$0
$18,570
$0
$4,000
$0
$543,298

$26,352
$36,352

$39,239
$75,590

$126,949
$202,539

Cash Received

Expenditures

Net Cash Flow


Cash Balance

Page 23

Phaethon's Chariot Restorations

8.5 Projected Balance Sheet


The following table presents the Balance Sheet.
Table: Balance Sheet
Pro Forma Balance Sheet
Year 1

Year 2

Year 3

$36,352
$17,818
$30,000
$84,170

$75,590
$26,083
$30,000
$131,674

$202,539
$28,695
$30,000
$261,233

$102,400
$19,992
$82,408
$166,578

$106,400
$39,992
$66,408
$198,082

$110,400
$59,992
$50,408
$311,641

Year 1

Year 2

Year 3

$23,476
$1,500
$5,500
$30,476

$16,522
$3,000
$5,500
$25,022

$19,913
$500
$5,500
$25,913

Long-term Liabilities
Total Liabilities

$102,524
$133,000

$85,032
$110,054

$66,462
$92,375

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

$35,000
($32,500)
$31,078
$33,578
$166,578

$35,000
($1,422)
$54,449
$88,027
$198,082

$35,000
$53,027
$131,239
$219,266
$311,641

$33,578

$88,027

$219,266

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
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

Net Worth

Page 24

Phaethon's Chariot Restorations

8.6 Business Ratios


Business ratios for the years of this plan are shown below. Industry profile ratios based on
the Industry Standards, Antique and Classic Automobile Restoration services, SIC code
7532 are shown for comparison.
Table: Ratios
Ratio Analysis
Sales Growth
Percent of Total Assets
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
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
Net Profit Margin
Return on Equity

Year 1

Year 2

Year 3

n.a.

51.56%

32.31%

Industry
Profile
1.55%

10.70%
18.01%
50.53%
49.47%
100.00%

13.17%
15.15%
66.47%
33.53%
100.00%

9.21%
9.63%
83.83%
16.17%
100.00%

9.44%
29.30%
52.30%
47.70%
100.00%

18.30%
61.55%
79.84%
20.16%

12.63%
42.93%
55.56%
44.44%

8.32%
21.33%
29.64%
70.36%

20.70%
28.94%
49.64%
50.36%

100.00%
78.61%
68.62%

100.00%
78.39%
66.84%

100.00%
78.80%
57.76%

100.00%
100.00%
73.48%

6.43%
16.42%

1.40%
17.74%

1.40%
30.82%

1.33%
0.60%

2.76
2.18
79.84%
132.22%
26.65%

5.26
4.22
55.56%
88.36%
39.27%

10.08
8.97
29.64%
85.51%
60.16%

1.95
1.31
55.95%
1.18%
2.67%

Year 1
9.99%
92.55%

Year 2
11.55%
61.86%

Year 3
21.04%
59.85%

n.a
n.a

Activity Ratios
Page 25

Phaethon's Chariot Restorations

Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover

5.98
8.25
28
1.87

4.64
12.17
36
2.38

4.83
12.17
27
2.00

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

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

3.96
0.23

1.25
0.23

0.42
0.28

n.a
n.a

$53,694
7.65

$106,651
14.29

$235,320
40.72

n.a
n.a

0.54
18%
2.18
9.26
0.29

0.42
13%
4.22
5.36
0.00

0.50
8%
8.97
2.84
0.00

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

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

Page 26

Appendix
Table: Sales Forecast
Sales
Forecast
Sales
Restoration
Work
Paint Work
Parts
Service
Total Sales
Direct Cost
of Sales
Restoration
Work
Paint Work
Parts
Service
Subtotal
Direct
Cost of
Sales

Month
1

Month
2

Month
3

Month
4

Month
5

0%

$5,000

$5,750

$6,613

$7,604

$8,745

0%
0%
0%

$1,500 $1,755 $2,053 $2,402 $2,811 $3,289 $3,848 $4,502 $5,267 $6,163 $7,210 $8,436
$3,000 $3,360 $3,763 $4,215 $4,721 $5,287 $5,921 $6,632 $7,428 $8,319 $9,318 $10,436
$3,600 $3,600 $3,000 $3,900 $3,900 $3,600 $3,600 $3,900 $3,900 $3,900 $3,900 $3,600
$13,100 $14,465 $15,429 $18,122 $20,176 $22,232 $24,935 $28,334 $31,890 $35,971 $40,656 $45,734

0%
0%
0%
0%

Month
6

Month
7

Month
8

Month
9

Month
10

Month
11

Month
12

$10,057 $11,565 $13,300 $15,295 $17,589 $20,228 $23,262

Month
1
$675

Month
2
$810

Month
3
$972

Month
4
$1,166

Month
5
$1,400

Month
6
$1,680

Month
7
$2,016

Month
8
$2,419

Month
9
$2,902

Month
10
$3,483

Month
11
$4,179

Month
12
$5,015

$313
$0
$1,440
$2,428

$359
$3,000
$1,440
$5,609

$413
$1,000
$1,200
$3,585

$475
$1,000
$1,560
$4,202

$547
$1,000
$1,560
$4,506

$629
$1,000
$1,440
$4,748

$723
$1,000
$1,440
$5,178

$831
$1,000
$1,560
$5,810

$956
$1,000
$1,560
$6,418

$1,099
$1,000
$1,560
$7,142

$1,264
$1,000
$1,560
$8,004

$1,454
$1,000
$1,440
$8,909

Page 1

Appendix
Table: Personnel
Personnel Plan
Owner
Foreman
Sheet Metal &
Body
Technician(s)
Automotive
Mechanic(s)
Painting
Technician
Admin Asst.
Total People
Total Payroll

Month Month Month Month Month Month Month Month


1
2
3
4
5
6
7
8
0% $1,000 $1,000 $1,000 $2,000 $2,000 $2,000 $2,000 $2,000
0%
$0 $1,000 $1,000 $1,000 $1,500 $1,500 $1,700 $1,700
0%
$0
$0
$0
$0
$0 $1,833 $1,833 $1,833

Month
9
$2,000
$2,000
$1,833

Month
10
$2,000
$2,000
$1,833

Month
11
$2,000
$2,000
$1,833

Month
12
$2,000
$2,000
$1,833

0%

$0

$0

$0

$0

$0

$2,166

$2,166

$2,166

$2,166

0%

$0

$0

$0

$0

$0

$0

$1,500

$1,500

$1,750

$2,000

0%

$0
1

$0
2

$0
2

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


3
3
5
5
5

$1,000
6

$1,000
6

$1,000
6

$1,000
6

$2,166 $2,166 $2,166


$0

$0

$1,000 $2,000 $2,000 $4,000 $4,500 $8,499 $8,699 $8,699 $10,499 $10,499 $10,749 $10,999

Page 2

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

Month
1
$13,100
$2,428
$0
$2,428

Gross Margin
Gross Margin %

$10,673 $8,856
81.47% 61.22%

$11,844 $13,920 $15,670 $17,484 $19,756 $22,524 $25,472 $28,829 $32,652 $


76.76% 76.81% 77.67% 78.64% 79.23% 79.49% 79.87% 80.14% 80.31%

$1,000
$0

$2,000
$1,000

$2,000
$1,000

$4,000
$1,500

$4,500
$1,500

$8,499
$2,500

$8,699
$2,500

$8,699
$2,500

$10,499 $10,499 $10,749 $


$2,500 $2,500 $2,500

$1,666
$1,800
$2,000
$2,000
$0
$1,000

$1,666
$1,800
$1,200
$2,000
$0
$1,000

$1,666
$1,800
$1,200
$2,000
$0
$1,200

$1,666
$1,800
$1,200
$2,000
$0
$300

$1,666
$1,800
$1,200
$2,000
$0
$300

$1,666
$1,800
$1,200
$2,000
$0
$300

$1,666
$1,800
$1,200
$2,000
$0
$300

$1,666
$1,800
$1,200
$2,000
$0
$300

$1,666
$1,800
$1,200
$2,000
$0
$300

Total Operating
Expenses

$9,466

$10,666 $10,866 $12,466 $12,966 $17,965 $18,165 $18,165 $19,965 $20,665 $20,915 $

Profit Before Interest


and Taxes
EBITDA
Interest Expense
Taxes Incurred

$1,207

($1,810)

$978

$1,454

$2,704

($481)

$1,591

$4,359

$5,507

$8,164

$11,737 $

$2,873
$588
$185

($144)
$590
($720)

$2,644
$587
$117

$3,120
$572
$264

$4,370
$561
$643

$1,185
$554
($311)

$3,257
$548
$313

$6,025
$549
$1,143

$7,173
$534
$1,492

$9,830
$527
$2,291

$13,403 $
$536
$3,360

Expenses
Payroll
Marketing/Promotio
n
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Fixtures

15%

Month
Month
Month
Month
Month
Month
Month
Month
Month
Month
2
3
4
5
6
7
8
9
10
11
$14,465 $15,429 $18,122 $20,176 $22,232 $24,935 $28,334 $31,890 $35,971 $40,656 $
$5,609 $3,585 $4,202 $4,506 $4,748 $5,178 $5,810 $6,418 $7,142 $8,004
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$5,609 $3,585 $4,202 $4,506 $4,748 $5,178 $5,810 $6,418 $7,142 $8,004

$1,666
$1,800
$1,200
$2,000
$0
$1,000

$1,666
$1,800
$1,200
$2,000
$0
$1,000

Page 3

Appendix
Net Profit
Net Profit/Sales

$433
3.30%

($1,680)
11.62%

$273
1.77%

$617
3.41%

$1,500
7.43%

($725)
-3.26%

$731
2.93%

$2,667
9.41%

$3,481
10.92%

$5,346
14.86%

$7,840 $
19.28%

Page 4

Appendix
Table: Cash Flow
Pro Forma
Cash Flow
Month
1

Month
2

$13,100
$13,100

$14,465
$14,465

$872

Month
3

Month
4

Month
5

Month
6

Month
7

Month
8

Month
9

Month
10

Month
11

Mon
1

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
(interestfree)
New Longterm
Liabilities
Sales of
Other

6.66%

$15,429 $18,122 $20,176


$15,429 $18,122 $20,176

$22,232 $24,935 $28,334 $31,890 $35,971 $40,656 $45,73


$22,232 $24,935 $28,334 $31,890 $35,971 $40,656 $45,73

$963

$1,028

$1,207

$1,344

$1,481

$1,661

$1,887

$2,124

$2,396

$2,708

$3,04

$0

$1,000

$1,000

$0

$0

$0

$0

$1,000

$0

$0

$2,000

$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

Page 5

Appendix
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

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$13,972

$16,428

Month
1

Month
2

Month
3

Month
4

Month
5

Month
6

Month
7

Month
8

$1,000

$2,000

$2,000

$4,000

$4,500

$8,499

$8,699

$8,699

$6,429

$13,056

$18,478

$8,061

$12,625

$13,125 $13,323 $14,762 $16,595 $17,542 $19,982 $22,19

$7,429

$15,056

$20,478 $12,061 $17,125

$21,624 $22,022 $23,461 $27,094 $28,041 $30,731 $33,19

$872

$963

$1,028

$1,207

$1,344

$1,481

$1,661

$1,887

$2,124

$2,396

$2,708

$3,04

$0

$0

$500

$1,000

$500

$0

$0

$0

$1,000

$0

$0

$50

$17,457 $19,328 $21,520

$23,713 $26,595 $31,221 $34,014 $38,367 $45,363 $48,77

Month
9

Month
10

Month
11

Mon
1

$10,499 $10,499 $10,749 $10,99

Page 6

Appendix
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

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$1,336

$1,342

$1,349

$1,356

$1,363

$1,370

$1,376

$1,383

$1,390

$1,397

$1,404

$1,41

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$20

$0
$9,837

$0
$17,561

$4,135

($1,133 ($6,098)
)
$13,003 $6,904

$14,135

$0 $1,000 $1,000
$23,555 $16,824 $21,532
$2,504
$9,409

$1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,00


$25,674 $26,259 $27,931 $32,808 $33,034 $36,042 $39,35

($12) ($1,961)
$9,397

$7,435

$336
$7,772

$3,290

$1,206

$5,333

$9,321

$11,062 $12,268 $17,601 $26,922 $36,35

Table: Balance Sheet


Pro Forma
Balance Sheet
Mont
h1
Assets

Mont
h2

Mont
h3

Mont
h4

Mont
h5

Mont
h6

Mont
h7

$9,42

Mont
h8

Mont
h9

Mont
h 10

Mont
h 11

Mont
h 12

Starting
Balances

Current Assets
Page 7

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

$10,000
$2,000
$30,000
$42,000

$100,000
$0
$100,000
$142,000

Liabilities and
Capital
Current Liabilities
Accounts Payable

$6,000

Current Borrowing

$0

Other Current
Liabilities
Subtotal Current
Liabilities
Long-term
Liabilities
Total Liabilities

$5,500
$11,500
$119,000
$130,500

$14,1
35
$4,85
5
$30,0
00
$48,9
90

$13,0
03
$11,2
19
$30,0
00
$54,2
21

$6,90
4
$7,63
3
$30,0
00
$44,5
38

$9,40
9
$8,40
3
$30,0
00
$47,8
12

$9,39
7
$9,01
2
$30,0
00
$48,4
09

$7,43
5
$9,49
6
$30,0
00
$46,9
32

$7,77
2
$10,3
57
$30,0
00
$48,1
28

$11,0
62
$11,6
20
$30,0
00
$52,6
82

$12,2
68
$12,8
37
$30,0
00
$55,1
05

$17,6
01
$14,2
84
$30,0
00
$61,8
86

$26,9
22
$16,0
07
$30,0
00
$72,9
29

$36,3
52
$17,8
18
$30,0
00
$84,1
70

$100,
200
$1,66
6
$98,5
34
$147,
524

$100,
400
$3,33
2
$97,0
68
$151,
289

$100,
600
$4,99
8
$95,6
02
$140,
140

$100,
800
$6,66
4
$94,1
36
$141,
948

$101,
000
$8,33
0
$92,6
70
$141,
079

$101,
200
$9,99
6
$91,2
04
$138,
136

$101,
400
$11,6
62
$89,7
38
$137,
866

$101,
600
$13,3
28
$88,2
72
$140,
954

$101,
800
$14,9
94
$86,8
06
$141,
911

$102,
000
$16,6
60
$85,3
40
$147,
226

$102,
200
$18,3
26
$83,8
74
$156,
803

$102,
400
$19,9
92
$82,4
08
$166,
578

Mont
h1

Mont
h2

Mont
h3

Mont
h4

Mont
h5

Mont
h6

Mont
h7

Mont
h8

Mont
h9

Mont
h 10

Mont
h 11

Mont
h 12

$12,4
28
$0

$7,64
1
$1,50
0
$5,50
0
$14,6
41

$12,1
88
$500

$12,6
82
$0

$12,8
33
$0

$14,2
09
$0

$19,2
44
$0

$5,50
0
$18,1
88

$5,50
0
$18,1
82

$5,50
0
$18,3
33

$5,50
0
$19,7
09

$16,0
13
$1,00
0
$5,50
0
$22,5
13

$16,8
79
$0

$5,50
0
$17,9
28

$18,2
15
$1,00
0
$5,50
0
$24,7
15

$5,50
0
$22,3
79

$5,50
0
$24,7
44

$21,3
86
$2,00
0
$5,50
0
$28,8
86

$23,4
76
$1,50
0
$5,50
0
$30,4
76

$117,
664
$135,
592

$116,
322
$141,
037

$114,
973
$129,
614

$113,
617
$131,
805

$112,
254
$130,
436

$110,
884
$129,
217

$109,
508
$129,
217

$108,
125
$130,
638

$106,
735
$129,
114

$105,
338
$130,
082

$103,
934
$132,
820

$102,
524
$133,
000
Page 8

Appendix
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and
Capital
Net Worth

$35,000

$35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0
00
00
00
00
00
00
00
00
00
00
00
00
($23,500) ($23,5 ($23,5 ($23,5 ($24,5 ($25,5 ($26,5 ($27,5 ($28,5 ($29,5 ($30,5 ($31,5 ($32,5
00)
00)
00)
00)
00)
00)
00)
00)
00)
00)
00)
00)
$0
$433 ($1,24 ($974) ($357) $1,14 $418
$1,14 $3,81 $7,29 $12,6 $20,4 $31,0
7)
3
9
6
7
43
84
78
$11,500
$11,9 $10,2 $10,5 $10,1 $10,6 $8,91 $8,64 $10,3 $12,7 $17,1 $23,9 $33,5
33
53
26
43
43
8
9
16
97
43
84
78
$142,000
$147, $151, $140, $141, $141, $138, $137, $140, $141, $147, $156, $166,
524
289
140
948
079
136
866
954
911
226
803
578
$11,500

$11,9
33

$10,2
53

$10,5
26

$10,1
43

$10,6
43

$8,91
8

$8,64
9

$10,3
16

$12,7
97

$17,1
43

$23,9
84

$33,5
78

Page 9