Assignment on Business Plan

ASSIGNMENT

on

Business Plan

Submitted to : Submitted by :

Abdullah M. Taher Faculty, School of Business Course: Production & Operation Management [B2602] AUB, Dhanmondi Campus Dhaka, Bangladesh.

Shantanu Das BBA, 29th Batch (B) ID: 200712883 AUB, Dhanmondi Campus Dhaka, Bangladesh.

Date of Submission: 09-03-2010.

http://www.aub-bd.org/�

BUSINESS PLAN

GlobeNet Wireless Broadband [Wi-MAX ISP]

Prepared by:

Serial Name ID 1 Shantanu Das 200712883 2 Sk. Saiful Islam Rozin 200710522 3 Mehedi Hassan 200710466 4 Sayed Sayem Ali 200710469 5 A.M.D. Abu Sufian Rashed 200710487

Copyright 2010, GlobeNet Wireless Broadband Page 2 of 28

Table of Contents

Serial Subject Co-subject Page

1 Executive Summary 03 1.1 Mission 04 1.2 Keys to Success 04 1.3 Objectives 04

2 Company Summary 05 2.1 Company Ownership 05 2.2 Start-up Summary 05

3 Service 07

4 Market Analysis Summary 08 4.1 Market Segmentation 08 4.2 Target Market Segment Strategy 09 4.3 Service Business Analysis 09 4.3.1 Competition and Buying Patterns 10

5 Strategy and Implementation

Summary 10

5.1 Competitive Edge 10 5.2 Marketing Strategy 11 5.3 Sales Strategy 11 5.3.1 Sales Forecast 11 5.4 Milestones 13

6 Web Plan Summary 14 6.1 Website Marketing Strategy 14 6.2 Development Requirements 14

7 Management Summary 14 7.1 Personnel Plan 15

8 Financial Plan 15 8.1 Break-even Analysis 15 8.2 Projected Profit and Loss 16 8.3 Projected Cash Flow 19 8.4 Projected Balance Sheet 20 8.5 Business Ratios 21

9 Appendix 23


Executive Summary

GlobeNet Wireless Broadband is an innovative start-up company that provides wireless broadband internet connections to several Dhaka Metropolitan Areas. Utilizing Wi-MAX technology and proprietary antennas and repeaters, GlobeNet will be able to serve a larger area with broadband Internet connections.

GlobeNet was been founded by Fahad Karim. With a MBA and an undergraduate Computer Science degree from the Harvard University (USA), Fahad has the skills to execute on this well-researched business plan. Fahad spent two years in the Karim Associates, which gave him not only an incredible and reasonable boost in confidence to accomplish a business venture, but also provided him with solid project management skills and experience.

The market for wireless broadband Internet connections in Bangladesh is new but is widely open. Demand for traditional broadband connections is surpassing conservative forecasts. The wireless market is even more exciting due to the significantly lower costs needed in terms of delivery infrastructure. As GlobeNet's customer base grows, costs decrease through scales of economy, creating an even more compelling argument for GlobeNet's existence.

GlobeNet has targeted three distinct groups. The first is students, a market segment that uses the Internet the most and also have high expectations regarding the speed of the connection. The second group is professionals, people with disposable income, not a lot of excessive time on their hands, and a group that uses the Internet a fair amount, both personally as well as professionally. The last group that will be targeted is techies. This group is the early adopters of any type of technology and spend incredible amounts of time immersed in Internet technology.

GlobeNet is a compelling business concept that leverages advances in technology and proprietary tools to offer a market need at below market prices. In addition to earning great margins with low infrastructure costs, margins increase as the customer base increases. This exciting business plan has a high likelihood of success with Fahad Karim responsible for the execution of it. The business will earn modest profits in year two, increasing exponentially in year three. Net profit is forecasted to be commensurate in years two and three.


1.1 Mission

It is GlobeNet Wireless's mission to provide fast, wireless Internet access at a reasonable price. The most important thing to remember is that every customer must be satisfied with our services.

1.2 Keys to Success

Practice disciplined growth. Reach profitability by year two. Ensure that the customer's needs are met and maintain a 90%

customer retention ratio.

1.3 Objectives

Provide, fast, reliable, wireless Internet access. Treat customers with the upmost respect. Become profitable within two years.


Company Summary

GlobeNet Wireless will be formed in 2011 to offer an inexpensive, wireless broadband Internet connection to compete with DSL or cable offerings. Using Wi-MAX technology, it is inexpensive to set up a neighborhood network. The company was founded by Fahad Karim. Fahad will rely on outside investors for the necessary start-up costs.

2.1 Company Ownership

GlobeNet Broadband Wireless is a Wi-NET BD Pvt. Ltd. company with Fahad Karim as the principal and majority owner.

2.2 Start-up Summary

Equipment that will be needed is as follows:

Three computer workstations; Wireless access point; Five repeaters; Five antennas; Assorted office equipment and supplies.


Start-up Funding

Start-up Expenses to Fund $9,500

Start-up Assets to Fund $60,500

Total Funding Required $70,000

Assets

Non-cash Assets from Start-up $5,000

Cash Requirements from Start-up $55,500

Additional Cash Raised $0

Cash Balance on Starting Date $55,500

Total Assets $60,500

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabilities $0

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

Total Liabilities $0

Capital

Planned Investment

Investor 1 $15,000

Investor 2 $55,000

Additional Investment Requirement $0

Total Planned Investment $70,000

Loss at Start-up (Start-up Expenses) ($9,500)

Total Capital $60,500

Total Capital and Liabilities $60,500

Total Funding $70,000


Start-up

Requirements

Start-up Expenses

Legal $2,000

Stationery etc. $100

Consultants $1,000

Insurance $200

Rent $200

Research and Development $1,000

Expensed Equipment $5,000

Total Start-up Expenses $9,500

Start-up Assets

Cash Required $55,500

Other Current Assets $0

Long-term Assets $5,000

Total Assets $60,500

Total Requirements $70,000

Services

GlobeNet offers wireless broadband Internet access. The service is DSL speed with customers only needing a Wi-MAX card/modem and to live within range of the signal which covers a thirty block radius currently. There are plans to enlarge the coverage area as more customers sign up.

Wi-MAX technology is based off of 2.4 Mhz spectrum wireless transmissions. Using the same wave lengths that some cordless phones use, the Internet signals are broadcasted out through the neighborhood. With the supplied password and a Wi-MAX receiver in each customer's computer, customers will have fast, wireless Internet connections.


Market Analysis Summary

Within the last three years there has been a proliferation of broadband Internet connections. With so many people enjoying fast connections at work, they are no longer willing to deal with a dial-up connection at home. With the advent of Wi-MAX technology, customers can now enjoy a fast connection without having to lay expensive cables since the signal is sent via radio waves. The targeted market segments are: students, professionals, techies.

4.1 Market Segmentation

The market can be segmented into three distinct groups:

Students: these are people currently in academia and are accustomed to fast connections and are willing to pay for it. This group uses the Internet the most, whether they are trading MP3s or downloading videos.

Professionals: this group conducts a fair amount of business over the Internet, whether banking, e-commerce, or communications.

Techies: this group embraces technology as they enjoy challenging themselves with technology and the complexity it brings.

Other than the students, GlobeNet' customers are fairly affluent (household income of >$50,000) and spend their money on technology offerings, whether it is digital cable, cellular service, or broadband Internet connections. The target customers are also generally well educated with 65% having a college degree and 20% having a graduate degree. Combining several demographic factors, GlobeNet arrives at the following primary customer profile:

Spends 10 hours a week on the Internet away from home. Has purchased something from a website at least once within the last

two months. Educated with at least some course work for an undergraduate degree. Household income of at least $50,000.


Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers

Growth CAGR

Students 9% 54,000 58,860 64,157 69,931 76,225 9.00%

Professionals 8% 34,000 36,720 39,658 42,831 46,257 8.00%

Techies 11% 10,000 11,100 12,321 13,676 15,180 11.00%

Total 8.87% 98,000 106,680 116,136 126,438 137,662 8.87%

4.2 Target Market Segment Strategy

GlobeNet has chosen the three aforementioned target markets due to their adoption of broadband Internet technology. It is these three groups that are most likely to use a fast connection and the most willing to pay a premium for the connection.

4.3 Service Business Analysis

There are three main participants within the consumer broadband Internet market.

DSL (digital subscriber line). A connection that utilizes the copper phone lines as the method of transmission.

Cable. A connection that uses cable TV wiring for transmission. Satellite connections. These use satellites, in orbit to provide "cable"

TV as well as Internet connections to residential and remote consumers.


4.3.1 Competition and Buying Patterns

As mentioned in the previous section, DSL, cable, and satellite access are the competitors in the broadband market. Consumer buying patterns are based on two factors:

Availability: not every type of broadband connection is available to every consumer. Consumers often pick service providers based on what is available to them.

Convenience: this is often based on where the outlet cords are based in the house, whether the computer will be located closer to the cable TV or nearer to a phone jack.

Strategy and Implementation Summary

Simply put, GlobeNet' strategy is to offer a service, demanded by customers, at a price that undercuts the competition. This will be accomplished, not by accepting below-market margins, but by leveraging technology, to help drive GlobeNet' costs down. Awareness regarding GlobeNet' services will be generated effectively and inexpensively to the specific target segments that GlobeNet has focused on.

5.1 Competitive Edge

GlobeNet' competitive edge is the effective and efficient use of Wi-MAX technology. Wi-MAX, while a fairly recent technology, has been adopted by several different service providers as well as used for home-based networks. What provides GlobeNet with a competitive edge is its efficient use of the technology. GlobeNet has developed a proprietary antenna that allows for signal transmission over great distances with less signal loss. Additionally, GlobeNet has significantly reduced administrative costs by having most administrative activities like marketing, sales, and service details administered via the Internet.


5.2 Marketing Strategy

As the name implies, GlobeNet will be using a GlobeNet approach to developing awareness of the offered services. GlobeNet will adopt a multi-pronged marketing approach:

Advertising/postings with local retailers and commercial businesses. This will provide GlobeNet with great visibility in the exact community that it operates in.

Mailings. GlobeNet will adopt a targeted mailing campaign to local residents.

Website. GlobeNet will leverage its website as a comprehensive and efficient source of marketing/sales information.

5.3 Sales Strategy

The sales strategy that GlobeNet will adopt is based on developing an awareness of GlobeNet' service as a viable alternative to Cable and DSL within the community. The message used will be that you can receive broadband speed connections to your computer, wherever it may be, even your laptop on your front lawn, at a price that is a fraction of the current competitors'. This will be done with targeted advertising with local retail/commercial establishments in the area. Additionally, GlobeNet will rely on mailings to get the word out. Lastly, GlobeNet will have a website for marketing, sales, and administrative purposes.

5.3.1 Sales Forecast

GlobeNet has developed a conservative sales forecast. Adoption rates of customers are fairly steady from one month to the next. A conservative approach has been adopted to minimize any external variables that may effect future operations.

GlobeNet believes that it will experience extensive growth for several years for several reasons. The first is the general adoption of broadband connections which has been encouraging for the last several years. Another reason GlobeNet believes their forecast to be accurate is it offers a viable, less expensive alternative to current broadband connections.


Sales Forecast

Year 1 Year 2 Year 3

Sales

Monthly Internet Service $36,584 $132,665 $211,443

Other $0 $0 $0

Total Sales $36,584 $132,665 $211,443

Direct Cost of Sales Year 1 Year 2 Year 3

Administrative costs $1,829 $6,633 $10,572

Other $0 $0 $0

Subtotal Direct Cost of Sales $1,829 $6,633 $10,572


5.4 Milestones

Milestones are a very important aspect of a business plan. They provide concrete, achievable, yet lofty goals that the business must concentrate on. By targeting lofty goals, GlobeNet ensures that it is aiming high, therefore it is more likely to achieve more. The milestones that GlobeNet has chosen are very specific to the company and will be embraced by all employees.

Milestones

Milestone Start Date End Date Budget Manager Department

Business plan completion

1/1/2003 2/1/2003 $0 Fahad Management

First 10 customers 1/1/2003 3/30/2003 $0 Fahad Sales

Profitability 1/1/2003 2/1/2004 $0 Fahad Operations

Enlargement of the network

1/1/2003 2/1/2004 $0 Fahad Operations

Totals $0


Web Plan Summary

The website will be used for:

Marketing/sales; Administrative functions.

6.1 Website Marketing Strategy

All of GlobeNet' marketing information will be present on the website for viewing and for downloading/printing. Awareness regarding the website will be accomplished by inclusion of the website address on all printed materials. Additionally, the website will have a comprehensive submission procedure to all of the popular search engines.

6.2 Development Requirements

The website will be developed in-house by leveraging interns.

Management Summary

Fahad Karim, founder and president will be the anchor of the management team. Fahad received his undergraduate degree in computer science from the HARVARD University. While Fahad enjoyed the course work he recognized that it was not something that he was interested in pursuing as a career. Fahad decided that it would be in his best interest to study for an MBA, however, he was not immediately ready to do this. So Fahad headed off to Ghana with the Peace Corps to develop community-based trading systems. Fahad's Peace Corp experience was invaluable, providing him with extensive project management experience as well as giving him confidence that he could accomplish anything he set his mind out to do.

After getting back to the States, Fahad began the MBA program at the University of Chicago. Fahad's course of study concentrated on entrepreneurial ventures, recognizing at some point his desire to start his own business. Near the end of his second year, Fahad began to hear about Wi-MAX technology. He became interested in what he saw was a strong market need for inexpensive broadband Internet connections transmitted wirelessly, thereby significantly decreasing delivery costs. Fahad formed GlobeNet Wireless to fulfill this market need.


7.1 Personnel Plan

The two main employees beyond Fahad are:

Technician: this position is responsible for the smooth operation of the wireless network as well as the website.

Administration: this is a general customer service position, assisting in sales and support.

Personnel Plan


President $24,000 $36,000 $48,000

Technician $19,800 $21,600 $21,600

Administration $15,000 $18,000 $18,000

Total People 3 3 3

Total Payroll $58,800 $75,600 $87,600

Financial Plan

The following sections outline important financial information.

8.1 Break-even Analysis

Average per-unit revenue: based on the $20 monthly access fee. Average per-unit variable cost: costs based on infrastructure, and administrative costs. Estimated monthly fixed costs: Internet connections costs.


Break-even Analysis

Monthly Revenue Break-even $8,072

Assumptions:

Average Percent Variable Cost 5%

Estimated Monthly Fixed Cost $7,668

8.2 Projected Profit and Loss

The following table and charts show the Projected Profit and Loss.



Pro Forma Profit and Loss


Sales $36,584 $132,665 $211,443

Direct Cost of Sales $1,829 $6,633 $10,572

Other Costs of Sales $0 $0 $0

Total Cost of Sales $1,829 $6,633 $10,572

Gross Margin $34,755 $126,032 $200,871

Gross Margin % 95.00% 95.00% 95.00%

Expenses

Payroll $58,800 $75,600 $87,600

Sales and Marketing and Other Expenses $2,400 $5,600 $12,000

Depreciation $996 $1,002 $1,002

Rent $2,400 $2,400 $2,400

Utilities $9,600 $13,000 $15,000

Insurance $3,000 $3,000 $3,000

Payroll Taxes $8,820 $11,340 $13,140

Other $6,000 $6,000 $6,000

Total Operating Expenses $92,016 $117,942 $140,142

Profit Before Interest and Taxes ($57,261) $8,090 $60,729

EBITDA ($56,265) $9,092 $61,731

Interest Expense $0 $0 $0

Taxes Incurred $0 $2,427 $18,219

Net Profit ($57,261) $5,663 $42,510

Net Profit/Sales -156.52% 4.27% 20.10%


8.3 Projected Cash Flow

The following table and chart display the Projected Cash Flow.

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $36,584 $132,665 $211,443

Subtotal Cash from Operations $36,584 $132,665 $211,443

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $36,584 $132,665 $211,443

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $58,800 $75,600 $87,600

Bill Payments $31,112 $49,195 $77,871

Subtotal Spent on Operations $89,912 $124,795 $165,471


Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $0

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $89,912 $124,795 $165,471

Net Cash Flow ($53,328) $7,870 $45,972

Cash Balance $2,172 $10,042 $56,014

8.4 Projected Balance Sheet

The following table presents the Projected Balance Sheet.

Pro Forma Balance Sheet


Assets

Current Assets

Cash $2,172 $10,042 $56,014

Other Current Assets $0 $0 $0

Total Current Assets $2,172 $10,042 $56,014

Long-term Assets

Long-term Assets $5,000 $5,000 $5,000

Accumulated Depreciation $996 $1,998 $3,000

Total Long-term Assets $4,004 $3,002 $2,000

Total Assets $6,176 $13,044 $58,014

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $2,938 $4,142 $6,603

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $2,938 $4,142 $6,603

Long-term Liabilities $0 $0 $0

Total Liabilities $2,938 $4,142 $6,603


Paid-in Capital $70,000 $70,000 $70,000

Retained Earnings ($9,500) ($66,761) ($61,098)

Earnings ($57,261) $5,663 $42,510

Total Capital $3,239 $8,902 $51,412

Total Liabilities and Capital $6,176 $13,044 $58,014

Net Worth $3,239 $8,902 $51,412

8.5 Business Ratios

The following table illustrates the different Business Ratios, based on NAICS code 518111, Internet Service Providers.

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 262.63% 59.38% 15.97%

Percent of Total Assets

Other Current Assets 0.00% 0.00% 0.00% 56.35%

Total Current Assets 35.17% 76.99% 96.55% 87.48%

Long-term Assets 64.83% 23.01% 3.45% 12.52%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 47.56% 31.76% 11.38% 30.66%

Long-term Liabilities 0.00% 0.00% 0.00% 23.07%

Total Liabilities 47.56% 31.76% 11.38% 53.73%

Net Worth 52.44% 68.24% 88.62% 46.27%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 95.00% 95.00% 95.00% 100.00%

Selling, General & Administrative Expenses

251.52% 90.73% 74.90% 73.80%

Advertising Expenses 0.00% 0.00% 0.00% 1.37%

Profit Before Interest and Taxes -156.52% 6.10% 28.72% 1.03%

Main Ratios

Current 0.74 2.42 8.48 1.97

Quick 0.74 2.42 8.48 1.50

Total Debt to Total Assets 47.56% 31.76% 11.38% 59.78%

Pre-tax Return on Net Worth -1767.98% 90.88% 118.12% 2.93%

Pre-tax Return on Assets -927.10% 62.02% 104.68% 7.28%


Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -156.52% 4.27% 20.10% n.a

Return on Equity -1767.98% 63.62% 82.69% n.a

Activity Ratios

Accounts Payable Turnover 11.59 12.17 12.17 n.a

Payment Days 27 26 24 n.a

Total Asset Turnover 5.92 10.17 3.64 n.a

Debt Ratios

Debt to Net Worth 0.91 0.47 0.13 n.a

Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios

Net Working Capital ($765) $5,900 $49,412 n.a

Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios

Assets to Sales 0.17 0.10 0.27 n.a

Current Debt/Total Assets 48% 32% 11% n.a

Acid Test 0.74 2.42 8.48 n.a

Sales/Net Worth 11.30 14.90 4.11 n.a

Dividend Payout 0.00 0.00 0.00 n.a


Appendix

Sales Forecast

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales

Monthly Internet Service

0% $0 $0 $1,200 $2,112 $2,544 $2,887 $3,543 $3,877 $4,322 $4,899 $5,323 $5,877

Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Sales $0 $0 $1,200 $2,112 $2,544 $2,887 $3,543 $3,877 $4,322 $4,899 $5,323 $5,877

Direct Cost of Sales

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Administrative costs

$0 $0 $60 $106 $127 $144 $177 $194 $216 $245 $266 $294

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales

$0 $0 $60 $106 $127 $144 $177 $194 $216 $245 $266 $294

Personnel Plan

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

President 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

Technician 0% $0 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800

Administration 0% $0 $0 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Total People 1 2 3 3 3 3 3 3 3 3 3 3

Total Payroll $2,000 $3,800 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300

General Assumptions

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Plan Month

1 2 3 4 5 6 7 8 9 10 11 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

10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Tax Rate

30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0


Pro Forma Profit and Loss

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales $0 $0 $1,200 $2,112 $2,544 $2,887 $3,543 $3,877 $4,322 $4,899 $5,323 $5,877

Direct Cost of Sales

$0 $0 $60 $106 $127 $144 $177 $194 $216 $245 $266 $294

Other Costs of Sales

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

Total Cost of Sales

$0 $0 $60 $106 $127 $144 $177 $194 $216 $245 $266 $294

Gross Margin

$0 $0 $1,140 $2,006 $2,417 $2,743 $3,366 $3,683 $4,106 $4,654 $5,057 $5,583

Gross Margin %

0.00% 0.00% 95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

Expenses

Payroll $2,000 $3,800 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300

Sales and Marketing and Other Expenses

$200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Depreciation

$83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83

Rent $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Utilities $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800

Insurance $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250

Payroll Taxes

15%

$300 $570 $795 $795 $795 $795 $795 $795 $795 $795 $795 $795

Other $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Total Operating Expenses

$4,333 $6,403 $8,128 $8,128 $8,128 $8,128 $8,128 $8,128 $8,128 $8,128 $8,128 $8,128

Profit Before Interest and Taxes

($4,333)

($6,403)

($6,988)

($6,122)

($5,711)

($5,385)

($4,762)

($4,445)

($4,022)

($3,474)

($3,071)

($2,545)

EBITDA ($4,250)

($6,320)

($6,905)

($6,039)

($5,628)

($5,302)

($4,679)

($4,362)

($3,939)

($3,391)

($2,988)

($2,462)

Interest Expense

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

Taxes Incurred

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

Net Profit ($4,333)

($6,403)

($6,988)

($6,122)

($5,711)

($5,385)

($4,762)

($4,445)

($4,022)

($3,474)

($3,071)

($2,545)

Net Profit/Sales

0.00% 0.00% -582.33%

-289.85%

-224.50%

-186.54%

-134.41%

-114.65%

-93.06%

-70.91%

-57.70%

-43.30%


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 $1,200 $2,112 $2,544 $2,887 $3,543 $3,877 $4,322 $4,899 $5,323 $5,877

Subtotal Cash from Operations

$0 $0 $1,200 $2,112 $2,544 $2,887 $3,543 $3,877 $4,322 $4,899 $5,323 $5,877

Additional Cash Received

Sales Tax, VAT, HST/GST Received

0.00%

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

New Current Borrowing

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

New Other Liabilities (interest-free)

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

New Long-term Liabilities

$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 $1,200 $2,112 $2,544 $2,887 $3,543 $3,877 $4,322 $4,899 $5,323 $5,877

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Expenditures from Operations

Cash Spending

$2,000 $3,800 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300

Bill Payments

$75 $2,259 $2,530 $2,807 $2,851 $2,873 $2,890 $2,923 $2,940 $2,962 $2,991 $3,012

Subtotal Spent on Operations

$2,075 $6,059 $7,830 $8,107 $8,151 $8,173 $8,190 $8,223 $8,240 $8,262 $8,291 $8,312

Additional


Cash Spent

Sales Tax, VAT, HST/GST Paid Out

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

Principal Repayment of Current Borrowing

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

Other Liabilities Principal Repayment

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

Long-term Liabilities Principal Repayment

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

Purchase Other Current Assets

$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

Subtotal Cash Spent

$2,075 $6,059 $7,830 $8,107 $8,151 $8,173 $8,190 $8,223 $8,240 $8,262 $8,291 $8,312

Net Cash Flow

($2,075)

($6,059)

($6,630)

($5,995)

($5,607)

($5,286)

($4,647)

($4,346)

($3,918)

($3,363)

($2,968)

($2,435)

Cash Balance

$53,425

$47,366

$40,737

$34,742

$29,135

$23,849

$19,201

$14,856

$10,938

$7,575 $4,607 $2,172

Pro Forma Balance Sheet

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Assets

Starting Balances

Current Assets

Cash $55,500

$53,425

$47,366

$40,737

$34,742

$29,135

$23,849

$19,201

$14,856

$10,938

$7,575 $4,607 $2,172

Other Current Assets

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

Total Current Assets

$55,500

$53,425

$47,366

$40,737

$34,742

$29,135

$23,849

$19,201

$14,856

$10,938

$7,575 $4,607 $2,172

Long-term



Assets

Long-term Assets

$5,000 $5,000

$5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Accumulated Depreciation

$0 $83 $166 $249 $332 $415 $498 $581 $664 $747 $830 $913 $996

Total Long-term Assets

$5,000 $4,917

$4,834 $4,751 $4,668 $4,585 $4,502 $4,419 $4,336 $4,253 $4,170 $4,087 $4,004

Total Assets

$60,500

$58,342

$52,200

$45,488

$39,410

$33,720

$28,351

$23,620

$19,192

$15,191

$11,745

$8,694 $6,176

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

$0 $2,175

$2,436 $2,712 $2,756 $2,776 $2,793 $2,825 $2,841 $2,862 $2,890 $2,911 $2,938

Current Borrowing

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

Other Current Liabilities

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

Subtotal Current Liabilities

$0 $2,175

$2,436 $2,712 $2,756 $2,776 $2,793 $2,825 $2,841 $2,862 $2,890 $2,911 $2,938

Long-term Liabilities

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

Total Liabilities

$0 $2,175

$2,436 $2,712 $2,756 $2,776 $2,793 $2,825 $2,841 $2,862 $2,890 $2,911 $2,938

Paid-in Capital

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

Retained Earnings

($9,500)

($9,500)

($9,500)

($9,500)

($9,500)

($9,500)

($9,500)

($9,500)

($9,500)

($9,500)

($9,500)

($9,500)

($9,500)

Earnings $0 ($4,333)

($10,736)

($17,724)

($23,846)

($29,557)

($34,942)

($39,704)

($44,149)

($48,171)

($51,645)

($54,716)

($57,261)

Total Capital

$60,500

$56,167

$49,764

$42,776

$36,654

$30,943

$25,558

$20,796

$16,351

$12,329

$8,855 $5,784 $3,239

Total Liabilities and Capital

$60,500

$58,342

$52,200

$45,488

$39,410

$33,720

$28,351

$23,620

$19,192

$15,191

$11,745

$8,694 $6,176

Net Worth

$60,500

$56,167

$49,764

$42,776

$36,654

$30,943

$25,558

$20,796

$16,351

$12,329

$8,855 $5,784 $3,239

Documents

Assignment on Business Plan