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BUSINESS PLAN
VERSA CRETE INDUSTRIES
TABLE OF CONTENTS
Table of Contents ......................................................................................................................... 1
Executive Summary .....................................................................................................................3
Management Summary .....................................................................................................4
Company Overview ..........................................................................................................8 Personnel Plan…………………………………………………………………………...9
Products and Service…………………………………………………………………...10
Mission Statement ...........................................................................................................10
Vision Statement .............................................................................................................10
Services ...........................................................................................................................10
Applications…………………………………………………………………………….11
Marketing Analysis .....................................................................................................................12
Marketing Programs……………………………………………………………………14
Strategy and Implementation………………………………….………………………..15
Commercialization Plan………………………………………….………………….….16
Promotional Campaign…. ..............................................................................................17
Safety…………………………………………………….……………………………..17
Financial Plan………………………………………………..…………………………………18
Chart of Potential Market Revenue ................................................................................18
Chart of Potential Market Revenue of SE states and TX ……………………………...19
Chart of Profit Increases and Expansion………………………………….…………….20
Company Finances. .....................................................................................................…21
Chart of Expenses ...........................................................................................................21
Chart of Profits ................................................................................................................22
Projected Monthly Cash Flow………………………………………………………….23
2
Executive Summary
The mission of Versa Crete Industries is to be the world leading innovative company producing the finest quality chemicals that increase the viscosity of cement by way of cost efficiency and operation. We will do this by saving cement producers costs of human capital, labor and wasted profits in lost cement. We will also provide the highest safety standards while establishing a customer service oriented environment that provides quality service at competitive pricing.
The innovation technology described in this business plan is a start-up venture developed by a distinguished Research Professor of the Florida State University, Leo Mandelkern. He is a professor of Polymer Science who has 27 years of experience as a Polymer Scientist. As a leading scientist in the field of water-soluble polymers and biocompatible polymer composites and blends, his talents and passion has created a product that will revolutionize the concrete industry. Viscosity is critical in the concrete industry because this determines whether the cement has an oatmeal-like consistency or is more spreadable similar to peanut butter. This new technology, called Visco, is user friendly and produces an extremely effective and inexpensive adhesive for all the common concrete powders in use. Serving as the distributor for this unique technology will be Versa Crete Industries.
Versa Crete Industries was founded by a dynamic group of investors in Tallahassee, FL who have 50 years combined experience to contribute to the success of the company. This group of individuals researched the concrete industry and found that they would transform the industry with this unique technology. When concrete is poured the cement trucks must wait each layer to be smoothed before the next layer can be added. This cost additional time and money as a result of the driver having dead time in between pours. Visco technology will allow cement trucks to conduct one pour and then be able to leave the work site having finished the job. Visco increases profitability by shortening cement delivery times and providing a more workable cement application thereby reducing the length of concrete finishing time. This technology decreases waste and increases the workable time from one hour to three hours. This provides a workable time increase of 200% that also adds a 30% increase in the volume of concrete delivered. The initial target
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audience for this product will be the top ten concrete companies in the Southeastern Region and Texas. During the following 2 to 5 years we will expand to other regions within the United States.
In planning for our launch, we have composed a financial plan based on forecasts for the first five years of operations including our start-up expenses estimated at $1,200,000. We will be pursuing a loan in the amount of $1,700,000 for the start-up costs. Dustin Johnson, a member of the advisory board has already contributed $50,000 to assist with the start-up costs.
Management Summary
Versa Crete Industries’ management philosophy will be based on responsibility and mutual respect. The company will maintain an environment and structure that will encourage productivity and respect for customers and fellow employees.
Versa Crete Industries will be responsible to its employees, independent contractors, subcontractors and all who work with the company. At Versa Crete Industries, everyone will be considered as an individual and the company will respect their dignity and recognize their merit. Employees will be encouraged to have a sense of security and pride in their jobs. Additionally, employees will be free to make suggestions and complaints. The company will afford equal opportunity for employment, development, and advancement for those qualified.
Versa Crete Industries employees will be committed to:
• Providing a safe work environment to protect employees, the employees of customers and subcontractors, and the public.
• Supplying safe products for customers. • Continuously improving the company's safety program to reduce the risk of
accidents and occupational illness in a changing work environment. • Encouraging employees to participate in accident prevention programs and
take personal responsibility for their own and their co-workers' health and safety.
4
• Regulatory compliance and contribution to high safety standards for our
industry. • Monitoring workplaces, enforcing safe work practices, and communicating
the company's safety performance to employees and other stakeholders. • Making safety a value-added service that the company provides to its
customers.
The company’s diverse and capable staff that is working to implement the mission and vision of Versa Crete Industries are as follows:
Maicel Malone is the Chief Executive Officer of Versa Crete Industries. She maintains the direction and focus for the company and directs the organization of the staff to maintain and increase efficiency. She appoints department heads, managers and delegates their responsibilities to them. She confers with board members, organization officials, and staff members to discuss issues, coordinate activities, or to resolve problems.
Maicel graduated with a Bachelor’s of Arts Degree in Communication from Arizona State University and has a Master’s of Science Degree in Sports Management from Florida A&M University.
Erica Belcher is the Chief Operations Officer of Versa Crete Industries. She oversees the internal functions that support the company but does not relate directly with the end users. She reports the Chief Operations Officer and serves as an integral member of the senior management team. She is responsible for the development of management strategies and implementation of policies and procedures for general operations.
Erica holds a Bachelor of Arts degree in Humanities with a major in women's studies and minors in African-American studies and political philosophy from Florida State University.
Barbara Groves is the Chief Financial Officer of Versa Crete Industries. She conducts quantitative analyses of information affecting investments. She analyzes
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financial information to forecast business, industry, or economic conditions in relation to the company. She also interprets data on price, yield, stability, future investment-risk trends, economic influences, and other factors affecting the company’s financials.
Barbara received her BS in Accounting from the Florida State University in January 2008 and her MS, in Certified Fraud Examining from Keller Grad School of Management in January 2009. Jared James is the Chief Technology Officer of Versa Crete Industries. He plans, initiates, and manages information technology (IT) projects. He leads and guides the work of technical staff and serves as liaison between business and technical aspects of projects. Jared received his BA in International Affairs with minors in Information Technology, Emergency Management and Public Administration from the Florida State University. Mark Harper is the Director of Communications of Versa Crete Industries. He manages all external communications and media inquiries related to the company. Prior to becoming the Director of Communications, he worked as an Assistant External Affairs Officer for Congressional Affairs for the Federal Emergency Management Agency for twenty years. In addition to his work in Congressional Affairs, he also worked as a Field Public Information Officer and Lead Public Affairs Officer where he worked over one hundred disaster assignments. Mark is a graduate of the Florida State University where he majored in Political Science and minored in English and Communications. Charlean M. Lanier is the Director of Marketing of Versa Crete Industries. She plans, directs, and coordinates marketing policies and programs, such as determining the demand for products and services and identifies potential customers. She also oversees product development and monitors trends that indicate the need for new products and services with the goal of ensuring the firm's customers are satisfied.
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Charlean earned her Bachelor of Science in Child Development/Family Relations from Florida State University in 1985. Tommy Lewis is the Analyst of Versa Crete Industries. He does all of the marketing research and analysis in relation to the company, the services the company provides and the end users. He worked as an Operations Manager for Unisource Worldwide, Inc. for 18 years and also served in the United States Marine Corps as a Sergeant for six years.
Tommy has a BS in Business Management from Flagler College.
Versa Crete Industries’ Advisory Board consists of 4 Staff members, Maicel Malone, Chief Executive Officer; Erica Belcher, Chief Operations Officer; Barbara Groves, Chief Financial Officer; Jared James, Chief Technology Officer and 1 non staff member, Dustin Johnson.
Dustin Johnson is a Managing Principal with Waddell & Reed covering the Florida panhandle, southern Georgia and Alabama where he leads and mentors a team of Waddell & Reed financial advisors. Dustin first gained experience as a personal financial advisor in Denver, Colorado in 2005 and later started his career with Waddell & Reed in 2009. Dustin received a Bachelor of Science Degree in Mathematics and Computer Science from the Colorado School of Mines. He then continued his education and successfully obtaining both his Certified Financial PlannerTM certification and Chartered Financial Consultant® designation.
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Company Overview
Versa Crete Industries provides a unique technology called Visco for controlling the viscosity in cement. Visco allows for more efficient use in applications such as sloping surfaces, vertical surfaces and on ceilings and roofs. It increases profitability by shortening cement delivery times and by providing a more workable cement viscosity, allowing for more efficient use in applications. It also increases profit by decreasing waste.
The goal of Versa Crete Industries is to be the standard in the industrial, commercial and consumer markets of the multi-billion dollar global cement industry.
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Personnel Plan Versa Crete Industries will hire the most highly experienced and qualified individuals for its Personnel staff. The table below outlines Versa Crete Industries' five year Personnel plan.
Personnel Plan: Year 1: Year 2: Year 3: Year 4: Year 5:
Advisory Board: $0 $0 $0 $0 $0
Administration: $93,696 $93,696 $93,696 $93,696 $99,696
Sales: $160,000 $172,000 $172,000 $172,000 $172,000
Total people: 5 11 11 11 11
Total Payroll: $253,696 $265,696 $265,707 $265,696 $271,696 Note: Payroll and Accounting work will be outsourced
0
0
$6,000
$42,671
$45,025
$0
0
$32,000
$4,000
$0
0
1
1
1
1
1
5
0
0
1
1
1
3
0
0
3
0
0
3
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
0
$6,000
$42,671
$45,025
$93,696
0
$96,000
$0
$0.00
$96,000
1
1
1
1
1
5
0
0
1
1
1
3
0
0
4
1
1
6
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
0
$6,000
$42,671
$45,025
$93,696
0
$128,000
$4,000
$0.00
$132,000
1
1
1
1
1
5
0
0
1
1
1
3
0
0
5
2
2
9
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
0
$6,000
$42,671
$45,025
$93,696
0
$160,000
$8,000
$0.00
$168,000
1
1
1
1
1
5
0
0
1
1
1
3
0
0
6
3
3
12
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
0
$6,000
$42,671
$45,025
$93,696
0
$192,000
$12,000
$0.00
$204,000
1
1
1
1
1
5
0
0
1
1
1
3
0
0
7
3
3
13
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
0
$8,000
$44,671
$47,025
$99,696
0
$224,000
$12,000
$0.00
$236,000
0% 20% 40% 60% 80% 100%
CEO
COO
CFO
CTO
Other
Administration:
Legal
Fiscal and budget management:
Human Resources:
Sales team:
Paid Sales people:
paid interns:
unpaid interns:
CORPORATE STRUCTURE
Salary:
year 1: # of employees
year 1: payroll #:
year 2: # of employees
year 2: payroll #:
year 3: # of employees
year 3: payroll #:
year 4: # of employees
year 4: payroll #:
year 5: # of employees
year 5: payroll #:
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Products and Services
Mission
The mission of Versa Crete Industries is to be the world leading innovative company producing the finest quality chemicals that increase the viscosity of cement by way of cost efficiency and operation. We will do this by saving cement producers costs of human capital, labor and wasted profits in lost cement. We will also provide the highest safety standards while establishing a customer service oriented environment that provides quality service at competitive pricing.
Vision
Our Vision is to be the leading company in product sales through effective marketing, cost effectiveness and ease of use.
Services
Versa Crete Industries will sell its innovative technology called Visco, to clients in the area of commercial construction. This technology is easily and readily adaptable to all concrete that calls for forming. The technology, Visco, has complete adaptability to all cement types and along with its cost effective prices, will cause major advances to be made. The application of Visco is quick and easy. The maintenance is minimal with no hassles.
Features
• There is nothing comparable in the market
Benefits • Inexpensive adhesive • Can be used in all concrete mixtures • Shortens cement delivery times • Provides a more workable cement
application
Extended Benefit • Reduces length of concrete finishing time • User Friendly • Spreads smooth like peanut butter
10
Visco will always be available to our end users since our manufacturing company has the capability to manufacture any amount of Visco necessary that may be required to add to cement packaging.
Developers, construction managers, general contractors, and concrete subcontractors will realize substantial savings in labor and material costs by using Visco. Applications of Visco in cement can be used for the building of commercial and residential structures, bridges, tunnels, and virtually every other type of concrete construction.
At Versa Crete Industries, health and safety will not be compromised. We will strive to eliminate any and all foreseeable hazards which could result in personal injury, illness or loss.
Applications
The following applications are uses for Versa Crete Industries’ Visco technology:
• Foundations • Parking Lots • Parking Garages • Low Rise/Tilt-Up • High Rise • Flowable Fill/Soil Displacement • Retaining Walls • Bridges
11
Marketing Analysis Market Analysis of the United States
Total U.S. (Nationally)
100,000,000 0.54
54,000,000.00
$ 1.82
$0.36400 $1.46 $78,624,000
$0.00 68,710,000
95,710,000 $27.54 $51,683,400.
00 $92.82 $18.56 $74.26 $75,251,030
Region
Cement Capacity
2005 Metrictons a year in (cubic yards)
2010 Metric tons a year in (Cubic yards)
Average Metric Tons a year in (cubic yards)
One cubic
yard of cement
U.S. cubic yards sold
Cost sold / Yd^3
cost to produce = 20%
profit
total potential
market revenue
TX Texas
14,670,000
10,160,000
12,415,000 0.54
6,704,100.00 $
1.82 $0.3640
0 $1.46 $9,761,170
SE Florida
11,220,000
3,620,000
7,420,000 0.54
4,006,800.00 $
1.82 $0.3640
0 $1.46 $5,833,901
SE Louisiana 2,170,000
2,740,000
2,455,000 0.54
1,325,700.00 $
1.82 $0.3640
0 $1.46 $1,930,219
SE Georgia 4,390,000
1,720,000
3,055,000 0.54
1,649,700.00 $
1.82 $0.3640
0 $1.46 $2,401,963
SE North Carolina
2,900,000
1,580,000
2,240,000 0.54
1,209,600.00 $
1.82 $0.3640
0 $1.46 $1,761,178
SE Virginia 2,670,000
1,390,000
2,030,000 0.54
1,096,200.00 $
1.82 $0.3640
0 $1.46 $1,596,067
SE Tennessee 2,240,000
1,230,000
1,735,000 0.54
936,900.00 $
1.82 $0.3640
0 $1.46 $1,364,126
SE Alabama 1,740,000
1,000,000
1,370,000 0.54
739,800.00 $
1.82 $0.3640
0 $1.46 $1,077,149
SE South Carolina
1,780,000
930,000
1,355,000 0.54
731,700.00 $
1.82 $0.3640
0 $1.46 $1,065,355
SE Mississippi
1,070,000
770,000
920,000 0.54
496,800.00 $
1.82 $0.3640
0 $1.46 $723,341
CA California
15,320,000
6,160,000
10,740,000 0.54
5,799,600.00 $
1.82 $0.3640
0 $1.46 $8,444,218
MW Illinois 4,540,000
2,430,000
3,485,000 0.54
1,881,900.00 $
1.82 $0.3640
0 $1.46 $2,740,046
MW Missouri 2,820,000
1,560,000
2,190,000 0.54
1,182,600.00 $
1.82 $0.3640
0 $1.46 $1,721,866
MW Michigan 2,920,000
1,550,000
2,235,000 0.54
1,206,900.00 $
1.82 $0.3640
0 $1.46 $1,757,246
MW Indiana 2,180,000
1,480,000
1,830,000 0.54
988,200.00 $
1.82 $0.3640
0 $1.46 $1,438,819
MW Iowa 1,930,000
1,430,000
1,680,000 0.54
907,200.00 $
1.82 $0.3640
0 $1.46 $1,320,883
MW Oklahoma
1,600,000
1,430,000
1,515,000 0.54
818,100.00 $
1.82 $0.3640
0 $1.46 $1,191,154
MW Wisconsin
2,350,000
1,430,000
1,890,000 0.54
1,020,600.00 $
1.82 $0.3640
0 $1.46 $1,485,994
MW Minnesota
2,020,000
1,200,000
1,610,000 0.54
869,400.00 $
1.82 $0.3640
0 $1.46 $1,265,846
MW Kansas 1,540,000
1,170,000
1,355,000 0.54
731,700.00 $
1.82 $0.3640
0 $1.46 $1,065,355
MW Nebraska 1,360,000
830,000
1,095,000 0.54
591,300.00 $
1.82 $0.3640
0 $1.46 $860,933
MW Arkansas 1,210,000
760,000
985,000 0.54
531,900.00 $
1.82 $0.3640
0 $1.46 $774,446
12
SW Arizona
4,670,000
1,470,000
3,070,000 0.54 1,657,800.00
$ 1.82
$0.36400 $1.46 $2,413,757
SW Colorado 2,520,000
1,470,000
1,995,000 0.54
1,077,300.00 $
1.82 $0.3640
0 $1.46 $1,568,549
SW Utah 1,530,000
1,020,000
1,275,000 0.54
688,500.00 $
1.82 $0.3640
0 $1.46 $1,002,456
SW Nevada 2,600,000
990,000
1,795,000 0.54
969,300.00 $
1.82 $0.3640
0 $1.46 $1,411,301
SW New Mexico
900,000
600,000
750,000 0.54
405,000.00 $
1.82 $0.3640
0 $1.46 $589,680
NE
Pennsylvania
3,310,000
2,410,000
2,860,000 0.54
1,544,400.00 $
1.82 $0.3640
0 $1.46 $2,248,646
NE Ohio 3,890,000
2,350,000
3,120,000 0.54
1,684,800.00 $
1.82 $0.3640
0 $1.46 $2,453,069
NE New York
3,150,000
2,300,000
2,725,000 0.54
1,471,500.00 $
1.82 $0.3640
0 $1.46 $2,142,504
NE New Jersey
1,970,000
1,120,000
1,545,000 0.54
834,300.00 $
1.82 $0.3640
0 $1.46 $1,214,741
NE Maryland 1,570,000
970,000
1,270,000 0.54
685,800.00 $
1.82 $0.3640
0 $1.46 $998,525
NE Kentucky 1,490,000
850,000
1,170,000 0.54
631,800.00 $
1.82 $0.3640
0 $1.46 $919,901
NE
Massachusetts
1,240,000
680,000
960,000 0.54
518,400.00 $
1.82 $0.3640
0 $1.46 $754,790
NE Conneticutt 800,000
470,000
635,000 0.54
342,900.00 $
1.82 $0.3640
0 $1.46 $499,262
NE West Virginia
510,000
430,000
470,000 0.54
253,800.00 $
1.82 $0.3640
0 $1.46 $369,533
NE Maine 350,000
190,000
270,000 0.54
145,800.00 $
1.82 $0.3640
0 $1.46 $212,285
NE New Hampshire
370,000
190,000
280,000 0.54
151,200.00 $
1.82 $0.3640
0 $1.46 $220,147
NE Delaware 210,000
170,000
190,000 0.54
102,600.00 $
1.82 $0.3640
0 $1.46 $149,386
NE District of Colombia
210,000
110,000
160,000 0.54
86,400.00 $
1.82 $0.3640
0 $1.46 $125,798
NE Vermont 150,000
100,000
125,000 0.54
67,500.00 $
1.82 $0.3640
0 $1.46 $98,280
NE Rhode Island
190,000
90,000
140,000 0.54
75,600.00 $
1.82 $0.3640
0 $1.46 $110,074
NW South Dakota
480,000
450,000
465,000 0.54
251,100.00 $
1.82 $0.3640
0 $1.46 $365,602
NW Idaho 700,000
390,000
545,000 0.54
294,300.00 $
1.82 $0.3640
0 $1.46 $428,501
NW Washington
2,220,000
1,320,000
1,770,000 0.54
955,800.00 $
1.82 $0.3640
0 $1.46 $1,391,645
NW Oregon 1,240,000
610,000
925,000 0.54
499,500.00 $
1.82 $0.3640
0 $1.46 $727,272
NW North Dakota
350,000
410,000
380,000 0.54
205,200.00 $
1.82 $0.3640
0 $1.46 $298,771
NW Wyoming 470,000
320,000
395,000 0.54
213,300.00 $
1.82 $0.3640
0 $1.46 $310,565
NW Montana 380,000
260,000
320,000 0.54
172,800.00 $
1.82 $0.3640
0 $1.46 $251,597
Hawaii Hawaii
430,000
260,000
345,000 0.54 186,300.00
$ 1.82
$0.36400 $1.46 $271,253
Alaska Alaska
170,000
140,000
155,000 0.54 83,700.00
$ 1.82
$0.36400 $1.46 $121,867
13
Marketing Programs
Versa Crete Industries plans to use a direct sales and relationship selling to reach of its target market.
The following channels listed below are most appropriate because of time to market, reduced capital requirements, and fast access to established distribution channels.
The overall marketing plan for Versa Crete Industries' service is based on the following fundamentals:
• Building Industry Associations • Industry Conferences • Product Sampling • Testimonials • Website • Social Media Plan • Print Collateral • Advertising Plan
During the first six months of operation, Versa Crete Industries’ advertising and promotion will distribute coffee mugs, T-shirts, pens, and other advertising specialties with its logo. After the six months, Versa Crete Industries will maintain the advertising budget expenses at or below 10% of revenues on an ongoing basis.
Specification sheets will also be used to outline Versa Crete Industries' goals and products. It will show and remind customers of the efficiency of the Visco technology. Versa Crete Industries will develop two separate brochures: one to be used to promote sales and one to use to announce the new product in the new market.
14
Strategy and Implementation Summary
Versa Crete Industries plans to develop marketing alliances with industry leaders in order to pursue new sales of its product to the industrial, commercial and consumer markets of the cement industry. The market strategy is to capitalize on Versa Crete Industries alliances by securing business relationships with cement producing companies.
Versa Crete will provide a unique technology for routine problems in the cement industry by providing a more workable cement viscosity, allowing for more efficient use in applications. The goal is to be the standard in the industrial, commercial and consumer markets of the multi-billion dollar global cement industry.
With that in mind, Versa Crete Industries will adopt a corporate strategy that is dedicated to improving the performance of activities on the critical path of its customers' projects. The company will do this by building on its core strengths of innovative technology, superior intellectual property, and financial management of the company, sales and customer service.
At Versa Crete Industries, customer service is a pro-active partnership, a relationship that ensures a professional, efficiently run, safe workplace. The company's customer service philosophy starts at the top, is ingrained into the fabric of the company, and is closely aligned to Versa Crete Industries goal of contributing to its' customers critical success factors.
15
Commercialization Plan
The Visco product is a method of controlling the viscosity of a cement mixture using oppositely-charged polyelectrolytes. This product will serve as an additive to “Portland Cement” product which will significantly increases the viscosity of the cement mixture without negative effects on the working time of the cement mixture or the mechanical properties of the hardened cement. Moreover, the powder substance improves the viscosity of cement from an oatmeal-like consistency to become a more spreadable similar to peanut butter.
Since the Visco product achieved a patented in January 2002; the new-product planning process has been completed. Therefore, Vera Crete Industries will focus on managing the post launch marketing of Visco and operate as a distributor of the product. We will focus on marketing and market related issues. Versa Crete Industries plans to use a direct sales force and relationship selling to reach its markets.
Versa Crete plans to initially launch the Visco product in Texas and Florida at a business industry event and a webinar. These two states were selected as a result of the large amount of revenue generated in the targeted area. A time marketing plan will be designed around the best time to introduce this to the concrete industry. Ideally, the launch will be scheduled for the beginning of the business quarter, in order that if technical glitches occur there will still be time to recover lost momentum and regain mind share with both sales and early adopters.
In addition, Versa Crete Industries plans to advertise in magazines, newspapers, and via the internet.
16
Promotional Campaign
Versa Crete Industries will promote Visco aggressively and on a broad scale. To accomplish initial sales goals, the company will require an effective promotional campaign to accomplish two primary objectives:
1. Attract customers who will consistently look to Versa Crete Industries for their construction projects.
2. Attract quality sales personnel who have a desire to be successful.
In addition to standard advertisement practices, Versa Crete Industries will gain considerable recognition through these additional promotional mediums:
• Press releases sent to major radio stations, newspapers, and magazines. • Radio advertising on secondary stations and the internet
Safety
Versa Crete Industries is committed to safety of all employees, customers, and persons where it operates. Versa-Crete Industries will ensure that it complies with current Health Administration and Occupational Health and Safety laws. Therefore, we will utilize the Underwriters Laboratories Inc. (herein known as UL) which has been in operation for more than a century as our manufacturing company. UL is an independent nonprofit organization that writes and tests products for safety and certifies them. They have developed more than 800 standards for safety, and millions of products and their components are tested to ULs safety standards.
ULs web site is at http://www.ul.com. Information about UL standards can be found at http://ulstandardsinfonet.ul.com.
Some examples of UL standards are:
UL 1492: Audio-Video Products and Accessories UL 1419: Professional Video and Audio Equipment UL 1581: Reference Standard for Electrical Wires, Cables, and Flexible Cords UL 1411: Transformer and Motor Transformers for Use in Audio-, Radio-, and Television-Type Appliances UL 6500: Standard for Audio/Video and Musical Instrument Apparatus for Household, Commercial, and Similar General Use
17
Financial Plan
We studied the trends of the cement market throughout the United States to find out what the potential Market Revenue would be.
Potential Market Revenue
We then separated the United States into five different regions. Those regions consisted of the following:
Southeast, Northeast, Midwest, Southwest, Northwest
It was based on the market sales in each of those regions. We chose to start with the Southeast and Texas, because they were generating the largest volume of revenue sold in that region.
- 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000
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18
Potential Market Revenue of Southeast states and Texas
After the first year we would expand in the United States. We hope to capture sales in the Southeast in the amount of 3% of revenue in the first year and by adding California, 4% in the second year. The desired expansion plan is as follows:
Year 2 - add California because it was the second largest state generating sales.
Year 3 - add Midwest Region because it generates 12 million of revenue.
Year 4 - add the remainder of the Southwest
Year 5 - add the Northeast
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
Texas FloridaLouisiana
Georgia NorthCarolina
VirginiaTennessee
Alabama SouthCarolina Mississippi
U.S. (Nationally) $0.00 2005 Metrictons a year in (cubic yards)
100,000,000 25,140,000 2010 Metric tons a year in (Cubic yards)
100,000,000 34,995,000 Average Metric Tons a year in (cubic yards)
0.54 $5.40 One cubic yard of cement
54,000,000.00 $18,897,300.00 U.S. cubic yards sold
$1.82 $18.20 Cost sold / Yd^3
$0.36400 $3.64 cost to produce = 20%
$1.46 $14.56 profit
$78,624,000 $27,514,469 total potential market revenue
19
The Southeast and Texas (Texas alone generates 8 million) generates 11.7 million in concrete revenue.
The Southwest generates 9.2 (California alone generates 4.2)
The Northeast generates 9.7
The Midwest generates 20 million
Profit Increases and Expansion
SE + TX CA MW SW NE TOTAL Year 1 $825,434 $0 0 0 $0 $825,434 Year 2 $1,926,013 $253,327 0 0 $0 $2,179,339 Year 3 $2,476,302 $506,653 $468,678 0 $0 $3,451,633 Year 4 $2,751,447 $591,095 $937,355 $209,572 $0 $4,489,470 Year 5 $3,026,592 $675,537 $1,249,807 $349,287 $375,508 $5,676,731
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
SE + TX
CA
MW
SW
NE
TOTAL
20
Company Finances
cost forstaffing: Utilities: rent: Total Base
Expenses:cost of
production:
Est. Cost ofSales
Operations:
TotalExpenses:
Year 1: $253,696 $3,000 $3,000 $259,696 $1,045,153 $7,000 $1,311,849Year 2: $265,696 $3,000 $3,000 $271,696 $2,438,690 $7,000 $2,717,387Year 3: $265,707 $3,000 $3,000 $271,707 $3,135,459 $7,000 $3,414,167Year 4: $265,696 $3,000 $3,000 $271,696 $3,483,844 $7,000 $3,762,540Year 5: $271,696 $3,000 $3,000 $277,696 $3,832,228 $7,000 $4,116,924
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
Expenses
Year 1: Year 2: Year 3: Year 4: Year 5:
21
$0.00
$20,000,000.00
$40,000,000.00
$60,000,000.00
$80,000,000.00
$100,000,000.00
$120,000,000.00
Market Size ProjectedMarket
retention
MarketDemand
Profit per lb PotentialNeeded
Production(cubic yards)
Projectedneeded
production(cubic/yards):
Projected ofProfit:
Profits
Year 1: Year 2: Year 3: Year 4: Year 5:
22
2014 PROJECTED MONTHLY CASH FLOW
COMPANY NAME November 13, 2014
PRE-STARTUP Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
1. Cash On Hand
[Beginning of year] $8,550 $1,956,566 $6,896,815 $13,330,443 $20,511,353
2. Cash Receipts (a) Cash Sales/collections from
credit accounts $0 3,286,965
7,669,585
9,860,895
10,956,550
12,052,205 $43,826,200
(c) Loan or Other Cash Injection 950000* $0.00
3. Total Cash Receipts [2a + 2b + 2c=3] $0.00 $3,286,965 $7,669,585 $9,860,895 $10,956,550 $12,052,205 $43,826,200
4. Total Cash Available [Before cash out] (1 + 3) $0.00 $3,278,415 $9,626,151 $16,757,710 $24,286,993 $32,563,558
5. Cash Paid Out (a) Rent $3,000 $3,000 $3,000 $3,000 $3,000 $15,000 (b) Gross Wages (excludes
withdrawals) $0
(c) Payroll Expenses (Taxes, etc.) $0 $253,696.00 $265,696.00 $265,707.00 $265,696.00 $271,696.00 $1,322,491
(d) Utilities $0 $3,000 $3,000 $3,000 $3,000 $3,000 $15,000 (e) Supplies (Office and
operating) $500.00 $500 $500 $500 $500 $500 $3,000
(f) Repairs and Maintenance $0 $100 $50 $200 $200 $200 $750
(g) Advertising $0 $0.00 $0.00 $0.00 $0.00 $0.00 $0
23
(h) Auto, Delivery, and Travel $0 $5,000 $7,000 $8,000 $8,000 $8,000 $36,000
(i) Accounting and Legal $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $36,000
(j) Purchases (Merchandise) $0 $1,045,153 $2,438,690 $3,135,460 $3,483,844 $3,832,228 $13,935,375
(k) Telephone $450 $1,800 $1,800 $1,800 $1,800 $1,800 $9,450
(l) Outside Services $0 $0 $0 $0 $0 $0 $0
(m) Insurance $600 $2,600 $2,600 $2,600 $2,600 $2,600 $13,600
(n) Taxes (Real Estate, etc.) $0 $0
(o) Interest $0 (p) Other Expenses [Specify
each] $0
(q) Miscellaneous [Unspecified] $0
(r) Subtotal $7,550.00 $1,320,849 $2,728,336 $3,426,266 $3,774,640 $4,129,024 $7,483,002
(s) Loan Principal Payment $0
(t) Capital Purchases [Specify] $0
(u) Other Start-up Costs $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $6,000 (v) Reserve and/or Escrow
[Specify] $0
(w) Owner's Withdrawal $0
6. Total Cash Paid Out $0
[Total 5a thru 5w] $8,550.00 $1,321,849 $2,729,336 $3,427,266 $3,775,640 $4,130,024 $15,392,666
7. Cash Position $0
[End of Year] (4 minus 6) -$8,550.00 $1,956,566 $6,896,815 $13,330,443 $20,511,353 $28,433,534 $71,120,162
Essential Operating Data $0
[Non-cash flow information] $0
A. Sales Volume [Dollars] $0
24
B. Accounts Receivable [End
of Month] $0
C. Bad Debt [End of Month] $0 D. Inventory on Hand [End of
Month] $0
E. Accounts Payable [End of Month] $0
F. Depreciation $0
25
