assignment on business plan

ASSIGNMENT

On

Business Plan

Of product development

Date of Submission: 05/05/2014

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BUSINESS PLAN

{ \

“GLOBE NET WIFI MAX”

Prepared by:

Serial Name ID

1 KHALID AMIN 5631

2 WALEED NIAZ 5496

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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

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Executive Summary

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

[Globe Net was been founded by K&W group of industry Ltd: Khalid With BBA an undergraduate business management at city university of science and information technology has good managerial skills, Waleed has the skills to execute on this well-researched business plan. Waleed spent two years in the PTCL, 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 Pakistan 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 Globe Net’s customer base grows, costs decrease through scales of economy, creating an even more compelling argument for Globe Net’s existence.

Globe Net 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.

Globe Net 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. 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 Globe Net Wireless's mission to provide fast, wireless Internet access at a

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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

Globe Net Wireless will be formed in 2014 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 Khalid. Khalid will rely on outside investors for the necessary start-up costs.

2.1 Company Ownership

Globe Net Broadband Wireless is a Wi-NET BD Pvt. Ltd. company with Khalid Amin as the principal and majority owner.

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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

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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

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Other Current Assets $0

Long-term Assets $5,000

Total Assets $60,500

Total Requirements $70,000

Services

Globe Net 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.

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• 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, Globe Net 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 (Pie)

I Students

I Professionals ] Techies

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%

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•

4.2 Target Market Segment Strategy

Globe Net 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, Globe Net' 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 Globe Net' costs down. Awareness regarding Globe Net' services will be generated effectively and inexpensively to the specific target segments that GlobeNet has focused on.

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5.1 Competitive Edge

Globe Net' 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 Globe Net with a competitive edge is its efficient use of the technology. Globe Net has developed a proprietary antenna that allows for signal transmission over great distances with less signal loss. Additionally, Globe Net has significantly reduced administrative costs by having most administrative activities like marketing, sales, and service details administered via the Internet.Marketing StrategyAs the name implies, Globe Net will be using a Globe Net approach to developing awareness of the offered services. Globe Net will adopt a multi- pronged marketing approach:

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

• Mailings. Globe Net will adopt a targeted mailing campaign to local residents.• Website. Globe Net will leverage its website as a comprehensive and efficient source of

marketing/sales information.

• Sales Strategy

The sales strategy that Globe Net will adopt is based on developing an awareness of Globe Net' 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, Globe Net will rely on mailings to get the word out. Lastly, Globe Net will have a website for marketing, sales, and administrative purposes.

5.3.1 Sales Forecast

Globe Net 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 affect future operations.

Globe Net 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 Globe Net believes their forecast to be accurate is it offers a viable, less expensive alternative to current broadband connections.

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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

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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, Globe Net ensures that it is aiming high, therefore it is more likely to achieve more. The milestones that Globe Net has chosen are very specific to the company and will be embraced by all employees.

Enlargement of the network Profitability First 10 customers Business plan

completion

Milestones

Milestone Start Date End Date Budget Manager Department

Business plan completion

1/1/2013 2/1/2013 $0 Waleed Management

First 10 customers 1/1/2013 3/30/2013 $0 Waleed Sales

Profitability 1/1/2013 2/1/2014 $0 Waleed Operations

Enlargement of the network

1/1/2013 2/1/2014 $0 Waleed Operations

Totals $0

Milestones

Web Plan Summary

The website will be used for:

• Marketing/sales;• Administrative functions.

• Website Marketing Strategy

All of Globe Net' 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.

Development Requirements

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

Management Summary

Waleed Karim, founder and president will be the anchor of the management team. Waleed received his undergraduate degree in computer science from the HARVARD University. While Waleed enjoyed the course work he recognized that it was not something that he was interested in pursuing as a career. Waleed decided that it would be in his best interest to study for an MBA; however, he was not immediately ready to do this. So Waleed headed off to Ghana with the Peace Corps to develop community-based trading systems. Waleed '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, Waleed began the MBA program at the University of Chicago. Waleed '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, Waleed 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. Waleed formed Globe Net Wireless to fulfill this market need.

7.1 Personnel Plan

The two main employees beyond Waleed 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

!r

........... i...........!..........

4 ........... ........... ........... ..........

A

<

4The following table and charts show the Projected Profit and Loss.

$3,000

$2,000 J1,000

JO

C$1,0

00)

($2,000

)

($3,000

)

($4,000

)

($5,000

)

($6,000)

($7,000

)

JO

52,000 J4.000 J6.000 J8.000 J10,000,000 J3.000 J5.000 J7.000 $9,000 $11,000

Gross Margin Monthly

Month 1 Month 3 Months Month 7 Months Month 11

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%

Copyright © 2010, GlobeNet Wireless Broadband of 28

Month 2 Month 4 Month 6 Months Month 10 Month 12

$210

,000

$160,000

$150,000

$120,000

$90,000

$60,000

$30,000

$0Year 1 Year 2 Year 3

Gross Margin Yearly

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


8.3 Projected Cash Flow

The following table and chart display the Projected Cash Flow.

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


1 II II II 1Paid-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

Depreciati on

$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

TotalOperating 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

($4,33

3)

($6,40

3)

($6,98

8)

($6,12

2)

($5,71

1)

($5,38

5)

($4,7

6 2)

($4,44

5)

($4,02

2)

($3,47

4)

($3,07

1)

($2,5

4 5)

EBITDA ($4,25

0)

($6,32

0)

($6,90

5)

($6,03

9)

($5,62

8)

($5,30

2)

($4,6

7 9)

($4,36

2)

($3,93

9)

($3,39

1)

($2,98

8)

($2,4

6 2)

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 ($4,33

3)

($6,40

3)

($6,98

8)

($6,12

2)

($5,71

1)

($5,38

5)

($4,7

6 2)

($4,44

5)

($4,02

2)

($3,47

4)

($3,07

1)

($2,5

4 5)

NetProfit/Sale s

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 OperationsCash 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

AdditionalCashReceivedSales Tax, VAT, HST/GST Received

0.00%

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


NewCurrentBorrowing

$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- termLiabilities

$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 ofLong-termAssets

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

NewInvestment Received

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

SubtotalCashReceived

$0 $0 $1,200

$2,112

$2,544

$2,887

$3,543

$3,877

$4,322

$4,899

$5,323

$5,877

Expenditur es

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Expenditur es 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

BillPayments

$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 Repaymen t of Current Borrowing

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

Other Liabilities Principal Repaymen t

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


Long-term Liabilities Principal Repaymen t

$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

SubtotalCashSpent

$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

($2,07

5)

($6,05

9)

($6,63

0)

($5,99

5)

($5,60

7)

($5,28

6)

($4,64

7)

($4,34

6)

($3,91

8)

($3,36

3)

($2,96

8)

($2,43

5)

Cash Balance

$53,42 5

$47,36 6

$40,73 7

$34,74 2

$29,13 5

$23,84 9

$19,20 1

$14,85 6

$10,93 8

$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 StartingBalanc es

Current Assets

Cash $55,50 0

$53,4 25

$47,36 6

$40,73 7

$34,74 2

$29,13 5

$23,84 9

$19,20 1

$14,85 6

$10,93 8

$7,575

$4,607

$2,172

OtherCurrentAssets

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

TotalCurrentAssets

$55,50 0

$53,4 25

$47,36 6

$40,73 7

$34,74 2

$29,13 5

$23,84 9

$19,20 1

$14,85 6

$10,93 8

$7,575

$4,607

$2,172

Long- term

Assets

Long-termAssets

$5,000

$5,00 0

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

Accumul atedDepreciat ion

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

Total Long- term Assets

$5,000

$4,91 7

$4,834

$4,751

$4,668

$4,585

$4,502

$4,419

$4,336

$4,253

$4,170

$4,087

$4,004


Total Assets

$60,50 0

$58,3 42

$52,20 0

$45,48 8

$39,41 0

$33,72 0

$28,35 1

$23,62 0

$19,19 2

$15,19 1

$11,74 5

$8,694

$6,176

LiabilitiesandCapital

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 $2,17 5

$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

OtherCurrentLiabilities

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

Subtotal Current Liabilities

$0 $2,17 5

$2,436

$2,712

$2,756

$2,776

$2,793

$2,825

$2,841

$2,862

$2,890

$2,911 $2,938

Long- termLiabilities

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

Total Liabilities

$0 $2,17 5

$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

$70,00 0

$70,0 00

$70,00 0

$70,00 0

$70,00 0

$70,00 0

$70,00 0

$70,00 0

$70,00 0

$70,00 0

$70,00 0

$70,00 0

$70,00 0

Retained Earnings

($9,5

0 0)

($9,5 00)

($9,50

0)

($9,50

0)

($9,50

0)

($9,50

0)

($9,50

0)

($9,50

0)

($9,50

0)

($9,50

0)

($9,50

0)

($9,50

0)

($9,50

0)

Earnings $0 ($4,3 33)

($10,7 36)

($17,7 24)

($23,8 46)

($29,5 57)

($34,9 42)

($39,7 04)

($44,1 49)

($48,1 71)

($51,6 45)

($54,7 16)

($57,2 61)

Total Capital

$60,50 0

$56,1 67

$49,76 4

$42,77 6

$36,65 4

$30,94 3

$25,55 8

$20,79 6

$16,35 1

$12,32 9

$8,855

$5,784

$3,239

Total Liabilities and Capital

$60,50 0

$58,3 42

$52,20 0

$45,48 8

$39,41 0

$33,72 0

$28,35 1

$23,62 0

$19,19 2

$15,19 1

$11,74 5

$8,694

$6,176

Net Worth

$60,50 0

$56,1 67

$49,76 4

$42,77 6

$36,65 4

$30,94 3

$25,55 8

$20,79 6

$16,35 1

$12,32 9

$8,855

$5,784

$3,239


assignment on business plan

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