EXECUTIVE SUMMARY

Cellular telephones have revolutionized the communications arena, redefining how we perceive voice communications. Traditionally, cellular phones remained out of the hands of most consumers due to their high cost. As a result, cell phone carriers have invested time and resources into finding ways to give the systems higher capacity and thus lower cost. Cell systems are benefiting from this research and starting to develop into large-scale consumer products.

Today, cellular phones are truly consumer electronics devices with over 59 million subscribers. The Nokia Bowl and Qualcomm Stadium are further evidence of the idea that cell phones are consumer electronics devices. Cell phones have ceased to be an exclusive status symbol of high-powered lawyers and are now in the hands of millions of consumers.

Juni Cellular Phones, Inc. is taking advantage of an opportunity to become a highly distinguished and recognized leader in the cellular communications industry. It is the goal of our company to become established as the leading distributor of wireless communications services in the metro Niceburg area.

In order to achieve this goal, Juni Cellular Phones' critical success factors will be to identify emerging trends and integrate them into our company operations, respond quickly to technology changes/be there early, provide high-quality services, invest time and money in marketing and advertising, expand into specialty markets, and stay ahead of the "technology curve."

The company was initially formed as a sole proprietorship by Mr. Seramed Juni in the East Atlantic Island Archipelago (EAIA), and succeeded tremendously in that market. Capitalizing on the growing wireless communications industry and based on their success in EAIA the Juni family decided to expand their company's operations to the U.S.A. and create a niche market for its products and accessories.

1.1 Keys to SuccessOur company keys to success will include:1. Provide excellent customer service2. Grow and maintain a referral network of customers3. Focus expertise in GSM cellular phones and GSM cellular phone programs4. Respond rapidly to customer problems with product or plan

1.2 Mission

Juni Cellular's mission is to offer its customers the highest quality cell phone products and services. Its owner focuses on personalized service to his customers by offering convenience and rapid service. Additionally, Juni Cellular has the technological expertise to assist customers in picking the product and service that best meets their  needs. Finally, our staff will have strong vendor relationships with the product suppliers and will be able to meet customers' demand for the newest innovation in cellular phone technology.

We believe it is important to remain an active member of the community, and to impact people's lives in more ways than deriving a profit from them. We propose to host community events that bring out the best in people.

1.3 Objectives

The company plans to focus on the following target markets that will provide us with the greatest market penetration: the specialty business users, the general business users, and the personal users. We intend to offer products and service packages that are priced appropriately for each segment and will offer the services that best suit each segment's needs.

The suburb of Pleasant Village, picked to be our headquarters' location, is a focal point in the Niceburg area. Located a few miles south of downtown Niceburg, it is a community with a small town atmosphere but big city conveniences. 

The Metro Niceburg area is populated today by more than 700,000 inhabitants, is home to 13 Fortune 500 and 24 Fortune 1,000 company headquarters. The Metropolitan Niceburg Chamber of Commerce and corporate executives are committed to actively recruiting new companies to the region. Public and private partnerships with business, financial and nonprofit communities are key to spurring quality job creation and investment throughout the city’s neighborhoods.

Our company will center on serving the growing the Niceburg community (presently at a 6% per year rate) as well as concentrating on the local Pleasant Village population, banking on the current growing trend of using mobile phones.

Our company will concentrate on selling Global System for Mobile Communications (GSM) protocol cellular phones - sales, services and support.

Business Objectives Company growth Become established as the leading distributor of cellular phones and wireless communications

services Increase number of retail outlets

Financial Objectives Create and increase revenue

Marketing Objectives Increase marketing efforts Expand market area Expand marketing reach Brand recognition Increase telemarketing efforts

COMPANY SUMMARY

Juni Cellular Phones, Inc. will offer its customers GSM cellular phones, and cellular phones accessories. 

GSM stands for "Global System for Mobile Communications." GSM is originally a European system and is largely being adopted today in the United States. Its greatest advantage, a technical one, is that the owner can use the phone all over the world since the system is used mostly anywhere.

Market demand drives cell phone manufactures and service providers to offer new and improved services and functions in their cell phones. The demand for more visual interaction and entertainment with cell phones in the Japanese market, for instance, is great and as such, their phones are many years ahead of what we will see in the U.S.A. Phones have definitely become an important part of people's lives all over the world, whereas in North America many still view the cell phone as a tool and not as a entertainment device. The average phone in North America lasts 3-5 years before being replaced, in Japan it is a fraction of this time.

We believe that, with our long and thorough experience in the EAIA, our store will be in the perfect location to start our operations in the U.S.A., and will start operating in the right time. Juni Cellular Phones will provide its customers support and convenience second to none.

2.1 Company Ownership

Juni Cellular Phones is wholly owned by Mr. Seramed Juni, who is a citizen of the East Atlantic Island Archipelago and the owner of Juni Cellular Phones Ltd in that country.

2.2 Start-up Summary

Mr. Seramed Juni will invest $43,000 in Juni Cellular Phones, Inc. He will also invest an additional $50,000 when operation takes off in April Year 1. The following chart and table show projected initial start-up costs for Juni Cellular Phones, Inc.

Start-up Requirements

Start-up Expenses

Legal $5,000

Insurance $1,000

Rent $2,000

Equipment $2,000

Other $1,000

Total Start-up Expenses $11,000

Start-up Assets

Cash Required $2,000

Start-up Inventory $30,000

Other Current Assets $0

Long-term Assets $0

Total Assets $32,000

Total Requirements $43,000

PRODUCTS

The following are the products that will be offered by Juni Cellular Phones:

GSM Cellular Phones:  Motorola, Nokia, Sharp, Siemens, Samsung, Alcatel, Ericsson, Fujitsu, Hyundai, LG Electronics, and others.

Fixed Wireless Phones

Cellular Phone Accessories: antennas, batteries, belt clips, cables and adapters, cases, chargers, faceplates, and modems.

MARKET ANALYSIS SUMMARY

The market potential is huge for our products, evidenced by what appears to be the unstoppable growth of the telecom industry. Currently, the telecom industry is among the strongest growth industries and is responsible for huge gains in the capital markets. The proliferation of cellular phones is increasing at rates which at one time were unimaginable. One illustrative example is that it is forecasted that within two years over 65% of children from age of 10-15 will have cell phones.

Future growth of the market/products is projected in the following areas:

Text messages between friends (in Japan this big). Users can send regular Short-Message Service (SMS) or email on their phones. Email is of course limited to small file sizes, but many of the phones allow for English characters to be sent. Each provider also allows special characters to be sent, such as an array of happy and sad faces, small animated images, animals, people, hearts, etc. When special characters are not available, people often use a specialized set of faces to show emotion. Email can also be sent between different provider phones, but many of the special characters are lost, hence users may try to keep a circle of friends on the same provider to receive the special characters. Email, of course, may be sent from computers as well, but files are often stripped of headers and attachments when received on cell phones.

Most North American phones come with a few games to keep people entertained for a limited duration. Japanese phones come with two different types of games: built-in ones and Java application ones. The built-in ones are simple, but again the graphics are very important to the game value. Java application games are delivered via the network to the customer's phone and there is a charge for this service. These games are much more complex and require streaming data to access. New games come out monthly. You can even buy joysticks and navigation consoles that plug into your phone.

One of the recent popular additions to many of the Japanese and Korean phone models is a CCD Camera that is mounted either on the outside of the clamshell or on the clamshell hinge. The camera lens is slightly smaller than a dime and takes 4x4 cm pictures to display on the phone's screen or to send to others. Not only can users take pictures, they can take video clips as well. Most phones take between 5-15 seconds of footage due to memory limitations, but they can send streaming video. Many of the advertisements for camera phones show people taking to each other and watching each other on the screen (both holding the phone and camera at arm's length and using a hands-free microphone and earpiece). The camera also has a couple of neat accessories including an external flash that pops into an accessory port and a miniature printer that will print out pictures.

Our company will try to take advantage of these developments and serve its customers in all these new trends and developments.

4.1 Market Segmentation

Juni Cellular Phones, Inc. will focus on five customer groups, bearing in mind that it is quite customary today to have more than one cell phone per family:

Children in the age group of 10-17 years old

Students

General public

Professionals

Service organizations and companies that need to be in constant communication with their employees.

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers

Growth CAGR

Children 10-17 years old

3% 90,000 92,700 95,481 98,345 101,295 3.00%

Students 2% 50,000 51,000 52,020 53,060 54,121 2.00%

Professionals 2% 40,000 40,800 41,616 42,448 43,297 2.00%

General Public

2% 250,000 255,000 260,100 265,302 270,608 2.00%

Operating Service Companies

4% 40,000 41,600 43,264 44,995 46,795 4.00%

Other 1% 30,000 30,300 30,603 30,909 31,218 1.00%

Total 2.29% 500,000 511,400 523,084 535,059 547,334 2.29%

4.2 Industry Analysis

The U.S. market is dominated today by three large companies:

T-Mobile Wireless - owned by a subsidiary of Deutsche Telekom since May 31, 2001.

Revenues:Exceeding $13.6 billion in 2001.

Wireless Phone Service Subscribers: Cellular voice, messaging and high-speed wireless data services to more than 8 million customers.

Cellular Phone Service and Technology: T-Mobile Wireless operates the largest all digital, wireless network based exclusively on GSM (Global System for Mobile Communications) technology. GSM is the most widely used digital standard worldwide, accounting for more than 70 percent of the total digital wireless market.

Cingular Wireless is the second largest wireless company in the U.S. A leader in mobile voice and data communications, Cingular is a wireless company determined to promote the individual to a new level.  

Ownership: Cingular Wireless is a joint venture between the domestic wireless divisions of SBC (NYSE:SBC) and BellSouth (NYSE: BLS). Headquarters in Atlanta, Georgia. SBC owns 60

percent of the company and BellSouth owns 40 percent, based on the value of the assets both contributed to the venture.

Revenue on the cellular service in Year 2002 was more than $14.7 billion.

Cellular Phone Service Subscribers: more than 22 million voice and data customers across the U.S.A.

Cellular Phone Service and Technology: A leader in mobile voice and data communications, Cingular is the only U.S. wireless carrier to offer Rollover, the wireless plan that lets customers keep their unused monthly minutes. Cingular provides cellular/PCS service in 43 of the top 50 markets nationwide, and provides corporate e-mail and other advanced data services through its GPRS and Mobitex packet data networks

Nextel Communications, based in Reston, VA, is a leading provider of fully integrated, wireless communications services on the largest guaranteed, all-digital, wireless network in the country. 

Ownership: Nextel Wireless is traded on the NASDAQ National Market under the symbol NXTL. Nextel Partners is a separate company traded on the NASDAQ National Market.

Revenue on the cellular service $8.7 billion (2002).

Cellular Phone Service Subscribers: 10.61 million (Q4 2002).

Cellular Phone Service and Technology: Nextel uses a packet-based platform, the integrated Digital Enhanced Network (iDEN™) technology, developed by Motorola. The Nextel 4-in-1 service—Nextel Digital Cellular, Direct ConnectSM, Nextel Mobile Messaging, and Nextel Online®—covers thousands of communities across the United States. Nextel and Nextel Partners, Inc., currently serve 197 of the top 200 U.S. markets.

Juni Cellular Phones is aiming to gather a share of the market from these three.

4.2.1 Competition and Buying Patterns

Brand names are of little, if any, importance. The key to the buying decision on the part of the consumer is the salesman and the cell phone being in front of them. As has been pointed out in the Competitive Analysis section there are other sellers with similar brand names as those supplied by Juni Cellular Phones, Inc. which may even be less expensive. It is essential that the salesman point out the salient features and selling points favoring our products. Most importantly, our products must be available in the retail outlet, since whatever products our store carries are the ones that are going to be sold.

The need to attract, acquire, leverage, and retain customers remains a primary concern to business. Revenue growth through customer acquisition and retention is as important a requirement in e-commerce as it is in other business. Customers, especially in the Western business culture, count speed of service as a key reason why they do business with a company. They resent delays and hate waiting for service. In the United States, almost 80% of the gross domestic product (GDP) is generated through different kinds of services, and speed of service no longer distinguishes an enterprise as providing superior value. Customers generally are not thrilled if they receive good service, but they are highly dissatisfied if they do not. Juni Cellular will provide the necessary framework to cope with these demands by cutting the waiting time for a service.

Customers also want consistent, reliable, and easy-to-use service. As the speed of service increases, customer expectations grow, making friendly, easy, and solution-oriented customer service an important business trend.

Reflective shoppers get some support from e-commerce as well. They like to investigate products precisely and consciously. However, when browsing costs a lot because of on-line charges, they do less of it. Consequently, they do not get a holistic view of the available options, and their

expectations often are not met. Reference-spending customers do not let themselves be hurried or forced. They use alternative offline sources to get information. They refuse aggressive marketing, which is accepted in Western e-commerce.

Soon, shoppers will simply wave their cell phone over the item they want and the charge will automatically appear on their cell phone bill. It’s happening in some cities overseas already. And right now, MasterCard and Motorola are testing out a similar program here in the States. Retailers have registers that will take the signal from the cell phone, and the purchase is automatically converted to a MasterCard charge. Buyers don’t have to sign anything. The scary part is what could happen when people lose their cell phones or have them stolen. There are lots of technical and legal issues to work out here, but paying wirelessly is going to gain momentum quickly.

Juni Cellular is planning to take advantage of these trends of buying patterns. We shall also be very quick in establishing our own website to take advantage of E-trade.

4.3 Target Market Segment Strategy

The market for cellular phones and their accessories is very fragmented, crowded and competitive. Among these, there are only a few large local firms that serve the entire city of Niceburg and its surroundings. The remainder are small firms that sell from kiosks in the surrounding malls. Juni Cellular Phones current niche in its location, variety of products and expertise in serving the public will assure the projected sales.

We expect to take full advantage of the trends described in the Market Analysis above, and try to penetrate the market with new innovations and gadgets — mainly with the younger generation, using advertisements and demonstrations. We shall also try to lure independent small sellers to join our effort.

STRATEGY AND IMPLEMENTATION SUMMARY

Juni Cellular Phones will use a strategy of total market service. Assumptions:

1. Every person is a potential customer and all our potential markets will experience growth.

2. Marketing to one segment of the population will lead to an expansion in overall market growth.

The following sections review the various strategies that will support this effort.

5.1 Competitive Edge

The Seramed Communication's competitive edge will be:

Location : Locating the company in a suburb of Niceburg, Homestate enables the company to cover a large and rapidly developing customer populace.

Customer Service : Mr. Juni, owner and CEO of Juni Cellular Inc., has been the CEO of the Juni Cellular Phones Ltd. in the East Atlantic Island Archipelago for many years past, and accumulated a vast knowledge and experience in the cellular phone market, with a special expertise in GSM phones. He is very familiar with his target customer base.  He has an excellent reputation for customer service. 

E-Commerce : The company will make an effort to enhance its sales through a serious and advantageous website in order to attract customers that are reluctant to do business with large companies.

5.2 Marketing Strategy

Short-term marketing strategies are those that bring will bring us a temporary boost in traffic. Although these techniques are very important to our over-all plan, they are only a temporary traffic source and must not be solely relied upon. Short-term marketing strategies include:

Purchasing Advertising

Bulletin Boards

Search Engines

Long-term marketing strategies are those that will bring us a steady stream of targeted traffic over time. These strategies will continue to produce results even years down the road. Long-term marketing strategies include:

Opt-in Lists

Freebies

Content

By creating and implementing a balanced marketing strategy, using both short-term and long-term strategies, Juni Cellular will drive a steady stream of targeted traffic to our website.

Using this simple formula when creating our Internet marketing strategy and excelling at all three, we hope to guarantee our success.

Our short-term marketing strategy will focus heavily on sales promotion, niche positioning in the market and customer service with loyalty and retention in sales.

Our promotions will always stay in tune with our company objectives and mission statement.

5.3 Sales Strategy

Constructing our Sales Strategy we shall follow the following steps:

Sales Success Requires Planning - we shall formulate our sales strategy and tactics to achieve our sales success.Analyze Our Potential - we shall step through a structured process that will prepare us for the development of our sales strategy.Strategize Around Strengths - the description of our sales activity will be analyzed producing a report that reveals factors impacting our sales potential.Develop Our Tactics - we shall receive guidance to develop a comprehensive tactical plan to achieve our success.Measure Our Success - we shall constantly develop key measurements that mark the progress of financial estimates that guide our growth.Employ An Action Plan for Success - we shall provide our sales force a clear tactical plan that is also aligned with management's strategic objectives.The sales strategy of Juni Cellular Phones is simple. The key to customer satisfaction is having the product and services that meet the customer's needs. A crucial part of that is to also have knowledgeable employees to help customers quickly find what they want.

5.3.1 Sales ForecastSales forecast displayed here is very conservative — although we aim very high, we decided

to show a very slow growth and revise the plan on a yearly basis. As a rule we expect to expand the volume much more rapidly.

Sales Forecast

Year 1 Year 2 Year 3

Sales

Cellular Phones $138,000 $190,000 $270,000

Fixed Wireless Phones $46,500 $60,000 $90,000

Other Sevices $46,500 $90,000 $150,000

Total Sales $357,000 $500,000 $710,000

Direct Cost of Sales Year 1 Year 2 Year 3

Cellular Phones $31,650 $43,560 $61,900

Cellular Phones Accessories $30,450 $41,500 $51,800

Fixed Wireless Phones $11,700 $15,500 $23,300

Other Services $11,710 $23,300 $38,900

Subtotal Direct Cost of Sales $85,510 $123,860 $175,900

5.4 Milestones

The Milestones table hereunder is destined to be a working plan for the formation of the new organization, including legal negotiations, hiring of personnel, rental of the facility, building of initial inventory, beginning of marketing and start of physical operation.

The team to execute the chores will have to follow up on the timetable and make sure that everything falls in place — to ensure smooth start of sales and success of the organization.

Milestones

Milestone Start Date End Date Budget Manager Department

Preview of Business Plan by Investor 1/1/2005 1/15/2005 $1,000 CEO Department

Concluding Legal Matters 1/10/2005 2/10/2005 $4,000 Owner Department

Hiring of Operators 2/1/2005 3/1/2005 $500 CEO Department

Conclussion of Rentals 1/15/2005 2/15/2005 $2,000 Owner Department

Preparation of Website 1/15/2005 3/1/2005 $2,500 Programmer Department

Acquiring Initial Inventory 2/15/2005 3/15/2005 $31,000 Store Personnel Department

Start of Marketing 3/1/2005 4/1/2005 $0 Marketing Mgr. Department

Start of Operation 4/1/2005 4/10/2005 $2,000 All Department

Totals $43,000Next Page »

MANAGEMENT SUMMARY

The management of Juni Cellular Phones, Inc. is made up of the owner, a Marketing manager (Mr. Nomassu Perozia) and three other members who will be hired locally and will be added: a Programmer, and two store attendants with one serving at the beginning as secretary. 

6.1 Personnel Plan

The Juni Cellular Phones' store will operate virtually 24 hours a day 7 days a week. Although the store opening hours will be officially 10:00 a.m. to 6:00 p.m., it is clear that due to our Internet operation the customer support will be a non-stop one. The personnel plan, as detailed in the following table, has been developed to support these hours.

Assumptions regarding personnel have been made for year 1 through year 3 as follows:

Year 1 Ending March, 2006 - Owner, Mr. Seramed Juni, will draw a salary of $42,000. The Marketing Manager, Mr. Nomassu Perozia will receive a yearly salary of $26,400. The programmer will have $21,000 a year plus a percentage of his Internet sales, and the two store attendants will earn $16,800 each. However, they will divide the total week hours between them so that only during busy hours will they both be present.

Year 2 Ending March, 2007 - Salaries will be boosted by 10 - 15 percent. Additional staff will be hired if significant increases in sales warrant.

The same applies to Year 3 Ending March, 2008.Personnel Plan

Year 1 Year 2 Year 3

CEO $42,000 $48,000 $54,000

Marketing Manager $26,400 $28,800 $31,200

Programmer/Office Administrator $21,000 $22,200 $23,400

2 Store Attendantds $33,600 $36,960 $40,000

Other $0 $0 $0

Total People 0 0 0

Total Payroll $123,000 $135,960 $148,600

FINANCIAL PLAN

It is assumed that the owner's private resources will be sufficient to finance any monthly cash-flow shortage. However, it would be advisable to establish a bank relationship as soon as possible. Sales could very well increase at a much sharper rate than assumed in these conservative projections. Sharper sales will result in a greater need for funds in support of inventory and receivables. An over-draft line of credit with the bank will be an excellent cushion to fall back on.

This is considered a very good time to start a new business. The economy is beginning its trek up, and consumer spending is up. The Commerce Department reported, "Consumers had increased their spending, the largest advance in nine months."

A shorter learning curve will be brought to the business by the owner due to his extensive background and in-depth market knowledge. He has a clear understanding of the need to manage costs and forecast future needs so that the business is not "broadsided" by the unexpected.

One other component on which the financial plan is based is wise purchases. Finding the right product, at the right price will enable the business to meet planned margins and maintain inventory at an attractive level with a high turn rate.

7.1 Start-up FundingMr. Seramed Juni will invest $43,000 in Juni Cellular Phones, Inc. to cover start-up

costs. He will also invest an additional $50,000 when operation takes off in April 2005. The table below illustrates funding sources for our start-up costs.

Start-up Funding

Start-up Expenses to Fund $11,000

Start-up Assets to Fund $32,000

Total Funding Required $43,000

Assets

Non-cash Assets from Start-up $30,000

Cash Requirements from Start-up $2,000

Additional Cash Raised $0

Cash Balance on Starting Date $2,000

Total Assets $32,000

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

Owner $43,000

Investor $0

Additional Investment Requirement $0

Total Planned Investment $43,000

Loss at Start-up (Start-up Expenses) ($11,000)

Total Capital $32,000

Total Capital and Liabilities $32,000

Total Funding $43,000

7.2 Important AssumptionsAs a general rule our company will not sell on credit. However for very special cases we

might offer short-term credit against valid assurances. We shall accept cash and checks, Visa, MasterCard, Discover and American Express, and PayPal on the Internet. All sales paid via credit cards will be deposited in our business checking account within 48 hours.

7.3 Break-even Analysis

Our break-even analysis is summarized by the following chart and table.

Break-even Analysis

Monthly Revenue Break-even $17,916

Assumptions:

Average Percent Variable Cost 24%

Estimated Monthly Fixed Cost $13,625

7.4 Projected Profit and Loss

There are many factors to include when determining a projected profit and loss statement, these are included in the following table.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales $357,000 $500,000 $710,000

Direct Cost of Sales $85,510 $123,860 $175,900

Other Costs of Sales $26,824 $30,000 $45,000

Total Cost of Sales $112,334 $153,860 $220,900

Gross Margin $244,666 $346,140 $489,100

Gross Margin % 68.53% 69.23% 68.89%

Expenses

Payroll $123,000 $135,960 $148,600

Marketing/Promotion $4,500 $10,000 $25,000

Depreciation $0 $0 $0

Rent $24,000 $24,000 $24,000

Insurance $12,000 $12,000 $12,000

Payroll Taxes $0 $0 $0

Other $0 $0 $0

Total Operating Expenses $163,500 $181,960 $209,600

Profit Before Interest and Taxes $81,166 $164,180 $279,500

EBITDA $81,166 $164,180 $279,500

Interest Expense $0 $0 $0

Taxes Incurred $24,350 $49,254 $83,850

Net Profit $56,816 $114,926 $195,650

Net Profit/Sales 15.91% 22.99% 27.56%7.5 Projected Cash FlowOur projected cash flow is outlined in the following chart and table.

Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $357,000 $500,000 $710,000

Subtotal Cash from Operations $357,000 $500,000 $710,000

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 $50,000 $0 $0

Subtotal Cash Received $407,000 $500,000 $710,000

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $123,000 $135,960 $148,600

Bill Payments $139,315 $247,800 $360,927

Subtotal Spent on Operations $262,315 $383,760 $509,527

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 $262,315 $383,760 $509,527

Net Cash Flow $144,685 $116,240 $200,473

Cash Balance $146,685 $262,924 $463,397

7.6 Projected Balance Sheet

The table shows the annual balance sheet results, with a healthy projected increase in net worth. Detailed monthly projections are in the appendix.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3

Assets

Current Assets

Cash $146,685 $262,924 $463,397

Inventory $8,000 $11,588 $16,457

Other Current Assets $0 $0 $0

Total Current Assets $154,685 $274,512 $479,854

Long-term Assets

Long-term Assets $0 $0 $0

Accumulated Depreciation $0 $0 $0

Total Long-term Assets $0 $0 $0

Total Assets $154,685 $274,512 $479,854

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $15,869 $20,770 $30,462

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities

$15,869 $20,770 $30,462

Long-term Liabilities $0 $0 $0

Total Liabilities $15,869 $20,770 $30,462

Paid-in Capital $93,000 $93,000 $93,000

Retained Earnings ($11,000) $45,816 $160,742

Earnings $56,816 $114,926 $195,650

Total Capital $138,816 $253,742 $449,392

Total Liabilities and Capital

$154,685 $274,512 $479,854

Net Worth $138,816 $253,742 $449,392

7.7 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5731.9902, Consumer electronic equipment, nec, are shown for comparison.

Ratio Analysis

Year 1 Year 2 Year 3Industry Profile

Sales Growth 0.00% 40.06% 42.00% 5.90%

Percent of Total Assets

Inventory 5.17% 4.22% 3.43% 33.94%

Other Current Assets 0.00% 0.00% 0.00% 26.57%

Total Current Assets 100.00% 100.00% 100.00% 80.73%

Long-term Assets 0.00% 0.00% 0.00% 19.27%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 10.26% 7.57% 6.35% 41.85%

Long-term Liabilities 0.00% 0.00% 0.00% 11.83%

Total Liabilities 10.26% 7.57% 6.35% 53.68%

Net Worth 89.74% 92.43% 93.65% 46.32%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 68.53% 69.23% 68.89% 32.59%

Selling, General & Administrative Expenses

52.62% 46.24% 41.33% 17.11%

Advertising Expenses 0.00% 0.00% 0.00% 2.28%

Profit Before Interest and Taxes 22.74% 32.84% 39.37% 0.85%

Main Ratios

Current 9.75 13.22 15.75 1.73

Quick 9.24 12.66 15.21 0.79

Total Debt to Total Assets 10.26% 7.57% 6.35% 58.93%

Pre-tax Return on Net Worth 58.47% 64.70% 62.20% 2.27%

Pre-tax Return on Assets 52.47% 59.81% 58.25% 5.54%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 15.91% 22.99% 27.56% n.a

Return on Equity 40.93% 45.29% 43.54% n.a

Activity Ratios

Inventory Turnover 8.67 12.65 12.54 n.a

Accounts Payable Turnover 9.78 12.17 12.17 n.a

Payment Days 27 26 25 n.a

Total Asset Turnover 2.31 1.82 1.48 n.a

Debt Ratios

Debt to Net Worth 0.11 0.08 0.07 n.a

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

Liquidity Ratios

Net Working Capital $138,816 $253,742 $449,392 n.a

Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios

Assets to Sales 0.43 0.55 0.68 n.a

Current Debt/Total Assets 10% 8% 6% n.a

Acid Test 9.24 12.66 15.21 n.a

Sales/Net Worth 2.57 1.97 1.58 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

Cellular Phones

0% $10,000 $10,000 $10,000 $11,000 $11,000 $11,000 $12,000 $12,000 $12,000 $13,000 $13,000 $13,000

Cellular Phones Accessories

0% $9,000 $9,000 $9,000 $10,000 $10,000 $10,000 $11,000 $11,000 $11,000 $12,000 $12,000 $12,000

Fixed Wireless Phones

0% $3,500 $3,500 $3,500 $3,750 $3,750 $3,750 $4,000 $4,000 $4,000 $4,250 $4,250 $4,250

Other Sevices

0% $3,500 $3,500 $3,500 $3,750 $3,750 $3,750 $4,000 $4,000 $4,000 $4,250 $4,250 $4,250

Total Sales

$26,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500

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

Cellular Phones

$2,300 $2,300 $2,300 $2,500 $2,500 $2,500 $2,750 $2,750 $2,750 $3,000 $3,000 $3,000

Cellular Phones Accessories

$2,250 $2,250 $2,250 $2,400 $2,400 $2,400 $2,600 $2,600 $2,600 $2,900 $2,900 $2,900

Fixed Wireless Phones

$900 $900 $900 $950 $950 $950 $1,000 $1,000 $1,000 $1,050 $1,050 $1,050

Other Services

$900 $900 $900 $950 $950 $950 $1,000 $1,000 $1,000 $1,060 $1,050 $1,050

Subtotal Direct Cost of Sales

$6,350 $6,350 $6,350 $6,800 $6,800 $6,800 $7,350 $7,350 $7,350 $8,010 $8,000 $8,000

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

CEO 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500

Marketing Manager 0% $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200

Programmer/Office Administrator

0% $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750

2 Store Attendantds 0% $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800

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

Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250

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 $26,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500

Direct Cost of Sales $6,350 $6,350 $6,350 $6,800 $6,800 $6,800 $7,350 $7,350 $7,350 $8,010 $8,000 $8,000

Other Costs of Sales $2,000 $2,040 $2,081 $2,122 $2,165 $2,208 $2,252 $2,297 $2,343 $2,390 $2,438 $2,487

Total Cost of Sales $8,350 $8,390 $8,431 $8,922 $8,965 $9,008 $9,602 $9,647 $9,693 $10,400 $10,438 $10,487

Gross Margin $17,650 $17,610 $17,569 $19,578 $19,535 $19,492 $21,398 $21,353 $21,307 $23,100 $23,062 $23,013

Gross Margin % 67.88% 67.73% 67.57% 68.69% 68.54% 68.39% 69.02% 68.88% 68.73% 68.95% 68.84% 68.70%

Expenses

Payroll $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250

Marketing/Promotion $0 $500 $500 $500 $0 $0 $1,000 $0 $1,000 $0 $1,000 $0

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

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

Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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

Total Operating Expenses

$13,250 $13,750 $13,750 $13,750 $13,250 $13,250 $14,250 $13,250 $14,250 $13,250 $14,250 $13,250

Profit Before Interest and Taxes

$4,400 $3,860 $3,819 $5,828 $6,285 $6,242 $7,148 $8,103 $7,057 $9,850 $8,812 $9,763

EBITDA $4,400 $3,860 $3,819 $5,828 $6,285 $6,242 $7,148 $8,103 $7,057 $9,850 $8,812 $9,763

Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Taxes Incurred $1,320 $1,158 $1,146 $1,748 $1,886 $1,873 $2,144 $2,431 $2,117 $2,955 $2,644 $2,929

Net Profit $3,080 $2,702 $2,673 $4,079 $4,400 $4,369 $5,003 $5,672 $4,940 $6,895 $6,168 $6,834

Net Profit/Sales 11.85% 10.39% 10.28% 14.31% 15.44% 15.33% 16.14% 18.30% 15.93% 20.58% 18.41% 20.40%

Pro Forma Cash Flow

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month

10Month

11Month 12

Cash Received

Cash from Operations

Cash Sales $26,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500

Subtotal Cash from Operations

$26,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500

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

$50,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received

$76,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500

Expenditures

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month

10Month

11Month 12

Expenditures from Operations

Cash Spending

$10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250

Bill Payments

$211 $6,333 $6,699 $6,836 $10,148 $13,851 $13,961 $16,256 $15,103 $15,850 $17,017 $17,050

Subtotal Spent on Operations

$10,461 $16,583 $16,949 $17,086 $20,398 $24,101 $24,211 $26,506 $25,353 $26,100 $27,267 $27,300

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

$10,461 $16,583 $16,949 $17,086 $20,398 $24,101 $24,211 $26,506 $25,353 $26,100 $27,267 $27,300

Net Cash Flow

$65,539 $9,417 $9,051 $11,414 $8,102 $4,399 $6,789 $4,494 $5,647 $7,400 $6,233 $6,200

Cash Balance

$67,539 $76,957 $86,008 $97,421 $105,523 $109,922 $116,710 $121,204 $126,852 $134,251 $140,484 $146,685

Pro Forma Balance Sheet

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month

10Month

11Month

12

AssetsStarting Balances

Current Assets

Cash $2,000 $67,539 $76,957 $86,008 $97,421 $105,523 $109,922 $116,710 $121,204 $126,852 $134,251 $140,484 $146,685

Inventory $30,000 $23,650 $17,300 $10,950 $6,800 $6,800 $6,800 $7,350 $7,350 $7,350 $8,010 $8,000 $8,000

Other Current Assets

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

Total Current Assets

$32,000 $91,189 $94,257 $96,958 $104,221 $112,323 $116,722 $124,060 $128,554 $134,202 $142,261 $148,484 $154,685

Long-term Assets

Long-term Assets

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

Accumulated Depreciation

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

Total Long-term Assets

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

Total Assets $32,000 $91,189 $94,257 $96,958 $104,221 $112,323 $116,722 $124,060 $128,554 $134,202 $142,261 $148,484 $154,685

Liabilities and Capital

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month

10Month

11Month

12

Current Liabilities

Accounts Payable

$0 $6,109 $6,475 $6,502 $9,687 $13,389 $13,418 $15,753 $14,576 $15,283 $16,448 $16,503 $15,869

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 $6,109 $6,475 $6,502 $9,687 $13,389 $13,418 $15,753 $14,576 $15,283 $16,448 $16,503 $15,869

Long-term Liabilities

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

Total Liabilities

$0 $6,109 $6,475 $6,502 $9,687 $13,389 $13,418 $15,753 $14,576 $15,283 $16,448 $16,503 $15,869

Paid-in Capital

$43,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000

Retained Earnings

($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000)($11,000

)($11,000) ($11,000) ($11,000) ($11,000)

Earnings $0 $3,080 $5,782 $8,455 $12,535 $16,934 $21,304 $26,307 $31,979 $36,919 $43,813 $49,982 $56,816

Total Capital

$32,000 $85,080 $87,782 $90,455 $94,535 $98,934 $103,304 $108,307 $113,979 $118,919 $125,813 $131,982 $138,816

Total Liabilities and Capital

$32,000 $91,189 $94,257 $96,958 $104,221 $112,323 $116,722 $124,060 $128,554 $134,202 $142,261 $148,484 $154,685

Net Worth $32,000 $85,080 $87,782 $90,455 $94,535 $98,934 $103,304 $108,307 $113,979 $118,919 $125,813 $131,982 $138,816

Nama : Juni Rohmanto

NIM : 2010541011

Fakultas : Teknik Industri

Mata Kuliah : English for Business and Special

Purposes

B U S I N E S S P L A N

Universitas Az Zahra

Class Cibinong

R E T A I LSHOP

CELLULER

&