market research business plan

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Confidentiality Agreement

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disclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this business plan is in all respectsconfidential in nature, other than information which is in the public domain through other means

and that any disclosure or use of same by reader, may cause serious harm or damage to

_________________________.

Upon request, this document is to be immediately returned to _________________________.

___________________Signature

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Name (typed or printed)

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Date

This is a business plan. It does not imply an offering of securities.


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Table of Contents

1.0 Executive Summary.............................................................................................................................11.1 Objectives...................................................................................................................................11.2 Mission........................................................................................................................................11.3 Keysto Success........................................................................................................................2

1.3.1 External (Business Environment) Factors..................................................................21.3.2 InternalFactors..............................................................................................................2Chart: Highlights......................................................................................................................3

2.0 Company Summary.............................................................................................................................3

2.1 Company Ownership.................................................................................................................32.2 Company History........................................................................................................................4

Table: Past Performance.......................................................................................................4Chart: Past Performance.......................................................................................................5

2.3 CompanyLocations and Facilities..........................................................................................53.0 Services.................................................................................................. ..............................................5

3.1 Service Description...................................................................................................................53.2 Competitive Comparison..........................................................................................................6

3.3 Sales Literature..........................................................................................................................63.4 Fulfillment....................................................................................................................................63.5 Technology..................................................................................................................................7

4.0 Market Analysis Summary..................................................................................................................74.1 Market Segmentation................................................................................................................7

Table: MarketAnalysis...........................................................................................................7Chart: Market Analysis (Pie)..................................................................................................8

4.2 Target Market Segment Strategy.............................................................................................8

4.3 ServiceBusiness Analysis........................................................................................................84.4 Competition and Buying Patterns............................................................................................9

5.0 Strategy and Implementation Summary............................................................................................95 1 Competitive Edge 9


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Table of ContentsChart: Profit Yearly................................................................................................................18

Chart: Gross Margin Monthly...............................................................................................18Chart: Gross Margin Yearly..................................................................................................19Table: Profit and Loss..........................................................................................................19Chart: Profit Monthly.............................................................................................................20

7.5 Projected Cash Flow...............................................................................................................20Table: Cash Flow..................................................................................................................21Chart: Cash...........................................................................................................................22

7.6 Projected Balance Sheet........................................................................................................23

Table: Balance Sheet...........................................................................................................23Table: Sales Forecast...............................................................................................................................1Table: Personnel........................................................................................................................................2Table: General Assumptions....................................................................................................................3Table: Profit and Loss...............................................................................................................................4Table: Cash Flow.......................................................................................................................................5Table: Balance Sheet................................................................................................................................6


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West Pacific Marketing Consultants

1.0 Executive Summary

West Pacific Marketing Consultants aims to provide marketing services to targeted business

environments in Indonesia, Asia, and the west Pacific region. This plan seeks to generate asignificant increase in company sales and profits from the delivery of retainer consulting,project consulting, market research and industrial analysis, feasibility studies, and strategic

analysis and reporting services, compared to the preceding year.

The highlights of this plan are the targeted gross margin and sales-revenue. The targetedgross margin and sales-revenue for each of the first five years of this plan are presented in the

following chart and the tables presented later in this plan. These figures represent the keyprospects available for West Pacific Marketing Consultants. These targets are attainable througha proactive approach to the candidacy of clients, teaming-up with technology providers, and

partnering with reputable local and regional engineering suppliers and construction firms toreduce competition, improve pricing, and reduce risks.

This business plan has been created on the basis of five years of market research. Data

conclude the size and growth of the market and geographical segments, customer needs,perception, and buying behavior trends have been on the upswing, and are expected to continue

in this trend for the next five years. West Pacific Marketing Consultants feels that it is able to fillthe hole in the marketing niche, and will benefit from operations beginning in January, Year 1.

Note: All figures within this plan are in the U.S. dollar, and reflect the currency exchange rateof $1 = Rp 7,200.

1.1 Objectives

West Pacific Marketing Consultants' objectives are to make an equal and fair profit in the


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West Pacific Marketing ConsultantsIndonesian, Asian, and Pacific business environments.

1.3 Keys to Success

The are two keys to success that West Pac ific Marketing Consultants is focused on. These arebroadlky characterized as Internal and External Factors, and are explained in more detail in the

following two sections.

1.3.1 External (Business Environment) Factors

The Asia-Pacific Region is now living in an interesting era: the process of change from the "old

economy" to the "global new economy" brings a tremendous development growth of e-commerce,mobility of capital, and liberalization to the region. Since the new global economy brings new

economics, new market structures, new industry structures, and new company structures, theprofile of customers has also changed. Customers have evolved from "solution demander" to

"value demander," and from "clients" to "business partners."

West Pacific Marketing Consultants is proactively focused on establishing relationships withmultiple digital contents, companies, government institutions, regional (provincial) governmentoffices, NGOs, and individual customers as its prospect ive business partners.

1.3.2 Internal Factors

The company feels that it controls its own success through some basic internal factors. Theseare:


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West Pacific Marketing Consultantswell as sales assistance for global companies in the Indonesian market.

6. Key management team. The right management team is integral, and must have astrong foundation in marketing, management, finance, and services development. The

company is confident in its team.

2.0 Company Summary

Th f d f W t P ifi M k ti C lt t f k t f l lti ti l


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2.2 Company History

Between April and December of the previous year, West Pacific Marketing Consultants

achieved excellent performance ratings. The sales revenue of $1.9 million, with a gross margin of$1.6 million, was 15% higher than the projected sales for that year.

From its recent growth until the time of this writing, West Pacific Marketing Consultants hascosts and cash flow under control.

Table: Past Performance

Past Performance

1998 1999 2000

Sales $0 $0 $1,895,000

Gross Margin $0 $0 $1,516,000

Gross Margin % 0.00% 0.00% 80.00%

Operating Expenses $0 $0 $84,400Collection Period (days) 0 0 0

Balance Sheet

1998 1999 2000

Current Assets

Cash $0 $0 $656,086

Accounts Receivabl e $0 $0 $118,43 8

Other Current Assets $0 $0 $0

Total Current Assets $0 $0 $774,524

Long-term Assets

Long-term Assets $0 $0 $126,588

Accumulated Deprecia tion $0 $0 $0


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2.3 Company Locations and Facilities

The office is located in one of the strategic locations in the heart of the Indonesian business

area, at Komplek Pertanian, in Jakarta.

3 0 S i


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3.2 Competitive Comparison

Within its niche, West Pacific Marketing Consultants does not have any competitors, but rather

has "prospective business partners." This is because the cmpany provides itsclients with solutions as well as value creations. Its services have been sought out by companiesranging from high-level management firms to international market research companies. Companies

choosing to do business development, channel development, and in-house market research, willseek West Pacific Marketing Consultants to deliver the following value creations:

Consulting/Market Researchers/Traders/Suppliers:

Improved communicat ion Access to new markets Broader products offering Lower cost of doing business New ways of adding value

Technology Providers/Manufacturers:

Lower cost of sales Access to niche markets Better cost of identification

New business models (outsourcing alliances)

Individual Clients:

Shopping convenience Immediate delivery More frequent updates


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West Pacific Marketing Consultantsmarket research, presentation, and report development; these areas are ones that the

company can afford to sub-contract without risking the core values provided to the clients.

3.5 Technology

West Pacific Marketing Consultants maintains the latest Windows and Macintosh capabilities

including:

1. Internet facilities for working with clients directly through email delivery of drafts andinformation.

2. Fac ilities for preparation and delivery of multimedia presentations on any computer, informats including on-disk, live, or video.

3. Desktop publishing facilities for delivery of regular retainer reports, project output reports,

marketing materials, and market research reports.

4.0 Market Analysis Summary

West Pac ific Marketing Consultants has a unique offering of services that appeals to a large

customer base. The company will concentrate on large corporations because they provide themaximum profit potential. The following sections outline key information regarding the target

markets.

4.1 Market Segmentation

The groups of potential customers for West Pacific Marketing Consultants are, in order of

importance:


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4.2 Target Market Segment Strategy

As indicated by the previous chart and table, West Pacific Marketing Consultants must focus on

large corporations, medium companies, small businesses, and individual customers in the globalmarket; and in the Indonesian market, regional (provincial) government offices,NGOs, academics, and individual customers will be the core of profits.


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West Pacific Marketing Consultants16. SOFRES FSA Jakarta (Taylor Nelson Sofres Group)

4.4 Competition and Buying Patterns

Recent analysis indicated that consultant costs (in US$/man-hour) in Indonesiahave decreased by 12% since the economic turmoil of 1996. This analysis is based on the

assumptions that the local senior consultants' and senior engineers' salaries have increased by25% at the average exchange rate of US$1 = Rp 7,200. This is because the Indonesian skilled

manpower market offers the lowest man-hour cost in the world, even with the estimatedaverage increasing 20% per year.

To take advantage of this situation, West Pacific Marketing Consultants utilizes Indonesianresources for serving both global and regional markets.

5.0 Strategy and Implementation Summary

West Pacific Marketing Consultants will focus on six technographical market segments as follows:

1. Large corporations. The most important market segment consists of the largemanufacturers, technology providers, suppliers, t rading houses, turnkey contractors,

developers, utilities, banking and financing institutions, mining, consulting, andengineering industries. These companies will be interacting with West Pacific Marketing

Consultants for development functions that are more effective when spun off thanwhen managed in-house.

2. Medium-sized growth companies. For high-growth fields, such as softwareand multimedia, West Pacific Marketing Consultants will offer an att ractive developmentalternative that will allow the company to address opportunities in new market segments.

3. Regional (Provincial) Government Office. In line with the launching of the new


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West Pacific Marketing Consultantsprovide this range of services to anyone from a high-level marketing firm to a home-based

business owner; clients can always count on quick, accurate services from the company.

5.2 Sales Strategy

West Pacific Marketing Consultants' strategy focuses first on maintaining the identity of the

high-end buyer who appreciates quality service, but is also very demanding regarding valuecreations. West Pacific Marketing Consultants has been able to find these customers using a

combination of social and interactive email relationships.

Furthermore, as a part of its "individual sales strategy," to ensure opt imum client satisfac tion,West Pacific Marketing Consultants customizes its services for each specific client. Thisapproach is called "individual sales strategy" because customization permits c lients to participate

in producing exactly what they want.

Even when a business offers a standard service, it is not making a standard sales offer. Thecustomer is able to choose a tailored offering mix of elements, such as optional services

benefits, delivery conditions, training, financing alternatives, technical services options, salesassistance options, etc.

5.2.1 Sales Forecast

The sales forecast monthly summary is included in the appendix. The annual sales projections areincluded here in the following chart and table.

The sales forecast assumes that the yearly change in costs or prices will average 20%, whichis a reasonable assumption based on the last few years.


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Table: Sales Forecast

Sales Forecast

2001 2002 2003 2004 2005

Sales

Retainer Consulting $580,000 $696,000 $835,200 $ 1,002,240 $1,202,688

Project Consulting $480,000 $576,000 $691,200 $829,440 $995,328

Market Research & Industri al Anal yses $360,000 $432,000 $518,400 $622,080 $746,496

Feasibil ity Studies $360,000 $432,000 $518,400 $622,080 $746,496


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West Pacific Marketing ConsultantsParticipation in Indonesian business and trade exhibitions will be important as well.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Business Plan 11/20/2000 11/24/2000 $3,500 Jaka Legawa CEO

Stationery 11/1/2000 11/3/2000 $3 000 VP Internal Internal Bus


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West Pacific Marketing ConsultantsThe management philosophy is based on responsibility and mutual respect. People who work

at West Pacific Marketing Consultants want to work at the company because it has anenvironment that encourages "C4A," which is: Creativity, Concepts, Competencies, Connections,

and Achievement. This C4A concept is our tool in performing the Shareholders Value Creationof West Pacific Marketing Consultants.

6.1 Personnel Plan

The team includes 17 employees, under a president and three vice-presidents.

The three main management divisions are Sales and Marketing, Operations, and Internal BusinessManagement. The departments managed by the Sales and Marketing division are: marketing,sales, products and services, research and development, and public relations operations. The

departments managed by the Internal Business Management division are: accounting,administration, and human resources development.

Note: The following table reflects the currency exchange rate of US$1 = Rp 7,2000

Table: Personnel

Personnel Plan

2001 2002 2003 2004 2005

Vice President Sales & Marketing $24,000 $26,400 $29,040 $31,944 $35,138

Technical Sales B2B $14,400 $15,840 $17,424 $19,166 $21,083

Technical Sales B2C $14,400 $15,840 $17,424 $19,166 $21,083

Secretary - Sales & Marketing Office $3,600 $3,960 $4,356 $4,792 $5,271Vice President Operations $24,000 $26,400 $29,040 $31,944 $35,138

Senior Consultant - Marketing $14,400 $15,840 $17,424 $19,166 $21,083

Senior Consultant - Finance Management $14,400 $15,840 $17,424 $19,166 $21,083

Senior Consultant - Strategic Management $14,400 $15,840 $17,424 $19,166 $21,083


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West Pacific Marketing ConsultantsThe company does expect to be able to take some money out as dividends. The owners don't

take overly generous salaries, so some draw is appropriate.

7.1 Important Assumptions

The accompanying table lists West Pacific Marketing Consultants' main assumptions for

developing its financial projections. The most sensitive assumption is the collection days. WestPacific Marketing Consultants would like to improve collection days to take pressure off of its

working capital.

Table: General Assumptions

General Assumptions

2001 2002 2003 2004 2005

Plan Month 1 2 3 4 5

Current Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00%

Long-term Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00%Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00%

Other 0 0 0 0 0


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7.2 Business Ratios

The following table presents significant business ratios for West Pacific Marketing Consultants.

The last column, Industry Profiles, contains ratios based on the management consultingservices industry, as defined by the Standard Industry Classificat ion (SIC) Index code 8742.


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Table: Ratios

Ratio Anal ysis

2001 2002 2003 2004 2005 Industry Profi le

Sales Growth 9.76% 20.00% 20.00% 20.00% 20.00% 8.60%

Percent of Total Assets

Accounts Receivabl e 9.13% 6.82% 5.61% 4.86% 4.36% 24.40%

Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 46.70%

Total Current Assets 93.28% 95.82% 97.14% 97.93% 98.45% 74.90%

Long-term Assets 6.72% 4.18% 2.86% 2.07% 1.55% 25.10%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabil i ties 3.75% 2.92% 2.40% 2.09% 1.88% 42.80%

Long-term Liabili ties 0.00% 0.00% 0.00% 0.00% 0.00% 17.20%

Total Liabili ties 3.75% 2.92% 2.40% 2.09% 1.88% 60.00%

Net Worth 96.25% 97.08% 97.60% 97.91% 98.12% 40.00%

Percent of Sal es

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Gross Margin 80.18% 80.18% 80.18% 80.18% 80.18% 0.00%

Sel li ng, General & Administrati ve Expenses 36.08% 35.14% 34.28% 33.49% 32.77% 83.50%

Advertising Expenses 1.27% 1.27% 1.27% 1.27% 1.27% 1.20%

Profit Before Interest and Taxes 58.80% 60.05% 61.20% 62.25% 63.21% 2.60%

Main Ratios

Current 24.86 32.86 40.41 46.87 52.42 1.59

Quick 24.86 32.86 40.41 46.87 52.42 1.26

Total Debt to Total Assets 3.75% 2.92% 2.40% 2.09% 1.88% 60.00%

Pre-tax Return on Net Worth 67.44% 51.02% 42.51% 37.35% 33.93% 4.40%

Pre-tax Return on Assets 64.91% 49.54% 41.49% 36.57% 33.29% 10.90%

Addit ional Ratios 2001 2002 2003 2004 2005

Net Profit Margin 44.10% 45.04% 45.90% 46.69% 47.41% n.a


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7.3 Break-even Analysis

The following chart and table summarize the break-even analysis, including monthly units and

sales break-even points.

Table: Break-even Analysis


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Table: Profit and Loss

Pro Forma Profit and Loss

2001 2002 2003 2004 2005

Sales $2,080,000 $2,496,000 $2,995,200 $3,594,240 $4,313,088

Direct Cost of Sales $412,320 $494,784 $593,651 $712,489 $854,983

Other $0 $0 $0 $0 $0

Total Cost of Sales $412,320 $494,784 $593,651 $712,489 $854,983


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7.5 Projected Cash Flow

Cash flow projections are critical to West Pacific Marketing Consultants' success. The monthly

cash flow is shown in the illustration, with one bar representing the cash flow per month and theother representing the monthly balance. The annual cash flow figures are included below in thefollowing chart and table. Detailed monthly numbers are included in the appendix.


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Table: Cash Flow

Pro Forma Cash Flow

2001 2002 2003 2004 2005

Cash Received

Cash from Operations

Cash Sales $1,040,000 $1,248,000 $1,497,600 $1,797,120 $2,156,544

Cash from Receivables $986,355 $1,213,583 $1,456,300 $1,747,560 $2,097,072

Subtotal Cash from Operati ons $2,026,355 $2,461,583 $2,953,900 $3,544,680 $4,253,616

Addit ional Cash Received

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

New Current Borrowing $0 $0 $0 $0 $0

New Other Liabil ities (interest-free) $0 $0 $0 $0 $0

New Long-term Liabil ities $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0

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

New Investment Received $0 $0 $0 $0 $0

Subtotal Cash Received $2,026,355 $2,461,583 $2,953,900 $3,544,680 $4,253,616

Expenditures 2001 2002 2003 2004 2005

Expenditures from Operations

Cash Spending $271,200 $298,320 $328,152 $360,967 $397,064

Bill Payments $825,811 $1,056,025 $1,274,264 $1,533,659 $1,845,321

Subtotal Spent on Operati ons $1,097,011 $1,354,345 $1,602,416 $1,894,626 $2,242,385

Addit ional Cash Spen t

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

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0

Other Liabil ities Principal Repayment $0 $0 $0 $0 $0

Long-term Liabili ties Principal Repayment $0 $0 $0 $0 $0

Purchase Other Current Assets $0 $0 $0 $0 $0


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7.6 Projected Balance Sheet

The following balance sheet shows healthy growth of net worth, and strong financial position.

The monthly estimates are included in the appendix.

Table: Balance Sheet

Pro Forma Bal ance Sheet2001 2002 2003 2004 2005

Assets

Current Assets

Cash $1,585,430 $2,692,668 $4,044,152 $5,694,206 $7,705,437

Accounts Receivabl e $172,083 $206,500 $247,800 $297,360 $356,832

Other Current Assets $0 $0 $0 $0 $0

Total Current Assets $1,757,513 $2,899,168 $4,291,952 $5,991,566 $8,062,269

Long-term AssetsLong-term Assets $126,588 $126,588 $126,588 $126,588 $126,588

Accumulated Deprecia tion $0 $0 $0 $0 $0

Total Long-term Assets $126,588 $126,588 $126,588 $126,588 $126,588

Total Assets $1,884,101 $3,025,756 $4,418,540 $6,118,154 $8,188,857

Liabil ities and Capital 2001 2002 2003 2004 2005

Current Liabilities

Accounts Payab le $70,709 $88 ,237 $106,211 $127,831 $153,805

Current Borrowing $0 $0 $0 $0 $0Other Current Liabili ties $0 $0 $0 $0 $0

Subtotal Current Liabil ities $70,709 $88,237 $106,211 $127,831 $153,805

L t Li bi li ti $0 $0 $0 $0 $0


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Appendix

Page 1

Table: Sales Forecast

Sales Forecast

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sales

Retainer Consulting 0% $46,000 $46,000 $46,000 $46,000 $46,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000

Project Consulting 0% $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000

Market Research & Industrial Analyses 0% $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000

Feasibility Studies 0% $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000

Strategic Analysis and Reports 0% $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000

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

Total Sales $171,000 $171,000 $171,000 $171,000 $171,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Retainer Consulting $9,670 $9,670 $9,670 $9,670 $9,670 $9,670 $9,670 $9,670 $9,670 $9,670 $9,670 $9,670

Project Consulting $7,810 $7,810 $7,810 $7,810 $7,810 $7,810 $7,810 $7,810 $7,810 $7,810 $7,810 $7,810

Market Research & Industrial Analyses $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000

Feasibility Studies $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000

Strategic Analysis and Reports $4,880 $4,880 $4,880 $4,880 $4,880 $4,880 $4,880 $4,880 $4,880 $4,880 $4,880 $4,880

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

Subtotal Direct Cost of Sales $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360


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Appendix

Page 2

Table: Personnel

Personnel Plan


Vice President Sales & Marketing 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

Technical Sales B2B 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Technical Sales B2C 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Secretary - Sales & Marketing Office 0% $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Vice President Operations 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

Senior Consultant - Marketing 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Senior Consultant - Finance Management 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Senior Consultant - Strategic Management 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Secretary - Operations Office 0% $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

VP Internal Business Management 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

Accountant 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Legal Officer 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Administrative Officer 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

HRD Officer 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

President/CEO 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000

Secretary to the CEO 0% $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Bookkeeper 0% $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Clerical 0% $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

Clerical 0% $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

Clerical 0% $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

Clerical 0% $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

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

Total Payroll $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600


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Appendix

Page 3

Table: General Assumptions

General Assumptions


Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%

Long-term Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%

Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%

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


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Appendix

Page 4

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $171,000 $171,000 $171,000 $171,000 $171,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000

Direct Cost of Sales $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360

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

Total Cost of Sales $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360 $34,360

Gross Margin $136,640 $136,640 $136,640 $136,640 $136,640 $140,640 $140,640 $140,640 $140,640 $140,640 $140,640 $140,640

Gross Margin % 79.91% 79.91% 79.91% 79.91% 79.91% 80.37% 80.37% 80.37% 80.37% 80.37% 80.37% 80.37%

Expenses

Payroll $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600

Sales and Marketing and Other

Expenses

$10,500 $4,500 $2,000 $12,500 $2,000 $2,000 $8,000 $15,000 $2,000 $2,000 $19,500 $5,000

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

Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Utilities $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600

Insurance $180 $180 $180 $180 $180 $180 $180 $180 $180 $180 $180 $180

Office Rent $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200

Payroll Taxes 15% $3,390 $3,390 $3,390 $3,390 $3,390 $3,390 $3,390 $3,390 $3,390 $3,390 $3,390 $3,390

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

Total Operating Expenses $40,470 $34,470 $31,970 $42,470 $31,970 $31,970 $37,970 $44,970 $31,970 $31,970 $49,470 $34,970

Profit Before Interest and Tax es $96,170 $102,170 $104,670 $94,170 $104,670 $108,670 $102,670 $95,670 $108,670 $108,670 $91,170 $105,670

EBITDA $96,170 $102,170 $ 104,670 $94,170 $ 104,670 $108,670 $ 102,670 $95,670 $ 108,670 $ 108,670 $91,170 $ 105,670

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

Taxes Incurred $24,043 $25,543 $26,168 $23,543 $26,168 $27,168 $25,668 $23,918 $27,168 $27,168 $22,793 $26,418

Net Profit $72,128 $76,628 $78,503 $70,628 $78,503 $81,503 $77,003 $71,753 $81,503 $81,503 $68,378 $79,253

Net Profit/Sales 42.18% 44.81% 45.91% 41.30% 45.91% 46.57% 44.00% 41.00% 46.57% 46.57% 39.07% 45.29%


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Appendix

Page 5

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $85,500 $85,500 $85,500 $85,500 $85,500 $87,500 $87,500 $87,500 $87,500 $87,500 $87,500 $87,500

Cash from Receivables $59,219 $62,069 $85,500 $85,500 $85,500 $85,500 $85,567 $87,500 $87,500 $87,500 $87,500 $87,500

Subtotal Cash from Opera tio ns $ 144 ,7 19 $14 7,569 $1 71,00 0 $ 171 ,00 0 $ 171 ,0 00 $17 3,000 $1 73,06 7 $ 175 ,00 0 $ 175 ,0 00 $17 5,000 $1 75,00 0 $ 175 ,00 0

Additional Cash Received

Sales Tax , VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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

New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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

New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received $144,719 $147,569 $171,000 $171,000 $171,000 $173,000 $173,067 $175,000 $175,000 $175,000 $175,000 $175,000

Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Expenditures from Operations

Cash Spending $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600 $22,600

Bill Payments $7,542 $76,123 $71,710 $70,160 $77,510 $69,931 $71,048 $75,573 $80,323 $70,898 $71,335 $83,660

Subtotal Spent on Operations $30,142 $98,723 $94,310 $92,760 $100,110 $92,531 $93,648 $98,173 $102,923 $93,498 $93,935 $106,260

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 $30,142 $98,723 $94,310 $92,760 $100,110 $92,531 $93,648 $98,173 $102,923 $93,498 $93,935 $106,260

Net Cash Flow $114,577 $48,847 $76,690 $78,240 $70,890 $80,469 $79,419 $76,828 $72,078 $81,503 $81,065 $68,740

Cash Bala nce $ 770 ,6 63 $81 9,509 $8 96,19 9 $ 974 ,43 9 $1,045 ,3 29 $1,12 5,798 $1 ,2 05,21 7 $ 1,282 ,04 5 $1,354 ,1 22 $1,43 5,625 $1 ,5 16,69 0 $ 1,585 ,43 0


33/33

Appendix

Page 6

Table: Balance Sheet

Pro Forma Balance Sheet


Assets Starting Balances

Curren t Assets

Cash $ 656 ,0 86 $77 0,663 $8 19,50 9 $8 96,19 9 $9 74 ,43 9 $ 1,0 45,32 9 $ 1,125 ,7 98 $ 1,205 ,2 17 $1,28 2,045 $1,35 4,122 $1,43 5,6 25 $1,51 6,6 90 $1,58 5,4 30

Accounts Receivable $118 ,438 $144,71 9 $168,15 0 $168,15 0 $168 ,150 $168,15 0 $170 ,150 $172 ,083 $172,08 3 $172,08 3 $172,08 3 $172 ,083 $172 ,083

Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

T ota l C ur re nt Ass ets $ 77 4,5 24 $ 91 5,3 82 $ 98 7,6 59 $ 1,0 64 ,3 49 $ 1,1 42 ,5 89 $ 1,2 13 ,4 79 $ 1,2 95 ,9 48 $ 1,3 77 ,3 01 $ 1,4 54 ,1 28 $ 1,5 26 ,2 06 $ 1,6 07 ,7 08 $ 1,6 88 ,7 73 $ 1,7 57 ,5 13

Long -term Assets

Long-term Assets $126,588 $126,588 $126,588 $126,588 $126,588 $126,588 $126,588 $126,588 $126,588 $126,588 $126,588 $126,588 $126,588

Accumulated Depr eciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Lo ng-term Assets $ 126 ,5 88 $12 6,588 $1 26,58 8 $1 26,58 8 $1 26 ,58 8 $1 26,58 8 $ 126 ,5 88 $ 126 ,5 88 $12 6,588 $12 6,588 $12 6,5 88 $ 12 6,5 88 $ 12 6,5 88

To ta l Asse ts $ 90 1,1 12 $ 1,0 41 ,9 69 $ 1,1 14 ,2 47 $ 1 ,1 90 ,9 37 $ 1,2 69 ,1 77 $ 1 ,3 40 ,0 67 $ 1,4 22 ,5 36 $ 1 ,5 03 ,8 88 $ 1,5 80 ,7 16 $ 1,6 52 ,7 93 $ 1,7 34 ,2 96 $ 1,8 15 ,3 61 $ 1,8 84 ,1 01

Liabilities and Capital Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Current Liabilities

Accounts Payable $5,000 $73,730 $69,38 0 $67,568 $75,18 0 $67,56 8 $68,534 $72,884 $77,959 $68,534 $68,534 $81,222 $70,709

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 $5,000 $73,730 $69,380 $67,568 $75,180 $67,568 $68,534 $72,884 $77,959 $68,534 $68,534 $81,222 $70,709

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Liabilities $5,000 $73,730 $69,380 $67,568 $75,180 $67,568 $68,534 $72,884 $77,959 $68,534 $68,534 $81,222 $70,709

Paid-in Capital $37,800 $37,800 $37,800 $37,800 $37,800 $37,800 $37,800 $37,800 $37,800 $37,800 $37,800 $37,800 $37,800

Retained Earnings $12,762 $858,312 $858,312 $858,312 $858,312 $858,312 $858,312 $858,312 $858,312 $858,312 $858,312 $858,312 $858,312

Earnings $845,550 $72,128 $148,755 $227,258 $297,885 $376,388 $457,890 $534,893 $606,645 $688,148 $769,650 $838,028 $917,280

To ta l Ca pita l $ 89 6,1 12 $ 96 8,2 39 $ 1,0 44 ,8 67 $ 1,1 23 ,3 69 $ 1,1 93 ,9 97 $ 1,2 72 ,4 99 $ 1,3 54 ,0 02 $ 1,4 31 ,0 04 $ 1,5 02 ,7 57 $ 1,5 84 ,2 59 $ 1,6 65 ,7 62 $ 1,7 34 ,1 39 $ 1,8 13 ,3 92

Total L iab il it ies and Cap ital $901,112 $1,041,969 $1 ,114,247 $1 ,190,937 $1 ,269,177 $1 ,340,067 $1 ,422,536 $1 ,503,888 $1,580,716 $1,652,793 $1,734,296 $1,815,361 $1,884,101

Ne t W or th $ 89 6,1 12 $ 96 8,2 39 $ 1,0 44 ,8 67 $1 ,1 23 ,3 69 $ 1,1 93 ,9 97 $1 ,2 72 ,4 99 $ 1,3 54 ,0 02 $1 ,4 31 ,0 04 $ 1,5 02 ,7 57 $1 ,5 84 ,2 59 $1 ,6 65 ,7 62 $1 ,7 34 ,1 39 $1 ,8 13 ,3 92

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