L-1 Visa Business Plan
MISSION
Executive Summary ................................................ 4 Management Biographies. .............................................. 4 Organizational Chart. .................................................... 6 Financial Objectives ..................................................... 7 Start-Up Summary ................................................. 8 Market Analysis Summary ......................................... 9 Branding and Marketing ............................................... 10 SWOT Analysis .............................................................. 11 Personnel Plan .......................................................... 12 Financial Indicators ........................................................ 13 Revenue Forecast ....................................................... 14 Break-Even Analysis .................................................... 15 Projected Profit and Loss ................................................. 16 Projected Cash Flow....................................................... 18 Projected Balance Sheet.................................................. 19 Sensitivity Analysis ..................................................... 20 Year 1 Revenue Forecast. ...................................................... 21 Year 1 Personnel Forecast ...................................................... 21 Year 1 Profit & Loss ...................................................... 22 Year 1 Cash Flow ........................................................... 23 Year 1 Balance Sheet .................................................... 24
Xxx. will be a subsidiary of Yyy; a construction and real estate company located in the state of Veracruz, Mexico. Yyy was founded in Xalapa, Veracruz on the east coast of Mexico where the operation is still headquartered. For nearly a quarter of a century, Yyy has been instrumental in the development of mixed-usage real estates projects that have positively impacted local communities. Some of the projects that the organization has successfully completed include shopping centers, warehouses, office buildings
as well as housing and urban
development subdivisions. In addition to the aforementioned projects, the organization has also owned a variety of rental properties. Yyy currently has ongoing projects valued at $135 million dollars. The majority of their operations, 80%, are located in the VeracruzBoca del Rio region where the company is currently engaged in a 1000 house project that is valued at $100 million dollars. Plans call for this project to be completed by no later than 2016. The vision for establishing a presence in the United States sees the organization providing professional services, precast construction, materials, supplies and a variety of equipment and machinery. The aforementioned list of services will far exceed any currently being offered in Mexico and this will allow the organization to more adequately serve the core market. The goal will be to become entrenched in the market and provide a level of service that protects the business from any would-be competitors that may enter at a later date. Up until this point, Yyy has been forced to outsource these services to vendors and this has drastically reduced the profit margin potential of the organization. Through A Enterprises, the organization will be in position to retain those earnings and in the process, strengthen the market position. The opportunities for revenues and profits in the United States are promising but the founder and staff understands that in order to capitalize on them, an effective marketing approach that communicates value must be created. In addition, resource allocation and management must also be strictly adhered to.
MANAGEMENT BIOGRAPHIES Mr. A – General Director Mr. A is a trained industrial engineer at the University of the Americas in Puebla, Mexico. His academic qualifications are exceptional and highlighted by training at some of the most prestigious learning institutions in the world including Harvard University, MIT, The Brookings Institution, The London Business School and The Institute of Monterrery Tenologico among others. His professional career began at an early age as he was actively entered into the family business and charged with leasing and managing property. In the 30 years that have passed since that time he has continued to increase his knowledge base in the fields of construction and real estate development. In 1987 Mr. A served as the Director of Public Investment and State Planning for the Governor of the State of Veracruz. In this position he was responsible for scheduling and budgeting investments made by the government. Other public sector experiences include being appointed The Director of Social Assistance where he developed strategies geared towards enhancing the quality of living standards for impoverished persons throughout the region. In the private sector he has participated in a number of ventures that included the planning, directing and execution of a variety of property-based projects including residential and commercial locations. Networking has always been one of his key business assets and he has partnered with investors throughout the globe from countries like Spain and Mexico to create results-oriented property solutions. Fluent in English and Spanish, as the General Manager for A Enterprises, Mr. A will be charged with overseeing the corporate vision of the organization which includes planning, budgeting and managing of the professionals that fall underneath the corporate umbrella.
Mr. B – General Counsel Mr. B is a graduate of the University of Veracruz Columbus where he majored in law. While working at the Office of Customs in Veracruz, Mr. A participated in a variety of real estate and property transactions including the areas of sales, purchasing and negotiations. His negotiation skills are one of his strongest assets and allowed him structure deals that are mutually beneficial to all parties involved in the transactions that he has been a part of. Equally adept in English and Spanish, his strong, diverse background which includes corporate law will allow him to adequately perform in all of the day to day legal and contractual functions for A Enterprises.
Mr. C – Director of International Trade Mr. C studied at the National Polytechnic Institute where he earned a degree in International Trade. During his career Mr. Mendoza has held a variety of positions including The Director of International Trade with the Government of the State of Veracruz. In this position he was called upon to attend a variety of events, fairs and expos while championing the vision of the organization that he was representing. Well-spoken in Spanish and English, polished and the consummate professional, during his management of foreign investments he has skillfully managed hundreds of millions of dollars in various branches of the economy including agriculture and manufacturing. His responsibilities with A Enterprises will center primarily on the procurement, purchase and exporting of goods to Mexico.
Mr. D – Architect Mr. E is an architect who studied his craft at the Universidad Veracruzana. Fluent in English and Spanish, his career spans more than 45 years of includes experience in all phases of property development including planning and construction. Over the course of his career, Mr. Gil has responsibly managed the edification of several residential and commercial properties that have allowed their value to increase exponentially. With A Enterprises, Mr. Gil is called upon to wear a variety of hats which includes the planning and coordinating of projects as well as technical aspects of properties that are being developed and managed.
Mr. E – Architect Luis Gil Adalid will be a key component of the A Enterprises business and management team. Mr. Leader is an architect with degrees and certifications from the Universidad Veracruzana. Over the course of his career he has held the position of President of the College of Architects at the State of Veracruz and has become recognized as an expert in the area of urban design. With A Enterprises, Mr. Leader will be called upon to undertake urban design projects, budgeting and project management while advising on a variety of machinery and equipment procurement initiatives. An effective communicator capable of speaking both English and Spanish fluently, Mr. Leader will be a key component of the long-term success of the A Enterprises vision.
Mr. F – Director of Supplies Jose Luis Herce is a mechanical engineering professional with degrees and certifications from The Christopher Columbus School of Engineering located at Veracruz University. Highly-skilled and detail-oriented, Mr. Herce will be charged with managing all logistical functions including material procurement, equipment and machinery acquisition and other day to day engineering functions. Mr. Herce is also fluent in English.
Mr. A
Mr. B
Mr. C
Mr. D
Mr. E
Mr. F
The following table and graphs illustrate the financial goals of the Company during the next five years:
FINANCIAL HIGHLIGHTS ($000) Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Revenue
72
76
79
83
88
92
96
Gross Margin
62
65
68
72
75
79
83
Operating E xpenses
71
72
72
72
72
72
EBIT DA
(8)
(6)
(2)
1
5
Net Profit
(11)
(8)
(5)
(2)
G ross Margin/R evenue
86%
86%
86%
E BIT DA/R evenue
-11%
-7%
-3%
Net P rofit/Revenue
-15%
-11%
-6%
Month 8
Month 9
Month 10
Month 11
Month 12
Y ear 1
Y ear 2
Y ear 3
Y ear 4
Y ear 5
101
106
112
117
123
1146
1318
1516
1743
87
92
96
101
106
987
1135
1305
1501
1726
72
72
72
72
72
72
858
928
975
1024
1064
8
12
17
21
25
30
35
139
217
341
487
672
2
6
10
14
18
23
28
33
107
188
314
464
652
86%
86%
86%
86%
86%
86%
86%
86%
86%
86%
86%
86%
86%
86%
1%
5%
9%
13%
16%
20%
23%
26%
29%
12%
16%
22%
28%
34%
-2%
2%
6%
10%
14%
17%
20%
24%
27%
9%
14%
21%
27%
33%
2004
Net Cash F low
112
(8)
(6)
(2)
1
5
9
13
18
22
27
32
222
170
296
443
627
Cash Balance - E nding
112
103
97
95
96
101
110
123
141
163
190
222
222
392
688
1131
1758
PROJECTED OPERATING HIGHLIGHTS BY YEAR ($000)
The following tables and graphs detail the funding the Company needs to bring its vision to reality. The startup funding is projected to come from a variety of sources including lenders and investors with A Mexico being a potential funder. Expenses
START-UP EXPENSES & ASSETS
Rent Deposits
$10,000
Technology
$2,000
Permits
$5,000
License
$3,000
Total Start-up Expenses
$20,000
Assets Working Capital
$10,000
Equipment
$5,000 0
$0
0
$0
0
$0
0
$0
0
$0
Total Start-up Expenses
$20,000 0
Total Requirements
$0 $20,000
PRODUCTS AND SERVICES A Enterprises, Inc. is an innovative property and real estate development entity with origins in the country of Mexico. The organization will operate under the Yyy umbrella. Yyy has become widely recognized in Mexico as a true market leader by providing a variety of property and service solutions including commercial and residential. A Enterprises, inc. will look to duplicate the successes that have been realized to date by the parent company. Plans call for the organization to mesh the successes that have been realized in Mexico with the presence in the United States. The overarching goal will be to capitalize on the potential opportunities in the United States to drive Yyy to capturing an even higher rate of market share in Mexico. In years past, when Yyy would look to the United States for the procurement of services of any type as they related to the construction industry, other vendors would be the primary source used. With the addition of A Enterprises, Inc. the organization will be given the ability to use the newly formed company. This will save in a variety of areas and ultimately have a positive impact on the overall market, revenue and profit positions of Yyy.
Revenue
Annual Growth 06-11
Annual Growth 11-16
Profit
Wages
Business
$102.2BN $1.8BN
-12.2% $69.8BN
6.5%
28,186
6.3% 7%
8.3% Other non-building construction services
Remodeling
63.2%
General contracting
15.2% Construction management sercies
Few industries have been more adversely impacted by the economic downturn than commercial construction. The total collapse of the housing market in 2007 and its subsequent strain on the financial sector set the stage for a stagnant commercial construction market from 2008 to 2011. Reduced corporate profits, high unemployment and low consumer spending contributed to the industry’s decline as businesses stopped growing or contracted, which constrained demand for new office space and warehouse construction. At the same time, high unemployment and low consumer spending severely hurt the retail and hospitality sectors. Industry revenue fell at an average annual rate of 12.2% to $102.2 billion over the five years to 2011 as construction of office buildings, hotels, warehouses, retail shops and restaurants significantly decreased. Commercial construction tends to lag the overall economy by 12 to 24 months (due in part to the length of construction contracts and industry backlog). The industry began to slow in 2008 and experienced steep revenue declines in 2009 and 2010 of 29.6% and 30.2%, respectively. Especially during those years, despite the influx of stimulus dollars, most contractors saw backlogs diminish to unprecedented levels and causing profit to shrink. As the market for construction services declined, firms had to cut profit margins and even bid on projects for a loss, just to keep their crews busy. In 2009 and 2010 profit margins dropped to less than 1.0% from a peak of 5.0% in 2007. Margins will remain low in 2011, at 1.8%, showing modest improvement as demand for new commercial construction is fueled by economic recovery and the price of services inches up. The industry continues to experience ongoing decline, even as the overall economy began showing signs of recovery in 2010. Industry revenue continued to contract in 2011, decreasing 5.1% to $102.2 billion from the previous year. The industry will begin a slow recovery in 2012. Over the five years to 2016 revenue is projected to increase at an annual average rate of 6.4% to $139.7 billion. Industry growth will be driven by continued improvements in the US economy, with demand for construction projected to steadily rise as businesses begin to expand operations. The industry will experience increased merger and acquisition activity in the next five years, as more established firms compete over market share as the construction markets recover. The number of firms will grow moderately, by 2.6% to total 31,983 in 2016.
A Enterprises, Inc. understands that building brand recognition will be a key factor in its growth and success as a business. To ensure the establishment of brand awareness in the market, the Company will utilize a professional logo and follow a comprehensive advertising and promotional plan. Along with leveraging its competitive advantages, the Company will follow certain keys to success in the pursuit of its objectives.
OBJECTIVES • Establishing a presence in the United States that strengthens the position in Mexico • Secure suitable funding that will allow the organization to effectively sustain domestic and international operations • Ascend to and maintain a position of recognized market leadership through the delivery of practical solutions and services • Develop additional revenue and profit streams that strengthen the global presence of the parent company
KEYS TO SUCCESS • Establishing a network of key influencers that have the ability to feed opportunities into the A Enterprises, Inc. pipeline • Maintaining the level of service that was established in the Mexican market and bringing it abroad • Developing and maintaining a consistent marketing message and customer service model that exceeds the expectations of the customer base
COMPETITIVE COMPARISON There are currently no other organizations that are proposing to offer the types of services that A Enterprises, Inc. will be bringing to the United States market.
COMPETITIVE ADVANTAGES The Company’s advantages as a reliable business will be a key in propelling its growth. Every effort will be made to stand out from competitors for its flexibility to customer needs, understanding of customer’s business objectives, and knowledge of local markets. The operational advantages of A Enterprises, Inc. are as follows:
A Enterprises, Inc. will consider the strengths and weakness inherent to the Company as well as the opportunities and threats presented by the marketplace. These factors, drawn from the previous sections of the plan, serve to summarize the competitive and economic landscape and place the Company within a macro perspective.
Risk Analysis: The real estate and property industries are perhaps the most volatile in the global economy but after years of decline, both are primed for growth over the course of the coming years. These projected growth trends coupled with the level of expertise that will be at the core of the A Enterprises business model greatly mitigate the risks associated with this venture.
MARKETING CAMPAIGN Marketing for A Enterprises, Inc. will be done in a variety of ways including a website as well as print. Internet efforts will center on the creation on a user friendly website along with social media powered by Facebook.com and Twitter.com. Print will be driven by brochures, sales letters and other pass-a-long print pieces that allow the organization’s marketing message to carry life long after the initial point of contact has been made. While the Internet and print will be important drivers for the marketing message, the face to face impressions have the potential of being the primary marketing and opportunity driving source. With that being said, key members of the A Enterprises, Inc. staff will be highly visible at events and expos that give them the opportunity to champion their brand.
The following table summarizes the Company’s projected financial performance with standardized measurement indicators used to evaluate profitability, leverage, asset turnover, and liquidity. As with any long-range projection, accuracy is based on reasonable estimates of return on investment and past performance. The Company believes the following numbers are attainable and reasonable. However, actual results will vary.
FINANCIAL INDICATORS Year 1
Year 2
Year 3
Year 4
Year 5
86.11%
86.11%
86.11%
86.11%
86.11%
9.37%
14.25%
20.73%
26.60%
32.52%
12.15%
16.47%
22.48%
27.95%
33.53%
Return on Assets
29.13%
35.56%
38.61%
37.21%
34.99%
Return on Equity
100.00%
63.61%
51.56%
43.21%
37.79%
Accounts Payable Turnover
4.17
4.68
4.93
5.20
5.57
Asset Turnover
3.11
2.50
1.86
1.40
1.08
Profitability %'s: Gross Margin Net Profit Margin EBITDA to Revenue
Activity Ratios:
Leverage Ratios: Debt to Equity Debt to Assets Ratio Interest Coverage Ratio
2.43
0.79
0.34
0.16
0.08
70.87%
44.10%
25.11%
13.89%
7.41%
6.50
11.49
21.11
37.13
68.41
Liquidity Ratios: Current Ratio Current Debt to Total Assets Ratio
5.84
10.04
16.14
24.31
35.18
10.35%
7.41%
5.24%
3.74%
2.68%
10.67
4.47
2.49
1.62
1.16
Additional Indicators: Revenue to Equity Ratio
The following is a five-year revenue forecast. Direct costs include all costs which can be directly tied to revenue and include “cost of goods.”
REVENUE FORECAST Year 1
Year 2
Year 3
Year 4
Year 5
32
37
42
48
56
$36,000.00
$36,000.00
$36,000.00
$36,000.00
$36,000.00
$1,146,033
$1,317,938
$1,515,629
$1,742,973
$2,004,419
$1,146,033
$1,317,938
$1,515,629
$1,742,973
$2,004,419
$5,000.00
$5,000.00
$5,000.00
$5,000.00
$5,000.00
$159,171
$183,047
$210,504
$242,080
$278,392
$159,171
$183,047
$210,504
$242,080
$278,392
Total Avg Property Service Price Avg Property Service Revenue Avg Property Service Total Revenue Direct Materials Cost Avg Property Service Direct Cost of Revenue Avg Property Service Subtotal Cost of Revenue
1
The table and chart below highlight the accumulated revenue required for the Company to break even.
BREAK-EVEN ANALYSIS Monthly Revenue Break-even
$85,109
Assumptions: Average Monthly Revenue
$95,503
Average Monthly Variable Cost
$13,264
Estimated Monthly Fixed Cost
$73,288
1
The Company intends to deploy its funding to maximize growth and profitability. In the Profit and Loss table below, gross margin equals sales minus direct costs. The “bottom line” or profit (as measured before and after interest, taxes, depreciation, and amortization) equals gross margin minus operating expenses.
PRO FORMA PROFIT AND LOSS Year 1 Revenue
Year 2
Year 3
Year 4
Year 5
$1,146,033
$1,317,938
$1,515,629
$1,742,973
$2,004,419
$159,171
$183,047
$210,504
$242,080
$278,392
$0
$0
$0
$0
$0
Total Cost of Revenue
$159,171
$183,047
$210,504
$242,080
$278,392
Gross Margin
$986,862
$1,134,891
$1,305,125
$1,500,894
$1,726,028
Subtotal Cost of Revenue Other Direct Costs
Gross Margin/Revenue
86.11%
86.11%
86.11%
86.11%
86.11%
Expenses Rent
$60,000
$61,500
$63,038
$64,613
$66,229
Maintenance
$1,800
$1,845
$1,891
$1,938
$1,987
Electricity
$1,800
$1,845
$1,891
$1,938
$1,987
Telephone
$6,000
$6,150
$6,304
$6,461
$6,623
Cable
$1,800
$36,000
$48,000
$60,000
$61,500
Gasoline
$11,250
$12,000
$12,300
$12,608
$12,923
Travel
$60,000
$61,500
$63,038
$64,613
$66,229
Insurance
$1,800
$1,845
$1,891
$1,938
$1,987
Housekeeping
$7,200
$7,380
$7,565
$7,754
$7,947
Miscellaneous
$6,000
$6,150
$6,304
$6,461
$6,623
$10,400
$10,400
$10,400
$10,400
$10,400 $106,947
Depreciation Payroll Taxes Total Personnel Total Operating Expenses
$90,000
$94,125
$98,119
$102,440
$600,000
$627,500
$654,125
$682,931
$712,978
$858,050
$928,240
$974,864
$1,024,097
$1,064,359
Profit Before Interest and Taxes
$128,812
$206,651
$330,261
$476,797
$661,669
EBITDA
$139,212
$217,051
$340,661
$487,197
$672,069
$21,410
$18,891
$16,135
$13,121
$9,824
$0
$0
$0
$0
$0
$107,402
$187,760
$314,126
$463,676
$651,845
Interest Expense Taxes Incurred
Net Profit Net Profit/Revenue
9.37%
14.25%
20.73%
26.60%
32.52%
The chart below represents total revenue for five years and illustrates the percentage of revenue allocated to cost of goods (COG), operating expenses and taxes, and interest. The net income piece represents revenue less the aforementioned expenditures.
The following depictions of the Company’s projected cash flow show that the Company expects to maintain sufficient cash balances over the five years of this plan. The “pro forma cash flow” table differs from the “pro forma profit and loss” (P&L) table. Pro forma cash flow is intended to represent the actual flow of cash in and out of the Company. In comparison, the revenue and expense projections on the P&L table include “non-cash” items and exclude funding and investment illustrations.
1
PRO FORMA PROFIT AND LOSS Year 1
Year 2
Year 3
Year 4
Year 5
$1,146,033
$1,317,938
$1,515,629
$1,742,973
$2,004,419
$0
$0
$0
$0
$0
$250,000
$0
$0
$0
$0
Sale of Other Current Assets
$0
$0
$0
$0
$0
Sale of Long-term Assets
$0
$0
$0
$0
$0
New Investment Received
$0
$0
$0
$0
$0
$1,396,033
$1,317,938
$1,515,629
$1,742,973
$2,004,419
Cash Spending
$600,000
$627,500
$654,125
$682,931
$712,978
Bill Payments
$390,053
$491,343
$533,427
$582,074
$625,761
$990,053
$1,118,843
$1,187,552
$1,265,005
$1,338,739
Cash Received Revenue New Current Borrowing New Long-term Liabilities (Loan)
Subtotal Cash Received
Expenditures Expenditures from Operations
Subtotal Spent on Operations
Additional Cash Spent Current Borrowing Repayment
$0
$0
$0
$0
$0
Long-term Liabilities Principal
$26,857
$29,377
$32,132
$35,146
$38,443
$1,000
$0
$0
$0
$0
$156,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$1,173,911
$1,148,220
$1,219,684
$1,300,151
$1,377,183
Net Cash Flow
$222,123
$169,718
$295,945
$442,822
$627,237
Cash Balance
$222,123
$391,841
$687,786
$1,130,608
$1,757,844
Purchase Inventory Purchase Long-term Assets Dividends Subtotal Cash Spent
PRO FORMA BALANCE SHEET Year 1
Year 2
Year 3
Year 4
Year 5
$222,123
$391,841
$687,786
$1,130,608
$1,757,844
$1,000
$1,000
$1,000
$1,000
$1,000
$0
$0
$0
$0
$0
$223,123
$392,841
$688,786
$1,131,608
$1,758,844
$156,000
$156,000
$156,000
$156,000
$156,000
$10,400
$20,800
$31,200
$41,600
$52,000
$145,600
$135,200
$124,800
$114,400
$104,000
Assets Current Assets Cash Inventory Other Current Assets Total Current Assets
Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Other Assets Other Assets
$0
$0
$0
$0
$0
$368,723
$528,041
$813,586
$1,246,008
$1,862,844
Accounts Payable
$38,178
$39,112
$42,664
$46,556
$49,991
Current Borrowing
$0
$0
$0
$0
$0
Other Current Liabilities
$0
$0
$0
$0
$0
$38,178
$39,112
$42,664
$46,556
$49,991
Long-term Liabilities
$223,143
$193,766
$161,634
$126,488
$88,044
Total Liabilities
$261,321
$232,879
$204,298
$173,044
$138,035
Total Assets Liabilities and Capital Current Liabilities
Subtotal Current Liabilities
Paid-in Capital
$0
$0
$0
$0
$0
Retained Earnings
$0
$107,402
$295,162
$609,288
$1,072,964
Earnings
$107,402
$187,760
$314,126
$463,676
$651,845
Total Capital
$107,402
$295,162
$609,288
$1,072,964
$1,724,809
Total Liabilities and Capital
$368,723
$528,041
$813,586
$1,246,008
$1,862,844
Net Worth
$107,402
$295,162
$609,288
$1,072,964
$1,724,809
SENSITIVITY ANALYSIS The sensitivity analysis below assumes that revenues are 15% higher or lower than figures projected earlier in this business plan.
BEST CASE SCENARIO (REVENUE INCREASES BY 15%) Year 1 Revenue Cost of Goods Gross Margin Gross Margin/Revenue
$1,317,938
Year 2 $1,515,629
Year 3 $1,742,973
Year 4 $2,004,419
Year 5 $2,305,082
$183,047
$210,504
$242,080
$278,392
$320,150
$1,134,891
$1,305,125
$1,500,894
$1,726,028
$1,984,932
86.11%
86.11%
86.11%
Operating Expenses
$858,050
$928,240
$974,864
$1,024,097
$1,064,359
Net Profit
$255,431
$357,994
$509,894
$688,810
$910,749
Cash Flow
$370,152
$339,952
$491,714
$667,956
$886,141
Cash Balance
$370,152
$710,104
$1,201,818
$1,869,773
$2,755,914
19.38%
23.62%
Net Profit/Revenue
29.25%
86.11%
34.36%
86.11%
39.51%
WORST CASE SCENARIO (REVENUE DECREASES BY 15%) Year 1
Year 2
Year 3
$1,515,629
Year 5
$996,551
$1,146,033
Cost of Goods
$138,410
$159,171
$183,047
$210,504
$242,080
Gross Margin
$858,141
$986,862
$1,134,891
$1,305,125
$1,500,894
Gross Margin/Revenue
$1,317,938
Year 4
Revenue
86.11%
$1,742,973
86.11%
86.11%
86.11%
Operating Expenses
$858,050
$928,240
$974,864
$1,024,097
$1,064,359
86.11%
Net Profit
($21,319)
$39,731
$143,892
$267,907
$426,711
Cash Flow
$93,401
$21,689
$125,711
$247,053
$402,102
Cash Balance
$93,401
$115,091
$240,802
$487,855
$889,957
Net Profit/Revenue
-2.14%
3.47%
10.92%
17.68%
24.48%
APPENDIX YEAR 1 REVENUE FORECAST Month
Price $3 ,000 00
$3 ,000 00
$3 ,000 00
$3 ,000 00
$3 ,000 00
$3 ,000 00
$3 ,000 00
$3 ,000 00
$3 ,000 00
$3 ,000 00
$3 ,000 00
$3 ,000 00
Revenue $75, 00
$87,51
$9 ,487
$11,57
$10 ,377
$111, 9
$12,7 3
$1 ,289
S ubtotal C os t of R evenue
YEAR 1 PERSONNEL FORECAST Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
General Director
1
1
1
1
1
1
General C ounsel
1
1
1
1
1
1
Direc tor of International T ra
1
1
1
1
1
Architect
2
2
2
2
T otal P ers on n el
7
7
7
7
Month 11
Month 12
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
2
2
1
2
2
2
2
2
7
7
7
7
7
7
7
7
P ersonnel C ount
P ersonnel Wage General Director
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
General C ounsel
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
Direc tor of International T ra
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
Architect
$6,250
$6,250
$6,250
$6,250
$6,250
$6,250
$6,250
$6,250
$6,250
$6,250
$6,250
$6,250
General Director
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
General C ounsel
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
$8,250
Direc tor of International T ra
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
P ersonnel C osts
Architect T otal P ayroll
YEAR 1 PROFIT & LOSS Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 9
Month 10
Month 11
Month 12
Revenue
$721000
$751600
$791380
$831349
$871516
$911892
$961487
$1011311
$1061377
$1111696
$1171280
$1231144
S ubtotal C ost of Revenue
$101000
$101500
$111025
$111576
$121155
$121763
$131401
$141071
$141775
$151513
$161289
$171103
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
T otal C ost of Revenue
$101000
$101500
$111025
$111576
$121155
$121763
$131401
$141071
$141775
$151513
$161289
$171103
Gross Margin
$621000
$651100
$681355
$711773
$751361
$791129
$831086
$871240
$911602
$961182
$1001991
$1061041
86.11%
86.11%
86.11%
86.11%
86.11%
86.11%
86.11%
86.11%
86.11%
86.11%
86.11%
86.11%
Other Direct C osts
Gross Margin/R evenue
$0
Month 8
$0
Expenses Rent
$51000
$51000
$51000
$51000
$51000
$51000
$51000
$51000
$51000
$51000
$51000
$51000
Maintenance
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
E lectricity
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
T elephone
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
C able
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
Gasoline
$250
$11000
$11000
$11000
$11000
$11000
$11000
$11000
$11000
$11000
$11000
$11000 $51000
T ravel
$51000
$51000
$51000
$51000
$51000
$51000
$51000
$51000
$51000
$51000
$51000
Insurance
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
Housekeeping
$600
$600
$600
$600
$600
$600
$600
$600
$600
$600
$600
$600
Miscellaneous
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
Depreciation
$867
$867
$867
$867
$867
$867
$867
$867
$867
$867
$867
$867
Payroll T axes
$71500
$71500
$71500
$71500
$71500
$71500
$71500
$71500
$71500
$71500
$71500
$71500
T otal Personnel T otal O p eratin g E xp en s es Profit Before Interest and T axes Interest E xpense T axes Incurred Net Profit Net P rofit/R evenue
$501000 $70,817
$501000 $71,567
$501000 $71,567
$501000 $71,567
$501000 $71,567
$501000 $71,567
$501000 $71,567
$501000 $71,567
$501000 $71,567
$501000 $71,567
$501000 $71,567
$501000 $71,567
($81817}
($61467}
($31212}
$206
$31795
$71563
$111519
$151674
$201036
$241616
$291425
$341474
$11875
$11859
$11843
$11826
$11810
$11793
$11777
$11760
$11743
$11726
$11708
$11691
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
($101692}
($81326}
($51054}
($11620}
$11985
$51770
$91743
$131914
$181293
$221890
$271716
$321783
-14.85%
-11.01%
-6.37%
-1.94%
2.27%
6.28%
10.10%
13.73%
17.20%
20.49%
23.63%
26.62%
YEAR 1 CASH FLOW Additional Cash Received
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$72,000
$75,600
$79,380
$83,349
$87,516
$91,892
$96,487
$101,311
$106,377
$111,696
$117,280
$123,144
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$250,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
S ale of Other Current Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
S ale of L ong-term Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Revenue New Current Borrowing New L ong-term L iabilities L oan
New lnvestment Received S ubtotal Cash Received Cash S pending B ill Payments
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$322,000
$75,600
$79,380
$83,349
$87,516
$91,892
$96,487
$101,311
$106,377
$111,696
$117,280
$123,144
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$1,061
$31,866
$33,076
$33,586
$34,121
$34,685
$35,277
$35,899
$36,554
$37,241
$37,964
$38,724
Additional Cash S pent Current Borrowing Repayment L ong-term L iabilities Principal Repayment Purchase lnventory Purchase L ong-term Assets Dividends Cash S pent
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$2,147
$2,163
$2,180
$2,196
$2,212
$2,229
$2,246
$2,263
$2,280
$2,297
$2,314
$2,331
$1,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$156,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$210,208
$84,030
$85,255
$85,781
$86,334
$86,914
$87,523
$88,162
$88,833
$89,538
$90,278
$91,055
Net Cash F low
$111,792
$8,430
$5,875
$2,432
$1,183
$4,979
$8,964
$13,149
$17,544
$22,158
$27,002
$32,089
Cash Balance
$111,792
$103,362
$97,487
$95,054
$96,237
$101,216
$110,180
$123,330
$140,873
$163,031
$190,033
$222,123
YEAR 1 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
$111,792
$103,362
$97,487
$95,054
$96,237
$101,216
$110,180
$123,330
$140,873
$163,031
$190,033
$222,123
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
T otal Current Assets
$112,792
$104,362
$98,487
$96,054
$97,237
$102,216
$111,180
$124,330
$141,873
$164,031
$191,033
$223,123
l ong-term Assets
$156,000
$156,000
$156,000
$156,000
$156,000
$156,000
$156,000
$156,000
$156,000
$156,000
$156,000
$156,000
$867
$1,733
$2,600
$3,467
$4,333
$5,200
$6,067
$6,933
$7,800
$8,667
$9,533
$10,400
$155,133
$154,267
$153,400
$152,533
$151,667
$150,800
$149,933
$149,067
$148,200
$147,333
$146,467
$145,600
Current Assets Cash Inventory Other Current Assets
Accumulated Depreciation T otal l ong-term Assets Other Assets Other Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$267,925
$258,629
$251,887
$248,588
$248,904
$253,016
$261,114
$273,396
$290,073
$311,364
$337,500
$368,723
Accounts Payable
$30,764
$31,957
$32,449
$32,966
$33,509
$34,081
$34,682
$35,313
$35,977
$36,674
$37,407
$38,178
Current Borrowing
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Other Current l iabilities
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
S ubtotal Current l iabilities
$30,764
$31,957
$32,449
$32,966
$33,509
$34,081
$34,682
$35,313
$35,977
$36,674
$37,407
$38,178
l ong-term l iabilities
$247,853
$245,689
$243,510
$241,314
$239,101
$236,872
$234,627
$232,364
$230,085
$227,788
$225,474
$223,143
T otall iabilities
$278,617
$277,646
$275,959
$274,280
$272,611
$270,953
$269,308
$267,677
$266,061
$264,462
$262,881
$261,321
Paid-in Capital
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Retained E arnings
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0 $107,402
T otal Assets Current l iabilities
E arnings
($10,692)
($19,017)
($24,072)
($25,692)
($23,707)
($17,937)
($8,195)
$5,719
$24,012
$46,902
$74,618
T otal Capital
($10,692)
($19,017)
($24,072)
($25,692)
($23,707)
($17,937)
($8,195)
$5,719
$24,012
$46,902
$74,618
$107,402
$267,925
$258,629
$251,887
$248,588
$248,904
$253,016
$261,114
$273,396
$290,073
$311,364
$337,500
$368,723
($10,692)
($19,017)
($24,072)
($25,692)
($23,707)
($17,937)
($8,195)
$5,719
$24,012
$46,902
$74,618
$107,402
T otall iabilities and Capital Net Worth
