I am happy to see you on our website. Let me tell you some information about it. This is big database of essays. It is absolutely free! Just find what you need and enjoy writing.


Category: Free Business Plans and Business Ideas | Views: 141

Marketing Consultancy Business Plan


MERIDIAN CONSULTING


3439 San Jose Blvd.
Santa Monica CA 60677



This plan describes an effort to launch a business on an international scale. Because of the nature of the business, the plan considers the business's positioning in the world marketplace and the heavy competition already in the arena. This plan was compiled using Business Plan Pro, by Palo Alto Software ©.





  • EXECUTIVE SUMMARY
  • COMPANY SUMMARY
  • COMPANY SERVICES
  • MARKET ANALYSIS SUMMARY
  • STRATEGY SUMMARY
  • MANAGEMENT SUMMARY
  • FINANCIAL PLAN

EXECUTIVE SUMMARY

Meridian Consulting will be formed as a consulting complany specializing in marketing of high-technology products in international markets. Its founders are former marketers of consulting services, personal computers, and market research, all in international markets. They are founding Meridian to formalize the consulting services they offer.



Objectives

  1. Sales of $350 thousand in 1995 and $1 million by 1997..
  2. Gross margin higher than 80%.
  3. Net income more than 10% of sales by the third year.


Mission

Meridian Consulting offers high-tech manufacturers a reliable, high-quality alternative to in-house resources for business development, market development, and channel development on an international scale. A true alternative to in-house resources offers a very high level of practical experience, know-how, contacts, and confidentiality. Clients must know that working with Meridian is a more professional, less risky way to develop new areas even than working completely in-house with their own people. Meridian must also be able to maintain financial balance, charging a high value for its services, and delivering an even higher value to its clients. Initial focus will be development in the European and Latin American markets, or for European clients in the United States market.



Keys to Success

  1. Excellence in fulfilling the promise — completely confidential, reliable, trustworthy expertise and information.
  2. Developing visibility to generate new business leads.
  3. Leveraging from a single pool of expertise into multiple revenue generation opportunities: retainer consulting, project consulting, market research, and market research published reports.


COMPANY SUMMARY

Meridian Consulting is a new company providing high-level expertise in international high-tech business development, channel development, distribution strategies, and marketing of high-tech products. It will focus initially on providing two kinds of international triangles:

  • Providing United States clients with development for European and Latin American markets.
  • Providing European clients with development for the United States and Latin American markets.

As it grows it will take on people and consulting work in related markets, such as the rest of Latin America, and the Far East, and similar markets. As it grows it will look for additional leverage by taking brokerage positions and representation positions to create percentage holdings in product results.



Company Ownership

Meridian Consulting will be created as a California C corporation based in Santa Marita County, owned by its principal investors and principal operators. As of this writing it has not been chartered yet and is still considering alternatives of legal formation.



Start-up Summary

Total start-up expense (including legal costs, logo design, stationery and related expenses) come to $73,000. Start-up assets required include $3,000 in short-term assets (office furniture, etc.) and $1,000,000 in initial cash to handle the first few months of consulting operations as sales and accounts receivable play through the cash flow. The details are included in Table 1.

Start-up Plan
Start-up Expenses
Legal $1,000
Stationery etc. $3,000
Brochures $5,000
Consultants $5,000
Insurance $350
Expensed equipment $3,000
Other $1,000
Total Start-up Expense $18,350
Start-up Assets Needed
Cash requirements $25,000
Start-up inventory $50,000
Other Short-term Assets $7,000
Total Short-term Assets $32,000
Long-term Assets
Capital Assets $0
Total Assets $32,000
Total Start-up Requirements: $50,350
Left to finance: $0
Start-up Funding Plan
Investment
Investor 1 $20,000
Investor 2 $20,000
Other $10,000
Total investment $50,000
Short-term borrowing
Unpaid expenses $5,000
Short-term loans $0
Interest-free short-term loans $0
Subtotal Short-term Borrowing $5,000
Long-term Borrowing $0
Total Borrowing $5,000
Loss at start-up ($23,000)
Total Equity $27,000
Total Debt and Equity $32,000
Checkline $0


COMPANY SERVICES

Meridian offers expertise in channel distribution, channel development, and market development, sold and packaged in various ways that allow clients to choose their preferred relationship: these include retainer consulting relationships, project-based consulting, relationship and alliance brokering, sales representation and market representation, project-based market research, published market research, and information forum events.



Services

Meridian offers the expertise a high-technology company needs to develop new product distribution and new market segments in new markets. This can be taken as high-level retainerconsulting, market research reports, or project-based consulting.



Service Description

  1. Retainer consulting: we represent a client company as an extension of its business development and market development functions. This begins with complete understanding of the client company's situation, objectives, and constraints. We then represent the client company quietly and confidentially, sifting through new market developments and new opportunities as is appropriate to the client, representing the client in initial talks with possible allies, vendors, and channels.
  2. Project consulting: Proposed and billed on a per-project and per-milestone basis, project consulting offers a client company a way to harness our specific qualities and use our expertise to solve specific problems, develop and/or implement plans, develop specific information.
  3. Market research: group studies available to selected clients at $5,000 per unit. A group study is packaged and published, a complete study of a specific market, channel, or topic. Examples might be studies of developing consumer channels in Japan or Mexico, or implications of changing margins in software.


Competitive Comparison

The competition comes in several forms

  1. The most significant competition is no consulting at all, companies choosing to do business development and channel development and market research in-house. Their own managers do this on their own, as part of their regular business functions. Our key advantage in competition with in-house development is that managers are already overloaded with responsibilities, they don't have time for additional responsibilities in new market development or new channel development. Also, Meridian can approach alliances, vendors, and channels on a confidential basis, gathering information and making initial contacts in ways that the corporate managers can't.
  2. The high-level prestige management consulting: McKinsey, Bain, Arthur Anderson, Boston Consulting Group, etc. These are essentially generalists who take their name-brand management consulting into specialty areas. Their other very important weakness is the management structure that has the partners selling new jobs, and inexperienced associates delivering the work. We compete against them as experts in our specific fields, and with the guarantee that our clients will have the top-level people doing the actual work.
  3. The third general kind of competitor is the international market research company: International Data Corporation (IDC), Dataquest, Stanford Research Institute, etc. These companies are formidable competitors for published market research and market forums, but cannot provide the kind of high-level consulting that Meridian will provide.
  4. The fourth kind of competition is the market-specific smaller house. For example: NomuraResearch in Japan, Select S.A. de C.V. in Mexico (now affiliated with IDC).
  5. Sales representation, brokering, and deal catalysts are an ad-hoc business form that will be defined in detail by the specific nature of each individual case.


Sales Literature

The business will begin with a general corporate brochure establishing the positioning. This brochure will be developed as part of the start-up expenses.

Literature and mailings for the initial market forums will be very important, with the need to establish a high-quality look and feel for



Sourcing

  1. The key fulfillment and delivery will be provided by the principals of the business. The real core value is professional expertise, provided by a combination of experience, hard work. and education (in that order).
  2. We will turn to qualified professionals for free-lance back-up in market research and presentation and report development, which are areas that we can afford to contract out without risking the core values provided to the clients.


Technology

Meridian Consulting will maintain latest Windows and Macintosh capabilities including:

  1. Complete Email facilities in Internet, Compuserve, America-Online, and Applelink, for working with clients directly through email delivery of drafts and information.
  2. Complete presentation facilities for preparation and delivery of multimedia presentations on Macintosh or Windows machines, in formats including on-disk presentation, live presentation, or video presentation.
  3. Complete desktop publishing facilities for delivery of regular retainer reports, project output reports, marketing materials, market research reports.


Future Services

In the future, Meridian will broaden the coverage by expanding into coverage of additional markets (e.g. all of Latin America, Far East, Western Europe) and additional product areas (e.g. telecommunications and technology integration).

We are also studying the possibility of newsletter or electronic newsletter services, or perhaps special on-topic reports.



MARKET ANALYSIS SUMMARY

Meridian will be focusing on high-technology manufacturers of computer hardware and software, services, and networking, who want to sell into markets in the United States, Europe, and Latin America. These are mostly larger companies, and occasionally medium-sized companies.

Our most important group of potential customers are executives in larger corporations. These are marketing managers, general managers, and sales managers, sometimes charged with international focus and sometimes charged with market or even specific channel focus. They do not want to waste their time or risk their money looking for bargain information or questionnable expertise. As they go into markets looking at new opportunities, they are very sensitive to risking their company's name and reputation. Professional experience



Market Segmentation

  1. Large manufacturer corporations: our most important market segment is the large manufacturer of high-technology products, such as Apple, Hewlett-Packard, IBM, Microsoft, Siemens, or Olivetti. These companies will be calling on Meridian for development functions that are better spun off than managed in-house, and for market research, and for market forums.
  2. Medium-sized growth companies: particularly in software, multimedia, and some related high-growth fields, Meridian will be able to offer an attractive development alternative to the company that is management constrained and unable to address opportunities in new markets and new market segments.


Industry Analysis

Connsulting "industry" is pulverized and disorganized, thousands of smaller consulting organizations and individual consultants for every one of the few dozen well-known companies.

Consulting is a disorganized industry, with participants ranging from major international name-brand consultants to tens of thousands of individuals. One of Meridian's challenges will be establishing itself as a "real" consulting company, positioned as a relatively risk-free corporate purchase.



Industry Participants

Consulting "industry" is pulverized and disorganized, thousands of smaller consulting organizations and individual consultants for every one of the few dozen well-known companies.

At the highest level are the few well-established major names in management consulting. Most of these are organized as partnerships established in major markets around the world, linked together by interconnecting directors and sharing the name and corporate wisdom. Some evolved from accounting companies (e.g. Arthur Anderson, Touche Ross) and some from managementconsulting (McKinsey, Bain). These companies charge very high rates for consulting, and maintain relatively high overhead structures and fulfillment structures based on partners selling and junior associates fulfilling.

At the intermediate level are some function-specific or market specific consultants, such as the market research firms (IDC, Dataquest) or channel development firms (ChannelCorp, Channel Strategies, ChannelMark).

Some kinds of consulting is little more than contract expertise provided by somebody looking for a job and offering consulting services as a stop-gap measure while looking.



Distribution Patterns

Consulting is sold and purchased mainly on a word-of-mouth basis, with relationships and previous experience being by far the most important factor.

The major name-brand houses have locations in major cities and major markets, and executive-level managers or partners develop new business through industry associations, business associations, and chambers of commerce and industry, etc., even in some cases social associations such as country clubs.

The medium-level houses are generally area-specific or function specific, and are not easily able to leverage their business through distribution.



Competition and Buying Patterns

The key element in purchase decisions made at the Meridian client level is trust in the professional reputation and reliability of the consulting firm.



Main Competitors

1. High-level prestige management consulting.

Strengths: international locations managed by owner-partners with a high level of presentation and understanding of general business. Enviable reputations which make purchase of consulting an easy decision for a manager, despite the very high prices.

Weaknesses: General business knowledge doesn't substitute for the specific market, channel, and distribution expertise of Meridian, focusing on high-technology markets and products only. Also, fees are extremely expensive, and work is generally done by very junior-level consultants, even though sold by high-level partners.

2. The international market research company

Strengths: International offices, specific market knowledge, permanent staff developing marketresearch information on permanent basis, good relationships with potential client companies.

Weaknesses: market numbers are not marketing, not channel development or market development. Although these companies compete for some of the business Meridian is after, they cannot really offer the same level of business understanding at a high level.

3. Market specific or function-specific experts

Strengths: expertise in market or functional areas. Meridian should not try to compete with Normura or Select in their markets with market research, or with ChannelCorp in channel management.

Weaknesses: the inability to spread beyond a specific focus, or to rise above a specific focus, to provide actuial management expertise, experience, and wisdom beyond the specifics.

The most significant competition is no consulting at all, companies choosing to do business development and channel development and market research in-house.

Strengths: no incremental cost except travel; also, the general work is done by the people who are entirely responsible, the planning done by those who will implement.

Weaknesses: most managers are terribly overburdened already, unable to find incremental resources in time and people to apply to incremental opportunities. Also, there is a lot of additional risk in market development and channel development done in house from the ground up. Finally, retainer-based antenna consultants can greatly enhance a company's reach and extend its position into conversations that might otherwise never hanve taken place.

Market Analysis

As indicated by Table 2, we must focus on a few thousand well-chosen potential customers in the United States, Europe, and Latin America. These few thousand high-tech manufacturing companies are the key customers for Meridian.

Market Analysis
Potential Customers Customers Growth rate
U.S. High Tech 5,000 10%
European High Tech 1,000 15%
Latin America 250 35%
Other 10,000 2%
Total 16,250 6.27%


STRATEGY SUMMARY

Meridian will focus on three geographical markets, the United States, Europe, and LatinAmerica, and in limited product segments: personal computers, software, networks, telecommunications, personal organizers, and technology integration products.

The target customer is usually a manager in a larger corporation, and occasionally an owner or president of a medium-sized corporation in a high-growth period.



Pricing Strategy

Meridian Consulting will be priced at the upper edge of what the market will bear, competing with the name brand consultants. The pricing fits with the general positioning of Meridian as high-level expertise.

Consulting should be based on $5,000 per day for project consulting, $2,000 per day for market research, and $10,000 per month and up for retainer consulting. Market research reports should be priced at $5,000 per report, which will of course require that reports be very well planned and focused on very important topics that are very well presented.



Sales Forecast

The sales forecast monthly summary is included in the appendix. The annual sales projections are included here in Table 3.

Sales Forecast
Sales 1996 1997 1998
Retainer Consulting $200,000 $350,000 $425,000
Project Consulting $270,000 $325,000 $350,000
Market Research $122,000 $150,000 $200,000
Strategic Reports $0 $50,000 $125,000
Other $0 $0 $0
Total Sales $592,000 $875,000 $1,100,000
Direct Costs 1996 1997 1998
Retainer Consulting $30,000 $38,000 $48,000
Project Consulting $45,000 $56,000 $70,000
Market Research $84,000 $105,000 $131,000
Strategic Reports $0 $20,000 $40,000
Other $0 $0 $0
Subtotal Direct Cost of Sales $159,000 $219,000 $289,000

Strategic Alliances

At this writing strategic alliances with Morgan and Daley are possibilities, given the content of existing discussions. Given the background of prospective partners, we might also be talking to European companies including Siemens and Olivetti and others, and to United States companies related to Apple Computer. In Latin America we would be looking at the key localhigh-technology vendors, beginning with Printaform.





MANAGEMENT SUMMARY

The initial management team depends on the founders themselves, with little back-up. As we grow we will take on additional consulting help, plus graphic/editorial, sales, and marketing.



Organizational Structure

Meridian should be managed by working partners, in a structure taken mainly from Morgan Partners. In the beginning we assume 3-5 partners:

  • Richard Wiley
  • At least one, probably two partners from Morgan and Daley
  • One strong European partner, based in Paris.
  • The organization has to be very flat in the beginning, with each of the founders reponsible for his or her own work and management.
  • One other strong partner


Management Team

The Meridian business requires a very high level of international experience and expertise, which means that it will not be easily leveragable in the common consulting company mode - in which partners run the business and make sales, while associates fulfill. Partners will necessarily be involved in the fulfillment of the core business proposition, providing the expertise to the clients.

The initial personnel plan is still tentative. It should involve 3-5 partners, 1-3 consultants, 1 strong editorial/graphic person with good staff support, 1 strong marketing person, an office manager, and a secretary. Later we add more partners, consultants and sales staff.



Personnel Plan

The detailed monthly personnel plan for the first year is included in the appendices. The annual personal estimates are included here as Table 5.

Personnel Plan
  1996 1997 1998
Partners 1.4 $144,000 $175,000 $200,000
Consultants 1.25 $0 $50,000 $63,000
Editorial/graphic 1.2 $18,000 $22,000 $26,000
VP Marketing 1.1 $20,000 $50,000 $55,000
Sales people 1.1 $0 $30,000 $33,000
Office Manager 1.1 $7,500 $30,000 $33,000
Secretarial 1.1 $5,250 $20,000 $22,000
Other 1.1 $0 $0 $0
Subtotal $194,750 $377,000 $432,000

FINANCI†AL PLAN


Important Assumptions

Table 6 summarizes key financial assumptions, including 45-day average collection days, sales entirely on invoice basis, expenses mainly on net 30 basis, 35 days on average for payment of invoices, and present-day interest rates.

General Assumptions
  1996 1997 1998
Short Term Interest Rate 8.00% 8.00% 8.00%
Long Term Interest Rate 10.00% 10.00% 10.00%
Payment days 35 35 35
Collection days 45 60 60
Tax Rate Percent 25.00% 25.00% 25.00%
Expenses in cash% 25.00% 25.00% 25.00%
Sales on credit 100.00% 100.00% 100.00%
Personnel Burden % 14.00% 14.00% 14.00%

Note: Ratios in assumptions are used as estimators and may therefore have different values than ratios calculated in the ratios section.



Key Financial Indicators

The following benchmark chart indicates our key financial indicators for the first three years. We foresee major growth in sales and operating expenses, and a bump in our collection days as we spread the business during expansion.



Break-even Analysis

Table 7 summarizes key financial assumptions, including 45-day average collection days, sales entirely on invoice basis, expenses mainly on net 30 basis, 35 days on average for payment of invoices, and present-day interest rates.

Break Even Analysis
Monthly Units Break-even $12,500
Monthly Sales Break-even $12,500
Assumptions
Average Unit Sale $1.00
Average Per-Unit Cost $0.20
Fixed Cost $10,000

Projected Profit and Loss

The detailed monthly pro-forma income statement for the first year is included in the appendices. The annual estimates are included here.

Pro-forma Income Statement
  1996 1997 1998
Sales $592,000 $875,000 $1,100,000
Cost of Sales $159,000 $219,000 $289,000
Other $0 $0 $0
  —————— —————— ——————
Total Cost of Sales $159,000 $219,000 $289,000
Gross margin $433,000 $656,000 $811,000
Gross margin percent 73.14% 74.97% 73.73%
Operating expenses:
Advertising/Promotion
10.00% $36,000 $40,000 $44,000
Public Relations
10.00% $30,000 $30,000 $33,000
Travel
10.00% $90,000 $60,000 $110,000
Miscellaneous
10.00% $6,000 $7,000 $8,000
  —————— —————— ——————
Payroll expense $194,750 $377,000 $432,000
Leased Equipment $6,000 $7,000 $7,000
Utilities $12,000 $12,000 $12,000
Insurance $3,600 $2,000 $2,000
Rent $18,000 $0 $0
Depreciation $200 $450 $600
Payroll Burden $27,265 $52,780 $60,480
  —————— —————— ——————
Contract/Consultants $0 $0 $0
Other $0 $0 $0
  —————— —————— ——————
Total Operating Expenses $423,815 $588,230 $709,080
Profit Before Interest and Taxes $9,185 $67,770 $101,920
Interest Expense ST $3,600 $12,800 $12,800
Interest Expense LT $5,000 $5,000 $5,000
Taxes Incurred $146 $12,493 $21,030
Net Profit $439 $37,478 $63,090
Net Profit/Sales 0.07% 4.28% 5.74%

Projected Cash Flow

Cash flow projections are critical to our success. The annual cash flow figures are included here as Table 8. Detailed monthly numbers are included in the appendices.

Pro-Forma Cash Flow
  1996 1997 1998
Net Profit: $439 $37,478 $63,090
Plus:
Depreciation $18,000 $0 $0
Change in Accounts Payable $26,068 $1,434 $11,035
Current Borrowing (repayment) $60,000 $100,000 $0
Increase (decrease) Other Liabilities $0 $0 $0
Long-term Borrowing (repayment) $50,000 $0 $0
Capital Input $0 $0 $0
Subtotal $154,507 $138,911 $74,125
Less: 1905 1905 1905
Change in Accounts Receivable $100,000 $97,072 $50,676
Change in Inventory $0 $0 $0
Change in Other ST Assets $0 $0 $0
Capital Expenditure $0 $0 $0
Dividends $0 $0 $0
Subtotal $100,000 $97,072 $50,676
Net Cash Flow $54,507 $41,839 $23,449
Cash balance $79,507 $121,346 $144,796

Projected Balance Sheet

The balance sheet shows healthy growth of net worth, and strong financial position. The monthly estimates are included in the appendices.

Pro-forma Balance Sheet
  1996 1997 1998
Short-term Assets Starting Balances
Cash $25,000 $79,507 $121,346 $144,796
Accounts receivable $0 $100,000 $197,072 $247,748
Inventory $0 $0 $0 $0
Other Short-term Assets $7,000 $7,000 $7,000 $7,000
Total Short-term Assets $32,000 $186,507 $325,418 $399,543
Long-term Assets
Capital Assets $0 $0 $0 $0
Accumulated Depreciation $0 $18,000 $18,000 $18,000
Total Long-term Assets $0 ($18,000) ($18,000) ($18,000)
Total Assets $32,000 $168,507 $307,418 $381,543
Debt and Equity
Accounts Payable $5,000 $31,068 $32,502 $43,537
Short-term Notes $0 $60,000 $160,000 $160,000
Other ST Liabilities $0 $0 $0 $0
Subtotal Short-term Liabilities $5,000 $91,068 $192,502 $203,537
Long-term Liabilities $0 $50,000 $50,000 $50,000
Total Liabilities $5,000 $141,068 $242,502 $253,537
Paid in Capital $50,000 $50,000 $50,000 $50,000
Retained Earnings ($23,000) ($23,000) ($22,561) $14,916
Earnings $0 $439 $37,478 $63,090
Total Equity $27,000 $27,439 $64,916 $128,006
Total Debt and Equity $32,000 $168,507 $307,418 $381,543
Net Worth $27,000 $27,439 $64,916 $128,006

Business Ratios

The following table shows the projected businesses ratios. We expect to maintain healthy ratios for profitability, risk, and return.

Ratio Analysis
Profitability Ratios: 1996 1997 1998 RMA
Gross margin 73.14% 74.97% 73.73% 0
Net profit margin 0.07% 4.28% 5.74% 0
Return on Assets 0.26% 12.19% 16.54% 0
Return on Equity 1.60% 57.73% 49.29% 0
Activity Ratios
AR Turnover 5.92 4.44 4.44 0
Collection days 31 62 74 0
Inventory Turnover 0.00 0.00 0.00 0
Accts payable turnover 8.71 8.71 8.71 0
Total asset turnover 3.51 2.85 2.88 0
Debt Ratios: 1996 1997 1998 RMA
Debt to net Worth 5.14 3.74 1.98 0
Short-term Debt to Liab. 0.65 0.79 0.80 0
Liquidity ratios
Current Ratio 2.05 1.69 1.96 0
Quick Ratio 2.05 1.69 1.96 0
Net Working Capital $95,439 $132,916 $196,006 0
Interest Coverage 1.07 3.81 5.73 0
Additional ratios 1996 1997 1998 RMA
Assets to sales 0.28 0.35 0.35 0
Debt/Assets 84% 79% 66% 0
Current debt/Total Assets 54% 63% 53% 0
Acid Test 0.95 0.67 0.75 0
Asset Turnover 3.51 2.85 2.88 0
Sales/Net Worth 21.58 13.48 8.59 0
Appendix: Projected Balance Sheet
Pro-forma Balance Sheet
  Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Jul-96
Short-term Assets Starting Balances
Cash $25,000 $58,428 $39,767 $36,494 $43,163 $48,312 $44,086
Accounts receivable $0 $10,000 $14,795 $29,589 $44,000 $75,000 $104,000
Inventory $0 $0 $0 $0 $0 $0 $0
Other Short-term Assets $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000
Total Short-term Assets $32,000 $75,428 $61,561 $73,083 $94,163 $130,312 $155,086
Long-term Assets
Capital Assets $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $1,500 $3,000 $4,500 $6,000 $7,500 $9,000
Total Long-term Assets $0 ($1,500) ($3,000) ($4,500) ($6,000) ($7,500) ($9,000)
Total Assets $32,000 $73,928 $58,561 $68,583 $88,163 $122,812 $146,086
Debt and Equity
  Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Jul-96
Accounts Payable $5,000 $14,475 $16,656 $17,951 $21,403 $26,149 $30,896
Short-term Notes $0 $0 $0 $20,000 $40,000 $60,000 $60,000
Other ST Liabilities $0 $0 $0 $0 $0 $0 $0
Subtotal Short-term Liabilities $5,000 $14,475 $16,656 $37,951 $61,403 $86,149 $90,896
Long-term Liabilities $0 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Total Liabilities $5,000 $64,475 $66,656 $87,951 $111,403 $136,149 $140,896
Paid in Capital $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Retained Earnings ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000)
Earnings $0 ($17,548) ($35,095) ($46,368) ($50,240) ($40,338) ($21,810)
Total Equity $27,000 $9,453 ($8,095) ($19,368) ($23,240) ($13,338) $5,190
Total Debt and Equity $32,000 $73,928 $58,561 $68,583 $88,163 $122,812 $146,086
Net Worth $27,000 $9,453 ($8,095) ($19,368) ($23,240) ($13,337) $5,190
Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 1996 1997 1998
$61,072 $83,398 $77,676 $58,072 $60,174 $79,507 $79,507 $121,346
$87,500 $60,000 $87,500 $120,000 $132,500 $100,000 $100,000 $197,072
$0 $0 $0 $0 $0 $0 $0 $0
$7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000
$155,572 $150,398 $172,176 $185,0 72 $199,674 $186,507 $186,507 $325,418
$0 $0 $0 $0 $0 $0 $0 $0
$10,500 $12,000 $13,500 $15,000 $16,500 $18,000 $18,000 $18,000
($10,500) ($12,000) ($13,500) ($15,000) ($16,500) ($18,000) ($18,000) ($18,000)
$145,072 $138,398 $158,676 $170,072 $183,174 $168,507 $168,507 $307,418
Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 1996 1997 1998
$24,855 $21,403 $33,053 $35,211 $36,074 $31,068 $31,068 $32,502
$60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $160,000 $160,000
$0 $0 $0 $0 $0 $0 $0 $0
$84,855 $81,403 $93,053 $95,211 $96,074 $91,068 $91,068 $192,502
$50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
$134,855 $131,403 $143,053 $145,211 $146,074 $141,068 $141,068 $242,502
$50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($22,561)
($16,783) ($20,005) ($11,378) ($2,139) $10,100 $439 $439 $37,478
$10,218 $6,995 $15,623 $24,861 $37,100 $27,439 $27,439 $64,916
$145,072 $138,398 $158,676 $170,072 $183,174 $168,507 $168,507 $307,418
$10,218 $6,995 $15,623 $24,861 $37,100 $27,439 $27,439 $64,916
Appendix: Projected Cash Flow
Pro-Forma Cash Flow
  Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96
Net Profit: ($17,548) ($17,548) ($11,273) ($3,873) $9,903 $18,528
Plus:
Depreciation $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Change in Accounts Payable $9,475 $2,181 $1,295 $3,452 $4,747 $4,747
Current Borrowing (repayment) $0 $0 $20,000 $20,000 $20,000 $0
Increase (decrease) Other Liabilities $0 $0 $0 $0 $0 $0
Long-term Borrowing (repayment) $50,000 $0 $0 $0 $0 $0
Capital Input $0 $0 $0 $0 $0 $0
Subtotal $43,428 ($13,866) $11,522 $21,080 $36,149 $24,774
Less: Jan Feb Mar Apr May Jun
Change in Accounts Receivable $10,000 $4,795 $14,795 $14,411 $31,000 $29,000
Change in Inventory $0 $0 $0 $0 $0 $0
Change in Other ST Assets $0 $0 $0 $0 $0 $0
Capital Expenditure $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0
Subtotal $10,000 $4,795 $14,795 $14,411 $31,000 $29,000
Net Cash Flow $33,428 ($18,661) ($3,273) $6,669 $5,149 ($4,226)
Cash balance $58,428 $39,767 $36,494 $43,163 $48,312 $44,086
Appendix: Important Assumptions
General Assumptions
  Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96
Short Term Interest Rate 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Long Term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Payment days 35 35 35 35 35 35
Collection days 45 45 45 45 45 45
Tax Rate Percent 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Expenses in cash% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Sales on credit 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Personnel Burden % 14.00% 14.00% 14.00% 14.00% 14.00% 14.00%
Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 1996 1997 1998
$5,028 ($3,223) $8,628 $9,239 $12,239 ($9,661) $439 $37,478 $63,090
$1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $18,000 $0 $0
($6,041) ($3,452) $11,651 $2,158 $863 ($5,005) $26,068 $1,434  
$0 $0 $0 $0 $0 $0 $60,000 $100,000  
$0 $0 $0 $0 $0 $0 $0 $0  
$0 $0 $0 $0 $0 $0 $50,000 $0  
$0 $0 $0 $0 $0 $0 $0 $0 $0
$486 ($5,175) $21,778 $12,896 $14,602 ($13,167) $154,507 $138,911 $74,125
Jul Aug Sep Oct Nov Dec 1905 1905 1905
($16,500) ($27,500) $27,500 $32,500 $12,500 ($32,500) $100,000 $97,072  
$0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0  
$0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0
($16,500) ($27,500) $27,500 $32,500 $12,500 ($32,500) $100,000 $97,072 $50,676
$16,986 $22,325 ($5,722) ($19,604) $2,102 $19,333 $54,507 $41,839 $23,449
$61,072 $83,398 $77,676 $58,072 $60,174 $79,507 $79,507 $121,346 $144,796



Note: Ratios in assumptions are used as estimators and may therefore have different values than ratios calculated in the ratios section.

Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 1996 1997 1998
8.00% 0% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
35 35 35 35 35 35 35 35 35
45 45 45 45 45 45 45 60 60
25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00%
Appendix: Personnel Plan
Personnel Plan
  Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96
Partners 1.4 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Consultants 1.25 $0 $0 $0 $0 $0 $0
Editorial/graphic 1.2 $0 $0 $0 $0 $0 $0
VP Marketing 1.1 $0 $0 $0 $0 $0 $0
Sales people 1.1 $0 $0 $0 $0 $0 $0
Office Manager 1.1 $0 $0 $0 $0 $0 $0
Secretarial 1.1 $0 $0 $0 $0 $0 $0
Other 1.1 $0 $0 $0 $0 $0 $0
Subtotal $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Appendix: Projected Profit and Loss
Pro-forma Income Statement
  Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96
Sales $10,000 $10,000 $20,000 $34,000 $58,000 $75,000
Cost of Sales $2,500 $2,500 $4,000 $8,000 $13,500 $19,000
Total Cost of Sales $2,500 $2,500 $4,000 $8,000 $13,500 $19,000
Gross margin $7,500 $7,500 $16,000 $26,000 $44,500 $56,000
Gross margin percent 75.00% 75.00% 80.00% 76.47% 76.72% 74.67%
Operating expenses:
Advertising/Promotion 10.00% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Public Relations 10.00% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Travel 10.00% $7,500 $7,500 $7,500 $7,500 $7,500 $7,500
Miscellaneous 10.00% $500 $500 $500 $500 $500 $500
Payroll expense $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Leased Equipment $500 $500 $500 $500 $500 $500
Utilities $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Insurance $300 $300 $300 $300 $300 $300
Rent $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Depreciation $0 $0 $0 $0 $0 $0
Payroll Burden $1,680 $1,680 $1,680 $1,680 $1,680 $1,680
Total Operating Expenses $30,480 $30,480 $30,480 $30,480 $30,480 $30,480
Profit Before Interest and Taxes ($22,980) ($22,980) ($14,480) ($4,480) $14,020 $25,520
Interest Expense ST $0 $0 $133 $267 $400 $400
Interest Expense LT $417 $417 $417 $417 $417 $417
Taxes Incurred ($5,849) ($5,849) ($3,758) ($1,291) $3,301 $6,176 $1,676
Net Profit ($17,548) ($17,548) ($11,273) ($3,873) $9,903 $18,528 $5,028
Net Profit/Sales -175.48% -175.48% -56.36% -11.39% 17.07% 24.70%
Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 1996 1997 1998
$12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $144,000 $175,000 $200,000
$0 $0 $0 $0 $0 $0 $0 $50,000 $63,000
$0 $0 $0 $6,000 $6,000 $6,000 $18,000 $22,000 $26,000
$0 $0 $5,000 $5,000 $5,000 $5,000 $20,000 $50,000 $55,000
$0 $0 $0 $0 $0 $0 $0 $30,000 $33,000
$0 $0 $0 $2,500 $2,500 $2,500 $7,500 $30,000 $33,000
$0 $0 $0 $1,750 $1,750 $1,750 $5,250 $20,000 $22,000
$0 $0 $0 $0 $0 $0 $0 $0 $0
$12,000 $12,000 $17,000 $27,250 $27,250 $27,250 $194,750 $377,000 $432,000

Related essays

Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 1996 1997 1998
$50,000 $35,000 $70,000 $85,000 $90,000 $55,000 $592,000 $875,000 $1,100,000
$12,000 $8,000 $21,500 $24,000 $25,000 $19,000 $159,000 $219,000 $289,000
$12,000 $8,000 $21,500 $24,000 $25,000 $19,000 $159,000 $219,000 $289,000
$38,000 $27,000 $48,500 $61,000 $65,000 $36,000 $433,000 $656,000 $811,000
76.00% 77.14% 69.29% 71.76% 72.22% 65.45% 73.14% 74.97% 73.73%
$3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $36,000 $40,000 $44,000
$2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $30,000 $30,000 $33,000
$7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $90,000 $60,000 $110,000
$500 $500 $500 $500 $500 $500 $6,000 $7,000 $8,000
$12,000 $12,000 $17,000 $27,250 $27,250 $27,250 $194,750 $377,000 $432,000
$500 $500 $500 $500 $500 $500 $6,000 $7,000
Publisher (Marketing Focused) Business Plan
Computer Reseller Business Plan
Fire Equipment Retailer Business Plan
Cigar Shop Business Plan
Carpet Cleaning Service Business Plan
Accounting
Business plan