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published by Palo Alto Software. Names, loc ations and numbers may have been changed, and substantial portions of text may have been omitted from the original plan to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to reproduce, resell, publish, distribute or even c opy this plan as it exists here. Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at marketing@paloalto.com. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright Palo Alto S oftwar e, Inc., 1 9 9 5 -2 0 0 9 All r ights r eser ved
Confidentiality Agreement The undersigned reader ac knowledges that the information provided by _________________________ in this business plan is confidential; therefore, reader agrees not to disc lose it without the express written permission of _________________________. It is ac knowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disc losure or use of same by reader, may cause serious harm or damage to _________________________. Upon request, this doc ument is to be immediately returned to _________________________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities.
Table of Contents
1.0 Executive Summary.............................................................................................................................1 1.1 Objectives ...................................................................................................................................1 1.2 Keys to Success ........................................................................................................................1 1.3 Mission........................................................................................................................................1 Chart: Highlights ......................................................................................................................2 2.0 Company Summary.............................................................................................................................2 2.1 Company Ownership .................................................................................................................2 2.2 Start-up Summary ......................................................................................................................2 Table: Start-up .........................................................................................................................3 Chart: Start-up .........................................................................................................................4 Table: Start-up Funding ..........................................................................................................5 2.3 Company Locations and Facilities ..........................................................................................5 3.0 Services................................................................................................................................................5 3.1 Service Description ...................................................................................................................6 3.2 Sales Literature ..........................................................................................................................6 3.3 Fulfillment ....................................................................................................................................7 3.4 Technology..................................................................................................................................7 3.5 Future Services ..........................................................................................................................8 4.0 Market Analysis Summary..................................................................................................................8 4.1 Target Market Segment Strategy.............................................................................................8 4.1.1 Market Needs ................................................................................................................9 4.1.2 Market Trends................................................................................................................9 4.1.3 Market Growth ...............................................................................................................9 4.2 Service Business Analysis .....................................................................................................10 4.2.1 Main Competitors .......................................................................................................10 4.2.2 Business Participants.................................................................................................11 4.3 Market Segmentation..............................................................................................................11 Chart: Market Analysis (Pie)................................................................................................12 Table: Market Analysis .........................................................................................................12 5.0 Strategy and Implementation Summary..........................................................................................12 5.1 Competitive Edge....................................................................................................................13 5.2 Marketing Strategy ..................................................................................................................13 5.2.1 Marketing Programs ...................................................................................................13 5.2.2 Pricing Strategy...........................................................................................................13 5.2.3 Promotion Strategy.....................................................................................................14 5.3 Sales Strategy..........................................................................................................................15 5.3.1 Sales Forecast ............................................................................................................16 Chart: Sales by Year ...................................................................................................16 Table: Sales Forecast.................................................................................................16 Chart: Sales Monthly ...................................................................................................17 5.3.2 Sales Programs ..........................................................................................................17 5.4 Strategic Alliances...................................................................................................................17 5.5 Milestones ................................................................................................................................17 Table: Milestones..................................................................................................................18 6.0 Management Summary ....................................................................................................................18 6.1 Organizational Structure..........................................................................................................18 6.2 Management Team Gaps .......................................................................................................19
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Table of Contents
6.3 Personnel Plan.........................................................................................................................20 Table: Personnel ...................................................................................................................20 7.0 Financial Plan ....................................................................................................................................21 7.1 Important Assumptions............................................................................................................21 Table: General Assumptions ...............................................................................................21 7.2 Key Financial Indicators ..........................................................................................................21 Chart: Benchmarks ...............................................................................................................22 7.3 Break-even Analysis................................................................................................................23 Chart: Break-even Analysis .................................................................................................23 Table: Break-even Analysis .................................................................................................23 7.4 Projected Profit and Loss .......................................................................................................24 Chart: Profit Monthly .............................................................................................................24 Chart: Profit Yearly................................................................................................................24 Chart: Gross Margin Monthly ...............................................................................................25 Chart: Gross Margin Yearly..................................................................................................25 Table: Profit and Loss ..........................................................................................................26 7.5 Projected Cash Flow...............................................................................................................27 Chart: Cash ...........................................................................................................................27 Table: Cash Flow..................................................................................................................28 7.6 Projected Balance Sheet ........................................................................................................29 Table: Balance Sheet ...........................................................................................................29 7.7 Business Ratios .......................................................................................................................30 Table: Ratios .........................................................................................................................31 Table: Sales Forecast ...............................................................................................................................1 Table: Personnel ........................................................................................................................................2 Table: General Assumptions ....................................................................................................................3 Table: Profit and Loss ...............................................................................................................................4 Table: Cash Flow .......................................................................................................................................6 Table: Balance Sheet ................................................................................................................................7
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Ibrio, Inc.
1.0 Executive Summary
Ibrio Incorporated is a small start-up firm loc ated in the business district of Palmyra, Pennsylvania. We offer Internet and Web-related services to small businesses in the Central Pennsylvania area. The services we offer include website development and design, hosting, maintenance, marketing, and analysis. Given our experience and expertise in both c ommercial Web development and business-tobusiness sales, we believe we can offer a unique and superior service to small business owners, in c omparison to what is currently available. The demand and growth rate for Web development and marketing services in the small business market is at an all time high and shows no sign of slowing anytime soon. Even more astonishing is the fac t that very few Web development companies have taken advantage of the opportunity, as there are no dominating participants in this huge market. We believe the reason for this virtually untapped market is due to expensive project costs, the highest profit margins in Web development today are in servicing large- and medium-sized corporations. We have developed a system that dramatically reduces steep project costs and henceforth will allow us to offer the same high-end Web development services as larger companies receive at a much lower cost to the client. This business plan will highlight many aspec ts of our system and our business. It will detail market growth and demand, and it will outline our projected cash flow and profit margins over the next three years. All numbers regarding our projected company growth are based on previous information gathered by ac tivity in the company over the last few months of operation.
1.1 Objectives
1. 2. 3. Revenues of $200,000 by month 10. Net Profit of 25% in year one and 35% in year two. 65% Gross margin by month 10.
1.3 Mission
Our mission is to provide affordable, ac cessible, and streamlined Internet and Web services to Page 1
Ibrio, Inc.
small businesses. We have developed a system for offering many different types of Web services (site development, hosting, marketing, and maintenance) that are exclusively tailored to fit the needs and resources of small companies.
Ibrio, Inc.
hours toward the start-up of Ibrio Inc. The cash requirement of $17,000 are funds that we need to provide the capital to run our business for the first few months. This capital will fund two employees payroll and equipment/ supplies to get them started. It will cover business expenses for a few months until our cash flow takes over. The four-year $20,000 loan has been secured from the XYZ bank to supply the needed capital explained above.
Table: Start-up
Start-up Requirements Start-up Expenses Business Cards Phone Line Install (Two Lines) Computer Monitor InfoUSA Database Office Equipment Dedicated Server Setup Fee Membership Fees DSL Setup and Install Phones Total Start-up Expenses Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets Total Requirements
$60 $150 $200 $400 $580 $150 $600 $350 $160 $2,650
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Ibrio, Inc.
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Ibrio, Inc.
Table: Start-up Funding
Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets $2,650 $24,650 $27,300
Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment David W. Hickethier Richard B. Andrews Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital
$0 $20,000 $0 $0 $20,000
$24,650 $27,300
3.0 Services
Ibrio Inc. is a full-service Internet solutions provider for small businesses. We foc us mainly on the Web, offering the following as our key 'Bread & Butter' website services: Design and development. Page 5
Ibrio, Inc.
Marketing and analysis. Hosting and maintenance.
We currently offer the following secondary services: E-commerce development. Website renovations and upgrades. Application development (i.e. chatrooms, message boards, online polling, live-feed audio/ video, etc.). Website maintenance training. Internet/website education seminars. Database construction.
We have plans to offer the following services within the next year: Internet ac cess service for small businesses. Local Area Network (LAN) installation. Intranet setup and installation. Result-based website marketing.
Ibrio, Inc.
about the company, plus a variety of helpful resources for small business owners which we will be constantly updating. In the next six months, we plan to produce and distribute bulk mail and fax flyers promoting our Web development and hosting services to small businesses in Central PA to solicit new business. We have plans to offer a more compac t version of our main sales folder in a broc hure format. This broc hure will be available both as a mailer to interested parties and as a sales solicitation in area businesses.
3.3 Fulfillment
For the website design, development, marketing, analysis, and maintenance we will employ industry professionals to handle our clients' needs. Working for the company presently is Brandon Andrews, a professional website development engineer and strategist with four years of experience in the commercial Web development industry. To keep employee costs low, we have designed a "team" development system that will consist of two full-time sales people and three full-time Web developers. Of the Web developers, one position will be filled by a highlyqualified senior Web professional and two lesser-qualified, lower paid developers. All three will work full-time on separate projects provided to them by the sales people. However, the senior developer will have the duty of maintaining the same high quality level of work in the junior developers' projects, that our clients have learned to expec t from us now. For the website hosting services we offer, Ibrio Inc. has formed several alliances with industry leaders to provide top-rate, reliable hosting solutions. Forming the alliances has allowed us much flexibility in important hosting features, customizability, and it has drove costs down dramatically. All these benefits are crucial to preserving the integrity of our company as being a 'fully-rounded Internet solutions provider' for small businesses.
3.4 Technology
It is a given that technology and keeping up with new innovations strongly influence our business. We operate a Windows based Local Area Network (LAN) in the office that is equipped with the most current software and hardware tools available to meet our project requirements. Within the next year, we will be investing in additional tools that will extend our capabilities in handling various types of program files (i.e. Macintosh c omputers, large capacity data storage, and high-end image sc anners). We also have plans to purchase licensing agreements with our major software vendors to allow for automatic upgrades in new software tools. Currently we own and operate both a professional digital and film camera for the purpose of offering on-site and in-house product and business photography to our clients. We would like to improve upon these services in the near future by purchasing a more complete photography system, it has been our experience that this is a service many small businesses are recognizing as a crucial part of their online marketing efforts and would take advantage of it were we to offer such a service.
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3.5 Future Services
Local Area Network Installation: These days, a quickly increasing number of small businesses are using computers as a nec essary tool in the everyday operations of the company. We would like to be able to expand our current services to meet this new demand. We will handle every aspec t of setting up a small business with an internal network of computers from purchasing, installing, and configuring the mac hines to software integration and educating the employees on proper usage and operating functions. Intranet Setup Installation: In our plan, after developing an Internet website for outside marketing purposes, we would like to offer the service of implementing the website into the network for use in all the business day-to-day operations. This would include extensive product/service cataloging, vital employee and management information, sharing of ac counting and inventory details, etc., all intended for strictly company uses. Internet Access for Small Business: This feature would ac t as another residual, pac kageable service. We would target small businesses exclusively allowing us to provide more flexibility and affordability to our clients through disc ounted high volume rates, value added service pac kages, and much more aggressive technical support services. Result-based Marketing: This is a service that no small business can turn down. We have plans to offer aggressive, intensified marketing services with the fees based solely on results. To ac hieve this, we are in the proc ess of forming multiple partnerships and alliances with industry specific Internet websites and various other software and service-oriented companies that provide spec ific marketing services and tools based on results ac hieved. We feel as though offering this rare service will dramatically increase our portfolio of clients.
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market with such a high demand. In addition to the very promising supply and demand ratio, it is also technically easier and less expensive to market to and attrac t small website projects than larger projects.
Ibrio, Inc.
U.S. businesses spend more of their total IT expenditures on Web-related services than on IT hardware (IDC Research). Currently, the total number of online users in the U.S. is 107 million, by 2004 that number will grow to 210 million (IDC Research). E-commerce revenue will reac h nearly $6.8 trillion by the year 2004, up from $48.6 billion in 2000 (Forrester Research Group).
Ibrio, Inc.
Weaknesses: For a company that claims to be experts in marketing for small business, they do virtually no advertising of their own and it appears that they lac k in the ability to bring on clients that are outside the city of Lebanon. Even though Web development is a service that Say1 offers, it is only one in a long list of varied services and we believe this will dramatically hinder their foc us toward leading the industry in our market. 4. WebWorks: Located approximately 25 miles from our Palmyra, PA offices. WebWorks offers Web development and marketing services to businesses in the Greater Harrisburg, PA area. Strengths: WebWorks has been in the Web services business for almost six years and has a very experienced team of developers and programmers. They also offer outstanding marketing services. Weaknesses: Although WebWorks is a direct competitor, they have begun to foc us a large portion of their services toward attrac ting medium- to large-sized companies. Their pricing is dramatically higher than any competing firms in the Central PA area and they now have put into effect a policy of only excepting jobs of a certain size.
Ibrio, Inc.
counties and therefore we will market in proportion to its size. The number of businesses is estimated at 2,547. It will make up 9% of our target area. York County: Located Southwest, approx. 40 miles from our loc ation. York county is the last of the four counties we will market in. It will be late next year before we begin marketing in this county. The number of businesses is estimated at 8,238. It will make up 28% of our target area. Our business allows us to offer services to small companies, no matter their geographical loc ation, and we plan to do so, eventually expanding outside our immediate area. The above counties are where we will market most heavily and expec t to receive the majority of our work. We do expec t to receive a small portion from outside this target area due to ad plac ement in a national business directory. The above demographic information can be found through the Geospatial & Statistical Data Center .
Ibrio, Inc.
Ibrio Inc. will initially foc us all marketing and sales efforts toward the Central Pennsylvania area, this includes Harrisburg, Lebanon, Lancaster, and York counties. We will market ourselves as an Internet and Web services organization devoted to offering high-end services to small businesses exclusively. Our target customer will be the owners of any small or home-based company who are looking to implement their business into the Web.
We plan on doing a large scale marketing project during this month including (March 5 - April 5, 2001): Radio advertising (WHP 580). Ad plac ement in loc al trade publications (The Central Penn Business Journal). Billboard Ads to promote wide-spread name recognition.
Ibrio, Inc.
For most small business owners, cost, both residual and one- time are huge influences on the dec isions they make regarding everyday operations of their company. Even though we offer 100% customized services and our pricing is based on an hourly fee, to make it easier and less confusing for the clients, Ibrio has established a pac kaged pricing system. Budget Domain Website Package ($585.00): For simple, information based websites. Popular with c ompanies who just need to gain an Internet presence. Mid-Level Website Package ($945.00): Information based websites with a large amount of content. Popular with c ompanies that have a large services/products list and/or want to implement more of their business into the Web. Catalog Website Package ($1,440.00): Usually reserved for product-oriented websites that are e-commerce enabled. Popular with c ompanies that have a desire to market heavily on the Internet or sell their products/services directly from the Web. Website Hosting (from $15.00 to $45.00 per month): Depending on the type and size of the website, the price for hosting can vary greatly. The average cost of hosting for most clients is $25 per month. Website Maintenance ($45.00 per hour): We charge a set fee of $45.00 per hour billed in 10 minute increments. If a client feels as though they will need their website updated or maintained on a regular basis, pac kages are available at a disc ount rate.
Direct Mail and Fax: We have sent out targeted bulk mail flyers promoting spec ial offerings by our company. We have participated in targeted broadcast fax promotions to small businesses in our area. In the near future we will begin a new aggressive, ongoing bulk mail campaign to promote our Web development and hosting services.
Mass Media Ads: We will begin advertising on a broader sc ale within the next six months. Radio spots will be continuously played during loc al area talk shows and news programs, this plac ement is intended to reac h the highest percentage of our target client possible. Billboard ad plac ement will be the second mass media marketing campaign we will implement into our marketing efforts. Billboard ads will be intended as 'name recognition' Page 14
Ibrio, Inc.
advertising. Educational Seminars: Ibrio Inc. has been invited to speak to business owners and managers at several Internet and Web-related educational seminars on a variety of topic. In the near future, we will promote our services through these seminars.
Local Area Commerce Groups: To promote our services and our name as a participant in the Web services industry, we will be joining many of the loc al area Chamber of Commerce groups and various other strategic partnership clubs.
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Ibrio, Inc.
5.3.1 Sales Forecast
The following table and chart summarize our forecast sales. We expec t the first month of operations (October) to be spent training the new developer and new salesman. November will be our first month of operation and we expec t to grow steadily in the following months. Website development sales will be the largest portion of our revenue with result-based marketing following. Maintenance and hosting revenue will be built up slowly but are the residual base we will stand on in the future.
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Ibrio, Inc.
5.5 Milestones
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The ac companying table lists important program milestones, with dates and managers in charge, and budgets for eac h. The milestone sc hedule indicates our emphasis on planning for implementation. What the table doesn't show is the commitment behind it. Our business plan includes complete provisions for plan-vs.-ac tual analysis, and we will hold monthly follow-up meetings every month to disc uss the variance and course corrections.
Table: Milestones
Milestones Milestone Incorporation Acquire Start-up Financing Accounting/Balance Sheet Setup Acquire Chamber Memberships Staff Sales Position #1 Staff Development Position #1 Upgrade Current Sales Literature Acquire Dedicated Web Host Service Staff Development Position #2 Staff Sales Position #2 Acquire Large Scale Outside Marketing Staff Developer Postion #3 Other Totals Start Date 8/14/2000 8/14/2000 8/31/2000 10/2/2000 10/9/2000 10/16/2000 10/23/2000 11/1/2000 1/15/2001 2/12/2001 3/5/2001 3/19/2001 1/1/2001 End Date 8/28/2000 10/1/2000 8/31/2000 10/9/2000 10/16/2000 10/23/2000 11/6/2000 11/8/2000 2/1/2001 2/26/2001 4/5/2001 4/2/2001 1/1/2001 Budget $500 $0 $300 $600 $2,240 $3,200 $300 $770 $3,200 $2,240 $2,000 $3,200 $0 $18,550 Manager Dave Dave Dave Dave Dave Brandon Dave Brandon Brandon Dave Dave Brandon ABC Department Admin Admin Admin Marketing HR HR Sales Development HR HR Marketing HR Department
Ibrio, Inc.
payable, marketing, and talent recruitment. David Hickethier will serve as chief operations officer and sales manager. He will supervise all salesmen and all sales promotions and projects. David will also be holding the office of the treasurer therefore will be responsible for all financial related matters. Brandon Andrews will serve as chief technology officer and lead Web developer. He will be directly supervising all Web development (employee and sub-contrac ting projects), and will also be responsible for any nec essary training in the same department.
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Ibrio, Inc.
6.3 Personnel Plan
We visualize implementing a "team" development system that will consist of two full-time sales people and three full-time Web developers. Of the Web developers, one position will be filled by a highly-qualified senior Web professional and two lesser-qualified, lower paid developers. All three will work full-time on separate projects provided to them by the sales people. However, the senior developer will have the duty of maintaining the same high quality level of work in the junior developers' projects, that our clients have learned to expec t from us now. By May, 2001 we plan to have one of these teams fully functional. The following table shows how we plan on making the above a reality.
Table: Personnel
Personnel Plan Year 1 Production Personnel Brandon/Web Developer Keith/Hired in Oct Developer #2/Hired in Feb Developer #3/Hired in Apr Other Subtotal Sales and Marketing Personnel Dave/Marketing Sales Position #1/Hired in Oct Sales Position #2/Hired in Feb Other Subtotal General and Administrative Personnel N/A N/A Subtotal Other Personnel N/A N/A Subtotal Total People Total Payroll $3,400 $16,228 $10,944 $7,920 $0 $38,492 Year 2 $25,000 $23,000 $21,000 $21,000 $0 $90,000 Year 3 $60,000 $27,000 $25,000 $25,000 $0 $137,000
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0 7 $68,492
$0 $0 $0 7 $159,000
$0 $0 $0 7 $245,000
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Ibrio, Inc.
7.0 Financial Plan
Ibrio's financials summarize the following areas: Important Assumptions. Key Financial Indicators. Break-even Analysis. Projected Profit and Loss. Projected Cash Flow. Projected Balance Sheet. Business Ratios.
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Ibrio, Inc.
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Ibrio, Inc.
7.3 Break-even Analysis
The following table and chart summarize our break-even analysis. With two developers and two salesmen we plan on developing eight sites in November and once the two new hires are fully trained doubling the number to 16 sites a month. (We don't plan on that happening until March 2001). The average variable cost is an aggregate measure for all the types of services which will be offered.
9% $4,210
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Ibrio, Inc.
7.4 Projected Profit and Loss
Our projected profit and loss is shown on the following table. Some highlights are the Gross Margin at 67% for our first year and steadily increasing. Our Net Profit/Sales starting at 26% and increasing by approximately 10% the following two years to reac h 45% by our third year.
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Ibrio, Inc.
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Ibrio, Inc.
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Production Payroll Other Total Cost of Sales Gross Margin Gross Margin % Operating Expenses Sales and Marketing Expenses Sales and Marketing Payroll Advertising/Promotion Travel Miscellaneous Total Sales and Marketing Expenses Sales and Marketing % General and Administrative Expenses General and Administrative Payroll Sales and Marketing and Other Expenses Depreciation Rent Depreciation Leased Equipment Utilities Insurance Payroll Taxes Other General and Administrative Expenses Total General and Administrative Expenses General and Administrative % Other Expenses: Other Payroll Consultants Contract/Consultants Total Other Expenses Other % Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales Year 1 $164,520 $15,550 $38,492 $0 $54,042 $110,478 67.15% Year 2 $514,900 $50,000 $90,000 $0 $140,000 $374,900 72.81% Year 3 $1,194,500 $127,600 $137,000 $0 $264,600 $929,900 77.85%
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Ibrio, Inc.
7.5 Projected Cash Flow
Cash flow projections for the first half of the year are slightly dec lining and in May they begin to raise sufficiently. We may need to borrow against our ac counts receivables but are projecting that the initial capital raised should cover us until our cash becomes fluid.
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Ibrio, Inc.
Table: Cash Flow
Pro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance Year 2 Year 3
$0 $0 $0 $0 $0 $0 $0 $431,289 Year 2
$0 $0 $0 $0 $0 $0 $0 $1,032,326 Year 3
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Ibrio, Inc.
7.6 Projected Balance Sheet
The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendix.
$9,050 $0 $0 $9,050 $20,000 $29,050 $18,000 ($2,650) $43,034 $58,384 $87,434 $58,384
$13,213 $0 $0 $13,213 $15,411 $28,624 $18,000 $40,384 $190,139 $248,523 $277,147 $248,523
$32,836 $0 $0 $32,836 $10,189 $43,025 $18,000 $230,523 $537,996 $786,519 $829,544 $786,519
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Ibrio, Inc.
7.7 Business Ratios
The following table shows the projected businesses ratios. We expec t to maintain healthy ratios for profitability, risk, and return. The Industry Profile ratios, shown for comparison, are based on Standard Industrial Classification (SIC) code 7375, Information Retrieval Services.
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Ibrio, Inc.
Table: Ratios
Ratio Analysis Sales Growth Percent of Total Assets Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout $81,564 23.06 $252,114 111.14 $776,888 434.50 n.a n.a Year 1 n.a. Year 2 212.97% Year 3 131.99% Industry Profile 9.70%
n.a n.a
0.50 0.31
0.12 0.46
0.05 0.76
n.a n.a
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Appendix
Table: Sales Forecast
Sales Forecast Month 1 Sales Website Development Result-based Marketing Maintenance Hosting Total Sales Direct Cost of Sales Website Development Result-based Marketing Maintenance Hosting Subtotal Direct Cost of Sales 0% 0% 0% 0% $0 $0 $0 $0 $0 Month 1 $0 $0 $0 $0 $0 Month 2 $0 $0 $0 $0 $0 Month 2 $0 $0 $0 $0 $0 Month 3 $4,800 $0 $110 $200 $5,110 Month 3 $0 $0 $0 $350 $350 Month 4 $5,400 $0 $280 $300 $5,980 Month 4 $0 $0 $0 $350 $350 Month 5 $7,200 $0 $510 $540 $8,250 Month 5 $0 $0 $0 $350 $350 Month 6 $8,400 $0 $750 $780 $9,930 Month 6 $0 $0 $0 $350 $350 Month 7 $8,400 $1,750 $1,010 $1,020 $12,180 Month 7 $0 $900 $0 $350 $1,250 Month 8 $11,200 $2,100 $1,350 $1,340 $15,990 Month 8 $0 $1,080 $0 $1,100 $2,180 Month 9 $14,000 $2,800 $1,790 $1,740 $20,330 Month 9 $0 $1,440 $0 $700 $2,140 Month 10 $19,200 $3,500 $2,290 $2,200 $27,190 Month 10 $0 $1,800 $0 $700 $2,500 Month 11 $19,200 $4,200 $2,810 $2,700 $28,910 Month 11 $0 $2,160 $0 $700 $2,860 Month 12 $19,200 $4,900 $3,330 $3,220 $30,650 Month 12 $0 $2,520 $0 $700 $3,220
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Appendix
Table: Personnel
Personnel Plan Month 1 Production Personnel Brandon/Web Developer Keith/Hired in Oct Developer #2/Hired in Feb Developer #3/Hired in Apr Other Subtotal Sales and Marketing Personnel Dave/Marketing Sales Position #1/Hired in Oct Sales Position #2/Hired in Feb Other Subtotal General and Administrative Personnel N/A N/A Subtotal Other Personnel N/A N/A Subtotal Total People Total Payroll $0 $0 $0 $0 $0 $200 $0 $0 $0 $200 $200 $1,904 $0 $0 $2,104 $200 $1,080 $0 $0 $1,280 $300 $1,440 $0 $0 $1,740 $300 $1,680 $1,120 $0 $3,100 $300 $1,680 $1,232 $0 $3,212 $300 $1,680 $1,176 $0 $3,156 $400 $1,760 $1,288 $0 $3,448 $400 $1,760 $1,760 $0 $3,920 $400 $1,760 $1,760 $0 $3,920 $400 $1,760 $1,760 $0 $3,920 $0 $0 $0 $0 $0 $0 Month 2 $200 $0 $0 $0 $0 $200 Month 3 $200 $1,836 $0 $0 $0 $2,036 Month 4 $200 $1,152 $0 $0 $0 $1,352 Month 5 $300 $1,584 $0 $0 $0 $1,884 Month 6 $300 $1,440 $1,440 $0 $0 $3,180 Month 7 $300 $1,584 $1,584 $0 $0 $3,468 Month 8 $300 $1,512 $1,512 $1,512 $0 $4,836 Month 9 $400 $1,840 $1,656 $1,656 $0 $5,552 Month 10 $400 $1,680 $1,512 $1,512 $0 $5,104 Month 11 $400 $1,760 $1,584 $1,584 $0 $5,328 Month 12 $400 $1,840 $1,656 $1,656 $0 $5,552
$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 $0
$0 $0 $0 0 $0
$0 $0 $0 2 $400
$0 $0 $0 4 $4,140
$0 $0 $0 4 $2,632
$0 $0 $0 4 $3,624
$0 $0 $0 6 $6,280
$0 $0 $0 6 $6,680
$0 $0 $0 7 $7,992
$0 $0 $0 7 $9,000
$0 $0 $0 7 $9,024
$0 $0 $0 7 $9,248
$0 $0 $0 7 $9,472
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Appendix
Table: General Assumptions
General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Month 1 1 10.00% 13.00% 30.00% 0 Month 2 2 10.00% 13.00% 25.00% 0 Month 3 3 10.00% 13.00% 25.00% 0 Month 4 4 10.00% 13.00% 25.00% 0 Month 5 5 10.00% 13.00% 25.00% 0 Month 6 6 10.00% 13.00% 25.00% 0 Month 7 7 10.00% 13.00% 25.00% 0 Month 8 8 10.00% 13.00% 25.00% 0 Month 9 9 10.00% 13.00% 25.00% 0 Month 10 10 10.00% 13.00% 25.00% 0 Month 11 11 10.00% 13.00% 25.00% 0 Month 12 12 10.00% 13.00% 25.00% 0
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Appendix
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Production Payroll Other Total Cost of Sales Gross Margin Gross Margin % Operating Expenses Sales and Marketing Expenses Sales and Marketing Payroll Advertising/Promotion Travel Miscellaneous Total Sales and Marketing Expenses Sales and Marketing % General and Administrative Expenses General and Administrative Payroll Sales and Marketing and Other Expenses Depreciation Rent Depreciation Leased Equipment Utilities Insurance Payroll Taxes Other General and Administrative Expenses Total General and Administrative Expenses General and Administrative % Other Expenses: 12% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $48 $0 $48 0.00% $0 $0 $300 $450 $0 $0 $55 $0 $497 $0 $1,302 25.48% $0 $0 $300 $450 $0 $0 $70 $0 $316 $0 $1,136 18.99% $0 $0 $300 $450 $0 $0 $70 $0 $435 $0 $1,255 15.21% $0 $0 $300 $450 $0 $0 $80 $0 $754 $0 $1,584 15.95% $0 $0 $330 $450 $0 $0 $80 $0 $802 $0 $1,662 13.64% $0 $0 $330 $450 $0 $0 $90 $0 $959 $0 $1,829 11.44% $0 $0 $330 $450 $0 $0 $90 $0 $1,080 $0 $1,950 9.59% $0 $0 $330 $450 $0 $0 $90 $0 $1,083 $0 $1,953 7.18% $0 $0 $330 $450 $0 $0 $90 $0 $1,110 $0 $1,980 6.85% $0 $0 $330 $450 $0 $0 $90 $0 $1,137 $0 $2,007 6.55% Month 1 $0 $0 $0 $0 $0 $0 0.00% Month 2 $0 $0 $200 $0 $200 ($200) 0.00% Month 3 $5,110 $350 $2,036 $0 $2,386 $2,724 53.31% Month 4 $5,980 $350 $1,352 $0 $1,702 $4,278 71.54% Month 5 $8,250 $350 $1,884 $0 $2,234 $6,016 72.92% Month 6 $9,930 $350 $3,180 $0 $3,530 $6,400 64.45% Month 7 $12,180 $1,250 $3,468 $0 $4,718 $7,462 61.26% Month 8 $15,990 $2,180 $4,836 $0 $7,016 $8,974 56.12% Month 9 $20,330 $2,140 $5,552 $0 $7,692 $12,638 62.16% Month 10 $27,190 $2,500 $5,104 $0 $7,604 $19,586 72.03% Month 11 $28,910 $2,860 $5,328 $0 $8,188 $20,722 71.68% Month 12 $30,650 $3,220 $5,552 $0 $8,772 $21,878 71.38%
$0 $0 $0 $0 $0 0.00%
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Appendix
Other Payroll Consultants Contract/Consultants Total Other Expenses Other % Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales $0 $0 $0 $0 0.00% $0 $0 $0 $217 ($65) ($152) 0.00% $0 $0 $0 $0 0.00% $248 ($448) ($448) $217 ($166) ($499) 0.00% $0 $0 $0 $0 0.00% $3,696 ($972) ($672) $217 ($297) ($891) -17.44% $0 $0 $0 $0 0.00% $2,706 $1,572 $1,872 $217 $339 $1,017 17.00% $0 $0 $0 $0 0.00% $3,285 $2,731 $3,031 $217 $629 $1,886 22.86% $0 $0 $0 $0 0.00% $5,104 $1,296 $1,596 $217 $270 $810 8.16% $0 $0 $0 $0 0.00% $5,294 $2,168 $2,498 $217 $488 $1,464 12.02% $0 $0 $0 $0 0.00% $5,405 $3,569 $3,899 $217 $838 $2,514 15.72% $0 $0 $0 $0 0.00% $5,818 $6,820 $7,150 $217 $1,651 $4,953 24.36% $0 $0 $0 $0 0.00% $6,293 $13,293 $13,623 $217 $3,269 $9,807 36.07% $0 $0 $0 $0 0.00% $6,320 $14,402 $14,732 $217 $3,546 $10,639 36.80% $0 $0 $0 $0 0.00% $6,347 $15,531 $15,861 $217 $3,829 $11,486 37.47%
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Appendix
Table: Cash Flow
Pro Forma Cash Flow Month 1 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $0 $5 $5 $400 $150 $550 $4,140 $147 $4,287 $2,632 $1,577 $4,209 $3,624 $2,045 $5,669 $6,280 $2,443 $8,723 $6,680 $2,579 $9,259 $7,992 $3,754 $11,746 $9,000 $5,184 $14,184 $9,024 $6,114 $15,138 $9,248 $8,051 $17,299 $9,472 $8,715 $18,187 0.00% $0 $0 $0 $0 $0 $0 $0 $0 Month 1 $0 $0 $0 $0 $0 $0 $0 $0 Month 2 $0 $0 $0 $0 $0 $0 $0 $1,686 Month 3 $0 $0 $0 $0 $0 $0 $0 $2,088 Month 4 $0 $0 $0 $0 $0 $0 $0 $6,166 Month 5 $0 $0 $0 $0 $0 $0 $0 $7,334 Month 6 $0 $0 $0 $0 $0 $0 $10,700 $20,284 Month 7 $0 $0 $0 $0 $0 $0 $0 $11,980 Month 8 $0 $0 $0 $0 $0 $0 $0 $14,955 Month 9 $0 $0 $0 $0 $0 $0 $0 $19,783 Month 10 $0 $0 $0 $0 $0 $0 $0 $23,315 Month 11 $0 $0 $0 $0 $0 $0 $0 $28,370 Month 12 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$0 $0 $0
$0 $0 $0
$1,686 $0 $1,686
$0 $0 $0 $0 $0 $0 $0 $5 ($5) $16,995
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Appendix
Table: Balance Sheet
Pro Forma Balance Sheet Month 1 Assets Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth $0 $0 $0 $0 $20,000 $20,000 $7,300 ($2,650) $0 $4,650 $24,650 $4,650 $147 $0 $0 $147 $20,000 $20,147 $7,300 ($2,650) ($152) $4,498 $24,645 $4,498 $95 $0 $0 $95 $20,000 $20,095 $7,300 ($2,650) ($650) $4,000 $24,095 $4,000 $1,509 $0 $0 $1,509 $20,000 $21,509 $7,300 ($2,650) ($1,542) $3,108 $24,618 $3,108 $1,964 $0 $0 $1,964 $20,000 $21,964 $7,300 ($2,650) ($525) $4,125 $26,089 $4,125 $2,359 $0 $0 $2,359 $20,000 $22,359 $7,300 ($2,650) $1,361 $6,011 $28,370 $6,011 $2,456 $0 $0 $2,456 $20,000 $22,456 $7,300 ($2,650) $2,171 $6,821 $29,276 $6,821 $3,583 $0 $0 $3,583 $20,000 $23,583 $18,000 ($2,650) $3,635 $18,985 $42,567 $18,985 $4,982 $0 $0 $4,982 $20,000 $24,982 $18,000 ($2,650) $6,149 $21,499 $46,481 $21,499 $5,846 $0 $0 $5,846 $20,000 $25,846 $18,000 ($2,650) $11,101 $26,451 $52,297 $26,451 $7,761 $0 $0 $7,761 $20,000 $27,761 $18,000 ($2,650) $20,909 $36,259 $64,020 $36,259 $8,403 $0 $0 $8,403 $20,000 $28,403 $18,000 ($2,650) $31,548 $46,898 $75,301 $46,898 $9,050 $0 $0 $9,050 $20,000 $29,050 $18,000 ($2,650) $43,034 $58,384 $87,434 $58,384 $17,000 $0 $7,650 $24,650 $16,995 $0 $7,650 $24,645 $16,445 $0 $7,650 $24,095 $13,844 $3,424 $7,650 $24,918 $11,723 $7,316 $7,650 $26,689 $12,219 $9,401 $7,650 $29,270 $10,830 $11,996 $7,650 $30,476 $21,855 $14,592 $7,650 $44,097 $22,089 $18,602 $7,650 $48,341 $22,860 $23,977 $7,650 $54,487 $27,505 $31,384 $7,650 $66,540 $33,521 $36,980 $7,650 $78,151 $43,704 $39,260 $7,650 $90,614 Starting Balances Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$0 $0 $0 $24,650
$0 $0 $0 $24,645 Month 1
$0 $0 $0 $24,095 Month 2
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