Professional Documents
Culture Documents
The College Cafe is a student-to-student Internet marketplace providing college students with the opportunity to buy,
sell and trade college textbooks, participate in auctions, post classified ads, provide teacher evaluations, and buy
products for college. The College Cafe's target market consists of over 15.8 million college students who spend $200
billion annually. The College Cafe was founded in July and is presently in its start-up stage.
1.1 Solution
The College Cafe will enable students to buy, sell, and trade used textbooks directly to other students, by-passing the
university bookstores. By selling textbooks to other students, the seller can receive more money than the bookstore
will pay and the buyer can pay less than the bookstore charges. In addition to textbooks, students will be able to sell
class notes, old tests, computers, dorm accessories, used CDs, tutoring services or anything students wish to sell via
an online student-to-student marketplace. In addition, the College Cafe will offer other services such as classifieds,
teacher evaluations, weblogs (bloggers), specialized content and retail.
The College Cafe will establish itself as the leading online student-to-student marketplace by combining extensive
market-specific expertise with Internet technologies to generate revenue while creating a win-win solution for
students. The College Cafe will achieve market dominance by utilizing extensive domain experience, a local grass
roots marketing strategy, an exceptional management team, superior software, and the formation of strategic
alliances, memberships and partnerships with companies within the college market.
1.2 Market
The U.S. college student market is a growing yet underserved niche market. The U.S. Department of Education
expects the U.S. college student market to grow from 15.8 million students to 17.2 million in the next five years.
According to Harris Interactive college students are expected to spend over $200 billion this year.
1.3 Opportunity
College students are eager to find ways to get "quick cash" at the end of every semester. One method college
students use is to sell their old textbooks at the end of every semester, however the re-sell market is controlled by the
local university bookstore. Because university bookstores monopolize the market, students receive only a fraction of
the value paid for the book, typically 75% or less of the purchase prices. The bookstores then re-sell the books back
to other students, receiving over 125% profit. The current situation creates a lose-lose situation for students and a
win-win situation for bookstores. Students are looking for convenient, money saving ways to purchase textbooks and
to receive more value when re-selling textbooks at the end of each semester.
The College Cafe will require an initial seed investment as well as later rounds of investment. The initial seed capital
will be used for marketing and customer acquisition, software and website development.
1.5 Objectives
The College Cafe will strive to achieve the following objectives:
Company Overview
The College Cafe was founded in July and is presently in its start-up stage. The College Cafe website has been in
operation with limited functionality since August of last year. The College Cafe is currently being test marketed at
Georgia State University.
The College Cafe's data center is hosted and maintained by Atl-Connect Internet Services. Atl-Connect is located in
Atlanta, Georgia.
2.2 Mission
The College Cafe's mission is to provide college students a valuable and unique source for products, services and
information. In order to achieve our mission, The College Cafe commits to the following philosophies:
Recruit an exceptional management and marketing team with extensive domain experience in the college
market.
Create and maintain a "Grass Roots" marketing campaign.
Offer innovative and unique products and services.
Form strategic alliances and partnerships with companies suppling products to the college market.
2.5 Management Summary
The strength of The College Cafe's management team stems from the combined expertise in both management and
technical areas. The College Cafe recognizes that additional staff is required to properly support marketing, sales,
research, and support functions. Currently, The College Cafe is supported by three people with experience in e-
commerce strategy, website architecture and design and graphic design. Additional employees may be required in
the areas of senior level management, Web development, marketing, sales, human resources/recruiting,
administration, customer support and other critical operational positions.
The College Cafe will utilize current college students to fill positions in the areas of regional campus marketing, local
advertisement sales, administration, customer support other non-critical operational positions. These positions will
be full-time, part-time and intern positions depending on the local market. Using current college students will enable
The College Cafe to receive inexpensive local employment and valuable market feedback from The College Cafe's
target market while also providing real world work experience to college students.
The College Cafe will utilize consultants and contractors during website enhancements and development efforts.
Board of Directors
At this time The College Cafe is seeking individuals for a Board of Directors. These individuals will include highly
qualified business and industry professionals/experts along with members of the investment team. These individuals
will assist our management team in making appropriate decisions, forming strategic alliances and taking the most
effective action to be the industry leader.
Start-up
Requirements
Start-up Expenses
Domain Name Registration $15
SSL Encrynption $100
GeoTrust True Site Certificate $100
Auction & Classified Software (Xcent) $800
Legal Fees $150
Utilitizes $100
Merchant Account Fees $200
Computers (2 @ $2000) $4,000
Programming & Site Development $50,000
Site Hosting (1st 3 months) $120
Miscellance Expenses $1,000
Beta Launch Promotions $1,000
Search Engine Registration $100
Total Start-up Expenses $57,685
Start-up Assets
Cash Required $2,315
Other Current Assets $5,000
Long-term Assets $150,000
Total Assets $157,315
Total Requirements $215,000
Product Summary
The College Cafe will offer college students a unique blend of products, services, and content that is not offered by
any single company on the Internet. The College Cafe will aggregate participants, products, services and content to
create a student-to-student marketplace and retail website targeting 15.8 million college students. The following
describe The College Cafe's revenue models:
The College Cafe will offer functionality to allow students to buy, sell and trade their used textbooks with other
students. Specifically, the Textbook Exchange functionality allows students to post their textbooks online for sale or
trade, upload images, and indicate the condition of the book. Students looking for used textbooks will be able to
search for used textbooks for sale or trade in their local area or nationwide. A fee will be charge for posting
textbooks. The fee may vary based on the asking price of the textbook. Sample textbook categories include:
Accounting
Business
Computer Science
Engineering
Marketing
History
Law
Physics
Political Science
3.2 Auctions
The College Cafe will offer a powerful auction package. The Auction functionality will have many features such as
Standard, Reverse, Multi Item, Dutch and Blind auctions; Flash Buy and Proxy Bidding. A fee will be charged for
posting items to be auctioned. The posting fee structure will be similar to eBay's. Sample auctions categories
include:
Textbooks
Class Notes
Old Tests
Used CDs & DVDs
Computer Equipment
Tickets
Electronics
Games
Dorm Furnishing
3.3 Classifieds
The College Cafe will offer fee based, student targeted, classifieds ads. Here many features such as image upload,
Web links and nested categories will be offered. A fee will be charged for posting a classified. The amount charged
will be based on the length of time the classified will be posted. Sample classified categories include:
Textbooks
Class Notes
Tutors
Room Wanted
For Rent
For Sale
Tickets
Rides
Help Wanted
For Hire
3.4 Retail
The College Cafe will sell products targeted to college students. Margins will range from 10% to 50% depending on
the product. Sample product categories include:
Textbooks
CDs & DVDs
Computer Equipment
Electronics
Games
Appliances
Dorm Furnishings
University Merchandise
Clothes
General Merchandise
3.5 Teacher Evaluations
The College Cafe will enable students to post and review teacher evaluations. The teacher evaluation functionality
will be a value added service encouraging students to visit the site each semester. Revenue for teacher evaluations
will be generated from the sale of banner ad space located within the teacher evaluation pages. Banner ad sales will
be targeted toward local businesses on or around campus. The fee for banner ad space will be determined by the
length of posting, number of users for teacher evaluations and demand.
3.6 Bloggers
The College Cafe will offer Weblogs (Bloggers) services with topics tailored toward students. Weblog functionality
will be a value added service to encourage students to return to the site. Revenue for the Weblog will be generated
from the sale of banner ad space located within the Weblog pages. Depending on the Weblog topic, banner ad sales
will be targeted toward either local businesses in or around campus or national companies. The fees for banner ad
space will be determined by the length of posting, number of users for the Weblog and demand. Weblog topics will
include:
College Sports
Politics
Entertainment
Technology
News
3.7 Future Products
Overall, we conclude that our current products, services and banner ad strategy will ensure a strong market presence
and continued revenue growth. However as part of our growth model, we will regularly examine new services,
products, categories and content to support demand.
Brick & Mortar Locations - The College Cafe will evaluate opening retail outlets in proximity to college campuses to
support and complement the online presences. Franchise rights may also be available.
Employment Opportunities - The College Cafe will offer a local and national job posting service so that students
may search for new opportunities within the local community and nationwide. A fee will be charged for posting jobs.
Apartment Finder - The College Cafe will offer a local and national apartment finder service so that students may
search for apartments within the local community and nationwide. A fee will be charged for postings.
Club & Organization Finder - The College Cafe will offer a local and national club and organization finder service so
that students may search for clubs and organization within the local community and nationwide. A fee will be charged
for posting.
Targeted Content - The College Cafe will offer content. Sample topics will include:
News
Wine & Dine
Weather
What's Happening
Best Of
John Geraci, Vice President of Youth Research at Harris Interactive concludes: "The college consumer is easily
overlooked since most information sources that marketers rely on for tracking consumer behavior tend to under-
represent college students. However, it is a consumer group that marketers should recognize as offering substantial
opportunity. Connecting with consumers during the college years can pay great dividends, both now and well into the
future."
University Bookstores
The National Association of College Stores estimated U.S./Canadian university bookstore sales to be $11.12 billion
for the 2001-2002 academic year and online textbooks sales to be an estimated $1.8 billion. University bookstores
sell a variety of items, ranging from textbooks to toothpaste. The following table display the estimate of average
product sales in the entire university bookstore market, from largest to smallest segments[1].
According to the Harris Interactive Study, college students spend an average of $287 per month on discretionary
items (which is defined as spending on anything other than tuition, room/board, rent/mortgage, books/school fees).
Projections based on Spring 2002 360 Youth/Harris Interactive College Explorer Study; this represents a partial list of
categories for entertainment and leisure activities.
The National Association of College Stores estimates U.S. college store sales to be $11.12 billion for the 2001-2002
academic year. College stores sell a variety of items, ranging from textbooks to toothpaste.
SOURCE: U.S. Department of Commerce, Bureau of the Census, Current Population Reports, Series P-25, Nos.
1092, 1095, and "National Population Estimates," December 2001, and "Annual Projections of the Total Resident
Population: 1999 to 2100," January 2000
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
18-24 years of age 1% 28,400,000 28,684,000 28,970,840 29,260,548 29,553,153 1.00%
25-29 years of age 2% 17,900,000 18,258,000 18,623,160 18,995,623 19,375,535 2.00%
Male 2% 6,900,000 7,038,000 7,178,760 7,322,335 7,468,782 2.00%
Female 2% 9,000,000 9,180,000 9,363,600 9,550,872 9,741,889 2.00%
Total 1.55% 62,200,000 63,160,000 64,136,360 65,129,378 66,139,359 1.55%
4.4 Target Market Segment Strategy
The potential market for The College Cafe consists of 15.8 million college students enrolled in over 4,180 institutions.
For the Phase 1 launch of The College Cafe, we plan to focus our marketing effort on a subset market located in the
Southeastern U.S. We plan to expand to new markets with a phased approach focusing on a new region of the
country each semester. The Phase 1 target market segment will consist of the following universities:
University/College Enrollment
Clemson University
16,396
East Carolina University 18,271
Total 419,940
Phase 2 will focus on additional colleges and universities located in the southeast with the addition of colleges and
universities in the Northeast.
The National Association of College Stores estimates U.S./Canadian university bookstore sales to be $11.12 billion
for the 2001-2002 academic year.
There are approximately 4,840 college bookstores serving 4,182 institutions in the United States and 170 college
stores in Canada. Larger universities will often have several stores to serve students, smaller schools in a local area
may be served by a single store, and several schools in an urban community may share multiple retail outlets. While
many college stores share a common mission, they vary widely in size, location, ownership, and customer base.
The majority of stores are owned or operated by the university they serve. On-campus stores are mostly institutional,
but they may also be contract managed, cooperatives, or student associations. Off-campus stores are typically
privately owned.
Sales volume in college stores is determined by many factors, but the major influence on sales seems most closely
tied to the size of the institution served. According to the NACS College Store Industry Financial Report 2003,
average sales per college store were $6,320,556 while the median was $3,303,062. The majority of college stores
have less than $1 million in sales each year.
According to the NACS College Store Industry Financial Report 2003, college stores returned a median net income of
7.3% of net sales to their institutions.
Based on the 2003 College Store Industry Financial Report, total online sales at university bookstores for 2001-2002
are estimated to be $150 million or 1.41% of total college store sales. With a "click and mortar" strategy, the
university bookstore can offer the convenience of web ordering, paired with:
Ease of returns
The ability to pick up items for immediate use
One-stop shopping
Accurate information on what textbooks students need for their courses
The trust and security of buying from a well-known source with an on-campus location
The following table lists some of the major independent online retailers not associated with a university bookstore:
Marketing Strategy
The College Cafe's customers will be the 15.8 million college students in the United States. This segment is a niche
market that has no single business entity accounting for any significant percentage of total aggregated college
student purchases.
The main business model for The College Cafe relies on college students providing textbooks, auctions, classifieds
and teacher evaluations available on the website. Therefore, our focus will be on the marketing strategy to increase
student traffic and usage. In turn, visitor volume and transactions will maintain the inventory of products and services
offered.
The College Cafe recognizes the key to success as an extensive promotion strategy to attract users. Once additional
funding is secured the advertising and promotion plan will be implemented.
The College Cafe is looking to form relationships with major companies in the college student market. Companies
that we will approach included university merchandise manufacturers or resellers, specialized content suppliers, new
and used textbook wholesalers and local businesses.
The College Cafe's overall advertising and promotional objectives are to:
The College Cafe will attract customers by using a mixture of traditional and online advertising strategies to create a
grassroots marketing campaign.
Since the majority of The College Cafe's customer acquisition will result from direct promotion local to universities,
The College Cafe will recruit current college students to fill positions in the areas of campus marketing, local
advertisement sales and implementation of a "grassroots" marketing campaign.
The following is a list of advertising and promotional channels The College Cafe will utilize:
Sourcing
The main business model for The College Cafe relies on college students providing the textbooks, auctions,
classifieds and teacher evaluations that are posted on the website. Therefore, our focus relies heavily on the
marketing strategy that will increase traffic and usage and, in turn, maintain our inventory of products and services.
For the retail business component we will establish relationships with manufacturers or distributors that offer drop-
shipments direct to the customer. This will allow The College Cafe to keep expenses associated with inventory and
distribution to a minimum.
We will be contracting students as subject matter experts to provide the content in the weblogs. The use of students
as weblog content experts will help keep costs to a minium yet still providing interesting and relevant content.
For content and other value added service we will establish relationships with 3rd party vendors. This will enable The
College Cafe to offer a wide variety of products and services online yet allow The College Cafe to focus on the key
business elements; textbooks, auctions, classifieds and teacher evaluations.
Technology
The website is designed with the needs of the college student as the focus. The College Cafe is built using Microsoft
technologies which will provide the flexibility to easily expand products and service offerings in the future. The
College Cafe will initially host the website with an external web-hosting vendor thus reducing initial start-up cost. At a
later date, The College Cafe may elect to bring hosting in-house for better support and maintenance.
The Textbook Exchange, Auction, Classified, and User Administration software was purchased from Xcent Software,
Inc and modified to support The College Cafe's business needs. The rights to the source code of the Xcent's
software were included in the purchase price of the software. This will enable our programmers to customize the
software to support The College Cafe's growing business needs.
The College Cafe website and databases are hosted by Atl-Connect Internet Services which guarantees 99.99%
uptime. In addition to Web hosting, Atl-Connects provides site monitoring and statistical performance metrics that
include uptime, page views, unique users, banner impressions, search keywords stats and link stats from other sites.
Milestones
The accompanying table lists important milestones with dates and managers in charge. The milestone schedule also
indicates our initial beta launch of the website at Georgia State University.
Milestones
Milestone Start Date End Date Budget Manager Department
Business Concept & GLO, KM,
6/1/2003 7/15/2003 $0 Management
Planning AP
Beta Site Development 7/1/2003 10/1/2003 $0 GLO, KM Web
Beta Site Launch 10/1/2003 10/2/2003 $0 GLO Web
Beta Site Promotional GLO, KM,
10/1/2003 2/15/2004 $0 Marketing
Campaign AP
GLO, KM, Web &
Beta Site Analysis 10/15/2003 2/28/2004 $0
AP Marketing
Secure Funding for Phase
7/1/2004 7/30/2004 $0 GLO Management
1 Launch
Phase 1 - Site
2/1/2004 8/15/2004 $0 GLO, KM Web
Development
Phase 1 - Launch 8/15/2004 8/17/2004 $0 GLO Web
Phase 1 - Promotional GLO, KM,
8/15/2004 10/1/2004 $0 Marketing
Campaign AP
Secure Funding for Phase
10/1/2004 10/30/2004 $0 GLO Management
2
Totals $0
Financial Plan
The following are the summarized points from The College Cafe's financial plan. All charts and tables supporting
these results are included in the appendix at the end of the business plan:
The College Cafe will generate assertive revenues by the end of year one.
The College Cafe will start reporting sustained profits during the 9th month of the 1st year.
Sales and profits by year three will top 1.5x that of year one.
The College Cafe will require an initial investment in capital to finance the marketing campaign and launch
strategy.
The College Cafe will require additional investment to fund additional Web development, sales and
marketing efforts and general operating expenses.
The College Cafe will provide a complete student-to-student marketplace. Investment contacts have already been
approached and their expressions of satisfaction and encouragement are numerous. We intend to continue our
advances with more unique and effective business solutions for the the college market. Based on the attached
financial projections, we believe that this venture represents a sound business investment.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 9.00% 9.00% 9.00%
Long-term Interest Rate 5.00% 5.00% 5.00%
Tax Rate 27.00% 27.00% 27.00%
Other 0 0 0
9.2 Start-up Funding
In order to implement The College Cafe Phase 1 marketing campaign and launch strategy, we are seeking an initial
seed investment of $150,000. An additional investment of $1 million will be required for operational expenses,
continuing marketing campaigns, additional website enhancements, maintenance and support as necessary to
establish and maintain The College Cafe as the leading online student-to-student market place.
As detailed in the Cash Balance chart for one year, The College Cafe will be able to begin and sustain its operations
with the above mentioned investments. We are confident the opportunities in the market place are so compelling
that with year one cash flows, The College Cafe will grow and take advantage of the growth in the college market.
Start-up Funding
Start-up Expenses to Fund $57,685
Start-up Assets to Fund $157,315
Total Funding Required $215,000
Assets
Non-cash Assets from Start-up $155,000
Cash Requirements from Start-up $2,315
Additional Cash Raised $0
Cash Balance on Starting Date $2,315
Total Assets $157,315
Liabilities and Capital
Liabilities
Current Borrowing $5,000
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $5,000
Capital
Planned Investment
Gerald Owens $50,000
Andrea Powers $5,000
Kelley Mitchell $2,500
Allison Elliott $2,500
Additional Investment Requested $150,000
Additional Investment Requirement $0
Total Planned Investment $210,000
Loss at Start-up (Start-up Expenses) ($57,685)
Total Capital $152,315
Total Capital and Liabilities $157,315
Total Funding $215,000
9.3 Use of Funds
Initial funding proceeds will be used primarily for marketing, additional website development and maintenance. All
the equipment needed will be leased or purchased, and included in the operational expenses. The rest of the funds
will be used as working capital to maintain the operations until revenues generated by The College Cafe will be at the
point where we can sustain operational expenses.
Break-even Analysis
Monthly Revenue Break-even $133,362
Assumptions:
Average Percent Variable Cost 56%
Estimated Monthly Fixed Cost $58,648
9.7 Sales Forcast
The table and charts below show our forecasts for sales and costs of sales. Annual figures for three years are
shown. Monthly estimates for the first year are included in the appendix.
Sales Forecast
Year 1 Year 2 Year 3
Sales
Textbook Exchange $741,000 $963,300 $1,252,290
Classifieds $596,000 $774,800 $1,007,240
Auctions $291,000 $378,300 $491,790
Retail $206,000 $267,800 $348,140
Advertisement $278,500 $362,050 $470,665
Total Sales $2,112,500 $2,746,250 $3,570,125
Direct Cost of Sales Year 1 Year 2 Year 3
Textbook Exchange $391,000 $430,100 $473,110
Classifieds $258,000 $283,800 $312,180
Auction $170,500 $187,550 $206,305
Retail $193,500 $212,850 $234,135
Advertisement $170,500 $187,550 $206,305
Subtotal Direct Cost of Sales $1,183,500 $1,301,850 $1,432,035
9.8 Personnel Plan
The table below shows our forecasts for personnel. Annual figures for three years are shown. Monthly estimates for
the first year are included in the appendix.
Personnel Plan
Year 1 Year 2 Year 3
Gerald Owens $66,000 $70,000 $75,000
Kelley Mitchell $60,000 $65,000 $70,000
Andrea Powers $57,000 $60,000 $65,000
College Reps (1 at each College for phase 1) $228,000 $250,000 $300,000
Students Interns $0 $0 $0
Total People 22 0 0
Total Payroll $411,000 $445,000 $510,000
9.9 Projected Profit and Loss
The table and charts below present our forecasted for profit and loss. Annual figures for three years are shown.
Monthly estimates for the first year are included in the appendix.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $2,112,500 $2,746,250 $3,570,125
Direct Cost of Sales $1,183,500 $1,301,850 $1,432,035
Other Costs of Goods $0 $0 $0
Total Cost of Sales $1,183,500 $1,301,850 $1,432,035
Gross Margin $929,000 $1,444,400 $2,138,090
Gross Margin % 43.98% 52.60% 59.89%
Expenses
Payroll $411,000 $445,000 $510,000
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $0 $0 $0
Web Hosting $720 $1,000 $1,250
Utilities $1,200 $1,500 $2,000
Website Enhancement Projects $225,000 $200,000 $200,000
Insurance $1,200 $15,000 $17,500
Payroll Taxes $59,850 $64,650 $74,250
Other General and Administrative
$4,800 $7,500 $10,000
Expenses
Total Operating Expenses $703,770 $734,650 $815,000
Profit Before Interest and Taxes $225,230 $709,750 $1,323,090
EBITDA $225,230 $709,750 $1,323,090
Interest Expense $275 $63 $0
Taxes Incurred $60,738 $191,615 $357,234
Net Profit $164,218 $518,072 $965,856
Net Profit/Sales 7.77% 18.86% 27.05%
9.10 Projected Cash Flow
The table and chart below show our cash flow predictions. Annual figures for three years are shown. Monthly
estimates for the first year are included in the appendix.
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $2,112,500 $2,746,250 $3,570,125
Subtotal Cash from Operations $2,112,500 $2,746,250 $3,570,125
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $150,000 $0 $0
Subtotal Cash Received $2,262,500 $2,746,250 $3,570,125
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $411,000 $445,000 $510,000
Bill Payments $1,290,342 $1,883,557 $2,068,700
Subtotal Spent on Operations $1,701,342 $2,328,557 $2,578,700
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $3,600 $1,400 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $1,704,942 $2,329,957 $2,578,700
Net Cash Flow $557,558 $416,293 $991,425
Cash Balance $559,873 $976,167 $1,967,591
9.11 Projected Balance Sheet
The table below details our projected balance sheet. Annual figures for three years are shown. Monthly estimates
for the first year are included in the appendix.
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 30.00% 30.00% 4.01%
Percent of Total Assets
Other Current Assets 0.70% 0.44% 0.24% 26.25%
Total Current Assets 79.02% 86.74% 92.93% 81.30%
Long-term Assets 20.98% 13.26% 7.07% 18.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 34.74% 12.96% 8.11% 39.21%
Long-term Liabilities 0.00% 0.00% 0.00% 14.66%
Total Liabilities 34.74% 12.96% 8.11% 53.87%
Net Worth 65.26% 87.04% 91.89% 46.13%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 43.98% 52.60% 59.89% 32.36%
Selling, General & Administrative
39.49% 33.69% 33.21% 20.70%
Expenses
Advertising Expenses 13.37% 8.19% 7.00% 1.71%
Profit Before Interest and Taxes 10.66% 25.84% 37.06% 1.42%
Main Ratios
Current 2.27 6.69 11.46 1.85
Quick 2.27 6.69 11.46 0.71
Total Debt to Total Assets 34.74% 12.96% 8.11% 3.32%
Pre-tax Return on Net Worth 48.22% 72.08% 67.83% 58.10%
Pre-tax Return on Assets 31.47% 62.74% 62.33% 7.93%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 7.77% 18.86% 27.05% n.a
Return on Equity 35.20% 52.62% 49.52% n.a
Activity Ratios
Accounts Payable Turnover 6.23 12.17 12.17 n.a
Payment Days 27 40 28 n.a
Total Asset Turnover 2.96 2.43 1.68 n.a
Debt Ratios
Debt to Net Worth 0.53 0.15 0.09 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $316,533 $834,604 $1,800,460 n.a
Interest Coverage 820.51 11,265.87 0.00 n.a
Additional Ratios
Assets to Sales 0.34 0.41 0.59 n.a
Current Debt/Total Assets 35% 13% 8% n.a
Acid Test 2.27 6.69 11.46 n.a
Sales/Net Worth 4.53 2.79 1.83 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Appendix
Sales Forecast
Mon Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Month
th 1 h 2 h 3 h 4 h 5 h 6 h 7 h 8 h 9 h 10 h 11 12
Sales
Textbook
0 $1,0 $25, $35, $50,0 $35,0 $50,0 $60,0 $75,0 $80,0 $90,0 $115, $125,
Exchang
% 00 000 000 00 00 00 00 00 00 00 000 000
e
Classifie 0 $1,0 $20, $25, $40,0 $30,0 $45,0 $50,0 $60,0 $75,0 $70,0 $80,0 $100,
ds % 00 000 000 00 00 00 00 00 00 00 00 000
0 $1,0 $10, $20, $25,0 $20,0 $25,0 $30,0 $30,0 $25,0 $30,0 $35,0 $40,0
Auctions
% 00 000 000 00 00 00 00 00 00 00 00 00
0 $1,0 $2,5 $5,0 $10,0 $10,0 $12,5 $15,0 $20,0 $20,0 $25,0 $35,0 $50,0
Retail
% 00 00 00 00 00 00 00 00 00 00 00 00
Advertise 0 $1,0 $2,5 $5,0 $10,0 $15,0 $20,0 $25,0 $25,0 $30,0 $40,0 $50,0 $55,0
ment % 00 00 00 00 00 00 00 00 00 00 00 00
Total $5,0 $60, $90, $135, $110, $152, $180, $210, $230, $255, $315, $370,
Sales 00 000 000 000 000 500 000 000 000 000 000 000
Direct
Mon Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Month
Cost of
th 1 h 2 h 3 h 4 h 5 h 6 h 7 h 8 h 9 h 10 h 11 12
Sales
Textbook
$1,0 $5,0 $10, $15,0 $20,0 $30,0 $40,0 $45,0 $40,0 $50,0 $60,0 $75,0
Exchang
00 00 000 00 00 00 00 00 00 00 00 00
e
Classifie $1,0 $2,0 $5,0 $10,0 $15,0 $20,0 $25,0 $27,0 $30,0 $33,0 $40,0 $50,0
ds 00 00 00 00 00 00 00 00 00 00 00 00
$1,0 $2,5 $5,0 $7,50 $10,0 $15,0 $17,5 $20,0 $20,0 $22,0 $25,0 $25,0
Auction
00 00 00 0 00 00 00 00 00 00 00 00
$1,0 $1,5 $5,0 $10,0 $12,0 $15,0 $20,0 $22,0 $25,0 $25,0 $27,0 $30,0
Retail
00 00 00 00 00 00 00 00 00 00 00 00
Advertise $1,0 $2,5 $5,0 $5,00 $10,0 $10,0 $15,0 $20,0 $20,0 $25,0 $27,0 $30,0
ment 00 00 00 0 00 00 00 00 00 00 00 00
Subtotal
Direct $5,0 $13, $30, $47,5 $67,0 $90,0 $117, $134, $135, $155, $179, $210,
Cost of 00 500 000 00 00 00 500 000 000 000 000 000
Sales
Personnel Plan
Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Month
h 1 h 2 h 3 h 4 h 5 h 6 h 7 h 8 h 9 h 10 h 11 12
Gerald
0 $5,50 $5,50 $5,50 $5,50 $5,50 $5,50 $5,50 $5,50 $5,50 $5,50 $5,50 $5,50
Owen
% 0 0 0 0 0 0 0 0 0 0 0 0
s
Kelley
0 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00
Mitche
% 0 0 0 0 0 0 0 0 0 0 0 0
ll
Andre
a 0 $4,75 $4,75 $4,75 $4,75 $4,75 $4,75 $4,75 $4,75 $4,75 $4,75 $4,75 $4,75
Power % 0 0 0 0 0 0 0 0 0 0 0 0
s
Colleg 0 $19,0 $19,0 $19,0 $19,0 $19,0 $19,0 $19,0 $19,0 $19,0 $19,0 $19,0 $19,0
e % 00 00 00 00 00 00 00 00 00 00 00 00
Reps
(1 at
each
Colleg
e for
phase
1)
Stude
0
nts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
%
Interns
Total
Peopl 22 22 22 22 22 22 22 22 22 22 22 22
e
Total $34,2 $34,2 $34,2 $34,2 $34,2 $34,2 $34,2 $34,2 $34,2 $34,2 $34,2 $34,2
Payroll 50 50 50 50 50 50 50 50 50 50 50 50
General Assumptions
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Plan
1 2 3 4 5 6 7 8 9 10 11 12
Month
Curre
nt
Intere 9.00%9.00%9.00%9.00%9.00%9.00%9.00%9.00%9.00%9.00%9.00% 9.00%
st
Rate
Long-
term
Intere 5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00% 5.00%
st
Rate
Tax 27.00 27.00 27.00 27.00 27.00 27.00 27.00 27.00 27.00 27.00 27.00 27.00
Rate % % % % % % % % % % % %
Other 0 0 0 0 0 0 0 0 0 0 0 0
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Startin
g
Assets
Balan
ces
Current
Assets
$2,31 $97,1 $129, $156, $207, $208, $234, $258, $285, $313, $359, $443, $559,
Cash
5 67 349 092 523 964 145 588 777 290 168 650 873
Other
$5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00
Current
0 0 0 0 0 0 0 0 0 0 0 0 0
Assets
Total
$7,31 $102, $134, $161, $212, $213, $239, $263, $290, $318, $364, $448, $564,
Current
5 167 349 092 523 964 145 588 777 290 168 650 873
Assets
Long-
term
Assets
Long-
$150, $150, $150, $150, $150, $150, $150, $150, $150, $150, $150, $150, $150,
term
000 000 000 000 000 000 000 000 000 000 000 000 000
Assets
Accumul
ated
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Depreci
ation
Total
Long- $150, $150, $150, $150, $150, $150, $150, $150, $150, $150, $150, $150, $150,
term 000 000 000 000 000 000 000 000 000 000 000 000 000
Assets
Total $157, $252, $284, $311, $362, $363, $389, $413, $440, $468, $514, $598, $714,
Assets 315 167 349 092 523 964 145 588 777 290 168 650 873
Liabilitie
Month Month Month Month Month Month Month Month Month Month Month Month
s and
1 2 3 4 5 6 7 8 9 10 11 12
Capital
Current
Liabilitie
s
Account
$17,3 $27,1 $46,5 $70,9 $88,7 $116, $142, $162, $168, $188, $210, $246,
s $0
34 01 73 48 66 088 669 141 065 702 712 941
Payable
Current
$5,00 $4,70 $4,40 $4,10 $3,80 $3,50 $3,20 $2,90 $2,60 $2,30 $2,00 $1,70 $1,40
Borrowin
0 0 0 0 0 0 0 0 0 0 0 0 0
g
Other
Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilitie
s
Subtotal $5,00 $22,0 $31,5 $50,6 $74,7 $92,2 $119, $145, $164, $170, $190, $212, $248,
Current 0 34 01 73 48 66 288 569 741 365 702 412 341
Liabilitie
s
Long-
term
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilitie
s
Total
$5,00 $22,0 $31,5 $50,6 $74,7 $92,2 $119, $145, $164, $170, $190, $212, $248,
Liabilitie
0 34 01 73 48 66 288 569 741 365 702 412 341
s
Paid-in $210, $335, $360, $360, $360, $360, $360, $360, $360, $360, $360, $360, $360,
Capital 000 000 000 000 000 000 000 000 000 000 000 000 000
Retaine
($57,6 ($57,6 ($57,6 ($57,6 ($57,6 ($57,6 ($57,6 ($57,6 ($57,6 ($57,6 ($57,6 ($57,6 ($57,6
d
85) 85) 85) 85) 85) 85) 85) 85) 85) 85) 85) 85) 85)
Earnings
($47,1 ($49,4 ($41,8 ($14,5 ($30,6 ($32,4 ($34,2 ($26,2 ($4,39 $21,1 $83,9 $164,
Earnings $0
82) 67) 96) 40) 17) 58) 97) 79) 0) 51 23 218
Total $152, $230, $252, $260, $287, $271, $269, $268, $276, $297, $323, $386, $466,
Capital 315 133 848 419 775 698 857 018 036 925 466 238 533
Total
Liabilitie $157, $252, $284, $311, $362, $363, $389, $413, $440, $468, $514, $598, $714,
s and 315 167 349 092 523 964 145 588 777 290 168 650 873
Capital
Net $152, $230, $252, $260, $287, $271, $269, $268, $276, $297, $323, $386, $466,
Worth 315 133 848 419 775 698 857 018 036 925 466 238 533