[INSERT IMAGE/LOGO]
COMPANY NAME
Owner: OWNER’S NAME
ADDRESS
CITY, STATE ZIP CODE
Tel.
Fax:
Email:
BUSINESS PLAN
© Copyright 2012 Docstoc Inc. 1
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by COMPANY NAME in this business plan is confidential; therefore,
reader agrees not to disclose it without the express written permission of COMPANY NAME.
It is acknowledged 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 disclosure or use of same by reader may cause serious harm
or damage to COMPANY NAME.
Upon request, this document is to be immediately returned to COMPANY NAME.
___________________
Signature
___________________
Name (typed or printed)
___________________
Date
This is a business plan. It does not imply an offering of securities.
© Copyright 2012 Docstoc Inc. 2
Table of Contents
1.0 Executive Summary .................................................................................................................................. 1
1.1 Objectives ........................................................................................................................................................ 2
1.2 Mission ............................................................................................................................................................. 2
1.3 Keys to Success ............................................................................................................................................... 2
2.0 Company Summary .................................................................................................................................. 2
2.1 Company Ownership ........................................................................................................................................ 2
2.2 Start-up Summary ............................................................................................................................................ 3
3.0 Services .................................................................................................................................................. 4
4.0 Market Analysis Summary ......................................................................................................................... 4
Table: Sales Forecast..................................................................................................................................... 1
Table: Profit and Loss ................................................................................................................................. 2
Table: Profit and Loss ................................................................................................................................. 2
Table: Cash Flow ........................................................................................................................................ 3
Table: Cash Flow ........................................................................................................................................ 3
Table: Balance Sheet................................................................................................................................... 5
Table: Balance Sheet................................................................................................................................... 5
APPENDIX
Page 1
2010 COMPANY NAME
1.0 Executive Summary
COMPANY NAME is a start-up managed solely by OWNER‘S NAME. OWNER‘S NAME has extensive experience in
the design industry and has maintained an excellent reputation in the Los Angeles community. In addition, OWNER‘S NAME is highly
educated and is capable of handling the sales/management and finance/administration areas, respectively.
COMPANY NAME will be buying, retrofitting, and remodeling older apartment buildings (in southern California/Los Angeles county
primarily) to be energy efficient in order to reduce the carbon footprint and to increase the quality of apartment living. In addition,
COMPANY NAME will aid in increasing the property values of the neighborhoods through improving the energy efficiency, the look
and grounds of the buildings. COMPANY NAME plans to install electric chargers in every parking space in the event that
tenants own an electric car. The company's plan is to have the sun and other green resources power the electricity, heating of water
and laundry facilities of the buildings. COMPANY NAME will implement professional landscaping and outdoor lighting design. All
remodeling of the building, both inside and out, will be using only sustainable and non-toxic products using local companies and
manufacturers as much as possible.
COMPANY NAME also wants to use the "greywater" from the building to water the grounds instead of using fresh water. OWNER‘S
NAME intends for the company to do these projects in California as the requested grant funding will be coming from
California. COMPANY NAME has future plans to expand operations into Central and Northern California in the future.
The purpose of this plan is to attain grant funding in the amount of $1,000,000 to acquire an already occupied multi-family dwelling,
renovations, landscaping design and installing green technology so that the apartment building can operate off of the power grid of
Los Angeles, California independently.
COMPANY NAME
[INSERT CONTACT INFO]
OWNER‘S NAME, Owner – [INSERT NUMBER] Page 1
2010 COMPANY NAME
1.1 Objectives
1. To purchase, restore and retro-fit apartment and condominium buildings in Los Angeles County with green technology, such as
solar energy panels and the like.
2. To actively participate in preserving original buildings from the 1920s-1970s in Los Angeles, California.
3. To be the example of green technology implementation in real estate in a major metropolitan area and further promote saving the
environment.
4. To educate others about the advantages of green technology in multi-family dwellings.
1.2 Mission
COMPANY NAME sole purpose is to establish a profitable and well managed company while at the same time creating an
atmosphere of visual stimulation and relaxation for future tenants. In addition, implementing green technology into well designed
original and restored properties to please the environmentally conscious residents will further establish COMPANY NAME as the
company to go to for others what want to follow the company's footsteps for consulting on outside projects.
The mission of COMPANY NAME is to collaborate with the owner's very large network of well skilled and educated designers,
architects and builders in the Los Angeles area to make this project a successful reality with plenty of room to grow in the future to
other parts of the State of California.
1.3 Keys to Success
Keys to success for the company will include:
1. Maintaining a reputable and untarnished reputation in the community.
2. Quality work and care on the buildings acquired for restoration and retro-fitting.
3. Competitive pricing of rental units in the properties.
4. Passion, drive and honest work ethic.
2.0 Company Summary
COMPANY NAME is a start-up managed solely by. OWNER‘S NAME has extensive experience in the design industry and has
maintained an excellent reputation in the Los Angeles community. In addition, OWNER‘S NAME is highly educated and is capable of
handling the sales/management and finance/administration areas, respectively.
2.1 Company Ownership
The company, COMPANY NAME, is an S-Corporation run and operated by the owner, OWNER‘S NAME. The company originated in
July of 2010.
OWNER‘S NAME is the Owner and Manager of the company. OWNER‘S NAME has an AA degree from Orange Coast College in
Fine Art and a BA degree from University of California Irvine in Production Design and Technical Theater. She also has a Holistic
Health Degree from the International Professional School of Bodywork in San Diego California. OWNER‘S NAME grew up in Laguna
Beach with parents that were very good at remodeling the family home. OWNER‘S NAME has always loved architecture and has
always seen how great older buildings could be improved. She has worked on designing and building numerous theatrical sets and
has worked on film and television sets as well. OWNER‘S NAME currently works as a full-time massage therapist at the #2 hotel in
the world, the Peninsula Beverly Hills. She has a very strong work ethic and is very experienced at working collaboratively with
others. OWNER‘S NAME is very well connected in the design sector of the entertainment industry and already has everyone on
board that she needs to do the first ―green‖ apartment building project.
OWNER‘S NAME has a passion for saving great historical buildings in Los Angeles. OWNER‘S NAME feels that Los Angeles is
a truly a beautiful city and wants to help make it more beautiful. OWNER‘S NAME is a problem solver, a 100% environment minded
person and has always succeeded at what I‘ve set out to do. OWNER‘S NAME thinks outside of the box.
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2010 COMPANY NAME
2.2 Start-up Summary
Total start-up expense (including legal costs, solar panel installation, real estate acquisition and related expenses) comes to
$394,500. Start-up assets required include short-term assets (computer equipment, office supplies, etc.) and $20,000 in initial cash to
handle the first few months of consulting operations as building renovations, permits and licensing and green-technology retro-fitting
of the buildings play through the cash flow. The details are included in Table 2-2.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $10,000
Insurance $10,000
Real Estate Down Payment $160,000
Computer $2,500
Solar Panel Installation/Retrofitting $72,000
Building Restoration/Renovation $120,000
Total Start-up Expenses $374,500
Start-up Assets
Cash Required $20,000
Other Current Assets $0
Long-term Assets $0
Total Assets $20,000
Total Requirements $394,500
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2010 COMPANY NAME
3.0 Services
COMPANY NAME will offer beautifully restored, renovated and environmentally beneficial apartments and condos for the residential
rental market in Los Angeles County. In addition, COMPANY NAME will be aiding in preserving the history of Los Angeles by turning
distressed original buildings from the 1920s-1970s into beautiful, elegant and energy efficient residences.
To start, COMPANY NAME will be attaining real estate in Los Angeles County and has future plans to expand operations to include
Orange County, Ventura County, Santa Barbara County and then San Francisco and surrounding Northern California counties.
4.0 Market Analysis Summary
Los Angeles is the second largest city in the United States, the largest city in the state of California and the Western United States,
with a population of 3.83 million within its administrative limits on a land area of 498.3 square miles (1,290.6 km2). The urban area of
Los Angeles extends beyond the administrative city limits with a population of over 14.8 million; it is the 14th largest urban area in the
world, affording it megacity status. The Los Angeles–Long Beach–Santa Ana metropolitan statistical area (MSA) is home to nearly
12.9 million residents while the broader Los Angeles-Long Beach-Riverside combined statistical area (CSA) contains nearly 17.8
million people. Los Angeles is also the seat of Los Angeles County, the most populated and one of the most multicultural counties in
the United States. The city's inhabitants are referred to as "Angelinos".
Unlike other large cities that rely on rain to clear smog, Los Angeles gets only 15 inches (381.00 mm) of rain each year: pollution
accumulates over many consecutive days. Issues of air quality in Los Angeles and other major cities led to the passage of early
national environmental legislation, including the Clean Air Act. More recently, the state of California has led the nation in working to
limit pollution by mandating low emission vehicles. Smog levels are only high during summers because it is dry and warm. In the
winter, storms help to clear the smog and it is not as much of a problem. Smog should continue to drop in the coming years due to
aggressive steps to reduce it, electric and hybrid cars, improvements in mass transit, and other pollution reducing measures.
Current estimates from the U.S. Census Bureau put the city's population at 3,833,995. The California Department of Finance
estimates the population at 4,094,764 as of January 1, 2009. The 2000 census recorded 3,694,820 people, 1,275,412 households,
and 798,719 families residing in the city, with a population density of 7,876.8 people per square mile (3,041.3/km2). There were
1,337,706 housing units at an average density of 2,851.8 per square mile (1,101.1/km2). Los Angeles has become a multiethnic and
multicultural city, with major new groups of Latino and Asian immigrants in recent decades. From a metropolitan area that in 1960 was
over 80% non-Hispanic white, Los Angeles has been transformed into a city that now has a "majority-minority" population. As of the
2000 US Census, the racial distribution in Los Angeles was 46.9% White American, 11.2% African American, 10.5% Asian American,
0.8% Native American, 0.2% Pacific Islander, 25.7% from other races, and 5.2% from two or more races. 46.5% of the population was
Hispanic or Latino (of any race).
The census indicated that 42.2% spoke English, 41.7% Spanish, 2.4% Korean, 2.3% Tagalog, 1.7% Armenian, 1.5% Chinese
(including Cantonese and Mandarin) and 1.3% Persian as their first language.]
According to the census, 33.5% of households had children under 18, 41.9% were married couples, 14.5% had a female householder
with no husband present, and 37.4% were non-families. 28.5% of households were made up of individuals and 7.4% had someone
living alone who was 65 years of age or older. The average household size was 2.83 and the average family size 3.56.
The age distribution was: 26.6% under 18, 11.1% from 18 to 24, 34.1% from 25 to 44, 18.6% from 45 to 64, and 9.7% who were 65 or
older. The median age was 32. For every 100 females there were 99.4 males. For every 100 females aged 18 and over, there were
97.5 males.
The median income for a household was $36,687, and for a family was $39,942. Males had a median income of $31,880, females
$30,197. The per capita income was $20,671. 22.1% of the population and 18.3% of families were below the poverty line. 30.3% of
those under the age of 18 and 12.6% of those aged 65 or older were below the poverty line. Los Angeles has had a high degree of
income disparity as compared to the rest of the country. Recently, however, income disparity has declined. The median household
income of the wealthiest neighborhood was $207,938, while in the poorest it was $15,003.
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2010 COMPANY NAME
Los Angeles is home to people from more than 140 countries speaking 224 different identified languages. Ethnic enclaves like
Chinatown, Historic Filipinotown, Koreatown, Little Armenia, Little Ethiopia, Tehrangeles, Little Tokyo, and Thai Town provide
examples of the polyglot character of Los Angeles.
Gross Rent
Census 2009 Supplementary Survey Summary Data (Estimates)
Specified Renter-Occupied Housing Units in Los Angeles, California
Gross Rent Estimate Percent
All Rented Housing Units 768,033 100.00%
With cash rent 757,021 98.57%
Less than $100 4,433 0.58%
$100 to $149 2,412 0.31%
$150 to $199 11,845 1.54%
$200 to $249 9,966 1.30%
$250 to $299 8,973 1.17%
$300 to $349 15,401 2.01%
$350 to $399 26,459 3.45%
$400 to $449 41,027 5.34%
$450 to $499 39,731 5.17%
$500 to $549 47,436 6.18%
$550 to $599 66,332 8.64%
$600 to $649 61,804 8.05%
$650 to $699 73,637 9.59%
$700 to $749 42,991 5.60%
$750 to $799 51,248 6.67%
$800 to $899 72,889 9.49%
$900 to $999 46,519 6.06%
$1,000 to $1,249 64,830 8.44%
$1,250 to $1,499 34,925 4.55%
$1,500 to $1,999 25,301 3.29%
$2,000 or more 8,862 1.15%
No cash rent 11,012 1.43%
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2010 COMPANY NAME
4.1 Market Segmentation
COMPANY NAME is primarily targeting two main groups. These two categories are:
1. Renters Seeking a Historic Restored Building. This is a growing group that either appreciate art, aesthetics of a building or are
in love with the past (i.e. 1920's - 1970's). This is a growing niche that is expanding throughout the United States.
2. Renters That Are Environmentally Conscious. Many around the world are seeking more energy efficient ways to power their
homes and their cars. Many single-family dwellings are installing solar panels, wind turbines and many other methods to contribute to
saving the environment. The company feels that making this green technology also applicable to a multi-family dwelling is on the
fore-front to change in this arena. Renters will not only hear about COMPANY NAME and owned and operated properties, but will
want to live there as well.
Table: Market Analysis
Market
Analysis
2010 2011 2012 2013 2014
Potential Growth CAGR
Customers
Seeking 3% 306,400 315,592 325,060 334,812 344,856 3.00%
Restored
Historic
Apt.
Building
Renters 10% 459,600 505,560 556,116 611,728 672,901 10.00%
Seeking
Green-
Technology
Apt.
Building
Total 7.36% 766,000 821,152 881,176 946,540 1,017,757 7.36%
4.2 Target Market Segment Strategy
According to recent demographic studies, more than 30% of the U.S. population will be in the age group of 25-44 by the year 2009. In
addition, work force studies indicate that the number of trained professionals for most industry categories is inadequate to meet
business growth demands and attrition rates. Therefore not only is there a large population of renters in this age bracket, but their
long-term employability, and thus their ability to make rental payments, is quite favorable. With these trends in mind, the
company's target customer is a young, professional, dual-income family. These tenants will have good credit and income potential,
but may not have significant cash reserves. The company's approach to these tenants, therefore, will be to get them into COMPANY
NAME apartment houses with creative solutions to their cash shortage problems.
4.3 Service Business Analysis
The country‘s two biggest metropolitan areas, New York and Los Angeles, are a microcosm of today‘s more nuanced real estate
market. Average house prices across both areas have fallen enough that buying may now be a good deal for many families. Yet there
are still significant pockets where renting looks promising — including parts of Manhattan, the New York suburbs and Orange County,
California.
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The buy-versus-rent question is particularly relevant right now. To qualify for an expiring federal tax credit of up to $8,000, home
buyers must have signed a contract by April 30 and closed on the house by June 30. Many economists also expect mortgage rates to
rise in coming months.
The real estate investment industry is pulverized and disorganized in today's market. With the number of foreclosures and distressed
properties across the country and in Los Angeles County alone, COMPANY NAME feels this is the best time to not only save and
restore a piece of history in Los Angeles, but to promote and demonstrate the possibilities of green technology in a multi-family
dwelling residing in a major metropolitan area.
COMPANY NAME wants to provide an easier, cost-effective and environmentally conscious way of living for "Angelinos" and for the
State of California in the future.
4.3.1 Competition and Buying Patterns
The key element in purchase decisions made at the COMPANY NAME client level is trust in the professional reputation and reliability
of the real estate firm. Clients can rest assured that the company stands behind its' convictions of helping the earth and at the same
time keeping a piece of the City of Los Angeles' history at the same time. To date, this is not currently being done which will make the
company stand out. COMPANY NAME will easily make the press for the company's effort and, therefore, will open a floodgate for
potential tenants.
5.0 Strategy and Implementation Summary
Image is a key factor in making in-roads into the higher echelons of real estate retrofitting and management. COMPANY NAME's
strategy is to lift its image through advertising in prestigious trade publications, joining and net-working and actively marketing a
selected group of 15 interior designers located in close proximity to the company's target market area.
5.1 Competitive Edge
COMPANY NAME 's competitive edge will be the facility's efforts in obtaining all appropriate licensing and certifications for green
technology and being able to announce that the company's buildings are not on the City of Los Angeles power grid. Additionally,
thorough pre-hire background screenings are performed on all individuals before hired for employment or involvement on the project.
5.2 Marketing Strategy
Tenants of COMPANY NAME can come from all age groups, male and female, all races and every income level and can be long-
established local residents or new residents to the area. That is why the marketing plan started at the construction phase; by
keeping in mind, if it looks aesthetically pleasing and is unique in functionality, people will come. Thus the main factor to the
company's success is simply that a person can enjoy living at any of COMPANY NAME‘s while participating in practicing alternative
methods for power.
Mid-Century Modern and the contemporary period, generally describes furniture, architectural, and interior design that appeared in the
span of time between the early 50's to late 70's. The movement, often described as irrational, humorous and ironic, also reflected a
sense of optimism, and still holds a special place in our collective imagination. Many mid-century designs are viewed as works of art,
on exhibition at many of the world's finest museums. The trend is brought to the forefront by today's designers, making mid century
modern popular once again. Every year, more commercials and print ads employ modern furniture; this in turn influences the
consumer and results in a contagious mindset (especially among young customers discovering the trend for the first time).
Driving this movement existed designers, who, at the time, may have been misunderstood as too avant gard. The list includes such
names as Eero Aarnio, Joe Colombo, Charles and Ray Eames, George Nelson, Alvar Aalto, Arne Jacobsen, Frank Gehry, Florence
Knoll, and Hans Wegner (amongst others). Their desire to deviate from the dourness of minimalism towards a more playful aesthetic
was occasionally looked down upon by their peers. Many of them also had a hand in influencing architecture during that period, as
organic design encompassed not only the structure itself, but also the items therein (the earliest pioneer of this method was Frank
Lloyd Wright).
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With the dawn of the 70's, the Pop Culture era evolved, along with the trend to embrace intense colors and the utilization of new
materials. Plastic and fiberglass especially allowed for greater liberty to create new shapes by virtue of their simple manufacturing
processes. Once considered 'throw away' or disposable designs, these whimsical pieces drew us out of the pessimistic decade of
Vietnam and Watergate, rendering daylight on the future. Today, much of the furniture and accessories of this period are highly
coveted by a new generation of collectors.
Fortunately, many of the most revered mid-century designs never went out of production. In most cases, the estate family members
have authorized companies such as Vitra and Adelta to re-issue items to their original specifications. Additionally, showrooms such as
Mod Livin, the Rocky Mountain regions largest mid-century retailer, are keeping the dream alive by representing the products from the
likes of Adelta, Cherner, Magis, Vitra, Kartell, Blu Dot, Heller and Emeco. Mod Livin also has a vintage showroom featuring the
designs of such renowned designers as Ray and Charles Eames, Florence Knoll, George Nelson, Rons John Gibbings, and Charles
Widdicomb.
The importance of Greater L.A.‘s mid-century architecture can no longer be denied.
Although the City of Los Angeles and State of California don‘t require resources to be fifty years old in order to gain landmark status,
the widespread perception is that younger buildings just aren‘t old enough to be considered significant. Plus, the National Register of
Historic Places has a general guideline that eligible resources are at least fifty years old.
The all-volunteer Modern Committee (ModCom) of the Los Angeles Conservancy has dealt with the ―fifty-year hurdle‖ since its
founding in 1984, long before the renaissance of mid-century modernism.
The sixties were a particularly important decade for Los Angeles.
The 1960s were a remarkable period in U.S. history and a watershed moment in the history of Los Angeles. Against the national
backdrop of the Kennedy era, the civil rights movement, the space race, and the Age of Aquarius, Los Angeles developed its freeway
system, the aerospace industry flourished, the population boomed, and our love affair with the automobile was at its peak.
This all spurred an incredibly prolific building period in the Los Angeles region, particularly in terms of civic and commercial
development. Companies, cities, and institutions pursued ambitious building programs of tremendous scale.
It was during the sixties that Los Angeles first became a ‗world city'. It was also when we fully realized much of the postwar promise
that had been building up steam throughout the late forties and fifties. Commercial architects really hit their stride in terms of large-
scale development. And Los Angeles International Airport embodied the jet age. When visitors arrived in Los Angeles, they knew that
Los Angeles had arrived.
Preservation also took hold in the U.S. during the decade. The City of Los Angeles created its Cultural Heritage Ordinance in 1962,
becoming one of the first cities in the U.S. to do so. The National Historic Preservation Act followed in 1966. Ironically, this came
largely in response to the destruction of older landmarks to make way for new structures—many of which have now gained their own
significance and are the subject of this very program.
5.3 Sales Strategy
COMPANY NAME will make a significant profit through the excellent care the company's building and in turn, its' tenants. Even
though COMPANY NAME will be the first of its' kind, the company will see profit within the first year due to beneficial word-of-mouth
advertising and easily attained media coverage.
The sales forecast monthly summary is included in the appendix. The annual sales projections are included here in Table 5.2.
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5.3.1 Sales Forecast
As the following table shows, the company plans to deliver sales of approximately $270,000 in the first year, $283,920 in the second
year, and $298,116 in the third year plan implementation.
Sales forecast data is presented in the chart and table below.
Table: Sales Forecast
Sales Forecast
2010 2011 2012
Sales
Tenants $230,400 $241,920 $254,016
Film Location Fees $40,000 $42,000 $44,100
Total Sales $270,400 $283,920 $298,116
Direct Cost of Sales 2010 2011 2012
Landscape Maintenance $24,000 $24,720 $25,462
Repairs $24,000 $24,720 $25,462
Subtotal Direct Cost of Sales $48,000 $49,440 $50,924
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5.4 Milestones
The detailed milestones for COMPANY NAME are shown in the following table and chart. The related budgets are included with the
expenses shown in the projected Profit and Loss statement, which is in the financial analysis that comes in Chapter 7 of this plan.
Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department
Acquire Real 7/29/2010 11/30/2010 $800,000 Owner
Estate
Install Solar 7/29/2010 2/1/2011 $72,000 Owner
Panels
Repairs and 7/29/2010 6/1/2011 $50,000 Owner
Maintenance
Design and 7/29/2010 1/15/2011 $20,000 Owner
Install
Landscaping
Hire PR Firm 7/29/2010 12/31/2010 $10,000 Owner
Totals $952,000
6.0 Management Summary
The initial management team depends on the founder herself, OWNER‘S NAME, with little back-up. As the company grows, she will
take on additional consulting help, plus graphic/editorial, sales, and marketing.
6.1 Personnel Plan
The detailed monthly personnel plan for the first year is included in the appendix. The annual personnel estimates are included here.
OWNER‘S NAME, the manager and only employee, will not take a salary until the company has made a sufficient profit. Outside of
OWNER‘S NAME, other individuals working with the company will be independent contractors.
Table: Personnel
Personnel Plan
2010 2011 2012
Management $0 $0 $0
Other $0 $0 $0
Total People 1 1 1
Total Payroll $0 $0 $0
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2010 COMPANY NAME
7.0 Financial Plan
The business of COMPANY NAME does not require substantial outlays for inventory and virtually all sales are on a cash basis, so
increases in sales will not be accompanied by initial cash-flow deficits.
7.1 Start-up Funding
OWNER‘S NAME‘s start-up costs are detailed above, in the Start-up Table.
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund $374,500
Start-up Assets to Fund $20,000
Total Funding Required $394,500
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $20,000
Additional Cash Raised $0
Cash Balance on Starting Date $20,000
Total Assets $20,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
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2010 COMPANY NAME
Planned Investment
Owner $0
Investor $0
Additional Investment Requirement $394,500
Total Planned Investment $394,500
Loss at Start-up (Start-up Expenses) ($374,500)
Total Capital $20,000
Total Capital and Liabilities $20,000
Total Funding $394,500
7.2 Important Assumptions
The company is assuming steady growth from good management, barring any unforeseen local or national disasters such as the
economic slowdown continuing in most of the country or earthquakes.
The company is assuming adequate grant funding to sustain COMPANY NAME during start-up.
7.3 Break-even Analysis
Table 7.3 summarizes the break-even analysis, including monthly units and sales break-even points.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even $5,500
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $5,500
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7.4 Projected Profit and Loss
As the Profit and Loss table shows, the company expects to continue its steady growth in profitability over the next three years of
operations.
Table: Profit and Loss
Pro Forma Profit and Loss
2010 2011 2012
Sales $270,400 $283,920 $298,116
Direct Cost of Sales $48,000 $49,440 $50,924
Other Costs of Sales $0 $0 $0
Total Cost of Sales $48,000 $49,440 $50,924
Gross Margin $222,400 $234,480 $247,192
Gross Margin % 82.25% 82.59% 82.92%
Expenses
Payroll $0 $0 $0
Marketing/Promotion $0 $0 $0
Depreciation $0 $0 $0
Mortgage/Property Tax $38,400 $39,552 $40,739
Insurance $9,600 $9,888 $10,182
Independent Contractors/Maintenance $12,000 $12,360 $12,731
Property Management Company $6,000 $6,180 $6,365
Total Operating Expenses $66,000 $67,980 $70,017
Profit Before Interest and Taxes $156,400 $166,500 $177,175
EBITDA $156,400 $166,500 $177,175
Interest Expense $8,587 $58,182 $54,168
Taxes Incurred $44,344 $32,495 $36,902
Net Profit $103,469 $75,822 $86,105
Net Profit/Sales 38.27% 26.71% 28.88%
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7.5 Projected Cash Flow
The cash flow projection shows that provisions for ongoing expenses are adequate to meet the needs of the company as the
business generates sufficient cash flow to support operations.
Table: Cash Flow
Pro Forma Cash Flow
2010 2011 2012
Cash Received
Cash from Operations
Cash Sales $270,400 $283,920 $298,116
Subtotal Cash from Operations $270,400 $283,920 $298,116
Additional Cash Received
Sales Tax, VAT, HST/GST $0 $0 $0
Received
New Current Borrowing $0 $0 $0
New Other Liabilities (interest- $0 $10,000 $0
free)
New Long-term Liabilities $640,000 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $1,000,000 $0 $0
Subtotal Cash Received $1,910,400 $293,920 $298,116
Expenditures 2010 2011 2012
Expenditures from Operations
Cash Spending $0 $0 $0
Bill Payments $120,649 $171,912 $176,128
Subtotal Spent on Operations $120,649 $171,912 $176,128
OWNER‘S NAME, Owner – [INSERT NUMBER] Page 18
2010 COMPANY NAME
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid $0 $0 $0
Out
Principal Repayment of Current $0 $0 $0
Borrowing
Other Liabilities Principal $0 $0 $0
Repayment
Long-term Liabilities Principal $38,400 $39,552 $40,739
Repayment
Purchase Other Current Assets $0 $72,000 $0
Purchase Long-term Assets $800,000 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $959,049 $283,464 $216,867
Net Cash Flow $951,351 $10,456 $81,249
Cash Balance $971,351 $981,807 $1,063,056
OWNER‘S NAME, Owner – [INSERT NUMBER] Page 19
2010 COMPANY NAME
7.6 Projected Balance Sheet
The balance sheet shows healthy growth of net worth, and strong financial position. The monthly estimates are included in the
appendix.
Table: Balance Sheet
Pro Forma Balance
Sheet
2010 2011 2012
Assets
Current Assets
Cash $971,351 $981,807 $1,063,056
Other Current Assets $0 $72,000 $72,000
Total Current Assets $971,351 $1,053,807 $1,135,056
Long-term Assets
Long-term Assets $800,000 $800,000 $800,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $800,000 $800,000 $800,000
Total Assets $1,771,351 $1,853,807 $1,935,056
Liabilities and Capital 2010 2011 2012
Current Liabilities
Accounts Payable $12,682 $14,259 $14,496
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $10,000 $10,000
Subtotal Current Liabilities $12,682 $24,259 $24,496
Long-term Liabilities $601,600 $562,048 $521,309
Total Liabilities $614,282 $586,307 $545,805
OWNER‘S NAME, Owner – [INSERT NUMBER] Page 20
2010 COMPANY NAME
Paid-in Capital $1,394,500 $1,394,500 $1,394,500
Retained Earnings ($374,500) ($237,431) ($127,000)
Earnings $137,069 $110,430 $121,752
Total Capital $1,157,069 $1,267,500 $1,389,251
Total Liabilities and $1,771,351 $1,853,807 $1,935,056
Capital
Net Worth $1,157,069 $1,267,500 $1,389,251
7.7 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC)
code 1522, Residential Remodelers, are shown for comparison.
Table: Ratios
Ratio Analysis
2010 2011 2012 Industry
Profile
Sales Growth 0.00% 5.00% 5.00% -2.88%
Percent of Total Assets
Other Current Assets 0.00% 3.88% 3.72% 26.36%
Total Current Assets 54.84% 56.85% 58.66% 77.28%
Long-term Assets 45.16% 43.15% 41.34% 22.72%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 0.72% 1.31% 1.27% 43.77%
Long-term Liabilities 33.96% 30.32% 26.94% 12.37%
Total Liabilities 34.68% 31.63% 28.21% 56.14%
Net Worth 65.32% 68.37% 71.79% 43.86%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 16.71%
Selling, General & 49.31% 61.11% 59.16% 5.14%
Administrative Expenses
Advertising Expenses 0.00% 0.00% 0.00% 0.23%
Profit Before Interest and 75.59% 76.06% 76.51% 0.96%
Taxes
Main Ratios
Current 76.59 43.44 46.34 1.60
Quick 76.59 43.44 46.34 0.58
Total Debt to Total Assets 34.68% 31.63% 28.21% 58.63%
Pre-tax Return on Net 16.92% 12.45% 12.52% 4.89%
Worth
Pre-tax Return on Assets 11.05% 8.51% 8.99% 2.02%
OWNER‘S NAME, Owner – [INSERT NUMBER] Page 21
2010 COMPANY NAME
Additional Ratios 2010 2011 2012
Net Profit Margin 50.69% 38.89% 40.84% n.a
Return on Equity 11.85% 8.71% 8.76% n.a
Activity Ratios
Accounts Payable Turnover 10.51 12.17 12.17 n.a
Payment Days 27 28 30 n.a
Total Asset Turnover 0.15 0.15 0.15 n.a
Debt Ratios
Debt to Net Worth 0.53 0.46 0.39 n.a
Current Liab. to Liab. 0.02 0.04 0.04 n.a
Liquidity Ratios
Net Working Capital $958,669 $1,029,548 $1,110,560 n.a
Interest Coverage 23.80 3.71 4.21 n.a
Additional Ratios
Assets to Sales 6.55 6.53 6.49 n.a
Current Debt/Total Assets 1% 1% 1% n.a
Acid Test 76.59 43.44 46.34 n.a
Sales/Net Worth 0.23 0.22 0.21 n.a
Dividend Payout 0.00 0.00 0.00 n.a
OWNER‘S NAME, Owner – [INSERT NUMBER] Page 22
Appendix
Table: Sales Forecast
Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales
Tenants $19,200 $19,200 $19,200 $19,200 $19,200 $19,200 $19,200 $19,200 $19,200 $19,200 $19,200 $19,200
Film Location Fees $10,000 $0 $0 $10,000 $0 $0 $10,000 $0 $0 $10,000 $0 $0
Total Sales $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $19,200 $19,200
Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Landscape Maintenance $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Repairs $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Subtotal Direct Cost of Sales $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Page 1
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $19,200 $19,200
Direct Cost of Sales $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Gross Margin $25,200 $15,200 $15,200 $25,200 $15,200 $15,200 $25,200 $15,200 $15,200 $25,200 $15,200 $15,200
Gross Margin % 86.30% 79.17% 79.17% 86.30% 79.17% 79.17% 86.30% 79.17% 79.17% 86.30% 79.17% 79.17%
Expenses
Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Marketing/Promotion $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Mortgage/Property Tax $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200
Insurance 15% $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Independent Contractors/Maintenance 15% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Property Management Company 15% $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Total Operating Expenses $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500
Profit Before Interest and Taxes $19,700 $9,700 $9,700 $19,700 $9,700 $9,700 $19,700 $9,700 $9,700 $19,700 $9,700 $9,700
EBITDA $19,700 $9,700 $9,700 $19,700 $9,700 $9,700 $19,700 $9,700 $9,700 $19,700 $9,700 $9,700
Interest Expense ($27) ($53) ($80) ($107) ($133) ($160) ($187) ($213) ($240) ($267) $5,040 $5,013
Taxes Incurred $5,918 $2,926 $2,934 $5,942 $2,950 $2,958 $5,966 $2,974 $2,982 $5,990 $1,398 $1,406
Net Profit $13,809 $6,827 $6,846 $13,865 $6,883 $6,902 $13,921 $6,939 $6,958 $13,977 $3,262 $3,281
Net Profit/Sales 47.29% 35.56% 35.66% 47.48% 35.85% 35.95% 47.67% 36.14% 36.24% 47.87% 16.99% 17.09%
Page 2
Appendix
Table: Cash Flow
Pro Forma Cash Flow
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Received
Cash from Operations
Cash Sales $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $19,200 $19,200
Subtotal Cash from Operations $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $19,200 $19,200
Additional Cash Received
Sales Tax, VAT, HST/GST 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Received
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $640,000 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,000,000 $0
Subtotal Cash Received $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $19,200 $19,200 $29,200 $1,659,200 $19,200
Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Expenditures from Operations
Cash Spending $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Bill Payments $513 $15,291 $12,372 $12,453 $15,235 $12,316 $12,397 $15,179 $12,260 $12,341 $15,247 $15,937
Subtotal Spent on Operations $513 $15,291 $12,372 $12,453 $15,235 $12,316 $12,397 $15,179 $12,260 $12,341 $15,247 $15,937
Page 3
Appendix
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Out
Principal Repayment of Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other Liabilities Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Long-term Liabilities Principal $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200
Repayment
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $800,000 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $3,713 $18,491 $15,572 $15,653 $18,435 $15,516 $15,597 $18,379 $15,460 $15,541 $818,447 $19,137
Net Cash Flow $25,487 $709 $3,628 $13,547 $765 $3,684 $13,603 $821 $3,740 $13,659 $840,753 $63
Cash Balance $45,487 $46,196 $49,824 $63,371 $64,136 $67,820 $81,423 $82,244 $85,984 $99,643 $940,395 $940,458
Page 4
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Assets Starting Balances
Current Assets
Cash $20,000 $45,487 $46,196 $49,824 $63,371 $64,136 $67,820 $81,423 $82,244 $85,984 $99,643 $940,395 $940,458
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $20,000 $45,487 $46,196 $49,824 $63,371 $64,136 $67,820 $81,423 $82,244 $85,984 $99,643 $940,395 $940,458
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $800,000 $800,000
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $800,000 $800,000
Total Assets $20,000 $45,487 $46,196 $49,824 $63,371 $64,136 $67,820 $81,423 $82,244 $85,984 $99,643 $1,740,395 $1,740,458
Page 5
Appendix
Liabilities and Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Capital
Current
Liabilities
Accounts $0 $14,878 $11,960 $11,942 $14,824 $11,906 $11,888 $14,770 $11,852 $11,834 $14,716 $15,407 $15,389
Payable
Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Subtotal Current $0 $14,878 $11,960 $11,942 $14,824 $11,906 $11,888 $14,770 $11,852 $11,834 $14,716 $15,407 $15,389
Liabilities
Long-term $0 ($3,200) ($6,400) ($9,600) ($12,800) ($16,000) ($19,200) ($22,400) ($25,600) ($28,800) ($32,000) $604,800 $601,600
Liabilities
Total Liabilities $0 $11,678 $5,560 $2,342 $2,024 ($4,094) ($7,312) ($7,630) ($13,748) ($16,966) ($17,284) $620,207 $616,989
Paid-in Capital $394,500 $394,500 $394,500 $394,500 $394,500 $394,500 $394,500 $394,500 $394,500 $394,500 $394,500 $1,394,500 $1,394,500
Retained ($374,500) ($374,500) ($374,500) ($374,500) ($374,500) ($374,500) ($374,500) ($374,500) ($374,500) ($374,500) ($374,500) ($374,500) ($374,500)
Earnings
Earnings $0 $13,809 $20,636 $27,482 $41,347 $48,230 $55,132 $69,053 $75,992 $82,950 $96,927 $100,189 $103,469
Total Capital $20,000 $33,809 $40,636 $47,482 $61,347 $68,230 $75,132 $89,053 $95,992 $102,950 $116,927 $1,120,189 $1,123,469
Total Liabilities $20,000 $45,487 $46,196 $49,824 $63,371 $64,136 $67,820 $81,423 $82,244 $85,984 $99,643 $1,740,395 $1,740,458
and Capital
Net Worth $20,000 $33,809 $40,636 $47,482 $61,347 $68,230 $75,132 $89,053 $95,992 $102,950 $116,927 $1,120,189 $1,123,469
Page 6