[COMPANY NAME]
[Address]
[City, State ZIP]
Contact: [Name]
Phone: XXX-XXX-XXXX
Fax: XXX-XXX-XXXX
[Email Address]
© 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
Chart: Highlights.................................................................................................................. 1
1.1 Objectives ......................................................................................................................... 1
1.2 Mission ............................................................................................................................. 1
1.3 Keys to Success ............................................................................................................... 2
2.0 Company Summary .............................................................................................................. 2
2.1 Company Ownership ........................................................................................................ 2
2.2 Company History .............................................................................................................. 2
Table: Past Performance .................................................................................................... 3
Chart: Past Performance ..................................................................................................... 4
3.0 Services ............................................................................................................................... 4
4.0 Market Analysis Summary .................................................................................................... 4
4.1 Market Segmentation ........................................................................................................ 5
Table: Market Analysis ........................................................................................................ 5
Chart: Market Analysis (Pie) ............................................................................................... 5
4.2 Target Market Segment Strategy ...................................................................................... 6
4.3 Service Business Analysis ................................................................................................ 6
4.3.1 Competition and Buying Patterns ............................................................................... 6
5.0 Strategy and Implementation Summary ............................................................................... 6
5.1 SWOT Analysis................................................................................................................. 6
5.1.1 Strengths .................................................................................................................... 7
5.1.2 Weaknesses............................................................................................................... 7
5.1.3 Opportunities .............................................................................................................. 7
5.1.4 Threats ....................................................................................................................... 7
5.2 Competitive Edge ............................................................................................................. 7
5.3 Marketing Strategy............................................................................................................ 8
5.4 Sales Strategy .................................................................................................................. 8
5.4.1 Sales Forecast ........................................................................................................... 8
Table: Sales Forecast ...................................................................................................... 8
Chart: Sales Monthly ....................................................................................................... 8
Chart: Sales by Year ....................................................................................................... 9
5.5 Milestones ...................................................................................................................... 10
Table: Milestones .............................................................................................................. 10
Chart: Milestones .............................................................................................................. 10
6.0 Management Summary ...................................................................................................... 11
6.1 Personnel Plan ............................................................................................................... 11
Table: Personnel ............................................................................................................... 11
Page 1
Table of Contents
7.0 Financial Plan ..................................................................................................................... 11
7.1 Important Assumptions ................................................................................................... 11
Table: General Assumptions ............................................................................................. 11
7.2 Break-even Analysis ....................................................................................................... 12
Table: Break-even Analysis .............................................................................................. 12
Chart: Break-even Analysis ............................................................................................... 12
7.3 Projected Profit and Loss................................................................................................ 12
Table: Profit and Loss ....................................................................................................... 13
Chart: Profit Monthly ......................................................................................................... 13
Chart: Profit Yearly ............................................................................................................ 14
Chart: Gross Margin Monthly ............................................................................................ 15
Chart: Gross Margin Yearly ............................................................................................... 15
7.4 Projected Cash Flow ....................................................................................................... 16
Table: Cash Flow .............................................................................................................. 16
Chart: Cash ....................................................................................................................... 16
7.5 Projected Balance Sheet ................................................................................................ 17
Table: Balance Sheet ........................................................................................................ 17
7.6 Business Ratios .............................................................................................................. 18
Table: Ratios ..................................................................................................................... 18
Appendix
Table: Sales Forecast ................................................................................................................ 1
Table: Personnel ........................................................................................................................ 2
Table: Profit and Loss ................................................................................................................ 3
Table: Cash Flow ....................................................................................................................... 4
Table: Balance Sheet ................................................................................................................. 5
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ENVIRONMENTAL RECOVERY SERVICES, INC.
1.0 Executive Summary
[Company Name] is well established in the portable toilet service industry in the South-Central Louisiana
market. The company provides portable toilets, roll-off containers, hurricane relief & disaster recovery and
other various mediation and waste recovery services to customers. [Company Name] is committed to
providing prompt, dependable and reliable service and the dedicated and knowledgeable workforce the
company employs delivers a service that customers value. [Company Name] is seeking funding of $556,000
to assist in the expansion and continuing operations of the company by acquiring another building, purchasing
additional equipment and increasing marketing and sales efforts.
Chart: Highlights
1.1 Objectives
[Company Name]'s objectives for this business plan are to utilize the $556,000 of requested funding for the
following:
Acquiring another building.
Purchasing additional equipment to allow the company to expand and effectively service the current
coverage area.
Increasing marketing and advertising efforts to broaden the company's customer base.
Hiring qualified personnel to increase sales.
1.2 Mission
The mission of [Company Name] is to provide peace of mind to customers by insuring that waste and debris
are disposed of properly and efficiently in a manner that reduces the damage caused by natural,
environmental and man-made disasters.
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ENVIRONMENTAL RECOVERY SERVICES, INC.
1.3 Keys to Success
One of the keys to success for the company is the wastewater treatment services it provides. Of the nearly
ten competing portable toilet companies in the South-Central Louisiana market, [Company Name] is the only
company that operates an onsite wastewater treatment facility.
The services the company offers and the location of [Company Name] within the U.S. seasonal hurricane
path is another key to success. When the area is devastated by natural disasters, there is a high demand for
the company's trash dumpsters, portable toilets and various remediation and waste removal services. The
reputation [Company Name] has developed for providing dependable reliable service to customers and the
company's knowledgeable, qualified employees are diligent and conscientious when working with customers
and this has generated word of mouth publicity that is virtually priceless.
2.0 Company Summary
[Company Name] is located in Iberia Parish, Louisiana. The company provides portable toilets, roll-off
containers, hurricane relief & disaster recovery, decontamination & hazardous waste removal, remediation &
mitigation, grey-water removal & abatement, wastewater removal & abatement, asbestos removal &
abatement, mold remediation & mitigation services to customers. [Company Name] currently has two offices,
one in Delcambre and a satellite location in Patterson that services Iberia, St. Mary, Vermilion, St. Martin,
Lafayette, Acadia & St. Landry Parishes. The company's main office in Delcambre is situated on 1.5 acres of
land with 500 square feet of office space and includes an onsite wastewater treatment facility which is utilized
to properly manage customer's needs.
2.1 Company Ownership
[Company Name] is a Subchapter S Corporation that is owned and operated by [Name]. [Name] has been
involved in the rental of portable toilets, septic cleaning and waste disposal business for over 20 years.
[Name] has been the proprietor of the current business for the last thirteen years and prior to owning
[Company Name], he was largely responsible for managing the operations of his family's small landfill
business.
2.2 Company History
Since the company was formed in 1997, [Company Name] has acquired two small, independent, individually
owned and operated companies, Clean-Rite and Triple T. Both of these companies were engaged in the
business of renting portable toilets to customers. The purchase of these companies has allowed [Company
Name] to increase revenues by servicing the customers and acquiring the assets of these businesses.
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ENVIRONMENTAL RECOVERY SERVICES, INC.
Table: Past Performance
Past Performance
2007 2008 2009
Sales $1,041,508 $902,690 $634,147
Gross Margin $737,300 $396,884 $234,136
Gross Margin % 70.79% 43.97% 36.92%
Operating Expenses $898,191 $453,874 $387,731
Earnings ($160,892) ($56,990) ($153,595)
Balance Sheet
2007 2008 2009
Current Assets
Cash $29,392 $22,731 ($48,020)
Accounts Receivable ($58) ($119) ($5)
Other Current Assets $12,786 $3,200 $3,200
Total Current Assets $42,120 $25,812 ($44,825)
Long-term Assets
Long-term Assets $1,416,635 $1,560,371 $1,560,371
Accumulated Depreciation $694,462 $832,671 $944,770
Total Long-term Assets $722,173 $727,700 $615,601
Total Assets $764,293 $753,512 $570,776
Current Liabilities
Accounts Payable $0 $0 $0
Current Borrowing $223,879 $327,823 $239,236
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $223,879 $327,823 $239,236
Long-term Liabilities $534,130 $520,429 $496,037
Total Liabilities $758,010 $848,252 $735,273
Paid-in Capital $167,175 ($37,693) ($10,788)
Retained Earnings $0 ($58) ($114)
Earnings ($160,891) ($56,990) ($153,595)
Total Capital $6,283 ($94,740) ($164,497)
Total Capital and Liabilities $764,293 $753,512 $570,776
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ENVIRONMENTAL RECOVERY SERVICES, INC.
Chart: Past Performance
3.0 Services
[Company Name] provides portable toilets, roll-off containers, hurricane relief & disaster recovery,
decontamination & hazardous waste removal, remediation & mitigation, grey-water removal & abatement,
wastewater removal & abatement, asbestos removal & abatement, mold remediation & mitigation services to
customers. The company is the only portable toilet company with a wastewater treatment facility in the South-
Central Louisiana area.
4.0 Market Analysis Summary
[Company Name] is located in Delcambre, Louisiana, a small city with a population of under 2,500 within
Iberia Parish (pop. 73,850 per 2002 census). The company also operates a satellite office located in
Patterson, Louisiana which has a population of over 5,000 in St. Mary Parish (pop. 52,425). Lafayette (pop.
110,257) in Lafayette Parish (pop. 192,896) is the largest city within the South-Central Louisiana market that
the company currently services which includes Vermilion Parish (pop. 54,114), St. Martin Parish (pop.
49,657), Acadia Parish (pop. 58,920) and St. Landry Parish (pop. 88,199). According to city-data.com
information, there are less than 40 companies in the waste management & remediation services industry
within this market area and sales for this industry are in excess of $100 million annually.
Parishes require portable toilets and trash dumpsters to be used at all construction sites. The oil field service
industry and other construction based companies provide the largest customer base for portable toilet
companies. In addition, because [Company Name] is located in an area within the United States that is
susceptible to seasonal hurricanes, when the area is devastated by natural disasters, the market of potential
customers for the trash dumpsters and portable toilets the company offers is extremely high. The latest
census quickfacts information indicates that there are nearly 250,000 households and over 15,000 non-farm
business establishments within this seven Parish area that could be potential customers.
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ENVIRONMENTAL RECOVERY SERVICES, INC.
4.1 Market Segmentation
Parishes require the use of portable toilets and trash dumpsters for all construction sites, festivals and other
events held for the public by businesses, the government or other organizations. [Company Name] is able to
meet the requirements of these customers and provide the appropriate wastewater treatment or disposal
services needed.
[Company Name] is located in an area within the United States that is susceptible to seasonal hurricanes.
When the area is devastated by natural disasters, the market for trash dumpsters and portable toilets is
extremely high, especially by individual household customers. Many of the company's other waste and
remediation services are also in high demand by many small businesses and household customers in the
aftermath of such devastating events.
Table: Market Analysis
Market Analysis
2010 2011 2012 2013 2014
Potential Customers Growth CAGR
Households 3% 248,964 256,433 264,126 272,050 280,212 3.00%
Businesses 3% 15,552 16,019 16,500 16,995 17,505 3.00%
Total 3.00% 264,516 272,452 280,626 289,045 297,717 3.00%
Chart: Market Analysis (Pie)
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ENVIRONMENTAL RECOVERY SERVICES, INC.
4.2 Target Market Segment Strategy
[Company Name] will use some of the requested funds to implement aggressive marketing and advertising
promotions to pursue more construction based companies and to gain a larger share of the oil field service
industry customers that currently provide the largest customer base for portable toilet services. By increasing
the sales staff with some of the funds being requested, [Company Name] will commence a direct mailing
program and begin a cold calling campaign to pursue business from large organized functions and outings,
community centers, public parks and other facilities where the Parishes require portable toilets and trash
dumpsters to be used.
4.3 Service Business Analysis
There are only a limited number of businesses within this market area that are engaged in the waste
management & remediation services industry. [Company Name] provides portable toilets, roll-off containers,
hurricane relief & disaster recovery, decontamination & hazardous waste removal, remediation & mitigation,
grey-water removal & abatement, wastewater removal & abatement, asbestos removal & abatement, mold
remediation & mitigation services to meet the needs of customers in this market.
4.3.1 Competition and Buying Patterns
According to city-data.com information, there are less than 40 companies in the waste management &
remediation services industry within this seven Parish market area and sales for this industry are in excess of
$100 million annually. The South-Central region of Louisiana has approximately ten portable toilet companies
and [Company Name] is the only one with an onsite wastewater treatment facility.
Service and price are the principal factors that influence customers in the portable toilet business. Most
customers will maintain the relationship with their current provider as long as the service is dependable and
customer satisfaction is a priority. The major competitors to the company in the portable toilet business have
more financial means than [Company Name] One competitor, Potty Time, engages in more aggressive
marketing and caters only to larger businesses, they do not handle smaller jobs and they are not as customer
oriented as [Company Name] Another competitor, Gotta Geaux, generally offers lower pricing than [Company
Name] but their service is not as efficient or dependable.
5.0 Strategy and Implementation Summary
[Company Name] has developed a reputation for providing dependable reliable service to customers. The
company's knowledgeable, qualified employees are diligent and conscientious when working with customers
and this has generated word of mouth publicity that has been vital to the company's success. Obtaining the
requested funding will enable [Company Name] to continue to provide the quality of service that customers
expect and it will allow the company to grow and expand.
5.1 SWOT Analysis
[Company Name]'s strength lies with the many years of experience that the company has been in business.
The company's workforce is experienced and provides a quality service that customers value.
Additional funding will allow [Company Name] to address many of the issues the company faces. By obtaining
the funding the company is requesting, [Company Name] can implement an aggressive advertising campaign
to pursue additional business, purchase more equipment, and hire, train and educate the staff necessary to
permit the company to properly service the South-Central Louisiana market effectively.
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ENVIRONMENTAL RECOVERY SERVICES, INC.
5.1.1 Strengths
[Company Name] is the only portable toilet business in the South-Louisiana region that operates an onsite
wastewater treatment facility. This permits the company to offer customers competitive pricing for the portable
toilet services it provides. The longevity of [Company Name]'s existence is attributable to the prompt,
dependable and reliable service provided to customers and the dedicated and knowledgeable workforce the
company employs.
5.1.2 Weaknesses
[Company Name] lacks the funding to properly service the broader target market in the South-Central
Louisiana area. The company's limited resources restricts the ability to successfully advertise to the target
market. The lack of equipment and the company's inability to be able to find and hire qualified and trained
employees does not permit [Company Name] to properly service the South-Central Louisiana market.
5.1.3 Opportunities
Several smaller competitors may be unable to withstand the current economic conditions. These companies
may be interested in selling their assets. [Company Name] may be able to take advantage of this situation
either by acquiring these competitors, instantly increasing the value of the company's assets and sales, or by
obtaining a portion of their customer base through the competitive process.
The current situation in the Gulf of Mexico has provided some opportunities for [Company Name] to increase
revenues for the various remediation and mitigation services the company offers. Once the government
imposed moratorium on the oil field industry is relaxed, there should be ample opportunity for [Company
Name] to increase sales because the oil field industry is the largest customer base in the area for the portable
toilet services the company offers.
5.1.4 Threats
Because of the recent British Petroleum oil disaster in the Gulf of Mexico, the United States Government has
imposed a moratorium on the oil field business activities. This is a major threat to [Company Name] and other
companies that provide portable toilet services. More than any other industry in the market area, the oil field
based companies provide the largest customer base for the portable toilet services the company offers.
Competition has kept dumping fees down because more than one location is available to dump waste
materials. Recent price increases from local landfills has had a considerable impact on the company's
dumping fee expenses. Government regulations imposed by the Department of Environmental Quality (DEQ)
has significantly affected some of the smaller landfills, causing them to close or raise prices to comply with the
new requirements.
5.2 Competitive Edge
[Company Name] is the only portable toilet business in the South-Louisiana region that operates an onsite
wastewater treatment facility. This permits the company to offer customers competitive pricing for the portable
toilet services it provides.
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ENVIRONMENTAL RECOVERY SERVICES, INC.
Another competitive edge for [Company Name] is the reputation the company has developed for providing
dependable, reliable service to customers. The company's knowledgeable, qualified employees are diligent
and conscientious when working with customers and this has generated invaluable word of mouth referrals
within the targeted customer group.
5.3 Marketing Strategy
[Company Name] will implement aggressive marketing and advertising promotions in an effort to increase the
company's share of oil field industry customers and to pursue additional business from other construction
based companies. The company intends to set up a direct mailing program and begin a cold calling campaign
to appeal to other non-business functions where portable toilets and trash dumpsters are required by the
Parishes.
5.4 Sales Strategy
[Company Name] will utilize some of the requested funding to increase the sales staff to pursue customer
leads in response to the aggressive marketing strategy the company will implement. Depending on the size,
scope and nature of the contract or agreement, the company may offer discounts, rate reductions or other
incentives to consummate sales.
5.4.1 Sales Forecast
The local economy is heavily dependent on the oil field industry. When the government imposed moratorium
on the industry is relaxed and with the addition of new equipment and the hiring of sales personnel to be
obtained as a result of this funding request, [Company Name] expects the company's sales and revenues to
increase.
Table: Sales Forecast
Sales Forecast
2010 2011 2012
Sales
Portable Toilets $405,000 $425,000 $525,000
Trash Dumpsters $275,000 $325,000 $375,000
Other $100,000 $100,000 $100,000
Total Sales $780,000 $850,000 $1,000,000
Direct Cost of Sales
Equipment Expense $14,000 $14,420 $14,853
Auto/Truck Expense $220,000 $226,600 $233,398
Landfill Fees $65,000 $66,950 $68,959
Chemicals and Supplies $75,000 $77,250 $79,568
Labor $74,000 $76,220 $78,507
Other $4,500 $4,635 $4,774
Subtotal Direct Cost of Sales $452,500 $466,075 $480,057
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ENVIRONMENTAL RECOVERY SERVICES, INC.
Chart: Sales Monthly
Chart: Sales by Year
Page 9
ENVIRONMENTAL RECOVERY SERVICES, INC.
5.5 Milestones
Additional funding will allow [Company Name] to address many of the issues the company faces. By obtaining
the funding the company is requesting, [Company Name] can purchase another building and more
equipment, implement an aggressive advertising campaign to pursue additional business, and hire, train and
educate the staff necessary to permit the company to properly service the South-Central Louisiana market
effectively.
Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department
Purchase Building 1/1/2011 1/31/2011 $400,000 [Name] Owner
Purchase New Equipment 11/1/2010 11/30/2010 $100,000 [Name] Owner
Increase Advertising and Marketing 11/1/2010 12/31/2012 $24,000 [Name] Owner
Hire Sales Personnel 11/1/2010 12/31/2012 $32,000 [Name] Owner
Totals $556,000
Chart: Milestones
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ENVIRONMENTAL RECOVERY SERVICES, INC.
6.0 Management Summary
[Name] is the principal owner/operator of [Company Name] The company also has an office manager that is
responsible for the day-to-day operations, a receptionist and a bookkeeper that processes customer billings
and handles the accounting functions for the company.
6.1 Personnel Plan
Six of the nine hourly employees of [Company Name] are integral to the production of revenues and the
payroll expenses for these employees (two CDL drivers; three route drivers; and one general laborer) have
been included as Cost of Sales. Upon approval of the requested funding, the company intends to hire a sales
associate and will consider hiring additional hourly employees as required. Mr. Miguez, the owner, is not
currently drawing a salary from the operations of the business.
Table: Personnel
Personnel Plan
2010 2011 2012
[Name], Owner $0 $0 $0
Hourly employees $42,333 $71,070 $73,202
Total People 11 11 11
Total Payroll $42,333 $71,070 $73,202
7.0 Financial Plan
[Company Name]'s financial plan is to obtain funding of $556,000. The company will utilize the funds to
acquire a building, purchase new equipment, increase advertising and marketing efforts and hire a sales staff
to increase company revenues.
7.1 Important Assumptions
The following table shows the General Assumptions for [Company Name]
Table: General Assumptions
General Assumptions
2010 2011 2012
Current Interest Rate 5.00% 5.00% 5.00%
Long-term Interest Rate 4.00% 4.00% 4.00%
Tax Rate 10.00% 10.00% 10.00%
Other 0 0 0
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ENVIRONMENTAL RECOVERY SERVICES, INC.
7.2 Break-even Analysis
Break-even data for [Company Name] is presented in the chart and table below.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even $49,357
Assumptions:
Average Percent Variable Cost 58%
Estimated Monthly Fixed Cost $20,724
Chart: Break-even Analysis
7.3 Projected Profit and Loss
The local economy is heavily dependent on the oil field industry and the government's restrictions on the
industry have taken a toll on the company's growth and revenues. When the government imposed moratorium
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ENVIRONMENTAL RECOVERY SERVICES, INC.
on the industry is relaxed and with the purchase of another building, the addition of new equipment, increased
advertising and marketing and the hiring of sales personnel obtained through this funding request, [Company
Name] will be able to effectively service the larger market area and the company expects sales and revenues
to increase.
Table: Profit and Loss
Pro Forma Profit and Loss
2010 2011 2012
Sales $780,000 $850,000 $1,000,000
Direct Cost of Sales $452,500 $466,075 $480,057
Other Costs of Sales $0 $0 $0
Total Cost of Sales $452,500 $466,075 $480,057
Gross Margin $327,500 $383,925 $519,943
Gross Margin % 41.99% 45.17% 51.99%
Expenses
Payroll $42,333 $71,070 $73,202
Marketing/Promotion $9,000 $20,000 $20,600
Rent $30,000 $0 $0
Utilities $24,000 $24,720 $25,462
Insurance $65,000 $66,950 $68,959
Legal $12,000 $12,360 $12,731
Office Expenses $12,000 $12,360 $12,731
Payroll Taxes $6,350 $10,661 $10,980
Other $48,000 $49,440 $50,923
Total Operating Expenses $248,683 $267,561 $275,587
Profit Before Interest and Taxes $78,817 $116,365 $244,355
EBITDA $78,817 $116,365 $244,355
Interest Expense $30,471 $28,113 $25,653
Taxes Incurred $4,835 $8,825 $21,870
Net Profit $43,511 $79,426 $196,832
Net Profit/Sales 5.58% 9.34% 19.68%
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ENVIRONMENTAL RECOVERY SERVICES, INC.
Chart: Profit Monthly
Chart: Profit Yearly
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ENVIRONMENTAL RECOVERY SERVICES, INC.
Chart: Gross Margin Monthly
Chart: Gross Margin Yearly
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ENVIRONMENTAL RECOVERY SERVICES, INC.
7.4 Projected Cash Flow
[Company Name] will obtain a short-term, interest-free loan from the proprietor to facilitate continuing
operations of the company until the requested funding is acquired. Upon receiving the requested funding,
[Company Name] expects to purchase additional equipment to meet the demands of servicing the target
market area. The company also intends to acquire another building to expand the operations of the business
but this will not effectively take place until 2011.
Table: Cash Flow
Pro Forma Cash Flow
2010 2011 2012
Cash Received
Cash from Operations
Cash Sales $585,000 $637,500 $750,000
Cash from Receivables $189,949 $212,047 $249,030
Subtotal Cash from Operations $774,949 $849,547 $999,030
Additional Cash Received
Sales Tax, VAT, HST/GST Received $62,400 $68,000 $80,000
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $47,000 $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 $556,000 $0 $0
Subtotal Cash Received $1,440,349 $917,547 $1,079,030
Expenditures
Expenditures from Operations
Cash Spending $42,333 $71,070 $73,202
Bill Payments $684,807 $655,352 $727,636
Subtotal Spent on Operations $727,140 $726,422 $800,838
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $62,400 $68,000 $80,000
Principal Repayment of Current Borrowing $30,000 $30,000 $30,000
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $24,000 $24,000 $24,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $100,000 $400,000 $0
Dividends $0 $0 $0
Subtotal Cash Spent $943,540 $1,248,422 $934,838
Net Cash Flow $496,809 ($330,875) $144,191
Cash Balance $448,789 $117,914 $262,105
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ENVIRONMENTAL RECOVERY SERVICES, INC.
Chart: Cash
7.5 Projected Balance Sheet
The owner of [Company Name] was recently divorced and the equity from the company was liquidated in
2009 as a result of the divorce settlement. The company intends to increase long-term assets through the
purchase of additional equipment in 2010 and by acquiring another building in 2011 upon receiving the
requested funding.
Table: Balance Sheet
Pro Forma Balance Sheet
2010 2011 2012
Assets
Current Assets
Cash $448,789 $117,914 $262,105
Accounts Receivable $5,047 $5,499 $6,470
Other Current Assets $3,200 $3,200 $3,200
Total Current Assets $457,035 $126,613 $271,775
Long-term Assets
Long-term Assets $1,660,371 $2,060,371 $2,060,371
Accumulated Depreciation $944,770 $944,770 $944,770
Total Long-term Assets $715,601 $1,115,601 $1,115,601
Total Assets $1,172,636 $1,242,214 $1,387,376
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ENVIRONMENTAL RECOVERY SERVICES, INC.
Liabilities and Capital 2010 2011 2012
Current Liabilities
Accounts Payable $9,349 $53,501 $55,831
Current Borrowing $209,236 $179,236 $149,236
Other Current Liabilities $47,000 $47,000 $47,000
Subtotal Current Liabilities $265,585 $279,737 $252,067
Long-term Liabilities $472,037 $448,037 $424,037
Total Liabilities $737,622 $727,774 $676,103
Paid-in Capital $545,212 $545,212 $545,212
Retained Earnings ($153,709) ($110,198) ($30,772)
Earnings $43,511 $79,426 $196,832
Total Capital $435,014 $514,440 $711,272
Total Liabilities and Capital $1,172,636 $1,242,214 $1,387,376
Net Worth $435,014 $514,440 $711,272
7.6 Business Ratios
Business ratios for [Company Name] are shown on the following table. Industry profile ratios are shown for
comparison. These ratios were taken from North American Industry Classification System (NAICS) code
562991 (Portable toilet renting and/or servicing). Many of the ratios used for this comparison may vary
significantly from the industry profile because [Company Name] offers a variety of services besides renting
and servicing portable toilets.
Table: Ratios
Ratio Analysis
2010 2011 2012 Industry Profile
Sales Growth 23.00% 8.97% 17.65% -14.65%
Percent of Total Assets
Accounts Receivable 0.43% 0.44% 0.47% 18.85%
Other Current Assets 0.27% 0.26% 0.23% 31.55%
Total Current Assets 38.98% 10.19% 19.59% 55.52%
Long-term Assets 61.02% 89.81% 80.41% 44.48%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 22.65% 22.52% 18.17% 20.32%
Long-term Liabilities 40.25% 36.07% 30.56% 55.57%
Total Liabilities 62.90% 58.59% 48.73% 75.89%
Net Worth 37.10% 41.41% 51.27% 24.11%
Page 18
ENVIRONMENTAL RECOVERY SERVICES, INC.
2010 2011 2012 Industry Profile
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 41.99% 45.17% 51.99% 66.96%
Selling, General & Administrative Expenses 36.41% 35.82% 32.31% 17.19%
Advertising Expenses 1.15% 2.35% 2.06% 0.41%
Profit Before Interest and Taxes 10.10% 13.69% 24.44% 3.27%
Main Ratios
Current 1.72 0.45 1.08 2.08
Quick 1.72 0.45 1.08 1.83
Total Debt to Total Assets 62.90% 58.59% 48.73% 75.89%
Pre-tax Return on Net Worth 11.11% 17.15% 30.75% 8.36%
Pre-tax Return on Assets 4.12% 7.10% 15.76% 2.01%
Additional Ratios
Net Profit Margin 5.58% 9.34% 19.68% n.a
Return on Equity 10.00% 15.44% 27.67% n.a
Activity Ratios
Accounts Receivable Turnover 38.64 38.64 38.64 n.a
Collection Days 9 9 9 n.a
Accounts Payable Turnover 74.25 13.07 13.07 n.a
Payment Days 4 16 27 n.a
Total Asset Turnover 0.67 0.68 0.72 n.a
Debt Ratios
Debt to Net Worth 1.70 1.41 0.95 n.a
Current Liab. to Liab. 0.36 0.38 0.37 n.a
Liquidity Ratios
Net Working Capital $191,450 ($153,124) $19,708 n.a
Interest Coverage 2.59 4.14 9.53 n.a
Additional Ratios
Assets to Sales 1.50 1.46 1.39 n.a
Current Debt/Total Assets 23% 23% 18% n.a
Acid Test 1.70 0.43 1.05 n.a
Sales/Net Worth 1.79 1.65 1.41 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Page 19
Appendix
Table: Sales Forecast
Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales
Portable Toilets $33,750 $33,750 $33,750 $33,750 $33,750 $33,750 $33,750 $33,750 $33,750 $33,750 $33,750 $33,750
Trash Dumpsters $22,917 $22,917 $22,917 $22,917 $22,917 $22,917 $22,917 $22,917 $22,917 $22,917 $22,917 $22,917
Other $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333
Total Sales $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000
Direct Cost of Sales
Equipment Expense $1,167 $1,167 $1,167 $1,167 $1,167 $1,167 $1,167 $1,167 $1,167 $1,167 $1,167 $1,167
Auto/Truck Expense $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333
Landfill Fees $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417
Chemicals and Supplies $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250
Labor $6,167 $6,167 $6,167 $6,167 $6,167 $6,167 $6,167 $6,167 $6,167 $6,167 $6,167 $6,167
Other $375 $375 $375 $375 $375 $375 $375 $375 $375 $375 $375 $375
Subtotal Direct Cost of Sales $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708
Page 1
Appendix
Table: Personnel
Personnel Plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
[Name], Owner $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Hourly employees $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $5,750 $5,750
Total People 10 10 10 10 10 10 10 10 10 10 11 11
Total Payroll $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $5,750 $5,750
Page 2
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000
Direct Cost of Sales $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708 $37,708
Gross Margin $27,292 $27,292 $27,292 $27,292 $27,292 $27,292 $27,292 $27,292 $27,292 $27,292 $27,292 $27,292
Gross Margin % 41.99% 41.99% 41.99% 41.99% 41.99% 41.99% 41.99% 41.99% 41.99% 41.99% 41.99% 41.99%
Expenses
Payroll $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $5,750 $5,750
Marketing/Promotion $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $2,417 $2,417
Rent $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Utilities $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Insurance $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417
Legal $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Office Expenses $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Payroll Taxes $463 $463 $463 $463 $463 $463 $463 $463 $463 $463 $863 $863
Other $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Total Operating Expenses $19,879 $19,879 $19,879 $19,879 $19,879 $19,879 $19,879 $19,879 $19,879 $19,879 $24,946 $24,946
Profit Before Interest and Taxes $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $2,346 $2,346
EBITDA $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $7,413 $2,346 $2,346
Interest Expense $2,633 $2,616 $2,599 $2,582 $2,565 $2,548 $2,531 $2,514 $2,497 $2,479 $2,462 $2,445
Taxes Incurred $478 $480 $481 $483 $485 $486 $488 $490 $492 $493 ($12) ($10)
Net Profit $4,301 $4,317 $4,332 $4,348 $4,363 $4,378 $4,394 $4,409 $4,424 $4,440 ($105) ($89)
Net Profit/Sales 6.62% 6.64% 6.66% 6.69% 6.71% 6.74% 6.76% 6.78% 6.81% 6.83% -0.16% -0.14%
Page 3
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 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750
Cash from Receivables $11,360 $16,235 $16,235 $16,235 $16,235 $16,235 $16,235 $16,235 $16,235 $16,235 $16,235 $16,235
Subtotal Cash from Operations $60,110 $64,985 $64,985 $64,985 $64,985 $64,985 $64,985 $64,985 $64,985 $64,985 $64,985 $64,985
Additional Cash Received
Sales Tax, VAT, HST/GST Received $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $47,000 $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 $0 $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 $556,000 $0 $0
Subtotal Cash Received $112,310 $70,185 $70,185 $70,185 $70,185 $70,185 $70,185 $70,185 $70,185 $626,185 $70,185 $70,185
Expenditures
Expenditures from Operations
Cash Spending $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $3,083 $5,750 $5,750
Bill Payments $49,933 $57,615 $57,599 $57,584 $57,569 $57,553 $57,538 $57,523 $57,507 $57,492 $57,540 $59,354
Subtotal Spent on Operations $53,017 $60,698 $60,683 $60,667 $60,652 $60,637 $60,621 $60,606 $60,590 $60,575 $63,290 $65,104
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200 $5,200
Principal Repayment of Current Borrowing $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
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 $100,000 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $62,717 $70,398 $70,383 $70,367 $70,352 $70,337 $70,321 $70,306 $70,290 $70,275 $172,990 $74,804
Net Cash Flow $49,594 ($213) ($197) ($182) ($167) ($151) ($136) ($121) ($105) $555,910 ($102,804) ($4,619)
Cash Balance $1,574 $1,361 $1,164 $981 $815 $663 $528 $407 $302 $556,212 $453,408 $448,789
Page 4
Appendix
Table: Balance Sheet
Pro Forma
Balance
Sheet
Starting
Assets Balances Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Current
Assets
Cash ($48,020) $1,574 $1,361 $1,164 $981 $815 $663 $528 $407 $302 $556,212 $453,408 $448,789
Accounts
Receivable ($5) $4,885 $4,900 $4,914 $4,929 $4,944 $4,958 $4,973 $4,988 $5,002 $5,017 $5,032 $5,047
Other
Current
Assets $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200
Total
Current
Assets ($44,825) $9,659 $9,460 $9,278 $9,110 $8,958 $8,822 $8,701 $8,595 $8,504 $564,429 $461,640 $457,035
Long-term
Assets
Long-term
Assets $1,560,371 $1,560,371 $1,560,371 $1,560,371 $1,560,371 $1,560,371 $1,560,371 $1,560,371 $1,560,371 $1,560,371 $1,560,371 $1,660,371 $1,660,371
Accumulated
Depreciation $944,770 $944,770 $944,770 $944,770 $944,770 $944,770 $944,770 $944,770 $944,770 $944,770 $944,770 $944,770 $944,770
Total Long-
term Assets $615,601 $615,601 $615,601 $615,601 $615,601 $615,601 $615,601 $615,601 $615,601 $615,601 $615,601 $715,601 $715,601
Total
Assets $570,776 $625,259 $625,061 $624,878 $624,711 $624,559 $624,422 $624,301 $624,195 $624,105 $1,180,030 $1,177,240 $1,172,636
Page 5
Appendix
Liabilities Starting
and Capital Balances Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Current
Liabilities
Accounts
Payable $0 $7,682 $7,667 $7,652 $7,637 $7,623 $7,608 $7,593 $7,578 $7,563 $7,548 $9,364 $9,349
Current
Borrowing $239,236 $236,736 $234,236 $231,736 $229,236 $226,736 $224,236 $221,736 $219,236 $216,736 $214,236 $211,736 $209,236
Other
Current
Liabilities $0 $47,000 $47,000 $47,000 $47,000 $47,000 $47,000 $47,000 $47,000 $47,000 $47,000 $47,000 $47,000
Subtotal
Current
Liabilities $239,236 $291,418 $288,903 $286,389 $283,874 $281,359 $278,844 $276,329 $273,814 $271,299 $268,784 $268,100 $265,585
Long-term
Liabilities $496,037 $494,037 $492,037 $490,037 $488,037 $486,037 $484,037 $482,037 $480,037 $478,037 $476,037 $474,037 $472,037
Total
Liabilities $735,273 $785,455 $780,940 $776,425 $771,910 $767,395 $762,880 $758,366 $753,851 $749,336 $744,821 $742,136 $737,622
Paid-in
Capital ($10,788) ($10,788) ($10,788) ($10,788) ($10,788) ($10,788) ($10,788) ($10,788) ($10,788) ($10,788) $545,212 $545,212 $545,212
Retained
Earnings ($114) ($153,709) ($153,709) ($153,709) ($153,709) ($153,709) ($153,709) ($153,709) ($153,709) ($153,709) ($153,709) ($153,709) ($153,709)
Earnings ($153,595) $4,301 $8,618 $12,950 $17,298 $21,661 $26,039 $30,433 $34,842 $39,266 $43,706 $43,601 $43,511
Total
Capital ($164,497) ($160,196) ($155,879) ($151,547) ($147,199) ($142,836) ($138,458) ($134,064) ($129,655) ($125,231) $435,209 $435,104 $435,014
Total
Liabilities
and Capital $570,776 $625,259 $625,061 $624,878 $624,711 $624,559 $624,422 $624,301 $624,195 $624,105 $1,180,030 $1,177,240 $1,172,636
Net Worth ($164,497) ($160,196) ($155,879) ($151,547) ($147,199) ($142,836) ($138,458) ($134,064) ($129,655) ($125,231) $435,209 $435,104 $435,014
Page 6