[Company Name 20___
[Company Name]
[Name]
[Address]
Email: [Email Address]
Phone: XXX-XXX-XXXX
Web Site: [Website Address]
© Copyright 2012 Docstoc Inc. 1
[Company Name 20___
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.................................................................................................................................... 1
1.2 Mission .......................................................................................................................................... 2
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
3.0 Services ............................................................................................................................................ 4
4.0 Market Analysis Summary ........................................................................................................ 4
4.1 Market Segmentation ............................................................................................................. 5
Table: Market Analysis ............................................................................................................... 5
4.2 Target Market Segment Strategy ...................................................................................... 6
4.3 Service Business Analysis ..................................................................................................... 6
4.3.1 Competition and Buying Patterns .............................................................................. 7
5.0 Strategy and Implementation Summary ............................................................................ 7
5.1 SWOT Analysis .......................................................................................................................... 7
5.1.1 Strengths ............................................................................................................................. 7
5.1.2 Weaknesses ........................................................................................................................ 7
5.1.3 Opportunities ..................................................................................................................... 8
5.1.4 Threats ................................................................................................................................. 8
5.2 Competitive Edge ..................................................................................................................... 8
5.3 Marketing Strategy .................................................................................................................. 8
5.4 Sales Strategy ........................................................................................................................... 9
5.4.1 Sales Forecast.................................................................................................................... 9
Table: Sales Forecast ............................................................................................................. 9
5.5 Milestones.................................................................................................................................. 11
Table: Milestones ....................................................................................................................... 11
6.0 Management Summary ............................................................................................................ 11
6.1 Personnel Plan ......................................................................................................................... 11
7.0 Financial Plan ............................................................................................................................... 11
7.1 Important Assumptions ....................................................................................................... 12
7.2 Break-even Analysis .............................................................................................................. 12
Table: Break-even Analysis.................................................................................................... 13
7.3 Projected Profit and Loss ..................................................................................................... 13
Table: Cash Flow ........................................................................................................................ 17
7.5 Projected Balance Sheet ...................................................................................................... 19
Table: Balance Sheet ........................................................................................................................ 19
7.6 Business Ratios ....................................................................................................................... 21
Table: Ratios ................................................................................................................................ 21
7.7 Long-term Plan ........................................................................................................................ 22
Page 1
[Company Name] 2010
1.0 Executive Summary
[Company Name] is led by a respected businessman, [Name], who has considerable experience
in running an effective business. [Company Name]is a music and sound recording studio,
located in Washington State in the city of Lakewood. The Company's owner [Name] offers more
than 10 years of industry experience. He has a strong background in sound recording, audio
engineering and promotional marketing and designing. He also has notable experience in the
entertainment field.
The focus of this business plan is to put forth objectives to provide audio recording services for
musicians/artists, to provide quality promotional materials for musicians/artists, increase sales
and customer base, and to offer outstanding videography services in the near future. [Company
Name]is ready to elevate to the next step. The Company is seeking a business loan in the
amount of $100,000. The loan will be used in the areas of new equipment
purchases, equipment upgrades and advertising.
1.1 Objectives
[Company Name] has four main objectives:
1. To provide exceptional audio recording services for musicians/artists.
2. To provide promotional materials (posters, fliers, cd covers) for musicians/artists.
3. To increase sales and customer base.
4. To offer outstanding videography services in the near future.
[Name] XXX-XXX-XXXX| 1.0 Executive Summary 1
[Company Name] 2010
1.2 Mission
[Company Name]’s mission is to provide an environment in which personal artistry is
encouraged and creativity is inspired as well as expressed. We will commit to our customers by
providing a professional full-service recording studio and video production Company dedicated
to supplying superior quality at affordable rates.
1.3 Keys to Success
1. Provide professional quality audio production
2. Guarantee client satisfaction
3. Maintain exiting clients to refer future business
4. Have affordable rates
2.0 Company Summary
Company: [Company Name]
Address: [Address]
Phone: XXX-XXX-XXXX
Email: [Email Address]
Web Site: [Website Address]
[Company Name] is a music and sound recording studio, located in Washington State in the city
of Lakewood. The Company was established in 1999 by the sole proprietor, [Name], who brings
more than 10 years experience to the recording industry.
[Company Name] sits between two military bases, the McChord Air Force Base and Fort Lewis
Army Base. The 800 sq ft building consist of three rooms: a waiting area, a pre-production area
and post production area with a state of the art recording sound booth. It is the only full
service, professional recording studio in the area.
2.1 Company Ownership
[Company Name] is a sole proprietorship. The sole owner is [Name].
2.2 Company History
Sales for 2007, 2008 and 2009 were $32,392, $39,474, and $45,657, respectively. Earnings for
this period were $6,485, $8,388, and $6,436, respectively.
The Past Financial Performance shows that we have had an increase in sales, while our earnings
have declined. This is due to our main customers (military members) deploying back to Iraq
and Afghanistan. However, we anticipate large profits once the soldiers return to Fort Lewis,
Washington and at the McChord Air Force Base.
[Name] XXX-XXX-XXXX| 2.0 Company Summary 2
[Company Name] 2010
Table: Past Performance
Past Performance
2007 2008 2009
Sales $32,392 $39,474 $45,657
Gross Margin $32,392 $39,474 $45,657
Gross Margin % 100.00% 100.00% 100.00%
Operating Expenses $17,621 $11,593 $23,973
Balance Sheet
2007 2008 2009
Current Assets
Cash $4,893 $1,287 $1,863
Other Current Assets $4,732 $4,274 $3,784
Total Current Assets $9,625 $5,561 $5,647
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $9,625 $5,561 $5,647
Current Liabilities
Accounts Payable $0 $0 $0
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $0 $0 $0
Long-term Liabilities $0 $0 $0
Total Liabilities $0 $0 $0
Paid-in Capital $400 $400 $400
Retained Earnings $2,740 ($3,227) ($1,189)
Earnings $6,485 $8,388 $6,436
Total Capital $9,625 $5,561 $5,647
Total Capital and Liabilities $9,625 $5,561 $5,647
Other Inputs
Payment Days 30 30 30
[Name] XXX-XXX-XXXX| 2.0 Company Summary 3
[Company Name] 2010
3.0 Services
[Company Name] provides sound recording services throughout the Lakewood, Washington
area. These superior services include:
Professional audio recording
Manufacture and press compact discs for artists
Creating innovative sound and concepts
Military appreciation discounts
Discount services for children interested in recording music or making songs
4.0 Market Analysis Summary
The overall market for sound recording is immense and the demand for sound recordings is
increasing. Sound recordings aids the booming technology field that delivers audio to
computers, MP3 players, etc. Sound engineering technicians operate machines and equipment
to record, synchronize, mix, or reproduce music, voices, or sound effects in recording studios,
sporting arenas, theater productions, or movie and video productions. Related industries
include: Music Publishing; Sheet Music Publishing; Record, CD, Tape Production; Integrated
Record Production/Distribution.
[Company Name] provides sound recording services to local vocal talent, whether
they're independent artist, military musicians and children interested in tutorial sessions in
audio recording. The Company is close to two military bases and provides a stress-free place
for soldiers and veterans to utilize their musical capabilities. These military crowds have a
unique talent and passion, and are willing to spend money on sound recording to keep a
competitive edge in the music industry.
[Company Name] anticipate market growth by 2011 when soldiers are deployed back to Fort
Lewis, Washington and at the McChord Air Force Base.
[Name] XXX-XXX-XXXX| 3.0 Services 4
[Company Name] 2010
4.1 Market Segmentation
Our market segmentation scheme is fairly straightforward, and focuses on our target market,
customers within the music and sound recording industry. These customers prefer
certain quality of work and it’s our duty to deliver on their expectations.
The information contained in our market analysis table, displays [Company Name] main
markets, which are local independent artists, military musicians and children. [Company
Name]’s proximity to the military base aids us in gaining our military clients, who are our
biggest and more popular market. Our market for local independent artists exists due to
our professional reputation, the Company's ideal location as well as through the long-standing
relationship we've developed. Our children clientele exist due to the tutorial sessions we offer in
our community. [Company Name]’s demographics are Lakewood citizens between 13-29 years-
old.
Our customers appreciate our innovative concepts, unique sounds and exceptional service.
They utilize us to maximize their productivity. These customers have the option to do business
with other recording studios, but they understand that working with [Company Name] is
beneficial to them because we deliver the quality audio engineering service and environment
that they desire.
Table: Market Analysis
Market Analysis
2010 2011 2012 2013 2014
Potential Customers Growth CAGR
Military Musicians 2% 23,351 23,818 24,294 24,780 25,276 2.00%
Independent Artist 2% 17,114 17,456 17,805 18,161 18,524 2.00%
Children 2% 14,203 14,487 14,777 15,073 15,374 2.00%
Total 2.00% 54,668 55,761 56,876 58,014 59,174 2.00%
[Name] XXX-XXX-XXXX| 4.0 Market Analysis Summary 5
[Company Name] 2010
4.2 Target Market Segment Strategy
Currently, [Company Name] serve the music recording market segment. Since our Company is
located between two military bases, the target market is Military musicians. This group has the
talent and funds to keep our business successful. They utilize us to build onto their audio
portfolio, and to provide excellent engineering service. Furthermore, since this segment is
relatively well connected, establishing a stronger reputation among such clients will strengthen
our Company.
Because we mainly focus on the music recording market, we know how to meet the specific
needs of our clients. Therefore, we will reach our target market through word-of-
mouth marketing, fliers and business cards. We will distribute our marketing material at:
Barbershops
Tattoo parlors
Nightclubs
Hair salons
Other neighborhood business
4.3 Service Business Analysis
As a music recording Company, [Company Name], specializes in audio recording. It’s our duty
to offer our customers the best engineering services, a professional atmosphere and
comfortable environment. We also provide musicians/artist with promotional materials, such
as: fliers, posters and cd covers at a very reasonable price.
As simple as it may be, our method of executing exceptional customer service has an important
effect on the bottom line: People want to give their business to those who appreciate it. Skillful
use of strong communication will bring the business we desire.
[Name] XXX-XXX-XXXX| 4.0 Market Analysis Summary 6
[Company Name] 2010
4.3.1 Competition and Buying Patterns
[Company Name] is the only full service, professional recording studio in the Lakewood,
Washington area; thus, our business is in a non-competitive environment. The music recording
Company has a very modern and abstract sound. Most artists/musicians are
attracted to [Company Name] because they know [Company Name]understands their vision.
The owner, [Name] has over 10 years of experience in the music recording industry and relates
to his military customers due to his army background.
Producers and audio engineers seek to establish strong relationships with clients to ensure
that they are satisfied. Our goal is to fulfill our client’s strict demands because it aids us in
generating future business. If our client is happy, they will recommend us to others who need
our service.
Oftentimes word of mouth marketing provides more business than advertising; thus we
heavily rely on word of mouth to generate business. Additionally, our reasonable prices, quality
service and unique sound also contribute in gaining new clients or business.
5.0 Strategy and Implementation Summary
We have clearly defined the target market and have differentiated ourselves by offering a solid
solution to fulfilling our customer’s needs. Reasonable sales targets have been established with
an implementation plan designed to ensure the goals set forth below are achieved.
5.1 SWOT Analysis
The SWOT analysis aids in displaying the internal strengths and weaknesses that [Company
Name] must address. It allows us to examine the opportunities presented to [Company Name]
as well as potential threats. The Company's strength will help it to succeed. These strengths
are: having an outstanding reputation, 11 years of industry knowledge, quality production and
sound, excellent and stable staff, essential equipment, high customer loyalty and good referral
relationships as well as strong media relationships. Strengths are valuable, but it is also
important to realize the weaknesses [Company Name] must address. These weaknesses
include: lack of money to advertise and cost factor associated with keeping state-of-the-art
hardware.
5.1.1 Strengths
Outstanding reputation.
11 years of industry knowledge.
Quality production and sound.
Excellent and stable staff, offering personalized customer service.
Essential equipment.
High customer loyalty and good referral relationships.
Strong media relationships
5.1.2 Weaknesses
Cost factor associated with keeping state-of-the-art hardware.
Lack of money to advertise
[Name] XXX-XXX-XXXX| 5.0 Strategy and Implementation Summary 7
[Company Name] 2010
5.1.3 Opportunities
Growing market with a significant percentage of our target market still not knowing we
exist.
Strategic alliances offering sources for referrals and joint marketing activities to extend our
reach.
5.1.4 Threats
Emerging local competitors. Currently, [Company Name] is the only full service,
professional recording studio in the area. However, additional competitors are on the
horizon, and we need to be prepared for their entry into the market. Our superb service and
expertise is designed to build customer loyalty.
5.2 Competitive Edge
[Company Name]' competitive edge relies in our ability to position ourselves as strategic ally
with our customers. [Company Name]' reputation of being trustworthy and reliable is
important. By building a business based on long-standing relationships with satisfied clients, we
simultaneously build defenses against competition. The longer the relationship stands, the more
we help our clients understand what we offer them and why they need it.
5.3 Marketing Strategy
Our marketing strategy involves advertising and reaching all the potential clients that we can.
Our goal is to provide exceptional service to our customers. We know what each customer
needs and aim to satisfy them.
Currently, [Company Name] has an advantage because the owner/producer, [Name] is a
superior business man that has excellent audio engineering and communication skills. [Name]
also offers 11 years of experience to the music recording industry.
[Name] XXX-XXX-XXXX| 5.0 Strategy and Implementation Summary 8
[Company Name] 2010
5.4 Sales Strategy
The owner [Name] has excellent customer relations and interpersonal skills; these are the skills
which have been useful in making customers/musicians comfortable in trusting [Company
Name] to produce and record music for them. Keeping customers happy, we feel, is an implicit
part of building a relationship that will encourage repeat business.
5.4.1 Sales Forecast
[Company Name] averages about 21 sessions a month. Studio sessions cost $50/hr. Most
sessions last 3 hours; thus each session totals $150.
Each promotional design cost $100. [Company Name]designs between 50-100
promotional designs a year. The average monthly income for promotional designs is $700.
Our 2010 forecast for [Company Name]' total sales are $46,200. During the years 2011 - 2014
we will see a 10% annual increase.
Table: Sales Forecast
Sales Forecast
2010 2011 2012 2013 2014
Unit Sales
Audio Production 252 277 305 335 369
Promotional Design 84 92 102 112 123
Total Unit Sales 336 370 407 447 492
Unit Prices 2010 2011 2012 2013 2014
Audio Production $150.00 $150.00 $150.00 $150.00 $150.00
Promotional Design $100.00 $100.00 $100.00 $100.00 $100.00
Sales
Audio Production $37,800 $41,580 $45,738 $50,312 $55,343
Promotional Design $8,400 $9,240 $10,164 $11,180 $12,298
Total Sales $46,200 $50,820 $55,902 $61,492 $67,641
Direct Unit Costs 2010 2011 2012 2013 2014
Audio Production $1.50 $1.50 $1.50 $1.50 $1.50
Promotional Design $0.00 $0.00 $0.00 $0.00 $0.00
Direct Cost of Sales
Audio Production $378 $416 $457 $503 $553
Promotional Design $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $378 $416 $457 $503 $553
[Name] XXX-XXX-XXXX| 5.0 Strategy and Implementation Summary 9
[Company Name] 2010
[Name] XXX-XXX-XXXX| 5.0 Strategy and Implementation Summary 10
[Company Name] 2010
5.5 Milestones
In order to achieve the sales and marketing goals that have been outline in this business
plan, the Company has deadlines to meet and ideas to implement. Some of these are outlined
below:
1. Obtain a loan to improve business.
2. Update equipment and software.
3. Increase advertising.
4. Provide video recording services.
Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department
Advertising 4/1/2010 5/1/2010 $10,000 [Name] Sales
New Equipment 4/1/2010 5/1/2010 $40,000 [Name] Services
Video Services 4/1/2010 5/1/2010 $40,000 [Name] Services
Totals $90,000
6.0 Management Summary
[Name] is the sole proprietor of [Company Name]. [Name] has more than 11 years of
experience in the audio production industry and has extensive knowledge of the
market. [Company Name] independently manages all aspects of the business and operates the
Company without the assistance of a staff.
6.1 Personnel Plan
[Company Name] is solely owned and operated by [Name]. There are no other employees or
mangers.
7.0 Financial Plan
The current financial plan for [Company Name] is to obtain a business loan in the amount of
$100,000. The loan will be used to update and purchase new equipment and software, increase
advertising and provide video recording services.
The following sections of this plan will serve to describe [Company Name]’s financial plan in
more detail:
General Assumptions
Break-even Analysis
Profit and Loss
Cash Flow
Balance
[Name] XXX-XXX-XXXX| 6.0 Management Summary 11
[Company Name] 2010
7.1 Important Assumptions
The table below presents the assumptions used in the financial calculations of this business
plan.
The average per-unit revenue cost is estimated to be $137.50. The average per-unit variable
cost is estimated to be $1.13. The estimated monthly fixed cost is $1,794.
7.2 Break-even Analysis
For our break-even analysis, the monthly break-even stands at 13 units. The monthly sales
needed to break-even are $1,809. The break-even analysis has been calculated on the "burn
rate" of the Company. The Company feels that this gives the investor a more accurate picture
of the actual risk of the venture.
[Name] XXX-XXX-XXXX| 7.0 Financial Plan 12
[Company Name] 2010
Table: Break-even Analysis
Break-even Analysis
Monthly Units Break-even 13
Monthly Revenue Break-even $1,809
Assumptions:
Average Per-Unit Revenue $137.50
Average Per-Unit Variable Cost $1.13
Estimated Monthly Fixed Cost $1,794
7.3 Projected Profit and Loss
The net income for 2010, 2011, 2012, 2013 and 2014 is forecast to be $46,200, $50,820,
$55,902, $61,492 and $67,641, respectively. The net profit for the same period is
$13,437, $15,156, $18,414, $22,012 and $25,983, respectively.
The net profit sales for this period is forecast to be 29.08%, 29.82%, 32.94%,
35.80% and 38.41%, respectively.
[Name] XXX-XXX-XXXX| 7.0 Financial Plan 13
[Company Name] 2010
Table: Profit and Loss
Pro Forma Profit and Loss
2010 2011 2012 2013 2014
Sales $46,200 $50,820 $55,902 $61,492 $67,641
Direct Cost of Sales $378 $416 $457 $503 $553
Other Costs of Sales $0 $0 $0 $0 $0
Total Cost of Sales $378 $416 $457 $503 $553
Gross Margin $45,822 $50,404 $55,445 $60,989 $67,088
Gross Margin % 99.18% 99.18% 99.18% 99.18% 99.18%
Expenses
Payroll $0 $0 $0 $0 $0
Marketing/Promotion $6,252 $6,440 $6,633 $6,832 $7,037
Depreciation $0 $0 $0 $0 $0
Rent $5,352 $5,513 $5,678 $5,848 $6,024
Utilities $672 $692 $713 $734 $756
Insurance $204 $210 $216 $223 $230
Other $9,048 $9,319 $9,599 $9,887 $10,184
Total Operating Expenses $21,528 $22,174 $22,839 $23,524 $24,230
Profit Before Interest and Taxes $24,294 $28,230 $32,606 $37,465 $42,858
EBITDA $24,294 $28,230 $32,606 $37,465 $42,858
Interest Expense $5,098 $6,579 $6,299 $6,019 $5,739
Taxes Incurred $5,759 $6,495 $7,892 $9,434 $11,136
Net Profit $13,437 $15,156 $18,414 $22,012 $25,983
Net Profit/Sales 29.08% 29.82% 32.94% 35.80% 38.41%
[Name] XXX-XXX-XXXX| 7.0 Financial Plan 14
[Company Name] 2010
[Name] XXX-XXX-XXXX| 7.0 Financial Plan 15
[Company Name] 2010
[Name] XXX-XXX-XXXX| 7.0 Financial Plan 16
[Company Name] 2010
7.4 Projected Cash Flow
[Company Name], has applied for a business loan of $100,000, and we forecast that we'll
receive the $100,000 in the month of April. During this period, we'll use the funds to start our
video services, purchase new equipment and increase advertising.
Over the next 25 years, we will re-pay our loan using $334 a month or $4,000 a year.
The purchase of other current assets reflects the $40,000 we will use in April to upgrade and
purchase new equipment.
The following table displays [Company Name]’s cash flow, and the chart illustrates monthly
cash flow in the first year. Monthly cash flow projections are also included in the appendix.
Table: Cash Flow
Pro Forma Cash Flow
2010 2011 2012 2013 2014
Cash Received
Cash from Operations
Cash Sales $46,200 $50,820 $55,902 $61,492 $67,641
Subtotal Cash from Operations $46,200 $50,820 $55,902 $61,492 $67,641
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0
New Long-term Liabilities $100,000 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0
Subtotal Cash Received $146,200 $50,820 $55,902 $61,492 $67,641
Expenditures 2010 2011 2012 2013 2014
Expenditures from Operations
Cash Spending $0 $0 $0 $0 $0
Bill Payments $30,032 $35,464 $37,338 $39,317 $41,479
Subtotal Spent on Operations $30,032 $35,464 $37,338 $39,317 $41,479
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $4,008 $4,000 $4,000 $4,000 $4,000
Purchase Other Current Assets $40,000 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0
Subtotal Cash Spent $74,040 $39,464 $41,338 $43,317 $45,479
Net Cash Flow $72,160 $11,356 $14,564 $18,176 $22,162
Cash Balance $74,023 $85,379 $99,943 $118,119 $140,281
[Name] XXX-XXX-XXXX| 7.0 Financial Plan 17
[Company Name] 2010
[Name] XXX-XXX-XXXX| 7.0 Financial Plan 18
[Company Name] 2010
7.5 Projected Balance Sheet
The net worth is $19,084, $34,240, $52,654, $74,666 and $100,649 for 2010, 2011, 2012,
2013 and 2014 respectively.
Table: Balance Sheet
Pro Forma Balance Sheet
2010 2011 2012 2013 2014
Assets
Current Assets
Cash $74,023 $85,379 $99,943 $118,119 $140,281
Other Current Assets $43,784 $43,784 $43,784 $43,784 $43,784
Total Current Assets $117,807 $129,163 $143,727 $161,903 $184,065
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0
Total Assets $117,807 $129,163 $143,727 $161,903 $184,065
[Name] XXX-XXX-XXXX| Table: Balance Sheet 19
[Company Name] 2010
Liabilities and Capital 2010 2011 2012 2013 2014
Current Liabilities
Accounts Payable $2,731 $2,931 $3,081 $3,245 $3,424
Current Borrowing $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0
Subtotal Current Liabilities $2,731 $2,931 $3,081 $3,245 $3,424
Long-term Liabilities $95,992 $91,992 $87,992 $83,992 $79,992
Total Liabilities $98,723 $94,923 $91,073 $87,237 $83,416
Paid-in Capital $400 $400 $400 $400 $400
Retained Earnings $5,247 $18,684 $33,840 $52,254 $74,266
Earnings $13,437 $15,156 $18,414 $22,012 $25,983
Total Capital $19,084 $34,240 $52,654 $74,666 $100,649
Total Liabilities and Capital $117,807 $129,163 $143,727 $161,903 $184,065
Net Worth $19,084 $34,240 $52,654 $74,666 $100,649
[Name] XXX-XXX-XXXX| Table: Balance Sheet 20
[Company Name] 2010
7.6 Business Ratios
The table below presents ratios from the sound recording markets as a reference.
Table: Ratios
Ratio Analysis
2010 2011 2012 2013 2014 Industry Profile
Sales Growth 1.19% 10.00% 10.00% 10.00% 10.00% 7.70%
Percent of Total Assets
Other Current Assets 37.17% 33.90% 30.46% 27.04% 23.79% 48.62%
Total Current Assets 100.00% 100.00% 100.00% 100.00% 100.00% 78.45%
Long-term Assets 0.00% 0.00% 0.00% 0.00% 0.00% 21.55%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Current Liabilities 2.32% 2.27% 2.14% 2.00% 1.86% 37.65%
Long-term Liabilities 81.48% 71.22% 61.22% 51.88% 43.46% 14.87%
Total Liabilities 83.80% 73.49% 63.37% 53.88% 45.32% 52.52%
Net Worth 16.20% 26.51% 36.63% 46.12% 54.68% 47.48%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 99.18% 99.18% 99.18% 99.18% 99.18% 100.00%
Selling, General & Administrative Expenses 70.10% 69.36% 66.24% 63.39% 60.77% 76.18%
Advertising Expenses 13.53% 12.67% 11.86% 11.11% 10.40% 1.83%
Profit Before Interest and Taxes 52.58% 55.55% 58.33% 60.93% 63.36% 1.49%
Main Ratios
Current 43.14 44.06 46.65 49.89 53.76 1.49
Quick 43.14 44.06 46.65 49.89 53.76 1.18
Total Debt to Total Assets 83.80% 73.49% 63.37% 53.88% 45.32% 62.03%
Pre-tax Return on Net Worth 100.59% 63.23% 49.96% 42.11% 36.88% 9.93%
Pre-tax Return on Assets 16.29% 16.76% 18.30% 19.42% 20.17% 3.77%
[Name] XXX-XXX-XXXX| Table: Balance Sheet 21
[Company Name] 2010
Additional Ratios 2010 2011 2012 2013 2014
Net Profit Margin 29.08% 29.82% 32.94% 35.80% 38.41% n.a
Return on Equity 70.41% 44.26% 34.97% 29.48% 25.82% n.a
Activity Ratios
Accounts Payable Turnover 12.00 12.17 12.17 12.17 12.17 n.a
Payment Days 27 29 29 29 29 n.a
Total Asset Turnover 0.39 0.39 0.39 0.38 0.37 n.a
Debt Ratios
Debt to Net Worth 5.17 2.77 1.73 1.17 0.83 n.a
Current Liab. to Liab. 0.03 0.03 0.03 0.04 0.04 n.a
Liquidity Ratios
Net Working Capital $115,076 $126,232 $140,646 $158,658 $180,641 n.a
Interest Coverage 4.77 4.29 5.18 6.22 7.47 n.a
Additional Ratios
Assets to Sales 2.55 2.54 2.57 2.63 2.72 n.a
Current Debt/Total Assets 2% 2% 2% 2% 2% n.a
Acid Test 43.14 44.06 46.65 49.89 53.76 n.a
Sales/Net Worth 2.42 1.48 1.06 0.82 0.67 n.a
Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a
7.7 Long-term Plan
Our long-term goal is to maintain a steady cash flow while expanding our service by breaking
into the videography market. This will aid us in increasing sales annually.
[Name] XXX-XXX-XXXX| Table: Balance Sheet 22
Appendix
Table: Sales Forecast
Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Unit Sales
Audio Production 21 21 21 21 21 21 21 21 21 21 21 21
Promotional Design 7 7 7 7 7 7 7 7 7 7 7 7
Total Unit Sales 28 28 28 28 28 28 28 28 28 28 28 28
Unit Prices Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Audio Production $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00
Promotional Design $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00
Sales
Audio Production $3,150 $3,150 $3,150 $3,150 $3,150 $3,150 $3,150 $3,150 $3,150 $3,150 $3,150 $3,150
Promotional Design $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700
Total Sales $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850
Direct Unit Costs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Audio Production 1.00% $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50
Promotional Design 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Direct Cost of Sales
Audio Production $32 $32 $32 $32 $32 $32 $32 $32 $32 $32 $32 $32
Promotional Design $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of $32 $32 $32 $32 $32 $32 $32 $32 $32 $32 $32 $32
Sales
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 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850
Direct Cost of Sales $32 $32 $32 $32 $32 $32 $32 $32 $32 $32 $32 $32
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $32 $32 $32 $32 $32 $32 $32 $32 $32 $32 $32 $32
Gross Margin $3,819 $3,819 $3,819 $3,819 $3,819 $3,819 $3,819 $3,819 $3,819 $3,819 $3,819 $3,819
Gross Margin % 99.18% 99.18% 99.18% 99.18% 99.18% 99.18% 99.18% 99.18% 99.18% 99.18% 99.18% 99.18%
Expenses
Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Marketing/Promotion $521 $521 $521 $521 $521 $521 $521 $521 $521 $521 $521 $521
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $446 $446 $446 $446 $446 $446 $446 $446 $446 $446 $446 $446
Utilities 15% $56 $56 $56 $56 $56 $56 $56 $56 $56 $56 $56 $56
Insurance $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17
Other $754 $754 $754 $754 $754 $754 $754 $754 $754 $754 $754 $754
Total Operating $1,794 $1,794 $1,794 $1,794 $1,794 $1,794 $1,794 $1,794 $1,794 $1,794 $1,794 $1,794
Expenses
Profit Before Interest $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025
and Taxes
EBITDA $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025 $2,025
Interest Expense ($2) ($4) ($6) $576 $574 $572 $570 $568 $566 $564 $562 $560
Taxes Incurred $608 $609 $609 $435 $435 $436 $436 $437 $438 $438 $439 $439
Net Profit $1,419 $1,420 $1,421 $1,014 $1,016 $1,017 $1,018 $1,020 $1,021 $1,022 $1,024 $1,025
Net Profit/Sales 36.84% 36.88% 36.92% 26.34% 26.38% 26.42% 26.45% 26.49% 26.52% 26.56% 26.59% 26.63%
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 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850
Subtotal Cash from $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850
Operations
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- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
free)
New Long-term Liabilities $0 $0 $0 $100,000 $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 $0 $0 $0
Subtotal Cash Received $3,850 $3,850 $3,850 $103,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850 $3,850
Page 3
Appendix
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 $81 $2,431 $2,430 $2,442 $2,836 $2,834 $2,833 $2,832 $2,830 $2,829 $2,827 $2,826
Subtotal Spent on Operations $81 $2,431 $2,430 $2,442 $2,836 $2,834 $2,833 $2,832 $2,830 $2,829 $2,827 $2,826
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 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Borrowing
Other Liabilities Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Long-term Liabilities Principal $334 $334 $334 $334 $334 $334 $334 $334 $334 $334 $334 $334
Repayment
Purchase Other Current $0 $0 $0 $40,000 $0 $0 $0 $0 $0 $0 $0 $0
Assets
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $415 $2,765 $2,764 $42,776 $3,170 $3,168 $3,167 $3,166 $3,164 $3,163 $3,161 $3,160
Net Cash Flow $3,435 $1,085 $1,086 $61,074 $680 $682 $683 $684 $686 $687 $689 $690
Cash Balance $5,298 $6,383 $7,468 $68,542 $69,222 $69,904 $70,587 $71,272 $71,957 $72,644 $73,333 $74,023
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 $1,863 $5,298 $6,383 $7,468 $68,542 $69,222 $69,904 $70,587 $71,272 $71,957 $72,644 $73,333 $74,023
Other Current Assets $3,784 $3,784 $3,784 $3,784 $43,784 $43,784 $43,784 $43,784 $43,784 $43,784 $43,784 $43,784 $43,784
Total Current Assets $5,647 $9,082 $10,167 $11,252 $112,326 $113,006 $113,688 $114,371 $115,056 $115,741 $116,428 $117,117 $117,807
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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 $0 $0
Total Assets $5,647 $9,082 $10,167 $11,252 $112,326 $113,006 $113,688 $114,371 $115,056 $115,741 $116,428 $117,117 $117,807
Liabilities and Capital Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Current Liabilities
Accounts Payable $0 $2,350 $2,349 $2,348 $2,741 $2,740 $2,739 $2,737 $2,736 $2,735 $2,733 $2,732 $2,731
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current $0 $2,350 $2,349 $2,348 $2,741 $2,740 $2,739 $2,737 $2,736 $2,735 $2,733 $2,732 $2,731
Liabilities
Long-term Liabilities $0 ($334) ($668) ($1,002) $98,664 $98,330 $97,996 $97,662 $97,328 $96,994 $96,660 $96,326 $95,992
Total Liabilities $0 $2,016 $1,681 $1,346 $101,405 $101,070 $100,735 $100,399 $100,064 $99,729 $99,393 $99,058 $98,723
Paid-in Capital $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Retained Earnings ($1,189) $5,247 $5,247 $5,247 $5,247 $5,247 $5,247 $5,247 $5,247 $5,247 $5,247 $5,247 $5,247
Earnings $6,436 $1,419 $2,838 $4,260 $5,274 $6,290 $7,307 $8,325 $9,345 $10,366 $11,388 $12,412 $13,437
Total Capital $5,647 $7,066 $8,485 $9,907 $10,921 $11,937 $12,954 $13,972 $14,992 $16,013 $17,035 $18,059 $19,084
Total Liabilities and $5,647 $9,082 $10,167 $11,252 $112,326 $113,006 $113,688 $114,371 $115,056 $115,741 $116,428 $117,117 $117,807
Capital
Net Worth $5,647 $7,066 $8,485 $9,907 $10,921 $11,937 $12,954 $13,972 $14,992 $16,013 $17,035 $18,059 $19,084
Page 5