Business Plan
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BUSINESS PLAN
1. Executive Summary 1.1. The Management Team 1.2. The Company’s Mission 1.3. The Company’s Keys to Success 2. Services 2.1. Competitive Comparison 2.2. Technology 2.3. Future Development 3. Market Analysis Summary 3.1. Market Segmentation 3.2. Target Market Segment Strategy 3.3. Industry Analysis 4. Strategy 4.1. Competitive Edge 4.2. Marketing Strategy 4.5. Sales Strategy 5. Operating Plan 5.1. Company Operations 5.2. VoIP network dimensioning 6 Organization 6.1. Personnel Plan 7. Financial Plan 7.1. Important Assumption 7.2. Key Financial Indicators 7.3. Projected Profit and Loss 7.4. Projected Cash Flow 7.5. Projected Balance Sheet
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3 3 4 4 4 4 5 7 7 8 8 Error! Bookmark not defined. 8 9 9 10 11 12 12 12 13 13 14 15 16 17 18
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1. Executive Summary
Voice over IP (VOIP) is one of the fastest growing technologies in the world. According to Industry analyst predictions, the VoIP business could be reach € 6.4 billion in Europe, by 2008. Gartner predicts that in 2009, as much as 56% of enterprise telephony lines shipped in Western Europe will have an IP endpoint. Currently, market requirements are being addressed by a wide range of proprietary technologies as well as products built on a mix of protocols approved by the IETF and other standardsdevelopment organizations. Although proprietary technologies can be quite successful in the short and even medium term, over time market and regulatory pressures have tended to push towards convergence on standards-based solutions, since large enterprises, service providers, and governments do not want to be locked in to proprietary technologies. JabberOut is a pioneer VOIP Service Provider, developed entirely on the open and standardized protocol –Jingle/XMPP – and open-source server-side infrastructure, Asterisk and Jobill, a billing system developed by us. It makes international calls available to 50 million Jabber/XMPP users, who would otherwise pay higher fees to benefit from the traditional telephony services. Jabber is becoming the de facto standard for presence-enabling existing services and applications. Jabber easily bridges legacy and standard protocols to aggregate presence with speed, scale, and security. Jingle provides benefits to those who have already implemented and deployed XMPP technologies. Jingle is a native XMPP extension for setting up peer-to-peer multimedia sessions between XMPP entities for voice chat, video chat, and various types of media sharing and is being standardized within the Jabber Software Foundation’s (JSF) Jabber Enhancement Protocol (JEP) series, and has broad support from a wide range of XMPP vendors and developers.
1.1. The Management Team
The start-up team is formed by Stefano Grini and Andrea Bodrati, who both have impressive experience in the telecommunication and Internet industries. Stefano Grini is the co-founder and CFO at JabberOut and has strong experience in finance management, excellent skills in general management, brand and sales management. Andrea Bodrati has a strong experience as entrepreneur and in wholesale telecommunication services, and is CTO at JabberOut. Andrea has over 15 years experience in the telecommunication and Internet industry.
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1.2. The Company’s Mission
JabberOut is challenging the proprietary protocol many VoIP companies are using which has left users vulnerable to security holes, virus attack, memory leaks and abnormal port activities, while also paying for inferior quality. Our slogan is “Open Your Voice”, inviting everyone to benefit from an open, standardized, secure, feature-rich, widely-deployed service for VoIP communication and collaboration over the Internet. Users now suffer from incompatibility across the network. With JabberOut leading the charge toward adopting open standard protocols VoIP users will ultimately benefit in the same way that adopting the http standard did for web users, VoIP will inevitably become a service similar to today's web mail.
1.3. The Company’s Keys to Success
JabberOut’s strong points include: Pioneering the jingle technology and integration in existing services using Jabber/XMPP (Meebo, Me.dium, Chesspark) The possibility to show that you are using something new, different, unique and that we care for Internet freedom and compatibility by using an open protocol: Jingle is based on XMPP, a standard-based protocol also used by Google Talk and others. More than 50 million potential clients using Jabber/XMPP for IM and in future for VoIP with JabberOut. Using the marketing rumors (word of mouth) by spreading the idea of open source telecommunication; A strong connection with other software communities; Highly experienced management team in strong partnership with termination provider.
2. Services
JabberOut is a pioneer VOIP Service Provider, developed entirely on open and standardized protocol –Jingle/XMPP – and open-source software, Asterisk and Jobill, a billing system developed by us.
2.1. Competitive Comparison
In the broader sense, our competition is formed by all the other VoIP providers. The bulk of the target market wants an easy to use and cheap VoIP provider. Our part of the market is both developing the software for the product and selling the product. At present, we compete mainly against Skype and SIPphone. The traditional VoIP leader is Skype. It’s the most used VoIP application. While the Skype-toSkype calls are always free, calling from Skype to phone and mobiles cost as little as €1.7 4
cents/minute. Users can either purchase Skype Credit or upgrade to Skype Pro for only €2/month (including VAT). In 2006, there were 246 million Skype users1. The most important competitor in Sip is SIPphone Inc.. Sip enables two or more people to make phone calls to each other using the Internet. SIP to SIP phone calls are always free, while when calling PSTN phones the fees are low, with no monthly fees or taxes. For example, to call a US phone number, it costs the user $1.9 cents/minute and the users needs to buy SIP minutes (worth $10, $20 or $50) in order to be able to use the service. Gtalk2voip (www.gtalk2voip.com) uses the Jingle technology, but the company doesn’t effectively promote the product, the product is not user friendly, it’s difficult to use, therefore not a serious current competitor for us. Other popular VoIP providers include: SunRocket, Viatalk, VoIP.com, VoIP Your Life, allo.com, Vonage, VoicePulse, Earthlink True Voice and VoIPGO. Each provider offers slightly differing deals and plans.
2.2. Technology
JabberOut is a pioneer VoIP service provider based on open protocol –Jingle/XMPP – and open source software: Asterisk and Jobill. XMPP/Jaber protocol is currently used by 50 million users and a lot of the new web 2.0 services use it (Meebo,Me.dium, Chesspark). JabberOut benefits from using our Jingle client, Jabbin, and our own billing system, Jobill. Jabbin offers users free PC to PC calls using the XMPP/Jabber protocol, as well as instant messaging. More details about Jabbin can be found on: http://www.jabbin.com Jabber is known as the “Linux of instant messaging”2 and is an open source, secure and ad-free alternative to the popular services such as ICQ, MSN, YM or AIM. Jabber is a set of streaming XML protocols and technologies which allow two persons on the Internet to exchange messages and other information close to real time. Jabber technologies offer several advantages. Jabber is open as the protocols are free, public and easily understandable. It’s standard and proven to be stable, decentralized, secure, extensible and flexible, as well as diverse. Jabber is becoming the de facto standard for presence-enabling existing services and applications. Jabber easily bridges legacy and standard protocols to aggregate presence with speed, scale, and security. Jingle provides benefits to those who have already implemented and deployed XMPP technologies.
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Wolfgang Gruener, 2005, Analysts: VoIP Users Are 17 Million Strong And Growing, at http://www.vonageforum.com/article1989.html , visited on Thursday, July 05, 2007 2 Jabber Overview, at http://www.jabber.org/about/overview.shtml , visited Thursday, July 05, 2007
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Jingle is a native XMPP extension for setting up peer-to-peer multimedia sessions between XMPP entities for voice chat, video chat, and various types of media sharing and is being standardized within the Jabber Software Foundation’s (JSF) Jabber Enhancement Protocol (JEP) series, and has broad support from a wide range of XMPP vendors and developers. The intent of Jingle is to provide a pure-XML mechanism for negotiating and managing multimedia interactions between Jabber/XMPP users. For one, Jingle re-uses existing XMPP identifiers rather than forcing the use of an XMPP ID; since XMPP IDs are fully Unicode compliant; this is a strong selling point for service providers outside the English-speaking countries. Second, XMPP technologies in general have a stronger security profile than SIP technologies do; for instance, address spoofing is much more difficult in XMPP than in SIP and authentication is mandatory in XMPP but optional in SIP. Third, Jingle provides pure XML formats, thus easing the burden of auditing and compliance through schema checking of the XMPP streams. Finally, Jingle’s modular design makes it possible to interface with a number of popular technologies that are not based on SIP and RTP, such as Asterisk, used in the server-side infrastructure of JabberOut
Asterisk3 is the most popular open source telephone system in the world. It is also the most extensible. It offers flexibility, functionality and features that are not available in high cost business systems. Asterisk can be downloaded for free and runs on a variety of operating systems, including Linux, Sun Solaris, Mac OS X, OpenBSD and FreeBS. Asterisk supports VoIP in many protocols.
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About Asterisk, at http://www.asterisk.org/about , visited on Thursday, July 05, 2007
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Recently, Kevin Fleming, senior software engineer at Digium and co-maintainer of Asterisk, announced that a team is working on a new, improved 1.6 version of Asterisk which will provide flexible multi-channel bridging, as well as improved call handling capacity and performance. Jobill is the billing system for Jinglephones and Asterisk. Jobill is developed by Andrea Bodrati, our team member, and will be the first billing system for Jingle.
2.3. Future Development
The most important factor in developing future products/services is the market need. Our understanding of the needs of our target market segment is one of our competitive advantages. Next, we plan to develop software to connect with JabberOut, at the intersection of mobile phones, telephony and web: a VoIP Firefox Extension (based on Samplace www.sameplace.cc), a Web-based phone, as well as free mobile VoIP software for Linux -embedded phone (qtopia, OpenMoko, Zaurus) that allows customers connect to JabberOut. Based on the market’s need we are also considering launching new plugins for the existing Jabber Clients.
3. Market Analysis Summary
VoIP is one of the telecommunication industry’s fastest growing markets. By 2010, studies show, that there will be at least 44 million VoIP subscribers, as opposed to 10.3 million at present. On World states that by 2011 there will be 100 million VoIP users and Skype will have 25% of the market share with $1.2 billion in voice services revenues4. Japan continues to be the largest VoIP market with 7.2 million users in 20055. In Japan the market leader is Yahoo Softbank. After Japan, USA cable sector is the most important VoIP sector with 2.1 million subscribers in 2005, according to the market research firm Point Topic. In Europe, France is the largest market, with 1.2 million subscribers in 2005. According to In-Stat’s research “Europe Leads the Booming Consumer VoIP Market” 6, the market for consumer VoIP services boomed in 2006 all over the world. Europe is leading the way with an increase of over 14 million subscribers last year. France, Germany and the Netherlands were the countries with the largest VoIP subscribers in 2006. Also, In-Stat predicts that the consumer VoIP market will total almost $44 billion worldwide, by 2011. The eBay Q3 2007 results present that in that quarter Skype reaches 246 million users and 1.4 billion SkypeOut minutes. VoiceGlo, another soft client, is estimated to have about 605,000 users in 2005. These two soft phone providers therefore account for 33% of the market share in 2005, based upon Point Topic’s estimates.
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Source at http://blog.tmcnet.com/blog/rich-tehrani/voip/100-million-mobile-voip-users.html, visited Thursday, July 05, 2007 5 Wolfgang Gruener, 2005, Analysts: VoIP Users Are 17 Million Strong And Growing, at http://www.vonageforum.com/article1989.html , visited on Thursday, July 05, 2007 6 US Lags Global VoIP Market According to In-Stat, at http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070709005758&ne wsLang=en , visited on Thursday, July 12, 2007
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3.1. Market Segmentation
Our market is based on Jabber users and has a potential of over 50 million users. Many Jabber users are Linux users as Jabber is provided as default software on the Linux desktop’s Gnome and KDE, therefore making the Linux users one of the main market segments. However, our service will be aimed at Windows users as well. Users in home offices, small office, schools and professional offices are also targeted. The trends favor our business with growing needs for people to being always connected at a low price, without the need of using a phone. According to studies published recently, the market for VoIP services is estimated at €6.4 billion in Europe by 2008 and is projected to grow steadily each year.
3.2. Target Market Segment Strategy
The target customers are adults, both male and female. Our customers have at least basic computer skills, and in some cases business skills (when we refer to companies). Most importantly, the customers are relatively unsophisticated at computing. We find the main target market segment by focusing on Linux users, who already have an experience using Jabber. Jabber is provided as default on Linux Gnome and KDE environments. This brings an important advantage because we are focusing on a market that is already familiar with the messaging system JabberOut is using. Also, the small business and home office market segment is part of our secondary target market. This segment is also includes individuals who use the Internet and is one of the fastest growing in the U.S. market and all over the world, being given increased attention by many marketers. In the Linux users target market, the small business and home office segment, our target customer is a smart, educated, self-reliant, Internet user in a small business set who requires a cheap alternative for making local and international calls. This person is a generalist, not a functional expert in the area our service covers, but wants an easy to use application to help him communicate at low rates. Schools, including students and teaching staff, will use our service to assist their teaching. JabberOut is excellent for helping people collaborate and learning by doing. We call this group the academic market. Freelancers use our product to be able to keep in touch with their buyers. These people have the knowledge of how to use such services for increased productivity.
4. Strategy
Our strategy is built on serving niche market well. The world is full of small or medium businesses that develop similar products. We are building our marketing infrastructure so that we can, eventually, rich specific kinds of business across broad geographic lines. We focus on satisfying the needs of small business and home user. We focus on using a technology we can take to the masses and not leading edge technology that aims at the experts.
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4.1. Competitive Edge
JabberOut will benefit from using our VoIP client, Jabbin, and using our own billing system, Jobill. Both will offer us a strong competitive edge, along with using open source software.
4.2. Marketing Strategy
Our marketing strategy is based on a powerful viral marketing and user generated content. We want to create a user friendly web site and promote it via search engine advertising (SEO and Keywords advertising). Hence, we will attract the target audience to the site, making it easy for them to purchase our product. We also plan to involve users and bloggers, who in turn, will promote our product. More specifically, we are going to use the following tools to promote our website and product: Viral video on YouTube and other similar sites; Screencast and slideshare tutorials; A good ticket management; Create a powerful brand using merchandising tools , photosharing and a Corporate blog; 4.2.1. Pricing Strategy Our pricing strategy is determined by our focus on the market needs. We aim at the consumer market with prices intended to be in line with our main competitors (Skype and Sipphone). We do not expect to change the price in the next year. 4.2.2. Distribution Strategy In the beginning, registers users will use Jabbin as client for JabberOut, but after a while it will be possible to use other clients which support the Jingle protocol –such as PSI, kopete, spark. Extremely important for us will be the reseller agreements with open source client teams – PSI, Kopete, Pidgin- which will offer our services using their software. 4.2.3. Marketing Programs Based on early calculations, we can summarise our marketing plan for the next three years, as follows:
Marketing Plan Keyword advertising Viral Marketing Press and corporate blog Web advertising Others Total
Start-up € 8 € 10 € 1 € 1 € $ 20*
€ € € € € $
2008 15 20 5 5 5 50*
2009 € € € € € $ 15 40 5 20 20 100* € € € € € $
2010 20 100 10 40 30 200*
*000’s 9
4.5. Sales Strategy
The Sales Strategy is not expected to change dramatically over the years. During 2008 we will focus not on changing the strategy but on improving our implementation, by working on key objectives and better coordinating our marketing efforts related to sales channels. The short term strategy and the selling process depends on point of purchase decisions. The main point of purchase is our website. Then, as a key part in marketing/sales, our service will represent the reseller agreements signed with open source client teams – PSI, Kopete, Pidginwhich will offer our services using their software.
Sales Forecast Sales Customers Number of Minutes $ $ $ Start-up 60 1.000 1.200 $ $ $ 2008 1.800 20.000 36.000 $ $ $ 2009 8.400 100.000 168.000 $ $ $ 2010 15.600 200.000 312.000
Sales
18.000 16.000 14.000 12.000 10.000 8.000 6.000 4.000 2.000 -
value (000$)
15.600 8.400 1.800 60 2007 2008 year 2009 2010
4.5.1. Sales Forecast JabberOut is primarily targeting the USA market (which will count for about 40% of the total future subscribers), but much of the intended growth will also take place in the BRIC (Brazil, Russia, India and China) countries because of the price and because they aren’t locked in to other services/technologies yet. In this light, we will be analyzing some statistical data containing information about the subscribers of the top 10 WorldWide VoIP companies.
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VoIP ranking by subscriber for Quarter 4 2006
Rank 1 2 3 4 5 6 7 8 9 10 Company/ISP Vonage Comcast Digital Phone Time Warner Digital Phone Skype (paid only customers worldwide) CableVision Charter Sun Rocket Insight Communications Mediacom XP Communications Subscribers (thousands) 2,200 1,900 1,860 1,800 1,209 446 150 123 105 100 Other details As of Dec 31, 2006 As of Feb 26, 2007 As of Jan 31, 2007 As of July 2005 As of Feb 27, 2007 As of Feb 28, 2007 Sun Rocket ceased operations as of Jul 17, 20077 As of March 27, 2007 As of March 8, 2007 As of January 24, 2007
Source: ISP Planet, http://www.isp-planet.com/research/rankings/2006/voip_q42006.html
As explained earlier, in chapters 3.2 and 3.3., the VoIP market has continued to develop over recent years. One of the companies which offers similar products to what we offer (and plan to develop), Jajah, has just announced reaching two million customers, hence doubling its customer base. Jajah started in 2005 and operates globally. Another good example is VoIP, Inc., which recently published its financial data, stating that in the 2Q 2006, the company “produced positive gross margin of $230,000 (+3% of sales)”8. The 2Q 2006 results showed a continuing improvement trend in gross margin for three consecutive quarters. We have based our calculations for sales forecasts on similar companies, such as Jajah and VoIP, Inc. Therefore we can be sure that we will be able to reach the numbers presented in the sales forecast table. The sales value depends directly on the number of subscribers our product will have. The table that follows shows the sales forecasts from start up to 2010. We will work with resellers, such as open source client teams – PSI, Kopete, Pidginwhich will offer our services using their software.
5. Operating Plan
Currently, JabberOut has a Network Operations Centre (NOC) in which all the networking systems are housed. At NOC, JabberOut also manages network monitoring and critical technical support.
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Source: http://gigaom.com/2007/07/16/sunrocket-is-toast-memo/, visited on Tuesday, July 17, 2007 Source: http://solokay.blogspot.com/2006/08/voip-inc-reports-second-quarter.html , visited on Thursday, July 19, 2007
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5.1. Company Operations
JabberOut’s operations are managed within the Customer Care department. Customer activation, invoicing and monitoring is fully automated. When a new user register using the web interface all his personal details are stored in company database and he is immediately activated Technical support is performed using an online forum. Community Customers invoicing is also automated. The customer can look at the CDRs (Call detail records) and self-configure value added services (like voice mail, call forwarding). Networks, systems and numbering plan used for service provisioning JabberOut's network has dedicated Internet access. Each access is guaranteed by a SLA (Service Level Agreement). Company's server hosts email, ftp, web and billing services. All server services are replicated and backed up to guarantee service availability and reliability. We plan to host backup servers in our housing facility in Redbus server farm in Milan to guarantee service in case of disaster. The company's VoIP network is interconnected with multiple international VoIP providers to guarantee low call termination prices and reliability. The service supports both SIP and H323 signaling protocols. JabberOut also has direct interconnection with Italian landline and mobile networks and the ability to provide Italian geographic numbers. We plan to provide incoming geographic numbering in other countries as well as the VoIP services we are provided using Asterisk software on Linux operating system.
5.2. VoIP network dimensioning
The VoIP network has been planned with the projection that all the 4 E1s (120 voice ports) can support 3575 BHCCS (ERLANGb with 0,1 GOS). This assumption is made considering calls terminating on the PSTN network only. Calls between users will not generate any load on JabberOut's VoIP network since these are made using peer-to-peer technology.
6 Organization
Stefano Grini is a 31 years old visionary, co-founder and CEO at JabberOut. He has strong experience in finance management, excellent skills in general management, brand and sales management, obtained after working for 5 years in different sectors – industrial waste management and building materials industry. He founded Jabbin, the open source VoIP client for Jabber, using Jingle protocol, instead of the most used SIP protocol. Jabbin is still in beta version but will be released as a final version by the end of this summer. Andrea Bodrati has a strong experience as an entrepreneur and in wholesale telecommunication services, and is CTO at JabberOut. He is born Italy but later moved to Ukraine, where he currently lives. In 2007, he founded MPTelecom in Cyprus. A year earlier he started a project aiming to provide the first open source VoIP PBX and also was appointed International Sales Manager at Telecom64 International, a US-based company which provides wholesale telecommunication services in Europe and the Far East. Andrea has over 15 years experience in the telecommunication and Internet industry. 12
6.1. Personnel Plan
The personnel plan will be as follows:
Personnel Plan Stefano Grini, President CFO/CEO Andrea Bodrati, VP/CTO Technical Development Personnel Technical Development Freelancer General and Administrative Personnel Sales and Marketing Personnel Total People Total Payroll Start-up $2,500 $2,500 $0,000 $8,000 $0,000 $0,000 3 $13,000 1st year $12,500 $12,500 $24,000 $12,000 $25,000 $24,000 6 $110,000 2nd year $25,000 $25,000 $96,000 $48,000 $50,000 $48,000 12 $292,000 3rd year $25,000 $25,000 $144,000 $48,000 $100,000 $72,000 17 $414,000
As explained in the table, the work force will increase over the years. JabberOut will start with 3 employees (Stefano Grini, Andrea Bodrati and a Technical Developer working as freelancer with the company), while in the next year, the company will expend to 6 employees. Based on our calculations we will need as many as 12 employees by our second year of operations and 17 by our third year. The payroll will increase accordingly.
7. Financial Plan
Our goal is to get an initial $150,000 in the company quickly in order to set up the company future development and sustain the operations within the first year of operations. Ideally, we would like to bring in equity from investors compatible with our growth plan, management style and vision, in return for some equity ownership. The company is raising the money for the purpose of funding growth and operations. The funding will cover the operating expenses and product development as follows: Jabbin development; Creation and changes of our website; Cover all the expenses in the first year of operation; Creating plug-ins for other Jabber VOIP client; Developing a Firefox add-on. A fundamental respect for giving our customers value; Respect for realistic forecasts; Growth and profitability ; Willingness to contribute with valuable input to strategy and implementation decisions. 13
We want compatible investors or no investors at all. In our vision, compatibility means:
7.1. Important Assumption
This plan is based on important assumptions, which can be stated as follows: We assume a slower economic growth for 2008 but without major recession9. We assume that there will be no unforeseen changes in the VoIP technology which could make our services obsolete; We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables. 7.1.1. Limitation of Projections: This financial projection is based on sales volume at the levels described in the revenue section (see sub-chapters 4.5 and 7.3) and presents, to the best of management’s knowledge and belief the company’s expected revenues, liabilities, capital, revenues and expenses. The projections reflect the management’s judgment of the expected conditions, given the hypothetical assumptions. 7.1.2. Revenue The company’s revenue is derived directly from service subscriptions. The exact numbers can be found in sub-chapter 4.5. Sales Strategy and 7.4. Projected Cash-Flow. 7.1.3. Expenses The company’s expenses are primarily those of advertising ($20,000 at start up) and Internet and bandwidth ($10,000 at start up). Other expenses are based on management’s assumptions and industry average.
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Source: http://www.reliableplant.com/article.asp?articleid=6374 , visited at Thursday, July 19, 2007
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7.2. Key Financial Indicators
The following charts show the changes in three key financial indicators: sales, gross profit and net profit after tax. The growth in sales is the most obvious change. We believe that a growing market for our services and a large potential market justifies the growth predictions (all values are in thousands of US Dollars).
Sales Gross Profit EBITDA Net Profit After Tax Start-up $ 60 $ 18 $ (36) (37) 2008 $ 1.800 $ 540 $ 292 139 $ $ $ 2009 8.400 2.520 1.873 922 $ $ $ 2010 15.600 4.680 3.461 1.701
EBITDA in .000 $ 3.461
1.873 292
2008
2009
2010
Net Profit After Tax
in .000 $
1.701
922 139
2008 2009 2010
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7.3. Projected Profit and Loss
The following table shows that we expect to maintain gross margin, while increasing net profit margin during the next three years (2008 -2010). The most important factor in improving our profit margin is the economics of operating expenses. The expenses should decline as a percentage of sales from over 90% at start-up (2007) to as little as 15% in 2010. We don’t expect to decrease marketing (advertising) expenses as a percent of sales, since selling software does require a lot of marketing. The values in the profit and loss account don’t contain the investment we hope to get via this business plan (all the values are in thousands of US dollars).
2008
in 000 USD
%
2009
%
2010
%
Sales Direct Cost of Sales Gross Profit Operating Expenses Salary (Office & Overhead) Payroll (taxes etc.) Technical Freelancer Supplies (off and operation) Repairs/ Maintenance Advertising Car, Delivery and Travel Accounting and Legal Rent & Leasing (Servers) Internet & Bandwitch Telephone Utilities Insurance Taxes (real estate etc.) Interest Depreciation Total Expenses Net Profit Before Tax Income Taxes Net Profit After Tax Owner Draw/ Dividends Adj. to Retained Earnings
$1.800 100,00% 1.260 70,00% $ 540 30,00%
$8.400 100,00% 5.880 70,00% $2.520 30,00%
$15.600 100,00% 10.920 70,00% $ 4.680 30,00%
$
25 73 12
1,39% 4,06% 0,67% 0,56% 0,56% 2,78% 0,56% 0,28% 0,56% 1,67% 0,28% 0,33% 0,11% 0,00% 0,56% 0,28% 14,61%
$
50 194 48
0,60% 2,31% 0,57% 0,24% 0,36% 1,19% 0,24% 0,12% 0,24% 1,49% 0,12% 0,18% 0,06% 0,00% 0,24% 0,12% 8,06%
$
100 316 48
0,64% 2,03% 0,31% 0,22% 0,38% 1,28% 0,19% 0,10% 0,22% 1,44% 0,10% 0,19% 0,06% 0,00% 0,26% 0,13% 14,04%
10 10 50 10 5 10 30 5 6 2 10 5 $ 263 277 139 139
20 30 100 20 10 20 125 10 15 5 20 10 $ 677 1.843 922 922
35 60 200 30 15 35 225 15 30 10 40 20 $ 1.179 3.501 1.751 1.751
$ 139
$ 922
$ 1.751
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7.4. Projected Cash Flow
The following chart is most important for illustration our cash projections for the next 12 months. The chart presents the total cash paid out vs. the cash balance (at the end of each month). The values in the cash flow chart don’t contain the investment we hope to get via this business plan (all the values are in thousands of US dollars).
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7.5. Projected Balance Sheet
The table shows the annual balance sheet results, with a healthy projected increase in the net worth. The values in balance sheet don’t contain the investment we hope to get via this business plan (all the values are in thousands of US dollars).
2008 Assets Current Assets Cash in bank Total Current Assets Fixed Assets Machinery & equipment Furniture & fixtures Total Fixed Assets (net of depreciation) Other Assets Deposits Total Other Assets TOTAL Assets Liabilities and Equity Current Liabilities Accounts payable Interest payable Taxes payable Total Current Liabilities Long-term Debt Bank loans payable Total Long-term Debt Total Liabilities Owners' Equity Invested capital Retained earnings - beginning Retained earnings - current Total Owners' Equity Total Liabilities & Equity $ 115 139 254 $ 520 783 1.303 $ 972 782 1.754 2009 2010
$ $
161 161
$ $
1.300 1.300
$ $
1.428 1.428
$
2 8 10
$
10 40 50
$
20 80 100
$
$
$
$ $
338 338 509
$ $
1.130 1.130 2.480
$ $
3.153 3.153 4.681
$
$
$
$ $ $
254
$ $ $
1.303
$ $ $
1.754
$
150 106 256 509
$
$ $
$ $
150 106 922 1.177 2.480
$
$ $
150 1.027 1.751 2.928 4.681
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