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........... 11 7...................................................................................................................................................................... 17 Chart: Cash ...............................0 Management Summary .................................................................................................. 14 Chart: Profit Monthly ...................................................................... 11 Table: Personnel ........................................................................................................................................................................................1 Objectives............................... 7 4............................................................................................................................................................................1 Important Assumptions ...............................................................................................................................3 Keys to Success ...................................................................................................0 Financial Plan ....................................................................2 Break-even Analysis .................................................. 12 7............2 Mission .. 10 Chart: Sales by Year ...............................................................................3 Projected Profit and Loss ...................................2 Service Business Analysis ...................2................................................ 2 1...............................0 Strategy and Implementation Summary ............................................. 12 7..... 16 7.................................................................................. 13 7...........................................................................................................2 Break-even Analysis ........................................................... 13 Table: Break-even Analysis................................................................... 10 6........................................................................................ 6 4.................................................................... 15 Chart: Gross Margin Monthly......1 Sales Forecast.................................................................2 Sales Strategy .............1 Market Segmentation ............. 10 6........................................................................................................... 9 Table: Sales Forecast ............................. 2 1.........................................................................................2 Start-up Summary ............................................................................................................................................................................... 3 Table: Start-up....... 6 Table: Market Analysis ......................... 3 Table: Start-up Funding ............................................. 12 Table: General Assumptions .................................................................................... 5 4....................................................................................................................................... 8 5...........0 Company Summary ............................... 3 2.............................................................................................................................................................................................................................................................0 Services ............................................................................................................................................. 9 Chart: Sales Monthly ..............Table of Contents 1.......... 14 Chart: Profit Yearly ........................................................................................................................................................................................................................................... 12 7....................................................................................................................................................................... 17 Page 1 .......... 8 5........................................................................................0 Financial Plan ............................................................................................................................................ 2 1................... 9 5............ 7 4... 13 Chart: Break-even Analysis .......................................... 7 Chart: Market Analysis (Pie) ............................................................................... 15 Chart: Gross Margin Yearly . 1 Chart: Highlights ....................... 16 Table: Profit and Loss .................................................................. 13 7.................................................................................2.............................................. 4 Chart: Start-up ....................................................................................................................................................................1 Company Ownership ..............................0 Market Analysis Summary ...................................................1 Competition and Buying Patterns ................................................................................................................................................................................................................................... 3 2.................1 Marketing Strategy ...................................................................0 Executive Summary .......................................................................................................... 9 5.........................................4 Projected Cash Flow ....................................1 Personnel ......................................................... 3 2.......... 5 3..........................................

........................ 3 Table: Profit and Loss .................................... 5 Table: Cash Flow ...................................................................................................................................................................................................................................................................................... 19 Table: Sales Forecast ................6 Business Ratios ..............................................................................................................5 Projected Balance Sheet .........................................................................................5 Projected Balance Sheet .......... 2 Table: General Assumptions ................................................................................................................................................................ 19 7........................................................................................................................................................................................................................................................................................................................................Table of Contents Table: Cash Flow ................................... 17 7. 2 Table: Personnel ............................................................................................................................................................. 6 Table: Balance Sheet ..................... 4 Table: Profit and Loss ............................................... 4 Table: Cash Flow .............................. 19 Table: Balance Sheet .... 1 Table: Personnel ......................................................................................................................................................................................................................................................... 6 Page 2 ................................................................................................. 5 Table: Balance Sheet ........................................................................................................................................................................................ 19 7........................................... 19 Table: Ratios ................................................ 3 Table: General Assumptions .................................................................

These companies range from major international name-brand firms to tens of thousands of individuals. The Market There are plenty of opportunities within this market especially since recent local and federal regulations have required many of our potential customers to carryout geotechnical studies and monitoring before construction. slope stability analysis. rocks and groundwater. Our services fall into two main categories of geotechnical engineering services and construction monitoring/laboratory testing. The Company CGA will be a limited liability partnership registered in the state of Delaware for tax purposes. a former engineering geology department head with Wilson and Brown. and cost are unique. The Services CGA offers comprehensive geo-engineering services to our diverse clients. Page 1 . By focusing on institutions such as these that have special needs. laboratory analysis of soils.Compton Geotechnical Associates Inc. real estate companies and utility and water companies. we believe we will be able to better serve our clients and produce a superior service that is more effective that other geo-engineering firms. Its founder is Mr. the industry has averaged approximately 22% per year over the past five years. Compton has brought together a highly respected group of geologists. depth. and settlement analysis. conference rooms and office spaces. According to the Journal of Hydrology & Geoengineering. length. engineers and graphic art specialists who. The company has a limited number of private investors and does not plan to go public. 1. hydrologists. Maine. have a total of 35 years of experience in this industry. Some of these services include surface and groundwater evaluation. We believe that we can service this limited market better than larger firms and we have better service packages at a more reasonable cost than existing competitors of equal size. reach. (CGA) will provide innovative approaches to geological engineering services throughout the state of Maine. bluff studies. Martin Compton. The company expects to begin offering its services in January of Year 1. The geoengineering industry has been growing at a very fast rate for the past twenty years. local and state governments. combined. Mr.0 Executive Summary Introduction Compton Geotechnical Associates Inc. load testing. The geotechnical consulting business consists of thousands of smaller consulting organizations and individual consultants for every one of the few dozen well-known companies. The company has its main offices in Augusta. Inc. CGA will enter into this limited geographical area where it can leverage its staffs' existing collective reputation into long-term contracts centered on excellent service and cost effectiveness. Each project is customized to our client and its scope. The facilities include a soil/rock and water testing lab. The company's main clients will be major construction companies.

2 Mission It is the mission of CGA to provide innovative approaches to geological engineering services and to build effective long-term relations with our clients with excellent services delivered in a timely and cost-effective manner. average profitability per month per segment will be about $8. A long-term loan of [see Start-up Funding table] through Charter Bank of Augusta will be paid off in ten years.Compton Geotechnical Associates Inc. Page 2 .000. Financial Considerations Start-up assets required are [see Start-up table]. 1. We expect that about three projects per month will guarantee a break-even point. We conservatively believe that during the first three years. The company expects to reach profitability in year one and does not anticipate any serious cash flow problems. we have obtained [see Start-up Funding table] in current borrowing from Bank of America Commercial Investments. This includes [see Start-up table] in expenses and the rest in cash needed to support operations until revenues reach an acceptable level. Chart: Highlights 1.1 Objectives The three year goals for Compton Geotechnical Associates (CGA) are the following:    Achieve break-even by year two. the principal to be paid off in two years. however. Establish a minimum of a 95% customer satisfaction rate to establish long-term relationships with our clients and create word-of-mouth marketing. Establish long-term contracts with at least four clients. Most of the company's liabilities will come from outside private investors and management investment.

Inc. (20%). engineers and graphic art specialists who. All other financing will come from loans. Mr. David Gillen. field and laboratory work. Its founder is Mr. however. a former engineering geology department head with Wilson and Brown. 2. This includes expenses and cash needed to support operations until revenues reach an acceptable level. The rest will be owned by the senior management including Mr. 2. conference rooms and office spaces. The company's main clients will be major construction companies. hydrologists. analysis. Compton has brought together a highly respected group of geologists. in-house design.  Keeping close contact with clients and establishing a well functioning long-term relationship with them to generate repeat business and obtain a top-notch reputation. Elizabeth Bathory (20%). Ms. The company has a limited number of private investors and does not plan to go public.0 Company Summary CGA will be a limited liability partnership registered in the state of Delaware for tax purposes. and Mr. the principal to be paid off in two years. combined. have a total of 35 years of experience with this industry. (25%). 1. Maine.2 Start-up Summary Start-up assets required are shown below. Martin Compton. The company expects to begin offering its services in January of 2003. The company has its main offices in Augusta. Martin Compton. By focusing on institutions such as these that have special needs.  Establish a comprehensive service experience for our clients that includes consultation. we believe we will be able to better serve our clients and produce a superior service that is more effective that other geo-engineering firms.1 Company Ownership The company will have a number of outside private investors who will own 27% of the company's shares. and follow up monitoring of geo-hazards. The facilities include a soil/rock and water testing lab. 2. local and state governments. Jeremy Leither (8%). we have obtained current borrowing from Bank of America Commercial Investments. Most of the company's liabilities will come from outside private investors and management investment.Compton Geotechnical Associates Inc. A long-term loan through Charter Bank of Augusta will be paid off in ten years. real estate companies and utility and water companies. Mr.3 Keys to Success CGA's keys to long-term survival and profitability are as follows:  Create long-term contracts that demand constant monitoring or on-call services. Table: Start-up Start-up Requirements Page 3 .

500 $104.300 Total Funding $164.300 Total Requirements $164.000 Loss at Start-up (Start-up Expenses) Total Capital ($30. Jeremy Leither Others Additional Investment Requirement Total Planned Investment $25.300 Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities $16.000 Capital Planned Investment Mr.000 $3.000 $20.000 $200 $3. Martin Compton Ms.700) $69.800 $0 $104.000 $27.000 Page 4 .000 $45.000 $8.800 $3.000 Table: Start-up Funding Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required $30.700 $133.000 $2.000 $6.Compton Geotechnical Associates Inc.000 $0 $100.800 $133.300 Total Capital and Liabilities $133.500 $25.500 $8.000 $20.000 $30.000 Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets $28.300 $164.700 Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets $104. Elizabeth Bathory Mr.000 $2.000 $133.000 $0 $64.000 $8. Start-up Expenses Legal Insurance Utilities Rent Accounting and bookkeeping fees Expensed equipment Advertising Other Total Start-up Expenses $1. David Gillen Mr.

Our geotechnical engineering services include:      Exploration and characterization of soil and rock. Our services fall into two main opportunities of geotechnical engineering services and construction monitoring/laboratory testing. Chart: Start-up 3. Slope stability and landslide analysis. and settlement analysis.0 Services CGA offers comprehensive geo-engineering services to our diverse clients. length. tieback. The services we provide for construction monitoring and laboratory testing include:      Compaction monitoring and testing structural fill. and water properties. depth. Laboratory analysis of soil. and cost are unique. Page 5 . Evaluation. rock. Each project is customized to our client and its scope.Compton Geotechnical Associates Inc. Pile and pier installation monitoring. Surface and groundwater evaluation. reach. Load testing. and shoring monitoring. Shoring requirements and analysis. Forensic studies of failures and/or distress.

etc. real estate companies. These companies effect us most because of their higher capitalization or geographical proximity. This reputation is difficult to obtain by new firms unless its personnel bring it with them from previous companies. These include major construction companies. This will be our expected geographical focus. This is because these types of organizations have the greatest needs and/or the best capitalized of all our potential clients. Utility and water companies. 4. It must be Page 6 . Finally utility companies require a wide variety of services that also include soil and water analysis. seismicity studies. According to the Journal of Hydrology and Geo-engineering. by law. Local and state governments. An analysis of the market using the five forces of profitability indicates that the greatest threat at the moment is in new entrants to the market who will want to capitalize on this high growth. the industry has averaged approximately 22% growth per year over the past five years. certain certifications of safe practices including retaining wall and foundation load bearing capacities.0 Market Analysis Summary CGA will be concentrating on four main types of market segments. local and state governments. Price and scope are also important reasons for accepting contracts. Real estate companies. These include:      Major construction companies.Compton Geotechnical Associates Inc. geomorphological studies and coastal processes studies for their constituents. Currently rivalry among different geotechnical companies is relatively moderate as much of the potential rivalry is absorbed by this high growth rate. The market analysis table and graph which follows shows the number of each type of organizations in the state of Maine. Real estate companies are in need of bluff studies and fault mapping. 4. The construction industry now requires. The geo-engineering industry has been growing at a very fast rate for the past twenty years. We are concentrating on these specific market segments for a variety of reasons. as we are. Many of the competitors are able to improve profitability simply by keeping up with industry expansion.1 Market Segmentation There are various land-use companies and organizations within the state of Maine that CGA will be concentrating on. slope stabilities. aerial photo interpretation. Local and state governments often require services such as earth science historical reviews. especially if the company is small. and water and utility companies. Other. Our most serious competitors are Goldner Geotechnical and Earth Sciences Consultants. Companies usually enter into contracts with geotechnical companies based on their reputation of professionalism and quality of services rendered in the past. and geo-instrumentation installation. All these companies further require ongoing services that will provide CGA with long-term profitability.

Table: Market Analysis Market Analysis Potential Customers Major construction companies Local and state governments Real estate companies Utility companies Other Total Year 1 Year 2 Year 3 Year 4 Year 5 12 18 40 6 10 86 12 19 42 6 11 90 12 20 44 6 12 94 12 21 46 6 13 98 12 22 48 6 14 102 Growth 2% 3% 4% 0% 5% 4.66% 0. although they are quite small in the number of potential clients. Page 7 .2 Service Business Analysis The geoengineering industry has been growing at a very fast rate for the past twenty years. According to the Journal of Hydrology & Geoengineering. The geotechnical consulting business consists of thousands of smaller consulting organizations and individual consultants for every one of the few dozen well-known companies. the industry has averaged approximately 22% growth per year over the past five years.36% CAGR 0.00% 5. have very high profitability levels. noted however.14% 4.Compton Geotechnical Associates Inc. Much of this growth has been due to increased environmental awareness and the subsequent local and federal legislation that has resulted from this trend. that some of the segments.36% Chart: Market Analysis (Pie) 4.78% 4.00% 8. These companies range from major international name-brand firms to tens of thousands of individuals.

5. Price and scope are also important reasons for accepting contracts. with a large number of small companies that mainly cater to small firms and a few large companies that seek the largest contracts. as we are. such as governments have "profitability" restraints that cause them to pressure geotechnical companies for superior terms. with a fine track record of quality work. 4.2. furthermore. the one major disadvantage to new entrants is that all firms engaged in contracting to geoengineering firms face significant switching costs when bringing on a consulting partner. some of our market segments. Buying Patterns and Needs Companies usually enter into contracts with geotechnical companies based on their reputation of professionalism and quality of services rendered in the past. The geoengineering industry is highly fragmented. its personnel bring it with them from previous companies. Earth Sciences Consultants is one of the largest and best known geotechnical firms on the east coast and is expected to expand into a nationwide company within the next five years.1 Competition and Buying Patterns Competition Competition includes all potential geotechnical companies in our geographical operating area. and estimated profits. This reputation is difficult to obtain by new firms unless. Our most serious competitors are Goldner Geotechnical and Earth Sciences Consultants.0 Strategy and Implementation Summary Compton Geotechnical Associates' business strategy is to enter into a limited geographical area where it can leverage its staff's existing collective reputation into long-term contracts centered on employee service and cost effectiveness. small consulting companies with fewer than ten employees. The power of potential clients is very great in this industry because most clients are very concentrated in our geographical area.Compton Geotechnical Associates Inc. CGA understands that in this industry there is a significant learning curve that creates declining "unit" costs as a firm gains more cumulative experience in the field itself and with long-term clients specifically. The most likely entrants will be new. especially if the company is small. Goldner is an established company that has been in operation for the past ten years. Furthermore. CGA believes that the greatest threat at the moment is in new entrants to to market who will want to capitalize on this high growth industry. It has hundreds of staff consultants and very deep pockets that can be used to counter any sort of competitive move. We believe that we can service this limited market better than larger firms and we have better service packages at a more reasonable cost than existing competitors of equal size. clients tend to "shop around" for the best package of services and cost. Many of the competitors are able to improve profitability simply by keeping up with industry growth. services. Finally. It currently employees twelve consultants and has long-term contracts with the city of Damrascotta and the Skowhegan River Water District. capabilities. because of the high cost of our services. However. This company is analogous to CGA in size. Rivalry among different geotechnical companies is relatively moderate as much of the potential rivalry is absorbed by the high growth rate. Page 8 .

Bathory will be traveling to six conventions across the eastern part of the country during the first year of operations where we will have booths to advertise our services.000 $33.Compton Geotechnical Associates Inc.000 $550.000 $85.1 Sales Forecast Sales are based on the various contract projects we anticipate acquiring in the various market segments.000 Year 1 $1. Table: Sales Forecast Sales Forecast Year 1 Year 2 Year 3 $93. CGA's founder Mr.000 $299. 5.000 $145. Finally we will be setting up cold calls to potential clients and have half. will generate the reputation CGA needs for further contracts.2 Sales Strategy CGA's management will be focusing on leveraging its extensive contacts in its various market segments to generate contracts.1 Marketing Strategy In order to attract clients. In addition. These promotions will allow us to begin to make our reputation.000 $93. which is expected to have a project life of five years.000 $56.000 $36.000 $90.000 $69. 5. Mr. Revenues are based on average costs per project based on estimated time and complexity of project plus and undisclosed profit margin. 5.000 $224.000 $45. At the current time. The company does not have any significant direct costs of sales. CGA will begin to contact promising organizations and offer free consultations. In addition.000 $98. Martin Compton has been aggressively pursuing this contact and based on recent events.200 $2.000 $110.2.and full-page advertisements in various publications that address our clients needs.000 $441. In October of 2002 the Wiscasset Utility district announced it was accepting bids for a new long-term geotechnical contract focusing on groundwater and soil studies.400 Year 2 $0 $0 $0 Year 3 $0 $0 $0 Sales Local and state governments Real estate companies Construction companies Utility companies Other projects Total Sales Direct Cost of Sales Row 1 Other Subtotal Direct Cost of Sales Page 9 . to be announced in February 2003. and if successful. Mr. This will generate both much needed revenue. and an initial contract at reduced prices. it is likely that our firm will win the bid. Compton and Ms.000 $45.000 $68.200 $1. Gillen will be pursuing a number of other open-ended contracts through his contacts with real estate companies. Amherst County has entered into negotiations with CGA for its Coastal Processes Studies Project (CPSP).

Bathory. David Gillen. Mr. Chart: Sales Monthly Chart: Sales by Year 6. Finances and general admin will be handled by Ms. Our head of operations will be Mr.0 Management Summary The company will have four officers including our president. Martin Compton. Page 10 . plus we will have two initial geotechnical consultants and a CAD draftsperson.Compton Geotechnical Associates Inc.

000 6 $190. Mr. Danielson worked for The USGS as a key figure in its groundbreaking National Water/Soil Suitability Survey. research.office manager Mr.000 $45. David Gillen graduated from Penn State University with a bachelors degree in Hydrology in 1975.projects manager Mr.000 $36. Elizabeth Bathory . Compton spent the last four years as the engineering geology department head with Wilson and Brown. In 1989 he went to work for Anderson Consulting in their geotechnical division where he worked on sub-bottom acoustic profiling.500 $209. tunnel and shaft rehabilitation.000 $268. The company plans to hire additional consultants. Mr. Mr.000 Page 11 .000 $36.000 $36.000 $16.000 $60.000 $38.Compton Geotechnical Associates Inc. Jeremy Leither .1 Personnel CGA's management brings to the company strong capabilities in creative flair. resolving engineering issues. From 1978-1988 Mr.000 $13. Since then. Compton has had extensive experience in site specific municipal. 6.000 $39. etc. Key Personnel Mr. and a unique combination of skills drawn from other businesses. and designing procedures for testing ground water infiltration rates. commercial and residential construction projects.000 $45. design support and administrative personnel as we begin to get large numbers of contracts.000 6 $60. Martin Compton .000 $42. project oversight.000 $10.000 $36.staff engineer Geo-engineering consultant CAD draftsperson P/T Total People Total Payroll Year 1 Year 2 Year 3 $36.500 6 $40. Inc. Martin Compton is a graduate of the University of Kansas where he obtained his civil engineering degree in 1971.000 $39. In 1996 he obtained a graduate degree in geo engineering from MIT. This includes experience in budgeting.president Mrs.000 $40. Table: Personnel Personnel Plan Mr. David Gillen .

1 Important Assumptions We are assuming approximately 75% sales on credit and average interest rates of 10%.00% 10.00% 30. These are considered to be conservative in case our predictions are erroneous.00% 30. Table: General Assumptions General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Year 1 Year 2 Year 3 1 10.00% 0 2 10.00% 0 3 10.00% 0 Page 12 . 7.0 Financial Plan Our financial plan anticipates one year of negative profits as we gain sales volume.00% 30. 7.Compton Geotechnical Associates Inc.00% 10. We have budgeted enough investment to cover these losses and have an additional credit line available if sales do not match predictions.00% 10.

256 Chart: Break-even Analysis Page 13 . it is difficult to assign and average per unit revenue figure. 7. average profitability per month per segment will be about $8. length. In other words.Compton Geotechnical Associates Inc. Since each project will be of different scope.444 Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost 1% $23. We expect that about three projects per month will guarantee a break-even point. we will have insignificant direct cost of sales.000. it is conservatively believed that during the first three years. and complexity. However. This is because we will be dealing with smaller companies at first that have smaller projects. Table: Break-even Analysis Break-even Analysis Monthly Revenue Break-even $23.2 Break-even Analysis Our Break-even Analysis is based on the assumptions that our gross margin is 100%.

we expect monthly profits to begin in fourth quarter of 2003 (see appendix for monthly Profit and Loss table).3 Projected Profit and Loss The following table itemizes our revenues and associated costs. As the reader can see. 7. We expect to be paying higher costs in marketing and advertising than other companies as we attempt to build sales volume.Compton Geotechnical Associates Inc. Chart: Profit Monthly Page 14 .

Compton Geotechnical Associates Inc. Chart: Profit Yearly Chart: Gross Margin Monthly Page 15 .

000 $14.050 $5.700 $10.000 $2.525 $6.097 1.73% Payroll Sales and Marketing and Other Expenses Depreciation Rent Utilities Insurance Payroll Taxes Travel Other $190.300 $44.04% $82.575 $12.000 $2.200 $209.500 $35.000 $0 $18.600 $13.41% $543.000 Gross Margin Gross Margin % $289.075 $310.000 $7.600 18.350 $12.000 $550.000 $268.500 $20.000 Total Operating Expenses $279.000 $31.100 $1.74% $103.635 18.000 $2.000 $3.84% Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales Page 16 .Compton Geotechnical Associates Inc.500 $22.000 $10.000 $10.200 $28.000 $0 $7.200 $15.415 $152.000 98.86% $434.000 $7.000 98.000 $7.450 $390. Chart: Gross Margin Yearly Table: Profit and Loss Pro Forma Profit and Loss Year 1 Year 2 Year 3 Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales $299.400 $3.000 $0 $7.000 $4.550 $126.525 $10.000 $40.000 $8.000 $3.328 $123.500 $6.600 96.000 $15.600 $14.800 $4.000 $9.400 $441.300 $154.400 $7.

Our short-term loan will be repaid in two equal payments in 2004-2005.250 $301. We do not expect to have any short-term cash flow problems even though we will be operating at a loss for the first nine months.843 $527.484 $137.850 $110.100 $236.850 $0 $0 $0 $0 $0 $0 $0 $411.750 $162. Our long-term loan will be paid off in ten years. Chart: Cash Table: Cash Flow Pro Forma Cash Flow Year 1 Year 2 Year 3 $74. HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Page 17 . 7.500 $389.4 Projected Cash Flow The following is our cash flow chart and diagram.Compton Geotechnical Associates Inc.000 $239.234 $411.343 $0 $0 $0 $0 $0 $0 $3.343 Year 1 Year 2 Year 3 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax. VAT.484 $0 $0 $0 $0 $0 $0 $0 $527.

000 $0 $0 $0 $371.000 $173.Compton Geotechnical Associates Inc.964 $101.438 $73.520 $268. Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations $190.520 $0 $8. VAT.000 $0 $4.176 $0 $8.514 $441.520 $359.176 $209.500 $92.000 $150.000 $0 $0 $0 $453.676 $283.514 Sales Tax.830 $175.267 Additional Cash Spent Page 18 . HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent $0 $0 $0 $0 $0 $0 $0 $283.474 $39.326) $61.514 Net Cash Flow Cash Balance ($43.000 $0 $4.

000 ($30.700) $3.398 $152.000 $20.500 $219. 47.500 $293.6 Business Ratios We have included industry standard ratios from the construction and civil engineering industry to compare with ours. especially in sales growth.398 $158.000 $61. Table: Ratios Ratio Analysis Sales Growth Year 1 Year 2 Year 3 Industry Profile n. 7.267 $114.000 $55.090 Year 1 Year 2 Year 3 Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities $15.000 $0 $20.000 $5.000 $51.033 $261.323 $3.104 $25. Table: Balance Sheet Pro Forma Balance Sheet Year 1 Year 2 Year 3 $61.Compton Geotechnical Associates Inc.000 $152. However.090 $75.600 $261.071 $14.071 $37.000 $76.458 $103.474 $62.49% 24. our projections indicate a healthy company that will be able to obtain and retain long-term profitability.666 $3.124 $25. however there are some significant differences.000 $0 $31.097 $75.000 $2.000 $0 $25.458 Long-term Liabilities Total Liabilities $45. financing ratios.72% 6.000 ($27.090 $25.124 $103.726 $41.5 Projected Balance Sheet The following table shows the projected balance sheet for Compton Geotechnical.a.500 $22.438 $91.032 $103.633 $313.726 $16.39% Page 19 .104 $103.633 Assets Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth 7.635 $158.603) $82.033 $219. long-term asset investments and net worth.458 $0 $0 $14.124 $101.500 $196.500 $127.726 $12.000 $313.071 $8. These ratios are as closely matched to our industry as management could find.150 $3.604 $175.

12% 93.27 20.58% 50.04% 4.86% 96.33 0.56% 9.51% 1.a n.43% 100.50 9% 5.00% 39.06% 0. General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Year 1 Year 2 Year 3 Net Profit Margin Return on Equity 1. to Liab. Percent of Total Assets Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Total Assets 40.a $95.00 0.84% 39.44% 83.a n.a n.17 35 2.00% 28.36% 48.84% 100.73 $176.30% 83.28 n.61 85 12.23 2.87% 72.87% 0.43% Percent of Sales Sales Gross Margin Selling.97 0.32% 2.01 4.a 1.86% 29.a n.02 0.16% 22.89% 0.85% 2.56% 38.60% n.91% 9.00 0.10 0.a n.73% 10.01 3.61% 6.02% 100.87% 2.24% 13.27 16.27% 1.398 1.36 2.00% 36.41 0.39% 100.44% 5.41% 79.51 21% 2.533 22.57% 16.a n.17 28 1.00% 98.05 3.90% 77.a n.79 0. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout Page 20 .00% 27.00 n.76 n.a n.80 27.44% 49.16% 18.97 3.29% 18.69% 100.27% 100.80 9.633 35.70 28 1.00% 81.57 5% 12.36% 13.82% 16.52% 100.Compton Geotechnical Associates Inc.01 50.84% 1.33% 4.57% 47.73% 79.00% 96.73 1.67% 0.a 3.a n.42 n.00% 3.87% 74.00% 100.39 0.11% 18.20 0.a n.00% Current Liabilities Long-term Liabilities Total Liabilities Net Worth 20.46 $278.70% 53.13% 4.28% 34.60% 89.a Activity Ratios Accounts Receivable Turnover Collection Days Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab.12% 51.72% 57.00% 98.00% 41.88% 20.a n.62% 11.44% 56.61 91 12.43 5.61 55 6.64% 100.a 0.71% 27.74% 52.

000 $46.000 $6.000 $5.000 $6.000 $34.000 $4.000 $5.000 $5.000 $0 $0 $5.000 $9.000 $0 $11.000 $7.000 Sales Local and state governments Real estate companies Construction companies Utility companies Other projects Total Sales Direct Cost of Sales 0% 0% 0% 0% 0% Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Row 1 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Other $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Subtotal Direct Cost of Sales $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 Page 1 .000 $4.000 $3.000 $7.000 $26.000 $0 $0 $5.000 $7.000 $7.000 $0 $11.000 $0 $7.000 $6.000 $5.000 $7.000 $7.000 $25.000 $5.000 $6.000 $34.000 $5.000 $5.000 $24.000 $30.000 $5.000 $6.000 $7.000 $4.000 $2.000 $10.000 $6.000 $6.000 $0 $11.000 $0 $0 $5.Appendix Table: Sales Forecast Sales Forecast Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $6.000 $50.000 $5.000 $0 $18.000 $6.000 $12.000 $2.000 $7.000 $0 $11.000 $0 $18.000 $0 $0 $5.000 $6.000 $5.000 $6.

office manager Mr. David Gillen .000 $3.000 $3. Elizabeth Bathory . Jeremy Leither .000 $3.500 $16.500 6 $3.president Mrs.000 $3.500 6 $3.000 $1.staff engineer Geo-engineering consultant CAD draftsperson P/T Total People Total Payroll 0% 0% 0% 0% 0% 0% 0% Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $3.000 $3.000 $3.000 $1.500 6 $15.500 $16.000 $1.000 $3.000 $15.000 $3.000 $1. Martin Compton .000 $0 5 $3.Appendix Table: Personnel Personnel Plan Mr.000 $3.000 $3.000 $0 5 $3.000 $3.000 $3.500 6 $3.000 $3.000 $3.000 $3.000 $3.000 $3.000 $3.000 $0 5 $3.500 6 $3.000 $3.000 $3.000 $3.500 $16.000 $3.000 $3.000 $3.000 $16.000 $0 5 $3.000 $1.000 $3.500 $16.000 $3.000 $3.000 $3.000 $3.000 $3.000 $3.000 $3.000 $1.000 $3.000 $3.000 $3.000 $3.500 $16.000 $3.000 $0 5 $3.000 $3.500 $16.000 $3.000 $3.000 $3.000 $3.000 $15.500 Page 2 .projects manager Mr.000 $15.000 $3.000 $1.500 6 $3.500 6 $3.000 $3.000 $3.000 $3.000 $3.000 $3.000 $15.

00% 10.00% 30.00% 10.00% 30.00% 10.00% 30.00% 10.00% 10.00% Tax Rate 30.00% 30.00% 10.00% 10.00% 30.00% 10.00% 10.00% 10.00% 30.00% 10.00% Long-term Interest Rate 10.00% 30.00% 10.00% 10.00% 30.00% 10.00% 0 0 0 0 0 0 0 0 0 0 0 0 Plan Month Other Month 12 Page 3 .00% 30.00% 10.00% 10.00% 30.00% 10.00% 10.00% 10.00% 30.00% 10.00% 10.00% 10.Appendix Table: General Assumptions General Assumptions Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 1 2 3 4 5 6 7 8 9 10 11 12 Current Interest Rate 10.

500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 Sales Expenses Payroll Sales and Marketing and Other Expenses Depreciation Rent Utilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1.000 $600 $22.100 $1.100 $49.35% 98.300 $17.000 $15.74% 34.51% 31.100 $29.125 $9.032 $17.125 $9.000 $600 $2.155) ($55) $6.475 $1.500 $1.250 $1.000 $30.950) ($11.37% 17.950) ($11.300 $17.500 $16.000 $16.385 $2.500 $1.125 $508 $508 $508 $508 $508 $508 $508 $508 $508 $508 $508 $508 ($3.20% $15.28% -21.100 $1.000 $46.500 $1.475 $1.385 Insurance Payroll Taxes Travel Other Total Operating Expenses Interest Expense Taxes Incurred 15% 15% Net Profit ($8.000 $600 $2.738) ($3.000 $50.125 $25.000 $11.00% 97.500 $1.100 $2.500 $16.500 $16.000 $600 $2.125 $5.000 $600 $2.500 $1.721) ($8.250 $1.100 $1.950) ($4.500 $1.475 $1.500 $1.20% 98.475 $1.500 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $1.100 $1.000 $600 $2.000 $15.721) ($8.100 $1.738) ($3.28% -79.500 $1.46% Page 4 .975 Profit Before Interest and Taxes ($11.950) ($11.100 $1.000 $18.11% 96.500 $1.100 $33.000 $25.100 $1.100 $1.125 $9.500 $16.100 Gross Margin % 93.000 $600 $2.500 $1.475 $1.950) ($4.000 $600 $2.950) ($6.300 $10.475 $1.675) $325 $21.637) ($2.250 $22.975 $23.950) ($11.100 $33.300 $45.975 $23.250 $22.Appendix Table: Profit and Loss Pro Forma Profit and Loss Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $11.250 $1.975 $23.475 $1.250 $1.23% -27.125 $9.100 $1.250 $23.585 $1.000 $600 $2.77% 17.000 $34.300 $10.738) ($1.975 $23.28% -79.000 $34.000 $15.04% 97.500 $16.028) ($128) $14.64% 93.000 $600 $2.100 $1.11% 97.64% 93.232 Net Profit/Sales -79.300 $24.432 $6.975 $23.125 EBITDA ($11.950) ($11.721) ($3.000 $600 $2.64% 93.721) ($8.000 Direct Cost of Sales $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 Other Costs of Sales $500 $500 $500 $500 $500 $500 $500 $700 $700 $700 $700 $700 Total Cost of Sales $700 $700 $700 $700 $700 $700 $700 $900 $900 $900 $900 $900 Gross Margin $10.821) ($5.100 $1.74% 10.000 $600 $2.125 $5.032 $3.250 $22.000 $11.000 $11.185 $2.675) $325 $21.250 $22.500 $1.585 $7.950) ($11.000 $18.250 $1.000 $15.950) ($6.300 $10.500 $16.738) ($3.28% -79.975 $23.232 $6.64% 96.94% -0.125 $25.35% 97.

750 $4.00% Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Subtotal Cash Spent Page 5 .700 $33.393 $72. VAT.721 $19.250 $26.721 $4.972 Cash Balance $89.721 $19.925 $21.448 $27.500 $16.600 $41.772 $7.312 $33.000 $15.157 Month 10 Month 11 Month 12 $7.100 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $15.628 $18.750 $3.502 $61.721 $19.000 $15.041) ($10.500 $16.900 $35.500 $1.848) $1.250 $2.098 $25.843 $14.721 $19.928 $26.200 $25.100 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1.Appendix Table: Cash Flow Pro Forma Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 $2.750 $25.092 $6.811 $6.428 $10.386) ($1.500 $13.721 $4.500 $4.128 Net Cash Flow ($15.598 $8.500 $16.750 $3. HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 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 $0 $0 Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $18.308 $11.157 $19.639 $47.000 Month 1 Month 2 $15.250 $8.791 $23.750 $2.500 $6.925 $19.775 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2.750 $12.980 $37.750 $2.775 $41.500 $16.928 $26.157 $19.025 $11.721) ($8.721 $4.808 $28.721) ($7.500 $0 $0 $0 $0 $11.696) ($8.791 $6.000 $12.808 $28.175 $27.000 $15.000 $16.474 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax.976 $55.400 $22.311 $23.500 $0 $275 $8.250 $11.275 $12.500 $34.828 $35.000 $0 $0 $0 $0 $0 $0 New Other Liabilities (interest-free) $0 $0 New Long-term Liabilities $0 $0 Sales of Other Current Assets $0 Sales of Long-term Assets New Investment Received Month 9 $4.500 $12.000 $3.900 $35.675 $19.343 $31.673) $13.750 $12.250 $8.425 $13.791 $23.025 $11.721 $19.000 $11.697 $63.500 $8.311 $23.255 $48.343 $31.098 $25.407) ($16.721 $19.410 $54.214 $37.948 $11.500 $8.500 $16.675 $27.500 $8.500 $16.128 Sales Tax.750 $2.332 ($3.700 $33. VAT. HST/GST Received New Current Borrowing Subtotal Cash Received Expenditures 0.448 $27.

060 $25.700) ($43.166) $52.579 $51.000 ($30.871 $118.000 $120.000 $0 $22.000 $0 $25.300 $100.000 $16.593 $6.701 $55.939 $42.000 $0 $25.800 $0 $3.878 $101.550 $3.225 $3.000 $45.000 $126.000 $0 $25.300 $60.563 $4.500 $127.563 $4.000 $75.134 $58.474 $62.000 $0 $25.163) $43.437 $33.926 $16.000 $0 $30.980 $31.086 $45.563 $45.475 $3.000 $92.858 $43.255 $16.000 $118.700) ($17.000 ($30.500 $67.000 $4.579 $126.878 $35.311 $8.000 $65.625 $3.000 $0 $20.726 Long-term Liabilities Total Liabilities $45.417 $30.300 $133.150 $3.086 $9.134) $58.989 $47.976 $16.Appendix Table: Balance Sheet Pro Forma Balance Sheet Assets Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $104.700) ($20.214 $21.000 $0 $25.500 $93.124 $25.398 Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth Page 6 .086 $16.566 $16.000 $67.000 $99.000 $0 $31.143 $25.252 $25.300 $25.225 $3.000 ($30.060 $103.700) ($29.700) ($14.000 $0 $25.437 $103.000 $0 $20.563 $16.000 $72.138 $34.124 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Starting Balances Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities $3.926 $45.902 $120.697 $16.000 $96.000 ($30.500 $108.150 $3.000 ($30.086 $15.500 $74.500 $101.000 $0 $25.989 $25.502 $47.596 $98.250 $3.903 $52.422 $63.341 $16.393 $8.500 $92.701 $25.398) $48.252 $61.726 $16.429) $42.410 $47.060 $54.000 $133.138 $108.700) $0 $69.000 ($30.311 $45.700) ($38.563 $16.980 $25.312 $52.000 ($30.563 $16.166 $75.000 $0 $25.252 $103.563 $16.280 $103.700) ($8.000 $70.861) $26.566 $11.300 $89.341 $45.134 $123.800 $3.989 $103.000 $152.422 $25.700) ($34.143 $100.000 $64.596 $25.000 ($30.000 $0 $27.500 $98.000 $76.189 $100.000 ($30.563 $45.000 $0 $22.000 $0 $24.000 $0 $20.086 $16.000 $0 $27.828 $26.850 $3.726 $100.000 $98.700) $3.000 $108.980 $100.086 $45.568 $26.858 $117.701 $100.566 $45.500 $73.733) $25.000 $72.883) $34.000 ($30.000 $0 $25.500 $95.500 $71.000 $65.700) ($43.000 $0 $25.000 ($30.563 $45.000 $0 $20.000 $0 $25.000 $65.926 $11.000 $0 $25.593 $16.398 $152.000 $123.563 $6.500 $105.280 $25.000 $0 $25.000 $0 $19.225 $3.639 $58.721) $60.250 $3.000 $65.189 $25.311 $16.124 $69.437 $25.871 $48.417 $99.704) $30.500 $83.700) ($23.000 $0 $25.097 $75.280 $37.593 $45.980 $48.500 ($30.000 $117.878 $25.939 $96.000 ($30.700) ($26.000 $67.000 $130.000 $69.341 $14.189 $37.442) $51.422 $100.567 $92.143 $72.563 $45.563 $4.166 $130.

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