Mortgage Broker Business Plan

Plan Outline
1.0 >Executive Summary
○ Objectives
○ Mission
2.0> Company Summary:

Company Ownership
Start-up Summary

3.0>Services:
4.0 >Market Analysis Summary:

Market Segmentation
Target Market Segment Strategy

5.0> Strategy and Implementation Summary:


Sales Forecast
Milestones
Competitive Edge

6.0> Management Summary:

Personnel Plan

7.0> Financial Plan:





Important Assumptions
Break-even Analysis
Projected Profit and Loss
Projected Cash Flow
Projected Balance Sheet
Business Ratios

Appendix:

Executive Summary
Claremont Funding is an outstanding mortgage brokerage firm serving the lending needs of real
estate professionals, builders and individual home buyers. We have access to a full range of
mortgage sources and are dedicated to finding the right loan--with the best rates, terms and
costs--to meet our clients' unique needs.
This firm is capitalized by two principal investors, Joan Billings and Maureen Shoe. Both are
licensed brokers with a combined experience of over 30 years in the industry.

1.1 Objectives

Claremont Funding aims to offer comprehensive mortgage broker services. Claremont Funding
will focus on providing personal and specialized services to meet each client's specific needs.
The primary objectives of our firm are:

Become profitable serving the real estate investment opportunities becoming
available in the rapidly growing old town section of the city.

Develop a solid, corporate identity in our specified target market area.

Become one of the top brokerage firms in the area by our third year of
operation, or before.

Realize a positive return on investment within the first 12 months.

1.2 Mission

Claremont Funding offers high-quality mortgage brokerage services to residential and business
customers. Our aim is to provide our customers with fair mortgage rates at reasonable prices,
while keeping our clients informed and educated throughout the process. We will become
friends and mentors to our customers as well as quality service providers. Claremont is an
excellent place to work, a professional environment that is challenging, rewarding, creative, and
respectful of ideas and individuals. Claremont ultimately provides excellent value to its
customers and fair reward to its owners and employees.

2.1
Company
Ownership

The
brokers of Claremont Funding are Joan Billings and Maureen Shoe.
2.2 Start-up Summary

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
Assets
Non-cash Assets from Startup
Cash
Requirements
from

$20,050
$59,950
$80,000
$20,000
$39,950

owners

and

Start-up
Additional Cash Raised
Cash Balance on Starting
Date
Total Assets

$0
$39,950
$59,95
0

Liabilities and Capital
Liabilities
Current Borrowing
Long-term Liabilities
Accounts
Payable
(Outstanding Bills)
Other
Current
Liabilities
(interest-free)
Total Liabilities

$0
$30,000
$10,000
$0
$40,00
0

Capital
Planned Investment
Investor 1
Investor 2
Additional
Investment
Requirement
Total Planned Investment
Loss at Start-up
Expenses)
Total Capital

(Start-up

$20,000
$20,000
$0
$40,000
($20,05
0)
$19,950

Total Capital and Liabilities

$59,950

Total Funding

$80,000

Our start-up costs are outlined in the following table. Start-up costs derive from website design,
office equipment, main computer station complete with all mortgage information for broker
usage, stationery, legal costs, furnishings, office advertising and services, and expenses
associated with opening our office. The start-up costs are to be financed by direct owner
investment and credit. Lease office space averages $1.10 - 1.60 per square foot to an
approximate of $1,500 per month, plus utilities, for efficient leased office space. Commercial
lease will be for a three to five year agreement with the first month and a security deposit equal
to the monthly lease rate payable at the time of lease start date.

Start-up
Requiremen
ts
Start-up
Expenses
Legal
Stationery etc.
Brochures
Advertising
Insurance
Rent
Answering Service
Utilities Start Up
Office Furnishings

$900
$2,00
0
$1,00
0
$2,50
0
$200
$3,00
0
$200
$250
$4,00

Expensed Equipment
Business Software
Office Supplies
Total Start-up Expenses
Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets

Total Requirements

0
$3,00
0
$2,00
0
$1,00
0
$20,0
50
$39,9
50
$20,0
00
$0
$59,9
50
$80,0
00

Services
Our personal goal is to break through the barriers that impede homeownership for those who
wish to realize the American Dream. We provide potential and current homeowners the
opportunity to find the best mortgage loan for their needs.
We match buyers to loan programs. We have an extensive questionnaire for our buyers to list
their wants and needs. We then take this questionnaire and put the supplied information to match
buyers to the loan packages matching their criteria.

Market Analysis Summary
Due to the strengthening of the area's economy and lower interest rates, more home buyers today
are looking to purchase homes. These changes in attitudes of home buyers are a tremendous
boost to real estate firms. Residential construction is booming in the city's Old Town section. We
are poised to take advantage of these changes, and expect to become a recognized name and
profitable entity in the city's real estate market. We chose to locate our office in the area of most
revenue potential and where we have close connection to dominant real estate firms. Our targeted
market area, the Old Town area, shows stability and growth. We have a beautiful office, centered
in the Old Town area.
The first quarter home values were up 12.5 percent from the same period in 2001, the Office of
Federal Housing Enterprise Oversight reported. The gain reflects an increase from the previous
quarter, when residential real estate values saw growth of 12.1 percent.
4.1 Market Segmentation

The home buyers that Claremont Funding will be serving can be divided into two groups:

First-time homeowners: A bulk of the new construction in the Old Town
section of the city is directed toward first-time homeowners.

Residential refinancing: Whether it is for purchasing, construction,
remodeling, debt consolidation, investment properties or refinancing--we
have programs available to service those with good and bad credit.

Market Analysis
Year 1
Potential Customers

Year 2

Year 3

Year 4

Year 5

Growth

CAGR

First-Time
Homeowners
Residential
Refinancing
Other Home Buyers

15%

80,000

92,000

10%

150,00
0
60,000

Total

10.87%

290,00
0

7%

165,00
0
64,200

105,80
0
181,50
0
68,694

121,67
0
199,65
0
73,503

139,92
1
219,61
5
78,648

15.00
%
10.00
%
7.00%

321,20
0

355,99
4

394,82
3

438,18
4

10.87
%

4.2 Target Market Segment Strategy

We cannot survive waiting for the customer to come to us. Instead, we must get better at focusing
on the specific market segments whose needs match our offerings. Focusing on targeted
segments is the key to our future. Therefore, we need to focus our marketing message and our
services offered. We need to develop our message, communicate it, and make good on it.

Strategy and Implementation Summary
Claremont Funding will focus on the mortgage broker needs in the Old Town section of the city
and the surrounding areas. Our target customer will be first-time home buyers and existing
homeowners who are interested in refinancing.
5.1 Sales Forecast

The following table and chart give a run-down on forecasted sales. We expect sales to build
between Januarys through March with the most growth during the months of March through
August. We expect sales to drop off from September till the end of the year.
Sales Forecast

Year 1

Year 2

Year 3

Sales
First-Time Homeowners
Other Homebuyers
Residential Refinancing
Total Sales
Direct Cost of Sales

$104,6
72
$52,33
6
$107,8
39
$264,8
47
Year 1

$150,0
00
$75,00
0
$140,0
00
$365,0
00
Year 2

$180,0
00
$90,00
0
$175,0
00
$445,0
00
Year 3

First-Time Homeowners

$0

$0

$0

Other Homebuyers

$0

$0

$0

Residential Refinancing

$0

$0

$0

Subtotal Direct Cost of
Sales

$0

$0

$0

5.2 Milestones

The accompanying table lists important program milestones, with dates and managers in charge,
and budgets for each. The milestone schedule indicates our emphasis on planning for
implementation.
Milestones
Milestone
Lease Office Space
Purchase Office
Equipment/Computer, etc.
Office Utilities
Answering Service
Stationary
Business Software
Advertising
Totals

Start Date

End Date

Budget

Manager

12/15/2001
12/1/2001

12/28/2001
12/15/2001

$3,000
$3,000

Maureen
Maureen

Departmen
t
Marketing
Marketing

12/20/2001
12/13/2001
12/1/2001
12/15/2001
12/1/2001

12/21/2001
12/23/2001
12/10/2001
12/28/2001
12/30/2001

$250
$200
$2,000
$2,000
$2,500

Joan
Joan
Joan
Joan
Maureen

Web
Web
Admin
Admin
Marketing

$12,950

5.3 Competitive Edge

Claremont Funding's competitive edge is that both Joan and Maureen are the most visible
lecturers to new home owners in the city. Joan has a weekly column in the city's daily
newspaper and Maureen lectures weekly to the city's numerous neighborhood councils and civic
groups. Together, they represent the most recognizable faces in the city on the subject of home
ownership and refinancing a home.

Between them, they have a base of 6,000 satisfied customers who continue to make referrals to
the brokers.
The city has been growing by 15% annually for the past 10 years. With the population now at
1.3 million, the new construction in the Old Town section of the city is valued at two billion
dollars in home sales next year alone. Claremont Funding is positioned well to grab a large share
of the mortgage services demanded by the city's growth in Old Town.

Management Summary
Claremont Funding is a two member mortgage brokerage firm. Both brokers are equal partners
in the firm.
6.1 Personnel Plan

The following table shows the personnel plan for Claremont Funding.
Personnel Plan
Joan Billings
Maureen Shoe
Admin Assistants
Total People
Total Payroll

Year 1
$60,00
0
$60,00
0
$46,00
0
3

Year 2
$80,00
0
$80,00
0
$60,00
0
4

Year 3
$90,00
0
$90,00
0
$80,00
0
4

$166,0
00

$220,0
00

$260,0
00

Financial Plan

We want to finance growth mainly through cash flow.

The most important factor for Claremont Funding is the closing sales days.
These dates will be determined ultimately by the Seller and the Buyer and a
move out/move in schedule will be complied with.

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following
table as annual assumptions. The monthly assumptions are included in the appendix. From the
beginning, we recognize that collection days are critical, but not a factor we can influence easily.
At least we are planning on the problem, and dealing with it. Interest rates, tax rates, and
personnel burden are based on conservative assumptions. Some of the more important
underlying assumptions are:

We assume a strong economy, without major recession.

We assume, of course, that there are no unforeseen changes in the economy
that would change our estimations.

General Assumptions
Plan Month
Current Interest
Rate

Year 1
Year 2
Year 3
1
2
3
10.00%
10.00%
10.00%

Long-term Interest
Rate
Tax Rate
Other

10.00%

10.00%

10.00%

30.00%
0

30.00%
0

30.00%
0

7.2 Break-even Analysis

The following table and chart will summarize our break-even analysis.
Break-even Analysis

Monthly Revenue
Break-even
Assumptions:
Average Percent
Variable Cost
Estimated Monthly
Fixed Cost

$19,975

0%
$19,975

7.3 Projected Profit and Loss

Our projected profit and loss is shown on the following table.

Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Other Production Expenses

Year 1
Year 2
Year 3
$264,847
$365,000
$445,000
$0
$0
$0
$0
$0
$0

Total Cost of Sales

$0

$0

$0

Gross Margin
Gross Margin %

$264,847
100.00%

$365,000
100.00%

$445,000
100.00%

$166,000
$7,800

$220,000
$13,000

$260,000
$19,000

$0
$200
$2,400
$2,400
$36,000
$24,900
$0

$0
$0
$2,400
$2,400
$36,000
$33,000
$0

$0
$0
$2,400
$2,400
$36,000
$39,000
$0

Total Operating Expenses

$239,700

$306,800

$358,800

Profit Before Interest and Taxes
EBITDA
Interest Expense
Taxes Incurred

$25,147
$25,147
$2,950
$6,659

$58,200
$58,200
$2,550
$16,695

$86,200
$86,200
$2,250
$25,185

Net Profit
Net Profit/Sales

$15,538
5.87%

$38,955
10.67%

$58,765
13.21%

Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other

7.4 Projected Cash Flow: Cash flow projections are critical to our success. The
annual cash flow figures are included here and the more important detailed monthly
numbers are included in the appendix.

Pro Forma Cash Flow
Year 1
Cash Received

Year 2

Year 3

Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interestfree)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received

$66,212
$187,004
$253,216

$91,250
$269,352
$360,602

$111,250
$330,237
$441,487

$0
$4,500
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0
$12,000
$269,716

$0
$0
$0
$0
$360,602

$0
$0
$0
$0
$441,487

Expenditures

Year 1

Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, 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
Net Cash Flow
Cash Balance

Year 2

Year 3

$166,000
$90,879
$256,879

$220,000
$99,759
$319,759

$260,000
$124,576
$384,576

$0
$4,500

$0
$0

$0
$0

$0

$0

$0

$3,000

$3,000

$3,000

$0
$0
$0
$264,379

$0
$0
$0
$322,759

$0
$0
$0
$387,576

$5,337
$45,287

$37,842
$83,129

$53,911
$137,040

7.5 Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth, and a
sufficiently healthy financial position. The monthly estimates are included in the appendix.
Pro Forma Balance Sheet
Year 1
Assets

Year 2

Year 3

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

$45,28
7
$11,63
1
$20,00
0
$76,91
8

$83,12
9
$16,03
0
$20,00
0
$119,1
59

$137,0
40
$19,54
3
$20,00
0
$176,5
83

$0
$0

$0
$0

$0
$0

$0

$0

$0

$76,91
8

$119,1
59

$176,5
83

Year 1

Year 2

Year 3

$2,430

$8,716

Current Borrowing
Other Current
Liabilities
Subtotal Current
Liabilities

$0
$0

$0
$0

$2,430

$8,716

$10,37
5

Long-term Liabilities

$27,00
0
$29,43
0

$24,00
0
$32,71
6

$21,00
0
$31,37
5

$52,00
0
($20,05
0)
$15,53
8
$47,48
8
$76,91
8

$52,00
0
($4,512
)
$38,95
5
$86,44
3
$119,1
59

$52,00
0
$34,44
3
$58,76
5
$145,2
08
$176,5
83

Total Liabilities

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and
Capital

$10,37
5
$0
$0

Net Worth

$47,48
8

$86,44
3

$145,2
08

7.6 Business Ratios

The following table provides important ratios for the industry, as determined by the Standard
Industry Classification (SIC) Index, 7389, Business Services.
Ratio Analysis
Year 1
Sales Growth

0.00%

37.82%

21.92%

Industry
Profile
8.50%

Percent of Total Assets
Accounts Receivable
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets

15.12%
26.00%
100.00%
0.00%
100.00%

13.45%
16.78%
100.00%
0.00%
100.00%

11.07%
11.33%
100.00%
0.00%
100.00%

20.90%
55.70%
81.60%
18.40%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

3.16%
35.10%
38.26%
61.74%

7.31%
20.14%
27.46%
72.54%

5.88%
11.89%
17.77%
82.23%

48.20%
15.50%
63.70%
36.30%

100.00%
100.00%
94.18%

100.00%
100.00%
89.41%

100.00%
100.00%
86.91%

100.00%
0.00%
82.60%

2.27%
9.49%

2.74%
15.95%

3.37%
19.37%

0.60%
1.50%

31.65
31.65
38.26%
46.74%
28.86%

13.67
13.67
27.46%
64.38%
46.70%

17.02
17.02
17.77%
57.81%
47.54%

1.57
1.13
63.70%
1.90%
5.20%

Percent of Sales
Sales
Gross Margin
Selling, 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

Year 2

Year 3

Additional Ratios
Net Profit Margin
Return on Equity

Year 1
Year 2
Year 3
5.87%
10.67%
13.21%
32.72%
45.06%
40.47%

n.a
n.a

Activity Ratios
Accounts Receivable Turnover
Collection Days
Accounts Payable Turnover
Payment Days
Total Asset Turnover

17.08
59
34.28
31
3.44

17.08
18
12.17
19
3.06

17.08
19
12.17
28
2.52

n.a
n.a
n.a
n.a
n.a

Debt Ratios
Debt to Net Worth
Current Liab. to Liab.

0.62
0.08

0.38
0.27

0.22
0.33

n.a
n.a

Liquidity Ratios
Net Working Capital
Interest Coverage

$74,488
8.52

$110,443
22.82

$166,208
38.31

n.a
n.a

Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

0.29
3%
26.86
5.58
0.00

0.33
7%
11.83
4.22
0.00

0.40
6%
15.14
3.06
0.00

n.a
n.a
n.a
n.a
n.a

Appendix
Sales Forecast

Sales
First-Time
Homeow
ners
Other
Homebuy
ers
Residenti
al
Refinanci
ng
Total
Sales
Direct
Cost of
Sales
First-Time
Homeow
ners

M
onth
1

M
onth
2

Mont
h3

Mont
h4

Mont
h5

Mont
h6

Mont
h7

Mont
h8

Mont
h9

Mont
h 10

M
onth
11

Mont
h 12

0
%

$2,1
00

$2,2
00

$5,02
0

$8,00
0

$10,5
00

$15,0
00

$18,0
00

$22,0
00

$10,0
22

$5,21
0

$3,8
20

$2,8
00

0
%

$1,0
50

$1,1
00

$2,51
0

$4,00
0

$5,25
0

$7,50
0

$9,00
0

$11,0
00

$5,01
1

$2,60
5

$1,9
10

$1,4
00

0
%

$3,0
00

$3,0
00

$6,64
0

$10,0
00

$11,0
00

$14,0
00

$17,0
00

$20,0
00

$13,0
00

$4,32
2

$3,2
22

$2,6
55

$6,1
50

$6,3
00

$14,1
70

$22,0
00

$26,7
50

$36,5
00

$44,0
00

$53,0
00

$28,0
33

$12,1
37

$8,9
52

$6,8
55

M
onth
1
$0

M
onth
2
$0

Mont
h3

Mont
h4

Mont
h5

Mont
h6

Mont
h7

Mont
h8

Mont
h9

Mont
h 10

M
onth
11
$0

Mont
h 12

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other
Homebuy
ers
Residenti
al
Refinanci
ng
Subtotal
Direct
Cost of
Sales

$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

$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

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$3,000

$3,000

$3,000

$3,000

$5,000

$5,000

$5,000

$5,000

$5,000

$3,000

$3,000

$3,000

3

3

3

3

4

4

4

4

4

3

3

3

$13,00
0

$13,00
0

$13,00
0

$13,00
0

$15,00
0

$15,00
0

$15,00
0

$15,00
0

$15,00
0

$13,00
0

$13,00
0

$13,00
0

Personnel Plan

Joan
Billings
Maureen
Shoe
Admin
Assistants
Total
People
Total
Payroll

0
%
0
%
0
%

General Assumptions
Month
1
Plan
Month

Month
2

Month
3

Month
4

Month
5

Month
6

Month
7

Month
8

Month
9

Month
10

Month
11

Month
12

2

3

4

5

6

7

8

9

10

11

12

1

Current
Interest
Rate

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

Longterm
Interest
Rate

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

10.00
%

Tax Rate

30.00
%
0

30.00
%
0

30.00
%
0

30.00
%
0

30.00
%
0

30.00
%
0

30.00
%
0

30.00
%
0

30.00
%
0

30.00
%
0

30.00
%
0

30.00
%
0

Other

Pro Forma Profit and Loss
Month
1
Sales
$6,150
Direct
Cost of

$0

Month
2
$6,300
$0

Month
3
$14,17
0
$0

Month
4
$22,00
0
$0

Month
5
$26,75
0
$0

Month
6
$36,50
0
$0

Month
7
$44,00
0
$0

Month
8
$53,00
0
$0

Month
9
$28,03
3
$0

Month
10
$12,13
7
$0

Month
11
$8,952

Month
12
$6,855

$0

$0

Sales
Other
Productio
n
Expenses
Total Cost
of Sales

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$6,150

$6,300

$26,75
0
100.00
%

$36,50
0
100.00
%

$44,00
0
100.00
%

$53,00
0
100.00
%

$28,03
3
100.00
%

$12,13
7
100.00
%

$6,855

100.00
%

$22,00
0
100.00
%

$8,952

100.00
%

$14,17
0
100.00
%

100.00
%

100.00
%

$13,00
0
$650

$13,00
0
$650

$13,00
0
$650

$13,00
0
$650

$15,00
0
$650

$15,00
0
$650

$15,00
0
$650

$15,00
0
$650

$15,00
0
$650

$13,00
0
$650

$13,00
0
$650

$13,00
0
$650

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$200

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$200
$200
$3,000
$1,950

$200
$200
$3,000
$1,950

$200
$200
$3,000
$1,950

$200
$200
$3,000
$1,950

$200
$200
$3,000
$2,250

$200
$200
$3,000
$2,250

$200
$200
$3,000
$2,250

$200
$200
$3,000
$2,250

$200
$200
$3,000
$2,250

$200
$200
$3,000
$1,950

$200
$200
$3,000
$1,950

$200
$200
$3,000
$1,950

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total
Operating
Expenses

$19,20
0

$19,00
0

$19,00
0

$19,00
0

$21,30
0

$21,30
0

$21,30
0

$21,30
0

$21,30
0

$19,00
0

$19,00
0

$19,00
0

Profit
Before
Interest
and Taxes
EBITDA

($13,05
0)

($12,70
0)

($4,83
0)

$3,000

$5,450

$15,20
0

$22,70
0

$31,70
0

$6,733

($6,86
3)

($10,04
8)

($12,14
5)

($13,05
0)
$248

($12,70
0)
$246

($4,83
0)
$244

$3,000

$5,450
$277

$22,70
0
$235

$31,70
0
$233

$6,733

$279

$15,20
0
$275

($6,86
3)
$229

($10,04
8)
$227

($12,14
5)
$225

($3,989
)

($3,884
)

($1,52
2)

$816

$1,552

$4,478

$6,739

$9,440

$1,951

($2,12
8)

($3,083
)

($3,711
)

($9,309
)
-151.36
%

($9,062
)
-143.84
%

($3,55
2)
-25.06
%

$1,905

$3,621
13.54
%

$15,72
5
35.74
%

$22,02
7
41.56
%

$4,551

8.66%

$10,44
8
28.62
%

($4,96
5)
-40.90
%

($7,193
)
-80.35
%

($8,659
)
-126.32
%

Gross
Margin
Gross
Margin %
Expenses
Payroll
Sales and
Marketing
and Other
Expenses
Depreciati
on
Leased
Equipmen
t
Utilities
Insurance
Rent
Payroll
Taxes
Other

Interest
Expense
Taxes
Incurred
Net Profit
Net
Profit/Sale
s

15
%

$231

16.24
%

Pro Forma Cash Flow
Month 1

Month 2

Month
3

Month
4

Month
5

Month
6

Month
7

Month
8

Month
9

Month
10

Month
11

Month
12

Cash
Received
Cash from
Operations
Cash Sales
Cash from
Receivables
Subtotal
Cash from
Operations
Additional
Cash
Received
Sales Tax,
VAT,
HST/GST
Received
New
Current
Borrowing
New Other
Liabilities
(interestfree)
New Longterm
Liabilities
Sales of
Other
Current
Assets
Sales of
Long-term
Assets
New
Investment
Received
Subtotal
Cash
Received

0.00
%

$1,538

$1,575

$3,543

$5,500

$6,688

$9,125

$13,25
0
$27,56
3
$40,81
3

$7,008

$3,034

$2,238

$1,714

$16,61
9
$25,74
4

$11,00
0
$20,30
6
$31,30
6

$0

$154

$4,616

$4,922

$10,823

$33,22
5
$40,23
3

$39,12
6
$42,16
0

$20,62
7
$22,86
5

$9,023

$1,538

$1,729

$8,159

$10,422

$17,511

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$4,500

$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

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$12,00
0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$1,538

$1,729

$20,15
9

$14,922

$17,511

$25,74
4

$31,30
6

$40,81
3

$40,23
3

$42,16
0

$22,86
5

$10,737

$10,737

Expenditure
s

Month 1

Expenditure
s from
Operations
Cash
Spending
Bill
Payments
Subtotal
Spent on
Operations
Additional
Cash Spent
Sales Tax,
VAT,
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
Net Cash
Flow
Cash
Balance

Month 2

Month
3

Month
4

Month
5

$13,00
0
$2,441

$13,000

$15,000

$4,801

$7,130

$13,000

$13,000

$10,082

$2,455

$23,082

$15,455

$15,44
1

$17,801

$22,130

$0

$0

$0

$0

$0

$0

$0

$0

$0

$250

Month
6

$15,00
0
$8,226

Month
7

Month
8

Month
9

Month
10

Month
11

Month
12

$15,00
0
$13,36
5
$28,36
5

$15,00
0
$15,72
4
$30,72
4

$13,00
0
$8,336

$13,00
0
$4,070

$13,000

$23,22
6

$15,00
0
$11,12
7
$26,12
7

$21,33
6

$17,07
0

$16,124

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$4,500

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$250

$250

$250

$250

$250

$250

$250

$250

$250

$250

$250

$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
$23,332

$0
$15,705

$0
$15,69
1

$0
$18,051

$0
$22,380

$0
$23,47
6

$0
$30,87
7

$0
$28,61
5

$0
$30,97
4

$0
$21,58
6

$0
$17,32
0

$0
$16,374

($21,794
)
$18,156

($13,977
)
$4,179

$4,468

($4,869
)
$649

$2,267

$430
$3,346

$20,57
4
$45,37
8

$5,546

$2,916

$12,19
8
$15,54
4

$9,260

$8,647

($3,129
)
$5,518

($5,637
)
$45,287

Month
2

Month
3

Month
4

Month
5

Month
6

Month
7

Month
8

Month
9

Month
10

$24,80
3
$59,45
0

$45,37
8
$29,42
7

$50,92
3
$15,51
3

$45,28
7
$11,63
1

$24,80
3

$50,92
3

$3,124

Pro Forma Balance Sheet
Month
1
Assets

Current
Assets
Cash
Accounts
Receivabl
e
Other
Current
Assets
Total
Current
Assets
Long-term

Month
11

Month
12

Startin
g
Balanc
es

$39,95
0
$0

$18,15
6
$4,613

$4,179

$8,647

$5,518

$649

$2,916

$3,346

$9,184

$15,19
5

$26,77
3

$36,01
3

$46,76
9

$59,46
3

$15,54
4
$71,65
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$59,95
0

$42,76
8

$33,36
3

$43,84
2

$52,29
1

$56,66
1

$69,68
5

$82,80
8

$107,1
94

$104,2
53

$94,80
4

$86,43
7

$76,91
8

Assets
Long-term
Assets
Accumulat
ed
Depreciati
on
Total
Long-term
Assets
Total
Assets

$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

$0

$0

$0

$0

$0

$59,95
0

$42,76
8

$33,36
3

$43,84
2

$52,29
1

$56,66
1

$69,68
5

$82,80
8

$107,1
94

$104,2
53

$94,80
4

$86,43
7

$76,91
8

Month
9

Month
10

Liabilities
and
Capital
Current
Liabilities
Accounts
Payable
Current
Borrowing
Other
Current
Liabilities
Subtotal
Current
Liabilities

Month
1

Month
2

Month
3

Month
4

Month
5

$10,00
0
$0

$2,377

$2,283

$4,564

$6,859

$7,858

$0

$0

$0

$4,500

$0

$0

$0

$0

$0

$10,00
0

$2,377

$2,283

$4,564

Long-term
Liabilities
Total
Liabilities

$30,00
0
$40,00
0

$29,75
0
$32,12
7

$29,50
0
$31,78
3

Paid-in
Capital
Retained
Earnings
Earnings

$40,00
0
($20,0
50)
$0

Total
Capital
Total
Liabilities
and
Capital

$19,95
0
$59,95
0

$40,00
0
($20,0
50)
($9,30
9)
$10,64
1
$42,76
8

$40,00
0
($20,0
50)
($18,3
71)
$1,579

Net Worth

$19,95
0

$10,64
1

$1,579

$33,36
3

Month
6

Month
7

Month
8

Month
11

Month
12

$12,83
2
$0

$15,44
1
$0

$8,199

$3,965

$3,040

$2,430

$4,500

$10,68
4
$4,500

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$11,35
9

$12,35
8

$15,18
4

$12,83
2

$15,44
1

$8,199

$3,965

$3,040

$2,430

$29,25
0
$33,81
4

$29,00
0
$40,35
9

$28,75
0
$41,10
8

$28,50
0
$43,68
4

$28,25
0
$41,08
2

$28,00
0
$43,44
1

$27,75
0
$35,94
9

$27,50
0
$31,46
5

$27,25
0
$30,29
0

$27,00
0
$29,43
0

$52,00
0
($20,0
50)
($21,9
22)
$10,02
8
$43,84
2

$52,00
0
($20,0
50)
($20,0
18)
$11,93
2
$52,29
1

$52,00
0
($20,0
50)
($16,3
97)
$15,55
3
$56,66
1

$52,00
0
($20,0
50)
($5,94
9)
$26,00
1
$69,68
5

$52,00
0
($20,0
50)
$9,776
$41,72
6
$82,80
8

$52,00
0
($20,0
50)
$31,80
3
$63,75
3
$107,1
94

$52,00
0
($20,0
50)
$36,35
4
$68,30
4
$104,2
53

$52,00
0
($20,0
50)
$31,38
9
$63,33
9
$94,80
4

$52,00
0
($20,0
50)
$24,19
7
$56,14
7
$86,43
7

$52,00
0
($20,0
50)
$15,53
8
$47,48
8
$76,91
8

$10,02
8

$11,93
2

$15,55
3

$26,00
1

$41,72
6

$63,75
3

$68,30
4

$63,33
9

$56,14
7

$47,48
8

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