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February 2006

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Table of Contents
1.0 Executive Summary.............................................................................................................................1 1.1 Mission........................................................................................................................................1 1.2 Objectives ...................................................................................................................................2 1.3 Keys to Success ........................................................................................................................2 2.0 Company Summary.............................................................................................................................2 2.1 Company History........................................................................................................................2 3.0 Products and Services........................................................................................................................4 4.0 Market Analysis Summary..................................................................................................................5 4.1 Market Segmentation ................................................................................................................5 4.2 Target Market Segment Strategy.............................................................................................6 4.3 Service Business Analysis........................................................................................................7 4.3.1 Competition and Buying Patterns .........................................................................................7 5.0 Strategy and Implementation Summary ............................................................................................7 5.1 Competitive Edge ......................................................................................................................7 5.2 Marketing Strategy.....................................................................................................................7 5.3 Sales Strategy............................................................................................................................8 5.3.1 Sales Forecast........................................................................................................................8 5.4 Milestones...................................................................................................................................9 6.0 Web Plan Summary ..........................................................................................................................11 6.1 Website Marketing Strategy...................................................................................................12 6.2 Development Requirements ...................................................................................................13 6.2.1 Technical Specifications......................................................................................................14 7.0 Management Summary ....................................................................................................................14 7.1 Personnel Plan.........................................................................................................................15 8.0 Financial Plan ....................................................................................................................................16 8.1 Break-even Analysis................................................................................................................17 8.2 Projected Profit and Loss .......................................................................................................18 8.3 Projected Cash Flow...............................................................................................................21 8.4 Projected Balance Sheet ........................................................................................................24 8.5 Business Ratios .......................................................................................................................24 8.6 Financial Risks and Contingencies-2....................................................................................26

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Mad Keen Motors
1.0 Executive Summary
Mad Keen Motors is a family-owned business loc ated in Bac kwater Downs, a suburb of London. It has been under the ownership of the Keen family for 35 years and has grown from a single mec hanical repair shop to five loc ations that deal with body and mechanical repairs, vehicle storage and towing, washing and valeting and used car sales. This plan is an internal document, outlining the effects on the company of adding a website. The Mad Keen Motors website will ac t as an additional customer service element for all our garages, offering basic advice on car maintenance, information about our services, staff, and loc ation, and regular disc ount offers for website visitors on featured repairs and maintenance. Our current phone-based and fac e-to-fac e customer service is excellent, but requires that potential customers make ac tive contac t with the company to learn about us. Most of our new business comes from referrals from current satisfied customers. We hope to make the referral proc ess easier, by encouraging existing customers to point out our website to their friends, colleagues, neighbours and family members, building familiarity with our company long before they need emergency car care or consider buying another car. The "advice" section will be crucial in establishing customers' trust in our expertise, as will our affiliation with nationallysyndicated car experts. By helping loc al customers help themselves, Mad Keen hopes to build trust and relationships with existing and potential customers.

1.1 Mission
Mad Keen Motors provides excellent automotive care and service to all of our customers, whether they need to buy a used car, contrac t major body work or get a simple wash and wax.

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Mad Keen Motors
1.2 Objectives
The objec tives of the Mad Keen Motors website are: 1. To drive traffic from the website to the garage. 2. To expand the community of Mad Keen Motors customers. 3. To provide customers with a substantial list of questions and answers regarding typical car repairs. 4. To allow convenient bookings for service and repairs.

1.3 Keys to Success
The keys to success for the company's website will be: 1. Compiling an extensive and thorough listing of questions and answers that will encourage customers to return to the site whenever they have a problem with their cars. 2. Providing additional expert advice for answers that customers don't find in the base list of questions in a timely and thorough manner. 3. Offering Web-based promotions that will encourage customers to book cars into the garage through the website. 4. Communicating the site's existence to the businesses and residents within the loc al area. 5. Getting existing customers to rec ommend the website to others.

2.0 Company Summary
Mad Keen Motors is a family-owned business loc ated in Bac kwater Downs, a suburb of London. It has been under the ownership of the Keen family for 35 years and has grown from a single mec hanical repair shop to five loc ations that deal with body and mechanical repairs, vehicle storage and towing, washing and valeting and used car sales.

2.1 Company History
Mad Keen Motors has done very well. Annual net profits have exceeded £30,000 for the last two years. We dec reased the marketing budget last year, which led to a small dec line in sales. By directing the missing amount (and a bit more) towards the creation of a website, we hope to increase overall sales and net profits. The table shows only last year's performance.

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Mad Keen Motors

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Mad Keen Motors
Table: Past Performance
Past Performance Sales Gross Margin Gross Margin % Operating Expenses Stock Turnover Balance Sheet FY 2003 Current Assets Cash Stock Other Current Assets Total Current Assets Fixed Assets Capital Assets Accumulated Depreciation Total Fixed Assets Total Assets Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities (interest free) Total Current Liabilities Fixed Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Capital and Liabilities Other Inputs Payment Days FY 2004 FY 2005 FY 2003 £0 £0 0.00% £0 0.00 FY 2004 £0 £0 0.00% £0 0.00 FY 2005 £798,000 £767,853 96.22% £695,820 5.01

£0 £0 £0 £0

£0 £0 £0 £0

£203,488 £12,040 £70,000 £285,528

£0 £0 £0 £0

£0 £0 £0 £0

£1,250,000 £15,000 £1,235,000 £1,520,528

£0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0

£0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0

£20,000 £0 £0 £20,000 £750,000 £770,000 £400,000 £314,488 £36,040 £750,528 £1,520,528

0

0

30

3.0 Products and Services
Mad Keen Motors offers body and mec hanical repairs, vehicle storage and towing, washing and valeting and used car sales.

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Mad Keen Motors
4.0 Market Analysis Summary
Mad Keen will target the following market segments with its website: 1. 2. 3. 4. 5. New car owners Older luxury car owners Sports car owners Lifetime owners Buyers

4.1 Market Segmentation
Mad Keen Motors segments its customers by type of car ownership. We believe that the type of car that a person owns says volumes about their driving and therefore their garage requirements. 1. New car owners: owners of newer cars are likely not to use the company's garage repair service. If they do have problems with their car, they will return to the dealer where they bought it. These owners, though, will take great pride in their cars and will bring them often to the wash and valet service. The goal with these customers is to promote regular use of the wash and valet service. Eventually, as their warranty runs out, the goal will be to sell them on the efficiency, excellent service and price competitiveness of Mad Keen Motors' repair services. 2. Older luxury car owners: people who have either owned their high-end luxury cars for some years, or are unable to afford the expense of a brand new luxury car but want the feel of relaxed driving. Both of these groups want to keep their cars in the best shape possible. Those who have bought second-hand cars will often spend many hours in their cars and will plac e much importance on reliability. These owners will bring their cars in for regular services and oc casional valets. 3. Sports car owners: people who are younger, or middle-aged men, and will regard performance as important. They will also pride themselves on the look of their car and if involved in a minor sc rape will have the body repaired very quickly, since looks are also important. These people will have regular service and tune-ups on their cars. 4. Lifetime owners: many of these people have owned their cars for more than five or six years. They are more likely to be women. They are attac hed to their cars as friends and though it may be more sensible for them to purchase a new car, they will continue to have repairs done on their "old faithful." 5. Buyers: the site will provide links to information on new and used car prices and include tips on what to look for when buying a car.

Table: Market Analysis
Market Analysis 2005 Potential Customers New Car Owners Sports Car Owner Older luxury car owner Lifetime Owners Used Car Buyers Total Growth 2% 5% 10% 2% 12% 5.40% 52,000 25,000 30,000 80,000 40,000 227,000 2006 53,040 26,250 33,000 81,600 44,800 238,690 2007 54,101 27,563 36,300 83,232 50,176 251,372 2008 55,183 28,941 39,930 84,897 56,197 265,148 2009 56,287 30,388 43,923 86,595 62,941 280,134 CAGR 2.00% 5.00% 10.00% 2.00% 12.00% 5.40%

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Mad Keen Motors

4.2 Target Market Segment Strategy
Aside from the washing and valet services, we are currently targeting owners of older cars or cars in need of much maintenance, since that will provide us the greatest revenue.

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Mad Keen Motors
4.3 Service Business Analysis
The garage repair business as a whole is fragmented. There are a few major dealerships in eac h area, with a larger number of small garage repair shops, like Mad Keen Motors. Dealers target customers who buy new and used cars from them. Small garages rely on word of mouth and get most new customers bec ause of emergency car care needs.

4.3.1 Competition and Buying Patterns
Word of mouth is important in the car repair business, since people are very wary of garages, due to their lac k of knowledge of cars and engines. Mad Keen Motors leads the loc al competition in regards to word of mouth, having been in business for over three dec ades under the same ownership. Competition from dealerships is bec oming stiffer. Car design is bec oming more and more specialized, as car manufacturers aim to encourage owners of their vehicles to have services carried out at their franchised dealerships. However, small garages like Mad Keen have a price advantage over dealership, usually charging 50-70% less per hour for repair work.

5.0 Strategy and Implementation Summary
The marketing budget for this website is limited, so we will be relying on grassroots and viral marketing to spread the word about the site. In addition, the narrow geographical foc us of the business does not necessitate large sc ale advertising and marketing support. We will foc us on communicating with neighbours, nearby businesses, and existing customers to get the word out about the new website.

5.1 Competitive Edge
The website's competitive edge is that it: 1. Provides a loc al service for Bac kwater Downs car owners and wannabe car owners; 2. Has the benefit of over 60 years of automobile repair experience to draw from; 3. Provides an additional mode of communication for customers. In addition, the website itself will be a competitive edge for the company as a whole, opening up new methods of communicating with our customers and potential customers, and making bookings and customer service faster and more convenient.

5.2 Marketing Strategy
Each of the car-owning groups identified in the Market Segmentation will be targeted, with different portions of the website directed at their unique needs. Our marketing strategy for the website itself involves mailing fliers to all existing customers in our database, as well as to nearby neighbours and businesses. The fliers will include a special savings code - by going to the website and entering the code on the mailer, they ac cess a 10% off coupon they can use on their next visit.

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Mad Keen Motors
5.3 Sales Strategy
Mad Keen c loses the sale by always putting our best fac e forward. Employees are thoroughly trained in c ustomer service, the fac ilities are attrac tive and clean, and estimates for repair work are prepared promptly. A customer who is not suffering an immediate emergency will "shop around" until he finds a shop that feels trustworthy - it is our job to earn that trust in every encounter and contrac t.

5.3.1 Sales Forecast
"Standard revenues" represents projec tions of existing revenue streams over the next three years. The second line shows projec tions for additional sales and costs directly related to the new website, either from increased visibility or online coupons. By the end of the 2006, we expec t almost 2.5% of monthly sales to be directly trac eable to the website, rising to 4% by the end of 2008.

Table: Sales Forecast
Sales Forecast FY 2006 Sales Revenue from all Standard Streams Increased Sales through website Other Total Sales Direct Cost of Sales Direct Costs Other Subtotal Direct Cost of Sales £804,000 £18,360 £0 £822,360 FY 2006 £32,894 £0 £32,894 FY 2007 £820,080 £23,000 £0 £843,080 FY 2007 £33,723 £0 £33,723 FY 2008 £836,482 £35,000 £0 £871,482 FY 2008 £34,859 £0 £34,859

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Mad Keen Motors

5.4 Milestones
The following milestones illustrate the timeline for the development and implementation of our website.

Table: Milestones
Milestones Milestone Draft layout to owners Website Content Developed Initial UI Completed Back End Developed Design Approved Graphics & Logos Completed BETA Complete User Testing Necessary Changes Site Launch Totals Start Date 01/02/2006 01/02/2006 10/02/2006 01/03/2006 16/03/2006 20/03/2006 20/03/2006 01/04/2006 07/04/2006 12/04/2006 End Date 10/02/2006 01/03/2006 01/03/2006 15/03/2006 20/03/2006 30/03/2006 30/03/2006 07/04/2006 11/04/2006 12/04/2006 Budget £250 £0 £500 £700 £0 £0 £500 £200 £200 £0 £2,350 Manager Adrian Mark/Barry Adrian Adrian Mark/Barry Elisabeth Adrian Adrian Adrian Adrian Department Consultant Owners Consultant Consultant Owners Admin Consultant Consultant Consultant Consultant

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Mad Keen Motors
6.0 Web Plan Summary
The key champion for the development of the website is the co-owner of Mad Keen Motors, Mark Keen. He will be responsible for managing the development of the site and will work closely with Adrian Monkey on the design and creation. He will also be responsible for implementing the promotions that will be run at least monthly on the site and will maintain the "Ask the Mechanic" section on the site. Most of the site development will be carried out by the consultant, Adrian Monkey. He will initially be paid a pre-arranged fee as he completes eac h stage of development. Later he will be paid a monthly retainer to maintain the site. Barry Keen will work with Mark to develop the content section of the site dealing with typical car problems and tips on maintaining your vehicle during the different seasons. Website Demographics Strategy The website will foc us on the the first three segments, since the last segment of lifetime owners are less likely to be connec ted to the Internet. It will also target people in the loc al area who aim to move into any of these categories (buyers), by providing information on how to buy a used car, and links to sites that contain new car reviews and pricing information. Traffic Forecast The following traffic forec ast has been c reated after researching other small loc al service websites, and based on the size of the potential market with Internet presence in the Bac kwater Downs area. It is a conservative estimate of monthly page views and unique user sessions. Feb Unique Users Page Views Total 100 500 Mar 175 800 Apr 250 1250 May 450 2200 Jun 600 2900 Jul 400 2000 Aug 400 2000 Sep 600 2900 Oct 600 2900 Nov 500 2400 Dec 400 2000 Jan 600 2900

600

975

1500

2650

3500

2400

2400

3500

3500

2900

2400

3500

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Mad Keen Motors
6.1 Website Marketing Strategy
The website will have two main goals: 1. To provide potential and existing customers with information about their cars through the provision of a typical problems area, plus an Ask the Mechanic Question and Answer section, where they can have specific questions about their cars answered. 2. To ease the service experience and improve customer service through online booking database section that will allow them to review their cars service and repair rec ords. Key sections of the website will be: • • • • Question and Answer section. Ask the Mechanic section. Buyers guide--how to look for a new car. Links to information on car reviews--new and used.

Strategic Internet Alliances Mad Keen Motors will rely on its alliance with Web consultant Adrian Monkey to ensure that the site is maintained and regularly updated. Business Model The aim of this site is not to earn direc t sales, but to increase customer satisfac tion rates, and therefore increase retention levels by 10%. In addition, the goal will be to encourage other customers in the Bac kwater Downs area to choose Mad Keen Motors over other service and repair fac ilities. The overall goal of the site in terms of increased sales is 7-10% over the next year. Site Positioning For sports car owners who value the importance of their car's performance Mad Keen Motors website will give them tips on how to keep their car in tip-top running condition, with things that they can do themselves, as well as solutions that their loc al garage can provide. Unlike the loc al quick stop garages, it will provide part of the full-service solution for sports car owners. Unlike dealerships, prices will be competitive. For older luxury car owners who value personal service, Mad Keen Motors website will provide another way for them to interac t with the garage and provide excellent customer service. Unlike dealerships websites, it will not simply foc us on new cars, it will provide them valuable information on their make and model of older luxury car as well as a full database of information on their car that they will be able to ac cess at any time. For buyers who require an abundance of information when making a purchase, Mad Keen Motors website will provide an extensive list of online resources, so will ac t as a starting point for their search for information eac h time they ac cess the Web. Unlike other online sites it will also give customers information about what to look for in a used car, that may save them the time and money of a mec hanics inspec tion.

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Mad Keen Motors
6.2 Development Requirements
Website Outline The site will be designed with the following technology: ColdFusion, SQL and HTML. Home Page: explains the website's relation to the company, with visible links to the other sections of the site. Section 1 - Q&A: begins with search. Visible links will go off to the subsections below. • Ask the Mechanic: simple form that sends directly to the head mechanic. • Q&A Browse: users will be able to browse through other customer's Q&A sessions. Section 2 - Booking • Page 1: first page will display available dates, customer clicks on preferred available time, and proc eeds to the next page. • Page 2: customer fills out name, phone number, and car problem. • Page 3: confirmation page for customer to print off as a reminder. • User Car Information: first page has two links: "Buying a car" and "Selling a car." • Buying a car: first half of page with summary information, bottom half contains links to helpful sites. • Selling a car: first half of page with summary information, bottom half contains links to helpful sites.

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Mad Keen Motors
6.2.1 Technical Specifications
Front End Bec ause most people in the UK currently ac cess the Web from their homes at 56.6k or less, the user interfac e will be a simple as possible, though still looking professional. Graphics will be kept to a minimum in order to keep download times short. Though pictures of cars for sale will take up room, thumbnail views with access to larger views will be used. Information will be organized in buckets listed on front of eac h page so navigation will be as simple as possible for users. The Objectives of the User Interfac e will be: 1. To allow easy and fast navigation for the users. 2. To create interest so that people will use and return to the site. 3. Display a lot of content information in a simple a manner as possible. 4. To encourage user interac tion, i.e. bookings online and questions to the mec hanics. Back End The bac k end of the site will be very simple, since it is really an information only website. There will be a number of areas where a visitor can send an email to request an answer to an expert question, to get information about a used car for sale or to book in their car for service. Visitors will be able to interac t with the site in two ways: 1. Send an email requesting an appointment to have their car cleaned, valeted or repaired. 2. To ask questions about problems they may be having with their car, for example "I had new brake pads fitted on my car approximately eight moths ago and they have started squeaking. Is it possible that they are worn out already?" We will be hiring a Web engineer, Adrian Monkey, to build the website, so he will build this functionality into the site. We will rely on Adrian to give us rec ommendations for the database we will use to support the site. Resource Requirements Mad Keen Motors will hire the services of a consultant, Adrian Monkey, to build the website. Both the bac k end and the front end will be outsourced. The contents of the Website will be developed by the company owners, who between them have over 60 years of automobile repair experience, and the secretary who has excellent writing skills. Future Development Future development will be assessed after the website has been launched and user tested. It is hoped that the site will be popular enough to include an area for online repair bookings.

7.0 Management Summary
Mad Keen Motors is a family business, in which eac h employed family member oversees the area of operations best suited to his or her talents. • Mark Keen is in c harge of marketing and advertising, and non-mec hanic employee training and personnel issues. Mark will oversee the company's new website • Barry Keen is head mec hanic, and supervises all the mec hanics working for Mad Keen Motors. • Elisabeth Keen oversees the financial aspec ts of the business, including billing, ac counting, and taxes. In weekly meetings, these managers follow up on planned goals and deadlines and plan for the ongoing operations of the business. Page 14

Mad Keen Motors
7.1 Personnel Plan
Mad Keen employees ten full-time mec hanics, as well as eight other full-time workers who serve as rec eptionists, car wash and valet attendants, and salespeople.

Table: Personnel
Personnel Plan Mark Keen, Co-Owner Barry Keen, Co-Owner Mechanics Other Staff Elisabeth Keen, Admin Total People Total Payroll FY 2006 £24,000 £18,000 £240,000 £102,000 £18,000 17 £402,000 FY 2007 £20,000 £20,000 £242,000 £103,000 £20,000 17 £405,000 FY 2008 £20,000 £20,000 £243,000 £104,000 £20,000 19 £407,000

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Mad Keen Motors
8.0 Financial Plan
Website Expenses and Costs: We expec t to spend £6,200 over the next year on developing and then maintaining the website, with regular updates. We project another £6,200 will be needed for the same areas over the following two years. In addition, we will have a slightly lower price/c ost spread for website-related sales, once online coupons and other disc ounts are included. These have been fac tored in to the cost of sales. We will trac k this amount with a special record for "website coupons" in our sales and customer database. Website Revenues: We anticipate an additional £18,360 of sales in the next year direc tly related to the development of the website. This is based on reports from other loc ally foc used service businesses which implemented websites to enhance visibility and promote sales through online disc ounts.

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Mad Keen Motors
8.1 Break-even Analysis
The following table and chart show our break-even analysis with the website in plac e.

Table: Break-even Analysis
Break-even Analysis Monthly Revenue Break-even Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost £40,547

4% £38,925

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Mad Keen Motors
8.2 Projected Profit and Loss
This table outlines additions to the standard operating expenses for developing and maintaining the website. Detailed monthly numbers can be found in the appendix.

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Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales Gross Margin Gross Margin % FY 2006 £822,360 £32,894 £0 £32,894 £789,466 96.00% FY 2007 £843,080 £33,723 £0 £33,723 £809,357 96.00% FY 2008 £871,482 £34,859 £0 £34,859 £836,622 96.00%

Expenses Payroll Other Expense Account Name Depreciation Standard Operating Expenses Website Infrastructure Website Development Website Maintenance Expensed Equipment Payroll Taxes (National Insurance, etc.) Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales

£402,000 £0 £4,800 £0 £0 £0 £0 £0 £60,300 £0 £467,100 £322,366 £327,166 £73,700 £74,600 £174,066 21.17%

£405,000 £0 £4,800 £190,000 £0 £0 £1,500 £2,000 £60,750 £0 £470,550 £338,807 £343,607 £71,400 £80,222 £187,185 22.20%

£407,000 £0 £4,800 £196,000 £0 £0 £1,500 £1,200 £61,050 £0 £472,850 £363,772 £368,572 £69,000 £88,432 £206,341 23.68%

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Mad Keen Motors

8.3 Projected Cash Flow
Mad Keen Motors is in a strong c ash position right now, and can afford the relatively small expenses to start up the website. The following table and chart show our projected cash flow and cash balance.

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Table: Cash Flow
Pro Forma Cash Flow FY 2006 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received VAT Received (Output Tax) VAT Repayments New Current Borrowing New Other Liabilities (interest-free) New Fixed Liabilities Sales of Other Current Assets Sales of Fixed Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent VAT Paid Out (Input Tax) VAT Payments Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Fixed Liabilities Principal Repayment Purchase Other Current Assets Purchase Fixed Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance FY 2007 FY 2008

£822,360 £822,360

£843,080 £843,080

£871,482 £871,482

£143,913 £0 £0 £0 £0 £0 £0 £0 £966,273 FY 2006

£147,539 £0 £0 £0 £0 £0 £0 £0 £990,619 FY 2007

£152,509 £0 £0 £0 £0 £0 £0 £0 £1,023,991 FY 2008

£402,000 £232,757 £634,757

£405,000 £245,377 £650,377

£407,000 £252,838 £659,838

£13,175 £98,254 £0 £0 £24,000 £0 £0 £0 £770,186 £196,087 £399,575

£15,026 £164,996 £0 £0 £24,000 £0 £0 £0 £854,400 £136,219 £535,794

£15,274 £137,235 £0 £0 £24,000 £0 £0 £0 £836,348 £187,643 £723,438

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8.4 Projected Balance Sheet
Our Net Worth will continue to grow as we pay off the mortgage for the two newest Mad Keen Motors loc ations.

Table: Balance Sheet
Pro Forma Balance Sheet FY 2006 Assets Current Assets Cash Stock Other Current Assets Total Current Assets Fixed Assets Fixed Assets Accumulated Depreciation Total Fixed Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Fixed Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth £19,446 £0 £130,738 £150,183 £726,000 £876,183 £400,000 £350,528 £174,066 £924,594 £1,800,777 £826,340 £20,233 £0 £263,250 £283,483 £702,000 £985,483 £400,000 £524,594 £187,185 £1,111,779 £2,097,262 £848,528 £20,830 £0 £400,485 £421,316 £678,000 £1,099,316 £400,000 £711,779 £206,341 £1,318,119 £2,417,435 £917,634 FY 2007 FY 2008

£399,575 £2,748 £70,000 £472,323

£535,794 £2,817 £70,000 £608,611

£723,438 £2,912 £70,000 £796,350

£1,250,000 £19,800 £1,230,200 £1,702,523 FY 2006

£1,250,000 £24,600 £1,225,400 £1,834,011 FY 2007

£1,250,000 £29,400 £1,220,600 £2,016,950 FY 2008

8.5 Business Ratios
The following table outlines some of the more important ratios from the General Automotive Repair Shop industry. The final column, Industry Profile, details specific ratios based on the industry.

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Table: Ratios
Ratio Analysis Sales Growth Percent of Total Assets Stock Other Current Assets Total Current Assets Fixed Assets Total Assets Current Liabilities Fixed Liabilities Total Liabilities Net Worth 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 Additional Ratios Net Profit Margin Return on Equity Activity Ratios Stock Turnover Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout FY 2006 3.05% FY 2007 2.52% FY 2008 3.37% Industry Profile 5.37%

0.16% 4.11% 27.74% 72.26% 100.00% 8.82% 42.64% 51.46% 48.54%

0.15% 3.82% 33.18% 66.82% 100.00% 15.46% 38.28% 53.73% 46.27%

0.14% 3.47% 39.48% 60.52% 100.00% 20.89% 33.62% 54.50% 45.50%

8.50% 24.67% 45.07% 54.93% 100.00% 22.43% 26.48% 48.91% 51.09%

100.00% 96.00% 74.83% 0.00% 39.20%

100.00% 96.00% 73.80% 0.00% 40.19%

100.00% 96.00% 72.32% 0.00% 41.74%

100.00% 100.00% 71.18% 1.75% 2.37%

3.14 3.13 51.46% 30.09% 14.61% FY 2006 21.17% 21.06%

2.15 2.14 53.73% 31.51% 14.58% FY 2007 22.20% 22.06%

1.89 1.88 54.50% 32.12% 14.61% FY 2008 23.68% 22.49%

1.48 0.91 54.67% 3.63% 8.00%

n.a n.a

8.86 11.94 30 0.48

12.12 12.17 29 0.46

12.17 12.17 30 0.43

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

1.06 0.17

1.16 0.29

1.20 0.38

n.a n.a

£322,140 4.37

£325,128 4.75

£375,034 5.27

n.a n.a

2.07 9% 3.13 1.00 0.00

2.18 15% 2.14 0.99 0.00

2.31 21% 1.88 0.95 0.00

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

Page 25

Mad Keen Motors
8.6 Financial Risks and Contingencies-2
Risks and Assumptions The key risk with this website for Mad Keen Motors is that people will get information on their cars from other plac es. Since it is not typical for small garages to have this much c ontent on their sites, Bac kwater Downs loc als may not think to search for car and garage information on the Web. As cars and components bec ome more specialized and car owners may tend to trust dealerships more, they will be less likely to use their loc al garage. This is a risk to the business as a whole, though we hope that the website will help to reduce Mad Keen Motors' exposure to this risk. If the site is not supported properly and people do not get quick answers to their questions, they may assume that service from the garage itself is lac king too. Therefore, emails must be answered promptly, the site must be updated regularly and the garage workers should also be aware of information and features on the website, and be educated about it when they speak to customers. Contingency Plan Since there will be minimal integration between the website and Mad Keen Motors' c ore business, a contingency plan is not a huge concern. If use of the site falls well below forec asted levels and it proves not to be cost effective to continue the site in its current format, the site will be changed to essentially a business card site, where people can get information about the garage, loc ation, hours, ownership information, etc.

Page 26

Appendix
Table: Sales Forecast
Sales Forecast Feb Sales Revenue from all Standard Streams Increased Sales through website Other Total Sales Direct Cost of Sales Direct Costs Other Subtotal Direct Cost of Sales VAT Rate 17.50% 17.50% 17.50% £67,000 £660 £0 £67,660 Feb £2,706 £0 £2,706 Mar £67,000 £1,000 £0 £68,000 Mar £2,720 £0 £2,720 Apr £67,000 £1,400 £0 £68,400 Apr £2,736 £0 £2,736 May £67,000 £1,700 £0 £68,700 May £2,748 £0 £2,748 Jun £67,000 £1,350 £0 £68,350 Jun £2,734 £0 £2,734 Jul £67,000 £1,350 £0 £68,350 Jul £2,734 £0 £2,734 Aug £67,000 £1,350 £0 £68,350 Aug £2,734 £0 £2,734 Sep £67,000 £1,700 £0 £68,700 Sep £2,748 £0 £2,748 Oct £67,000 £2,050 £0 £69,050 Oct £2,762 £0 £2,762 Nov £67,000 £2,400 £0 £69,400 Nov £2,776 £0 £2,776 Dec £67,000 £1,700 £0 £68,700 Dec £2,748 £0 £2,748 Jan £67,000 £1,700 £0 £68,700 Jan £2,748 £0 £2,748

VAT Rate 17.50% 17.50%

Page 1

Appendix
Table: Personnel
Personnel Plan Feb Mark Keen, Co-Owner Barry Keen, Co-Owner Mechanics Other Staff Elisabeth Keen, Admin Total People Total Payroll 0% 0% 0% 0% 0% £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Mar £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Apr £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 May £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Jun £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Jul £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Aug £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Sep £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Oct £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Nov £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Dec £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Jan £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500

Page 2

Appendix
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales Gross Margin Gross Margin % VAT Rate 17.50% Feb £67,660 £2,706 £0 £2,706 £64,954 96.00% Mar £68,000 £2,720 £0 £2,720 £65,280 96.00% Apr £68,400 £2,736 £0 £2,736 £65,664 96.00% May £68,700 £2,748 £0 £2,748 £65,952 96.00% Jun £68,350 £2,734 £0 £2,734 £65,616 96.00% Jul £68,350 £2,734 £0 £2,734 £65,616 96.00% Aug £68,350 £2,734 £0 £2,734 £65,616 96.00% Sep £68,700 £2,748 £0 £2,748 £65,952 96.00% Oct £69,050 £2,762 £0 £2,762 £66,288 96.00% Nov £69,400 £2,776 £0 £2,776 £66,624 96.00% Dec £68,700 £2,748 £0 £2,748 £65,952 96.00% Jan £68,700 £2,748 £0 £2,748 £65,952 96.00%

Expenses Payroll Other Expense Account Name Depreciation Standard Operating Expenses Website Infrastructure Website Development Website Maintenance Expensed Equipment Payroll Taxes (National Insurance, etc.) Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales

VAT Rate £33,500 17.50% 15.00% 0.00% 17.50% 17.50% 17.50% 15.00% 17.50% VAT Rate £0 £400 £15,000 £0 £600 £0 £2,000 £5,025 £0 £38,925 £26,029 £26,429 £6,233 £5,939 £13,857 20.48% £33,500 £0 £400 £15,000 £0 £600 £0 £0 £5,025 £0 £38,925 £26,355 £26,755 £6,217 £6,041 £14,097 20.73% £33,500 £0 £400 £15,000 £0 £600 £0 £0 £5,025 £0 £38,925 £26,739 £27,139 £6,200 £6,162 £14,377 21.02% £33,500 £0 £400 £15,000 £350 £0 £150 £0 £5,025 £0 £38,925 £27,027 £27,427 £6,183 £6,253 £14,591 21.24% £33,500 £0 £400 £15,000 £350 £0 £150 £0 £5,025 £0 £38,925 £26,691 £27,091 £6,167 £6,157 £14,367 21.02% £33,500 £0 £400 £15,000 £350 £0 £150 £0 £5,025 £0 £38,925 £26,691 £27,091 £6,150 £6,162 £14,379 21.04% £33,500 £0 £400 £15,000 £0 £0 £150 £0 £5,025 £0 £38,925 £26,691 £27,091 £6,133 £6,167 £14,390 21.05% £33,500 £0 £400 £15,000 £0 £0 £150 £0 £5,025 £0 £38,925 £27,027 £27,427 £6,117 £6,273 £14,637 21.31% £33,500 £0 £400 £15,000 £0 £0 £150 £0 £5,025 £0 £38,925 £27,363 £27,763 £6,100 £6,379 £14,884 21.56% £33,500 £0 £400 £15,000 £0 £0 £150 £0 £5,025 £0 £38,925 £27,699 £28,099 £6,083 £6,485 £15,131 21.80% £33,500 £0 £400 £15,000 £0 £0 £150 £0 £5,025 £0 £38,925 £27,027 £27,427 £6,067 £6,288 £14,672 21.36% £33,500 £0 £400 £15,000 £0 £0 £150 £0 £5,025 £0 £38,925 £27,027 £27,427 £6,050 £6,293 £14,684 21.37%

Page 3

Appendix
Table: Cash Flow
Pro Forma Cash Flow Feb Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received VAT Received (Output Tax) VAT Repayments New Current Borrowing New Other Liabilities (interest-free) New Fixed Liabilities Sales of Other Current Assets Sales of Fix ed Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent VAT Paid Out (Input Tax) VAT Payments Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Fix ed Liabilities Principal Repayment Purchase Other Current Assets Purchase Fix ed Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance 17.50% 17.50% VAT Rate £754 £0 £0 £0 £2,000 £0 £0 £0 £56,827 £22,674 £226,162 £754 £0 £0 £0 £2,000 £0 £0 £0 £53,454 £26,446 £252,608 £754 £0 £0 £0 £2,000 £0 £0 £0 £53,540 £26,830 £279,438 £1,037 £33,449 £0 £0 £2,000 £0 £0 £0 £87,429 (£6,707) £272,731 £1,230 £0 £0 £0 £2,000 £0 £0 £0 £55,843 £24,469 £297,199 £1,232 £0 £0 £0 £2,000 £0 £0 £0 £56,801 £23,510 £320,709 £1,232 £32,446 £0 £0 £2,000 £0 £0 £0 £89,249 (£8,938) £311,772 £1,237 £0 £0 £0 £2,000 £0 £0 £0 £56,801 £23,922 £335,693 £1,240 £0 £0 £0 £2,000 £0 £0 £0 £56,920 £24,214 £359,907 £1,242 £32,359 £0 £0 £2,000 £0 £0 £0 £89,384 (£7,839) £352,068 £1,230 £0 £0 £0 £2,000 £0 £0 £0 £57,103 £23,619 £375,688 £1,235 £0 £0 £0 £2,000 £0 £0 £0 £56,835 £23,888 £399,575 £33,500 £20,573 £54,073 £33,500 £17,200 £50,700 £33,500 £17,287 £50,787 £33,500 £17,443 £50,943 £33,500 £19,113 £52,613 £33,500 £20,069 £53,569 £33,500 £20,071 £53,571 £33,500 £20,064 £53,564 £33,500 £20,180 £53,680 £33,500 £20,283 £53,783 £33,500 £20,374 £53,874 £33,500 £20,100 £53,600 17.50% 17.50% VAT Rate £11,841 £0 £0 £0 £0 £0 £0 £0 £79,501 Feb £11,900 £0 £0 £0 £0 £0 £0 £0 £79,900 Mar £11,970 £0 £0 £0 £0 £0 £0 £0 £80,370 Apr £12,023 £0 £0 £0 £0 £0 £0 £0 £80,723 May £11,961 £0 £0 £0 £0 £0 £0 £0 £80,311 Jun £11,961 £0 £0 £0 £0 £0 £0 £0 £80,311 Jul £11,961 £0 £0 £0 £0 £0 £0 £0 £80,311 Aug £12,023 £0 £0 £0 £0 £0 £0 £0 £80,723 Sep £12,084 £0 £0 £0 £0 £0 £0 £0 £81,134 Oct £12,145 £0 £0 £0 £0 £0 £0 £0 £81,545 Nov £12,023 £0 £0 £0 £0 £0 £0 £0 £80,723 Dec £12,023 £0 £0 £0 £0 £0 £0 £0 £80,723 Jan Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

£67,660 £67,660

£68,000 £68,000

£68,400 £68,400

£68,700 £68,700

£68,350 £68,350

£68,350 £68,350

£68,350 £68,350

£68,700 £68,700

£69,050 £69,050

£69,400 £69,400

£68,700 £68,700

£68,700 £68,700

Page 4

Appendix
Table: Balance Sheet
Pro Forma Balance Sheet Feb Assets Current Assets Cash Stock Other Current Assets Total Current Assets Fix ed Assets Fix ed Assets Accumulated Depreciation Total Fixed Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Fix ed Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth £20,000 £0 £0 £20,000 £750,000 £770,000 £400,000 £314,488 £36,040 £750,528 £1,520,528 £750,528 £16,624 £0 £11,087 £27,710 £748,000 £775,710 £400,000 £350,528 £13,857 £764,385 £1,540,095 £764,385 £16,707 £0 £22,233 £38,940 £746,000 £784,940 £400,000 £350,528 £27,954 £778,482 £1,563,422 £778,482 £16,807 £0 £33,449 £50,256 £744,000 £794,256 £400,000 £350,528 £42,331 £792,859 £1,587,115 £792,859 £18,444 £0 £44,435 £62,879 £742,000 £804,879 £400,000 £350,528 £56,921 £807,449 £1,612,328 £774,000 £19,400 £0 £55,166 £74,566 £740,000 £814,566 £400,000 £350,528 £71,288 £821,816 £1,636,383 £788,367 £19,402 £0 £65,895 £85,298 £738,000 £823,298 £400,000 £350,528 £85,667 £836,195 £1,659,493 £802,746 £19,391 £0 £76,624 £96,015 £736,000 £832,015 £400,000 £350,528 £100,057 £850,585 £1,682,601 £784,690 £19,504 £0 £87,410 £106,914 £734,000 £840,914 £400,000 £350,528 £114,695 £865,223 £1,706,137 £799,327 £19,604 £0 £98,254 £117,858 £732,000 £849,858 £400,000 £350,528 £129,579 £880,107 £1,729,965 £814,211 £19,704 £0 £109,157 £128,861 £730,000 £858,861 £400,000 £350,528 £144,710 £895,238 £1,754,098 £796,984 £19,430 £0 £119,950 £139,380 £728,000 £867,380 £400,000 £350,528 £159,382 £909,910 £1,777,290 £811,656 £19,446 £0 £130,738 £150,183 £726,000 £876,183 £400,000 £350,528 £174,066 £924,594 £1,800,777 £826,340 £203,488 £12,040 £70,000 £285,528 £226,162 £9,334 £70,000 £305,495 £252,608 £6,614 £70,000 £329,222 £279,438 £3,878 £70,000 £353,315 £272,731 £2,748 £70,000 £345,479 £297,199 £2,734 £70,000 £369,933 £320,709 £2,734 £70,000 £393,443 £311,772 £2,734 £70,000 £384,506 £335,693 £2,748 £70,000 £408,441 £359,907 £2,762 £70,000 £432,669 £352,068 £2,776 £70,000 £424,844 £375,688 £2,748 £70,000 £448,436 £399,575 £2,748 £70,000 £472,323 Starting Balances Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

£1,250,000 £15,000 £1,235,000 £1,520,528

£1,250,000 £15,400 £1,234,600 £1,540,095 Feb

£1,250,000 £15,800 £1,234,200 £1,563,422 Mar

£1,250,000 £16,200 £1,233,800 £1,587,115 Apr

£1,250,000 £16,600 £1,233,400 £1,578,879 May

£1,250,000 £17,000 £1,233,000 £1,602,933 Jun

£1,250,000 £17,400 £1,232,600 £1,626,043 Jul

£1,250,000 £17,800 £1,232,200 £1,616,706 Aug

£1,250,000 £18,200 £1,231,800 £1,640,241 Sep

£1,250,000 £18,600 £1,231,400 £1,664,069 Oct

£1,250,000 £19,000 £1,231,000 £1,655,844 Nov

£1,250,000 £19,400 £1,230,600 £1,679,036 Dec

£1,250,000 £19,800 £1,230,200 £1,702,523 Jan

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