You are on page 1of 44

Business Plan: By Muhammad Farooq

1
2
3
Executive Summary

Welcome to the future of event planning! Star Event Management, The Event
Planning Specialists, brings to the community of Pakistan a new breath of air in
the event planning market. By combining old fashioned values, going the extra
mile, and using cutting edge event-planning software, Star Event Management
will lead the market, providing the same quality results, every time.

Star Event Management is an equal opportunity business making its expertise and
its products available to help its customers plan their own events. Party Packs
(complete kits for their event), make hosting a party a snap, right down to the
refreshments. The event planning software brings interactive event planning as
close as their personal computer. Through these and other affordable products and
services, Star Event Management aims to be the number one resource for any
event.

4
Table of contents
Introduction ......................................................................................................................................................5
Mission.........................................................................................................................................................5
Company.......................................................................................................................................................6
Company Ownership....................................................................................................................................6
Start-up Summary.........................................................................................................................................6
Company Location And Facilities..............................................................................................................10
Product and Services...................................................................................................................................11
1. Party Pack...........................................................................................................................................11
2. Step-by-Step Guides ..........................................................................................................................11
3. Event Planning Software....................................................................................................................12
4. Resources Manual...............................................................................................................................12
Competitive Comparison:...........................................................................................................................12
Market Analysis summary ........................................................................................................................13
Market segmentation..................................................................................................................................13
3. Age Breakdowns.................................................................................................................................14
Target Market segment Strategy.................................................................................................................15
Service Business Analysis..........................................................................................................................16
Hotels and Conference Centers..............................................................................................................16
2. Other Event Planners..........................................................................................................................16
Strategy and Implementation Summary.................................................................................................17
Sales Strategy..............................................................................................................................................17
Sales Forecast.............................................................................................................................................18
Milestones...................................................................................................................................................19
Management Summary...............................................................................................................................21
Organizational Structure.............................................................................................................................21
Personnel Plan............................................................................................................................................22
Financial Plan.............................................................................................................................................22
Important Assumptions...............................................................................................................................22
Key Financial Indicators.............................................................................................................................23
Break-even Analysis...................................................................................................................................24
Projected Profit and Loss............................................................................................................................25
Projected Cash Flow...................................................................................................................................28
Projected Balance Sheet.............................................................................................................................31
Business Ratios...........................................................................................................................................33

Introduction
Mission

Star Event Management strives to batter guide and exceed customer


expectation within limited funding. We create our client’s trust, loyalty,
and reliability by adding significant value with strong commitment to
make every event unforgettable. Our main focus is;

5
1. Consistent, accurate fulfillment of the client’s wishes.

2. Competitive pricing for the quality of services offered.

Company

Star Event Management Inc. was founded in January 2010 and provides products
and services for Social, Cultural, Political, Corporate, Government and non
Government Special events. This company is associated with Event Management
Industry and Located at Saleem Complex Jinah Road Quetta.

Founded originally on a part-time basis, Star Event Management is a small


business designed to meet the needs of the ever changing social world. Pakistan,
is the current home with plans to expand to branch offices within four years. Star
Event Management' staff of two, with numerous contract vendors, plans events,
writes event-planning products, and trains area students in the art of event
planning. Star Event Management is invested in the community it resides in.

Star Event Management is, in part, the answer to demands of the social world, on
the working family, heavily-burdened office, out-of-town business, or special Star
Event Management in need of special recognition. As a business, we understand
the needs of public and private organizations. As parents and family members, we
understand the needs of setting special time apart from other events in our lives.
Star Event Management strives to accomplish these goals, in Pakistan and
eventually other countries.

Company Ownership

Star Event Management is established as a sole proprietorship with the intention


of selling the business when it is established. The sole proprietor will use his or
her name as the guarantor of each service. Therefore, the sole proprietor must
embody the vision and mission of Star Event Management.

Start-up Summary

Through careful planning on the part of the founders, the start-up costs for Star
Event Management are minimal. It began as a home-based business with little
overhead, and it continues to demand least outlay of funds as a service-based

6
business. The start-up cost investment funds were assets saved from prior
earnings by the owners who did event planning on a part-time basis before
establishing themselves as a business.

It is the wish of the founders to remain a debt-free establishment. However,


recognizing that in reality not all variables are controllable, outside financing is a
viable option.

Start-up

Requirements

Start-up Expenses

Legal $200

Stationery etc. $300

Brochures $185

7
Consultants $200

Insurance $145

Rent $150

Expensed Equipment $1,985

Other $200

Total Start-up Expenses $3,365

Start-up Assets

Cash Required $2,300

Start-up Inventory $0

Other Current Assets $0

Long-term Assets $0

Total Assets $2,300

Total Requirements $5,665

Start-up Funding

Start-up Expenses to Fund $3,365

8
Start-up Assets to Fund $2,300

Total Funding Required $5,665

Assets

Non-cash Assets from Start-up $0

Cash Requirements from Start-up $2,300

Additional Cash Raised $0

Cash Balance on Starting Date $2,300

Total Assets $2,300

Liabilities and Capital

Liabilities

Current Borrowing $2,000

Long-term Liabilities $0

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

Total Liabilities $2,000

9
Capital

Planned Investment

Alicia Nollan $3,400

Other $265

Additional Investment Requirement $0

Total Planned Investment $3,665

Loss at Start-up (Start-up Expenses) ($3,365)

Total Capital $300

Total Capital and Liabilities $2,300

Total Funding $5,665

Company Location And Facilities

Star Event Management is located inside the city limits of, Quetta,
Pakistan, . It is a home-based business. Most meetings with clients are
conducted in social settings, such as restaurants, coffee houses, the client's

10
home, facilities wishing to be used for the event, or over the phone.
Although the demand has not yet reached its peak, Star Event
Management will eventually move from its home base into a small office
complex, also within the city limits of Quetta, Pakistan, . When the
company has reached its finished point, Star Event Management will have
branch offices in Quetta, Major cities of Pakistan and abroad.

The company will maintain a high degree of professionalism. All offices


are equipped with the latest in business technology, such as telephone
systems, computers, fax machines, email, duplicators, printers, and
software. Each location will have a secure storage area for supplies and
equipment used in events, such as walkie-talkies, cellular phones, portable
fax machines, laptops and other equipments.

Product and Services

Although Star Event Management is primarily a service business, we also


offer products to aid our customers in planning the event. The following
products are tools used inside our operation for the best possible results

1. Party Pack

The Party Pack is a complete kit for any party. It includes decorations,
lighting effects guide, disposable theme cameras, cutlery, plates, napkins,
cups, punch mix (or recipe), snack supplies (or recipe), tablecloths, theme
music (where applicable), invitations, thank-you cards, and a step-by-step
guide to planning, putting together, and hosting the event.

2. Step-by-Step Guides

These booklets include a calendar to map out the event, a step-by-step


guide on what is needed for and how to put together a successful, worry-
free event, resource information, popular refreshments with recipes, games
and tips to put their event in the record books. The events available
include birthdays for all ages, meetings, retreats, parties, vacations, and
special Star Event Management celebrations such as graduations, holidays,
showers, weddings, and receptions.

11
3. Event Planning Software

This cutting-edge tool will allow the client all the resources and visual aids
for their event planning. They will be able to visualize the decoration
themes, listen to theme music, design invitations, thank-you cards, and
RSVP cards, use the interactive planning calendar, and much more. This
software will bring the event into the millennium with cutting edge
technology that is designed to save time and money.

4. Resources Manual

This valuable guide acts as a review for all the resources located in the
surrounding area. A ranking is given to the various services, such as
caterers, decorators, disc jockeys, bands, and facilities. This manual gives
the client the freedom of making a choice based on experience

Free Event Planners Training for High School and College Students.

As a member of the Pakistan community, it is our mission to support our


community. Ten hours each month will be devoted to training area
students in event planning. This will aid them in planning proms,
graduation parties, river clean-ups, homecoming, and other important
events. This is a priority of Star Event Management. It will not be cut back
as the business grows.

Star Event Management provides event planning in a wide range of


applications. We guarantee satisfaction in the areas of appearance,
performance, and taste. The following is a sampling of the types of events
we plan every year.

1. Meetings, Trainings, and Retreats

2. Conferences and Workshops

3. Birthdays, Anniversaries, Graduations and Holidays

4. Weddings, Receptions, and Showers

5. Company picnics, banquets, and award ceremonies.

Competitive Comparison:

12
Star Event Management, although young, draws from the age-old tradition of going
above and beyond what is expected, every time. Our systems for event planning have
been drawn up, evaluated, practiced, worked, and reworked to ensure the maximum
efficiency while minimizing the possibility of error. We employ local vendors who have
the same desire to be the best at what they do, while providing un-match able services.
Thus, we give back to the community by providing jobs outside of our organization. We
encourage new and upcoming small businesses who provide a service within our need
base to step up to the challenge of being the best through their contract with Star Event
Management.

Our products will serve the function of aiding those that cannot afford the cost of an
event planner. We wish to make our event planning tips available to those who need a
helping hand. Star Event Management is a member of the community. Through event
planning, Star Event Management gets the opportunity to laugh when the community
laughs and cry when the community cries, to rejoice when the community rejoices and to
help put the pieces back together when things change or begin to fall apart. We care
about the things that have meaning in the lives of our neighbors.

Market Analysis summary

The following sections describe the market segmentation, strategies, and industry
analysis

Market segmentation
The breakdown of the market for event planning, falls in a wide, very diverse grouping.
Individuals as well as organizations demand the services we provide. In order to provide
the greatest depth of information, the market segments have been broken down into
private and public organizations, and age groups

1. Private Organizations and Businesses


Private organizations make up the single largest portion of Star Event Management' client
base. Private organizations such as businesses, corporations, and political parties host the
most events on the largest scales, therefore, these events generate larger revenues per
event. The majority of larger scale holiday functions will fall under this segment.
2. Public Organizations
Government agencies host many events every year. Star Event Management hopes to
alleviate the pressure of event planning for public employees. The second single largest
segment, the public sector, can save money and give back to its community at the same
time. These events are moderate in scale with middle to low revenues generated.

13
Emphasis is placed on the visibility of the event for public viewing. The majority of
organizational family functions will fall under this segment

3. Age Breakdowns

Under 24: Persons under the age of twenty-four (24) using an event planner are rare at
best. We hope to tap the early college graduates who have begun their professional
careers but have not yet started their families. These events will focus mainly on themes
with moderate to high energy appeal. The revenues generated will range from moderate
to high, depending on the event. The majority of weddings will fall into this segment.

Ages 25-55: The persons that fall into this age group are employed, middle to upper-
middle class families. The reason they choose event planners is they are too busy to do it
themselves. Therefore, Star Event Management will be on hand for questions, contact
will be moderate in length but occur regularly so as not to disturb the daily life of the
families. These events will generate moderate revenues, with a few generating low
revenues. The majority of special Star Event Management planning will occur in this
market segment.

Ages 56 and above: Persons over the age of 55 have reached the turning point of life.
Many are retiring, others are celebrating anniversaries of significant years, and still others
are seeing that their children's special events are taken care of. These events will generate
moderate to high revenues depending upon the income level of the family (direct
correlation to social status). Most holiday parties, and other special Star Event
Management, such as wedding receptions and reunions, will occur in this market segment

4. Other
This segment has no direct information to compile for a description. It consists of any
event planned that does not fit into one of the above categories.

14
Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Under 24 0% 18 18 20 21 22 5.14%

Age 25 to 55 0% 33 33 44 51 59 15.63%

Age 56 and over 0% 31 31 37 40 44 9.15%

Private Organizations 0% 40 40 102 163 261 59.83%

Public Organizations 0% 62 62 105 137 178 30.17%

Other 0% 5 5 7 8 9 15.83%

Total 31.95% 189 189 315 420 573 31.95%

Target Market segment Strategy

15
Our target markets are middle to upper-middle class families, couples, individuals, or
private and public organizations. We chose these groups because they are most able to
afford event planners, and have the least amount of time to spare for event planning in
general. Families demand attention, employees are overburdened, and overwhelming
detail needed to plan large events are too large a constraint to place on people not trained
in the area of event planning.

The fast pace of the world we live in leaves little time for extra things we would like to
do, like plan events, parties, and social get-togethers. Star Event Management fills the
need by being available to take on the burden of planning so that people can spend time
on more important things, like family and friends. The demand for this service can only
increase considering the rise in incomes, population, and need for interpersonal relations
in the workplace.

Service Business Analysis

Star Event Management is in a unique position of competition. We compete against


hotels with conference facilities, conference centers, other event planners both on the
large and small scale, persons within an organization who are assigned the task of
organizing an event, and people who wish to organize their own events without the
benefit of assistance. The benefits and drawbacks of each of our competitors as compared
with the services we offer are hardly a match in quality and price.

Hotels and Conference Centers

Strengths: On-site facilities, equipment, and support staff. Ability to transport and house
persons for overnight stays. Able to internalize costs of transportation and equipment.
Weakness: Often very expensive, impersonal, rely on unskilled labor for support staff.
The error rate is high due to high volume and traffic from other events happening at the
same time

2. Other Event Planners

Strengths: Have been in the market longer, have established a reputation and client base.
Weakness: Reputation precedes them, no systems-based businesses designed to produce
consistent results; focus on smaller events, specialized events are main focused rather

16
than all events; do not have the supporting products to market with, or instead of, event
planning services

3. Employees or Persons wishing to do it themselves

Strengths: Internalized cost of planning the event; able to add tiny personalized touches
that have meaning within the group or family.
Weakness: Consumes time that could be spent on other things; don't have access to the
best prices, services, and other needed resources available.

Strategy and Implementation Summary

Marketing and Competition


We have discussed our client base as being predominately middle to upper-middle class
individuals, couples or families, public and private organizations. We must then look at
the needs of these markets and cater to them. We promise the same great results, every
time.

When marketing to individuals, the idea of releasing them from the task, freeing their
time for family and friends, and the promise of a worry-free event are the buzz words and
concepts. Our marketing is predominantly by word of mouth or visual connection to large
events these individuals have participated in or worked at.

When marketing to public or private organizations, the idea of greater efficiency for the
money and a professional event without error would be the key concept. Groups,
especially large ones, do not wish to deal with problems that arise due to oversight on
their part. If the guarantee of worry-free, error-free events is available at a cost benefit to
them, there really appears to be no better choice.

Sales Strategy

Star Event Management deals with a diverse market of clients. Within each market
segment, closing of sales will differ. Each approach is described as follows.

1. Private and Public Organizations


Sales will be concluded one to two days after the end of the event. A follow-up
phone call will be placed informing the client of the total cost, number of
attendees, and information about the billing packet that will arrive at their offices.
Feedback forms will be included in these packets to ensure the client is being

17
served as they deem appropriate. Form letter thank-yous will be sent following
each event.

2. Individuals
Sales will be concluded with a follow-up phone call one to two days after the
event. The phone call will explain the total cost of the event, number of attendees,
and information concerning the billing. Individual parties of any age group are
placed on a billing cycle. Invoices will be sent out the 25th of the month and will
be due the 10th of the following month. Feedback forms will be included in these
packets to ensure the client is being served as they deem appropriate. Thank-you
cards will follow each individual event.

Sales Forecast

By beginning on a smaller scale, Star Event Management has the foresight to grow at a
rapid pace to keep up with demand. We wish to maintain a steady rate of sales growth;
however, we understand that sales of products and services will vary in different months.
As noted in the graph and chart, rapid increases during the holiday season will boost
sales, then allow that growth to level off at a steady rate

Sales Forecast

Year 1 Year 2 Year 3

18
Sales

Private $206,170 $276,099 $299,002

Public $113,185 $178,490 $193,000

Other $33,794 $40,081 $62,777

Total Sales $353,149 $494,670 $554,779

Direct Cost of Sales Year 1 Year 2 Year 3

Private $28,864 $38,654 $41,860

Public $11,319 $17,849 $19,300

Other $1,690 $2,004 $3,139

Subtotal Direct Cost of Sales $41,872 $58,507 $64,299

Milestones
The milestones table and chart show the specific detail about actual program activities
that should be taking place during the year. Each one has its manager, starting date,
ending date, and budget. During the year we will be keeping track of implementation
against plan, with reports on the timely completion of these activities as planned.

19
Milestones

Milestone Start Date End Date Budget Manager Department

Sample Milestones 1/4/2008 1/4/2008 $0 ABC Department

Finish Business Plan 5/7/2009 6/6/2009 $100 Dude LeGrande Fromage

Acquire Financing 5/17/2009 7/6/2009 $200 Dudette Legumers

Ah HA! Event 5/27/2009 6/1/2009 $60 Marianne Bosses

Oooooh Noooooo! Event 6/26/2009 7/1/2009 $250 Marionette Chèvre deBlâme

Grande Opening 7/6/2009 7/11/2009 $500 Gloworm Nobs

Marketing Program Starts 6/6/2009 7/1/2009 $1,000 Glower Marketeers

Plan vs. Actual Review 11/1/2009 11/8/2009 $0 Galore Alles

20
First Break-even Month 3/5/2010 4/4/2010 $0 Bouys Salers

Hire Employees 2/1/2010 3/3/2010 $150 Gulls HRM

Upgrade Business Plan Pro 4/22/2010 4/24/2010 $100 Brass Bossies

Totals $2,360

Management Summary

Information and expense details are presented in subtopics Organizational Structure and
Personnel Plan.

Organizational Structure

The management team within Star Event Management will be small in the beginning.
The primary employee is the founder, who plans events, then contracts with caterers,
decorators, disc jockeys, and bands to fill out the event. A contract labor site manager
will be on hand to work the events as a liaison and vendor coordinator. Thus, there are
two main employees with various levels of vendors.

When Star Event Management reaches its expansion goals, each office will have one to
two event planners, an office assistant, two to three site managers for the events, and a
product and marketing specialist. This team will function as one with constant
communication through weekly staff meetings, email, and message boards. All jobs are
interrelated. The performance of one affects the performance of the others; therefore,
each team member expects nothing but the best from each other.

As it functions currently, we see no gaps in the management of this organization. Should


Star Event Management grow beyond its estimated size, more positions in specialized
areas will need to be added as well as additional site support and office assistance. To fill
these positions, Star Event Management is looking for energetic, teachable, detail-
oriented persons who want the potential to grow and improve their skills within the
organization. Star Event Management wants to be the best; therefore, they will hire those
who want to succeed.

21
Personnel Plan
The following table shows the estimated personnel needs for Star Event Management.

Personnel Plan

Year 1 Year 2 Year 3

Event Specialist $36,000 $40,000 $42,000

Site Manager $11,097 $13,750 $14,560

Other $8,947 $9,560 $10,000

Total People 0 0 0

Total Payroll $56,044 $63,310 $66,560

Financial Plan

Service-based businesses require little funds to start-up, and as they grow and expand,
less funds to maintain. The charts and graphs that follow will show that investment up
front allows Star Event Management to function debt-free with little overhead. This gives
Star Event Management a quicker break-even point and increased profit margins from the
start. As Star Event Management grows, the debt-free philosophy will be maintained until
it is impossible to function during growth periods without financial assistance.

Important Assumptions

22
Tax rates are noted for information. We carry no loan burden that would be effected by
these rates. What hits Star Event Management the hardest (but not nearly are bad as other
service businesses), is the tax rate of 24%, which is nearly one quarter of the total sales.
As Star Event Management continues to grow, these numbers will be reference rather
than influence.

General Assumptions

Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 24.00% 24.00% 24.00%

Other 0 0 0

Key Financial Indicators

The break-even point for Star Event Management is based on the assumption that we will
produce 22 events per month and average approximately $521 per event. In the current
situation, we average more than this assumption for our public and private organization
events. These currently make up 18 of the 22 average events hosted per month.

23
Break-even Analysis

The break-even point is based on the assumption that we will produce 22 events per
month and average approximately $521 per event. In the current situation, we average
more than this assumption for our public and private organization events. These currently
make up 18 of the 22 average events hosted per month.

The break-even point will appear more rapidly for Star Event Management than for other
types of home-based businesses. Start-up costs are limited to minimal equipment, there is
little or no staff to pay in the beginning, and contracted companies will handle any
additional equipment required for the planned events.

24
Break-even Analysis

Monthly Revenue Break-even $19,313

Assumptions:

Average Percent Variable Cost 12%

Estimated Monthly Fixed Cost $17,023

Projected Profit and Loss

25
Leading the industry in event planning requires the use of the resources available at the
lowest cost. As noted in the table, we spend less money on overhead than another event
planners with an outside office or office space in their own facility. This savings allows
us to market in creative ways and spend funds on expansion into other areas when the
time is right.

Pro Forma Profit and Loss

26
Year 1 Year 2 Year 3

Sales $353,149 $494,670 $554,779

Direct Cost of Sales $41,872 $58,507 $64,299

Other Costs of Sales $196 $203 $221

Total Cost of Sales $42,068 $58,710 $64,520

Gross Margin $311,081 $435,960 $490,259

Gross Margin % 88.09% 88.13% 88.37%

Expenses

Payroll $56,044 $63,310 $66,560

Sales & Marketing & Other Expenses $146,013 $68,400 $73,400

Depreciation $0 $0 $0

Leased Equipment $0 $0 $0

Utilities $516 $750 $800

Insurance $264 $750 $1,000

Rent $1,440 $1,800 $1,800

Payroll Taxes $0 $0 $0

27
Other $0 $0 $0

Total Operating Expenses $204,277 $135,010 $143,560

Profit Before Interest and Taxes $106,804 $300,950 $346,699

EBITDA $106,804 $300,950 $346,699

Interest Expense $406 $279 $362

Taxes Incurred $25,535 $72,161 $83,121

Net Profit $80,862 $228,510 $263,216

Net Profit/Sales 22.90% 46.19% 47.45%

Projected Cash Flow


Our cash situation is great. Although we begin with little extra cash, our increased growth
allows us to make up for lost time. Our cash balance is always above the mark with the
cash flow not too far behind. We have no negatives in our cash analysis

28
Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $141,260 $197,868 $221,912

Cash from Receivables $178,271 $283,330 $327,145

Subtotal Cash from Operations $319,531 $481,198 $549,057

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $4,000 $1,080 $1,080

29
New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $323,531 $482,278 $550,137

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $56,044 $63,310 $66,560

Bill Payments $199,964 $209,268 $223,979

Subtotal Spent on Operations $256,008 $272,578 $290,539

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of Current Borrowing $3,500 $500 $0

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $0

30
Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $259,508 $273,078 $290,539

Net Cash Flow $64,023 $209,200 $259,598

Cash Balance $66,323 $275,523 $535,121

Projected Balance Sheet


Star Event Management is set up for success. According to the numbers, we start out fair and end up amazing. By
FY2000, we will be worth over $125,000 with a profit margin of over 30%. We are operating with little to zero debt,
boosting the net worth even higher. Our only weakness is the products to be released in FY2000 have not been
accounted for as an investment of funds. This will effect the cash flow in a moderate way, and is undetermined how it
will effect the profit ratio of the business.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3

Assets

Current Assets

Cash $66,323 $275,523 $535,121

Accounts Receivable $33,618 $47,090 $52,812

Inventory $4,991 $6,975 $7,665

31
Other Current Assets $0 $0 $0

Total Current Assets $104,933 $329,588 $595,598

Long-term Assets

Long-term Assets $0 $0 $0

Accumulated Depreciation $0 $0 $0

Total Long-term Assets $0 $0 $0

Total Assets $104,933 $329,588 $595,598

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $21,270 $16,836 $18,550

Current Borrowing $2,500 $3,080 $4,160

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $23,770 $19,916 $22,710

Long-term Liabilities $0 $0 $0

32
Total Liabilities $23,770 $19,916 $22,710

Paid-in Capital $3,665 $3,665 $3,665

Retained Earnings ($3,365) $77,497 $306,007

Earnings $80,862 $228,510 $263,216

Total Capital $81,162 $309,672 $572,888

Total Liabilities and Capital $104,933 $329,588 $595,598

Net Worth $81,162 $309,672 $572,888

Business Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 40.07% 12.15% 11.37%

Percent of Total Assets

Accounts Receivable 32.04% 14.29% 8.87% 10.40%

Inventory 4.76% 2.12% 1.29% 3.83%

33
Other Current Assets 0.00% 0.00% 0.00% 48.41%

Total Current Assets 100.00% 100.00% 100.00% 62.64%

Long-term Assets 0.00% 0.00% 0.00% 37.36%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 22.65% 6.04% 3.81% 23.10%

Long-term Liabilities 0.00% 0.00% 0.00% 24.97%

Total Liabilities 22.65% 6.04% 3.81% 48.07%

Net Worth 77.35% 93.96% 96.19% 51.93%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 88.09% 88.13% 88.37% 100.00%

Selling, General & Administrative Expenses 69.22% 35.37% 34.65% 65.24%

Advertising Expenses 0.51% 0.44% 0.47% 2.43%

Profit Before Interest and Taxes 30.24% 60.84% 62.49% 4.31%

Main Ratios

Current 4.41 16.55 26.23 1.83

34
Quick 4.20 16.20 25.89 1.31

Total Debt to Total Assets 22.65% 6.04% 3.81% 58.52%

Pre-tax Return on Net Worth 131.09% 97.09% 60.45% 7.33%

Pre-tax Return on Assets 101.40% 91.23% 58.15% 17.66%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 22.90% 46.19% 47.45% n.a

Return on Equity 99.63% 73.79% 45.95% n.a

Activity Ratios

Accounts Receivable Turnover 6.30 6.30 6.30 n.a

Collection Days 43 50 55 n.a

Inventory Turnover 10.91 9.78 8.78 n.a

Accounts Payable Turnover 10.40 12.17 12.17 n.a

Payment Days 27 34 29 n.a

Total Asset Turnover 3.37 1.50 0.93 n.a

Debt Ratios

Debt to Net Worth 0.29 0.06 0.04 n.a

35
Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios

Net Working Capital $81,162 $309,672 $572,888 n.a

Interest Coverage 262.90 1,078.67 957.73 n.a

Additional Ratios

Assets to Sales 0.30 0.67 1.07 n.a

Current Debt/Total Assets 23% 6% 4% n.a

Acid Test 2.79 13.83 23.56 n.a

Sales/Net Worth 4.35 1.60 0.97 n.a

Dividend Payout 0.00 0.00 0.00 n.a

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

Sales

Private 0% $12,860 $10,966 $11,435 $12,889 $13,001 $15,777 $15,998 $24,960 $26,522 $20,009 $19,650 $22,103

Public 0% $3,852 $7,884 $7,200 $8,965 $8,566 $7,600 $9,705 $11,245 $11,780 $11,999 $12,300 $12,089

Other 0% $800 $955 $900 $1,190 $2,450 $2,133 $2,100 $4,656 $4,500 $4,622 $4,800 $4,688

36
Total Sales $17,512 $19,805 $19,535 $23,044 $24,017 $25,510 $27,803 $40,861 $42,802 $36,630 $36,750 $38,880

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Private $1,800 $1,535 $1,601 $1,804 $1,820 $2,209 $2,240 $3,494 $3,713 $2,801 $2,751 $3,094

Public $385 $788 $720 $897 $857 $760 $971 $1,125 $1,178 $1,200 $1,230 $1,209

Other $40 $48 $45 $60 $123 $107 $105 $233 $225 $231 $240 $234

Subtotal Direct Cost of Sales $2,226 $2,371 $2,366 $2,760 $2,799 $3,075 $3,315 $4,852 $5,116 $4,232 $4,221 $4,538

Personnel Plan

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Event Specialist 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Site Manager 0% $735 $907 $735 $735 $735 $735 $1,245 $1,400 $1,245 $875 $875 $875

Other 0% $586 $800 $586 $586 $586 $586 $844 $895 $844 $844 $895 $895

Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $4,321 $4,707 $4,321 $4,321 $4,321 $4,321 $5,089 $5,295 $5,089 $4,719 $4,770 $4,770

Pro Forma Profit and Loss

37
Month
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11
12

Sales $17,512 $19,805 $19,535 $23,044 $24,017 $25,510 $27,803 $40,861 $42,802 $36,630 $36,750 $38,880

Direct Cost of Sales $2,226 $2,371 $2,366 $2,760 $2,799 $3,075 $3,315 $4,852 $5,116 $4,232 $4,221 $4,538

Other Costs of Sales $15 $13 $15 $16 $16 $16 $19 $22 $22 $13 $15 $14

Total Cost of Sales $2,241 $2,384 $2,381 $2,776 $2,815 $3,091 $3,334 $4,874 $5,138 $4,245 $4,236 $4,552

Gross Margin $15,271 $17,421 $17,154 $20,268 $21,202 $22,419 $24,469 $35,987 $37,664 $32,385 $32,514 $34,328

Gross Margin % 87.21% 87.96% 87.81% 87.95% 88.28% 87.88% 88.01% 88.07% 88.00% 88.41% 88.47% 88.29%

Expenses

Payroll $4,321 $4,707 $4,321 $4,321 $4,321 $4,321 $5,089 $5,295 $5,089 $4,719 $4,770 $4,770

Sales & Marketing & Other


$9,015 $10,748 $9,982 $10,260 $10,315 $10,415 $12,418 $18,015 $16,615 $13,290 $11,975 $12,965
Expenses

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Utilities $43 $43 $43 $43 $43 $43 $43 $43 $43 $43 $43 $43

Insurance $22 $22 $22 $22 $22 $22 $22 $22 $22 $22 $22 $22

Rent $120 $120 $120 $120 $120 $120 $120 $120 $120 $120 $120 $120

Payroll Taxes 12% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

38
Total Operating Expenses $13,521 $15,640 $14,488 $14,766 $14,821 $14,921 $17,692 $23,495 $21,889 $18,194 $16,930 $17,920

Profit Before Interest and


$1,750 $1,781 $2,666 $5,502 $6,381 $7,498 $6,777 $12,492 $15,775 $14,191 $15,584 $16,408
Taxes

EBITDA $1,750 $1,781 $2,666 $5,502 $6,381 $7,498 $6,777 $12,492 $15,775 $14,191 $15,584 $16,408

Interest Expense $17 $50 $47 $44 $41 $38 $35 $33 $30 $27 $24 $21

Taxes Incurred $416 $415 $629 $1,310 $1,521 $1,790 $1,618 $2,990 $3,779 $3,399 $3,734 $3,933

Net Profit $1,318 $1,315 $1,990 $4,148 $4,818 $5,669 $5,123 $9,469 $11,966 $10,765 $11,826 $12,454

Net Profit/Sales 7.52% 6.64% 10.19% 18.00% 20.06% 22.22% 18.43% 23.17% 27.96% 29.39% 32.18% 32.03%

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 $7,005 $7,922 $7,814 $9,218 $9,607 $10,204 $11,121 $16,344 $17,121 $14,652 $14,700 $15,552

Cash from Receivables $0 $5,604 $11,241 $11,797 $12,844 $14,138 $14,888 $16,040 $20,860 $25,138 $23,706 $22,016

Subtotal Cash from Operations $7,005 $13,526 $19,055 $21,014 $22,451 $24,342 $26,009 $32,384 $37,981 $39,790 $38,406 $37,568

Additional Cash Received

39
Sales Tax, VAT, HST/GST
0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Received

New Current Borrowing $0 $4,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Other Liabilities (interest-


$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
free)

New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received $7,005 $17,526 $19,055 $21,014 $22,451 $24,342 $26,009 $32,384 $37,981 $39,790 $38,406 $37,568

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations

Cash Spending $4,321 $4,707 $4,321 $4,321 $4,321 $4,321 $5,089 $5,295 $5,089 $4,719 $4,770 $4,770

Bill Payments $477 $14,309 $13,919 $13,277 $15,006 $14,951 $15,891 $18,185 $27,728 $25,842 $20,173 $20,204

Subtotal Spent on Operations $4,798 $19,016 $18,240 $17,598 $19,327 $19,272 $20,980 $23,480 $32,817 $30,561 $24,943 $24,974

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid


$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Out

Principal Repayment of Current


$0 $0 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350
Borrowing

Other Liabilities Principal


$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment

40
Long-term Liabilities Principal
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment

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

Subtotal Cash Spent $4,798 $19,016 $18,590 $17,948 $19,677 $19,622 $21,330 $23,830 $33,167 $30,911 $25,293 $25,324

Net Cash Flow $2,206 ($1,490) $465 $3,066 $2,773 $4,720 $4,679 $8,554 $4,814 $8,879 $13,113 $12,245

Cash Balance $4,506 $3,016 $3,481 $6,547 $9,321 $14,041 $18,719 $27,273 $32,087 $40,966 $54,079 $66,323

Pro Forma Balance Sheet

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
Assets
Balances

Current Assets

Cash $2,300 $4,506 $3,016 $3,481 $6,547 $9,321 $14,041 $18,719 $27,273 $32,087 $40,966 $54,079 $66,323

Accounts Receivable $0 $10,507 $16,786 $17,266 $19,296 $20,863 $22,031 $23,825 $32,301 $37,122 $33,963 $32,306 $33,618

Inventory $0 $2,448 $2,609 $2,602 $3,037 $3,079 $3,383 $3,647 $5,337 $5,628 $4,655 $4,643 $4,991

Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Current Assets $2,300 $17,462 $22,411 $23,350 $28,880 $33,262 $39,454 $46,191 $64,911 $74,837 $79,584 $91,028 $104,933

41
Long-term Assets

Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Assets $2,300 $17,462 $22,411 $23,350 $28,880 $33,262 $39,454 $46,191 $64,911 $74,837 $79,584 $91,028 $104,933

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities

Accounts Payable $0 $13,844 $13,478 $12,777 $14,509 $14,423 $15,296 $17,259 $26,860 $25,169 $19,502 $19,470 $21,270

Current Borrowing $2,000 $2,000 $6,000 $5,650 $5,300 $4,950 $4,600 $4,250 $3,900 $3,550 $3,200 $2,850 $2,500

Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Current Liabilities $2,000 $15,844 $19,478 $18,427 $19,809 $19,373 $19,896 $21,509 $30,760 $28,719 $22,702 $22,320 $23,770

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Liabilities $2,000 $15,844 $19,478 $18,427 $19,809 $19,373 $19,896 $21,509 $30,760 $28,719 $22,702 $22,320 $23,770

Paid-in Capital $3,665 $3,665 $3,665 $3,665 $3,665 $3,665 $3,665 $3,665 $3,665 $3,665 $3,665 $3,665 $3,665

Retained Earnings ($3,365) ($3,365) ($3,365) ($3,365) ($3,365) ($3,365) ($3,365) ($3,365) ($3,365) ($3,365) ($3,365) ($3,365) ($3,365)

Earnings $0 $1,318 $2,633 $4,623 $8,771 $13,589 $19,258 $24,381 $33,851 $45,817 $56,582 $68,408 $80,862

Total Capital $300 $1,618 $2,933 $4,923 $9,071 $13,889 $19,558 $24,681 $34,151 $46,117 $56,882 $68,708 $81,162

Total Liabilities and Capital $2,300 $17,462 $22,411 $23,350 $28,880 $33,262 $39,454 $46,191 $64,911 $74,837 $79,584 $91,028 $104,933

42
Net Worth $300 $1,618 $2,933 $4,923 $9,071 $13,889 $19,558 $24,681 $34,151 $46,117 $56,882 $68,708 $81,162

43
44