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Table of Contents
Page
Table of Contents
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Fradoo.com
Introduction
Fradoo.com, Inc. (Fradoo.com) creates specialized customer Poster & Photo Print Home
Delivery products, its strength being specialized in Marketing and Online interface with
integrated Supply Chain components. This interface is for business-to-business Poster and
Photo Prints, as well as business-to-client Poster & Photo Print. The core products are Posters a
business might send to its customers or a household orders directly.
The focus of this business plan is to put forth objectives to introduce a unique product to the
Middle East market, solve the present initial Start-up and midterm operations funds
requirement, to increase profits and be profitable from the second year, and reach break-even
level by the end of the first year. We intend to accomplish this by focusing on Marketing,
creating a cult for quality and conformance, capitalizing our popular products for the large retail
chains, and to concentrate on our designated target markets with news product offering.
The Company
Fradoo.com's mission is to provide specialized customer Poster & Photo Print Home Delivery
products via the internet Web Interface. These products are either not available at the retail
level, and are too expensive if obtained from normal commercial printers for on demand
customized Poster printing.
Fradoo.com, through a series of Market Research and Market Intelligence, has gained Market
insight with the know-how that is needed to consistently achieve profitable response rates
through Online ordering trends in the UAE and Middle East. Adequate initial working capital will
boost the company's position to resort the commercial printing activity, capitalizing on
economies of scale, and introducing a Product that further will introduce Online digitally
integrated products for existing Customer base.
Fradoo.com is Web-based Product that has a status of FZ-LLC corporation that will be fully
owned by two companies and one Financial Investor, Mr. Osman, Mr. Husam, and Angel
Investor. Mr. Osman comes from a Project Management and Supply Chain background. The
knowledge, experience, and contacts accumulated during that period have led to increased
knowhow and contribute positively to modus operandi of Fradoo.com. Online Commercial
products and ad specialties will take an increasing percentage of Fradoo.com's sales.
At the present time, Fradoo.com's facilities will all be located in Dubai Internet City, Dubai. The
plans are in place to move the entire operation to International Media Production Zone in
November, 2009, at the end of the present lease. There will be less than ten employees of
Fradoo.com. The growth of the company will be determined by how accurately and efficiently
the company is able to implement the facets of this business plan.
The Products
A general description of Fradoo.com's core products would be client Poster & Photo Print Prints.
Prints which, for example, an Agent might send to someone who had recently come into the
showroom and expressed an interest in his make of A Poster or Paintings. Fradoo.com could
personalize the Prints with the Agent logo and could print any special message the Agent
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Fradoo.com
wanted. A normal commercial printer cannot compete in this type of work for individual
requirements but the Web Interface would allow the Agent to customize the product and give to
productions all from a Singe Web Interface the Fradoo.com. A detailed presentation and a
Project of the Web interface is Attached to this Business Pan.
Some of the products Fradoo.com offers are: Album-Prints, Ad-Prints, Presentation and custom
pocket folders, and promotional products such as Calendars, Ad Flyers, Magnets, etc.
The Market
There is a huge market in the Middle East for customer Poster & Photo Print products, with
plenty of profitable business to be had. Nearly 600,000 businesses and 16,000,000 households
have been identified as attractive in addition to those market sectors to which Fradoo.com has
directed its attention (Central Asia, South Asia, and Europe). Capturing market share at a profit
is definitely achievable.
The company will focus on a number of key industries and markets that will have a high level of
consumption of our products. These include marketing companies, ad companies, servicing
companies, travel agents and households. The use of specialty online catalogues oriented
strictly for these industries will be the tool to create greater market share.
Revenues are projected to increase by almost 19% over the next three years. We expect net
profits to increase by year three. Such a large increase in profits is projected because we will be
increasing our marketing and advertising costs significant and introducing new products to
existing customers. (Please view highlights and financial appendix for details).
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Fradoo.com
Highlights
$50,000,000
$45,000,000
$40,000,000
$35,000,000
Sales
$30,000,000
Gross Margin
$25,000,000
Net Profit
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
1.1 Objectives
There are four major objectives to this business plan, of which three are immediate and the
fourth is of a longer-term nature:
1. Solve the present working capital shortage. This will allow some flex space to pursue the
more permanent marketing solution expressed in the fourth objective mentioned below.
Fradoo.com should immediately introduce the product to the market to be the first and to
penetrate the market and capture significant market share to muscles potential new
entrants.
2. Optimize the Fradoo.com website. This will result in more sales; and, with adjustments, the
Internet site will increase exposure and will result in even greater sales. Two meetings have
already been held with a Web designer and Consultants. They are convinced that they can
completely overhaul Fradoo.com's registration with the major search engines, as well as the
Google, and Facebook which will result in visitors to Fradoo.com's website in large numbers.
4. To replace Fradoo.com's Pull approach to online order selling of Prints to more of a Push and
Aggressive Marketing and Promotion method aimed at one or two targeted industries. Key
words: Market Segmentation and Penetration. This objective must be executed carefully
after adequate market research, careful design of the marketing strategy, using the
traditional skills of online direct ordering while considering new technology and trends, such
as order from Mobile Phone or sent to from Social Networks. Results are not expected to
appear until the second years of this plan.
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1.2 Mission
Fradoo.com's mission is to provide specialized customer Poster & Photo Print Home Delivery
products through the Internet Web Interface. These products are either not available at the
retail level, or are too expensive if obtained from normal commercial printers.
There are five generally accepted keys to success in the Internet Web Interface order industry:
There is a huge market in the Middle East for customer Poster & Photo Print products, with
plenty of profitable business to be had. Nearly 600,000 businesses have been identified as
attractive in addition to those market sectors to which Fradoo.com has directed its attention.
Capturing market share at a profit is definitely achievable if the above five steps are skillfully
executed.
Fradoo.com, through a series of Market Research and Market Intelligence, has gained Market
insight with the know-how that is needed to consistently achieve profitable response rates
through Internet Web Interface order. Inadequate initial working capital has hamstrung the
company's acquisition of these skills by forcing the owner to resort to commercial printing
activity. These setbacks are the cause for this business plan, and will be remedied according to
Fradoo.com's reconfigured market and sales approach.
Fradoo.com is a FZ-LLC corporation that is fully owned by two, Mr. Osman and Mr. Husam. Mr.
Osman comes from a Project Management and Supply Chain background. The knowledge,
experience, and contacts accumulated during that period have led to increased knowhow and
contribute positively to modus operandi of Fradoo.com. Online Commercial products and ad
specialties will take an increasing percentage of Fradoo.com's sales.
Our start-up costs come to $195,500, which is mostly stationery, legal costs, and expenses
associated with opening our office and operation. The start-up costs are to be financed by direct
owner investment. The assumptions are shown in Table 1 and Illustration 2.
Table: Start-up
Start-up
Requirements
Start-up Expenses
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Fradoo.com
Legal $25,000
Stationery etc. $10,000
Insurance $5,000
Rent $50,000
Digital $40,000
Other $35,000
Website $30,000
Total Start-up Expenses $195,000
Start-up Assets
Cash Required $3,000,000
Other Current Assets $0
Long-term Assets $0
Total Assets $3,000,000
Start-up
$2,800,000
$2,400,000
$2,000,000
$1,600,000
$1,200,000
$800,000
$400,000
$0
Expenses Assets Investment Loans
At the present time, Fradoo.com's facilities will all be located in Dubai Internet City, Dubai. The
plans are in place to move the entire operation to International Media Production Zone in
November, 2009, at the end of the present lease. There will be less than ten employees of
Fradoo.com. The growth of the company will be determined by how accurately and efficiently
the company is able to implement the facets of this business plan. This planned move is
expected to bring the operation close to the production.
The following subtopics discuss Fradoo.com's products, how these products are produced, and
an overview of competitor's products.
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A general description of Fradoo.com's core products would be client Poster & Photo Print Prints.
Prints which, for example, an Agent might send to someone who had recently come into the
showroom and expressed an interest in his make of A Poster or Paintings. Fradoo.com could
personalize the Prints with the Agent logo and could print any special message the Agent
wanted. A normal commercial printer cannot compete in this type of work for individual
requirements but the Web Interface would allow the Agent to customize the product and give to
productions all from a Singe Web Interface the Fradoo.com. A detailed presentation and a
Project of the Web interface is Attached to this Business Pan.
The company maintains a large stock of Ready materials for Prints which can fairly easily be
allocated from the inventory, have a special logo overprinted on them, and sent off in the
Internet Web Interface. A normal commercial printer cannot compete in this type of work that
would need to go through several steps to interact with customers and to understand their
requirements.
Poster-Prints®. This makes it possible for a business and for households to personalize a
generic "Picture" digitally by providing special size and design category to sent to its
customer or for own use can print their customized digital photos into specially designed big
size posters.
Album-Prints®. This makes it possible for a business to personalize a generic or a
household by providing special book which a business can send to its customers, or a
household can print their digital photos and keep in hard copy as Photo Albums.
Ad-Prints®. These are especially targeted Prints that form marketing and ad products.
Presentation and custom pocket folders, calendars, marketing flyers, customized promotion
tags, etc.
Another category of products encompasses ad specialty and promotional products
(magnets, maps, brochures, etc.). Fradoo.com will be a member of Google Ads, Social
media networks Ads, and Image Databases (istock.com). An initiative to reach thousands to
attract to use when they should use our services. These initiatives are depict and described
on networks where it is possible to search through thousands of items using key words, and
then choose items especially suited to a particular posters that they can activate in sent to
Fradoo.com for your personalized Poster Print. These products will be an addition to the
Fradoo.com line and have not yet been fully marketed.
For a competitive comparison of Fradoo.com's core product, the Poster-Prints® and Album-
Prints®, the following options are considered:
1. Retail Outlets: Here, only a very limited number of generic Prints are available, and these
are without customization and big scale prints. The design is uninspired and the size is
slightly smaller than Fradoo.com's Poster-Prints®. Fradoo.com sells via Internet Web
Interface order which includes a wider choice of messages and customer retention, and
offers the addition of a personalized logo and notes. Again special optional colors, special
logos and custom messaging are available from Fradoo.com that can't be offered at the
retail level. Pricing strategy and Fradoo.com intend to keep slightly below the retail in order
to attract more customers.
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attached to the Business as appendix) and slightly higher than penetration price of
Fradoo.com in the UAE and Middle East market.
3. Do-it-yourself Desk Top Publishing Programs: This method is often tried, but is not
very competitive. Ink jet printers can only handle certain paper stock, folding by hand
leaves an unattractive result, and it is usually more expensive if one factors in the high cost
of ink cartridges. And sizes are limited to A4.
4. Other Competitors: Some publishing which target a specialized industry Brochures and
calendars offer Prints similar to the Executive and exclusive Prints that Fradoo.com will
produces. Competition from this sector is very powerful due to their economies of scale but
difficult due to their switching cost from big orders to customized and special orders.
Our Web Interface is based around a combination of Supply Chain components that connects
Printing house, Express Company and Payment Stream designed and configured by the
Owners. It is designed to operate in conjunction with 6 stations in GCC and 10 Stations in the
Middle East to provide Middle East wide access. Inclusive of the design is the ability to operate
at extremely low cost. In addition to the base functionality, Fradoo.com intends to cost
effectively add additional logic to support the following features:
3.4 Fulfillment
Sourcing is not a major concern for Fradoo.com. The Prints are manufactured using only ink,
paper stock, and envelopes--all of which are available from a number of paper suppliers.
Fradoo.com has a close relationship with major suppliers. Who provides special payment terms
which permit Fradoo.com partner to purchase in large quantity to take advantage of attractive
pricing while allowing payment term to begin only when shipments are delivered.
Ad specialty and promotional items are outsourced to suppliers’ networks. If one manufacturer
can't make a delivery, Fradoo.com can choose another from the list of approved suppliers.
3.5 Technology
Technology has had a great effect on this business over the past couple decades; moreover, a
new trend in the business is specialized services opt to more usage of digital interactions and
cloud environments, such as Facebook, Myspace, and other Social Networks. Companies with
large customer bases can upload addresses and names over the Internet and have host of
customer Poster & Photo Prints out-sourced. A company, such as a furniture retailer, could
arrange to have a Poster or brochure automatically sent to every buyer on the first anniversary
of the purchase or sent Postcards on buyers’ birthdays.
Technological advances in Internet Web Interface are also attracting the attention of companies
and households who depends on direct interactions with print retails and post offices.
Fradoo.com specializes on skillful Internet Web Interface and design with an exciting website
with new technological advancements that will easier the customizations and cloud process.
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Fradoo.com
The main product which Fradoo.com encompasses is the specially designed to cater to the
needs of a targeted market and industry. This market segmentation approach is necessary to
secure a stable market share of business and household Poster & Photo Print products against
invasion by new entrants.
The overall market for customer Poster & Photo Print products is immense. This business plan
has identified over 12 million businesses and households that have a potential need to maintain
and/or generate prints. In reality, all businesses and households are in need of a product that
will enable them to maintain positive memory easy and fast accessible. Fradoo.com has the
products necessary for this to happen; whether it is a doctor's office sending reminders to their
patients, or a software company sending holiday Prints to its clientele, a student to access his
Photo album in hard copy, or via the internet, it is imperative for all types of businesses and
households to remain on a personal level with their clients and likes.
Many industries will be heavily marketed by Fradoo.com. Some industry sectors, such as
insurance companies, and Doctors/Dentists, are targeted with extensive well-established
catalogs, making entry by others difficult. The following industry sectors listed under the table
heading "Attractive Possibilities" are likely to offer the best opportunity for new territory and
market segmentation:
Market Analysis
2009 2010 2011 2012 2013
Potential Customers Growth CAGR
Business Users 10% 5,000 5,500 6,050 6,655 7,321 10.00%
Private Users 35% 800,000 1,080,000 1,458,000 1,968,300 2,657,205 35.00%
Organizations 10% 1,500 1,650 1,815 1,997 2,197 10.01%
Retailers 20% 250 300 360 432 518 19.98%
Total 34.84% 806,750 1,087,450 1,466,225 1,977,384 2,667,241 34.84%
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Fradoo.com
Business Users
Private Users
Organizations
Retailers
The largest category is the "Private Users" category which consists of over eight hundred
thousand. These users are very lucrative too reach, moreover, they are all likely to patronize
land advocate Fradoo.com because of the pricing systems and value added services and the
product itself. The customer Poster & Photo Print products presently are not known of these
users and limited to their unique selling proposition that will catch them by surprise.
The specialized market sectors such as banks, insurance companies, and travel agents have all
received marketing attention. Some of these sectors (insurance agencies, dentists, etc.) have
been the targets of market of Print and Promotions on the part of comprehensive catalogs that
try to present themselves as the "super store" to that industry but accessibility and
convenience it not as with Fradoo.com.
Needs have changed significantly in recent years. With the era of digital service, it is even more
important now for a client to receive hard copy memories of appreciation. One can never
underestimate the value of a Thank You note. People want to feel like their patronage is
important to a business and to their memories; they want to know and feel that there are back-
ups of the digital photos. This is why Fradoo.com is essential to all companies and households.
Fradoo.com provides businesses and households with a means to show their appreciation to
their customers and their memories. There is something about receiving a Thank You note or
reminder about a check-up in the Internet Web Interface. It is real, it is tangible, and it cannot
be deleted. Fradoo.com creates notes that are heartfelt, elegant, and to-the-point. These notes
and prints are a sincere way to extend customer service to the human level and to households
good times memories.
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Fradoo.com
Traditionally, Fradoo.com will sent Internet Web Interface invitations to various market sectors.
Those receiving the Internet Web Interface invitation offer decide they need the product, and
will fill out the form and try an order. Market trends have moved in the following direction:
1. With the increase in the level of "digital" it has become increasing difficult to get easy
accessible Internet Web Interface services that can print and store digital albums.
2. Individual Printing costs have increased.
3. Competition from market segmentation has decreased. Now we see the advent of
companies segmenting the market by concentrating on one specialized industry. When that
happens, direct Internet Web Interface access with broad offerings of a more -specialized
nature are put at an advantage.
4. Overall competition has decreased.
5. A growth in the use of the Internet to search for services. With the increase of potential
customers resorting to the Internet for their customer Poster & Photo Prints products,
Fradoo.com has gained a one in a life time opportunity with an efficient website.
The market for customer base development products is expected to grow. Decreased or none
existing competition will fuel this growth. With the revolution in technology, the effect of a
customer receiving a Thank You note in the Internet Web Interface is still an elegant way to say
your patronage is appreciated. Customer loyalty is built this way, and no suitable alternatives
are in sight.
In industries where the product purchased is very similar to products offered by the
competition, businesses have long recognized the importance of finding economic tools to win
and maintain customers. Where a business cannot offer a price savings or some other clearly
recognized advantage, customer Poster & Photo Print products have proven useful. Below is a
list of situations in which a doctor or a dentist might use a customer Poster & Photo Print
product:
Patient Acquisition: To attract a new resident to the practice. From a list of new residents
to the town.
Welcome Patients: Make a good first-visit impression by sending a warm welcome card.
Promotional gifts: Keep patients coming back by sending them home with reminders of
the practice (calendars, magnets, etc.).
Recall Card: After six months, send a recall card.
Reminder Notices: To avoid missed appointments.
Thanks for Referral: A simple gesture that goes a long way.
Reactivate: Be able to know when a customer stops coming and inform them that they are
missed.
As simple as it may be, this method of Poster & Photo Print has an important effect on the
bottom line: People want to give their business to those who appreciate it. Skillful use of these
products will bring in business equal to a thousand times their cost.
Traditionally, these business Poster & Photo Print products will be been offered via direct
Internet Web Interface. Fradoo.com will be offering these products to a broad spectrum of
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Fradoo.com
businesses and households for years to come. The products of these companies will have
relatively generic. That is to say that the Prints have a simple message like "Thank You" which
can be used by a long list of businesses. Messages in the Prints to hold a card will help to
personalize it and adding a company logo will personalize it further. The degree of success
enjoyed by companies selling these products is closely related to their skill at direct Internet
Web Interface that allows freedom to access anytime anywhere. Choosing lists carefully,
running purges to eliminate doubles, carefully designing the marketing letter (as well as the
envelope), including coupons, samples, design of the order form, etc. are all important factors.
Companies that sell these generic products (with some customizing) over a broad spectrum of
industries are probably viewed alike by those on the receiving end of the direct Internet Web
Interface; according to Fradoo.com market research, they often get bored with the process of
customizing through a representative.
Another method of selling customer-base management/client Poster & Photo Print products is a
method used by the specialty catalogues. Instead of taking a shotgun approach (i.e. mass
Internet Web Interface to many industries), they concentrate on one industry. They put
together a comprehensive catalog of all products that the industry might need. The catalog will
include marketing tools, such as printed brochures. Their offering of client Poster & Photo Print
post Prints will have a marketing theme, as will their letterhead, and presentation folders.
Fradoo.com will be viewed as being the push cart with variety of products; and it would be very
difficult for any competitor to gain entry once a "supermarket" had been established to serve a
broad range of industry's special needs. Therefore, Fradoo.com will focus its attention on more
profitable market segments.
The market has expressed the need to have more control in the transportation of their cargo
through better information. This has manifested itself in the form of greater visibility and timely
event notice so the appropriate corrective or scheduled actions can be implemented, to ensure
an efficient supply chain. The areas that have been identified as lacking are:
The need for accurate and timely visibility information instead of the existing event-based
historical data.
The requirement for improvement in the quality of data received through the current
manual entry system.
Confidence in the source of the information.
The ability to apply a single visibility solution across all service providers involved in the
end-to-end transport without expensive integration or outsourcing.
The ability to receive visibility data in a consistent format across multiple service providers.
Timely notification of a security breach to allow immediate inspection and the necessary
corrective action.
Today's systems do not instill a confidence because the customer is reliant on his own
resources. Providing home delivery services, based on events designated by the service
provider, will meet requirements. The customer is empowered with control of the products at
their door step, which increases the value of the content.
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Print agencies and Print offices have been targeted as competitors. Preliminary conversations
with market research agencies, as well as selected end users and retailers have been
encouraging and have resulted in request for prototypes to perform field testing.
The competition for this market is unaware because of customer loyalty. Once a business
decides to go with a certain card company, it is extremely demanding for quality and value
added services. Therefore, Fradoo.com will maintains its effort to gain its clientele and keep
them updated and introduce news services with technological advancements making
competition difficult to enter.
Fradoo.com's main competitor is PosterJack; this is because their products are virtually
identical. Their approach is broad spectrum (as it is with Fradoo.com's). This is a healthy
competition, with equal spoils going to both competitors. Fradoo.com will take an edge over
their competitor because of the ability of the company to do its own printing. PosterJack cannot
make this claim due to their reach to the Middle East. This enables Fradoo.com to promise--and
deliver--quick shipments of accurate orders. There is one less step for Fradoo.com to go
through when processing an order. As a result, there will be fewer mistakes and more
responsible customer service.
The Fradoo.com website will be the virtual business portfolio for the company, as well as its
online "Cloud." The website needs to be a simple, yet elegant and well designed, website that
stays current with the latest trends and provides information to the customers and a portal to
our programs and products. A site that is flashy, and introduces the latest Flash technology will
be decisive, and create potential clients to look as trendsetter for our products and information.
We will maintain a two-way link between our website and our product suppliers. In addition to
using the page as a sole tool, we will develop a monthly newsletter and a links page for Blogs
and share your Photos.
We will also maintain two-way links between large Social networks and supporters.
The Fradoo.com website will be initially developed with few technical resources. A Dedicated
Virtual Private Network hosting provider, Zymondi.com, will host the site and provide the
technical back end.
Fradoo.com will work with a number of users graphic and interface designer to develop the
simple, elegant, yet efficient Internet focused site. This group will design all website graphics
and layout.
The maintenance of the site will be done by selective technicians of Web Development Services.
As the website rolls out future development such as newsletters and other related blogs, a
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technical resource need to be contracted to build the tractable download and the newsletter
capabilities.
The primary focus for Fradoo.com's marketing strategy must be to increase sales and
profitability in its core business (Posters and Albums) quickly without resorting to the expense
of flyers that have not been introduced to the market. This can be achieved by gaining entry
into the large Search Engine Optimization, and to take the necessary steps to make
Fradoo.com's website a useful sales generating tool.
The SWOT analysis provides us with an opportunity to examine the internal strengths and
weaknesses Fradoo.com must address. It also allows us to examine the opportunities presented
to Fradoo.com as well as potential threats.
Fradoo.com has a valuable inventory of strengths that will help it succeed. These strengths
include: a knowledgeable and friendly staff, state-of-the-art digital software, and a clear vision
of the market need. Strengths are valuable, but it is also important to realize the weaknesses
Fradoo.com must address. These weaknesses include: a dependence on quickly changing
technology, and the cost factor associated with keeping state-of-the art digital software.
6.1.1 Strengths
1. Knowledgeable and friendly staff. We've gone to great lengths at Fradoo.com to find
people with a passion for teaching and sharing their Internet experiences. Our staff is both
knowledgeable and eager to please.
2. State-of-the art equipment. Part of the Fradoo.com experience includes access to state-
of-the-art digital equipment. Our customers will enjoy beautiful Prints, fast deliveries, and
high-quality prints.
3. Up-scale ambiance. When enter into Fradoo.com, you'll feel the technology. High backed
with a cozy hideaway for customization and share friendly gatherings. Large displays
viewable in full screen provide a forum for larger customization and friendly "how-to"
modifications on the Internet. Aluminum follow color schemes and art from local artists will
set the mood. Last, but not least, quality background selective music provides appealing
good moods to stay in the website for longer time.
4. Clear vision of the market need. Fradoo.com knows what it takes to build an upscale
Web interface. We know the customers, we know the technology, and we know how to build
the service that will bring the two together.
6.1.2 Weaknesses
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rapidly. Product lifecycles are measured in weeks, not months. Fradoo.com needs to keep
up with the technology because a lot of the Fradoo.com experience is technology.
2. Cost factor associated with keeping state-of-the-art software. Keeping up with the
technology of the Internet is an expensive undertaking. Fradoo.com needs to balance
technology needs with the other needs of the business. One aspect of the business can't be
sacrificed for the other.
6.1.3 Opportunities
1. Growing population of daily Internet users. The importance of the Internet almost
equals that of the telephone. As the population of daily Internet users increases, so will the
need for the services Fradoo.com offers.
2. Social bonds fostered by the new Internet communities. The Internet is bringing
people from across the world together unlike any other medium. Fradoo.com will capitalize
on this social trend by providing a place for Internet communities to customize digital print
house in person. Fradoo.com will grow some of these communities on its own by
establishing blogs and community programs such as share my album. These programs will
be designed to build customer loyalty.
6.1.4 Threats
1. Rapidly falling cost of Print Paper. The cost of access to the Print Papers home users is
dropping rapidly. Print Papers may become so cheap and affordable that nobody will be
willing to pay for having it printed at retails. Fradoo.com is aware of this threat and will
closely monitor pricing and value added services that cannot be gained with home and own
use only.
2. Emerging local competitors. Currently, Fradoo.com will enjoy a first-mover advantage in
the local market. However, additional competitors will be on the horizon, and we need to be
prepared for their entry into the market. Many of our programs will be designed to build
customer loyalty, and it is our strength that our quality service and marketing strategy
won't be easily duplicated.
Fradoo.com will embark on an aggressive sales and marketing strategy to achieve quick market
penetration and brand recognition. The sales and marketing campaign will be a combination of
direct sales and mass marketing depending on the particular market.
Due to the large volume and geographic scope of the Print market, we will engage in a mass
marketing and advertising campaign to develop brand recognition and market penetration.
This product and service can be communicated effectively in direct Internet Web Interface and
print ads to reach the broadest market possible.
Since there will be familiarity with the technology and concept, direct Internet Web Interface
utilizing a targeted industry database from Bernekon will be a cost effective means of
introducing Fradoo.com to the market. Bernekon is a direct marketer databases listing
2,500,000 UAE users including detail on their industry sector and annual income. Such
databases provide for a more focused marketing campaign as well as promotions to targeted
customer groups.
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Fradoo.com
Print media advertising will be employed sparingly in industry publications like Google, Yahoo,
Facebook, and MySpace for the UAE market and Local social Networks and News Forums for the
Middle East market to reach those not listed outside UAE.
Press releases targeted to specific sectors of the industry will be utilized to announce recent
developments in technology and customer acquisition as a cost effective means of exposure to
the target market.
Direct sales will be used for the largest UAE retailers and services through a personal network
of contacts developed by Mr. Osman and Mr. Husam developed over a five year career in
Internet and Service industry.
Our marketing campaign will include utilizing search engine optimization techniques to increase
our visibility on the Internet and drive traffic to us. Our current website will be promotional
description of our services and will encourage potential customers to use the Web interface.
Industry trade shows draw large numbers of qualified customers that are seeking the latest
technological advances to improve their supply chain or reduce transportation cost. We will
target six to eight trade shows annually to increase brand awareness and solicit direct sales.
The first strategic move for Fradoo.com must be to improve brand awareness. An amount of
significance will set aside for this purpose. A contract will be signed by the end of November,
2009, with completion due by the end of December in that same year to mass advertise the
product. The Fradoo.com site will have a shopping cart capability to allow on-line secured credit
card transactions.
It is essential that care be taken to cause the most important search engines to find
Fradoo.com's website using a variety of key words. Multiple hosting is likely to be necessary to
accomplish this. Similar skill needs to be undertaken to bring many more visitors to
Fradoo.com's site from the internet.
While the above work is being done, Fradoo.com must immediately take steps to enter the
retail market with several of Fradoo.com's most popular Album-Prints® products. There are
more than five million potentials the Middle East. These five million potentials are in addition to
the industries that are normally targeted by Fradoo.com and its competitors. An initial brief
investigation of the retail shelves at large discounters indicates that this level of retail is
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Fradoo.com
appropriate for these limited products. To dedicate the proper time and effort to this launch,
consultant who will research the appropriate outlets and put together prototypes of attractively
packaged Prints, working in conjunction with Fradoo.com's in-house marketers. The consultant
will need a full month to handle the project and get the finished packets in front of the right
people. Sales are expected to begin in April. This is not overly ambitious considering the size of
the potential market. Unattractive Prints, without personal notes, are presently on the market.
Since Fradoo.com can print its own Prints, this gives Fradoo.com an advantage over the
competition. The important thing to remember in this market strategy is that the first one to
devote the time and effort to the market is likely to shut out the competition. Another
important aspect of this launch is the enduring effect of extensive sales. The brand name,
Poster-Prints® and Album-Prints®, will gain greater exposure, and Fradoo.com can insert a
small leaflet that informs the buyer of other available products. Here, Fradoo.com can list in a
brief, attractive way the customized options that are available, and give phone numbers and
refer to the website. The advantages of this manner of reaching the interested are many:
Every leaflet will get seen by a buyer who has just bought our generic product. This is
exactly the person Fradoo.com wants to speak with when offering the various personalized
custom products.
There are no Internet Web Interfacing costs, address label costs, etc., to get that leaflet
out.
The greater the volume of packets sold, the greater the distribution of the individual Prints
in those packets. Fradoo.com has its name and logo on the back of each one. This means
increased likelihood of new leads in the form of visitors to Fradoo.com's website.
The above advantages far out-weigh any fears that the retailer may eventually squeeze
Fradoo.com on price. Fradoo.com leads generated from them will be substantial.
A longer-term market strategy will require some extensive research to locate at least one
business Poster & Photo Print market sector that is at present:
After locating the ideal market sector the task then becomes to design and structure specialized
business Poster & Photo Print solutions, specialized printing needs, and ad specialties targeted
to this market sector(s) in such a concentrated and thorough way that business Poster & Photo
Print products will have a chance to compete.
For businesspeople who want to be sure their digital systems are always working reliably,
Profiman is a vendor and trusted strategic ally who make sure their systems work, their people
are trained, and their down time is minimal. Profiman knows the customer and goes to his or
her site when needed, and offers proactive support, service, training, and installation.
Pricing strategy does not appear to be a major consideration. Management, who determine
prices, will listen to the opinions of the market researchers who are more likely to know when
Fradoo.com is at a disadvantage in respect to the competition and consumers buying behaviors.
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Fradoo.com
We will mix channels of advertising as our main way to reach new buyers. As we change
strategies, however, we need to change the way we promote ourselves:
1. Advertising--We'll be developing our core positioning message: "24 Hour Online Service -
365 Days a Year with No Extra Charges" to differentiate our service from the competition. We
will be using direct marketing, Online media, newspaper advertising, radio, and cable TV to
launch the initial campaign.
2. Sales Brochure--Our Direct Marketers will sell key clients, and visiting the servicing
industry for direct marketing.
3. Direct Internet Web Interface--We will continuously improve our direct Internet Web
Interface efforts, reaching our established customers with how to use training, support services,
upgrades, and blogs.
4. Media--It's time to work more closely with the local media. We could offer the local radio a
regular talk show on Prints and share experience on Travel and sightseeing, as one example.
Apart from distributing Fradoo.com's products (only a few popular generic Album-Prints®) in
the retail market, other new channels will be considered on an on-going basis. Fradoo.com
could, get a brochure together for distribution to ad specialty agents. There is significant
number of these agents in the Middle East.
In performing the research to locate an ideal market sector, ripe for market segmentation
specialization, Fradoo.com will keep an eye peeled for publications that already cater to
specialized markets. This will help the company know what is attractive to customers.
2. Immediate action to market several Album-Prints® for the retail market. Concept,
packaging, researching outlets, etc. Budget for consultant: $45,000. Time for completion:
six weeks.
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Fradoo.com
Fradoo.com has a direct marketing department that operates satisfactorily. Each member is
adept at making sales. Once this plan's market programs are installed, closing sales deals over
the internet will be much more efficient, and there will be many orders to come through the
website.
To simplify sales projections, we will project only three items: The core business in the form of
Internet Web Interface-order Poster-Prints®, Ad-Prints®, and Album-Prints®; and
Commercial Printing.
Poster, Ad, and Album-Prints®: These core businesses, generated by telemarketers and
Internet Web Interface-order has various price levels beginning. The price per card varies
widely on sizes (Details please view the Financial appendix).
Beginning in April, 2009 positive results should appear from the website, the improvements
made SEO, and from leads for custom Prints generated by the retail sales. It is not easy to
predict how many inquiries for custom Prints will be generated by the purchase. However, all of
these buyers will be purchasers of the product. It seems reasonable that a much larger
percentage will result in a custom Print order (for Details please view the Table Sales Forecast).
Sales Forecast
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Unit Sales
Posters 534,601 427,681 500,000 575,000 650,000
Digital Prints 384,920 149,693 225,000 300,000 400,000
New Added Products 256,616 106,924 125,000 150,000 185,000
Total Unit Sales 1,176,137 684,298 850,000 1,025,000 1,235,000
Sales
Posters $18,711,035 $14,968,835 $17,500,000 $20,125,000 $22,750,000
Digital Prints $17,321,400 $6,736,185 $10,125,000 $13,500,000 $18,000,000
New Added Products $14,113,880 $5,880,820 $6,875,000 $8,250,000 $10,175,000
Total Sales $50,146,315 $27,585,840 $34,500,000 $41,875,000 $50,925,000
Page 18
Oct Nov Dec
Fradoo.com
Sales Monthly
$7,000,000
$6,000,000
$5,000,000
Posters
$4,000,000
Digital Prints
$2,000,000
$1,000,000
$0
Sales by Year
$50,000,000
$45,000,000
$40,000,000
$35,000,000 Posters
$30,000,000
Digital Prints
$25,000,000
New Added Products
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
1. Direct Internet Web Interface: Sales and Promotions to selected customers with Market
research and end user acceptance programs will be employed by Market research companies to
predict and enhance brand awareness and marketing.
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Fradoo.com
2. Online Seminars: Customers wanting to become advance users (retails) Fradoo.com will
provide seminars Online Seminars and Workshops to familiarize with the Web interface and
create super users for advocacy of the products.
Comprehensive research of competition within this market identifies the existing segmentation
of the services available today. In each case, Fradoo.com offers a unique solution to address
the needs that are not fulfilled by our competitors.
We differentiate ourselves by providing households, business, and agencies with a tool that is
new and easy to adopt.
6.8 Milestones
The following 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.
Table: Milestones
Milestones
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Fradoo.com
Milestones
PR & Advertising 1
PR 1
Marketing Campaign 3
Sales Promotion 2
Marketing Campaign 2
Marketing Campaign 1
Nov Dec Jan `10 Feb Mar Apr May Jun Jul
The management of Fradoo.com is a direct Internet Web Interface background. The specialized
expertise acquired to consistently conduct mass market research and predict the results needed
to be built a sound marketing program planned for October 30, 2009 will make the product
viable in the market.
The organization is structured into two groups with sales/marketing, finance, and distribution
being located in the Dubai Internet City office and development, operation, and production
being located in the International Publication Free Zone office.
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Fradoo.com
Osman Tari
Mr. Tari is a seasoned professional with over 15 years of experience in management,
operations, application and product development in Marketing and Servicing environments. And
is the founder of Bernekon.com (www.bernekon.com) Market research Company.
Husam
Mr. Husam……….
At present we have a good team for covering the main points of the business plan. The addition
of Vice President for PR will be important as a way to cement our fundamental re-positioning
and rejuvenation to the market.
At present, we are weakest in the area of technical capabilities to manage the database
marketing programs and upgraded service and support, particularly with cross-platform
networks. That’s we will outsource to a specialized IT Company in maintained first class IT
infrastructure.
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Fradoo.com
There are currently less than ten employees of Fradoo.com. The growth of the company will be
determined by how accurately and efficiently the company is able to implement the facets of
this business plan.
Each member of the Fradoo.com team is highly valued; everyone is expected to have opinions,
as it is a team that will make this company excel. It is the mission of the company to employ
people who are committed to a high standard of excellence, who thrive on a team atmosphere,
and who have outstanding customer service skills. This idealism is represented by the current
staff, and will continue to be the guideline by which new team members are hired.
Table: Personnel
Personnel Plan
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Marketing $174,000 $198,000 $198,000 $198,000 $198,000
Sales & Operation $192,000 $192,000 $192,000 $192,000 $192,000
Business Development $186,000 $210,000 $210,000 $210,000 $210,000
Administration & Finance $120,000 $132,000 $132,000 $132,000 $132,000
Total People 21 34 34 34 34
The following subtopics help present the financial plan for Fradoo.com.
The start-up costs of Fradoo.com will consist primarily equipment and fixtures. And a 2 year
operation costs.
Start-up Funding
Start-up Expenses to Fund $195,000
Start-up Assets to Fund $3,000,000
Total Funding Required $3,195,000
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $3,000,000
Additional Cash Raised $335,000
Cash Balance on Starting Date $3,335,000
Total Assets $3,335,000
Liabilities
Current Borrowing $200,000
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Fradoo.com
Capital
Planned Investment
Owner $100,000
Investor $3,000,000
Additional Investment Requirement $0
Total Planned Investment $3,100,000
The table below presents the assumptions used in the financial calculations of this business
plan.
The following chart shows changes in key financial indicators: sales, gross margin, and
operating expenses. The growth in sales goes above 20% for the second year in a row, but
then settles. We expect to keep gross margin higher than before, but our projections show a
slight decline as we go into new product areas and face new competition.
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Fradoo.com
Benchmarks
FY 2010
1.0
FY 2011
FY 2012
FY 2013
FY 2014
0.0
Sales Gross Margin% Operating Expenses
Each of these projected numbers for breakeven is attainable, and Fradoo.com believes these
two numbers is a starting point.
Break-even Analysis
Assumptions:
Average Per-Unit Revenue $42.64
Average Per-Unit Variable Cost $31.98
Estimated Monthly Fixed Cost $84,105
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Fradoo.com
Break-even Analysis
$40,000
$20,000
$0
($20,000)
($40,000)
($60,000)
($80,000)
0 2000 4000 6000 8000 10000
1000 3000 5000 7000 9000 11000
Expenses
Payroll $672,000 $732,000 $732,000 $732,000 $732,000
Marketing/Promotion $191,010 $342,160 $500,000 $600,000 $700,000
Depreciation $18,000 $30,000 $30,000 $30,000 $30,000
Rent $48,000 $54,000 $54,000 $54,000 $54,000
Utilities $12,000 $24,000 $24,000 $24,000 $24,000
Insurance $10,800 $13,200 $13,200 $13,200 $13,200
Payroll Taxes $57,456 $60,972 $60,000 $60,000 $60,000
Profit Before Interest and Taxes $11,487,511 $5,581,078 $7,146,800 $8,880,550 $11,033,050
EBITDA $11,505,511 $5,611,078 $7,176,800 $8,910,550 $11,063,050
Interest Expense $32,000 $32,000 $32,000 $32,000 $32,000
Taxes Incurred $3,436,653 $1,664,723 $2,134,440 $2,654,565 $3,300,315
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Fradoo.com
Profit Monthly
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Profit Yearly
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
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Fradoo.com
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
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Fradoo.com
Page 29
Oct
Fradoo.com
Cash
$12,000,000
$10,000,000
$8,000,000
Net Cash Flow
$6,000,000
Cash Balance
$4,000,000
$2,000,000
$0
The table below presents the projected balance sheet for Fradoo.com. This table reflects a
positive cash position throughout the period of this financial plan and dramatic growth in net
worth, 2010.
Current Assets
Cash $11,630,474 $15,380,529 $20,422,936 $26,697,563 $34,490,297
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets $11,630,474 $15,380,529 $20,422,936 $26,697,563 $34,490,297
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0
Accumulated Depreciation $18,000 $48,000 $78,000 $108,000 $138,000
Total Long-term Assets ($18,000) ($48,000) ($78,000) ($108,000) ($138,000)
Total Assets $11,612,474 $15,332,529 $20,344,936 $26,589,563 $34,352,297
Current Liabilities
Accounts Payable $368,617 $204,317 $236,364 $287,006 $349,005
Current Borrowing $200,000 $200,000 $200,000 $200,000 $200,000
Other Current Liabilities $0 $0 $0 $0 $0
Subtotal Current Liabilities $568,617 $404,317 $436,364 $487,006 $549,005
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Fradoo.com
The table below presents common business ratios as a reference. Industry Profile comparisons
are excluded from this table since the business of "Digital Printing" does not fall underneath any
predefined Industry dataset.
Table: Ratios
Ratio Analysis
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Industry Profile
Sales Growth 0.00% -44.99% 25.06% 21.38% 21.61% 2.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 24.92% 24.79% 24.81% 24.82% 24.83% 100.00%
Selling, General & Administrative Expenses 8.93% 10.70% 10.38% 10.03% 9.71% 75.27%
Advertising Expenses 0.38% 1.24% 1.45% 1.43% 1.37% 1.48%
Profit Before Interest and Taxes 22.91% 20.23% 20.72% 21.21% 21.67% 4.08%
Main Ratios
Current 20.45 38.04 46.80 54.82 62.82 1.57
Quick 20.45 38.04 46.80 54.82 62.82 1.17
Total Debt to Total Assets 5.93% 3.42% 2.73% 2.28% 1.95% 59.62%
Pre-tax Return on Net Worth 104.87% 37.47% 35.95% 34.06% 32.66% 20.13%
Pre-tax Return on Assets 98.65% 36.19% 34.97% 33.28% 32.02% 8.13%
Activity Ratios
Accounts Payable Turnover 112.41 112.27 121.67 121.67 121.67 n.a
Payment Days 2 5 3 3 3 n.a
Total Asset Turnover 4.32 1.80 1.70 1.57 1.48 n.a
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Fradoo.com
Debt Ratios
Debt to Net Worth 0.06 0.04 0.03 0.02 0.02 n.a
Current Liab. to Liab. 0.83 0.77 0.78 0.80 0.82 n.a
Liquidity Ratios
Net Working Capital $11,061,858 $14,976,212 $19,986,572 $26,210,557 $33,941,292 n.a
Interest Coverage 358.98 174.41 223.34 277.52 344.78 n.a
Additional Ratios
Assets to Sales 0.23 0.56 0.59 0.63 0.67 n.a
Current Debt/Total Assets 5% 3% 2% 2% 2% n.a
Acid Test 20.45 38.04 46.80 54.82 62.82 n.a
Sales/Net Worth 4.59 1.86 1.74 1.61 1.51 n.a
Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a
We anticipate that the percentage of digital printing deemed quality, time sensitive, of high
value, or privacy nature will continue to increase faster than the average increase in print in
general. Further, we believe that the concerns over digital data storage security risks will
balloon. With only 2% of the storage back-ups today, the concern of data loss has created
opportunities for a print and cloud storage device such as ours.
We will achieve profitability in just over one year and due to the nature of the exponential
growth of access charges, we will realize a respectable net profit on sales by year two. The
success of our implementation and sales efforts will have a strong affect on our year two
through year five operations and fiscal position. If slower than planned, we risk a negative cash
balance, even though we might have already reached profitability. Additional rounds of
investment may be needed or acquiring long-term business loans.
Ironically, a faster than planned industry acceptance of Fradoo.com could push us into a period
of risky increased expansion, which would also drain our operating capital reserve, again
requiring us to seek another round of investment or loans.
Alternatively, early-on proof-of-concept and feasibility analyses could spark high demand from
Ad and Marketing establishment could lead to substantial financial and operational gains, in
Ads, and Marketing Campaign to our websites.
Fradoo.com plans to be a privately-held, FZ - Limited Liability Corporation, with Mr. Tari, Mr.
Husam, and Angel Investor as of the owners and the key driver of research and new product
development. See the table below for an ownership breakdown.
Owners % Ownership
Mr. Tari 33.4% Max
Mr. Husam 33.3% Max
Investors 33.3% Max
Fradoo.com proposes participating shares for our external investors in exchange for $3,000,000
funding. The Company is willing to offer up to 33% of equity stake in the company for the
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Fradoo.com
requested funding. In addition to funding, we are looking for investors with business,
management and industry experience.
8.11 Valuation
We anticipate the ending total valuation of Fradoo.com at the time of sale of share in 2009 will
be $9,090,000. The Investment Analysis table shows our projected valuation of an outside
investor's equity.
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Fradoo.com
Investment Analysis
Start FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Initial Investment
Investment $3,100,000 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0
Ending Valuation $0 $0 $0 $0 $0 $35,647,500
Combination as Income Stream ($3,100,000) $0 $0 $0 $0 $35,647,500
Percent Equity Acquired 35%
Net Present Value (NPV) $17,303,903
Internal Rate of Return (IRR) 63%
Assumptions
Discount Rate 10.00%
Valuation Earnings Multiple 10 10 10 10 10
Valuation Sales Multiple 2 2 2 2 2
The following table shows our Use of Funds for the requested investment. The money will cover
both start-up expenses to begin the applications, and a cash cushion to cover the varying
personnel and marketing costs of the first two year. Fradoo.com start-up costs are associated
with the related legal services to structure the operating agreement with each stakeholder, the
final software development costs, the sales and marketing expenses.
Use of Funds
Use Amount
Marketing $800,000
Advertising $700,000
Business Development $800,000
PR $700,000
Total $3,000,000
Page 34
Appendix
Sales Forecast
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Unit Sales
Posters 25,000 27,500 30,250 33,275 36,602 40,262 44,288 48,717 53,589 58,948 64,843 71,327
Digital Prints 18,000 19,800 21,780 23,958 26,354 28,989 31,888 35,077 38,585 42,444 46,688 51,357
New Added Products 12,000 13,200 14,520 15,972 17,569 19,326 21,259 23,385 25,724 28,296 31,126 34,239
Total Unit Sales 55,000 60,500 66,550 73,205 80,525 88,577 97,435 107,179 117,898 129,688 142,657 156,923
Unit Prices Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Posters $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00 $35.00
Digital Prints $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00
New Added Products $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00
Sales
Posters $875,000 $962,500 $1,058,750 $1,164,625 $1,281,070 $1,409,170 $1,550,080 $1,705,095 $1,875,615 $2,063,180 $2,269,505 $2,496,445
Digital Prints $810,000 $891,000 $980,100 $1,078,110 $1,185,930 $1,304,505 $1,434,960 $1,578,465 $1,736,325 $1,909,980 $2,100,960 $2,311,065
New Added Products $660,000 $726,000 $798,600 $878,460 $966,295 $1,062,930 $1,169,245 $1,286,175 $1,414,820 $1,556,280 $1,711,930 $1,883,145
Total Sales $2,345,000 $2,579,500 $2,837,450 $3,121,195 $3,433,295 $3,776,605 $4,154,285 $4,569,735 $5,026,760 $5,529,440 $6,082,395 $6,690,655
Direct Unit Costs Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Posters 75.00% $26.25 $26.25 $26.25 $26.25 $26.25 $26.25 $26.25 $26.25 $26.25 $26.25 $26.25 $26.25
Digital Prints 75.00% $33.75 $33.75 $33.75 $33.75 $33.75 $33.75 $33.75 $33.75 $33.75 $33.75 $33.75 $33.75
New Added Products 75.00% $41.25 $41.25 $41.25 $41.25 $41.25 $41.25 $41.25 $41.25 $41.25 $41.25 $41.25 $41.25
Page 1
Appendix
Table: Personnel
Personnel Plan
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Marketing $14,500 $14,500 $14,500 $14,500 $14,500 $14,500 $14,500 $14,500 $14,500 $14,500 $14,500 $14,500
Sales & Operation $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000
Business Development $15,500 $15,500 $15,500 $15,500 $15,500 $15,500 $15,500 $15,500 $15,500 $15,500 $15,500 $15,500
Administration & Finance $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Total People 10 11 12 13 14 15 16 17 18 19 20 21
Total Payroll $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000
Page 2
Appendix
Gross Margin $583,750 $642,250 $706,607 $777,405 $855,285 $940,960 $1,035,220 $1,138,915 $1,252,995 $1,378,480 $1,516,525 $1,668,386
Gross Margin % 24.89% 24.90% 24.90% 24.91% 24.91% 24.92% 24.92% 24.92% 24.93% 24.93% 24.93% 24.94%
Expenses
Payroll $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000
Marketing/Promotion $12,000 $12,600 $13,230 $13,892 $14,587 $15,316 $16,082 $16,886 $17,730 $18,616 $19,547 $20,524
Depreciation $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Rent $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Utilities $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Insurance 15% $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900
Payroll Taxes 15% $4,788 $4,788 $4,788 $4,788 $4,788 $4,788 $4,788 $4,788 $4,788 $4,788 $4,788 $4,788
Total Operating Expenses $80,188 $80,788 $81,418 $82,080 $82,775 $83,504 $84,270 $85,074 $85,918 $86,804 $87,735 $88,712
Profit Before Interest and Taxes $503,562 $561,462 $625,189 $695,325 $772,510 $857,456 $950,950 $1,053,841 $1,167,077 $1,291,676 $1,428,790 $1,579,674
EBITDA $505,062 $562,962 $626,689 $696,825 $774,010 $858,956 $952,450 $1,055,341 $1,168,577 $1,293,176 $1,430,290 $1,581,174
Interest Expense $2,667 $2,667 $2,667 $2,667 $2,667 $2,667 $2,667 $2,667 $2,667 $2,667 $2,667 $2,667
Taxes Incurred $150,269 $167,639 $186,757 $207,797 $230,953 $256,437 $284,485 $315,352 $349,323 $386,703 $427,837 $473,102
Net Profit $350,627 $391,157 $435,765 $484,861 $538,890 $598,353 $663,799 $735,822 $815,087 $902,307 $998,286 $1,103,905
Net Profit/Sales 14.95% 15.16% 15.36% 15.53% 15.70% 15.84% 15.98% 16.10% 16.21% 16.32% 16.41% 16.50%
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Appendix
Expenditures Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
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Appendix
Net Cash Flow $371,252 $405,588 $451,488 $502,004 $557,595 $618,776 $686,114 $760,217 $841,771 $931,504 $1,030,251 $1,138,914
Cash Balance $3,706,252 $4,111,840 $4,563,328 $5,065,332 $5,622,927 $6,241,703 $6,927,817 $7,688,034 $8,529,805 $9,461,309 $10,491,560 $11,630,474
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Appendix
Current Assets
Cash $3,335,000 $3,706,252 $4,111,840 $4,563,328 $5,065,332 $5,622,927 $6,241,703 $6,927,817 $7,688,034 $8,529,805 $9,461,309 $10,491,560 $11,630,474
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $3,335,000 $3,706,252 $4,111,840 $4,563,328 $5,065,332 $5,622,927 $6,241,703 $6,927,817 $7,688,034 $8,529,805 $9,461,309 $10,491,560 $11,630,474
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $1,500 $3,000 $4,500 $6,000 $7,500 $9,000 $10,500 $12,000 $13,500 $15,000 $16,500 $18,000
Total Long-term Assets $0 ($1,500) ($3,000) ($4,500) ($6,000) ($7,500) ($9,000) ($10,500) ($12,000) ($13,500) ($15,000) ($16,500) ($18,000)
Total Assets $3,335,000 $3,704,752 $4,108,840 $4,558,828 $5,059,332 $5,615,427 $6,232,703 $6,917,317 $7,676,034 $8,516,305 $9,446,309 $10,475,060 $11,612,474
Liabilities and Capital Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Current Liabilities
Accounts Payable $110,000 $129,125 $142,056 $156,279 $171,922 $189,127 $208,050 $228,866 $251,761 $276,945 $304,642 $335,107 $368,617
Current Borrowing $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $310,000 $329,125 $342,056 $356,279 $371,922 $389,127 $408,050 $428,866 $451,761 $476,945 $504,642 $535,107 $568,617
Long-term Liabilities $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000
Total Liabilities $430,000 $449,125 $462,056 $476,279 $491,922 $509,127 $528,050 $548,866 $571,761 $596,945 $624,642 $655,107 $688,617
Paid-in Capital $3,100,000 $3,100,000 $3,100,000 $3,100,000 $3,100,000 $3,100,000 $3,100,000 $3,100,000 $3,100,000 $3,100,000 $3,100,000 $3,100,000 $3,100,000
Retained Earnings ($195,000) ($195,000) ($195,000) ($195,000) ($195,000) ($195,000) ($195,000) ($195,000) ($195,000) ($195,000) ($195,000) ($195,000) ($195,000)
Earnings $0 $350,627 $741,784 $1,177,549 $1,662,410 $2,201,300 $2,799,652 $3,463,451 $4,199,273 $5,014,360 $5,916,667 $6,914,953 $8,018,858
Total Capital $2,905,000 $3,255,627 $3,646,784 $4,082,549 $4,567,410 $5,106,300 $5,704,652 $6,368,451 $7,104,273 $7,919,360 $8,821,667 $9,819,953 $10,923,858
Total Liabilities and Capital $3,335,000 $3,704,752 $4,108,840 $4,558,828 $5,059,332 $5,615,427 $6,232,703 $6,917,317 $7,676,034 $8,516,305 $9,446,309 $10,475,060 $11,612,474
Net Worth $2,905,000 $3,255,627 $3,646,784 $4,082,549 $4,567,410 $5,106,300 $5,704,652 $6,368,451 $7,104,273 $7,919,360 $8,821,667 $9,819,953 $10,923,858
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