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business plan is confidential; therefore, reader agrees not to disc lose it without the express
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This is a business plan. It does not imply an offering of securities.
Table of Contents

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 LBA Technologies Business Plan

Table: Start-up
Start-up

Requirements

Start-up Expenses
Legal/Accounting R5,000
Stationery etc. R1,500
Insurance R2,000
Rent R5,000
Computer R20,000
Brochures R1,500
Software & Web R5,000
Total Start-up Expenses R40,000

Start-up Assets
Cash Required R10,000
Other Current Assets R0
Long-term Assets R0
Total Assets R10,000

Total Requirements R50,000

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Table: Market Analysis

Market Analysis
2014 2015 2016 2017 2018
Potential Customers Growth CAGR
Small Office & Home Office 5% 360 378 397 417 438 5.03%
(SOHO)
Medium/Large Business 5% 200 210 221 232 244 5.10%
Corporate 3% 80 82 84 87 90 2.99%
Government 2% 250 255 260 265 270 1.94%
Total 4.02% 890 925 962 1,001 1,042 4.02%

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Table: Sales Forecast

Sales Forecast
FY 2015 FY 2016 FY 2017
Sales
Business Software Solutions R720,000 R748,800 R786,240
Service Agreements/Repairs R540,000 R561,600 R589,680
Total Sales R1,260,000 R1,310,400 R1,375,920

Direct Cost of Sales FY 2015 FY 2016 FY 2017

Software Expenses R288,000 R299,520 R314,496
Service Expenses R216,000 R224,640 R235,872
Subtotal Direct Cost of Sales R504,000 R524,160 R550,368

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Table: Milestones
Milestones

Milestone Start Date End Date Budget Manager Department

Acquire Funding 8/1/2014 8/16/2014 R0 ABC Department
Hire Resources 8/1/2014 8/16/2014 R0 ABC Department
Purchase Software 8/1/2014 8/16/2014 R0 ABC Department
TBA 7/17/2014 8/16/2014 R0 ABC Department
TBA 7/17/2014 8/16/2014 R0 ABC Department
TBA 7/17/2014 8/16/2014 R0 ABC Department
TBA 7/17/2014 8/16/2014 R0 ABC Department
TBA 7/17/2014 8/16/2014 R0 ABC Department
TBA 7/17/2014 8/16/2014 R0 ABC Department
TBA 7/17/2014 8/16/2014 R0 ABC Department
Totals R0

Table: Personnel
Personnel Plan
FY 2015 FY 2016 FY 2017
Managing Director R240,000 R240,000 R240,000
Software Engineer R120,000 R120,000 R120,000
IT Support R96,000 R96,000 R96,000
Total People 0 0 0

Total Payroll R456,000 R456,000 R456,000

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Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund R40,000
Start-up Assets to Fund R10,000
Total Funding Required R50,000

Assets
Non-cash Assets from Start-up R0
Cash Requirements from Start-up R10,000
Additional Cash Raised R0
Cash Balance on Starting Date R10,000
Total Assets R10,000

Liabilities and Capital

Liabilities
Current Borrowing R0
Long-term Liabilities R0
Accounts Payable (Outstanding Bills) R0
Other Current Liabilities (interest-free) R0
Total Liabilities R0

Capital

Planned Investment
Group Financing R40,000
Investor R10,000
Additional Investment Requirement R0
Total Planned Investment R50,000

Loss at Start-up (Start-up Expenses) (R40,000)

Total Capital R10,000

Total Capital and Liabilities R10,000

Total Funding R50,000

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Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even R71,667

Assumptions:
Average Percent Variable Cost 40%
Estimated Monthly Fixed Cost R43,000

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Table: Profit and Loss

Pro Forma Profit and Loss
FY 2015 FY 2016 FY 2017
Sales R1,260,000 R1,310,400 R1,375,920
Direct Cost of Sales R504,000 R524,160 R550,368
Other Costs of Sales R0 R0 R0
Total Cost of Sales R504,000 R524,160 R550,368

Gross Margin R756,000 R786,240 R825,552

Gross Margin % 60.00% 60.00% 60.00%

Expenses
Payroll R456,000 R456,000 R456,000
Marketing/Promotion R36,000 R40,000 R45,000
Depreciation R0 R0 R0
Insurance R12,000 R12,000 R12,000
Other R12,000 R12,000 R12,000

Total Operating Expenses R516,000 R520,000 R525,000

Profit Before Interest and Taxes R240,000 R266,240 R300,552

EBITDA R240,000 R266,240 R300,552
Interest Expense R0 R0 R0
Taxes Incurred R72,000 R79,872 R90,166

Net Profit R168,000 R186,368 R210,386

Net Profit/Sales 13.33% 14.22% 15.29%

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Table: Cash Flow

Pro Forma Cash Flow
FY 2015 FY 2016 FY 2017
Cash Received

Cash from Operations

Cash Sales R1,260,000 R1,310,400 R1,375,920
Subtotal Cash from Operations R1,260,000 R1,310,400 R1,375,920

Additional Cash Received

Sales Tax, VAT, HST/GST Received R0 R0 R0
New Current Borrowing R0 R0 R0
New Other Liabilities (interest-free) R0 R0 R0
New Long-term Liabilities R0 R0 R0
Sales of Other Current Assets R0 R0 R0
Sales of Long-term Assets R0 R0 R0
New Investment Received R0 R0 R0
Subtotal Cash Received R1,260,000 R1,310,400 R1,375,920

Expenditures FY 2015 FY 2016 FY 2017

Expenditures from Operations

Cash Spending R456,000 R456,000 R456,000
Bill Payments R584,767 R664,359 R706,123
Subtotal Spent on Operations R1,040,767 R1,120,359 R1,162,123

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out R0 R0 R0
Principal Repayment of Current Borrowing R0 R0 R0
Other Liabilities Principal Repayment R0 R0 R0
Long-term Liabilities Principal Repayment R0 R0 R0
Purchase Other Current Assets R0 R0 R0
Purchase Long-term Assets R0 R0 R0
Dividends R0 R120,000 R180,000
Subtotal Cash Spent R1,040,767 R1,240,359 R1,342,123

Net Cash Flow R219,233 R70,041 R33,797

Cash Balance R229,233 R299,275 R333,072

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Table: Balance Sheet

Pro Forma Balance Sheet
FY 2015 FY 2016 FY 2017
Assets

Current Assets
Cash R229,233 R299,275 R333,072
Other Current Assets R0 R0 R0
Total Current Assets R229,233 R299,275 R333,072

Long-term Assets
Long-term Assets R0 R0 R0
Accumulated Depreciation R0 R0 R0
Total Long-term Assets R0 R0 R0
Total Assets R229,233 R299,275 R333,072

Liabilities and Capital FY 2015 FY 2016 FY 2017

Current Liabilities
Accounts Payable R51,233 R54,907 R58,318
Current Borrowing R0 R0 R0
Other Current Liabilities R0 R0 R0
Subtotal Current Liabilities R51,233 R54,907 R58,318

Long-term Liabilities R0 R0 R0
Total Liabilities R51,233 R54,907 R58,318

Paid-in Capital R50,000 R50,000 R50,000

Retained Earnings (R40,000) R8,000 R14,368
Earnings R168,000 R186,368 R210,386
Total Capital R178,000 R244,368 R274,754
Total Liabilities and Capital R229,233 R299,275 R333,072

Net Worth R178,000 R244,368 R274,754

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Table: Ratios
Ratio Analysis
FY 2015 FY 2016 FY 2017 Industry Profile
Sales Growth 0.00% 4.00% 5.00% 7.70%

Percent of Total Assets

Other Current Assets 0.00% 0.00% 0.00% 48.62%
Total Current Assets 100.00% 100.00% 100.00% 78.45%
Long-term Assets 0.00% 0.00% 0.00% 21.55%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 22.35% 18.35% 17.51% 37.65%

Long-term Liabilities 0.00% 0.00% 0.00% 14.87%
Total Liabilities 22.35% 18.35% 17.51% 52.52%
Net Worth 77.65% 81.65% 82.49% 47.48%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 60.00% 60.00% 60.00% 100.00%
Selling, General & Administrative Expenses 46.67% 45.78% 44.71% 76.18%
Advertising Expenses 2.86% 3.05% 3.27% 1.83%
Profit Before Interest and Taxes 19.05% 20.32% 21.84% 1.49%

Main Ratios
Current 4.47 5.45 5.71 1.49
Quick 4.47 5.45 5.71 1.18
Total Debt to Total Assets 22.35% 18.35% 17.51% 62.03%
Pre-tax Return on Net Worth 134.83% 108.95% 109.39% 9.93%
Pre-tax Return on Assets 104.70% 88.96% 90.24% 3.77%

Additional Ratios FY 2015 FY 2016 FY 2017

Net Profit Margin 13.33% 14.22% 15.29% n.a
Return on Equity 94.38% 76.27% 76.57% n.a

Activity Ratios
Accounts Payable Turnover 12.41 12.17 12.17 n.a
Payment Days 27 29 29 n.a
Total Asset Turnover 5.50 4.38 4.13 n.a

Debt Ratios
Debt to Net Worth 0.29 0.22 0.21 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios
Net Working Capital R178,000 R244,368 R274,754 n.a
Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.18 0.23 0.24 n.a
Current Debt/Total Assets 22% 18% 18% n.a
Acid Test 4.47 5.45 5.71 n.a
Sales/Net Worth 7.08 5.36 5.01 n.a
Dividend Payout 0.00 0.64 0.86 n.a

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Table: Investment Offering

Investment Offering Seed Round 1 Round 2 Exit
Proposed Year: 1 2 3 5

Valuation, Investment, Shares

Investment Amount R40,000 R0 R0
Equity Share Offering Percentage 80.00% 0.00% 0.00%
Valuation R50,000 R0 R0 R1,000,000
Investor Exit Payout R800,000 R0 R0
Investor Years Until Exit 4 3 2
Investor IRR 111.47% 0.00% 0.00%

Share Ownership Year 1 Year 2 Year 3 Year 5

Founders' Shares 100 100 100 100
Stock Split Multiple 0 0 0
Stock Options Issued 0 0 0 0
Investor Shares Issued 400 0 0
Price per share R100.00 R0.00 R0.00 R2,000.00
Options Holders' Shares 0 0 0 0
Year 1 Investors' Shares 400 400 400 400
Year 2 Investors' Shares 0 0 0
Year 3 Investors' Shares 0 0
Total Shares Outstanding 500 500 500 500

Equity Ownership Percentage Year 1 Year 2 Year 3 Year 5

Founders' Equity 20.00% 20.00% 20.00% 20.00%
Option Holders' Equity 0.00% 0.00% 0.00% 0.00%
Year 1 Investors' Equity 80.00% 80.00% 80.00% 80.00%
Year 2 Investors' Equity 0.00% 0.00% 0.00%
Year 3 Investors' Equity 0.00% 0.00%
Total Equity 100.00% 100.00% 100.00% 100.00%
Investors' Equity 80.00% 80.00% 80.00% 80.00%
Founders' & Employees' Equity 20.00% 20.00% 20.00% 20.00%

Table: Investment Analysis

Investment Analysis
Start FY 2015 FY 2016 FY 2017
Initial Investment
Investment R50,000 R0 R0 R0
Dividends R0 R0 R120,000 R180,000
Ending Valuation R0 R0 R0 R962,500
Combination as Income Stream (R50,000) R0 R120,000 R1,142,500
Percent Equity Acquired 35%
Net Present Value (NPV) R825,046
Internal Rate of Return (IRR) 212%

Assumptions
Discount Rate 10.00%
Valuation Earnings Multiple 10 10 10
Valuation Sales Multiple 2 2 2

Investment (calculated) R50,000 R0 R0 R0

Dividends R0 R120,000 R180,000
Calculated Earnings-based Valuation R1,680,000 R1,860,000 R2,100,000
Calculated Sales-based Valuation R2,520,000 R2,620,000 R2,750,000
Calculated Average Valuation R2,100,000 R2,240,000 R2,425,000

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Table: Use of Funds

Use of Funds

Use Amount
Name R0
Name R0
Name R0
Name R0
Total R0

Table: Payback
Payback

Projected Payback Calculation

Investment FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Investment R500,000
Cash Returns by Year R100,000 R100,000 R100,000 R100,000 R100,000
Combination as Income Stream (R500,000) R100,000 R100,000 R100,000 R100,000 R100,000
Cumulative Net Cash Flow to Investors (R500,000) (R400,000) (R300,000) (R200,000) (R100,000) R0
Payback Period 5 years

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Table: Sales Forecast

Sales Forecast
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Sales
Business Software Solutions R60,000 R60,000 R60,000 R60,000 R60,000 R60,000 R60,000 R60,000 R60,000 R60,000 R60,000 R60,000
Service Agreements/Repairs R45,000 R45,000 R45,000 R45,000 R45,000 R45,000 R45,000 R45,000 R45,000 R45,000 R45,000 R45,000
Total Sales R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000

Direct Cost of Sales Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Software Expenses R24,000 R24,000 R24,000 R24,000 R24,000 R24,000 R24,000 R24,000 R24,000 R24,000 R24,000 R24,000
Service Expenses R18,000 R18,000 R18,000 R18,000 R18,000 R18,000 R18,000 R18,000 R18,000 R18,000 R18,000 R18,000
Subtotal Direct Cost of Sales R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000

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 Appendix
Table: Personnel

Personnel Plan
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Managing Director R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000
Software Engineer R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000
IT Support R8,000 R8,000 R8,000 R8,000 R8,000 R8,000 R8,000 R8,000 R8,000 R8,000 R8,000 R8,000
Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000

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 Appendix
Table: Profit and Loss

Pro Forma Profit and Loss

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Sales R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000
Direct Cost of Sales R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000
Other Costs of Sales R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Total Cost of Sales R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000 R42,000

Gross Margin R63,000 R63,000 R63,000 R63,000 R63,000 R63,000 R63,000 R63,000 R63,000 R63,000 R63,000 R63,000
Gross Margin % 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00%

Expenses
Payroll R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000
Marketing/Promotion R3,000 R3,000 R3,000 R3,000 R3,000 R3,000 R3,000 R3,000 R3,000 R3,000 R3,000 R3,000
Depreciation R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Insurance R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000
Other R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000 R1,000

Total Operating Expenses R43,000 R43,000 R43,000 R43,000 R43,000 R43,000 R43,000 R43,000 R43,000 R43,000 R43,000 R43,000

Profit Before Interest and Taxes R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000
EBITDA R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000 R20,000
Interest Expense R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Taxes Incurred R6,000 R6,000 R6,000 R6,000 R6,000 R6,000 R6,000 R6,000 R6,000 R6,000 R6,000 R6,000

Net Profit R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000
Net Profit/Sales 13.33% 13.33% 13.33% 13.33% 13.33% 13.33% 13.33% 13.33% 13.33% 13.33% 13.33% 13.33%

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 Appendix
Table: Cash Flow

Pro Forma Cash Flow

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Cash Received

Cash from Operations

Cash Sales R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000
Subtotal Cash from Operations R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
New Current Borrowing R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
New Other Liabilities (interest-free) R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
New Long-term Liabilities R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Sales of Other Current Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Sales of Long-term Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
New Investment Received R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Subtotal Cash Received R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000 R105,000

Expenditures Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Expenditures from Operations

Cash Spending R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000 R38,000
Bill Payments R1,767 R53,000 R53,000 R53,000 R53,000 R53,000 R53,000 R53,000 R53,000 R53,000 R53,000 R53,000
Subtotal Spent on Operations R39,767 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Principal Repayment of Current Borrowing R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Other Liabilities Principal Repayment R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Long-term Liabilities Principal Repayment R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Purchase Other Current Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Purchase Long-term Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Dividends R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Subtotal Cash Spent R39,767 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000 R91,000

Net Cash Flow R65,233 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000 R14,000
Cash Balance R75,233 R89,233 R103,233 R117,233 R131,233 R145,233 R159,233 R173,233 R187,233 R201,233 R215,233 R229,233

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Table: Balance Sheet

Pro Forma Balance Sheet

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Assets Starting Balances

Current Assets
Cash R10,000 R75,233 R89,233 R103,233 R117,233 R131,233 R145,233 R159,233 R173,233 R187,233 R201,233 R215,233 R229,233
Other Current Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Total Current Assets R10,000 R75,233 R89,233 R103,233 R117,233 R131,233 R145,233 R159,233 R173,233 R187,233 R201,233 R215,233 R229,233

Long-term Assets
Long-term Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Accumulated Depreciation R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Total Long-term Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Total Assets R10,000 R75,233 R89,233 R103,233 R117,233 R131,233 R145,233 R159,233 R173,233 R187,233 R201,233 R215,233 R229,233

Liabilities and Capital Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Current Liabilities
Accounts Payable R0 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233
Current Borrowing R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Other Current Liabilities R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Subtotal Current Liabilities R0 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233

Long-term Liabilities R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Total Liabilities R0 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233 R51,233

Paid-in Capital R50,000 R50,000 R50,000 R50,000 R50,000 R50,000 R50,000 R50,000 R50,000 R50,000 R50,000 R50,000 R50,000
Retained Earnings (R40,000) (R40,000) (R40,000) (R40,000) (R40,000) (R40,000) (R40,000) (R40,000) (R40,000) (R40,000) (R40,000) (R40,000) (R40,000)
Earnings R0 R14,000 R28,000 R42,000 R56,000 R70,000 R84,000 R98,000 R112,000 R126,000 R140,000 R154,000 R168,000
Total Capital R10,000 R24,000 R38,000 R52,000 R66,000 R80,000 R94,000 R108,000 R122,000 R136,000 R150,000 R164,000 R178,000
Total Liabilities and Capital R10,000 R75,233 R89,233 R103,233 R117,233 R131,233 R145,233 R159,233 R173,233 R187,233 R201,233 R215,233 R229,233

Net Worth R10,000 R24,000 R38,000 R52,000 R66,000 R80,000 R94,000 R108,000 R122,000 R136,000 R150,000 R164,000 R178,000

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