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Safe Current is small business unit of The Cleveland Illuminating Company (TCIC), and
electric utility. Safe Current was formed and will be lead by Brian Henderson.
Safe Current has identified three key factors that will be instrumental to its sustainability:
1. Ensure 100% customer satisfaction: Repeat customers and customer referrals are
valuable.
3. Design and implement strict financial controls. This is very important because
although Safe Current is a small business unit of TCIC, they must be a stand alone
entity financially and and yet they have financial and accounting responsibilities to
the shareholders of TCIC.
Products
Safe Current will offer two main products, surge arrestors and surge protectors. These
products are made by a contract manufacturer and sold under the Safe Current brand
name:
Management
Brian has an MBA from Case Western Reserve University and has experience working
for the large telecom ATT as an assistant project manager, and Allegheny Power working
in the value added services department. Safe Current has been forecasted to achieve
impressive sales for years two and three, with correspondingly respectable net profit.
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1.1 Objectives
To develop a profitable product for TCIC that is unregulated from the core power
generation business services.
Company Summary
Safe Current is an unregulated subsidiary of The Cleveland Illuminating Company that
sells direct to businesses and consumers. It will be operated as a stand alone business
leveraging the existing resources and goodwill of TCIC.
Safe Current will be located on site at TCIC, using an office within the complex and also
sharing TCIC's computer network connection and phone connections. Safe Current will
operate their own customer service call department. Safe Current will use TCIC's existing
call center for sales calls and TCIC's existing billing system as well as their order
fulfillment and shipping departments. Safe Current will pay a flat rate (10%) for these
services.
The Cleveland Illuminating Company has chosen to create Safe Current as a means of
increasing the rate of return to shareholders outside the government regulated rates
available to electric utilities.
Safe Current will leverage the existing resources of TCIC and pay a set overhead fee for
the resources used. Equipment that will be needed as follows:
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START-UP FUNDING
Start-up Expenses to Fund $15,600
Start-up Assets to Fund $39,400
TOTAL FUNDING REQUIRED $55,000
Assets
Non-cash Assets from Start-up $17,500
Cash Requirements from Start-up $21,900
Additional Cash Raised $0
Cash Balance on Starting Date $21,900
TOTAL ASSETS $39,400
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $50,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $50,000
Capital
Planned Investment
TCIC $5,000
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $5,000
Loss at Start-up (Start-up Expenses) ($15,600)
TOTAL CAPITAL ($10,600)
TOTAL CAPITAL AND LIABILITIES $39,400
Total Funding $55,000
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START-UP
Requirements
Start-up Expenses
Stationery etc. $100
Brochures $2,000
Website development $5,000
Furniture $1,500
Expensed Equipment $7,000
TOTAL START-UP EXPENSES $15,600
Start-up Assets
Cash Required $21,900
Start-up Inventory $0
Other Current Assets $3,000
Long-term Assets $14,500
TOTAL ASSETS $39,400
Total Requirements $55,000
These two segments have been chosen because families with children typically have a
large number of electronic devices and the upper income single home owners often adopt
technology using lots of gadgets in their home.
The third segment is commercial businesses that have equipment they want protected.
Competition is very limited for surge arrestors as they require electric utility installation.
There is some competition with the surge protectors, however the competitive products
are of a consumer level of quality and protection, different from Safe Current's products
which offer industrial levels of protection.
Safe Current has segmented the market into three distinct groups.
Ages 25-40.
Commercial sales
This segment is small to mid-size businesses that have expensive electronic equipment
that they need protected. Commercial sales are not industry specific. All businesses,
regardless of type, have pieces of equipment that can be protected.
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MARKET ANALYSIS
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Potential Customers Growth CAGR
Family homeowners 8% 143,545 154,311 165,884 178,325 191,699 7.50%
Single home owners 8% 165,987 179,266 193,607 209,096 225,824 8.00%
Commercial sales 6% 11,254 11,929 12,645 13,404 14,208 6.00%
Total 7.71% 320,786 345,506 372,136 400,825 431,731 7.71%
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While most home owners insurance offers some level of compensation for damage,
deductibles are typically high enough that most people do not make claims. Both
segments are already customers and aware of TCIC's reputation for safety, reliability and
operational excellence, making it easy to solicit their business.
Safe Current operates selling two similar service devices, surge arrestors and surge
protectors. While these products are similar, they have serve different purposes.
The surge arrestors are a product that can only be offered by a utility so it is typically
only sold and installed as a package by the utility.
The surge protectors operate within the more general consumer product segment as
evidenced by the fact that surge protectors can be found by a wide range of retailers such
as hardware stores, do-it-yourself type stores, and computer and electronic retailers.
It should be noted that Safe Current's parent company, The Cleveland Illuminating
Company is an electric utility and is therefore operating within a regulated industry.
Current regulation by the public utility commission (PUC) dictates that the rate of return
is capped at 10.5% for utility activities.
Safe Current however provides a product that operates within the unregulated area of the
utility and therefore does not have rate of return caps. This is quite advantageous to Safe
Current because it allows them to leverage the assets of the utility without being held to
the same restrictions as the rest of the utility.
While there are four current vendors that sell the actual arrestor equipment, it is far more
expensive to buy the equipment and then pay the utility for installation than buying the
package (product and installation) directly from the utility.
Surge protectors
Safe Current faces general competition from several sources. This is qualified as general
competition since the products typically sold (90% of the time) are of consumer quality
versus the industrial quality that Safe Current offers.
Due to TCIC's direct contacts with electrical component manufacturers and their sheer
buying scale/power, Safe Current is able to offer high-quality industrial grade products
for prices that are similar to the consumer units. Competitors in this segment include:
Hardware stores
Mass merchants
Do-it-yourself stores
Computer retailers
Electronic retailers
3.4 Products
Safe Current will offer a family of surge arrestors and surge protectors for consumers. A
surge protector protects appliances plugged into it against spikes in voltage.
A surge arrestor or "whole house surge protector" protects all circuits of a house from a
surge in current emanating from outside the building. These products will protect
consumers and their sensitive electric and electronic appliances from power surges or
transient voltage.
A power surge is an increase in voltage significantly above the designated level of flow
of electricity. If a surge or spike is high enough it will inflict serious damage, just like
applying to much water pressure through a hose. Too much will case the hose to burst.
The same thing happens when there is too much electrical pressure through a wire, the
wire "bursts."
Surge protectors work by diverting the extra electricity into the outlet's grounding wire. A
surge arrestor offers the same protection, however, the protection occurs before the
current comes into the home. There are several sources of surges.
The most familiar source is lightning. When lightning strikes near a power line, the
electrical energy creates a boost of electrical pressure. A surge arrestor is the best form of
protection against lightning as a lightning surge will overpower most surge protectors.
A more common source is the operation of high power electrical devices such as
refrigerators and air conditioning units. These appliances cause spikes when their
compressors or motors are turned on and off, creating sudden, brief demands for power
and upsetting the flow of the electrical voltage.
These types of surges can be protected only by surge protectors because the spike occurs
within the home and not from the electrical grid.
The last main source of surges come from the utility company's equipment. The complex
system of equipment that brings electrical power from the grid into the home may
have points of failure that can cause uneven power transmissions.
A combination of a surge arrestor and surge protectors on major or expensive
electric/electronic components can significantly decrease the possibility of surge/spike
damage.
Safe Current will offer two main products, surge arrestors and surge protectors. These
products are made by a contract manufacturer and sold under the Safe Current brand
name:
Only the electrical utility can install a surge arrestor because the unit is connected
directly to the outside meter and the electrical grid. A surge arrestor is the ONLY
protection against spikes that come in through the outside electrical lines.
While most hardware stores, electronic stores, and mass merchants sell some sort of
surge protector, the products offered by Safe Current are differentiated by their
industrial grade offer and, a far higher level of protection than most other surge
protectors. These units are $50 each and offer the best protection when used in
conjunction with a surge arrestor. Any type of electric or electronic appliance of
value should be protected such as furnaces, refrigerators, stoves, TVs, stereos,
computers, modems, phones, etc.
Safe Current has chosen to outsource production because 1) it has numerous relationships
with contract manufacturers that can make the products for far less than they can, 2)
production would create significant capital costs which are truly unnecessary. The beauty
of this business model is the usage of contract manufacturers and the leveraging of TCIC
resources.
The marketing strategy will concentrate on the ability to offer supreme, inexpensive
protection for an entire family's stable of electric and electronic appliances. This
campaign will be communicated through various methods and will focus on the product
offerings coming from the safe, established TCIC, an icon of Cleveland for over 50 years.
Please review the following sections for a more detailed analysis.
Safe Current's competitive edge is their ability to leverage the huge advantage of being
aligned with The Cleveland Illuminating Company, an electric utility serving the
Cleveland market for over 50 years. TCIC has spent a long time developing brand equity
and Safe Current will be able to tap into this equity immediately.
Safe Current will also be able to use TCIC's extensive vendor connections and buying
power. The last component of their competitive edge is Safe Current's exclusive ability to
install house arrestors. This last edge is a sustainable edge since no other company will
ever be able to make arrestor installations, a function of the regulated power industry.
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By proactively purchasing Safe Current's products, customers are able to protect against
loss and damage of all of their expensive appliances. While many homeowners probably
have some sort of insurance, deductibles are often prohibitively high, making a claim for
damage to one or a couple appliances not worth the money. Safe Current will use several
forms of communication for this marketing campaign:
Inserts in Bills: Colorful inserts will be added into the bills of TCIC customers.
Currently, the customers are receiving a monthly bill from TCIC and inserts are an
inexpensive, yet powerful way of reaching the customers.
Direct Mail: Another advantage of the relationship Safe Current has with TCIC is
the ability to use their customer database. This allows Safe Current to generate a
targeted list of customers that they can send product information to.
4.3 Sales Strategy
Safe Current's sales campaign will emphasize the fact that Safe Current is a subsidiary of
TCIC. This will be effective because TCIC is a well known, stable electric utility known
for its safe and reliable operation.
This idea is evidenced by the fact that almost every time that a consumer reaches for a
light switch the light goes on. Sure there are interruptions, often weather related, that
interrupt the electrical service, but those interruptions are reconnected quite fast.
The utility is stable and safe and is always working to serve the customer. These
electricity related products will clearly leverage the brand equity developed by TCIC over
the last five decades.
The sales forecast has been developed as a forecast and tracking tool to provide the
company with realistic sales goals as well as a way to verify progress. The forecast has
been developed as a conservative estimate, not an aggressive sales promise.
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SALES FORECAST
YEAR 1 YEAR 2 YEAR 3
Sales
Surge Arrestors $56,841 $83,434 $95,454
Surge Protectors $37,515 $55,066 $63,000
Commercial sales $37,515 $55,066 $63,000
TOTAL SALES $131,871 $193,567 $221,453
Direct Cost of Sales Year 1 Year 2 Year 3
Surge Arrestors $15,915 $23,362 $26,727
Surge Protectors $14,256 $20,925 $23,940
Commercial sales $12,380 $18,172 $20,790
Subtotal Direct Cost of Sales $42,551 $62,459 $71,457
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4.4 Milestones
Safe Current has identified several quantifiable, reachable milestones that will serve as
goals that the entire organization will work toward in order to make Safe Current a
sustainable business.
The following table details the specific milestones as well provides a temporal timetable
for expected completion dates. Following the table is a chart for a graphical
representation of the information.
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MILESTONES
Milestone Start Date End Date Budget Manager Department
Business plan 1/1/2003 1/15/2003 $0 Brian Startegic
completion development
First products shipped 1/1/2003 2/15/2003 $0 Brian Operations
$50K in sales 1/1/2003 8/15/2003 $0 Brian Sales
12 months of strong 1/1/2003 8/30/2004 $0 Brian Operations
sales, proving concept
Totals $0
The site will also be used as a sales tool, allowing customers to purchase the products as
well as set up installation appointments for the surge arrestors. Allowing the website to
offer sales support will provide consumers with a convenient way to purchase the
products as well as provide Safe Current with a low-cost sales program that does not
require a live sales support agent. The site will periodically be updated to encourage
customers to make repeat visits.
Search engine submission: As search engines become more and more powerful, a
large number of Internet users use them to find relevant information on the Internet.
Safe Current will submit their site to many popular engines ensuring that their site
comes up high on the list of hits.
The website will be developed by TCIC's internal Web development team for the price of
$5,000.
Management Summary
Brian Henderson received a Bachelors of Science in business and marketing from the
University of Pittsburgh and an MBA from Case Western Reserve University. Upon
graduation from the MBA program, Brian went to work for ATT for three years. At ATT
Brian was an assistant project manager, selling telephone accessories using direct
marketing techniques. After his ATT experience, Brian worked for Allegheny Power, a
Pennsylvania-based electric utility. At Allegheny Power Brian was again an assistant
project manager in charge of selling commercial businesses value added services. Brian
spent three years at Allegheny before joining The Cleveland Illuminating Company as a
Project Manager.
As a side business unit of TCIC, Safe Current will have only a few employees. Billing,
sales, and order fulfillment will be accomplished using TCIC's existing organization,
paying a 10% fee for these services. The employees/positions that Safe Current will use
include:
Project Manager: Brian will take on a wide range of functions including business
development, product procurement, management, and sales.
Customer Service Agents (4): These positions will assist customers calling
about Safe Current's products. Additionally, at times the employees may help Brian
with other activities.
PERSONNEL PLAN
YEAR 1 YEAR 2 YEAR 3
Project Manager $50,400 $51,000 $53,000
Customer service agent $9,400 $10,800 $10,800
Customer service agent $9,400 $10,800 $900
Customer service agent $9,000 $900 $900
Customer service agent $7,200 $900 $900
TOTAL PEOPLE 5 5 5
Total Payroll $85,400 $74,400 $66,500
Financial Plan
The following sections outline important financial information.
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 30.00% 30.00% 30.00%
Other 0 0 0
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7.2 Break-even Analysis
The Break-even Analysis indicates what will be needed in monthly revenue to reach the
break even point.
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BREAK-EVEN ANALYSIS
Monthly Revenue Break-even $13,732
Assumptions:
Average Percent Variable Cost 32%
Estimated Monthly Fixed Cost $9,301
7.3 Projected Cash Flow
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The following business ratios detail both ratios specific to Safe Current as well as ratios
specific to the general industry. Variances in Safe Current's ratios relative to the
industry's can be explained by the fact that Safe Current is able to leverage the valuable
assets of TCIC, an electric utility, to achieve above market margins. As a small business
unit of an electrical utility it is normal for business ratios to be different from the
competition.
RATIO ANALYSIS
YEAR 1 YEAR 2 YEAR 3 INDUSTRY
PROFILE
Sales Growth 0.00% 46.78% 14.41% 8.79%
Percent of Total Assets
Inventory 22.53% 23.67% 15.38% 17.86%
Other Current Assets 10.42% 7.46% 4.24% 43.53%
Total Current Assets 54.52% 70.94% 85.47% 77.93%
Long-term Assets 45.48% 29.06% 14.53% 22.07%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 29.51% 20.71% 13.67% 31.98%
Long-term Liabilities 148.65% 86.96% 38.28% 20.70%
Total Liabilities 178.16% 107.67% 51.96% 52.68%
NET WORTH -78.16% -7.67% 48.04% 47.32%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 67.73% 67.73% 67.73% 20.85%
Selling, General & Administrative 88.10% 54.09% 50.95% 6.60%
Expenses
Advertising Expenses 0.00% 0.00% 0.00% 0.49%
Profit Before Interest and Taxes -16.91% 16.34% 25.34% 1.44%
Main Ratios
Current 1.85 3.43 6.25 1.96
Quick 1.08 2.28 5.13 1.15
Total Debt to Total Assets 178.16% 107.67% 51.96% 57.62%
Pre-tax Return on Net Worth 119.55% -898.84% 155.82% 3.71%
Pre-tax Return on Assets -93.44% 68.95% 74.86% 8.76%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -20.40% 10.03% 16.76% n.a
Return on Equity 0.00% 0.00% 109.07% n.a
Activity Ratios
Inventory Turnover 10.91 7.80 7.00 n.a
Accounts Payable Turnover 9.23 12.17 12.17 n.a
Payment Days 27 30 28 n.a
Total Asset Turnover 4.58 4.81 3.13 n.a
Debt Ratios
Debt to Net Worth 0.00 0.00 1.08 n.a
Current Liab. to Liab. 0.17 0.19 0.26 n.a
Liquidity Ratios
Net Working Capital $7,200 $20,209 $50,844 n.a
Interest Coverage -4.84 8.13 18.07 n.a
Additional Ratios
Assets to Sales 0.22 0.21 0.32 n.a
Current Debt/Total Assets 30% 21% 14% n.a
Acid Test 1.08 2.28 5.13 n.a
Sales/Net Worth 0.00 0.00 6.51 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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Appendix
SALES FORECAST
MON MON MON MON MON MONT MONT MONT MONT MONT MONT MONT
TH 1 TH 2 TH 3 TH 4 TH 5 H6 H7 H8 H 9 H 10 H 11 H 12
Sales
Surge 0 $0 $2,00 $2,43 $3,23 $4,09 $4,645 $5,232 $6,121 $6,653 $7,121 $7,434 $7,878
Arrestor % 0 5 2 0
Surge 0 $0 $1,32 $1,60 $2,13 $2,69 $3,066 $3,453 $4,040 $4,391 $4,700 $4,906 $5,199
Protecto % 0 7 3 9
rs
Commer 0 $0 $1,32 $1,60 $2,13 $2,69 $3,066 $3,453 $4,040 $4,391 $4,700 $4,906 $5,199
cial sales % 0 7 3 9
TOTAL $0 $4,6 $5,6 $7,4 $9,4 $10,7 $12,1 $14,2 $15,4 $16,5 $17,2 $18,2
SALES 40 49 98 89 76 38 01 35 21 47 77
Direct Month Month Month Month Month Month Month Month Month Month Month Month
Cost of 1 2 3 4 5 6 7 8 9 10 11 12
Sales
Surge $0 $560 $682 $905 $1,14 $1,301 $1,465 $1,714 $1,863 $1,994 $2,082 $2,206
Arrestor 5
s
Surge $0 $502 $611 $811 $1,02 $1,165 $1,312 $1,535 $1,669 $1,786 $1,864 $1,976
Protecto 6
rs
Commer $0 $436 $530 $704 $891 $1,012 $1,140 $1,333 $1,449 $1,551 $1,619 $1,716
cial sales
Subtotal $0 $1,49 $1,82 $2,41 $3,06 $3,477 $3,917 $4,582 $4,980 $5,331 $5,565 $5,897
Direct 7 3 9 2
Cost of
Sales
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PERSONNEL PLAN
MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT
H1 H2 H3 H4 H5 H6 H7 H8 H 9 H 10 H 11 H 12
Project 0 $4,20 $4,20 $4,20 $4,20 $4,20 $4,20 $4,20 $4,20 $4,20 $4,20 $4,20 $4,20
Manage % 0 0 0 0 0 0 0 0 0 0 0 0
r
Custom 0 $0 $400 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900
er %
service
agent
Custom 0 $0 $400 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900
er %
service
agent
Custom 0 $0 $0 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900
er %
service
agent
Custom 0 $0 $0 $0 $0 $900 $900 $900 $900 $900 $900 $900 $900
er %
service
agent
TOTAL 1 3 4 4 5 5 5 5 5 5 5 5
PEOPL
E
Total $4,20 $5,00 $6,90 $6,90 $7,80 $7,80 $7,80 $7,80 $7,80 $7,80 $7,80 $7,80
Payroll 0 0 0 0 0 0 0 0 0 0 0 0
GENERAL ASSUMPTIONS
MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT
H1 H2 H3 H4 H5 H6 H7 H8 H 9 H 10 H 11 H 12
Plan 1 2 3 4 5 6 7 8 9 10 11 12
Month
Curren 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
t % % % % % % % % % % % %
Interes
t Rate
Long- 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
term % % % % % % % % % % % %
Interes
t Rate
Tax 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00
Rate % % % % % % % % % % % %
Other 0 0 0 0 0 0 0 0 0 0 0 0
MON MON MON MON MON MON MON MON MON MON MON MON
TH 1 TH 2 TH 3 TH 4 TH 5 TH 6 TH 7 TH 8 TH 9 TH TH TH
10 11 12
Sales $0 $4,64 $5,64 $7,49 $9,48 $10,7 $12,1 $14,2 $15,4 $16, $17, $18,2
0 9 8 9 76 38 01 35 521 247 77
Direct $0 $1,49 $1,82 $2,41 $3,06 $3,47 $3,91 $4,58 $4,98 $5,3 $5,5 $5,89
Cost of 7 3 9 2 7 7 2 0 31 65 7
Sales
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Costs of
Goods
TOTAL $0 $1,4 $1,8 $2,4 $3,0 $3,4 $3,9 $4,5 $4,9 $5,3 $5,5 $5,8
COST 97 23 19 62 77 17 82 80 31 65 97
OF
SALES
Gross $0 $3,14 $3,82 $5,07 $6,42 $7,29 $8,22 $9,61 $10,4 $11, $11, $12,3
Margin 3 6 9 7 9 2 9 55 190 682 79
Gross 0.00 67.73 67.73 67.73 67.73 67.73 67.73 67.73 67.73 67.7 67.7 67.73
Margin % % % % % % % % % 3% 3% %
%
Expenses
Payroll $4,20 $5,00 $6,90 $6,90 $7,80 $7,80 $7,80 $7,80 $7,80 $7,8 $7,8 $7,80
0 0 0 0 0 0 0 0 0 00 00 0
Sales $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
and
Marketin
g and
Other
Expenses
Deprecia $117 $117 $117 $117 $117 $117 $117 $117 $117 $117 $117 $117
tion
Rent $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Utilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Insuranc $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
e
Payroll 15 $630 $750 $1,03 $1,03 $1,17 $1,17 $1,17 $1,17 $1,17 $1,1 $1,1 $1,17
Taxes % 5 5 0 0 0 0 0 70 70 0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total $5,94 $6,86 $9,05 $9,05 $10,0 $10,0 $10,0 $10,0 $10,0 $10, $10, $10,0
Operatin 7 7 2 2 87 87 87 87 87 087 087 87
g
Expenses
Profit ($5,9 ($3,7 ($5,2 ($3,9 ($3,6 ($2,7 ($1,8 ($468 $368 $1,1 $1,5 $2,29
Before 47) 24) 26) 73) 60) 88) 65) ) 03 95 2
Interest
and
Taxes
EBITDA ($5,8 ($3,6 ($5,1 ($3,8 ($3,5 ($2,6 ($1,7 ($351 $485 $1,2 $1,7 $2,40
30) 07) 09) 56) 43) 71) 48) ) 20 12 9
Interest $412 $407 $402 $397 $392 $387 $382 $377 $372 $367 $362 $357
Expense
Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Incurred
Net Profit ($6,3 ($4,1 ($5,6 ($4,3 ($4,0 ($3,1 ($2,2 ($845 ($4) $736 $1,2 $1,93
59) 31) 27) 70) 52) 75) 47) ) 33 6
Net 0.00 - - - - - - - - 4.46 7.15 10.59
Profit/Sal % 89.03 99.61 58.28 42.70 29.46 18.51 5.95 0.03 % % %
es % % % % % % % %
PRO FORMA CASH FLOW
MON MON MON MON MON MON MON MON MON MONTH MON MON
TH 1 TH 2 TH 3 TH 4 TH 5 TH 6 TH 7 TH 8 TH 9 10 TH TH
11 12
Cash
Received
Cash
from
Operation
s
Cash $0 $4,64 $5,64 $7,49 $9,48 $10,7 $12,1 $14,2 $15,4 $16,521 $17,2 $18,2
Sales 0 9 8 9 76 38 01 35 47 77
SUBTOT $0 $4,6 $5,6 $7,4 $9,4 $10, $12, $14, $15, $16,521 $17, $18,
AL CASH 40 49 98 89 776 138 201 435 247 277
FROM
OPERATI
ONS
Additional
Cash
Received
Sales 0.0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Tax, VAT, 0%
HST/GST
Received
New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Borrowin
g
New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other
Liabilities
(interest-
free)
New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-
term
Liabilities
Sales of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other
Current
Assets
Sales of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-
term
Assets
New $0 $0 $0 $15,0 $0 $0 $0 $0 $0 $0 $0 $0
Investme 00
nt
Received
SUBTOT $0 $4,6 $5,6 $22, $9,4 $10, $12, $14, $15, $16,521 $17, $18,
AL CASH 40 49 498 89 776 138 201 435 247 277
RECEIVE
D
Expenditu Mont Mont Month Month Month Month Month Month Month Month 10 Month Month
res h1 h2 3 4 5 6 7 8 9 11 12
Expenditu
res from
Operation
s
Cash $4,20 $5,00 $6,90 $6,90 $7,80 $7,80 $7,80 $7,80 $7,80 $7,800 $7,80 $7,80
Spending 0 0 0 0 0 0 0 0 0 0 0
Bill $68 $2,15 $5,27 $4,64 $5,53 $6,33 $6,50 $6,98 $7,86 $7,970 $8,25 $8,36
Payments 0 8 7 5 5 6 2 4 6 9
SUBTOT $4,2 $7,1 $12, $11, $13, $14, $14, $14, $15, $15,770 $16, $16,
AL 68 50 178 547 335 135 306 782 664 056 169
SPENT
ON
OPERATI
ONS
Additional
Cash
Spent
Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Tax, VAT,
HST/GST
Paid Out
Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayme
nt of
Current
Borrowin
g
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Principal
Repayme
nt
Long- $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600
term
Liabilities
Principal
Repayme
nt
Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other
Current
Assets
Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-
term
Assets
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
SUBTOT $4,8 $7,7 $12, $12, $13, $14, $14, $15, $16, $16,370 $16, $16,
AL CASH 68 50 778 147 935 735 906 382 264 656 769
SPENT
Net Cash ($4,8 ($3,1 ($7,1 $10,3 ($4,4 ($3,9 ($2,7 ($1,1 ($829 $151 $591 $1,50
Flow 68) 10) 29) 51 46) 59) 68) 81) ) 8
Cash $17,0 $13,9 $6,79 $17,1 $12,6 $8,73 $5,97 $4,78 $3,96 $4,111 $4,70 $6,20
Balance 32 22 3 44 98 9 1 9 0 2 9
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