Computer Service Business Plan

1.0 ExecutiveSummary1
1.1 Objectives1
Chart:Highlights2
1.2 Mission2
1.3 KeystoSuccess2
2.0 CompanySummary2
2.1 CompanyOwnership2
2.2 Start-upSummary3
Table:Start-up3
Table:Start-upFunding4
Chart:Start-up5
3.0 Services5
4.0 MarketAnalysis Summary6
4.1 MarketSegmentation6
Table:MarketAnalysis7
Chart:MarketAnalysis(Pie)7
4.2 TargetMarketSegmentStrategy7
4.3 ServiceBusinessAnalysis8
4.3.1 CompetitionandBuyingPatterns8
5.0 StrategyandImplementationSummary9
5.1 CompetitiveEdge9
5.2 MarketingStrategy9
5.3 SalesStrategy10
5.3.1 SalesForecast10
Chart:SalesbyYear12
Table:SalesForecast11
 Chart:ProfitYearly19
7.4 ProjectedCashFlow20
Chart:Cash20
Table:CashFlow21
7.5 BusinessRatios21
Table:Ratios22
7.6 ProjectedBalanceSheet23
7.6ProjectedBalanceSheet23
Table:BalanceSheet23
1.0 ExecutiveSummary

PC Repair will provide computer and technical consulting (repairs,

training, networking and
upgradeservice)tolocalsmallbusinessesaswellashomePCusers.Thec
ompanywillfocuson marketing, responsiveness, quality, and
creating and retaining customer relations.

PC Repair was initially formed as a sole proprietorship, but was

reconfigured as AAA systems in December of 2020. PC Repair will
at first be a home office start-up, utilizing one studio room in the
owner's home and serving customers in the local RBT Mall, Salem
New bus stand. .Inthethird
monthofourplan,wewillmoveintoaleasedofficespaceandhire
asecondtechnician.Assalesincrease,wewillhireadditionalpersonn
el.

TheMarket
Theverynatureofthecomputingindustry,withitsextraordinaryrateoft
echnological development, creates a constant need for businesses
skilled in updating and advising customers oncomputer-
relatedissues.Intown,themajorityofpotentialcustomersaredissatisfi
edwith
existingoptions,creatinganattractivenicheforaninnovativestart-
up.SmallbusinessPC
userswillprovidethemajorityofourbusinessrevenue. Business Week
expectsthecomputing
industrytogrowatarateof12%andtheprocessorspeeds
tocontinuetoexpandforyearsto
come,providingarichresourceforsales.

PC Repair has decided to focus mainly on the small business

market, as these customers typically don't have a full-time IT
person, but have full-time IT needs. PC Repair will offer
anaffordable, on-demand service for these customers. We can also
offer maintenance agreements that generate additional monthly
income. For our residential customers, we will offer a very
affordable and helpful service with a very flexible schedule to meet
their needs. Our target market will focus on Salem new bus stand
and the surrounding areas. Market research indicates there is an
abundance of business for a small company such as PC Repair.
 Start-upFundingandFinancials

Chart:Highlights

1.2 Mission

Ourgoalistosetthestandardforon-
sitecomputersolutionsthroughfast,on-siteserviceand response. Our
customers will always receive one-on-one personal attention at a very
affordable
price.Ourcustomerswillreceivethehighestqualityofcustomerserviceava
ilable.Our
employeeswillreceiveextensivetraining,agreatplacetowork,fairpayand
benefits,and
incentivestousetheirowngoodjudgementtosolvecustomers'problems.o
perations of the company as we expand the personnel to 5 within the
next three years, lease a separate space for offices, and purchase
company vehicles and cell phones.

The owner, Ansari.B, has 10 years of experience in the fields of

technicalsupport, networking, and computer training and repair.
 Kathir has also spent the last three years as the manager of a
custom computer building and repairstore, and understands the
computer needs of small businesses.

2.2 Start-upSummary

Total start-up expenses include initial expenses for establishing our

website, setting up the business, and doing our pre-opening
advertising

Thebulkofourstart-
uprequirementsareassetneeds:weneeddiagnosticandrepair
equipment,halfofwhichwillbecontributedto
thebusinessbytheownerfromhisown
materials.Wearetreatingthisequipmentasassetsbecauseweexpect
ittolastatleastthree years,andtohavesomeresalevaluewhenwe
arethroughwithit; wewillbuyadditional
expensedequipmentinyearstwoandthree.Wealsoneedstart-
upinventorywhichincludes RAM, spare hard drives, cables, and
cases. Although we will keep expenses to a minimum for
thefirstthreemonths,beforewemove,wewill alsoneedcashat start-
up,toseeusthrough
thenextseveralmonthswithapositivecashbalance.

Weplantofundourtotalstart-
uprequirementsdirectownerinvestment(includingthe
contributedassets),andathree-
yearloansecuredwiththeowner'scollateral(hishome
equity).Weshouldbeabletoeasilyrepaythisloanwithinthreeyears,ev
enwithamuchlower salesrevenuethanprojected.
(SeetheCashFlowtableforprojectedrepayment.)

Table:Start-up
Table:Start-upFunding

Start-up Funding
Start-upExpensestoFund 3,00,000
Start-upAssetstoFund 32,00,000
TotalFundingRequired 35,00,000

Assets
Non-cashAssetsfromStart-up 9,00,000
CashRequirementsfromStart-up 22,00,000
AdditionalCashRaised 0
CashBalanceonStartingDate 1,00,000
TotalAssets 32,00,000

LiabilitiesandCapital

Liabilities
CurrentBorrowing 15,00,000
Long-termLiabilities 0
AccountsPayable(OutstandingBills) 0
OtherCurrentLiabilities(interest-free) 0
TotalLiabilities 15,00,000

Capital

PlannedInvestment
Owner 23,00,0000
Investor 0
AdditionalInvestmentRequirement 0
TotalPlannedInvestment 23,00,000

LossatStart-up(Start-upExpenses) 0
TotalCapital 23,00,00
 Chart:Start-up

3.0 Services

PC Repair will offer computer repairs, training, networking and

upgrade service to clients in two major categories: home PC users
and small business users. As PC Repair and the client demands
grow, we will offer softwaredevelopment to our business clients.

Fromtheveryfirstday,wewillofferon-
siterepairandconsultingservices,sothatourclients
don'tneedtotaketimeoutoftheirbusydaysto
haulacomputerintoourworkshop. Thisis
4.0 MarketAnalysisSummary

PCRepairwillprovidecomputersupportinbothaconsultingandtechn
icalcapacitytosmall
businessownersaswellashomePCusers.SincePCRepairiscurrentlya
onemanoperation,
itsgrowthinthefirstthreemonthswillbelimitedbytheowner's
capacitytocompletework.
However,thesefirstthreemonthsarecriticalforestablishingourcredi
bilityandareputation
forgettingthejobdonequicklyandwell.Wewillfocusondeliveringexc
ellentservice,and usingthegoodwordofmouthfromthisinitial
periodtonetworkwithotherpotential clients.

Personal market research by the owner indicates an attractive

market niche for our services, of which PC Repair willtake full
advantage. The very nature of the computing industry, withits
extraordinary rate of technological development, creates a constant
need for businesses skilled in updating and advising customers on
computer-related issues.

Nationalchains,suchas"SR Info solutions,"andBestBuy's"Matrix

info tech"haveseenrapidgrowth in demand for these services in the
last few years. Customers are seeking skilled help with everything
from installation of software and hardware components, to
networking, totransferring files from an old computer to a new one.
Those who can often enlist their tech- savvy children's help, but
others are not so fortunate, and small-business owners need
reliable and quick help with all their computerneeds, since every
hour down may mean an hour ormore of lost revenue, especially
for any business with a website or those doing e-commerce.

4.1 MarketSegmentation

Theexistingcomputerservicemarketissoextensivethatcategorizin
gitisratherdifficult.We
havebrokenourpotentialmarketdownintotwogroups,basedontheir
needs:homePCusers and small business clients.

HomePCUser
OurhomePCusermarketincludesnon-tech-
savvyresidentsofthelocalarea(15KMradius),
 quality repairs and support are available in a crisis. Their hardware
needs will include the same items as home users, plus servers,
backup systems, data storage, and wireless networking.

Theportionofthesmallbusinessmarketwearetargetingisgrowingataroun
d2% ayear.

Table:MarketAnalysis
MarketAnalysis
Year1 Year2 Year3 Year4 Year5
Potential Customers Growth CAGR
HomePCUsers 7% 25,000 26,750 28,623 30,626 32,770 7.00%
SmallBusinessUsers 2% 10,000 10,100 10,201 10,303 10,406 1.00%
Other 0% 0 0 0 0 0 0.00%
Total 5.39% 35,000 36,850 38,824 40,929 43,176 5.39%

person, as frustrated clients waited for days or weeks for their critical components to
bereturned to full capacity, with no inexpensive alternative to the existing computer
repair shops. All of our clients need technical assistance, but we are also selling peace
of mind: our clientswill know that friendly, efficient help isjust a phone call away.
Asmore and more companies switch their support services to automated call centers
or touch-tone menus, the simple reassurance of hearing another human voice on the
phone within a few rings isimmeasurable. Even better is knowing that within a few
hours, someone will show up and take care of their problem.

4.3 ServiceBusinessAnalysis

Secondary market research shows computer service customers

tend to be very loyal to providers that do good work and satisfy
their needs. An analysis of PC Repair's main competitors shows
no overwhelming strengths that would be significant barriers to
entry into the market, as our local competitors have serious
weaknesses.

Thecomputermaintenanceandrepairindustryisfragmented,withafe
wlarge,nationalplayers
andhundredsofsmall,localstores.Whilemostcomputersareactually
repairedin-store,near
thecustomer,partsfortherepaircomefrommajormanufacturersandd
istributors;delaysin
receivingnecessarypartscansignificantlyslowdowntherepairproces
s.Largechainshave
solvedthisproblembykeepingvastamountsofinventoryinstockat
alltimes,whilelocal storesoffercustomersthetrade-off
ofpersonalinteractionandtrustthatmaymakeup for some delay.
 1. CompetitorA.Theyareawellestablishedproviderofcomputer
upgradesandservices,
anddoquickwork.However,theyhaveahighstaffturnover,ayo
ungandinexperienced
staff,andaremoreinterestedinsellingnewcomponentsthanin
maintainingexisting
machinesorfindingcustomsolutions.Theydonotofferanykind
ofpick-upanddrop-off service,anddonotofferon-
sitehelp.Theyreallyonlyofferhardwaresupport.

2. CompetitorB.SmallerandlessknownthenA,Bprovidesmanyser
vicesforresidents
livingineastandsouthpartsoftown.Theyaremorewillingtospend
timewith aclient,
figuringoutexactlywhathisorherneedsare,andsuggestingnewo
ptionsthancompetitor
A. However, they have an inefficient ordering system and an
unkempt shop, which deters potential customers and can turn
existing customers to the competition. They also do not offer
on-site services, although they are considering instituting a trial
pick-up/drop-offservice. They are in the best position to copy
our innovations and steal customers, but their management is
complacent and may not respond to competition.

BothofthesecompanieschargeratesinexcessofPCRepair;wew
illbeabletoattractthe price-sensitive market without much
work.

5.0 StrategyandImplementationSummary

OurStrategyandImplementationturnonthreepoints:

1. Avaluepropositionoftimelyandpracticalsolutions,atareasona
blerate,coupledwitha 100% guarantee.

2. Exploitingourcompetitorsweaknesses:acompetitiveedgebase
donquick,effective,and sympathetic customer service, which
meets the customer where his needs are, rather than trying to
fit him into an existing box.

3. Quicklyestablishingabrandidentityanddevelopingagreatreputationam
onglocal
 around times. They will announce our opening date, and include
acoupon for free diagnostic service for the first 20 customers.

We will follow up on these opening ads with a smaller direct-

marketing campaign to small business owners, with lists drawn
from the local Chamber of Commerce. Ansari will use his contacts
with business customers from his years as a manager to create a
"buzz" about this new business.

Wewillcontinueperiodicadvertisements,includingseveralpromotions(
discounts,free
diagnosis,etc.)throughoutthefirstyear.Weexpectasmallbutsteadyresp
onsefromhomePC
userswhoseeouradselsewhere,butwillalsorunmonthlyads
insectionsotherthanthe business one.

Wewillofferapromotionduringthefirst90daysofbusinesstogenerate
businesstrafficand
wordofmouth.OurpromoisSpywareremovalonanydesktopPCfor1,0
00includingtaxand software.Spywareisa
hugeproblemforalotofresidentialandsmallbusinesscustomers,and
the offer should draw a lot of interest.

5.3 SalesStrategy

Ourmarketingstrategywillgeneratecustomerinquiries.Wewillcloset
hedealsbyofferingan outstanding service and a very reasonable
price. Happy customers generate repeat business
andwordofmouth.Ourtollfreenumberisoperational24hoursaday,se
vendaysaweek,and
from8amto9pm,Iwillbeavailabletoanswercalls.Atothertimes,orw
henIamonthe
phone,anansweringservicewehavehiredwillcatchcallersandgiveth
emanestimatedwait timeforacall-
back;thisisanothersteptowardsdeliveringacompletesolutiontoour
customers.

Sales forecast figures are based on industry figures for the typical
growth of a start-up and reflect repeat business generated through
meeting customer needs.
 The one element of sales not represented in the table below is
direct costs forour maintenance contracts. We estimate these costs
at 12% of sales revenue, but expect a delayed occurrence - that is,
we will sell maintenance contracts starting in February, but do not
expect to actuallyperform maintenance on computers guaranteed
under them for the firstfew months. We will incur more and more
costs from these astime goes on, and the computers age - most of
the serviceinamaintenancecontractisperformedwithin
thelastquarterofthespecifiedperiod.
ProjectionsforthedirectcostsforthesecontractscanbefoundintheProf
itandLossTable,as other costs of sales.

Table:SalesForecast

Sales Forecast
Year1 Year2 Year3
UnitSales
HomePCUnit 166 200 225
SmallBusinessUnit 264 300 350
Promo 235 0 0
MaintenanceContract 32 60 85
s
TotalUnitSales 697 560 660

UnitPrices Year1 Year2 Year3

HomePCUnit 25,000 30,000 30,000
SmallBusinessUnit 30,000 40,000 40,000
Promo 1,000 $0.00 $0.00
MaintenanceContract 2,000 3,000 3,000
s
Sales
HomePCUnit 50,000 60,000 67,500
SmallBusinessUnit 1,50,000 180,000 210,000
Promo 15,000 0 0
MaintenanceContract 10,000 36,000 51,000
s
TotalSales 2,5000 276,000 328,500

DirectUnitCosts Year1 Year2 Year3

 5.4 Milestones

Ourmilestones,listedinthetablebelow,outlinethemajoreventsthatwi
llpromote,aswellas
insurethesuccessofPCRepairandkeepitagoingconcernwellintothef
uture.Wewill
measureoursuccessinmeetingthesemilestoneseverymonth,andadj
usttheplantokeepup withour objectives. Name recognition,
inparticular, is veryimportant to breaking into this market-
wewillconductasurveybycalling200randomlyselectedsmallbusine
ssesfromthe
ChamberofCommercelistingsonthespecifieddatesandaskingthem
whethertheyhave
heardofPCRepair,andifso,whattheirimpressionisofourservice.Ifan
yoftherespondents
haveactuallyusedourservices,wewillelicitfeedbackontheirexperien
cewithus,and
suggestionsforimprovement.Wewillalsoaskiftheywouldrecommen
dustoacolleague.

Table:Milestones
Milestones

Milestone Start Date EndDate Budget Manager Department

Procurementofmaterialsfor 12/1/2019 2/1/2020 1,200 JMH Department
opening
Start-upAd Campaign 12/15/2019 2/6/2020 1,200 JMH Department
GetLoanApproved 1/1/2020 1/17/2020 0 JMH Department
OpenBusiness 2/7/2020 2/8/2020 0 JMH Department
NameRecognitionby5%of 2/28/2020 2/28/2020 0 JMH Department
potentialmarket
MeetwithLeasingAgent 3/1/2020 3/10/2020 0 JMH Department
InterviewpotentialTechs 3/1/2020 4/25/2020 0 JMH Department
MoveintoLeased Space 4/1/2020 4/10/2020 2,000 JMH Department
SignonLeasedVehicle 4/15/2020 4/20/2020 6,000 JMH Department
TargetedAdsBegin 4/15/2020 5/15/2020 4,000 JMH Department
1stTech Starts 5/1/2020 5/1/2020 0 JMH Department
2ndRoundTechInterviews 7/1/2020 7/31/2020 0 JMH Department
DirectmarketingtoSmall 7/1/2020 9/30/2020 8,000 JMH Department
Businesses
IncreaseNameRecognitionto 8/1/2020 8/2/2020 0 JMH Department
20%
 Chart:Milestones

6.0 ManagementSummary

PCRepairwillbeownedandmanagedbyKathirvel.
Kathirhas10yearsofexperienceinthe fields of technical support,
networking, and computer training and repair. Kathir has also
spent the last three years as the manager of a custom computer
building and repairstore, and understands the computer needs of
small businesses. Kathir is adept at managing his time, and at
quickly responding to multiple customer calls and needs.
6.1 PersonnelPlan

Kathirvelwillbetheonlyemployeeforthefirstfewmonths;hissalaryisdi
rectlyrelatedto
thesuccessofthebusiness,andwillneverexceed18%ofsalesrevenu
e.Inthethirdmonth,
wewillmovetoaleasedofficespaceandhireasecondemployee,withat
hirdhireplannedfor
August,ifprojectionsareontarget.Weplantohireadditionalpart-
timeemployeesinthe
secondyear,tobetterhandletheincreasingsales.

Ouremployeeswillbeskilledprofessionals,withequallystrongtechnic
alandpeopleskills.Itis
veryimportanttoKathirthattheybepaidsalariescommensuratewitht
heirabilitiesand dedication-
happytechsupportpeoplemakeforhappycustomers.To
thatend,ourfull-time
employeeswillreceivehealthbenefits(premiumssplitbetweentheem
ployeeandPCRepair), paidholidays,andsicktime.

7.0 FinancialPlan

The following sections include the annual estimates for the standard
set of financial tables. Detailedmonthlypro-
formatablesareincludedintheappendix.
7.2Break-evenAnalysis

Fixedcostsareprojectedatamonthlyaverageforthefirstyear.Thisincl
udespayroll,moving expenses and rent, purchase of a company
vehicle, and other necessities like cell phones and
theansweringservice.Variablecosts(inventoryusedinrepairingorse
rvicingcomputers)are projectedaswell.At
theselevels,whatweneedtobringin permonthtobreakevenisshown
inthetableandchartbelow.Wewillreachourbreak-evenpointmid-
year,althoughweexpect
salesinNovemberandDecembertodipbelowthislevelbecauseofholi
days.

Chart:Break-evenAnalysis
7.3ProjectedProfitandLoss
Thetablebelowshowsourprojectedprofitandloss.Therearetwolinesfordir
ectcostofsales
-
thesecondlineshowsprojectedinventorycostsoffulfillingourmainten
ancecontracts.The marketing/promotion line shows our planned
advertising program expenses. Although these are
aggressive,wemustspendheavilyinthefirstyearinordertoestablisht
hebrandrecognition that will help us break in to the local market.

This table also shows our projected expense increases as we hire

more employees and move
intoalargerrentedspace.Beforethemove,theownerwillabsorbexpe
nsesrelatedtoutilities.
Inyearstwoandthree,wehavebudgetedforadditionalexpensedequi
pmenttoexpandour
diagnosticandrepaircapabilitiestokeepupwithorders.

Weareseekingamodestnetprofitinthefirstyear.Asourreputationgrows,
wewillseehigher revenues and net profit over the next three years.

Chart:GrossMarginMonthly
 Chart:GrossMargin Yearly

Table:ProfitandLoss

ProFormaProfitandLoss
Year1 Year2 Year3
Sales 203,030 276,000 328,500
DirectCostofSales 42,604 55,800 64,350
CostsofFulfillingMaintenanceContracts 1,488 4,320 6,120
TotalCostofSales 44,092 60,120 70,470
Chart:ProfitMonthly
7.4 ProjectedCashFlow

TheCashFlowchart,below,showsourprojectedcashpositionforthefi
rstyear;thetable
followingitshowshighlightsforthefirstthreeyears.Withtherequested
start-upfunding,we
willmaintainapositivecashbalancethroughout,andrepaytheloanwit
hinthreeyears.

Chart:Cash
 Table:CashFlow

ProFormaCashFlow
Year1 Year2 Year3
CashReceived

CashfromOperations
CashSales 203,030 276,000 328,500
SubtotalCashfromOperations 203,030 276,000 328,500

AdditionalCash Received
SalesTax,VAT,HST/GSTReceived 0 0 0
NewCurrentBorrowing 0 0 0
NewOtherLiabilities(interest-free) 0 0 0
New Long-termLiabilities 0 0 0
SalesofOtherCurrentAssets 0 0 0
SalesofLong-termAssets 0 0 0
NewInvestmentReceived 0 0 0
SubtotalCash Received 203,030 276,000 328,500

Expenditures Year1 Year2 Year3

ExpendituresfromOperations
CashSpending 69,000 110,000 115,000
Bill Payments 110,873 142,543 163,375
SubtotalSpenton Operations 179,873 252,543 278,375

AdditionalCashSpent
SalesTax,VAT,HST/GSTPaidOut 0 0 0
PrincipalRepaymentofCurrentBorrowing 6,564 6,550 6,111
OtherLiabilitiesPrincipalRepayment 0 0 0
Long-termLiabilitiesPrincipalRepayment 0 0 0
PurchaseOtherCurrentAssets 0 0 0
PurchaseLong-termAssets 0 0 0
Dividends 0 0
SubtotalCash Spent 186,437 259,093 284,486
 Table:Ratios

Ratio Analysis

Year1 Year2 Year3 IndustryProfile

SalesGrowth n.a. 35.94% 19.02% 5.23%

PercentofTotalAssets
Inventory 8.22% 9.07% 5.90% 2.79%
OtherCurrentAssets 16.81% 12.72% 8.15% 51.19%
TotalCurrentAssets 100.00% 100.00% 100.00% 75.09%
Long-termAssets 0.00% 0.00% 0.00% 24.91%
TotalAssets 100.00% 100.00% 100.00% 100.00%

CurrentLiabilities 42.77% 22.55% 11.07% 31.75%

Long-termLiabilities 0.00% 0.00% 0.00% 18.48%
TotalLiabilities 42.77% 22.55% 11.07% 50.23%
Net Worth 57.23% 77.45% 88.93% 49.77%

PercentofSales
Sales 100.00% 100.00% 100.00% 100.00%
GrossMargin 78.28% 78.22% 78.55% 100.00%
Selling,General&AdministrativeExpen 38.70% 65.72% 64.96% 80.06%
ses
AdvertisingExpenses 0.00% 0.00% 0.00% 1.23%
ProfitBeforeInterestandTaxes 10.44% 16.28% 21.64% 1.95%

MainRatios
Current 2.34 4.43 9.03 1.53
Quick 2.15 4.03 8.50 1.24
TotalDebttoTotalAssets 42.77% 22.55% 11.07% 57.27%
Pre-taxReturnonNetWorth 59.02% 63.01% 63.16% 2.73%
Pre-taxReturnonAssets 33.78% 48.80% 56.17% 6.39%

AdditionalRatios Year1 Year2 Year3

NetProfitMargin 6.93% 9.73% 14.69% n.a
Returnon Equity 41.32% 44.10% 44.21% n.a
7.6ProjectedBalanceSheet

The Balance Sheet shows a steadily increasing net worth over

the next three years. Since we are planning to rent, and because
computer technology changes sorapidly, we will have only short-
term assets, such as computer equipment and furniture. This will
make our net worth much more liquid than many similar
businesses.

ProFormaBalanceSheet
Year1 Year2 Year3
Assets

CurrentAssets
Cash 44,593 61,500 105,514
Inventory 4,890 7,129 7,239
OtherCurrentAssets 10,000 10,000 10,000
TotalCurrentAssets 59,482 78,629 122,753

Long-termAssets
Long-termAssets 0 0 0
AccumulatedDepreciation 0 0 0
TotalLong-termAssets 0 0 0
TotalAssets 59,482 78,629 122,753

LiabilitiesandCapital Year1 Year2 Year3

CurrentLiabilities
AccountsPayable 12,783 11,620 13,590
CurrentBorrowing 12,661 6,111 0
OtherCurrentLiabilities 0 0 0
SubtotalCurrentLiabilities 25,444 17,731 13,590
Table:BalanceSheet
Table:SalesForecast

SalesForecast

Month1 Month2 Month3 Month4 Month5 Month6 Month7 Month8 Month9 Month10 Month11 Month12
UnitSales
HomePCUnit 3 5 3 15 18 20 20 20 17 15 10 20
SmallBusinessUnit 3 3 3 10 25 35 40 45 50 15 10 25
Promo 0 0 10 30 40 0 40 40 40 0 0 35
MaintenanceContracts 0 1 1 2 3 3 3 4 4 3 4 4
TotalUnitSales 6 9 17 57 86 58 103 109 111 33 24 84

UnitPrices Month1 Month2 Month3 Month4 Month5 Month6 Month7 Month8 Month9 Month10 Month11 Month12
HomePCUnit 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00
SmallBusinessUnit 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00
Promo 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
MaintenanceContracts 400.00 400.00 400.00 400.00 400.00 400.00 400.00 400.00 400.00 400.00 400.00 400.00

Sales
HomePCUnit 840 1,400 840 4,200 5,040 5,600 5,600 5,600 4,760 4,200 2,800 5,600
SmallBusinessUnit 1,500 1,500 1,500 5,000 12,500 17,500 20,000 22,500 25,000 7,500 5,000 12,500
Promo 0 0 500 1,500 2,000 0 2,000 2,000 2,000 0 0 1,750
MaintenanceContracts 0 400 400 800 1,200 1,200 1,200 1,600 1,600 1,200 1,600 1,600
TotalSales 2,340 3,300 3,240 11,500 20,740 24,300 28,800 31,700 33,360 12,900 9,400 21,450

DirectUnitCosts Month1 Month2 Month3 Month4 Month5 Month6 Month7 Month8 Month9 Month10 Month11 Month12
HomePCUnit 30.00% 84.00 84.00 84.00 84.00 84.00 84.00 84.00 84.00 84.00 84.00 84.00 84.00
SmallBusinessUnit 21.00% 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00
Promo 8.00% 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00
MaintenanceContracts 12.00% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

DirectCostofSales
HomePCUnit 252 420 252 1,260 1,512 1,680 1,680 1,680 1,428 1,260 840 1,680
SmallBusinessUnit 315 315 315 1,050 2,625 3,675 4,200 4,725 5,250 1,575 1,050 2,625
Promo 0 0 40 120 160 0 160 160 160 0 0 140
MaintenanceContracts 0 0 0 0 0 0 0 0 0 0 0 0
SubtotalDirectCostofSales 567 735 607 2,430 4,297 5,355 6,040 6,565 6,838 2,835 1,890 4,445
Table:Personnel

PersonnelPlan

Month1 Month2 Month3 Month4 Month5 Month6 Mont Month8 Month9 Month1 Month1 Month12
h7 0 1
Owner 0 2,000 2,000 2,500 2,500 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000
%
Tech1 0 0 0 0 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400
%
Tech2 0 0 0 0 0 0 0 2,400 2,400 2,400 2,400 2,400 2,400
%
Part Time 0 0 0 0 0 0 0 0 0 0 0 0 0
%
TotalPeople 1 1 1 2 2 2 3 3 3 3 3 3

TotalPayroll 2,000 2,000 2,500 4,900 5,400 5,400 7,800 7,800 7,800 7,800 7,800 7,800

Table:GeneralAssumptions

GeneralAssumptions

Month1 Month2 Month3 Month4 Month5 Month6 Month7 Month8 Month9 Month10 Month11
PlanMonth 1 2 3 4 5 6 7 8 9 10 11
CurrentInterestRate 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Long-termInterestRate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00 10.00% 10.00%
%
TaxRate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00 30.00% 30.00%
%
Other 0 0 0 0 0 0 0 0 0 0 0
Table:ProfitandLoss

ProFormaProfitandLoss

Month1 Month2 Month3 Month Month Month6 Month7 Month8 Month9 Month10 Month11 Month12
4 5
Sales 2,340 3,300 3,240 11,500 20,740 24,300 28,800 31,700 33,360 12,900 9,400 21,450
DirectCostofSales 567 735 607 2,430 4,297 5,355 6,040 6,565 6,838 2,835 1,890 4,445
Costs of Fulfilling 0 0 48 96 144 144 144 192 192 144 192 192
MaintenanceContracts
TotalCostofSales 567 735 655 2,526 4,441 5,499 6,184 6,757 7,030 2,979 2,082 4,637

GrossMargin 1,773 2,565 2,585 8,974 16,299 18,801 22,616 24,943 26,330 9,921 7,318 16,813
Gross Margin % 75.77% 77.73% 79.78% 78.03% 78.59% 77.37% 78.53% 78.68% 78.93% 76.91% 77.85% 78.38%

Expenses
Payroll 2,000 2,000 2,500 4,900 5,400 5,400 7,800 7,800 7,800 7,800 7,800 7,800
Marketing/Promotion 4,000 1,000 3,000 2,000 2,000 3,000 3,000 2,000 2,000 2,000 2,000 2,000
Depreciation 0 0 0 0 0 0 0 0 0 0 0 0
Lease 0 0 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
ExpensedEquipment 0 0 0 0 0 0 0 0 0 0 0 0
Insurance 150 0 300 300 300 300 300 300 300 300 300 300
Website 40 40 200 200 200 200 200 200 200 200 200 200
AnsweringService 200 0 0 0 0 0 0 0 0 0 0 0
Mileage 80 85 95 100 200 300 300 300 300 300 300 300
Vehicles 0 0 6,000 800 800 800 800 800 800 800 800 800
CellPhones 0 60 120 120 120 120 120 120 120 120 120 120
Utilities 0 0 500 500 500 500 500 500 500 500 500 500
Internet 15% 0 0 120 120 120 120 120 120 120 120 120 120
MovingExpenses 0 0 2,000 0 0 0 0 0 0 0 0 0

TotalOperatingExpenses 6,470 3,185 15,835 10,040 10,640 11,740 14,140 13,140 13,140 13,140 13,140 13,140

ProfitBeforeInterestandTax (4,697) (620) (13,250 (1,066) 5,659 7,061 8,476 11,803 13,190 (3,219) (5,822) 3,673
es )
EBITDA (4,697) (620) (13,250 (1,066) 5,659 7,061 8,476 11,803 13,190 (3,219) (5,822) 3,673
)
InterestExpense 109 106 103 99 96 93 90 87 83 80 77 74
TaxesIncurred (1,442) (218) (4,006) (350) 1,669 2,090 2,516 3,515 3,932 (990) (1,770) 1,080

NetProfit (3,364) (508) (9,347) (816) 3,894 4,878 5,870 8,201 9,175 (2,309) (4,129) 2,519
NetProfit/Sales -143.77% -15.39% - -7.09% 18.78% 20.07% 20.38% 25.87% 27.50% -17.90% -43.93% 11.75%
288.48
%
Statements
Projected Profit and Loss

  2018 2019 2020

Revenue $441,000 $457,800 $483,000

Direct Costs $200,466 $208,124 $219,674
Gross Margin $240,534 $249,676 $263,326

Gross Margin % 55% 55% 55%

Operating Expenses      

Salaries & Wages $139,200 $171,984 $175,423

Employee Related Expenses $27,840 $34,397 $35,084

Rent $38,400 $38,400 $38,400

Marketing $8,820 $9,156 $9,660

Insurance $2,400 $2,400 $2,400

Utilities $3,000 $3,000 $3,000

Amortization of Other Current Assets $0 $0 $0

Total Operating Expenses $219,660 $259,337 $263,967

Operating Income $20,874 ($9,661) ($641)
Interest Incurred $701 $100  

Depreciation and Amortization      

Gain or Loss from Sale of Assets      

Income Taxes $3,026 ($1,464) ($96)

Total Expenses $423,853 $466,097 $483,545

Net Profit $17,147 ($8,297) ($545)
Net Profit/Sales 4% -2% 0%