RJ Wagner & Assoc. Realty - Sample Plan
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Table of Contents 1.0
Execut Executive ive Summary Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 1.1 Obje Object ctiv ives es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Missi Mission on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.0 2.0
Company Compa ny Sum Summa mary ry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1 2.1 Compa Company ny Own Owner ershi ship p . .. . .. . .. . .. . .. .. . .. . .. . .. . .. . .. .. . .. . .. . .. . 3 2.2 2.2 Star Startt-up up Summ Summar ary y . .. . .. . .. . .. . .. . .. . .. . .. .. . .. . .. . .. .. . .. . .. . . 3
3.0
Servic Services es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.0 4.0
Mark Market et Ana Analy lysi sis s Summ Summar ary y . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . . 6 4.1 4.1 Marke Markett Segm Segmen enta tati tion on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.2 4.2 Targe Targett Mark Market et Segm Segmen entt Stra Strateg tegy y . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . . 8
5.0 5.0
Stra Strate tegy gy and and Imp Imple leme ment ntat atio ion n Summ Summar ary y . . .. . . .. . . .. . . .. . . .. . 5.1 5.1 Compe Competi titi tive ve Edge Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 5.2 Sale Sales s Stra Strate tegy gy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.1 5.2.1 Sales Sales Forec Forecast ast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 5.3 Mile Milest ston ones es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.0 6.0
Mana Managem gemen entt Summ Summar ary y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 6.1 6.1 Pers Person onne nell Pla Plan n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.0
Financ Financial ial Plan Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 7.1 7.1 Impo Importa rtant nt Ass Assum umpt ptio ions ns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 7.2 7.2 BreakBreak-ev even en Ana Analy lysi sis s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 7.3 7.3 Proje Project cted ed Prof Profit it and Loss Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 7.4 7.4 Proje Project cted ed Cash Cash Flo Flow w . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 7.5 7.5 Proje Project cted ed Bala Balanc nce e She Sheet et . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
. .. . . .. . . .. .. . .. . .. . .. .. .. . .. . .. . .. . . .. . . .. . . .. . .. .. . ..
8 9 9 10 11
RJ Wagner & Associates Realty 1.0 Executive Summary RJ Wagner & Associates Realty, Inc., is an S corporation domiciled in the state of Texas. This corporation is capitalized by one single stockholder and one principal investor, Regina Wagner. Regina Wagner is a licensed broker and the sponsoring broker for this firm. The licensed broker of this firm will sponsor licensed real estate agents (independent contractors) in the state of Texas. This corporation will formalize the real estate services offered. RJ Wagner & Associates Realty, Inc., will open its doors for operation in July 2001. The office is located in Houston, Texas (Ch ampions area) in the Greenwood Square Shopping Center, to provide services to the higher income section of Metropolitan Houston. Credibility Credibility and reputation excel with the broker of this firm, with a published real estate book and real estate organizational programs placed in the Houston Association of Realtors and the Dallas Association of Realtors bookstores and superstores. For the past year novice licensed agents have enjoyed the organizational tools and guidance offered in the book Texas Real Estate/The Mobile Mentor.
1.1 Objectives The primary objectives of our organization are to: • • • • •
Become Become a profitable profitable organi organization zation allowi allowing ng us the freedom freedom of taking taking advantage advantage of other other real estate investment opportunities as they become av ailable. Recruit Recruit and hire hire self-moti self-motivated, vated, successsuccess-orie oriented, nted, and and hardworking hardworking sales sales agents. agents. Maintain Maintain an office office of of at least least 15 sales sales agents agents who meet meet the previ previous ous requirem requirements. ents. Develop Develop a solid, solid, corporate corporate identi identity ty in our specified specified targeted targeted market market area. area. To establis establish h good working working relatio relationship nships s and begin begin working working as a team, promotin promoting g communication and suggestions from all participants.
RJ Wagner & Associates Realty conquering this goal. The same sales as noted above would profit the corporation $2,250 per month X 12 months = $27,000 for the year X 15 agents = $405,000. This is not including sales from the active broker of this corporation which would be $4,500 commission commission from each side to total $9,000 (100%) to the corporation. The broker will receive a salary from the corporation.
1.2 Mission This plan is written as a guide for starting and managing this new business, and will also serve as the basis for a separate, detailed marketing plan. Following is a summary of th e main points of this plan. •
The objecti objectives ves of RJ Wagner Wagner & Associ Associates ates Realty, Realty, Inc., Inc., are to to generate generate a profit, profit, grow grow at a challenging and manageable rate, and to live up to the ethical codes set forth by the Texas Real Estate Commission.
•
The first first mission mission of of RJ Wagner Wagner & Associate Associates s Realty, Realty, Inc., Inc., is to first first recruit recruit Texas Texas real estate agents. The agents ch oosing this firm will receive top commission allowing them more financial advantage for advertising in order to gain more business.
•
The ongoing ongoing mission mission will will be be to assist both both homeowners homeowners sellin selling g their their homes, as well well as homebuyers purchasing the home of their future, by providing professional and personal assistance. Ensuring customer's best interest are always of the utmost importance.
•
The keys keys to success success for RJ Wagner & Associa Associates tes Realty, Realty, Inc., Inc., are marketing marketing and networking, responsiveness and quality of customer service and generating repeat customers.
RJ Wagner & Associates Realty 2.0 Company Summary RJ Wagner & Associates Realty, Inc ., is a new company that provides high-level expertise in real estate sales in the sta te of Texas. It will focus initially on homesellers and homebuyers, as well as in-house sales agents. Our customer service philosophy is unique. In a philosophic sense, RJ Wagner & Associates Realty, Inc., has three distinct customer groups: sellers, buyers, and agents. Sellers of real property are our first customers. Listers of properties (sellers) pay commissions from the sale of their property and are the direct clients of the real estate brokers. We will never lose our focus that clients who have retained RJ Wagner & Associates Realty, Inc., to list and sell their properties are o ur first obligation. Our second real customer is the buyer of residential real estate. We will provide provide superior personal services to buyers. Our third real customer is the licensed real estate sales agent. It is the agent's job to provide a professional service to both sellers and buyers, specifically in this order. Therefore, it is the direct responsibility responsibility of RJ Wagner & Associates Realty, Inc., to provide service to our sales agents. As it grows, it will take on new agents providing them with a highly competitive commission earnings, as well as providing them with a support service tha t will allow for more productive time in order to gain clients at a faster pace. Hence motivating productive licensed agents in the real estate arena. As it grows, it will look for additional marketing techniques to offer clientele and serve the public in the high standards handed down by the Texas Real Estate Commission.
2.1 Company Ownership
RJ Wagner & Associates Realty Table: Start-up
Start-up Requirements Start-up Expenses Legal/Incorporating Better Business Bureau Fee Stationery etc. Brochures Mailings/Postal Advertising Company Yard Signs Insurance Answering Service Website Design Utilities Start Up Rent Expensed equipment/Computer/Copier Office Furnishings/Lease or Used Office Supplies Other/Miscellaneous Business Software Total Start-up Expense
$930 $399 $2,000 $1,000 $1,000 $2,500 $1,300 $225 $200 $440 $250 $3,000 $3,000 $4,000 $1,000 $1,000 $1,000 $23,244
Start-up Assets Needed Cash Balance on Starting Date Other Short-term Assets Total Short-term Assets
$9,756 $20,000 $29,756
Long-term Assets Total Assets Total Requirements
$7,000 $36,756 $60,000
Funding Investment
RJ Wagner & Associates Realty
Start-up
$50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Expenses
Assets
Investment
Loans
3.0 Services At RJ Wagner & Associates Realty, Inc., our principal service consists of selling residential real estate in a targeted market area. Our services provide our clients with an international network of buyers and an d sellers through the multiple listing service (MLS). Because of our capabilities capabilities to network with other brokers, we will sell homes faster than o ur clients could if
RJ Wagner & Associates Realty •
Flyer Flyer distr distrib ibuti ution on to other other broker broker sites sites/ag /agent ents. s.
Sellers will be provided with the following services: • •
• •
• • • • • • •
Free Free CMA (Compar (Comparati ative ve Marke Markett Analys Analysis is). ). Inside/ou Inside/outsid tside e photos in in panoramic panoramic view placed placed on MLS (Multi (Multiple ple Listing Listing System) System) and and real estate Internet sites. This allows potential buyers to view our seller's property online. Advertisi Advertising ng in local real estate publicati publications. ons. We design design an attractive attractive pamphle pamphlett with all all property property informati information, on, room dimensi dimensions, ons, tax information, a letter from the seller, and a complete history of the home for potential buyers to read while viewing the property. This pamphlet is for the seller to keep or to give to the new owner when the home sells. Attractive Attractive yard yard signs signs with flyer flyer tubes tubes attached for for potential potential buyers buyers drivi driving ng by. "Just Listed Listed Post Post Cards" Cards" mailed mailed to to surroundin surrounding g neighbor neighborhoods. hoods. Listing Listing flyers flyers distr distribute ibuted d to other broker broker sites. sites. Circulated Circulated open house invitations invitations (per seller seller approval approval). ). Supra System System Compute Computerize rized d Lockboxes Lockboxes (we know when when and who who entered entered premise premises s at all times). Excell Excellent ent foll followow-up up system system on on each showi showing. ng. If no contract contract is submit submitted ted within within the the first first listed listed month, month, we re-anal re-analyze yze our future future marketing procedures with the seller.
Buyers will be provided with the following services: •
We match match buyers buyers to homes. homes. We have an an extensive extensive questionna questionnaire ire for for our buyers buyers to list list their wants and needs. We then take this questionnaire and put the supplied information into our Passport program to match buyers to the homes matching their criteria. (Passport is the latest software available to licensed real estate agents and brokers in the state of Texas.)
RJ Wagner & Associates Realty stability and growth. We have a beautiful office, centered in the Champions area. This location will enable our sales associates to work in an area that will allow them to make more money in a shorter period of time. The first quarter home va lues were up 8.8% from the same period in 2000, the Office of Federal Housing Enterprise Oversight says. The gain reflects an increase from the previous quarter, when residential real estate values saw year-over-year growth of 8.1%. As stated in the Objectives section--we outline the profits to be gained with each agent striving for one seller and one buyer each month. We also state the extensive marketing plans, goal setting and training provided by this corporation to a ssist each agent in reaching this goal. As stated in the Services section--we outline the services we will be supplying supplying to the agents, a gents, sellers and buyers (all of which this corporation con siders to be our customer). As the outline following will will indicate--our agents will earn top commissions, be supplied with the latest in marketing and advertising assistance, and have on-site broker assistance at all times. This coupled with the teamwork and excellent marketing programs provided, we feel we have a recipe for success.
4.1 Market Segmentation 1.
2.
Our most importa important nt market market segment segment is the homese homeselle ller. r. The selle sellerr will will be calli calling ng upon RJ Wagner & Associates Realty, Inc., for our excellent marketing strategies and techniques, and our abili a bility ty to deliver personal consulting, professionalism and a follow up system. As important important would would be be the homebuyer homebuyer.. These buyers buyers will will be callin calling g on RJ Wagner Wagner & Associates Realty, Inc., to "match" their criteria criteria selections. This corporation will will be previewing previewing matching criteria homes for t he buyer, thus providing the buyer with on-site viewing capabilities capabilities without actually visiting the home site.
RJ Wagner & Associates Realty
Market Analysis (Pie)
Home Sellers Home Buyers Property Photography
Table: Market Market Analysis
Market Analysis Potential Customers Home Sellers Home Buyers Property Photography Total
Growth 3% 3% 3% 3.00%
2001 153,819 145,412 48,334 347,565
2002 158,434 149,774 49,784 357,992
2003 163,187 154,268 51,278 368,732
2004 168,082 158,896 52,816 379,794
2005 173,125 163,662 54,400 391,187
CAGR 3.00% 3.00% 3.00% 3.00%
RJ Wagner & Associates Realty 5.1 Competitive Edge The corporate broker of this firm has a published real estate book (Texas Real Estate/The Mobile Mentor). This book and the accompanying organizational programs, are distributed throughout the state of Texas in real estate book stores and associations. This book was written for the novice agent which will be provided to oncoming agents as a reference too l, therefore, allowing a fast start program. This firm allows "Top Commissions" to the agents allowing for more agent advertising and marketing promotions. This firm is highly supportive to the a gent it sponsors in the res pect of compliance with agent listing tasks. All of which free the agent's time to do what th e agent is trained to do and that th at is to sell and gain clients. This firm has a marketing plan in place for agents to utilize. The company will be assisting all agents in goal setting/planning and in their marketing techniques/strategies. Even though the agents are independent contractors, this firm will run as a team. The open door policy will be in place at all times inviting new ideas and suggestions. In addition, please reference the Services section for an outline of our services offered to inhouse agents, our sellers and our buyers. All services offered to each provide this corporation with a competitive edge, for we know of no other firm offering the extensive services we provide.
5.2 Sales Strategy • • •
Sales Sales in our business business is gaining gaining property property listing listings s and utilizing utilizing a marketing marketing plan plan that works best for the client. We locate locate and match match homes homes to buyers buyers according according to the the criteria criteria submi submitted tted by the the buyer. buyer. We assist assist in relocating relocating clients clients to their their new destinatio destinations ns and/or assist assist clients clients relocatin relocating g
RJ Wagner & Associates Realty 5.2.1 Sales Forecast The following table and chart give a run-down o n forecasted sales. We expect sales to be slowest during September through December, building building between January through Marc h and the most growth during the months of March through August.
Table: Sales Forecast (Planned) (Planned)
Sales Forecast Sales Agent Sales - 25% To Company Broker Sales - 100% To Company Photo Service - 100% To Company Referrals - 25% Agent/25% Company Total Sales
2002 $83,625 $44,245 $5,280 $2,244 $135,394
2003 $205,000 $45,000 $5,760 $3,750 $259,510
2004 $405,000 $45,000 $5,760 $3,750 $459,510
Direct Cost of Sales Agent Sales - 25% To Company Broker Sales - 100% To Company Photo Service - 100% To Company Referrals - 25% Agent/25% Company Subtotal Direct Cost of Sales
2002 $8,363 $10,837 $440 $330 $19,970
2003 $67,650 $40,500 $440 $400 $108,990
2004 $187,500 $40,500 $440 $400 $228,840
Sales Monthly (Planned)
$25,000 $20,000 $15,000
Agent Sales - 25% To Company
RJ Wagner & Associates Realty 5.3 Milestones The accompanying 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. What the table doesn't show is the commitment co mmitment behind it. Our business plan includes complete provisions for plan-vs.-actual analysis, and we will hold monthly follow-up meetings to discuss the variance and course corrections.
Table: Milestones (Planned) (Planned)
Milestones Milestone Business Plan Logo Design Website Design/Placement Company Stationary Design/Print Co.Docs (CD-Rom/Disk) Agent Distribution Company Signs/Advertising BBB Membership/Yearly Photo Merchant Account Charge Incorporating Charges Nat'l Realtor Assoc. Membership/Yearly TX Realtor Assoc. Membership/Yearly Houston Assoc.Corp. MLS/Yearly Montgomery Assoc. Membership/Yearly Purchased Office Equipment/Computer,etc. Office Utilities
Start Date 6/1/01 6/1/01 6/1/01 6/1/01 6/1/01
End Date 6/15/01 6/15/01 6/15/01 6/15/01 6/15/01
Budget $2,000 $500 $500 $2,000 $500
Manager RJW RJW RJW RJW RJW
Department Owner Owner Owner Owner Owner
5/15/01 1/1/01 5/15/01 3/15/01 1/1/01
6/15/01 6/15/01 6/15/01 6/15/01 12/31/02
$1,300 $390 $200 $930 $300
RJW RJW RJW RJW RJW
Owner Owner Owner Owner Owner
1/1/01
12/31/02
$300
RJW
Owner
1/1/01 1/1/01
12/31/02 12/31/01
$1,080 $300
RJW RJW
Owner Owner
5/30/01
7/1/01
$3,000
RJW
Owner
6/15/01
7/30/01
$200
RJ Wagner & Associates Realty homebuyers, this firm offers inside/outside photography services in-house as well as to other broker firms. This service is free to in-house a gents and a service fee is cha rged to other broker sites and agents utilizing this service. As RJ Wagner is a sole proprietorship, the principal's principal's personal net worth is given below.
Table: Personal Net Net Wort Wort h
Personal Net Worth Assets Current Assets Checking Savings Investment Household Goods Auto Auto All Other
Notes:
Balance $1,500 $6,000 $58,000 $24,000 $6,300 $0 $0
Total Current Assets Long-term Assets Main Residence Improvements Account All Other Total Long-term Assets Total Assets
$95,800
$150,000 $0 $0 $20,000 $170,000 $265,800
Liabilities Current Borrowing Credit Card Credit Card Credit Card
Balance $3,000 $350 $58
RJ Wagner & Associates Realty We believe this plan is a fair compromise between fairness and expedience, and meets the commitment of our mission sta tement. The detailed monthly personnel plan for the first year is included in the appendices.
Table: Personnel (Planned)
Personnel Plan 2002 $36,000
Payroll
2003 $60,000
2004 $100,000
7.0 Financial Plan •
We want want to finance finance growth growth mainly mainly through through cash flow. flow. We recogniz recognize e that this this means we we will have to grow more slowly than we might like.
•
The most most important important factor factor for R.J. R.J. Wagner Wagner & Associates Associates Realt Realty y is the closi closing ng sales sales days. These dates will be determined ultimately by the seller and the buyer and a move out/move in schedule will be complied with. Immediately following the closing sale commission will be disbursed by the title company conducting the closing.
7.1 Important Assumptions The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions a re included in the appendices. From the beginning, we recognize that collection days are critical, but not a factor we can influence easily. At least we are planning on the problem, and dealing with it. Interest rates, tax rates, and personnel burden are based on conservative assumptions.
RJ Wagner & Associates Realty 7.2 Break-even Analysis The following table and chart will summarize our break-even analysis. Most of our cost of fulfillment is actually the sales of the agents as well as the sales of the active broker. We don't expect to reach break-even until a few months into the business operation.
Table: Break-even Analysis
Break-even Analysis: Monthly Units Break-even Monthly Sales Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost
3 $3,658
$1,125.00 $1.00 $3,655
Break-even Analysis $10,000 $8,000 $6,000 $4,000 $2,000 $0
RJ Wagner & Associates Realty 7.3 Projected Profit and Loss Our projected profit and loss is shown on the following table. As with the break-even, we are projecting very conservatively regarding cost of sales and gross margin. Initially, we will depend depend on our associates a ssociates for most fulfillment, which is why costs should be lower than shown. We prefer to project conservatively so that we make sure we have enough cash. We are spending less on marketing expenses due to our paid memberships with the associations. This broker has a published real estate book and organizational programs placed in the Houston Association of Realtors and also the Dallas Association of Realtors. The associations advertise these marketing tools free to this broker. The detailed monthly projections are included in the appendices.
Table: Profit and Loss (Planned) (Planned)
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Operating Expenses: Advertising/Promotion Travel Miscellaneous Payroll Expense Payroll Burden
2002 $135,394 $19,970 $0 -----------$19,970 $115,425 85.25%
2003 $259,510 $108,990 $0 -----------$108,990 $150,520 58.00%
2004 $459,510 $228,840 $0 -----------$228,840 $230,670 50.20%
$4,700 $2,400 $0 $36,000 $0
$0 $0 $0 $60,000 $0
$0 $0 $0 $100,000 $0
RJ Wagner & Associates Realty 7.4 Projected Cash Flow Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other the monthly balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendices.
Cash (Planned) $50,000 $40,000 $30,000
Net Cash Flow
$20,000
Cash Balance $10,000 $0 ($10,000) Jun Jun
Jul Jul Aug Aug Sep Sep Oct Oct Nov Dec Dec Jan Jan Feb Feb Mar Mar Apr Apr May May
RJ Wagner & Associates Realty Table: Cash Flow (Planned)
Pro Forma Cash Flow
2002
2003
2004
Cash Received Cash from Operations: Cash Sales From Receivables Subtotal Cash from Operations
$121,855 $10,142 $131,996
$233,559 $22,836 $256,395
$413,559 $40,932 $454,491
Additional Cash Received Extraordinary Items Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of other Short-term Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received
$0 $0 $6,000 $0 $0 $0 $0 $0 $137,996
$0 $0 $4,620 $0 $0 $0 $0 $0 $261,015
$0 $0 $3,150 $0 $0 $0 $0 $0 $457,641
Expenditures Expenditures from Operations: Cash Spent on Costs and Expenses Wages, Salaries, Payroll Taxes, etc. Payment of Accounts Payable Subtotal Spent on Operations
2002
2003
2004
$6,405 $36,000 $59,390 $101,796
$15,131 $60,000 $124,934 $200,065
$28,149 $100,000 $236,563 $364,712
Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Short-term Assets Purchase Long-term Assets Dividends Adjustment for Assets Purchased on Credit Subtotal Cash Spent
$0 $0 $0 $0 $0 $0 $0 $0 $101 796
$0 $0 $0 $0 $0 $0 $0 $0 $200 065
$0 $0 $0 $0 $0 $0 $0 $0 $364 712
RJ Wagner & Associates Realty 7.5 Projected Balance Sheet The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendices.
Table: Balance Sheet Sheet (Planned) (Planned)
Pro Forma Balance Sheet Assets Short-term Assets Cash Accounts Receivable Other Short-term Assets Total Short-term Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets
2002 $45,956 $3,398 $20,000 $69,354
2003 $106,906 $6,513 $20,000 $133,419
2004 $199,835 $11,532 $20,000 $231,367
$7,000 $1,270 $5,730 $75,084
$7,000 $2,240 $4,760 $138,179
$7,000 $3,210 $3,790 $235,157
Accounts Payable Current Borrowing Other Short-term Liabilities Subtotal Short-term Liabilities
2002 $8,256 $6,000 $0 $14,256
2003 $19,504 $10,620 $0 $30,124
2004 $36,284 $13,770 $0 $50,054
Long-term Liabilities Total Liabilities
$0 $14,256
$0 $30,124
$0 $50,054
$50,000 ($23,244) $34 072
$50,000 $10,828 $47 227
$50,000 $58,055 $77 048
Liabilities and Capital
Paid-in Capital Retained Earnings Earnings
Appendix Appendix Table: Sales Forecast (Planned)
Sales Forecast Sales Agent Sales - 25% To Company Broker Sales - 100% To Company Photo Service - 100% To Company Referrals - 25% Agent/25% Company Total Sales
Jun $0 $3,389 $0 $187 $3,576
Jul $2,375 $3,731 $480 $187 $6,773
Aug $8,125 $6,750 $480 $187 $15,542
Sep $11,250 $0 $480 $187 $11,917
Oct $4,500 $3,375 $480 $187 $8,542
Nov $4,500 $3,375 $480 $187 $8,542
Dec $4,500 $3,375 $480 $187 $8,542
Jan $3,375 $0 $480 $187 $4,042
Feb $3,375 $0 $480 $187 $4,042
Mar $12,375 $4,500 $480 $187 $17,542
Apr $14,625 $7,875 $480 $187 $23,167
May $14,625 $7,875 $480 $187 $23,167
Direct Cost of Sales Agent Sales - 25% To Company Broker Sales - 100% To Company Photo Service - 100% To Company Referrals - 25% Agent/25% Company Subtotal Direct Cost of Sales
Jun $0 $339 $0 $0 $339
Jul $238 $373 $40 $30 $681
Aug $813 $675 $40 $30 $1,558
Sep $1,125 $1,350 $40 $30 $2,545
Oct $450 $675 $40 $30 $1,195
Nov $450 $1,350 $40 $30 $1,870
Dec $450 $675 $40 $30 $1,195
Jan $338 $1,350 $40 $30 $1,758
Feb $338 $1,350 $40 $30 $1,758
Mar $1,238 $1,350 $40 $30 $2,658
Apr $1,463 $675 $40 $30 $2,208
May $1,463 $675 $40 $30 $2,208
Appendix Appendix Table: Personnel (Planned)
Personnel Plan Payroll
Jun $3,000
Jul $3,000
Aug $3,000
Sep $3,000
Oct $3,000
Nov $3,000
Dec $3,000
Jan $3,000
Feb $3,000
Mar $3,000
Apr $3,000
May $3,000
Appendix Appendix Table: General Assumptions Assumptions
General Assumptions Short-term Interest Rate % Long-term Interest Rate % Tax Rate % Expenses in Cash % Sales on Credit % Personnel Burden %
Jun 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Jul 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Aug 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Sep 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Oct 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Nov 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Dec 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Jan 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Feb 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Mar 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Apr 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
May 10.00% 10.00% 25.00% 10.00% 10.00% 15.00%
Appendix Appendix Table: Profit and Loss (Planned) (Planned)
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Operating Expenses: Advertising/Promotion Travel Miscellaneous Payroll Expense Payroll Burden Depreciation Depreciation Depreciation Depreciation Office Supplies Business Software Leased Equipment Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Short-term Interest Expense Long-term Taxes Incurred Extraordinary Items Net Profit Net Profit/Sales
Jun $3,576 $339 $0 ------------------$339 $3,237 90.52%
Jul $6 $6,773 $681 $0 ------------------$681 $6,093 89.95%
Aug $15,542 $1,558 $0 ------------------$1,558 $13,985 89.98%
Sep $11,917 $2,545 $0 ------------------$2,545 $9,372 78.64%
Oct $8 $8,542 $1,195 $0 ------------------$1,195 $7,347 86.01%
Nov $8 $8,542 $1,870 $0 ------------------$1,870 $6,672 78.11%
Dec $8 $8,542 $1,195 $0 ------------------$1,195 $7,347 86.01%
Jan $4 $4,042 $1,758 $0 ------------------$1,758 $2,285 56.52%
Feb $4 $4,042 $1,758 $0 ------------------$1,758 $2,285 56.52%
Mar $17,542 $2,658 $0 ------------------$2,658 $14,885 84.85%
Apr $23,167 $2,208 $0 ------------------$2,208 $20,960 90.47%
May $23,167 $2,208 $0 ------------------$2,208 $20,960 90.47%
$0 $200 $0 $3,000 $0 $150 $150 $1,300 $0 $0 $0 $250 $0 ------------------$5,050 ($1,813) $4 $0 ($454) $0 ($1,363) -38.11%
$0 $2 $200 $0 $3,000 $0 $1 $150 $150 $1 $1,300 $0 $100 $0 $250 $0 ------------------$5,150 $943 $8 $0 $234 $0 $701 10.34%
$200 $2 $200 $0 $3,000 $0 $1 $150 $150 $1 $1,300 $0 $200 $0 $250 $200 ------------------$5,650 $8,335 $13 $0 $2 $2,081 $0 $6,242 40.16%
$500 $2 $200 $0 $3,000 $0 $150 $150 $1 $1,300 $0 $200 $0 $250 $0 ------------------$5,750 $3,622 $17 $0 $901 $0 $2,704 22.69%
$500 $2 $200 $0 $3,000 $0 $1 $125 $150 $1 $1,300 $0 $300 $0 $250 $300 ------------------$6,125 $1,222 $21 $0 $300 $0 $901 10.55%
$500 $2 $200 $0 $3,000 $0 $90 $150 $1 $1,300 $0 $300 $0 $250 $0 ------------------$5,790 $882 $25 $0 $214 $0 $643 7.52%
$500 $2 $200 $0 $3,000 $0 $75 $150 $1 $1,300 $0 $300 $0 $250 $0 ------------------$5,775 $1,572 $29 $0 $386 $0 $1,157 13.55%
$500 $2 $200 $0 $3,000 $0 $75 $150 $1 $1,300 $0 $300 $0 $250 $200 ------------------$5,975 ($3,691) $33 $0 ($931) $0 ($2,793) -69.10%
$500 $2 $200 $0 $3,000 $0 $75 $150 $1 $ 1,300 $0 $300 $0 $250 $0 ------------------$5,775 ($3,491) $38 $0 ($882) $0 ($2,646) -65.46%
$500 $2 $200 $0 $3,000 $0 $75 $150 $1 $1,300 $0 $300 $0 $250 $0 ------------------$5,775 $9,110 $42 $0 $2 $2,267 $0 $6,801 3 8.77%
$500 $2 $200 $0 $3,000 $0 $75 $150 $1 $ 1,300 $0 $300 $0 $250 $300 ------------------$6,075 $14,885 $46 $0 $3 $3,710 $0 $11,129 48.04%
$500 $2 $200 $0 $3,000 $0 $80 $150 $1 $1,300 $0 $300 $1,000 $250 $0 ------------------$6,780 $14,180 $50 $0 $3 $3,532 $0 $10,597 45.74%
Appendix Appendix Table: Cash Flow (Planned) (Planned)
Pro Forma Cash Flow Cash Received Cash from Operations: Cash Sales From Receivables Subtotal Cash from Operations Additional Cash Received Extraordinary Items Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of other Short-term Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received
0.00%
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
$3,218 $0 $3,218
$6 $ 6,096 $191 $6,286
$13,988 $528 $14,516
$10,725 $1,145 $11,870
$ 7,688 $1,361 $9,049
$7 $ 7,688 $1,012 $8,700
$7 $ 7,688 $854 $8,542
$3 $ 3,638 $854 $4,492
$3 $ 3,638 $614 $4,252
$15,788 $404 $16,192
$20,850 $1,124 $21,975
$20,850 $2,054 $22,905
$0 $0 $500 $0 $0 $0 $0 $0 $3,718
$0 $0 $500 $0 $0 $0 $0 $0 $6,786
$0 $0 $500 $0 $0 $0 $0 $0 $1 $ 15,016
$0 $0 $500 $0 $0 $0 $0 $0 $1 $ 12,370
$0 $0 $500 $0 $0 $0 $0 $0 $9,549
$0 $0 $500 $0 $0 $0 $0 $0 $9,200
$0 $0 $500 $0 $0 $0 $0 $0 $9,042
$0 $0 $500 $0 $0 $0 $0 $0 $4,992
$0 $0 $500 $0 $0 $0 $0 $0 $4,752
$0 $0 $500 $0 $0 $0 $0 $0 $1 $ 16,692
$0 $0 $500 $0 $0 $0 $0 $0 $2 $ 22,475
$0 $0 $500 $0 $0 $0 $0 $0 $2 $ 23,405
Expenditures Expenditures from Operations: Cash Spent on Costs and Expenses W ages, Salaries, Payroll Taxes, etc. Payment of Accounts Payable Subtotal Spent on Operations
Jun
Jul
Au Aug
Se Sep
Oct
No Nov
De Dec
Jan
Fe Feb
Ma Mar
Apr
May
$179 $3,000 $10,054 $13,233
$292 $3,000 $1,644 $4,936
$615 $3,000 $2,727 $6,342
$606 $3,000 $5,533 $9,139
$452 $3,000 $5,410 $8,862
$481 $3,000 $4,073 $7,554
$431 $3,000 $4,313 $7,744
$376 $3,000 $3,862 $7,238
$361 $3,000 $3,379 $6,741
$767 $3,000 $3,373 $7,140
$896 $3,000 $6,938 $10,835
$949 $3,000 $8,083 $12,031
Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Short-term Assets Purchase Long-term Assets Dividends Adjustment for Assets Purchased on Credit Subtotal Cash Spent
$0 $0 $0 $0 $0 $0 $0 $0 $13,233
$0 $0 $0 $0 $0 $0 $0 $0 $4,936
$0 $0 $0 $0 $0 $0 $0 $0 $6,342
$0 $0 $0 $0 $0 $0 $0 $0 $9,139
$0 $0 $0 $0 $0 $0 $0 $0 $8,862
$0 $0 $0 $0 $0 $0 $0 $0 $7,554
$0 $0 $0 $0 $0 $0 $0 $0 $7,744
$0 $0 $0 $0 $0 $0 $0 $0 $7,238
$0 $0 $0 $0 $0 $0 $0 $0 $6,741
$0 $0 $0 $0 $0 $0 $0 $0 $7,140
$0 $0 $0 $0 $0 $0 $0 $0 $1 $10,835
$0 $0 $0 $0 $0 $0 $0 $0 $1 $12,031
Net Cash Flow Cash Balance
($9,514) $242
$1,850 $2,092
$8,674 $10,766
$3,231 $13,997
$687 $14,684
$1,645 $16,329
$1,298 $17,627
($2,246) $15,380
($1,989) $13,392
$9,552 $22,944
$11,640 $34,583
$11,373 $45,956
Appendix Appendix Table: Balance Sheet (Planned)
Pro Forma Balance Sheet Assets Short-term Assets Cash Accounts Receivable Other Short-term Assets Total Short-term Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets
Starting Balances $9,756 $0 $20,000 $29,756
Jun $242 $358 $20,000 $20,599
Jul $2,092 $844 $20,000 $22,936
Aug $10,766 $1,870 $20,000 $32,636
Sep $13,997 $1,917 $20,000 $35,914
Oct $14,684 $1,410 $20,000 $36,094
Nov $16,329 $1,253 $20,000 $37,582
Dec $17,627 $1,253 $20,000 $38,880
Jan $15,380 $803 $20,000 $36,183
Feb $13,392 $593 $20,000 $33,984
Mar $22,944 $1,943 $20,000 $44,887
Apr $34,583 $3,135 $20,000 $57,719
May $45,956 $3,398 $20,000 $69,354
$7,000 $0 $7,000 $36,756
$7,000 $150 $6,850 $27,449
$7,000 $300 $6,700 $29,636
$7,000 $450 $6,550 $39,186
$7,000 $600 $6,400 $42,314
$7,000 $725 $6,275 $42,369
$7,000 $815 $6,185 $43,767
$7,000 $890 $6,110 $44,990
$7,000 $965 $6,035 $42,218
$7,000 $1,040 $5,960 $39,944
$7,000 $1,115 $5,885 $50,772
$7,000 $1,190 $5,810 $63,529
$7,000 $1,270 $5,730 $75,084
Accounts Payable Current Borrowing Other Short-term Liabilities Subtotal Short-term Liabilities
$10,000 $0 $0 $10,000
Jun $1,556 $500 $0 $2,056
Jul $2,542 $1,000 $0 $3,542
Aug $5,351 $1,500 $0 $6,851
Sep $5,275 $2,000 $0 $7,275
Oct $3,929 $2,500 $0 $6,429
Nov $4,184 $3,000 $0 $7,184
Dec $3,750 $3,500 $0 $7,250
Jan $3,271 $4,000 $0 $7,271
Feb $3,143 $4,500 $0 $7,643
Mar $6,670 $5,000 $0 $11,670
Apr $7,798 $5,500 $0 $13,298
May $8,256 $6,000 $0 $14,256
Long-term Liabilities Total Liabilities
$0 $10,000
$0 $2,056
$0 $3,542
$0 $6,851
$0 $7,275
$0 $6,429
$0 $7,184
$0 $7,250
$0 $7,271
$0 $7,643
$0 $11,670
$0 $13,298
$0 $14,256
$50,000 ($23,244) $0 $26,756 $36,756 $26,756
$50,000 ($23,244) ($1,363) $25,393 $27,449 $25,393
$50,000 ($23,244) ($662) $26,094 $29,636 $26,094
$50,000 ($23,244) $5,579 $32,335 $39,186 $32,335
$50,000 ($23,244) $8,283 $35,039 $42,314 $35,039
$50,000 ($23,244) $9,184 $35,940 $42,369 $35,940
$50,000 ($23,244) $9,827 $36,583 $43,767 $36,583
$50,000 ($23,244) $10,984 $37,740 $44,990 $37,740
$50,000 ($23,244) $8,191 $34,947 $42,218 $34,947
$50,000 ($23,244) $5,545 $32,301 $39,944 $32,301
$50,000 ($23,244) $12,346 $39,102 $50,772 $39,102
$50,000 ($23,244) $23,475 $50,231 $63,529 $50,231
$50,000 ($23,244) $34,072 $60,828 $75,084 $60,828
Liabilities and Capital
Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net W orth
