Acme Consulting - Sample Plan
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Table of Contents 1.0
Executive Executive Summar Summary y . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . . 1.1 Object Objective ivess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Mission Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Keys to Success Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 2 2 3
2.0
Company Company Summary Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Company Company Owners Ownership hip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Start-up Start-up Summary Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Company Company Locati Locations ons and and Faci Faciliti lities es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 3 3 5
3.0
Services Servic es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Service Service Descript Description ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Competi Competitiv tivee Compa Compariso rison n . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. 3.3 Sales Literature Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Fulfillment Fulfillment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Technol Technology ogy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 Future Future Serv Service icess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 5 6 6 6 7 7
4.0
Market Market Anal Analysis ysis Summar Summary y . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . 4.1 Market Market Segm Segment entatio ation n . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . .. . . . .. . . .. . . .. . . . 4.2 Target Target Market Market Segmen Segmentt Strate Strategy gy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Servic Servicee Busine Business ss Anal Analys ysis is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1 Business Business Participant Participantss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.2 Distribution Distribution Patterns Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.3 Competition Competition and and Buying Buying Patterns Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.4 4.3.4 Main Main Compet Competitor itorss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 7 8 8 9 9 9 9
5.0
Strategy Strate gy and and Implem Implement entati ation on Summa Summary ry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Untitle Untitled d . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . .. . . .. . . .. . . .. . . .. . . . 5.2 Sales Sales Stra Strateg tegy y .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . . 5.3 Milestones Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 10 11 12
Acme Consulting 1.0 Executive Summary Acme Consulting will be formed as a consulting company specializing in the marketing of hightechnology products in international markets. It will offer high-tech manufacturers a reliable, reliable, high-quality alternative to in-house resources for business development, market development, and channel development on an international scale. It will be formed as a California C corporation based in Santa Clara C ounty and will be owned and operated by its principal investors. Acme will provide high-technology companies with the expertise they need to develop new product distribution channels and establish new segments in new markets. These services can take the form of high-level retainer consulting, market research reports, or project-based consulting. The initial focus will be development development of the European and Latin American markets, or for European clients doing business in U.S. markets. Acme C onsulting's founders are welltrained to provide these services, being former marketers of consulting services, personal computers, and market research, a ll in international markets. The office will be in A-quality A-quality office space in Santa Clara County - the "Silicon Valley" area of California and the heart of the U.S. high-tech industry. Target customers in the U.S. and Europe are mainly large manufacturing corporations such as HP, IBM and Microsoft. Our secondary target will be the medium-sized medium-sized companies in high growth areas such as multimedia and software. Industry competition comes in several forms:
• •
The most signi significan ficantt competiti competition on comes from from companies companies that that choose choose to do busines business s development and market research in-house. There are are also large, large, well known managem management ent consulti consulting ng firms firms such as as Arthur Anderson, Boston Consulting Group, etc. These companies are generalist in nature and do not focus on a niche market. Furthermore, they are often hampered by a flawed
Acme Consulting
Highlights
$1,200,000 $1,000,000 $800,000
Sales $600,000
Gross Margin Net Profit
$400,000 $200,000 $0 1998
1999
2000
1.1 Objectives 1. 2. 3.
Sales Sales of $550 $550,000 ,000 in 1998 1998 and $1 $1 milli million on by 2000. 2000. Gros Gross s marg margin in high higher er tha than n 70% 70%.. Net income income more than 10% 10% of sales sales by by 1998 1998..
Acme Consulting 1.3 Keys to Success 1. 2. 3.
Excellenc Excellence e in fulfilli fulfilling ng the promise--co promise--compl mpletel etely y confidential confidential,, reliable reliable,, trustworthy trustworthy expertise and information. Developin Developing g visibi visibility lity to genera generate te new new busine business ss leads. leads. Leveraging Leveraging from a single single pool of expertise expertise into into multipl multiple e revenue revenue generati generation on opportunities: retainer consulting, project consulting, market research, and market research published reports.
2.0 Company Summary Acme Consulting is a new company providing high-level expertise in international high-tech business development, channel development, distribution distribution strategies, and marketing mark eting of hightech products. It will focus initially initially on providing two kinds of international triangles: • •
Providing Providing United United States States client clients s with develo development pment for for European European and Latin Latin American American markets. Providing Providing European European clients clients with with developme development nt for the United United States and Latin Latin American American markets.
As it grows it will take on people and consulting work in related markets, such as the rest of Latin America, the Far East, and similar markets. It will also look for additional leverage by taking brokerage positions and representation positions t o create percentage holdings ho ldings in product results.
2.1 Company Ownership
Acme Consulting Table: Start-up
Start-up Requirements Start-up Expenses Legal Stationery etc. Brochures Consultants Insurance Expensed equipment Other Total Start-up Expenses
$1,000 $3,000 $5,000 $5,000 $350 $3,000 $1,000 $18,350
Start-up Assets Needed Cash Balance on Starting Date Other Current Assets Total Current Assets
$25,000 $7,000 $32,000
Long-term Assets Total Assets Total Requirements
$0 $32,000 $50,350
Funding Investment Investor 1 Investor 2 Other Total Investment Current Liabilities Liabilities Accounts Payable Current Borrowing Other Current Liabilities Current Liabilities
$20,000 $20,000 $10,000 $50,000 $350 $0 $0 $350
Acme Consulting
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
2.3 Company Locations and Facilities The initial office will be established in A-quality office space in the Santa Clara County "Silicon Valley" area of California, the heart of th e U.S. high tech industry.
Acme Consulting 3.2 Competitive Comparison The competition comes in several forms:
1.
2.
3.
4. 5.
The most signi significan ficantt competiti competition on is no consult consulting ing at all, all, companie companies s choosing choosing to do business development, channel development development and market research in-house. Their own managers do this on their own, as part of their regular business functions. Our key advantage in competition with in-house development is that managers are already overloaded with responsibilities, responsibilities, they don't have time for additional responsibilities responsibilities in new market development or new channel development. Also, Acme can approach alliances, vendors, and channels on a confidential basis, gathering information and making initial contacts in ways that the corporate managers can't. The high-le high-level vel prestig prestige e management management consulti consulting: ng: McKinse McKinsey, y, Bain, Arthur Arthur Anderson, Anderson, Boston Consulting Group, etc. These are essentially generalists who take their namebrand management consulting into specialty areas. Their other very important weakness is the management structure that has the partners selling new jobs, and inexperienced associates delivering delivering the work. We compete against them a s experts in our specific fields, and with the guarantee that our clients will have the top-level people people doing the actual work. The third third general general kind of competitor competitor is is the internat international ional market resear research ch company: company: International Data Corporation (IDC), Dataquest, Stanford Research Institute, etc. These companies are formidable competitors for published market research and market forums, but cannot provide the kind of high-level consulting that Acme will provide. provide. The fourth fourth kind kind of competit competition ion is the the market-sp market-specif ecific ic smaller smaller house. house. For exampl example: e: Nomura Research in Japan, Select S.A. de C.V. in Mexico (now affiliated with IDC). Sales representat representation, ion, brokeri brokering, ng, and deal catalysts catalysts are an ad-hoc ad-hoc busine business ss form that that will be defined in detail by the specific nature of each individual case.
Acme Consulting 3.5 Technology Acme Consulting will maintain the latest Windows an d Macintosh capabilities including: 1. 2.
3.
Complete Complete e-mail e-mail faciliti facilities es on the Internet, Internet, Compuserve, Compuserve, AmericaAmerica-Onli Online, ne, and Applel Applelink, ink, for working with clients directly through e-mail delivery of drafts and information. Complete Complete presenta presentation tion faciliti facilities es for preparati preparation on and delivery delivery of multi multimedi media a presentations on Macintosh or Windows machines, in formats including on-disk presentation, live presentation, or video presentation. Complete Complete desktop desktop publish publishing ing faciliti facilities es for delivery delivery of regular regular retaine retainerr reports, reports, project output reports, marketing materials, and market research reports.
3.6 Future Services In the future, Acme will broaden the coverage by expanding into coverage of additional markets (e.g., all of Latin America, Far Eas t, Western Europe) and additional product areas (e.g., telecommunications and technology integration). We are also studying the possibility of newsletter or electronic newsletter services, or perhaps special on-topic reports.
4.0 Market Analysis Summary Acme will be focusing on high-technology manufacturers of computer hardware and so ftware, services, and networking, who want to sell into markets in the United States, Europe, and Latin America. These are mostly larger companies, and oc casionally medium-sized medium-sized companies. Our most important group of potential customers are executives in larger corporations. These
Acme Consulting
Market Analysis (Pie)
U.S. High Tech European High Tech Latin America Other
Table: Market Analysis
Market Analysis Potential Customers U.S. High Tech European High Tech Latin America Other Total
Growth 10% 15% 35% 2% 6.27%
1998 5,000 1,000 250 10,000 16,250
1999 5,500 1,150 338 10,200 17,188
2000 6,050 1,323 456 10,404 18,233
2001 6,655 1,521 616 10,612 19,404
2002 7,321 1,749 832 10,824 20,726
CAGR 10.00% 15.00% 35.07% 2.00% 6.27%
Acme Consulting 4.3.1 Business Participants At the highest level are the few well-established major names in management consulting. Most of these are organized as partnerships established in major markets a round the world, linked together by interconnecting directors and sharing the name and corporate wisdom. Some evolved from accounting companies (e.g. Arthur Andersen, Touche Ross) and some from management consulting (McKinsey, Bain). These companies charge very high rates for consulting, and maintain relatively high overhead structures and fulfillment structures based on partners selling and junior associates fulfilling. At the intermediate level are some function-specific or market-specific consultants, such as the market research firms (IDC, Data quest) or channel development firms (ChannelCorp, Channel Strategies, ChannelMark). Some kinds of consulting are little more than contra ct expertise provided by somebody who, while temporarily temporarily out of work, offers consulting services.
4.3.2 Distribution Patterns Consulting is sold and purchased mainly on a word-of-mouth basis, with relationships relationships and previous experience being, being, by far, the most important factor. The major name-brand houses have locations in major cities and major markets, and executive-level managers or partners develop new business thro ugh industry associations, business associations, chambers of commerce and industry, etc., and in some cases social associations such as country clubs. The medium-level houses are generally area specific or function specific, and are not easily able to leverage their business thro ugh distribution.
Acme Consulting Weaknesses: Market numbers are not marketing, not channel development nor market development. Although these companies compete for some of the business Acme is after, they cannot really offer the same level of business understanding at a high level. 3. Market specific or function specific experts: Strengths: Expertise in market or functional areas. Acme s hould not try to compete with Nomura or Select in their markets with market research, or with C hannelCorp in channel management. Weaknesses: The inability to spread beyond a specific focus, or to rise above a specific focus, to provide actual management expertise, experience, and wisdom beyond the specifics. 4. Companies do in-house research and development: Strengths: No incremental cost except travel; also, the general work is done by the people who are entirely responsible, the planning is done by those who will implement implement it. Weaknesses: Most managers are terribly overburdened already, unable to find incremental resources in time and people to apply to incremental opportunities. Also, there is a lot o f additional risk in market and channel development done in-house from the ground up. Finally, retainer-based antenna consultants can greatly enhance a company's reach and extend its position into conversations that might otherwise never hav e taken place.
5.0 Strategy and Implementation Summary Acme will focus on three geographical markets, the United States, Europe, and Lat in America, and in limited product segments: personal computers, software, networks, telecommunications, personal organizers, and technology integration products.
Acme Consulting 5.2 Sales Strategy The sales forecast monthly summary is included in the appendix. The annual sales projections are included here in Table 5.2.
Sales by Year
$1,200,000 $1,000,000
Retainer Consulting
$800,000
Project Consulting $600,000
Market Research Strategic Reports
$400,000
Other
$200,000 $0 1998
1999
2000
Table: Sales Forecast
Sales Forecast Sales Retainer Consulting
1998 $200,000
1999 $350,000
2000 $425,000
Acme Consulting
Sales Monthly $90,000 $80,000 $70,000 $60,000
Retainer Consulting
$50,000
Project Consulting
$40,000
Market Research Strategic Reports
$30,000
Other
$20,000 $10,000 $0 Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun
Jul Jul Aug Aug Sep Oct Nov Nov Dec
5.3 Milestones Our detailed milestones are shown in the following table and chart. The related budgets are included with the expenses shown in the projected Profit and Loss sta tement, which is in the financial analysis that comes in Chapter 7 of this plan.
Acme Consulting Table: Milestones
Milestones Milestone Business plan Logo design Retainer contracts Stationery Brochures Financial backing presentations Initial mailing Office location Office equipment Other Totals
Start Date 10/1/1997 1/1/1998 2/1/1998 3/1/1998 3/1/1998
End Date 11/19/1997 2/1/1998 12/31/1998 4/15/1998 4/15/1998
Budget $5,000 $2,000 $10,000 $500 $2,500
Manager HM TAJ HM JD TAJ
Department Devpt Marketing Sales G&A Marketing
4/1/1998
9/15/1998
$10,000
HM
Devpt
6/1/1998 1/15/1998 1/15/1998 1/1/1998
7/1/1998 2/ 2/9/1998 2/19/1998 12/31/1998
$5,000 $5,000 $12,500 $10,000 $62,500
HM JD JD ABC
Sales G&A G&A Department
6.0 Management Summary The initial management team depends on the founders themselves, with little back-up. As we grow, we will take on additional consulting help, plus graphic/editorial, graphic/editorial, sales, and marketing.
6.1 Organizational Structure Acme should be managed by working partners, in a st ructure taken mainly from Smith Partners. In the beginning we assume 3-5 partners: • • • • •
Ral Ralph Sam amp pson. son. At least least one, one, probab probably ly two, two, partners partners from Smith Smith and Jones. One stron strong g Europe European an partne partner, r, based based in in Paris Paris.. The organiza organization tion has has to be very very flat in in the beginn beginning, ing, with with each each of the founder founders s responsible for his or her own work and management. One othe otherr str strong ong part partne ner. r.
Acme Consulting 6.3 Personnel Plan The detailed monthly personnel plan for the first year is included in the appendix. The annual personnel estimates are included here.
Table: Personnel
Personnel Plan Partners Consultants Editorial/graphic VP Marketing Sales people Office Manager Secretarial Other Other Total People Total Payroll
1998 $144,000 $0 $18,000 $20,000 $0 $7,500 $5,250 $0 $0 7 $194,750
1999 $175,000 $50,000 $22,000 $5 $50,000 $30,000 $3 $ 30,000 $20,000 $0 $0 14 $377,000
2000 $200,000 $63,000 $26,000 $5 $55,000 $33,000 $3 $ 33,000 $22,000 $0 $0 20 $432,000
Acme Consulting 7.0 Financial Plan Our financial plan is based on conservative estimates and assumptions. We will need to plan on initial investment to make the financials work.
7.1 Important Assumptions Table 7.1 summarizes key financial assumptions, including 45-day average c ollection days, sales entirely on invoice basis, expenses mainly on net 30 basis, 35 days on average for payment of invoices, and present-day interest rates. Table: General Assumptions
General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Sales on Credit % Other
1998 1 8.00% 10.00% 25.42% 100.00% 0
1999 2 8.00% 10.00% 25.00% 100.00% 0
2000 3 8.00% 10.00% 25.42% 100.00% 0
7.2 Key Financial Indicators The following benchmark chart indicates our key financial indicators for the first three years. We foresee major growth in sales and operating expenses, and a bump in our co llection days as we spread the business during expansion.
Benchmarks
Acme Consulting 7.3 Break-even Analysis Table 7.3 summarizes the break-even analysis, including monthly units and sales break-even points.
Break-even Analysis $10,000
$5,000
$0
($5,000)
($10,000) $0
$4,000
$8,000
$12,000
$16,000
Monthly break-even point Break-even point = where line intersects with 0
Table: Break-even Analysis
Break-even Analysis: Monthly Units Break-even Monthly Revenue Break-even
12,500 $12,500
$20,000
Acme Consulting 7.4 Projected Profit and Loss The detailed monthly pro-forma income statement for the first year is included in the appendix. The annual estimates are included here. Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Leased Equipment Utilities Insurance Rent Other Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales
1998 $592,000 $159,000 $0 -----------$159,000 $433,000 73.14%
1999 $875,000 $219,000 $0 -----------$219,000 $656,000 74.97%
2000 $1,100,000 $289,000 $0 -----------$289,000 $811,000 73.73%
$194,750 $162,000 $0 $6,000 $12,000 $3,600 $18,000 $0 $27,265 $0 -----------$423,615 $9,385 $6,800 ($524) $3,109 0.53%
$377,000 $137,000 $0 $7,000 $12,000 $2,000 $0 $0 $52,780 $0 -----------$587,780 $68,220 $11,400 $14,205 $42,615 4.87%
$432,000 $195,000 $0 $7,000 $12,000 $2,000 $0 $0 $60,480 $0 -----------$708,480 $102,520 $15,400 $22,143 $64,977 5.91%
Acme Consulting 7.5 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 representing the monthly balance. The annual cash flow figures are included here as Table 7.5. Detailed monthly numbers are included in the appendix.
Cash $60,000 $50,000 $40,000 $30,000 $20,000
Net Cash Flow
$10,000
Cash Balance
$0 ($10,000) ($20,000) ($30,000) Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun
Jul Jul Aug Aug Sep Sep Oct Oct Nov Dec Dec
Acme Consulting Table: Cash Flow
Pro Forma Cash Flow 1998
1999
2000
Cash Received Cash from Operations: Cash Sales Cash from Receivables Subtotal Cash from Operations
$0 $495,000 $495,000
$0 $0 $828,630 $828,630
$0 $0 $1,063,133 $1,063,133
Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received
$0 $30,000 $0 $50,000 $0 $0 $0 $575,000
$0 $1 $ 100,000 $0 $0 $0 $0 $0 $928,630
$0 $0 $0 $0 $0 $0 $0 $1,063,133
Expenditures Expenditures from Operations: Cash Spending Payment of Accounts Payable Subtotal Spent on Operations
1998
1999
2000
$92,012 $467,603 $559,615
$100,651 $728,952 $829,603
$135,545 $888,243 $1,023,788
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 Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent
$0 $0 $0 $0 $0 $0 $0 $559,615
$0 $0 $0 $0 $0 $0 $0 $829,603
$0 $0 $0 $0 $0 $0 $0 $1,023,788
$15,385 $40 385
$99,027 $139 412
$39,346 $178 758
Net Cash Flow Cash Balance
Acme Consulting 7.6 Projected Balance Sheet The balance sheet shows healthy growth of net worth, and strong financial position. The monthly estimates are included in the appendix. Table: Balance Sheet
Pro Forma Balance Sheet Assets Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets
1998 $40,385 $97,000 $7,000 $144,385
1999 $139,412 $143,370 $7,000 $289,782
2000 $178,758 $180,236 $7,000 $365,995
$0 $0 $0 $144,385
$0 $0 $0 $289,782
$0 $0 $0 $365,995
Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities
1998 $29,627 $30,000 $0 $59,627
1999 $32,409 $130,000 $0 $162,409
2000 $43,644 $130,000 $0 $173,644
Long-term Liabilities Total Liabilities
$50,000 $109,627
$50,000 $212,409
$50,000 $223,644
Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net W orth
$50,000 ($18,350) $3,109 $34,759 $144,385 $34,759
$50,000 ($15,241) $42,615 $77,374 $289,782 $77,374
$50,000 $27,374 $64,977 $142,351 $365,995 $142,351
Acme Consulting Table: Ratios
Ratio Analysis Sales Growth Percent of Total Assets Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net W orth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net W orth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover
1998 0.00%
1999 47 47.80%
2000 25 25.71%
Industry Profile 8.60%
67.18% 0.00% 4.85% 100.00% 0.00% 100.00%
49.48% 0.00% 2.42% 100.00% 0.00% 100.00%
49.25% 0.00% 1.91% 100.00% 0.00% 100.00%
24.40% 3.80% 46.70% 74.90% 25.10% 100.00%
41.30% 34.63% 75.93% 24.07%
56.05% 17.25% 73.30% 26 26.70%
47.44% 13.66% 61.11% 38 38.89%
42.80% 17.20% 60.00% 40.00%
100.00% 73.14% 72.81% 6.08% 1.59%
100.00% 74.97% 70.10% 4.57% 7.80%
100.00% 73.73% 67.79% 4.00% 9.32%
100.00% 0.00% 83.50% 1.20% 2.60%
2.42 2.42 75.93% 7.44% 1.79%
1.78 1.78 73.30% 73.44% 19.61%
2.11 2.11 61.11% 61.20% 23.80%
1.59 1.26 60.00% 4.40% 10.90%
1998 0.53% 8.94%
1999 4.87% 55.08%
2000 5.91% 45.65%
n.a n.a
6 10
6 10
6 10
na
Appendix Appendix Table: Sales Forecast Forecast
Sales Forecast Sales Retainer Consulting Project Consulting Market Research Strategic Reports Other Total Sales Direct Cost of Sales Retainer Consulting Project Consulting Market Research Strategic Reports Other Subtotal Direct Cost of Sales
Jan $10,000 $0 $0 $0 $0 $10,000
Feb $10,000 $0 $0 $0 $0 $10,000
Mar $10,000 $10,000 $0 $0 $0 $20,000
Apr $10,000 $20,000 $4,000 $0 $0 $34,000
May $20,000 $30,000 $8,000 $0 $0 $58,000
Jun $20,000 $40,000 $15,000 $0 $0 $75,000
Jul $20,000 $20,000 $10,000 $0 $0 $50,000
Aug $20,000 $10,000 $5,000 $0 $0 $35,000
Sep $20,000 $30,000 $20,000 $0 $0 $70,000
Oct $20,000 $45,000 $20,000 $0 $0 $85,000
Nov $20,000 $50,000 $20,000 $0 $0 $90,000
Dec $20,000 $15,000 $20,000 $0 $0 $55,000
Jan $2,500 $0 $0 $0 $0 $2,500
Feb $2,500 $0 $0 $0 $0 $2,500
Mar $2,500 $1,500 $0 $0 $0 $4,000
Apr $2,500 $3,500 $2,000 $0 $0 $8,000
May $2,500 $5,000 $6,000 $0 $0 $13,500
Jun $2,500 $6,500 $10,000 $0 $0 $19,000
Jul $2,500 $3,500 $6,000 $0 $0 $12,000
Aug $2,500 $1,500 $4,000 $0 $0 $8,000
Sep $2,500 $5,000 $ 14,000 $0 $0 $21,500
Oct $2,500 $7,500 $14,000 $0 $0 $24,000
Nov $2,500 $8,500 $14,000 $0 $0 $25,000
Dec $2,500 $2,500 $14,000 $0 $0 $19,000
Appendix Appendix Table: Personnel
Personnel Plan Partners Consultants Editorial/graphic VP Marketing Sales people Office Manager Secretarial Other Other Total People Total Payroll
140% 125% 120% 110% 110% 110% 110% 110%
Jan $12,000 $0 $0 $0 $0 $0 $0 $0 $0 3 $12,000
Feb $12,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 $12,000
Mar $12,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 $12,000
Apr $12,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 $12,000
May $12,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 $12,000
Jun $12,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 $12,000
Jul $12,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 $12,000
Aug $12,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 $12,000
Sep $12,000 $0 $0 $5 $5,000 $0 $0 $0 $0 $0 $0 5 $17,000
Oct $12,000 $0 $6,000 $5 $5,000 $0 $2 $2,500 $1,750 $0 $0 $0 7 $27,250
Nov $12,000 $0 $6,000 $5 $5,000 $0 $2 $2,500 $1,750 $0 $0 $0 7 $27,250
Dec $12,000 $0 $6,000 $5 $5,000 $0 $2 $2,500 $1,750 $0 $0 $0 7 $27,250
Appendix Appendix Table: General Assumptions Assumptions
General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Sales on Credit % Other
Jan 1 8.00% 10.00% 30.00% 100.00% 0
Feb 2 8.00% 10.00% 25.00% 100.00% 0
Mar 3 8.00% 10.00% 25.00% 100.00% 0
Apr 4 8.00% 10.00% 25.00% 100.00% 0
May 5 8.00% 10.00% 25.00% 100.00% 0
Jun 6 8.00% 10.00% 25.00% 100.00% 0
Jul 7 8.00% 10.00% 25.00% 100.00% 0
Aug 8 8.00% 10.00% 25.00% 100.00% 0
Sep 9 8.00% 10.00% 25.00% 100.00% 0
Oct 10 10 8.00% 10.00% 25.00% 100.00% 0
Nov 11 11 8.00% 10.00% 25.00% 100.00% 0
Dec 12 12 8.00% 10.00% 25.00% 100.00% 0
Appendix Appendix Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Leased Equipment Utilities Insurance Rent Other Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales
14%
Jan $10,000 $2,500 $0 ------------------$2,500 $7,500 75.00%
Feb $1 $10,000 $2,500 $0 ------------------$2,500 $7,500 75.00%
Mar $2 $20,000 $4,000 $0 ------------------$4,000 $16,000 80.00%
Apr $3 $34,000 $8,000 $0 ------------------$8,000 $26,000 76.47%
May $5 $58,000 $13,500 $0 ------------------$13,500 $44,500 76.72%
Jun $7 $75,000 $19,000 $0 ------------------$19,000 $56,000 74.67%
Jul $50,000 $12,000 $0 ------------------$12,000 $ 38,000 76.00%
Aug $3 $35,000 $8,000 $0 ------------------$8,000 $27,000 77.14%
Sep $7 $70,000 $21,500 $0 ------------------$21,500 $48,500 69.29%
Oct $8 $85,000 $24,000 $0 ------------------$24,000 $61,000 71.76%
Nov $9 $90,000 $25,000 $0 ------------------$25,000 $65,000 72.22%
Dec $5 $55,000 $19,000 $0 ------------------$19,000 $36,000 65.45%
$12,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $1,680 $0 ------------------$30,480 ($22,980) $417 ($7,019) ($16,378) -163.78%
$12,000 $13,500 $0 $500 $1 $ 1,000 $300 $1 $ 1,500 $0 $1,680 $0 ------------------$30,480 ($22,980) $417 ($ ($5,849) ($17,548) -175.48%
$12,000 $13,500 $0 $500 $1 $ 1,000 $300 $1 $1,500 $0 $1,680 $0 ------------------$30,480 ($14,480) $550 ($ ( $3,758) ($11,273) -5 - 56.36%
$12,000 $13,500 $0 $500 $1 $ 1,000 $300 $1 $1,500 $0 $1,680 $0 ------------------$30,480 ($4,480) $550 ($ ( $1,258) ($ ($3,773) -1 - 11.10%
$12,000 $13,500 $0 $500 $1 $ 1,000 $300 $1 $ 1,500 $0 $1,680 $0 ------------------$30,480 $14,020 $550 $3,368 $10,103 17.42%
$12,000 $13,500 $0 $500 $1 $ 1,000 $300 $1 $ 1,500 $0 $1,680 $0 ------------------$30,480 $25,520 $617 $6,226 $18,678 24.90%
$12,000 $13,500 $0 $500 $1 $ 1,000 $300 $1 $1,500 $0 $1,680 $0 ------------------$30,480 $7,520 $617 $1,726 $5,178 10.36%
$12,000 $13,500 $0 $500 $1 $ 1,000 $300 $1 $ 1,500 $0 $1,680 $0 ------------------$30,480 ($3,480) $617 ($ ($1,024) ($ ($3,073) -8.78%
$17,000 $13,500 $0 $500 $1 $ 1,000 $300 $1 $1,500 $0 $2,380 $0 ------------------$36,180 $12,320 $617 $2,926 $8,778 12.54%
$27,250 $13,500 $0 $500 $1 $ 1,000 $300 $1 $ 1,500 $0 $3,815 $0 ------------------$47,865 $13,135 $617 $3,130 $9,389 11.05%
$27,250 $13,500 $0 $500 $1 $ 1,000 $300 $1 $1,500 $0 $3,815 $0 ------------------$47,865 $17,135 $617 $4,130 $12,389 13.77%
$27,250 $13,500 $0 $500 $1 $ 1,000 $300 $1 $ 1,500 $0 $3,815 $0 ------------------$47,865 ($11,865) $617 ($ ( $3,120) ($ ($9,361) -1 - 17.02%
Appendix Appendix Table: Cash Flow
Pro Forma Cash Flow
Cash Received Cash from Operations: Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received
0.00%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$0 $0 $0
$0 $5,333 $5,333
$0 $10,000 $10,000
$0 $15,333 $15,333
$0 $27,467 $27,467
$0 $46,800 $46,800
$0 $67,067 $67,067
$0 $61,667 $61,667
$0 $42,000 $42,000
$0 $53,667 $53,667
$0 $78,000 $78,000
$0 $87,667 $87,667
$0 $0 $0 $50,000 $0 $0 $0 $50,000
$0 $0 $0 $0 $0 $0 $0 $5,333
$0 $20,000 $0 $0 $0 $0 $0 $30,000
$0 $0 $0 $0 $0 $0 $0 $15,333
$0 $0 $0 $0 $0 $0 $0 $27,467
$0 $10,000 $0 $0 $0 $0 $0 $56,800
$0 $0 $0 $0 $0 $0 $0 $67,067
$0 $0 $0 $0 $0 $0 $0 $61,667
$0 $0 $0 $0 $0 $0 $0 $42,000
$0 $0 $0 $0 $0 $0 $0 $53,667
$0 $0 $0 $0 $0 $0 $0 $78,000
$0 $0 $0 $0 $0 $0 $0 $87,667
Expenditures Expenditures from Operations: Cash Spending Payment of Accounts Payable Subtotal Spent on Operations
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$3,467 $12,810 $16,277
$3,467 $22,737 $26,204
$4,398 $24,088 $28,486
$6,023 $26,502 $32,525
$8,554 $31,099 $39,654
$1 $10,661 $38,331 $48,991
$7,786 $44,819 $52,605
$6,098 $38,187 $44,285
$1 $10,461 $38,349 $48,810
$1 $11,137 $60,702 $71,838
$1 $11,637 $64,204 $75,841
$8,324 $65,775 $74,099
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 Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent
$0 $0 $0 $0 $0 $0 $0 $16,277
$0 $0 $0 $0 $0 $0 $0 $26,204
$0 $0 $0 $0 $0 $0 $0 $28,486
$0 $0 $0 $0 $0 $0 $0 $32,525
$0 $0 $0 $0 $0 $0 $0 $39,654
$0 $0 $0 $0 $0 $0 $0 $48,991
$0 $0 $0 $0 $0 $0 $0 $0 $52,605
$0 $0 $0 $0 $0 $0 $0 $44,285
$0 $0 $0 $0 $0 $0 $0 $48,810
$0 $0 $0 $0 $0 $0 $0 $0 $71,838
$0 $0 $0 $0 $0 $0 $0 $75,841
$0 $0 $0 $0 $0 $0 $0 $74,099
Net Cash Flow Cash Balance
$33,723 $58,723
($20,870) $37,853
$1,514 $39,367
($17,192) $22,175
($12,187) $9,988
$7,809 $17,797
$14,462 $32,258
$17,382 $49,640
($6,810) $42,830
($18,172) $24,658
$2,159 $26,817
$13,568 $40,385
Appendix Appendix Table: Balance Sheet Sheet
Pro Forma Balance Sheet Assets Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets
Starting Balances $25,000 $0 $7,000 $32,000
Jan $58,723 $10,000 $7,000 $75,723
Feb $37,853 $14,667 $7,000 $59,519
Mar $39,367 $24,667 $7,000 $71,033
Apr $22,175 $43,333 $7,000 $72,508
May $9,988 $73,867 $7,000 $90,855
Jun $17,797 $102,067 $7,000 $126,863
Jul $32,258 $85,000 $7,000 $124,258
Aug $49,640 $58,333 $7,000 $114,973
Sep $42,830 $86,333 $7,000 $136,163
Oct $24,658 $117,667 $7,000 $149,325
Nov $26,817 $129,667 $7,000 $163,484
Dec $40,385 $97,000 $7,000 $144,385
$0 $0 $0 $32,000
$0 $0 $0 $75,723
$0 $0 $0 $59,519
$0 $0 $0 $71,033
$0 $0 $0 $72,508
$0 $0 $0 $90,855
$0 $0 $0 $126,863
$0 $0 $0 $124,258
$0 $0 $0 $114,973
$0 $0 $0 $136,163
$0 $0 $0 $149,325
$0 $0 $0 $163,484
$0 $0 $0 $144,385
Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities
$350 $0 $0 $350
Jan $10,451 $0 $0 $10,451
Feb $11,795 $0 $0 $11,795
Mar $14,581 $20,000 $0 $34,581
Apr $19,829 $20,000 $0 $39,829
May $28,072 $20,000 $0 $48,072
Jun $35,404 $30,000 $0 $65,404
Jul $27,621 $30,000 $0 $57,621
Aug $21,409 $30,000 $0 $51,409
Sep $33,821 $30,000 $0 $63,821
Oct $37,594 $30,000 $0 $67,594
Nov $39,364 $30,000 $0 $69,364
Dec $29,627 $30,000 $0 $59,627
Long-term Liabilities Total Liabilities
$0 $350
$50,000 $60,451
$50,000 $61,795
$50,000 $84,581
$50,000 $89,829
$50,000 $98,072
$50,000 $115,404
$50,000 $107,621
$50,000 $101,409
$50,000 $113,821
$50,000 $117,594
$50,000 $119,364
$50,000 $109,627
$50,000 ($18,350) $0 $31,650 $32,000 $31,650
$50,000 ($18,350) ($ ($16,378) $15,272 $75,723 $15,272
$50,000 ($18,350) ($ ($33,925) ($2,275) $59,519 ($2,275)
$50,000 ($18,350) ($ ($45,198) ($13,548) $71,033 ($ ($13,548)
$50,000 ($18,350) ($48,970) ($17,320) $72,508 ($17,320)
$50,000 ($18,350) ($ ($38,868) ($7,218) $90,855 ($7,218)
$50,000 ($18,350) ($ ($20,190) $11,460 $126,863 $11,460
$50,000 ($18,350) ($ ($15,013) $16,637 $124,258 $16,637
$50,000 ($18,350) ($ ($18,085) $13,565 $114,973 $13,565
$50,000 ($18,350) ($9,308) $22,342 $136,163 $22,342
$50,000 ($18,350) $81 $31,731 $149,325 $31,731
$50,000 ($18,350) $12,470 $44,120 $163,484 $44,120
$50,000 ($18,350) $3,109 $34,759 $144,385 $34,759
Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth
