energy conservation business plan
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Cover Page
This sample business plan has been made available to users ofBusiness Plan Pro, businessplanning software published by Palo Alto Software, Inc. Names, locations and numbers may have
been changed, and substantial portions of the original plan text may have been omitted to preserve
confidentiality and proprietary information.
You are welcome to use this plan as a starting point to create your own, but you do not havepermission to resell, reproduce, publish, distribute or even copy this plan as it exists here.
Requests for reprints, academic use, and other dissemination of this sample plan should be emailedto the marketing department of Palo Alto Software at marketing@paloalto.com. For product
information visit our website: www.paloalto.com or call: 1-800-229-7526.
Copyright Palo Alto Software, Inc., 1995-2009 All rights reserved.
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Legal Page
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by_________________________ in this business plan is confidential; therefore, reader agrees not to
disclose it without the express written permission of _________________________.
It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other meansand that any disclosure or use of same by reader, may cause serious harm or damage to
_________________________.
Upon request, this document is to be immediately returned to _________________________.
___________________Signature
___________________
Name (typed or printed)
___________________Date
This is a business plan. It does not imply an offering of securities.
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Table of Contents
1.0 Executive Summary ............................................................................................................................... 1
Chart: Highlights ..................................................................................................................................2
1.1 Mission ...............................................................................................................................................21.2 Keys to Success ..................................................................................................................................2
1.3 Objectives .......................................................................................................................................... 2
2.0 Company Summary ............................................................................................................................... 32.1 Start-up Summary .............................................................................................................................. 3
Table: Start-up Funding ....................................................................................................................... 4
Chart: Start-up ......................................................................................................................................5Table: Start-up ..................................................................................................................................... 5
2.2 Company Ownership ......................................................................................................................... 5
3.0 Services .................................................................................................................................................. 64.0 Market Analysis Summary .................................................................................................................... 6
4.1 Market Segmentation ......................................................................................................................... 7
Table: Market Analysis ........................................................................................................................7Chart: Market Analysis (Pie) ............................................................................................................... 8
4.2 Target Market Segment Strategy ....................................................................................................... 8
4.3 Service Business Analysis ................................................................................................................. 94.3.1 Competition and Buying Patterns ............................................................................................... 9
5.0 Strategy and Implementation Summary ...............................................................................................10
5.1 Competitive Edge .............................................................................................................................10
5.2 Marketing Strategy ...........................................................................................................................105.3 Sales Strategy ................................................................................................................................... 11
5.3.1 Sales Forecast ............................................................................................................................11
Table: Sales Forecast .....................................................................................................................11Chart: Sales Monthly .....................................................................................................................12
Chart: Sales by Year ......................................................................................................................12
5.4 Milestones ........................................................................................................................................13
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Table of Contents
................................................................................................................................................................ 16
8.3 Projected Profit and Loss .................................................................................................................17Table: Profit and Loss ........................................................................................................................ 17
Chart: Profit Monthly .........................................................................................................................18
Chart: Profit Yearly ............................................................................................................................18Chart: Gross Margin Monthly ............................................................................................................19
Chart: Gross Margin Yearly ...............................................................................................................19
8.4 Projected Cash Flow ........................................................................................................................ 20Table: Cash Flow ............................................................................................................................... 20
Chart: Cash .........................................................................................................................................218.5 Projected Balance Sheet ...................................................................................................................22
Table: Balance Sheet ..........................................................................................................................22
................................................................................................................................................................ 22
8.6 Business Ratios ................................................................................................................................ 23Table: Ratios ...................................................................................................................................... 23
Table: Sales Forecast ................................................................................................................................... 1
...................................................................................................................................................................... 1
Table: Personnel ...........................................................................................................................................2
...................................................................................................................................................................... 2Table: General Assumptions ........................................................................................................................3
...................................................................................................................................................................... 3Table: Profit and Loss ..................................................................................................................................4
...................................................................................................................................................................... 4
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Green Power Consultancy
1.0 Executive Summary
Green Power Consultancy is a start-up organization in Burlington, VT that offers designs andadvice to architects and consumers regarding environmentally sensitive buildings as well as
energy consumption recommendations. Green Power has identified three keys to its success.
The first is the need to only offer solutions which are based on market demand. The second isto ensure that all of its offerings are based on economic justifications; the solution should make
sense beyond the environmental considerations because it has long-term economic value.
Green Power will be targeting architects and individual consumers. Green Power will work
closely with several architects providing them the ability to offer environmental solutionsto their customers. This group is growing at 7% and there are 23 potential customers in the
area. The second customer group is individual consumers; an environmentally consciousgroup that have sought out a service provider to help them implement their personal ethics into
the design of their new or existing structure.
Green Power is an environmental energy consultancy that offers a wide range of services:
advice regarding passive heating, grey water usage recommendations, renewable energyconsiderations and employee transportation options.
Green Power will be led by the seasoned management team of Dan and Sue Lang. Dan receiveda degree in environmental studies, business, and a Masters in architecture. Dan has several
years of work experience within the industry. The second part of the team is Sue Lang. Sue hasan MBA and work experience with the Bonneville Power Administration in their renewable
energy department. Through a combination of excellent education and good work experience,Green Power's management team will be able to successfully execute on its business plan.
Green Power has conservatively forecasted sales of $202,343 for year two, rising to $238,402for year three. Net profit will be reached in the second year. Through a combination of a proven
business model, a strong management team, and this comprehensive energy business plan toguide the organization, Green Power will be long lasting, profitable business.
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Green Power Consultancy
Chart: Highlights
Sales
Gross Margin
Net Profit
$0
$30,000
$60,000
$90,000
$120,000
$150,000
$180,000
$210,000
$240,000
Year 1 Year 2 Year 3
Highlights
1.1 Mission
It is Green Power Consultancy's mission to provide the finest green energy solutions for newconstructions as well as existing building owners/lessors. Through careful analysis, attentive
customer support, and cost effective solutions, Green Power will become a stable businessserving the Burlington community.
1.2 Keys to Success
Green Power has identified several keys to success that will be instrumental in creating a
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Green Power Consultancy
2.0 Company Summary
Green Power is a Vermont-based L.L.C green energy consultancy. Green Power offers itsservices both to architects who are constructing new businesses as well as existing buildingowners/users who are looking to make their existing structure more environmentally sound.
2.1 Start-up Summary
Green Power will require the following equipment in order to begin operations:
Computer system including three workstations, standard laser printer as well as a wide
mouth printer, Internet access, and assorted software such as Microsoft Office, QuickBooksand CadArchitect (the premier architect industry software).
Three work areas including two drawing tables and the assorted office supplies for thestandard workdesks as well as the drawing tables.
Various bookshelves, lights, and couches (for clients).
Bike storage unit/locker.
Refrigerator, microwave, and assorted utensils for the lunch room.
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Green Power Consultancy
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund $7,150Start-up Assets to Fund $32,850Total Funding Required $40,000
Assets
Non-cash Assets from Start-up $9,000Cash Requirements from Start-up $23,850Additional Cash Raised $0
Cash Balance on Starting Date $23,850Total Assets $32,850
Liabilities and Capital
Liabilities
Current Borrowing $0Long-term Liabilities $0Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0Total Liabilities $0
Capital
Planned Investment
Investor 1 $20,000Investor 2 $20,000Additional Investment Requirement $0Total Planned Investment $40,000
Loss at Start-up (Start-up Expenses) ($7,150)Total Capital $32,850
Total Capital and Liabilities $32 850
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Green Power Consultancy
Chart: Start-up
$0
$4,000
$8,000
$12,000
$16,000
$20,000
$24,000
$28,000
$32,000
$36,000
$40,000
Expenses Assets Investment Loans
Start-up
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $2,000Stationery etc. $200Brochures $200
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Green Power Consultancy
4.1 Market Segmentation
Green Power has segmented its target market into two different customer groups, both equallyattractive.
Architects
This customer group is made up of professional architects that design buildings and additionsfor clients. Architects have developed a strategic relationship with Green Power to offer value-
added-services for their clients.
The architect firms typically have two - nine partners.
Offer both residential and commercial design work, however 67% of their work is
commercial.
The firms typically have only a handful of service providers that they work with. This means
that once they find someone they trust, they develop a long-term relationship with thatservice provider.
Yearly revenue ranges from $200 thousand - $5 million.
Individual customers
This segment contains consumers who are either having a residential home, or a commercialstructure, designed. Due to their personal environmental concerns and a recognition that it can
be cost effective to have building decisions with environmental considerations, they haverequested Green Power's assistance. They are generally working directly with Green Power for
their design needs and will likely then take this design criteria to their builder.
The individual is an environmentalist and they take into account how their action will impactthe environment.
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Green Power Consultancy
Chart: Market Analysis (Pie)
Architects
Individual cus tomers
Market Analysis (Pie)
4.2 Target Market Segment Strategy
Green Power has chosen these two market segments for compelling reasons. The architectshave been focused on because they are the service providers that do the bulk of the design
work for residential and commercial structures. The architects are used as sales people forGreen Power's services, they are the ones that can then sell these services to their customers.
It benefits the architects because they are able to offer a wider range of value-added-servicesto their customers without spending capital of learning the information themselves. By aligning
itself with architects, Green Power is able to offer their services to a larger group of people.
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Green Power Consultancy
4.3 Service Business Analysis
The environmental power consultancy industry is fairly new. Only recently has there been anemergence of firms that offer these services. This can be explained by several factors. First,
people are becoming more environmentally aware these days, a function of many things
including the recent problems with the Middle East and Fundamental Islamists. These recentproblems have forced people to reconsider America's dependence on oil and the need to
maintain good relationships with Saudi Arabia only because of their oil. Another factor that hascontributed to the growth of green power is that it has become increasingly cost effective to
make business decisions while taking into account the decisions impact on the environment. For
years an environmental decision was based on personal consciousness and ethics, notoverriding economic factors. Now money can be saved when environmental impacts are takeninto account. Please read the following section which will indicate the different players within
the industry.
4.3.1 Competition and Buying Patterns
The competition generally takes two different forms:
Eco-architects
These are architects that specialize in environmental design considerations. Typically theirentire practice is based around structures that have environmental elements. Green Power
could actually be within this industry niche, however they are able to serve a larger customerbaser, therefore earn more revenue as well as make a positive impact in our world by
offering its services to both end consumers as well as regular architects as opposed to thebusiness model of only serving one set of customers.
Local utilityThe local utilities often have a department that offers free consultation for environmental
design considerations. There are incentives for the utilities to attempt to curb their customer'suse of their energy. These incentives take the form of not needing to make as many capital
dit t d l th d li i f t t t d t th i d l d
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Green Power Consultancy
5.0 Strategy and Implementation Summary
Green Power's business strategy recognizes and will leverage the fact that a lot of business willbe transacted through networking and word-of-mouth referrals. With this in mind, Green Powerwill work diligently to build alliances with architects who can co-brand their services with Green
Power thereby increasing Green Power's potential qualified customers.
Green Power will rely on its competitive edge of adopting a cost effective environmental
solution so in addition to meeting environmental concerns of the customer, Green Power's
services will save the customer money over time.The marketing strategy will highlight bothenvironmental attributes as well as economic ones.The marketing campaign will recognize the
existence of two distinct market customers. Lastly, the sales strategy will offer a compellingeconomic analysis of how the customer can save money by adopting Green Power's designs.
5.1 Competitive Edge
Green Power will use its competitive edge of economic justification to turn potential customersinto qualified sales customers. While some of the other similar companies often highlight the
positive environmental impact that their designs offer, Green Power will also offer economicjustifications for their designs. This is an important competitive edge as it provides evidence
that the customer can save money in the long term and make a positive impact on theenvironment. Providing a cost benefit analysis for the green design is important because it
makes the potential market larger, moving from people that want to do good for theenvironment to people that also want to save money. By offering an environmental solution
that saves the person or business money creates a compelling reason to adopt the suggestions.There are too few people that will act only for environmental reasons, but when you save
people money, there are far more people interested.
5.2 Marketing Strategy
The marketing strategy is based on developing an awareness regarding Green Power's servicesto both architects and the end use consumers. Green Power will strongly use networking as a
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Green Power Consultancy
5.3 Sales Strategy
The sales strategy implicitly and explicitly takes into account the philosophy that the reasonthat many of the people are attracted to Green Power is because of its personal environmental
ethics. The sales strategy will leverage this desire with the fact that environmental decisions
can have positive economic impacts in the long term. Therefore the sales strategy will leveragethe competitive edge of economic justification as the method for turning sales leads into
customers. For this strategy to be effective, Green Power will present customers case studiesand quantifiable data proving economic justification.
5.3.1 Sales Forecast
Green Power has adopted a conservative sales forecast for the business plan. By adopting a
conservative prediction, it is easier to hit sales goals and increase the likelihood that thebusiness plan is relevant to the business. If the sales forecasts was wildly off, it casts doubt on
the application of the plan for the business.
Sales will be slow for the first several months, a function of Green Power being a start-uporganization. As Green Power increases their customer pool and more architects become
familiar with GP's services, business will grow. Growth will be forecasted and preferenced as
steady. The steadier it is, the easier it will be to deal with the incremental growth in work.Please view the following table and charts for a graphical representation on monthly and yearly
sales.
Cost of sales for a consulting company are negligible, however, cost of architects sales will be
20%, since we will pay commissions to the architects for referrals.
Table: Sales Forecast
Sales Forecast
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Green Power Consultancy
Chart: Sales Monthly
Architects
Individuals
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Sales Monthly
Chart: Sales by Year
$210,000
$240,000
Sales by Year
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Green Power Consultancy
5.4 Milestones
Green Power has identified several milestones as a way of setting achievablegoals. Performance is likely to be improved through the quest of reaching the goals. This
phenomenon is well documented and is used in large corporations such as GE's Seven Sigma
Program as well as many state's benchmarked-based assessment testing systems. Green Powerhas identified the following milestones:
Business plan completion;
10th customer;
Revenues exceeding $50,000; Profitability.
Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2003 2/15/2003 $0 Dan & Sue Business planning10th customer 1/1/2003 3/30/2003 $0 Sue SalesRevenue exceeding $50,000 1/1/2003 8/30/2003 $0 Sue SalesProfitability 1/1/2003 2/28/2004 $0 Dan AccountingTotals $0
Chart: Milestones
Milestones
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Green Power Consultancy
6.0 Web Plan Summary
The website will be used as a marketing tool. It will offer a description of the services offered aswell as a listing of different clients served.
6.1 Website Marketing Strategy
The plan for marketing the site is fairly simple: submission to search engines such as Google
and listing the website on all of the company's correspondence and printed marketing/sales
media.
6.2 Development Requirements
Green Power will utilize a local programmer to build the site.
7.0 Management Summary
The company will be lead by the husband and wife team of Dan and Sue Lang. Dan grew up in
Oregon and attended the University of Oregon for his undergraduate education. Dan's major
was environmental studies and business. After graduation Dan worked for a year at anenvironmental testing company. Through general networking, Dan was introduced to one of the
three principals of a company called The Seal Company. The business model for this companywas to make assessments for private and public companies as to their environmental
impact. His position with The Seal Company provided him with wonderful insight into theindustry of environmental assessment and helped provide him with a foundation of knowledge
regarding green energy, just one of the areas of assessment. After a year of this Dan enrolledinto the University of Oregon's Master's Architect program, taking course work in environmental
design. This degree would provide Dan with the skills to make a larger impact in his
community.
Sue went to the University of Burlington for undergrad and then moved out to Oregon to attendWillamette University's MBA program. After her degree Sue moved up to Portland and worked
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Green Power Consultancy
7.1 Personnel Plan
For the first three months of business the organization will be quite lean, consisting of just Danand Sue. Dan will be responsible for most of the business-related issues as well as doing
research and helping out with the work projects. Sue's responsibilities will be marketing and
sales based. She will work hard on developing visibility for the company as well as working withprospective customers. Green Power has forecasted that on month four it will
need administrative assistance. The duties will be answering the phone, some input accounting,and other clerical functions. Initially this person will be part time but will move to full time at
the beginning of year two.
Table: Personnel
Personnel Plan
Year 1 Year 2 Year 3
Dan $24,000 $30,000 $36,000Sue $24,000 $30,000 $36,000Associate consultant $0 $15,000 $30,000Administrative assistant $4,600 $18,000 $20,000
Total People 3 3 4
Total Payroll $52,600 $93,000 $122,000
8.0 Financial Plan
The following sections will outline the important Financial Assumptions.
8.1 Important Assumptions
The following table details important Financial Assumptions.
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Green Power Consultancy
8.2 Break-even Analysis
The Break-even Analysis is indicated below.
Chart: Break-even Analysis
$0
$1,000
$2,000
$3,000
$4,000
($1,000)
($2,000)
($3,000)
($4,000)
($5,000)
($6,000)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
Break-even Analysis
Table: Break-even Analysis
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Green Power Consultancy
8.3 Projected Profit and Loss
The following table and charts will indicate Projected Profit and Loss.
Table: Profit and Loss
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $87,047 $202,343 $238,402
Direct Cost of Sales $8,212 $29,779 $35,086Other Costs of Sales $0 $0 $0Total Cost of Sales $8,212 $29,779 $35,086
Gross Margin $78,835 $172,565 $203,317Gross Margin % 90.57% 85.28% 85.28%
Expenses
Payroll $52,600 $93,000 $122,000Sales and Marketing and Other Expenses $4,800 $4,800 $4,800
Depreciation $1,800 $1,800 $1,800Rent $6,000 $6,000 $6,000Utilities $2,400 $2,400 $2,400Insurance $2,400 $2,400 $2,400Payroll Taxes $7,890 $13,950 $18,300Other $1,800 $1,800 $1,800
Total Operating Expenses $79,690 $126,150 $159,500
Profit Before Interest and Taxes ($855) $46,415 $43,817EBITDA $945 $48,215 $45,617
Interest Expense $0 $0 $0
Taxes Incurred $0 $13,924 $13,145
Net Profit ($855) $32,490 $30,672Net Profit/Sales -0.98% 16.06% 12.87%
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Green Power Consultancy
Chart: Profit Monthly
$0
$200
$400
$600
$800
($200)
($400)($600)
($800)
($1,000)
($1,200)
($1,400)
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Profit Monthly
Chart: Profit Yearly
$28 000
$32,000
Profit Yearly
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Green Power Consultancy
Chart: Gross Margin Monthly
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Gross Margin Monthly
Chart: Gross Margin Yearly
$180 000
$210,000
Gross Margin Yearly
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Green Power Consultancy
8.4 Projected Cash Flow
The following table and chart indicate Projected Cash Flow.
Table: Cash Flow
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $87,047 $202,343 $238,402Subtotal Cash from Operations $87,047 $202,343 $238,402
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0New Current Borrowing $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0New Long-term Liabilities $0 $0 $0Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0New Investment Received $0 $0 $0Subtotal Cash Received $87,047 $202,343 $238,402
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $52,600 $93,000 $122,000Bill Payments $30,707 $71,679 $83,201Subtotal Spent on Operations $83,307 $164,679 $205,201
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0Long term Liabilities Principal Repayment $0 $0 $0
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Green Power Consultancy
Chart: Cash
Net Cash Flow
Cash Balance
$0
$3,000
$6,000
$9,000
$12,000
$15,000
$18,000
$21,000
$24,000
$27,000
$30,000
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Cash
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Green Power Consultancy
8.5 Projected Balance Sheet
The following table will indicate the Projected Balance Sheet.
Table: Balance Sheet
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $27,590 $65,254 $98,456Other Current Assets $0 $0 $0Total Current Assets $27,590 $65,254 $98,456
Long-term Assets
Long-term Assets $9,000 $9,000 $9,000Accumulated Depreciation $1,800 $3,600 $5,400Total Long-term Assets $7,200 $5,400 $3,600Total Assets $34,790 $70,654 $102,056
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $2,795 $6,169 $6,898Current Borrowing $0 $0 $0Other Current Liabilities $0 $0 $0Subtotal Current Liabilities $2,795 $6,169 $6,898
Long-term Liabilities $0 $0 $0Total Liabilities $2,795 $6,169 $6,898
Paid-in Capital $40,000 $40,000 $40,000Retained Earnings ($7,150) ($8,005) $24,485Earnings ($855) $32,490 $30,672Total Capital $31 995 $64 485 $95 157
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Green Power Consultancy
8.6 Business Ratios
The following table contains typical Business Ratios of both Green Power as well as the industryas a whole.
Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 132.45% 17.82% 8.18%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 41.37%Total Current Assets 79.30% 92.36% 96.47% 75.36%Long-term Assets 20.70% 7.64% 3.53% 24.64%Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.03% 8.73% 6.76% 31.49%Long-term Liabilities 0.00% 0.00% 0.00% 16.85%Total Liabilities 8.03% 8.73% 6.76% 48.34%
Net Worth 91.97% 91.27% 93.24% 51.66%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%Gross Margin 90.57% 85.28% 85.28% 100.00%Selling, General & Administrative Expenses 91.55% 69.23% 72.42% 82.59%Advertising Expenses 0.00% 0.00% 0.00% 1.16%Profit Before Interest and Taxes -0.98% 22.94% 18.38% 1.47%
Main Ratios
Current 9.87 10.58 14.27 1.93
Quick 9.87 10.58 14.27 1.50Total Debt to Total Assets 8.03% 8.73% 6.76% 3.09%Pre-tax Return on Net Worth -2.67% 71.98% 46.05% 59.56%Pre-tax Return on Assets -2.46% 65.69% 42.93% 7.63%
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Green Power Consultancy
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Appendix
Table: Sales Forecast
Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Architects 0% $2,500 $2,654 $2,747 $3,212 $3,455 $3,525 $3,656 $3,787 $3,987 $3,902 $3,878 $3,757Individuals 0% $2,800 $2,972 $3,077 $3,597 $3,870 $3,948 $4,095 $4,241 $4,465 $4,370 $4,343 $4,208
Total Sales $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Architects $500 $531 $549 $642 $691 $705 $731 $757 $797 $780 $776 $751
Individuals $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $500 $531 $549 $642 $691 $705 $731 $757 $797 $780 $776 $751
Page 1
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Appendix
Table: Personnel
Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month10
Month11
Month12
Dan 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000Sue 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000Associate consultant 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Administrative assistant 0% $0 $0 $0 $400 $400 $400 $500 $500 $600 $600 $600 $600
Total People 2 2 2 3 3 3 3 3 3 3 3 3
Total Payroll $4,000 $4,000 $4,000 $4,400 $4,400 $4,400 $4,500 $4,500 $4,600 $4,600 $4,600 $4,600
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Table: General Assumptions
General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term InterestRate
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 3 0.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
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Table: Profit and Loss
Pro Forma Profit andLoss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Direct Cost of Sales $500 $531 $549 $642 $691 $705 $731 $757 $797 $780 $776 $751
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $500 $531 $549 $642 $691 $705 $731 $757 $797 $780 $776 $751
Gross Margin $4,800 $ 5,096 $5,274 $6,167 $6,634 $6,768 $7,020 $7,271 $7,655 $7,492 $7,446 $7,213
Gross Margin % 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57%
Expenses
Payroll $4,000 $4,000 $4,000 $4,400 $4,400 $4,400 $4,500 $4,500 $4,600 $4,600 $4,600 $4,600
Sales and Marketing andOther Expenses
$400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Depreciation $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150Rent $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Utilities $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Payroll Taxes 15% $600 $600 $600 $660 $660 $660 $675 $675 $690 $690 $690 $690Other $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Total OperatingExpenses
$6,200 $6,200 $6,200 $6,660 $6,660 $6,660 $6,775 $6,775 $6,890 $6,890 $6,890 $6,890
Profit Before Interest andTaxes
($1,400) ($1,104) ($926) ($493) ($26) $108 $245 $496 $765 $602 $556 $323
EBITDA ($1,250) ($954) ($776) ($343) $124 $258 $395 $646 $915 $752 $706 $473
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($1,400) ($1,104) ($926) ($493) ($26) $108 $245 $496 $765 $602 $556 $323
Net Profit/Sales -26.42% -19.63% -15.90% -7.24% -0.36% 1.45% 3.15% 6.18% 9.05% 7.28% 6.76% 4.06%
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Table: Cash Flow
Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month10
Month11
Month12
Cash Received
Cash from Operations
Cash Sales $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Subtotal Cash from Operations $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free)
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month10
Month11
Month12
Expenditures from Operations
Cash Spending $4,000 $4,000 $4,000 $4,400 $4,400 $4,400 $4,500 $4,500 $4,600 $4,600 $4,600 $4,600
Bill Payments $85 $2,551 $2,581 $2,604 $2,754 $2,801 $2,816 $2,857 $2,884 $2,937 $2,920 $2,915
Subtotal Spent on Operations $4,085 $6,551 $6,581 $7,005 $7,154 $7,201 $7,316 $7,357 $7,484 $7,537 $7,520 $7,515
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of CurrentBorrowing
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities PrincipalRepayment
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities PrincipalRepayment
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $4,085 $6,551 $6,581 $7,005 $7,154 $7,201 $7,316 $7,357 $7,484 $7,537 $7,520 $7,515
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Net Cash Flow $1,215 ($925) ($758) ($195) $171 $272 $434 $671 $968 $735 $701 $450
Cash Balance $25,065 $24,140 $23,383 $23,188 $23,358 $23,630 $24,064 $24,735 $25,704 $26,439 $27,140 $27,590
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Table: Balance Sheet
Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month10
Month11
Month12
Assets StartingBalances
Current Assets
Cash $23,850 $25,065 $24,140 $23,383 $23,188 $23,358 $23,630 $24,064 $24,735 $25,704 $26,439 $27,140 $27,590Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $23,850 $25,065 $24,140 $23,383 $23,188 $23,358 $23,630 $24,064 $24,735 $25,704 $26,439 $27,140 $27,590
Long-term Assets
Long- term Assets $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000Accumulated Depreciation $0 $150 $300 $450 $600 $750 $900 $1,050 $1,200 $1,350 $1,500 $1,650 $1,800
Total Long-term Assets $9,000 $8,850 $8,700 $8,550 $8,400 $8,250 $8,100 $7,950 $7,800 $7,650 $7,500 $7,350 $7,200 Tota l Assets $32,850 $33,915 $32,840 $31,933 $31,588 $31,608 $31,730 $32,014 $32,535 $33,354 $33,939 $34,490 $34,790
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month10
Month11
Month12
Current Liabilities
Accounts Payable $0 $2,465 $2,495 $2,513 $2,661 $2,708 $2,721 $2,761 $2,786 $2,839 $2,823 $2,818 $2,795Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Current Liabilities $0 $2,465 $2,495 $2,513 $2,661 $2,708 $2,721 $2,761 $2,786 $2,839 $2,823 $2,818 $2,795
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Liabilities $0 $2,465 $2,495 $2,513 $2,661 $2,708 $2,721 $2,761 $2,786 $2,839 $2,823 $2,818 $2,795
Paid- in Capital $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000Retained Earnings ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150)Earnings $0 ($1,400) ($2,504) ($3,430) ($3,923) ($3,949) ($3,841) ($3,597) ($3,101) ($2,336) ($1,734) ($1,178) ($855)
Tota l Capita l $32,850 $31,450 $30,346 $29,420 $28,927 $28,901 $29,009 $29,253 $29,749 $30,514 $31,116 $31,672 $31,995 Total Liabilities and Capital $32,850 $33,915 $32,840 $31,933 $31,588 $31,608 $31,730 $32,014 $32,535 $33,354 $33,939 $34,490 $34,790
Net Worth $32,850 $31,450 $30,346 $29,420 $28,927 $28,901 $29,009 $29,253 $29,749 $30,514 $31,116 $31,672 $31,995
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