corporate fitnessbusiness plan

8/13/2019 Corporate FitnessBusiness plan

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Confidentiality Agreement

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It is acknowledged by reader that information to be furnished in this business plan is in all respectsconfidential in nature, other than information which is in the public domain through other means

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___________________Signature

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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.............................................................................................................................1Chart: Highlights......................................................................................................................1

1.1 Objectives...................................................................................................................................21.2 Keys toSuccess........................................................................................................................21.3 Mission........................................................................................................................................2

2.0 Company Summary.............................................................................................................................22.1 Company Ownership.................................................................................................................22.2 Start-up Summary......................................................................................................................3

Chart: Start-up.........................................................................................................................3Table: Start-up Funding..........................................................................................................4Table: Start-up.........................................................................................................................5

2.3 Company Locations and Facilities..........................................................................................53.0 Services................................................................................................................................................5

3.1 Service Description...................................................................................................................53.2 Competitive Comparison..........................................................................................................63.3 Fulfillment....................................................................................................................................6

4.0 Market Analysis Summary..................................................................................................................64.1 Market Segmentation................................................................................................................6

Chart: Market Analysis (Pie)..................................................................................................7Table: Market Analysis...........................................................................................................7

4.2 Service Business Analysis........................................................................................................74.2.1 Main Competitors..........................................................................................................74.2.2 Distributing a Service...................................................................................................84.2.3 Business Participants...................................................................................................8

5.0 Strategy and Implementation Summary............................................................................................85.1 Milestones...................................................................................................................................9

Chart: Milestones....................................................................................................................9Table: Milestones 9


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Table of Contents7.3 Break-even Analysis................................................................................................................15

Table: Break-even Analysis.................................................................................................15Chart: Break-even Analysis.................................................................................................15

7.4 ProjectedProfit and Loss.......................................................................................................16Chart: Gross Margin Yearly..................................................................................................16Table: Profit and Loss..........................................................................................................17Chart: Profit Monthly.............................................................................................................17Chart: Profit Yearly................................................................................................................18Chart: Gross Margin Monthly...............................................................................................18

7.5 Projected Cash Flow...............................................................................................................19Table: Cash Flow..................................................................................................................19Chart: Cash...........................................................................................................................20

7.6 Projected Balance Sheet........................................................................................................21Table: Balance Sheet...........................................................................................................21

7.7 Business Ratios.......................................................................................................................22Table: Ratios.........................................................................................................................23

Table: Sales Forecast...............................................................................................................................1Table: Personnel........................................................................................................................................2Table: Profit and Loss...............................................................................................................................3Table: Cash Flow.......................................................................................................................................4Table: Balance Sheet................................................................................................................................5


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Corporate Fitness

1.0 Executive Summary

Corporate Fitness will serve Seattle-area businesses, helping them to become more

product ive, while lowering their overall costs.

Our business is based on two simple facts:

1. Healthy employees are more productive than chronically ill employees.

2. It costs less to prevent injuries or illnesses than to treat them after they occur.

At Corporate Fitness, we tie worker productivity directly to the health care issue. We believethat traditional approaches to the current health care crisis are misdirected. These traditionalefforts are what we call reactive-- that is, they wait until after the worker has been stricken

with illness or injury, and then pay for the necessary treatments. Our approach, whichemphasizes prevention and good health promotion, is much more proactive.

By helping employees change their behavior patterns and choose more healthy lifestyles,

Corporate Fitness will lower companies' health care expenditures, while raising workerproductivity. Health care expenditures will decrease due to reduced medical insurancepremiums, reduced absenteeism, reduced turnover rates, reduced worker's compensation

claims, reduced tardiness, shorter hospital stays, etc.

The state of America's health care crisis, coupled with current demographic changes, threatento not only exacerbate the crisis, but further erode worker productivity as well. These

environmental factors coupled with the local competitive situation signal a favorableopportunity in this market. We feel the time is right for Corporate Fitness.


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Corporate Fitness

1.1 Objectives

1. Provide wellness strategies/programs to businesses in the downtown Seattle area.

2. Create working relationships with 20 companies by the end of year one.3. Expand Corporate Fitness into Portland, Oregon by the end of year two.

1.2 Keys to Success

Corporate Fitness' keys to success are:

Marketing services to companies and individuals. Recruitment of experienced managerial talent. Dedication and hard work of the founders. Raising productivity. Lowering overall costs.

1.3 Mission

Corporate Fitness is a health service that helps businesses and individual workers attain one ofthe greatest gifts of all--that of good health. Personal gains, such as improved self-esteem

and self-motivation, combined with measurable benefits will create tremendous advantages forboth the employer and the employee.

2.0 Company Summary


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Corporate Fitness

2.2 Start-up Summary

Start-up will require approximately $300,000 of capital, $200,000 of which will be provided by the

founders and their families. The remaining $100,000 will come as a loan.

Approximately $140,000 will be allocated to leasehold improvements and $75,000 to equipment.


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Corporate Fitness

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $290,000

Start-up Assets to Fund $10,000

Total Funding Required $300,000

Assets

Non-cash Assets from Start-up $0

Cash Requirements from Start-up $10,000

Addit ional Cash Raised $0

Cash Balance on Starting Date $10,000

Total Assets $10,000

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabili ties $100,000

Accounts Payab le (Outstanding Bi ll s) $0

Other Current Liabili ties (interest-free) $0

Total Liabili ties $100,000

Capital

Planned Investment

Investor 1 $80,000

Investor 2 $60,000

Investor 3 $60,000

Addit ional Investment Requi rement $0

Total Planned Investment $200,000

Lo ss a t Start-up (Start-up Expense s) ($290,000)


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Corporate Fitness

Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal $1,250

Stationery etc. $1,000

Brochures $800

Insurance $5,000

Rent $58,000

Expensed Equipment $75,000

Util ities $6,500

Leasehold improvements $140,000

Other $2,450

Total Start-up Expenses $290,000

Start-up Assets

Cash Required $10,000

Other Current Assets $0

Long-term Assets $0

Total Assets $10,000

Total Requirements $300,000

2.3 Company Locations and Facilities

Corporate Fitness headquarters are located within the first club located in downtown Seattle.Upon expansion, off ices will be moved to a different location, not within any individual club.


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Corporate Fitnesswork force.

3.2 Competitive Comparison

Corporate Fitness is not primarily a health c lub, as are the majority of competitors. Thisorganization is in the business of health care cost management. The major function is to work

with c lient companies to implement wellness strategies. Many employees will become benefactorsof such strategies without ever visiting the fitness facility, as exercise is only one facet of

overall wellness.

Corporate Fitness has a vested interest in each individual member of every wellness program,unlike many competitors. An integral part of this service is following up and monitoring theindividuals.

3.3 Fulfillment

All fitness machines are purchased from exercise equipment distributors, while all medical

equipment is bought from a reputable supply company.

4.0 Market Analysis Summary

In 1991, the U.S. medical bill was $738 million, of which businesses paid 30 percent. Recent

studies indicate returns on investments in wellness programs for various companies rangingfrom $1.91:1 to $5.78:1. General Electric's aircraft engines division, for example, saves $1million per year through its wellness programs. Traveler's Insurance Company reported savings

of $7.8 million in 1991, attributable to its wellness programs, and a return of $3.41 for every


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Corporate Fitnessescalating health care costs, and wish to more effectively manage those costs.

Corporate Fitness, however, segments its services for individual organizations. Corporate

Fitness works with senior management to develop mission statements and provide incentiveplans, and with employees to design personalized health and fitness programs.

Table: Market Analysis


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Corporate Fitnessaffordability of fitness facilities.

Gold's Gym-services are targeted toward those motivated and dedicated individualswho workout five to seven times per week.

Better Bodies-aimed at casual fitness-seekers who do not workout with a high intensitybut still desire the status and recognition.

4.2.2 Distributing a Service

Few fitness centers are located in the downtown Seattle area, while the majority are found insuburban neighborhoods and shopping complexes. Those in the downtown area are located close

to professional centers containing restaurants, parks, and other recreational activities. Insuburban locales, these establishments are often found close to grocery stores, restaurants, andretail stores.

4.2.3 Business Participants

Participants in the fitness industry include national, regional, and local organizations. On the

national level, companies such as Gold's Gym and the YMCA offer exercise facilities and trainingprograms. At the regional level, firms such as Better Bodies and Bally's offer comparable services,while locally, privately-owned businesses provide similar, but less extensive services to

exercise-seekers.

5.0 Strategy and Implementation Summary

Corporate Fitness' strategy is based on raising worker product ivity and lowering overall costs

for businesses. The most logical way to approach these factors is through a healthy work


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Corporate Fitness

5.1 Milestones

Sample Milestones topic text.

The milestones table and chart show the specific detail about actual program activities thatshould be taking place during the year. Each one has its manager, starting date, ending date,

and budget. During the year we will be keeping track of implementation against plan, with reportson the timely completion of these activities as planned.


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Corporate Fitness

5.2 Marketing Strategy

Corporate Fitness will begin by targeting small- to medium-sized businesses in the downtown

Seattle area. The first task is to convince senior executives of the benefits and needs ofwellness programs. This will be accomplished by aggressively pursuing interaction andrelationships with business professionals who would profit from using this service. Once a st rong

image is established, Corporate Fitness will use similar strategies to market its services tolarger corporations in Seatt le and other areas of expansion.

5.2.1 Pricing Strategy

Prices for using Corporate Fitness' services are comparable to those of higher-end fitnesscenters. An employee choosing to utilize a Corporate Fitness center will pay a $100 monthly fee.

For each employee enrolled in the general wellness program, regardless of whether or not theyuse the fitness facility, the employer will pay $150 annually. The prices reflect the quality of

the equipment and service.

5.2.2 Promotion Strategy

Following initial promotional activity through advertisements in newspapers, magazines, and on

television and radio, Corporate Fitness will significantly reduce its promotional efforts in the hopethat word-of-mouth will attract potential clients. Promotional activity will still be utilized

through these media outlets, but only minimally.


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Corporate Fitness

Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3

Sales

Sales $539,075 $650,750 $825,600

Other $0 $0 $0

Total Sales $539,075 $650,750 $825,600

Direct Cost of Sales Year 1 Year 2 Year 3

Cost of Sales $33,000 $44,000 $55,000

Other $0 $0 $0

Subtotal Direct Cost of Sales $33,000 $44,000 $55,000


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Corporate Fitness

6.0 Management Summary

Corporate Fitness is currently a small organization headed by three individuals. The CEO/

Director of Sales and Marketing oversees the activities of the Director of Health and WellnessPrograms and the Director of Finance and Administration.

The Director of Health and Wellness Programs is the contact for and supervisor of the fitnessi li t d h lth d t d t


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Corporate Fitnessundergraduate degree at the University of North Carolina, and then earned his MBA from

the University of Texas. Steve Perkins: Director of Finance and Administration. Mr. Perkins is responsible for

guiding and direct ing financial and control activities of the company in a mannerdesigned to protect assets, meet reporting requirements, and effectively plan for and

audit the financial needs of the firm. Mr. Perkins completed his undergraduate work at theUniversity of California-Berkeley, and received his MBA from Vanderbilt University.

Robert Gomez: Director of Health and Wellness Programs. Mr. Gomez will assume the

overall management of the health promotion program, including organizing and conductinghealth education programs. Mr. Gomez received his undergraduate degree in Exercise

and Movement Science from the University of Oregon.

6.3 Management Team Gaps

The gaps of Corporate Fitness' management team include:

Lack of experience in the fitness industry.

Minimal expertise in areas of finance and accounting. Strong desire for financial prosperity immediately with little patience for minimal

profitability.

6.4 Personnel Plan

Corporate Fitness' personnel staff requirements are shown in the table below.

Table: Personnel


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Corporate Fitness

7.1 Important Assumptions

Three assumptions for Corporate Fitness are:

1. A constantly growing economy without any major recession or boom.2. No unpredictable changes in fitness, medical, or office equipment.

3. No major national or global events that threaten the stability and health of the countryand its citizens.

Table: General Assumptions

General Assumptions


Plan Month 1 2 3

Current Interest Rate 3.00% 3.00% 3.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 25.00% 25.00% 25.00%

Other 0 0 0

7.2 Key Financial Indicators

The most important financial indicators are net increase in cash and net income. Net increasefrom cash will exemplify the relationship between net income and net cash from operating

activities. The greater the increase is, Corporate Fitness has that level of financial strength atthat point in time.


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Corporate Fitness

7.3 Break-even Analysis

Corporate Fitness' break-even point is computed in the table below, comparing sales and monthly

expenses. Sales forecasts indicate that units sold and monthly sales are expected to be muchgreater than the break-even point mentioned in the table.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $26,683

Assumpti ons:

Average Percent Variabl e Cost 6%

Estimated Monthly Fixed Cost $25,050


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Corporate Fitness

7.4 Projected Profit and Loss

Sales are predicted to increase each month with first year annual sales totaling close to a half-

million dollars. Gross margin, likewise, is expected to increase correspondingly.

Compared to total sales, net profit will increase each month and is predicted to increase for 1995

through 1997.


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Corporate Fitness

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $539,075 $650,750 $825,600

Direct Cost of Sales $33,000 $44,000 $55,000

Other Costs of Sales $0 $0 $0

Total Cost of Sales $33,000 $44,000 $55,000

Gross Margin $506,075 $606,750 $770,600

Gross Margin % 93.88% 93.24% 93.34%

Expenses

Payroll $150,000 $150,000 $150,000

Marketing/Promotion $25,200 $25,200 $25,200

Depreciation $7,200 $7,200 $7,200

Rent $60,000 $60,000 $6,000

Util ities $25,200 $25,200 $25,200

Insurance $5,400 $5,400 $5,400

Leased Equipment $27,600 $27,600 $27,600

Payroll Taxes $0 $0 $0

Other $0 $0 $0

Total Operating Expenses $300,600 $300,600 $246,600

Profit Before Interest and Taxes $205,475 $306,150 $524,000

EBITDA $212,675 $313,350 $531,200

Interest Expense $10,449 $8,500 $7,500

Taxes Incurred $48,757 $74,413 $129,125

Net Profit $146,270 $223,238 $387,375

Net Profit/Sales 27.13% 34.30% 46.92%


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Corporate Fitness


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Corporate Fitness

7.5 Projected Cash Flow

Ordinary cash flow will increase significantly while expenses remain relatively static, with only

minimal increases. We plan to take out a short-term loan to cover our receivables and othercontingencies in month one, and repay it in month 12.

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $215,630 $260,300 $330,240

Cash from Receivables $230,395 $371,174 $465,179

Subtotal Cash from Operations $446,025 $631,474 $795,419

Addit ional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $36,000 $0 $0

New Other Liabil ities (interest-free) $0 $0 $0

New Long-term Liabil ities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $482,025 $631,474 $795,419

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $150,000 $150,000 $150,000


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Corporate Fitness


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Corporate Fitness

7.6 Projected Balance Sheet

The balance sheet indicates that at the end of the first year of operation, net worth will be

positive and constantly increasing through the end of 1997.

Table: Balance Sheet

Pro Forma Bal ance SheetYear 1 Year 2 Year 3

Assets

Current Assets

Cash $80,303 $264,599 $610,273

Accounts Receivabl e $93 ,050 $112,326 $142,507

Other Current Assets $0 $0 $0

Total Current Assets $173,353 $376,925 $752,780

Long-term AssetsLong-term Assets $9,600 $19,200 $28,800

Accumulated Deprecia tion $7,200 $14 ,400 $21,600

Total Long-term Assets $2,400 $4,800 $7,200

Total Assets $175,753 $381,725 $759,980

Liabil ities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payab le $29 ,483 $22 ,217 $23,098

Current Borrowing $0 $0 $0Other Current Liabili ties $0 $0 $0

Subtotal Current Liabil ities $29,483 $22,217 $23,098

L t Li bi li ti $90 000 $80 000 $70 000


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Corporate Fitness

7.7 Business Ratios

The following table outlines some of Corporate Fitness' more important business ratios. The

final column, Industry Profile, details specific ratios based on the Physical FitnessFacilities industry as it is classified by the Standard Industry Classification (SIC) code, 7991.These ratios indicate strong financial growth and an impressive chance for investment

opportunities, making expansion and further development both very possible.


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Corporate Fitness

Table: Ratios

Ratio Anal ysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth n.a. 20.72% 26.87% 4.96%

Percent of Total Assets

Accounts Receivabl e 52.94% 29.43% 18.7 5% 5.74%

Other Current Assets 0.00% 0.00% 0.00% 34.12%

Total Current Assets 98.63% 98.74% 99.05% 39.86%

Long-term Assets 1.37% 1.26% 0.95% 60.14%Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabil i ties 16.78% 5.82% 3.04% 21.71%

Long-term Liabili ties 51.21% 20.96% 9.21% 29.51%

Total Liabili ties 67.98% 26.78% 12.25% 51.22%

Net Worth 32.02% 73.22% 87.75% 48.78%

Percent of Sal es

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 93.88% 93.24% 93.34% 100.00%Selling, General & Administrative Expenses 66.74% 58.93% 46.42% 72.76%

Advertising Expenses 1.34% 1.11% 0.87% 2.44%

Profit Before Interest and Taxes 38.12% 47.05% 63.47% 3.01%

Main Ratios

Current 5.88 16.97 32.59 1.05

Quick 5.88 16.97 32.59 0.73

Total Debt to Total Assets 67.98% 26.78% 12.25% 2.72%

Pre-tax Return on Net Worth 346.59% 106.49% 77.45% 61.25%

Pre-tax Return on Assets 110.97% 77.98% 67.96% 7.03%

Addit ional Ratios Year 1 Year 2 Year 3

Net Profit Margin 27.13% 34.30% 46.92% n.a


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Appendix

Page 1

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

Sales 0% $17,500 $21,000 $22,500 $26,000 $32,500 $40,000 $47,500 $52,375 $56,450 $65,750 $72,500 $85,000

Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Sales $17,500 $21,000 $22,500 $26,000 $32,500 $40,000 $47,500 $52,375 $56,450 $65,750 $72,500 $85,000

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

Cost of Sales $1,500 $1,500 $2,000 $2,000 $2,500 $2,500 $3,000 $3,000 $3,500 $3,500 $4,000 $4,000

Other $0 $ 0 $0 $ 0 $0 $ 0 $0 $ 0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $1,500 $1,500 $2,000 $2,000 $2,500 $2,500 $3,000 $3,000 $3,500 $3,500 $4,000 $4,000


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Appendix

Page 3

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $17,500 $21,000 $22,500 $26,000 $32,500 $40,000 $47,500 $52,375 $56,450 $65,750 $72,500 $85,000

Direct Cost of Sales $1,500 $1,500 $2,000 $2,000 $2,500 $2,500 $3,000 $3,000 $3,500 $3,500 $4,000 $4,000

Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $1,500 $1,500 $2,000 $2,000 $2,500 $2,500 $3,000 $3,000 $3,500 $3,500 $4,000 $4,000

Gross Margin $16,000 $19,500 $20,500 $24,000 $30,000 $37,500 $44,500 $49,375 $52,950 $62,250 $68,500 $81,000

Gross Margin % 91.43% 92.86% 91.11% 92.31% 92.31% 93.75% 93.68% 94.27% 93.80% 94.68% 94.48% 95.29%

Expenses

Payroll $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500

Marketing/Promotion $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100

Depreciation $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600

Rent $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Utilities $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100

Insurance $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450

Leased Equipment 0% $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300

Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050

Profit Before Interest and Taxes ($9,050) ($5,550) ($4,550) ($1,050) $4,950 $12,450 $19,450 $24,325 $27,900 $37,200 $43,450 $55,950

EBITDA ($8,450) ($4,950) ($3,950) ($450) $5,550 $13,050 $20,050 $24,925 $28,500 $37,800 $44,050 $56,550

Interest Expense $916 $909 $903 $896 $889 $882 $875 $868 $861 $854 $847 $750

Taxes Incurred ($2,492) ($1,615) ($1,363) ($486) $1,015 $2,892 $4,644 $5,864 $6,760 $9,087 $10,651 $13,800

Net Profit ($7,475) ($4,845) ($4,089) ($1,459) $3,046 $8,676 $13,931 $17,593 $20,279 $27,260 $31,952 $41,400

Net Profit/Sales -42.71% -23.07% -18.18% -5.61% 9.37% 21.69% 29.33% 33.59% 35.92% 41.46% 44.07% 48.71%


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Appendix

Page 4

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $7,000 $8,400 $9,000 $10,400 $13,000 $16,000 $19,000 $20,950 $22,580 $26,300 $29,000 $34,000

Cash from Receivables $0 $350 $10,570 $12,630 $13,570 $15,730 $19,650 $24,150 $28,598 $31,507 $34,056 $39,585

Subtotal Cash from Operations $7,000 $8,750 $19,570 $23,030 $26,570 $31,730 $38,650 $45,100 $51,178 $57,807 $63,056 $73,585

Additional Cash Received

Sales Tax , VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current Borrowing $36,000 $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 $43,000 $8,750 $19,570 $23,030 $26,570 $31,730 $38,650 $45,100 $51,178 $57,807 $63,056 $73,585

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations

Cash Spending $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500

Bill Payments $396 $11,904 $12,769 $13,518 $14,426 $16,416 $18,299 $20,509 $21,728 $23,148 $25,459 $27,549

Subtotal Spent on Operations $12,896 $24,404 $25,269 $26,018 $26,926 $28,916 $30,799 $33,009 $34,228 $35,648 $37,959 $40,049

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 Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $ 36,000

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities Principal Repayment $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $837

Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Long-term Assets $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $14,529 $26,037 $26,902 $27,651 $28,559 $30,549 $32,432 $34,642 $35,861 $37,281 $39,592 $77,686

Net Cash Flow $28,471 ($17,287) ($7,332) ($4,621) ($1,989) $1,181 $6,218 $10,458 $15,316 $20,526 $23,464 ($4,101)

Cash Balance $38,471 $21,184 $13,852 $9,231 $7,242 $8,423 $14,641 $25,099 $40,415 $60,941 $84,405 $80,303


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Appendix

Page 5

Table: Balance Sheet

Pro Forma Balance Sheet

Mon th 1 Mo nth 2 Mo nth 3 Month 4 Month 5 Mon th 6 Mon th 7 Mon th 8 Mon th 9 Month 10 Month 11 Month 12

Assets Starting Balances

Curren t Assets

Cash $10,000 $38,471 $21,184 $13,852 $9,231 $7,242 $8,423 $14,641 $25,099 $40,415 $60,941 $84,405 $80,303

Accounts Receivable $0 $10,500 $22,75 0 $25,680 $28,65 0 $34,58 0 $42,850 $51,700 $58,975 $64,248 $72,191 $81,635 $93,050

Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Current Assets $10,000 $48,971 $43,934 $39,532 $37,881 $41,822 $51,273 $66,341 $84,074 $104,663 $133,132 $166,040 $173,353

Long -term Assets

Long-term Assets $0 $800 $1,600 $2,400 $3,200 $4,000 $4,800 $5,600 $6,400 $7,200 $8,000 $8,800 $9,600

Accumulated Depr eciation $0 $600 $1,200 $1,800 $2,400 $3,000 $3,600 $4,200 $4,800 $5,400 $6,000 $6,600 $7,200

Total Long-term Assets $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400

Total Assets $10,000 $49,171 $44,334 $40,132 $38,681 $42,822 $52,473 $67,741 $85,674 $106,463 $135,132 $168,240 $175,753

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities

Accounts Payable $0 $11,479 $12,32 0 $13,040 $13,88 1 $15,80 9 $17,616 $19,786 $20,959 $22,302 $24,544 $26,533 $29,483

Current Borrowing $0 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $0

Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Current Liabilities $0 $47,479 $48,320 $49,040 $49,881 $51,809 $53,616 $55,786 $56,959 $58,302 $60,544 $62,533 $29,483

Long-term Liabilities $100,000 $99,167 $98,334 $97,501 $96,668 $95,835 $95,002 $94,169 $93,336 $92,503 $91,670 $90,837 $90,000

Total Liabilities $100,000 $146,646 $146,654 $146,541 $146,549 $147,644 $148,618 $149,955 $150,295 $150,805 $152,214 $153,370 $119,483

Paid-in Capital $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000

R eta in ed Ea rn in gs ( $2 90 ,0 00 ) ( $2 90 ,0 00 ) ( $2 90 ,0 00 ) ( $2 90 ,0 00 ) ( $2 90 ,0 00 ) ( $ 29 0,0 00 ) ( $2 90 ,0 00 ) ( $ 29 0,0 00 ) ( $2 90 ,0 00 ) ( $ 29 0,0 00 ) ( $ 29 0,0 00 ) ( $ 29 0,0 00 ) ( $ 29 0,0 00 )

Earnings $0 ($7,475) ($12,319) ($16,409) ($17,868) ($14,822) ($6,146) $7,786 $25,379 $45,658 $72,918 $104,870 $146,270

Total Capital ($9 0,000 ) ($ 97,475 ) ($1 02,31 9) ($1 06,40 9) ($ 107 ,8 68) ($ 104 ,8 22) ($9 6,146 ) ($8 2,2 14) ($6 4,621 ) ($4 4,342 ) ($1 7,082 ) $1 4,8 70 $5 6,2 70

Total Liabilities and Capital $10,000 $49,171 $44,334 $40,132 $38,681 $42,822 $52,473 $67,741 $85,674 $106,463 $135,132 $168,240 $175,753

Net Worth ($90,000) ($97,475) ($102,319) ($106,409) ($107,868) ($104,822) ($96,146) ($82,214) ($64,621) ($44,342) ($17,082) $14,870 $56,270

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