energy conservation business plan

8/3/2019 Energy Conservation Business Plan

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Cover Page

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Legal Page

Confidentiality Agreement

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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

_________________________.

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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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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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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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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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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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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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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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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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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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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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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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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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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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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


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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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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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


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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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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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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8.4 Projected Cash Flow

The following table and chart indicate Projected Cash Flow.

Table: Cash Flow

Pro Forma Cash Flow


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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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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8.5 Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.

Table: Balance Sheet

Pro Forma Balance Sheet


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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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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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

Page 2


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Appendix

Table: General Assumptions

General Assumptions


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

Page 3

A di


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Appendix

Table: Profit and Loss

Pro Forma Profit andLoss


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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Appendix

Table: Cash Flow

Pro Forma Cash Flow


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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Appendix

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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Appendix

Table: Balance Sheet

Pro Forma Balance Sheet


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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energy conservation business plan

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