Business plan sample

Executive Summary
Introduction

It is the mission of Vashon Solicitation Services to provide clients with top quality call center services 24
hours-a-day. A service that provides our clients with the greatest chance of communicating with their end
customers. We do B2B and B2C services including both inbound and outbound calls. We have a
dedicated and well trained cadre of customer support specialists who are able to consistently provide
excellent services delivered in a timely and cost-effective manner.

Whatever a client's customer relations goals are: quantifying sales leads, taking orders, responding to ad
inquiries, market research, or general information requests, VSS has the people with the expertise to
professionally service those needs.

The Company

VSS will be a limited liability partnership registered in the state of Delaware for tax purposes. Its founder
is Mr. Martin Gibbs, a former telemarketing head with Medfone, Inc. Mr. Gibbs has brought together a
highly respected group of telemarketing and customer relations specialists who have a total of 35 years of
combined experience with this industry.

The company has a limited number of private investors and does not plan to go public. The company has
its main offices in Gig Harbor, Washington. The facilities include office spaces, conference rooms, and a
phone center. The company expects to begin offering services in June of Year 1.

The Services

Vashon offers a wide range of call center service including both inbound and outbound calls. We provide
bilingual services in both english and spanish. The most common needs that we can fulfill are:

Generate sales leads
Set appointments
Market research
Surveys (including statistical analysis and political surveys)
First level help desk
Database or mailing list information
Business development
Point-of-sale product promotion
Seminar and conference invitations

VSS is not a telemarketing company, we do not create the marketing campaigns for our clients.
Experience has shown that many companies desire to create their own marketing campaign since they
already have marketing personnel with extensive contact and experience in the industry.

The Market

The telemarketing industry is a growing industry with most companies having an annual growth between
6.5% and 8%. This is due to businesses that are becoming increasingly aware of the need for market
information and the desire to reduce customer turnover rates in a hard hit economy. A significant trend in
this industry is the growing number of clients who wish to outsource telemarketing functions to client
companies instead of developing such infrastructure in-house. This makes for an excellent opportunity for
VSS. However, long-term analysis of growth rates in this industry show a cyclical pattern and VSS does
not expect this high growth rate to continue.

VSS plans to enter into two market segments. First, we will work in the medical services industry since
they have a high need to maintain contact with their patients at all times. We will also be working as a first
level help desk for a number of small high-tech companies, and be taking on short-term projects such as
surveys from small clients.

Financial Considerations

Start-up assets required are shown in the tables accompanying the Start-up Summary topic. This includes
expenses and the cash needed to support operations until revenues reach an acceptable level. Most of
the company's liabilities will come from outside private investors and management investment, however,
we have obtained current borrowing from Bank of America Commercial Investments, the principal to be
paid off in two years. A long-term loan through Charter Bank of Tillamook will be paid off in ten years. We
also have a line of credit from Viking Bank that we can draw upon if need be.

The company expects to reach profitability in year two and does not anticipate any serious cash flow
problems. We conservatively believe that during the first three years that about three ongoing contracts
per month will guarantee a break-even point.

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1.1 Keys to Success
Vashon's keys to long-term survivability and profitability are:

Create long-term contracts that demand constant monitoring or on-call services.
Keeping close contact with clients and establishing a well-functioning long-term relationship
with them to generate repeat business and obtain a top notch reputation.
Establish a comprehensive service experience for our clients that include consultation,
progress reports and post-program feedback.

1.2 Mission
It is the mission of VSS to provide our clients with top quality call center services 24 hours-a-day that
provide the greatest chance of communicating with end customers. We do B2B and B2C services
including both inbound and outbound calls. We have a dedicated and well trained cadre of customer
support specialists who are able to consistently provide excellent services delivered in a timely and cost-
effective manner.

Whatever a client's customer relations goals are: quantifying sales leads, taking orders, responding to ad
inquiries, market research, or general information requests, VSS has the people with the expertise to
professionally service your needs.

1.3 Objectives
The three year goals for Vashon Solicitation Services LLC (VSS) are:

Achieve break-even by year two.
Establish long-term contracts with at least four clients.
Establish minimum 95% customer satisfaction rate to form long-term relationships with our
clients and create word of mouth marketing.

Company Summary
VSS will be a limited liability partnership registered in the state of Delaware for tax purposes. Its
founder is Mr. Martin Gibbs, a former telemarketing head with Medfone, Inc. Mr. Gibbs has
brought together a highly respected group of telemarketing and customer relations specialists
who have a total of 35 years of combined experience with this industry.
The company has a limited number of private investors and does not plan to go public. The
company has its main offices in Gig Harbor, Washington. The facilities include office spaces,
conference rooms, and a phone center. The company expects to begin offering its services in
June of Year 1.
The company's main clients will be companies that require high amounts of communication
between themselves and their clients. This includes medical services, and companies that wish to
outsource first-level help desk support. By focusing on institutions such as these that have special
needs, we believe we will be able to better serve our clients and produce a superior service that
is more effective that other call center firms.
2.1 Start-up Summary
Start-up assets required are shown in the tables below. This includes expenses and the cash
needed to support operations until revenues reach an acceptable level. Most of the company's
liabilities will come from outside private investors and management investment, however, we
have obtained current borrowing from Bank of America Commercial Investments, the principal to
be paid off in two years. A long-term loan through Charter Bank of Tillamook will be paid off in ten
years.We also have a line of credit from Viking Bank that we can draw upon if need be.

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Start-up Requirements

Start-up Expenses

Legal $2,000

Insurance $1,000

utilities $200

Rent $3,000

Accounting and bookkeeping fees $2,000

Expensed equipment $8,000

Advertising $3,500

Other $8,000

Total Start-up Expenses $27,700

Start-up Assets

Cash Required $117,800

Other Current Assets $3,500

Long-term Assets $25,000

Total Assets $146,300

Total Requirements $174,000

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Start-up Funding

Start-up Expenses to Fund $27,700

Start-up Assets to Fund $146,300

Total Funding Required $174,000

Assets

Non-cash Assets from Start-up $28,500

Cash Requirements from Start-up $117,800

Additional Cash Raised $0

Cash Balance on Starting Date $117,800

Total Assets $146,300

Liabilities and Capital

Liabilities

Current Borrowing $16,000

Long-term Liabilities $55,000

Accounts Payable (Outstanding Bills) $3,000

Other Current Liabilities (interest-free) $0

Total Liabilities $74,000

Capital

Planned Investment

Mr. Martin Gibbs $25,000

Ms. Mary Stuart $20,000

Mr. Henry Hannover $20,000

Mr. Nicolas Caput $8,000

Others $27,000

Additional Investment Requirement $0

Total Planned Investment $100,000

Loss at Start-up (Start-up Expenses) ($27,700)

Total Capital $72,300

Total Capital and Liabilities $146,300

Total Funding $174,000

2.2 Company Ownership
The company will have a number of outside private investors who will own 27% of the company's
shares. The rest will be owned by the senior management including Mr. Martin Gibbs, (25%), Ms.
Mary Stuart (20%), Mr. Henry Hannover, (20%), and Mr. Nicholas Caput (8%). All other financing
will come from loans.

Services
Vashon offers a wide range of call center service including both inbound and outbound calls. We provide
bilingual services in both english and spanish. The most common needs for call centers are:

Generate sales leads
Set appointments
Market research
Surveys (including statistical analysis and political surveys)
First level help desk
Database or mailing list information
Business development
Point-of-sale product promotion
Seminar and conference invitations

VSS is not a telemarketing company we do not create the marketing campaigns for our clients.
Experience has shown that many companies desire to create their own marketing campaign since they
already have marketing personnel with extensive contact and experience in the industry. However, the
costs of carrying out such a telemarketing campaign can be prohibitive and often the firm does not wish to
develop the infrastructure to do so. This requires developing different skills and core competencies that
divert management and resources from their primary duties. This is where VSS comes in. We either
connect a prospective client with a telemarketing company (we have arrangements and contacts with
three such consulting firms) or once such a campaign is designed we implement it for our clients. We
work closely with our clients in the creation of the campaign's goals, scope, length, and costs so has to
create as close a fit between the client needs and our capabilities

Market Analysis Summary

information and the desire to reduce customer turnover rates in a hard hit economy. A significant trend in
this industry is the growing number of clients who wish to outsource telemarketing functions to client
companies instead of developing such infrastructure in-house. This makes for an excellent opportunity for
VSS. However, long-term analysis of growth rates in this industry show a cyclical pattern and VSS does
not expect this high growth rate to continue.

The telemarketing industry is quite fragmented with companies that vary greatly in size, scope, services
offered, and market share. Many companies are general advertising agencies that offer telemarketing
services along with a wide range of other consulting services. In addition, many companies, still not
realizing the potential advantages of outsourcing, choose to develop their own telemarketing services.

they have a high need to maintain contact with their patients at all times. We also will be working as a first
level help desk for a number of small high-tech companies. Mr. Gibbs and Ms. Stuart have already signed
contracts with Evergreen Medical and Sno-net, Inc. to serve in these capacities. We will also be taking on
short-term projects, such as surveys, from small clients.

4.1 Market Segmentation
Virtually every company, both large and small require some form of telemarketing at some point. Often it
is a survey to determine customer satisfaction or awareness. Sometimes it is effectively communicating
an upcoming event such as a conference.

Other companies wish to know if telemarketing is a feasible method of sales generation. One of the new
uses for call centers is in first level help desk services. About 75-80% of all technical problems faced by
end customers can be solved by non-technical customer service representatives who are familiar with a
computer or technical system and who have a scripted set of procedures to solve most common occuring
problems. This is where an outsourced call center can save a client a large amount of money and allow a
reduction in personnel needed on call 24 hours-a-day.

they have a high need to maintain contact with their patients at all times. We also will be working as a first
level help desk for a number of small high-tech companies.

Mr. Gibbs and Ms. Stuart have already signed contracts with Evergreen Medical and Sno-net, Inc. to
serve in these capacities. Our customer service representatives are already in the process of receiving
hands-on training from these two companies to meet their needs. We will also be taking on short-term
projects such as surveys from small clients.

Once we have established a good working relationship with these initial clients, we will leverage our
reputation and profitability into new contacts and contracts with other local companies. Our ultimate goal
is to service the entire west coast region and become the company with a dominant market share.

The market analysis table and graph which follows shows the number of businesses within the state of
Washington. This will be our initial geographical focus for the first four to five years of our company's

existance. Later, as we expand to a west coast scope, our future business plans will include all of our
potential clients in this area.

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Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

High-tech companies 2% 400 408 416 424 432 1.94%

Medical companies 3% 350 361 372 383 394 3.00%

Other 3% 2,200 2,266 2,334 2,404 2,476 3.00%

Total 2.86% 2,950 3,035 3,122 3,211 3,302 2.86%


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4.2 Service Business Analysis
information and the desire to reduce customer turnover rates in a hard hit economy. However, long-term
analysis of growth rates in this industry show a cyclical pattern and VSS does not expect this high growth
rate to continue.

The telemarketing industry is quite fragmented with companies that vary greatly in size, scope, services
offered, and market share. Many companies are general advertising agencies that offer telemarketing
services along with a wide range of other consulting services. In addition, many companies, not realizing
the potential advantages of outsourcing, choose to develop their own telemarketing services.

VSS believes that the greatest threat at the moment is in new entrants to the market who perceive an
opportunity in a "high" growth industry. The most likely entrants will be pre-existing advertising agencies
wishing to horizontally integrate and enter new sub-markets.

The one major disadvantage to new entrants is that all firms engaged in contracting to telemarketing
agencies face significant switching costs when bringing on a new partner. Furthermore, VSS understands
that in this industry there is a significant learning curve that creates declining "unit" costs as a firm gains
more cumulative experience in the field itself and with long-term clients specifically. Finally there are
significant start-up costs associated with creating a call center.

Rivalry among different call center agencies is quite intense. The telemarketing industry as a whole is
mature with long-term moderate growth. Most of the largest agencies are mutually dependent when it
comes to jockeying for position and market share. The fact that there are so many diverse and seemingly
"generic" or general telemarketing agencies makes this a cutthroat industry.

The threat of clients backwardly integrating so as to have all their advertising done in-house is one of the
major factors that buyers use to indirectly control price in this industry, and increase competition among
firms. This must always be foremost in the minds of Vashon's management when offering services and
setting prices.

4.2.1 Competition and Buying Patterns
Competition
Competition includes all potential call centers and telemarketing agencies across the country. In addition
we have indirect competition from organizations that handle all their telemarketing in-house. Practically
speaking, this means we have the greatest threat from the largest telemarketing agencies such as Crouch
&Weasley, Berman Telemarketing, and other big, nationwide call center companies that hold significant
market share. The call center industry is highly fragmented, with a large number of small companies that
mainly cater to small firms and a few large companies that seek the largest contracts from companies
such as Sprint, GM, etc. This makes competition within the industry very intense. Through our focused
strategy of serving niche markets such as help desk services, we intend to avoid such a debilitating
environment and avoid its drawbacks such as price wars, and etc.

Buying patterns and needs
Companies usually enter into contracts with call center firms based on their reputation of professionalism
and effective campaigns in the past. This reputation is difficult to obtain by new firms unless its personnel
bring it with them from previous companies such as ours. Price and scope are also important reasons for
accepting contracts, especially if the company is small.

Strategy and Implementation Summary
Vashon Solicitation Services' business strategy is to enter into a focused approach to its services rather
than being everything to its clients. Our company does not intend to be a telemarketing consultation firm,
nor will it ever become so. We are a call center firm that simply implements telemarketing campaigns or
help desk functions for its clients. These services are where we can offer a higher standard of quality to
our clients. This will allow us to charge a higher profit margin for these differentiated and more focused
services.

5.1 Marketing Strategy
Vashon has already concluded two contracts with local companies requiring 24 hour call center services.
These will provide us with initial revenue and the chance to build our reputation. Our company intends to
use testimonials from such clients to build further contracts. We have begun to establish our presence
using various marketing methods such as flyers, cold calls, B2B contacts, and we will be attending
conventions and other events as well.

5.2 Sales Strategy
Vashon's management will be focusing on leveraging its employee's established reputations and contacts
in the telemarketing industry to generate contracts. Both Mr. Gibbs and Mr. Hannover have been in the
industry for many years and experience shows that many of their existing clients will still wish to work with
them despite having to establish a new contract with VSS. We also understand that we may need to lower
costs in our first couple of years in order to attract new customers and close deals.

In addition to our first contracts with Evergreen Medical and Sno-net, Inc. Mr. Hannover has been actively
seeking to acquire a large contract with National Conventions & Events over the past seven months. This

company is the largest event organizing firm on the West coast and has been seeking a call center firm
for a customer survey project to be launched in the near future. VSS believes that its chances for
acquiring this contract are excellent.

5.2.1 Sales Forecast
Sales are based on the various contract projects we anticipate acquiring in the various market segments.
Revenues are based on average costs per project/contract based on estimated time and complexity of
contract plus and undisclosed profit margin. The company does not have any significant direct costs of
sales.

We anticipate that our most attractive target markets, medical services and help desk clients will provide
us with significant early revenue. As time goes on, and we acquire more customers, the percentage of
short-term and other projects will increase.

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Sales Forecast

Year 1 Year 2 Year 3

Sales

Medical call center services $132,000 $180,000 $270,000

Help desk services $69,000 $120,000 $150,000

Short-term projects $43,500 $65,000 $96,000

Other projects $33,500 $58,000 $69,000

Total Sales $278,000 $423,000 $585,000

Direct Cost of Sales Year 1 Year 2 Year 3

Row 1 $0 $0 $0

Other $0 $0 $0

Subtotal Direct Cost of Sales $0 $0 $0


plan.


Management Summary
The company will have four officers including our president, Mr. Martin Gibbs. Our head of operations will
be Mr. Nicholas Caput, plus 12 customer service representatives. Finances and general admin will be
handled by Ms. Stuart.

The company plans to hire additional service representatives, and administrative personnel as we begin
to get large numbers of contracts.

6.1 Personnel
Vashon's management brings to the company strong capabilities in contract negotiation, project
management, telemarketing, and a unique combination of skills drawn from other businesses.

Key Personnel

Mr. Martin Gibbs is a graduate of the University of Missouri where he obtained his business degree
degree in 1971. Since then, Mr. Gibbs has had extensive experience in marketing, telemarketing, and
project management. This includes experience in budgeting, project oversight, etc. In 1996 he obtained a
graduate degree in marketing from University of Washington. Mr. Gibbs spent the last four years as the
telemarketing department head with Medfone, Inc.

Mr. Nicholas Caput graduated from Arizona State University with a bachelors degree in marketing in
1975. From 1978-1988 Mr. Caput worked for Nelson Marketing Consultants. In 1989 he went to work for
Anderson Consulting in their marketing division, where he worked as a project manager.

Personnel Plan


Mr. Martin Gibbs - President $36,000 $36,000 $60,000

Ms. Mary Stuart - Office Manager $36,000 $36,000 $60,000

Mr. Nicholas Caput - Operations $36,000 $36,000 $36,000

Customer service representatives $101,050 $203,000 $203,000

Total People 19 27 27

Total Payroll $209,050 $311,000 $359,000


plan.


Financial Plan
Our financial plan anticipates two years of negative profits as we gain sales volume. We have budgeted
enough investment to cover these losses and have an additional credit line available if sales do not match
predictions.

7.1 Important Assumptions
We are assuming approximately 75% sales on credit and average interest rates of 10%. These are
considered to be conservative in case our predictions are erroneous.

General Assumptions


Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 30.00% 30.00% 30.00%

Other 0 0 0


plan.


7.2 Break-even Analysis
Our break-even analysis is based on the assumptions that our gross margin is approximately 100%. In
other words, we will have insignificant direct cost of sales. Since each contract will be of different scope,
length, and complexity, it is difficult to assign and average per unit revenue figure. However, it is
conservatively believed that during the first three years, average profitability per month per segment will
be moderate. This is because we will be dealing with smaller companies at first that have smaller
contracts. We expect that about three ongoing contracts per month will guarantee a break-even point.

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Break-even Analysis

Monthly Revenue Break-even $27,234

Assumptions:

Average Percent Variable Cost 0%

Estimated Monthly Fixed Cost $27,234

7.3 Projected Profit and Loss
The following table itemizes our revenues and associated costs. We expect to be paying higher costs in
marketing and advertising than other companies as we attempt to build sales volume. As shown in the
table in the Appendix, we expect monthly profits to begin in December 2003.

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Pro Forma Profit and Loss


Sales $278,000 $423,000 $585,000

Direct Cost of Sales $0 $0 $0

Other Costs of Sales $4,300 $6,000 $6,000

Total Cost of Sales $4,300 $6,000 $6,000

Gross Margin $273,700 $417,000 $579,000

Gross Margin % 98.45% 98.58% 98.97%

Expenses

Payroll $209,050 $311,000 $359,000

Sales and Marketing and Other Expenses $18,000 $10,000 $10,000

Depreciation $0 $0 $2,500

Rent $18,000 $18,000 $18,000

Utilities $7,200 $8,000 $9,000

Insurance $13,200 $14,000 $15,000

Payroll Taxes $31,358 $46,650 $53,850

Travel $12,000 $8,000 $4,000

Other $18,000 $15,000 $15,000

Total Operating Expenses $326,808 $430,650 $486,350

Profit Before Interest and Taxes ($53,108) ($13,650) $92,650

EBITDA ($53,108) ($13,650) $95,150

Interest Expense $8,183 $9,400 $9,100

Taxes Incurred $0 $0 $25,065

Net Profit ($61,291) ($23,050) $58,485

Net Profit/Sales -22.05% -5.45% 10.00%

7.4 Projected Cash Flow
The following is our cash flow chart and diagram. We do not expect to have any short-term cash flow
problems even though we will be operating at a loss for the first nine months. Our short-term loan will be
repaid in two equal payments in 2004-2005. Our long-term loan will be paid off in ten years.

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Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $69,500 $105,750 $146,250

Cash from Receivables $159,050 $291,458 $409,934

Subtotal Cash from Operations $228,550 $397,208 $556,184

Additional Cash Received

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

New Current Borrowing $20,000 $6,000 $0

New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

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

New Investment Received $3,000 $5,000 $0

Subtotal Cash Received $251,550 $408,208 $556,184

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $209,050 $311,000 $359,000

Bill Payments $121,806 $135,385 $162,552

Subtotal Spent on Operations $330,856 $446,385 $521,552

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $8,000

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $4,000

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $330,856 $446,385 $533,552

Net Cash Flow ($79,306) ($38,177) $22,632

Cash Balance $38,494 $317 $22,949

7.5 Projected Balance Sheet
The following table shows the projected balance sheet for VSS.

Pro Forma Balance Sheet


Assets

Current Assets

Cash $38,494 $317 $22,949

Accounts Receivable $49,450 $75,242 $104,058

Other Current Assets $3,500 $3,500 $3,500

Total Current Assets $91,444 $79,059 $130,507

Long-term Assets

Long-term Assets $25,000 $25,000 $25,000

Accumulated Depreciation $0 $0 $2,500

Total Long-term Assets $25,000 $25,000 $22,500

Total Assets $116,444 $104,059 $153,007

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $11,435 $11,100 $13,563

Current Borrowing $36,000 $42,000 $34,000

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $47,435 $53,100 $47,563

Long-term Liabilities $55,000 $55,000 $51,000

Total Liabilities $102,435 $108,100 $98,563

Paid-in Capital $103,000 $108,000 $108,000

Retained Earnings ($27,700) ($88,991) ($112,041)

Earnings ($61,291) ($23,050) $58,485

Total Capital $14,009 ($4,041) $54,444

Total Liabilities and Capital $116,444 $104,059 $153,007

Net Worth $14,009 ($4,041) $54,444


plan.


7.6 Business Ratios
We have included industry standard ratios from the telemarketing solicitation services industry to compare
with ours. These ratios are as closely matched to our industry as management could find, however there
are some significant differences, especially in sales growth, financing ratios, long-term asset investments
and net worth. However, our projections indicate a healthy company that will be able to obtain and retain
long-term profitability.

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 52.16% 38.30% 8.79%

Percent of Total Assets

Accounts Receivable 42.47% 72.31% 68.01% 28.12%

Other Current Assets 3.01% 3.36% 2.29% 44.18%

Total Current Assets 78.53% 75.98% 85.29% 76.27%

Long-term Assets 21.47% 24.02% 14.71% 23.73%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 40.74% 51.03% 31.09% 38.61%

Long-term Liabilities 47.23% 52.85% 33.33% 13.60%

Total Liabilities 87.97% 103.88% 64.42% 52.21%

Net Worth 12.03% -3.88% 35.58% 47.79%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 98.45% 98.58% 98.97% 100.00%

Selling, General & Administrative Expenses 120.50% 104.03% 88.98% 82.68%

Advertising Expenses 0.00% 0.00% 0.00% 1.66%

Profit Before Interest and Taxes -19.10% -3.23% 15.84% 1.37%

Main Ratios

Current 1.93 1.49 2.74 1.59

Quick 1.93 1.49 2.74 1.22

Total Debt to Total Assets 87.97% 103.88% 64.42% 3.09%

Pre-tax Return on Net Worth -437.51% 570.43% 153.46% 60.22%

Pre-tax Return on Assets -52.64% -22.15% 54.61% 7.76%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -22.05% -5.45% 10.00% n.a

Return on Equity -437.51% 0.00% 107.42% n.a

Activity Ratios

Accounts Receivable Turnover 4.22 4.22 4.22 n.a

Collection Days 56 72 75 n.a

Accounts Payable Turnover 11.39 12.17 12.17 n.a

Payment Days 28 30 27 n.a

Total Asset Turnover 2.39 4.06 3.82 n.a

Debt Ratios

Debt to Net Worth 7.31 0.00 1.81 n.a

Current Liab. toLiab. 0.46 0.49 0.48 n.a

Liquidity Ratios

Net Working Capital $44,009 $25,959 $82,944 n.a

Interest Coverage -6.49 -1.45 10.18 n.a

Additional Ratios

Assets to Sales 0.42 0.25 0.26 n.a

Current Debt/Total Assets 41% 51% 31% n.a

Acid Test 0.89 0.07 0.56 n.a

Sales/Net Worth 19.84 0.00 10.74 n.a

Dividend Payout 0.00 0.00 0.00 n.a

Appendix

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

Medical call center services 0% $8,000 $8,000 $8,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000

Help desk services 0% $0 $0 $0 $5,000 $5,000 $5,000 $8,000 $8,000 $8,000 $8,000 $11,000 $11,000

Short-term projects 0% $2,000 $2,500 $0 $0 $2,000 $3,000 $3,000 $6,000 $4,000 $7,000 $7,000 $7,000

Other projects 0% $1,000 $1,500 $0 $0 $0 $0 $7,000 $5,000 $7,000 $5,000 $2,000 $5,000

Total Sales $11,000 $12,000 $8,000 $17,000 $19,000 $20,000 $30,000 $31,000 $31,000 $32,000 $32,000 $35,000

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

Row 1 $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

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of

Sales


plan.


Personnel Plan

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

Mr. Martin Gibbs - President 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Ms. Mary Stuart - Office Manager 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Mr. Nicholas Caput - Operations 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Customer service
0% $5,760 $5,760 $5,760 $5,760 $5,760 $7,680 $9,600 $10,000 $10,000 $10,000 $11,500 $13,470
representatives

Total People 0% 9 9 9 9 9 11 13 15 15 15 17 19

Total Payroll $14,760 $14,760 $14,760 $14,760 $14,760 $16,680 $18,600 $19,000 $19,000 $19,000 $20,500 $22,470

General Assumptions

Month
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11
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 Interest
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Rate

Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss

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

Sales $11,000 $12,000 $8,000 $17,000 $19,000 $20,000 $30,000 $31,000 $31,000 $32,000 $32,000 $35,000

Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Costs of Sales $200 $100 $100 $200 $300 $300 $500 $600 $500 $500 $500 $500

Total Cost of Sales $200 $100 $100 $200 $300 $300 $500 $600 $500 $500 $500 $500

Gross Margin $10,800 $11,900 $7,900 $16,800 $18,700 $19,700 $29,500 $30,400 $30,500 $31,500 $31,500 $34,500

Gross Margin % 98.18% 99.17% 98.75% 98.82% 98.42% 98.50% 98.33% 98.06% 98.39% 98.44% 98.44% 98.57%

Expenses

Payroll $14,760 $14,760 $14,760 $14,760 $14,760 $16,680 $18,600 $19,000 $19,000 $19,000 $20,500 $22,470

Sales and Marketing
$1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
and Other Expenses

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Rent $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Utilities $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600

Insurance $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100

Payroll Taxes 15% $2,214 $2,214 $2,214 $2,214 $2,214 $2,502 $2,790 $2,850 $2,850 $2,850 $3,075 $3,371

Travel 15% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Other $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Total Operating
$24,174 $24,174 $24,174 $24,174 $24,174 $26,382 $28,590 $29,050 $29,050 $29,050 $30,775 $33,041
Expenses

Profit Before Interest
($13,374) ($12,274) ($16,274) ($7,374) ($5,474) ($6,682) $910 $1,350 $1,450 $2,450 $725 $1,460
and Taxes

EBITDA ($13,374) ($12,274) ($16,274) ($7,374) ($5,474) ($6,682) $910 $1,350 $1,450 $2,450 $725 $1,460

Interest Expense $592 $592 $592 $592 $633 $675 $717 $758 $758 $758 $758 $758

Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit ($13,966) ($12,866) ($16,866) ($7,966) ($6,107) ($7,357) $193 $592 $692 $1,692 ($33) $701

Net Profit/Sales -126.96% -107.21% -210.82% -46.86% -32.14% -36.79% 0.64% 1.91% 2.23% 5.29% -0.10% 2.00%

Pro Forma Cash Flow

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 Received

Cash from Operations

Cash Sales $2,750 $3,000 $2,000 $4,250 $4,750 $5,000 $7,500 $7,750 $7,750 $8,000 $8,000 $8,750

Cash from Receivables $0 $275 $8,275 $8,900 $6,225 $12,800 $14,275 $15,250 $22,525 $23,250 $23,275 $24,000

Subtotal Cash from
$2,750 $3,275 $10,275 $13,150 $10,975 $17,800 $21,775 $23,000 $30,275 $31,250 $31,275 $32,750
Operations

Additional Cash Received

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

New Current Borrowing $0 $0 $0 $0 $5,000 $5,000 $5,000 $5,000 $0 $0 $0 $0

New Other Liabilities (interest-
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
free)

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 $1,500 $1,500 $0 $0 $0 $0

Subtotal Cash Received $2,750 $3,275 $10,275 $13,150 $15,975 $22,800 $28,275 $29,500 $30,275 $31,250 $31,275 $32,750

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 $14,760 $14,760 $14,760 $14,760 $14,760 $16,680 $18,600 $19,000 $19,000 $19,000 $20,500 $22,470

Bill Payments $3,340 $10,202 $10,106 $10,109 $10,210 $10,358 $10,695 $11,213 $11,405 $11,308 $11,316 $11,543

Subtotal Spent on Operations $18,100 $24,962 $24,866 $24,869 $24,970 $27,038 $29,295 $30,213 $30,405 $30,308 $31,816 $34,013

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Out

Principal Repayment of Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing

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

Long-term Liabilities Principal
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment

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 $18,100 $24,962 $24,866 $24,869 $24,970 $27,038 $29,295 $30,213 $30,405 $30,308 $31,816 $34,013

Net Cash Flow ($15,350) ($21,687) ($14,591) ($11,719) ($8,995) ($4,238) ($1,020) ($713) ($130) $942 ($541) ($1,263)

Cash Balance $102,450 $80,762 $66,172 $54,453 $45,457 $41,219 $40,199 $39,486 $39,356 $40,298 $39,757 $38,494


plan.


Pro Forma Balance Sheet

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

Starting
Assets
Balances

Current Assets

Cash $117,800 $102,450 $80,762 $66,172 $54,453 $45,457 $41,219 $40,199 $39,486 $39,356 $40,298 $39,757 $38,494

Accounts Receivable $0 $8,250 $16,975 $14,700 $18,550 $26,575 $28,775 $37,000 $45,000 $45,725 $46,475 $47,200 $49,450

Other Current Assets $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500

Total Current Assets $121,300 $114,200 $101,237 $84,372 $76,503 $75,532 $73,494 $80,699 $87,986 $88,581 $90,273 $90,457 $91,444

Long-term Assets

Long-term Assets $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000

Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Long-term Assets $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000

Total Assets $146,300 $139,200 $126,237 $109,372 $101,503 $100,532 $98,494 $105,699 $112,986 $113,581 $115,273 $115,457 $116,444

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

Current Liabilities

Accounts Payable $3,000 $9,865 $9,769 $9,769 $9,865 $10,002 $10,321 $10,833 $11,028 $10,931 $10,931 $11,149 $11,435

Current Borrowing $16,000 $16,000 $16,000 $16,000 $16,000 $21,000 $26,000 $31,000 $36,000 $36,000 $36,000 $36,000 $36,000

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

Subtotal Current
$19,000 $25,865 $25,769 $25,769 $25,865 $31,002 $36,321 $41,833 $47,028 $46,931 $46,931 $47,149 $47,435
Liabilities

Long-term Liabilities $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000

Total Liabilities $74,000 $80,865 $80,769 $80,769 $80,865 $86,002 $91,321 $96,833 $102,028 $101,931 $101,931 $102,149 $102,435

Paid-in Capital $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $101,500 $103,000 $103,000 $103,000 $103,000 $103,000

Retained Earnings ($27,700) ($27,700) ($27,700) ($27,700) ($27,700) ($27,700) ($27,700) ($27,700) ($27,700) ($27,700) ($27,700) ($27,700) ($27,700)

Earnings $0 ($13,966) ($26,831) ($43,697) ($51,663) ($57,770) ($65,127) ($64,934) ($64,342) ($63,650) ($61,959) ($61,992) ($61,291)

Total Capital $72,300 $58,334 $45,469 $28,603 $20,637 $14,530 $7,173 $8,866 $10,958 $11,650 $13,341 $13,308 $14,009

Total Liabilities and
$146,300 $139,200 $126,237 $109,372 $101,503 $100,532 $98,494 $105,699 $112,986 $113,581 $115,273 $115,457 $116,444
Capital

Net Worth $72,300 $58,334 $45,469 $28,603 $20,637 $14,530 $7,173 $8,866 $10,958 $11,650 $13,341 $13,308 $14,009

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