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SAMPLECOFinancial and Operating PlanFRAMEWORKS AND ANALYSES ARE PRODUCED ON A CASE BY CASEBASIS AND AND ARE TAILORED TO THE PARTICULAR COMPANYOF INTEREST by NRI Solutions HIGHLIGHTS OF THIS ANALYSIS INCLUDE ,[object Object]
RISK ANALYSIS
IDENTIFICATION OF TIME TO CASH FLOW POSITIVITY WITH AND WITHOUT FUNDING;
CASH FOR SURVIVAL
OPERATING PLAN FOR GROWTH ; IDENTIFICATION OF KEY OPERATING LEVERS
DETAILED COST OF SCALING ANALYSIS
SALARY/EMPLOYEE ADDITION SCHEDULE FOR GROWTH
INDUSTRY OVERVIEW/COMPARABLE ANALYSIS TO SENSE CHECK MARGIN AND GROWTH PROJECTIONS,[object Object]
Internet Marketing will grow as companies seek to reach consumers online. SAMPLECO needs to capture only 0.2% of the projected NA market to reach revenue targets. Growth can occur at above market rates in unsaturated markets such as Canada Source SEMPO ‘State of the industry report’, 2008
Comparable Companies are high margin, high growth businesses. SAMPLECO expects gross margins at x% in year five and revenues of $y (mm)  ``Big online ad networks have an average profit margin of 45%, according to Jordan Rohan, a veteran Internet analyst and the founder and managing partner of Clearmeadow Partners -- and some are taking an even larger percentage. `` -Online Media Daily,  July 29, 2009 318% 480% PCMI`s unique relationships with suppliers  in India will allow it to outperformTrade Doubler in Gross Margin 1000% Source: company filings, 1 http://list.canadianbusiness.com/rankings/profit100/2009 (See Search Engine People)
The long term nature of SAMPLECO`s service deliverynecessitatesthat SAMPLECO payoverheadcosts up front.  This is the central reason for SAMPLECO`s need for funding – a challenge easilyturnedinto profit with minimal investment. timeline
SAMPLECO and has a detailed account of all critical costs to scale the business New Hire Onboarding – Costs of  Scaling Travel for  Sales Outside Local region
SAMPLECO will achieve first class performance by strategically investing capital in sales  and delivery - the areas most crucial to driving operations - while maintaining cost discipline.   Sales Funnel – Number of  potential market contacts per close Sales Funnel -  total labour costs Average contract value at Close $AVERAGE Total Cost $TOTAL
SAMPLECO will achieve first class performance by strategically investing capital in sales  and delivery - the areas most crucial to driving operations - while maintaining cost discipline.   Delivery cost estimate PRODUCT 1  Delivery  cost estimate PRODUCT 2 Based on contract with  average value $AVERAGE Total Cost $TOTAL Total Cost $TOTAL
Exit Value  Including overhead costs, travel expenses, equipment purchases and training, SAMPLECO estimates an operating profit margin of  X% and EBITDA of $Y (mm) (CAD) in year 5 Using EV/EBITDA multiple of 10, SAMPLECO expects an exit value of $YY  CAD in year 5 Opportunities: SAMPLECO’s strength lies in innovation and cuTting edge product  design. Market share will be won from competitors as SAMPLECO is flexible  around delivering products to meet client needs. SAMPLECO’s experience in  ``XYZ`` distinguishes it from other technology start ups in this space..MORE Threats:  Pricing pressure in the industry may depress margins as competition increases.
SAMPLECO seeksadditional capital as a liquidity cushion in year 1.  SAMPLECO will raise debt capital in the amount of $ABC to be repaid within N years. Credit analysis:  SAMPLECO’s sales are projected to grow rapidly within the next  N years and there are currently substancial revenue generating contracts in  negotiations. SAMPLECO’s need arises from the long term nature of its services.  Were the dollar value of each contract available upon signing, SAMPLECO would be  immediately cash flow postive. However, contracts are designed such that customers pay as service is completed.  Employee salaries must be carefully balanced against sales collectible in cash during the first six months of the firms operations to cover  the upfront cost of the first sales.  Risks include cancellation of sales contracts by customers. There is some chance that projected revenues will not materialize and that sales will be unsuccessful. Cancellation events are not likely to overwhelm sales performance, given historical  customer fidelity. If the firm must be liquidated before  breakeven, then tangible assets will be insufficient to cover $ABC  Present tangible assets amount to $X thousand CAD. Existing, transferable client  relationships4 are valued at $Y thousand. Industry expertise and human capitalis valued at $Z thousand, contracts in discussion5  are valued at $A thousand Sources: 3 estimate based on current market rate for experienced professionals in advertising  4 estimate based on number of Prairie Choice Marketing legacy relationships and fraction of estimated revenue to be recaptured within the next one to two years 5estimate based on current sales contracts in final stages of sales funnel

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Sampleco Presentation

  • 1.
  • 3. IDENTIFICATION OF TIME TO CASH FLOW POSITIVITY WITH AND WITHOUT FUNDING;
  • 5. OPERATING PLAN FOR GROWTH ; IDENTIFICATION OF KEY OPERATING LEVERS
  • 6. DETAILED COST OF SCALING ANALYSIS
  • 8.
  • 9. Internet Marketing will grow as companies seek to reach consumers online. SAMPLECO needs to capture only 0.2% of the projected NA market to reach revenue targets. Growth can occur at above market rates in unsaturated markets such as Canada Source SEMPO ‘State of the industry report’, 2008
  • 10. Comparable Companies are high margin, high growth businesses. SAMPLECO expects gross margins at x% in year five and revenues of $y (mm) ``Big online ad networks have an average profit margin of 45%, according to Jordan Rohan, a veteran Internet analyst and the founder and managing partner of Clearmeadow Partners -- and some are taking an even larger percentage. `` -Online Media Daily, July 29, 2009 318% 480% PCMI`s unique relationships with suppliers in India will allow it to outperformTrade Doubler in Gross Margin 1000% Source: company filings, 1 http://list.canadianbusiness.com/rankings/profit100/2009 (See Search Engine People)
  • 11. The long term nature of SAMPLECO`s service deliverynecessitatesthat SAMPLECO payoverheadcosts up front. This is the central reason for SAMPLECO`s need for funding – a challenge easilyturnedinto profit with minimal investment. timeline
  • 12. SAMPLECO and has a detailed account of all critical costs to scale the business New Hire Onboarding – Costs of Scaling Travel for Sales Outside Local region
  • 13. SAMPLECO will achieve first class performance by strategically investing capital in sales and delivery - the areas most crucial to driving operations - while maintaining cost discipline. Sales Funnel – Number of potential market contacts per close Sales Funnel - total labour costs Average contract value at Close $AVERAGE Total Cost $TOTAL
  • 14. SAMPLECO will achieve first class performance by strategically investing capital in sales and delivery - the areas most crucial to driving operations - while maintaining cost discipline. Delivery cost estimate PRODUCT 1 Delivery cost estimate PRODUCT 2 Based on contract with average value $AVERAGE Total Cost $TOTAL Total Cost $TOTAL
  • 15. Exit Value Including overhead costs, travel expenses, equipment purchases and training, SAMPLECO estimates an operating profit margin of X% and EBITDA of $Y (mm) (CAD) in year 5 Using EV/EBITDA multiple of 10, SAMPLECO expects an exit value of $YY CAD in year 5 Opportunities: SAMPLECO’s strength lies in innovation and cuTting edge product design. Market share will be won from competitors as SAMPLECO is flexible around delivering products to meet client needs. SAMPLECO’s experience in ``XYZ`` distinguishes it from other technology start ups in this space..MORE Threats: Pricing pressure in the industry may depress margins as competition increases.
  • 16. SAMPLECO seeksadditional capital as a liquidity cushion in year 1. SAMPLECO will raise debt capital in the amount of $ABC to be repaid within N years. Credit analysis: SAMPLECO’s sales are projected to grow rapidly within the next N years and there are currently substancial revenue generating contracts in negotiations. SAMPLECO’s need arises from the long term nature of its services. Were the dollar value of each contract available upon signing, SAMPLECO would be immediately cash flow postive. However, contracts are designed such that customers pay as service is completed. Employee salaries must be carefully balanced against sales collectible in cash during the first six months of the firms operations to cover the upfront cost of the first sales. Risks include cancellation of sales contracts by customers. There is some chance that projected revenues will not materialize and that sales will be unsuccessful. Cancellation events are not likely to overwhelm sales performance, given historical customer fidelity. If the firm must be liquidated before breakeven, then tangible assets will be insufficient to cover $ABC Present tangible assets amount to $X thousand CAD. Existing, transferable client relationships4 are valued at $Y thousand. Industry expertise and human capitalis valued at $Z thousand, contracts in discussion5 are valued at $A thousand Sources: 3 estimate based on current market rate for experienced professionals in advertising 4 estimate based on number of Prairie Choice Marketing legacy relationships and fraction of estimated revenue to be recaptured within the next one to two years 5estimate based on current sales contracts in final stages of sales funnel
  • 17. Appendix – financialresultsgraphicalsummary Profit margins include costs of scaling described in this deck