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******************************************************************
* Business Plan Document - Created by Business Architect (TM)
* Created on Wednesday 18 November 1992 at 17:56
* Associated Business Plan File - D:\BIZARCH\SAMPLE.LBR
******************************************************************
Landscaping Plus
Business Plan
Copy Number 1
Earl Lindbergh
100 North Highway 100
Centerville, MO
66666
(314)-345-6666
Executive Summary
------------------------------------------------------------------------
Business Overview
-----------------
Landscaping Plus incorporated in Missouri is a landscaping company that
will provide a full range of products and care services. The company
will not only provide a complete line of landscaping materials, but
also a full-range of complementary services never provided in the
area before.
Products/Services
-----------------
The company will provide a complete line of items for landscaping as
follows: Trees, shrubs, landscaping materials, and automatic sprinkler
system supplies. Also, the following categories of service will be
provided: Landscape design/installations, automatic sprinkler
installation/maintenance, plant/tree rental and plant/tree maintenance.
Marketing/Sales
---------------
The promotion plan will be to advertise in the local newspapers, radio
stations and the use of direct mail campaigns. The marketing effort
will begin in December to build momentum for January. The company
will differentiate with a complete selection of products and a
full-range of services.
Competition
-----------
There is only one local competitor that currently carries a very
limited product line and none of the services that Landscaping Plus
will offer. Much of the existing landscaping has been provided by firms
in Big City located 200 miles from Centerville.
Market Segments
---------------
The target market will be the homeowners in a fifty mile radius from
Centerville and the 15,000 businesses in the area. Centerville has
been rated as the third most desirable area in the USA based upon a
study completed by the US Economic Council.
Management
----------
The management/operations team consist of three highly experienced
people that have a strong local reputation from their participation in
various business associations. President - Earl Lindbergh brings
significant business management and landscaping experience to the
company from his previous position with Big Tree, the largest tree
grower in the USA. Claire Green - VP of Operations comes from
California based Green Lawn, a large lawn care and automatic sprinkler
system company. Sam Clemons brings sales/marketing expertise from his
position with XMAS Trees, a large provider of Christmas trees.
- 1-
Executive Summary
------------------------------------------------------------------------
Operations
----------
The company will occupy an ideal facility that offers a location that
will be convenient to many of the prospective customers. Additionally,
sufficient land space will be available to inventory and grow
landscaping plants and materials.
Current Status
--------------
The facility has been selected and the move is scheduled for the first
week of November. Supplies and equipment will be obtained during the
last quarter of the year. A lawyer and an accountant have been
selected and they will be assisting in the completion of the start-up
activity.
Financial Summary
-----------------
The following financials summarize the forecast for the next three
years:
Revenue Net Income After Tax
1993 $388,912 $-5,841
1994 $626,300 $140,514
1995 $848,035 $233,354
Funding Requirements
--------------------
Funding from a lending institution for the amount of $70,000 is being
sought. These funds will be used to purchase capital equipment and
fund the promotional marketing plan. The term of the loan is assumed
to be three years.
- 2-
Business Concept
------------------------------------------------------------------------
Company
-------
Company Information
The company name is Landscaping Plus, a new company incorporated on June
3, 1992 in the state of Missouri. It has been formed to provide
landscaping products and services to the Centerville, Missouri area.
The facilities for the company are located at 100 North Highway 100,
Centerville, Missouri. This will be the only location where the
company will be doing business.
Management
The company has been formed by a highly experienced management and
operations team. Each of the members possess over fifteen years
experience in the landscaping business with other companies. These
people are well known in the community with their involvement in local
business and civic associations.
The key management personnel are as follows:
- Earl Lindbergh - President
- Claire Green - Vice President/Operations
- Sam Clemons - Vice President/Marketing
The board of directors will include the officers listed above and an
outside director, Johnny Appleseed from the Apple Seed Company.
Business Description
The business has been established to provide home and commercial
landscaping products and services. The company will specialize in
providing a variety of different size trees, delivery services, and
landscaping maintenance care to Centerville, Missouri and the
surrounding area. There has been an explosive increase in new home
construction in the area due to the opening of several new major
manufacturing facilities estimated to attract 50,000 new residents in
the next five years. Currently trees are available at the only local
nursery and large trees must be delivered from Big City located 200
miles from Centerville. Additionally, we will focus on providing
services to home and commercial businesses including: planting,
pesticide spraying, fertilization, trimming, disease treatment, tree
removal, indoor tree/plant rental, and automatic watering systems.
The company statement of mission is to provide quality landscaping
plants and materials and a full-range of landscaping services to
residents in the Centerville area at a reasonable price.
- 3-
Business Concept
------------------------------------------------------------------------
Company Structure
The company has been incorporated as an S-Corporation, with the three
officers retaining equal thirty-three and one-third ownership in the
corporation. The corporation has issued three thousand shares of stock,
one thousand each to the owners, with 27,000 shares of stock remaining
outstanding.
The funding for the company to date has come from the personal savings
of the three owners. The company is seeking $70,000 from lending
institutions to fund the acquisition of required equipment and an
aggressive marketing campaign.
Products/Services Definition
----------------------------
Landcsaping Plus will provide a full-range of landscaping products for
both the home and commercial targets of potential customers. An
emphasis will be placed on providing established trees, installation
services, and maintenance services. The maintenance care will bundled
into packages for annual services that will be easy for customers to
select from. Our company will be the only local full-range supplier of
landscaping products and services.
Due to more than fifteen years of experience possessed by each of
the officers, the company will be well positioned to grow rapidly.
Each of the officers are qualified to perform all of the professional
services that will be offered by the company.
Status Summary
--------------
The company was formed on June 3, 1992 and will be ready to begin
operation on January 1, 1993. The following significant milestones
have been completed:
- Selection and lease agreement for the facility has been completed.
- A lawyer, John B. Justice has been retained.
- An accountant, Jill Cash has been retained.
- Agreements are being negotiated with ten suppliers.
- Equipment has been selected.
- Draft marketing promotion plan has been completed.
Business Objectives
-------------------
The short-term objective of the business is to achieve a high market
impact and grow market share very rapidly. Many of the
product/services have never been available in the area until now. The
income statement enclosed forecast a small loss in 1993 and positive
earnings planned for 1994 and 1995.
- 4-
Business Concept
------------------------------------------------------------------------
Anticipated Risks
-----------------
The risks with the venture are that new home construction could not
continue at the pace that we are realizing today due to a down-turn in
the health of the local manufacturing companies that moved to the
area. In order to off-set the possible down-turn in new home
construction, we will target a campaign for our bundled services to the
existing 15,000 businesses. These services will include indoor
plant/tree rental and year-around outdoor maintenance services.
- 5-
Market Analysis
------------------------------------------------------------------------
Market Characteristics
----------------------
The geographic market area will include Centerville and the
communities in the surrounding 50 mile area. The number of residents
in this area is 2,500,000. An estimated 45 percent of these residents
own homes that are five years or less in age due to the rapid growth
realized with the relocation of five companies. These manufacturing
facilities have moved to the area because of a state tax exemption
program, a qualified work force, and pleasant living conditions. The
normal landscaping business will experience a slow-down in sales during
the winter that can be off-set with the in-door services targeted to
the business community.
There is also a strong demand for automatic watering systems and
lawn care services based upon the market survey that was conducted by
Sherlock Holmes Ltd. with a sample of 500 people.
Market Opportunity Analysis
---------------------------
The relocation of several new manufacturing facilities has resulted in
an explosion in the construction of new homes that is continuing as
50,000 new workers will be relocated to the area. These new home
opportunities coupled with the needs of the commercial businesses
create tremendous opportunity. Currently, there is only one competitor
in the area with a limited selection of products and services.
An analysis was completed of the critical characteristics of the market
opportunity with the matrix found in the Appendix. This analysis
concludes that the long-term profit potential is high. Long-term
potential is strong due to the high demand for services that ease the
effort
required by the homeowner to have an attractive landscape. US
government statistics verify this trend by stating that the services
industry is forecasted to grow 125 percent over the next five years,
compared to an overall GNP growth of approximately 15 percent during
that same period.
Letters-of-intent have been executed with two of the major home
builders in the area, Homes Inc. and Perfect Homes. Also, agreements
have been signed with two new manufacturing facilities to design and
install their landscaping.
Market Segments
---------------
Market Segments
The company will focus on two distinct target markets:
- The first target market will be the home owners in the area with
- 6-
Market Analysis
------------------------------------------------------------------------
Market Segments (Cont.)
-----------------------
Market Segments
homes that are five years or less in age. Currently, it is
estimated that 282,000 home owners match this criteria.
- The second target market is the 15,000 businesses in the area.
Many of these companies have been downsizing or are too small to
justify the staff to maintain their own indoor and outdoor
landscaping.
Feature/Function/Benefit
The company will be positioned as a full-service supplier of outdoor and
indoor landscaping and services company. The customer will be able to
purchase landscaping products in a wide variety of sizes with the added
benefit of a complete line of bundled services that insure easy
installation and on-going beauty.
Benefit/Segment Analysis
We will be able to deliver the selection required due to the fact that
we will have agreements with ten suppliers that specialize in different
types of landscaping products. We also will have a highly trained staff
of personnel knowledgeable to advise on the considerations for planting,
care and for the customer.
Competition
-----------
Competition
The competition is a local nursery that has a very limited selection
of products and none of the landscaping services. Additionally, they
have not focused on the commercial business segment of the market. The
commercial companies to-date have purchased their landscaping products
from Big City located 200 miles from Centerville. Customers will
prefer dealing with a local quality supplier that can be more
responsive to the customer needs.
However, due to the high growth opportunity and little competition,
the long term threat of new competition is substantial. It is
critical that we establish a high quality reputation and achieve high
market penetration in the first year to off-set the threat of new
market entries.
- 7-
Market Analysis
------------------------------------------------------------------------
Benefit/Competition Analysis
Our analysis found on page 28 of the Appendices indicates that we will
be positioned to better deliver the benefits desired by the target
market than our competition. The benefits highlighted are: 1) a variety
of selection 2) a full-range of services. A sample survey was conducted
with 500 prospective customers by an independent research firm
specializing in market research. The firm Sherlock Holmes Ltd.,
conducted their research by completing telephone interviews and
concluded that 85 percent of the sample ranked these two benefits as
the highest.
- 8-
Assumptions
------------------------------------------------------------------------
Assumptions
-----------
The following assumptions have been used to develop this plan:
- 2 percent of the total revenue will be discounted.
- The employee benefit factor is 20 percent of the salaries amount.
- 2 percent of the total revenue will be written off as bad debts.
- 10 percent of the sales will be sold on 30 day credit terms.
- All capital depreciation will be straight-line method for a 3
year period.
- 9-
Marketing Plan
------------------------------------------------------------------------
Products/Services
-----------------
Products/Services
Landscaping Plus will provide a wide selection of landscaping products
and optional bundled services. The major products are as follows:
- Trees
- Shrubs
- Landscaping materials (top soil, rock, mulch, edging materials,
fertilizers, grass sod & seed)
- Automatic watering system supplies
The services will be priced and bundled as separate optional service
items. The types of service available will be as follows:
- Planting
- Spraying for pesticides
- Trimming or repair of trees and shrubs
- Landscaping design and installation
- Rental of indoor trees and plants
- Maintenance of indoor and outdoor trees and plants
- Installation and maintenance of automatic watering systems
Pricing Conclusions
The pricing will be as follows for most the significant items:
- Trees with planting $30/per ft.
- Trees without planting $15/per ft.
- Shrubs with planting - $70
- Shrubs without planting - $45
- All services will priced based upon the specific details of the
service. As a general rule the services will be priced at an
hourly rate of $35 per hour plus material cost.
Promotion
---------
The company will be promoted as a full-service landscaping and services
company. The company will be promoted on radio, newspaper, and the
business journal. Additionally, two direct mail campaign will be
launched to the 15,000 businesses and another to the home owners in the
area.
-10-
Operations Plan
------------------------------------------------------------------------
Facilities
----------
The facilities will be leased at a site with an existing building and
three acres of land sufficient to stock the required inventory. The
owner has agreed to make all of the required improvements on the
property in return for a two year lease agreement. The site will be
located on one of the major highways on the north edge of the city
where a majority of the new construction has taken place. This will
be an ideal location for potential customers and many of the newer
business locations.
Equipment/Technology
--------------------
The following equipment will be purchased:
- Large flat-bed truck with power crane
- Pickup truck
- (2) Power hole drills
- (2) Chain saws
- Trench digger
- Computer system
- Equipment trailer
Delivery/Production
-------------------
In the beginning all of the trees and shrubs will be purchased from
growers located in various parts of the country. Additionally, a
limited selection of trees and shrubs will be planted for resale on our
leased premises for future sales. All other items will be purchased for
resale from ten suppliers through-out the country.
Customer Service
----------------
The processing of orders will be handled by a computer system that has
been designed to meet the needs of the landscaping business including
invoicing, inventory management, and financial reporting. Service
and maintenance will be priced as options to both home and commercial
customers. All live landscaping items installed by Landscaping Plus
will be guaranteed for one year from the planting date. All items
will either be transported by the customer or we will deliver free of
charge if we provide installation services.
-11-
Financial Plan
------------------------------------------------------------------------
Financial Summary
-----------------
The financials show that we will realize a loss of $5,841 in the first
year and a profit of $170,514 in 1994 and $263,354 in 1995. At the
planned funding level, cash flow will be negative during the first
year with a strong cash flow of $147,065 and $351,615 for 1994 and
1995 respectively.
-12-
Financial Plan
------------------------------------------------------------------------
Use of Funds
------------
Sources of Funds
---------------------------------------------
Equity Financing
Preferred Stock $0
Commom Stock $0
Debt Financing
Mortgage Loans $0
Long-term Loans $70,000
Short-term Loans $0
Convertible Debt $0
Investment from Prin. $50,000
Other $0
---------------------------------------------
Total Funds $120,000
Use of Funds
---------------------------------------------
Property $0
Leasehold Improvements $0
Equipment/Furniture $45,000
Other $0
Working Capital
Purchase of Inventory $0
Staff $0
New Product Launch $0
Marketing $25,000
Other Expansion Activity $0
---------------------------------------------
Total Disbursements $70,000
Cash Reserve $50,000
-13-
Financial Plan
------------------------------------------------------------------------
Income Statement
----------------
REVENUE JAN. FEB. MAR. APR.
----------------------- --------- --------- --------- ---------
Gross Revenue $36,350 $32,550 $32,550 $32,550
Discounts $527 $451 $451 $451
Net Revenue $35,823 $32,099 $32,099 $32,099
Cost of Goods $4,400 $3,125 $3,125 $3,525
========= ========= ========= =========
Gross Profit $31,423 $28,974 $28,974 $28,574
OPERATING EXPENSES
Marketing/Sales Exp.
Salaries & Fringes $0 $0 $0 $0
Advertising & Prom. $2,100 $2,100 $2,100 $2,100
Contract & Other $100 $100 $100 $100
========= ========= ========= =========
Total Sales/Marketing $2,200 $2,200 $2,200 $2,200
R&D Expenses
Salaries & Fringes $0 $0 $0 $0
Contract & Others $0 $0 $0 $0
========= ========= ========= =========
Total R&D Expenses $0 $0 $0 $0
General & Admin.
Salaries & Fringes $21,600 $21,600 $21,600 $21,600
Contract Services $0 $0 $0 $0
Rent $2,000 $2,000 $2,000 $2,000
Insurance $500 $0 $0 $0
Depreciation and Amort. $1,250 $1,250 $1,250 $1,250
Office Supplies $100 $100 $100 $100
Interest $0 $0 $0 $0
Telephone & Utilities $100 $100 $100 $100
Postage $100 $100 $100 $100
Travel $200 $200 $200 $200
Maintenance $250 $250 $250 $250
Equipment Rental $500 $500 $500 $500
Furniture & Equipment $1,500 $0 $0 $0
Software $800 $0 $0 $0
Bad Debts $716 $642 $642 $642
Other $250 $250 $250 $250
========= ========= ========= =========
Total G&A Expenses $29,866 $26,992 $26,992 $26,992
TOTAL OPERATING EXPENSE $32,066 $29,192 $29,192 $29,192
----------------------- --------- --------- --------- ---------
Net Income Before Taxes $-643 $-218 $-218 $-618
Taxes on Income $0 $0 $0 $0
NET INCOME AFTER TAXES $-643 $-218 $-218 $-618
-14-
Financial Plan
------------------------------------------------------------------------
Income Statement (Cont.)
------------------------
REVENUE MAY JUN. JUL. AUG.
----------------------- --------- --------- --------- ---------
Gross Revenue $32,550 $32,550 $32,550 $32,550
Discounts $451 $451 $451 $451
Net Revenue $32,099 $32,099 $32,099 $32,099
Cost of Goods $3,525 $3,125 $3,525 $3,125
========= ========= ========= =========
Gross Profit $28,574 $28,974 $28,574 $28,974
OPERATING EXPENSES
Marketing/Sales Exp.
Salaries & Fringes $0 $0 $0 $0
Advertising & Prom. $2,100 $2,100 $2,100 $2,100
Contract & Other $100 $100 $100 $100
========= ========= ========= =========
Total Sales/Marketing $2,200 $2,200 $2,200 $2,200
R&D Expenses
Salaries & Fringes $0 $0 $0 $0
Contract & Others $0 $0 $0 $0
========= ========= ========= =========
Total R&D Expenses $0 $0 $0 $0
General & Admin.
Salaries & Fringes $21,600 $21,600 $21,600 $21,600
Contract Services $0 $0 $0 $0
Rent $2,000 $2,000 $2,000 $2,000
Insurance $0 $0 $0 $0
Depreciation and Amort. $1,250 $1,250 $1,250 $1,250
Office Supplies $100 $100 $100 $100
Interest $0 $0 $0 $0
Telephone & Utilities $100 $100 $100 $100
Postage $100 $100 $100 $100
Travel $200 $200 $200 $200
Maintenance $250 $250 $250 $250
Equipment Rental $500 $500 $500 $500
Furniture & Equipment $0 $0 $0 $0
Software $0 $0 $0 $0
Bad Debts $642 $642 $642 $642
Other $250 $250 $250 $250
========= ========= ========= =========
Total G&A Expenses $26,992 $26,992 $26,992 $26,992
TOTAL OPERATING EXPENSE $29,192 $29,192 $29,192 $29,192
----------------------- --------- --------- --------- ---------
Net Income Before Taxes $-618 $-218 $-618 $-218
Taxes on Income $0 $0 $0 $0
NET INCOME AFTER TAXES $-618 $-218 $-618 $-218
-15-
Financial Plan
------------------------------------------------------------------------
Income Statement (Cont.)
------------------------
REVENUE SEP. OCT. NOV. DEC.
----------------------- --------- --------- --------- ---------
Gross Revenue $32,550 $32,550 $32,550 $32,550
Discounts $451 $451 $451 $451
Net Revenue $32,099 $32,099 $32,099 $32,099
Cost of Goods $3,525 $3,525 $3,525 $3,525
========= ========= ========= =========
Gross Profit $28,574 $28,574 $28,574 $28,574
OPERATING EXPENSES
Marketing/Sales Exp.
Salaries & Fringes $0 $0 $0 $0
Advertising & Prom. $2,100 $2,100 $2,100 $2,100
Contract & Other $100 $100 $100 $100
========= ========= ========= =========
Total Sales/Marketing $2,200 $2,200 $2,200 $2,200
R&D Expenses
Salaries & Fringes $0 $0 $0 $0
Contract & Others $0 $0 $0 $0
========= ========= ========= =========
Total R&D Expenses $0 $0 $0 $0
General & Admin.
Salaries & Fringes $21,600 $21,600 $21,600 $21,600
Contract Services $0 $0 $0 $0
Rent $2,000 $2,000 $2,000 $2,000
Insurance $0 $0 $0 $0
Depreciation and Amort. $1,250 $1,250 $1,250 $1,250
Office Supplies $100 $100 $100 $100
Interest $0 $0 $0 $0
Telephone & Utilities $100 $100 $100 $100
Postage $100 $100 $100 $100
Travel $200 $200 $200 $200
Maintenance $250 $250 $250 $250
Equipment Rental $500 $500 $500 $500
Furniture & Equipment $0 $0 $0 $0
Software $0 $0 $0 $0
Bad Debts $642 $642 $642 $642
Other $250 $250 $250 $250
========= ========= ========= =========
Total G&A Expenses $26,992 $26,992 $26,992 $26,992
TOTAL OPERATING EXPENSE $29,192 $29,192 $29,192 $29,192
----------------------- --------- --------- --------- ---------
Net Income Before Taxes $-618 $-618 $-618 $-618
Taxes on Income $0 $0 $0 $0
NET INCOME AFTER TAXES $-618 $-618 $-618 $-618
-16-
Financial Plan
------------------------------------------------------------------------
Income Statement (Cont.)
------------------------
REVENUE TOTAL 1994 1995
----------------------- --------- --------- ---------
Gross Revenue $394,400 $635,000 $860,240
Discounts $5,488 $8,700 $12,205
Net Revenue $388,912 $626,300 $848,035
Cost of Goods $41,575 $65,800 $100,500
========= ========= =========
Gross Profit $347,337 $560,500 $747,535
OPERATING EXPENSES
Marketing/Sales Exp.
Salaries & Fringes $0 $36,000 $36,000
Advertising & Prom. $25,200 $27,000 $50,000
Contract & Other $1,200 $2,000 $3,000
========= ========= =========
Total Sales/Marketing $26,400 $65,000 $89,000
R&D Expenses
Salaries & Fringes $0 $0 $0
Contract & Others $0 $0 $0
========= ========= =========
Total R&D Expenses $0 $0 $0
General & Admin.
Salaries & Fringes $259,200 $270,000 $324,000
Contract Services $0 $0 $0
Rent $24,000 $24,000 $24,000
Insurance $500 $1,000 $1,200
Depreciation and Amort. $15,000 $21,660 $28,320
Office Supplies $1,200 $1,500 $1,500
Interest $0 $0 $0
Telephone & Utilities $1,200 $1,500 $1,700
Postage $1,200 $1,500 $1,700
Travel $2,400 $3,000 $3,000
Maintenance $3,000 $3,500 $4,000
Equipment Rental $6,000 $8,000 $10,000
Furniture & Equipment $1,500 $3,000 $3,000
Software $800 $800 $800
Bad Debts $7,778 $12,526 $16,961
Other $3,000 $3,000 $5,000
========= ========= =========
Total G&A Expenses $326,778 $354,986 $425,181
TOTAL OPERATING EXPENSE $353,178 $419,986 $514,181
----------------------- --------- --------- ---------
Net Income Before Taxes $-5,841 $140,514 $233,354
Taxes on Income $0 $0 $0
NET INCOME AFTER TAXES $-5,841 $140,514 $233,354
-17-
Financial Plan
------------------------------------------------------------------------
Cash Flow
---------
Income from Sales JAN. FEB. MAR. APR.
----------------------- --------- --------- --------- ---------
Cash Sales $32,241 $28,890 $28,890 $28,890
Collections $0 $3,582 $3,209 $3,209
========= ========= ========= =========
Total Cash From Sales $32,241 $32,472 $32,099 $32,099
Income from Financing
Interest Income $0 $0 $0 $0
Loan Proceeds $50,000 $0 $0 $0
========= ========= ========= =========
Total Cash from Fin. $50,000 $0 $0 $0
Other Cash Receipts $0 $0 $0 $0
========= ========= ========= =========
Total Cash Receipts $82,241 $32,472 $32,099 $32,099
CASH DISBURSEMENTS
Expenses
Cost of Goods $4,400 $3,125 $3,125 $3,525
Operating Expenses $32,066 $29,192 $29,192 $29,192
Loan Payments $2,067 $2,067 $2,067 $2,067
Income Tax Payments $0 $0 $0 $0
Other Expenses/Equip $45,000 $0 $0 $0
Reserve $5,000 $0 $0 $0
Owners Draw $0 $0 $0 $0
========= ========= ========= =========
Total Cash Disb. $88,533 $34,384 $34,384 $34,784
Net Cash Flow $-6,292 $-1,912 $-2,285 $-2,685
Opening Cash Balance $50,000 $43,708 $41,796 $39,511
Cash Receipts $82,241 $32,472 $32,099 $32,099
Cash Disbursements $88,533 $34,384 $34,384 $34,784
----------------------- --------- --------- --------- ---------
Ending Cash Balance $43,708 $41,796 $39,511 $36,826
-18-
Financial Plan
------------------------------------------------------------------------
Cash Flow (Cont.)
-----------------
Income from Sales MAY JUN. JUL. AUG.
----------------------- --------- --------- --------- ---------
Cash Sales $28,890 $28,890 $28,890 $28,890
Collections $3,209 $3,209 $3,209 $3,209
========= ========= ========= =========
Total Cash From Sales $32,099 $32,099 $32,099 $32,099
Income from Financing
Interest Income $0 $0 $0 $0
Loan Proceeds $0 $0 $0 $0
========= ========= ========= =========
Total Cash from Fin. $0 $0 $0 $0
Other Cash Receipts $0 $0 $0 $0
========= ========= ========= =========
Total Cash Receipts $32,099 $32,099 $32,099 $32,099
CASH DISBURSEMENTS
Expenses
Cost of Goods $3,525 $3,125 $3,525 $3,125
Operating Expenses $29,192 $29,192 $29,192 $29,192
Loan Payments $2,067 $2,067 $2,067 $2,067
Income Tax Payments $0 $0 $0 $0
Other Expenses/Equip $0 $0 $0 $0
Reserve $0 $0 $0 $0
Owners Draw $0 $0 $0 $0
========= ========= ========= =========
Total Cash Disb. $34,784 $34,384 $34,784 $34,384
Net Cash Flow $-2,685 $-2,285 $-2,685 $-2,285
Opening Cash Balance $36,826 $34,141 $31,856 $29,171
Cash Receipts $32,099 $32,099 $32,099 $32,099
Cash Disbursements $34,784 $34,384 $34,784 $34,384
----------------------- --------- --------- --------- ---------
Ending Cash Balance $34,141 $31,856 $29,171 $26,886
-19-
Financial Plan
------------------------------------------------------------------------
Cash Flow (Cont.)
-----------------
Income from Sales SEP. OCT. NOV. DEC.
----------------------- --------- --------- --------- ---------
Cash Sales $28,890 $28,890 $28,890 $28,890
Collections $3,209 $3,209 $3,209 $3,209
========= ========= ========= =========
Total Cash From Sales $32,099 $32,099 $32,099 $32,099
Income from Financing
Interest Income $0 $0 $0 $0
Loan Proceeds $0 $0 $0 $0
========= ========= ========= =========
Total Cash from Fin. $0 $0 $0 $0
Other Cash Receipts $0 $0 $0 $0
========= ========= ========= =========
Total Cash Receipts $32,099 $32,099 $32,099 $32,099
CASH DISBURSEMENTS
Expenses
Cost of Goods $3,525 $3,525 $3,525 $3,525
Operating Expenses $29,192 $29,192 $29,192 $29,192
Loan Payments $2,067 $2,067 $2,067 $2,067
Income Tax Payments $0 $0 $0 $0
Other Expenses/Equip $0 $0 $0 $0
Reserve $0 $0 $0 $0
Owners Draw $0 $0 $0 $0
========= ========= ========= =========
Total Cash Disb. $34,784 $34,784 $34,784 $34,784
Net Cash Flow $-2,685 $-2,685 $-2,685 $-2,685
Opening Cash Balance $26,886 $24,201 $21,516 $18,831
Cash Receipts $32,099 $32,099 $32,099 $32,099
Cash Disbursements $34,784 $34,784 $34,784 $34,784
----------------------- --------- --------- --------- ---------
Ending Cash Balance $24,201 $21,516 $18,831 $16,146
-20-
Financial Plan
------------------------------------------------------------------------
Cash Flow (Cont.)
-----------------
Income from Sales TOTAL 1994 1995
----------------------- --------- --------- ---------
Cash Sales $350,031 $563,670 $763,232
Collections $35,672 $65,839 $84,803
========= ========= =========
Total Cash From Sales $385,703 $629,509 $848,035
Income from Financing
Interest Income $0 $0 $0
Loan Proceeds $50,000 $0 $0
========= ========= =========
Total Cash from Fin. $50,000 $0 $0
Other Cash Receipts $0 $0 $0
========= ========= =========
Total Cash Receipts $435,703 $629,509 $848,035
CASH DISBURSEMENTS
Expenses
Cost of Goods $41,575 $65,800 $100,500
Operating Expenses $353,178 $419,986 $514,181
Loan Payments $24,804 $18,804 $18,804
Income Tax Payments $0 $0 $0
Other Expenses/Equip $45,000 $20,000 $20,000
Reserve $5,000 $10,000 $20,000
Owners Draw $0 $0 $0
========= ========= =========
Total Cash Disb. $469,557 $534,590 $673,485
Net Cash Flow $-33,854 $94,919 $174,550
Opening Cash Balance $0 $16,146 $111,065
Cash Receipts $435,703 $629,509 $848,035
Cash Disbursements $469,557 $534,590 $673,485
----------------------- --------- --------- ---------
Ending Cash Balance $16,146 $111,065 $285,615
-21-
Financial Plan
------------------------------------------------------------------------
Balance Sheet
-------------
ASSETS 1993 1994 1995
----------------------- --------- --------- ---------
ASSETS
Current Assets
Cash $16,146 $111,065 $285,615
Accounts Receivable $3,209 $0 $0
Inventory $3,805 $5,810 $7,200
Prepaid Expenses $0 $0 $0
--------- --------- ---------
Total Current Assets $23,160 $116,875 $292,815
Fixed Assets
Land $0 $0 $0
Buildings $0 $0 $0
Equipment $45,000 $20,000 $20,000
Furniture $1,500 $3,000 $3,000
Fixtures $0 $0 $0
Less Accum. Depr. $15,000 $21,660 $28,320
--------- --------- ---------
Total Fixed Assets $31,500 $1,340 $-5,320
Other Assets
TOTAL Assets $54,660 $118,215 $287,495
LIABILITIES
Current Liabilities
Accounts Payable $0 $0 $0
Accrued Payroll $0 $0 $0
Taxes Payable $0 $0 $0
Short-Term Notes Pay $0 $0 $0
--------- --------- ---------
Total Current Liab. $0 $0 $0
Long-Term Liabilities
Long-Term Notes Pay $37,608 $18,804 $0
--------- --------- ---------
TOTAL LIABILITIES $37,608 $18,804 $0
Net Worth
Shareholders Equity $44,159 $184,673 $418,027
Retained Earnings $-5,841 $134,673 $368,027
Total Net Worth $17,052 $99,411 $287,495
----------------------- --------- --------- ---------
TOTAL LIAB.&NET WORTH $54,660 $118,215 $287,495
-22-
Financial Plan
------------------------------------------------------------------------
Ratio Analysis
--------------
Ratio Items 1993 1994 1995
----------------------- --------- --------- ---------
Liquidity Ratios
Current 0.00 0.00 0.00
Quick or 'Acid Test' 0.00 0.00 0.00
Inv. to Net. Cap. 0.16 0.05 0.02
Profitability Ratios
Profit to Sales -0.02 0.22 0.28
Return on Equity -0.34 1.41 0.81
Return on Assets -0.11 1.19 0.81
Gross Profit Margin 0.89 0.89 0.88
Net Profit Margin -0.02 0.22 0.28
Earnings Per Share $-0.22 $5.20 $8.64
Debt Ratios
Debt to Assets 0.69 0.16 0.00
Debt to Equity 2.21 0.19 0.00
Activity Ratios
Inv. Turnover 10.93 11.33 13.96
Inv. Utilitzation 21.86 13.69 15.45
Fixed Asset Util. 24.69 38.14 -426.15
Total Asset Util. 14.23 7.25 4.18
----------------------- --------- --------- ---------
-23-
Implement
------------------------------------------------------------------------
Implementation Approach
-----------------------
The planning and initiation of the business will occur during the
remainder of 1992 in preparation for launching in January of 1993.
The attached action plans describe the initiation of the business in
detail.
Critical Success Factors
------------------------
The following critical success factors will be measured to monitor the
health of the business:
- Provide 75 services quotes per month
- Sell 113 trees per month
- Sell 56 shrubs per month
- Less than 2 percent returns per month
-24-
APPENDICES
------------------------------------------------------------------------
Market Opportunity Matrix
-------------------------
Factor Scoring Value
1. Market Share Goal 50% 10
2. Growth of Market 20% 7
3. Competitors
Number 1 10
Activity Passive 10
4. Life Cycle Early Maturity 4
5. Price Sensitivity
Functional Equivalent None 10
Value Perception Average 5
6. Cost Allocations
Research & Development 0%
Operations 58%
Marketing 10%
General & Administration 5%
Total Cost 73% 10
7. Physical Factors
Segmentation Average 5
Seasonality 80 19560n 6 mos. 5
Cyclicity None 10
Regulatory Requirements Few 5
Total Market Value 8
Note: Use the following guideline to evaluate the value of your
business opportunity. A total market value of 0-4 means
Forget It, 4-6 means Be Careful, 6-8 means Fair to Good,
and 8-10 mean High Opportunity.
-25-
APPENDICES
------------------------------------------------------------------------
Benefit/Segment
---------------
[----------------Segment--------------]
No. Benefit 1 2 3 4 5 6 7 8 Average
--- --------------------- --- --- --- --- --- --- --- --- -------
1. Selection 1 2 1.5
2. Full-service 2 1 1.5
-26-
APPENDICES
------------------------------------------------------------------------
Benefit/Competition
-------------------
[----------------Segment--------------]
No. Benefit 1 2 3 4 5 6 7 8 Average
--- --------------------- --- --- --- --- --- --- --- --- -------
1. Selection 2 2 2.0
2. Full-Services 2 2 2.0
-27-
APPENDICES
------------------------------------------------------------------------
Action Plan
-----------
Start End Comments
No. Task Description Hrs Who Date Date Status
--- -------------------------- --- --- -------- -------- -------------------
1. Complete lease contract 16 EL 09-01-92 09-15-92
2. Visit suppliers 40 CR 09-06-92 09-15-92
3. Complete supplier contract 40 CR 09-15-92 10-01-92
4. Draft promotion plan 24 SC 09-01-92 09-08-92
5. Review plan with board 8 SC 09-09-92 09-09-92
6. Review equipment 40 EL 09-15-92 10-01-92
7. Review equip. plan w/board 8 EL 10-02-92 10-02-92
8. Meet with PR firm 8 SC 10-01-92 10-01-92
9. Acquire equipment 16 EL 10-03-92 10-10-92
10. Interview & hire staff 80 CR 10-01-92 11-15-92
11. Acquire inventory 80 CR 10-01-92 11-15-92
12. Establish policies 40 EL 10-10-92 10-20-92
13. Prepare facilities 80 EL 10-10-92 11-01-91
14. Move into facilities 40 EL 11-01-92 11-10-92
15. Acquire office supplies 16 EL 11-10-92 11-16-92
16. Acquire fixtures/furniture 40 EL 11-13-92 11-20-92
17. Initiate advertising 8 SC 10-02-92 10-03-92
18. Complete direct mail piece 40 SC 10-03-92 10-10-92
19. Initiate direct mail 8 SC 12-01-92 12-02-92
20. Sales calls 160 SC 10-10-92 12-31-92
-28-
APPENDICES
------------------------------------------------------------------------
Milestone Plan
--------------
Milestone Description Who J F M A M J J A S O N D J F M A M J
------------------------------------ --- -----------------------------------
Move to facility EL X
Launch promotion campaign SC X
Hire staff CR X X
Acquire Inventory CR X X
Acquire equipment EL X X
Complete all administrative tasks EL X
-29-
TABLE OF CONTENTS
------------------------------------------------------------------------
Executive Summary
Business Overview . . . . . . . . . . . . . . . . . . . Page 1
Products/Services . . . . . . . . . . . . . . . . . . . Page 1
Marketing/Sales . . . . . . . . . . . . . . . . . . . . Page 1
Competition . . . . . . . . . . . . . . . . . . . . . . Page 1
Market Segments . . . . . . . . . . . . . . . . . . . . Page 1
Management. . . . . . . . . . . . . . . . . . . . . . . Page 1
Operations. . . . . . . . . . . . . . . . . . . . . . . Page 2
Current Status. . . . . . . . . . . . . . . . . . . . . Page 2
Financial Summary . . . . . . . . . . . . . . . . . . . Page 2
Funding Requirements. . . . . . . . . . . . . . . . . . Page 2
Business Concept
Company . . . . . . . . . . . . . . . . . . . . . . . . Page 3
Products/Services Definition. . . . . . . . . . . . . . Page 4
Status Summary. . . . . . . . . . . . . . . . . . . . . Page 4
Business Objectives . . . . . . . . . . . . . . . . . . Page 4
Anticipated Risks . . . . . . . . . . . . . . . . . . . Page 5
Market Analysis
Market Characteristics. . . . . . . . . . . . . . . . . Page 6
Market Opportunity Analysis . . . . . . . . . . . . . . Page 6
Market Segments . . . . . . . . . . . . . . . . . . . . Page 6
Competition . . . . . . . . . . . . . . . . . . . . . . Page 7
Assumptions
Assumptions . . . . . . . . . . . . . . . . . . . . . . Page 9
Marketing Plan
Products/Services . . . . . . . . . . . . . . . . . . . Page 10
Promotion . . . . . . . . . . . . . . . . . . . . . . . Page 10
Operations Plan
Facilities. . . . . . . . . . . . . . . . . . . . . . . Page 11
Equipment/Technology. . . . . . . . . . . . . . . . . . Page 11
Delivery/Production . . . . . . . . . . . . . . . . . . Page 11
Customer Service. . . . . . . . . . . . . . . . . . . . Page 11
Financial Plan
Financial Summary . . . . . . . . . . . . . . . . . . . Page 12
Use of Funds. . . . . . . . . . . . . . . . . . . . . . Page 13
Income Statement. . . . . . . . . . . . . . . . . . . . Page 14
Cash Flow . . . . . . . . . . . . . . . . . . . . . . . Page 18
Balance Sheet . . . . . . . . . . . . . . . . . . . . . Page 22
Ratio Analysis. . . . . . . . . . . . . . . . . . . . . Page 23
Implement
Implementation Approach . . . . . . . . . . . . . . . . Page 24
Critical Success Factors. . . . . . . . . . . . . . . . Page 24
TABLE OF CONTENTS
------------------------------------------------------------------------
APPENDICES
Market Opportunity Matrix . . . . . . . . . . . . . . . Page 25
Benefit/Segment . . . . . . . . . . . . . . . . . . . . Page 26
Benefit/Competition . . . . . . . . . . . . . . . . . . Page 27
Action Plan . . . . . . . . . . . . . . . . . . . . . . Page 28
Milestone Plan. . . . . . . . . . . . . . . . . . . . . Page 29