september 21, 2011 montgomery, tx 77316 people...

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September 21, 2011

Re-Bath 14080 Liberty Road Montgomery, TX 77316 Ms. Lisa Cox People Fund 2921 E. 17th Street Austin, TX, USA 78702 Re: Loan Request for $200,000

Dear Ms. Cox,

With over four years of Lead Installer experience with Re-Bath, we are requesting a loan to buy our own Re-Bath franchise, in Texas’ Montgomery County. Re-Bath is a franchise operation that specializes in bathroom remodels in homes that are 15 years or older. It has been in operation for over twenty years with over 200 franchises worldwide, and is the largest bathroom remodeling franchise in the industry. The climate for a successful Re-Bath in Montgomery County is perfect. Montgomery County, TX is the 24th fastest growing county in the United States. Between 1990 and 2009 90,393 houses were built in Montgomery County. Sixty-three percent of the residential areas built between 1990 and 2009 were middle to high income households that are due for a 15 year remodel. We will be buying an already existing franchise store in Montgomery, TX that has an excellent reputation and has seen between 25 and 30 percent growth from 2009 to 2011. Our target market is owners of homes that are 15 years or older that are due for a bathroom remodel, in addition to commercial business owners. We plan to reach this target market with focused marketing, which you will read about in our business plan. In addition, we have a good working relationship with suppliers and the community since the Re-Bath we are purchasing has been in operation for three years. Re-Bath has become the largest bathroom remodeling franchise in its industry due to its convenience, affordability, and quality products. These attributes, along with a lifetime guarantee have allowed Re-Bath to beat out local competition and spread the word of our superior service through satisfied customers. We are investing $15k in savings and are requesting a $200K loan from your bank. We would like seven years to repay the loan, using the cash flow of the business. Our secondary source of repayment will be from collateralized equipment. Our house and two vehicles, valued at $153,300.00, are offered as collateral for the loan. Our business plan is attached; in it you will find the information you need. If you have any questions or need more information, please contact Mr. Matt Vonruden at (512) 367-3281. Respectfully Submitted, Matt Vonruden Daniel Vonruden

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Executive Summary

The Woodlands Re-Bath’s strategic focus will be to improve its sales, marketing and customer service functions. The goal is to increase sales to more than $1 million in three years, while also improving the gross profit and working capital. We want to become known as the best quality bathroom remodeling company around.

This business plan leads the way. It renews our vision and strategic focus: adding value to our target market segments in our local market. It also provides the step-by-step plan for improving our sales, gross margin, and profitability.

This plan includes this summary, and chapters on the company, products and services, market focus, action plans and forecasts, management team, financial plan and management and working capital.

1.1 Objectives

1. Sales increasing to $1 million by June Year 3. 2. Improve net profitability to 28% by end of fiscal year 3. 3. Provide 10% of gross sales for Owner and 10% of gross sales for company.

1.2 Mission

Re-Bath is a full service remodeling company that is devoted to building the dream bathrooms of local high-end and medium income clients.

We believe that attention to detail and customer service sets us apart from our competition. We work with the property owner to select products that will last for the lifetime of their home and fit the needs of their family or business. To ensure longstanding customer satisfaction, we will also continue to contact the customer even after the job has been completed.

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600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2011 2012 2013 2014 2015 2016

Highlights

Sales

Gross Margin

Net Profit

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1.3 Keys to Success

Marketing: Creating a desire for our services above all competitors is a key to our continued success, as well as

creating the perception that we are the top of the line.

Craftsmanship: No matter how good the marketing program is, poor-quality of work will destroy our base referral business. It will also take us out of our high end market.

Communication: Our communication systems, both internally and with our customers, are the key to excellent performance - projects completed on schedule, on budget and to our customers' satisfaction. We also must ensure that the customer feels like we have been responsive to his/her every request so that we can get a good referral.

Building Material prices: In order to turn a profit, we need to have a good feel for the prices of materials in our area, and where to get the best deals.

Company Summary

Over the past 30 years Re-Bath has become the largest bathroom remodeling franchise in the bathroom remodeling industry. With over 200 franchise locations, this company owes its success to its innovative Dura bath SSP™ material and a quick, affordable one stop solution to customer’s remodeling needs. Re-Bath typically services bathrooms that are 15 years old and guarantees its products with a lifetime warranty.

2.1 Company Ownership

Re-Bath is a Limited Liability Company. Matt Vonruden and his father Daniel Vonruden will be purchasing franchise rights to Montgomery county Texas under a Co-ownership.

The Woodlands Re-Bath was started by Jeff Housley as a Sole Proprietorship in 2009. In his one and a half years of ownership, he has increased gross sales from $500,000 to $800,000 from 2009 to 2011. Matt Vonruden and his father, Daniel Vonruden, will be purchasing The Woodlands Re-Bath under Co-Ownership with the intent of continuing to exploit the area for an increased sales growth of 12% per year for the next five years.

Increased sales growth will be realized through experience and financial stability. Matt Vonruden’s four plus years of experience working as a lead installer for Re-Bath brings experienced leadership to this business proposal. In his over four years working for Re-Bath, he has earned the highest title of “Grade A Installer”, trained six other Re-Bath installers, and helped build the San Antonio, TX &Texas’ Bell County Re-Baths from the ground up. Matt’s experienced will be enhanced by the assistance of Ryan Garrod, an experienced Re-Bath installer, and, Daniel Vonruden, the Financier.

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2.2 Company History

In 1982, Re-Bath was founded to offer bathtub liners top homeowners interested in replacement bathtubs

through a dealer network.

In 1991, Re-Bath converted its residential dealership business to a franchise organization.

In 2000, Re-Bath is awarded its 100th

franchise, making it the largest franchise in the industry.

In 2006, Re-Bath was awarded its 200th

franchise and introduced Dura bath SSP, its new proprietary sanitary-ware

surface; available in bathtub replacements, walk-in bathtubs, shower bases, wall surrounds and more.

In 2009, Re-Bath expanded its product offerings to encompass full bathroom remodeling, including bathroom

vanities, toilets and pedestal sinks, bathroom flooring and more.

Past Performance FY 2009 FY 2010 FY 2011

Sales $500,000 $650,000 $800,000

Gross Margin $306,827 $399,302 $490,962

Gross Margin % 61% 61% 61%

Operating Expenses $480,303 $585,210 $687,116

Collection Period (days) 74 74 74

0

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600,000

700,000

800,000

2009 2010 2011

Past Performance

Sales

Gross Margin

Net Profit

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Products and Services

Am Bath, LLC, with whom the Company has an Exclusive Licensing Agreement, is the exclusive manufacturer of most of the Re-Bath Products. Re-Bath products include, Dura bath SSP, replacement bathtubs, walk-in bathtubs, shower bases, wall surrounds, bathroom vanities, toilets and pedestal sinks and bathroom flooring.

The Woodlands Re-Bath is a full-service bathroom remodeling company. At present we do mostly high-end and medium income bathroom remodels. It is our philosophy that we can offer a quality product in a timely fashion giving the customer one-on-one service.

This includes:

Residential Bathroom Remodeling

Lake house (second home) Bathroom Remodeling

Apartment Bathroom Remodeling

Dormitory Bathroom Remodeling

HUD Project Bathroom Remodeling

Hotel and Motel Bathroom Remodeling

Green Remodeling

Market Analysis Summary

The Woodlands Re-Bath is focusing on both the commercial and residential markets of Montgomery County, with the residential being about 83% of the overall volume of the company.

As housing prices fall, potential clients will be more apt to remodel their high-end bathrooms, rather than try to sell them. Medium income clients will be more apt to remodel their older homes in order to increase their appeal and market value.

20%

38%

25%

17%

Market Segments Available for Bathroom Remodeling in Montgomery TX

Low IncomeResidential

Middle IncomeResidential

High IncomeResidential

Business Remodels

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4.1 Market Segmentation

In an era of decreasing residential property values and relatively stable rates of personal income growth, The Woodlands Re-Bath is focusing on two segments of the residential remodeling market:

1) Neighborhoods where homeowners have achieved success in their careers and have room in their budget for investment in their homes, but are not eager to incur a much higher mortgage payment by selling their house and 'buying up.' [Such targeted neighborhoods have housing stock with room to expand and are deemed to be worth the upgrade expenditures.]

2) New build communities. Texas' Montgomery county is the 24th fastest growing county in the United States and for this reason, The Woodlands Re-Bath will target these communities for future sales. Re-Bath intends on becoming a household name for these communities.

About 17% of The Woodlands Re-Bath overall volume consists of remodeling projects for businesses.

1900 – 1989: 66, 135 houses were built in Montgomery County, TX.

1990 – 1999: 40,795 houses were built in Montgomery County, TX.

2000 – 2009: 49,598 houses were built in Montgomery County, TX.

35%

39%

26%

Houses Built in Montgomery County TX

1900-1989

1990-1999

2000-2009

35%

39%

26%

Houses Due for a 15 Year Remodel in Montgomery County TX

Due for Remodelin 2004

Due for Remodelin 2005

Due for Remodel2015-2024

* Note that The Woodlands Re-Bath did not open until 2009.

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4.2 Target Market Segment Strategy

Re-Bath’s targeted market groups were chosen because of the long-term potential for continued sales. Assuming high quality work and effective word-of-mouth marketing, the targeted, potentially upgradeable, neighborhoods afford a continuing supply of work to do. The business remodels, while providing a smaller portion of the firm's income, offer an important opportunity to build relationships and generate trust with business owners and managers who have homes in the targeted ‘upgradeable' homes.

4.3 Service Business Analysis

As a whole, the building industry is a very fragmented industry. Despite large homebuilders, no single company has as much as a 2% market share.

The remodeling industry is even more diluted with only a handful of companies in the nation showing annual sales in excess of $10 million. Under the standard definition, all remodelers fall into the category of a small business.

4.3.1 Competition and Buying Patterns

The remodeling market is made up of potential customers who weigh three competing values: Price, Quality and Service. There is a saying that a remodeling company can deliver any two of those values. A large portion of the potential customers are asking for quality and service, and then go shopping for price. These customers are extremely difficult to work for and make a profit.

There is another segment of the market that is concerned with getting a "fair" price. Re-Bath offers its customers a lifetime guarantee on their products and services. This guarantee will entice customers that are looking for an investment “bargain” to choose Re-Bath as their bathroom remodelers.

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20,000

40,000

60,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Montgomery County Home Improvement Loans

# of Loans Approved $ Value of Loans

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Strategy and Implementation Summary

Re-Bath will change its focus to differentiate their services from fly-by-night contractors, improve its sales and customer service functions and increase the amount of work received from past clients and referrals. The marketing challenge is to improve the company's image, allowing estimators to price work more profitably, reduce or eliminate the amount of work competitively bid for, and to raise the perceived value the client gains by hiring Re-Bath.

5.1 Sales Strategy

1. The Woodland’s Re-Bath needs to sell the company and its lifetime guarantee, not the price.

2. Re-Bath has to sell its quality, convenience and service. It is Re-Bath’s goal to install our quality products as quickly and conveniently as possible so that our customers’ home life will not be disturbed for more than one to two days. Re-Bath’s specially designed tub liners and bathroom enclosures ensure the installation of a quality product with convenience and well trained service technicians.

The Yearly Total Sales chart summarizes an ambitious sales forecast. The Woodlands Re-Bath expects sales to increase significantly from $800,000 last year.

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5.1.1 Sales Forecast

The important elements of the sales forecast are shown in the Total Sales by Month in Year 1 chart. Total sales will increase substantially over the next several years.

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Monthly Sales

Residential

Commercial

Other

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2012 2013 2014 2015 2016

Yearly Sales

Residential

Commercial

Other

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Sales Forecast FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Sales Commercial $136,000 $152,320 $170,598 $191,070 $213,999 $239,678

Residential $592,000 $725,760 $812,851 $910,393 $1,019,640 $1,141,997

Other $72,000 $80,640 $90,317 $101,154 $113,293 $126,889

Total Sales $800,000 $896,000 $1,003,520 $1,123,942 $1,258,815 $1,409,873

Absorption Cost of Sales FY 2011 FY 2012 FY2013 FY 2014 FY 2015 FY 2016

Materials $217,006 $243,284 $271,258 $305,165 $341,615 $382,304

Permits & Licensing $4,608 $4,608 $4,608 $4,608 $4,608 $4,608

Sales Commission $79,872 $89,544 $99,840 $112,320 $125,736 $140,712

Vehicle Rental & Ins. $7,200 $7,200 $10,800 $10,800 $10,800 $10,800

Employee Benefits $40,000 $40,000 $70,000 $70,000 $70,000 $70,000

Utilities $23,988 $23,988 $23,988 $23,988 $23,988 $23,988

Labor Wage $45,000 $48,000 $50,000 $55,000 $58,000 $60,000

Sales Tax $68,000 $76,160 $85,299 $95,535 $106,999 $119,893

Franchise Tax $8,000 $8,960 $10,035 $11,239 $12,588 $14,099

Medicare $2,580 $2,580 $4,118 $4,118 $4,118 $4,118

Labor Commission $79,872 $89,544 $99,840 $112,320 $125,736 $140,712

Administrative Pay $22,800 $22,800 $22,800 $22,800 $22,800 $22,800

Loan Payment with 7.5 interest $36,812 $36,812 $36,812 $36,812 $36,812 $36,812

Trash $720 $720 $720 $720 $720 $720

Other $49,992 $49,992 $49,992 $49,992 $49,992 $49,992

Subtotal Absorption Cost of Sales $686,450 $744,192 $840,110 $915,417 $994,512 $1,081,504

5.2 Marketing Strategy

The marketing strategy is the core of the main strategy:

1. Emphasize quality, convenience and service. 2. Build a relationship business--treat the customers like members of the family. 3. Take care of the customers for the rest of their life.

5.3 Competitive Edge

The Woodlands Re-Bath’s competitive edge is its reputation in the community. Over the past five years, Re-Bath has become the largest bathroom remodeling company in the nation. In fact, the first Re-Bath franchises will be opening this year in Ireland, and the UK. Its satisfied customer base continues to expand and spread the word.

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5.4 Milestones

The following table lists important program milestones, with dates and persons in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation. The most important programs are the sales and marketing programs listed in detail in the previous topics.

Milestones Milestones Start Date End Date Budget Manager Department

Business Plan Aug. 29 2011 Sept. 22

2011 $100.00 Rebecca Eastman Contract

New Computer System Nov. 1 2011 Nov. 7 2011 $800 Daniel

Vonruden Co-owner

Thank You Cards Dec. 1 2011 Dec. 3 2011 $20 Matt

Vonruden Co-owner

SCORE Business Start-up Seminar Oct. 15 2011 Oct. 15 2011 $0

Matt Vonruden Co-owner

Assess Current Store Location Oct. 3 2011 Dec. 30

2011 $0 Matt

Vonruden Co-owner

Start Woodlands Re-Bath Website Oct. 10 2011

Nov. 11 2011 $500

Daniel Vonruden Co-owner

Web Plan Summary

The Woodland’s Re-Bath website will be the virtual business card and portfolio for the company, as well as its online "home."

It will showcase the construction experience within the company, as well as the portfolio of all the past and current projects done by Re-Bath. The website will include a resources area, offering articles, research and weekly newsletters to interested parties.

The key to the website strategy will be combining a very well designed front end, with a back end capable of recording leads and proposal requests.

Management Summary

The Woodlands Re-Bath is a company that desires to be of service to others. Its whole existence is keyed to helping people who have need to improve the quality of their life. Re-Bath encourages team work and cooperation in helping the customer. The company is very loyal to its employees and provides them with the security and satisfaction to know that they are the business and that without them the company would not exist.

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7.1 Personnel Plan

The Personnel Plan reflects the need to bolster our capabilities to match our positioning. Our total head-count should increase to 5 this first year, and to 8 by the third year. This reflects a ~5% growth per year.

Personnel Plan

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Labor $89,544 $99,840 $112,320 $125,736 $140,712

Installation Manager $48,000 $50,000 $55,000 $58,000 $60,000

Sales (commission) $89,544 $99,840 $112,320 $125,736 $140,712

Office $22,800 $22,800 $22,800 $22,800 $22,800

Owners $90,808 $102,410 $140,525 $174,303 $211,186

Total People 5 7 7 7 7

Total Payroll $340,696 $374,890 $442,965 $506,575 $572,593

Financier:

Daniel Vonruden (Co-owner)

Profession: Senior Electrical Technician with 15 plus years’ experience.

Sales and Marketing:

Jose Leva

7 years of Sales and Marketing experience. Leva will be responsible for office staff, sale estimated, customer service and potential service plans.

One office staff member: One full time Administrative Assistant. The Administrative assistant would be paid a salary of $22,800.00 annually. The Salesman will work on commission that is estimated to be $89,544 the first year, $99840 the second year and $112,320 the third year. They will receive medical insurance.

Operations

Matt Vonruden

4 Plus years of operational experience as a Re-Bath installer. Vonruden will be categorized as a lead installer and holds a plumber card.

Ryan Garrod

1 year of operational experience as a Re-bath installer, 5 years of general constriction experience, and three years of mechanical experience. Vonruden will be working for a minimum wage of plus 2.5 % weekly in addition to owner’s profit. Garrod will be working as Installation Manager for $48,000 the first year, $50,000 the second year and $55,000 the third year. They will both work Monday – Saturday, 6:00 am – 4:00pm. A 14 day training period is required before joining the company. Employees will receive full health coverage costing, $9,998.00 per employee annually.

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Financial Plan

The most important element in the financial plan is the critical need for improving several of the key factors that impact cash flow:

1. The Woodlands Re-Bath must do a better job of collecting deposits and asking for (demanding) prompt payment from the customers.

2. We must bring the gross margin up to 61%. This is related to improving the marketing program which will generate higher quality leads and jobs.

8.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the General Assumptions table below. The key underlying assumptions are:

A slow-growth economy, without major recession.

There are no unforeseen changes in technology to make our services immediately obsolete (very unlikely).

We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables.

General Assumptions

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Plan Month 1 2 3 4 5

Current Interest Rate 7.50% 7.50% 7.50% 7.50% 7.50%

Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00%

Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00%

Other 0 0 0 0 0

8.2 Projected Profit and Loss

The most important assumption in the Projected Profit and Loss statement is the gross margin, which is supposed to increase, up quite a bit from the last year. The increase in gross margin is based on changing our sales mix due to increased target marketing based on 5% assumptions between years.

$0

$500,000

FY 2012FY 2013 FY 2014 FY 2015FY 2016

Profit

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Pro Forma Profit and Loss

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Sales $896,000 $1,003,520 $1,123,942 $1,258,815 $1,409,873

Absorption Cost of Sales $744,192 $840,110 $915,417 $994,512 $1,081,504

Other Cost of Goods $0 $0 $0 $0 $0

Total Cost of Sales $744,192 $840,110 $915,417 $994,512 $1,081,504

Gross Margin $550,085 $616,625 $690,041 $773,087 $867,497

Gross Margin % 61.39% 61.45% 61.39% 61.41% 61.53%

Expenses

Payroll $340,696 $374,890 $442,965 $506,575 $572,593

Advertising $6,000 $4,000 $4,000 $4,000 $5,000

Marketing $0 $0 $0 $0 $0

Sales Tax $76,160 $85,299 $95,535 $106,999 $119,839

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Bad Credit $12,210 $12,210 $12,210 $12,210 $12,210

Donations $0 $0 $0 $0 $0

Marketing $0 $0 $0 $0 $0

Entertainment $0 $0 $0 $0 $0

Employee Benefits $40,000 $70,000 $70,000 $70,000 $70,000

Equipment Rental $3,000 $3,000 $3,000 $3,000 $3,000

Bank Interest $13,951.27 $12,176.55 $10,264.05 $8,203.06 $5,982.10

Tool Repair / Replacement $500 $500 $500 $500 $500

Computer Hardware $800 $100 $100 $500 $100

Other $61,000 $61,000 $68,000 $90,000 $120,000

Dues/Sub./Licenses $4,608 $4,608 $4,608 $4,608 $4,608

Depreciation $8,498 $9,884 $13,937 $17,208 $19,988

Franchise Tax $8,960 $10,035 $11,239 $12,588 $14,099

Legal Expenses $0 $0 $0 $0 $0

Accounting Expenses $2,331 $2,453 $2,582 $2,718 $2,861

Rent Office / Warehouse $10,800 $10,800 $10,800 $10,800 $10,800

Repairs / Maintenance $1,137 $1,197 $1,260 $1,326 $1,396

Utilities $7,200 $7,200 $7,200 $7,200 $7,200

Office Expenses $4,208 $4,430 $4,450 $4,820 $5,139

Employee Liability Insurance $2,689 $3,756 $3,756 $3,756 $3,756

Vehicle Expenses / Insurance $7,200 $7,200 $7,200 $7,200 $7,200

Insurance (general) $1,000 $1,000 $1,000 $1,000 $1,000

Payroll Taxes $64,271 $69,742 $81,704 $95,452 $110,814

Total Operating Expenses $670,209 $745,771 $849,350 $964,253 $1,091,675

Profit Before Interest & Taxes $99,163 $109,959 $142,035 $175,954 $211,186

Net Profit $99,163 $109,959 $142,035 $175,954 $211,186

Net Profit / Sales 11.06% 10.96% 12.64% 13.98% 14.98%

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8.4 Projected Cash Flow

The cash flow depends on assumptions for payment days and accounts receivable management. The projected 75-day collection days are critical, and it is also reasonable.

Pro Forma Cash Flow

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Cash Received Cash from Operations Cash Sales $447,720 $501,760 $561,971 $629,408 $704,937

Cash from Receivables $447,720 $501,760 $561,971 $629,408 $704,937

Subtotal Cash from Operations $896,000 $1,003,520 $1,123,942 $1,258,815 $1,409,873

Additional Cash Received $0 $0 $0 $0 $0

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

New Current Borrowing $0 $0 $0 $0 $0

New Other Liabilities $0 $0 $0 $0 $0

New Long - Term Liabilities $0 $0 $0 $0 $0

Sale of Other Current Assets $0 $0 $0 $0 $0

Sale of Long - Term Assets $0 $0 $0 $0 $0

New Investments Received $0 $0 $0 $0 $0

Subtotal Cash Received $896,000 $1,003,520 $1,123,942 $1,258,815 $1,409,873

Expenditures FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Expenditures from Operations Cash Spending $178,207 $136,318 $223,534 $250,234 $280,038

Bill Payments $670,209 $745,771 $849,350 $964,253 $1,091,675

Subtotal Spent on Operations $848,416 $882,089 $1,072,884 $1,214,469 $1,371,713

Additional Cash Spent Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0

Principle Repayment on Current Borrowing $0 $0 $0 $0 $0

Other Liabilities Principle Payment $0 $0 $0 $0 $0

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

Dividends $0 $0 $0 $0 $0

Subtotal Cash Spent $848,416 $882,089 $1,072,884 $1,214,469 $1,371,713

Net Cash Flow $47,584 $121,431 $51,058 $44,346 $38,160

Cash Balance $161,747 $246,390 $208,093 $235,300 $264,346

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8.5 Projected Balance Sheet

The Projected Balance Sheet is quite solid. We do not project any real trouble meeting our debt obligations--as long as we can achieve our specific objectives.

8.6 Business Ratios

The table follows with our main business ratios. We do intend to improve gross profit and collection days.

8.7 Long-term Plan

The long-term plan is shown in the Appendix.

Appendix

Sales Forecast

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Sales

Commercial

$3,237 $3,699 $5,780 $11,098 $16,416 $20,116 $19,884 $16,647 $12,486 $9,249 $6,705 $6,474

Residential

$73,410 $76,879 $77,746 $89,884 $96,243 $101,156 $99,711 $109,827 $111,850 $119,075 $116,301 $116,532

Other

$151 $151 $151 $151 $151 $151 $151 $151 $2,900 $3,587 $151 $151

Total Sales

$76,798 $80,729 $83,677 $101,133 $112,810 $121,423 $119,746 $126,625 $127,236 $131,911 $123,157 $123,157

17

Direct Cost of Sales


Materials

$13,056 $13,724 $14,225 $17,193 $19,178 $20,642 $20,357 $21,526 $21,630 $22,425 $20,937 $20,937

Sub-Contractor Costs

$26,879 $28,255 $29,287 $35,397 $39,484 $42,498 $41,911 $44,319 $44,533 $46,169 $43,105 $43,105

Permits & Licensing

$282 $282 $282 $282 $282 $282 $282 $282 $282 $282 $282 $282

Sales Costs

w/commission

$484 $509 $527 $637 $711 $765 $754 $798 $802 $831 $776 $776

Warranties

$377 $385 $393 $401 $409 $417 $425 $434 $443 $452 $461 $470

Trash

$530 $530 $530 $530 $530 $530 $530 $530 $530 $530 $530 $530

Other

$161 $161 $161 $161 $161 $161 $161 $161 $161 $161 $161 $161

Subtotal Direct Cost of

Sales

$41,769 $43,846 $45,406 $54,601 $60,754 $65,295 $64,421 $68,050 $68,381 $70,850 $66,252 $66,261

Personnel Plan


Labor

$14,986 $14,986 $14,986 $14,986 $14,986 $14,986 $14,986 $14,986 $14,986 $14,985 $14,985 $14,985

Prod. Manager

$3,153 $3,153 $3,153 $3,153 $3,153 $3,153 $3,153 $3,153 $3,153 $3,154 $3,154 $3,154

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Design

$887 $887 $887 $887 $887 $887 $887 $888 $888 $888 $888 $888

Prod Mgr. (office)

$773 $773 $773 $773 $773 $773 $773 $773 $773 $773 $773 $773

Sales (salaried/draw)

$712 $713 $713 $713 $713 $713 $713 $713 $713 $713 $713 $713

Office

$3,555 $3,555 $3,555 $3,555 $3,555 $3,555 $3,555 $3,555 $3,555 $3,555 $3,555 $3,555

Owners

$6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500

Total People

12 12 12 12 1 12 12 12 12 12 12 12

Total Payroll

$30,566 $30,567 $30,567 $30,567 $30,567 $30,567 $30,567 $30,568 $30,568 $30,568 $30,568 $30,568

General Assumptions


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

Current Interest

Rate 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%

Long-term 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%

Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%

19

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

Pro Forma Profit and Loss


Sales

76,798 80,729 83,677 101,133 112,810 121,423 119,746 $126,625 $127,236 $131,911 $123,157 $123,157

Direct Cost of Sales

$41,769 $43,846 $45,406 $54,601 $60,754 $65,295 $64,421 $68,050 $68,381 $70,850 $66,252 $66,261

Other Costs of Goods

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales

41,769 43,846 45,406 $54,601 $60,754 $65,295 $64,421 $68,050 $68,381 $70,850 $66,252 $66,261

Gross Margin

35,029 36,883 38,271 $46,532 $52,056 $56,128 $55,325 $58,575 $58,855 $61,061 $56,905 $56,896

Gross Margin %

45.61% 45.69% 45.74% 46.01% 46.14% 46.22% 46.20% 46.26% 46.26% 46.29% 46.21% 46.20%

Expenses

Payroll

30,566 30,567 30,567 $30,567 $30,567 $30,567 $30,567 $30,568 $30,568 $30,568 $30,568 $30,568

Advertising

$556 $612 $673 $740 $814 $895 $985 $1,084 $1,192 $1,311 $1,442 $1,586

Depreciation

$738 $738 $738 $738 $738 $738 $738 $738 $738 $738 $738 $738

Marketing

$643 $707 $778 $856 $942 $1,036 $1,140 $1,254 $1,379 $1,517 $1,669 $1,836

20

Bad Debts

$187 $187 $187 $187 $187 $187 $187 $187 $187 $187 $187 $187

Donations

$197 $197 $197 $197 $197 $197 $197 $197 $197 $197 $197 $197

Entertainment 50%

$175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175

Employee Benefits

$4,129 $4,335 $4,552 $4,780 $5,019 $5,270 $5,534 $5,811 $6,102 $6,407 $6,727 $7,063

Equipment Buy/Rental

$244 $256 $269 $282 $296 $311 $327 $343 $360 $378 $397 $417

Interest/Bank Charges

($17) ($17) ($17) ($17) ($17) ($17) ($17) ($17) ($17) ($17) ($17) ($17)

Tool Repair/Replacement

$230 $230 $230 $230 $230 $230 $230 $230 $230 $230 $230 $230

Computer/Hardware/Software

Consultants

$541 $568 $596 $626 $657 $690 $724 $760 $798 $838 $880 $924

Dues/Sub/Licenses/Royalties/Trade

Assoc.

$237 $237 $237 $237 $237 $237 $237 $237 $237 $237 $237 $237

Corp & Business Taxes

$175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175

Legal Expenses

$109 $109 $109 $109 $109 $109 $109 $109 $109 $109 $109 $109

Accounting Expenses

$194 $194 $194 $194 $194 $194 $194 $194 $194 $194 $194 $194

Rent of Office/Warehouse Space

$1,210 $1,210 $1,210 $1,210 $1,210 $1,210 $1,210 $1,210 $1,210 $1,210 $1,210 $1,210

Repairs/Maintenance

$95 $95 $95 $95 $95 $95 $95 $95 $95 $95 $95 $95

21

Communications

$780 $780 $780 $780 $780 $780 $780 $780 $780 $780 $780 $780

Utilities

$77 $77 $77 $77 $77 $77 $77 $77 $77 $77 $77 $77

Office Expenses

$701 $701 $701 $701 $701 $701 $701 $701 $701 $701 $701 $701

Miscellaneous/Other

$382 $382 $382 $382 $382 $382 $382 $382 $382 $382 $382 $382

Liability Insurance

$626 $626 $626 $626 $626 $626 $626 $626 $626 $626 $626 $626

Vehicle Expenses & Insurance

$866 $866 $866 $866 $866 $866 $866 $866 $866 $866 $866 $866

Liability Insurance for employees

$42 $42 $42 $42 $42 $42 $42 $42 $42 $42 $42 $42

Vehicle Expenses & Insurance

$337 $337 $337 $337 $337 $337 $337 $337 $337 $337 $337 $337

Insurance - General (#43)

$85 $85 $85 $85 $85 $85 $85 $85 $85 $85 $85 $85

Payroll Taxes

$5,471 $5,472 $5,472 $5,472 $5,472 $5,472 $5,472 $5,472 $5,472 $5,472 $5,472 $5,472

Total Operating Expenses

49,578 49,944 50,334 $50,750 $51,194 $51,668 $52,176 $52,719 $53,298 $53,918 $54,582 $55,293

Profit Before Interest and Taxes

(14549) (13061) (12062) ($4,217) $862 $4,460 $3,150 $5,856 $5,557 $7,143 $2,323 $1,603

EBITDA

(13811) (12323) (11324) ($3,479) $1,600 $5,198 $3,888 $6,594 $6,295 $7,881 $3,061 $2,341

Interest Expense

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

22

Taxes Incurred

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit

(14549) (13061) (12062) (4,217) 862 4,460 3,150 5,856 5,557 7,143 2,323 1,603

Net Profit/Sales

-18.9% -16.2% -14.4% -4.2% 0.76% 3.67% 2.63% 4.62% 4.37% 5.42% 1.89% 1.30%

Pro Forma Cash Flow


Cash Received

Cash from

Operations

Cash Sales

$19,200 $20,182 $20,919 $25,283 $28,203 $30,356 $29,937 $31,656 $31,809 $32,978 $30,789 $30,789

Cash from

Receivables

$294,000 $294,000 $177,719 $59,171 $61,726 $69,740 $80,521 $88,053 $90,396 $92,561 $95,213 $97,297

Subtotal Cash from

Operations

$313,200 $314,182 $198,638 $84,454 $89,928 $100,096 $110,457 $119,709 $122,205 $125,539 $126,002 $128,086

Additional Cash

Received

Sales Tax, VAT,

HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

23

Borrowing

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

$313,200 $314,182 $198,638 $84,454 $89,928 $100,096 $110,457 $119,709 $122,205 $125,539 $126,002 $128,086

Expenditures


Expenditures from

Operations

Cash Spending

$30,566 $30,567 $30,567 $30,567 $30,567 $30,567 $30,567 $30,568 $30,568 $30,568 $30,568 $30,568

Bill Payments

$71,721 $60,124 $62,550 $64,755 $74,265 $80,810 $85,646 $85,430 $89,493 $90,475 $93,331 $89,552

Subtotal Spent on

Operations

$102,288 $90,691 $93,117 $95,322 $104,832 $111,377 $116,213 $115,998 $120,061 $121,044 $123,899 $120,120

Additional Cash

24

Spent

Sales Tax, VAT,

HST/GST Paid Out

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Principal Repayment

of Current Borrowing

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Liabilities

Principal Repayment

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities

Principal Repayment

$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

$102,288 $90,691 $93,117 $95,322 $104,832 $111,377 $116,213 $115,998 $120,061 $121,044 $123,899 $120,120

Net Cash Flow

$210,912 $223,491 $105,522 ($10,868) ($14,904) ($11,281) ($5,756) $3,710 $2,144 $4,495 $2,103 $7,967

Cash Balance

$394,340 $617,831 $723,353 $712,485 $697,581 $686,300 $680,544 $684,255 $686,399 $690,894 $692,997 $700,964

We recommend using Business Plan Pro as the easiest way to create automatic financials for your own business plan.

Pro Forma Balance Sheet

25


Assets Starting

Balances

Current

Assets

Cash $183,428 $394,340 $617,831 723,353 712,485 $697,581 $686,300 $680,544 $684,255 $686,399 $690,894 $692,997 $700,964

Accounts

Receivable $735,000 $498,599 $265,145 150,184 166,863 $189,744 $211,071 $220,360 $227,276 $232,307 $238,679 $235,834 $230,904

Other

Current

Assets

$31,380 $31,380 $31,380 $31,380 $31,380 $31,380 $31,380 $31,380 $31,380 $31,380 $31,380 $31,380 $31,380

Total Current

Assets $949,808 $924,318 $914,356 904,916 910,728 $918,705 $928,751 $932,284 $942,911 $950,086 $960,953 $960,211 $963,249

Long-term

Assets

Long-term

Assets $145,879 $145,879 $145,879 145,879 145,879 $145,879 $145,879 $145,879 $145,879 $145,879 $145,879 $145,879 $145,879

Accumulated

Depreciation $56,879 $57,617 $58,355 $59,093 $59,831 $60,569 $61,307 $62,045 $62,783 $63,521 $64,259 $64,997 $65,735

Total Long-

term Assets $89,000 $88,262 $87,524 $86,786 $86,048 $85,310 $84,572 $83,834 $83,096 $82,358 $81,620 $80,882 $80,144

Total Assets 1,038,808 1,012,580 1,001,880 991,702 996,776 1,004,015 1,013,323 1,016,118 1,026,007 1,032,444 1,042,573 1,041,093 1,043,393

26

Liabilities

and Capital


Current

Liabilities

Accounts

Payable $69,720 $58,041 $60,402 $62,286 $71,577 $77,955 $82,803 $82,448 $86,481 $87,360 $90,347 $86,543 $87,239

Current

Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other

Current

Liabilities

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal

Current

Liabilities

$69,720 $58,041 $60,402 $62,286 $71,577 $77,955 $82,803 $82,448 $86,481 $87,360 $90,347 $86,543 $87,239

Long-term

Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total

Liabilities $69,720 $58,041 $60,402 $62,286 $71,577 $77,955 $82,803 $82,448 $86,481 $87,360 $90,347 $86,543 $87,239

Paid-in

Capital $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000

Retained

Earnings $949,088 $949,088 $949,088 949,088 949,088 $949,088 $949,088 $949,088 $949,088 $949,088 $949,088 $949,088 $949,088

Earnings $0 ($14,549) ($27,610) (39,672) (43,889) ($43,027) ($38,567) ($35,418) ($29,562) ($24,004) ($16,861) ($14,538) ($12,935)

27

Total Capital $969,088 $954,539 $941,478 929,416 925,199 $926,061 $930,521 $933,670 $939,526 $945,084 $952,227 $954,550 $956,153

Total

Liabilities

and Capital

1,038,808 1,012,580 1,001,880 991,702 996,776 1,004,015 1,013,323 1,016,118 1,026,007 1,032,444 1,042,573 1,041,093 1,043,393

Net Worth $969,088 $954,539 $941,478 929,416 925,199 $926,061 $930,521 $933,670 $939,526 $945,084 $952,227 $954,550 $956,153

Long-term

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Sales $1,328,403 $1,496,903 $1,666,998 $1,822,098 $1,982,202 $1,995,000 $2,024,925 $2,055,299 $2,086,128 $2,117,420

Cost of Sales $715,885 $805,135 $895,541 $978,094 $1,063,327 $1,057,350 $1,073,210 $1,089,308 $1,105,648 $1,122,233

Gross Margin $612,517 $691,768 $771,457 $844,004 $918,875 $937,650 $951,715 $965,990 $980,480 $995,188

Gross Margin % 46.11% 46.21% 46.28% 46.32% 46.36% 47.00% 47.00% 47.00% 47.00% 47.00%

Operating Expenses $625,452 $668,161 $703,328 $740,345 $779,309 $778,050 $789,721 $801,567 $813,590 $825,794

Operating Income ($12,935) $23,607 $68,129 $103,658 $139,566 $159,600 $161,994 $164,424 $166,890 $169,394

Net Income ($12,935) $17,705 $51,097 $77,744 $104,675 $1,321,466 $1,453,613 $1,598,974 $1,758,872 $1,934,759

Current Assets $963,249 $989,191 $1,059,473 $1,156,141 $1,280,569 $1,283,130 $1,285,696 $1,288,267 $1,290,844 $1,293,426

28

Long-term Assets $80,144 $70,822 $61,009 $50,680 $39,807 $36,031 $39,634 $43,598 $47,958 $52,753

Current Liabilities $87,239 $86,155 $95,527 $104,122 $113,002 $92,950 $102,245 $112,470 $123,716 $136,088

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Equity $956,153 $973,858 $1,024,955 $1,102,699 $1,207,374 $1,226,211 $1,223,085 $1,219,396 $1,215,085 $1,210,091

september 21, 2011 montgomery, tx 77316 people...

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