web company business plan

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Table of Contents

1.0 Executive Summary.............................................................................................................................11.1 Objectives ...................................................................................................................................11.2 Keys to Success ........................................................................................................................11.3 Mission.......................................................................................... ..............................................1

Chart: Highlights......................................................................................................................22.0 Company Summary.............................................................................................................................2

2.1 Company Ownership .................................................................................................................22.2 Start-up Summary......................................................................................................................2

Table: Start-up.........................................................................................................................3Chart: Start-up .........................................................................................................................4Table: Start-up Funding..........................................................................................................5

2.3 Company Locations and Facilities ..........................................................................................53.0 Services................................................................................................................................................5

3.1 Service Description...................................................................................................................63.2 Sales Literature..........................................................................................................................63.3 Fulfillment....................................................................................................................................7

3.4 Technology..................................................................................................................................73.5 Future Services ..........................................................................................................................8

4.0 Market Analysis Summary..................................................................................................................84.1 Target Market Segment Strategy.............................................................................................8

4.1.1 Market Needs ................................................................................................................94.1.2 Market Trends................................................................................................................94.1.3 Market Growth ...............................................................................................................9

4.2 Service Business Analysis .....................................................................................................10

4.2.1 Main Competitors .......................................................................................................104.2.2 Business Participants.................................................................................................11

4.3 Market Segmentation..............................................................................................................11Chart: Market Analysis (Pie) 12


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Table of Contents6.3 Personnel Plan.........................................................................................................................20

Table: Personnel...................................................................................................................207.0 Financial Plan....................................................................................................................................21

7.1 Important Assumptions............................................................................................................21Table: General Assumptions ...............................................................................................21

7.2 Key Financial Indicators..........................................................................................................21Chart: Benchmarks...............................................................................................................22

7.3 Break-even Analysis................................................................................................................23Chart: Break-even Analysis .................................................................................................23

Table: Break-even Analysis.................................................................................................237.4 Projected Profit and Loss .......................................................................................................24

Chart: Profit Monthly .............................................................................................................24Chart: Profit Yearly................................................................................................................24Chart: Gross Margin Monthly...............................................................................................25Chart: Gross Margin Yearly..................................................................................................25Table: Profit and Loss ..........................................................................................................26

7.5 Projected Cash Flow...............................................................................................................27Chart: Cash ...........................................................................................................................27Table: Cash Flow..................................................................................................................28

7.6 Projected Balance Sheet........................................................................................................29Table: Balance Sheet...........................................................................................................29

7.7 Business Ratios.......................................................................................................................30Table: Ratios .........................................................................................................................31

Table: Sales Forecast ...............................................................................................................................1Table: Personnel ........................................................................................................................................2Table: General Assumptions ....................................................................................................................3Table: Profit and Loss ...............................................................................................................................4Table: Cash Flow.......................................................................................................................................6Table: Balance Sheet 7


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Ibrio, Inc.

1.0 Executive Summary

Ibrio Incorporated is a small start-up firm located in the business district of Palmyra,

Pennsylvania. We offer Internet and Web-related services to small businesses in the CentralPennsylvania area. The services we offer include website development and design, hosting,maintenance, marketing, and analysis.

Given our experience and expertise in both commercial Web development and business-to-

business sales, we believe we can offer a unique and superior service to small business owners,in comparison to what is currently available.

The demand and growth rate for Web development and marketing services in the smallbusiness market is at an all time high and shows no sign of slowing anytime soon. Even more

astonishing is the fact that very few Web development companies have taken advantage ofthe opportunity, as there are no dominating participants in this huge market.

We believe the reason for this virtually untapped market is due to expensive project costs, the

highest profit margins in Web development today are in servicing large- and medium-sizedcorporations. We have developed a system that dramatically reduces steep project costs and

henceforth will allow us to offer the same high-end Web development services as largercompanies receive at a much lower cost to the client.

This business plan will highlight many aspects of our system and our business. It will detailmarket growth and demand, and it will outline our projected cash flow and profit margins over

the next three years. All numbers regarding our projected company growth are based on previousinformation gathered by activity in the company over the last few months of operation.

1.1 Objectives


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Ibrio, Inc.small businesses. We have developed a system for offering many different types of Web

services (site development, hosting, marketing, and maintenance) that are exclusively tailored tofit the needs and resources of small companies.

2.0 Company Summary

Ibrio Incorporated is a start-up company that will provide high-end, affordable Internet relatedi t ll b i th t l ki t d th i i ti k ti ff t t h


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Ibrio, Inc.hours toward the start-up of Ibrio Inc.

The cash requirement of $17,000 are funds that we need to provide the capital to run our

business for the first few months. This capital will fund two employees payroll and equipment/supplies to get them started. It will cover business expenses for a few months until our cash

flow takes over.

The four-year $20,000 loan has been secured from the XYZ bank to supply the needed capital

explained above.

Table: Start-up

Start-up

Requirements

Start-up Expenses

Business Cards $60

Phone Line Instal l (Two Lines) $150

Computer Monitor $200

InfoUSA Database $400

Office Equipment $580

Dedicated Server Setup Fee $150

Membership Fees $600

DSL Setup and Instal l $350

Phones $160

Total Start-up Expenses $2,650

Start-up AssetsCash Required $17,000

Other Current Assets $7,650

Long-term Assets $0

Total Assets $24,650


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Ibrio, Inc.


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Ibrio, Inc.

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $2,650

Start-up Assets to Fund $24,650

Total Funding Required $27,300

Assets

Non-cash Assets from Start-up $7,650

Cash Requirements from Start-up $17,000

Addit ional Cash Raised $0

Cash Balance on Starting Date $17,000

Total Assets $24,650

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabili ties $20,000

Accounts Payab le (Outstanding Bi ll s) $0

Other Current Liabili ties (interest-free) $0

Total Liabili ties $20,000

Capital

Planned Investment

David W. Hickethier $3,650

Richard B. Andrews $3,650

Addit ional Investment Requi rement $0

Total Planned Investment $7,300

Loss at Start-up (Start-up Expenses) ($2,650)

Total Capital $4,650


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Ibrio, Inc. Marketing and analysis.

Hosting and maintenance.

We currently offer the following secondary services:

E-commerce development. Website renovations and upgrades. Application development (i.e. chatrooms, message boards, online polling, live-feed audio/

video, etc.). Website maintenance training.

Internet/website educat ion seminars. Database construction.

We have plans to offer the following services within the next year:

Internet access service for small businesses. Local Area Network (LAN) installation. Intranet setup and installation. Result-based website marketing.

3.1 Service Description

Website Design and Development: The service that we offer to small businesses is modeledafter the service that larger Web development firms offer Fortune 1000 companies in the sensethat it is completely customized and unique to each individual client.

Website Marketing and Analysis: After we build the website for our client, or a new clientintroduces us to their pre-existing site, we offer this service. As experts of the Web, we cananalyze and test a website based on an established set of standards that account for the

website's aesthetic value, scalability, functionality, ease-of-use, and main customer base.After an analysis has been made we then explore and present to the client a detailed list of


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Ibrio, Inc.about the company, plus a variety of helpful resources for small business owners which we will

be constantly updating.

In the next six months, we plan to produce and distribute bulk mail and fax flyers promotingour Web development and hosting services to small businesses in Central PA to solicit new

business.

We have plans to offer a more compact version of our main sales folder in a brochure format.

This brochure will be available both as a mailer to interested parties and as a sales solicitat ionin area businesses.

3.3 Fulfillment

For the website design, development, marketing, analysis, and maintenance we will employindustry professionals to handle our clients' needs. Working for the company presently is Brandon

Andrews, a professional website development engineer and strategist with four years ofexperience in the commercial Web development industry. To keep employee costs low, we

have designed a "team" development system that will consist of two full-time sales people andthree full-time Web developers. Of the Web developers, one position will be filled by a highly-

qualified senior Web professional and two lesser-qualified, lower paid developers. All three willwork full-time on separate projects provided to them by the sales people. However, the seniordeveloper will have the duty of maintaining the same high quality level of work in the junior

developers' projects, that our clients have learned to expect from us now.

For the website hosting services we offer, Ibrio Inc. has formed several alliances with industryleaders to provide top-rate, reliable host ing solutions. Forming the alliances has allowed us

much flexibility in important hosting features, customizability, and it has drove costs downdramatically. All these benefits are c rucial to preserving the integrity of our company as being a'fully-rounded Internet solutions provider' for small businesses.


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Ibrio, Inc.

3.5 Future Services

Local Area Network Installation: These days, a quickly increasing number of small

businesses are using computers as a necessary tool in the everyday operations of thecompany. We would like to be able to expand our current services to meet this new demand. Wewill handle every aspect of sett ing up a small business with an internal network of computers

from purchasing, installing, and configuring the machines to software integration and educatingthe employees on proper usage and operating funct ions.

Intranet Setup Installation: In our plan, after developing an Internet website for outside

marketing purposes, we would like to offer the service of implementing the website into thenetwork for use in all the business day-to-day operations. This would include extensiveproduct /service cataloging, vital employee and management information, sharing of accounting

and inventory details, etc., all intended for strictly company uses.

Internet Access for Small Business: This feature would act as another residual, packageableservice. We would target small businesses exclusively allowing us to provide more flexibility and

affordability to our clients through discounted high volume rates, value added servicepackages, and much more aggressive technical support services.

Result-based Marketing: This is a service that no small business can turn down. We have plansto offer aggressive, intensified marketing services with the fees based solely on results. To

achieve this, we are in the process of forming multiple partnerships and alliances with industryspecific Internet websites and various other software and service-oriented companies that

provide specific marketing services and tools based on results achieved. We feel as thoughoffering this rare service will dramatically increase our portfolio of clients.

4.0 Market Analysis Summary


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Ibrio, Inc.market with such a high demand. In addition to the very promising supply and demand ratio, it

is also technically easier and less expensive to market to and attract small website projects thanlarger projects.

4.1.1 Market Needs

The need for small business Internet services has existed for several years. Small businesses andstart-up businesses alike are migrating onto the Web at an astonishing rate and making their

online presence a higher priority than in earlier years. We have noticed an enormous holehowever in the small business services that are currently available.

Without a doubt, there is a need for custom, high-end, dynamic services designed exclusively forsmall businesses. At this point, the majority of our competitors are offering services tailored

around big business, to small business owners, or they are offering the exact opposite, one-dimensional, "cookie cutter" type services.

While every small business has now recognized the need for having a presence on the

Internet, many do not know where to start, how much it will cost, or even how it will benefittheir company. It has been our experience by talking to small business owners that the

decision to take advantage of the Web is not a matter of 'if' but a matter of 'when.'

4.1.2 Market Trends

An important market trend right now is the one toward aggressive online and website

marketing. Although many small businesses are still waiting to gain an Internet presence,those who already have are beginning to look for more options along the lines of improvingtheir existing efforts. We believe that in the upcoming years, small companies especially, will

start to look for more ways to increase the traffic to their websites.


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Ibrio, Inc.U.S. businesses spend more of their total IT expenditures on Web-related services than

on IT hardware (IDC Research). Currently, the total number of online users in the U.S. is 107 million, by 2004 that

number will grow to 210 million (IDC Research). E-commerce revenue will reach nearly $6.8 trillion by the year 2004, up from $48.6 billion

in 2000 (Forrester Research Group).

4.2 Service Business Analysis

Web services and development companies vary greatly in the type of service they offer and

the type of client they attract. Ibrio Inc. will be relatively unique in the fact that we aremarketing exclusively to small businesses.

This industry consists of many small Web development firms usually less than 10 years old thatgenerally start out offering services to smaller companies but with long-term goals of catering to

large, corporate Web accounts.

4.2.1 Main Competitors

1. Teeple Graphics: Located approximately 10 miles from our Palmyra offices, they offer

Web development and graphic services.Strengths: Teeple has a very strong clientele, by talking to several of their Web

development clients, we have come to the conclusion that Teeple offers a verydependable and high-quality service.

Weaknesses: Teeple Graphics is owned and operated by George Teeple, he is also theonly employee working for the company out of his home, and does not run his business as

a full-time operation. In addition, Teeple Graphics requires all clients who operate an e-


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Ibrio, Inc.

Weaknesses: For a company that claims to be experts in marketing for small business,they do virtually no advertising of their own and it appears that they lack in the ability to

bring on clients that are outside the city of Lebanon. Even though Web development isa service that Say1 offers, it is only one in a long list of varied services and we believe

this will dramatically hinder their focus toward leading the industry in our market.

4. WebWorks: Located approximately 25 miles from our Palmyra, PA offices. WebWorks

offers Web development and marketing services to businesses in the Greater Harrisburg,PA area.

Strengths: WebWorks has been in the Web services business for almost six years and hasa very experienced team of developers and programmers. They also offer outstanding

marketing services.

Weaknesses: Although WebWorks is a direct competitor, they have begun to focus a

large portion of their services toward attracting medium- to large-sized companies.Their pricing is dramatically higher than any competing firms in the Central PA area and

they now have put into effect a policy of only excepting jobs of a certain size.

4.2.2 Business Participants

The Web services and development industry consists mainly of three different types of firms.

The first type are the very large, high revenue companies who service larger Fortune 1000corporations and well-funded Internet based start-ups exclusively. In this category are only a

few worldwide participants that dominate.

The second type of firm offers pre-fabricated, all-in-one, proprietary type Web services to any

size company at a very low cost or without any cost. The participants in this category consist


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Ibrio, Inc.counties and therefore we will market in proportion to its size. The number of businesses is

estimated at 2,547. It will make up 9% of our target area.

York County: Located Southwest, approx. 40 miles from our location. York county is the lastof the four counties we will market in. It will be late next year before we begin marketing in

this county. The number of businesses is estimated at 8,238. It will make up 28% of our targetarea.

Our business allows us to offer services to small companies, no matter their geographicallocation, and we plan to do so, eventually expanding outside our immediate area. The above

counties are where we will market most heavily and expect to receive the majority of ourwork. We do expect to receive a small portion from outside this target area due to ad placement

in a national business directory.

The above demographic information can be found through the Geospatial & Statistical Data

Center.


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Ibrio, Inc.Ibrio Inc. will initially focus all marketing and sales efforts toward the Central Pennsylvania

area, this includes Harrisburg, Lebanon, Lancaster, and York counties.

We will market ourselves as an Internet and Web services organization devoted to offeringhigh-end services to small businesses exclusively. Our target customer will be the owners of

any small or home-based company who are looking to implement their business into the Web.

5.1 Competitive Edge

We have a valuable competitive edge over our local competitors based on the fact that we have

streamlined all our services into the small business market. Through setting up severalstrategic partnerships with various Internet and Web-related companies, we are able to offer ourclients an affordable and efficient proprietary Web package that will meet all their related needs.

Ibrio Inc. also has as its lead development manager, Brandon Andrews, a main principal in the

company. Brandon Andrews has four years of commercial Web development experience and hasbeen recognized as a leader and innovator in the graphic design and layout areas of website

development.

5.2 Marketing Strategy

Successful marketing of Web services to small business owners depends on how you approach

and follow-up every potential client. It is very important to deliver our marketing pitch in a clear,no non-sense method. Details of the Internet and Web are still relatively unknown by many small

business owners, giving it the tendency to confuse and intimidate easily.


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Ibrio, Inc.For most small business owners, cost, both residual and one-time are huge influences on the

decisions they make regarding everyday operations of their company. Even though we offer100% customized services and our pricing is based on an hourly fee, to make it easier and less

confusing for the clients, Ibrio has established a packaged pricing system.

Budget Domain Website Package ($585.00): For simple, information based websites.Popular with companies who just need to gain an Internet presence.

Mid-Level Website Package ($945.00): Information based websites with a large amountof content. Popular with companies that have a large services/products list and/or want

to implement more of their business into the Web.

Catalog Website Package ($1,440.00): Usually reserved for product-oriented websitesthat are e-commerce enabled. Popular with companies that have a desire to marketheavily on the Internet or sell their products/services directly from the Web.

Website Hosting (from $15.00 to $45.00 per month): Depending on the type and size

of the website, the price for hosting can vary greatly. The average cost of hosting formost clients is $25 per month.

Website Maintenance ($45.00 per hour): We charge a set fee of $45.00 per hour billedin 10 minute increments. If a client feels as though they will need their website updated

or maintained on a regular basis, packages are available at a discount rate.

5.2.3 Promotion Strategy

Our target client is part of a very specific demographic, for this reason, we market andpromote our services in a direct and specifically targeted manner.

Print Ads:


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Ibrio, Inc.advertising.

Educational Seminars:

Ibrio Inc. has been invited to speak to business owners and managers at several

Internet and Web-related educational seminars on a variety of topic. In the nearfuture, we will promote our services through these seminars.

Local Area Commerce Groups:

To promote our services and our name as a participant in the Web services industry,we will be joining many of the local area Chamber of Commerce groups and variousother strategic partnership clubs.

5.3 Sales Strategy

Our clients are small business owners, most are very protective of their company, and almostall of them are salesmen themselves. We sell value, service, and quality when we talk to

business owners. We need to convince them that they can look past all of the hypesurrounding the Internet and still see why having a website is worth the money spent.

We currently utilize a database system specifically targeted toward our desired demographic to

establish our first contact with every potential client. It has proven a successful method forsoliciting new business directly due to the method in which we approach the first call. Thesalesman always requests to speak to the business owner, asking for him by his first name

only, and when asked who is calling, responds by providing simply his first name as well. Once on

the phone with the business owner, there is absolutely no script and the salesman clearlyidentifies himself and asks the business owner if he has ever considered having a websitedeveloped for his company, no matter what the response, a brief conversation will always

pursue, sometimes leading to an appointment, and sometimes to a follow-up call.


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Ibrio, Inc.

5.3.1 Sales Forecast

The following table and chart summarize our forecast sales. We expect the first month of

operations (October) to be spent training the new developer and new salesman. November willbe our first month of operation and we expect to grow steadily in the following months.

Website development sales will be the largest portion of our revenue with result-based marketingfollowing. Maintenance and hosting revenue will be built up slowly but are the residual base we

will stand on in the future.


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Ibrio, Inc.

5.3.2 Sales Programs

The following is a summary of the our sales programs from the Milestones table:

October 9-16: Hiring first salesman. We will be training this employee this month to maketelephone calls to business owners in the area and set appointments to meet with them

and show them what we have to offer. Starting in mid-November he/she will beginmeeting with c lients alone


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Ibrio, Inc.The accompanying table lists important program milestones, with dates and managers in

charge, and budgets for each. The milestone schedule indicates our emphasis on planning forimplementation.

What the table doesn't show is the commitment behind it. Our business plan includes complete

provisions for plan-vs.-actual analysis, and we will hold monthly follow-up meetings everymonth to discuss the variance and course corrections.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Incorporation 8/14/2000 8/28/2000 $500 Dave Admin

Acquire Start-up Fi nancing 8/14 /2000 10/1/2000 $0 Dave Admin

Accounti ng/Bal ance Sheet

Setup

8/31/2000 8/31/2000 $300 Dave Admin

Acquire Chamber M emberships 10/2 /2000 10/9/2000 $600 Dave Marketi ng

Staff Sales Position #1 10/9/2000 10/16/2000 $2,240 Dave HR

Staff Development Position #1 10/16/2000 10/23/2000 $3,200 Brandon HRUpgrade Current Sales Literature 10/23/2000 11/6/2000 $300 Dave Sales

Acquire Dedicated Web Host

Service

11/1/2000 11/8/2000 $770 Brandon Development

Staff Development Position #2 1/15/2001 2/1/2001 $3,200 Brandon HR

Staff Sales Position #2 2/12/2001 2/26/2001 $2,240 Dave HR

Acquire Large Scal e Ou tside

Marketing

3/5/2001 4/5/2001 $2,000 Dave Marketing

Staff Developer Postion #3 3/19/2001 4/2/2001 $3,200 Brandon HR

Other 1/1/2001 1/1/2001 $0 ABC Department

Totals $18,550

6.0 Management Summary


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Ibrio, Inc.payable, marketing, and talent recruitment.

David Hickethier will serve as chief operations officer and sales manager. He will supervise all

salesmen and all sales promotions and projects. David will also be holding the office of thetreasurer therefore will be responsible for all financial related matters.

Brandon Andrews will serve as chief technology off icer and lead Web developer. He will bedirectly supervising all Web development (employee and sub-contracting projects), and will

also be responsible for any necessary training in the same department.

6.2 Management Team Gaps

The current management team will require support in both the business development and

administrative departments. Both managers have had prior experience in these fields, but feelas though their experience is limited given the fact that prior working environments rarely

required this type of support.

We will turn to Parks & Company, our finance and accounting firm, to provide expert adviseand counseling in both the business development and administrative support departments. This

strategy will allow the partners of Ibrio Inc. to lend the majority of their time to theirrespective areas of the company.

We will turn to the law offices of Keefer Wood Allen & Rahal, LLP for all advice concerning thelegal issues of running Ibrio, Inc.


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Ibrio, Inc.

6.3 Personnel Plan

We visualize implementing a "team" development system that will consist of two full-time sales

people and three full-time Web developers. Of the Web developers, one position will be filled by ahighly-qualified senior Web professional and two lesser-qualified, lower paid developers. Allthree will work full-t ime on separate projects provided to them by the sales people. However,

the senior developer will have the duty of maintaining the same high quality level of work in thejunior developers' projects, that our clients have learned to expect from us now. By May, 2001

we plan to have one of these teams fully functional.

The following table shows how we plan on making the above a reality.

Table: Personnel

Personnel Plan

Year 1 Year 2 Year 3

Production PersonnelBrandon/Web Developer $3,400 $25,000 $60,000

Keith/Hired in Oct $16,228 $23,000 $27,000

Developer #2/Hired in Feb $10,944 $21,000 $25,000

Developer #3/Hired in Apr $7,920 $21,000 $25,000

Other $0 $0 $0

Subtotal $38,492 $90,000 $137,000

Sales and Marketing Personnel

Dave/Marketing $3,400 $25,000 $60,000

Sales Position #1/Hired in Oct $16,504 $23,000 $25,000Sales Position #2/Hired in Feb $10,096 $21,000 $23,000

Other $0 $0 $0

Subtotal $30,000 $69,000 $108,000


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Ibrio, Inc.

7.0 Financial Plan

Ibrio's financials summarize the following areas:

Important Assumptions. Key Financial Indicators. Break-even Analysis. Projected Profit and Loss.

Projected Cash Flow. Projected Balance Sheet. Business Ratios.

7.1 Important Assumptions

Our financial assumptions are based on a steady economy and standard numbers for a business

in our industry.

Table: General Assumptions

General Assumptions


Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 13.00% 13.00% 13.00%

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0


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Ibrio, Inc.


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Ibrio, Inc.

7.3 Break-even Analysis

The following table and chart summarize our break-even analysis. With two developers and two

salesmen we plan on developing eight sites in November and once the two new hires are fullytrained doubling the number to 16 sites a month. (We don't plan on that happening until March2001).

The average variable cost is an aggregate measure for all the types of services which will be

offered.


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Ibrio, Inc.

7.4 Projected Profit and Loss

Our projected profit and loss is shown on the following table. Some highlights are the Gross

Margin at 67% for our first year and steadily increasing. Our Net Profit/Sales starting at 26% andincreasing by approximately 10% the following two years to reach 45% by our third year.


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Ibrio, Inc.


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Ibrio, Inc.

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $164,520 $514,900 $1,194,500

Direct Cost of Sales $15,550 $50,000 $127,600

Production Payroll $38,492 $90,000 $137,000

Other $0 $0 $0

Total Cost of Sales $54,042 $140,000 $264,600

Gross Margin $110,478 $374,900 $929,900Gross Margin % 67.15% 72.81% 77.85%

Operating Expenses

Sales and Marketing Expenses

Sales and Marketing Payroll $30,000 $69,000 $108,000

Advertising/Promotion $2,790 $3,500 $10,000

Travel $1,020 $3,000 $7,000

Miscellaneous $0 $1,000 $2,500

T otal Sales and Marketing Expenses $33,810 $76,500 $127,500

Sales and Marketing % 20.55% 14.86% 10.67%

General and Administrative Expenses

General and Administrative Payroll $0 $0 $0

Sales and Marketing and Other Expenses $0 $0 $0

Depreciation $3,180 $5,000 $12,000

Rent $4,500 $12,000 $24,000

Depreciation $0 $2,000 $4,000

Leased Equipment $0 $0 $0

Util ities $805 $2,000 $5,000Insurance $0 $2,500 $5,000

Payroll Taxes $8,219 $19,080 $29,400

Other General and Admini strative $0 $0 $0


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Ibrio, Inc.

7.5 Projected Cash Flow

Cash flow projections for the first half of the year are slightly declining and in May they begin

to raise sufficiently. We may need to borrow against our accounts receivables but are projectingthat the initial capital raised should cover us until our cash becomes fluid.


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Ibrio, Inc.

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $54,292 $169,917 $394,185

Cash from Receivables $70,969 $261,372 $638,141

Subtotal Cash from Operations $125,260 $431,289 $1,032,326

Addit ional Cash Received

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

New Current Borrowing $0 $0 $0

New Other Liabil ities (interest-free) $0 $0 $0

New Long-term Liabil ities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

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

New Investment Received $10,700 $0 $0

Subtotal Cash Received $135,960 $431,289 $1,032,326

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $68,492 $159,000 $245,000

Bill Payments $40,764 $156,598 $379,881

Subtotal Spent on Operations $109,256 $315,598 $624,881

Addit ional Cash Spen t

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

Principal Repayment of Current Borrowing $0 $0 $0Other Liabil ities Principal Repayment $0 $0 $0

Long-term Liabili ties Principal Repayment $0 $4,589 $5,222

Purchase Other Current Assets $0 $0 $0


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Ibrio, Inc.

7.6 Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth,

and a suff iciently healthy financial position. The monthly est imates are included in the appendix.

Table: Balance Sheet

Pro Forma Bal ance SheetYear 1 Year 2 Year 3

Assets

Current Assets

Cash $43,704 $134,806 $517,029

Accounts Receivabl e $39 ,260 $122,871 $285,045

Other Current Assets $7,650 $7,650 $7,650

Total Current Assets $90,614 $265,327 $809,724

Long-term AssetsLong-term Assets $0 $20,000 $40,000

Accumulated Deprecia tion $3,180 $8,180 $20,180

Total Long-term Assets ($3,180) $11,820 $19,820

Total Assets $87,434 $277,147 $829,544

Liabil ities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payab le $9,050 $13 ,213 $32,836

Current Borrowing $0 $0 $0Other Current Liabili ties $0 $0 $0

Subtotal Current Liabil ities $9,050 $13,213 $32,836

L t Li bi li ti $20 000 $15 411 $10 189


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Ibrio, Inc.

7.7 Business Ratios

The following table shows the projected businesses ratios. We expect to maintain healthy

ratios for profitability, risk, and return. The Industry Profile ratios, shown for comparison, arebased on Standard Industrial Classification (SIC) code 7375, Information Retrieval Services.


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Ibrio, Inc.

Table: RatiosRatio Anal ysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth n.a. 212.97% 131.99% 9.70%

Percent of Total Assets

Accounts Receivabl e 44.90% 44.33% 34.3 6% 25.00%

Other Current Assets 8.75% 2.76% 0.92% 46.30%

Total Current Assets 103.64% 95.74% 97.61% 76.60%

Long-term Assets -3.64% 4.26% 2.39% 23.40%Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabil i ties 10.35% 4.77% 3.96% 49.40%

Long-term Liabili ties 22.87% 5.56% 1.23% 21.20%

Total Liabili ties 33.23% 10.33% 5.19% 70.60%

Net Worth 66.77% 89.67% 94.81% 29.40%

Percent of Sal es

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 67.15% 72.81% 77.85% 0.00%Selling, General & Administrative Expenses 41.00% 35.88% 32.56% 78.10%

Advertising Expenses 1.70% 0.68% 0.84% 0.90%

Profit Before Interest and Taxes 36.45% 49.68% 60.53% 1.90%

Main Ratios

Current 10.01 20.08 24.66 1.57

Quick 10.01 20.08 24.66 1.19

Total Debt to Total Assets 33.23% 10.33% 5.19% 70.60%

Pre-tax Return on Net Worth 98.25% 102.01% 91.71% 4.10%

Pre-tax Return on Assets 65.61% 91.47% 86.96% 13.80%

Addit ional Ratios Year 1 Year 2 Year 3

Net Profit Margin 26.16% 36.93% 45.04% n.a


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Appendix

Page 1

Table: Sales Forecast

Sales Forecast

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

Sales

Website Development 0% $0 $0 $4,800 $5,400 $7,200 $8,400 $8,400 $11,200 $14,000 $19,200 $19,200 $19,200

Result-based Marketing 0% $0 $0 $0 $0 $0 $0 $1,750 $2,100 $2,800 $3,500 $4,200 $4,900

Maintenance 0% $0 $0 $110 $280 $510 $750 $1,010 $1,350 $1,790 $2,290 $2,810 $3,330

Hosting 0% $0 $0 $200 $300 $540 $780 $1,020 $1,340 $1,740 $2,200 $2,700 $3,220

Total Sales $0 $0 $5,110 $5,980 $8,250 $9,930 $12,180 $15,990 $20,330 $27,190 $28,910 $30,650

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

Website Development $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Result-based Marketing $0 $0 $0 $0 $0 $0 $900 $1,080 $1,440 $1,800 $2,160 $2,520

Maintenance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Hosting $0 $0 $350 $350 $350 $350 $350 $1,100 $700 $700 $700 $700

Subtotal Direct Cost of Sales $0 $0 $350 $350 $350 $350 $1,250 $2,180 $2,140 $2,500 $2,860 $3,220


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Appendix

Page 2

Table: Personnel

Personnel Plan

Mon th 1 Mo nth 2 Mo nth 3 Month 4 Month 5 Mon th 6 Mon th 7 Mon th 8 Mon th 9 Month 10 Month 11 Month 12

Production Personnel

Brandon/Web Developer $0 $200 $200 $200 $300 $300 $300 $300 $400 $400 $400 $400

Keith/Hired in Oct $0 $0 $1,836 $1,152 $1,584 $1,440 $1,584 $1,512 $1,840 $1,680 $1,760 $1,840

Developer #2/Hired in Feb $0 $0 $0 $0 $0 $1,440 $1,584 $1,512 $1,656 $1,512 $1,584 $1,656

Developer #3/Hired in Apr $0 $0 $0 $0 $0 $0 $0 $1,512 $1,656 $1,512 $1,584 $1,656

Other $0 $ 0 $0 $ 0 $0 $ 0 $0 $ 0 $0 $0 $0 $0

Subtotal $0 $200 $2,036 $1,352 $1,884 $3,180 $3,468 $4,836 $5,552 $5,104 $5,328 $5,552

Sales and Marketing Personnel

Dave/Marketing $0 $200 $200 $200 $300 $300 $300 $300 $400 $400 $400 $400

Sales Position #1/Hired in Oct $0 $0 $1,904 $1,080 $1,440 $1,680 $1,680 $1,680 $1,760 $1,760 $1,760 $1,760

Sales Position #2/Hired in Feb $0 $0 $0 $0 $0 $1,120 $1,232 $1,176 $1,288 $1,760 $1,760 $1,760

Other $0 $ 0 $0 $ 0 $0 $ 0 $0 $ 0 $0 $0 $0 $0

Subtotal $0 $200 $2,104 $1,280 $1,740 $3,100 $3,212 $3,156 $3,448 $3,920 $3,920 $3,920

General and Administrative Personnel

N/A $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

N/A $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Personnel

N/A $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

N/A $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total People 0 2 4 4 4 6 6 7 7 7 7 7

Total Payroll $0 $400 $4,140 $2,632 $3,624 $6,280 $6,680 $7,992 $9,000 $9,024 $9,248 $9,472


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Appendix

Page 3

Table: General Assumptions

General Assumptions


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

Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Long-term Interest Rate 13.00% 13.00% 13.00% 13.00% 13.00% 13.00% 13.00% 13.00% 13.00% 13.00% 13.00% 13.00%

Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%

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


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Appendix

Page 4

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $0 $0 $5,110 $5,980 $8,250 $9,930 $ 12,180 $15,990 $20,330 $27,190 $28,910 $30,650

Direct Cost of Sales $0 $0 $350 $350 $350 $350 $1,250 $2,180 $2,140 $2,500 $2,860 $3,220

Production Payroll $0 $200 $2,036 $1,352 $1,884 $3,180 $3,468 $4,836 $5,552 $5,104 $5,328 $5,552

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $0 $200 $2,386 $1,702 $2,234 $3,530 $4,718 $7,016 $7,692 $7,604 $8,188 $8,772

Gross Margin $0 ($200) $2,724 $4,278 $6,016 $6,400 $7,462 $8,974 $12,638 $19,586 $20,722 $21,878

Gross Margin % 0.00% 0.00% 53.31% 71.54% 72.92% 64.45% 61.26% 56.12% 62.16% 72.03% 71.68% 71.38%

Operating Expenses

Sales and Marketing Expenses

Sales and Marketing Payroll $0 $200 $2,104 $1,280 $1,740 $3,100 $3,212 $3,156 $3,448 $3,920 $3,920 $3,920

Advertising/Promotion $0 $0 $230 $230 $230 $300 $300 $300 $300 $300 $300 $300

Travel $0 $0 $60 $60 $60 $120 $120 $120 $120 $120 $120 $120

Miscellaneous $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Sales and Marketing

Expenses

$0 $200 $2,394 $1,570 $2,030 $3,520 $3,632 $3,576 $3,868 $4,340 $4,340 $4,340

Sales and Marketing % 0.00% 0.00% 46.85% 26.25% 24.61% 35.45% 29.82% 22.36% 19.03% 15.96% 15.01% 14.16%

General and Administrative Expenses

General and Administrative Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales and Marketing and Other

Expenses

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

Depreciation $0 $0 $300 $300 $300 $300 $330 $330 $330 $330 $330 $330

Rent $0 $0 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Utilities $0 $0 $55 $70 $70 $80 $80 $90 $90 $90 $90 $90

Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Payroll Taxes 12% $0 $48 $497 $316 $435 $754 $802 $959 $1,080 $1,083 $1,110 $1,137

Other General and Administrative

Expenses

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

Total General and Administrative

Expenses

$0 $48 $1,302 $1,136 $1,255 $1,584 $1,662 $1,829 $1,950 $1,953 $1,980 $2,007

General and Administrative % 0.00% 0.00% 25.48% 18.99% 15.21% 15.95% 13.64% 11.44% 9.59% 7.18% 6.85% 6.55%

Other Expenses:


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Appendix

Page 5

Other Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Consultants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Contract/Consultants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Other Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Total Operating Expenses $0 $248 $3,696 $2,706 $3,285 $5,104 $5,294 $5,405 $5,818 $6,293 $6,320 $6,347

Profit Before Interest and Taxes $0 ($448) ($972) $1,572 $2,731 $1,296 $2,168 $3,569 $6,820 $13,293 $14,402 $15,531

EBITDA $0 ($448) ($672) $1,872 $3,031 $1,596 $2,498 $3,899 $7,150 $ 13,623 $ 14,732 $ 15,861

Interest Expense $217 $217 $217 $217 $217 $217 $217 $217 $217 $217 $217 $217

Taxes Incurred ($65) ($166) ($297) $339 $629 $270 $488 $838 $1,651 $3,269 $3,546 $3,829

Net Profit ($152) ($499) ($891) $1,017 $1,886 $810 $1,464 $2,514 $4,953 $9,807 $10,639 $11,486

Net Profit/Sales 0.00% 0.00% -17.44% 17.00% 22.86% 8.16% 12.02% 15.72% 24.36% 36.07% 36.80% 37.47%


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Appendix

Page 6

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $0 $0 $1,686 $1,973 $2,723 $3,277 $4,019 $5,277 $6,709 $8,973 $9,540 $10,115

Cash from Receivables $0 $0 $0 $114 $3,443 $4,057 $5,565 $6,703 $8,246 $10,810 $13,774 $18,256

Subtotal Cash from Operations $0 $0 $1,686 $2,088 $6,166 $7,334 $9,584 $11,980 $14,955 $19,783 $23,315 $28,370

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

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

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

Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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

New Investment Received $0 $0 $0 $0 $0 $0 $10,700 $0 $0 $0 $0 $0

Subtotal Cash Received $0 $0 $1,686 $2,088 $6,166 $7,334 $20,284 $11,980 $14,955 $19,783 $23,315 $28,370

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 $0 $400 $4,140 $2,632 $3,624 $6,280 $6,680 $7,992 $9,000 $9,024 $9,248 $9,472

Bill Payments $5 $150 $147 $1,577 $2,045 $2,443 $2,579 $3,754 $5,184 $6,114 $8,051 $8,715

Subtotal Spent on Operations $5 $550 $4,287 $4,209 $5,669 $8,723 $9,259 $11,746 $14,184 $15,138 $17,299 $18,187

Additional Cash Spent

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

Principal Repayment of 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 $5 $550 $4,287 $4,209 $5,669 $8,723 $9,259 $11,746 $14,184 $15,138 $17,299 $18,187

Net Cash Flow ($5) ($550) ( $2,601) ( $2,121) $497 ($1,389) $11,025 $234 $771 $4,645 $6,016 $10,183

Cash Balance $16,995 $16,445 $13,844 $11,723 $12,219 $10,830 $21,855 $22,089 $22,860 $27,505 $33,521 $43,704


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Appendix

Page 7

Table: Balance Sheet

Pro Forma Balance Sheet

Mon th 1 Mo nth 2 Mo nth 3 Month 4 Month 5 Mon th 6 Mon th 7 Mon th 8 Mon th 9 Month 10 Month 11 Month 12

Assets Starting Balances

Curren t Assets

Cash $17,000 $16,995 $16,445 $13,844 $11,723 $12,219 $10,830 $21,855 $22,089 $22,860 $27,505 $33,521 $43,704

Accounts Receivable $0 $0 $0 $3,424 $7,316 $9,401 $11,996 $14,592 $18,602 $23,977 $31,384 $36,980 $39,260

Other Current Assets $7,650 $7,650 $7,650 $7,650 $7,650 $7,650 $7,650 $7,650 $7,650 $7,650 $7,650 $7,650 $7,650

Total Current Assets $24,650 $24,645 $24,095 $24,918 $26,689 $29,270 $30,476 $44,097 $48,341 $54,487 $66,540 $78,151 $90,614

Long -term Assets

Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Accumulated Depr eciation $0 $0 $0 $300 $600 $900 $1,200 $1,530 $1,860 $2,190 $2,520 $2,850 $3,180

Total Long-term Assets $0 $0 $0 ($300) ($600) ($900) ($1,200) ($1,530) ($1,860) ($2,190) ($2,520) ($2,850) ($3,180)

Total Assets $24,650 $24,645 $24,095 $24,618 $26,089 $28,370 $29,276 $42,567 $46,481 $52,297 $64,020 $75,301 $87,434

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

Current Liabilities

Accounts Payable $0 $147 $95 $1,509 $1,964 $2,359 $2,456 $3,583 $4,982 $5,846 $7,761 $8,403 $9,050

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 $0 $147 $95 $1,509 $1,964 $2,359 $2,456 $3,583 $4,982 $5,846 $7,761 $8,403 $9,050

Long-term Liabilities $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

Total Liabilities $20,000 $20,147 $20,095 $21,509 $21,964 $22,359 $22,456 $23,583 $24,982 $25,846 $27,761 $28,403 $29,050

Paid-in Capital $7,300 $7,300 $7,300 $7,300 $7,300 $7,300 $7,300 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000

Retained Earnings ($2,650) ($2,650) ($2,650) ($2,650) ($2,650) ($2,650) ($2,650) ($2,650) ($2,650) ($2,650) ($2,650) ($2,650) ($2,650)

Earnings $0 ($152) ($650) ($1,542) ($525) $1,361 $2,171 $3,635 $6,149 $ 11,101 $ 20,909 $ 31,548 $ 43,034

Total Capital $4,650 $4,498 $4,000 $3,108 $4,125 $6,011 $6,821 $18,985 $21,499 $26,451 $36,259 $46,898 $58,384

Total Liabilities and Capital $24,650 $24,645 $24,095 $24,618 $26,089 $28,370 $29,276 $42,567 $46,481 $52,297 $64,020 $75,301 $87,434

Net Worth $4,650 $4,498 $4,000 $3,108 $4,125 $6,011 $6,821 $18,985 $21,499 $26,451 $36,259 $46,898 $58,384

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