Video Production Business Plan

Michael's Video Service

Executive Summary

Michael's Video Service uses the latest technology to provide video production services. This means that the services provided achieve a level of quality previously reserved for only the most expensive video production companies. 

Michael's Video Service is a new company and as such, we will need to meet market acceptance. To that end, the company is working to determine trends in the industry, the needs of the customer, and how best to address the needs of the customer.   

Our services are geared for several markets, including television stations, companies, high schools, and families. We will initially target high schools with whom we can establish strategic alliances that will enable us to establish long term relationships with them. In our first year of operation, we believe we can capture 15 to 25% of the market, which translates into $100,000 - $130,000 in sales.

We believe that we can earn $149,000 in our first year, rising to $175,000 and $191,000 in our second and third years, respectively. Our market strategy will be to advertise and capitalize on the services that our competitors do not offer.

There are several companies with whom we will be competing. We have a competitive advantage, however, because our equipment is more aligned with the video production industry trends requiring digital technology, as opposed to analog devices.  

The company is seeking a loan in the amount of $300,000 which will be used to purchase the equipment and start-up expenses. The company's revenue projections for the first three years are $149,000, $175,000, and $191,000, respectively. Michael's Video Service expects to achieve profitability early on. 

 

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Company Summary

Legal Business Description

Michael's Video Service was founded in May 1996 by Mr. Michael Morrison. Michael's Video Service is a Limited Liability Company (LLC) with principal offices located in Denton, Ohio. 

Start-up Funding

Start-up Expenses to Fund

$15,000

Start-up Assets to Fund

$302,000

Total Funding Required

$317,000

Assets

Non-cash Assets from Start-up

$242,000

Cash Requirements from Start-up

$60,000

Additional Cash Raised

$0

Cash Balance on Starting Date

$60,000

Total Assets

$302,000

Liabilities and Capital

Liabilities

Current Borrowing

$0

Long-term Liabilities

$300,000

Accounts Payable (Outstanding Bills)

$0

Other Current Liabilities (interest-free)

$0

Total Liabilities

$300,000

Capital

Planned Investment

Michael Morisson

$17,000

Other

$0

Additional Investment Requirement

$0

Total Planned Investment

$17,000

Loss at Start-up (Start-up Expenses)

($15,000)

Total Capital

$2,000

Total Capital and Liabilities

$302,000

Total Funding

$317,000

 2.1 Mission

Our mission is to become the leading freelance and video production company in state, utilizing the latest technology to shift market share from competitors to Michael's Video Service. 

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Start-up

Requirements

Start-up Expenses

Legal

$500

Stationery etc.

$200

Brochures

$300

Consultants

$1,000

Insurance

$1,200

Rent

$600

Expensed equipment

$10,000

Other

$1,200

Total Start-up Expenses

$15,000

Start-up Assets

Cash Required

$60,000

Start-up Inventory

$2,000

Other Current Assets

$0

Long-term Assets

$240,000

Total Assets

$302,000

Total Requirements

$317,000

Services

Michael's Video Service is in business to cover events and special occasions on a freelance basis. What we will be providing is an alternative solution for video companies or out of town television stations. Instead of them sending a crew or taking time out of their busy schedules, they can hire us to do the filming for them. This gives them the opportunity to focus on their core competencies. 

We will attend any and every event that we will have to cover for our customer. Using our experience, we will find a strategic location from which we will film. Once the filming is complete, we will then deliver the tape to the customer.

Michael's Video Service will contract video services to its target markets. Services are not only limited to the Denton, we are able to travel around the country. Our main goal is to contract our services to anyone who may need an event video taped.

3.1 Service Description

The operation begins with the customer contacting Michael's Video Service with the intent of using our services. All the details of the event are gathered and all the relevant information pertaining the specific requirements, as well as the delivery of the tape. Thereafter, we attend the event and proceed to do the filming. Once the filming is completed, the next step is to deliver the tape to the customer.

3.2 Technology

Background

Analog is the old technology and digital is the new. Analog communication systems involve the amplitude modulation of a radio signal. In other words, they transmit and receive information through a continuous flow of electromagnetic signals. An inherent weakness of the technology is that analog signals weaken over distances and require additional equipment to boost them as they travel.

Digital cameras are the future of television broadcasting as well as the future of consumer camcorders. The FCC has mandated that all television stations must transmit a digital signal to the homes of its viewers by 2002.

In keeping up with the trends in the industry, we plan to purchase the latest digital equipment on the market. We plan to use the following equipment:

Strategy and Implementation

We plan to initially market our products and services as an alternative solution for television networks and video companies.  These markets were selected because of their size, trends in technology, our experience with video production, our industry contacts, and an overall belief that they are most appropriate to initially target.

We aim to rapidly develop alliances with the major high schools to enable us to gain credibility as the best video production company. Our market strategy will be to advertise and capitalize on the products and services that our competitors do not have. 

4.1 Market Analysis Summary

We expect to compete as a freelance video production company in the broadcasting industry. Companies in the industry are involved in the creation and delivery of various types of programming to consumers. Much of that programming is recorded on film, tape, or disk, so that it can be seen or heard repeatedly by both new audiences and those that are familiar with it. Many of the events that are broadcast live are likely to be recorded, with some or all of such events to be rebroadcast at future times.

Within this national market, Michael's Video Service will initially focus on supplying its services to the high school market market. We intend to be the only freelance video company in the city and state to offer our services to companies of any size. Our goal is to be on the freelance list for all the major television networks for news and sports coverage in the southeast region of the United States.

4.1.1 Market Segmentation

Our customer is defined as any individual or organization that has need for one of the services we provide. Our target customers are as follows.

  1. Television stations
  2. Video production companies
  3. Movie directors and producers  
  4. High schools
  5. Future brides and grooms 
  6. Families

 

Market Analysis

Year 1

Year 2

Year 3

Year 4

Year 5

Potential Customers

Growth

CAGR

TV stations

5%

600

630

662

695

730

5.03%

Video production companies

10%

150

165

182

200

220

10.05%

Movie directors and producers

10%

500

550

605

666

733

10.04%

High schools

5%

160

168

176

185

194

4.94%

Future brides and grooms

20%

900

1,080

1,296

1,555

1,866

20.00%

Families

15%

260

299

344

396

455

15.02%

Total

13.05%

2,570

2,892

3,265

3,697

4,198

13.05%

4.1.2 Competition and Buying Patterns

Customers are expected to use our services based on traditional factors:

 

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4.1.3 Distribution Strategy

We plan to market our services through diverse channels including the radio, print advertising, and television. These channels are most appropriate initially because we are seeking to gain recognition in the industry. Another element of distribution is our plan to work with established video production companies. This will provide access to their distribution channels and reduce our marketing costs.

4.1.4 Service Business Analysis

The major companies that compete in the market are:

  1. Synergy Productions
  2. Local Television Stations
  3. Video Production, Inc.
  4. Gene's Video Productions
  5. Denton Video Service
  6. VIP Productions

All of our competitors specialize in one aspect of video production. We are a diversified company and we believe that there will be no down period for us. We are not seasonal based, our services are offered throughout the year. With our diversity, we will be able to attract the larger organizations that like to entrust one company to handle all of their affairs.

4.1.4.1 Possible Barriers to Entry

Michael's Video Service will benefit from several significant barriers to entry which include:

  1. Equipment
  2. Strategic Alliances
  3. Experience in the field

4.1.5 Strategic Alliances

The company plans to form strategic alliances with clients who require a freelancer to cover various events for them. Michael's Video Service will also develop strategic alliances with video production companies and work with them as a sub-contractor. 

4.1.6 Value Proposition

By using Michael's Video Service to cover various events for them, companies will be able to save time. They can then use this time saved to focus on their core competencies and the things that they do best. We are in business to provide a service that is second to none. As such, we guarantee that our customers will receive first class service and a final product that is well worth the money invested. To that end, we guarantee a full refund in the event that a customer is not satisfied. At Michael's Video Service, we take pride in our work and it is our aim to be the best at what we do. We will conduct our business in a professional manner from our methods and character to our standards and ethics.

4.2 Sales Forecast

The following table and chart show our planned sales.

 

Sales Forecast

Year 1

Year 2

Year 3

Sales

Video services

$149,000

$175,000

$191,000

Other

$0

$0

$0

Total Sales

$149,000

$175,000

$191,000

Direct Cost of Sales

Year 1

Year 2

Year 3

Video services

$4,800

$5,700

$6,600

Other

$0

$0

$0

Subtotal Direct Cost of Sales

$4,800

$5,700

$6,600

4.2.1 Channels

Sales, Distribution, and Marketing Channels

In marketing our products and services, we will rely on a combination of the following channels:

Alliances with video companies that have industry credibility, presence, and distribution are key to our strategy. In monitoring our services and market position, we will rely on feedback from customers with whom we have relationships. This will be done through direct sales. The message associated with our products and services is high quality for less money. Our promotional plan is diverse and will include a range of marketing communications.

4.2.2 Pricing Strategy

We plan to set our pricing based on market value. Our actual price will be based on whether our services are required on a daily or an hourly basis. It is anticipated that we will charge $300 per hour and $1,000 per day. For out of town travel, additional charges will be added for expenses.

 

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Management Summary

The company's management philosophy will be based on responsibility and mutual respect. Michael Video Services will maintain an environment and structure that will encourage productivity and respect for customers and fellow employees. Additionally, the environment will encourage employees to have fun by allowing creative independence and providing challenges that are realistic and rewarding.

Michael's Video Service's management team is highly experienced and qualified. The management team is lead by Mr. Michael Morisson.

 

Personnel Plan

Year 1

Year 2

Year 3

Michael Morisson

$30,000

$32,000

$34,000

Other

$18,000

$30,000

$32,000

Total People

2

3

3

Total Payroll

$48,000

$62,000

$66,000

Financial Plan

We are requesting a loan of $300,000. The funds will be used to purchase video equipment and to cover initial operating expenses. 

Payback Strategy

Our repayment for this loan will come from cash in excess of profits, paid monthly. The increase in profits generated by business from television stations will provide funds to repay the loan in 10 years.

6.1 Important Assumptions

The table below highlights some assumptions that are key to the success of the company.

 

General Assumptions

Year 1

Year 2

Year 3

Plan Month

1

2

3

Current Interest Rate

10.00%

10.00%

10.00%

Long-term Interest Rate

10.00%

10.00%

10.00%

Tax Rate

25.42%

25.00%

25.42%

Other

0

0

0

 

6.2 Break-even Analysis

For our Break-even Analysis, we assume running costs of approximately $9,000 per month, which includes gas, phone, and an estimation of other running costs. Variable costs mostly include video tapes. The chart and table below show our break-even point.

 

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Break-even Analysis

Monthly Revenue Break-even

$9,351

Assumptions:

Average Percent Variable Cost

3%

Estimated Monthly Fixed Cost

$9,050

6.3 Projected Profit and Loss

The table below provides the projected income statements for Michael's Video Service. The company is basing its revenue projections on anticipated sales of services, initially to the television networks and video companies, then to other markets such as high school events and weddings.

 

Описание: http://www.bplans.com/video_production_business_plan/images/66140b6bf2284f32bceef0f91104f501.png

 

Описание: http://www.bplans.com/video_production_business_plan/images/4a8e604b8937476399763b3103bd526c.png

 

Описание: http://www.bplans.com/video_production_business_plan/images/c0ff7cb2ef794dff92ae1c236bf7a900.png

Описание: http://www.bplans.com/video_production_business_plan/images/6d59d7b13a224bbd98b7d83db951a703.png

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales

$149,000

$175,000

$191,000

Direct Cost of Sales

$4,800

$5,700

$6,600

Other

$0

$0

$0

Total Cost of Sales

$4,800

$5,700

$6,600

Gross Margin

$144,200

$169,300

$184,400

Gross Margin %

96.78%

96.74%

96.54%

Expenses

Payroll

$48,000

$62,000

$66,000

Sales and Marketing and Other Expenses

$18,600

$21,400

$24,600

Depreciation

$24,000

$24,000

$24,000

Gas

$4,800

$5,700

$6,600

Utilities & phone

$2,400

$3,000

$3,600

Rent

$3,600

$3,600

$3,600

Payroll Taxes

$7,200

$9,300

$9,900

Other

$0

$0

$0

Total Operating Expenses

$108,600

$129,000

$138,300

Profit Before Interest and Taxes

$35,600

$40,300

$46,100

EBITDA

$59,600

$64,300

$70,100

Interest Expense

$30,000

$28,984

$26,844

Taxes Incurred

$1,065

$2,829

$4,894

Net Profit

$4,535

$8,487

$14,362

Net Profit/Sales

3.04%

4.85%

7.52%

6.4 Financial Risks and Contingencies

The company recognizes that it is subject to both market and industry risks. We believe our risks are as follows, and we are addressing each as indicated. We face all the risks associated with being a start-up company. We feel that we can overcome these with our experience in the industry and by quickly establishing desired relationships. The economy in south Ohio is based on the oil and gas industry, which is very unstable. Having seen the oil bust in the 1980's and its effects on the economy, we have diversified our efforts and will be going after markets that will not be affected by fluctuations in the oil and gas industry.

6.5 Projected Cash Flow

The following chart and table present the cash flow assumptions for the company.

 

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Pro Forma Cash Flow

Year 1

Year 2

Year 3

Cash Received

Cash from Operations

Cash Sales

$37,250

$43,750

$47,750

Cash from Receivables

$90,375

$127,520

$140,955

Subtotal Cash from Operations

$127,625

$171,270

$188,705

Additional Cash Received

Sales Tax, VAT, HST/GST Received

$0

$0

$0

New Current Borrowing

$0

$0

$0

New Other Liabilities (interest-free)

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

New Investment Received

$0

$0

$0

Subtotal Cash Received

$127,625

$171,270

$188,705

Expenditures

Year 1

Year 2

Year 3

Expenditures from Operations

Cash Spending

$48,000

$62,000

$66,000

Bill Payments

$64,802

$80,965

$86,360

Subtotal Spent on Operations

$112,802

$142,965

$152,360

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

Principal Repayment of Current Borrowing

$0

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

Long-term Liabilities Principal Repayment

$0

$20,330

$22,458

Purchase Other Current Assets

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

Dividends

$0

$0

$0

Subtotal Cash Spent

$112,802

$163,295

$174,818

Net Cash Flow

$14,823

$7,975

$13,887

Cash Balance

$74,823

$82,798

$96,685

6.6 Projected Balance Sheet

Projected balance sheets are provided below.

 

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

Assets

Current Assets

Cash

$74,823

$82,798

$96,685

Accounts Receivable

$21,375

$25,105

$27,400

Inventory

$1,200

$1,425

$1,650

Other Current Assets

$0

$0

$0

Total Current Assets

$97,398

$109,328

$125,736

Long-term Assets

Long-term Assets

$240,000

$240,000

$240,000

Accumulated Depreciation

$24,000

$48,000

$72,000

Total Long-term Assets

$216,000

$192,000

$168,000

Total Assets

$313,398

$301,328

$293,736

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities

Accounts Payable

$6,863

$6,636

$7,139

Current Borrowing

$0

$0

$0

Other Current Liabilities

$0

$0

$0

Subtotal Current Liabilities

$6,863

$6,636

$7,139

Long-term Liabilities

$300,000

$279,670

$257,212

Total Liabilities

$306,863

$286,306

$264,351

Paid-in Capital

$17,000

$17,000

$17,000

Retained Earnings

($15,000)

($10,465)

($1,978)

Earnings

$4,535

$8,487

$14,362

Total Capital

$6,535

$15,022

$29,384

Total Liabilities and Capital

$313,398

$301,328

$293,736

Net Worth

$6,535

$15,022

$29,384

6.7 Business Ratios

The following table presents important business ratios from the motion picture production industry, as determined by the Standard Industry Classification (SIC) Index code 7812, Motion Picture and Video Production.

 

Ratio Analysis

Year 1

Year 2

Year 3

Industry Profile

Sales Growth

0.00%

17.45%

9.14%

0.00%

Percent of Total Assets

Accounts Receivable

6.82%

8.33%

9.33%

0.00%

Inventory

0.38%

0.47%

0.56%

0.00%

Other Current Assets

0.00%

0.00%

0.00%

100.00%

Total Current Assets

31.08%

36.28%

42.81%

100.00%

Long-term Assets

68.92%

63.72%

57.19%

0.00%

Total Assets

100.00%

100.00%

100.00%

100.00%

Current Liabilities

2.19%

2.20%

2.43%

0.00%

Long-term Liabilities

95.72%

92.81%

87.57%

0.00%

Total Liabilities

97.91%

95.01%

90.00%

0.00%

Net Worth

2.09%

4.99%

10.00%

100.00%

Percent of Sales

Sales

100.00%

100.00%

100.00%

100.00%

Gross Margin

96.78%

96.74%

96.54%

0.00%

Selling, General & Administrative Expenses

93.96%

91.89%

88.98%

0.00%

Advertising Expenses

4.03%

4.00%

4.19%

0.00%

Profit Before Interest and Taxes

23.89%

23.03%

24.14%

0.00%

Main Ratios

Current

14.19

16.48

17.61

0.00

Quick

14.02

16.26

17.38

0.00

Total Debt to Total Assets

97.91%

95.01%

90.00%

0.00%

Pre-tax Return on Net Worth

85.69%

75.33%

65.53%

0.00%

Pre-tax Return on Assets

1.79%

3.76%

6.56%

0.00%

Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

3.04%

4.85%

7.52%

n.a

Return on Equity

69.40%

56.50%

48.88%

n.a

Activity Ratios

Accounts Receivable Turnover

5.23

5.23

5.23

n.a

Collection Days

57

65

67

n.a

Inventory Turnover

4.50

4.34

4.29

n.a

Accounts Payable Turnover

10.44

12.17

12.17

n.a

Payment Days

27

31

29

n.a

Total Asset Turnover

0.48

0.58

0.65

n.a

Debt Ratios

Debt to Net Worth

46.96

19.06

9.00

n.a

Current Liab. to Liab.

0.02

0.02

0.03

n.a

Liquidity Ratios

Net Working Capital

$90,535

$102,692

$118,596

n.a

Interest Coverage

1.19

1.39

1.72

n.a

Additional Ratios

Assets to Sales

2.10

1.72

1.54

n.a

Current Debt/Total Assets

2%

2%

2%

n.a

Acid Test

10.90

12.48

13.54

n.a

Sales/Net Worth

22.80

11.65

6.50

n.a

Dividend Payout

0.00

0.00

0.00

n.a

Appendix

 

Sales Forecast

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales

Video services

0%

$5,000

$7,000

$12,000

$13,000

$13,000

$13,000

$14,000

$14,000

$14,000

$15,000

$15,000

$14,000

Other

0%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Sales

$5,000

$7,000

$12,000

$13,000

$13,000

$13,000

$14,000

$14,000

$14,000

$15,000

$15,000

$14,000

Direct Cost of Sales

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Video services

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Direct Cost of Sales

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

 

Personnel Plan

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Michael Morisson

0%

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

Other

0%

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

Total People

2

2

2

2

2

2

2

2

2

2

2

2

Total Payroll

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

 

General Assumptions

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Plan Month

1

2

3

4

5

6

7

8

9

10

11

12

Current Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Long-term Interest 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

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

 

Pro Forma Profit and Loss

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

$5,000

$7,000

$12,000

$13,000

$13,000

$13,000

$14,000

$14,000

$14,000

$15,000

$15,000

$14,000

Direct Cost of Sales

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Cost of Sales

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

Gross Margin

$4,600

$6,600

$11,600

$12,600

$12,600

$12,600

$13,600

$13,600

$13,600

$14,600

$14,600

$13,600

Gross Margin %

92.00%

94.29%

96.67%

96.92%

96.92%

96.92%

97.14%

97.14%

97.14%

97.33%

97.33%

97.14%

Expenses

Payroll

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

Sales and Marketing and Other Expenses

$1,300

$1,300

$1,600

$1,600

$1,600

$1,600

$1,600

$1,600

$1,600

$1,600

$1,600

$1,600

Depreciation

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

Gas

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

Utilities & phone

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

Rent

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

Payroll Taxes

15%

$600

$600

$600

$600

$600

$600

$600

$600

$600

$600

$600

$600

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Operating Expenses

$8,800

$8,800

$9,100

$9,100

$9,100

$9,100

$9,100

$9,100

$9,100

$9,100

$9,100

$9,100

Profit Before Interest and Taxes

($4,200)

($2,200)

$2,500

$3,500

$3,500

$3,500

$4,500

$4,500

$4,500

$5,500

$5,500

$4,500

EBITDA

($2,200)

($200)

$4,500

$5,500

$5,500

$5,500

$6,500

$6,500

$6,500

$7,500

$7,500

$6,500

Interest Expense

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

Taxes Incurred

($2,010)

($1,175)

$0

$250

$250

$250

$500

$500

$500

$750

$750

$500

Net Profit

($4,690)

($3,525)

$0

$750

$750

$750

$1,500

$1,500

$1,500

$2,250

$2,250

$1,500

Net Profit/Sales

-93.80%

-50.36%

0.00%

5.77%

5.77%

5.77%

10.71%

10.71%

10.71%

15.00%

15.00%

10.71%

 

Pro Forma Cash Flow

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash Received

Cash from Operations

Cash Sales

$1,250

$1,750

$3,000

$3,250

$3,250

$3,250

$3,500

$3,500

$3,500

$3,750

$3,750

$3,500

Cash from Receivables

$0

$125

$3,800

$5,375

$9,025

$9,750

$9,750

$9,775

$10,500

$10,500

$10,525

$11,250

Subtotal Cash from Operations

$1,250

$1,875

$6,800

$8,625

$12,275

$13,000

$13,250

$13,275

$14,000

$14,250

$14,275

$14,750

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

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$1,250

$1,875

$6,800

$8,625

$12,275

$13,000

$13,250

$13,275

$14,000

$14,250

$14,275

$14,750

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Expenditures from Operations

Cash Spending

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

Bill Payments

$110

$3,318

$4,174

$5,642

$6,817

$5,850

$5,892

$7,067

$6,133

$7,075

$6,350

$6,375

Subtotal Spent on Operations

$4,110

$7,318

$8,174

$9,642

$10,817

$9,850

$9,892

$11,067

$10,133

$11,075

$10,350

$10,375

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

$4,110

$7,318

$8,174

$9,642

$10,817

$9,850

$9,892

$11,067

$10,133

$11,075

$10,350

$10,375

Net Cash Flow

($2,860)

($5,443)

($1,374)

($1,017)

$1,458

$3,150

$3,358

$2,208

$3,867

$3,175

$3,925

$4,375

Cash Balance

$57,140

$51,698

$50,323

$49,307

$50,765

$53,915

$57,273

$59,482

$63,348

$66,523

$70,448

$74,823

 

Pro Forma Balance Sheet

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Assets

Starting Balances

Current Assets

Cash

$60,000

$57,140

$51,698

$50,323

$49,307

$50,765

$53,915

$57,273

$59,482

$63,348

$66,523

$70,448

$74,823

Accounts Receivable

$0

$3,750

$8,875

$14,075

$18,450

$19,175

$19,175

$19,925

$20,650

$20,650

$21,400

$22,125

$21,375

Inventory

$2,000

$1,600

$1,200

$800

$1,400

$1,000

$600

$1,200

$800

$1,400

$1,000

$600

$1,200

Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Current Assets

$62,000

$62,490

$61,773

$65,198

$69,157

$70,940

$73,690

$78,398

$80,932

$85,398

$88,923

$93,173

$97,398

Long-term Assets

Long-term Assets

$240,000

$240,000

$240,000

$240,000

$240,000

$240,000

$240,000

$240,000

$240,000

$240,000

$240,000

$240,000

$240,000

Accumulated Depreciation

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

$22,000

$24,000

Total Long-term Assets

$240,000

$238,000

$236,000

$234,000

$232,000

$230,000

$228,000

$226,000

$224,000

$222,000

$220,000

$218,000

$216,000

Total Assets

$302,000

$300,490

$297,773

$299,198

$301,157

$300,940

$301,690

$304,398

$304,932

$307,398

$308,923

$311,173

$313,398

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

$3,180

$3,988

$5,413

$6,622

$5,655

$5,655

$6,863

$5,897

$6,863

$6,138

$6,138

$6,863

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

$3,180

$3,988

$5,413

$6,622

$5,655

$5,655

$6,863

$5,897

$6,863

$6,138

$6,138

$6,863

Long-term Liabilities

$300,000

$300,000

$300,000

$300,000

$300,000

$300,000

$300,000

$300,000

$300,000

$300,000

$300,000

$300,000

$300,000

Total Liabilities

$300,000

$303,180

$303,988

$305,413

$306,622

$305,655

$305,655

$306,863

$305,897

$306,863

$306,138

$306,138

$306,863

Paid-in Capital

$17,000

$17,000

$17,000

$17,000

$17,000

$17,000

$17,000

$17,000

$17,000

$17,000

$17,000

$17,000

$17,000

Retained Earnings

($15,000)

($15,000)

($15,000)

($15,000)

($15,000)

($15,000)

($15,000)

($15,000)

($15,000)

($15,000)

($15,000)

($15,000)

($15,000)

Earnings

$0

($4,690)

($8,215)

($8,215)

($7,465)

($6,715)

($5,965)

($4,465)

($2,965)

($1,465)

$785

$3,035

$4,535

Total Capital

$2,000

($2,690)

($6,215)

($6,215)

($5,465)

($4,715)

($3,965)

($2,465)

($965)

$535

$2,785

$5,035

$6,535

Total Liabilities and Capital

$302,000

$300,490

$297,773

$299,198

$301,157

$300,940

$301,690

$304,398

$304,932

$307,398

$308,923

$311,173

$313,398

Net Worth

$2,000

($2,690)

($6,215)

($6,215)

($5,465)

($4,715)

($3,965)

($2,465)

($965)

$535

$2,785

$5,035

$6,535