Medical Services Management Business Plan

The Medical Group

Executive Summary

The Medical Group (TMG) has been formed to offer management services to doctors in the ever-changing healthcare environment. A unique market opportunity currently presents itself to a few skilled individuals who have both the awareness of this opportunity, and the experience, credibility, and know-how to access this previously-untapped, profitable segment of government health programs.

TMG has identified and begun the numerous tasks necessary to organize these traditional physicians into a management services organization which will enable doctors to:

TMG has been formed to provide services to doctors and provide managed care access via these physicians to Medicare HMOs. The managed care industry, including payors, doctors, and hospitals, have been unaware of the potential walk-in patient population.

There are no companies in the Southern Texas healthcare market capable of accessing the walk-in market. The company has a significant competitive advantage over any future competitors based upon two factors:

The company projects start-up development costs which will fund an initial development period of approximately 12 months, at this point, profitable operation is expected to be reached.

 

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Company Summary

TMG was founded in July 1999 in Irving, Texas as a management service organization. TMG is a Texas Corporation, with principal offices located in Irving. 

 

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Start-up Requirements

Start-up Expenses

Legal

$2,000

Stationery etc.

$2,000

Sales Materials

$10,000

Consultants

$14,000

Insurance

$1,000

Rent

$2,000

Research and development

$40,000

Expensed equipment

$20,000

Other

$4,000

Total Start-up Expenses

$95,000

Start-up Assets

Cash Required

$250,000

Other Current Assets

$5,000

Long-term Assets

$0

Total Assets

$255,000

Total Requirements

$350,000

 

Start-up Funding

Start-up Expenses to Fund

$95,000

Start-up Assets to Fund

$255,000

Total Funding Required

$350,000

Assets

Non-cash Assets from Start-up

$5,000

Cash Requirements from Start-up

$250,000

Additional Cash Raised

$0

Cash Balance on Starting Date

$250,000

Total Assets

$255,000

Liabilities and Capital

Liabilities

Current Borrowing

$0

Long-term Liabilities

$0

Accounts Payable (Outstanding Bills)

$0

Other Current Liabilities (interest-free)

$0

Total Liabilities

$0

Capital

Planned Investment

Michael Johnson

$50,000

Seed Financing

$300,000

Other

$0

Additional Investment Requirement

$0

Total Planned Investment

$350,000

Loss at Start-up (Start-up Expenses)

($95,000)

Total Capital

$255,000

Total Capital and Liabilities

$255,000

Total Funding

$350,000

2.1 Mission

The mission of TMG is to provide a management structure that will allow physicians to access more managed care revenue. 

2.2 Strategy

TMG's market strategy is to build on its core alliance with the leading group of doctors in Denton County, using the company's expertise in the healthcare industry, along with its unique knowledge of the walk-in market and its extensive experience with managed care payors, regulation, and management. 

2.2.1 Strategic Alliances

The company has developed a strategic alliance with medical centers. These alliances are valuable to TMG because these Medicare systems will support development, and because they can also provide, under contract, infrastructure services that will enable TMG to avoid costly infrastructure start-up costs and delays as it moves into operations.

2.3 Risks

The only risk that TMG realistically faces in the marketplace is that of developmental delays, which may extend the period before profitable operations are initiated. To mitigate this risk, TMG has made several conservative assumptions in the development of its operational budget.  Operational staff levels are directly related to membership enrollment of walk-in patients. Once operational status is obtained, profits are ensured.

Services

TMG has obtained start-up capital and initiated development activities toward completing a physician network for access to Medicare managed care revenues. TMG believes that they are currently two years ahead of the industry in knowledge and experience.

3.1 Research and Development

TMG, through three years of research, has developed a proprietary and exclusive listing of all physicians in Texas and their walk-in patient volumes. This research and management tool has allowed us to identify and approach several local physicians. It is because of this knowledge that Mr. Johnson is able to obtain initial seed development capital from the hospital system. His knowledge and expertise in this market, and his relationship with key physicians, has been widely recognized by several hospital systems in Southern Texas over the past few years.

3.2 Market Needs

TMG plans to respond to market needs by expanding into additional counties in the near future. In addition, as TMG operations unfold, the utilization of the Internet as a billing mechanism is foreseen. TMG projects that, as a part of its contract for infrastructure services for its development, it will provide Internet activity to its member physicians for cost reductions and ease of operations.

Market Analysis Summary

In 1993, the Texas State Department of Health Services announced the beginning of a process to convert approximately 75% of the over 5 million medical recipients in the state into a healthcare environment. This artificial government interdiction into the healthcare delivery system in Texas has had a significant impact on medical recipients, payors, and most importantly, doctors.

This change, in combination with changes in the Medicare Act, has created an opportunity for TMG to provide a managed care access vehicle to doctors for an extremely profitable portion of the healthcare delivery system, individuals who have both Medicare and Medical health benefits (walk-in).

 

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Market Analysis

Year 1

Year 2

Year 3

Year 4

Year 5

Potential Customers

Growth

CAGR

Walk-in Patients

25%

200,000

250,000

312,500

390,625

488,281

25.00%

Doctors

15%

500

575

661

760

874

14.98%

Other

5%

150

158

166

174

183

5.10%

Total

24.97%

200,650

250,733

313,327

391,559

489,338

24.97%

 

4.1 Market Description

The managed care industry is a vital component of the healthcare delivery system of the United States. Its component parts are payors (HMOs), physicians (managed care entities such as IPAs and MSOs), hospitals, and other providers.

4.2 Market Size

In Denton County there are over 300,000 individuals with both Medicare and Medical coverage (walk-in). In the five Southern Texas Counties (Denton, Garland, Dallas, Plano, and Memphis), there are 330,000 walk-in, and in the whole state, there are 650,000 walk-in. In Denton, there are 436,000 Medicare recipients. Currently 17% of those recipients are in Medicare HMOs and approximately 592,000 are not. Of this 592,000, approximately one third (1/3) are walk-in. In the State of Texas, there are 1.8 million Medicare recipients with 27.22% currently in HMOs. That leaves 1.5 million Medicare members still not in HMO's. Walk-ins are one third (1/3) of that total, or 650,000 eligible.  

4.3 Customers and Target Markets

Doctors and the walk-in market

In Denton County there are approximately 1.8 million medical recipients, of whom, more than 200,000 are walk-in patients, or individuals who have both Medical and Medicare. 

In Denton County alone there are over 330 physicians who fall into the category of doctors with more than 100 walk-in patients in their practice base. This group, which incorporated in the spring of 1999, has as its key officers physicians with walk-in patient levels in excess of 500. 

Competitive Analysis

Currently, TMG does not believe there are any competitive threats to its development and penetration of the walk-in market in Southern Texas. That assessment is based upon the following factors. 

5.1 Competitive Edge

TMG enjoys a significant competitive advantage over any entity who would attempt to penetrate the walk-in market.

Strategy and Implementation Summary

The company plans to use the Internet as one of its primary marketing channels. The Internet is a growing force in the buying and selling of a wide variety of products, including medical services. According to International Data Corporation (IDC), a leading provider of information technology data, aggregate Internet commerce across all industries was estimated to have been $32 billion in 1998, and is projected to soar to $425 billion by 2002.

The Internet provides a relatively easy way to gather information and to shop for the best deals, in terms of both price and needed attributes. Through websites, consumers can read a variety of reviews to compare models and see which vehicles meet their needs. They can view, search, and screen for prices, features, and other important information. For retailers, the Internet is a means of increasing volume through leads that are converted into sales and a means of decreasing marketing, advertising, and personnel costs per sale.

 

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Sales Forecast

Year 1

Year 2

Year 3

Sales

Customers

$250,000

$3,750,000

$10,750,000

Physician membership

$325,000

$4,875,000

$15,875,000

Other services

$500,000

$7,500,000

$18,500,000

Total Sales

$1,075,000

$16,125,000

$45,125,000

Direct Cost of Sales

Year 1

Year 2

Year 3

Customers

$33,330

$500,000

$1,102,564

Physician membership

$0

$0

$0

Other services

$66,670

$1,000,000

$1,897,436

Subtotal Direct Cost of Sales

$100,000

$1,500,000

$3,000,000

6.1 Marketing Communications

The key message associated with TMG's services are affordability and reliability for customers. TMG believes that it can achieve success through the implementation of a new promotional plan. The company's new promotional plan is diverse and includes a range of marketing:

·         Management Summary

·         The company's management philosophy will be based on responsibility and mutual respect. TMG 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.

·         TMG's management is highly experienced and qualified. Key members of TMG's management teams, their backgrounds, and responsibilities are as follows.

·         Mr. Michael Johnson, President and CEO.

·         Note: Background has been removed for confidentiality.

·         Board of Advisors

·         It is TMG's intent to utilize the extensive contacts that Mr. Johnson has in the Southern Texas market in terms of an Advisory Board to TMG and its owners. As TMG develops, depending upon which hospital systems are utilized to the greatest amount, other healthcare delivery executives will be invited to participate in the Board of Advisors.

·          

Personnel Plan

Year 1

Year 2

Year 3

All Staff

$256,522

$453,066

$608,696

Other

$0

$0

$0

Total People

7

9

13

Total Payroll

$256,522

$453,066

$608,696

Financial Plan

The company is raising funding to complete development through Year 2 of operation.  

8.1 Important Assumptions

The following table presents some assumptions that are necessary to the success of TMG.

 

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

8.2 Break-even Analysis

The chart and table below outline present the Break-even Analysis for TMG.

 

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Break-even Analysis

Monthly Revenue Break-even

$69,700

Assumptions:

Average Percent Variable Cost

9%

Estimated Monthly Fixed Cost

$63,217

8.3 Projected Profit and Loss

The company is in the early stage of development, thus initial projections have only been made on accounts that are believed to most drive the income statement. 

 

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Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales

$1,075,000

$16,125,000

$45,125,000

Direct Cost of Sales

$100,000

$1,500,000

$3,000,000

Other

$38,000

$570,000

$600,000

Total Cost of Sales

$138,000

$2,070,000

$3,600,000

Gross Margin

$937,000

$14,055,000

$41,525,000

Gross Margin %

87.16%

87.16%

92.02%

Expenses

Payroll

$256,522

$453,066

$608,696

Sales and Marketing and Other Expenses

$382,000

$2,163,810

$3,366,850

Depreciation

$8,400

$0

$0

Continued education

$36,000

$517,500

$575,500

Utilities

$3,600

$4,000

$4,500

Insurance

$9,600

$20,000

$25,000

Rent

$24,000

$25,000

$25,000

Payroll Taxes

$38,478

$67,960

$91,304

Other

$0

$0

$0

Total Operating Expenses

$758,600

$3,251,336

$4,696,850

Profit Before Interest and Taxes

$178,400

$10,803,664

$36,828,150

EBITDA

$186,800

$10,803,664

$36,828,150

Interest Expense

$0

$0

$0

Taxes Incurred

$42,564

$2,700,916

$9,360,488

Net Profit

$135,835

$8,102,748

$27,467,662

Net Profit/Sales

12.64%

50.25%

60.87%

8.4 Projected Cash Flow

The cash flow projections are presented in the following chart and table.

 

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Pro Forma Cash Flow

Year 1

Year 2

Year 3

Cash Received

Cash from Operations

Cash Sales

$0

$0

$0

Cash from Receivables

$868,500

$13,234,000

$39,554,302

Subtotal Cash from Operations

$868,500

$13,234,000

$39,554,302

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

$500,000

$0

$0

Subtotal Cash Received

$1,368,500

$13,234,000

$39,554,302

Expenditures

Year 1

Year 2

Year 3

Expenditures from Operations

Cash Spending

$256,522

$453,066

$608,696

Bill Payments

$616,643

$7,004,661

$16,269,509

Subtotal Spent on Operations

$873,165

$7,457,727

$16,878,205

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

$0

$0

Purchase Other Current Assets

$0

$0

$0

Purchase Long-term Assets

$500,000

$2,000,000

$8,000,000

Dividends

$0

$0

$0

Subtotal Cash Spent

$1,373,165

$9,457,727

$24,878,205

Net Cash Flow

($4,665)

$3,776,273

$14,676,097

Cash Balance

$245,335

$4,021,608

$18,697,706

8.5 Projected Balance Sheet

The table below provides TMG's projected balance sheet for 2000-2002. 

 

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

Assets

Current Assets

Cash

$245,335

$4,021,608

$18,697,706

Accounts Receivable

$206,500

$3,097,500

$8,668,198

Other Current Assets

$5,000

$5,000

$5,000

Total Current Assets

$456,835

$7,124,108

$27,370,903

Long-term Assets

Long-term Assets

$500,000

$2,500,000

$10,500,000

Accumulated Depreciation

$8,400

$8,400

$8,400

Total Long-term Assets

$491,600

$2,491,600

$10,491,600

Total Assets

$948,435

$9,615,708

$37,862,503

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities

Accounts Payable

$57,599

$622,125

$1,401,258

Current Borrowing

$0

$0

$0

Other Current Liabilities

$0

$0

$0

Subtotal Current Liabilities

$57,599

$622,125

$1,401,258

Long-term Liabilities

$0

$0

$0

Total Liabilities

$57,599

$622,125

$1,401,258

Paid-in Capital

$850,000

$850,000

$850,000

Retained Earnings

($95,000)

$40,835

$8,143,584

Earnings

$135,835

$8,102,748

$27,467,662

Total Capital

$890,835

$8,993,584

$36,461,245

Total Liabilities and Capital

$948,435

$9,615,708

$37,862,503

Net Worth

$890,835

$8,993,584

$36,461,245

 8.6 Business Ratios

The following table contains important business ratios for the offices and clinics of medical doctors industry, as determined by the Standard Industry Classification (SIC) Index code 8011, Offices & Clinics of Medical Doctors.

 

Ratio Analysis

Year 1

Year 2

Year 3

Industry Profile

Sales Growth

0.00%

1400.00%

179.84%

5.90%

Percent of Total Assets

Accounts Receivable

21.77%

32.21%

22.89%

10.00%

Other Current Assets

0.53%

0.05%

0.01%

50.50%

Total Current Assets

48.17%

74.09%

72.29%

60.80%

Long-term Assets

51.83%

25.91%

27.71%

39.20%

Total Assets

100.00%

100.00%

100.00%

100.00%

Current Liabilities

6.07%

6.47%

3.70%

39.80%

Long-term Liabilities

0.00%

0.00%

0.00%

14.10%

Total Liabilities

6.07%

6.47%

3.70%

53.90%

Net Worth

93.93%

93.53%

96.30%

46.10%

Percent of Sales

Sales

100.00%

100.00%

100.00%

100.00%

Gross Margin

87.16%

87.16%

92.02%

0.00%

Selling, General & Administrative Expenses

74.72%

36.91%

30.81%

57.10%

Advertising Expenses

6.14%

6.05%

2.77%

0.40%

Profit Before Interest and Taxes

16.60%

67.00%

81.61%

2.00%

Main Ratios

Current

7.93

11.45

19.53

1.37

Quick

7.93

11.45

19.53

1.12

Total Debt to Total Assets

6.07%

6.47%

3.70%

53.90%

Pre-tax Return on Net Worth

20.03%

120.13%

101.01%

6.90%

Pre-tax Return on Assets

18.81%

112.35%

97.27%

15.00%

Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

12.64%

50.25%

60.87%

n.a

Return on Equity

15.25%

90.09%

75.33%

n.a

Activity Ratios

Accounts Receivable Turnover

5.21

5.21

5.21

n.a

Collection Days

57

37

48

n.a

Accounts Payable Turnover

11.71

12.17

12.17

n.a

Payment Days

27

16

22

n.a

Total Asset Turnover

1.13

1.68

1.19

n.a

Debt Ratios

Debt to Net Worth

0.06

0.07

0.04

n.a

Current Liab. to Liab.

1.00

1.00

1.00

n.a

Liquidity Ratios

Net Working Capital

$399,235

$6,501,984

$25,969,645

n.a

Interest Coverage

0.00

0.00

0.00

n.a

Additional Ratios

Assets to Sales

0.88

0.60

0.84

n.a

Current Debt/Total Assets

6%

6%

4%

n.a

Acid Test

4.35

6.47

13.35

n.a

Sales/Net Worth

1.21

1.79

1.24

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

Customers

0%

$10,000

$10,000

$15,000

$15,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

Physician membership

0%

$10,000

$15,000

$30,000

$30,000

$30,000

$30,000

$30,000

$30,000

$30,000

$30,000

$30,000

$30,000

Other services

0%

$15,000

$20,000

$25,000

$40,000

$50,000

$50,000

$50,000

$50,000

$50,000

$50,000

$50,000

$50,000

Total Sales

$35,000

$45,000

$70,000

$85,000

$105,000

$105,000

$105,000

$105,000

$105,000

$105,000

$105,000

$105,000

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

Customers

$1,333

$1,333

$2,000

$2,000

$3,333

$3,333

$3,333

$3,333

$3,333

$3,333

$3,333

$3,333

Physician membership

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other services

$2,000

$2,667

$3,333

$5,334

$6,667

$6,667

$6,667

$6,667

$6,667

$6,667

$6,667

$6,667

Subtotal Direct Cost of Sales

$3,333

$4,000

$5,333

$7,334

$10,000

$10,000

$10,000

$10,000

$10,000

$10,000

$10,000

$10,000

 

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

All Staff

0%

$21,375

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

Other

0%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total People

7

7

7

7

7

7

7

7

7

7

7

7

Total Payroll

$21,375

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

 

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

$35,000

$45,000

$70,000

$85,000

$105,000

$105,000

$105,000

$105,000

$105,000

$105,000

$105,000

$105,000

Direct Cost of Sales

$3,333

$4,000

$5,333

$7,334

$10,000

$10,000

$10,000

$10,000

$10,000

$10,000

$10,000

$10,000

Other

$2,500

$2,500

$2,500

$2,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

Total Cost of Sales

$5,833

$6,500

$7,833

$9,834

$13,500

$13,500

$13,500

$13,500

$13,500

$13,500

$13,500

$13,500

Gross Margin

$29,167

$38,500

$62,167

$75,166

$91,500

$91,500

$91,500

$91,500

$91,500

$91,500

$91,500

$91,500

Gross Margin %

83.33%

85.56%

88.81%

88.43%

87.14%

87.14%

87.14%

87.14%

87.14%

87.14%

87.14%

87.14%

Expenses

Payroll

$21,375

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

Sales and Marketing and Other Expenses

$38,500

$31,000

$29,000

$36,500

$29,000

$29,000

$36,500

$29,000

$29,000

$36,500

$29,000

$29,000

Depreciation

$700

$700

$700

$700

$700

$700

$700

$700

$700

$700

$700

$700

Continued education

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

Utilities

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

Insurance

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

Rent

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

Payroll Taxes

15%

$3,206

$3,207

$3,207

$3,207

$3,207

$3,207

$3,207

$3,207

$3,207

$3,207

$3,207

$3,207

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Operating Expenses

$69,881

$62,384

$60,384

$67,884

$60,384

$60,384

$67,884

$60,384

$60,384

$67,884

$60,384

$60,384

Profit Before Interest and Taxes

($40,714)

($23,884)

$1,783

$7,282

$31,116

$31,116

$23,616

$31,116

$31,116

$23,616

$31,116

$31,116

EBITDA

($40,014)

($23,184)

$2,483

$7,982

$31,816

$31,816

$24,316

$31,816

$31,816

$24,316

$31,816

$31,816

Interest Expense

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Taxes Incurred

($12,214)

($5,971)

$446

$1,821

$7,779

$7,779

$5,904

$7,779

$7,779

$5,904

$7,779

$7,779

Net Profit

($28,500)

($17,913)

$1,338

$5,462

$23,337

$23,337

$17,712

$23,337

$23,337

$17,712

$23,337

$23,337

Net Profit/Sales

-81.43%

-39.81%

1.91%

6.43%

22.23%

22.23%

16.87%

22.23%

22.23%

16.87%

22.23%

22.23%

 

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

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Cash from Receivables

$0

$1,167

$35,333

$45,833

$70,500

$85,667

$105,000

$105,000

$105,000

$105,000

$105,000

$105,000

Subtotal Cash from Operations

$0

$1,167

$35,333

$45,833

$70,500

$85,667

$105,000

$105,000

$105,000

$105,000

$105,000

$105,000

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

$500,000

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$0

$1,167

$35,333

$545,833

$70,500

$85,667

$105,000

$105,000

$105,000

$105,000

$105,000

$105,000

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

$21,375

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

$21,377

Bill Payments

$1,381

$41,405

$41,027

$46,948

$57,532

$59,586

$59,773

$65,023

$59,586

$59,773

$65,023

$59,586

Subtotal Spent on Operations

$22,756

$62,782

$62,404

$68,325

$78,909

$80,963

$81,150

$86,400

$80,963

$81,150

$86,400

$80,963

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

$25,000

$25,000

$25,000

$25,000

$50,000

$50,000

$50,000

$50,000

$50,000

$50,000

$50,000

$50,000

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Spent

$47,756

$87,782

$87,404

$93,325

$128,909

$130,963

$131,150

$136,400

$130,963

$131,150

$136,400

$130,963

Net Cash Flow

($47,756)

($86,616)

($52,071)

$452,508

($58,409)

($45,296)

($26,150)

($31,400)

($25,963)

($26,150)

($31,400)

($25,963)

Cash Balance

$202,244

$115,629

$63,558

$516,066

$457,657

$412,361

$386,211

$354,811

$328,848

$302,698

$271,298

$245,335

 

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

$250,000

$202,244

$115,629

$63,558

$516,066

$457,657

$412,361

$386,211

$354,811

$328,848

$302,698

$271,298

$245,335

Accounts Receivable

$0

$35,000

$78,833

$113,500

$152,667

$187,167

$206,500

$206,500

$206,500

$206,500

$206,500

$206,500

$206,500

Other Current Assets

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

Total Current Assets

$255,000

$242,244

$199,462

$182,058

$673,733

$649,824

$623,861

$597,711

$566,311

$540,348

$514,198

$482,798

$456,835

Long-term Assets

Long-term Assets

$0

$25,000

$50,000

$75,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

Accumulated Depreciation

$0

$700

$1,400

$2,100

$2,800

$3,500

$4,200

$4,900

$5,600

$6,300

$7,000

$7,700

$8,400

Total Long-term Assets

$0

$24,300

$48,600

$72,900

$97,200

$146,500

$195,800

$245,100

$294,400

$343,700

$393,000

$442,300

$491,600

Total Assets

$255,000

$266,544

$248,062

$254,958

$770,933

$796,324

$819,661

$842,811

$860,711

$884,048

$907,198

$925,098

$948,435

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

$40,044

$39,474

$45,033

$55,546

$57,599

$57,599

$63,037

$57,599

$57,599

$63,037

$57,599

$57,599

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

$40,044

$39,474

$45,033

$55,546

$57,599

$57,599

$63,037

$57,599

$57,599

$63,037

$57,599

$57,599

Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Liabilities

$0

$40,044

$39,474

$45,033

$55,546

$57,599

$57,599

$63,037

$57,599

$57,599

$63,037

$57,599

$57,599

Paid-in Capital

$350,000

$350,000

$350,000

$350,000

$850,000

$850,000

$850,000

$850,000

$850,000

$850,000

$850,000

$850,000

$850,000

Retained Earnings

($95,000)

($95,000)

($95,000)

($95,000)

($95,000)

($95,000)

($95,000)

($95,000)

($95,000)

($95,000)

($95,000)

($95,000)

($95,000)

Earnings

$0

($28,500)

($46,413)

($45,075)

($39,613)

($16,276)

$7,061

$24,774

$48,111

$71,448

$89,161

$112,498

$135,835

Total Capital

$255,000

$226,500

$208,587

$209,925

$715,387

$738,724

$762,061

$779,774

$803,111

$826,448

$844,161

$867,498

$890,835

Total Liabilities and Capital

$255,000

$266,544

$248,062

$254,958

$770,933

$796,324

$819,661

$842,811

$860,711

$884,048

$907,198

$925,098

$948,435

Net Worth

$255,000

$226,500

$208,587

$209,925

$715,387

$738,724

$762,061

$779,774

$803,111

$826,448

$844,161

$867,498

$890,835