January 2004
Transcription
January 2004
January 2004 This sample business plan has been made available to users of Business Plan Pro®, business planning software published by Palo Alto Software. Names, loc ations and numbers may have been c hanged, and substantial portions of text from the original plan may have been omitted to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to reproduce, publish, distribute or even copy this plan as it exists here. Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at [email protected]. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright © Palo Alto Software, Inc., 1995-2007 Confidentiality Agreement The undersigned reader ac knowledges that the information provided by _________________________ in this business plan is confidential; therefore, reader agrees not to disc lose it without the express written permission of _________________________. It is ac knowledged by reader that information to be furnished in this business plan is in all respec ts confidential in nature, other than information which is in the public domain through other means and that any disc losure or use of same by reader, may cause serious harm or damage to _________________________. Upon request, this document is to be immediately returned to _________________________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities. Table of Contents 1.0 Executive Summary.............................................................................................................................1 1.1 Objectives ...................................................................................................................................1 1.2 Mission........................................................................................................................................1 1.3 Keys to Success ........................................................................................................................1 2.0 Company Summary.............................................................................................................................2 2.1 Company Ownership .................................................................................................................2 2.2 Start-up Summary ......................................................................................................................2 3.0 Services................................................................................................................................................5 4.0 Market Analysis Summary..................................................................................................................6 4.1 Market Segmentation ................................................................................................................6 4.2 Service Business Analysis........................................................................................................7 4.2.1 Competition and Buying Patterns .........................................................................................8 4.3 Target Market Segment Strategy.............................................................................................9 5.0 Strategy and Implementation Summary ............................................................................................9 5.1 Competitive Edge ......................................................................................................................9 5.2 Marketing Strategy ..................................................................................................................10 5.3 Sales Strategy..........................................................................................................................10 5.3.1 Sales Forecast .....................................................................................................................11 5.4 Milestones ................................................................................................................................12 6.0 Web Plan Summary ..........................................................................................................................13 6.1 Website Marketing Strategy...................................................................................................13 6.2 Development Requirements ...................................................................................................13 7.0 Management Summary ....................................................................................................................13 7.1 Personnel Plan.........................................................................................................................14 8.0 Financial Plan ....................................................................................................................................14 8.1 Important Assumptions............................................................................................................14 8.2 Break-even Analysis................................................................................................................15 8.3 Projected Profit and Loss .......................................................................................................16 8.4 Projected Cash Flow ...............................................................................................................18 8.5 Projected Balance Sheet ........................................................................................................21 8.6 Business Ratios .......................................................................................................................22 Page 1 HandyMan Stan 1.0 Executive Summary HandyMan Stan is a start-up organization offering residents of Duluth, Minnesota a complete handyman service. By developing the reputation as a qualified, reasonably priced and trusted service provider, HandyMan Stan will quickly generate market penetration and develop a solid foundation of repeat customers. The Market HandyMan Stan's target market has been segmented into: home owners and property managers. There are 24,090 potential customers in the home owner segment. This group has a 5% annual growth rate. There are 1,243 potential customers in the property manager segment. This group is growing at a 4% annual growth rate. Services As a handyman, Stan will offer a wide range of home repair services. The services are generally fairly minor tasks, if the problem bec omes major a contrac tor is best suited to solve the difficulty. HandyMan Stan will offer the value-added feature to pre-sc reen a contrac tor when Stan is unable to perform the repair. This will develop a trust bond with the customer so that when a more minor issue comes up the customer is more likely to call Stan due to his honesty displayed earlier. Stan offers fix-it services for: plumbing, elec trical, fences, windows, dec ks/patios, painting, weather proofing, floors. Competitive Edge HandyMan Stan will differentiate from the competition by offering: low price and low minimum charge. Stan is charging a reasonable $30 per hour in an effort to encourage people to hire him for tasks that they would otherwise try themselves of just ignore until it bec ame more of a problem. The second element of the competitive edge is Stan's low one hour minimum. This compares favorably with the other industry competitors who often have two to three hour minimums. This edge also creates an incentive for the customer to call for Stan's assistance earlier than they would with c omparable service providers. 1.1 Objectives • Develop the business into full-time employment within 12 months. • Generate steady revenue per year by the end of year two. • Create over 20% of business from repeat customers. 1.2 Mission HandyMan Stan's mission is to provide knowledgeable, convenient, and reasonably-priced handyman service to the Duluth, Minnesota community. HandyMan Stan will provide every customer with an honest day's work and will fix anything that is not done right. 1.3 Keys to Success • Treat every customer as if they were the most important customer the business has. • Honestly evaluate the needed skills for a job, passing it onto a contrac tor if it is too difficult as opposed to taking on a job that cannot be completed perfec tly. • Work hard, guarantee all work and promote 100% customer satisfac tion, if this is done profitability will fall into plac e. Page 1 HandyMan Stan 2.0 Company Summary HandyMan Stan has been formed as a Minnesota Limited Liability Company (LLC) by Stan Roberts. Stan will be the sole employee and owner of the company. The company will incur certain start-up costs, primarily tools, detailed in the Start-up Summary section. 2.1 Company Ownership Stan Roberts is the founder and owner of HandyMan Stan. The company will remain a one-man operation for the foreseeable future. 2.2 Start-up Summary HandyMan Stan will incur start-up costs associated with the beginning of the business. The following table details the start-up costs as well as indicated the needed capital for initial operations. Stan will be using his personal tools for jobs but will need to purchase the following additional equipment/tools: • Assorted plumbing tools including: slip wrenches, snakes, teflon tape, and assorted caps, nuts, and bolts. • Elec trical tools including: elec trical gauge meters, wire cutters, various wires and wire caps, and soldering iron. • Painting material including: paint brushes, paint roller, pneumatic paint sprayer, air compressor, sand papers, spackle tools and masking tape. • Pressure washer. • Various general tools. • Assorted power tools (drill, saw, sander, Dremel). • Assorted nails, bolts, sc rews, and fixtures. • Laptop with portable printer for mobile invoice printing and submission. • Mobile phone. Page 2 HandyMan Stan Table: Start-up Funding Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required $1,500 $28,500 $30,000 Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets $8,000 $20,500 $0 $20,500 $28,500 Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities $0 $30,000 $0 $0 $30,000 Capital Planned Investment Investor 1 Other Additional Investment Requirement Total Planned Investment $0 $0 $0 $0 Loss at Start-up (Start-up Expenses) Total Capital ($1,500) ($1,500) Total Capital and Liabilities $28,500 Total Funding $30,000 Page 3 HandyMan Stan Table: Start-up Start-up Requirements Start-up Expenses Legal Accountant Brochures Insurance Total Start-up Expenses $500 $500 $250 $250 $1,500 Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets $20,500 $0 $8,000 $28,500 Total Requirements $30,000 Page 4 HandyMan Stan 3.0 Services HandyMan Stan offers the community of Duluth the finest home repair and maintenance for home owners and property managers. All services start at just $30 per hour plus parts. HandyMan Stan will give every customer at least one hour of work at their property. All work is "handyman" work, for larger jobs that require a contrac tor, HandyMan Stan will presc reen a service provider free for the customer. By providing only handyman services, HandyMan Stan will always attempt to repair the problem first, replac ement is only an option if the item cannot be repaired. This differs from a contrac tor philosophy which is generally to replac e everything first. Repairing items is far less expensive for the consumer. HandyMan Stan offers a one year guarantee for all of their work, if something goes wrong, HandyMan Stan will make it right. The goal is to not have any unsatisfied customers. Offered services include: Minor plumbing Leaky faucets, repair/replac e fixtures, sprinkler repair, minor drain problems, garbage disposal install, install ice maker lines. Minor elec trical Ceiling fan repair and install, elec trical plugs and switches, vanity lights, motion lights, cable and phone line installation. Metal and wood fence repair and install, elec tric dog fences, gate and latch install. Small hole repair, door installation, window maintenance and repair. Dec k repair and maintenance, chemical cleaning, pressure washing, wood replac ement, handrail installation. Interior and exterior (short of an entire exterior of a house). Weather stripping, caulking. Carpet and hard wood repair. Fence repair Window, wall and door repairs Dec ks and patios Painting Weather proofing Flooring Page 5 HandyMan Stan 4.0 Market Analysis Summary HandyMan Stan has identified two distinct market segments, home owners and property managers. These are the most attrac tive customer segments as they are the customers who often have small repairs that are too small for a contrac tor but too complicated for the owner to perform themselves. The handyman industry competes with the contrac tor industry for home repair jobs. Handymen are typically used for small items, contrac tors are typically called in for more extensive projec ts. Customers will often call whatever service provider they are familiar with, regardless of the appropriateness. For this reason, word of mouth referrals will be very important. Potential customers will ask neighbors/friends and other property managers for rec ommendations on handyman service providers. HandyMan Stan will capitalize on word of mouth marketing by going the extra mile to keep customers satisfied. Exemplary service will result in new and repeat business. 4.1 Market Segmentation The market has been segmented into two distinct customer groups: Home owners • The value of the homes ranges generally between $150,000 - $650,00. • 47% of home owners attempt to make small repairs themselves, often starting the repair and realizing that they do not have the skills to complete it. The remaining 53% do not attempt to repair it, they call a professional from the start. • 62% have owned their home for more than two years. • 73% wait until several small problems ac cumulate before they call a handyman. This behavior can be explained by not wanting to incur a large upfront charge just to have someone fix one thing. Property managers • Manage between three - 20 units. • Typically do not have their own in-house repair man in an effort to reduce overhead expenses. • The range of monthly rental costs of their units is $350-$675. Table: Market Analysis Market Analysis 2004 Potential Customers Home owners Property managers Total Growth 5% 4% 4.95% 2005 24,090 1,234 25,324 2006 25,295 1,283 26,578 2007 26,560 1,334 27,894 2008 27,888 1,387 29,275 29,282 1,442 30,724 CAGR 5.00% 3.97% 4.95% Page 6 HandyMan Stan 4.2 Service Business Analysis Handymen operate within the general home repair industry. This industry encompass both handymen as well as general contrac tors. The distinction between the two is as follows: handymen can fix most minor problems, items that are not to extensively damaged nor do they require expensive special tools. Contrac tors are most useful for jobs that are very tec hnical in nature, extensive in the repair, or require very specialized tools. A handyman is typically far more of a generalist, he can handle a wider range of repairs whereas a contrac tor has a smaller realm of expertise. Page 7 HandyMan Stan 4.2.1 Competition and Buying Patterns HandyMan Stan will rec eive competition from several sources. The most well-known competitors are detailed below: Handymen • Jack Of All Trades: This is a handyman company that employs six different workers as handymen. This is a large company (for handymen) with a far less intimate customer experience. If a customer used this service on four different oc cassions, they are likely to rec eive four different people on the service calls. • Fix-It-Up: This is a one man outfit that specializes in plumbing and elec trical problems. Painting and patios are not serviced. In speaking with several customers regarding their experience with this service, their impressions have been mixed. Contractors (General) • Duluth Contrac tors: This is a full-service general contrac tor. The organization is large with 17 employees. This company does a mixture of commercial and residential work. This company has a eight hour minimum. • Red Roc k Contrac tors: This is a small sized contrac tor of six employees. They concentrate on residential jobs and have a smaller minimum of four hour projec ts. The buying patterns of consumers are largely based on who they know. Either they know a handyman or contrac tor whom they call or they will inquire with friends or neighbors as to who they rec ommend. They will often stay with that person unless they are unhappy with the service. Stan plans to capitalize on word of mouth referrals, ac hieved by ensuring every customer has their expec tations exceeded. It is reasonable to expec t that some of the larger contrac ting companies would be able to offer a better hourly rate due to economies of sc ale. This does not turn out to be the case since most of the large contrac tors perform a wider range of specialized services, necessitating many more tools and skilled workers, increasing overhead and therefore there billable rate. Page 8 HandyMan Stan 4.3 Target Market Segment Strategy The two customer segments, home owners and property managers have been targeted bec ause they are the most likely consumer of handyman services. Unless the home owner is particularly crafty, he/she does not have the skills, time or desire to tac kle most jobs. Their preference is to hire someone and have them take care of it. The property manager are also likely consumers bec ause they are managing a group rental property which needs periodic maintenance. Property managers with less than 20 units rarely have on-site maintenance personnel, it is less expensive to hire someone as needed. It is rare that the property manager would have any maintenance skills themselves and those that do usually do not have the time in the day to perform the repair. It should be noted that the majority of business will be coming from residents and rental property from within the Duluth c ity limits. As you venture farther out of town into the country people tend to have more free time and more fix it skills and are therefore more likely to try to repair things themselves. 5.0 Strategy and Implementation Summary HandyMan Stan's strategy for quickly gaining market share will be leveraging the competitive edge of reasonable hourly rates and a small, one hour minimum, encouraging more frequent service trips. The marketing strategy has been designed to raise awareness of HandyMan Stan services among a community of people where there has already been a trust relationship established among the community. This supports the idea that HandyMan Stan's business will be built on word of mouth referrals. Lastly, the sales strategy will emphasize the wide repertoire of qualified skills, encouraging current customers to use HandyMan Stan for a wider range of repairs. 5.1 Competitive Edge HandyMan Stan's competitive edge is the offering of reasonable prices and a one hour minimum, encouraging customers to call HandyMan Stan whenever a problem arises. A one hour ($30) service call is reasonable (not excessively high) but long enough so that several small items can be repaired in one visit. 90% of competing handymen have a two hour minimum creating a barrier for the customer to not call bec ause the problem is too small to warrant two hours of paid work. HandyMan Stan's one hour minimum develops a pattern of behavior for the customer to call anytime that they have small repairs. This competitive edge also applies to property managers (especially managers who operate lower income property, typically less than $600 per month) who often balk at calling a handyman until there is a list of different problems. Page 9 HandyMan Stan 5.2 Marketing Strategy HandyMan Stan will employ a marketing strategy that seeks to develop awareness regarding HandyMan Stan's expertise, high level of trust, and reasonable rates among a community of people. This will be ac complished by plac ing advertisements in organizational newsletters such as the Lions Club, religious organizations, and other social and sport associations. These organizations will be targeted with the advertisements bec ause once HandyMan Stan has satisfied several different customers within an organization, there is an increased likelihood that the organizational members will talk among themselves, sharing their good experience with HandyMan Stan among their colleagues. This is a likely sc enario bec ause in this industry it is very common for friends and neighbors to ask friends for trusted service providers. When a person does not know a specific service provider, they will often act upon a rec ommendation from a friend who had a positive experience with one. These social, religious, or sport-based organizations tend to be quite social and often share their trials and tribulations regarding service providers. 5.3 Sales Strategy The sales strategy will be designed to convert a current customer from using just one or two of HandyMan Stan's skills to employing Stan for a wide variety repairs. This will be ac complished several ways. First, Stan will complete each repair with a level of professionalism which is unexpec ted for a handyman. Providing this aura of professionalism will help create a very positive impression for Stan's services. Additionally, Stan will always be on the look out for problem areas within the home and offer a solution that he believes will be attrac tive to the customer. The key to generating increased tickets from an individual customer is based on the ability for Stan to showcase qualified skills, reasonable prices, and a trustworthy nature, enough so that the customer feels comfortable for Stan to be in the home even when they are not there. While this strategy should assist the business in increasing individual ticket prices, it will at the same time develop a voc al following for his services which will increase word of mouth referrals. Page 10 HandyMan Stan 5.3.1 Sales Forecast The sales forec ast has been developed in a conservative manner to increase the likelihood of ac hieving the sales goals. The forec ast (detailed in the following table) breaks down sales based on the ac tivity that HandyMan Stan will perform. Needed parts will be billed additionally, there are certain "consumables" such as nails, caulk, and etc., that Stan will be using that are included in the $30 hourly fee. These consumables are captured in the direc t costs of goods as a percentage of the overall service charge. The different services have different percentages assigned to each type of service. While Stan performs a wide range of jobs, he bills out at the same hourly rate. The competition typically bills out elec trical work at a higher rate, and painting at a lower rate. Stan has chosen a single hourly rate to encourages customers to use him for multiple repairs on the same visit. While he may not get as much painting work as he could bec ause his rate is above the market rate, the variances in the long run average out and it creates an incentive for the customer to call Stan and throw a wide range of projec ts to him while he is at the projec t site. Table: Sales Forecast Sales Forecast Sales Plumbing Electrical Fences Windows Decks Paint Weather proofing Parts Floors Total Sales Direct Cost of Sales Plumbing Electrical Fences Windows Decks Paint Weather proofing Parts Floors Subtotal Direct Cost of Sales 2004 2005 2006 $4,250 $3,698 $782 $1,360 $945 $2,508 $1,403 $850 $1,615 $17,410 $12,500 $10,875 $2,875 $4,000 $4,500 $7,375 $4,125 $2,500 $4,750 $53,500 $16,550 $14,399 $3,807 $5,296 $5,958 $9,765 $5,462 $3,310 $6,289 $70,834 2004 $298 $185 $23 $109 2005 $875 $544 $86 $320 2006 $1,159 $720 $114 $424 $38 $226 $84 $680 $65 $1,707 $180 $664 $248 $2,000 $190 $5,106 $238 $879 $328 $2,648 $252 $6,761 Page 11 HandyMan Stan 5.4 Milestones HandyMan Stan has identified several specific milestones which will function as goals for the organization. The milestones will provide a target for ac hievement as well as a mec hanism for trac king progress. The following table will provide a timeframe for each milestone. Page 12 HandyMan Stan Table: Milestones Milestones Milestone Business plan completion First customer Full time work threshold Revenues exceeding $75,000 Totals Start Date 1/1/2004 2/15/2004 3/15/2004 3/15/2004 End Date 2/15/2004 3/15/2004 6/30/2005 7/15/2005 Budget $0 $0 $0 $0 $0 Manager Stan Stan Stan Stan Department Marketing Department Department Department 6.0 Web Plan Summary HandyMan Stan's website will serve as a basic catalog of offered services that will be provided. In addition to a listing of the different skills that Stan possess, a list of testimonials and referrals will be on the site. Stan believes that this will be quite effec tive at swaying unsure people who have never heard about HandyMan Stan. More in depth inquires will be direc ted to Stan's phone number. 6.1 Website Marketing Strategy The marketing strategy will employ two distinct mec hanisms: • Search engine submission: This will be most useful to people who are unfamiliar with HandyMan Stan but are looking for a loc al handyman. There will also be searches from customers who may know about HandyMan Stan but are seeking additional information. • URL on all printed material: For every printed piec e of material that Stan offers, the site's Web address will be listed, encouraging a visit to the site. 6.2 Development Requirements The site will be developed by a friend under a barter agreement. Bec ause the value of the development services will be less than $600, it will not have to be listed as a payout of 1099 income for tax purposes. 7.0 Management Summary Stan Roberts is the founder and sole employee of HandyMan Stan. Stan began as a "fixer" out of high sc hool when he secured a job with a general contrac tor. Bec ause he did not have any formal contrac tor/c onstruction experience he was relegated as a helping hand, assisting in a wide range of capacities. Over ten years Stan bec ame quite proficient in a wide range of ac tivities, bec oming a journeymen plumber and elec trician as well as developing a strong repertoire of general fixing skills. Stan enrolled in business courses at the loc al community college at night. Stan spent two years taking classes, developing his business skills. Once he was completed with the course he began to feel more comfortable with the idea of starting a new business. Page 13 HandyMan Stan 7.1 Personnel Plan HandyMan Stan is a one man business. Stan will perform all of the handyman ac tivities. Additionally, Stan will be responsible for ac counting issues which will be ac complished using Quicken. With a laptop computer and portable printer, Stan will be able to create, print, submit and collec t invoices on site immediately following the completed projec t. Table: Personnel Personnel Plan Stan Other Total People 2004 $20,000 $0 1 2005 $24,000 $0 1 2006 $30,000 $0 1 Total Payroll $20,000 $24,000 $30,000 8.0 Financial Plan The following sections will outline important financial information. 8.1 Important Assumptions The following table details important Financial Assumptions. Table: General Assumptions General Assumptions 2004 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 2005 2 10.00% 10.00% 30.00% 0 2006 3 10.00% 10.00% 30.00% 0 10.00% 10.00% 30.00% 0 Page 14 HandyMan Stan 8.2 Break-even Analysis The Break-even Analysis indicates what will be needed in monthly revenue to reach the breakeven point. Table: Break-even Analysis Break-even Analysis Monthly Revenue Break-even $2,860 Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost 10% $2,580 Page 15 HandyMan Stan 8.3 Projected Profit and Loss The following table and charts will indicate Projec ted Profit and Loss. Page 16 HandyMan Stan Page 17 HandyMan Stan Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales 2004 $17,410 $1,707 $0 $1,707 2005 $53,500 $5,106 $0 $5,106 2006 $70,834 $6,761 $0 $6,761 Gross Margin Gross Margin % $15,703 90.20% $48,394 90.46% $64,073 90.46% Expenses Payroll Sales and Marketing and Other Expenses Depreciation License fees (electrical & plumbing) $20,000 $1,800 $1,596 $360 $24,000 $1,800 $1,596 $360 $30,000 $1,800 $1,596 $360 $2,400 $3,000 $1,800 $2,400 $3,600 $1,800 $2,400 $4,500 $1,800 $30,956 $35,556 $42,456 Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred ($15,253) ($13,657) $2,740 $0 $12,838 $14,434 $2,279 $3,168 $21,617 $23,213 $1,808 $5,943 Net Profit Net Profit/Sales ($17,994) -103.36% $7,391 13.82% $13,866 19.58% Insurance Payroll Taxes Gas/other incidentals Total Operating Expenses 8.4 Projected Cash Flow The following table and chart will indicate Projec ted Cash Flow. Page 18 HandyMan Stan Page 19 HandyMan Stan Table: Cash Flow Pro Forma Cash Flow 2004 2005 2006 Cash from Operations Cash Sales Subtotal Cash from Operations $17,410 $17,410 $53,500 $53,500 $70,834 $70,834 Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received $0 $0 $0 $0 $0 $0 $0 $17,410 $0 $0 $0 $0 $0 $0 $0 $53,500 $0 $0 $0 $0 $0 $0 $0 $70,834 2004 2005 2006 Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations $20,000 $12,484 $32,484 $24,000 $20,150 $44,150 $30,000 $24,972 $54,972 Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent $0 $0 $0 $4,868 $0 $0 $0 $37,352 $0 $0 $0 $4,688 $0 $0 $0 $48,838 $0 $0 $0 $4,727 $0 $0 $0 $59,699 ($19,943) $557 $4,662 $5,220 $11,135 $16,354 Cash Received Expenditures Net Cash Flow Cash Balance Page 20 HandyMan Stan 8.5 Projected Balance Sheet The following table will indicate the Projec ted Balance Sheet. Table: Balance Sheet Pro Forma Balance Sheet 2004 2005 2006 $557 $0 $557 $5,220 $0 $5,220 $16,354 $0 $16,354 $8,000 $1,596 $6,404 $6,961 $8,000 $3,192 $4,808 $10,028 $8,000 $4,788 $3,212 $19,566 2004 2005 2006 $1,323 $0 $0 $1,323 $1,686 $0 $0 $1,686 $2,085 $0 $0 $2,085 $25,132 $26,455 $20,444 $22,130 $15,717 $17,802 Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital $0 ($1,500) ($17,994) ($19,494) $6,961 $0 ($19,494) $7,391 ($12,102) $10,028 $0 ($12,102) $13,866 $1,764 $19,566 Net Worth ($19,494) ($12,102) $1,764 Assets Current Assets Cash Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Page 21 HandyMan Stan 8.6 Business Ratios The following table indicates Business Ratios specific to HandyMan Stan as well as industry ratios for the Personal and Household Goods Repair and Maintenance industry, NAICS code 811490. Page 22 HandyMan Stan Table: Ratios Ratio Analysis 2004 0.00% 2005 207.30% 2006 32.40% Industry Profile 9.27% Percent of Total Assets Other Current Assets Total Current Assets Long-term Assets Total Assets 0.00% 8.00% 92.00% 100.00% 0.00% 52.05% 47.95% 100.00% 0.00% 83.58% 16.42% 100.00% 27.35% 66.95% 33.05% 100.00% Current Liabilities Long-term Liabilities Total Liabilities Net Worth 19.00% 361.03% 380.03% -280.03% 16.81% 203.88% 220.69% -120.69% 10.66% 80.33% 90.98% 9.02% 22.05% 8.56% 30.61% 69.39% Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes 100.00% 90.20% 193.55% 0.00% -87.62% 100.00% 90.46% 76.64% 0.00% 24.00% 100.00% 90.46% 70.88% 0.00% 30.52% 100.00% 18.28% 5.96% 0.65% 67.63% Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets 0.42 0.42 380.03% 92.31% -258.49% 3.10 3.10 220.69% -87.25% 105.30% 7.84 7.84 90.98% 1122.93% 101.24% 2.41 1.20 34.25% 244.58% 371.96% Additional Ratios Net Profit Margin Return on Equity 2004 -103.36% 0.00% 2005 13.82% 0.00% 2006 19.58% 786.05% n.a n.a 10.44 27 2.50 12.17 27 5.34 12.17 27 3.62 n.a n.a n.a 0.00 0.05 0.00 0.08 10.09 0.12 n.a n.a ($766) -5.57 $3,534 5.63 $14,269 11.96 n.a n.a 0.40 19% 0.42 0.00 0.00 0.19 17% 3.10 0.00 0.00 0.28 11% 7.84 40.15 0.00 n.a n.a n.a n.a n.a Sales Growth Activity Ratios Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout Page 23 Appendix Table: Sales Forecast Sales Forecast Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0% $0 $0 $100 $165 $150 $280 $305 $450 $525 $650 $775 $850 0% 0% 0% $0 $0 $0 $0 $0 $0 $87 $23 $32 $144 $38 $53 $131 $35 $48 $244 $64 $90 $265 $70 $98 $392 $104 $144 $457 $121 $168 $566 $150 $208 $674 $178 $248 $740 $0 $272 Decks Paint Weather proofing 0% 0% 0% $0 $0 $0 $0 $0 $0 $36 $59 $33 $59 $97 $54 $54 $89 $50 $101 $165 $92 $110 $180 $101 $162 $266 $149 $189 $310 $173 $234 $384 $215 $0 $457 $256 $0 $502 $281 Parts 0% $0 $0 $20 $33 $30 $56 $61 $90 $105 $130 $155 $170 Floors Total Sales 0% $0 $0 $0 $0 $38 $428 $63 $706 $57 $642 $106 $1,198 $116 $1,305 $171 $1,926 $200 $2,247 $247 $2,782 $295 $3,038 $323 $3,137 Jan $0 Feb $0 Mar $7 Apr $12 May $11 Jun $20 Jul $21 Aug $32 Sep $37 Oct $46 Nov $54 Dec $60 Electrical Fences Windows $0 $0 $0 $0 $0 $0 $4 $1 $3 $7 $1 $4 $7 $1 $4 $12 $2 $7 $13 $2 $8 $20 $3 $12 $23 $4 $13 $28 $4 $17 $34 $5 $20 $37 $0 $22 Decks Paint Weather proofing $0 $0 $0 $0 $0 $0 $1 $5 $2 $2 $9 $3 $2 $8 $3 $4 $15 $6 $4 $16 $6 $6 $24 $9 $8 $28 $10 $9 $35 $13 $0 $41 $15 $0 $45 $17 Parts $0 $0 $16 $26 $24 $45 $49 $72 $84 $104 $124 $136 Floors Subtotal Direct Cost of Sales $0 $0 $0 $0 $2 $41 $3 $67 $2 $61 $4 $114 $5 $125 $7 $184 $8 $214 $10 $266 $12 $305 $13 $329 Sales Plumbing Electrical Fences Windows Direct Cost of Sales Plumbing Page 1 Appendix Table: Personnel Personnel Plan Jan $0 $0 Feb $0 $0 Mar $2,000 $0 Apr $2,000 $0 May $2,000 $0 Jun $2,000 $0 Jul $2,000 $0 Aug $2,000 $0 Sep $2,000 $0 Oct $2,000 $0 Nov $2,000 $0 Dec $2,000 $0 Total People 1 1 1 1 1 1 1 1 1 1 1 1 Total Payroll $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Stan Other 0% 0% Page 2 Appendix Table: General Assumptions General Assumptions Jan Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 Feb 2 Mar 3 Apr 4 May 5 Jun 6 Jul 7 Aug 8 Sep 9 Oct 10 Nov 11 Dec 12 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 10.00% 30.00% 0 Page 3 Appendix Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Jan $0 $0 Feb $0 $0 Mar $428 $41 Apr $706 $67 May $642 $61 Jun $1,198 $114 Jul $1,305 $125 Aug $1,926 $184 Sep $2,247 $214 Oct $2,782 $266 Nov $3,038 $305 Dec $3,137 $329 Other Costs of Sales Total Cost of Sales $0 $0 $0 $0 $0 $41 $0 $67 $0 $61 $0 $114 $0 $125 $0 $184 $0 $214 $0 $266 $0 $305 $0 $329 $0 0.00% $0 0.00% $387 90.46% $639 90.46% $581 90.46% $1,084 90.46% $1,181 90.46% $1,742 90.46% $2,033 90.46% $2,516 90.46% $2,733 89.95% $2,807 89.51% Gross Margin Gross Margin % Expenses Payroll $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $133 $30 $133 $30 $133 $30 $133 $30 $133 $30 $133 $30 $133 $30 $133 $30 $133 $30 $133 $30 $133 $30 $133 $30 $200 $0 $150 $200 $0 $150 $200 $300 $150 $200 $300 $150 $200 $300 $150 $200 $300 $150 $200 $300 $150 $200 $300 $150 $200 $300 $150 $200 $300 $150 $200 $300 $150 $200 $300 $150 $663 $663 $2,963 $2,963 $2,963 $2,963 $2,963 $2,963 $2,963 $2,963 $2,963 $2,963 ($663) ($530) $247 ($663) ($530) $244 ($2,576) ($2,443) $240 ($2,324) ($2,191) $237 ($2,382) ($2,249) $234 ($1,879) ($1,746) $230 ($1,782) ($1,649) $227 ($1,221) ($1,088) $223 ($930) ($797) $220 ($447) ($314) $216 ($230) ($97) $213 ($156) ($23) $209 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Net Profit ($910) ($907) ($2,816) ($2,561) ($2,616) ($2,109) ($2,009) ($1,444) ($1,150) ($663) ($443) ($365) Net Profit/Sales 0.00% 0.00% -657.96% -362.66% -407.46% -176.00% -153.90% -74.99% -51.20% -23.83% -14.60% -11.64% Sales and Marketing and Other Expenses Depreciation License fees (electrical & plumbing) Insurance Payroll Taxes Gas/other incidentals Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred 15% Page 4 Appendix Table: Cash Flow Pro Forma Cash Flow Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $0 $0 $0 $0 $428 $428 $706 $706 $642 $642 $1,198 $1,198 $1,305 $1,305 $1,926 $1,926 $2,247 $2,247 $2,782 $2,782 $3,038 $3,038 $3,137 $3,137 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received $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) New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Other Current Assets Sales of Long-term Assets New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Received $0 $0 $428 $706 $642 $1,198 $1,305 $1,926 $2,247 $2,782 $3,038 $3,137 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Expenditures Expenditures from Operations Cash Spending 0.00% $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Bill Payments $26 $777 $785 $1,112 $1,134 $1,127 $1,175 $1,183 $1,238 $1,266 $1,313 $1,349 Subtotal Spent on Operations $26 $777 $2,785 $3,112 $3,134 $3,127 $3,175 $3,183 $3,238 $3,266 $3,313 $3,349 Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets $0 $387 $0 $0 $391 $0 $0 $394 $0 $0 $397 $0 $0 $400 $0 $0 $404 $0 $0 $407 $0 $0 $411 $0 $0 $414 $0 $0 $417 $0 $0 $421 $0 $0 $424 $0 Purchase Long-term Assets Dividends Subtotal Cash Spent $0 $0 $413 $0 $0 $1,167 $0 $0 $3,179 $0 $0 $3,509 $0 $0 $3,534 $0 $0 $3,530 $0 $0 $3,582 $0 $0 $3,594 $0 $0 $3,652 $0 $0 $3,683 $0 $0 $3,734 $0 $0 $3,774 ($413) $20,087 ($1,167) $18,919 ($2,751) $16,169 ($2,803) $13,366 ($2,892) $10,473 ($2,332) $8,141 ($2,277) $5,865 ($1,668) $4,197 ($1,405) $2,792 ($901) $1,890 ($696) $1,194 ($637) $557 Additional Cash Spent Net Cash Flow Cash Balance Page 5 Appendix Table: Balance Sheet Pro Forma Balance Sheet Assets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Starting Balances Current Assets Cash Other Current Assets $20,500 $0 $20,087 $0 $18,919 $0 $16,169 $0 $13,366 $0 $10,473 $0 $8,141 $0 $5,865 $0 $4,197 $0 $2,792 $0 $1,890 $0 $1,194 $0 $557 $0 Total Current Assets $20,500 $20,087 $18,919 $16,169 $13,366 $10,473 $8,141 $5,865 $4,197 $2,792 $1,890 $1,194 $557 $8,000 $0 $8,000 $8,000 $133 $7,867 $8,000 $266 $7,734 $8,000 $399 $7,601 $8,000 $532 $7,468 $8,000 $665 $7,335 $8,000 $798 $7,202 $8,000 $931 $7,069 $8,000 $1,064 $6,936 $8,000 $1,197 $6,803 $8,000 $1,330 $6,670 $8,000 $1,463 $6,537 $8,000 $1,596 $6,404 $28,500 $27,954 $26,653 $23,770 $20,834 $17,808 $15,343 $12,934 $11,133 $9,595 $8,560 $7,731 $6,961 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable $0 $751 $748 $1,074 $1,097 $1,087 $1,135 $1,142 $1,196 $1,222 $1,268 $1,303 $1,323 Current Borrowing Other Current Liabilities Subtotal Current Liabilities $0 $0 $0 $0 $0 $751 $0 $0 $748 $0 $0 $1,074 $0 $0 $1,097 $0 $0 $1,087 $0 $0 $1,135 $0 $0 $1,142 $0 $0 $1,196 $0 $0 $1,222 $0 $0 $1,268 $0 $0 $1,303 $0 $0 $1,323 $30,000 $30,000 $29,613 $30,363 $29,222 $29,970 $28,828 $29,902 $28,431 $29,527 $28,030 $29,118 $27,627 $28,762 $27,219 $28,361 $26,809 $28,005 $26,395 $27,617 $25,977 $27,246 $25,556 $26,860 $25,132 $26,455 Long-term Liabilities Total Liabilities Paid-in Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Retained Earnings ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) Earnings Total Capital $0 ($1,500) ($910) ($2,410) ($1,816) ($3,316) ($4,632) ($6,132) ($7,193) ($8,693) ($9,809) ($11,309) ($11,919) ($13,419) ($13,928) ($15,428) ($15,372) ($16,872) ($16,522) ($18,022) ($17,185) ($18,685) ($17,629) ($19,129) ($17,994) ($19,494) Total Liabilities and Capital $28,500 $27,954 $26,653 $23,770 $20,834 $17,808 $15,343 $12,934 $11,133 $9,595 $8,560 $7,731 $6,961 Net Worth ($1,500) ($2,410) ($3,316) ($6,132) ($8,693) ($11,309) ($13,419) ($15,428) ($16,872) ($18,022) ($18,685) ($19,129) ($19,494) Page 6