Bay Business Plan

7/31/2019 Bay Business Plan

1/37

Table of Contents


2/37

Table of Contents

1.0 Executive Summary ....................................................................................................................................1

Chart: Highlights .......................................................................................................................................2

1.1 Objectives ................................................................................................................................................21.2 Mission ....................................................................................................................................................2

1.3 Keys to Success .......................................................................................................................................3

2.0 Company Summary .....................................................................................................................................32.1 Company Ownership ..............................................................................................................................4

2.2 Company History ....................................................................................................................................4

Table: Past Performance ...........................................................................................................................5Chart: Past Performance ...........................................................................................................................6

3.0 Services .......................................................................................................................................................64.0 Market Analysis Summary .........................................................................................................................6

4.1 Market Segmentation ..............................................................................................................................7Chart: Market Analysis (Pie) ....................................................................................................................7

Table: Market Analysis .............................................................................................................................7

4.2 Target Market Segment Strategy ............................................................................................................8

4.3 Service Business Analysis ......................................................................................................................8

5.0 Strategy and Implementation Summary .....................................................................................................85.1 Competitive Edge ....................................................................................................................................8

5.2 Sales Strategy ..........................................................................................................................................9

5.2.1 Sales Forecast .................................................................................................................................11Chart: Sales Monthly ..........................................................................................................................11

Chart: Sales by Year ...........................................................................................................................12

Table: Sales Forecast ..........................................................................................................................12

5.3 Marketing Strategy ................................................................................................................................12

5.4 Milestones .............................................................................................................................................13

Table: Milestones ....................................................................................................................................14


3/37

Table of Contents

Chart: Break-even Analysis ....................................................................................................................20

8.4 Projected Profit and Loss ......................................................................................................................21

Chart: Profit Yearly .................................................................................................................................21Chart: Gross Margin Monthly ................................................................................................................22

Chart: Gross Margin Yearly ...................................................................................................................22

Chart: Profit Monthly ..............................................................................................................................23................................................................................................................................................................. 23

Table: Profit and Loss .............................................................................................................................24

8.5 Projected Cash Flow .............................................................................................................................25Chart: Cash ..............................................................................................................................................25

Table: Cash Flow ....................................................................................................................................26

..................................................................................................................................................................... 26Table: Balance Sheet ...............................................................................................................................27

8.7 Business Ratios .....................................................................................................................................27Table: Ratios ...........................................................................................................................................28

Table: Sales Forecast .........................................................................................................................................1

........................................................................................................................................................................... 1

Table: Personnel ................................................................................................................................................2

........................................................................................................................................................................... 2

Table: Profit and Loss .......................................................................................................................................3

........................................................................................................................................................................... 4Table: Cash Flow ..............................................................................................................................................5

Table: Balance Sheet .........................................................................................................................................6


4/37

Truckbay

1.0 Executive Summary

Truckbay, LLC is a Limited Liability Company organized under the laws of Nebraska andestablished in October 2002 by co-founders Jim Bell and John Bell. The new fundamentalbusiness model for Truckbay.com is to become a light equipment listing service on eBay Motors

and build a comprehensive network of linked websites that deliver increased sales andexposure. The ultimate goal is to build Truckbay.com into the leading classified listing service in

the global light equipment market. The best way to achieve this goal is to provide the mostviews per listing of any service.

Truckbay was founded in October 2002. After an initial five-month software development

period, Truckbay.com launched in February 2003. Currently, the core business model consistsof recurring monthly revenue from a membership fee charged to light duty truck dealers. This

membership fee allows access to a private e-community of like dealers who utilize this industry-

specific software to buy and sell wholesale equipment online.

In September, 2004, a proposed merger was discussed between Truckbay, Mr. Y and Mr. Z. The

purpose of this discussion was to analyze the benefits Truckbay would receive from a consultingarrangement with them. Mr. Y and Mr. Z founded Company X in early 2000. Company X

became the most successful listing service for eBay Motors, capturing over 21% of their totalautomotive listings in their brief history. Company X agreed to sell their company to eBay

Corporation in January 2003 returning over 800% return to their original investors. Theirsuccess and expertise in eBay Motors and Search Engine technology are ideal compliments as

Truckbay turns its focus to this similar business model. Company X has agreed to contributecapital, business and technical consulting, along with a venture capital pool, in exchange for

15% ownership in Truckbay.

Truckbay will focus on four key markets to sell our online classified advertising solutions to:

Light Truck Dealers

Fleets

Financial Institutions

d d l


5/37

Truckbay

Chart: Highlights

Sales

Gross Margin

Net Profit

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

2005 2006 2007

Highlights

1.1 Objectives

Truckbay's fundamental objective is to provide a leading, online classified advertising

solution that targets the global heavy truck and equipment market. Our key goals include:

1. Leverage eBay Motor's marketplace to gain rapid market exposure in this large nicheindustry.

2 Utilize cutting-edge Search Engine technology to drive viewership


6/37

Truckbay

1.3 Keys to Success

We believe that our main keys to success include:

Utilizing key Search Engine technology to drive traffic

Leveraging eBay Motors to drive traffic

Positive team workplace environment

Seasoned management team

We will minimize certain risk factors by:

Maintaining a low overhead structure

Hiring a draw, versus commissioned, Sales Team

Utilizing successful practices from a proven business model

2.0 Company Summary

Truckbay was founded in October 2002. After an initial five-month software developmentperiod, the website launched in February 2003. Currently, the core business model consists of

recurring monthly revenue from a membership fee charged to heavy duty truck and trailerdealers. This membership fee allows access to a private e-community of like dealers who

utilize this industry specific software to buy and sell wholesale equipment online.

Truckbay did not meet revenue expectations during the first two years of business, even

though over one-half the potential market tried our limited services and over 800 trucks andtrailers are listed on the site. Unfortunately, a majority of the members that utilize

Truckbay are not listing their equipment at wholesale prices. Since this is the core business, themembership cannot gain momentum as long as Dealers try to sell their wholesale inventory at

retail prices. This delay in market acceptance has unexpectedly exhausted the working capitalbudgeted for this start-up.

It has become evident that continuing to nurture this business model will not allow the


7/37


8/37

Truckbay

The company will continue to maintain the lowest possible overhead and will not incur any debtunless absolutely necessary. The founders believe that keeping fixed costs down is a key to

success. This has been shown during the first two years of business.

Table: Past Performance

Past Performance

2002 2003 2004

Sales $0 $31,000 $43,000Gross Margin $0 ($15,000) $10,000Gross Margin % 0.00% -48.39% 23.26%

Operating Expenses $0 $48,000 $35,000

Balance Sheet

2002 2003 2004

Current Assets

Cash $0 $3,000 $4,000Other Current Assets $0 $1 $1Total Current Assets $0 $3,001 $4,001

Long-term Assets

Long-term Assets $0 $26,000 $26,000Accumulated Depreciation $0 $11,000 $11,000Total Long-term Assets $0 $15,000 $15,000

Total Assets $0 $18,001 $19,001

Current Liabilities

Accounts Payable $0 $0 $0Current Borrowing $0 $3,500 $7,000Other Current Liabilities (interest free) $0 $0 $0Total Current Liabilities $0 $3,500 $7,000

Long-term Liabilities $0 $0 $0Total Liabilities $0 $3,500 $7,000


9/37

Truckbay

Chart: Past Performance

Sales

Gross

Net

$0

$10,000

$20,000

$30,000

$40,000

($10,000)

2002 2003 2004

Past Performance

3.0 Services

Truckbay will be a multi-channel marketing tool for classified equipment, and will offer thefollowing core services:

Provide a premier listing service for eBay Motors to assist their clients in advertising, selling

and ultimately making more profit for their equipment. Provide a heavy-equipment search engine on multiple websites for the global Internet

community.

Provide a private wholesale section for the dealer network to exchange equipment.


10/37

Truckbay

expensive and more efficient solution to advertising their trades, repossessions and agedequipment.

4.1 Market Segmentation

Truckbay will target markets with the highest volume of potential equipment listings. These

target markets in North America include:

Mid-to-large sized truck dealerships

Mid-to-large sized heavy equipment dealerships

Fleets operating 5 or more vehicles

Trucking Companies operating 5 or more vehicles

Chart: Market Analysis (Pie)

Heavy Truck and Equipm ent De

Fleets and Trucking Companies

Individual Owners of Equipm ent

Financial Institutions

Market Analysis (Pie)


11/37

Truckbay

4.2 Target Market Segment Strategy

By focusing our efforts on these specific markets, we will grow our inventory database quickerthan trying to reach the entire market segment. While not forecasted in our financial plan, we

intend to gain incremental growth from the individual owner operator market as they find ourservices at eBay Motors and from top placement on search engines.

4.3 Service Business Analysis

The often neglected heavy truck and equipment industry has relatively few organizations

offering online services. While we anticipate that this will change, Truckbay is currentlypositioned to take advantage of being "first to market" with our unique classified listing service.

Typically, this conservative industry trails the more glamorous automotive industry by 3-5years in adopting technology trends. These Dealers may no longer survive doing business the

old fashion way. As they slowly embrace technology, Dealers have begun to allocate more andmore of their advertising budget for online services. We are in our infancy, while eBay Motors

has a proven track record. As of today, no organization has a similar service that targets theheavy truck and equipment business. Truckbay will fill that void and provide a valuable new

service that produces immediate results. Wide-spread acceptance will become inevitable aslong as we remain proactive.

5.0 Strategy and Implementation Summary

The sales and marketing strategy is to move as quickly as possible into the eBay Motors

classified listing service for heavy trucks and equipment. It has been shown that these marketareas are presently not being actively pursued by the competition. We will maintain our lead

and competitive advantage if we:

Emphasize serviceWe will focus on surpassing our customers' expectations in every facet of our business.


12/37

Truckbay

5.2 Sales Strategy

The marketing strategy discussed previously in this business plan will generate the desiredsales leads. These leads will begin with a phone call or email to Truckbay. In addition, ourSales Team will proactively make calls to their respective assigned regions. Initially, we plan to

divide North America into eight regions of responsibility (Northeast, Mid-Atlantic, Southeast,North Central, South Central, West, Canada and Mexico). Team members will be provided with

a contact database of heavy truck and equipment dealers in their area. This list will be acquiredby Polk, the leading provider of list in our industry.

As mentioned, our Sales Team will be proactively contacting Dealers, Trucking Companies,

Fleets, Finance Companies and individual owners of heavy trucks and equipment. We willsupport whatever level of service the customer requires with the objective to get their listings

in our database. We will even have the ability to send a 3rd party inspector to their property

and gather the data and take multiple pictures to achieve this goal.

To protect the company's long term viability, team members will be required to sign a limited

non-compete agreement. In addition, we will invest in the infrastructure to maintain theintegrity of our sales database. The company will provide each team member with a networked

PC that will allow them to access the internet at high speeds. The Company database will be

maintained by Salesforce.com, which will deter theft of information and keep the dataclean. Each PC will include limited software to keep the initial investment low. All PCs will havethe ability to print to a single laser printer.

With regard to our database of customers and prospects, it is essential that a consultativesales approach be adopted to ensure a thorough, organized, orderly approach for each

prospect. Detailed notes will be kept on each client. Follow-up and persistence will pay off. Thisapproach will allow the company tremendous flexibility in case of turnover. A new team

member will have the ability to be quickly trained and instantly become a profit center byutilizing the existing contact database with detailed notes.

The typical sales position will consist of the following responsibilities:


13/37

Truckbay

ownership and maximize the revenue from each potential client. It requires additional energy tolisten to each client every day. While some clients require more hand-holding than others, the

Team member that "goes the extra mile" to achieve the ultimate goal, a sold listing, will besubstantially rewarded.

The purpose of a Team concept versus the typical Salesforce is to cultivate a "true" teamenvironment. Our mission statement clearly describes our focus to surpass the customer's

expectation. What typically happens when a customer calls a company and their assignedsalesperson is not immediately available? They are quickly passed on to voice mail or put on

hold. This will not surpass our customer's expectations and they will become frustrated, hang-up and/or take their business elsewhere. This is not an option.

Therefore, our customer experience will be much different. If an assigned Team member is not

available to immediately speak with our clients, the individual that picks up the phone call

before the end of the second ring will take ownership of the call. They will be trained andprovided access to the client's information so that the customer is "wowed" by the ending

results. While the interim Team member will not receive any commission for "going the extramile," they will be able to confidently expect the same treatment of their clients in the

inevitable event they are unavailable. This is a main reason why we will have a monthly teambonus structure. This positive office environment cultivates a win-win solution. If we do not

master these skills, someone else will.

To assist in the hiring process, we will offer the best, qualified candidates a base salary of

$2,500 per month. Each assigned cubicle will be treated as a separate profit center for thecompany. The office structure will be an open call center with cubicles that cultivate active

energy and positive synergies for the Team members. Cab Trucker has a successful history inbuilding and managing a team environment as a manager.


14/37

Truckbay

5.2.1 Sales Forecast

As the following table shows, the company plans to deliver sales of approximately $824,000 inthe first year, $1,290,000 in the second year, and $1,660,000 in the third year plan

implementation.

Chart: Sales Monthly

eBay Motors Single Listing

eBay Motors Unlim ited Listings

Affiliate Buyer's Ass istance Prog

Buyer Ass istant Partnerships

Co-op Advertising

Dealers Single Listing

Dealer Wholesale Membership

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

FebApr

JunAug

OctDec

Sales Monthly


15/37

Truckbay

Chart: Sales by Year

eBay Motors Single Listing

eBay Motors Unlim ited Listings

Affiliate Buyer's Ass istance Prog

Buyer Ass istant Partnerships

Co-op Advertising

Dealers Single Listing

Dealer Wholesale Membership

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

2005 2006 2007

Sales by Year

Table: Sales Forecast

Sales Forecast

2005 2006 2007

Sales

eBay Motors Single Listing $640,000 $750,000 $1,000,000eBay Motors Unlimited Listings $138,080 $480,000 $600,000Affiliate Buyer's Assistance Programs $6,490 $7,500 $8,000Buyer Assistant Partnerships $4,100 $6,000 $6,000Co-op Advertising $1,500 $2,000 $2,000Dealers Single Listing $4 700 $6 000 $6 000


16/37

Truckbay

It is estimated that eBay Motors is helping sell 1 car per minute, clearly making them the topautomotive seller in the world.

For the first time in eBay's history, it has hired sales staff to actively contact used car dealersand promote the site. Truckbay will also have a Sales Team that proactively contacts the heavy

truck and equipment market. Ford has recently advised its dealers that the number of vehiclesbeing sold sight-unseen prior to sale has risen above 5%. Our goal is to be first to market for

trucks, and offer the best service to this large niche market.

5.4 Milestones

Our first milestone will be to secure $475,000 in capital from the private market. 19% of thebusiness will be available with a minimum investment of $25,000 securing 1%. We have

allocated 2 months to gather these funds; however, this may be accelerated as interest hasalready been expressed by outside investors.

After the holidays, we plan to begin building the technical infrastructure and the eBay MotorsAPI integration. Concurrently, we will redesign the website to improve upon the existing

structure. A main focus will be to eliminate the password requirement in order to access theexisting inventory. There will continue to be a private "Dealer-only" link which will be password-

protected and include wholesale pricing.

Once the website is complete, the core search engine technology will be cloned to the

homepage of 10 new affiliate websites that target a smaller, popular niche market. While thesewebsites will look entirely different, they will ultimately provide filtered search results from the

main website database or information for typical Search Engine questions from the consumer.

In addition, there will be links to all other Truckbay websites on each homepage navigatingusers to areas of interest. This will not be transparent to the average Web surfer.

We estimate the design and development will take no more than 3 months. Assuming we stay

on schedule, we will try to secure office space and begin the process of recruiting and training aSales Team for a March 1, 2005 launch date. The first month will be used to perfect the website


17/37

Truckbay

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager DepartmentReview Business Plan 10/15/2004 11/1/2004 $0 ALL ALLSecure Private Capital 11/1/2004 12/31/2004 $500 RAS, LP N/ARepurposing website 1/3/2005 2/1/2005 $3,000 Dale Corley MarketingBuild website 1/3/2005 3/1/2005 $12,500 Shane Rapp TechnologyBuild eBAY API integration 1/3/2005 3/1/2005 $12,500 Shane Rapp TechnologyCreate 10 HTML affiliate websites 1/3/2005 3/1/2005 $10,000 Shane Rapp Technology

Recruit and Hire Sales Team 3/1/2005 4/1/2005 $5,000 Russ Chaney SalesOffice Furniture & PCs 3/1/2005 6/1/2005 $10,000 Dale Corley GMOffice Rent Factor 2/1/2005 12/31/2005 $15,000 Dale Corley GMSubmit Search Engine Ad words 3/1/2005 12/31/2005 $2,500 Dale Corley AdvertisingPay-Per-Click w/ Google &Overture

3/1/2005 12/31/2005 $5,000 Dale Corley Advertising

Software Leasing - Salesforce.com 3/1/2005 12/31/2005 $5,000 Dale Corley SaleseBay Store and Ad words 3/1/2005 12/31/2005 $2,500 Dale Corley AdvertisingTotals $83,500

Chart: Milestones

Create 10 HTML aff iliate w ebsites

Build w ebsite

Secure Private Capital

Milestones


18/37

Truckbay

6.0 Web Plan Summary

Truckbay will consist of two core and ten affiliate websites, all driving listings and traffic to eachother. www.Truckbay.net will be our eBay Motors listing service website. www.Truckbay.com

will be our main classified advertising website. The ten affiliate websites will be described in the

next section.

6.1 Website Marketing Strategy

The customer has two choices from the beginning. They can add a few listings and try out the

auction service or add their entire inventory. Team members will be trained to ask if they cangather more of their inventory off of their company website to add to their free showroom. Thisshowroom will be built into our eBay template and provide additional exposure to all of the

Dealer's inventory. In addition, select inventory will be placed in the Truckbay eBay Store,ultimately driving more views, traffic and leads to our existing clients.

From here our proactive Sales Team will research matching equipment from the eBay Motorssold archives to pick out those items they feel will be successful in the eBay Motors auction. A

follow-up phone call discussing the research results and reminding them that their listing is

already in our database will help close more listings.

Once a new listing has been added to the auction, showrooms and stores, we will download theequipment to the main website. This public website will hold our entire database of classified

ads and will have a simple Search Feature on the homepage for visitors to easily find theequipment they are looking for. Once they find matching listings, they will have the ability to

view the dealer contact information or save it for future reference and comparison.

Finally, we will start with 10 linked websites that target a smaller niche market within the heavytruck and equipment industry. As we get closer to the launch date, we will research popularkeywords and phrases used by our customers when they visit Search Engines. We will use the

most common phrases and keywords to create our new domain names. For example, we know
http://www.truckbay.net/http://www.truckbay.com/http://www.truckbay.com/http://www.truckbay.net/


19/37

Truckbay

helpful as we fine-tune each individual website. We have allocated three months ofdevelopment time and one month of debugging.

Cab will be responsible for providing Mr. Z with the keyword and phrase market research so hecan secure the appropriate Web domains and Search Engine Ad words. Phase two of our

development plan includes continuing to build affiliate linked websites and enhancing thefunctionality and appearance of our existing network of sites.

Our websites will be hosted externally at a hurricane-protected server facility in Miami,

Florida. Z will monitor this relationship to ensure our needs are met and company protected.

7.0 Management Summary

Truckbay is fortunate to have numerous consulting partners that will compliment any holes we

may have in our Management team. Three of the four partners have owned and operate highlysuccessful corporations that have achieved tremendous growth and returns for their

investors. More importantly, Mr. Y and Mr. Z have been successful in building and running asimilar business to the one proposed in this plan.

Specifically, the Management Team will consist of the following people and their areas ofexpertise:

Cab Trucker - President of Company focusing on Operations, Sales, Marketing and

Advertising

Mr. Y - Management Advisor focusing on Legal, Operations and Sales

Mr. Z - Technical Advisor focusing on IT, Hosting and all things technical

John Speed - Entrepreneurial Consultant

Barry Stir - Legal Advisor

7.1 Personnel Plan

Truckbay plans to employ one full-time Web developer, one part-time Web


20/37

Truckbay

will rotate two team members each week to work a 10AM - 7PM shift in order to supportour West Coast customers.

Table: Personnel

Personnel Plan

2005 2006 2007

Sales Team Personnel

Base salary $127,500 $127,500 $127,500Bonuses $5,800 $12,800 $12,800Commission on standard listing $68,058 $125,150 $162,200

Commission on Dealer Single Listing $470 $600 $600Commission on Full-service Dealer Listing $2,100 $4,000 $4,000Subtotal $203,928 $270,050 $307,100

Development Personnel

Web Developer 1 $78,000 $78,000 $78,000Assistant Web Developer $30,000 $35,000 $35,000Developer Bonus $0 $0 $0Subtotal $108,000 $113,000 $113,000

General and Administrative Personnel

President $60,000 $60,000 $60,000Name or Title or Group $0 $0 $0Name or Title or Group $0 $0 $0Subtotal $60,000 $60,000 $60,000

Other Personnel

Name or Title or Group $0 $0 $0Name or Title or Group $0 $0 $0Name or Title or Group $0 $0 $0Subtotal $0 $0 $0

Total People 0 0 0

Total Payroll $371,928 $443,050 $480,100


21/37

Truckbay

8.1 Valuation

We understand that an investor's concern is to recoup his investment with a high profit in ashort period of time. Based on the experience of Company X, and with the help of its founders,

we conservatively estimate an earnings-based valuation of $5,500,000 for Truckbay in 2007.

For an investor contributing $475,000 now, that works out to an ending valuation of$1,043,000, with an IRR of 109%. This valuation is based on an exit strategy of selling the

company within 3-5 years to a related corporation (such as eBay). Details of the InvestmentAnalysis can be found below.

Table: Investment Analysis

Investment Analysis

Start 2005 2006 2007

Initial Investment

Investment $0 $475,000 $0 $0Dividends $0 $0 $300,000 $300,000Ending Valuation $0 $0 $0 $1,138,100Combination as Income Stream $0 ($475,000) $300,000 $1,438,100

Percent Equity Acquired 19%Net Present Value (NPV) $815,074

Internal Rate of Return (IRR) 108%

Assumptions

Discount Rate 10.00%

Valuation Earnings Multiple 10 10 10

Valuation Sales Multiple 2 2 2

Investment (calculated) $55,000 $475,000 $0 $0Dividends $0 $300,000 $300,000

Calculated Earnings-based Valuation $1,820,000 $4,360,000 $5,990,000

Calculated Sales-based Valuation $1,650,000 $2,580,000 $3,320,000


22/37

Truckbay

8.2 Important Assumptions

NOTES FOR PROJECTIONS

All sales projections/assumptions are based on historical data referenced from the first threeyears of Company X.

Other Assumptions:

1. We can find adequate office space to rent below $11 per square foot - full service in the

Atlanta market.2. We can recruit a highly skilled Web Developer for $78,000 salary plus bonus incentives.

3. The website development is completed by March 1, 2005.4. Truckbay's success will be based on the participation level of Mr. Y and Mr. Z.

Table: General Assumptions

General Assumptions

2005 2006 2007

Plan Month 1 2 3Current Interest Rate 10.00% 10.00% 10.00%Long-term Interest Rate 10.00% 10.00% 10.00%Tax Rate 30.00% 30.00% 30.00%Other 0 0 0

Chart: Benchmarks

Benchmarks


23/37

Truckbay

8.3 Break-even Analysis

The following table shows the break-even analysis for Truckbay's new websites and salesstrategy. The table shows that we need to sell roughly $29,000 of listings each month to break

even in the next year. Truckbay will reach its break-even point in April.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $23,478

Assumptions:

Average Percent Variable Cost 15%Estimated Monthly Fixed Cost $20,063

Chart: Break-even Analysis

$0

$4,000

$8,000

$12,000

$16,000

$20,000

($4 000)

Break-even Analysis


24/37

Truckbay

8.4 Projected Profit and Loss

The following table and charts shows our projected Profit and Loss for the next three years.Monthly details can be found in the Appendix. Our sales team salaries are counted as part of

our direct cost of sales, for the purpose of calculating our gross margin.

Chart: Profit Yearly

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

2005 2006 2007

Profit Yearly


25/37

Truckbay

Chart: Gross Margin Monthly

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

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

Gross Margin Monthly

Chart: Gross Margin Yearly

$1,200,000

Gross Margin Yearly


26/37

Truckbay

Chart: Profit Monthly

$0

$10,000

$20,000

$30,000

($10,000)

($20,000)


Profit Monthly


27/37

Truckbay

Table: Profit and Loss

Pro Forma Profit and Loss

2005 2006 2007

Sales $824,870 $1,291,500 $1,662,000Direct Cost of Sales $120,000 $150,000 $250,000Sales Team Payroll $203,928 $270,050 $307,100Other Costs of Sales $0 $0 $0Total Cost of Sales $323,928 $420,050 $557,100

Gross Margin $500,942 $871,450 $1,104,900

Gross Margin % 60.73% 67.48% 66.48%

Operating Expenses

Development Expenses

Development Payroll $108,000 $113,000 $113,000Training $4,000 $6,000 $6,000Other Development Expenses $0 $0 $0Total Development Expenses $112,000 $119,000 $119,000Development % 13.58% 9.21% 7.16%

General and Administrative Expenses

General and Administrative Payroll $60,000 $60,000 $60,000Marketing/Promotion $5,000 $5,000 $5,000Depreciation $2,400 $2,400 $2,400Rent $19,200 $19,200 $19,200Utilities $6,000 $6,000 $6,000Insurance $3,000 $3,000 $3,000Payroll Taxes $0 $0 $0Other $12,000 $12,000 $12,000Total General and Administrative Expenses $107,600 $107,600 $107,600General and Administrative % 13.04% 8.33% 6.47%

Other Expenses:

Other Payroll $0 $0 $0Meals and Entertainment $4,000 $6,000 $6,000Trade Shows and Association Dues $4,000 $4,000 $4,000


28/37

Truckbay

8.5 Projected Cash Flow

The cash flow projection shows that provisions for ongoing expenses are adequate to meet theneeds of the company as the business generates sufficient cash flow to support operations. We

will collect all fees up front from our customers and pay commissions at the end of each month.

Chart: Cash

Net Cash Flow

Cash Balance

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Jan

Feb

Mar

Apr

May

Jun Ju

l

Aug

Sep

Oct

Nov

Dec

Cash


29/37

Truckbay

Table: Cash Flow

Pro Forma Cash Flow

2005 2006 2007

Cash Received

Cash from Operations

Cash Sales $824,870 $1,291,500 $1,662,000Subtotal Cash from Operations $824,870 $1,291,500 $1,662,000

Additional Cash ReceivedSales Tax, VAT, HST/GST Received $0 $0 $0New Current Borrowing $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0New Long-term Liabilities $0 $0 $0Sales of Other Current Assets $0 $0 $0Sales of Long-term Assets $0 $0 $0New Investment Received $475,000 $0 $0Subtotal Cash Received $1,299,870 $1,291,500 $1,662,000

Expenditures 2005 2006 2007

Expenditures from Operations

Cash Spending $371,928 $443,050 $480,100Bill Payments $240,028 $405,298 $566,230Subtotal Spent on Operations $611,956 $848,348 $1,046,330

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0Principal Repayment of Current Borrowing $3,500 $3,500 $0Other Liabilities Principal Repayment $0 $0 $0Long-term Liabilities Principal Repayment $0 $0 $0

Purchase Other Current Assets $10,000 $0 $0Purchase Long-term Assets $0 $0 $0Dividends $0 $300,000 $300,000Subtotal Cash Spent $625,456 $1,151,848 $1,346,330

$ $ $


30/37

Truckbay

8.6 Projected Balance SheetThe following table shows our projected Balance Sheet. We plan to repay our current credit

card debt within two years. With the help help of Company X's founders, we should increase the

net worth of the business significantly over the next three years.

Table: Balance Sheet

Pro Forma Balance Sheet

2005 2006 2007

Assets

Current Assets

Cash $678,414 $818,066 $1,133,737Other Current Assets $10,001 $10,001 $10,001Total Current Assets $688,415 $828,067 $1,143,738

Long-term Assets

Long-term Assets $26,000 $26,000 $26,000Accumulated Depreciation $13,400 $15,800 $18,200Total Long-term Assets $12,600 $10,200 $7,800Total Assets $701,015 $838,267 $1,151,538

Liabilities and Capital 2005 2006 2007

Current Liabilities

Accounts Payable $28,737 $33,722 $47,687Current Borrowing $3,500 $0 $0Other Current Liabilities $0 $0 $0Subtotal Current Liabilities $32,237 $33,722 $47,687

Long-term Liabilities $0 $0 $0Total Liabilities $32,237 $33,722 $47,687

Paid-in Capital $530,000 $530,000 $530,000Retained Earnings ($42,999) ($161,222) ($25,455)Earnings $181,777 $435,768 $599,305Total Capital $668 778 $804 545 $1 103 850


31/37

Truckbay

Table: Ratios

Ratio Analysis

2005 2006 2007 Industry Profile

Sales Growth 1818.30% 56.57% 28.69% 2.79%

Percent of Total Assets

Other Current Assets 1.43% 1.19% 0.87% 42.87%Total Current Assets 98.20% 98.78% 99.32% 78.45%Long-term Assets 1.80% 1.22% 0.68% 21.55%Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 4.60% 4.02% 4.14% 34.05%Long-term Liabilities 0.00% 0.00% 0.00% 5.29%Total Liabilities 4.60% 4.02% 4.14% 39.34%Net Worth 95.40% 95.98% 95.86% 60.66%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%Gross Margin 60.73% 67.48% 66.48% 100.00%Selling, General & Administrative Expenses 38.69% 33.73% 30.42% 77.34%Advertising Expenses 0.29% 0.19% 0.14% 5.22%

Profit Before Interest and Taxes 31.54% 48.22% 51.51% 3.09%

Main Ratios

Current 21.35 24.56 23.98 1.94Quick 21.35 24.56 23.98 1.52Total Debt to Total Assets 4.60% 4.02% 4.14% 44.15%Pre-tax Return on Net Worth 38.83% 77.38% 77.56% 11.73%Pre-tax Return on Assets 37.04% 74.26% 74.35% 21.00%

Additional Ratios 2005 2006 2007

Net Profit Margin 22.04% 33.74% 36.06% n.a

Return on Equity 27.18% 54.16% 54.29% n.a

Activity Ratios

Accounts Payable Turnover 9.35 12.17 12.17 n.a


32/37

Appendix

Table: Sales Forecast

Sales Forecast


Sales

eBay Motors Single List ing 0% $0 $0 $16,000 $32,000 $48,000 $64,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000eBay Motors Unlimited Listings 0% $80 $500 $2,500 $5,000 $7,500 $10,000 $12,500 $15,000 $17,500 $20,000 $22,500 $25,000Affiliate Buyer's AssistancePrograms

0% $0 $0 $250 $300 $360 $432 $518 $622 $746 $896 $1,075 $1,290

Buyer Assistant Partnerships 0% $0 $0 $100 $200 $300 $500 $500 $500 $500 $500 $500 $500Co-op Advertising 0% $0 $0 $0 $0 $0 $0 $250 $250 $250 $250 $250 $250Dealers Single Listing 0% $0 $0 $300 $400 $500 $500 $500 $500 $500 $500 $500 $500Dealer Wholesale Membership 0% $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Total Sales $80 $500 $22,150 $40,900 $59,660 $78,432 $97,268 $99,872 $102,496 $105,146 $107,825 $110,540

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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

Technology $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000

Subtotal Direct Cost of Sales $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000

Page 1

A di


33/37

Appendix

Table: Personnel

Personnel Plan


Sales Team Personnel

Base salary $0 $0 $7,500 $7,500 $7,500 $10,000 $10,000 $12,500 $15,000 $17,500 $20,000 $20,000

Bonuses 0% $0 $0 $0 $0 $0 $0 $0 $0 $1,200 $1,400 $1,600 $1,600Commiss ion on standard l ist ing 10% $0 $0 $0 $0 $0 $7,543 $9,427 $9,687 $9,950 $10,215 $10,482 $10,754Commiss ion on Dealer Single Listing 10% $0 $0 $30 $40 $50 $50 $50 $50 $50 $50 $50 $50Commission on Full-service DealerListing

5% $0 $0 $0 $0 $0 $300 $300 $300 $300 $300 $300 $300

Subtotal $0 $0 $7,530 $7,540 $7,550 $17,893 $19,777 $22,537 $26,500 $29,465 $32,432 $32,704

Development Personnel

Web Developer 1 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500

Ass istant Web Developer 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500Developer Bonus 1% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000

General and AdministrativePersonnelPresident $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Name or Title or Group $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0


Subtotal $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Other Personnel




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

Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $14,000 $14,000 $21,530 $21,540 $21,550 $31,893 $33,777 $36,537 $40,500 $43,465 $46,432 $46,704

Page 2

A di


34/37

Appendix

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $80 $500 $22,150 $40,900 $59,660 $78,432 $97,268 $99,872 $102,496 $105,146 $107,825 $110,540

Direct Cost of Sales $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000

Sales Team Payroll $0 $0 $7,530 $7,540 $7,550 $17,893 $19,777 $22,537 $26,500 $29,465 $32,432 $32,704

Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $10,000 $10,000 $17,530 $17,540 $17,550 $27,893 $29,777 $32,537 $36,500 $39,465 $42,432 $42,704

Gross Margin ($9,920) ($9,500) $4,620 $23,360 $42,110 $50,539 $67,492 $67,335 $65,997 $65,681 $65,392 $67,836

Gross Margin % -12400.00

%

-1900.00% 20.86% 57.11% 70.58% 64.44% 69.39% 67.42% 64.39% 62.47% 60.65% 61.37%

Operating Expenses

Development Expenses

Development Payrol l $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000

Training $1,500 $0 $0 $0 $0 $0 $2,500 $0 $0 $0 $0 $0

Other DevelopmentExpenses

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

Total DevelopmentExpenses

$10,500 $9,000 $9,000 $9,000 $9,000 $9,000 $11,500 $9,000 $9,000 $9,000 $9,000 $9,000

Development % 13125.00%

1800.00% 40.63% 22.00% 15.09% 11.47% 11.82% 9.01% 8.78% 8.56% 8.35% 8.14%

General andAdministrative ExpensesGeneral andAdministrative Payroll

$5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Marketing/Promotion $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417

Depreciation $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Rent $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600

Utilities $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Insurance $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250

Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Total General andAdministrative Expenses

$8,967 $8,967 $8,967 $8,967 $8,967 $8,967 $8,967 $8,967 $8,967 $8,967 $8,967 $8,967

General andAdministrative %

11208.75%

1793.33% 40.48% 21.92% 15.03% 11.43% 9.22% 8.98% 8.75% 8.53% 8.32% 8.11%

Other Expenses:

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

Page 3

A di


35/37

Appendix

Meals and Entertainment $0 $0 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400

Trade Shows andAssociation Dues

$0 $0 $0 $0 $0 $1,500 $0 $0 $0 $0 $2,500 $0

Subscriptions $150 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Business Travel $1,000 $1,000 $2,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Total Other Expenses $1,150 $1,000 $2,400 $1,400 $1,400 $2,900 $1,400 $1,400 $1,400 $1,400 $3,900 $1,400

Other % 1437.50% 200.00% 10.84% 3.42% 2.35% 3.70% 1.44% 1.40% 1.37% 1.33% 3.62% 1.27%

Total Operating Expenses $20,617 $18,967 $20,367 $19,367 $19,367 $20,867 $21,867 $19,367 $19,367 $19,367 $21,867 $19,367

Profit Before Interest andTaxes

($30,537) ($28,467) ($15,747) $3,993 $22,743 $29,672 $45,625 $47,968 $46,630 $46,315 $43,526 $48,469

EBITDA ($30,337) ($28,267) ($15,547) $4,193 $22,943 $29,872 $45,825 $48,168 $46,830 $46,515 $43,726 $48,669

Interest Expense $56 $53 $51 $49 $46 $44 $41 $39 $36 $34 $32 $29

Taxes Incurred ($9,178) ($8,556) ($4,739) $1,183 $6,809 $8,889 $13,675 $14,379 $13,978 $13,884 $13,048 $14,532

Net Profit ($21,415) ($19,964) ($11,058) $2,761 $15,888 $20,740 $31,909 $33,551 $32,616 $32,396 $30,446 $33,908

Net Profit/Sales -26768.79

%

-3992.82% -49.93% 6.75% 26.63% 26.44% 32.80% 33.59% 31.82% 30.81% 28.24% 30.67%

Page 4

A di


36/37

Appendix

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $80 $500 $22,150 $40,900 $59,660 $78,432 $97,268 $99,872 $102,496 $105,146 $107,825 $110,540

Subtotal Cash from Operations $80 $500 $22,150 $40,900 $59,660 $78,432 $97,268 $99,872 $102,496 $105,146 $107,825 $110,540

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New 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 $475,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received $475,080 $500 $22,150 $40,900 $59,660 $78,432 $97,268 $99,872 $102,496 $105,146 $107,825 $110,540

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

Expenditures from Operations

Cash Spending $14,000 $14,000 $21,530 $21,540 $21,550 $31,893 $33,777 $36,537 $40,500 $43,465 $46,432 $46,704

Bill Payments $243 $7,261 $6,438 $11,642 $16,586 $22,141 $25,792 $31,323 $29,571 $29,178 $29,140 $30,713

Subtotal Spent on Operations $14,243 $21,261 $27,968 $33,182 $38,136 $54,034 $59,569 $67,860 $70,071 $72,643 $75,573 $77,417

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Principal Repayment of CurrentBorrowing

$292 $292 $292 $292 $292 $292 $292 $292 $292 $292 $292 $288

Other Liabilities PrincipalRepayment

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

Long-term Liabilities PrincipalRepayment

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

Purchase Other Current Assets $0 $0 $10,000 $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 $14,535 $21,553 $38,260 $33,474 $38,428 $54,326 $59,861 $68,152 $70,363 $72,935 $75,865 $77,705

Page 5

Appendix


37/37

Appendix

Net Cash Flow $460,545 ($21,053) ($16,110) $7,426 $21,232 $24,106 $37,408 $31,720 $32,134 $32,211 $31,960 $32,835

Cash Balance $464,545 $443,492 $427,382 $434,808 $456,040 $480,145 $517,553 $549,273 $581,407 $613,618 $645,578 $678,414

Table: Balance Sheet

Pro Forma Balance Sheet


Assets StartingBalances

Current Assets

Cash $4,000 $464,545 $443,492 $427,382 $434,808 $456,040 $480,145 $517,553 $549,273 $581,407 $613,618 $645,578 $678,414Other Current Assets $1 $1 $1 $10,001 $10,001 $10,001 $10,001 $10,001 $10,001 $10,001 $10,001 $10,001 $10,001

Total Current Assets $4,001 $464,546 $443,493 $437,383 $444,809 $466,041 $490,146 $527,554 $559,274 $591,408 $623,619 $655,579 $688,415

Long-term Assets

Long-term Assets $26,000 $26,000 $26,000 $26,000 $26,000 $26,000 $26,000 $26,000 $26,000 $26,000 $26,000 $26,000 $26,000Accumulated Depreciation $11,000 $11,200 $11,400 $11,600 $11,800 $12,000 $12,200 $12,400 $12,600 $12,800 $13,000 $13,200 $13,400

Total Long-term Assets $15,000 $14,800 $14,600 $14,400 $14,200 $14,000 $13,800 $13,600 $13,400 $13,200 $13,000 $12,800 $12,600Total Assets $19,001 $479,346 $458,093 $451,783 $459,009 $480,041 $503,946 $541,154 $572,674 $604,608 $636,619 $668,379 $701,015

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

Current Liabilities

Accounts Payable $0 $7,052 $6,055 $11,096 $15,852 $21,288 $24,746 $30,337 $28,598 $28,209 $28,115 $29,722 $28,737Current Borrowing $7,000 $6,708 $6,416 $6,124 $5,832 $5,540 $5,248 $4,956 $4,664 $4,372 $4,080 $3,788 $3,500Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Current Liabilities $7,000 $13,760 $12,471 $17,220 $21,684 $26,828 $29,994 $35,293 $33,262 $32,581 $32,195 $33,510 $32,237

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Liabilities $7,000 $13,760 $12,471 $17,220 $21,684 $26,828 $29,994 $35,293 $33,262 $32,581 $32,195 $33,510 $32,237

Paid-in Capital $55,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000Retained Earnings ($25,999) ($42,999) ($42,999) ($42,999) ($42,999) ($42,999) ($42,999) ($42,999) ($42,999) ($42,999) ($42,999) ($42,999) ($42,999)

Earnings ($17,000) ($21,415) ($41,379) ($52,438) ($49,676) ($33,788) ($13,048) $18,860 $52,411 $85,026 $117,423 $147,869 $181,777Total Capital $12,001 $465,586 $445,622 $434,563 $437,325 $453,213 $473,953 $505,861 $539,412 $572,027 $604,424 $634,870 $668,778Total Liabilities and Capital $19,001 $479,346 $458,093 $451,783 $459,009 $480,041 $503,946 $541,154 $572,674 $604,608 $636,619 $668,379 $701,015

Net Worth $12,001 $465,586 $445,622 $434,563 $437,325 $453,213 $473,953 $505,861 $539,412 $572,027 $604,424 $634,870 $668,778

Page 6

Documents

Bay Business Plan