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LEAP
BUSINESS PLAN
FOR CAR COMPANY
OUR MISSION
Car Company is dedicated to providing an unparalleled used car
shopping experience. To offer reasonable financing solutions and
competitively priced vehicles to those that feel such things are out
of reach. To hold an impeccable reputation for integrity and
honest business dealings in its local community. To become the
destination for all used car purchases.
TABLE OF CONTENTS
CONTENTS
Our Mission
Table of Content
Executive Summary
Use of Funds
Company Overview
Company Ownership and Location
Industry Analysis: Used Cars Dealership in the Us
Used vs New Car Purchasing Behavior
Internet Trends
Market Segmentation
Local Market Analysis
Competitors
Our Advantage
Management Summary
Marketing Plan
Projections
Projected Income Statement
Break-Even Analysis
Personnel Plan
Projected Cash Flow
Projected Balance Sheet
Appendix: Year One Financials
EXECUTIVE SUMMARY
In 2014, one in three adults with
subprime credit believe they will
qualify for an auto loan. Of those
that try, the vast majority of
consumers will simply overpay as
they believe they are desperate. At
Car Company, neither bankruptcy
nor bad credit will prevent
customers from purchasing a
quality vehicle at a fair price. All
that is required is a monthly gross
income of $1,800 and a valid
driver’s license. In fact, since its
inception in 2013 Credit Car Select
has helped over 90% of its
applicants secure reasonable loans
to purchase competitively priced
cars. It is precisely this ethical
treatment of an otherwise
vulnerable market segment in the
Springfield community that has
earned Car Company its
outstanding reputation. The
company will continue to use these
same tried and tested values to
expand in its local market.
While more traditional dealership
models may shy from or exploit
deep subprime and subprime credit
customers, Car Company embraces
them. The Company recognizes a
gap in its local market and has
modeled its business to offer credit
to even the riskiest credit
consumer. To achieve this end, the
Company has partnered with AFC
lending. The results have been
outstanding as Credit Car Selects
customer’s default rate has been
consistent below estimates,
demonstrating a viable long term
solution.
The market conditions in Virginia
for used cars are projected to be
extremely favorably.
IBISWorldreports industry revenue
is expected to increase at an
annualized rate of 2.5% in the five
years to 2015, lifted by an estimated
1.7% increase in 2015. At the same
time, IBISWorld forecasts a 2.5%
increase in disposable income over
the same five-year period.
Customers with poor credit are
expected to represent 41.8% of
revenue in 2015. Virginia is expected
to compose 3.5% of all used car
sales in the US. After incorporating
all the variables mentioned thus far,
the total addressable market for the
Company is over $1.4B.
EXECUTIVE SUMMARY
To expand and improve the Company’s profitability, the Company has
partnered with its E-2 Investor Mr. Ricky Tony. Mr. Tony will provide an
immense strategic advantage by lending both his expertise and capital
investment totaling to $300K. These funds will enhance the Company’s
capital structure by enabling Car Company to purchase more inventory and
save over $200 in interest payments per vehicle. In the next five years, the
savings along accumulates to $239,400. The Company expects to increase
the number of Vehicles sold from 69 in 2014 to 417 in year 5. The company
projects a $2.6M in sales in its 5th, profiting over $10K or 11.9%
$0
$300,000
$600,000
$900,000
$1,200,000
$1,500,000
$1,800,000
$2,100,000
$2,400,000
$2,700,000
Year 1 Year 2 Year 3 Year 4 Year 5
Sales Gross Margin Net Profit
HIGHLIGHTS
USE OF FUNDS
Car Company is looking to decrease
its interest expense on purchased
vehicle inventory. A direct owner
investment of $300K will decrease
inventory cost by $200 per unit. Mr.
2Tony has recently invested $115K
and is looking to invest an addition
$185K in return for 80% ownership.
The Company has a credit line of
$250K that it will exercise. The use
of funds is listed as below:
STARTUP REQUIEMENTS AMOUNT
Startup Expenses to Fund $16,414
Startup Assets to Fund $378,755
Total Funding Required $395,169
ASSETS
Non-cash Assets from
Startup$247,055
Cash Requirements from
Startup$131,700
Cash balance on Starting
Date$131,700
Total Assets $378,755
LIABILITIES AND CAPITAL
LIABILITIES
Current Borrowing $174,669
Long-term Liabilities $0
Accounts Payable
(Outstanding Bills)$0
Other Current Liabilities
(interest-free)$35,500
Total Liabilities $210,169
CAPITAL
PLANNED INVESTMENT
Investor $185,000
Additional Investment
Requirement$0
Total Planned Investment $185,000
Loss at Startup (Startup
Expenses)($16,414)
Total Capital $168,586
Total Capital and Liabilities $378,755
Total Funding $395,169
STARTUP REQUIEMENTS AMOUNT
STARTUP EXPENSES
Consultation Fees $2,800
Immigration Lawyer $4,000
Bill Advances $8,114
Business Attorney $1,500
Total Startup Expenses $16,414
STARTUP ASSETS
Cash Required $131,700
Inventory purchases $227,604
Other Current Assets $0
Long term Assets $19,451
Total Requirements $395,169
COMPANY OVERVIEW
Car Company is a used car
dealership that sells a breadth of
used makes and models.
Established on January 1st 2013, the
Company purchases cars at deep
discounts from its local auction
house, makes the necessary repairs
to bring it up to commercial
standards, and passes its savings
directly to the consumer.
The Company offers an outstanding
shopping experience for customers
in Springfield County, Virginia and
surrounding areas by incorporating
superior customer service and
ethical business practices to its
client base.
Car Company is conveniently on a
busy road located at West Shirley
Ave. There is ample parking and
visible signage to easy locate the
dealership. Car Company specializes
in helping its customers attain the
best financing possible for the “right
car”. Where most car dealers either
reject or manipulate customers with
bad credit, Car Company is able to
approve nearly 90% of loan
applicants through the credit
company AFC. The Company holds
by strong ethical practices as it
does not tolerate exorbitant rates
that other dealers will exploit on
uninformed consumers.
The company holds a twofold
distinct advantage amongst its
competitors. 1) the ability to grant
better and more reasonable access
to credit for its consumers and 2)
leveraging equity capital to reduce
the burden of interest expenses
while capitalizing on a free net 60
credit line to expand its business.
COMPANY OVERVIEW
In addition to the two items mentioned above, the following
provides an overview of Car Company advantages:
Focus on
lower end
vehicle car
segment:
lower cost
per unit with
increase in
average gross
margin and
higher
inventory
turnover rate.
Inventory
inspection: A
standard
checklist to
ensure the
appraisals are
completed
consistently
and
accurately,
and free from
major defects.
Bad Debt
Allowances:
Strategic
partnership
with AFC
financial
lending
institution,
reduces the
risk of bad
debt and
collectables.
Experienced
Staff:
Knowledgeabl
e staff and
Management
team, able to
cater to
customers
unique
requirements.
Complete
online
Inventory
updated
every few
days.
COMPANY OWNERSHIP
AND LOCATION
Car Company is a Limited
Liability Company registered in
the State of Virginia. The
Company will be owned by
Ricky Tony (80%), Eric Muller
(10%) and Henry Lewis (10%).
Car Company LLC used car
dealership is located in the
heart of Springfield at 000
Maple Dr.
INDUSTRY ANALYSIS: USED CARS
DEALERSHIPS IN THE US
As noted, Car Company LLC. is operating in a 1$106.9bn dollar industry,
which is projected to grow at a healthy rate will industry profit at $2.7bn
despite a decrease to 1.8% down from 2.5% from the previous five years. The
industry is also enjoying higher sales due to increase in disposable incomes
and decreasing unemployment rate.
The firm provides the following industry overview and forecasts.
INDUSTRY AT A GLANCEUsed Car Dealers in 2015
Key Statistics Snapshot
Revenue
$106.9bn
Annual Growth 10-15
2.5%
Annual Growth 15-20
1.8%
Profit
$2.7bn
Wages
$5.8bn
Businesses
122,913
Market Share
CarMax Inc.
12.7%
Key External
Drivers
Per capita disposable
Income
Price of new cars
Aggregate household
debt
Average age of vehicle
fleet
World price of crude oil
Revenue vs. employment growth
-15
-10
-5
0
5
10
15
7 9 11 13 15 17 19 21
% c
han
ge
Per capita disposable income
-2
-1
0
1
2
3
4
8 10 12 14 16 18 20
% c
han
ge
SOURCE:WWW.IBISWORLD.COMRevenue Employment
Products and service segmentation (2015)
SOURCE:WWW.IBISWORLD.COM
37.5%Used
vehicles
29.4%Parts and
service
27.8%Financing and
insurance
5.3%Other
INDUSTRY ANALYSIS: USED CARS
DEALERSHIPS IN THE US
1 “Used Car Dealers in the US” Industry Report” IBISWorld, Jan 2015
www.ibisworld.com
Between new and used vehicle prices, the retail price of a one-year-old used
vehicle is now below 80 percent of the cost of a new vehicle. Older model
vehicle supply will increase, but overall supply will continue to fall as sales of
used cars continue. Despite the growth in late-model supply, the supply of
units up to eight years in age is expected to decrease by 2% or more. Newer
used vehicles (vehicles that are three years or under) will still be roughly 25
percent below where it was previously. While the growth in late-model
supply will have an adverse effect on younger used vehicle prices, the
continued slide in early-model supply will benefit prices of older models.
Increasingly
competitive
lending
environment will
continue to see
credit standards
loosen and
availability grow.
Employment will
continue to
improve as
disposable
incomes increase
The recovery in
housing and
construction will
pick up steam,
benefiting both
the economy
and employment.
This will increase
demand for
traditional used
car and truck
consumers.
Vehicle age
remains on the
rise, with the
average vehicle
age at
approximately
11.4 years.
Overall key trends are listed as below
INDUSTRY ANALYSIS: USED CARS
DEALERSHIPS IN THE US
USED VS NEW CAR PURCHASING BEHAVIOR
Compared to other car market segments, the typical customers who
purchased used cars had less income on average. The average annual income
for used vehicle purchasers was $48,004 compared with $72,992 for lessees
and $69,875 for new-vehicle purchasers. Among consumers that bought or
leased a vehicle, 80.9% of lower wage earners are likely to purchase a used
vehicle compared to 36% of those who lease or buy in the highest income
quintile for new vehicle purchases. Down payments and monthly payment
amounts influence whether the consumer will purchase a new or used car. 76
% of used-vehicle purchasers paid down payments of $1,147 on average and
only 30 percent of the amount that a new-vehicle purchaser put for a down
payment was $2,914 including new car incentives and discounts. The
maximum down payment was $8,500 for lessees, $37,000 for new-vehicle
purchasers, and $19,000 for used-vehicle purchasers. The average monthly
payment was $353 for lessees, $399 for new-vehicle purchasers, and $273
for used-vehicle purchasers.
INTERNET TRENDS
Internet usage has changed the way shoppers search for used vehicles. A J.D
Power and Associates survey concluded that 64% of potential clients first
searched the internet before visiting the dealership. In addition 88% of buyers
that went to a dealership to test drive a car had spent time researching
information on the internet prior to their visit.
INDUSTRY ANALYSIS: USED CARS
DEALERSHIPS IN THE US
MARKET SEGMENTATION
Within the Used Car Dealers industry, dealers compete mainly on the basis of
vehicle offering and price. For the consumer credit availability and access is
paramount in the purchasing decision. Credit availability will continue to
expand further fueling used cars sales. Data from the Federal Reserve Board’s
Senior Loan Officer Survey shows that lenders have loosened auto loan
standards for five years running, a trend that helped see loan portfolios grow.
Experian data also shows that the subprime share of used vehicle financing
improved by over 2%.
Used car dealers classify customers’ credit worthiness in five different credit
rating segments, with deep subprime customers possessing the worst credit.
Customers choose to purchase vehicles from used car dealers for different
reasons, depending on their credit score. During the economic downturn,
contractions in credit availability made it more difficult and expensive for
these customers to get financing. Customers with the worst credit scores are
largely unable to purchase vehicles on traditional credit, facing interest rates
6.0% or more above prime rates.
MAJOR MARKET SEGMENTATION (2015)
22.4%Nonprime
customers
22.2%Subprime
customers
19.6%Deep Subprime
customers
18.7%Super prime
customers
17.1%prime customers
Total $106.9bn SOURCE:WWW.IBISWORLD.COM
LOCAL MARKET ANALYSIS
The following Table provides pertinent figures for the population within
Fauquier County which encompasses 647.45 sq. miles. Income data for the
region is highlighted in yellow below.
SPRINGFIELD COUNTY, VIRGINIA
PEOPLE QUICKFACTS SPRINGFIELD COUNTY
Population, 2013 estimate 67207
Population, 2010 (April 1) estimates base 65203
Population, percent change - April 1, 2010 to July 1, 2013 0.031
Population, 2010 65203
Persons under 5 years, percent, 2013 0.057
Persons under 18 years, percent, 2013 0.242
Persons 65 years and over, percent, 2013 0.144
Female persons, percent, 2013 0.506
Per capita money income in past 12 months (2013
dollars), 2009-201339600
Median household income, 2009-2013 88409
Persons below poverty level, percent, 2009-2013 0.056
GEOGRAPHY QUICKFACTS SPRINGFIELD COUNTY
Land area in square miles, 2010 647.45
Persons per square mile, 2010 100.7
LOCAL MARKET ANALYSIS
COMPETITORS
The Company will experience direct competition from other used vehicle
dealerships in the Springfield area. Our main competitors who hold similar
inventory and compete based on price and offerings are listed as below.
http://www.anzo-motors.com
Overview: Anzo Motors is a locally operated used car dealership that offers a
range of used cars as well as in house financing option.
• Advantages: Anzo Motors operates in the low and mid end price segment of
the used car industry aimed at appealing to a broader customer base. Anzo
motors also offers extended credit services to customers with bad credit.
• Disadvantages: Anzo Motors has a weak internet presence, and with little to
no reviews. The current climate of internet based shopping is hampering the
Company and currently there is no inventory online for view.
www.summitmotorsinc.com
Overview: Summit Motors is a larger used car dealership operating out of
Warrenton and is a division of Country Chevrolet. Summit Motors inventory
consists of higher end used vehicles.
• Advantages: Summit Motors offers additional warranty services and
extended hours of operations.
• Disadvantages: Financing options are slightly more limited, customers in
the deep subprime credit rating will have difficulty finding approval.
www.wellsautos.com
Overview: Wells Auto Sales specializes in later model and low mileage used
cars. Wells Auto Sales inventory is geared towards the higher end used car
consumer, with offerings included in its inventory at $40K or more.
• Advantages: Wells Auto Sales was founded in 1997 and has a larger local
client base.
• Disadvantages: The higher end market has a lower inventory turnover
rate, and high inventory costs using up much of current assets.
LOCAL MARKET ANALYSIS
OUR ADVANTAGE
Car Company is located on a prime lot right off Lincoln Ave, which runs
through the heart of downtown Springfield. The Company has have a very
easy to navigate website with an online credit approval form that is linked to
the business email. Car Company caters heavily to potential customers with
bad credit that have been rejected for car loans everywhere else due to lack
of credit or significant down payment. The approval success rate is over 90%
and adding to a large customer referral base. Car Company focuses on the
following main advantages:
Little or no down
payment required to
purchase
Ease of credit access Ability to service the
Deep-Subprime and
Subprime used cars
consumers market
Liabilities are held with
AFC financial institution,
relieving Credit Card
Select of potential Bad
Debt expenses.
Large inventory of
cars on its website for
easy viewing, with
inventory updated
every few days.
Located in prime busy
location on a main
street in Springfield,
Virginia.
RICKY TONY comes from a
strong entrepreneurial
background. He holds a
bachelor’s degree in commerce
and 7 years of international
business experience. John
started out as a manager at his
father’s gas station and later
became a managing partner.
Soon after, John took his
ambitions to Dubai, known as
the business hub of the world.
There he became a managing
director and partner of
Transport enterprise, dealing
with vehicles on a daily basis,
John foresaw an opportunity to
take his entrepreneur spirit to
the next level. In July of 2009,
the conception of Ricky Tony
Motors became a reality. Ricky
Tony Motors specialized in
purchasing cars from the US,
UK and Japan. The car
business venture did very well
for John, and within a year, Car
Company LLC opened its
doors. After four years of
owning and operating multiple
successful dealerships, Joh
Tony set his ambitions for
America. He had always heard
about great opportunities in
America and he wanted to
pursue his passion here. On
October of 2014, Ricky Tony
successfully sold both of his
used car dealerships in Dubai
and set sail for the USA.
MANAGEMENT SUMMARY
MARKETING PLAN
Car Company will benefit from
utilizing traditional marketing
methods including online initiatives.
NETWORKING
As with any service oriented
business, the Company will benefit
from developing business
relationships by participating
actively in community events. Car
Company will attend a variety of
events to gauge prospective
clients, including fairs and trade
shows.
WORD OF MOUTH
Referral marketing will be an
integral part in maintaining long
lasting relationships and increasing
brand awareness. Current clients
will increase leads by word of
mouth advertising, which is
considered the most effective and
trustworthy form of advertising.
INTERNET
Independent sites drive roughly half
(45%) of all dealer walk-in traffic by
the internet, followed by dealer
sites (32%), search sites (14%),
manufacturer sites (6%) and other
sites (3%). The Company will be
heavily advertising on well-known
internet sites that potential buyers
frequent including, kijiji.com,
Autotrader, Cars.com, craigslist,
Facebook and Yelp.
WHAT ADVERTISING DRIVERS
DEALER WALK-IN TRAFFIC?
• The Internet is the No. 1 media
source driving dealer walk-in traffic.
• More than one half of all walk-in
traffic generated by advertising can
be attributed to the Internet.
DEALER’S PERCEPTION
0%
6%
7%
8%
9%
11%
27%
32%
Phonebook
Outdoor Ads
Direct Mail
Television
Radio
Classified Magazine
Newspeper
Internet
REALITY
0%
3%
3%
4%
8%
13%
15%
54%
Outdoor Ads
Phonebook
Direct Mail
Radio
Television
Newspeper
Classified Magazine
Internet
PROJECTIONS
The following table and graph illustrate the financial goals for Car Company
during the next five years.
SALES FORECAST YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Car Sold 99 153 219 309 417
Total Unit Sales 99 153 219 309 417
UNIT PRICES
Vehicle $6,260.00 $6,260.00 $6,260.00 $6,260.00 $6,260.00
SALES
Vehicle $619,740 $957,780 $1,370,940 $1,934,340 $2,610,420
Total Sales $619,740 $957,780 $1,370,940 $1,934,340 $2,610,420
DIRECT UNIT COSTS
Vehicle $4,695.00 $4,695.00 $4,420.00 $4,420.00 $4,420.00
DIRECT COST OF
SALES
Renovations $464,805 $718,335 $967,980 $1,365,780 $1,843,140
Subtotal Direct
Cost of Sales $464,805 $718,335 $967,980 $1,365,780 $1,843,140
*unit sales were based on historical sales volumes and increase in marketing expenditure,
general assumptions include:
PROJECTIONS
1. Avg. price of sales: $6,260
2. COS
3. During year 3 in-house mechanic was hired cutting outside paid labor paid
reducing Parts cost from $826 to $551.
(50% Parts, 50% Labor ($413, $413) outside labor $56.25 per hour, In-house
$18.75 per hour, $413+$138 = $551 a avg. savings of $275 per vehicle.
TOWING + TAG +
Fees Misc title Parts Vehicle
$42 $123 $159 $826 4,713
$0
$3,000,000
$6,000,000
$9,000,000
$12,000,000
$15,000,000
$18,000,000
$21,000,000
$24,000,000
$27,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
Vehicle Row 2
SALES BY YEAR
PROJECTED INCOME STATEMENT
PRO FORMA INCOME
STATEMENTYEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Sales $619,740 $957,780 $1,370,940 $1,934,340 $2,610,420
Direct Cost of Sales $464,805 $718,335 $967,980 $1,365,780 $1,843,140
Other Costs of Sales $0 $0 $0 $0 $0
Total Cost of Sales $464,805 $718,335 $967,980 $1,365,780 $1,843,140
Gross Margin $154,935 $239,445 $402,960 $568,560 $767,280
Gross Margin % 25.00% 25.00% 29.39% 29.39% 29.39%
EXPENSES
Payroll $117,600 $141,600 $177,600 $199,200 $229,200
Marketing/Promotion $14,400 $17,600 $20,600 $23,600 $26,600
Depreciation $3,888 $3,888 $3,888 $3,888 $3,888
Rent $42,000 $42,000 $42,000 $42,000 $42,000
Cable & Internet $3,264 $3,264 $3,264 $3,264 $3,264
Dues & Subscriptions $1,296 $1,296 $1,296 $1,296 $1,296
Insurance $3,612 $3,612 $3,612 $3,612 $3,612
Telephone $1,812 $1,812 $1,812 $1,812 $1,812
Utilities $3,264 $3,264 $3,264 $3,264 $3,264
Postage & Delivery $3,132 $3,132 $3,132 $3,132 $3,132
Others $5,376 $5,376 $5,376 $5,376 $5,376
$199,644 $226,844 $265,844 $290,444 $323,444
Profit Before Interest
and Taxes ($44,709) $12,602 $137,116 $278,116 $443,836
EBITDA ($44,709) $16,489 $141,004 $282,004 $447,724
Interest Expense $0 $0 $0 $0 $0
Taxes Incurred $0 $3,780 $41,135 $83,435 $133,151
Net Profit ($44,709) $8,821 $95,981 $194,681 $310,685
Net Profit/Sales -7.21% 0.92% 7.00% 10.06% 11.90%
Investment of $300K from Ricky Tony ($115K+$185K) reduced over all
expenditure by $200 per vehicle increasing revenues by the same amount.
BREAK-EVEN ANALYSIS
BREAK-EVEN ANALYSIS VALUE
Monthly Revenues Break-even $66,548
ASSUMPTION
Estimated Monthly Fixed Cost $16,637
BREAK-EVEN ANALYSIS
$20,000
$16,000
$12,000
$8,000
$4,000
$0
($4,000)
($8,000)
($12,000)
($16,000)
0 2 4 6 8 10 12 14 16 18 20 22
*As depicted above Monthly Break even sales of $66,548 was sufficient to
cover break even fixed costs.
PERSONNEL PLAN
PERSONNEL PLAN YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
General Manager/Sales $72,000 $72,000 $72,000 $72,000 $72,000
Operations Manager $24,000 $24,000 $24,000 $24,000 $24,000
Finance Manager/Sales* $12,000 $12,000 $12,000 $12,000 $12,000
Office Assistant* $9,600 $9,600 $9,600 $9,600 $9,600
Junior Sales Consultant $- $24,000 $24,000 $24,000 $24,000
On-Site Mechanic $- $- $36,000 $36,000 $36,000
Sales Consultant $- $- $- $- $30,000
Total People 4 5 6 6 7
Total Payroll $117,600 $141,600 $177,600 $199,200 $229,200
*Finance Manager and Office Assistant hired on as part time basis until year 3.
During year 3 in mechanic hired to reduce Parts & Labor costs on average by
$275 per vehicle. Junior Sales Consultant Hired in year 2, and experienced
consultant hired in 5.
PROJECTED CASH FLOW
PRO-FORMA
CASH FLOWYEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
CASH RECEIVED
CASH FROM OPERATIONS
Cash Sales $619,740 $957,780 $1,370,940 $1,934,340 $2,610,420
Cash from Receivables $0 $0 $0 $0 $0
Subtotal Cash from
Operations$619,740 $957,780 $1,370,940 $1,934,340 $2,610,420
ADDITIONAL CASH
RECEIVED
New Current Borrowing $0 $0 $0 $0 $0
Subtotal Cash Received $619,740 $957,780 $1,370,940 $1,934,340 $2,610,420
EXPENDITURE YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
EXPENDITURES FROM
OPERATIONS
Cash Spending $117,600 $141,600 $117,600 $199,200 $229,200
Bill Payments $301,393 $898,025 $1,104,028 $1,582,689 $2,102,518
Subtotal Spent on
Operations$418,993 $1,039,625 $1,281,628 $1,781,889 $2,331,718
ADDITIONAL CASH
SPENT
Principal Repayment of
Current Borrowing$34,932 $34,932 $34,932 $34,932 $34,932
Long-term Liabilities
Principal Repayment$7,100 $7,100 $7,100 $7,100 $7,100
Subtotal Cash Spent $461,025 $1,081,657 $1,323,660 $1,823,921 $2,373,750
Net Cash Flow $158,715 ($123,877) $47,280 $110,419 $236,670
Cash Balance $290,415 $166,539 $213,818 $324,238 $560,907
PROJECTED BALANCE SHEET
PRO FORMA BALANCE
SHEETYEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
ASSETS
CURRENT ASSETS
Cash $290,415 $166,539 $213,818 $324,238 $560,907
Accounts Receivable $0 $0 $0 $0 $0
Inventory $42,255 $155,975 $183,264 $270,748 $349,467
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets $332,670 $322,514 $397,082 $594,986 $910,374
LONG-TERM ASSETS
Long-term Assets $19,451 $19,451 $19,451 $19,451 $19,451
Accumulated Depreciation $3,888 $7,776 $11,664 $15,552 $19,440
Total Long-term Assets $15,563 $11,675 $7,787 $3,899 $11
OTHER ASSETS
Other Assets$0 $0 $0 $0 $0
Total Assets $348,233 $334,188 $404,869 $598,885 $910,386
LIABILITIES AND
CAPITALYEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
CURRENT LIABILITIES
Accounts Payable $56,219 $75,386 $92,117 $133,484 $176,331
Current Borrowing $139,737 $104,805 $69,873 $34,941 $9
Other Current Liabilities $28,400 $21,300 $14,200 $7,100 $0
Subtotal Current Liabilities $224,356 $201,491 $176,190 $175,525 $176,340
Long-term Liabilities $0 $0 $0 $0 $0
Total Liabilities $224,356 $201,491 $176,190 $175,525 $176,340
Paid-in Capital $185,000 $185,000 $185,000 $185,000 $185,000
Retained Earnings ($16,414) ($61,123) ($52,302) $43,679 $238,360
Earnings ($44,709) $8,821 $95,981 $194,681 $310,685
Total Capital $123,877 $132,698 $228,679 $423,360 $734,045
Total Liabilities and Capital $348,233 $334,188 $404,869 $598,885 $910,386
Net Worth $123,877 $132,698 $228,679 $423,360 $734,045
APPENDIX: YEAR ONE FINANCIALS
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
UNIT SALES
Vehicle 8 9 10 10 8 7 8 6 9 8 7 9
Row 2 0 0 0 0 0 0 0 0 0 0 0 0
Total Unit 8 9 10 10 8 7 8 6 9 8 7 9
SALES
UNIT 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
Vehicle $6,260.00 $6,260.00 $6,260.00 $6,260.00 $6,260.00 $6,260.00 $6,260.00 $6,260.00 $6,260.00 $6,260.00 $6,260.00 $6,260.00
Row 2 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
SALES
Vehicle $50,080 $56,340 $62,600 $62,600 $50,080 $43,820 $50,080 $37,560 $56,340 $50,080 $43,820 $56,340
Row 2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $50,080 $56,340 $62,600 $62,600 $50,080 $43,820 $50,080 $37,560 $56,340 $50,080 $43,820 $56,340
DIRECT UNITMONTH
1
MONTH
2
MONTH
3
MONTH
4
MONTH
5
MONTH
6
MONTH
7
MONTH
8
MONTH
9
MONTH
10
MONTH
11
MONTH
12
COSTS
Vehicle 75.00% $4,695.00 $4,695.00 $4,695.00 $4,695.00 $4,695.00 $4,695.00 $4,695.00 $4,695.00 $4,695.00 $4,695.00 $4,695.00
Row 2 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
DIRECT COST
OF SALES
Vehicle $37,560 $42,255 $46,950 $46,950 $37,560 $32,865 $37,560 $28,170 $42,255 $37,560 $32,865 $42,255
Row 2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct
Cost of Sales $37,560 $42,255 $46,950 $46,950 $37,560 $32,865 $37,560 $28,170 $42,255 $37,560 $32,865 $42,255
APPENDIX: YEAR ONE FINANCIALS
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
General
Manager/Sales$6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Operations
Manager$2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Finance
Manager/Sales *$1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Office Assistant * $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Junior Sales
Consultant$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
On-Site Mechanic $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Consultant $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 4 4 4 4 4 4 4 4 4 4 4 4
Total Payroll $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800
APPENDIX: YEAR ONE FINANCIALS
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 $50,080 $56,340 $62,600 $62,600 $50,080 $43,820 $50,080 $37,560 $56,340 $50,080 $43,820 $56,340
Direct Cost
of Sales$37,560 $42,255 $46,950 $46,950 $37,560 $32,865 $37,560 $28,170 $42,255 $37,560 $32,865 $42,255
Other Costs
of Sales$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Gross Margin $12,520 $14,085 $15,650 $15,650 $12,520 $10,955 $12,520 $9,390 $14,085 $12,520 $10,955 $14,085
Gross Margin % 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
EXPENSES
Payroll $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800
Marketing/
Promotion$1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Depreciation $324 $324 $324 $324 $324 $324 $324 $324 $324 $324 $324 $324
Rent $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Cable & Internet $272 $272 $272 $272 $272 $272 $272 $272 $272 $272 $272 $272
Dues &
Subscriptions$108 $108 $108 $108 $108 $108 $108 $108 $108 $108 $108 $108
Insurance $301 $301 $301 $301 $301 $301 $301 $301 $301 $301 $301 $301
Telephone $151 $151 $151 $151 $151 $151 $151 $151 $151 $151 $151 $151
Utilities $272 $272 $272 $272 $272 $272 $272 $272 $272 $272 $272 $272
Postage & Delivery $261 $261 $261 $261 $261 $261 $261 $261 $261 $261 $261 $261
Other $448 $448 $448 $448 $448 $448 $448 $448 $448 $448 $448 $448
Total Operating
Expenses $16,637 $16,637 $16,637 $16,637 $16,637 $16,637 $16,637 $16,637 $16,637 $16,637 $16,637 $16,637
Profit Before
Interest and Taxes ($4,117) ($2,552) ($987) ($987) ($4,117) ($5,682) ($4,117) ($7,247) ($2,552) ($4,117) ($5,682) ($2,552)
EBITDA ($3,793) ($2,228) ($663) ($663) ($3,793) ($5,358) ($3,793) ($6,923) ($2,228) ($3,793) ($5,358) ($2,228)
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($4,117) ($2,552) ($987) ($987) ($4,117) ($5,682) ($4,117) ($7,247) ($2,552) ($4,117) ($5,682) ($2,552)
Net Profit/Sales -8.22% -4.53% -1.58% -1.58% -8.22% -12.97% -8.22% -19.29% -4.53% -8.22% -12.97% -4.53%
APPENDIX: YEAR ONE FINANCIALS
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 $50,080 $56,340 $62,600 $62,600 $50,080 $43,820 $50,080 $37,560 $56,340 $50,080 $43,820 $56,340
Cash from
Receivables$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash
from Operations$50,080 $56,340 $62,600 $62,600 $50,080 $43,820 $50,080 $37,560 $56,340 $50,080 $43,820 $56,340
EXPENDITURESMONTH
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 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800
Bill Payments $217 $6,513 $6,513 $6,513 $7,221 $27,975 $35,153 $47,986 $26,545 $62,071 $39,222 $35,466
Subtotal Spent on
Operations $10,017 $16,313 $16,313 $16,313 $17,021 $37,775 $44,953 $57,786 $36,345 $71,871 $49,022 $45,266
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
$2,911 $2,911 $2,911 $2,911 $2,911 $2,911 $2,911 $2,911 $2,911 $2,911 $2,911 $2,911
Other Liabilities
Principal
Repayment
$591 $591 $591 $591 $591 $591 $591 $591 $591 $591 $591 $591
Long-term
Liabilities Principal
Repayment
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other
Current Assets$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-
term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash
Spent$13,519 $19,815 $19,815 $19,815 $20,524 $41,278 $48,456 $61,289 $39,848 $75,374 $52,525 $48,769
Net Cash Flow $36,561 $36,525 $42,785 $42,785 $29,556 $2,542 $1,625 ($23,729) $16,492 ($25,294) ($8,705) $7,572
Cash Balance $168,261 $204,786 $247,571 $290,356 $319,912 $322,454 $324,078 $300,350 $316,842 $291,548 $282,844 $290,415
APPENDIX: YEAR ONE FINANCIALS
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 $131,700 $168,261 $204,786 $247,571 $290,356 $319,912 $322,454 $324,078 $300,350 $316,842 $291,548 $282,844 $290,415
Accounts
Receivable$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Inventory $227,604 $190,044 $147,789 $100,839 $53,889 $37,560 $32,865 $37,560 $28,170 $42,255 $37,560 $32,865 $42,255
Other Current
Assets$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current
Assets$359,304 $358,305 $352,575 $348,410 $344,245 $357,472 $355,319 $361,638 $328,520 $359,097 $329,108 $315,709 $332,670
LONG-TERM
ASSETS
Long-term Asset $19,451 $19,451 $19,451 $19,451 $19,451 $19,451 $19,451 $19,451 $19,451 $19,451 $19,451 $19,451 $19,451
Accumulated
Depreciation $0 $324 $648 $972 $1,296 $1,620 $1,944 $2,268 $2,592 $2,916 $3,240 $3,564 $3,888
Total Long-term
Assets$19,451 $19,127 $18,803 $18,479 $18,155 $17,831 $17,507 $17,183 $16,859 $16,535 $16,211 $15,887 $15,563
Total Assets $378,755 $377,432 $371,378 $366,889 $362,400 $375,303 $372,826 $378,821 $345,379 $375,632 $345,319 $331,596 $348,233
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 $6,296 $6,296 $6,296 $6,296 $26,819 $33,527 $47,142 $24,450 $60,758 $38,065 $33,527 $56,219
Current
Borrowing$174,669 $171,758 $168,847 $165,936 $163,025 $160,114 $157,203 $154,292 $151,381 $148,470 $145,559 $142,648 $139,737
Subtotal Current
Liabilities$210,169 $212,963 $209,461 $205,959 $202,457 $219,477 $222,682 $232,794 $206,599 $239,404 $213,208 $205,167 $224,356
Long-term
Liabilities$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $210,169 $212,963 $209,461 $205,959 $202,457 $219,477 $222,682 $232,794 $206,599 $239,404 $213,208 $205,167 $224,356
Paid-in Capital $185,000 $185,000 $185,000 $185,000 $185,000 $185,000 $185,000 $185,000 $185,000 $185,000 $185,000 $185,000 $185,000
Retained
Earnings($16,414) ($16,414) ($16,414) ($16,414) ($16,414) ($16,414) ($16,414) ($16,414) ($16,414) ($16,414) ($16,414) ($16,414) ($16,414)
Earnings $0 ($4,117) ($6,669) ($7,656) ($8,643) ($12,760) ($18,442) ($22,559) ($29,806) ($32,358) ($36,475) ($42,157) ($44,709)
Total Capital $168,586 $164,469 $161,917 $160,930 $159,943 $155,826 $150,144 $146,027 $138,780 $136,228 $132,111 $126,429 $123,877
Total Liabilities
and Capital $378,755 $377,432 $371,378 $366,889 $362,400 $375,303 $372,826 $378,821 $345,379 $375,632 $345,319 $331,596 $348,233
Net Worth $168,586 $164,469 $161,917 $160,930 $159,943 $155,826 $150,144 $146,027 $138,780 $136,228 $132,111 $126,429 $123,877
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