Professional Documents
Culture Documents
Table of Contents
.....................................................................................................................................................................19
Table: Start-up Funding..........................................................................................................................20
9.3 Use of Funds.........................................................................................................................................21
9.4 Exit Strategy..........................................................................................................................................21
9.5 Key Financial Indicators.......................................................................................................................21
Chart: Benchmarks..................................................................................................................................21
9.6 Break-even Analysis.............................................................................................................................22
Table: Break-even Analysis....................................................................................................................22
Chart: Break-even Analysis....................................................................................................................22
9.7 Sales Forecast........................................................................................................................................23
Table: Sales Forecast..............................................................................................................................23
Chart: Sales Monthly..............................................................................................................................24
Chart: Sales by Year...............................................................................................................................24
9.8 Personnel Plan.......................................................................................................................................25
Table: Personnel......................................................................................................................................25
.....................................................................................................................................................................25
9.9 Projected Profit and Loss......................................................................................................................26
Table: Profit and Loss.............................................................................................................................26
Chart: Profit Monthly..............................................................................................................................27
Chart: Profit Yearly.................................................................................................................................27
Chart: Gross Margin Yearly...................................................................................................................28
.................................................................................................................................................................28
Chart: Gross Margin Monthly................................................................................................................28
9.10 Projected Cash Flow...........................................................................................................................29
Table: Cash Flow....................................................................................................................................29
Chart: Cash..............................................................................................................................................30
9.11 Projected Balance Sheet......................................................................................................................31
Table: Balance Sheet...............................................................................................................................31
9.12 Business Ratios...................................................................................................................................31
Table: Ratios...........................................................................................................................................32
Table: Sales Forecast.........................................................................................................................................1
...........................................................................................................................................................................1
Table: Personnel................................................................................................................................................2
...........................................................................................................................................................................2
Table: General Assumptions.............................................................................................................................3
...........................................................................................................................................................................3
Table: Profit and Loss.......................................................................................................................................4
...........................................................................................................................................................................5
Table: Cash Flow..............................................................................................................................................6
Page 2
Table of Contents
...........................................................................................................................................................................6
Table: Balance Sheet.........................................................................................................................................7
Page 3
Chart: Highlights
Highlights
$3,600,000
$3,200,000
$2,800,000
$2,400,000
Sales
$2,000,000
Gross Margin
$1,600,000
Net Profit
$1,200,000
$800,000
$400,000
$0
Year 1
Year 2
Year 3
1.1 Solution
The College Cafe will enable students to buy, sell, and trade used textbooks directly to other
students, by-passing the university bookstores. By selling textbooks to other students, the
seller can receive more money than the bookstore will pay and the buyer can pay less than the
bookstore charges. In addition to textbooks, students will be able to sell class notes, old tests,
computers, dorm accessories, used CDs, tutoring services or anything students wish to sell via
an online student-to-student marketplace. In addition, the College Cafe will offer other services
such as classifieds, teacher evaluations, weblogs (bloggers), specialized content and retail.
The College Cafe will establish itself as the leading online student-to-student marketplace
by combining extensive market-specific expertise with Internet technologies to generate
revenue while creating a win-win solution for students. The College Cafe will achieve market
dominance by utilizing extensive domain experience, a local grass roots marketing strategy, an
exceptional management team, superior software, and the formation of strategic alliances,
memberships and partnerships with companies within the college market.
Page 1
1.2 Market
The U.S. college student market is a growing yet underserved niche market. The
U.S. Department of Education expects the U.S. college student market to grow from 15.8
million students to 17.2 million in the next five years. According to Harris Interactive college
students are expected to spend over $200 billion this year.
1.3 Opportunity
College students are eager to find ways to get "quick cash" at the end of every semester. One
method college students use is to sell their old textbooks at the end of every semester,
however the re-sell market is controlled by the local university bookstore. Because university
bookstores monopolize the market, students receive only a fraction of the value paid for the
book, typically 75% or less of the purchase prices. The bookstores then re-sell the books back
to other students, receiving over 125% profit. The current situation creates a lose-lose
situation for students and a win-win situation for bookstores. Students are looking for
convenient, money saving ways to purchase textbooks and to receive more value when reselling textbooks at the end of each semester.
1.4 Financial & Capital Requirements
According to the opportunities and requirements for The College Cafe described in this business
plan, we have determined the following financial projections:
The College Cafe will require an initial seed investment as well as later rounds of investment.
The initial seed capital will be used for marketing and customer acquisition, software and
website development.
1.5 Objectives
The College Cafe will strive to achieve the following objectives:
Page 2
2.3 Ownership
The College Cafe is a Limited Liability Company and is solely owned by its founder, Gerald
Owens.
2.4 Keys to Success
Our key to success will lie in our ability to execute our business model. In order to achieve
success, we need to focus on the following areas to establish The College Cafe as a successful
and profitable enterprise. They are:
Recruit an exceptional management and marketing team with extensive domain experience
in the college market.
Create and maintain a "Grass Roots" marketing campaign.
Offer innovative and unique products and services.
Form strategic alliances and partnerships with companies suppling products to the college
market.
Page 3
The College Cafe will utilize current college students to fill positions in the areas of regional
campus marketing, local advertisement sales, administration, customer support other noncritical operational positions. These positions will be full-time, part-time and intern positions
depending on the local market. Using current college students will enable The College Cafe to
receive inexpensive local employment and valuable market feedback from The College Cafe's
target market while also providing real world work experience to college students.
The College Cafe will utilize consultants and contractors during website enhancements and
development efforts.
Board of Directors
At this time The College Cafe is seeking individuals for a Board of Directors. These individuals
will include highly qualified business and industry professionals/experts along with members of
the investment team. These individuals will assist our management team in making
appropriate decisions, forming strategic alliances and taking the most effective action to be the
industry leader.
2.6 Management Team
Our management team consists of three dedicated employees and two technical advisors.
Their backgrounds consist of more than 30 years of experience in e-commerce, marketing and
the Internet technology. In addition to their professional experience, the management team
has over 30 years of college domain experience.
Gerald Owens, Founder, Chief Technical Officer/Web Development
Mr. Owens has over 12 years of work experience including engineering, programming and
sales. He was successful in founding the start-up company, DCSi-Online, an online
intermediary serving the building automation industry. Mr. Owens has a Bachelor of Science
degree in Electrical Engineering form North Carolina State University and a MBA with a
concentration in E-commerce and Computer Information Systems from Georgia State
University. He is an active member of the Technology Association of Georgia (TAG) and the
Southeastern Regional Internet Society (SERIS).
Kelly Mitchell - Online User Experience and Marketing
Ms. Mitchell has 7 years' experience in the interactive space, specializing in online branding,
marketing, and user experience design. Her most recent position involves leading a user
experience team for a Fortune-50 company. Ms. Mitchell has a Bachelor of Science degree
from the University of Georgia and has received art direction training from the Woodruff School
of Art in Atlanta. She is an active member of the Atlanta Interactive Marketing Association.
Andra Powers - Marketing and Communications
Ms. Powers has 10 years marketing and communications experience. She has worked for two
major corporations headquartered in Atlanta, Georgia and has experience in sales, employee
communications, public relations, interactive communications and technology marketing. Ms.
Powers has a wealth of knowledge regarding interactive web management, project
management, account/vendor management, customer needs analysis, concept strategy, and
building quality strategic interpersonal relationships. She has a Bachelor of Science degree in
Communications from Florida State University.
Page 4
Start-up
Requirements
Start-up Expenses
Domain Name Registration
SSL Encrynption
GeoTrust True Site Certificate
Auction & Classified Software (Xcent)
Legal Fees
Utilitizes
Merchant Account Fees
Computers (2 @ $2000)
Programming & Site Development
Site Hosting (1st 3 months)
Miscellance Expenses
Beta Launch Promotions
Search Engine Registration
Total Start-up Expenses
$15
$100
$100
$800
$150
$100
$200
$4,000
$50,000
$120
$1,000
$1,000
$100
$57,685
Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets
$2,315
$5,000
$150,000
$157,315
Total Requirements
$215,000
Page 5
Chart: Start-up
Start-up
$210,000
$180,000
$150,000
$120,000
$90,000
$60,000
$30,000
$0
Expenses
Assets
Investment
Loans
Accounting
Business
Computer Science
Engineering
Marketing
History
Law
Physics
Political Science
Page 6
3.2 Auctions
The College Cafe will offer a powerful auction package. The Auction functionality will have
many features such as Standard, Reverse, Multi Item, Dutch and Blind auctions; Flash Buy and
Proxy Bidding. A fee will be charged for posting items to be auctioned. The posting fee
structure will be similar to eBay's. Sample auctions categories include:
Textbooks
Class Notes
Old Tests
Used CDs & DVDs
Computer Equipment
Tickets
Electronics
Games
Dorm Furnishing
3.3 Classifieds
The College Cafe will offer fee based, student targeted, classifieds ads. Here many features
such as image upload, Web links and nested categories will be offered. A fee will be charged
for posting a classified. The amount charged will be based on the length of time the classified
will be posted. Sample classified categories include:
Textbooks
Class Notes
Tutors
Room Wanted
For Rent
For Sale
Tickets
Rides
Help Wanted
For Hire
3.4 Retail
The College Cafe will sell products targeted to college students. Margins will range from 10%
to 50% depending on the product. Sample product categories include:
Textbooks
CDs & DVDs
Computer Equipment
Electronics
Games
Appliances
Dorm Furnishings
University Merchandise
Clothes
General Merchandise
Page 7
College Sports
Politics
Entertainment
Technology
News
Page 8
Targeted Content - The College Cafe will offer content. Sample topics will include:
News
Wine & Dine
Weather
What's Happening
Best Of
70.67%
$7.858 billion
General/trade books
3.40%
$.378 billion
Student supplies
5.49%
$.611 billion
Computer products
7.63%
$.849 billion
Insignia merchandise
7.85%
$.872 billion
Other merchandise
4.96%
$.552 billion
Total
100%
$11.12 billion
Textbooks
The total textbook/course materials market is estimated to be $7.8 billion based on sales data
for the 2001-2002 academic year. The textbook market is made up of three segments - new
texts, used texts, and custom-published materials(or course packs). The percent of total store
sales and estimated market size of each segment is provided below.
Page 9
New texts
54.71%
$6.1 billion
Used texts
14.86%
$1.6 billion
1.10%
$0.1 billion
70.67%
$7.8 billion
Course packs
Total Course Materials
Online Retail
Jupiter forecasts that online retail spending in the will grow by 28 percent in 2003 to $52
billion. The research company estimates that by 2007, online retail spending will reach $105
billion and account for five percent of all retail spending. Jupiter estimates that the online retail
will grow at an average annual growth rate of 21 percent between 2002 and 2007.
[1] National Association of College Stores (2000-2001)
4.2 Market Trends
The follow statistics indicate that college students are receptive to the Internet channel for the
products, services and content offered by the College Cafe. The following U.S. college student
statistics were based on a report by the Student Monitor and the Harris Interactive Explorer
Study.
According to the Harris Interactive Study, college students spend an average of $287 per
month on discretionary items (which is defined as spending on anything other than tuition,
room/board, rent/mortgage, books/school fees).
Page 10
% Students
Participating in Past
Year
Purchase Videos/DVDs
(not including equipment)
$2,754
70%
$2,746
76%
$2,284
37%
Vacation Travel
$4,607
61%
$1,009
83%
Going to Movies
$887
91%
$791
49%
Going to an Amusement
Park
$456
41%
Spending Category
Projections based on Spring 2002 360 Youth/Harris Interactive College Explorer Study; this
represents a partial list of categories for entertainment and leisure activities.
The National Association of College Stores estimates U.S. college store sales to be $11.12
billion for the 2001-2002 academic year. College stores sell a variety of items, ranging from
textbooks to toothpaste.
Page 11
Market Analysis
Potential Customers
Growth
1%
2%
2%
2%
1.55%
Year 1
Year 2
Year 3
Year 4
Year 5
28,400,000
17,900,000
6,900,000
9,000,000
62,200,000
28,684,000
18,258,000
7,038,000
9,180,000
63,160,000
28,970,840
18,623,160
7,178,760
9,363,600
64,136,360
29,260,548
18,995,623
7,322,335
9,550,872
65,129,378
29,553,153
19,375,535
7,468,782
9,741,889
66,139,359
CAGR
1.00%
2.00%
2.00%
2.00%
1.55%
Page 12
Enrollment
Auburn University
21,505
Clemson University
16,396
18,271
Emory University
11,300
30,401
23,000
Georgia Tech
13,800
46,834
15,628
28,281
Tulane University
10,921
University of Alabama
18,342
University of Florida
45,114
University of Georgia
31,280
University of Kentucky
23,540
University of Miami
13,651
24,368
25,447
University of Tennessee
25,401
Total
419,940
Phase 2 will focus on additional colleges and universities located in the southeast with the
addition of colleges and universities in the Northeast.
4.5 Competitive Anaylsis
Competitors of The College Cafe includes traditional university bookstores, online textbook
retailers, textbook exchange sites, textbook price comparison sites, online auction sites and
online content specific sites targeting the college student market.
4.5.1 University Bookstores
The major objective and strategy of university bookstores is to maintain competitive pricing and
customer service. The strengths of the traditional university bookstores are current customer
Page 13
relationships and location to the University. The major weaknesses of university bookstores are
the limited product selection and lack of value added services that can be offered online.
The National Association of College Stores estimates U.S./Canadian university bookstore sales
to be $11.12 billion for the 2001-2002 academic year.
There are approximately 4,840 college bookstores serving 4,182 institutions in the United
States and 170 college stores in Canada. Larger universities will often have several stores to
serve students, smaller schools in a local area may be served by a single store, and several
schools in an urban community may share multiple retail outlets. While many college stores
share a common mission, they vary widely in size, location, ownership, and customer base.
The majority of stores are owned or operated by the university they serve. On-campus stores
are mostly institutional, but they may also be contract managed, cooperatives, or student
associations. Off-campus stores are typically privately owned.
Sales volume in college stores is determined by many factors, but the major influence on sales
seems most closely tied to the size of the institution served. According to the NACS College
Store Industry Financial Report 2003, average sales per college store were $6,320,556 while
the median was $3,303,062. The majority of college stores have less than $1 million in sales
each year.
According to the NACS College Store Industry Financial Report 2003, college stores returned a
median net income of 7.3% of net sales to their institutions.
NACS Membership by Sales Volume
Sales Volume in $$
Member Stores
Under $1 million
57.0%
$1 to $3 million
27.5 %
$3 to $7 million
9.8%
Over $7 million
5.8%
Ease of returns
The ability to pick up items for immediate use
One-stop shopping
Page 14
The following table lists some of the major independent online retailers not associated with a
university bookstore:
Company
Business Model
Amazon.com
Online retailer
Online retailer
Bigwords.com
Ebay.com
Online Auction
Ecampus.com
Efollett.com
Half.com
Online Auction
JourneyEd.com
Lazystudents.com
Studentmarket.com
TextbooksDirect.com
Textbooksource.net
TextbooksX.com
Varsitybooks.com
Page 15
Page 16
6.0 Sourcing
The main business model for The College Cafe relies on college students providing the
textbooks, auctions, classifieds and teacher evaluations that are posted on the website.
Therefore, our focus relies heavily on the marketing strategy that will increase traffic and usage
and, in turn, maintain our inventory of products and services.
For the retail business component we will establish relationships with manufacturers or
distributors that offer drop-shipments direct to the customer. This will allow The College Cafe
to keep expenses associated with inventory and distribution to a minimum.
We will be contracting students as subject matter experts to provide the content in the
weblogs. The use of students as weblog content experts will help keep costs to a minium yet
still providing interesting and relevant content.
For content and other value added service we will establish relationships with 3rd party
vendors. This will enable The College Cafe to offer a wide variety of products and services
online yet allow The College Cafe to focus on the key business elements; textbooks, auctions,
classifieds and teacher evaluations.
7.0 Technology
The website is designed with the needs of the college student as the focus. The College Cafe is
built using Microsoft technologies which will provide the flexibility to easily expand products and
service offerings in the future. The College Cafe will initially host the website with an external
web-hosting vendor thus reducing initial start-up cost. At a later date, The College Cafe may
elect to bring hosting in-house for better support and maintenance.
The Textbook Exchange, Auction, Classified, and User Administration software was purchased
from Xcent Software, Inc and modified to support The College Cafe's business needs. The
rights to the source code of the Xcent's software were included in the purchase price of
the software. This will enable our programmers to customize the software to support The
College Cafe's growing business needs.
The College Cafe website and databases are hosted by Atl-Connect Internet Services which
guarantees 99.99% uptime. In addition to Web hosting, Atl-Connects provides site monitoring
and statistical performance metrics that include uptime, page views, unique users, banner
impressions, search keywords stats and link stats from other sites.
Page 17
8.0 Milestones
The accompanying table lists important milestones with dates and managers in charge. The
milestone schedule also indicates our initial beta launch of the website at Georgia State
University.
Table: Milestones
Milestones
Milestone
Business Concept & Planning
Beta Site Development
Beta Site Launch
Beta Site Promotional Campaign
Beta Site Analysis
Secure Funding for Phase 1 Launch
Phase 1 - Site Development
Phase 1 - Launch
Phase 1 - Promotional Campaign
Secure Funding for Phase 2
Start Date
6/1/2003
7/1/2003
10/1/2003
10/1/2003
10/15/2003
7/1/2004
2/1/2004
8/15/2004
8/15/2004
10/1/2004
End Date
7/15/2003
10/1/2003
10/2/2003
2/15/2004
2/28/2004
7/30/2004
8/15/2004
8/17/2004
10/1/2004
10/30/2004
Budget
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Totals
Manager
GLO, KM, AP
GLO, KM
GLO
GLO, KM, AP
GLO, KM, AP
GLO
GLO, KM
GLO
GLO, KM, AP
GLO
Department
Management
Web
Web
Marketing
Web & Marketing
Management
Web
Web
Marketing
Management
$0
Chart: Milestones
Milestones
Business Concept & Planning
Beta Site Development
Beta Site Launch
Beta Site Promotional Campaign
Beta Site Analysis
Secure Funding for Phase 1 Launch
Phase 1 - Site Development
Phase 1 - Launch
Phase 1 - Promotional Campaign
Secure Funding for Phase 2
Q3
Q4
Q1 `04
Q2
Q3
Q4
Page 18
The College Cafe will generate assertive revenues by the end of year one.
The College Cafe will start reporting sustained profits during the 9th month of the 1st year.
Sales and profits by year three will top 1.5x that of year one.
The College Cafe will require an initial investment in capital to finance the marketing
campaign and launch strategy.
The College Cafe will require additional investment to fund additional Web development,
sales and marketing efforts and general operating expenses.
The College Cafe will provide a complete student-to-student marketplace. Investment contacts
have already been approached and their expressions of satisfaction and encouragement are
numerous. We intend to continue our advances with more unique and effective business
solutions for the the college market. Based on the attached financial projections, we believe
that this venture represents a sound business investment.
9.1 Important Assumptions
The financial projections are based on the following assumptions and facts for the industry as
outlined in our market analysis:
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
Year 1
Year 2
Year 3
1
9.00%
5.00%
27.00%
0
2
9.00%
5.00%
27.00%
0
3
9.00%
5.00%
27.00%
0
Page 19
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
$57,685
$157,315
$215,000
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets
$155,000
$2,315
$0
$2,315
$157,315
Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities
$5,000
$0
$0
$0
$5,000
Capital
Planned Investment
Gerald Owens
Andrea Powers
Kelley Mitchell
Allison Elliott
Additional Investment Requested
Additional Investment Requirement
Total Planned Investment
$50,000
$5,000
$2,500
$2,500
$150,000
$0
$210,000
($57,685)
$152,315
$157,315
Total Funding
$215,000
Page 20
Chart: Benchmarks
Benchmarks
Year 1
1.0
Year 2
Year 3
0.0
Sales
Gross Margin%
Operating Expenses
Page 21
Break-even Analysis
Monthly Revenue Break-even
$133,362
Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost
56%
$58,648
Break-even Analysis
$40,000
$30,000
$20,000
$10,000
$0
($10,000)
($20,000)
($30,000)
($40,000)
($50,000)
$0
$40,000
$80,000
$120,000
$160,000
$200,000
$20,000
$60,000
$100,000
$140,000
$180,000
$220,000
Page 22
Sales Forecast
Year 1
Year 2
Year 3
Textbook Exchange
Classifieds
Auctions
Retail
Advertisement
Total Sales
$741,000
$596,000
$291,000
$206,000
$278,500
$2,112,500
$963,300
$774,800
$378,300
$267,800
$362,050
$2,746,250
$1,252,290
$1,007,240
$491,790
$348,140
$470,665
$3,570,125
Year 1
$391,000
$258,000
$170,500
$193,500
$170,500
$1,183,500
Year 2
$430,100
$283,800
$187,550
$212,850
$187,550
$1,301,850
Year 3
$473,110
$312,180
$206,305
$234,135
$206,305
$1,432,035
Sales
Page 23
Sales Monthly
$400,000
$360,000
$320,000
Textbook Exchange
$280,000
Classifieds
$240,000
$200,000
Auctions
$160,000
Retail
$120,000
Advertisement
$80,000
$40,000
Month 12
Month 11
Month 10
Month 9
Month 8
Month 7
Month 6
Month 5
Month 4
Month 3
Month 2
Month 1
$0
Sales by Year
$3,600,000
$3,200,000
$2,800,000
Textbook Exchange
$2,400,000
Classifieds
$2,000,000
Auctions
$1,600,000
Retail
$1,200,000
Advertisement
$800,000
$400,000
$0
Year 1
Year 2
Year 3
Page 24
Personnel Plan
Year 1
Year 2
Year 3
Gerald Owens
Kelley Mitchell
Andrea Powers
College Reps (1 at each College for phase 1)
Students Interns
Total People
$66,000
$60,000
$57,000
$228,000
$0
22
$70,000
$65,000
$60,000
$250,000
$0
0
$75,000
$70,000
$65,000
$300,000
$0
0
Total Payroll
$411,000
$445,000
$510,000
Page 25
Year 2
Year 3
$2,112,500
$1,183,500
$0
$1,183,500
$2,746,250
$1,301,850
$0
$1,301,850
$3,570,125
$1,432,035
$0
$1,432,035
$929,000
43.98%
$1,444,400
52.60%
$2,138,090
59.89%
Payroll
Sales and Marketing and Other Expenses
Depreciation
Web Hosting
Utilities
Website Enhancement Projects
Insurance
Payroll Taxes
Other General and Administrative Expenses
$411,000
$0
$0
$720
$1,200
$225,000
$1,200
$59,850
$4,800
$445,000
$0
$0
$1,000
$1,500
$200,000
$15,000
$64,650
$7,500
$510,000
$0
$0
$1,250
$2,000
$200,000
$17,500
$74,250
$10,000
$703,770
$734,650
$815,000
$225,230
$225,230
$275
$60,738
$709,750
$709,750
$63
$191,615
$1,323,090
$1,323,090
$0
$357,234
Net Profit
Net Profit/Sales
$164,218
7.77%
$518,072
18.86%
$965,856
27.05%
Sales
Direct Cost of Sales
Other Costs of Goods
Total Cost of Sales
Gross Margin
Gross Margin %
Expenses
Page 26
Profit Monthly
$80,000
$60,000
$40,000
$20,000
$0
($20,000)
($40,000)
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12
Profit Yearly
$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
Year 1
Year 2
Year 3
Page 27
$2,100,000
$1,800,000
$1,500,000
$1,200,000
$900,000
$600,000
$300,000
$0
Year 1
Year 2
Year 3
Page 28
Year 2
Year 3
$2,112,500
$2,112,500
$2,746,250
$2,746,250
$3,570,125
$3,570,125
$0
$0
$0
$0
$0
$0
$150,000
$2,262,500
$0
$0
$0
$0
$0
$0
$0
$2,746,250
$0
$0
$0
$0
$0
$0
$0
$3,570,125
Year 1
Year 2
Year 3
$411,000
$1,290,342
$1,701,342
$445,000
$1,883,557
$2,328,557
$510,000
$2,068,700
$2,578,700
$0
$3,600
$0
$0
$0
$0
$0
$1,704,942
$0
$1,400
$0
$0
$0
$0
$0
$2,329,957
$0
$0
$0
$0
$0
$0
$0
$2,578,700
$557,558
$559,873
$416,293
$976,167
$991,425
$1,967,591
Cash Received
Page 29
Chart: Cash
Cash
$600,000
$500,000
$400,000
Cash Balance
$200,000
$100,000
Month 12
Month 11
Month 10
Month 9
Month 8
Month 7
Month 6
Month 5
Month 4
Month 3
Month 2
Month 1
$0
Page 30
Year 2
Year 3
$559,873
$5,000
$564,873
$976,167
$5,000
$981,167
$1,967,591
$5,000
$1,972,591
$150,000
$0
$150,000
$714,873
$150,000
$0
$150,000
$1,131,167
$150,000
$0
$150,000
$2,122,591
Year 1
Year 2
Year 3
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$246,941
$1,400
$0
$248,341
$146,563
$0
$0
$146,563
$172,132
$0
$0
$172,132
Long-term Liabilities
Total Liabilities
$0
$248,341
$0
$146,563
$0
$172,132
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$360,000
($57,685)
$164,218
$466,533
$714,873
$360,000
$106,533
$518,072
$984,604
$1,131,167
$360,000
$624,604
$965,856
$1,950,460
$2,122,591
Net Worth
$466,533
$984,604
$1,950,460
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
Page 31
Table: Ratios
Ratio Analysis
Year 1
Year 2
Year 3
Industry Profile
n.a.
30.00%
30.00%
4.01%
0.70%
79.02%
20.98%
100.00%
0.44%
86.74%
13.26%
100.00%
0.24%
92.93%
7.07%
100.00%
26.25%
81.30%
18.70%
100.00%
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
34.74%
0.00%
34.74%
65.26%
12.96%
0.00%
12.96%
87.04%
8.11%
0.00%
8.11%
91.89%
39.21%
14.66%
53.87%
46.13%
100.00%
43.98%
39.49%
13.37%
10.66%
100.00%
52.60%
33.69%
8.19%
25.84%
100.00%
59.89%
33.21%
7.00%
37.06%
100.00%
32.36%
20.70%
1.71%
1.42%
2.27
2.27
34.74%
48.22%
31.47%
6.69
6.69
12.96%
72.08%
62.74%
11.46
11.46
8.11%
67.83%
62.33%
1.85
0.71
3.32%
58.10%
7.93%
Sales Growth
Percent of Total Assets
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios
Year 1
Year 2
Year 3
7.77%
35.20%
18.86%
52.62%
27.05%
49.52%
n.a
n.a
6.23
27
2.96
12.17
40
2.43
12.17
28
1.68
n.a
n.a
n.a
0.53
1.00
0.15
1.00
0.09
1.00
n.a
n.a
$316,533
820.51
$834,604
11,265.87
$1,800,460
0.00
n.a
n.a
0.34
35%
2.27
4.53
0.00
0.41
13%
6.69
2.79
0.00
0.59
8%
11.46
1.83
0.00
n.a
n.a
n.a
n.a
n.a
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 32
Page 33
Appendix
Table: Sales Forecast
Sales Forecast
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Sales
Textbook Exchange
Classifieds
Auctions
Retail
Advertisement
0%
0%
0%
0%
0%
$1,000
$1,000
$1,000
$1,000
$1,000
$25,000
$20,000
$10,000
$2,500
$2,500
$35,000
$25,000
$20,000
$5,000
$5,000
$50,000
$40,000
$25,000
$10,000
$10,000
$35,000
$30,000
$20,000
$10,000
$15,000
$50,000
$45,000
$25,000
$12,500
$20,000
$60,000
$50,000
$30,000
$15,000
$25,000
$75,000
$60,000
$30,000
$20,000
$25,000
$80,000
$75,000
$25,000
$20,000
$30,000
$90,000
$70,000
$30,000
$25,000
$40,000
$115,000
$80,000
$35,000
$35,000
$50,000
$125,000
$100,000
$40,000
$50,000
$55,000
Total Sales
$5,000
$60,000
$90,000
$135,000
$110,000
$152,500
$180,000
$210,000
$230,000
$255,000
$315,000
$370,000
Month 1
Month 2
Month 10
Month 11
Month 12
Textbook Exchange
$1,000
$5,000
$10,000
$15,000
$20,000
$30,000
$40,000
$45,000
$40,000
$50,000
$60,000
$75,000
Classifieds
$1,000
$2,000
$5,000
$10,000
$15,000
$20,000
$25,000
$27,000
$30,000
$33,000
$40,000
$50,000
Auction
$1,000
$2,500
$5,000
$7,500
$10,000
$15,000
$17,500
$20,000
$20,000
$22,000
$25,000
$25,000
Retail
$1,000
$1,500
$5,000
$10,000
$12,000
$15,000
$20,000
$22,000
$25,000
$25,000
$27,000
$30,000
Advertisement
$1,000
$2,500
$5,000
$5,000
$10,000
$10,000
$15,000
$20,000
$20,000
$25,000
$27,000
$30,000
$5,000
$13,500
$30,000
$47,500
$67,000
$90,000
$117,500
$134,000
$135,000
$155,000
$179,000
$210,000
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Page 1
Appendix
Table: Personnel
Personnel Plan
Gerald Owens
Kelley Mitchell
Andrea Powers
College Reps (1 at each College for
phase 1)
Students Interns
Total People
Total Payroll
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
0%
0%
0%
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
$5,500
$5,000
$4,750
0%
$19,000
$19,000
$19,000
$19,000
$19,000
$19,000
$19,000
$19,000
$19,000
$19,000
$19,000
$19,000
0%
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
22
22
22
22
22
22
22
22
22
22
22
22
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
Page 2
Appendix
Table: General Assumptions
General Assumptions
Month 1
Plan Month
Month 2
2
Month 3
3
Month 4
4
Month 5
5
Month 6
6
Month 7
7
Month 8
8
Month 9
9
Month 10
10
Month 11
11
Month 12
12
9.00%
9.00%
9.00%
9.00%
9.00%
9.00%
9.00%
9.00%
9.00%
9.00%
9.00%
9.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
27.00%
27.00%
27.00%
27.00%
27.00%
27.00%
27.00%
27.00%
27.00%
27.00%
27.00%
27.00%
Tax Rate
Other
Page 3
Appendix
Table: Profit and Loss
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Sales
$5,000
$60,000
$90,000
$135,000
$110,000
$152,500
$180,000
$210,000
$230,000
$255,000
$315,000
$370,000
$5,000
$13,500
$30,000
$47,500
$67,000
$90,000
$117,500
$134,000
$135,000
$155,000
$179,000
$210,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$5,000
$13,500
$30,000
$47,500
$67,000
$90,000
$117,500
$134,000
$135,000
$155,000
$179,000
$210,000
Gross Margin
Gross Margin %
$0
$46,500
$60,000
$87,500
$43,000
$62,500
$62,500
$76,000
$95,000
$100,000
$136,000
$160,000
0.00%
77.50%
66.67%
64.81%
39.09%
40.98%
34.72%
36.19%
41.30%
39.22%
43.17%
43.24%
Expenses
Payroll
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Depreciation
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Web Hosting
Utilities
Website Enhancement
Projects
Insurance
$60
$60
$60
$60
$60
$60
$60
$60
$60
$60
$60
$60
$100
$100
$100
$100
$100
$100
$100
$100
$100
$100
$100
$100
$25,000
$10,000
$10,000
$10,000
$25,000
$25,000
$25,000
$25,000
$25,000
$25,000
$10,000
$10,000
$100
$100
$100
$100
$100
$100
$100
$100
$100
$100
$100
$100
$4,988
$4,988
$4,988
$4,988
$4,988
$4,988
$4,988
$4,988
$4,988
$4,988
$4,988
$4,988
$100
$100
$100
$500
$500
$500
$500
$500
$500
$500
$500
$500
$64,598
$49,598
$49,598
$49,998
$64,998
$64,998
$64,998
$64,998
$64,998
$64,998
$49,998
$49,998
($64,598)
($3,098)
$10,403
$37,503
($21,998)
($2,498)
($2,498)
$11,003
$30,003
$35,003
$86,003
$110,003
EBITDA
($64,598)
($3,098)
$10,403
$37,503
($21,998)
($2,498)
($2,498)
$11,003
$30,003
$35,003
$86,003
$110,003
Payroll Taxes
Other General and
Administrative Expenses
Interest Expense
15%
$35
$33
$31
$29
$26
$24
$20
$17
$15
$13
$11
($17,451)
($845)
$2,800
$10,118
($5,946)
($681)
($680)
$2,965
$8,096
$9,447
$23,217
$29,698
Net Profit
($47,182)
($2,285)
$7,571
$27,356
($16,077)
($1,841)
($1,839)
$8,018
$21,889
$25,541
$62,773
$80,294
Net Profit/Sales
-943.64%
-3.81%
8.41%
20.26%
-14.62%
-1.21%
-1.02%
3.82%
9.52%
10.02%
19.93%
21.70%
Taxes Incurred
$22
Page 4
Appendix
Page 5
Appendix
Table: Cash Flow
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
$5,000
$60,000
$90,000
$135,000
$110,000
$152,500
$180,000
$210,000
$230,000
$255,000
$315,000
$370,000
$5,000
$60,000
$90,000
$135,000
$110,000
$152,500
$180,000
$210,000
$230,000
$255,000
$315,000
$370,000
$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
$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
$125,000
$25,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$130,000
$85,000
$90,000
$135,000
$110,000
$152,500
$180,000
$210,000
$230,000
$255,000
$315,000
$370,000
Expenditures
0.00%
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$34,250
$598
$18,269
$28,707
$49,019
$74,008
$92,769
$121,007
$148,260
$167,937
$174,572
$195,968
$219,227
$34,848
$52,519
$62,957
$83,269
$108,258
$127,019
$155,257
$182,510
$202,187
$208,822
$230,218
$253,477
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$300
$300
$300
$300
$300
$300
$300
$300
$300
$300
$300
$300
$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
$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
$35,148
$52,819
$63,257
$83,569
$108,558
$127,319
$155,557
$182,810
$202,487
$209,122
$230,518
$253,777
$94,852
$32,181
$26,743
$51,431
$1,442
$25,181
$24,443
$27,190
$27,513
$45,878
$84,482
$116,223
Cash Balance
$97,167
$129,349
$156,092
$207,523
$208,964
$234,145
$258,588
$285,777
$313,290
$359,168
$443,650
$559,873
Page 6
Appendix
Table: Balance Sheet
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Starting Balances
Current Assets
Cash
Other Current Assets
Total Current Assets
$2,315
$5,000
$7,315
$97,167
$5,000
$102,167
$129,349
$5,000
$134,349
$156,092
$5,000
$161,092
$207,523
$5,000
$212,523
$208,964
$5,000
$213,964
$234,145
$5,000
$239,145
$258,588
$5,000
$263,588
$285,777
$5,000
$290,777
$313,290
$5,000
$318,290
$359,168
$5,000
$364,168
$443,650
$5,000
$448,650
$559,873
$5,000
$564,873
$150,000
$0
$150,000
$157,315
$150,000
$0
$150,000
$252,167
$150,000
$0
$150,000
$284,349
$150,000
$0
$150,000
$311,092
$150,000
$0
$150,000
$362,523
$150,000
$0
$150,000
$363,964
$150,000
$0
$150,000
$389,145
$150,000
$0
$150,000
$413,588
$150,000
$0
$150,000
$440,777
$150,000
$0
$150,000
$468,290
$150,000
$0
$150,000
$514,168
$150,000
$0
$150,000
$598,650
$150,000
$0
$150,000
$714,873
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
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
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$0
$5,000
$0
$5,000
$17,334
$4,700
$0
$22,034
$27,101
$4,400
$0
$31,501
$46,573
$4,100
$0
$50,673
$70,948
$3,800
$0
$74,748
$88,766
$3,500
$0
$92,266
$116,088
$3,200
$0
$119,288
$142,669
$2,900
$0
$145,569
$162,141
$2,600
$0
$164,741
$168,065
$2,300
$0
$170,365
$188,702
$2,000
$0
$190,702
$210,712
$1,700
$0
$212,412
$246,941
$1,400
$0
$248,341
Long-term Liabilities
Total Liabilities
$0
$5,000
$0
$22,034
$0
$31,501
$0
$50,673
$0
$74,748
$0
$92,266
$0
$119,288
$0
$145,569
$0
$164,741
$0
$170,365
$0
$190,702
$0
$212,412
$0
$248,341
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$210,000
($57,685)
$0
$152,315
$157,315
$335,000
($57,685)
($47,182)
$230,133
$252,167
$360,000
($57,685)
($49,467)
$252,848
$284,349
$360,000
($57,685)
($41,896)
$260,419
$311,092
$360,000
($57,685)
($14,540)
$287,775
$362,523
$360,000
($57,685)
($30,617)
$271,698
$363,964
$360,000
($57,685)
($32,458)
$269,857
$389,145
$360,000
($57,685)
($34,297)
$268,018
$413,588
$360,000
($57,685)
($26,279)
$276,036
$440,777
$360,000
($57,685)
($4,390)
$297,925
$468,290
$360,000
($57,685)
$21,151
$323,466
$514,168
$360,000
($57,685)
$83,923
$386,238
$598,650
$360,000
($57,685)
$164,218
$466,533
$714,873
Net Worth
$152,315
$230,133
$252,848
$260,419
$287,775
$271,698
$269,857
$268,018
$276,036
$297,925
$323,466
$386,238
$466,533
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