Equipment Rental

August 2001
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Table of Contents
1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Locations and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Past Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Future Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.0 Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Product Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1.1 Product Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1.2 Future Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.0 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4.1 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.3 Industry Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3.1 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3.2 Market Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4 Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4.1 Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4.2 Marketing Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.0 Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

5.1 Key Components of the Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2 Strategic Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.0 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

7.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

8.1 General Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.2 Key Financial Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.3 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.4 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.5 Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.6 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.7 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Equipment Rental
1.0 Executive Summary
Equipment Rental, Inc. (ER) is a Breaux Bridge, Tennessee company that sells and rents heavy
equipment such as dozers, backhoes, excavators, and trenchers as well as small home use
and construction equipment such as tillers, augers, and chain saws.
ER has obtained the authorization to be a distributor for Hancor Pipe, Stone Equipment, Pro-
Cut Diamond Products, Echo Lawn Care, Compact Excavators, and Skid Steer Loaders. The
company is the only authorized distributor for the South-Tennessee area for Ramrod
Equipment and Komatsu Forklifts.
ER has a world-class management team with direct knowledge of the industry, extensive
research experience, and unique administrative skills. Its team includes Mr. David James and
Mrs. Sally James. Having lived in Denton Parish for six years, and worked throughout the
state, as well as parts of Texas, Mississippi, Alabama, and Georgia, President/CEO, Mr. James
has compiled an extensive list of customers/potential customers, vendors, and contacts for
equipment consignment.
The company plans to employ two people from the area, in positions within the shop. By
employing local individuals, ER would be contributing toward the development of the area.
Funds would remain in the area thereby boosting the economy and contributing to the
community as a whole. Loyal customers help to expand the company's business area by word-
of-mouth and a pocketful of ER's business cards.
A key component of the company's strategy is to continue to add to its ever-increasing

product line which currently includes homeowner equipment from Echo and Interstate
Batteries, commercial, equipment from Ramrod, Compact S/I Technology, and industrial
equipment from Komatsu.
The company is seeking a loan/credit line in the amount of $300,000 for the purpose of
expanding the business. Expansion plans include the purchase of additional land and
construction of a larger shop/service area, increase rental inventory, purchase of delivery
truck, and the hiring of additional personnel including a mechanic and delivery driver.
Projected revenues for 2000 to 2002 are $210,000, $420,000, and $840,000, respectively.
Highlights
$900,000
$800,000
$700,000
$600,000
Sales
$500,000
Gross Margin
$400,000
Net Profit
$300,000
$200,000
$100,000
$0
2000 2001 2002
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Equipment Rental
1.1 Mission
ER's mission is to become THE exclusive full-service equipment rental, sales, and service
company in upper and lower Denton Parish with the ability to service the surrounding parishes
of Memphis, Knoxville, Grand Prairie, Plano, Garland, Irvine, and Riverside. Therefore the
company's strategy is to create a limited geographical niche for itself where there are no
potential competitors.
ER's vision is to continue to expand its service to other areas. The company's coverage area is
constantly increasing, as the areas are becoming aware of the company's presence.
2.0 Company Summary
ER began its operations on May 2, 1997 with little capital investment. The company combined
10 years of experience in the sales and rental field to generate a large customer base. After
eight months of operations at the present facility, the company has increased its customer list
by 100% and its vendor list by 75%. ER takes pride in having brought several new items to
this area that were otherwise unknown, such as the spreader/grader and Ramrod products.
2.1 Company Ownership
ER was founded in Memphis, Tennessee in May 1997 to sell and rent heavy equipment, small
home use machines, and construction equipment. The company was formed by Mr. David
James and Mrs. Sally James. ER is a Tennessee S-Corporation, with principal offices located in
Memphis, TN.
2.2 Locations and Facilities
The company has one office currently in Memphis, TN.
ER is located 1/2 mile from the Interstate (I-65) with easy access and a large turnaround area
for larger vehicles used in pick up and delivery of equipment. ER is not inside any municipal
jurisdiction which would restrict the type of business being conducted. The location also
benefits from easy access to hotels (1/2 mile), banks (less than 1/4 mile), groceries (1/8
mile), repair shops (1/4 mile), service stations (1/8 mile), and a parts supply house (1/3 mile).
Currently, there are no environmental concerns, but the company hopes to be able to have a
repair shop located on the premises at which time any environmental concerns will be seen to.
ER's current hours of operation are from 8:00 a.m. until 5:00 p.m. However, the company
does receive after hours calls and provides assistance as needed. Work hours have sometimes
extended from 5:00 a.m. to later than 6:00 p.m. as needed.
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Equipment Rental
2.3 Past Performance
The following is the company's past three years of performance since start-up.
Table: Past Performance
Past Performance
1997 1998 1999
Sales $49,000 $57,000 $100,000
Gross Margin $32,830 $42,351 $86,500
Gross Margin % 67.00% 74.30% 86.50%
Operating Expenses $33,810 $39,330 $69,000
Collection Period (days) 0 0 0
Inventory Turnover 4.00 4.00 4.00
Balance Sheet
Current Assets 1997 1998 1999
Cash $3,500 $1,500 $2,500
Accounts Receivable $6,000 $7,000 $9,000
Inventory $8,000 $14,000 $19,000
Other Current Assets $2,500 $5,000 $6,000
Total Current Assets $20,000 $27,500 $36,500
Long-term Assets
Capital Assets $5,200 $6,400 $8,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $5,200 $6,400 $8,000
Total Assets $25,200 $33,900 $44,500
Capital and Liabilities

1997 1998 1999
Accounts Payable $5,500 $7,000 $9,000
Current Borrowing $8,000 $9,000 $9,500
Other Current Liabilities $4,000 $3,400 $3,700
Subtotal Current Liabilities $17,500 $19,400 $22,200
Long-term Liabilities $10,000 $12,000 $10,000

Total Liabilities $27,500 $31,400 $32,200
Paid-in Capital $0 $0 $0
Retained Earnings ($2,300) $2,500 $12,300
Earnings $0 $0 $0
Total Capital ($2,300) $2,500 $12,300
Total Capital and Liabilities $25,200 $33,900 $44,500
Other Inputs 1997 1998 1999

Payment Days 60 45 45
Sales on Credit $0 $0 $0
Receivables Turnover 0.00 0.00 0.00
2.4 Future Facilities
There is 1/2 - 1 acre of additional property directly to the north side and is available for the
construction of a storage/equipment yard if necessary. Mr. James has worked with a steel
building construction company and is able to purchase items to construct a building at cost or
at a sufficient discount that it would not be necessary to use the greater portion of the loan for
building needs. The estimated cost of building is expected to be between $10,000 and
$13,500. ER has access to a main highway with concrete entrances to and from the property.
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Equipment Rental
3.0 Products
ER sells and rents heavy equipment such as dozers, backhoes, excavators, and trenchers, as
well as small home use, and construction equipment such as tillers, augers, and chain saws.
ER takes pride in having brought several new items to this area that were otherwise unknown,
such as the spreader/grader and Ramrod products.
ER has obtained the authorization to be a distributor for Hancor Pipe, Stone Equipment, Pro-
Cut Diamond Products, Echo Lawn Care, Compact Excavators, and Skid Steer Loaders. The
company is the only authorized distributor for the South-Tennessee area for Ramrod
Equipment and Komatsu Forklifts.
3.1 Product Summary
Interstate
ER carries a range of Interstate equipment including:
• Megatron Plus - 72 month;

• Megatron - 60 month;
• Light truck and van (LTV);
• Interstate - 50 month;
• Extreme performance;
• Interstate - 50 month (imported cars);
• Special use - lawn and garden, etc.;
• Marine/RV - 12 volt;
• Commercial - Very HD 12 volt;
• Commercial - 6 volt;
• Commercial - 8 volt special duty.
Komatsu
ER carries gasoline, diesel, LPG, and electric forklifts from Komatsu. The benefits of Komatsu
products include:
• Low noise designs reduce operator fatigue;

• Non-asbestos brakes;
• Open mast designs for excellent visibility;
• Heavy-duty air filtration systems with high air intake for extended engine life;
• Easy access to mechanical components.
Ramrod
ER carries a series of Ramrod Taskmaster products that are designed for any task. They
include:
• The post hole auger (9" and 12") - can dig up to 60 holes in one hour;
• 32" forks - mini fork lift;
• Leveller - for back landscaping;
• The trencher - the attachment of choice for digging trenches;
• Hay and mower fork - horse and cattle stall cleanup;
• Scattrack. ER carries a series of mini excavators and skid steer loaders with various
attachments;
• Hydraulic breakers - for breaking concrete, rock, or other hard surfaces;
• Trenchers - for installing electric lines and underground cables;
• Pallet fork - for handling heavy palletized material;
• Grapples - for clean up of loose, bulky, or baled materials;
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Equipment Rental
• Augers - for digging holes and wide trenches in tight areas;
• Angle blade - for grading;
• Mini excavator - for construction, landscaping, and utility applications;
• Trimmers and bushcutters and accessories;
• Tiller/Cultivator;
• Power blowers and accessories;
• Hedge clippers;
• Power pruners and accessories;
• Chain saws;
• Safety accessories.
3.1.1 Product Support
ER is also listed on the bidder list for several states and receive bid packages by mail, fax, and
email which is checked daily. The company is currently on the Atchafalaya Basin Development
Committee mailing list and is working with the Henderson Area Committee.
3.1.2 Future Products
ER plans to increase its current inventory and suppliers while adding new product lines
available on the market. ER also plans to be able to offer specials such as manufacturer's
discounts that would entice potential customers to ER, while at the same time retaining a good
working capital within the company.
Stone
ER anticipates carrying a series of Stone products including:
• Stomper;
• WolfPac asphalt rollers;
• Rhino ride-on vibratory dirt rollers;
• Bulldog trench rollers;
• Hydroblend continuous mixers.
4.0 Market Analysis Summary
The company expects to participate in a variety of different industries, including commercial

and residential construction and farm machinery. The following sections will describe the
industries in which ER hopes to compete.
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Equipment Rental
4.1 Target Market Segment Strategy
ER currently has customers in the industrial and commercial fields, petro-chemical plants,
contractors, sub-contractors, oil fields, and municipalities, with expansion potential in other
areas. The Market Analysis table below gives the total potential number of businesses that
could rent or buy our equipment in the local area.
Table: Market Analysis
Market Analysis
Potential Customers Growth 2000 2001 2002 2003 2004 CAGR
Petro-chemical clients 1% 5 5 5 5 5 0.00%
Contractors and 10% 160 176 194 213 234 9.97%
subcontractors
Municipalities 1% 8 8 8 8 8 0.00%
Farmers 3% 127 131 135 139 143 3.01%
Industrial clients 4% 86 89 93 97 101 4.10%
Other 2% 40 41 42 43 44 2.41%
Total 5.86% 426 450 477 505 535 5.86%
Market Analysis (Pie)
Petro-chemical clients
Contractors and subcontractors
Municipalities
Farmers
Industrial clients
Other
4.2 Market Growth
Most of ER's client industries such as the petro-chemical and farm industries have flat or very
slow growth because these are mature or declining industries. However, often times there are
other factors that make them attractive in the long run. The farming industry is heavily
subsidized by the government and many of the farms in the local area are small plots with less
than 100 acres. This means that most are poorly capitalized and seasonally require heavy
equipment for planting and harvesting. This makes for an excellent cash-cow type client.
The one industry that can be counted on to grow significantly for the short-term is the
contractor/commercial construction industry. The housing boom of the past five years has
produced annual growth rates ranging from 5-10%. In evaluating our total market we plan to
concentrate on this industry as our primary target market.
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Equipment Rental
4.3 Industry Analysis
Industry Description (information provided by imarketinc.com)
Market size statistics - Industrial trucks and tractors

Establishments primarily engaged in manufacturing industrial trucks, tractors, trailers,
stackers (truck type), and related equipment used for handling materials on floors and paved
surfaces in and around industrial and commercial plants, depots, docks, airports, and
terminals.
Estimated number of U.S. establishments 1,004

Total people employed in this industry 37,854
Total annual sales in this industry $13,004 million
Average employees per establishment 38
Average sales per establishment $16 million
Market size statistics - Farm machinery and equipment

Establishments primarily engaged in manufacturing farm machinery and equipment including
soil preparation machinery, for use in the preparation and maintenance of the soil, planting
and harvesting of the crop, preparing crops for market on the farm, or for use in performing
other farm operations and processes.

Average sales per establishment $13.3 million
Market size statistics - Construction machinery

Establishments primarily engaged in manufacturing heavy machinery and equipment, such as
bulldozers, concrete mixers, cranes.

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Equipment Rental
4.3.1 Competition and Buying Patterns
ER's closest competitors are located in Memphis Parish. They include the following five
companies:
• CBC Equipment;
• Northern Equipment;
• Jones Rental Service;
• Rental Service Center;
• Memphis Rental.
Being located in or near Memphis, they charge a drop off and/or pick up fee. ER can, in most
cases, wave this fee which will allow the customer more funds to purchase/rent additional
equipment.
4.3.2 Market Statistics
Market Description (information provided by S&P and imarketinc.com)
The market in ER's area is very large with new construction being at an all-time high. ER is in
need of inventory to be able to supply the local area and neighboring communities. The
company has been able to sub-rent some equipment but would like to obtain certain items to
put into its fleet thereby increasing profit margins. ER plans on offering a substantial line of
equipment for rental and sales to meet customer needs as well as service for the equipment
and those owned by others in the area.
The housing industry has proceeded at a red-hot pace for several years running. An all-time
record was set in 1998, when 886,000 new-site single family homes were sold. That
represented a 10% gain from the robust total of 804,000 homes sold in 1997, and an 8.1%
rise from the prior record of 819,000 units in 1977. Single-family housing construction
accounted for $47,539 million of the total $124,953 million generated in the industry.
Home sales were strengthened even further during most of 1999's first 10 months. In that
period, new single-family home sales increased by 4.8% on a year-to-year basis, to 791,000
units, according to the U.S. Department of Commerce. Through October 1999, seasonally
adjusted sales had exceeded 800,000 on an annualized basis in every month since the start of
1998.
The record setting string of home sales since the second half of 1997 has forced builders to
pick up the pace of their construction activity. During 1998, total starts increased by 9.7% to
1.62 million units. Starts for single family units moved up 12% for the year, and those of multi-
family units were ahead by 1.5%. As an indication of building activity at year-end 1999,
housing starts in November 1999 came in at a seasonally adjusted annual rate of 1.6 million
units.
Market size statistics - Single-family housing construction

General contractors primarily engaged in construction of single-family houses.

Average people employed in this industry 831,158
Average sales per establishment $.6 million
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Equipment Rental
Market size statistics - Residential construction, nec

General contractors primarily engaged in construction (including new work additions,
alterations, remodeling, and repair) of residential buildings other than single-family houses.
This includes hotels, motels, apartments, and multi-family homes.

Market size statistics - Heavy construction, nec

General and special trade contractors primarily engaged in the construction of heavy projects
not elsewhere classified. This includes canal, drainage system, athletic and recreation facilities,
land preparation, rock removal, waste water and sewage treatment plant, and trenching
construction.

Market size statistics - Bridge, tunnel, and elevated highway construction

General contractors primarily engaged in the construction of bridges, viaducts, elevated
highways, and pedestrian and railway tunnels.

Market size statistics - Highway and street construction

General and special trade contractors primarily engaged in the construction of roads, streets,
alleys, public sidewalks, guardrails, parkways, and airports.

Market size statistics - Nonresidential construction, nec

General contractors primarily engaged in the construction (including new work additions,
alterations, remodeling, and repair) of nonresidential buildings other than industrial buildings
and warehouses. This includes commercial, institutional, religious, and amusement and
recreational buildings.

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Equipment Rental
4.4 Marketing
The overall marketing plan for ER's products and services is based on the following
fundamentals:
• The segment of the market(s) planned to reach.

• Distribution channels planned to be used to reach market segments: television, radio,
sales associates, and mailings.
• Share of the market expected to capture over a fixed period of time.
Market Responsibilities
ER is committed to an extensive promotional campaign. This will be done aggressively and on
a broad scale. To accomplish initial sales goals, the company will require an extremely
effective promotional campaign to accomplish two primary objectives:
1. Attract quality sales/service personnel that have a desire to be successful.

2. Attract customers that will constantly look to ER for their projects.
In addition, ER plans to advertise in magazines, newspapers, television, radio, and on

billboards throughout the state.
Promotion
In addition to standard advertisement practices, ER will gain considerable recognition through
these additional promotional mediums:
• Press releases sent to major radio stations, newspapers, and magazines.
• Radio advertising on secondary stations.
• Incentives. As an extra incentive for customers and potential customers to ER's name,
the company plans to distribute coffee mugs, T-shirts, pens, and other advertising
specialties with the company logo. This will be an ongoing program for the company,
when appropriate and where it is identified as beneficial.
• Brochures. The objective of brochures is to portray ERs' goals and products as an

attractive functionality. It is also to show customers how to use the latest in technology
as it relates to construction and building services. ER will develop three brochures: one
to be used to promote sales, one to use to announce the product in a new market, and
the other to recruit sales associates.
Investment in Advertising and Promotion

For the first year of operation, advertising, and promotion is budgeted at a combined total of
$14,000. A fixed amount of sales revenues will go toward the state ER advertisement
campaign. On an ongoing basis, ER feels that it can budget advertising expenses at less than
10% of revenues to ER.
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Equipment Rental
4.4.1 Pricing
Currently, ER maintains a commercial credit department for business customers with a 1% net
30-day limit. This loan will enable the company to establish its lending ability but will be
structured so as not to hamper its ability to assist other customers (due on receipt with
approved credit references). Most of ER's customers choose to deal with their own financial
sources, however ER does have several financial sources to choose from, thereby giving them
references should it become necessary to do so.
The company offers competitive prices, which are subject to review when necessary. ER has
done sufficient work in this area to know that it can place a markup on merchandise and still
retain sufficient funds to be competitive. Knowledge of market and competitor prices gives ER
the advantage of pricing in-line with competitors. ER suppliers have and will continue to supply
products that enable the company to meet the customers price range.
Most companies have a 15-20% markup on their merchandise. Having worked for most of the
larger companies in the area, Mr. James has an advantage of knowing which companies are
firm with the prices and how much others will decrease their prices. Several companies do not
have a working list of rental prices and change with the market thereby causing a delay of
several hours or even days to allow for a check of existing rental rates.
At ER, pricing is derived from an American Rental Association (ARA) formula used to price
sales and rental items in relation to cost and resale/use value.
4.4.2 Marketing Communications
The company's promotional plan is diverse and includes a range of marketing communications:
• Trade shows. Company representatives will attend and participate in several trade
shows, such as Lagcoe.
• Print advertising. The company's print advertising program includes advertisements
in the Denton Parish newspaper, church bulletin, Denton Economics 101 directory, and
restaurant menus in Memphis and Denton Parish.
• Festivals. The company plans to take part in various local shows.
• Additional methods include:
• Yard signs - changed on a two week rotating schedule.
• Magnetic signs - for trucks.
• Business cards.
• Sponsoring baseball and soccer teams.
5.0 Strategy and Implementation Summary
The company plans to rapidly develop marketing alliances with industry leaders and pursue
new sales of homeowner, commercial, and industrial equipment. The market strategy is to
capitalize on ER's ever-increasing customer base and contacts by offering the latest products
and personalized service.
The company's goal in the next year is to obtain financing which will allow for expanding the
shop/service area with up-to-date servicing equipment, hiring additional employees, and
obtaining a delivery truck as well as rental and sales inventory for all aspects of the company's
customer base.
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Equipment Rental
The company's goal in the next two to five years is to hire additional employees, concentrate
on customer service, and promote the company and the environment that has allowed for this
increase in service by way of discounts and promotional specials that will benefit the company
and the customer.
5.1 Key Components of the Strategy
• Obtain financing. The company is currently working to obtain financing that will
enable it to carry out its operations.
• Expansion. ER is currently in need of property for expansion and display, rental and
sale, and to increase its product line. Storage is a constant problem without a building
and additional land to met ER's current needs.
• Purchase additional equipment. Most previous equipment purchases have been for
resale/consignment, and the markup has not allowed for a great increase in supplies.
• Hire more employees. The company plans to employ two people from the area, in
positions within the shop. They will be responsible for maintenance, repair, and
delivery. This will enable Mr. and Mrs. James to focus on the core of the business.
• Increase advertising. The company is currently working to expand its advertising

campaigns. The company has designed a tri-fold brochure that will make people in the
area aware of its product offering and how it can meet their needs.
• Establish more alliances. ER has contacts with several companies with floor plans,
which will enable the company to stock several of their items for resale. The company
plans to purchase some of their products, leaving them to furnish the display
equipment.
5.2 Strategic Relationships
The company has strategic alliances with the ARA. This alliance is valuable to ER because the
company gets to air television ads, and they are valuable to the ally firms because they are
promoting a local company and this helps in community development. ER plans to also form
strategic alliances with Internet sites, area publications, and other equipment dealers.
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Equipment Rental
6.0 Sales Forecast
The following table and charts show the Projected Sales Forecast for Equipment Rental.
Table: Sales Forecast
Sales Forecast
Sales 2000 2001 2002
Sales and Rentals $210,000 $420,000 $840,000
Other $0 $0 $0
Total Sales $210,000 $420,000 $840,000
Direct Cost of Sales 2000 2001 2002

Sales and Rentals $31,500 $60,000 $150,000
Other $3,000 $6,000 $12,000
Subtotal Direct Cost of Sales $34,500 $66,000 $162,000
Sales Monthly
$30,000
$25,000
$20,000
$15,000 Sales and Rentals

Other
$10,000
$5,000
$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Page 13
Equipment Rental
Sales by Year
$900,000
$800,000
$700,000
$600,000
$500,000 Sales and Rentals

$400,000 Other
$300,000
$200,000
$100,000
$0
2000 2001 2002
7.0 Management Summary
The company's management philosophy is based on responsibility and mutual respect. ER

maintains an environment and structure that encourages productivity and respect for
customers and fellow employees.
7.1 Personnel Plan
ER's management is highly experienced and qualified. Its key management team includes Mr.
David James and Mrs. Sally James.
Jointly, they are responsible for processing quotes, arranging financing, as needed, scheduling
invoices for pickup and delivery, and contract sales/rentals.
Descriptions of the management team and responsibilities are as follows.
Mr. David James. Mr. James has 10 years of marketing experience, 15 years rental/sales
experience, and 15 years mechanical experience.
Mr. James makes all decisions concerning equipment purchases, as this is his area of
expertise. Mr. James is in charge of obtaining all equipment for sales and rentals, completing
contracts, working up quotes, setting up delivery of merchandise, arranging financing as
needed, contacting customers, and verifying pickup and delivery.
Mrs. Sally L. James. Mrs. James has 10 years secretarial experience and 12 years accounts
payable and receivable experience.
Mrs. James answers the phone, faxes, does all the computer work, files any monthly or
quarterly tax forms, compiles correspondence as needed, accounts receivable, accounts
Page 14
Equipment Rental
payable, meets with a bookkeeper for end of year tax return, keeps all office needs running
smoothly, filing, typing, copies, and is majority stock holder in the company (45%).
Future plans call for the hiring of a mechanic and shopman with hopes of adding a truck and
delivery driver shortly there after from the area, with additional office/shop personnel to be
added as needed.
On occasion part-time personnel will be used and job training provided through the area
schools for those interested in this area of the job market.
Table: Personnel
Personnel Plan
2000 2001 2002
Sales/Rental Associate $19,200 $19,200 $19,200
Maintenance/Technician $0 $5,010 $9,500
Maintenance Technician $0 $0 $6,000
Total People 5 6 7
Total Payroll $57,600 $62,610 $73,100
8.0 Financial Plan
ER was capitalized with $5,000 when it was formed in May 1997. A strong knowledge of the
area and supply and demand needs led to the formation of the company. Most items
purchased to this date (truck, trailer, computer, office supplies, envelopes, and stationery)
have been financed through personal funds, and a $4,000 line of credit with Hibernia Bank.
ER's first sales placed $5,145 into the business account, most of which was used to pay off
initial purchases with the balance being used for office and truck expenses such as telephone
bill, postage, and fuel. As of April 1, 2000, the truck has been paid in full along with several of
the smaller home use items. The company has generated sales in the amount of $52,490 with
cost being $38,870 and a profit of $13,620 (97-98 Income Tax Return).
Funding Requirements and Uses

The company is seeking a loan/credit line in the amount of $300,000 for the purpose of
expanding the business. Expansion plans include the purchase of additional land and
construction of a larger shop/service area, increase rental inventory, and hiring of additional
personnel including a mechanic and delivery driver. The table below provides a breakdown of
the use of funds.
Use of Funds
Purchase land 25' X 175' on the north side of

$7,000
existing building
Erect shop area 25' X 32' on land w/concrete
$10,000
slab, office area
Shop equipment $14,000
Rental inventory $60,000
Consolidate regions loan, Hibernia L. O. C.,
current equipment purchases Bosch electric $50,000
breaker, 3.0 KW generator, shop items
Advertising $7,000
Page 15
Equipment Rental
Balance for working capital, employee training,
office equipment modernization, maintenance
$152,000
inventory (i.e.: oil, air, and hydraulic filters),
unforeseen building/maintenance expense
Shop equipment to include: air compressor, air tools and accessories, blow torch, welding
machine and accessories, 1 1/2 ton chain hoist, oil/water separator, holding tank, assorted
hand tools, washing vat, chain saw sharpener and repair accessories.
Rental inventory to include: Trash and diaphragm pumps 2 ea. 2" and 3", 3/4" submersible
pump and accessories, 3 hp. concrete vibrator, 2-48" concrete power trowels, Case 580L or JD
310 Backhoe, small trailer and larger trailer, 1-ton Ford F350 or F450 Diesel delivery truck, air
compressor, 90 lb. air hammer and accessories, rotovator for tractor, 1 push mower, 1 lawn
tractor.
8.1 General Assumptions
The following table lists the general assumptions.
Table: General Assumptions
General Assumptions
2000 2001 2002
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Sales on Credit % 80.00% 80.00% 80.00%
Other 0.00% 0.00% 0.00%
Calculated Totals
Payroll Expense $57,600 $62,610 $73,100
Sales on Credit $168,000 $336,000 $672,000
New Accounts Payable $167,387 $326,460 $624,916
Inventory Purchase $21,250 $70,293 $176,609
Page 16
Equipment Rental
8.2 Key Financial Indicators
The following chart shows the important benchmarks for Equipment Rental.
Benchmarks
10.0
8.0
6.0
1997
4.0
1998
2.0 1999
2000
0.0
2001
2002
Page 17
Equipment Rental
8.3 Break-even Analysis
The table and chart below contain the Break-even Analysis for Equipment Rental.
Table: Break-even Analysis
Break-even Analysis:
Monthly Units Break-even 3
Monthly Revenue Break-even $19,714
Assumptions:
Average Per-Unit Revenue $6,000.00
Average Per-Unit Variable Cost $2,500.00
Estimated Monthly Fixed Cost $11,500
Break-even Analysis
$30,000
$20,000
$10,000
$0
($10,000)
($20,000)
$0 $12,000 $24,000 $36,000 $48,000 $60,000
Monthly break-even point
Break-even point = where line intersects with 0
Page 18
Equipment Rental
8.4 Projected Profit and Loss
The Projected Profit and Loss can be seen in the following table and charts.
Table: Profit and Loss
Pro Forma Profit and Loss

2000 2001 2002
Sales $210,000 $420,000 $840,000
Direct Costs of Goods $34,500 $66,000 $162,000
Other Production Expenses $3,000 $42,000 $126,000
------------ ------------ ------------
Cost of Goods Sold $37,500 $108,000 $288,000
Gross Margin $172,500 $312,000 $552,000
Gross Margin % 82.14% 74.29% 65.71%
Expenses:
Payroll $57,600 $62,610 $73,100
Sales and Marketing and Other Expenses $14,000 $31,000 $82,598
Depreciation $0 $0 $0
Supplies and equipment $9,924 $19,851 $39,702
Utilities $1,602 $2,403 $3,604
Telephone $7,812 $7,810 $7,810
Insurance $14,448 $21,688 $32,533
Repairs and Maintenance $10,932 $20,397 $30,596
Services $2,832 $2,833 $2,833
Rent $12,420 $12,420 $12,420
Payroll Taxes $8,640 $9,392 $10,965
Other $0 $0 $0
------------ ------------ ------------
Total Operating Expenses $140,210 $190,404 $296,161
Profit Before Interest and Taxes $32,290 $121,597 $255,839
Interest Expense $29,938 $23,065 $18,365
Taxes Incurred $706 $29,559 $71,242
Net Profit $1,646 $68,972 $166,232
Net Profit/Sales 0.78% 16.42% 19.79%
Include Negative Taxes TRUE TRUE TRUE
Gross Margin Yearly
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2000 2001 2002
Page 19
Equipment Rental
Profit Yearly
$180,000
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
2000 2001 2002
8.5 Cash Flow
The following table and chart are the Projected Cash Flow figures for Equipment Rental.
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Equipment Rental
Table: Cash Flow
Pro Forma Cash Flow 2000 2001 2002
Cash Received
Cash from Operations:
Cash Sales $42,000 $84,000 $168,000
Cash from Receivables $157,400 $316,400 $632,800
Subtotal Cash from Operations $199,400 $400,400 $800,800
Additional Cash Received

Non Operating (Other) Income $0 $0 $0
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $149,000 $20,000 $20,000
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $151,000 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $499,400 $420,400 $820,800
Expenditures 2000 2001 2002

Expenditures from Operations:
Cash Spending $27,716 $28,862 $63,461
Payment of Accounts Payable $170,423 $326,213 $617,470
Subtotal Spent on Operations $198,139 $355,075 $680,931
Additional Cash Spent

Non Operating (Other) Expense $0 $0 $0
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $45,248 $30,000 $60,000
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $29,100 $19,000 $25,000
Purchase Other Current Assets $58,000 $2,000 $22,000
Purchase Long-term Assets $91,000 $4,000 $9,000
Dividends $65,000 $10,000 $20,000
Subtotal Cash Spent $486,487 $420,075 $816,931
Net Cash Flow $12,913 $325 $3,869

Cash Balance $15,413 $15,738 $19,606
Cash
$300,000
$250,000
$200,000
$150,000
$100,000 Net Cash Flow

Cash Balance
$50,000
$0
($50,000)
($100,000)
Page 21
Equipment Rental
8.6 Projected Balance Sheet
ER's projected balance sheets for 2000-2002.
Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Current Assets 2000 2001 2002
Cash $15,413 $15,738 $19,606
Accounts Receivable $19,600 $39,200 $78,400
Inventory $5,750 $10,043 $24,652
Other Current Assets $64,000 $66,000 $88,000
Total Current Assets $104,763 $130,981 $210,658
Long-term Assets
Long-term Assets $99,000 $103,000 $112,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $99,000 $103,000 $112,000
Total Assets $203,763 $233,981 $322,658
Liabilities and Capital

2000 2001 2002
Accounts Payable $5,964 $6,211 $13,656
Current Borrowing $113,252 $103,252 $63,252
Other Current Liabilities $3,700 $3,700 $3,700
Subtotal Current Liabilities $122,916 $113,163 $80,608
Long-term Liabilities $131,900 $112,900 $87,900

Total Liabilities $254,816 $226,063 $168,508
Paid-in Capital $0 $0 $0
Retained Earnings ($52,700) ($61,054) ($12,082)
Earnings $1,646 $68,972 $166,232
Total Capital ($51,054) $7,918 $154,150
Total Liabilities and Capital $203,763 $233,981 $322,658
Net Worth ($51,054) $7,918 $154,150
8.7 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 7359, [Equipment Rental and Leasing, nec], are
shown for comparison.
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Equipment Rental
Table: Ratios
Ratio Analysis
2000 2001 2002 Industry Profile
Sales Growth 110.00% 100.00% 100.00% 6.96%
Percent of Total Assets

Accounts Receivable 9.62% 16.75% 24.30% 5.39%
Inventory 2.82% 4.29% 7.64% 3.90%
Other Current Assets 31.41% 28.21% 27.27% 28.39%
Total Current Assets 51.41% 55.98% 65.29% 37.68%
Long-term Assets 48.59% 44.02% 34.71% 62.32%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 1.82% 1.58% 1.15% 19.17%

Long-term Liabilities 64.73% 48.25% 27.24% 29.21%
Total Liabilities 64.73% 48.25% 27.24% 48.38%
Net Worth 35.27% 51.75% 72.76% 51.62%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 82.14% 74.29% 65.71% 59.31%
Selling, General & Administrative Expenses 81.03% 57.70% 45.84% 39.09%
Advertising Expenses 3.33% 5.71% 6.90% 2.75%
Profit Before Interest and Taxes 15.38% 28.95% 30.46% 1.59%
Main Ratios
Current 0.85 1.16 2.61 1.26
Quick 0.81 1.07 2.31 0.87
Total Debt to Total Assets 125.06% 96.62% 52.23% 54.38%
Pre-tax Return on Net Worth -4.61% 1244.37% 154.05% 3.27%
Pre-tax Return on Assets 1.15% 42.11% 73.60% 7.17%
Business Vitality Profile 2000 2001 2002 Industry

Sales per Employee $42,000 $70,000 $120,000 $156,054
Survival Rate 67.68%
Additional Ratios 2000 2001 2002

Net Profit Margin 0.78% 16.42% 19.79% n.a
Return on Equity 0.00% 871.06% 107.84% n.a
Activity Ratios
Accounts Receivable Turnover 8.57 8.57 8.57 n.a
Collection Days 60 32 32 n.a
Inventory Turnover 2.99 8.36 9.34 n.a
Accounts Payable Turnover 28.06 52.56 45.76 n.a
Payment Days 42 82 70
Total Asset Turnover 1.03 1.80 2.60 n.a
Debt Ratios
Debt to Net Worth 0.00 28.55 1.09 n.a
Current Liab. to Liab. 0.48 0.50 0.48 n.a
Liquidity Ratios
Net Working Capital ($18,154) $17,818 $130,050 n.a
Interest Coverage 1.08 5.27 13.93 n.a
Additional Ratios
Assets to Sales 0.97 0.56 0.38 n.a
Current Debt/Total Assets 60% 48% 25% n.a
Acid Test 0.65 0.72 1.33 n.a
Sales/Net Worth 0.00 53.04 5.45 n.a
Dividend Payout 39.49 0.14 0.12 n.a
Page 23
Appendix
Appendix Table: Sales Forecast
Sales Forecast
Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales and Rentals $10,000 $10,000 $11,200 $14,400 $17,500 $20,400 $28,000 $29,000 $26,000 $18,500 $15,000 $10,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $10,000 $10,000 $11,200 $14,400 $17,500 $20,400 $28,000 $29,000 $26,000 $18,500 $15,000 $10,000
Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales and Rentals $1,500 $1,500 $1,680 $2,160 $2,625 $3,060 $4,200 $4,350 $3,900 $2,775 $2,250 $1,500
Other $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
Subtotal Direct Cost of Sales $1,750 $1,750 $1,930 $2,410 $2,875 $3,310 $4,450 $4,600 $4,150 $3,025 $2,500 $1,750
Page 1
Appendix
Appendix Table: Personnel
Personnel Plan
Sales/Rental Associate $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Maintenance/Technician $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Maintenance Technician $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 5 5 5 5 5 5 5 5 5 5 5 5
Total Payroll $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800
Page 2
Appendix
Appendix Table: Profit and Loss
Pro Forma Profit and Loss

Sales $10,000 $10,000 $11,200 $14,400 $17,500 $20,400 $28,000 $29,000 $26,000 $18,500 $15,000 $10,000
Direct Costs of Goods $1,750 $1,750 $1,930 $2,410 $2,875 $3,310 $4,450 $4,600 $4,150 $3,025 $2,500 $1,750
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $1,000 $750 $500 $750
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Cost of Goods Sold $1,750 $1,750 $1,930 $2,410 $2,875 $3,310 $4,450 $4,600 $5,150 $3,775 $3,000 $2,500
Gross Margin $8,250 $8,250 $9,270 $11,990 $14,625 $17,090 $23,550 $24,400 $20,850 $14,725 $12,000 $7,500
Gross Margin % 82.50% 82.50% 82.77% 83.26% 83.57% 83.77% 84.11% 84.14% 80.19% 79.59% 80.00% 75.00%
Expenses:
Payroll $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800
Sales and Marketing and Other Expenses $917 $917 $917 $2,417 $2,417 $917 $917 $917 $917 $917 $917 $917
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Supplies and equipment $827 $827 $827 $827 $827 $827 $827 $827 $827 $827 $827 $827
Utilities $134 $134 $134 $134 $134 $134 $134 $134 $134 $134 $134 $134
Telephone $651 $651 $651 $651 $651 $651 $651 $651 $651 $651 $651 $651
Insurance $1,204 $1,204 $1,204 $1,204 $1,204 $1,204 $1,204 $1,204 $1,204 $1,204 $1,204 $1,204
Repairs and Maintenance $911 $911 $911 $911 $911 $911 $911 $911 $911 $911 $911 $911
Services $236 $236 $236 $236 $236 $236 $236 $236 $236 $236 $236 $236
Rent $1,035 $1,035 $1,035 $1,035 $1,035 $1,035 $1,035 $1,035 $1,035 $1,035 $1,035 $1,035
Payroll Taxes 15% $720 $720 $720 $720 $720 $720 $720 $720 $720 $720 $720 $720
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Operating Expenses $11,434 $11,434 $11,434 $12,934 $12,934 $11,434 $11,434 $11,434 $11,434 $11,434 $11,434 $11,434
Profit Before Interest and Taxes ($3,184) ($3,184) ($2,164) ($944) $1,691 $5,656 $12,116 $12,966 $9,416 $3,291 $566 ($3,934)
Interest Expense $2,663 $2,663 $2,663 $2,643 $2,623 $2,604 $2,584 $2,565 $2,442 $2,296 $2,151 $2,043
Taxes Incurred ($1,754) ($1,754) ($1,448) ($1,076) ($280) $916 $2,860 $3,120 $2,092 $298 ($476) ($1,793)
Net Profit ($4,093) ($4,093) ($3,379) ($2,511) ($653) $2,136 $6,672 $7,281 $4,882 $696 ($1,110) ($4,184)
Net Profit/Sales -40.93% -40.93% -30.17% -17.44% -3.73% 10.47% 23.83% 25.11% 18.78% 3.76% -7.40% -41.84%
Include Negative Taxes
Page 3
Appendix
Appendix Table: Cash Flow
Pro Forma Cash Flow Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Received
Cash from Operations:
Cash Sales $2,000 $2,000 $2,240 $2,880 $3,500 $4,080 $5,600 $5,800 $5,200 $3,700 $3,000 $2,000
Cash from Receivables $4,500 $2,517 $10,250 $8,032 $9,045 $11,603 $14,077 $16,523 $22,427 $23,120 $20,600 $14,707
Subtotal Cash from Operations $6,500 $4,517 $12,490 $10,912 $12,545 $15,683 $19,677 $22,323 $27,627 $26,820 $23,600 $16,707
Additional Cash Received

Non Operating (Other) Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $149,000 $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 $151,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $306,500 $4,517 $12,490 $10,912 $12,545 $15,683 $19,677 $22,323 $27,627 $26,820 $23,600 $16,707
Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Expenditures from Operations:
Cash Spending $1,676 $4,876 $5,907 $4,692 $1,704 $1,399 $1,917 $1,659 $1,419 $920 $861 $686
Payment of Accounts Payable $5,081 ($20,374) ($2,225) $20,377 $39,912 $20,822 $18,325 $22,754 $20,438 $18,199 $13,841 $13,272
Subtotal Spent on Operations $6,758 ($15,497) $3,682 $25,069 $41,616 $22,221 $20,242 $24,413 $21,857 $19,119 $14,702 $13,957
Additional Cash Spent

Non Operating (Other) Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $12,416 $12,416 $12,416 $8,000
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $2,350 $2,350 $2,350 $2,350 $2,350 $2,350 $5,000 $5,000 $5,000
Purchase Other Current Assets $10,000 $12,000 $25,000 $4,000 $7,000 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $30,000 $27,000 $34,000 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417 $5,417
Subtotal Cash Spent $22,174 $31,919 $61,099 $70,836 $56,383 $29,988 $28,009 $32,179 $42,040 $41,952 $37,534 $32,374
Net Cash Flow $284,326 ($27,403) ($48,609) ($59,924) ($43,837) ($14,305) ($8,331) ($9,857) ($14,413) ($15,132) ($13,934) ($15,667)
Cash Balance $286,826 $259,423 $210,814 $150,890 $107,052 $92,747 $84,416 $74,559 $60,146 $45,014 $31,080 $15,413
Page 4
Appendix
Appendix Table: General Assumptions
General Assumptions
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Sales on Credit % 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00%
Other 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Calculated Totals
Payroll Expense $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800
Sales on Credit $8,000 $8,000 $8,960 $11,520 $14,000 $16,320 $22,400 $23,200 $20,800 $14,800 $12,000 $8,000
New Accounts Payable $10,666 $7,466 $6,742 $9,809 $13,914 $18,170 $22,831 $20,510 $18,349 $13,859 $13,324 $11,748
Inventory Purchase $0 $0 $0 $0 $340 $4,615 $7,870 $5,050 $2,800 $0 $575 $0
Page 5
Appendix
Appendix Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Current Assets Starting Balances Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash $2,500 $286,826 $259,423 $210,814 $150,890 $107,052 $92,747 $84,416 $74,559 $60,146 $45,014 $31,080 $15,413
Accounts Receivable $9,000 $12,500 $17,983 $16,693 $20,181 $25,136 $29,853 $38,176 $44,853 $43,227 $34,907 $26,307 $19,600
Inventory $19,000 $17,250 $15,500 $13,570 $11,160 $8,625 $9,930 $13,350 $13,800 $12,450 $9,425 $7,500 $5,750
Other Current Assets $6,000 $16,000 $28,000 $53,000 $57,000 $64,000 $64,000 $64,000 $64,000 $64,000 $64,000 $64,000 $64,000
Total Current Assets $36,500 $332,576 $320,906 $294,077 $239,231 $204,813 $196,530 $199,942 $197,213 $179,823 $153,346 $128,887 $104,763
Long-term Assets
Long-term Assets $8,000 $8,000 $38,000 $65,000 $99,000 $99,000 $99,000 $99,000 $99,000 $99,000 $99,000 $99,000 $99,000
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $8,000 $8,000 $38,000 $65,000 $99,000 $99,000 $99,000 $99,000 $99,000 $99,000 $99,000 $99,000 $99,000
Total Assets $44,500 $340,576 $358,906 $359,077 $338,231 $303,813 $295,530 $298,942 $296,213 $278,823 $252,346 $227,887 $203,763
Liabilities and Capital

Accounts Payable $9,000 $14,585 $42,425 $51,391 $40,823 $14,824 $12,171 $16,677 $14,434 $12,345 $8,004 $7,488 $5,964
Current Borrowing $9,500 $158,500 $158,500 $158,500 $158,500 $158,500 $158,500 $158,500 $158,500 $146,084 $133,668 $121,252 $113,252
Other Current Liabilities $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700
Subtotal Current Liabilities $22,200 $176,785 $204,625 $213,591 $203,023 $177,024 $174,371 $178,877 $176,634 $162,129 $145,372 $132,440 $122,916
Long-term Liabilities $10,000 $161,000 $161,000 $161,000 $158,650 $156,300 $153,950 $151,600 $149,250 $146,900 $141,900 $136,900 $131,900
Total Liabilities $32,200 $337,785 $365,625 $374,591 $361,673 $333,324 $328,321 $330,477 $325,884 $309,029 $287,272 $269,340 $254,816
Paid-in Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Retained Earnings $12,300 $6,883 $1,467 ($3,950) ($9,367) ($14,783) ($20,200) ($25,617) ($31,033) ($36,450) ($41,867) ($47,283) ($52,700)
Earnings $0 ($4,093) ($8,185) ($11,564) ($14,075) ($14,728) ($12,591) ($5,919) $1,362 $6,244 $6,940 $5,830 $1,646
Total Capital $12,300 $2,791 ($6,719) ($15,514) ($23,442) ($29,511) ($32,791) ($31,536) ($29,671) ($30,206) ($34,927) ($41,453) ($51,054)
Total Liabilities and Capital $44,500 $340,576 $358,906 $359,077 $338,231 $303,813 $295,530 $298,942 $296,213 $278,823 $252,346 $227,887 $203,763
Net Worth $12,300 $2,791 ($6,719) ($15,514) ($23,442) ($29,511) ($32,791) ($31,536) ($29,671) ($30,206) ($34,927) ($41,453) ($51,054)
Page 6

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Equipment Rental

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August 2001

Copyright Palo Alto Software, Inc., 1995-2002

The undersigned reader acknowledges that the information provided by _______________ in

It is acknowledged by reader that information to be furnished in this business plan is in all

Upon request, this document is to be immediately returned to _______________.

This is a business plan. It does not imply an offering of securities.

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

2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

4.0 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

5.0 Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

6.0 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

7.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

8.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

1.0 Executive Summary

A key component of the company's strategy is to continue to add to its ever-increasing

2.0 Company Summary

2.1 Company Ownership

2.2 Locations and Facilities

The company has one office currently in Memphis, TN.

2.3 Past Performance

Table: Past Performance

Capital and Liabilities

Long-term Liabilities $10,000 $12,000 $10,000

Other Inputs 1997 1998 1999

2.4 Future Facilities

3.1 Product Summary

• Megatron Plus - 72 month;

• Low noise designs reduce operator fatigue;

3.1.1 Product Support

3.1.2 Future Products

4.0 Market Analysis Summary

The company expects to participate in a variety of different industries, including commercial

4.1 Target Market Segment Strategy

Table: Market Analysis

Market Analysis (Pie)

4.2 Market Growth

4.3 Industry Analysis

Industry Description (information provided by imarketinc.com)

Market size statistics - Industrial trucks and tractors

Estimated number of U.S. establishments 1,004

Market size statistics - Farm machinery and equipment

Estimated number of U.S. establishments 2,594

Market size statistics - Construction machinery

Estimated number of U.S. establishments 2,266

4.3.1 Competition and Buying Patterns

4.3.2 Market Statistics

Market Description (information provided by S&P and imarketinc.com)

Market size statistics - Single-family housing construction

Estimated number of U.S. establishments 218,276

Market size statistics - Residential construction, nec

Estimated number of U.S. establishments 25,201

Market size statistics - Heavy construction, nec

Estimated number of U.S. establishments 16,914

Market size statistics - Bridge, tunnel, and elevated highway construction

Estimated number of U.S. establishments 1,414

Market size statistics - Highway and street construction

Estimated number of U.S. establishments 19,694

Market size statistics - Nonresidential construction, nec

Estimated number of U.S. establishments 44,505

• The segment of the market(s) planned to reach.

1. Attract quality sales/service personnel that have a desire to be successful.

In addition, ER plans to advertise in magazines, newspapers, television, radio, and on

• Press releases sent to major radio stations, newspapers, and magazines.