Executive Summary

Cellular telephones have revolutionized the communications arena, redefining how we perceive voice
communications. Traditionally, cellular phones remained out of the hands of most consumers due to their high cost.
As a result, cell phone carriers have invested time and resources into finding ways to give the systems higher
capacity and thus lower cost. Cell systems are benefiting from this research and starting to develop into large-scale
consumer products.

Today, cellular phones are truly consumer electronics devices with over 59 million subscribers. The Nokia Bowl and
Qualcomm Stadium are further evidence of the idea that cell phones are consumer electronics devices. Cell phones
have ceased to be an exclusive status symbol of high-powered lawyers and are now in the hands of millions of
consumers.

Garbles Cellular Phones, Inc. is taking advantage of an opportunity to become a highly distinguished and recognized
leader in the cellular communications industry. It is the goal of our company to become established as the leading
distributor of wireless communications services in the metro Niceburg area.

In order to achieve this goal, Garbles Cellular Phones' critical success factors will be to identify emerging trends and
integrate them into our company operations, respond quickly to technology changes/be there early, provide high-
quality services, invest time and money in marketing and advertising, expand into specialty markets, and stay ahead
of the "technology curve."

The company was initially formed as a sole proprietorship by Mr. Seramed Garbles in the East Atlantic Island
Archipelago (EAIA), and succeeded tremendously in that market. Capitalizing on the growing wireless
communications industry and based on their success in EAIA the Garbles family decided to expand their company's
operations to the U.S.A. and create a niche market for its products and accessories.

1.1 Keys to Success

Our company keys to success will include:

1. Provide excellent customer service

2. Grow and maintain a referral network of customers
3. Focus expertise in GSM cellular phones and GSM cellular phone programs
4. Respond rapidly to customer problems with product or plan
1.2 Mission
Garbles Cellular's mission is to offer its customers the highest quality cell phone products and services. Its
owner focuses on personalized service to his customers by offering convenience and rapid service.
Additionally, Garbles Cellular has the technological expertise to assist customers in picking the product and service
that best meets their  needs. Finally, our staff will have strong vendor relationships with the product suppliers and will
be able to meet customers' demand for the newest innovation in cellular phone technology.

We believe it is important to remain an active member of the community, and to impact people's lives in more ways
than deriving a profit from them. We propose to host community events that bring out the best in people.

1.3 Objectives
The company plans to focus on the following target markets that will provide us with the greatest market penetration:
the specialty business users, the general business users, and the personal users. We intend to offer products and
service packages that are priced appropriately for each segment and will offer the services that best suit each
segment's needs.

The suburb of Pleasant Village, picked to be our headquarters' location, is a focal point in the Niceburg area. Located
a few miles south of downtown Niceburg, it is a community with a small town atmosphere but big city conveniences. 

The Metro Niceburg area is populated today by more than 700,000 inhabitants, is home to 13 Fortune 500 and 24
Fortune 1,000 company headquarters. The Metropolitan Niceburg Chamber of Commerce and corporate
executives are committed to actively recruiting new companies to the region. Public and private partnerships with
business, financial and nonprofit communities are key to spurring quality job creation and investment throughout the
city’s neighborhoods.

Our company will center on serving the growing the Niceburg community (presently at a 6% per year rate) as well as
concentrating on the local Pleasant Village population, banking on the current growing trend of using mobile phones.

Our company will concentrate on selling Global System for Mobile Communications (GSM) protocol cellular phones -
sales, services and support.

Business Objectives
 Company growth
 Become established as the leading distributor of cellular phones and wireless communications services
 Increase number of retail outlets
Financial Objectives
 Create and increase revenue
Marketing Objectives
 Increase marketing efforts
 Expand market area
 Expand marketing reach
 Brand recognition
 Increase telemarketing efforts
Company summary

Garbles Cellular Phones, Inc. will offer its customers GSM cellular phones, and cellular phones accessories. 

GSM stands for "Global System for Mobile Communications." GSM is originally a European system and is largely
being adopted today in the United States. Its greatest advantage, a technical one, is that the owner can use the
phone all over the world since the system is used mostly anywhere.

Market demand drives cell phone manufactures and service providers to offer new and improved services and
functions in their cell phones. The demand for more visual interaction and entertainment with cell phones in the
Japanese market, for instance, is great and as such, their phones are many years ahead of what we will see in the
U.S.A. Phones have definitely become an important part of people's lives all over the world, whereas in North
America many still view the cell phone as a tool and not as a entertainment device. The average phone in North
America lasts 3-5 years before being replaced, in Japan it is a fraction of this time.

We believe that, with our long and thorough experience in the EAIA, our store will be in the perfect location to start
our operations in the U.S.A., and will start operating in the right time. Garbles Cellular Phones will provide its
customers support and convenience second to none.

2.1 Company Ownership

Garbles Cellular Phones is wholly owned by Mr. Seramed Garbles, who is a citizen of the East Atlantic Island
Archipelago and the owner of Garbles Cellular Phones Ltd in that country.

2.2 Start-up Summary

Mr. Seramed Garbles will invest $43,000 in Garbles Cellular Phones, Inc. He will also invest an additional $50,000
when operation takes off in April Year 1. The following chart and table show projected initial start-up costs for Garbles
Cellular Phones, Inc.

Start-up
Requirements
Start-up Expenses
Legal $5,000
Insurance $1,000
Rent $2,000
Equipment $2,000
Other $1,000
Total Start-up Expenses $11,000
Start-up Assets
Cash Required $2,000
Start-up Inventory $30,000
Other Current Assets $0
Long-term Assets $0
Total Assets $32,000
Total Requirements $43,000

Products
The following are the products that will be offered by Garbles Cellular Phones:

 GSM Cellular Phones:  Motorola, Nokia, Sharp, Siemens, Samsung, Alcatel, Ericsson, Fujitsu, Hyundai, LG
Electronics, and others.
 Fixed Wireless Phones
 Cellular Phone Accessories: antennas, batteries, belt clips, cables and adapters, cases, chargers,
faceplates, and modems

Market Analysis Summary

The market potential is huge for our products, evidenced by what appears to be the unstoppable growth of the
telecom industry. Currently, the telecom industry is among the strongest growth industries and is responsible for huge
gains in the capital markets. The proliferation of cellular phones is increasing at rates which at one time were
unimaginable. One illustrative example is that it is forecasted that within two years over 65% of children from age of
10-15 will have cell phones.

Future growth of the market/products is projected in the following areas:

Text messages between friends (in Japan this big). Users can send regular Short-Message Service (SMS) or email
on their phones. Email is of course limited to small file sizes, but many of the phones allow for English characters to
be sent. Each provider also allows special characters to be sent, such as an array of happy and sad faces, small
animated images, animals, people, hearts, etc. When special characters are not available, people often use a
specialized set of faces to show emotion. Email can also be sent between different provider phones, but many of the
special characters are lost, hence users may try to keep a circle of friends on the same provider to receive the special
characters. Email, of course, may be sent from computers as well, but files are often stripped of headers and
attachments when received on cell phones.

Most North American phones come with a few games to keep people entertained for a limited duration. Japanese
phones come with two different types of games: built-in ones and Java application ones. The built-in ones are simple,
but again the graphics are very important to the game value. Java application games are delivered via the network
to the customer's phone and there is a charge for this service. These games are much more complex and require
streaming data to access. New games come out monthly. You can even buy joysticks and navigation consoles that
plug into your phone.

One of the recent popular additions to many of the Japanese and Korean phone models is a CCD Camera that is
mounted either on the outside of the clamshell or on the clamshell hinge. The camera lens is slightly smaller than a
dime and takes 4x4 cm pictures to display on the phone's screen or to send to others. Not only can users take
pictures, they can take video clips as well. Most phones take between 5-15 seconds of footage due to memory
limitations, but they can send streaming video. Many of the advertisements for camera phones show people taking to
each other and watching each other on the screen (both holding the phone and camera at arm's length and using a
hands-free microphone and earpiece). The camera also has a couple of neat accessories including an external flash
that pops into an accessory port and a miniature printer that will print out pictures.

Our company will try to take advantage of these developments and serve its customers in all these new trends and
developments.

4.1 Market Segmentation

Garbles Cellular Phones, Inc. will focus on five customer groups, bearing in mind that it is quite customary today to
have more than one cell phone per family:

 Children in the age group of 10-17 years old

 Students
 General public
 Professionals
 Service organizations and companies that need to be in constant communication with their employees.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Children 10-17 years
3% 90,000 92,700 95,481 98,345 101,295 3.00%
old
Students 2% 50,000 51,000 52,020 53,060 54,121 2.00%
Professionals 2% 40,000 40,800 41,616 42,448 43,297 2.00%
General Public 2% 250,000 255,000 260,100 265,302 270,608 2.00%
Operating Service
4% 40,000 41,600 43,264 44,995 46,795 4.00%
Companies
Other 1% 30,000 30,300 30,603 30,909 31,218 1.00%
Total 2.29% 500,000 511,400 523,084 535,059 547,334 2.29%
4.2 Industry Analysis
The U.S. market is dominated today by three large companies:

T-Mobile Wireless - owned by a subsidiary of Deutsche Telekom since May 31, 2001.

 Revenues:Exceeding $13.6 billion in 2001.
 Wireless Phone Service Subscribers: Cellular voice, messaging and high-speed wireless data services to
more than 8 million customers.
  Cellular Phone Service and Technology: T-Mobile Wireless operates the largest all digital, wireless network
based exclusively on GSM (Global System for Mobile Communications) technology. GSM is the most widely
used digital standard worldwide, accounting for more than 70 percent of the total digital wireless market.
Cingular Wireless is the second largest wireless company in the U.S. A leader in mobile voice and data
communications, Cingular is a wireless company determined to promote the individual to a new level.  
 Ownership: Cingular Wireless is a joint venture between the domestic wireless divisions of SBC
(NYSE:SBC) and BellSouth (NYSE: BLS). Headquarters in Atlanta, Georgia. SBC owns 60 percent of the
company and BellSouth owns 40 percent, based on the value of the assets both contributed to the venture.
 Revenue on the cellular service in Year 2002 was more than $14.7 billion.
 Cellular Phone Service Subscribers: more than 22 million voice and data customers across the U.S.A.
 Cellular Phone Service and Technology: A leader in mobile voice and data communications, Cingular is the
only U.S. wireless carrier to offer Rollover, the wireless plan that lets customers keep their unused monthly
minutes. Cingular provides cellular/PCS service in 43 of the top 50 markets nationwide, and provides corporate
e-mail and other advanced data services through its GPRS and Mobitex packet data networks
Nextel Communications, based in Reston, VA, is a leading provider of fully integrated, wireless communications
services on the largest guaranteed, all-digital, wireless network in the country. 
 Ownership: Nextel Wireless is traded on the NASDAQ National Market under the symbol NXTL. Nextel
Partners is a separate company traded on the NASDAQ National Market.
 Revenue on the cellular service $8.7 billion (2002).
 Cellular Phone Service Subscribers: 10.61 million (Q4 2002).
 Cellular Phone Service and Technology: Nextel uses a packet-based platform, the integrated Digital
Enhanced Network (iDEN™) technology, developed by Motorola. The Nextel 4-in-1 service—Nextel Digital
Cellular, Direct ConnectSM, Nextel Mobile Messaging, and Nextel Online®—covers thousands of communities
across the United States. Nextel and Nextel Partners, Inc., currently serve 197 of the top 200 U.S. markets.

Garbles Cellular Phones is aiming to gather a share of the market from these three.

4.2.1 Competition and Buying Patterns

Brand names are of little, if any, importance. The key to the buying decision on the part of the consumer is the
salesman and the cell phone being in front of them. As has been pointed out in the Competitive Analysis section
there are other sellers with similar brand names as those supplied by Garbles Cellular Phones, Inc. which may even
be less expensive. It is essential that the salesman point out the salient features and selling points favoring our
products. Most importantly, our products must be available in the retail outlet, since whatever products our
store carries are the ones that are going to be sold.

The need to attract, acquire, leverage, and retain customers remains a primary concern to business. Revenue growth
through customer acquisition and retention is as important a requirement in e-commerce as it is in other business.
Customers, count speed of service as a key reason why they do business with a company. They resent delays and
hate waiting for service. Customers generally are not thrilled if they receive good service, but they are highly
dissatisfied if they do not. Sachdeva Cellular will provide the necessary framework to cope with these demands by
cutting the waiting time for a service.

Customers also want consistent, reliable, and easy-to-use service. As the speed of service increases, customer
expectations grow, making friendly, easy, and solution-oriented customer service an important business trend.

Reflective shoppers get some support from e-commerce as well. They like to investigate products precisely and
consciously. However, when browsing costs a lot because of on-line charges, they do less of it. Consequently, they
do not get a holistic view of the available options, and their expectations often are not met. Reference-spending
customers do not let themselves be hurried or forced. They use alternative offline sources to get information. They
refuse aggressive marketing, which is accepted in Western e-commerce.

Sachdeva Cellular is planning to take advantage of these trends of buying patterns. We shall also be very quick in
establishing our own website to take advantage of E-trade.
4.3 Target Market Segment Strategy
The market for cellular phones and their accessories is very fragmented, crowded and competitive. Among these,
there are only a few large local firms that serve the entire city of Niceburg and its surroundings. The remainder are
small firms that sell from kiosks in the surrounding malls. Garbles Cellular Phones current niche in its location, variety
of products and expertise in serving the public will assure the projected sales.

We expect to take full advantage of the trends described in the Market Analysis above, and try to penetrate the
market with new innovations and gadgets — mainly with the younger generation, using advertisements and
demonstrations. We shall also try to lure independent small sellers to join our effort.

Strategy and Implementation Summary

Garbles Cellular Phones will use a strategy of total market service. Assumptions:

1. Every person is a potential customer and all our potential markets will experience growth.
2. Marketing to one segment of the population will lead to an expansion in overall market growth.

The following sections review the various strategies that will support this effort.

5.1 Competitive Edge

The Seramed Communication's competitive edge will be:

Location: Locating the company in a suburb of Niceburg, Homestate enables the company to cover a large and
rapidly developing customer populace.
Customer Service: Mr. Seramed Garbles, owner and CEO of Garbles Cellular Inc., has been the CEO of
the Garbles Cellular Phones Ltd. in the East Atlantic Island Archipelago for many years past, and accumulated a vast
knowledge and experience in the cellular phone market, with a special expertise in GSM phones. He is very familiar
with his target customer base.  He has an excellent reputation for customer service. 
E-Commerce: The company will make an effort to enhance its sales through a serious and advantageous website in
order to attract customers that are reluctant to do business with large companies.
5.2 Marketing Strategy
Short-term marketing strategies are those that bring will bring us a temporary boost in traffic. Although these
techniques are very important to our over-all plan, they are only a temporary traffic source and must not be solely
relied upon. Short-term marketing strategies include:

 Purchasing Advertising
 Bulletin Boards
 Search Engines

Long-term marketing strategies are those that will bring us a steady stream of targeted traffic over time. These
strategies will continue to produce results even years down the road. Long-term marketing strategies include:

 Opt-in Lists
 Freebies
 Content

By creating and implementing a balanced marketing strategy, using both short-term and long-term
strategies, Garbles Cellular will drive a steady stream of targeted traffic to our website.

Using this simple formula when creating our Internet marketing strategy and excelling at all three, we hope
to guarantee our success.

Our short-term marketing strategy will focus heavily on sales promotion, niche positioning in the market and customer
service with loyalty and retention in sales.
Our promotions will always stay in tune with our company objectives and mission statement.

5.3 Sales Strategy

Constructing our Sales Strategy we shall follow the following steps:

Sales Success Requires Planning - we shall formulate our sales strategy and tactics to achieve our sales success.
Analyze Our Potential - we shall step through a structured process that will prepare us for the development of our
sales strategy.
Strategize Around Strengths - the description of our sales activity will be analyzed producing a report that reveals
factors impacting our sales potential.
Develop Our Tactics - we shall receive guidance to develop a comprehensive tactical plan to achieve our success.
Measure Our Success - we shall constantly develop key measurements that mark the progress of financial
estimates that guide our growth.
Employ An Action Plan for Success - we shall provide our sales force a clear tactical plan that is also aligned with
management's strategic objectives.

The sales strategy of Garbles Cellular Phones is simple. The key to customer satisfaction is having the product
and services that meet the customer's needs. A crucial part of that is to also have knowledgeable employees to help
customers quickly find what they want.

5.3.1 Sales Forecast

Sales forecast displayed here is very conservative — although we aim very high, we decided to show a very slow
growth and revise the plan on a yearly basis. As a rule we expect to expand the volume much more rapidly.
Sales Forecast
Year 1 Year 2 Year 3
Sales
Cellular Phones $138,000 $190,000 $270,000
Cellular Phones Accessories $126,000 $160,000 $200,000
Fixed Wireless Phones $46,500 $60,000 $90,000
Other Sevices $46,500 $90,000 $150,000
Total Sales $357,000 $500,000 $710,000
Direct Cost of Sales Year 1 Year 2 Year 3
Cellular Phones $31,650 $43,560 $61,900
Cellular Phones Accessories $30,450 $41,500 $51,800
Fixed Wireless Phones $11,700 $15,500 $23,300
Other Services $11,710 $23,300 $38,900
Subtotal Direct Cost of Sales $85,510 $123,860 $175,900
5.4 Milestones
The Milestones table hereunder is destined to be a working plan for the formation of the new organization,
including legal negotiations, hiring of personnel, rental of the facility, building of initial inventory, beginning of
marketing and start of physical operation.

The team to execute the chores will have to follow up on the timetable and make sure that everything falls in place —
to ensure smooth start of sales and success of the organization.
Milestones
Milestone Start Date End Date Budget Manager Department
Preview of Business Plan
1/1/2005 1/15/2005 $1,000 CEO Department
by Investor
Concluding Legal Matters 1/10/2005 2/10/2005 $4,000 Owner Department
Hiring of Operators 2/1/2005 3/1/2005 $500 CEO Department
Conclussion of Rentals 1/15/2005 2/15/2005 $2,000 Owner Department
Preparation of Website 1/15/2005 3/1/2005 $2,500 Programmer Department
Acquiring Initial Store
2/15/2005 3/15/2005 $31,000 Department
Inventory Personnel
Marketing
Start of Marketing 3/1/2005 4/1/2005 $0 Department
Mgr.
Start of Operation 4/1/2005 4/10/2005 $2,000 All Department
Totals $43,000

Management Summary
The management of Garbles Cellular Phones, Inc. is made up of the owner, a Marketing manager (Mr. Nomassu
Perozia) and three other members who will be hired locally and will be added: a Programmer, and two store
attendants with one serving at the beginning as secretary. 

6.1 Personnel Plan

The Garbles Cellular Phones' store will operate virtually 24 hours a day 7 days a week. Although the store opening
hours will be officially 10:00 a.m. to 6:00 p.m., it is clear that due to our Internet operation the customer support will
be a non-stop one. The personnel plan, as detailed in the following table, has been developed to support these
hours.

Assumptions regarding personnel have been made for year 1 through year 3 as follows:

Year 1 Ending March, 2010 - Owner, Mr. Darshan Kumar Sachdeva, will draw a salary of Rs.42,000. The Marketing
Manager will receive a yearly salary of Rs.26,400. The programmer will have Rs.21,000 a year plus a percentage of
his Internet sales, and the two store attendants will earn Rs.16,800 each. However, they will divide the total week
hours between them so that only during busy hours will they both be present.
Year 2 Ending March, 2011 - Salaries will be boosted by 10 - 15 percent. Additional staff will be hired if significant
increases in sales warrant.
The same applies to Year 3 Ending March, 2012.

Personnel Plan
Year 1 Year 2 Year 3
CEO $42,000 $48,000 $54,000
Marketing Manager $26,400 $28,800 $31,200
Programmer/Office Administrator $21,000 $22,200 $23,400
2 Store Attendantds $33,600 $36,960 $40,000
Other $0 $0 $0
Total People 0 0 0
Total Payroll $123,000 $135,960 $148,600

Financial Plan
It is assumed that the owner's private resources will be sufficient to finance any monthly cash-flow shortage.
However, it would be advisable to establish a bank relationship as soon as possible. Sales could very well increase at
a much sharper rate than assumed in these conservative projections. Sharper sales will result in a greater need for
funds in support of inventory and receivables. An over-draft line of credit with the bank will be an excellent cushion to
fall back on.

This is considered a very good time to start a new business. The economy is beginning its trek up, and consumer
spending is up. The Commerce Department reported, "Consumers had increased their spending, the largest advance
in nine months."

A shorter learning curve will be brought to the business by the owner due to his extensive background and in-depth
market knowledge. He has a clear understanding of the need to manage costs and forecast future needs so that the
business is not "broadsided" by the unexpected.

One other component on which the financial plan is based is wise purchases. Finding the right product, at the right
price will enable the business to meet planned margins and maintain inventory at an attractive level with a high turn
rate.

7.1 Start-up Funding

Mr. Seramed Garbles will invest $43,000 in Garbles Cellular Phones, Inc. to cover start-up costs. He will also invest
an additional $50,000 when operation takes off in April 2005. The table below illustrates funding sources for our start-
up costs.

Start-up Funding
Start-up Expenses to Fund $11,000
Start-up Assets to Fund $32,000
Total Funding Required $43,000
Assets
Non-cash Assets from Start-up $30,000
Cash Requirements from Start-up $2,000
Additional Cash Raised $0
Cash Balance on Starting Date $2,000
Total Assets $32,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Owner $43,000
Investor $0
Additional Investment Requirement $0
Total Planned Investment $43,000
Loss at Start-up (Start-up Expenses) ($11,000)
Total Capital $32,000
Total Capital and Liabilities $32,000
Total Funding $43,000
7.2 Important Assumptions
As a general rule our company will not sell on credit. However for very special cases we might offer short-term credit
against valid assurances. We shall accept cash and checks, Visa, MasterCard, Discover and American Express, and
PayPal on the Internet. All sales paid via credit cards will be deposited in our business checking account within 48
hours.

7.3 Break-even Analysis

Our break-even analysis is summarized by the following chart and table.

Break-even Analysis
Monthly Revenue Break-even $17,916
Assumptions:
Average Percent Variable Cost 24%
Estimated Monthly Fixed Cost $13,625
7.4 Projected Profit and Loss
There are many factors to include when determining a projected profit and loss statement, these are included in the
following table.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $357,000 $500,000 $710,000
Direct Cost of Sales $85,510 $123,860 $175,900
Other Costs of Sales $26,824 $30,000 $45,000
Total Cost of Sales $112,334 $153,860 $220,900
Gross Margin $244,666 $346,140 $489,100
Gross Margin % 68.53% 69.23% 68.89%
Expenses
Payroll $123,000 $135,960 $148,600
Marketing/Promotion $4,500 $10,000 $25,000
Depreciation $0 $0 $0
Rent $24,000 $24,000 $24,000
Insurance $12,000 $12,000 $12,000
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $163,500 $181,960 $209,600
Profit Before Interest and Taxes $81,166 $164,180 $279,500
EBITDA $81,166 $164,180 $279,500
Interest Expense $0 $0 $0
Taxes Incurred $24,350 $49,254 $83,850
Net Profit $56,816 $114,926 $195,650
Net Profit/Sales 15.91% 22.99% 27.56%
7.5 Projected Cash Flow
Our projected cash flow is outlined in the following chart and table.

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $357,000 $500,000 $710,000
Subtotal Cash from Operations $357,000 $500,000 $710,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $50,000 $0 $0
Subtotal Cash Received $407,000 $500,000 $710,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $123,000 $135,960 $148,600
Bill Payments $139,315 $247,800 $360,927
Subtotal Spent on Operations $262,315 $383,760 $509,527
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $262,315 $383,760 $509,527
Net Cash Flow $144,685 $116,240 $200,473
Cash Balance $146,685 $262,924 $463,397
7.6 Projected Balance Sheet
The table shows the annual balance sheet results, with a healthy projected increase in net worth. Detailed monthly
projections are in the appendix.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets
Current Assets
Cash $146,685 $262,924 $463,397
Inventory $8,000 $11,588 $16,457
Other Current Assets $0 $0 $0
Total Current Assets $154,685 $274,512 $479,854
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $154,685 $274,512 $479,854
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $15,869 $20,770 $30,462
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $15,869 $20,770 $30,462
Long-term Liabilities $0 $0 $0
Total Liabilities $15,869 $20,770 $30,462
Paid-in Capital $93,000 $93,000 $93,000
Retained Earnings ($11,000) $45,816 $160,742
Earnings $56,816 $114,926 $195,650
Total Capital $138,816 $253,742 $449,392
Total Liabilities and Capital $154,685 $274,512 $479,854
Net Worth $138,816 $253,742 $449,392
7.7 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial
Classification (SIC) code 5731.9902, Consumer electronic equipment, nec, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 40.06% 42.00% 5.90%
Percent of Total Assets
Inventory 5.17% 4.22% 3.43% 33.94%
Other Current Assets 0.00% 0.00% 0.00% 26.57%
Total Current Assets 100.00% 100.00% 100.00% 80.73%
Long-term Assets 0.00% 0.00% 0.00% 19.27%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 10.26% 7.57% 6.35% 41.85%
Long-term Liabilities 0.00% 0.00% 0.00% 11.83%
Total Liabilities 10.26% 7.57% 6.35% 53.68%
Net Worth 89.74% 92.43% 93.65% 46.32%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 68.53% 69.23% 68.89% 32.59%
Selling, General & Administrative
52.62% 46.24% 41.33% 17.11%
Expenses
Advertising Expenses 0.00% 0.00% 0.00% 2.28%
Profit Before Interest and Taxes 22.74% 32.84% 39.37% 0.85%
Main Ratios
Current 9.75 13.22 15.75 1.73
Quick 9.24 12.66 15.21 0.79
Total Debt to Total Assets 10.26% 7.57% 6.35% 58.93%
Pre-tax Return on Net Worth 58.47% 64.70% 62.20% 2.27%
Pre-tax Return on Assets 52.47% 59.81% 58.25% 5.54%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 15.91% 22.99% 27.56% n.a
Return on Equity 40.93% 45.29% 43.54% n.a
Activity Ratios
Inventory Turnover 8.67 12.65 12.54 n.a
Accounts Payable Turnover 9.78 12.17 12.17 n.a
Payment Days 27 26 25 n.a
Total Asset Turnover 2.31 1.82 1.48 n.a
Debt Ratios
Debt to Net Worth 0.11 0.08 0.07 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $138,816 $253,742 $449,392 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.43 0.55 0.68 n.a
Current Debt/Total Assets 10% 8% 6% n.a
Acid Test 9.24 12.66 15.21 n.a
Sales/Net Worth 2.57 1.97 1.58 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Appendix
Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month 10Month 11 Month 12
Sales
Cellular Phones 0% $10,000 $10,000 $10,000 $11,000 $11,000 $11,000 $12,000 $12,000 $12,000 $13,000 $13,000 $13,000
Cellular Phones
0% $9,000 $9,000 $9,000 $10,000 $10,000 $10,000 $11,000 $11,000 $11,000 $12,000 $12,000 $12,000
Accessories
Fixed Wireless Phones 0% $3,500 $3,500 $3,500 $3,750 $3,750 $3,750 $4,000 $4,000 $4,000 $4,250 $4,250 $4,250
Other Sevices 0% $3,500 $3,500 $3,500 $3,750 $3,750 $3,750 $4,000 $4,000 $4,000 $4,250 $4,250 $4,250
Total Sales $26,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month 10Month 11 Month 12
Cellular Phones $2,300 $2,300 $2,300 $2,500 $2,500 $2,500 $2,750 $2,750 $2,750 $3,000 $3,000 $3,000
Cellular Phones
$2,250 $2,250 $2,250 $2,400 $2,400 $2,400 $2,600 $2,600 $2,600 $2,900 $2,900 $2,900
Accessories
Fixed Wireless Phones $900 $900 $900 $950 $950 $950 $1,000 $1,000 $1,000 $1,050 $1,050 $1,050
Other Services $900 $900 $900 $950 $950 $950 $1,000 $1,000 $1,000 $1,060 $1,050 $1,050
Subtotal Direct Cost of
$6,350 $6,350 $6,350 $6,800 $6,800 $6,800 $7,350 $7,350 $7,350 $8,010 $8,000 $8,000
Sales

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month 10Month 11 Month 12
CEO 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Marketing Manager 0% $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200
Programmer/Office
0% $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750
Administrator
2 Store Attendantds 0% $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 0 0 0 0 0 0 0 0 0 0 0 0
Total Payroll $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250

Pro Forma Profit and Loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11Month 12
Sales $26,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500
Direct Cost of Sales $6,350 $6,350 $6,350 $6,800 $6,800 $6,800 $7,350 $7,350 $7,350 $8,010 $8,000 $8,000
Other Costs of Sales $2,000 $2,040 $2,081 $2,122 $2,165 $2,208 $2,252 $2,297 $2,343 $2,390 $2,438 $2,487
Total Cost of Sales $8,350 $8,390 $8,431 $8,922 $8,965 $9,008 $9,602 $9,647 $9,693 $10,400 $10,438 $10,487
Gross Margin $17,650 $17,610 $17,569 $19,578 $19,535 $19,492 $21,398 $21,353 $21,307 $23,100 $23,062 $23,013
Gross Margin % 67.88% 67.73% 67.57% 68.69% 68.54% 68.39% 69.02% 68.88% 68.73% 68.95% 68.84% 68.70%
Expenses
Payroll $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250
Marketing/Promotion $0 $500 $500 $500 $0 $0 $1,000 $0 $1,000 $0 $1,000 $0
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Insurance $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating
$13,250 $13,750 $13,750 $13,750 $13,250 $13,250 $14,250 $13,250 $14,250 $13,250 $14,250 $13,250
Expenses
Profit Before Interest
$4,400 $3,860 $3,819 $5,828 $6,285 $6,242 $7,148 $8,103 $7,057 $9,850 $8,812 $9,763
and Taxes
EBITDA $4,400 $3,860 $3,819 $5,828 $6,285 $6,242 $7,148 $8,103 $7,057 $9,850 $8,812 $9,763
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $1,320 $1,158 $1,146 $1,748 $1,886 $1,873 $2,144 $2,431 $2,117 $2,955 $2,644 $2,929
Net Profit $3,080 $2,702 $2,673 $4,079 $4,400 $4,369 $5,003 $5,672 $4,940 $6,895 $6,168 $6,834
Net Profit/Sales 11.85% 10.39% 10.28% 14.31% 15.44% 15.33% 16.14% 18.30% 15.93% 20.58% 18.41% 20.40%

Pro Forma Cash Flow

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash from
Operations
Cash Sales $26,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500
Subtotal Cash
$26,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500
from Operations
Additional Cash
Received
Sales Tax, VAT,
HST/GST 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Received
New Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
New Other
Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
(interest-free)
New Long-term
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Sales of Other
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Assets
Sales of Long-term
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Assets
New Investment
$50,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Received
Subtotal Cash
$76,000 $26,000 $26,000 $28,500 $28,500 $28,500 $31,000 $31,000 $31,000 $33,500 $33,500 $33,500
Received
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from
Operations
Cash Spending $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250 $10,250
Bill Payments $211 $6,333 $6,699 $6,836 $10,148 $13,851 $13,961 $16,256 $15,103 $15,850 $17,017 $17,050
Subtotal Spent on
$10,461 $16,583 $16,949 $17,086 $20,398 $24,101 $24,211 $26,506 $25,353 $26,100 $27,267 $27,300
Operations
Additional Cash
Spent
Sales Tax, VAT,
HST/GST Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Out
Principal
Repayment of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Borrowing
Other Liabilities
Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Long-term
Liabilities
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal
Repayment
Purchase Other
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Assets
Purchase Long-
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Assets
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash
$10,461 $16,583 $16,949 $17,086 $20,398 $24,101 $24,211 $26,506 $25,353 $26,100 $27,267 $27,300
Spent
Net Cash Flow $65,539 $9,417 $9,051 $11,414 $8,102 $4,399 $6,789 $4,494 $5,647 $7,400 $6,233 $6,200
Cash Balance $67,539 $76,957 $86,008 $97,421 $105,523 $109,922 $116,710 $121,204 $126,852 $134,251 $140,484 $146,685

Pro Forma Balance Sheet

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $2,000 $67,539 $76,957 $86,008 $97,421 $105,523 $109,922 $116,710 $121,204 $126,852 $134,251 $140,484 $146,685
Inventory $30,000 $23,650 $17,300 $10,950 $6,800 $6,800 $6,800 $7,350 $7,350 $7,350 $8,010 $8,000 $8,000
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $32,000 $91,189 $94,257 $96,958 $104,221 $112,323 $116,722 $124,060 $128,554 $134,202 $142,261 $148,484 $154,685
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $32,000 $91,189 $94,257 $96,958 $104,221 $112,323 $116,722 $124,060 $128,554 $134,202 $142,261 $148,484 $154,685
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $6,109 $6,475 $6,502 $9,687 $13,389 $13,418 $15,753 $14,576 $15,283 $16,448 $16,503 $15,869
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $6,109 $6,475 $6,502 $9,687 $13,389 $13,418 $15,753 $14,576 $15,283 $16,448 $16,503 $15,869
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $6,109 $6,475 $6,502 $9,687 $13,389 $13,418 $15,753 $14,576 $15,283 $16,448 $16,503 $15,869
Paid-in Capital $43,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000 $93,000
Retained Earnings ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000)
Earnings $0 $3,080 $5,782 $8,455 $12,535 $16,934 $21,304 $26,307 $31,979 $36,919 $43,813 $49,982 $56,816
Total Capital $32,000 $85,080 $87,782 $90,455 $94,535 $98,934 $103,304 $108,307 $113,979 $118,919 $125,813 $131,982 $138,816
Total Liabilities and Capital $32,000 $91,189 $94,257 $96,958 $104,221 $112,323 $116,722 $124,060 $128,554 $134,202 $142,261 $148,484 $154,685
Net Worth $32,000 $85,080 $87,782 $90,455 $94,535 $98,934 $103,304 $108,307 $113,979 $118,919 $125,813 $131,982 $138,816