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Table of Contents
1.0 Executive Summary.............................................................................................................................1 1.1 Mission........................................................................................................................................1 1.2 Objectives ...................................................................................................................................1 2.0 Company Summary.............................................................................................................................2 2.1 Company Ownership .................................................................................................................2 2.2 Start-up Summary ......................................................................................................................2 3.0 Services................................................................................................................................................5 4.0 Market Analysis Summary..................................................................................................................6 4.1 Market Segmentation ................................................................................................................6 4.2 Target Market Segment Strategy.............................................................................................8 4.3 Competition and Buying Patterns ............................................................................................8 5.0 Strategy and Implementation Summary ............................................................................................9 5.1 Competitive Edge ......................................................................................................................9 5.2 Sales Strategy..........................................................................................................................10 5.2.1 Sales Forecast .....................................................................................................................11 5.3 Milestones ................................................................................................................................12 6.0 Management Summary ....................................................................................................................13 6.1 Personnel Plan.........................................................................................................................14 7.0 Financial Plan ....................................................................................................................................14 7.1 Important Assumptions............................................................................................................14 7.2 Break-even Analysis................................................................................................................14 7.3 Projected Cash Flow ...............................................................................................................15 7.4 Projected Profit and Loss .......................................................................................................17 7.5 Projected Balance Sheet ........................................................................................................21 7.6 Business Ratios .......................................................................................................................22
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1.1 Mission
Mother's House Cleaning Service's mission is to provide the customer with all residential cleaning services in an environmentally sound, completely trustworthy, and professional manner. We exist to attrac t and maintain c ustomers. When we adhere to this maxim, everything else will fall into plac e. Our services will exceed the expec tations of our customers.
1.2 Objectives
Mother's House Cleaning Service's objec tives for the first three years of operation include: To create a service based company whose #1 goal is exceeding customer's expec tations. To increase our number of clients served by 20% per year through superior service. To develop a sustainable home-based business, living off its own c ash flow. The utilization of Mother's House Cleaning Service on a regular basis by at least 30% of the leads that contac t us for more information. Page 1
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Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Investor 1 Investor 2 Other Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital $0 $0 $0 $0 $0
$9,075 $13,000
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$300 $50 $200 $500 $100 $800 $100 $100 $1,500 $75 $200 $0 $3,925
3.0 Services
Mother's House Cleaning Service will provide a residential house cleaning service for the upper end of the market. We will have two target customers: 1. The affluent who has a spouse who does not work, but is not inclined to do housework. To many a maid/house cleaner is a symbol of wealth, and this idea symbolizes this group of customers. 2. The two-income households whose opportunity costs are too great to spend time cleaning the house. MHCS offers house cleaning to these targeted customers. House cleaning ranges from cleaning of standard rooms such as kitchen, bathrooms, bedrooms, as well as more unusual jobs like small disasters from children and pets.
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5.3 Milestones
Mother's House Cleaning Service will have several milestones early on: 1. Business plan completion. This will be done as a roadmap for the organization. While we do not need a business plan to raise capital, it will be an indispensable tool for the ongoing performance and improvement of the company. 2. Set up the office. This will be done within the first month. This includes setting up the physical office where business will be transacted. 3. Set up the supply room. This will be done in Sarah's garage. It will oc cur in the first month and will be the plac e where all of the bulk, environmentally sound, chemicals will be mixed into the proper concentrations. 4. Training program. This will be the development of a training program for the employees. The employees will rec eive initial sessions of training up-front, but will undergo constant training, part of our constant learning proc ess. 5. Welcoming our sixth employee. Page 12
Table: Personnel
Personnel Plan Owner Employees Total People Total Payroll 2002 $24,000 $86,889 0 $110,889 2003 $25,200 $93,000 0 $118,200 2004 $26,460 $102,000 0 $128,460
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3% $10,797
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$178,970 $178,970
$181,491 $181,491
$186,598 $186,598
$0 $0 $0 $0 $0 $0 $0 $181,491 2003
$0 $0 $0 $0 $0 $0 $0 $186,598 2004
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Expenses Payroll Sales and Marketing and Other Expenses Depreciation Additional Payroll Burden Leased Equipment Utilities Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales
$110,889 $6,013 $0 $9,058 $0 $1,200 $2,400 $0 $0 $0 $129,560 $43,902 $43,902 $0 $12,108 $31,794 17.76%
$118,200 $5,968 $0 $10,841 $0 $1,200 $2,400 $0 $0 $0 $138,609 $36,979 $36,979 $0 $9,245 $27,734 15.28%
$128,460 $5,968 $0 $10,942 $0 $1,200 $2,400 $0 $0 $0 $148,970 $31,478 $31,478 $0 $5,378 $26,101 13.99%
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$0 $0 $0 $46,062 2002
$0 $0 $0 $71,534 2003
$0 $0 $0 $97,343 2004
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n.a n.a
0.13 1.00
0.04 1.00
0.03 1.00
n.a n.a
$40,869 0.00
$68,603 0.00
$94,704 0.00
n.a n.a
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Appendix
Table: Sales Forecast
Sales Forecast Jan Sales Wealthy One-income Households Affluent Two-income Households Total Sales Direct Cost of Sales Wealthy One-income Households Affluent Two-income Households Subtotal Direct Cost of Sales 0% 0% $1,200 $3,850 $5,050 Jan $60 $151 $211 Feb $1,200 $3,850 $5,050 Feb $60 $151 $211 Mar $2,245 $4,445 $6,690 Mar $65 $160 $225 Apr $2,400 $4,600 $7,000 Apr $68 $165 $233 May $4,808 $8,897 $13,705 May $132 $354 $486 Jun $5,100 $9,258 $14,358 Jun $145 $365 $510 Jul $5,312 $10,100 $15,412 Jul $154 $371 $525 Aug $6,400 $14,580 $20,980 Aug $165 $387 $552 Sep $6,454 $15,000 $21,454 Sep $174 $412 $586 Oct $6,514 $15,011 $21,525 Oct $181 $445 $626 Nov $6,600 $16,741 $23,341 Nov $187 $457 $644 Dec $7,400 $17,005 $24,405 Dec $210 $489 $699
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Appendix
Table: Personnel
Personnel Plan Owner Employees Total People Total Payroll 0% 0% Jan $2,000 $2,250 0 $4,250 Feb $2,000 $3,185 0 $5,185 Mar $2,000 $6,200 0 $8,200 Apr $2,000 $6,254 0 $8,254 May $2,000 $7,000 0 $9,000 Jun $2,000 $7,000 0 $9,000 Jul $2,000 $8,000 0 $10,000 Aug $2,000 $8,000 0 $10,000 Sep $2,000 $8,000 0 $10,000 Oct $2,000 $10,000 0 $12,000 Nov $2,000 $10,000 0 $12,000 Dec $2,000 $11,000 0 $13,000
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Appendix
Table: General Assumptions
General Assumptions Jan Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 10.00% 10.00% 30.00% 0 2 10.00% 10.00% 0.00% 0 Feb 3 10.00% 10.00% 0.00% 0 Mar 4 10.00% 10.00% 0.00% 0 Apr 5 10.00% 10.00% 0.00% 0 May 6 10.00% 10.00% 25.00% 0 Jun 7 10.00% 10.00% 25.00% 0 Jul 8 10.00% 10.00% 25.00% 0 Aug 9 10.00% 10.00% 25.00% 0 Sep 10 10.00% 10.00% 25.00% 0 Oct 11 10.00% 10.00% 25.00% 0 Nov 12 10.00% 10.00% 25.00% 0 Dec
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Appendix
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Jan $5,050 $211 $0 $211 $4,839 95.82% Feb $5,050 $211 $0 $211 $4,839 95.82% Mar $6,690 $225 $0 $225 $6,465 96.64% Apr $7,000 $233 $0 $233 $6,767 96.67% May $13,705 $486 $0 $486 $13,219 96.45% Jun $14,358 $510 $0 $510 $13,848 96.45% Jul $15,412 $525 $0 $525 $14,887 96.59% Aug $20,980 $552 $0 $552 $20,428 97.37% Sep $21,454 $586 $0 $586 $20,868 97.27% Oct $21,525 $626 $0 $626 $20,899 97.09% Nov $23,341 $644 $0 $644 $22,697 97.24% Dec $24,405 $699 $0 $699 $23,706 97.14%
Expenses Payroll Sales and Marketing and Other Expenses Depreciation Additional Payroll Burden Leased Equipment Utilities Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales 15%
$4,250 $0 $0 $169 $0 $100 $200 $0 $0 $0 $4,719 $120 $120 $0 $36 $84 1.67%
$5,185 $503 $0 $239 $0 $100 $200 $0 $0 $0 $6,227 ($1,388) ($1,388) $0 $0 ($1,388) -27.48%
$8,200 $503 $0 $465 $0 $100 $200 $0 $0 $0 $9,468 ($3,003) ($3,003) $0 $0 ($3,003) -44.89%
$8,254 $503 $0 $469 $0 $100 $200 $0 $0 $0 $9,526 ($2,759) ($2,759) $0 $0 ($2,759) -39.41%
$9,000 $523 $0 $752 $0 $100 $200 $0 $0 $0 $10,575 $2,644 $2,644 $0 $0 $2,644 19.29%
$9,000 $523 $0 $758 $0 $100 $200 $0 $0 $0 $10,581 $3,267 $3,267 $0 $817 $2,450 17.06%
$10,000 $523 $0 $759 $0 $100 $200 $0 $0 $0 $11,582 $3,305 $3,305 $0 $826 $2,479 16.09%
$10,000 $523 $0 $1,041 $0 $100 $200 $0 $0 $0 $11,864 $8,564 $8,564 $0 $2,141 $6,423 30.62%
$10,000 $528 $0 $1,050 $0 $100 $200 $0 $0 $0 $11,878 $8,990 $8,990 $0 $2,247 $6,742 31.43%
$12,000 $528 $0 $1,099 $0 $100 $200 $0 $0 $0 $13,927 $6,972 $6,972 $0 $1,743 $5,229 24.29%
$12,000 $528 $0 $1,125 $0 $100 $200 $0 $0 $0 $13,953 $8,744 $8,744 $0 $2,186 $6,558 28.10%
$13,000 $828 $0 $1,133 $0 $100 $200 $0 $0 $0 $15,261 $8,445 $8,445 $0 $2,111 $6,334 25.95%
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Appendix
Table: Cash Flow
Pro Forma Cash Flow Jan Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $0 $0 $0 $0 $0 $0 $0 $4,300 $750 $9,825 $0 $0 $0 $0 $0 $0 $0 $6,674 ($1,624) $8,200 $0 $0 $0 $0 $0 $0 $0 $9,249 ($2,559) $5,641 $0 $0 $0 $0 $0 $0 $0 $9,555 $2,445 $8,086 $0 $0 $0 $0 $0 $0 $0 $11,249 $2,456 $10,542 $0 $0 $0 $0 $0 $0 $0 $10,636 $3,722 $14,264 $0 $0 $0 $0 $0 $0 $0 $13,365 $2,047 $16,311 $0 $0 $0 $0 $0 $0 $0 $12,495 $8,485 $24,796 $0 $0 $0 $0 $0 $0 $0 $15,009 $6,445 $31,242 $0 $0 $0 $0 $0 $0 $0 $17,077 $4,448 $35,690 $0 $0 $0 $0 $0 $0 $0 $15,719 $7,622 $43,312 $0 $0 $5,000 $0 $0 $0 $0 $23,147 $1,258 $44,570 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$5,050 $5,050
$5,050 $5,050
$6,690 $6,690
$7,000 $7,000
$13,705 $13,705
$14,358 $14,358
$15,412 $15,412
$20,980 $20,980
$21,454 $21,454
$21,525 $21,525
$23,341 $23,341
$24,405 $24,405
0.00%
$0 $0 $0 $0 $0 $0 $0 $5,050 Jan
$0 $0 $0 $0 $0 $0 $0 $5,050 Feb
$0 $0 $0 $0 $0 $0 $0 $6,690 Mar
$0 $0 $0 $0 $0 $0 $0 $13,705 May
$0 $0 $0 $0 $0 $0 $0 $14,358 Jun
$0 $0 $0 $0 $0 $0 $0 $15,412 Jul
$0 $0 $0 $0 $0 $0 $0 $20,980 Aug
$0 $0 $0 $0 $0 $0 $0 $21,454 Sep
$0 $0 $0 $0 $0 $0 $0 $21,525 Oct
$0 $0 $0 $0 $0 $0 $0 $23,341 Nov
$0 $0 $0 $0 $0 $0 $0 $24,405 Dec
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Appendix
Table: Balance Sheet
Pro Forma Balance Sheet Jan Assets Current Assets Cash Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth $0 $0 $0 $0 $0 $0 $13,000 ($3,925) $0 $9,075 $9,075 $9,075 $1,455 $0 $0 $1,455 $0 $1,455 $13,000 ($3,925) $84 $9,159 $10,614 $9,159 $1,007 $0 $0 $1,007 $0 $1,007 $13,000 ($3,925) ($1,304) $7,771 $8,778 $7,771 $1,226 $0 $0 $1,226 $0 $1,226 $13,000 ($3,925) ($4,307) $4,768 $5,994 $4,768 $2,196 $0 $5,000 $7,196 $0 $7,196 $13,000 ($3,925) ($7,066) $2,009 $9,206 $2,009 $1,523 $0 $5,000 $6,523 $0 $6,523 $13,000 ($3,925) ($4,422) $4,653 $11,176 $4,653 $3,285 $0 $5,000 $8,285 $0 $8,285 $13,000 ($3,925) ($1,972) $7,103 $15,388 $7,103 $2,328 $0 $5,000 $7,328 $0 $7,328 $13,000 ($3,925) $507 $9,582 $16,910 $9,582 $4,838 $0 $5,000 $9,838 $0 $9,838 $13,000 ($3,925) $6,930 $16,005 $25,843 $16,005 $4,955 $0 $5,000 $9,955 $0 $9,955 $13,000 ($3,925) $13,673 $22,748 $32,703 $22,748 $3,548 $0 $5,000 $8,548 $0 $8,548 $13,000 ($3,925) $18,902 $27,977 $36,525 $27,977 $4,968 $0 $5,000 $9,968 $0 $9,968 $13,000 ($3,925) $25,460 $34,535 $44,503 $34,535 $5,193 $0 $0 $5,193 $0 $5,193 $13,000 ($3,925) $31,794 $40,869 $46,062 $40,869 $0 $0 $0 $9,075 $0 $0 $0 $10,614 Jan $0 $0 $0 $8,778 Feb $0 $0 $0 $5,994 Mar $0 $0 $0 $9,206 Apr $0 $0 $0 $11,176 May $0 $0 $0 $15,388 Jun $0 $0 $0 $16,910 Jul $0 $0 $0 $25,843 Aug $0 $0 $0 $32,703 Sep $0 $0 $0 $36,525 Oct $0 $0 $0 $44,503 Nov $0 $0 $0 $46,062 Dec Starting Balances Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$9,075 $0 $0 $9,075
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