GYPLOY (JYPE ’ LOI’)
JAMES TUCKER
J AMES T UCKER
P RESIDENT
855-562-2500
INFO @ GYPLOY . COM
Business Plan | Prepared by Growthink
CONTENTS
Executive Summary ................................................................................................................................................................................ 3
Company Overview................................................................................................................................................................................. 5
Industry Analysis ..................................................................................................................................................................................... 7
Market Analysis........................................................................................................................................................................................ 9
Competition ............................................................................................................................................................................................. 10
Marketing Plan ....................................................................................................................................................................................... 12
Operations Plan ...................................................................................................................................................................................... 14
Financial Plan .......................................................................................................................................................................................... 16
Appendix ................................................................................................................................................................................................... 20
EXECUTIVE SUMMARY
COMPANY OVERVIEW
Gyploy is a consumer electronics retail website that offers consumer
products such as flat screen TVs, digital cameras, video cameras,
audio equipment and more. The company utilizes a streamlined
distribution process through partnerships with various dropshipping companies. When a customer purchases an item from the
company website at www.gyploy.com the customer order is
forwarded to the partnering drop-shipper who then delivers the
product to the consumer with The Gyploy logo and packaging. This
allows the company to minimize inventory costs and shipping
expenses.
BUSINESS MODEL
The company’s revenue stream comes from the sales of products via
the company website. The company receives approximately 6%
margin on the listed sale price of products sold on Gyploy website.
The key costs associated with revenue consist of monthly
membership fees paid to partnering drop-shipping companies and
website hosting costs. Gyploy does not have to purchase expensive
inventory in order to sell a consumer electronic device rather the
company simply pays the monthly membership fee to their-drop
shipping partners.
President:
James Tucker Jr.
Products and Services:
Consumer Electronics
Industry:
E-commerce
2011 $186.4 billion in Revenue
Competitors:
Amazon
EBay
HH Gregg
Best Buy
Capital Required
$35,000
VALUE PROPOSITION
Gyploy’s unique business model affords the company a low risk sales method in that the company will
never have to purchase expensive consumer electronic inventory. However, through access to partner’s
inventory Gyploy can easily sell some of the hottest items in consumer electronics at very attractive prices.
Due to the company’s low overhead, in order to break even in the first month of operations Gyploy only has
to sell 152 units or 4.98 units a day. Gyploy’s user friendly website allows consumers to navigate with ease
in order to find virtually any consumer electronic device on the market today. The nature of an online retail
store allows the company to reach consumers across the nation on a 24/7 basis.
INDUSTRY/ MARKET SNAPSHOT
In 2011 E-commerce was a $186.4 billion industry. Over the next five years the industry is expected to
grow at an average annual rate of 9.4% to reach $291.9 billion in 2016. E-commerce is projected to be one
of the nation’s fastest growing industries. This will continue to be driven by the preference for online retail
amongst consumers opposed to brick and mortar locations, as well as increased broadband internet access.
More specifically consumer electronic internet retail is expected to grow by 20.3% to 2015.
Gyploy has identified the 35 to 54 age group as the most important market for the company as this group
accounts for 39.5% of industry revenue making them the largest consumer segment within the industry.
Furthermore, those shopping online tend to have higher levels of income as 62% of individuals making
above $100,000 will make online purchases in a given year.
COMPETITIVE SNAPSHOT
There are other entities that operate as online retailers of consumer electronic goods, most notably,
Amazon, EBay, HH Gregg and Best Buy. However, the company does not have to outperform these
competitors in order to be profitable, all Gyploy has to do is establish a loyal base of customers and provide
a quality product and trust based service to them. This will be done through a high level of customer
service, competitive prices and targeted advertising. Gyploy maintains a high level of visibility by providing
its business address and company phone number to guarantee all the products sold by the company.
FINANCIAL PROJECTIONS
The table below displays how revenue will grow from $100,661 in year one to $142,064 by year five.
Revenue is driven by the amount of products sold and what type of product is sold.
For the Year Ending
FY1
FY2
FY3
FY4
FY5
Total Revenues
Total Direct Cost
$100,661
$0
$109,598
$0
$119,417
$0
$130,207
$0
$142,064
$0
Gross profit
Gross Profit Margin (%)
Total Other Expenses
$100,661
100%
($29,677)
$109,598
100%
($30,271)
$119,417
100%
($30,876)
$130,207
100%
($31,494)
$142,064
100%
($32,124)
EBITDA
Depreciation
Amortization & Impairment
$70,984
$0
$0
$79,327
$0
$0
$88,541
$0
$0
$98,713
$0
$0
$109,941
$0
$0
EBIT
Interest Expense-Debt
Interest Expense-Leased Assets
Interest Income
Other Income (Expenses)
$70,984
$0
$0
$0
$0
$79,327
$0
$0
$0
$0
$88,541
$0
$0
$0
$0
$98,713
$0
$0
$0
$0
$109,941
$0
$0
$0
$0
$70,984
($24,844)
$79,327
($27,765)
$88,541
($30,989)
$98,713
($34,550)
$109,941
($38,479)
$46,140
$51,563
$57,552
$64,164
$71,461
46%
47%
48%
49%
50%
Pretax Income
Income Tax Expense
Net Income
Net profit (%)
COMPANY OVERVIEW
Founded in 2010 Gyploy (also referred to as ‘the Company’) operates as a consumer electronics retail
website designed to offer customers with a wide range of products at very competitive prices.
James Tucker the owner and operator started the company to offer the latest technology at lower prices
realized through minimal overhead in the form of an e-commerce website. Gyploy sells everything from
digital cameras to flat screen televisions.
The company currently maintains the web address www.gyploy.com which is how the business receives its
customer orders. The website will utilize the technologies afforded to e-commerce websites in order to
maintain efficiency. These include electronic funds transfer, supply chain management, internet marketing,
online transaction processing, electronic data interchange and inventory management systems.
James Tucker will leverage his previous online retail experience in order to ensure Gyploy’s growth and
success. Owner operator James Tucker previously ran a profitable household items website that gave him
the knowledge necessary to compete in the online consumer electronics marketplace.
PRODUCT OFFERING
Gyploy offers the following products:










Car Audio
Car Security
Cellular Phones
Laptops
Tablets
Cordless Phones
Digital Cameras
DJ Products
Docking Stations
DVD Players










GPS Devices
Home Theater Equipment
LCD Flat Screens
Musical & Karaoke
MP3 Players
Electronic Accessories
Video Cameras
Digital Photo Frames
Game Consoles
Kids Electronics
BUSINESS MODEL
The company’s revenue stream comes from the sales of products via the company website. The company
receives approximately 6% margin on the listed sale price of products sold on Gyploy website. The key
costs associated with revenue consist of monthly membership fees paid to partnering drop-shipping
companies and website hosting costs. Gyploy does not have to purchase inventory in order to sell a product
rather simply pays the monthly membership fee to their-drop shipping partners.
Revenue
Product Sales
Key Costs
(6% of Retail Price)
Drop-Shipping Membersip
Fees
Website Hosting
VALUE PROPOSITION
Gyploy will never have to purchase expensive consumer electronic inventory in order to sell products to
end consumers. Rather, through access to partner’s inventory Gyploy can easily sell some of the hottest
items in consumer electronics at very attractive prices. The company simply has to pay a low monthly rate
to access thousands of consumer electronics goods in order to sell to end consumers. Due to the company’s
low overhead, in order to break even in the first month of operations Gyploy only has to sell 152 units or
4.98 units a day. Gyploy’s user friendly website allows consumers to navigate with ease in order to find
virtually any consumer electronic device on the market today. The nature of an online retail store allows
the company to reach consumers across the nation on a 24/7 basis.
INDUSTRY ANALYSIS
KEY INDUSTRY TAKEAWAYS
 Trend 1: Industry growth rate is projected at 9.4% over the next five years
o This means Gyploy will operate within one of the fastest growing industries in the United
States
 Trend 2: Industry has outpaced the overall economy over the last decade
o The e-commerce industry is still in the growth phase of its life-cycle meaning there is room
for new entrants to realize profits
 Trend 3: Consumer electronic internet retail is expected to grow by 20.3% to 20151
o Gyploy will be part of the product segment that will add $9.7 billion in new sales alone
 Trend 4: Forecasted increases in per capita income and broadband internet connections
o Increased income levels will lead to higher sales for online retailers as well as gaining access
to new customers as broadband internet penetration permeates throughout the country
INDUSTRY OVERVIEW
Gyploy will operate within the E-commerce industry which captures
Industry Size: $186.4 Billion
the activities of retail businesses selling solely online. The internet is
used as the primary selling platform via the retailers’ online store.
CAGR: 9.4%
Every year more than 100 million Americans purchase goods from
the online retail marketplace making it one of the fastest growing
Proj. Revenue 2016: $291.9
2
industries in the United States. In 2011 E-commerce was a $186.4
Billion
billion industry and is expected to grow at an average annual rate of 9.4% over the next five years to reach
$291.9 billion in 2016. In 2012 industry revenue is forecast to rise by 11.9% to $208.6 billion. The
industry’s expected growth can be attributed to several economic factors. Per capita income is projected to
grow by 1.9% in 2012 and will continue to at an average annual rate of 1.6% over the next five years. The
increase in per capita income and employment expected to drop below 9% in 2012 will revive consumer
sentiment thus increasing online spending.
Consumer preferences also play a role in driving industry growth. Rather than spend large amounts in big
box retail or department stores consumers have consistently turned to cheaper options that are offered
online. Online retailers benefit from low operational costs as they are able to avoid rent, staff and other
costs associated with brick and mortar locations. This has allowed profit margins to experience an
expected increase as margins will account for 10% of revenue by 2016 compared to 6.8% in 2011. In
addition by the end of 2016 85% of US households will have broadband internet connections giving online
retailers access to even more consumers.
Over the past ten years the e-commerce industry value added to the overall economy has increased by an
average annual rate of 11.0% while US GDP has risen by 2.0% over the same period. This indicates that the
1
2
Euromonitor International
All numerical data from IBISWorld E-Commerce US Industry Report unless otherwise noted
industry is still in the growth phase of its lifecycle. The fact that the e-commerce industry is still growing
bodes well for Gyploy as increases in profit and revenue have yet to be fully realized in addition to the
number of new customers entering the marketplace each year.
PRODUCT SEGMENTATION
The largest product segment among online retailers consists of computers, TVs and other electronic goods.
Demand for these products has been very strong as most households now own multiple TVs and computers
and new models of these products are released rapidly resulting in repeat purchases as older models
become obsolete. A growing number of consumers are buying their TVs and computers online as positive
reputation grows among the larger online retailers by providing warranty and guarantees benefitting
online retailers of all sizes. This product segment represents 24.3% of industry revenue. Clothing, footwear,
accessories, and jewelry account for 15% of sales with the average unit of purchase valued much lower
than that of electronics. Figure 1 shows the product segmentation in the e-commerce industry.
Figure 1
Product Segmentation, 2011
6.5%
5.5% 4.5%
Computers and TVs (Consumer
Electronics)
Other Merchandise
24.3%
7.2%
Clothing, Footwear, Accessories and
Jewelry
23.2%
13.8%
15.0%
Sporting Goods, Toys, Games
Furniture and Home Appliances
Medication and Cosmetics
Office Equipment and Supplies
KEY SUCCESS FACTORS
 Ability to Quickly Adopt new Technology: Constantly changing software systems, internet
speeds, and personal information security systems require operators to continually update their
business to follow suit.
 Superior after Service Sales: Operators should provide solid after sales service, including offering
refunds, exchanges and follow up to generate consumer trust.
 Loyal Customer Base: Repeat buyers and continued sales are vital to company profitability, this is
done through thorough before and after sale service for instance products must be accompanied by
a detailed description i.e. color, size, functionality and quantity.
MARKET ANALYSIS
MARKET OVERVIEW
More educated, computer literate and higher income consumers are more likely to buy online. Conversely,
lower wage consumers often avoid online shopping due to lack of confidence in the system, technology
constraints and concerns about divulging personal information and financial details. 62% of individuals
earning between $100,000 and $149,000 are expected to use e-commerce in 2011. More specifically, the
market for consumer electronics can be broken down by age; consumers aged between 25 to 54
representing the largest market segment for the industry accounting for 56.8%3 of consumer electronics
revenues.
Consumers between the ages of 25 to 54 are employed individuals with steady income streams that are
able to spend more freely on big ticket items. In addition consumers in this group typically have their own
families and homes which is why TV purchases were the highest revenue generators in 2011 within this
age group. Consumers between the ages of 55 to 64 account for 18.5% of consumer electronics revenue. In
this age group small appliances dominate purchases as many look to replace older equipment before
entering retirement leading to this age groups large share of revenue.
Consumer younger than the age of 25 account for the second smallest share of consumer electronic
revenue with 13.2%. Individuals in this age group typically have limited disposable income limiting their
ability to make big ticket purchases. However, these consumers are very aware of technological advances
constantly demanding new product developments. Figure 2 breaks down the market for consumer
electronics down by age.
Figure 2
Major Market Segmentation 2011
11.5%
Consumers Aged 35 to 54
13.2%
39.5%
Consumers Aged 55 to 64
Consumers Aged 25 to 34
Consumers Aged 24 and younger
17.3%
Consumers aged 65 and older
18.5%
3
IBISWorld Consumer Electronics in the US Industry Report
COMPETITION
COMPETITIVE OVERVIEW
The e-commerce industry has a low level of concentration as small companies make up 75% of the market.
The two largest players are expected to account for about 14.5% of industry revenue in 2011. 50.9% of all
industry firms employ less than five employees while non-employers account for 45.3% of all industry
firms.4 However, industry concentration has crept up in recent years as major players have made several
acquisitions and expanded their product mix to reach a wider customer base.
COMPETITIVE LANDSCAPE
Amazon – Headquartered in Seattle, Washington Amazon is the world’s largest online retailer with
separate websites for the following countries Canada, United Kingdom, Germany, France, Italy, Spain, Japan
and China. Originally created as an online bookstore the company quickly diversified into carrying virtually
any product that a consumer would desire. Amazon derives about 40% of its sales from affiliate marketing
called “Amazon Associates.” There are over 900,000 marketing affiliates operating websites who receive a
commission every time a customer clicks through their link to Amazon and results in a sale. Today the
company has revenues in excess of $48 billion and employs over 56,000.
EBay – The Company operates as an online auction and shopping website in which people and businesses
buy and sell a broad variety of goods and service, including consumer electronics. With more than 100
million active users globally EBay is the world’s largest online marketplace. In 2011, the total value of
goods sold on EBay was $68.6 billion equating to approximately $2,100 every second.
HH Gregg – The Company is one of the nation’s leading and fastest growing retailers of home appliances
and consumer electronics. HH Gregg currently has over 190 locations. In addition to their physical locations
the company also has a highly trafficked website in which consumers can purchase products directly.
According to compete.com the HH Gregg company website has over 1.1 million unique visitors each month.
Best Buy – Operates as a leading multi-channel global retailer and developer of technology products and
services. The company employs over 180,000 and in 2011 recorded revenues totaling $50.71 billion. In
addition to over 900 Best Buy locations the company also maintains a website in which the consumer can
purchase consumer electronics and have the product shipped directly to them. Compete.com reports that
the website receives over 20 million unique visitors each month.
4
US Census Bureau
COMPETITIVE ADVANTAGES
Gyploy differentiates itself from the competition in that it focuses solely on the sales of consumer
electronics unlike many other competitors in the space. Furthermore, Gyploy does not have to acquire the
same level of recognition or traffic as these competitors in order to be profitable. In fact Gyploy will realize
profits if the company is able to acquire just a fraction of the number of visitors that some of these major
companies see to their respective websites. This will be bolstered by the company’s commitment to
customer services and a quality guarantee that comes with every customer order. The company provides
its business address as well as telephone number to each visitor of the website as a way to build trust with
the consumer. This will serve to build a loyal and frequent customer base.
MARKETING PLAN
POSITIONING
The key consumer group for Gyploy is the higher income individual between the ages of 35 to 54 as higher
income individuals are more likely to make purchases online and those between the ages of 35 and 54
make up the largest portion of consumer electronics purchases. Gyploy will position itself as a customer
friendly online consumer electronics retail store that due to its low overhead will realize faster shipping
times and better customer service. The goals of the marketing plan will be to gain brand awareness,
generate a loyal customer base as well as repeat sales.
MARKETING CHANNELS AND TACTICS
SEO/SEM
The Company will implement an aggressive SEM and SEO strategy to reach critical mass by acquiring
members through keyword optimization. For example when an end user searches the phrase “flat screen
TV” Gyploy’s website will appear atop the list thus generating higher traffic for the website.
TRADE LINKS
There are three main effects of having a lot of links out on the internet pointing to your site all with the end
goal of driving traffic to the website. Users will see the link to Gyploy website on partner’s websites and
potentially click through. Search engines will rank Gyploy website higher if the website has higher link
popularity, meaning the website will show up atop the search results when end users search phrases
relating to the business. Many search engines use “spiders” to span the internet and index and update old
websites. These “spiders” will more easily and more often crawl the website if a link to it is placed all over
the internet. The website will be listed faster and revisited more often. A website like linkmarket.net will
allow Gyploy to connect with other websites to trade links to generate traffic.
ONLINE ADVERTISING
Gyploy will work to identify the best websites and/or social media outlets to purchase banner/display ad
space. The ad will be visually engaging and include a direct link to www.gyploy.com thus providing the
traffic and brand awareness needed to generate high levels of traffic. The company will advertise on
consumer electronic related websites. Potential websites include:






Cnet.com
Consumerreports.org
Epinions.com
Pcmag.com
Retrevo.com
Ecoustics.com
SOCIAL MEDIA MARKETING
Coinciding with the marketing campaign, advertising on social networks such as Facebook and Twitter will
be necessary in order to properly market and promote the brand. Gyploy will place ads visible to the
highest amount of 35 to 54 year old high income individuals will see them. In addition a Facebook fan page,
Twitter account, and a Pinterest presence will be essential in keeping connected with members.
The Company will employ real-time updates to keep users in-the-loop regarding new products available for
purchase. The social media channels will also allow members to receive special benefits and discounts.
This will also encourage an ‘insider’ feel with loyal customers.
AMERICAN EXPRESS
Gyploy will list itself in the American Express online directory for small businesses. This will provide the
website with a space to advertise to both American Express customers and those that wish to partner with
and purchase from small businesses.
DIRECT E-MAIL
The website will utilize an existing client book and begin to capture email addresses and customer
information directly through their website. Once a database is formed, The Company will distribute a
periodic e-mail blast announcing new products and sharing special offers. This will continue to engage
current customers create new ones and ultimately drive revenue.
PRINT ADVERTISEMENT
In order to realize higher website traffic the company will also look to traditional means of advertisement
in the form of newspapers and magazines. Gyploy will position itself as a local small business in local New
Jersey newspapers in order to generate traffic from those looking to support local business. The company
will advertise in consumer electronic circulated publications such as:




Electronic House
Electronic Products
Everyday Practical Electronics
HDTV Magazine
OPERATIONS PLAN
OPERATIONAL STRUCTURE
The company is wholly owned and operated by James Tucker Jr. as a sole proprietorship. Gyploy operates
as a very lean organization through low overhead costs allowing the company to respond quickly to
customer inquiries and constantly develop better organizational practices.
DISTRIBUTION CHANNELS
President
Customer
Product
Figure 3: Distributions Channel
Gyploy
Shipment
James Tucker
Drop-Shipper
MANAGEMENT TEAM BIOGRAPHIES
JAMES TUCKER, PRESIDENT
James Tucker graduated from Christopher Newport University in Newport News, Virginia with a bachelor’s
degree in Business Administration. Mr. Tucker has over ten year’s management experience as he had been
the manager at The Dump Furniture Store in Hampton, Virginia from 2004-2008. His past experience
running a profitable retail website will prove invaluable as Mr. Tucker looks to build another profitable
web based retail business.
STRATEGIC PARTNERS
Worldwide Merchandise – This partner operates as one of the company’s wholesalers/distributors that
give Gyploy access to its inventory in order to sell to end consumers. Once an order is placed with Gyploy,
Worldwide Merchandise will send the product to the consumer out of their warehouse.
Mega Goods – This partner also acts as one of Gyploy’s distributors. Gyploy pays only $95 per month to
have access to its inventory, once an order is placed through Gyploy’s website the company contacts Mega
Goods and the product is shipped to the end consumer through Mega Goods distribution channels.
E-Gadgets Plus – E-Gadgets is a manufacturer and wholesaler of electronics and gadgets. The fact that EGadgets manufacture their own electronics allows them to control the pricing and quality of the product as
well as provide custom designs, logos and labeling. Their wholesale electronic stock includes Bluetooth
headset, digital cameras, GPS, LED Products, Spy Items, USB flash drives and more.
KEY OPERATIONAL MILESTONES
Month 7
Month 4-6
Month 4
Month 3-4
Month 1-3
• Raise Capital
• Implement
Marketing Strategy
• Raise Brand
Awareness
Month 0
• Establish Legal
Structure
• Incorporate
Figure 4: Gyploy, Timeline for 12-months of operations
• Add New Products
to the Site
• Build Company
Inventory
• 10,000 Units per
Month
FINANCIAL PLAN
KEY REVENUE ASSUMPTIONS
The Gyploy’s revenue will be driven by the amount of items the website is able to sell and what type of
items are sold. If Gyploy sells a laptop at retail price for $1,700 and receives $100 in profit margin from
their partnering drop-shippers this represents 6% profit from goods sold. Figure 5 details the average price
for a product sold within the various categories offered by Gyploy. It also depicts items sold as a percentage
of total items sold through the website. The percentages of items sold are based off of the IBISWorld
Consumers Electronics Stores in the US Industry report. In order to reach $100,000 in revenue Gyploy will
have to sell 485 items per month.
Figure 5
Product
Category
Average
Price
Profit
Margin
($)
$100
$28.50
$6
Percentage
of Items
Sold
18%
17%
11%
Items
Sold
Revenue
Month 1
Monthly Revenue
Growth Year 1
$1,666
$475
$100
Profit
Margin
(%)
6%
6%
6%
Laptop
TVs
Audio
Equipment
Home
Theater
Consoles &
Games
Digital
Cameras
Video
Cameras
Total
87
82
53
$1,571
$2,350
$320
1%
1%
1%
$19,929
$29,802
$4,060
$250
6%
$15
15%
73
$1,091
1%
$13,840
$400
6%
$24
9%
44
$1,048
1%
$13,286
$150
6%
$9
13%
63
$567
1%
$7,197
$200
6%
$12
17%
82
$989
1%
$12,548
100%
485
$7,937
1%
$100,661
KEY COST ASSUMPTIONS
One of the major benefits of Gyploy’s business model is that the company does not have to risk buying large
amounts of inventory. Rather, through its strategic partnerships with various drop-shippers Gyploy has
access to their extensive inventory for a monthly fee. Figure 6 details the company’s monthly and yearly
operating expenditures.
Figure 6
Advertising/Marketing
Worldwide Inventory Expense
Mega Goods Inventory Expense
Telephone
Website Hosting
Total
Month 1
$2,000
$200
$95
$60.10
$88
$2,443
Advertising/Marketing
Worldwide Inventory Expense
Mega Good Inventory Expense
Telephone
Website Hosting
Total
FY 1
$24,000
$2,400
$1,140
$721
$1,056
$29,317
FY 2
$24,480
$2,448
$1,163
$736
$1,077
$29,904
FY 3
$24,790
$2,497
$1,186
$750
$1,099
$30,502
FY 4
$25,469
$2,547
$1,210
$765
$1,121
$31,112
FY 5
$25,978
$2,598
$1,234
$781
$1,143
$31,734
INITIAL CAPITAL REQUIREMENT
Gyploy requires an initial capital funding of $35,000 that will be used towards advertising in order to
increase brand awareness and increase traffic to the website. Advertising will be essential to driving
website traffic and sales. Figure 7 details the company’s required capital funding.
Figure 7
Initial Capital Requirement
$35,000
BREAK-EVEN ANALYSIS
In order to break even in the first month of operations Gyploy must sell 152 items. This equates to about
4.98 items per day. Figure 8 details the number of each item the company will sell based on assumed
percentage of sales. The accompanying income statement shows revenue and net income if the company
was to sell 152 items each month assuming 1% month over month growth and 10% yearly growth.
Items
Sold
Percent
of total
Items
Sold
Laptops
Sold
27
TVs
Audio
Equipment
17
Home
Theater
23
Console
& Games
14
Digital
Cameras
20
Total
26
Video
Cameras
26
18%
17%
17%
11%
15%
9%
13%
100%
152
For the Year Ending
FY1
FY2
FY3
FY4
FY5
Revenues
Laptop
Laptop Revenue
Revenue
Digital Camera Revenue
Video Camera Revenue
Home Theater Revenue
Console & Games Revenue
TV Revenue
Audio Revenue
$6,246
$2,255
$3,933
$4,337
$4,164
$9,340
$1,272
$6,870
$2,481
$3,972
$4,771
$4,580
$10,274
$1,400
$7,557
$2,729
$4,012
$5,248
$5,038
$11,301
$1,539
$8,313
$3,002
$4,052
$5,773
$5,542
$12,431
$1,693
$9,145
$3,302
$4,092
$6,350
$6,096
$13,675
$1,863
Net Sales
Direct Cost
Cost of Goods Sold
$31,547
$34,348
$37,426
$40,807
$44,523
-
-
-
-
-
GROSS PROFIT
Gross margin (%)
$31,547
100%
$34,348
100%
$37,426
100%
$40,807
100%
$44,523
100%
$(29,677)
$(29,677)
$(30,271)
$(30,271)
$(30,876)
$(30,876)
$(31,494)
$(31,494)
$(32,124)
$(32,124)
EBITDA
EBITDA %
Depreciation
Amortization & Impairment
$1,870
6%
$0
$0
$4,078
12%
$0
$0
$6,549
17%
$0
$9,313
23%
$0
$12,400
28%
$0
EBIT
$1,870
$4,078
$6,549
$9,313
$12,400
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Operating Expenses
Total Non-Personnel General & Administrative
Total Personnel Expenses
Total Operating Expenses
EBIT%
Interest Expense-Debt
Interest Expense-Leased Assets
Interest Income
Other Income (Expenses)
Pretax Income
Cumulative Net Operating Loss
Adjusted against Loss
Taxable Income
Income Tax Expense
$1,870
$0
$0
$1,870
($655)
$4,078
$0
$0
$4,078
($1,427)
$6,549
$0
$0
$6,549
($2,292)
$9,313
$0
$0
$9,313
($3,260)
$12,400
$0
$0
$12,400
($4,340)
NET INCOME
$1,216
$2,650
$4,257
$6,054
$8,060
Net Profit Margin (%)
4%
8%
11%
15%
18%
FINANCIAL PROJECTIONS
The company will generate $100,661 worth of revenue in year one with a net income of $46,140. By year
five the company will make a net income profit margin of 50% with total revenue of $142,064 and a net
income of $71,461. Figure 8 shows the summary financial projections, including net income and net profit
percentages.
Figure 8
For the Year Ending
FY1
FY2
FY3
FY4
FY5
Total Revenues
Total Direct Cost
$100,661
$0
$109,598
$0
$119,417
$0
$130,207
$0
$142,064
$0
Gross profit
Gross Profit Margin (%)
Total Other Expenses
$100,661
100%
($29,677)
$109,598
100%
($30,271)
$119,417
100%
($30,876)
$130,207
100%
($31,494)
$142,064
100%
($32,124)
EBITDA
Depreciation
Amortization & Impairment
$70,984
$0
$0
$79,327
$0
$0
$88,541
$0
$0
$98,713
$0
$0
$109,941
$0
$0
EBIT
Interest Expense-Debt
Interest Expense-Leased Assets
Interest Income
Other Income (Expenses)
$70,984
$0
$0
$0
$0
$79,327
$0
$0
$0
$0
$88,541
$0
$0
$0
$0
$98,713
$0
$0
$0
$0
$109,941
$0
$0
$0
$0
$70,984
($24,844)
$79,327
($27,765)
$88,541
($30,989)
$98,713
($34,550)
$109,941
($38,479)
$46,140
$51,563
$57,552
$64,164
$71,461
46%
47%
48%
49%
50%
Pretax Income
Income Tax Expense
Net Income
Net profit (%)
APPENDIX
INCOME STATEMENT ANNUAL
For the Year Ending
FY1
FY2
FY3
FY4
FY5
Revenues
Laptop
Laptop Revenue
Revenue
Digital Camera Revenue
Video Camera Revenue
Home Theater Revenue
Console & Games Revenue
TV Revenue
Audio Revenue
$19,929
$7,197
$12,548
$13,840
$13,286
$29,802
$4,060
$21,922
$7,916
$12,674
$15,224
$14,615
$32,782
$4,466
$24,114
$8,708
$12,800
$16,746
$16,076
$36,060
$4,912
$26,526
$9,579
$12,928
$18,421
$17,684
$39,666
$5,403
$29,178
$10,537
$13,058
$20,263
$19,452
$43,633
$5,944
Net Sales
Direct Cost
Cost of Goods Sold
$100,661
$109,598
$119,417
$130,207
$142,064
-
-
-
-
-
GROSS PROFIT
Gross margin (%)
$100,661
100%
$109,598
100%
$119,417
100%
$130,207
100%
$142,064
100%
Operating Expenses
Total Non-Personnel General & Administrative
Total Personnel Expenses
Total Operating Expenses
$(29,677)
$(29,677)
$(30,271)
$(30,271)
$(30,876)
$(30,876)
$(31,494)
$(31,494)
$(32,124)
$(32,124)
EBITDA
EBITDA %
Depreciation
Amortization & Impairment
$70,984
71%
$0
$0
$79,327
72%
$0
$0
$88,541
74%
$0
$98,713
76%
$0
$109,941
77%
$0
EBIT
$70,984
$79,327
$88,541
$98,713
$109,941
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
EBIT%
Interest Expense-Debt
Interest Expense-Leased Assets
Interest Income
Other Income (Expenses)
Pretax Income
Cumulative Net Operating Loss
Adjusted against Loss
Taxable Income
Income Tax Expense
NET INCOME
Net Profit Margin (%)
$70,984
$0
$0
$70,984
($24,844)
$79,327
$0
$0
$79,327
($27,765)
$88,541
$0
$0
$88,541
($30,989)
$98,713
$0
$0
$98,713
($34,550)
$109,941
$0
$0
$109,941
($38,479)
$46,140
$51,563
$57,552
$64,164
$71,461
46%
47%
48%
49%
50%
CASH FLOW ANNUAL
For the Year Ending
CASH FLOW FROM OPERATIONS
Net Income (Loss)
Plus Depreciation
Plus Amortization & Impairment
FY1
FY2
FY3
FY4
FY5
$46,140
$0
$0
$51,563
$0
$0
$57,552
$0
$0
$64,164
$0
$0
$71,461
$0
$0
Changes in Working Capital
Changes in A/R
Changes in Prepaid Expenses
Changes in Inventory
Changes in Other Current Assets
Changes in A/P
Changes in Accrued Expenses
Changes in Other Current Liabilities
($886)
($177)
$0
($177)
$0
$2,473
$177
($78)
($16)
$0
($16)
$0
$50
$16
($87)
($17)
$0
($17)
$0
$50
$17
($34)
($7)
$0
($7)
$0
$51
$7
($99)
($20)
$0
($20)
$0
$53
$20
Net Change in Working Capital
$1,410
($44)
($54)
$10
($66)
Net Cash Flow from Operations
$47,550
$51,519
$57,497
$64,174
$71,396
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$50,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Net Cash Flow from Financing
$50,000
$0
$0
$0
$0
Net Cash Flow
Cash at Beginning of Period
$97,550
$0
$51,519
$97,550
$57,497
$149,069
$64,174
$206,566
$71,396
$270,740
Cash at End of Period
$97,550
$149,069
$206,566
$270,740
$342,135
CASH FLOW FROM INVESTMENTS
Purchase of Assets (IP)
Purchase of Intangibles & Other Assets
Fixed Assets
Net Cash Flow from Investments
CASH FLOW FROM FINANCING
Paid in Capital
Debt
Lease Payments
BALANCE SHEET ANNUAL
For the Year Ending
FY1
FY2
FY3
FY4
FY5
ASSETS
Cash
Accounts Receivable
Prepaid Expenses
Inventory
Other Current Assets
97,550
886
177
0
177
149,069
964
193
0
193
206,566
1,051
210
0
210
270,740
1,085
217
0
217
342,135
1,184
237
0
237
Total Current Assets
98,790
150,418
208,037
272,259
343,793
Property & Equipment
Property & Equipment
Leased Asset
Accumulated Depreciation
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Property & Equipment, net
0
0
0
0
0
Intangible & Other Assets
Assets (IP)
Intangible & Other Assets
Amortization & Impairment
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
98,790
150,418
208,037
272,259
343,793
LIABILITIES & EQUITY
Accounts Payable
0
Accrued Expenses & Payroll Taxes Payable 2,473
Other Current Liabilities
177
Current Portion of Long Term Debt
0
0
2,523
193
0
0
2,573
210
0
0
2,624
217
0
0
2,677
237
0
Total Current Liabilities
2,650
2,716
2,783
2,841
2,914
0
0
0
0
0
0
0
0
0
0
2,650
2,716
2,783
2,841
2,914
Shareholder's Equity
Paid in Capital
50,000
50,000
50,000
50,000
50,000
Retained earnings
46,140
97,702
155,254
219,418
290,879
Total Equity
96,140
147,702
205,254
269,418
340,879
TOTAL LIABILITIES & EQUITY
98,790
150,418
208,037
272,259
343,793
TOTAL ASSETS
Long-Term Debt, net of Current
Due to Related Parties
Total Liabilities