Business Plan
for
On Time Printing
Prepared by
Troy Franklin
Ball State University
Entrepreneurship
New Venture Creation
Spring 1992
Dr. Donald Kuratko
S('l.11
fhe5!J
Table Of Contents
1..1)
J Lf$J
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,
1. Executive Summary
II. Business Description
A.
Industry Background
B.
Products and Services Offered
C.
Uniqueness
D.
Growth
ill. Marketing
rv.
V.
A.
Target Market
B.
Competition
C.
Sales and Promotion
1.
On TIme Guarantee
2.
Explanation of On TIme Guarantee Process
3.
Advertising
4.
Pricing
Location and Equipment
A.
Location
B.
Equipment
Management
VI. Critical Risks
VIT. Financial
A.
Assumptions
B.
First Year
C.
Second Year
D.
Third Year
E.
Important Ratios
VII. Milestones
IX. Appendix
A.
liOn Tune or It's Free" Guarantee
B.
Tom Carns-PDQ Printing
C.
Professional Office Survey and Results
D.
Bedford Business Survey and Results
E.
"Why Not Broker It All?"
F.
Single Shop Growth Analysis
G.
"Direct Mail Success" & "Getting Readers Attention"
H.
"Developing Your Advertising Budget"
1.
Property Specification Sheet
J.
Equipment and Prices
K.
Equipment Brochures & Specifications
L.
Advertising Rates & Information
M.
Insurance Policy
N.
Profit Leader Analysis
O.
Industry Important Ratios
Executive Summary
The following business plan has been developed by Mr. Troy Franklin in an
effort to obtain financing of $140,000 for the purchase of a building and equipment
for a quick printing shop in Bedford, Indiana. This quick printing shop will be
equipped with all brand new equipment including a thermography unit to produce
raised printing. This unit is the only one in Bedford and is therefore On Time
Printing's niche in the market. On Time Printing's other niche is that it guarantees
all printing to be completed by a specified time or it's free.
Mr. Franklin has been involved in the quick printing industry since 1982.
During this time he has been involved in all facets of this business. Mr. Franklin
has
worked
in
production
Resume-Management Section).
as
well
as
management
(See
Personal
He has worked in four different print shops
during this time, thus giving him exposure to many different pieces of equipment
as well as the different processes to complete jobs.
On TIme Printing's marketing strategy is designed to target professional
business people. There are 145 professional offices in Bedford. These people will
receive direct mailings advertising thermographed letterheads, envelopes, and
business cards. Another 355 of the total 1084 businesses in Bedford will also receive
monthly direct mailings.
A second marketing technique will be the use of newspaper advertising in the
Saturday business section. These ads will run weekly for the first six months and
then cut to twice a month. This will serve to keep the On Time Printing logo in the
front of customer's eyes. The savings from the advertising cutback will be used to
increase direct mailings to bimonthly.
The third marketing strategy is to drop off notepads to many area businesses.
1
This will agaIn keep the On Time Printing name and logo in the view of
customers-on the desks of business people and secretaries.
On TIme Printing's revenues will be as follows:
Xu!:
Grass Sal~s
1st
$139,583
2nd
$197,789
41.7%
3rd
$263,653
33.3%
% In,r~as~
The following is the profit for On TIme Printing:
Year
Profit
1st
$11,625
2nd
$34,342
3rd
$57,928
2
Business Description
On Time Printing is a new quick priht shop designed to produce a variety of
printed materials for customers needing their printing by a designated time. By
using state of the art equipment and having a system of control, On Time Printing
will be able to have a turnaround time faster than any of its competitors and a
guaranteed delivery time. The goal of On Time Printing is to become known as the
printer to rely on when the deadline has to be met. If On TIme Printing does not
meet its predetermined deadline then the materials are free.
Industry Background '"
According to Rob Schweiger in Quick Printing: An Industry Overview, quick
printing is "simply a marketing state of mind, rather than a specific technical
concept... it utilizes traditional retail concepts in a manufacturing environment."
For this reason it is sometimes difficult to differentiate between commercial
printing and quick printing. However, because of On Time Printing's marketing
efforts and its use of a retail storefront, On Time Printing will be classified as a quick
printing shop.
The quick printing industry evolved from three important developments in
technology. The first development was an offset press, the A.B. Dick 360, in 1959.
This press allowed for quick size changes, quick setup, and allowed for a more rapid
balancing of water and ink. The second innovation came in 1961 from Eastman
Kodak. Kodak developed a presensitized plate material that allowed for the making
of plates directly from a piece of projection equipment, thus avoiding chemical
development of plate material.
One year after Kodak's breakthrough, Itek
developed a camera/platemaker that further shortened the pre-press time necessary
1
to print a job. It was at this time in 1962 that the quick printing industry started to
grow.
Since 1962 the quick printing industry has grown to approximately 30,000
shops in 1992, with an aggregate sales of 7.5 billion (NAQP 1992 Resource Guide &
Membership Directory). Quick printing has grown so rapidly that some sources
believe that the market is saturated. But in a study by Quick Printing Magazine
(1988) 30% of quick printers still believed that the industry has not become saturated.
The saturation problem is evident in the major cities, especially in California, Texas,
Florida, Illinois, and Ohio.
These states contain the majority of quick printing
shops.
The following is a list of quick printing industry facts and statistics:
• Approximately 50% of all quick print shops are located in the suburbs of major
cities, while 20% are in downtown areas of small towns.
•
Because quick printers cater to smaller businesses, many shops are found in small
business districts.
•
Nearly half of all quick printers have a college degree. 15% have a graduate
degree.
•
Approximately 78% of quick printers are from a white collar background.
• Business customers generally have 20 or fewer employees and half have
computers and copiers in their office (1984 NAQP study).
•
The reasons for choosing a quick printer over a commercial printer are generally
low price or superior service.
• The median shop has sales of approximately $250,000/year.
2
•
Franchise shops represent approximately 17% of the industry's total.
•
85-90% of quick printing companies are single shop operations.
•
The average shop employs 4 full-time and 1 part-time employee, meaning sales
per employee averages $55,000/ employee.
•
Industry employee turnover is 11.5%.
•
More than half the industry uses storefront locations.
•
The average single shop owner's compensation was 16.78% in 1987.
•
22% of successful ($50,000+ compensation) had an initial investment of less than
$10,000, while another 22% had initial investment of over $81,000.
•
Salaries for counter sales help averages $12,600 to start and top out at $18,500.
Pressmen start at $13,900 and top out at $20,500 (1988-89 Wage and Fringe Benefit
Study).
• The typical salary increase was 6.9% (1988-89 Wage and Fringe Benefit Study).
"Note: All statistics not cited in this section are from Quick Printing: An Industry Overoiew.
Products and Services Offered
The idea of guaranteed deadlines has been used successfully by many printers
in the industry and has been proven to not only increase business but also make
employees more conscious about quality and time (See Appendix A).
There are
currently no printers in Bedford that offer any deadline guarantee. If a printing
3
customer wants their printing within a designated time and guaranteed they will
have to call upon On Time Printing.
On Time Printing will offer printed forms, flat printing (flyers, letters, posters,
etc.), booklets, tickets, rubber stamps, wedding invitations, and thermographed
(raised print) business cards, letterheads, and envelopes. Services offered include
folding, scoring, collating, numbering, stapling, binding, and padding, as well as pick
up and delivery of orders. On Time Printing will be the only printer to offer inhouse thermography, which should attract more doctors, lawyers, and professionals
looking for a professional image in their letterheads and envelopes. This strategy
was implemented by Tom Carns of PDQ Printing and is credited as the key
ingredient that caused sales to increase by 73% in 1983 (Inc., April 1992, 74- See
Appendix B).
Uniqueness
There are two primary factors that will differentiate On Time Printing from
every competitor. The first and the most important is the deadline guarantee. The
NAQP Customer Profile Study estimates that 42% of quick print customers change
printers because of service or reliability.
These customers will be looking for
someone who can do what their other printer couldn't- meeting the customers'
deadlines with good service. This guarantee is expected to create the draw of new
business. According to a survey of 35 diverse Bedford area businesses, a printer's
ability to meet deadlines consistently was ranked second out of ten characteristics.
Only quality was ranked higher. With the high quality materials being produced by
On Time Printing combined with the guaranteed deadline, customers should be
highly satisfied (See Appendix C for survey results).
The second uniqueness offered by On Time Printing will be a thermographic
4
process. Thermography can be used on business cards, letterheads, and envelopes to
convey an image of professionalism. On TIme Printing will be the only Bedford
print shop to offer thermography in-house, thus allowing for quicker turnaround
time.
According to the Professional Office Survey, professional organizations
averaged $680.77 /year on business cards, letterheads, and envelopes (Appendix C).
According to the Bedford Business Survey $277.56/year is spent on these three items
by an average small business (Appendix D). While 56% of professional offices stated
that they didn't use thermography, reasons given included too expensive and not
needed (Appendix C). The real problem seems to be that Bedford printers don't
suggest or push thermography because it is too costly both for the customer and the
printer who has to broker the thermography. The average mark-up for brokered
services is anywhere from 15-50%, or a 13-33% gross profit, while the profit leaders
of the industry have gross profits of 73%. To maintain these standards a print shop
would have to average a 300% mark-up on brokered jobs. ( For detailed explanation
see Appendix E)
Growth
Given that there are 145 professional offices in Bedford (Bedford Chamber of
Commerce) and each office averages $680.77/year (Professional Office SurveyAppendix C) on letterheads and envelopes, then with the assumption that On Time
Printing can gain 62% of that market in its first year (percentage taken from
Professional Office Survey- Appendix C), revenues from this market alone will
total $61,201.22. According to the 1991 Bedford City Directory there are a total of
1,084 businesses listed. If the average customer surveyed spends $773.09/ year on
printing then without the 145 professionals $783,822.76 is spent in a year (Bedford
Business Survey- Appendix D).
Robert Desatnick, marketing consultant and
5
1.....----------------------------------------
author of NAQP News articles, states that 15% of a print shops customers leave
unsatisfied. Of these 15%, 96% never complain and 90% never go back. On the
assumption that 13.5% of competitor's customers never return to that competitor
and that On TIme Printing can gain 75% of those customers because of its direct
mailings, advertising, and delivery guarantee, On Time Printing will gain 10% of
the unsatisfied customers in the market. At a 10% market share $78,382.28 would be
grossed plus $64,162.57 from the professional offices for, a gross first year revenue of
$139,583.50.
One area not reached by the surveys is the area's major industries. There are
15 major industries in the Bedford area ranging in size from 26 to 1420 employees.
These larger companies will spend more than the $773 average. These companies
were not considered in the survey
because of the ability for these companies
numbers to skew the results. In the first few years of operation, marketing efforts
will be directed toward the smaller clients, thus allowing the operational process to
become smooth and efficient before large accounts are attempted. Another reason
that larger companies will not be initially targeted is that with the On Time
Guarantee, On TIme Printing is better suited for the needs of the smaller companies.
According to Tom Carns, owner of PDQ Printing, smaller companies can not afford a
printing specialist to help with printing decisions and therefore must rely heavily
on its printer. He also states that "in white collar companies, printing done right
and on time is more critical to the overall health of the operation than it is in other
types of businesses" (Inc., April 1992, 70- Appendix B).
With
a
large
difference
between
the
competitor's
sales
(See
Marketing-Competition) and projected Bedford printing sales from the Bedford
Business Survey (Appendix D) it is assumed that there are two reasons for this
inequality. First, some out of city printing is done from surrounding areas, i.e.,
6
Paoli, Orleans, Mitchell, and Brownstown.
And second, the fact that major
industries were not included in the Bedford Business Survey. John Stewart, quick
printing industry expert and author of A Quick Printer's Checklist for Survival in
the 1990's, uses the 80/20 rule in many ways in running his print shop. The 80/20
rule states that 80% of your business comes from 20% of your customers. Using a
derivative of the 80/20 rule it is assumed that of the $1.5 million spent by
approximately 1200 Bedford and surrounding area customers 80% is spent by the top
20% of the customers it can be computed that $93,750 is spent annually by the 15
major industries in Bedford.
[15/(1200(20%))] x $1,500,000 = $93,750
This leaves $568,213.32 in printing from surrounding areas. While this market is
not in the primary marketing area of On Time Printing, it will serve as an area for
expansion in the future.
On TIme Printing's sales should grow at a rate similar to the average growth
rate of new quick print shops. According to the NAQP 1989 Industry Operating
Ratios Study average first year growth for a quick printing shop is 41.7%. Second
year growth is 33.3%. Using the projected sales of $139,583.50 as the first year sales,
On Time Printing will gross $197,789.82 in its second year and $263,653.83 in its third
year (See Appendix F).
7
Marketing
Target Market
The market for On Time Printing consists of 1084 businesses (1991 Bedford
City Directory). Of this market, 145 businesses are classified as professional offices
(Bedford Chamber of Commerce). On TIme Printing's marketing efforts will consist
of a mix between targeting the professional offices and using newspaper advertising
to reach the other small businesses. On Time Printing's customer will be small
businesses that, according to the Bedford Business Survey, average $773.09/year on
their printing needs (See Appendix D).
Because of its marketing toward the
professional offices and its ability to better fulfill the needs of these customers, On
Time Printing expects to gain a 61 % share of the letterheads and envelopes business
coming from the professional offices
in its first year (Professional Office
Survey-Appendix C). Also, in the overall market On Time Printing expects to gain
a 10% market share. This share resulting from sales calls, direct mail and newspaper
advertising, and word of mouth advertising, will consist of the competitor's
unsatisfied customers (For a detailed explanation, see Business DescriptionGrowth, p. 5). The fact that On Time Printing offers free printing if its deadline is
not met will cause many people to talk about On Time Printing. This word of
mouth advertising will be On TIme Printing's greatest form of advertising.
Competition
There are four competitors for On TIme Printing: Copy Trolley, Rainbow
Printing, Riverside Printing, and Stone City Press. All four print shops are located
in the downtown area, all within a six block area. All four print shops will be in
direct competition with On Time Printing's flat printing (not thermography),
1
however none are in direct competition with On Time Printing's in-house
thermography.
The following is a brief overview of the four competitors:
Copy Trolley:
Copy Trolley is located one block west of On Time Printing. It
was established in 1982 and relocated in 1990 to its current
location. Copy Trolley offers a sheet size up to llx17 using
electrostatic platemaking and no darkroom.
The current
location utilizes a retail storefront and uniforms to convey a
professional image. Its location is at a high traffic flow area, the
intersection of the two main roads in Bedford.
increased approximately
Sales have
50% over the last 5 years.
Copy
Trolley does not offer pick-up and delivery, thermography,
high quality coated stock printing (brochures, ad slicks, high
quality photographs, etc.), or an outside salesman.
Copy
Trolley's strengths are its customer service, community
relations, visible location, and professional appearance.
Its
weaknesses are limited abilities, no delivery, and occasional
missed deadlines. Copy Trolley has 4 full time and 1 part time
employee and has annual sales of approximately $150,000/year.
Rainbow Printing:
Rainbow Printing is located 4 blocks east and 2 block north of
On Time Printing. Established in 1968, it wasn't until 1985 that
it relocated to its current location.
Rainbow Printing is
Bedford's only commercial printer, with a maximum sheet size
of 20x29, allowing them to run jobs that no other area printer
2
can run. Rainbow has two major accounts that supply much of
their work, Bedford Independent Federal Credit Union and
Indiana University Federal Credit Union. Rainbow Printing
does not utilize a retail storefront, opting for three desks in the
entry, and is housed in a warehouse-type building. Rainbow
Printing's strengths are its ability to do a variety of jobs, high
quality jobs, and deliver the work. Its weaknesses are its lack of
a high quality image, its lack of advertising, and its slow
turnaround time.
Rainbow Printing has 15 employees and
annual sales of $500,000-$1,000,000.
Stone City Press:
Stone City Press was established in 1944. In 1991 it was sold to
the owner's daughter and son-in-law.
Stone City Press is
located 1 block east and 5 blocks north of On Time Printing. Its
maximum sheet size is 17x22. Stone City Press is located in a
concrete block building with a desk in the entry for order
taking.
Stone City Press's strengths are they are a well
established business with loyal customers, customer relations
are good, management is young, and quality work can be
accomplished. Its weaknesses are that equipment is old and
outdated, the building is run down, the location is very poor,
quality is inconsistent, advertising is lacking, turnaround is
slow, and deadlines are frequently missed. Stone City Press has
6 employees and sales of $245,000.
Riverside Printing: Riverside Printing was established in 1972 and relocated to its
3
present location in 1986. It is 3 blocks east and 3 blocks north of
On Time Printing. Riverside Printing has a maximum sheet
size of 12x18. It uses
~
retail storefront, but employees are not
in uniform. Its building is an old warehouse remodeled into a
retail store. Riverside Printing's strengths are its visual image
and its low price guarantee. Its weaknesses are deadlines are
usually missed, poor customer relations, no advertising, poor
quality, and bad overall reputation. Riverside Printing has 3
employees and annual sales of approximately $250,000.
'" Note: Competition information was received from an interview
with Paul Sanders, Printing Instructor, North Lawrence Area
Vocational School.
Mr. Sanders works closely with all four print
shops.
Sales and Promotion
On Time Guarantee
The best promotional tool that On Time Printing possesses is its On TIme
Guarantee. The On Time Guarantee states that if a job is not ready by the date and
time specified by On Time Printing then that job is free (See Appendix A). This
guarantee "forces your business to keep itself sharp, and it has strong pulling power
with customers", according to Mike Stevens, quick printing marketing consultant
and user of a guarantee. Every printer uses different methods for determining the
time it will take to complete a job. Some use charts with times needed for each
operation, some have counter salespeople to guess, and some, such as Mike Stevens
4
use a simple "day for each operation technique." On Time Printing will use the
latter technique, which is explained in the next section.
Explanation of On Time Guarantee Process
A customers job consists of distinct processes. There are three areas through
which a job can go-typesetting, press, and bindery. When quoting a deadline for a
job the salesperson will count the number of processes that the job must pass
through and then allow one day for each process. This method is both easy and
efficient. When Mike Stevens implemented his guarantee only 6 jobs out of 11,484
were given away (See Appendix A). This means 99.95% of the jobs were delivered
on time. For example, if a customer orders a flyer that needs typesetting, presswork,
perforation, and folding, then the job would be promised in 4 days at 2:00. All jobs
will be promised at 2:00 to keep things simple. If a job is promised for 5/6/92 then
the employee automatically knows that the order will be due at 2:00. The order
form will have the date ordered, the date promised, and the number of processes
that must be completed.
This way when the salesperson places the job on the
schedule in each department the person performing the process can double check to
make sure the deadline will be met. This double checking procedure should help
eliminate missed deadlines.
Advertising
The main advertising done by On Time Printing will be newspaper, direct
mailings, and literature drops. The newspaper advertising will be used to increase
community awareness of On TIme Printing, while the direct mailings and literature
drops will be used to target specific markets such as the professional offices (See
Appendix G). The newspaper ads will cost $6.31 per column inch and will run every
5
Saturday in the business section. The ads will be 2 columns by 4 inches, thus costing
approximately $200 per month. The direct mailings will be sent to approximately
500 of the 1084 businesses in the Bedford area. The main cost here is postage since
all printing will be performed by On Time Printing.
The postage will run
$lOO/month, causing monthly advertising expenditures to be $300. After the sixth
month of operation, newspaper ads will be cut to once a month, while direct
mailings will be mailed bimonthly. This change will cause the advertising expense
to remain at $300. This expense is 2.5% of sales compared to the average of 3-5%
(See Appendix H Developing Your Advertising Budget).
Literature drops will be the simplest form of promotion. Literature drops will
occur each time a delivery is made. Each time the delivery personnel delivers an
order, he or she will take a handful of On TIme Printing complimentary notepads
along with rolodex cards and give them out to the other tenants of the building
where the delivery is being made. This will not be a sales call- only a way to spread
On TIme Printing's name and at the same time give potential customers something
that they can use.
There are many advantages to this type of promotion. First is the low cost.
On TIme Printing can print four 50 sheet notepads for about $.30. It is also cost
efficient in that the delivery F:'30nnel is already in the building and only has to
take an extra 2 minutes to drop off the notepads. The promotional effect is that the
On TIme Printing logo is on the potential customer's desk all day long. Also, any
notes that are written to others are carrying the On Time Printing logo.
This
promotion will greatly increase On TIme Printing's name and logo recognition.
Pricing
Using the Printer's Plan software package, each piece of equipment is assigned
6
a specific hourly cost. These costs will be computed using the input costs and the
time allotments set for each process. The Printer's Plan will automatically invoice
and keep customer records of the yearly purchases of each customer. This software
will act as a management tool in that costs can be tracked as well as inventories,
accounts receivables, equipment efficiencies, and production efficiencies.
The
software will be run on a Macintosh Classic placed at the front counter. There will
only be one terminal to begin, with a second being added when business increases to
warrant this.
7
Location and Equipment
Location
On TIme Printing will be located at 1623 ilL" Street in Bedford, Indiana. Along
with the building used for the operations, the purchase will include two other
units- a two unit apartment house and a 2622 sq. ft. retail building. This building
will be purchased for $80,000. It will be paid for with $80,000 of the total financing of
On TIme Printing. While the property will be depreciated over 30 years, the notes
payable is for a 15 year term. The reason for the 15 year notes payable is that all
equipment with varying depreciation times are weighted into one note.
Both of the
rental units are presently occupied with month to month leases. The rent generated
from the two units is $950/month ( For specifications see Appendix I). Since the
rented retail store is leased by the month this space could be used for future
expansions.
The location for On Time Printing is ideal in many ways. It is conveniently
located in the downtown area- 1/2 block off the main street and 2 blocks from the
city square. Off-street parking is plentiful, with six parking stalls in the front of the
building (customer parking) and 8 stalls on the side (employees and overflow). The
side entrance into the pressroom allows for delivery of supplies and paper to On
Time Printing without disturbing customers (front lot). The building itself provides
adequate space for an efficient print shop operation. The dimensions of the building
are 27' x89' for a total of 2,403 sq. ft.
The Building will be insured by Farmers Insurance Group of Companies. The
building coverage is $80,000 for a yearly premium of $256. Contents are covered up
to $140.000 for a premium of $1,213. Glass and outdoor sign coverage is another $60
per year. Liability is covered by $500,000. The Deductible on this policy is $250. The
1
total yearly cost of the insurance premium is $1,539 (See Appendix M).
Equipment
For a listing of equipment, prices, and production area See Appendix J
On TIme Printing will have only one printing press with a thermography
unit on the end of it. The press being used is a Multigraphics 1650 (See Appendix K).
The 1650 is a single color duplicator, however with its precise registration techniques
3 and 4 color jobs can be produced by running the sheet back through the press. This
press has a maximum speed of 11,000 impressions per hour, a maximum paper size
of 13x17, and can run papers weights from 111b. bond to 11Olb. cardstock. It is
currently selling for $14,000.
The second major piece of equipment is the Virkotype thermography unit
(See Appendix K).
This unit sells for $18,900.
The Virkotype unit is used in
conjunction with the Multigraphics 1650 to spread a fine powder over the ink placed
on the sheet by the 1650. The sheet is run by conveyor from the delivery tray of the
press to a heat dryer. This dryer causes the powder to harden and rise, thus making
a raised image, or thermography. This process is used for business cards, letterheads,
and envelopes.
The pre-press equipment consists of a Macintosh IIci, a Laserwriter nNTX, a
Macintosh Classic, three Lanier 5040 copiers, and a NuArc light table.
the
Macintoshes will be used primarily for desktop publishing (design and layout of
jobs).
Two of the Lanier copiers will be self-serve copiers, while the other will be
used behind the counter for layout and pasteup, as well as short run copy jobs. The
NuArc light table will be used in the layout area to line up and paste up customer
copy.
2
The darkroom will consist of an Agfa 310 Repromaster camera, a NuArc 26lK Platemaker, and a NuArc FDS 18 film sink.
The Repromaster camera will
produce negatives for the plating process., Its maximum film size is 14 x 20, just
slightly larger than the maximum press sheet.
The NuArc 26-1K platemaker will be used to burn the image on the film
negative onto a metal plate. Its frame can hold up to two 13x17 plates at the same
time. This will allow for increase efficiency.
The NuArc film sink can hold up to three 14 x18 trays.
For negative
development three trays are used-a developer tray, a fixer tray, and a rinse tray.
This sink can handle three trays of the largest film size (12 x 18).
The last area in On Time Printing's production is the bindery, or post press,
area. In the bindery department there are three machines an MBM 21" cutter, a
Challenge SRA-3 folder, and a Ibico Kombo Binder (spiral binding). The cutter can
be used for both cutting down stock from a large size to a press sheet and for
trimming out jobs that have already been printed.
The folder is a table-top, air-feed folder capable of folding a sheet up to 14 x 20.
This folder can fold half-folds, tri-folds, letter-folds, and double -folds. it is capable of
running 30,000 sheets per hour.
This equipment will be purchased from six different dealers.
The
Multigraphics 1650 press, the Lanier 5040 copiers, and the Virkotype thermography
unit will both be purchased from the manufacturers. The folder will be purchased
from Modern Photo in Indianapolis, the MaCintosh equipment and software from
MicroComputers in Bloomington, Indiana, and the remainder of the equipment
will come from HPS in Indianapolis.
On TIme Printing will have two paper supplies-Crescent Papers of
Indianapolis and Butler Paper in Evansville, Indiana. Both suppliers carry many of
3
the same products, therefore if one supplier is out of a particular stock it
ca~ be
gotten from the other supplier.
The only other suppliers are Multigraphics, Lanier, and Virkotype. These
manufacturers sell supplies for their equipment. Some of these supplies can also be
obtained at both BPS and Modern Photo.
4
Management
On Time Printing will be established
~s
a sole proprietorship. Troy Franklin
will be in charge of day to day management of the shop, as well as any outside sales
that take place. Troy has worked in printing production in a part-time capacity for
five years, working in every facet of a printing business from pre-press to bindery. In
the summers of 1990 and 1991 Troy worked as assistant manager in a quick printing
operation.
Duties during these summers included day to day management,
accounts receivable/accounts payable, planning, and special project development
(See resume- p. 3).
In the first year of operations one full-time and three part-time employees
will be needed in addition to Mr. Franklin. The full time employee's duties will
include typesetting, layout, counter sales, and bindery.
A part-time pressman,
working 15-20 hours a week will be needed for presswork and bindery.
This
employee will most likely be a vocational student working in a work-study
program. The second part-time employee will be a counter salesperson, as well as
being in charge of copy jobs, and some bindery. This employee would average 20-25
hours per week, allowing Mr. Franklin to perform community relations and
administrative duties.
The third part-time employee will be a delivery person
working 2 hours per day delivering jobs and performing literature drops.
This
person will be a retired person looking for part-time work.
Wages will be based on experience for the typesetter / counter salesperson.
Estimated wages will be between $5 and $6 per hour.
Wages for a work-study
student and delivery person would be $4.25/hour, while a counter-salesperson
would start at $4.50/hour. In the beginning, no employee benefits will be offered. If
the employee proves worthy of retention, a compensation package will be
1
determined specifically for this employees needs. Raises will be given every six
months in the amount of $.05-$.25/hour. Evaluation will be based on how well the
employee meets the criteria outlined in his or her job description.
Owner's salary will be approximately 18% of sales. Using the projected sales,
this calculates to $24,400 in the first year, $35,602 in the second year, and $47,457 in
the third year.
This is comparable to the industry average of 16.8% (1989 Quick
Printing Industry Operating Ratios Study).
The reasons for the above average
owners's salary are that On Time Printing will be run more efficiently than the
average print shop, therefore all employees will receive above average
compensation once above average sales per employee ($55,000 ave.) have been
established. Some of the reasons that this efficiency will occur includes the On Time
Guarantee which will make the employees more efficiency conscious and the
Printer's Plan estimating and management software (See Appendix A).
This
software has the capability of tracking actual time used to complete a job by sections
(typesetting, press, bindery, etc.) and comparing this to the time allowed and the
time charged. This above average efficiency should occur in year one.
The only local advisor used will be an accountant.
prepare financial statements and prepare tax forms.
This accountant will
The strongest source of
advising will come from other printers around the nation. A National Association
of Quick Printers membership gives members the opportunity to advise each other.
This organization's members have an excellent reputation for helping each other.
There are also many members of this organization that are professional consultants
in the quick printing field.
2
Troy Eric Franklin
2860 North Everbrook Lane # lA
Muncie, ~diana 47304
Education
Ball State U niversi ty
Bachelor of Science, May 1992
Small Business Management/Entrepreneurship
3.7 Major GPA
3.6 Accum. GPA
Activities
Selling and Sales Management Club
Intramural Basketball
Director of 1990 Limestone Heritage Festival Miss
Pageant
Work Experience
Ball State University Printing Services, Muncie, IN
1/89 to 5/92 (excluding summers)
Duties included pre-press (darkroom, stripping, and plating)
as well as post-press (cutting, folding, padding, collating, and
binding).
Copy Trolley, Bedford, IN
Summers of 1989, 1990, 1991
Duties included presswork and post-press as management
duties (accounts payable, accounts receivable, personnel, daily
deposits,and day to day management.
Sir Speedy, Melbourne, FL
Summer of 1988
Duties included presswork, post-press, and deliveries.
Indiana University Printing Services, Bloomington, IN
3/88 to 6/88
Duties included presswork and press loader.
Critical Risks
1. Employee problemsIn a print shop, employees are very important to the image of the business.
Counter sales people interact with the customers one-on-one and this is the
"business" as the customer sees it.
~ll
five of On Time Printing's employees will
interact with customers. While the pressman will not interact often, there are times
when the pressman will be asked to answer phones or explain orders to customers.
For these reasons On Time Printing will need to have well-groomed, polite,
dependable employees as well as having a staff with a good knowledge of printing.
Finding a good employee is very difficult, therefore each candidate for
employment will go though two interview sessions.
The first interview will be
conducted by Mr. Franklin. This interview will consist of talking with the candidate
to get a feel for the person's speech and language usage as well as questions to find
out about the candidates personality.
If
the
candidate
passes
the
character / personality interview then a second interview will be given by the key
employee with whom the candidate would work most closely. It is in this interview
that the candidate is screened for compatibility with the company culture. Some
technical questions will be asked, but the main emphasis in this interview is on
compatibility with existing employees.
Mr. Franklin will then meet with the
employee interviewer and the two will decide on the hiring of the applicant.
With this "dual interview" system it is hoped that employee turnover will be
avoided as much as possible. If the new employee works well, raises will be given
accordingly.
1
2. Loss of tenants in rental propertiesOn Time Printing owns one retail building and a two-unit apartment house
along with the building it occupies.
Total revenue from these three units is
$950/month. If all three vacated at once the revenue loss would severely strain On
Time Printings cash flow. While this could happen it is not a likely scenario. The
two-unit apartment should rent fairly easily: There are very few available rental
units in Bedford, especially ones in good condition. Both of these units are in good
condition. These two units would probably not stay vacant for over a month. The
retail building rents for $300/month. It could function as a workshop (having a
garage door on the side), as a retail building, or as a storage area. These possibilities
make it certain that the building would not be completely vacant for more than two
months. In a likely scenario the apartment units will have a yearly turnover, losing
$650/ year and the retail store will have a turnover of once every five years (the
present tenant has been there for over 30 years).
3. Established company can copy marketing strengthsIt is possible that once On Time Printing opens, other competitors might try to
imitate On Time Printing's guarantee and possibly purchase thermography
equipment.
By the time the competitors realize what the On Time Guarantee is,
On Time Printing will have established itself as the "guaranteed printer." If a
competitor would try to implement this policy quickly as an attack on On Time
Printing it is likely that this competitor will miss several deadlines and
consequently lose profits and gain a worse reputation than they previously had.
As for thermography, On Time Printing's niche will be the successful
marketing of this thermography equipment. A competitor can purchase a piece of
equipment but still would have to market this to the professionals that On Time
2
Printing has already reached through its direct mailings and literature drops.
3
Assumptions
Income Statement
1. Net Revenues
Net revenues are based on projections in three market areas. The first area is
thermo graphed letterheads, envelopes, and business cards.
According to the
Professional Business Survey 62% of this market can be obtained. By multiplying
the 145 professional offices in Bedford (Chamber of Commerce) by the $680.77 /year
average spent on these items (Professional Office Survey), net revenues for this
market equals $61,201.22.
The second revenue figure comes from the printing from the total market.
With a 10% market share of the total market of $783,822.76 (Bedford Business
Survey), the revenues from this market will be $78,382.28 (For a detailed description
See Business Description-Growth).
Adding the two figures, total net revenues for the first year of operation
equals $139,583.50. According to the NAQP 1989 Operating Ratios Study, second year
growth will be 41.7%. Second year net revenues will therefore be $197,789.82. By the
same study, third year growth will be 33.3%, thus equaling $263,653.83.
The third source of revenue is rental revenues from the two apartment units
and the retail store. The rental revenue equals $950/month.
2. Cost of Sales
The cost of sales will be 31% of sales. This percentage was the average total
cost of sales for 559 single location print shops in a survey in the NAQP 1989
Industry Ratios Study (See Appendix N).
1
3. Gross Profit
Line 1 - Line 2
= Line 3
4. Salaries
Salary expense for the first three years is broken down as follows: $V
owner /manager's salary; $11,000 for a typesetter/counter salesperson (40h
$5.50/hr.); $5,000 for a press operator (20hrs.
counter salesperson (15hrs.
@
@
$5.00/hr.); $3,375 for a part
$4.50/hr.); and $2,175 for a delivery person (1011
$4.25/hr.). Wage increases will be approximately 10%/year.
5. Payroll taxes and benefits
Social Security tax rate is 7.65% of the first $53,400 per employee. Sin(
employees make less than $53,400. Social Security tax will therefore be 7.65
Salaries.
6. State and Federal Unemployment
State Unemployment is 2.7% of first $7,000 per employee.
Fe<
Unemployment is .8% of the first $7,000 per employee.
7. Insurance
Insurance coverage is provided by Farmer's Group Insurance.
The
premium for building and equipment is $1536 per year with a $250 deductible.
8. Utilities
According to Fiddler and Associates, realtor for property, average uti
2
(water, gas, and electric) run approximately $200/month for an office building.
Given the use of copiers, presses, and cutters, the electric bill is expected to increase
by approximately $50/month.
9. Property Tax
Property tax was estimated by adding inventory, depreciated value of
machinery and equipment, and the cost of land and building. This total was divided
by 3 and multiplied by the Lawrence County tax rate of 12.6689%.
10. Repairs and Maintenance
Since all equipment purchased will be new equipment no equipment
maintenance expense is expected. Building repairs and maintenance are accounted
for. A budget of $100/month is set for these particular repairs and maintenance.
11. Advertising and Promotion
Three forms of advertising and promotion are used-newspaper, direct mail,
and literature drops. In the first six months newspaper ads (2 columns by 4 inches)
will be run weekly, costing $50/ad. After the sixth month advertising will be cut to
bimonthly. Monthly cost for the first six months will be $200. For the remaining
time monthly costs will be $100.
Direct mailers will be sent to 500 businesses monthly.
$100/month.
This will cost
After the sixth month, mailings will be mailed bimonthly, thus
costing $200/ month.
12. Depreciation
Depreciation has been calculated using straight depreciation. The years of
3
depreciation are as follows: Equipment (7), Building (30), Computers/Software (5),
Truck (5), and Land (0).
13. Accounting
According to Crouch and Associates accounting fees to prepare quarterly
financial statements will run between $300 and $500 per year.
The average of
$400/year was used for projections.
14. Telephone
The quote for telephone installation for two lines with roll over capabilities is
$109. The monthly bill is $92 with an additional $20 added for long-distance calls.
15. Vehicle, gas
The delivery truck will be driven for approximately 2 hours per day, getting 18
m.p.g and driving approximately 36 miles per day, twenty days per month.
Assuming $1.00/gallon for fuel, monthly costs equal $40.
16. Total Operating Expenses
Sum of lines 4 through 15.
17. Operating Profit (Loss)
Gross Profit (line 3) less Total Operating Expenses (line 16).
18. Interest Expense
Interest Expense is computed by multiplying the Beginning Principle Balance
for that period by the interest rate which is .0075/month.
4
19. Net Income
Net Income is Operating Profit (line 17) less Interest Expense (line 18).
20. Federal Income Tax
The federal tax rate is 15% on taxable income up to $50,000, 25% for taxable
income between $50,001 and $75,000, 34% for taxable income between $75,001 and
$100,000, 39% for taxable income between $100,001 and $335,000, and 34% for any
taxable income above $335,001.
21. State Income Tax
Taxable income is taxed at 5%.
22. Net Income After Tax
Net Income (line 19) less Federal and State income tax (lines 20 & 21).
Balance Sheet
1. Inventory
Inventory is calculated as 39% of projected sales. This figure was derived by
using industry figures from the 1989 NAQP Industry Operating Ratios. Inventory
does not fluctuate because as jobs are order stock is ordered so that inventory
maintains its original level.
2. Property and Equipment
This is the total amount paid for the buildings, land, and machinery.
5
3. Accumulated Depreciation
Property and equipment are both depreciated for a different number of years.
The Building is set at a 30 year depreciation with the land not depreciating. The
printing equipment is set at a 7 year depreciation. Both the truck and the Computers
are set at a 5 year depreciation.
4. Accounts Payable
No Accounts payables are shown because On TIme Printing believes in paying
all accounts within thirty days.
6
AS&Ul~tions
Statement
ontlme
REVENUE FORECAST ASSUMPTIONS:
(choose one revenue method below)
Method '1:
Month I y doll ar revenues ..•••••.......•.
Rental revenues ..•.••.••••..••••.••••..
Method '2:
Firs t month revenues ••..•••••••••••••••
Monthly Increase In revenues •••••••••.•
INCOME STATEMENT ASSUMPTIONS:
Cost Of Sales: (choose one method below)
Method '1: Percent of lales ••••••••••••
Method '2: Monthly dollar amount ••••••.
Monthly Salaries and Wagel:
Salaries ••.••..•••••••••••••••••••.•.••
Payroll tax and benefl t rate •..••••.•••
Monthly Occupancy Expense:
Insurance ••..•••••.••••••.....•.••••...
Ut III ties ••••••...•.•••••.•.••..••••.•.
State and Federal Unemployment ••.•.....
Repairs and maintenance .•••••••••.••••.
Monthly Operating Expenses:
Advertising and promotion •.••••.•••••••
Office expense •••••.•..••••.••••••••••.
Account i ng .••.••••.•••...•.••••.•.••...
Stationery and printing ..•••••.••••••••
Telephone ••.••••.•..•••••..•.•..•••••.•
Vehicle, gas .......•••..••.•.••••.•.••.
Federal Income rax •.•....••••.••••••.••
State Income Tax •...••••••..••.••••.••.
Other .....•.....•••.•.••.•••.•..•..•••.••.
BALANCE SHEET ASSUMPTIONS:
Property And Equipment Purchased:
Printing equipment
Printing equipment cost •••.•.•••.•••
Period of purchase, equipment •••••.•
Depreciation in years, equipment .•..
Building
7/31/92
ontime
8/31/92
ontime
._-------
---------
9/30/92
onthlll
-. _.. _----
S11,632
950
S11,632
S11,632
$11,632
$11 ,632
$11,632
S11,632
S11,632
OX
OX
OX
OX
OX
OX
OX
10/31/92
ontime
11/30/92
ont lme
12/31/92
ontlme
1/31/93
ontlme
2/29/93
ontlme
3/31/93
ontlme
4/30/93
ontlme
-............ _-
$11,632
OX
.......... _.. _- -- ........ --- ---- .......... -..... _-- .... - ..... _--- ......
. -. _-----
5/31/93
ontlme
---------
6/30/93
ontlme
---- .. _ .. _-
Year 1
ont lme
..................
$11,632
$11,632
S11,632
$139,584
11,400
OX
OX
OX
OX
so
OX
so
291
SO
S3,705
7.n.
29X
SO
S3,705
$l,705
S3,705
$l,705
S3,705
$l,705
$l,705
S3,705
$l,705
$l,70~
S3,705
$128
S250
S71
SO
S424
$50
S33
$0
S221
S40
$0
0
144,460
7.n.
$1,536
$l,OOO
S852
SO
S274
S274
S274
S274
$274
S274
$274
$274
$274
$274
S274
S33
$34
$33
$33
S34
S33
S33
S34
Sl3
S33
S34
$112
$112
S112
S112
$112
S112
$112
S112
S112
S112
S112
Sl,438
1600
1400
$0
$1,453
1480
SO
0
SO
SO
S61,672
1
7
S61,672
7
Depreciation in years, building •.•.•
30
30
S13,541
S13,541
C~ters
C~ters cost ••••••••••••••••••••••
Period of purchase, computers •••••••
Depreci.tlon In ye.rs, computer •••••
Truck
.
Truck cost ......................... .
Period of purchase, truck •••••••••••
Depreciation in years, truck ••••••..
land
land cost. ......................... .
Period of purch.se, l.nd ••••••••••••
Depreci.tion in years, l.nd .••••••••
Initl.1 Inventory ..................... .
Base Period Depreciation In year ••••••••••
CASH FlOU ASSUMPTIONS:
Base Period Accounts Receivable Received ..
Monthly Revenues Collected:
X Collected 0-30 days ................. X Collected 31-60 days ................ .
X Collected 61-90 days ....•..•.••••••.•
X Collected 90+ days .................. .
Total Monthly Revenues Collected ..••..•• -.
Base Period Accounts Payable Paid .•••••...
Monthly Expenses Paid:
X Paid 0·30 days ...................... .
X Paid 31·60 days ••••••••••..••••••••.•
X Paid 61·90 days ••••••.••••.••••••••••
X Paid 90- days •...•••••..••••.•••••.•.
1
1
5
5
16,839
16,839
5
1
5
S16,OOO
S16,OOO
1
1
o
o
14,607
O.OX
_. __ .----
PROJECTED BREAKEVEN
Variable Portion
Variable Portion
Variable Portion
ASSUMPTIONS:
Of Cost Of Sales .•••.•...
of Salaries And Uages ....
Of Operational Expenses ..
so
so
so
so
so
so
so
so
so
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX·
O.OX
--------- --------- --------- --------- --------- _.------- --------- --------- --------- --------O.OX
O.OX
.=====~=3
O.OX
•••::=:=:
O.OX
_:==:::::
O.OX
.=.=~=...
O.OX
aca:_:::=
O.OX
•••• :a...
O.OX
._=:::...
O.OX
a.a==_:=:
O.OX
100.0X
======:=
O.OX
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
====_::== =========
.a~===:3~
100.0X
83=&a==== ========= ======... a: ••• ==xa .====a=:= a:=:::::: s:==:::::
9.0X
180
S2,OOO
9.0X
180
S2,OOO
S30, 000
S150,OOO
O.OX
O.OX
O.OX
O.OX
100.0X
O.OX
O.OX
O.OX
100.0X
O.OX
O.OX
O.OX
100.0X
O.OX
80.0X
15.0X
4.0X
LOX
========= ==:=:::_= ====_::::
O.OX
14,607
1
100.0X
===:::::=
Notes Payable:
Annual note interest rate •••••••••••..•
Term of note in months ••.•••.•••••••.•.
Min i IIU1l Cash Ba lance ..••.....•....•....•.•
Additional Funding:
New equi ty.. • • . . . . . . . . • . • • • • • . . • .. . . . . .
New debt (notes payable) .••..•.••••••..
so
80.0X
15.0X
4.0X
LOX
--------Total Monthly Expenses Paid .•••••••.•.....
so
1
SO
SO
SO
SO
SO
SO
so
SO
SO
SO
SO
SO
SO
SO
SO
SO
so
SO
SO
SO
SO
so
S30,000
S150,OOO
O.OX
O.OX
O.OX
A.. ~tlonl Stlt-.t
anti ...
Qtr 1
Qtr 2
Qtr 3
Qtr 4
ont lme
ontlme
ont lme
ontlme
Y"ar 1
antlme
Qtr 1
Qtr 2
Qtr 3
Qtr 4
antlme
ontl ...
ontlme
ontlme
Yeer 2
ont lme
Qtr 1
ont ime
Qtr
Qtr 3
Qtr 4
Year 3
ontlm
ontlme
ontlme
ontl ...
REVUUE FORECAST ASS ..... PTlONS:
(choose one revenue method ""low)
Method ":
Monthly dollar revenues •..•.••..•••••..
134,896
134,896
134,896
S34,896
1139,584
S49,446
149,446
S49,446
149,446
S 197,784
$65,913
165,913
165,913
165,913
S263,652
Rental revenues ••.•...••.....••.•.•..••
2,850
2,850
2,850
2,850
11,400
2,850
2,850
2,850
2,850
11,400
2,850
2,850
2,850
2,850
11,400
10
SO
SO
$0
OX
SO
10
SO
OX
SO
OX
SO
OX
SO
OX
$0
OX
SO
OX
SO
OX
SO
OX
SO
OX
OX
OX
OX
OX
Method '2:
FI rs t month revenues ...•.....••.•.•.•••
Monthly Increose In revenues •.•..•.••••
INC~E
OX
STATEMENT ASS .....PTlONS:
Cost Of Sale .. (choose one method ""low)
Method ,,: Perc''"t of sales .....•..••.•
29lt
29lt
SO
29X
SO
29X
29%
SO
SO
29X
SO
29X
SO
29lt
SO
29X
SO
29lt
SO
291:
so
29X
SO
29X
Method 112: Monthly dollar IIfI1<Mlt ••••.••
Monthly Salaries and IInges:
SO
SO
29X
SO
29X
SO
Salnries...............................
111,115
111,115
111,115
111,115
144,460
114,415
7.n.
"4,4'5
$14,415
S14,415
7.n.
7.n.
7.n
7.n
7.7'/.
7.n
S17,928
7.7'/.
171,712
7.n.
$17,928
7.7'X
117,928
7. n.
S57,660
7.7'/.
S17,928
P.yroll tnx .nd benefit r.te...........
Monthly Occupancy Ex~n.e:
7.n
7.7'/.
7.n
S384
S1,536
S3,OOO
1384
S384
1750
$384
S384
S750
S384
S384
1384
S750
S213
S213
S750
S213
S750
S213
S750
1213
11,536
S3,OOO
S213
S1,536
S3,OOO
S652
$384
S750
SO
SO
SO
SO
SO
10
10
1852
SO
I nsUrarlC@ • •••••••..•.••••.••• ; •••••••••
1384
Utilities ...•...•••..•.••••..••.••.•••.
State and Federal U~loyment .••••••••
1750
1213
S384
$750
1384
1750
$213
Repel r. and INIlntenance ••.•.••••••.••••
Monthly Operating Ex~.el:
10
SO
S213
SO
Advertising and promotion .•..••..•••.•.
$972
Offfce ex~nse .....•...•..•....•••••..•
$150
$100
1822
S150
Account Ing •...•.......•••....•••••••••.
Stationery and printing •...•....•.•••.•
10
1445
hlephone •••.•.•.....•.......••••••••••
V.hlde, gas •......•...••..••••..•.•••.
Fed"r.1 Inc""", Tex .....•...•.•.••••••••
State Inc""", Tex •..••.••••••.•.••••••••
1100
1750
$213
1852
S750
S213
SO
SO
10
S822
$150
$100
1822
$150
$100
$3,438
1822
S822
S622
1822
13,268
1822
1822
1822
1822
S3,288
1600
$150
$150
S150
S150
S150
S100
S100
SO
S100
SO
$1,453
S100
$0
S100
SO
S150
S100
10
1160
1400
1150
1100
S100
SO
1600
1400
SO
S336
S120
S336
S1,344
S120
1480
SO
SO
SO
o
SO
SO
$120
$0
1336
S120
10
1336
S120
10
SO
$336
.,20
$0
a
o
o
o
1480
$0
1213
SO
SO
$336
S336
S120
SO
S120
$0
1120
$0
10
1600
1400
SO
11,344
1480
SO
o
o
o
o
1336
$120
10
1336
10
S336
S120
S336
SO
S120
SO
o
o
o
o
o
o
$0
so
$0
$0
$0
so
$0
SO
SO
10
SO
so
SO
SO
SO
Print Ing equipment cost.............
161,672
161,672
161,672
161,672
161,672
161,672
161,672
161,672
161,672
161,672
161,672
161,672
S61,672
161,672
S61,672
Period of purchao", equlpment.......
D"pr~letion In years, equipment....
Building
1
7
1
7
1
1
1
1
1
7
7
7
7
1
7
1
7
1
7
1
7
1
7
7
7
7
Building cost.......................
Period of purchase, building .•••••••
Oepreelat Ion In yeare, building.....
COIIfJUter.
COII'DUter. cost.......
174,000
$74,000
S74,OOO
174,000
$74,000
$74,000
174,000
$74,000
174,000
S74,OOO
174,000
S74,OOO
174,000
S74,OOO
$74,000
1
1
30
1
30
1
1
30
1
30
1
30
1
30
1
30
1
30
1
30
1
30
30
Other •........•....••••••••.•.•..•.•••••••
BALANCE SHEET ASSlA'tPTIONS:
Property And Equipment Purchased:
Printing equipment
30
tn
~L I
30
"1' 11;./.1
iI:''II:.I..
..11:
£1.4
.... rl.
30
30
1
-----.-~---
Trud
Truck cost. .....•.........•••......•
of purchase, truck .•.••••••••
S6,839
1
S6,839
S6,839
S6,839
S6,839
S6,839
S6,839
1
I
1
5
1
5
5
5
5
1
5
1
5
D~r~clatlon In years, truck. ••.••••
lend cost. ...•..........•....••.••..
S16,OOO
S16,OOO
S16,OOO
S16,OOO
$16,000
S16,OOO
$16,000
$16,000
Period of purchose, land ....•....•.••
1
1
I
I
1
1
1
I
Depreclotlon In years, land .•••.••..
o
o
o
o
o
o
o
Initial Inventory ...••.•.•..••....•....
S4,607
SO
SO
SO
14,607
SO
SO
I
I
1
I
P~r I od
S6,839
I
S6,839
S6,839
1
S6,839
1
1
S6,839
1
5
5
5
5
S16,OOO
I
S16,OOO
S16,OOO
I
$16,000
1
o
o
o
o
SO
SO
SO
1
1
1
S6,839
S6,839
S6.839
S16,OOO
I
S16,OOO
1
516,000
o
o
o
o
SO
SO
SO
50
SO
1
1
1
1
5
lend
8ese Period
Depr~clatlon
In Yeers ........ .
I
1
CASH FUN ASSUMPTIONS:
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
X Collected 0-30 days •.••.••..••••.••••
80.0X
80_0X
8O.0X
8O.0X
80.0X
15.0X
4.0X
4.0X
4.0X
4.0X
15.0X
4.0X
15.0X
X Collected 61-90 days •.....•.•...•.•••
15.0X
4.0X
80.0X
15.0X
80. OX
15.0X
4.0X
8O.0X
15.0X
80.0X
15.0X
80.0X
15.0X
8O.0X
15.0X
4.0X
8O.OX
15.0X
80.0X
15.0X
80.0X
15.0X
80.OX
X Collected 31-60 days .•.••••••••.•.••.
4.0X
4.0X
4.0X
4.0X
X Collected 90- days ....•..•.•••••.....
1. OX
1. OX
1.0X
1. OX
1. OX
Total Monthly Revenues Collected ...•......
100.0X
100.0X
100.0X
100.0X
Base Period Accounts Receivable Received .•
Monthly Revenues Collected:
4.0X
1. OX
4.0X
1.0X
15.0X
4.0X
1. OX
1. OX
1.0X
1. OX
1. OX
1. OX
1. OX
1. OX
100.0X
100.0X
100.0X
100.OX
100.0X
100.0X
100.0X
100.0X
100.0X
100.0X
100.0X
esaZ'S2:::=C
15.OX
s • • • s:::z.
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
X Paid 0-30 days ...•.•.•.•.....•.••.•..
100.0X
100.0X
100.0X
100.0X
100.0X
100.0X
100.0X
100.0X
100.0X
l00.0X
100.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O_OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
100.0X
O.OX
100.OX
O.OX
O.OX
100.0X
O.OX
100.0X
X Paid 31-60 days ..••.....••••..••...•.
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
100.0X
100.0X
100.0X
100.0X
l00.0X
100.OX
100.0X
100.0X
100.OX
100.0X
100.0X
100.0X
100.0X
100.OX
100.0X
Annual note interest rate ••..•.....•.•.
9.0X
9.0X
9.0X
9.0X
9.0X
9.0X
9.0X
9.0X
9.0X
180
9.OX
180
9.0X
180
180
180
180
180
180
180
$2,000
$2,000
S2,OOO
52,000
S2,OOO
52,000
180
S2,OOO
180
Mini ..... Cash Balance ..................... .
180
S2,OOO
9.0X
180
9.0X
180
9.0X
180
9.0X
Term of note in months .•.•..•.•••.•.•.•
$2,000
$2,000
$2,000
52,000
52,000
S2,OOO
S2,OOO
New equity ......... _...................
S30,OOO
SO
50
SO
SO
SO
so
SO
SO
SO
5150,000
SO
SO
so
New debt (notes payable)...............
SO
SO
SO
SO
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
Base Period Accounts Payable Paid ••.•.•...
Monthl y Expenses Paid:
X Paid 61-90 days ....•••.•..•.....•••.•
X Paid 90+ days ........•.••....•••••••.
Total Monthly Expenses Paid ..•..•.•....•..
s:::........ .....::2... ..::1.: ••••
Notes Payable:
Acldl tional Funding:
so
so
so
SO
$30,000
so
SO
5150,000
SO
SO
50
SO
PROJECTED BREAKEVEN ASSUMPTIONS:
Variable Portion Of Cost Of Sales ....... ..
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
Variable Portion of Salaries And \lages •.. _
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
O.OX
Variable Portion Of Operational Expenses ..
Income St.t_nt
ontl ..
7/31/92
onthlll!
11/31/92
ontlme
9/30/92
ontlme
10/31/92
ontl..
11/30/92
ontl..
12/31/92
1/31/93
2/29/93
3/31/93
4/30/93
5/31/9J
6/30/93
ontlme
ontlme
ontlme
ontlme
ontlme
ont lme
ontim
Year 1
ont lme
SII~ •••••••••••••••••••••••••••••••••
$12,582
3,373
$12,582
3,313
$12,582
3,373
$12,5112
3,373
$12,582
3,373
$12,582
3,373
512,582
3,373
$12,582
3,373
512,582
3,373
$12,582
3,373
512,582
3,373
512,582
3,l73
5150,964
40,479
Grosl Profl t ................................ .
9,209
9,209
9,209
9,209
9,209
9,209
9,209
9,209
9,209
9,209
9,209
9,209
110,505
Oper.tlng Expenses:
S.I.ry .nd w.g~t
S.I.rle............................... .
Plyroll tlxes Ind benefit ••••••••••••••
Stlte end Federll Unemplo~t •••••••••
3, 70s
3,705
285
3,705
285
3,705
3,705
285
3,705
285
3,705
285
71
71
71
71
71
3,705
285
71
71
3,705
285
71
3,705
285
71
3,705
285
71
3,705
285
44,460
3,423
852
1211
250
675
128
250
655
128
250
651
1211
250
648
1211
250
644
1211
250
640
1211
250
636
128
250
632
128
250
629
1211
250
625
128
250
621
617
1,536
3,000
7,674
o
o
o
o
o
o
o
o
o
o
o
o
o
424
1,279
50
274
1,279
50
274
1,279
50
274
1,279
50
33
33
274
1,279
50
34
3l
274
1,279
50
33
274
1,279
33
274
1,279
50
34
274
1,279
50
33
274
1,279
50
33
274
1,279
50
33
274
1,279
50
34
3,438
15,353
600
400
o
o
o
o
o
o
o
o
o
o
o
o
o
221
40
112
40
112
40
112
40
112
40
112
40
112
40
112
40
112
40
112
112
1,453
40
112
40
40
480
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
Totll oper.tlng expenses ................ ..
7,162
6,883
6,880
6,1175
6,1172
6,869
6,864
6,860
6,857
6,853
6,849
6,846
82,670
Operltlng Profit (Loss) ..................... .
Inter~st Expens~ ........................... ..
2,047
1,125
2,326
1,122
2,329
2,333
1,116
2,337
2,340
1,113
1,110
2,345
1,107
2,349
1,104
2,351
1,101
2,356
1,097
2,360
1,094
2,363
1,091
27,835
1,119
Income Before 1.x ....................... .
922
1,204
1,210
1,217
1,224
1,230
1,238
1,245
1,251
1,259
1,266
1,272
14,536
federll ,.x ................................ ..
Stlte
138
46
181
60
182
60
183
184
61
185
62
186
62
187
62
188
63
189
63
190
63
191
61
2,164
727
$738
5963
5974
5979
$984
$990
5996
51,000
51,007
51,012
S1,017
N~t R~venues •••••••••••••••••••••••••••••••••
Cost Of
285
71
285
71
Occ~y IlCpenSl'
lneur.nce, clsual ty .................. ..
Uti I Itll•••••••••••••••••••••••••••••••
Property t.x ......................... ..
lIepelrl end .. Intenencl .............. ..
Operltlonel expensel
Advertiling end prOlllOtlon ............. .
Depreclltlon .......................... .
Off I ce expensl ........................ .
Profe •• lonel fees ..................... .
St.tlonery end prlntfng .............. ..
'elephone ............................ ..
Vehlchle, gl .......................... .
other ••••.•••••••••••••••••••••••••••••
Other 3 ............................... .
N~t
'.11 ................................... .
Net Income (Loss) .......................... ..
z==sc=e== ========u
5967
.=.c~===.
_=._ ..:.e ••••••••• a= •• :=:EZ a=======z ========= ========= ========= =========
128
250
50
34
64
11,299
S11,625
Beillne~ She~t
ant lme
7/31/92
ontlme
8/31/92
ant lme
9/30/92
ontlme
10/31/92
ontlme
11/30/92
ontlme
12/31/92
ontlme
C~9h end PqUlvel.mu .................. .
Acco\XlU receivAble, net. ..••••..•.....
Inventory ....•...........•••.....••...•
Other curr~nt essets ••....••..•••••.•.•
S2,450
2,512
S4,607
$3,668
3,1]6
$4,607
$5,391
3,257
$4,607
'7,244
3,252
$4,607
'9,098
3,248
$4,607
SlO,955
3,243
14,607
112,814
3,238
$4,607
o
o
o
o
Total cur rente!:s~t9 .....•......••..•..
9,569
Property And EquiplW'nt, net
Property rmd PqUlpment, CMt. ••••••••••
Less: Accumuleted depr~cletlon .•.•••...
To181 property "net equipment, net. .....
1/31/93
ontlme
2/29/93
ontlme
301/93
ont ime
4110/93
ontlme
5/31/91
ont ime
6/30/93
ont im
Y.. sr 1
ontime
ASSETS
Curr~nt A9,et~:
Other
A~'~t~
.............•••........•.••..
Total Assets ..........................•...
°
°
°
$14,676
3,233
$4,607
°
"6,540
3,229
$4,607
118,407
3,224
$4,607
$20,276
3,219
$4,607
$22,147
$4,607
$22,147
3,214
$4,607
o
o
o
o
o
3,21 f,
11,4 "
1],256
15,103
16,953
18,805
20,659
22,517
24,376
26,238
28,102
29,968
29,968
172,052
1,279
172,052
2,559
172,052
3,838
172,052
5,118
172,052
6,397
172,052
7,676
172,052
8,956
172,052
10,235
172,052
Tl,515
172,052
12,794
172,052
14,074
17<',057.
15,353
172,052
15,353
170,773
169,493
1611,214
166,934
165,655
164,376
163,096
161,817
160,537
159,258
157,978
156,699
156,699
o
o
o
o
o
o
o
o
o
o
o
'183,180
$183,756
$18",333
$184,913
SI86,667
SI86,667
=======~=
========= =========
$180,341
S180,905
$181,469
°
$182,037
°
$182,608
========= ========= ass::=:== =:,t===== ==a=_==== ========= =========
$185,496
Sf86,081
=:::======
====~====
LIABILITIES AND STOCKHOLDERS' EOUITY
Curr~nt llllbllltl~9:
peyebl~ ..................... ..
portion of long·term d ..bt .....•
Accrul'd e~"..ns!'s ......•......•.••......
$0
10,000
$0
10,000
$0
10,000
$0
10,000
$0
10,000
SO
10,000
SO
10,000
SO
10,000
SO
10,000
$0
10,000
SO
10,000
SO
10,000
SO
10,000
o
o
o
o
o
o
o
o
a
o
o
a
o
Totel eur,"nt I lAbilities ............. .
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10 ,000
Long· Term Debt. .......................... .
139,604
139,204
138,802
138,396
137,988
137,577
137,162
136,744
136,323
135,900
135,472
135,Of.2
135,042
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
o
o
o
o
o
o
o
o
o
o
o
o
o
738
1,700
2,667
3,641
4,620
5,604
6,594
7,589
8,589
9,596
10,608
11,625
11,625
Totel stockholdero;' equity ........... ..
30,738
31,700
32,667
33,641
34,620
35,604
36,594
37,589
38,589
39,596
40,608
41,625
41,625
Totnl Linbilltl!'s Ar~ Equity ..............
S180,341
$180,905
S181,469
$182,037
S182,608
$183,180
$183,756
S18",333
$10~,913
$105,"96
$186,081
$186,667
S186,667
~~===~~~~
=========
====e===~
==~ee====
========= ========= =========
~====~---
~~==~ __ ~=
=======~=
=~====~==
YES
YES
YES
YES
YES
YES
YES
YES
ACCOlJ1U
Curr~nt
Stockholders' Equity:
Contributed CApitel .................. ..
R!'Uined eArnings (deficit) .......... ..
Curr!'nt I'Ar nlngs (def lei t) . . . . . . . . . . . . .
Does thl' BAlAnce Sheet belance? ....•........
YES
YES
YES
YE
YES
cash Flow Stlltement
ontll11@
7/31192
ont I 111@
c",h
R~c~lv~
8/31192
9/30192
10/31/92
11/30192
12/31/92
ont II11@
ont'l11@
ont'l11@
ontll11@
ontll11@
1131193
ontll11@
2129193
ontlme
3tJl/9J
ontlme
4130/93
ont lme
501/9J
ont lme
6130/93
ont im
Year 1
ontime
(Inflows)
Recelvabl~8 coll~ct~:
so
so
B",e ~rlod acc~lt8 recelvebl~ coll~ ••
Period revenue~ coll~ct~ .••.•.•••••.••
10
10,070
11,958
10
12,461
10
12,587
10
12,587
10
12,587
10
12,587
10
12,587
SO
12,587
SO
12,587
SO
12,587
SO
12,587
147,nO
rec~lpt9 .•.•••.••..•.••••••••.•
10,070
11,958
12,461
12,587
12,587
12,587
12,587
12,587
12,587
12,587
12,$,87
12,587
147,no
(OUtflows)
accounts payebl~ peld •••••••••
p~rlod ~x~nges paid .•..••••.•••••.•••.•••
S"II,rles and wllges paid ••.••.•••.••••••.••
"'xes paid .........•...•••.•.•.•••••••.••.
o
o
o
o
o
o
o
o
o
o
181,853
4,061
184
4,915
4,061
241
4,913
4,904
4,061
245
248
4,890
4,061
251
4,881
4,061
4,893
4,061
249
4,885
242
4,901
4,061
247
4,897
4,061
4,908
4,061
244
4,061
252
4,061
253
Totel cash disbursements •••••••.••••••••••
186,099
9,218
9,216
9,213
9,211
9,209
9,206
9,203
9,202
9,198
(176,029)
2,740
3,244
3,374
3,376
3,378
3,381
3,383
3,385
1,119
402
3,668
1,116
405
5,391
1,113
1,110
1,107
408
7,244
411
415
o
1,122
399
2,450
9,098
10,955
1,104
418
12,814
1,101
421
14,676
.. .......
n,668
15,391
17,244
19,098
110,955
112,814
114,676
o
o
o
o
o
o
o
o
o
o
o
o
S5,391
17,244
19,098
110,955
Total cAsh
Cllsh
Dhburs~
Ra~~ ~rlod
Operating cash Surplus
(O~flclt)
•.••...••..••
Le~,:
Notes Payable Int~rest PaYl11@nts .•.•••..
Notes Payable Principal Payments ••••••.
Add: Beginning Of Honth Cash 811Ience •••.•••••
le~~:
Ca~h
Rllllmce Before funding..................
Additional funding
New PqUity .............................. ..
New debt (notes pnyllble) ................ ..
frld; ng
Cnsh On I "ncf' .•..•.•..••••••••..••..•••
1,125
396
30,000
150,000
S2,~50
13,668
========= ========= ========= ========= ========= :::::::::
Is Additionnl Funding Required? ............. .
If YES, pleAse enter your amount In the
"NI'w equity" Dr "New debt" (Notes Pey)
rows on the Assumption Stetement.
Your Hlnlmum CA~h Requirement UIIS .••••.•..•.•
Th~ CII~h Needed To Fund Your Venture Is •..•.•
NO
S2,000
SO
NO
NO
NO
NO
NO
112,814
========~
NO
o
o
4,879
4,061
235,720
255
2,911
9,196
9,194
287,366
3,388
3,391
3,392
(139,596)
1,097
424
16,540
1,094
427
18,407
1,091
430
20,276
13,299
4,958
116,540
118,407
S20,276
S22,147
o
o
o
o
o
o
o
o
o
o
114,676
S16,540
118,407
S20,276
o
========= ========= ========= =========
NO
NO
NO
NO
'22,147
====:==~
48,735
o
***.*.***
30,000
150,000
S22,147
::====::=
N
$2,000
SO
Income Statement
ontime
Qtr 1
ontime
Qtr 2
ontime
Qtr 3
ontime
Qtr 4
ontime
Year 2
ontime
Revenues •••.••••.•••••.••••••••.••••••••.
Cos t Of Sa l es ••••••••••.•..••.••••••••••••.••
$52,296
14,339
$52,296
14,339
$52,296
14,339
$52,296
14,339
1209,184
57,357
Gross Profit •••••••••••••.•••••••••••••••••••
37,957
37,957
37,957
37,957
151,827
14,415
1,110
213
14,415
1,110
213
14,415
1,110
213
14,415
1,'10
213
57,660
4,440
852
384
750
1,829
384
384
384
750
1,795
750
1,761
750
1,n7
1,536
3,000
7,113
o
o
o
o
o
822
3,838
150
100
822
822
3,838
150
100
3,838
150
100
822
3,838
150
100
3,288
15,353
o
o
o
o
o
336
120
336
120
336
120
336
120
1,344
o
o
o
o
o
o
o
o
o
o
TotaL operating expenses •.•••••••...•..•••
24,068
24,033
23,999
23,965
96,066
Operating Profit (Loss) ••.••••••••.•••.•.•••.
Interest Expense •..•.•••••.•..•..••.•••..••.•
13,889
3,254
13,923
3,224
13,957
3,194
13,991
3,163
55,761
12,834
Net Income Before Tax •..••.......•••.••..•..•
10,635
10,699
10,764
10,829
42,927
Federal Tax .•.•..•...••••••...••.••...•..•...
State Tax ••......•..•••.••.•.•..•.......•...•
1,596
532
1,605
535
1,614
538
1,624
541
6,439
2,146
$8,508
$8,559
=========
$8,612
=========
$8,663
=========
$34,342
=========
Het
Operating Expenses:
Salary and wages
Sa l ar i es •••••••••••••••••••••••••••••••
PayrolL taxes and benefits •••••••••••••
State and FederaL Unemployment •••••••••
Occupancy expenses
Insurance, casualty ••••••••••••••••••••
Utilities ••••••••••••••••••••••••••••••
Property tax •••••••••••••••••••••••••••
Repairs and maintenance ••••••••••••••••
Operational expenses
Advertising and promotion ••••••••••••••
Depreciation •••••••••••••••••••••••••••
Office expense •••••••••••••••••••••••••
Professional fees ••••••••••••••••••••••
Stationery and printing ••••.••••••.•.••
Telephone ••••••••••••••••••••••••••••••
Vehichle, gas •••••••••••••.••••••••••••
other •••••••••••••••••••••••.••••••••••
Other 3 .••.•••.•••..•••..••••.•.•••••.•
Net Income (Loss) ........•..................•
==~======
600
400
480
BaLance Sheet
ontime
Qtr 1
ontime
ASSETS
Current Assets:
Cash and equivaLents •.....•...•.•••.•••
Accounts receivabLe, net ..•••..•••..•.•
Inventory .•.•...•.••.•..••••.••••••••••
Other current assets .•.•.••••••••••••.•
Qtr 2
ontime
Qtr 3
ontime
Qtr 4
ontime
Year 2
ontime
S31,936
4,461
14,607
143,007
4,447
14,607
S54,101
4,433
14,607
165,215
4,418
14,607
165,215
4,418
14,607
o
o
o
o
o
Total current assets •••••••••••••••••••
41,004
52,061
63,140
74,240
74,240
Property And Equipment, net
Property and equipment, cost •••..••••••
Less: Accumulated depreciation •••••••••
1n,052
19,191
172,052
23,029
1n,052
26,868
1n,052
30,706
172,052
30,706
Total property and equipment, net ••••••
152,861
149,023
145,184
141,346
141,346
o
o
o
o
S208,325
S215,586
S215,586
Other Assets •••.•••••..•••••••••••.•••••.•
Total Assets ••••....•••.•....•.•.•..••••..
o
S193,865
S201,084
:=::===== ========= ========= ========= =========
LIABILITIES AND STOC~HOLDERS' EQUITY
Current Liabilities:
Accounts payable ..••...•.•.•••..••••..•
Current portion of long-term debt .••..•
Accrued expenses .........•••••.•..•...•
SO
10,000
SO
10,000
SO
10,000
SO
10,000
SO
10,000
o
a
a
o
o
Total current liabilities •...•....••..•
10,000
10,000
10,000
10,000
10,000
long-Term Debt........................ •...•
133,731
132,391
13 1,021
129,619
129,619
30,000
30,000
30,000
30,000
30,000
o
o
a
a
o
20,133
28,692
37,304
45,967
45,967
50,133
58,692
67,304
75,967
75,967
$193,865
$201,084
$208,325
$215,586
$215,586
Stockholders' Equity:
Contributed Capi tal ..........••.......•
Retained earnings (deficit) ........... .
Current earnings (deficit) ............ .
Total stockholders' equi ty ............ .
Total Liabilities
And
Equity ..............
========= ========= ========= ========= =========
Does the Balance Sheet balance? ............ .
YES
YES
YES
YES
YES
Cash FLow Statement
ontime
Qtr 1
ontime
Qtr 2
ontime
Qtr 3
ontime
Qtr 4
ontime
Year 2
ontime
Cash Received (Inflows)
Receivables collected:
Base period accounts receivable colle ••
Period revenues collected ••••••••••••.•
$0
$0
so
SO
so
51,049
52,310
52,310
52,310
207,980
Total cash receipts •••••••••••••••••••••••
51,049
52,310
52,310
52,310
207,980
Cash Disbursed (Outflows)
Base period accounts payable paid ••••••••.
Peri od expenses pa i d ••••••••••••••••••••••
Salaries and wages paid •••••.•••••••••••••
Taxes pai d ••••••••••••••••••••••••••••••••
o
o
o
o
o
18,831
15,738
2,128
18,797
15,738
2,140
18,763
15,738
2,152
18,728
15,738
2,165
7S,118
62,952
8,585
Total cash disbursements ••••••••••••••••••
36,696
36,67S
36,653
36,632
146,655
Operating Cash Surplus (Deficit) •••••••••••••
14,353
15,636
15,658
15,678
61,325
Less: Notes Payable Interest Payments ••••••.•
Less: Notes Payable PrincipaL Payments •••••••
Add: Beginning Of Month Cash Balance •••••••••
3,254
1,311
22,147
3,224
1,340
31,936
3,194
1,371
43,007
3,163
1,402
54,101
12,834
5,423
22,147
Cash Balance Before Funding..................
$31,936
$43,007
S54,101
165,215
165,215
Additional Funding
New equity ••••.•.••••.•.••••••••••••••••••
New debt (notes payable) •••••••••••••.••••
o
o
o
o
o
o
o
o
Ending Cash BaLance..........................
$31,936
=========
o
o
$54,101
S43,007
165,215
165,215
========= ========= ========= =========
Is Additional Funding Required? •••••••••••.•
If YES, please enter your amount in the
"New equity" or "New debt" (Notes Pay)
rows on the Assumption Statement.
Your Minimum Cash Requirement Yas •.•..•.•.•..
The Cash Needed To Fund Your Venture Is ..... .
$2,000
SO
S2,000
SO
$2,000
SO
S2,000
SO
S2,000
SO
Income Statement
ontime
Qtr 1
ontime
Qtr
ontim
Qtr 3
ontime
Qtr 4
ontime
Year:
ontill'M
Net Revenues ••••••...•••.•.••••••••••••••••••
Cos t Of Sa l es •...•.•.•••••..•••••••••••••••.•
568,763
19,115
568,763
19, 115
568,763
19,115
$68,763
19,115
$275,052
76,459
Gross Profit ••.•.•.•.••.•...••••••.••••••••••
49,648
49,648
49,648
49,648
198,593
17,928
1,380
213
17,928
1,380
213
17,928
1,380
213
17,928
1,380
213
71,712
5,522
852
384
384
384
384
750
1,693
750
1,659
750
1,625
750
1,591
1,536
3,000
6,568
o
a
o
a
a
822
822
3,838
150
100
822
3,838
150
100
822
3,838
150
100
3,288
15,353
600
400
Operating Expenses:
Salary and wages
Salaries •••••••••••••••••••••.•••••••••
Payroll taxes and benefits •.•••••••••••
State and Federal Unemployment •••••••.•
Occupancy expenses
Insurance, casualty ..•••.••••••••••••••
Utilities .••••••••••.••••••••••••••••••
Property tax •••••••••••••••••••••••••••
Repsi rs and maintenance ••••••••••••••••
Operational expenses
Advertising and promotion ••••••••••••••
Depreciation •••••••••••••••••••••••••••
Office expense ••••••••.••••••••••••••••
Profess i ona l fees ••••••••••••••••••••••
Stationery and printing ••••••.•••••••••
Telephone ••••.•••••••••••••••••••.•••••
Vehichle, gas .•••••••••••..••••••••.••.
other .••••.•••.•••.•.•.•..•••••.•.•.•.•
Other 3 •.•.•...........•.....•.••...•.•
3,838
150
100
a
o
a
a
a
336
120
336
120
336
120
336
1,344
480
a
o
a
o
a
a
a
a
o
120
a
Total operating expenses ..••••.•...•.•••••
27,715
27,681
27,647
27,613
110,655
Operating Profit (Loss) .....•...•.••......•..
Interest Expense .....•••........••..•........
21,933
3,131
21,968
3,098
22,002
3,065
22,036
3,031
87,938
12,325
Net Income Before Tax •...•.........•.......•.
18,803
18,869
18,937
19,005
75,613
Federal Tax ..•.......••.•....................
State Tax .............•....•......•..........
2,820
940
2,831
4,752
13,905
943
3,502
947
950
3,781
$15,043
$15,095
$14,488
$13,302
$57,928
Net Income (Loss) ........................... .
========= ========
========= ========= =========
Balance Sheet
ontime
Qtr 1
ontime
ASSETS
Current Assets:
Cash and equivalents •••..••••••.•••••••
Accounts receivable, net ••.••••••••••.•
Inventory •••.•..••••••••••••••••••••••.
Other current assets ..••.••••••••••••••
Qtr 2
ontime
Qtr 3
ontirne
Qtr 4
ontirne
Year 3
ontfrne
sal,249
5,831
S4,607
$98,731
5,817
$4,607
$115,572
5,803
$4,607
S131,193
5,788
S4,607
S131,193
5,788
S4,607
o
o
o
o
a
Total current assets •••••••••••••••••••
91,688
109,155
125,981
141,589
141,589
Property And Equipment, net
Property and equipment, cost •••.•••••••
Less: Accumulated depreciation •••••••••
172,052
34,544
172,052
38,382
172,052
42,221
172,052
46,059
172,052
46,059
Total property and equipment, net ••••••
137,508
133,670
129,831
125,993
125,993
Other Assets ••••••••••••••••••••••••••••••
o
o.
a
o
.0
$242,824
$255,813
S267,582
S267,582
Total Assets ••••.••••.•••...•.•••••.•••••.
S229,195
========= ======== ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Account s payab Ie ••••••••.•••••••••••••.
Current portion of long-term debt ••••.•
Accrued expenses •..•.•...••••.•••••••••
SO
10,000
SO
so
10,000
SO
10,000
10,000
SO
10,000
o
a
a
o
o
Total current liabilities •••.•.••••••••
10,000
10,000
10,000
10,000
10,000
Long- Term Debt ••.•........••.•.••.••••••••
128,185
126,719
125,220
123,687
123,687
30,000
Stockholders' Equity:
Contributed Capital •.•••....••..••.•.••
Retained earnings (deficit) ..••..••...•
Current earnings (deficit) ...•..•...•••
30,000
30,000
30,000
30,000
o
a
a
a
a
61,010
76,105
90,593
103,895
103,895
Tota l s tockhol ders' equi ty ........•...•
91,010
106,105
120,593
133,895
133,895
Total Liabilities And Equity ..............
$229,195
S242,82 4
$255,813
S267,582
$267,582
========= ========
Does the Balance Sheet balance? .••..........
YES
yes
========= ========= =========
YES
YES
YES
Cash Flow Statement
ontime
Qtr 1
ontime
Qtr 2
ontime
Qtr 3
ontime
Qtr 4
ontime
y,
01
Cash Received (Inflows)
Receivables collected:
Base period accounts receivable colle •.
Period revenues collected •••••••..•••..
SO
67,350
so
68,m
so
so
68,777
68,777
273,
TotaL cash receipts .•••••••.••••••.•••••..
67,350
68,m
68,777
68,777
273,
Cash Disbursed (Outflows)
Base period accounts payabLe paid ••••••••.
Per i od expenses pa i d ••••••••••••••••••••••
Salaries and wages paid •••••.••••••••••••.
Taxes pai d ••••••••••••••••.•••••••••••••••
o
o
o
o
23,470
19,521
3,760
23,436
19,521
3,774
23,402
19,521
4,449
23,368
19,521
5,702
93,
78,
17,
Total cash disbursements ••••••••••••••••••
46,751
46,732
47,372
48,591
189"
Operating Cash Surplus (Deficit) •••••••••••••
20,599
22,046
21,405
. 20,186
84,;
Less: Notes Payable Interest Payments ••••••••
Less: Notes Payable Principal Payments •.•••.•
Add: Beginning Of Month Cash Balance •••.....•
3,131
1,433
65,215
3,098
3,065
1,466
1,499
81,249
98,731
3,031
1,533
115,572
12,:
c: (.
oJ,
65 ,~
Cash Balance Before Funding ....•.••••..•••.••
$81,249
$98,731
$115,572
S131,193
S131,1
Additional Funding
New equi ty .••.......••.....•..••...••.....
New debt (notes payable) .•......••..•..•..
o
End i n9 Cash Sa lance ....•.........•...•.....•.
o
$81,249
=========
o
o
S98,731
========
o
o
o
o
$115,572 S131,193 $131,1
========= ========= ======
Is Additional Funding Required? ..•.•.••.....
If YES, please enter your amount in the
"New equity" or "New debt" (Notes Pay)
rows on the Assumption Statement.
Your Minimum Cash Requirement ~as ........... .
The Cash Needed To Fund Your Venture Is ..... .
S2,OOO
SO
S2,OOO
$0
$2,000
SO
S2,OOO
SO
S2,0(
On Time Printing's
Important Ratios
Average
On Time
$88,017
$57,830
$160
$114
$4,053
$18,537
42
Not Available
8.5 Times
16.6 Times
6. Current Ratio
2.1 to 1
14.2 to 1
7. Debt to Total Assets
68.20/0
500/0
8. Return on Assets
20.70/0
21.60/0
1. Sales Per Employee
2. Sales Per Square Foot
3. Profit Per Employee
4. Days Sales Outstanding
5. Inventory Turnover
For Industry Ratios see Appendix O.
Milestones
May 1 through May 31:
• Secure $150,000 in beginning capital
• Begin negotiations for building purchase
June 1 through June 15:
• Seek bids for renovation of storefront
• Purchase all equipment needed
• Place ad for employment
June 15 through June 29:
• Renovate storefront
• Order beginning inventory
• Begin advertising campaign
• Interview all employee candidates
June 29:
• Open for business
•
"On Time or It's Free" Guarantee
In the middle of 1988, we began a daring marketing policy that has turned out to be
a good tool for bringing in business because it shows people that we're serious
about speed. The policy is our "on time or it's free" program. which tells customers
that if we don't finish their job on time, they'll get it for free. We are the ones to set
the dead/illt; if the customer wants the project any earlier, then we do our best to
meet his or her desires, but the guarantee does not apply. When we set the deadline, we figure it takes us about one day per task; so if a job needs to be typeset,
copied, and folded, we tell the customer it will be ready in three days.
WE DO YOUR PRINTING
ON TIME, OR IT'S FREEl
_..-11.. __ ...........,.., ........................- ..........
....
---........
..,,,,._,..,
.,.-.
.....................
.............. _....... . . . . ........"...;u".., ....
Al~N&II,_."""."'AM
.......... w..... It.,....~.Ja . .
............. Ia-,...........
",
- . - -. . . . .....,. ... ...,. ... JM.
" . . .. _ _ _ . . dIIa ....... O' ....
N'MIl .... s.dI o.a.'........ ,.....
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• Mia Su-, 0-·'20 III Avenue Nonh • Farao. NO '8102 •
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232-6044
At first, the thought of giving away printing for a missed deadline terrified me. I
wanted our print shop to meet every deadline, but I knew that we hadn't been.
When I finally decided to go ahead with the program. I made the announcement
three months in advance so that we could fine-tune our systems and give everyone
a chance to get used to the idea.
The guarantee has worked out very well. In the first year, of the 11,484 jobs that we
printed, we only had to give away six jobs-and the advertising value of our guarantee was far greater than the cost of the jobs we gave away. Since we started this
policy, we've averaged one "giveaway" job each month.
If you feel your print shop is organized enough to try a guarantee like this, I encourage you to do so. It forces your business to keep itself sharp, and it has strong
pulling power with customers. You 11 be surprised how efficient your print shop can
be when it has to be.