ASSIGNMENT

ON
MANAGEMENT CONSULTING BUSINESS
PLAN

For
Project in Entrepreneurship Theory and Practice

Submitted To
Prof. Bhadresh Narielwala

By
Dinesh Choudhary (094216)
Shilpa Singh (094245)
Ankita Sanwal (094206)
Vikram Sisodiya (094258)
Dushyant Javiya (094217)

On
September 2nd, 2009
 INDEX

• 1.0 Executive Summary

• 2.0 Company Summary

• 3.0 Services

• 4.0 Market Analysis Summary

• 5.0 Strategy and Implementation Summary

• 6.0 Management Summary

• 7.0 Financial Plan

 CHAPTER 1
EXECUTIVE SUMMARY

Coaching Company will provide top-quality professional development and coaching

services. The principal officer of Coaching Company believes that most small
businesses and entrepreneurs suffer two major problems. They lack training or
development resources and the depth of knowledge needed to focus on their
businesses from a true "ownership" perspective. Both lead to lowered
expectations, lack of business and personal growth and frequent owner
burnout. Coaching Company believes that it can improve upon and exploit these
weaknesses to gain local market share.
The objectives for Coaching Company over the next three years are:
• Achieve sales revenues of approximately $81,000 by end of year one.
• Achieve sales revenues of approximately $150,000 by year three.
• Achieve a client mix of 60% small business/30% entrepreneurial/10%
individual per year.
• Move into small office space by the end of the first year.
The company will provide its professional development services in the most effective
manner and with an ongoing comprehensive quality-control program to provide
100% client satisfaction. The company's principal officer sees each contract as an
agreement not between a business and its clients, but between partners who wish to
create a close and mutually-beneficial long-term relationship. This will help to provide
greater long-term profits through referrals and repeat business.
Coaching Company will institute the following key procedures to reach its goals:
• The creation of a unique, upscale, innovative environment that will differentiate
Coaching Company from other coaching or professional development
businesses.
• Educating the business community on what business and strategic coaching has
to offer.
• The formation of a learning environment that will bring people with diverse
interests and backgrounds together in a common forum to overcome challenges
both professionally and personally.
• Affordable access to the resources of business coaching and other consulting
services.
Coaching Company is a start-up limited liability company (LLC) consisting of one
principal officer with 15 years of industry experience. Frank Smith (principal) will be
investing significant amounts of his own capital into the company to cover start-up
costs and future growth. Coaching Company will partner with the national franchise,
Coaching Company®, to provide services. Coaching Company will be limited in a
home office in Anytown, MI. Workshop facilities will be contracted from various
professional venues.
The company plans to use its existing contacts and customer base to generate both
short and long-term coaching contracts. Its long-term profitability will rely on
professional contracts obtained through strategic alliances, a comprehensive
marketing program and a successful referral program.
Initially, the company will focus on professional development, strategic workshops,
one-on-one coaching and special project relationships. Beginning in year two,
Coaching Company will provide a separate and comprehensive career counseling
service which will include resumé assistance, interviewing skills, job-seeking
strategies and networking opportunities. The company has rigorously examined its
financial projections and concluded that they are both conservative in profits and
generous in expenditures. This was done deliberately to provide for unforeseeable
events. The company's principal believes that cash flow projections are realistic.

1.1 Objectives
Coaching Company's objectives for the first three years of operation include:
• The creation of a unique, upscale, innovative environment that will differentiate
Coaching Company from other coaching or professional development
businesses.
• Educating the business community on what business and strategic coaching has
to offer.
• The formation of a learning environment that will bring people with diverse
interests and backgrounds together in a common forum to overcome challenges,
both professionally and personally.
• Affordable access to the resources of business coaching and other development
services.
The financial objectives for Coaching Company over the next three years are to:
• Achieve sales revenues of approximately $81,000 by end of year one.
• Achieve sales revenues of approximately $150,000 by year three.
• Achieve a client mix of 60% small business/30% entrepreneurial/10%
individual per year.
• Move into small office space by end of first year.
• Hire one salesperson / coach by end of second year.
1.2 Mission
Coaching Company offers small business owners, managers and entrepreneurs a
reliable, high-quality resource for business coaching, and professional and
management development on both a local and national scale. Its mission is to help
clients develop the strategy, motivation and accountability required to succeed in
their business and personal lives. The company sees each contract as an
agreement not between a business and its customers, but between partners who
wish to create a close and mutually beneficial long-term relationship. This will help to
provide greater long-term profits through referrals and repeat business. Coaching
Company must also be able to maintain financial balance, charging a high value for
its services, and delivering an even higher value to its clients.

1.3 Keys to Success

1. Excellence in fulfilling the promise--completely confidential, reliable, trustworthy
expertise and information
2. Developing visibility to generate new business leads
3. Leveraging from a single pool of expertise into multiple revenue generation
opportunities: retainer coaching, project consulting, workshop facilitation and
individual coaching
4. Consistently developing productive and thought-provoking learning experiences
to maintain growth and success with each client
5. Our use of state-of-the-art technology
6. Easy access to services
7. Establishing a seasoned advisory team
 CHAPTER 2
COMPANY SUMMARY

The True Group LLC, doing business as Coaching Company, is a start-up limited
liability company consisting of one principle officer with industry experience of 15
years in sales, professional development training and business operations. The
company was formed to take advantage of the perceived weakness of existing
professional development opportunities, in terms of quality and client satisfaction.
Coaching Company will be owned and operated by Frank Smith. Mr. Smith will be
investing significant amounts of his own capital into the company and may also seek
a loan to cover start-up costs and future growth.
Coaching Company will be located in a home office in Anytown, MI. The facilities
required for workshops will be contracted with professional service firms, community
facilities, colleges or universities or contract office facilities.
The company plans to use its existing contacts and the combined customer base of
Mr. Smith to generate both short and long-term coaching contracts. Its long-term
profitability will rely on focusing on professional contracts that will be obtained
through strategic alliances, a comprehensive marketing program and a successful
referral program.

2.1 Company Ownership

The True Group LLC is a privately owned limited liability company owned by Frank
Smith.
[Proprietary and confidential information removed.]

2.2 Start-up Summary

Total start-up expenses (including legal costs, logo design, stationery and related
expenses, and franchise fee) comes to $22,250. Start-up assets required include
$2,500 in short-term assets (office furniture, etc.) and $8,000 in initial cash to handle
the first few months of operations as sales play through the cash flow.
Start-up

Requirements

Start-up Expenses
Legal $1,000
Stationery etc. $450
Insurance $1,000
Rent $0
Computer $1,200
Franchise Fee $17,900
Phone $200
Travel $500
Other $0
Total Start-up Expenses $22,250

Start-up Assets
Cash Required $8,000
Other Current Assets $2,500
Long-term Assets $0
Total Assets $10,500

Total Requirements $32,750

 CHAPTER 3
SERVICES

Coaching Company provides strategic coaching, professional development and

counseling for small business owners, entrepreneurs and self-employed
professionals. The core services that will be offered from day one will be:
Two Year Strategic mindset Program: these quarterly workshops include strategic
planning, peer advisory counseling, marketing/sales planning, accountability
processes, business planning and work/life balance implementation.
One-on-One Coaching includes ongoing reinforcement to support Strategic
Coaching program, professional development coaching, leadership, career or
management coaching.
On Demand Coaching (for time restricted clients) includes but is not limited to,
private and objective business or professional coaching, affordable and "on-
demand," access to coaching via phone/email.
Special Projects includes strategic business planning and implementation, marketing
plans and implementation, leadership development, people management and
systematizing businesses.
Beginning in year two (2006), Coaching Company will provide a separate and
comprehensive career counseling service which will include but will not be limited to,
resumé assistance, interviewing skills, job seeking strategies and networking
opportunities.
 CHAPTER 4
MARKET ANALYSIS SUMMARY

Coaching Company will focus on small business owners, managers and

entrepreneurs who are concerned that their businesses have not grown at the rate
they want or need them to, frustrated that they are spending too much time in their
businesses and may be burning out and worried that their business will not survive
without them. These companies will have revenues of $10 million or less.
According to the July, 2002 census, there are approximately 81,600 small
businesses in the 5 county Anytown Metropolitan area. Although the majority are
manufacturing based, there are a significant number of service related
companies. Coaching Company will not take a position of industry expert but of
leadership and development expert; therefore industry will not have an impact on
any prospective markets.

4.1 Market Segmentation

Coaching Company will focus on two markets within the Anytown Metro area, the
small business segment (businesses with more than one employee/owner), and the
entrepreneur segment, which includes home-based and one-person business
operations. Although the company can handle larger organizations, the greatest
benefit will come to businesses with under $10 million in annual sales. The majority
of these companies are comprised of "technicians" who are gifted in the work of their
business, but typically do not have the resources to have in-house staff dedicated to
strategic planning, professional development and/or coaching. Our goal is to
eventually obtain approximately two-thirds of all our business from the
small business segment, since this generates the greatest cash flow. Furthermore,
this segment has the lowest percentage of variable costs. The small business
segment is considered to be the company's cash cow.
Initially the company will focus on the two segments in just the A County
and B County area. However, by the end of the three-year projections, the company
expects to be serving the entire Anytown Metropolitan area. The Market Analysis
table and chart show the number of small businesses in each county.
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential
Growth CAGR
Customers
County A 3% 31,424 32,367 33,338 34,338 35,368 3.00%
County B 2% 14,130 14,413 14,701 14,995 15,295 2.00%
County C 3% 6,189 6,375 6,566 6,763 6,966 3.00%
County D 2% 2,849 2,906 2,964 3,023 3,083 1.99%
County E 2% 27,008 27,548 28,099 28,661 29,234 2.00%
Total 2.46% 81,600 83,609 85,668 87,780 89,946 2.46%

4.2 Target Market Segment Strategy

The small business and entrepreneur markets are ideal targets for several reasons:
1. As a small or entrepreneurial business, resources are often limited to core
business functions such as production, administration, finance and
distribution. Professional development, training, coaching or planning frequently
goes unnoticed or even forgotten. As economic pressures increase and
competition becomes more intense, these companies are always looking for
effective ways to make themselves more prosperous.

2. As a small or entrepreneurial business, the owner is typically an accountable

technician which means he or she has everything on the line with regard to their
business succeeding or not, and that their area of expertise is in the business
they are "in." Frequently, a technician will be attracted to the "work" of the
business and neglect the fundamental health of the business, which includes
nurturing both themselves and the customer base.

4.3 Service Business Analysis

The United States spends more per capita on education than any other country.
Training or professional development in America is a $210+ billion industry.
There are five basic groups that need training as follows:
1. Government – Those employed in federal, state, and local governments, the
military, post office personnel, school teachers and administrators. This group
spends more than $23 billion in training funds annually.

2. Large Businesses – These are firms with 100 or more employees. This group
spends more than $28 billion in training, with the largest portion going to training
managers and career personnel.

3. Small Businesses – These are firms with fewer than 100 employees. There are
more than 79 million small businesses in the U.S. This group spends more than
$20 billion on training each year.

4. Professional Service Firms – This group includes doctors, lawyers,

accountants, engineers, consultants, etc. Continuing education requirements
move this group to spend training dollars disproportionate to their size, more
than $11 billion per year.

5. Individuals – Those who buy training with their own money and on their own
time. This group spends more than $2.5 billion on training and they tend to be
highly motivated.

4.3.1 Competition and Buying Patterns

The key element in purchase decisions made at Coaching Company client level is
trust in the professional reputation and reliability of the professional development
firm. The professional development industry is pulverized and disorganized, with
thousands of smaller consulting organizations and individual consultants for every
one of the few dozen well-known companies.
Competitors range from major international name-brand consultants to tens of
thousands of individuals. One of Coaching Company's challenges will be
establishing itself as a real professional development company, positioned as a
relatively risk-free corporate purchase.
When dealing with the small or entrepreneurial business market, cost or price will be
one of the greatest obstacles Coaching Company will face. It will be up to Coaching
Company to assist its clients in the discovery of how much it may cost them NOT to
pursue professional development and establish Coaching Company as the most
effective solution to their challenges.
With time, reputation and referrals will allow for a steady stream of new clients as
well as regular price increases. This is not a business to build brand as much as it is
to build reliability.
 CHAPTER 5
STRATEGY AND IMPLEMENTATION SUMMARY

Emphasize results
We will differentiate ourselves with results. We will establish our business offering as
a clear and viable alternative for our target market, from the scores of unrefined,
one-time seminar, consulting, and "feel good motivational" companies.

Build a relationship-oriented business

Build long-term relationships with clients, not single-visit deals. Become their advisor
and partner of choice. Make them understand the value of long-term relationships.

Focus on target markets

We need to focus our offerings on small business owners and entrepreneurs who
have a passion for their business and have the willingness to work for what they
receive. We do not want to compete for the buyers who seek "get rich quick" types
of resources. We need to be able to sell to smart, quality-conscious clients.

5.1 Competitive Edge

The most unique benefit that Coaching Company offers to clients is the ability to
experience ongoing, reinforcement development, versus a typical "one-time" seminar
format. Coaching Company provides development and support for a year or more.
Since each Strategic Workshop client will be immediately qualified for one-on-one
coaching, we will manage and monitor the specific progress of each client to ensure
appropriate development.

5.2 Marketing Strategy

Coaching Company plans to reach their target companies by four methods which
have been proven to be effective. They are:
Lead Generation Program: Coaching Company will do a direct mailing to 3,000
potential customers in the A and B county areas. Interested companies reply by mail
or phone. In this industry, an average of 3% of the recipients typically respond.

Sample Previews: These are invitation-only workshops that Coaching Company will
host for referral sources (i.e., accountants, attorneys, financial planners, insurance
professionals) as well as owners of businesses in a target market. The previews will
be the actual first year program offered to paying clients. The intent is to provide
value and proof of the Strategic Workshop process so that clients will be comfortable
making referrals. Coaching Company will be responsible for the generation of the
lists to which these invitations will be sent. The franchiser, Coaching Company,
recommends that one of these briefings be held monthly. Referral sources and
business owners who attend and are interested will have a follow-up call made to
them to further discuss what Coaching Company can do for their company.

Free Talks/Networking: These are talks given to Chambers of Commerce, trade

councils, professional organizations, etc. It has been industry experience that it is
most beneficial to have at least two of these talks per month and attend two
networking events per month.

Referrals: Referrals will not be a large part of Coaching Company's business until
late in the first year. In the second and third year they should account for as much as
50% of new business.
Other Income Generators: Special Project Assistance. This includes writing private
programs for specific businesses, designing custom programs and retainer based
coaching on an ongoing basis.

5.3 Sales Strategy

Coaching Company will make a significant profit through the delivery of top-of-the-
line professional development services. The company will see profit within the first
year due to beneficial word-of-mouth advertising and referral networking. The
company expects to double its clientele every six months, for the first 18 months.

Pricing :

Strategic Workshops (two year program) - $3000 for year one, $2500 for year
two. Includes 1 hour per month one-on-one coaching.

Platinum Package - $5000 for one year of Strategic Workshops, 1 hour per month
of one-on-one coaching & membership to the On Demand Coaching.

Gold Package - $4000 for one year of Strategic Workshops, 1 hour per month of
one-on-one coaching.

Silver Package - $3000 for one year of Strategic Workshops

Second year - $2500 per year for any client continuing with Strategic
Workshops (applies to workshop only)

One-on-one Coaching - $125/hr for any personalized coaching for non-workshop

clients. $100/hr for workshop clients.

On Demand Coaching - $250 per month. minimum purchase of 3 months.

Special Projects - Priced as needed

5.3.1 Sales Forecast

Coaching Company expects a slow start to 2005, but a strong finish with referral
marketing beginning to replace hard marketing dollars. The core business will be the
Strategic Workshops, which have a second year tied to the initial purchase (two year
program - $3,000 for year one, $2,500 for year two). Based on this, we should be
able to obtain and manage a 25% increase in sales. Sales exceeding the 25% would
place a tremendous burden on the acceptable delivery of service. Consistent efforts
made by Coaching Company based on the marketing plan will drive enough
opportunities to supply both initial and ongoing growth. At this growth rate, Coaching
Company will be in a position to hire one more salesperson beginning year four
(2008).
Potential obstacles to achieving these results:
1. Prospecting/marketing plan not followed
2. Poor delivery of service
3. Any health problems of owner

Sales Forecast
 Year 1 Year 2 Year 3
Sales
Strategic Workshops $64,000 $95,000 $115,000
One On One Coaching $5,622 $6,844 $8,555
Coaching Club $8,760 $8,760 $8,760
Special Projects $3,085 $10,000 $15,000
Total Sales $81,467 $120,604 $147,315

Direct Cost of Sales Year 1 Year 2 Year 3

Royalties $5,654 $7,236 $8,839
Marketing $5,000 $6,250 $7,500
Subtotal Direct Cost of Sales $10,654 $13,486 $16,339

5.4 Milestones
Coaching Company has a big year coming. In order to achieve the sales and
marketing goals that have been outline in this business plan, the company has
deadlines to meet and ideas to implement. Frank Smith is accountable for all items.
Some of these are outlined below:
• March 1, 2005 is the date Coaching Company must commence operations. This
requires a trip to Anytown in January 2005 with final franchise agreements
signed by February 1, 2005. Frank Smith will be visiting Anytown on January 14,
2005 to take care of this.

• March 1, 2005 is the date specified to begin the Lead Generation Program
(direct marketing) which includes direct mail, email marketing, advertising
and phone sales calls.

• February 28, 2005 is the deadline for joining two chamber of commerces
(Anytown and Pleasantville), and other networking groups; this is key to the
marketing/networking effort. This will be effective immediately after submitting
application and membership fee. Frank Smith will begin scheduling free talks
immediately.

• April 15, 2005 is the deadline for scheduling the first of monthly Sample
Previews.

• Marketing materials. Printing costs are involved in printing brochures, business

cards, and developing website. This can't be done until after the photo/logo
design work (costing $1,000) has been completed.

• February 28, 2005 is deadline for joining the Anytown Chamber of Commerce
and a secondary Chamber. Cost is $195-$225/year. Benefits include
networking, marketing and free talks.
• February 28, 2005 is the deadline to join Local Business Network. Cost is
$360/year. Benefits include networking, marketing and free talks. May also be
used to populate first workshops.

Milestones

Start End Manage Departme

Milestone Budget
Date Date r nt
Lead Generation 3/15/200
3/1/2005 $1,000 ABC Marketing
Prgm 5
2/15/200 3/15/200
Sample Previews $300 ABC Marketing
5 5
Free Talks 3/1/2005 3/1/2007 $50 ABC Marketing
2/28/200 $17,90
Start Business 2/1/2005 ABC Finance
5 0
Marketing
2/15/200 2/28/200
Materials/Statione $500 ABC Marketing
5 5
ry
Chamber of 2/28/200
2/1/2005 $195 ABC Marketing
Commerce 5
Networking 2/28/200
2/1/2005 $360 ABC Marketing
Group 5
2/28/200 Departme
Second Chamber 2/1/2005 $200 ABC
5 nt
$20,50
Totals 5
 CHAPTER 6
MANAGEMENT SUMMARY

The initial management team depends on the founder himself, with little back-up. As
we grow, we will take on additional consulting, sales, and marketing help.

6.1 Personnel Plan

The following table is the personnel plan for Coaching Company. The table reflects
the hiring of a second full-time salesperson / coach in year 2.

Personnel Plan
Year 1 Year 2 Year 3
President $27,000 $50,000 $50,000
Second salesperson/coach $0 $20,000 $42,000
Total People 1 2 2

Total Payroll $27,000 $70,000 $92,000

 CHAPTER 7
FINANCIAL PLAN

Our financial plan is based on conservative estimates and assumptions. We will

need initial investment to make the financials work, but the owner is prepared to
contribute that funding.
We can minimize risk factors by:
1. Obtaining initial capitalization of the company to sustain operations through year
one
2. Maintaining low overhead through the use of shared office space and home-
based office through year one
3. Developing a strong customer base through aggressive marketing
4. Creating strong community ties and involvement
5. Eliminating collection costs, by establishing cash/credit/debit card only facilities

7.1 Start-up Funding

The start-up costs are to be financed by the owners' personal funds.

Start-up Funding

Start-up Expenses to Fund $22,250

Start-up Assets to Fund $10,500
Total Funding Required $32,750

Assets
Non-cash Assets from Start-up $2,500
Cash Requirements from Start-up $8,000
Additional Cash Raised $950
Cash Balance on Starting Date $8,950
Total Assets $11,450

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0

Capital

Planned Investment
Owner $33,700
Investor $0
Additional Investment Requirement $0
Total Planned Investment $33,700

Loss at Start-up (Start-up Expenses) ($22,250)

Total Capital $11,450

Total Capital and Liabilities $11,450

Total Funding $33,700

7.2 Projected Profit and Loss

The following table and chart shows the projected Profit and Loss for Coaching
Company. The majority of our operating expenses are the owner's payroll,
benefits and taxes. This includes a standard PPO health plan, since the owner is
sole provider of services; if he gets sick, sales stop. The second largest category is
Marketing and Promotion, necessary for establishing brand recognition and
generating new business, as a start-up.
The moving expenses in December and increased rent starting at the same time
reflect the planned move into an office space, and out of the owner's home.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $81,467 $120,604 $147,315
Direct Cost of Sales $10,654 $13,486 $16,339
Other Costs of Sales $0 $0 $0
Total Cost of Sales $10,654 $13,486 $16,339

Gross Margin $70,813 $107,118 $130,976

Gross Margin % 86.92% 88.82% 88.91%

Expenses
Payroll $27,000 $70,000 $92,000
Marketing/Promotion $4,800 $5,400 $6,400
Depreciation $0 $0 $0
Rent $2,335 $10,000 $10,000
Utilities $480 $528 $580
Insurance $972 $1,020 $1,072
Payroll Taxes $4,050 $10,500 $13,800
Moving Expenses $1,000 $0 $0
Other $0 $0 $0

Total Operating Expenses $40,637 $97,448 $123,852

Profit Before Interest and

$30,176 $9,670 $7,124
Taxes
EBITDA $30,176 $9,670 $7,124
Interest Expense $0 $0 $0
Taxes Incurred $9,053 $2,901 $2,137

Net Profit $21,123 $6,769 $4,987

Net Profit/Sales 25.93% 5.61% 3.39%

7.3 Break-even Analysis

Break-even data is presented in the chart and table below.
Break-even Analysis

Monthly Revenue Break-even $3,896

Assumptions:
Average Percent Variable Cost 13%
Estimated Monthly Fixed Cost $3,386

7.4 Projected Cash Flow

The following table and chart show the Cash Flow for Coaching Company. After the
first six months, cash flow should be positive for all months. We expect an initial
period of decreasing cash balance, until sales reach mid-year targets.

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $81,467 $120,604 $147,315
SubtotalCash from Operations $81,467 $120,604 $147,315

Additional Cash Received

Sales Tax, VAT, HST/GST
$0 $0 $0
Received
New Current Borrowing $0 $0 $0
New Other Liabilities
$0 $0 $0
(interest-free)
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $81,467 $120,604 $147,315

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $60,344 $113,835 $142,328
Subtotal Spent on Operations $60,344 $113,835 $142,328

Additional Cash Spent

Sales Tax, VAT, HST/GST
$0 $0 $0
Paid Out
Principal Repayment of
$0 $0 $0
Current Borrowing
Other Liabilities Principal
$0 $0 $0
Repayment
Long-term Liabilities
$0 $0 $0
Principal Repayment
Purchase Other Current Assets$0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $60,344 $113,835 $142,328

Net Cash Flow $21,123 $6,769 $4,987

Cash Balance $30,073 $36,842 $41,829

7.5 Projected Balance Sheet

The following table presents the Balance Sheet for Coaching Company. It shows our
projected steady increase in Net Worth over the next three years. As a consulting
company, we do not need a great deal in the way of assets, so the largest factor in
the Balance Sheet is our cash balance.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets
Current Assets
Cash $30,073 $36,842 $41,829
Other Current Assets $2,500 $2,500 $2,500
Total Current Assets $32,573 $39,342 $44,329

Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $32,573 $39,342 $44,329

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $0 $0 $0

Long-term Liabilities $0 $0 $0
Total Liabilities $0 $0 $0

Paid-in Capital $33,700 $33,700 $33,700

Retained Earnings ($22,250) ($1,127) $5,642
Earnings $21,123 $6,769 $4,987
Total Capital $32,573 $39,342 $44,329
Total Liabilities and Capital $32,573 $39,342 $44,329

Net Worth $32,573 $39,342 $44,329

7.6 Business Ratios

The following table shows the projected business ratios. We expect to maintain
healthy ratios for profitability, risk, and return. The industry comparisons are for
Management Consulting Services, SIC code 8742.

Ratio Analysis
Industry
Year 1 Year 2 Year 3
Profile
Sales Growth 0.00% 48.04% 22.15% 7.74%

Percent of Total Assets

Other Current Assets 7.68% 6.35% 5.64% 48.61%
Total Current Assets 100.00% 100.00% 100.00% 77.64%
Long-term Assets 0.00% 0.00% 0.00% 22.36%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 0.00% 0.00% 0.00% 31.75%
Long-term Liabilities 0.00% 0.00% 0.00% 18.72%
Total Liabilities 0.00% 0.00% 0.00% 50.47%
Net Worth 100.00% 100.00% 100.00% 49.53%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 86.92% 88.82% 88.91% 100.00%
Selling, General &
60.99% 83.21% 85.52% 83.82%
Administrative Expenses
Advertising Expenses 0.00% 0.00% 0.00% 1.12%
Profit Before Interest and
37.04% 8.02% 4.84% 2.69%
Taxes

Main Ratios
Current 0.00 0.00 0.00 1.69
Quick 0.00 0.00 0.00 1.36
Total Debt to Total
0.00% 0.00% 0.00% 56.50%
Assets
Pre-tax Return on Net
92.64% 24.58% 16.07% 2.64%
Worth
Pre-tax Return on Assets 92.64% 24.58% 16.07% 6.07%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 25.93% 5.61% 3.39% n.a
Return on Equity 64.85% 17.21% 11.25% n.a

Activity Ratios
Accounts Payable
8.98 12.17 12.17 n.a
Turnover
Total Asset Turnover 2.50 3.07 3.32 n.a

Debt Ratios
Debt to Net Worth 0.00 0.00 0.00 n.a
Current Liab. to Liab. 0.00 0.00 0.00 n.a

Liquidity Ratios
Net Working Capital $32,573 $39,342 $44,329 n.a
Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.40 0.33 0.30 n.a
Current Debt/Total
0% 0% 0% n.a
Assets
Acid Test 0.00 0.00 0.00 n.a
Sales/Net Worth 2.50 3.07 3.32 n.a
Dividend Payout 0.00 0.00 0.00 n.a