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Table of Contents
1.0 Executive Summary.............................................................................................................................1
Chart: Highlights ......................................................................................................................2
1.1 Objectives ...................................................................................................................................2
1.2 Keys to Success ........................................................................................................................2
1.3 Mission........................................................................................................................................3
2.0 Company Summary.............................................................................................................................4
2.1 Company Ownership .................................................................................................................4
2.2 Start-up Summary ......................................................................................................................4
Chart: Start-up .........................................................................................................................5
Table: Start-up Funding ..........................................................................................................6
Table: Start-up .........................................................................................................................7
3.0 Products and Services........................................................................................................................7
3.1 Product and Service Description .............................................................................................7
3.2 Technology..................................................................................................................................8
3.3 Macro-environment ....................................................................................................................8
3.4 Future Products and Services ..................................................................................................8
4.0 Market Analysis Summary..................................................................................................................8
4.1 Market Segmentation ................................................................................................................9
Chart: Market Analysis (Pie) ..................................................................................................9
Table: Market Analysis .........................................................................................................10
4.2 Target Market Segment Strategy...........................................................................................10
4.2.1 Market Needs ..............................................................................................................10
4.2.2 Market Trends .............................................................................................................10
4.3 Service Business Analysis .....................................................................................................11
4.3.1 Business Participants.................................................................................................11
4.3.2 Competition and Buying Patterns .............................................................................11
5.0 Strategy and Implementation Summary..........................................................................................11
5.1 SWOT Analysis ........................................................................................................................12
5.1.1 Weaknesses................................................................................................................12
5.1.2 Opportunities ...............................................................................................................12
5.1.3 Threats .........................................................................................................................13
5.1.4 Strengths ......................................................................................................................13
5.2 Competitive Edge....................................................................................................................13
5.3 Marketing Strategy ..................................................................................................................13
5.3.1 Distribution Strategy ...................................................................................................14
5.3.2 Marketing Programs ...................................................................................................14
5.3.3 Positioning Statement ................................................................................................15
5.3.4 Pricing Strategy...........................................................................................................15
5.3.5 Promotion Strategy.....................................................................................................15
5.4 Sales Strategy..........................................................................................................................15
Table: Sales Forecast ..........................................................................................................16
Chart: Sales Monthly.............................................................................................................16
Chart: Sales by Year.............................................................................................................17
5.5 Strategic Alliances...................................................................................................................17
6.0 Management Summary ....................................................................................................................17
6.1 Organizational Structure..........................................................................................................17
6.2 Management Team .................................................................................................................18
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Table of Contents
6.3 Personnel Plan.........................................................................................................................18
Table: Personnel ...................................................................................................................18
6.4 Training .....................................................................................................................................18
6.5 Feedback and Control ............................................................................................................19
7.0 Financial Plan ....................................................................................................................................20
7.1 Break-even Analysis................................................................................................................21
Chart: Break-even Analysis .................................................................................................21
Table: Break-even Analysis .................................................................................................21
7.2 Important Assumptions............................................................................................................21
Table: General Assumptions ...............................................................................................22
7.3 Key Financial Indicators ..........................................................................................................23
Chart: Benchmarks ...............................................................................................................23
7.4 Projected Profit and Loss .......................................................................................................24
Chart: Gross Margin Monthly ...............................................................................................24
Chart: Gross Margin Yearly..................................................................................................25
Table: Profit and Loss ..........................................................................................................26
Chart: Profit Monthly .............................................................................................................27
Chart: Profit Yearly................................................................................................................27
7.5 Projected Cash Flow...............................................................................................................28
Chart: Cash ...........................................................................................................................28
Table: Cash Flow..................................................................................................................29
7.6 Projected Balance Sheet ........................................................................................................30
Table: Balance Sheet ...........................................................................................................30
7.7 Business Ratios .......................................................................................................................31
Table: Ratios .........................................................................................................................32
8.0 Contingency Planning .......................................................................................................................33
Table: Sales Forecast ...............................................................................................................................1
Table: Personnel ........................................................................................................................................2
Table: General Assumptions ....................................................................................................................3
Table: Profit and Loss ...............................................................................................................................4
Table: Cash Flow .......................................................................................................................................5
Table: Balance Sheet ................................................................................................................................6

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I Tech Solutions
1.0 Executive Summary
I Tech Solutions is a consulting-oriented company, intending to fill in the market need for a
professional, customer-foc used computer company. The company emphasizes service and
support to differentiate itself from more price-oriented computer companies. We are on the
brink of penetrating a lucrative market in a rapidly growing industry. The current trend towards
an increase in the number of entrepreneurs and competition amongst existing companies
presents an opportunity for I Tech Solutions to penetrate this market.
Located at (disc ussion omitted), we realize that, for us to prosper, we need to be flexible and
responsive, to delight clients by providing them with what they want, when they want it, and
before the competition can offer it. The company intends to ac hieve this through a solutions
approach that is customer-centric, and in which the customer's business objectives enjoy top
priority.
Once the needs and proc esses are understood and described, leading edge products and bestof-industry skills will be applied to design and develop a fitting solution to enable the client's
business in the most cost effective way.
Our marketing strategy will be based mainly on ensuring that clients know what need the
service(s) is able to fulfill, and making the right service and information available to the right
target client. We intend to implement a market penetration strategy that will ensure that our
services are well known and respec ted in our respec tive industry. Our strategy will convey a
sense of quality and satisfac tion in every picture, every promotion, and every publication. Our
promotional strategy will involve traditional advertising, Internet marketing, personal selling,
public relations, and direct marketing, details of which are provided in the marketing section of
this plan.
It is important to recognize that make our intangible resources, such as our ability to relate to
customers regarding their needs and wants, management style, corporate culture and
commitment. These elements will differentiate us from our competitors and contribute towards
the development of a sustainable competitive advantage.
In a nutshell, we don't intend to just market and sell our product and services, but to provide
customized services and products that will enable our clients to optimize their output and, assist
in the attainment of their goals and objectives. However, for us to attain the above stated we
shall need funding from outside investors.
Note: All currency values in the charts and tables are expressed in the Botswana Pula (P).

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I Tech Solutions

1.1 Objectives
Our business strategy will revolve around the need to provide quality products and services to
our various target customers. This shall be undertaken through the establishment of a
professional team and the provision of quality, custom-designed services, catering to the client's
particular needs.
We intend to attain the following objectives:
1.

Develop a follow-up strategy to gauge performance with all our clients.

2.

To continuously formalize and measure cross- functional working communication so as to

ensure that the various departments work harmoniously towards attainment of company
objectives.

3.

To instill a culture of continuous improvement in beating standards of customer

satisfac tion and efficiency.

4.

We are fully committed to supporting growth and development in the economy.

1.2 Keys to Success

The keys to the projects' success will undoubtedly be effective market segmentation through
identification of several niche markets and implementation strategies. The key success fac tors
will include the following:
1.

Excellence in fulfilling the promise: completely confidential, reliable, trustworthy expertise,

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I Tech Solutions
and service(s) through the provision of an uncompromising service. This dictates that
we have the latest technology, hardware, software, and well-trained personnel so as to
deliver this promise.
2.

Timeous response to clients' orders: we cannot afford to delay our clients for whatever
reason, as this will have a negative bearing on our image, reputation, and future
business. We need to be continually communicating with the client, ensuring we provide
needs-based solutions.

3.

Skill and depth of knowledge: Considering the nature of our services and their relative
infancy on the market, the skill and depth of knowledge of our personnel is of utmost
importance in determining the provision of the service(s) to the end-users.

4.

Clear product and marketing positioning: Not wanting to be assoc iated with the numerous
vendors on the market, we intend to aggressively market our business and the services
we provide in order to be at the top of our clients' minds.

5.

Leveraging from a large pool of expertise: The company's various alliances with
technological and training partners shall prove invaluable. The skills and intellectual
capacity these partners will have in the fields of product support, design and system
integration, implementation and execution, lifecycle support and understanding,
training, and in the application of new technology are intangible benefits to I Tech
Solutions.

1.3 Mission
Company Values
I Tech Solutions is committed to the fair and ethical treatment of employees and stakeholders.
This shall be undertaken through implementation of the following company values:

We intend to be a responsible corporate citizen, fulfilling our obligations as an integral

member of soc iety. Our business dec isions will give appropriate weight and consideration
to social and environmental impac ts.

We intend to provide products and services of uncompromising quality.

We intend to seek mutually beneficial and enduring relationships in all the commitments
that we make, ensuring that they are straightforward and honest. Our communication will
be open and ac curate, both internally and externally.

We will intend to uphold all the above company values, promoting our employees to do
likewise.

Through implementation of the company values, we believe that we will be able to attain our
goals and objectives for the benefit of all concerned, in particular, the communities in which
we will operate.
I Tech Solutions is built on the assumption that the management of information technology for
business is like legal advice or ac counting, in that it is not inherently a do-it-yourself prospec t,
and requires outside expertise to install and implement it. Smart business people need to find
quality vendors of reliable hardware, software, service, and support. They need to use these
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I Tech Solutions
quality vendors as they use their other professional service suppliers: as trusted allies.
I Tech Solutions intends to be such a solution provider. We will serve our clients as trusted
allies, providing them with the loyalty of a business partner and the economics of an outside
vendor. We want to make sure that our clients have what they need to run their businesses
as well as possible, with maximum efficiency and reliability. Many of our information
applications will be mission critical, so we will give our clients the assurance that we will be there
when they need us. The above is well summarized in our mission statement which is as follows:
"The company is dedicated to leveraging emerging technologies to provide the highest level of
quality products and services, customer service, and security."

2.0 Company Summary

I Tech Solutions was founded in November 2000 as a private limited company. For most of its
initial existence, the company intends to establish close relationships with its various clients,
with the intention of expanding in the near future.

2.1 Company Ownership

I Tech Solutions is a company incorporated at the Registrar of Companies by Mr. T, Mr. S, and
Mr. P. Though relatively new, the directors realize their company's vast potential market and
opportunity for growth if given the nec essary funding.

2.2 Start-up Summary

Total start-up capital and expenses covered include legal costs, business cards, stationery,
and related expenses. Messrs. T., S., and P. have provided investment covering much of the
starting assets, with the rest of required financing coming from a 5-year commercial loan
obtained from Bank Z. The start-up table below itemizes the start-up expenses.
Note: All currency values in the charts and tables are expressed in the Botswana Pula (P).

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I Tech Solutions

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I Tech Solutions
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

P207,749
P492,251
P700,000

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

P0
P492,251
P0
P492,251
P492,251

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)

P0
P600,000
P0

Other Current Liabilities (interest-free)

Total Liabilities

P0
P600,000

Capital
Planned Investment
Investor 1
Investor 2
Investor 3
Additional Investment Requirement
Total Planned Investment

P40,000
P30,000
P30,000
P0
P100,000

Loss at Start-up (Start-up Expenses)

Total Capital

(P207,749)
(P107,749)

Total Capital and Liabilities

P492,251

Total Funding

P700,000

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I Tech Solutions
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Consultants
Staff Engagement
Office Locatioin
Staff Training
Expensed equipment
Other
Total Start-up Expenses

P1,400
P2,000
P5,000
P4,500
P4,000
P2,600
P5,000
P171,349
P11,900
P207,749

Start-up Assets
Cash Required
Start-up Inventory

P492,251
P0

Other Current Assets

Long-term Assets
Total Assets

P0
P0
P492,251

Total Requirements

P700,000

3.0 Products and Services

I Tech Solutions will provide computer products and services to small, medium, and large
businesses. We will also be foc used on providing network systems and services to businesses.
The systems include both PC-based Land Area Networks (LAN) systems and minicomputer
server-based systems. Our services include design and installation of network systems,
training, and support.

3.1 Product and Service Description

I Tech Solutions intends to provide the following services:
1.

Financial Solutions (disc ussion omitted in this sample plan)

2.

Network Solutions (disc ussion omitted)

3.

Data Bac kup Solutions and Services (disc ussion omitted)

4.

E-commerce Solutions (disc ussion omitted)

5.

Hardware Supply and Technical Support (disc ussion omitted)

6.

Paperless Office Automation Solutions (disc ussion omitted)

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I Tech Solutions
7.

Training (disc ussion omitted)

3.2 Technology
I Tech Solutions will strive to maintain the latest hardware and software capabilities so as to
ensure we are continuously at the forefront in our market arena. The one certainty in our
industry is that technology will continue to evolve and develop, changing what we market, as
well as how we market it. Our aim is to be aware of the implications of this new technology,
and utilize it in our existing framework where possible. Complete presentation fac ilities for
preparation and delivery of multimedia presentations on Macintosh or Windows mac hines, in
formats that include on-disk presentation or video presentation are also possibilities.

3.3 Macro-environment
Our mac ro-environment is exciting. We are in the middle of an unprecedented boom in
connectivity and communications, as the Internet offers information technology like we never
dreamed of. We are concerned with real value, real changes in the way we deal with information.
Meanwhile, all other signs are positive. The current drive by the government towards a more
diversified economy presents an opportunity for our business to propel and excel in our
intended markets, benefiting from the support of the concerned institutions and trade bodies.
In addition to Botswana bec oming an increasing economic hub, we foresee the demand for high
quality business communication solutions to be on the rise. Through the undertaking of our
business ac tivities, we foresee no difficulty, in gaining market ac ceptance, provided we deliver
the final service timeously, of good quality, and at competitive rates.

3.4 Future Products and Services

We must remain on top of any new technology, bec ause this is our bread and butter. For
networking, we need to provide better knowledge of cross platform technologies. Also, we will be
under pressure to improve our understanding of direct-connect Internet and related
communications.
In putting the company together, we have attempted to offer enough services to allow us to
always be in demand by our clients. However, technological developments have provided us with
a new era of opportunities for the various organizations in which we can only guess at the
needs. For example, current rapid innovations/development of Wireless Application Protoc ol
(WAP) technology presents an opportunity to be realized, particularly foc using on WAPenabled cell phones that allow individuals to ac cess or send email messages on a cell phone.
However, the most important fac tor in developing future services will be market need. Our
understanding of the needs of our target market segments will be one of our competitive
advantages.

4.0 Market Analysis Summary

The current drive and emphasis by the government on diversification of the industrial base
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I Tech Solutions
away from the minerals sector presents an opportunity for I Tech Solutions to make a valuable
contribution towards ac hieving this goal. This will result in the implementation of modern
Information Technology (IT) services and techniques, transfer of knowledge, and availability of
quality brands.

4.1 Market Segmentation

We will be foc using on proactive, market seeking organizations that want to ensure an efficient
and effective IT system that will assist in the realization of their business objectives.
Our target companies are large enough to require the high-quality IT management we offer,
but too small to have a separate computer management staff. However, our most important
group of potential customers will be business executives in large, medium, and small
corporations. These are marketing managers, general managers, sales managers, and other
dec ision makers who often need to ac cess company data and information in their various
business dec isions. They will not waste their time or money looking for bargain information,
questionable expertise, or cheap computers and ac cessories. Our potential clients will include:
(disc ussion omitted).
Another intention will be to offer an attrac tive development alternative to the company that is
management constrained and unable to address opportunities in new markets and new market
segments, due to technological shortfalls.

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Table: Market Analysis
Market Analysis
Year 1

Year 2

Year 3

Year 4

Year 5

Potential Customers
SOHO Executives

Growth
3%

100

103

106

109

112

CAGR
2.87%

Government Institutions
Financial Institutions
Corporations
Professional Firms
Other
Total

12%
17%
22%
3%
4%
17.91%

800
50
3,000
400
200
4,550

896
59
3,660
412
208
5,338

1,004
69
4,465
424
216
6,284

1,124
81
5,447
437
225
7,423

1,259
95
6,645
450
234
8,795

12.00%
17.41%
22.00%
2.99%
4.00%
17.91%

4.2 Target Market Segment Strategy

Our marketing strategy will be based mainly on making the right service(s) available to the right
target customer. We will ensure that our products and services' prices take customers' budgets
into consideration, and that these people appreciate the product/service and know that it
exists, including where to find it. One of our intentions will be to target those innovative or
proactive companies contemplating transferring a part of their marketing ac tivities on the
Internet, in order to benefit from the advantages offered by this unique system of
communication. We realize the need to foc us our marketing message and our service offerings.

4.2.1 Market Needs

Since our target market is the product and service seeker, the most important market needs
are support, service, training, and installation, in that order. One of the key points of our
strategy will be the foc us on target segments that know and understand these needs and are
willing to pay to have them filled. We realize that all personal computer users need support and
service. Many of our target customers are going to be those who cannot get good products or
services from the major vendors who foc us on high volume orders only.
Our target businesses are dependent on reliable information technology. They use the computers
for a complete range of functions, beginning with the core administration information such as
ac counting and record entry, communications, and personal productivity. They are not,
however, large enough to have dedicated computer personnel such as the Management
Information System (MIS) departments in large businesses.

4.2.2 Market Trends

The most obvious trend in the market is the increasing number of IT firms on the market. This
has been true for years, but the trend seems to be ac celerating. We see the major brandname manufacturers being established on the market mainly through agents. Secondly, the
computer has bec ome a basic nec essity in the office environment and business set-up. The vast
improvements in c omputer power and storage, means that owners are mandated to up-grade
or buy new and improved systems, with the former often being much c heaper. A third trend is
ever-greater connectivity. Everybody wants to be on the Internet, and every office is looking at
having a LAN. However, the major stumbling bloc k for the majority of theses companies is the
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I Tech Solutions
high cost of installing such networks.

4.3 Service Business Analysis

The following sections provided disc ussions on who participates in the computer industry, what
the competition provides, and what the customer has been purchasing.

4.3.1 Business Participants

We are part of the computer reselling business, which includes several kinds of businesses:
1.

Computer Dealers: Storefront computer resellers usually offer a minimum of software,

and very little, if any service and support. They are concerned with moving as much
stoc k as possible. Their prices are usually higher than the larger stores.

2.

Chain and Computer Stores: They often occupy a large area of spac e, dec ent walkin service, and are often warehouse-like loc ations where people go to find products in
boxes. They often however charge exorbitant prices for their brand products and
maintenance service, if they provide any at all.

3.

Computer Consultants: These include consultancy companies that mainly specialize in

the installation of new systems. Their consultant fees are often very high, espec ially for
small- to medium-sized companies.

4.3.2 Competition and Buying Patterns

The vast majority of proactive, market-oriented businesses understand the value of having an
efficient computer system, as well as the concept of service and support. They are much more
likely to pay for them when the offering and benefits are clearly stated.
There is no doubt that we will compete more against the box pushers than other service
providers. We need to effectively compete against the idea that once a computer is out-dated
businesses should buy new ones, when with ongoing service and support, they can be upgraded.
The most important element of general competition, by far, is what it takes to keep clients for
repeat business. It is worth making huge concessions in any single service to maintain a client
relationship that brings the client bac k for future services.

5.0 Strategy and Implementation Summary

I Tech Solutions intends to win and maintain c ustomers by providing products and services
that add value, safety, and are supported by a well-trained professional team with c ommercial
expertise. This is important to the successful implementation of our overall strategy and the
need to ensure that all divisions and functions in the organization are working harmoniously
towards attainment of the goals and objectives.
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I Tech Solutions
Our marketing strategy emphasizes foc us. The target customers will include key dec isionmakers in business, who often order or recommend on behalf of the whole organization, the aim
being to obtain an initial order and fully satisfy the customer from then on.

We intend to initially build image and awareness through consistency and distinctiveness
in our product and service provision.

We intend to foc us on delivering quality products and services that produce good
referrals, which c an then generate revenue. We intend to have a heavy personal selling
component, supported by regular advertising we will always be ac tive in our personal
relationships with c lients and strategic allies, keeping abreast of their needs and wants.

We are foc using advertising on several key media.

We intend to ac hieve growth by creating a more enthusiastic customer culture than that of
our competitors. The strategy is to grow the business by nurturing customers, differentiating the
product/service offering through service and staff behavior.
Through the implementation of a fair, effective, and competitive remuneration policy we intend
to optimize our human resource output and advancement. We need the right people in the
right plac e at the right time if we are to ensure optimum growth. We intend to develop our
team so that our people can grow as the company grows--a mutually beneficial relationship.

5.1 SWOT Analysis

The SWOT Analysis is a nec essity to any start-up, it is an in-depth look at your Strengths,
Weaknesses, Opportunities, and Threats. We are in a highly lucrative market in a growing
economy. We foresee our strengths as the ability to respond to the market and to provide
custom designed technological services. Our key personnel will have a wide and thorough
knowledge of the technological services we intend to provide, which will go a long way
towards penetrating the market. Below is a summary of the SWOT Analysis.

5.1.1 Weaknesses

The introduction of new organizational prac tices and personnel who have not
previously worked together presents a challenge to the organization.
A limited financial base compared to the current major players in the IT industry.

5.1.2 Opportunities

The Internet. The increasing opportunities of the Internet offer us another area of
strength in c omparison to the box-on-the-shelf major stores. Our potential customers
want more help with the Internet, and we intend to be in a better position to give it to
them.
Service. As our target market needs more service, our competitors are less likely than
ever to provide it. Their business model doesn't include service, just selling the
computers.
Emerging Technologies. The rate of new product introduction in IT presents an
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opportunity to be explored.

5.1.3 Threats

Innovation shortens life cycles and hence the need to ac t timeously on the market.
This will recoup new service introductions in a shorter time frame.
Concerns of dec ision-makers over ease of ac cess and overall security of electronic
transactions may need to be addressed. The recent glitch of the Barclays electronic
system, which enabled some clients to ac cess other ac count holders' accounts while
upgrading the system, proves the very realistic security concerns regarding the use of
the Internet.
The slow adoption rate of new technologies and products in these parts of the world
does not bode well for our intended products and services.

5.1.4 Strengths

Knowledge. Our competitors are retailers, pushing boxes. We know systems, networks,
connectivity, programming, and data management.
Relationship selling. We intend to get to know our customers, one by one. Our direct
sales efforts will seek to maintain a relationship with our customers.
Diversified market segments. The diversity of the products and services we intend to
provide will ensure the lac k of dependency on one particular market.
Combination of skills in implementation. The management team intends to jointly
develop business strategy and long-term plans with its strategic allies, having wide
experience in their respective market and product know-how, and strong technical skills
and business know-how.

5.2 Competitive Edge

Our competitive edge is our positioning as a strategic ally with our clients, who are clients more
than c ustomers. By building a business based on long-standing relationships with satisfied
clients, we will simultaneously build defenses against competition. The longer the relationship
stands, the more we help our clients understand what we offer them and why they need it.
The delivery of whole, end-to-end solutions will have a significant impac t on gaining commitment
from the market at all levels. The company believes in partnering with its customers so as to
provide customized solutions that are needs-based.

5.3 Marketing Strategy

One core element of our marketing strategy will be that of differentiation from our competitors.
In terms of promotion, we intend to sell our company as a strategic ally, not just our
products. We intend to offer extremely reasonable prices in c omparison to competition, and we
need to be able to sustain that. Market penetration through lower prices shall be undertaken
where need be, while premium pricing in the case of the upper-end of the market.
We have developed two strategy foc i, eac h based on one main fundamental strategy. The first
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strategy is about (disc ussion omitted).
Our second strategic foc us, that of (disc ussion omitted).

5.3.1 Distribution Strategy

Service provision and consulting will be sold and purchased mainly on a word-of-mouth basis,
with relationships and previous experience being, by far, the most important fac tor. In this
regard we intend to provide a service that exceeds customer expec tations so as to ensure
they refer us to potential clients through word-of-mouth. New business shall be developed
through industry assoc iations, business assoc iations, and, in some cases, social associations,
such as country clubs.

5.3.2 Marketing Programs

Advertising
In view of the fac t that we are new on the market, we intend to undertake extensive advertising
of our name and products and services we offer. This is to instill awareness and knowledge of
our existence in the marketplac e, which shall convert into market share. We intend to advertise
in business and IT magazines that are read by our target market and will ensure we are
adequately exposed on the market. A constant lookout will be made of any spec ial editions in
these various publications, which may provide an opportunity for us to advertise our services
and ourselves. Advertising will also be conducted through television, radio, newspapers/
magazines, and the Internet. Sponsoring a technology disc ussion/call-in talk show is a
possibility.
Personal Selling
Word of mouth is critical in this segment. We will have to make sure that once we gain a
customer, we never lose him/her. To help ac complish this, we must work to establish and
maintain relationships. Personal selling will be a powerful form of promotion due to the fac t that
its flexibility will enable us to match the customer's needs to specific attributes of our services,
as well as giving concise details of what we are able to offer.
Public Relations
Recognizing that we are relatively new on the market, there will be a need to organize an event
introducing ourselves onto the market. To this we will invite potential customers, senior
officials, possibly including a government minister and other stakeholders, so as to penetrate the
market. In c ollaboration with this we, also intend to plac e news stories and features in
magazines and newspapers to keep stakeholders updated on the latest developments and to
increase awareness.
Events
The number of IT companies on the market dictates that the organization needs to promote
itself through participation in trade shows and expositions. Not only will these increase
awareness of our products and services, but if a particular product or service were to gain
recognition, for example through being chosen No. 1 in innovativeness, the organization will be
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I Tech Solutions
able to take advantage of this in all its promotional campaigns, adding leverage to its
reputation and corporate image. An example of a trade show we intend to participate at is
BITEC. These expositions will also be a good opportunity for us to network with various
organizations and individuals.
Internet Marketing
The company will sell its services over the Internet as it is cost effective to reac h a large
number of potential clients, regionally and internationally. We also realize that customer/c lient
research is needed before building an effective website, something which is rarely done by
existing companies, in order to find out how customers will want to ac cess information and
journey through the site.

5.3.3 Positioning Statement

I Tech Solutions will position itself as a reliable solutions provider and trusted strategic ally
who makes sure systems work, people are comfortable and conversant with the system, and
down time is minimal. Unlike the other vendors/retail stores, we intend to know the customer and
go to his or her site when needed, offering proactive support, service, training, and installation.
In addition, I Tech Solutions is an ally to our clients' businesses, and offers them a full range of
services, from installation to support.

5.3.4 Pricing Strategy

We must charge appropriately for the high-end, high-quality service and support we offer. Our
revenue structure has to match our cost structure, so the salaries we pay to assure good
service and support must be balanced by the revenue we charge. Therefore, we must make sure
that we deliver and charge for service and support. Training, service, installation, and
networking support--all of this must be readily available and priced to sell and deliver revenue.
We will charge (disc ussion omitted). This will ensure we penetrate the market upon entry.

5.3.5 Promotion Strategy

Our promotion strategy will be based primarily on informing potential customers of our
existence and making the right information available to our target customer. I Tech Solutions
intends to utilize an aggressive promotional campaign to introduce its products and services to
the market. The intention will be to take advantage of several media sources in announcing
the products and services and in the proc ess enforcing awareness of our existence.

5.4 Sales Strategy

I Tech Solutions will receive its revenue streams from a combination of licensing agreements,
sales commissions, monthly subsc riptions, registration fees, network ac cess charges, service
fees, transaction charges, training, promotional incentive programs, and sales of hardware and
software. The derived value of I Tech Solutions will come from the key partnerships
established and developed in order to deliver a product and service provision of transactionallyPage 15

I Tech Solutions
based ac tivities, providing opportunity to build brand and loyalty, around which relationship
marketing will play a key role.
The sales forecast monthly summary is included in the appendix. The annual sales projections are
provided in a table below. It should be noted that as we bec ome established and known on
the market we project sales to increase at a faster rate than the initial year.
Note: All currency values in the charts and tables are expressed in the Botswana Pula (P).

Table: Sales Forecast

Sales Forecast
Sales
Products/Services
Other
Total Sales
Direct Cost of Sales
Products/Services
Other
Subtotal Direct Cost of Sales

Year 1

Year 2

Year 3

P1,422,225
P0
P1,422,225

P2,528,400
P0
P2,528,400

P3,034,080
P0
P3,034,080

Year 1
P711,114
P0
P711,114

Year 2
P1,264,200
P0
P1,264,200

Year 3
P1,517,040
P0
P1,517,040

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I Tech Solutions

5.5 Strategic Alliances

I Tech Solutions intends to go into strategic alliances with several organizations. This will also
reassure our customers that they are investing in "winning" products, technology, and service
that are maintainable, flexible, and sc alable enough to meet future demands.
At this writing, strategic alliances with several companies are possibilities, including X, given
the content of existing interest and disc ussions. By going into strategic partnerships with
suitable organizations, we will benefit from being able to concentrate on our core ac tivities in the
delivery of our products and services to the end-user, while ensuring that we do not have to
compromise on quality of execution or the number of products and services we are able to
deliver.

6.0 Management Summary

The human resources element shall be an essential component in the delivery of the total
service. By having enthusiastic, capable, and empowered people interac ting with our clients,
we intend to build the competitive advantage of being able to comprehensively meet our
clients' needs. We also intend to give our teams enough leverage in decision-making to ensure
that clients are handled promptly and to reduce lead-time in actual delivery of the service. It will
be nec essary to evaluate jobs and remuneration pac kages against market benchmarks to
employees for their tasks to ensure they are competitive.

6.1 Organizational Structure

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I Tech Solutions
Our management philosophy is based on responsibility and mutual respec t. We recognize the
need to be constantly changing so as to adapt to the prevailing environment. We will have a
flexible structure allowing for the above to be undertaken swiftly and smoothly. Please find below
the job titles and descriptions we intend to have in plac e for the key personnel. (table omitted)

6.2 Management Team

In a highly volatile industry with increasing competition, we recognize the need to be
constantly changing to adapt to the prevailing environment. The management team extensive
expertise and a broad knowledge of the products/services and markets, which, if well planned,
will enable the business to realize its goals and objectives.
(profiles omitted)
The management style will reflect the participation of the shareholders. The company will
respec t its community and treat all employees well. We will develop and nurture the company
as a community. We will not be hierarchical, especially considering the rate of change in our
industry, which makes it mandatory for us to be highly flexible. Management's ongoing
initiatives to drive sales, market share and productivity will provide additional impetus.

6.3 Personnel Plan

The detailed monthly personnel plan for the first three years is included in the appendix. The
annual personnel estimates are included here. We believe this plan is a fair compromise
between fairness and expedience, and meets the commitments of our mission statement. We
want the company to stay lean and flexible so that we can respond to our markets' needs
quickly. As we expand and increase in size we do expec t to increase our personnel.
We will compensate our personnel well, so as to retain their invaluable expertise and ensure job
satisfac tion and enrichment through delegation of authority. Our compensation will include health
care, generous profit sharing, and a minimum of 3 weeks vac ation.
Note: All currency values in the charts and tables are expressed in the Botswana Pula (P).

Table: Personnel
Personnel Plan
Year 1
P135,000
P10,800
P3,600

Year 2
P180,000
P13,200
P6,000

Year 3
P216,000
P14,520
P7,200

Total People

Total Payroll

P149,400

P199,200

P237,720

Directors
Personal Assistant
Cleaner

6.4 Training
In-house training shall be continuous with regular external training being undertaken,
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I Tech Solutions
particularly following any new developments in the market. This is to ensure that we are
continuously able to anticipate our markets needs--a proactive approach, which is so essential if
we are to gain and maintain a competitive advantage. External training will also be conducted
to ensure we are aware of the latest products and technology. This will also ensure that our
personnel are able to set high standards, or benchmark, using these organizations standards.

6.5 Feedback and Control

(a) We will encourage our employees to put forward any suggestions they might have regarding
the improvement of any of the company's functions--an open door philosophy. Such a culture
will enhance innovativeness and creativity in turn leading to job satisfac tion and enrichment.
(b) We undertake to continuously formalize and measure cross-functional working communication
so as to ensure that the various departments work harmoniously towards attainment of
corporate objectives
(c ) Important notices and developments will be continuously communicated to employees so as
to keep them abreast of developments and promoting a sense of belonging and oneness in the
organization.

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I Tech Solutions
7.0 Financial Plan
We want to finance growth mainly through cash flow and equity. We recognize that this
means we will have to grow more slowly than we might like. The most important fac tor in our
case is collection days. We can't push our clients hard on collection days, bec ause they are in
larger companies and will normally have marketing authority, not financial authority. Therefore
we need to develop a permanent system of receivables financing, using one of the established
ac counting systems. In turn we intend to ensure that our investors are compatible with our
growth plan, management style, and vision. Compatibility in this regard means:
1.
2.
3.
4.

A fundamental respec t for giving our customers value, and for maintaining a healthy and
congenial workplac e
Respec t for realistic forecasts, conservative cash flow, and financial management
Cash flow as first priority, growth second, profits third
Willingness to follow the project objectives and contribute valuable input to strategy
and implementation dec isions.

Of these, only the last 2 are flexible.

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I Tech Solutions
7.1 Break-even Analysis
The following table and chart summarizes our Break-even Analysis. We don't really expec t to
reac h break-even until several months into the business operation, as illustrated in the
financials.
Note: All currency values in the charts and tables are expressed in the Botswana Pula (P).

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

P47,662

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

50%
P23,831

7.2 Important Assumptions

The financial plan depends on important assumptions. From the beginning, we recognize that
collection days are critical, but not a fac tor we can influence easily. Interest rates, tax rates,
and personnel burden are based on conservative assumptions.
Some of the more important underlying assumptions are:

We assume a strong economy, without major recession.

We assume that there are no unforeseen c hanges in economic policy to make our
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I Tech Solutions
products and service immediately obsolete.
Others include 30-day average collection days, sales entirely on invoice basis, including a
favorable deposit policy, expenses mainly on a net 30-day basis, 30 days on average for
payment of invoices, and present-day interest rates.

Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Year 1
1
17.00%
17.00%
25.42%
0

Year 2
2
17.00%
17.00%
25.00%
0

Year 3
3
17.00%
17.00%
25.42%
0

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I Tech Solutions
7.3 Key Financial Indicators
We foresee major growth in sales and operating expenses, and a bump in our collection days
as we spread the business during expansion.
Collection days are very important. We do not want to let our average collection days get above
30 under any circumstances. This could cause a serious problem with c ash flow, bec ause our
working capital situation is chronically tight. However, we recognize that we cannot control
this fac tor easily, bec ause of the relationship with our clients.

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I Tech Solutions
7.4 Projected Profit and Loss
Initial marketing and training expenses will be relatively high as we seek to bec ome known on the
market and staff get trained in provision of our services. This will be brought about by the
development of sales literature, advertising expenses, and function expenses. As our market
share increases and capital is generated, further marketing programs and the expansion of
those in existence at the time will be undertaken, to ensure market development. However,
with time, these programs will start generating revenue for the business, which we shall reinvest.
Our projected Profit and Loss is shown in the appendix, with sales increasing steadily from the
first year through the second, and into the third year. We do expec t to more than break-even in
the first year of operation. Our cost of sales should be much lower, and gross margin higher,
than in this projection.
Note: All currency values in the charts and tables are expressed in the Botswana Pula (P).

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I Tech Solutions

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I Tech Solutions
Table: Profit and Loss
Pro Forma Profit and Loss
Year 1
P1,422,225
P711,114
P0
P711,114

Year 2
P2,528,400
P1,264,200
P0
P1,264,200

Year 3
P3,034,080
P1,517,040
P0
P1,517,040

Gross Margin
Gross Margin %

P711,111
50.00%

P1,264,200
50.00%

P1,517,040
50.00%

Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Utilities
Telephone
Insurance
Rent

P149,400
P95,772
P0
P3,600
P6,000
P14,400
P16,800

P199,200
P154,140
P0
P3,960
P6,600
P15,840
P18,480

P237,720
P182,196
P0
P4,356
P7,260
P17,424
P20,328

P0
P0
P0

P0
P0
P0

P0
P0
P0

Total Operating Expenses

P285,972

P398,220

P469,284

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

P425,139
P425,139
P92,497
P82,612

P865,980
P865,980
P75,684
P197,574

P1,047,756
P1,047,756
P58,140
P251,527

Net Profit
Net Profit/Sales

P250,030
17.58%

P592,722
23.44%

P738,089
24.33%

Sales
Direct Cost of Sales
Other
Total Cost of Sales

Insurance
Payroll Taxes
Other

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I Tech Solutions

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I Tech Solutions
7.5 Projected Cash Flow
The chart and table below present the cash flow projections for I Tech Solutions.
Note: All currency values in the charts and tables are expressed in the Botswana Pula (P).

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I Tech Solutions
Table: Cash Flow
Pro Forma Cash Flow
Year 1

Year 2

Year 3

Cash from Operations

Cash Sales
Cash from Receivables
Subtotal Cash from Operations

P426,668
P763,507
P1,190,174

P758,520
P1,589,396
P2,347,916

P910,224
P2,041,349
P2,951,573

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received

P0
P0
P0
P0
P0
P0
P0
P1,190,174

P0
P0
P0
P0
P0
P0
P0
P2,347,916

P0
P0
P0
P0
P0
P0
P0
P2,951,573

Year 1

Year 2

Year 3

P149,400
P1,002,379
P1,151,779

P199,200
P1,810,874
P2,010,074

P237,720
P2,005,210
P2,242,930

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment

P0
P0
P0
P103,200

P0
P0
P0
P103,200

P0
P0
P0
P103,200

Purchase Other Current Assets

Purchase Long-term Assets
Dividends

P141,200
P240,000
P0

P0
P0
P0

P0
P0
P0

Subtotal Cash Spent

P1,636,179

P2,113,274

P2,346,130

Net Cash Flow

Cash Balance

(P446,005)
P46,246

P234,642
P280,888

P605,443
P886,331

Cash Received

Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations

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I Tech Solutions
7.6 Projected Balance Sheet
The balance sheet shows healthy growth of net worth, and strong financial position. The threeyear estimates are included in the appendix.
Note: All currency values in the charts and tables are expressed in the Botswana Pula (P).

Table: Balance Sheet

Pro Forma Balance Sheet
Year 1

Year 2

Year 3

Current Assets
Cash
Accounts Receivable

P46,246
P232,051

P280,888
P412,535

P886,331
P495,042

Inventory
Other Current Assets
Total Current Assets

P92,708
P141,200
P512,205

P206,017
P141,200
P1,040,641

P166,874
P141,200
P1,689,448

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

P240,000
P0
P240,000
P752,205

P240,000
P0
P240,000
P1,280,641

P240,000
P0
P240,000
P1,929,448

Year 1

Year 2

Year 3

Current Liabilities
Accounts Payable
Current Borrowing

P113,124
P0

P152,037
P0

P165,956
P0

Other Current Liabilities

Subtotal Current Liabilities

P0
P113,124

P0
P152,037

P0
P165,956

Long-term Liabilities
Total Liabilities

P496,800
P609,924

P393,600
P545,637

P290,400
P456,356

P100,000
(P207,749)
P250,030

P100,000
P42,281
P592,722

P100,000
P635,003
P738,089

Total Capital
Total Liabilities and Capital

P142,281
P752,205

P735,003
P1,280,641

P1,473,092
P1,929,448

Net Worth

P142,281

P735,003

P1,473,092

Assets

Liabilities and Capital

Paid-in Capital
Retained Earnings
Earnings

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I Tech Solutions
7.7 Business Ratios
The following table shows important ratios from the computer related services industry, as
determined by the Standard Industry Classification (SIC) Index #7379, Computer Related
Services.

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I Tech Solutions
Table: Ratios
Ratio Analysis
Year 1
n.a.

Year 2
77.78%

Year 3
20.00%

Industry Profile
7.20%

30.85%
12.32%
18.77%
68.09%
31.91%
100.00%

32.21%
16.09%
11.03%
81.26%
18.74%
100.00%

25.66%
8.65%
7.32%
87.56%
12.44%
100.00%

21.70%
3.50%
46.70%
71.90%
28.10%
100.00%

15.04%
66.05%
81.08%
18.92%

11.87%
30.73%
42.61%
57.39%

8.60%
15.05%
23.65%
76.35%

51.40%
19.10%
70.50%
29.50%

100.00%

100.00%

100.00%

100.00%

50.00%
32.96%
0.97%
29.89%

50.00%
27.34%
0.42%
34.25%

50.00%
26.62%
0.38%
34.53%

0.00%
80.70%
1.20%
1.70%

Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets

4.53
3.71
81.08%
233.79%
44.22%

6.84
5.49
42.61%
107.52%
61.71%

10.18
9.17
23.65%
67.18%
51.29%

1.27
1.01
70.50%
3.50%
11.80%

Additional Ratios
Net Profit Margin
Return on Equity

Year 1
17.58%
175.73%

Year 2
23.44%
80.64%

Year 3
24.33%
50.10%

n.a
n.a

4.29
56
10.91
9.86

4.29
66
8.46
12.17

4.29
78
8.14
12.17

n.a
n.a
n.a
n.a

Payment Days
Total Asset Turnover

27
1.89

26
1.97

29
1.57

n.a
n.a

Debt Ratios
Debt to Net Worth
Current Liab. to Liab.

4.29
0.19

0.74
0.28

0.31
0.36

n.a
n.a

P399,081

P888,603

P1,523,492

n.a

4.60

11.44

18.02

n.a

0.53
15%
1.66
10.00

0.51
12%
2.78
3.44

0.64
9%
6.19
2.06

n.a
n.a
n.a
n.a

Sales Growth
Percent of Total Assets
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios

Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover

Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth

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I Tech Solutions
Dividend Payout

0.00

0.00

0.00

n.a

8.0 Contingency Planning

1.

We intend to watch our results very carefully. We may need to concentrate less on
certain products and services than others, if we intend to get the margin up or clients
bec ome difficult to attrac t. We might be able to avoid straight competition with the major
IT companies by foc using more on our prime services.

2.

Another possibility is the introduction of a company or several companies in our niche.

The need to undertake aggressive marketing, networking, and delivering a value-added
service in our organization is a fundamental one.

Page 33

Appendix
Table: Sales Forecast
Sales Forecast
Sales
Products/Services
Other
Total Sales
Direct Cost of Sales
Products/Services
Other
Subtotal Direct Cost of Sales

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

0%

P31,605

P31,605

P31,605

P105,350

P105,350

P105,350

P168,560

P168,560

P168,560

P168,560

P168,560

P168,560

0%

P0
P31,605

P0
P31,605

P0
P31,605

P0
P105,350

P0
P105,350

P0
P105,350

P0
P168,560

P0
P168,560

P0
P168,560

P0
P168,560

P0
P168,560

P0
P168,560

Month 1
P15,803
P0
P15,803

Month 2
P15,803
P0
P15,803

Month 3
P15,803
P0
P15,803

Month 4
P52,675
P0
P52,675

Month 5
P52,675
P0
P52,675

Month 6
P52,675
P0
P52,675

Month 7
P84,280
P0
P84,280

Month 8
P84,280
P0
P84,280

Month 9
P84,280
P0
P84,280

Month 10
P84,280
P0
P84,280

Month 11
P84,280
P0
P84,280

Month 12
P84,280
P0
P84,280

Page 1

Appendix
Table: Personnel
Personnel Plan
Month 1
P7,500
P900
P300

Month 2
P7,500
P900
P300

Month 3
P7,500
P900
P300

Month 4
P7,500
P900
P300

Month 5
P7,500
P900
P300

Month 6
P7,500
P900
P300

Month 7
P15,000
P900
P300

Month 8
P15,000
P900
P300

Month 9
P15,000
P900
P300

Month 10
P15,000
P900
P300

Month 11
P15,000
P900
P300

Month 12
P15,000
P900
P300

Total People

Total Payroll

P8,700

P8,700

P8,700

P8,700

P8,700

P8,700

P16,200

P16,200

P16,200

P16,200

P16,200

P16,200

Directors
Personal Assistant
Cleaner

0%
0%
0%

Page 2

Appendix
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate

Month 1
1
17.00%

Month 2
2
17.00%

Month 3
3
17.00%

Month 4
4
17.00%

Month 5
5
17.00%

Month 6
6
17.00%

Month 7
7
17.00%

Month 8
8
17.00%

Month 9
9
17.00%

Month 10
10
17.00%

Month 11
11
17.00%

Month 12
12
17.00%

Long-term Interest Rate

17.00%

17.00%

17.00%

17.00%

17.00%

17.00%

17.00%

17.00%

17.00%

17.00%

17.00%

17.00%

Tax Rate
Other

30.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

Page 3

Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Sales
Direct Cost of Sales

Month 1
P31,605
P15,803

Month 2
P31,605
P15,803

Month 3
P31,605
P15,803

Month 4
P105,350
P52,675

Month 5
P105,350
P52,675

Month 6
P105,350
P52,675

Month 7
P168,560
P84,280

Month 8
P168,560
P84,280

Month 9
P168,560
P84,280

Month 10
P168,560
P84,280

Month 11
P168,560
P84,280

Month 12
P168,560
P84,280

Other
Total Cost of Sales

P0
P15,803

P0
P15,803

P0
P15,803

P0
P52,675

P0
P52,675

P0
P52,675

P0
P84,280

P0
P84,280

P0
P84,280

P0
P84,280

P0
P84,280

P0
P84,280

Gross Margin
Gross Margin %

P15,802
50.00%

P15,802
50.00%

P15,802
50.00%

P52,675
50.00%

P52,675
50.00%

P52,675
50.00%

P84,280
50.00%

P84,280
50.00%

P84,280
50.00%

P84,280
50.00%

P84,280
50.00%

P84,280
50.00%

P8,700

P8,700

P8,700

P8,700

P8,700

P8,700

P16,200

P16,200

P16,200

P16,200

P16,200

P16,200

P6,300

P2,100

P2,100

P7,368

P7,368

P7,368

P10,528

P10,528

P10,528

P10,528

P10,528

P10,528

Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

P300

P300

P300

P300

P300

P300

P300

P300

P300

P300

P300

P300

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P500
P1,200
P1,400

P0
P0
P0

P0
P0
P0

P0
P0
P0

P0
P0
P0

P0
P0
P0

P0
P0
P0

P0
P0
P0

P0
P0
P0

P0
P0
P0

P0
P0
P0

P0
P0
P0

P0
P0
P0

Total Operating Expenses

P18,400

P14,200

P14,200

P19,468

P19,468

P19,468

P30,128

P30,128

P30,128

P30,128

P30,128

P30,128

Profit Before Interest and Taxes

(P2,598)

P1,602

P1,602

P33,207

P33,207

P33,207

P54,152

P54,152

P54,152

P54,152

P54,152

P54,152

EBITDA
Interest Expense

(P2,598)
P8,378

P1,602
P8,256

P1,602
P8,135

P33,207
P8,013

P33,207
P7,891

P33,207
P7,769

P54,152
P7,647

P54,152
P7,525

P54,152
P7,404

P54,152
P7,282

P54,152
P7,160

P54,152
P7,038

Taxes Incurred

(P3,293)

(P1,664)

(P1,633)

P6,299

P6,329

P6,360

P11,626

P11,657

P11,687

P11,718

P11,748

P11,779

(P7,683)
-24.31%

(P4,991)
-15.79%

(P4,899)
-15.50%

P18,896
17.94%

P18,987
18.02%

P19,079
18.11%

P34,879
20.69%

P34,970
20.75%

P35,061
20.80%

P35,153
20.85%

P35,244
20.91%

P35,336
20.96%

Utilities
Telephone
Insurance
Rent
Insurance
Payroll Taxes
Other

Net Profit
Net Profit/Sales

0%

Page 4

Appendix
Table: Cash Flow
Pro Forma Cash Flow
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash from Operations

Cash Sales
Cash from Receivables

P9,482
P0

P9,482
P737

P9,482
P22,124

P31,605
P22,124

P31,605
P23,844

P31,605
P73,745

P50,568
P73,745

P50,568
P75,220

P50,568
P117,992

P50,568
P117,992

P50,568
P117,992

P50,568
P117,992

Subtotal Cash from Operations

P9,482

P10,219

P31,605

P53,729

P55,449

P105,350

P124,313

P125,788

P168,560

P168,560

P168,560

P168,560

Cash Received

Additional Cash Received

Sales Tax, VAT, HST/GST Received

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

New Current Borrowing

New Other Liabilities (interest-free)

0.00%

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

New Long-term Liabilities

Sales of Other Current Assets

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

Sales of Long-term Assets

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

New Investment Received

Subtotal Cash Received

P0
P9,482

P0
P10,219

P0
P31,605

P0
P53,729

P0
P55,449

P0
P105,350

P0
P124,313

P0
P125,788

P0
P168,560

P0
P168,560

P0
P168,560

P0
P168,560

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

P8,700
P1,599

P8,700
P47,302

P8,700
P27,893

P8,700
P30,821

P8,700
P116,958

P8,700
P77,660

P16,200
P80,061

P16,200
P151,085

P16,200
P117,387

P16,200
P117,296

P16,200
P117,204

P16,200
P117,113

P10,299

P56,002

P36,593

P39,521

P125,658

P86,360

P96,261

P167,285

P133,587

P133,496

P133,404

P133,313

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

P0

Principal Repayment of Current Borrowing

Other Liabilities Principal Repayment

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

P0
P0

Long-term Liabilities Principal Repayment

P8,600

P8,600

P8,600

P8,600

P8,600

P8,600

P8,600

P8,600

P8,600

P8,600

P8,600

P8,600

P0

P0

P141,200

P0

P0

P0

P0

P0

P0

P0

P0

P0

Purchase Long-term Assets

Dividends

P20,000
P0

P20,000
P0

P20,000
P0

P20,000
P0

P20,000
P0

P20,000
P0

P20,000
P0

P20,000
P0

P20,000
P0

P20,000
P0

P20,000
P0

P20,000
P0

Subtotal Cash Spent

P38,899

P84,602

P206,393

P68,121

P154,258

P114,960

P124,861

P195,885

P162,187

P162,096

P162,004

P161,913

Net Cash Flow

(P29,418)

(P74,383)

(P174,788)

(P14,393)

(P98,809)

(P9,610)

(P548)

(P70,097)

P6,373

P6,464

P6,556

P6,647

Cash Balance

P462,833

P388,450

P213,662

P199,269

P100,460

P90,850

P90,303

P20,206

P26,579

P33,043

P39,599

P46,246

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations

Purchase Other Current Assets

Page 5

Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Starting Balances

Current Assets
Cash
Accounts Receivable

P492,251
P0

P462,833
P22,124

P388,450
P43,510

P213,662
P43,510

P199,269
P95,131

P100,460
P145,032

P90,850
P145,032

P90,303
P189,279

P20,206
P232,051

P26,579
P232,051

P33,043
P232,051

P39,599
P232,051

P46,246
P232,051

Inventory
Other Current Assets
Total Current Assets

P0
P0
P492,251

P17,383
P0
P502,340

P17,383
P0
P449,343

P17,383
P141,200
P415,755

P57,943
P141,200
P493,543

P57,943
P141,200
P444,635

P57,943
P141,200
P435,025

P92,708
P141,200
P513,490

P92,708
P141,200
P486,165

P92,708
P141,200
P492,538

P92,708
P141,200
P499,002

P92,708
P141,200
P505,558

P92,708
P141,200
P512,205

Long-term Assets
Long-term Assets

P0

P20,000

P40,000

P60,000

P80,000

P100,000

P120,000

P140,000

P160,000

P180,000

P200,000

P220,000

P240,000

Accumulated Depreciation
Total Long-term Assets

P0
P0

P0
P20,000

P0
P40,000

P0
P60,000

P0
P80,000

P0
P100,000

P0
P120,000

P0
P140,000

P0
P160,000

P0
P180,000

P0
P200,000

P0
P220,000

P0
P240,000

P492,251

P522,340

P489,343

P475,755

P573,543

P544,635

P555,025

P653,490

P646,165

P672,538

P699,002

P725,558

P752,205

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing

P0
P0

P46,373
P0

P26,966
P0

P26,878
P0

P114,370
P0

P75,074
P0

P74,986
P0

P147,172
P0

P113,477
P0

P113,389
P0

P113,300
P0

P113,212
P0

P113,124
P0

Other Current Liabilities

Subtotal Current Liabilities

P0
P0

P0
P46,373

P0
P26,966

P0
P26,878

P0
P114,370

P0
P75,074

P0
P74,986

P0
P147,172

P0
P113,477

P0
P113,389

P0
P113,300

P0
P113,212

P0
P113,124

Long-term Liabilities

P600,000

P591,400

P582,800

P574,200

P565,600

P557,000

P548,400

P539,800

P531,200

P522,600

P514,000

P505,400

P496,800

Total Liabilities

P600,000

P637,773

P609,766

P601,078

P679,970

P632,074

P623,386

P686,972

P644,677

P635,989

P627,300

P618,612

P609,924

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

P100,000
(P207,749)

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

P0

(P7,683)

(P12,674)

(P17,573)

P1,322

P20,309

P39,388

P74,267

P109,237

P144,298

P179,451

P214,695

P250,030

(P107,749)

(P115,432)

(P120,423)

(P125,322)

(P106,427)

(P87,440)

(P68,361)

(P33,482)

P1,488

P36,549

P71,702

P106,946

P142,281

P492,251

P522,340

P489,343

P475,755

P573,543

P544,635

P555,025

P653,490

P646,165

P672,538

P699,002

P725,558

P752,205

(P107,749)

(P115,432)

(P120,423)

(P125,322)

(P106,427)

(P87,440)

(P68,361)

(P33,482)

P1,488

P36,549

P71,702

P106,946

P142,281

Page 6