Hair Recycling Technologies' (HRT) area of business will be to: collect, sanitize, and

market human hair to be used as a consumer good. Our recycled hair products will be
targeted toward the home gardener who will benefit from hair's numerous elemental
characteristics and its strong human scent.

The consumer will gain due to our product's ability to encourage healthy plant life and
deter unwanted pests and animals. Hair Recycling Technologies will initially
manufacture three products: SMART SOIL hair fertilizer, HARE AWAY pest deterrent,
and an organic plant food specifically for rose bushes.

Hair Recycling Technologies is entering a niche market since human hair has never been
marketed before to be used in this manner. The founders of the business believe this to be
a unique and viable concept that reaches an untapped and high growth market. Due to
these factors, this venture has exciting possibilities due to its high potential and unique,
innovative nature.

One of the most attractive aspects of this business is that investors will be paid back
within one year and the company will still maintain a positive cash position. The business
is expected to break-even in month nine of the first year.

Our in-depth research pertaining to human hair's positive elemental characteristics and its
many potential uses is well advanced. Even though this research will be an ongoing
process for the company, initial results have been shown to be positive.

The Horticulture Department at the University of Georgia has shown interest in this
concept and HRT plans to work with the department to research and test the use of
human hair as a plant growth promoter. In addition, nurseries in the South Bend market
have shown strong interest in carrying our product upon its release.
1.1 Keys to Success

Hair clippings have long been a useless waste problem for businesses engaged in the
operation of barber shops and beauty salons. In metropolitan areas that handle large
amounts of waste, human hair is often disposed in volume at municipal landfills. Driven
by state and federal mandates, recycling and composting of municipal solid waste have
increased dramatically during the past decade. There were more than 9,000 curbside
recycling programs in America in 1997, and 12,000 drop-off centers for recyclable
material. The EPA established a target-recycling goal of 35 percent by the year 2005,
while maintaining the per capita generation of solid waste at 4.3 pounds per person per
day. This presents an opportunity to recycle a landfill bound waste and give the consumer
the opportunity to benefit from the many positive properties that hair can provide.

Our research has shown that clippings of human hair contain an extremely high nutrient
value which, when utilized and mixed with potting soil, will produce a higher quality
plant food and soil enhancer than what is currently on the market.

Human hair, in common with wool, silk, and other organic materials, has a very high
nitrogen content, and in the soil, nitrogen encourages tissue growth. If the sweepings
from a barber shop were regularly applied to a compost heap, an enormous amount of
nitrogen could be recovered. Six to seven pounds of human hair contain approximately
one pound of nitrogen, as much as found in 100 to 200 pounds of manure. What's more,
hair will disintegrate as easily as feathers, as long as it is kept in a well-moistened
compost heap.

Experiments with 32 varieties of roses by William Stafford, of Austin Texas, indicate that
human hair used around the roots of bushes produces longer stems, larger buds, and
deeper color tones. Stafford experimented with hair at the base of plants and found it
accelerated growth, though slowly, since it took many months for the hair to decay.
Stafford produced a plant recipe for his experiments, which HRT will reproduce. No
patents are registered for Stafford's rose food recipe.
1.2 Mission

Hair Recycling Technologies intends to provide the consumer with a recyclable resource
so that they may benefit from human hair's many properties and organic elements. In
addition, we hope to give the consumer a positive feeling about recycling and the Earth's
environment.

1.3 Objectives

The concept of recycling human hair to be used as a plant food, soil enhancer, and animal
deterrent is unique and innovative to the plant and gardening industry. We feel that
introducing this product to the marketplace will be successful due to its unique factor and
the many positive characteristics that human hair can provide to the gardener. The
consumer will find this to be a compelling product not only because it is organic, and
thus in growing demand, but also due to its marketable benefits.

Company Summary

The legal name of the company will be established as Hair Recycling Technologies, Inc.
Hair Recycling Technologies will be formed as a Sub-chapter S Corporation in the state
of Delaware under the category "For Domestic Profit."

Due to its tax benefits, an S-chapter Corporation will be advantageous since early phase
start-up costs will be incurred by the founders. Delaware will be the place of
incorporation due to its temperate legal requirements and pro-business environment.

2.1 Start-up Summary

A team consisting of six talented individuals has been formed. Of the four people who
make up the company staff, all are the original founders of the company and its concept.
These individuals are the following:

• President and CEO: K. Justin Luber.

• Vice-president of operations/finance: Jason Mysliwec.
• Financial advisor: Hunter Korth.
• Marketing advisor: Robin Liu.

Start-up Funding

Start-up Expenses to Fund Rs.2,550

Start-up Assets to Fund Rs.91,450
Total Funding Required Rs.94,000

Assets
Non-cash Assets from Start- Rs.14,829
up
Cash Requirements from Rs.76,621
Start-up
Additional Cash Raised Rs.0
Cash Balance on Starting Rs.76,621
Date
Total Assets Rs.91,450

Liabilities and Capital

Liabilities
Current Borrowing Rs.0
Long-term Liabilities Rs.60,000
Accounts Payable Rs.0
(Outstanding Bills)
Other Current Liabilities Rs.0
(interest-free)
Total Liabilities Rs.60,000

Capital
Planned Investment
Investor 1 Rs.10,000
Investor 2 Rs.8,000
Investor 3 Rs.16,000
Additional Investment Rs.0
Requirement
Total Planned Investment Rs.34,000

Loss at Start-up (Start-up (Rs.2,550)

Expenses)
Total Capital Rs.31,450

Total Capital and Liabilities Rs.91,450

Total Funding Rs.94,000

Start-up

Requirements

Start-up
Expenses
Legal Rs.200
Stationery etc. Rs.150
Brochures Rs.200
Insurance Rs.200
Rent Rs.600
Utilities Rs.200
Other Rs.1,000
Total Start-up Rs.2,550
Expenses

Start-up Assets
Cash Required Rs.76,621
Start-up Rs.5,729
Inventory
Other Current Rs.0
Assets
Long-term Rs.9,100
Assets
Total Assets Rs.91,450

Total Rs.94,000
Requirements

2.2 Company Locations and Facilities

Hair Recycling Technologies will begin its initial operations in South Bend, IN. A
suitable location has been obtained in the basement of one of the founders. When
capacity is exhausted due to growth, the operations will be moved and based in a larger
facility in South Bend, IN.

2.3 Government Regulations

Because Hair Recycling Technologies recycles a waste product and incorporates it into
an environmental product, the company is under the potential jurisdiction of the
Environmental Protection Agency. The manufacture and sale of human hair is not
currently regulated or enforced by either federal or state authorities. According to the
Environmental Protection Agency, there are "no current restrictions on human hair."
Currently since the sale of human hair does not fall under any federal or state law
regulations, we will not need to file with the Environmental Protection Agency.

Hair Recycling Technologies will obtain all required federal and state permits and
licenses to operate its facilities. There can be no assurance that HRT's operation and
profitability will not be subject to future restrictive regulations or increased taxation by
federal, state, or local agencies.

Products

Hair Recycling Technologies will be the market leader as the first company of its type to
collect, sanitize, and recycle human hair to be used as a plant food, a soil enhancer, and
as an animal and pet deterrent. HRT realizes that consumers today are more conscious of
recycling and of their environment. Because of this trend, consumers are moving away
from traditional chemical based plant products to more natural organic plant materials.

3.1 Product Description

Hair is readily available at extremely low collection costs as the average major
metropolitan area throws away approximately five tons monthly. A certain barbershop
owner in Austin, TX illustrates: In one shop open five days per week, eight hours per
day, employing three barbers, with 10 minutes waiting time between customers, the yield
at 250 haircuts per week is approximately 2.5 lbs. per week or approximately 11 pounds
per month (approximately 1,083 people).

In large metropolitan areas, if one half of the population receives a haircut each month,
then one million people produce 10,000 lbs. of hair per month. One pound of hair per 100
lbs. of soil effectively feeds and maintains 33 potted plants equal to the size of a three
feet tomato plant. Thus, 10,000 lbs. of hair should produce 1,000,000 lbs. of fertile
nitrogen enriched soil, enough to support over 30,000 bushels of produce, all from one
month's collections of unused waste.

Hair Recycling Technologies will pick up the hair in the Midwest market and will take it
to our facility for processing.

3.2 Sales Literature

Hair Recycling Technologies will aggressively enter the gardening market from South
Bend, IN. We will begin by collecting the hair in the Midwest and will sell to Midwest
nurseries and specialty stores. HRT will remain based in South Bend, IN until strong
sustained growth allows us to penetrate the national market. We will then gradually move
our operations to a larger facility in South Bend. Since the supply of hair is so critical to
the success of our business, we will obtain contracts from our suppliers. In addition, HRT
intends to work on a contract with the U.S. Army and other branches of the U.S. military
to supply HRT with hair.

As our market share increases and growth allows, HRT will open facilities in other
regions such as the Northwest, which is open to environmental products. As HRT grows,
we will build on a national scale both collecting hair and distributing products
nationwide. After HRT proves to be the market leader, maintaining sustainable growth,
we will take advantage of free publicity since our products' unique and innovative
structures will attract many inquisitive parties.

Competitive Comparison

Hair Recycling Technologies is a company dedicated to the recycling concepts of our

society and providing organic products, which completely satisfies our customers. All of
our products will be composed of human hair that will be gathered from suppliers in the
Midwest.

The hair we collect will be marketed in two basic forms. First, the hair will be sanitized
and mixed with other organic elements to form a superior soil enhancer and plant food.
Secondly, the hair will be packaged alone to be sold as an animal deterrent.

Our soil enhancer/plant food will consist of human hair, organic elements, and potting
soil. What is a soil enhancer? A soil enhancer is an organic based mixture that can be
used in place of, or mixed with, the existing potting soil to increase the soil's nitrogen
content and enhance the nutrients present in the soil. Our enhancer is similar to fertilizers;
however, it reacts differently from most fertilizers. Our enhancer is time released and will
last over a long period of time, on average two to three months. The chemical reaction in
present fertilizers takes place immediately and usually lasts no longer than three to four
weeks. After three to four weeks, the customer must buy more fertilizer, costing both
time and money.

Our animal deterrent consists of only sanitized hair. The strong human scent in hair, as
shown by research, is what keeps the animals away. Not only does it deter animals, but it
has the benefit of adding nutrients for soil feeding. The customer simply places the hair
around the vegetation and the work is done.

Our soil enhancer, of course may be used as an animal deterrent as well. However, our
separately packaged deterrent product will contain a strong mix of human hair and can be
placed in strategic locations where it would face the animal head on.

4.1 Initial Product Line

HRT's goal is to carry many products in its line. However, initially the company will
introduce three specific products: SMART SOIL, HARE AWAY, and Rose Food.

4.1.1 Smart Soil

The first product will be a soil enhancer/plant food, which we will call SMART SOIL.
The SMART SOIL name was chosen because the name describes our product and its
advantages. SMART SOIL is a superior enhancer because the hair in our mixture slowly
releases its nutrients over a longer period of time than other organic products currently on
the market. All the consumer needs to do is spread the mix in with their plants and
SMART SOIL goes to work. The product alleviates the hassle of having to constantly
fertilize the plants, so hence the name SMART SOIL.

The advantage of our product with respect to other organic soil enhancers currently on
the market is that it uses an ingredient that is new and unique to the organic soil market.
Human hair is 97% protein and contains 27 trace elements: The chemical constituents are
as follows:
Carbon 50%
Oxygen 12%
Nitrogen 18%
Hydrogen07%
Sulfur 04%
Total 100%

SMART SOIL will be an organic mix containing potting soil, recycled sanitized human
hair, and other organic elements such as cottonseed meal and peat moss. SMART SOIL
will be packaged in a plastic 3-pound bag.

SMART SOIL will be introduced as a soil enhancer and not as a fertilizer, due to strict
EPA restrictions regarding listing product contents for fertilizers such as the amounts of
Nitrogen, Potassium, and Potash. We feel that initially we can save money by labeling
our product as a soil enhancer, thus avoiding an extra expense for lab work on our
product. As the company and resources grows, we will introduce SMART SOIL as a
fertilizer to compete in the fertilizer market and generate additional revenue.

4.1.2 Hare Away

The second product that HRT will carry is packaged recycled sanitized human hair. This
product will be called HARE AWAY. It will be marketed specifically toward consumers
who are having problems with animals such as deer and rabbits entering their garden.
Because our simple sanitizing process will not eliminate the human smell contained on
the hair follicle, HARE AWAY will be useful to deter animals and pests. The human hair
in HARE AWAY will be chopped and shredded to very short lengths. This will improve
its solvency as a nutrient, and make it more aesthetically pleasing to the buyer.

HARE AWAY will be sanitized and packaged in two different forms. First, it will be sold
in a recycled, clear plastic bag containing a header label on the top describing the product
and its beneficial uses. Secondly, the hair will be placed in a stocking type material and
sold in a plastic packaging. This product will be for consumers who desire to hang the
stocking from a tree or post near or around the garden. This will allow consumers to
strategically place our product in areas that will keep animals at a distance from their
garden.

4.1.3 Rose Food

The third product HRT will introduce will be a rose food. As discussed earlier, HRT will
reproduce the recipe by William Stafford of Austin, Texas to market towards avid rose
gardeners. The rose food will be introduced in three months from the start of operations.
The delay will be due to the time it takes to compost the ingredients in our product. The
recipe is as follows:

William Stafford's Hair Recipe:

(Enough for 50 rose bushes.)

• 10 pounds of hair clippings (should be clipped to 3/4 in lengths to prevent

matting).
• 20 pounds of cottonseed meal to help hold moisture and encourage rotting.
• 1 1/2 yards of leaf mold.

Mix the dry ingredients together; then wet down well. Keep in a compost pit 30 to 60
days, turning it until it is all rotted, then put about three quarts around each bush. Water
frequently the first ten days and keep watering until results show.

Hair used alone will produce similar results, although at longer duration. Spread the hair
around the surface as a mulch and water until it decays. Keep the hair on the surface since
it is a good insulator for the roots of all tender plants in the severe cold.

William Stafford has many blue ribbons as proof it helps roses bloom longer in the
winter.

Each of these products and all future products will be registered with the U.S. Trademark
Department and will have the recycled label on the package to show the consumer that
they are buying a recycled product. William Stafford's hair recipe has no current
copyrights or patents.
4.2 Future Products

Future products that HRT is looking forward to producing are the following:

Chemical conversion of human hair to be used as a food additive. The food industry
commonly uses a food ingredient called L-cysteine Hydrochloride (HCL). The additive
can be produced in two ways: synthetically, from non-organic bases such as petroleum or
directly from human hair. It can be cheaper to use human hair, which contains up to 8
percent of the natural amino acid cysteine. Cysteine is used as a flavoring and a dough
enhancer, but by the time it reaches our pizzas and snacks, the hair has been thoroughly
processed and reduced to its chemical constituents. Currently, the supply of hair that is
collected, cleaned, processed, and then chemically converted into L-cysteine is solely
done in Far East factories.

SMART SOIL fertilizer, similar to our soil enhancer however, marketed as a fertilizer
containing additional organic elements. Plant spikes similar to what is currently on the
market, but will be manufactured with our human hair formula. A gardening kit marketed
toward the pre-teen gardener to help them gain a better appreciation for his/her
environment. Resale of hair to wig manufacturers who use real hair for its wigs. In
addition, HRT will be researching the benefits of using animal hair in future products.

Market Analysis Summary

Customers who will benefit from HRT's products range from amateur plant lovers to
professional gardeners. HRT will focus on two market segments in the local area.
Amateur plant lovers consist of hobbyists, houseplant enthusiasts, first-time gardeners,
weekend gardeners, and other plant growers. HRT defines this group as amateurs because
their goal is to grow plants for the reason of enjoyment or as an entertaining hobby and
not for reasons of competition or profit.

Professional gardeners include those who grow plants to be judged in gardening

competitions and those who are organic food growers in the organic produce market.
Professional gardeners are very serious about their plant-growing methods because they
are motivated by goals of winning competitions or earning profits.

These amateur and professional gardeners make up the general customer base of HRT.
However, HRT has a more specifically targeted customer in mind. A significant number
of these amateurs and professionals are members in one or more of the 150+ organic
gardening clubs that have been organized throughout the United States. HRT intends to
target its customers as those who would use purely organic plant foods as an aid to their
plant growing. The following chart offers a more detailed description of HRT's
customers.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Growth CAGR
Customers
Amateur 3% 20,000,000 20,500,000 21,012,500 21,537,813 22,076,258 2.50%
Gardeners
Professional 2% 4,000,000 4,080,000 4,161,600 4,244,832 4,329,729 2.00%
Gardeners
Other 0% 0 0 0 0 0 0.00%
Total 2.42% 24,000,000 24,580,000 25,174,100 25,782,645 26,405,987 2.42%
5.1 Target Market Segment Strategy

To specifically target our customers, we examined the market trends. Hair Recycling
Technologies' products are targeted at the garden and indoor segments with a specific aim
at the organic segment. It is estimated that in the next five years, organic gardening
products could capture 25 percent of the billion-dollar U.S. lawn and garden market.
"Organic gardening is clearly in and chemical addiction is out," says Lucy Warren, a San
Diego-based garden historian and industry expert.

To what can we attribute this market growth? Research has shown that people are
becoming increasingly aware of the problems that chemicals pose to the foods we eat and
to the environment. A recent article states: The bloom clearly is off chemically dependent
gardening. A Harris Poll indicates more than 60 percent of America's home gardeners
used at least one organic method, such as mulching, composting, or beneficial insects
during the last year. And more than a third of gardeners, 37 percent, in the poll said they
use primarily organic methods.

The "Gardening in America ‘95" poll, commissioned by the Rodale Press, found that
only one in five U.S. gardeners admitted to not having used a single organic method over
the last 12 months. The reality is clear: organic is here to stay.

Supporting this is the fact that sales of organic foods have risen dramatically over the past
decade, totaling Rs.1.4 billion in 1992, according to the most recent figures. And the
organic food market continues to grow at an average rate of 25 percent a year, according
to the Organic Food Production Association of North America.

The Encyclopedia of Organic Gardening applauds the use of organics instead of

chemicals. It states: The organic school does not accept the use of artificial fertilizers for
many reasons...Chemical fertilizers are quick-acting, short-term plant "boosters" and are
responsible for:
 • Creating hardpan soil.
• Destruction of beneficial soil life.
• Altering vitamin and protein contents of certain crops.
• Making certain crops more vulnerable to disease.
• Preventing plants from absorbing some needed minerals.

The following list describes the positive effects of organic fertilizers and the negative
effects of chemicals, and thus exhibits the advantages of using organic fertilizers instead
of chemicals.

• Organic Fertilizers: Replenish the soil. Keep soil friable. Promote beneficial soil
life. Prevent hardpan soil conditions. Increase crop yields. Maintain a natural
balance in the soil. Protect certain crops from disease. Benefit the environment by
recycling wastes. Grow larger plants. Are easy to use. Are safe.
• Chemical Fertilizers: Pollute the nation's lakes, rivers, and streams. Increase the
infant mortality rate among female babies. Destroy beneficial soil life, including
earthworms. Alter vitamin and protein contents of certain crops. Make certain
crops vulnerable to disease. Prevent some plants from absorbing needed minerals.
Produce foods that just do not taste as good. Are a leading cause of blindness on
the farm. Are corrosive to farm equipment and storage areas. Deteriorate soil
friability. Create hardpan soil. Are costly.

Further research indicates that organics are the "up-and-coming" products in the plant
food market: "Organic gardeners are the long-term market. Retail sales for gardening
centers are flat except for organic supplies and fertilizers," says Mike McGrath, editor-in-
chief of Organic Gardening Magazine.

Market trends indicate that the customer needs an organic product that works as well as
or better than competitive chemical products. The product should be priced against
competing chemical and organic lines and should be easy to use, environmentally safe,
and have superior performance. HRT can specifically target customers who are
environmentally and health conscious, and also those who just want a product that works
better than the rest for a competitive price.

5.2 Industry Analysis

There are a number of companies in the fertilizer market that offer soil enhancers and
plant foods. These companies compete mainly on the basis of price, time between
applications, and promises of performance. However, market trends indicate that new
competition exists between chemical and organic products and the inherent positive and
negative effects of these differing formulas in soil enhancers and plant foods. HRT's
competition can be divided into two forms: direct and indirect.

5.2.1 Main Competitors

All of the prices are based on cost and a standard markup is used. Hair Recycling
Technologies prices will be competitive with other chemical and organic fertilizers.

Plant Foods:

• Miracle Gro All Purpose Rs.5.93 (48 oz.).

• Shultz's Starter Plus Rs.6.64 (40 oz.).
• Plantation Products Potting Mix Rs.7.97 (40 oz.).
• Organica Plant Growth Activator Rs.18.43 (16 oz.).

Animal Deterrents:

• Heneder Spray Rs.11.99 (1 qt.).

• Blood Meal Rs.4.99 (3 lbs.).
• Hair Today Gone Tomorrow Rs.13.84 (pint).
• Liquid Fence Animal Repellant Rs.29.95 (32 oz.).
• Bobex Deer Repellant Rs.19.95 (32 oz.).
5.2.2 Industry Participants

HRT's direct competition is made up of those companies that offer an organic soil
enhancer and plant food product. Organics are no longer a niche market. Organic plant
foods have developed from a niche market into a dominant sub-market in the plant food
and fertilizer market and are strong competition for chemical competitors. Major direct
competition includes VPG, makers of Super Bone Meal, and Scott's, makers of Iron Bull.
Other direct competition includes the products ZOO-DOO, and POO-PETS.

5.2.3 Distribution Patterns

Indirect competitors are those companies that offer only chemical soil enhancers and
plant foods. HRT feels that these companies are an indirect form of competition because
though the products they promote attempt to give the same results as our direct
competition, they fall far short of current market expectations, and it will only be a matter
of time until these companies' products will be out-dated. Even so, HRT does
acknowledge that as these companies' products become outdated, many companies will
be certain to phase-in their own organic substitutes in place of the chemicals. Major
indirect competitors are Grace/Sierra, Stern, and Pursell.

5.2.4 Competition and Buying Patterns

In order to compete in the soil enhancer and plant food market, HRT identified market
needs to gain an overall competitive advantage. The following explains our products
competitive advantages. Our product is:

• Organic: To respond to current market trends, HRT is offering an organic product.

This includes all of the advantages organics offer over chemicals.
• More effective between application times: Normal times between applications
range from two to four weeks. Our product lasts for many months, thereby saving
the customer time and money (no additional expenditure for more product).
• Recycled: This part of our product has to do with marketing. Recycled products
characterize a "caring company" and are more appealing to the customer.
 • A safe and effective pest repellent: Our product would be the only plant food on
the market with the added convenience of repelling pests. Most gardeners use
separate plant foods and pest repelling methods. Many of the methods used to
keep animals away are not only dangerous and life threatening to the animals, but
also to any humans that may come in contact with them.

These may include chemicals and/or barriers and traps. HRT's product is non-toxic
and has the ability to deter animals safely because of the human scent in the hair,
animals that are typically found in gardens steer clear!

Strategy and Implementation Summary

Hair Recycling Technologies marketing strategy is to enhance, promote, and support the
fact that our products, SMART SOIL and HARE AWAY are organic, recycled, and more
effective than our competitors. HRT will target the environmentally conscious gardener.
Our marketing will show the customer that HRT will be the leading company in the
organic soil enhancer and animal deterrent business for the 21st century. The quality and
competitive price of our products will be used to generate sales, and HRT will introduce
its products through retail outlets and through the Internet.

6.1 Strategy Pyramid

The first step is to create a website to promote our products. The creation of our website
is expected to take a minimum amount of time and effort after contracting with a
developer. This will be one source for selling our products directly to our customers.

Second, there will be much emphasis placed on contacting and securing contracts with
buyers of large retail establishments who supply home and garden products to the
marketplace. Establishments will include large nurseries such as Franks and discount
stores such as K-Mart, Mynards, Myers, and Wal-Mart. We will also focus on selling to
mid-sized retailers through direct selling.

6.1.1 Future Marketing Strategy

During the first year of operations, HRT will use traditional marketing channels such as
direct marketing and through the use of channel partners. In recent years, there has been a
large increase in the number of distribution channels. Less expensive and more effective
ways of promoting a product have emerged. Infomercials are a big part of this new trend.
HRT may plan to use this channel during our third and forth year of operations.

6.2 Value Proposition

HRT will focus its advertising efforts toward the home gardener. The company will stress
the fact that our product is organic, recycled, and does not require many applications.
This advertising strategy is aimed toward the environmentally conscious gardener who
believes SMART SOIL will add more time and require less maintenance to their
gardening experience. The animal deterrent HARE AWAY will be marketed toward the
gardener who needs protection for his or her plants.

6.3 Competitive Edge

The suggested retail price for a bag of our soil enhancer is Rs.2.99. Our wholesale price
for the same bag is Rs.1.50, and our cost per bag is less than 50 cents. The retail price for
our bagged hair is Rs.1.99. The wholesale price for the bagged hair is 85 cents a bag, and
our cost per bag is less than 15 cents.

The price for the soil enhancer and bagged hair are fairly inelastic. With the
environmental issues our world faces today, the consumer is more demanding of organic
and recycled products. We believe that most gardeners are true environmentalists and
will pay a premium for organic products.

The price margins on our products are relatively high. These margins may shrink with
possible unexpected costs and competitors, however, the margins are high enough to
sustain a considerable amount of growth and allocation toward a strong, aggressive
advertising campaign.

6.4 Strategic Alliances

HRT's advertising will play an important role in reaching our target market. The
company will try to reach the target market through print advertising. There are dozens of
gardening magazines which have thousands of subscribers. Organic Gardening and
Farming and Organic Gardening are two of the largest publications dealing with our
business.

These publications will be one of our first channels of advertising. As stated earlier,
HRT will also advertise through relationships with online retailers of home and gardening
supplies.

6.4.1 Advertising Budget

Advertising expenses for the first two years of operation can be summarized in the table
below.

Source Total
Organic Gardening 1/12 page Rs.2,958/year
Organic Gardening/Farming 1/6 pageRs.6,150/year
Worm's Way Catalog Rs.5,700/year
Internet Co-op Ads Variable Rs.3,692
Other Advertising Variable Rs.5,500
Total: Rs.24,000

Sales Strategy

Our present management team will become the main sales force when operations begin.
HRT's sales force will increase as business demand permits. In the first six to twelve
months of operations, our sales team will focus its efforts on small nurseries and other
related companies. The team will promote the products based on their environmental
strengths and extended duration. HRT will use other channels of selling after the first
year. Catalogs and direct mail selling are part of the selling plan. In the second year, HRT
will take its products to larger stores and retail chains.
sales Forecast
Year 1 Year 2 Year 3
Sales
Smart Soil, Hare Rs.160,200 Rs.378,000 Rs.562,500
Away, Rose Food,
Other Rs.0 Rs.0 Rs.0
Total Sales Rs.160,200 Rs.378,000 Rs.562,500

Direct Cost of Sales Year 1 Year 2 Year 3

Smart Soil, Hare Rs.68,748 Rs.137,500 Rs.206,250
Away, Rose Food,
Other Rs.0 Rs.0 Rs.0
Subtotal Direct Cost Rs.68,748 Rs.137,500 Rs.206,250
of Sales

Development Status

Acquisition of Supplies:

Hair Recycling Technologies will start its pilot program by establishing business partner
relationships with owners of hair establishments in the Midwest. These relationships will
involve placing hair collection bins in the salons to be picked up on a two-week basis.
HRT will use a leased van to receive the supply of hair. Potting soil, along with peat
moss, will be acquired to make the prototype. After two weeks, HRT will retrieve the hair
collection bins; subsequently, the company will begin the next phase of processing.

Prototype of Product:

Hair Recycling Technologies will process the human hair by using a conventional
microwave oven which will sanitize the human hair and then using a rotary cutter which
will chop the hair into smaller strands. HRT will then process the components of human
hair, potting soil, and peat moss. Substantial portions of each component will be
combined and packaged. Thus, SMART SOIL, the company's premier product, will be
completed with a cost of less than 50 cents a bag.

Geographical Location:

Presently, the company facility is a 18' x 30' room located in the basement of one of the
founders in the South Bend area. The maximum capacity of this facility is 250,000 units
of the SMART SOIL product. Here are the capacity projects for the next three years:

• 2001: ~125,000 units/yr.

• 2002: [Two people processing] ~250,000 units/yr.
• 2003: [Three people processing] ~375,000 units/yr.

Facilities and Improvements:

As the projections indicate, the company essentially plans to stay in its current South
Bend location through the first quarter of 2003. HRT projects to be fully established in a
new South Bend facility by the beginning of the second quarter of 2003.

In this facility, the company will implement new processing equipment and procedures.
Whereas HRT has sanitized the hair inside of a large commercial microwave oven, the
company will lease the following equipment to improve production:

1. The Gemco V-shape Tumble Blending Microwave Dryer

o To sanitize and toss the hair to prevent matting.
2. The Munson M-1 Mini Rotary Cutter to chop the hair
o Cuts hair into finer strands for better packaging and consumer appeal.

Costs:

Supplies for Products:

Item Price\Pound
Potting Soil Rs. 0.03
Peat Moss Rs.0.07
Cottonseed MealRs.0.01
Hair Rs.0.03
Bags (each) Rs.0.03
Labels (each) Rs.0.03
Total Rs.0.23

General Administrative Expenses:

• PBX system with voice mail service:

o Three phone lines (Rs.60/mo.) Rs.180
o One 800 line (Rs.20/mo.) Rs.20
• Used office furniture & equipment: Rs.3,600
• Rent: Rs.600.00/mo.

Advertising: Continued advertising costs will be approximately 15% of gross sales.

Additional in-depth cost structure will be covered in the Financial Analysis.

Management Summary

K. Justin Luber is the mind behind Hair Recycling Technologies. He saw the need for
hair to be recycled and used in several different and environmentally beneficial ways.
With the development, determination, motivation, and persistence of everyone involved,
HRT will be the leading producer of recycled hair in the future.

The management team of Hair Recycling Technologies will be comprised of the

following executive positions.

• President of operations: K. Justin Luber.

• Vice-president of operations/finance: Jason Mysliwec.
• Financial advisor: Hunter Korth.
• Marketing advisor: Robin Liu.
At Hair Recycling Technologies, the management team believes that this unique way of
recycling will change the way consumers look at gardening. As with any company, the
responsibilities and duties of the management team are very important and cannot be
taken lightly. However, along with these individual responsibilities the executives and
advisors at HRT will work together as a team to create a successful company.

9.1 Organizational Structure

The responsibilities involved in the company Hair Recycling Technologies are great and
abundant. HRT's main purpose is to appeal to environmentally conscious minded
gardeners by developing products that include recycled hair. Each executive member will
have several responsibilities that are imperative to fulfill the duties in producing such
unique gardening products.

As founder and president of Hair Recycling Technologies, Mr. Justin Luber will be
responsible for the entire operation. Some of his duties will include overseeing the areas
held by the other company executives, as well as the output produced by other
employees. He will be in charge of the company's public relations. He will also have the
job of hiring dedicated people and firing employees who are not willing to put their best
efforts into the production of HRT's products. In addition, he will establish a good
working relationship with the board of directors and company executives. Mr. Luber will
also have an important role in making decisions that concern the well being of HRT.

Mr. Jason Mysliwec has an important job as vice-president of finance/operations. His job
will be crucial in the survival of Hair Recycling Technologies. Mr. Mysliwec will be
responsible for HRT's financial operations which include start-up expenses, accounts
payable, accounts receivables, and developing yearly budgets. In addition, his job will
include developing funding needed for the company such as obtaining loans on behalf of
the company and fund-raising. This will include developing and sustaining relationships
with investors. Moreover, he will be allocating money for each division such as
marketing, research and development and sales. This job will be important in that each
department's survival is dependent upon the financial abilities of Mr. Mysliwec.
Marketing will play an important role in convincing consumers to switch from their old
products to HRT's unique soil enhancer and animal deterrent. Mr. Luber will be
responsible for creating the need for SMART SOIL and the animal deterrent while at the
same time capturing the attention of the consumers' targeted, home gardeners. Some of
his duties will include the pricing of HRT's products, monitoring the competition,
analyzing results from market research studies, realizing customers' needs, and appealing
to those needs. In addition, Mr. Luber will be working closely with Mr. Mysliwec on the
development and distribution of new product lines.

The sales department is parallel with marketing in that both aspects are dependent upon
the other. Mr. Luber will be using strategies to make people aware of HRT's unique
products. He will be responsible for advertising and promotion ideas and have input into
product pricing. He will also be in charge of projecting the overall sales of the products,
setting sales quotas for sales representatives, and developing a sales force. In addition,
Mr. Luber will be working along with marketing in order to obtain feedback from market
research surveys which will help him target the customer more accurately.

Research and development is an important stage in the success of Hair Recycling

Technologies. Mr. Mysliwec will be responsible for the growth of the company. His
duties will include creating new ideas for using recycled hair in the gardening industry.
This job might entail working closely with professionals who are experts in the field of
agriculture, horticulture, and possibly organic chemistry. In addition, Mr. Mysliwec will
have an important role in diversifying and expanding the product line.

Another responsibility Mr. Mysliwec will have is promoting teamwork throughout the
company as well as exemplifying leadership qualities to production employees. Some of
his duties will include handling conflicts within the company, dealing with problems that
arise quickly and motivating employees as well as rewarding them for good performance.
In addition, Mr. Mysliwec will be directly involved in people management. In order to
have a good operation the manager must create a honest, open, trusting relationship with
employees. This duty will entail establishing a good working relationship with production
line employees because without them HRT's products will not be produced.
9.2 Management Team

The management team and board of directors/advisors will play a critical part in the
success and growth of the company's unique products. One important aspect of being a
team is the ability to work together. In the early stages of this venture, four individuals
came together and formed a team in which they transformed into team players. Moreover,
each primary member has different qualities and skills that will be beneficial to their
division and company as a whole.

K. Justin Luber, President of Operations:

Mr. Luber is a second year MBA candidate at the Mendoza College of Business,
University of Notre Dame with concentrations in marketing and strategy. He is also a
graduate of the University of Georgia, Terry College of Business with a BBA degree in
finance. Mr. Luber has many strengths that will be beneficial to Hair Recycling
Technologies. He is motivated, ambitious and a team player. Throughout school, Mr.
Luber has been acknowledged for the leadership abilities he possesses. He received the
Outstanding Performance Award while attending a ten-week course at the Dale Carnegie
Human Relations Course in Atlanta, Georgia. In addition, Mr. Luber was awarded for
displaying leadership abilities at the United States Naval Gunnery School in Chicago,
Illinois. In addition to his college experience, Mr. Luber has over five years of business
experience which includes a management consulting summer internship with Arthur D.
Little, Inc, three years sales and marketing experience with Unisys Corporation, and
project management experience with the Atlanta Committee for the Olympic Games.
Specifically, as it relates to his sales and marketing abilities, Mr. Luber's sales and
marketing strategies at Unisys led to a consistent increase in sales volume coupled with
many achievements, such as achieving the Unisys 1997 Unisys Rookie of the Year
Award for the North American Field Operations and the Southern Field Operations.
Additionally, while working in sales and marketing with Unisys, Mr. Luber earned
national recognition for securing over Rs.2.5 million in new business.

Jason Mysliwec, Vice-President of Finance/Operations:

Mr. Mysliwiec will more than adequately complement the skills of Mr. Luber, Korth, and
Liu. With a Bachelor of Science degree in business administration from Pepperdine
University, as well as an MBA with a finance concentration from the University of Notre
Dame, Mr. Mysliwiec is well equipped to lead and manage HRT effectively. Proficient in
all Microsoft Office applications, and several financial software packages, Mr. Mysliwiec
will ensure that the firm utilizes its resources well, and allocates them efficiently in the
pursuit of profitability. Among Mr. Mysliwiec's professional experiences are two years as
internal finance and administration coordinator at Centura Health in Denver, Colorado.
During this time, Mr. Mysliwiec assembled and oversaw a Rs.40 million Information
Services budget, where he not only successfully kept the division within its parameters,
but also orchestrated programs which saved the company several hundred thousand
dollars per year.

Hunter Korth, Financial Advisor:

Mr. Korth has had experience in the past that will be beneficial to the company in his role
as a financial advisor. After graduating with a bachelors degree in economics from
Albion College in 1994, Mr. Korth worked for Merrill Lynch in several different
capacities. He initially worked in the corporate options and 401K departments where he
advised clients in the creation of options and 401K plans and administered financial
advice regarding the plans. Following his tenure in the corporate options and 401K
departments, Mr. Korth transitioned to the private client services department in San
Francisco. While with private client services, Mr. Korth developed investment plans with
strategies tailored to achieve clients' specific short- and long-term investment objectives
and provided comprehensive investment guidance and highly personalized service.
During this time, he managed a Rs.9 million dollar portfolio of securities consisting of
equities and fixed income products. Mr. Korth is currently a second year MBA student at
the University of Notre Dame and is concentrating in finance.

Robin Liu, Director/Advisor of Marketing:

Mr. Liu will be an important player in the growth of HRT. He worked in sales and
marketing for nine years and is very familiar with some of the elements involved in sales
strategies such as advertising, promotion, and the sales force. His skills in working with
emerging markets will be helpful in that he can analyze and understand the results of a
market research study. Mr. Liu will be able to relate to the different types of people
studied and comprehend their responses by making the company's product appeal to their
particular needs. He has also held several jobs such as project manager, national sales
manager, China chief representative, and president and founder for his own trading
company. He has demonstrated a high level of achievements by acting on various
managerial positions. Mr. Liu will receive his MBA with a concentration on marketing in
May of 2001 from the University of Notre Dame.

Personnel Plan
Year 1 Year 2 Year 3
Office Rs.19,800 Rs.40,788 Rs.63,018
Manager
Justin Rs.15,000 Rs.24,000 Rs.30,000
Luber
Jason Rs.15,000 Rs.24,000 Rs.30,000
Mysliwec
Hunter Rs.15,000 Rs.24,000 Rs.30,000
Korth
Robin Liu Rs.15,000 Rs.24,000 Rs.30,000
Total 5 6 7
People

Total Rs.79,800 Rs.136,788 Rs.183,018

Payroll

Financial Plan
Inception Loan: An original loan of Rs.60,000 will be procured for the opening of HRT.
At an annualized borrowing rate of 8%, interest payments of Rs.400 will be made
monthly.

Production: HRT will employ the following production schedule:

• 2001: 125,000 units (10,416/month).

• 2002: 250,000 units (20,833/month).
• 2003: 375,000 units (31,250/month).

Sales Forecasts: HRT has estimated the following unit sales forecasts:

• 2001: 106,800 units.

• 2002: 252,000 units.
• 2003: 375,000 units.

For simplicity, Price per Unit = Rs.1.50, Cost per Unit = Rs..55

Salaries: HRT will hire and employ one administrative office manager in 2001, two in
2002, and three in 2003. The first year salary will be Rs.19,800, increasing for inflation at
3% per year, per employee. Therefore, total salaries will be Rs.40,788 in 2002, and
Rs.63,018 in 2003.

Rent: HRT will sign a three-year lease at business inception. Terms of this lease will
include rent of Rs.600 per month, and will include electricity.

Utilities: Per the schedule found earlier in the business plan, HRT will pay non-electric
(included in rent) utilities of Rs.200 per month over the term of the lease.

Equipment: Per the schedule found in the business plan regarding equipment, HRT will
invest Rs.5,500 up front for its machinery, to be depreciated straight-line over a useful
life of five years. Therefore, yearly depreciation will be Rs.1,100 per year (Rs.92 per
month). Also, HRT will equip its firm with office equipment (per schedule in business
plan) at a one-time expense of Rs.3,600.
Insurance: HRT will enter into a liability insurance policy at the cost of Rs.2,400 per
year.

Advertising: HRT will originally plan to invest 15% of gross sales into advertising
expenses. This number may vary over time, but for preliminary financial planning, will
be allocated as follows:

• 2001: Rs.24,000.
• 2002: Rs.56,700.
• 2003: Rs.84,375.

Miscellaneous: HRT will reserve a miscellaneous expense account at the rate of 3% of

gross sales, amortized evenly over each month, for unforeseen costs.

Taxes: As a Sub-chapter S Corporation, Hair Recycling Technologies pays no corporate

tax. Rather, individual income taxes are paid by each owner based on his percentage of
stake in the company. For this reason, Hair Recycling Technologies taxes will be Rs.0,
and are noted as such for reporting purposes.

10.1 Break-even Analysis

The chart and table below contain the Break-even Analysis for HRT.

Break-even Analysis

Monthly Revenue Rs.19,812

Break-even

Assumptions:
Average Percent 43%
Variable Cost
Estimated Monthly Rs.11,310
Fixed Cost

10.2 Projected Profit and Loss

The most important assumption in the Projected Profit and Loss statement is the gross
margin, which is supposed to increase to 25%. Month-by-month assumptions for profit
and loss are included in the appendix.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales Rs.160,200 Rs.378,000 Rs.562,500
Direct Cost of Sales Rs.68,748 Rs.137,500 Rs.206,250
Other Production Rs.0 Rs.0 Rs.0
Expenses
Total Cost of Sales Rs.68,748 Rs.137,500 Rs.206,250

Gross Margin Rs.91,452 Rs.240,500 Rs.356,250

Gross Margin % 57.09% 63.62% 63.33%

Expenses
Payroll Rs.79,800 Rs.136,788 Rs.183,018
Advertising/Promotion Rs.28,806 Rs.56,700 Rs.84,375
Depreciation Rs.1,104 Rs.1,104 Rs.1,104
Leased Equipment Rs.0 Rs.0 Rs.0
Utilities Rs.2,400 Rs.2,400 Rs.2,400
Insurance Rs.2,400 Rs.2,400 Rs.2,400
Rent Rs.7,200 Rs.7,200 Rs.7,200
Payroll Burden Rs.11,970 Rs.20,518 Rs.27,453
Miscellaneous Rs.2,040 Rs.10,000 Rs.15,000

Total Operating Rs.135,720 Rs.237,110 Rs.322,950

Expenses

Profit Before Interest (Rs.44,268) Rs.3,390 Rs.33,300

and Taxes
EBITDA (Rs.43,164) Rs.4,494 Rs.34,404
Interest Expense Rs.4,540 Rs.4,080 Rs.3,600
Taxes Incurred Rs.0 Rs.0 Rs.743

Net Profit (Rs.48,808) (Rs.690) Rs.28,958

Net Profit/Sales -30.47% -0.18% 5.15%

10.3 Projected Cash Flow

The chart and table below project increasing cash flow throughout the first three years of
plan implementation.

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales Rs.80,100 Rs.189,000 Rs.281,250
Cash from Receivables Rs.59,017 Rs.160,336 Rs.256,969
Subtotal Cash from Rs.139,117 Rs.349,336 Rs.538,219
Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Rs.0 Rs.0 Rs.0
Received
New Current Borrowing Rs.0 Rs.0 Rs.0
New Other Liabilities Rs.0 Rs.0 Rs.0
(interest-free)
New Long-term Liabilities Rs.0 Rs.0 Rs.0
Sales of Other Current Rs.0 Rs.0 Rs.0
Assets
Sales of Long-term Assets Rs.0 Rs.0 Rs.0
New Investment Received Rs.0 Rs.26,000 Rs.0
Subtotal Cash Received Rs.139,117 Rs.375,336 Rs.538,219

Expenditures Year 1 Year 2 Year 3

Expenditures from
Operations
Cash Spending Rs.79,800 Rs.136,788 Rs.183,018
Bill Payments Rs.121,701 Rs.237,977 Rs.348,990
Subtotal Spent on Rs.201,501 Rs.374,765 Rs.532,008
Operations

Additional Cash Spent

Sales Tax, VAT, HST/GST Rs.0 Rs.0 Rs.0
Paid Out
Principal Repayment of Rs.0 Rs.0 Rs.0
Current Borrowing
Other Liabilities Principal Rs.0 Rs.0 Rs.0
Repayment
Long-term Liabilities Rs.6,000 Rs.6,000 Rs.6,000
Principal Repayment
Purchase Other Current Rs.0 Rs.0 Rs.0
Assets
Purchase Long-term Assets Rs.0 Rs.0 Rs.0
Dividends Rs.0 Rs.0 Rs.0
Subtotal Cash Spent Rs.207,501 Rs.380,765 Rs.538,008

Net Cash Flow (Rs.68,384) (Rs.5,429) Rs.211

Cash Balance Rs.8,237 Rs.2,808 Rs.3,019

10.4 Projected Balance Sheet

The following table projects healthy growth in sales and net worth.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets
Current
Assets
Cash Rs.8,237 Rs.2,808 Rs.3,019
Accounts Rs.21,083 Rs.49,747 Rs.74,029
Receivable
Inventory Rs.8,497 Rs.16,994 Rs.25,492
Other Rs.0 Rs.0 Rs.0
Current
Assets
Total Current Rs.37,817 Rs.69,550 Rs.102,539
Assets

Long-term
Assets
Long-term Rs.9,100 Rs.9,100 Rs.9,100
Assets
Accumulated Rs.1,104 Rs.2,208 Rs.3,312
Depreciation
Total Long- Rs.7,996 Rs.6,892 Rs.5,788
term Assets
Total Assets Rs.45,813 Rs.76,442 Rs.108,327

Liabilities Year 1 Year 2 Year 3

and Capital

Current
Liabilities
Accounts Rs.9,171 Rs.20,490 Rs.29,418
Payable
Current Rs.0 Rs.0 Rs.0
Borrowing
Other Rs.0 Rs.0 Rs.0
Current
Liabilities
Subtotal Rs.9,171 Rs.20,490 Rs.29,418
Current
Liabilities

Long-term Rs.54,000 Rs.48,000 Rs.42,000

Liabilities
Total Rs.63,171 Rs.68,490 Rs.71,418
Liabilities

Paid-in Rs.34,000 Rs.60,000 Rs.60,000

Capital
Retained (Rs.2,550) (Rs.51,358) (Rs.52,048)
Earnings
Earnings (Rs.48,808) (Rs.690) Rs.28,958
Total Capital (Rs.17,358) Rs.7,952 Rs.36,910
Total Rs.45,813 Rs.76,442 Rs.108,327
Liabilities
and Capital

Net Worth (Rs.17,358) Rs.7,952 Rs.36,910

10.5 Business Ratios

The following table contains important business ratios from the Soil Preparation Services
industry, as determined by the Standard Industry Classification (SIC) Index.

Several explanations must be made to balance the company's ratios against the industry
averages. First of all is the relative newness of this type of industry, which means that the
industry averages reflect companies that have very different products, consumers and
overall circumstances. Therefore, there will be substantial differences in the general
comparison between HRT and other firms. Furthermore, HRT is a start-up company that
is seeking to introduce a new type of product to the market through limited distribution
channels. The company is investing significant funds into advertising, and not expecting
to see profits for the first two years. This is why the company has a consecutive if
diminishing negative net worth during the period covered by this plan. As acquired assets
gear up to full production and the marketing efforts generate more sales, this negative net
worth will become more comparable to industry averages. Finally, as a start up, the
company is seeking ways to maximize profit while reducing the need to invest in
significant initial costs. Therefore the ratios of HRT's assets and liabilities to the industry
standard, which reflect more mature, established companies does not match well either.

Ratio Analysis
Year 1 Year 2 Year 3 Industry
Profile
Sales Growth 0.00% 135.96% 48.81% -2.20%

Percent of Total Assets

Accounts Receivable 46.02% 65.08% 68.34% 20.80%
Inventory 18.55% 22.23% 23.53% 26.20%
Other Current Assets 0.00% 0.00% 0.00% 24.70%
Total Current Assets 82.55% 90.98% 94.66% 71.70%
Long-term Assets 17.45% 9.02% 5.34% 28.30%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 20.02% 26.80% 27.16% 35.80%

Long-term Liabilities 117.87% 62.79% 38.77% 19.60%
Total Liabilities 137.89% 89.60% 65.93% 55.40%
Net Worth -37.89% 10.40% 34.07% 44.60%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 57.09% 63.62% 63.33% 35.40%
Selling, General & 86.44% 64.35% 58.60% 20.30%
Administrative Expenses
Advertising Expenses 14.98% 15.00% 15.00% 1.10%
Profit Before Interest and -27.63% 0.90% 5.92% 5.30%
Taxes

Main Ratios
Current 4.12 3.39 3.49 1.86
Quick 3.20 2.56 2.62 0.90
Total Debt to Total Assets 137.89% 89.60% 65.93% 55.40%
Pre-tax Return on Net Worth 281.18% -8.68% 80.47% 8.30%
Pre-tax Return on Assets -106.54% -0.90% 27.42% 18.60%
 Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -30.47% -0.18% 5.15% n.a
Return on Equity 0.00% -8.68% 78.46% n.a

Activity Ratios
Accounts Receivable Turnover 3.80 3.80 3.80 n.a
Collection Days 57 68 80 n.a
Inventory Turnover 10.91 10.79 9.71 n.a
Accounts Payable Turnover 14.27 12.17 12.17 n.a
Payment Days 27 22 25 n.a
Total Asset Turnover 3.50 4.94 5.19 n.a

Debt Ratios
Debt to Net Worth 0.00 8.61 1.93 n.a
Current Liab. to Liab. 0.15 0.30 0.41 n.a

Liquidity Ratios
Net Working Capital Rs.28,646 Rs.49,060 Rs.73,122 n.a
Interest Coverage -9.75 0.83 9.25 n.a

Additional Ratios
Assets to Sales 0.29 0.20 0.19 n.a
Current Debt/Total Assets 20% 27% 27% n.a
Acid Test 0.90 0.14 0.10 n.a
Sales/Net Worth 0.00 47.54 15.24 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Appendix

Sales Forecast
Month Month Month Month Month Month Month Month Month Month Month Month 12
1 2 3 4 5 6 7 8 9 10 11
Sales
Smart Soil, 0% Rs.13,3 Rs.13, Rs.10, Rs.7,5 Rs.7,5 Rs.7,5 Rs.8,5 Rs.11, Rs.18, Rs.20, Rs.25, Rs.18,000
Hare Away, 50 350 000 00 00 00 00 500 000 000 000
Rose Food,
Other 0% Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0
Total Sales Rs.13,3 Rs.13, Rs.10, Rs.7,5 Rs.7,5 Rs.7,5 Rs.8,5 Rs.11, Rs.18, Rs.20, Rs.25, Rs.18,000
50 350 000 00 00 00 00 500 000 000 000

Direct Cost Month Month Month Month Month Month Month Month Month Month Month Month 12
of Sales 1 2 3 4 5 6 7 8 9 10 11
Smart Soil, Rs.5,72 Rs.5,7 Rs.4,2 Rs.3,2 Rs.3,2 Rs.3,2 Rs.3,6 Rs.4,9 Rs.7,7 Rs.8,5 Rs.10, Rs.7,724
Hare Away, 9 29 91 19 19 19 48 35 24 83 728
Rose Food,
Other Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0
Subtotal Rs.5,72 Rs.5,7 Rs.4,2 Rs.3,2 Rs.3,2 Rs.3,2 Rs.3,6 Rs.4,9 Rs.7,7 Rs.8,5 Rs.10, Rs.7,724
Direct Cost 9 29 91 19 19 19 48 35 24 83 728
of Sales

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month M
10 1
Office 0% Rs.1,650 Rs.1,650 Rs.1,650 Rs.1,650 Rs.1,650 Rs.1,650 Rs.1,650 Rs.1,650 Rs.1,650 Rs.1,650 R
Manager
Justin 0% Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 R
Luber
Jason 0% Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 R
Mysliwec
Hunter 0% Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 R
Korth
Robin Liu 0% Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 Rs.1,250 R
Total 5 5 5 5 5 5 5 5 5 5 5
People

Total Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 R
Payroll

Pro Forma Profit and Loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 M
Sales Rs.13,350 Rs.13,350 Rs.10,000 Rs.7,500 Rs.7,500 Rs.7,500 Rs.8,500 Rs
Direct Cost of Sales Rs.5,729 Rs.5,729 Rs.4,291 Rs.3,219 Rs.3,219 Rs.3,219 Rs.3,648 Rs
Other Production Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs
Expenses
Total Cost of Sales Rs.5,729 Rs.5,729 Rs.4,291 Rs.3,219 Rs.3,219 Rs.3,219 Rs.3,648 Rs

Gross Margin Rs.7,621 Rs.7,621 Rs.5,709 Rs.4,281 Rs.4,281 Rs.4,281 Rs.4,852 Rs

Gross Margin % 57.09% 57.09% 57.09% 57.09% 57.09% 57.09% 57.09% 57

Expenses
Payroll Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs.6,650 Rs
Advertising/Promotion Rs.2,401 Rs.2,401 Rs.1,800 Rs.1,225 Rs.1,225 Rs.1,225 Rs.1,755 Rs
Depreciation Rs.92 Rs.92 Rs.92 Rs.92 Rs.92 Rs.92 Rs.92 Rs
Leased Equipment Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs.0 Rs
Utilities Rs.200 Rs.200 Rs.200 Rs.200 Rs.200 Rs.200 Rs.200 Rs
Insurance Rs.200 Rs.200 Rs.200 Rs.200 Rs.200 Rs.200 Rs.200 Rs
Rent Rs.600 Rs.600 Rs.600 Rs.600 Rs.600 Rs.600 Rs.600 Rs
Payroll Burden 15% Rs.998 Rs.998 Rs.998 Rs.998 Rs.998 Rs.998 Rs.998 Rs
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