This sample business plan has been made available to users of Business Plan Pro, business planning

software published by Palo Alto Software, Inc. Names, loc ations and numbers may have been
changed, and substantial portions of the original plan text may have been omitted to preserve
confidentiality and proprietary information.
You are welcome to use this plan as a starting point to create your own, but you do not have
permission to resell, reproduce, publish, distribute or even c opy this plan as it exists here.
Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailed
to the marketing department of Palo Alto Software at marketing@paloalto.com. For product
information visit our website: www.paloalto.com or call: 1-800-229-7526.
Copyright Palo Alto Software, Inc., 1995-2009 All rights reserved.

Confidentiality Agreement

The undersigned reader ac knowledges that the information provided by

_________________________ in this business plan is confidential; therefore, reader agrees not to
disc lose it without the express written permission of _________________________.
It is ac knowledged by reader that information to be furnished in this business plan is in all respec ts
confidential in nature, other than information which is in the public domain through other means
and that any disc losure or use of same by reader, may cause serious harm or damage to
_________________________.
Upon request, this document is to be immediately returned to _________________________.
___________________
Signature
___________________
Name (typed or printed)
___________________
Date
This is a business plan. It does not imply an offering of securities.

Table of Contents
1.0 Executive Summary.............................................................................................................................1
Chart: Highlights ......................................................................................................................2
1.1 Mission........................................................................................................................................2
1.2 Keys to Success ........................................................................................................................2
1.3 Objectives ...................................................................................................................................2
2.0 Company Summary.............................................................................................................................3
2.1 Start-up Summary ......................................................................................................................3
Table: Start-up Funding ..........................................................................................................4
Chart: Start-up .........................................................................................................................5
Table: Start-up .........................................................................................................................5
2.2 Company Ownership .................................................................................................................5
3.0 Services................................................................................................................................................5
4.0 Market Analysis Summary..................................................................................................................6
4.1 Market Segmentation ................................................................................................................6
Table: Market Analysis ...........................................................................................................7
Chart: Market Analysis (Pie) ..................................................................................................8
4.2 Target Market Segment Strategy.............................................................................................8
4.3 Service Business Analysis........................................................................................................8
4.3.1 Competition and Buying Patterns................................................................................9
5.0 Strategy and Implementation Summary ............................................................................................9
5.1 Competitive Edge....................................................................................................................10
5.2 Marketing Strategy ..................................................................................................................10
5.3 Sales Strategy..........................................................................................................................10
5.3.1 Sales Forecast ............................................................................................................11
Table: Sales Forecast.................................................................................................11
Chart: Sales Monthly ...................................................................................................12
Chart: Sales by Year ...................................................................................................12
5.4 Milestones ................................................................................................................................12
Table: Milestones..................................................................................................................13
Chart: Milestones ..................................................................................................................13
6.0 Web Plan Summary ..........................................................................................................................13
6.1 Website Marketing Strategy...................................................................................................13
6.2 Development Requirements ...................................................................................................14
7.0 Management Summary ....................................................................................................................14
7.1 Personnel Plan.........................................................................................................................15
Table: Personnel ...................................................................................................................15
8.0 Financial Plan ....................................................................................................................................15
8.1 Important Assumptions............................................................................................................15
Table: General Assumptions ...............................................................................................15
8.2 Break-even Analysis................................................................................................................16
Chart: Break-even Analysis .................................................................................................16
Table: Break-even Analysis .................................................................................................16
8.3 Projected Profit and Loss .......................................................................................................17
Table: Profit and Loss ..........................................................................................................17
Chart: Profit Monthly .............................................................................................................18
Chart: Profit Yearly................................................................................................................18
Chart: Gross Margin Monthly ...............................................................................................19
Page 1

Table of Contents
Chart: Gross Margin Yearly..................................................................................................19
8.4 Projected Cash Flow ...............................................................................................................20
Table: Cash Flow ..................................................................................................................20
Chart: Cash ...........................................................................................................................21
8.5 Projected Balance Sheet ........................................................................................................22
Table: Balance Sheet ...........................................................................................................22
8.6 Business Ratios .......................................................................................................................23
Table: Ratios .........................................................................................................................24
Table: Sales Forecast ...............................................................................................................................1
Table: Personnel ........................................................................................................................................2
Table: General Assumptions ....................................................................................................................3
Table: Profit and Loss ...............................................................................................................................4
Table: Cash Flow .......................................................................................................................................5
Table: Balance Sheet ................................................................................................................................6

Page 2

Green Power Consultancy

1.0 Executive Summary
Green Power Consultancy is a start-up organization in Burlington, VT that offers designs and
advice to architects and consumers regarding environmentally sensitive buildings as well as
energy consumption rec ommendations. Green Power has identified three keys to its success. The
first is the need to only offer solutions which are based on market demand. The second is to
ensure that all of its offerings are based on ec onomic justifications; the solution should make
sense beyond the environmental considerations bec ause it has long-term ec onomic value.
Green Power will be targeting architects and individual consumers. Green Power will work
closely with several architects providing them the ability to offer environmental solutions to their
customers. This group is growing at 7% and there are 23 potential customers in the area. The
second c ustomer group is individual consumers; an environmentally consc ious group that have
sought out a service provider to help them implement their personal ethics into the design of
their new or existing structure.
Green Power is an environmental energy consultancy that offers a wide range of services: advice
regarding passive heating, grey water usage rec ommendations, renewable energy
considerations and employee transportation options.
Green Power will be led by the seasoned management team of Dan and Sue Lang. Dan rec eived a
degree in environmental studies, business, and a Masters in architec ture. Dan has several
years of work experience within the industry. The second part of the team is Sue Lang. Sue
has an MBA and work experience with the Bonneville Power Administration in their renewable
energy department. Through a combination of excellent education and good work experience,
Green Power's management team will be able to successfully exec ute on its business plan.
Green Power has conservatively forec asted sales of $202,343 for year two, rising to $238,402
for year three. Net profit will be reached in the second year. Through a combination of a
proven business model, a strong management team, and this comprehensive energy business
plan to guide the organization, Green Power will be long lasting, profitable business.

Page 1

Green Power Consultancy

1.1 Mission
It is Green Power Consultancy's mission to provide the finest green energy solutions for new
constructions as well as existing building owners/lessors. Through careful analysis, attentive
customer support, and cost effec tive solutions, Green Power will bec ome a stable business
serving the Burlington community.

1.2 Keys to Success

Green Power has identified several keys to success that will be instrumental in c reating a
sustainable business. If these keys are followed, the likelihood of success will significantly
increase.
1.
2.
3.

Offer solutions that are demanded by customers.

Ensure all of the solutions have ec onomic considerations built into the respec tive models.
Only provide 100% customer satisfac tion. All customers must have their expec tations
exceeded.

1.3 Objectives
Green Power has identified three objec tives that it will pursue for the long-term success of the
business:

Proven cost-benefit analysis environmental approaches to structure building, maintenance

and energy consumption.
Page 2

Green Power Consultancy

Bec ome the premier environmental energy consultancy in the state within five years.
Reach profitability within three years.

2.0 Company Summary

Green Power is a Vermont-based L.L.C green energy consultancy. Green Power offers its services
both to architec ts who are constructing new businesses as well as existing building owners/users
who are looking to make their existing structure more environmentally sound.

2.1 Start-up Summary

Green Power will require the following equipment in order to begin operations:

Computer system including three workstations, standard laser printer as well as a wide
mouth printer, Internet ac cess, and assorted software such as Microsoft Office,
QuickBooks and CadArchitec t (the premier architec t industry software).
Three work areas including two drawing tables and the assorted office supplies for the
standard workdesks as well as the drawing tables.
Various bookshelves, lights, and couches (for clients).
Bike storage unit/loc ker.
Refrigerator, microwave, and assorted utensils for the lunch room.

Page 3

Green Power Consultancy

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

$7,150
$32,850
$40,000

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

$9,000
$23,850
$0
$23,850
$32,850

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities

$0
$0
$0
$0
$0

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

$20,000
$20,000
$0
$40,000

Loss at Start-up (Start-up Expenses)

Total Capital

($7,150)
$32,850

Total Capital and Liabilities

$32,850

Total Funding

$40,000

Page 4

Green Power Consultancy

Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Rent
Research and Development
Expensed Equipment
Total Start-up Expenses

$2,000
$200
$200
$500
$3,500
$750
$7,150

Start-up Assets
Cash Required
Other Current Assets

$23,850
$0

Long-term Assets
Total Assets

$9,000
$32,850

Total Requirements

$40,000

2.2 Company Ownership

The two principal owners of Green Power is Dan and Sue Lang.

3.0 Services
Page 5

Green Power Consultancy

Green Power offers a wide range of environmentally-consc ious energy solutions related to new
and existing structures. The main areas of consulting that Green Power will offer are:

Passive heating: This applies to the construction of the new structures, designing the
structure to capture and utilize heat that is either generated naturally or as a by-product
of the building. Examples of passive heating include specific plac ement of the heating
vents, the design and plac ement of the building and the windows.
Grey water: This is the capture and utilization of grey water. Grey water is water that
has been used for some other source such as in the faucets or rain water that can no
longer be offered as potable, but still can be used for toilet flushing or land irrigation.
Renewable energy: This service offers customers the information needed to make
intelligent dec isions regarding the use of renewable energy sources. Renewable energy
sources can be defined as sources of energy where the rate of energy depletion is not
faster than the production rate. Examples include: wind power, photovoltaics, hydro
power, biomass, solar energy.
Employee transportation: This service is to reduce the energy consumed by employees
traveling to work. Typical aspec ts of the plan are outlining public transportation
options, developing a company subsidized public/alternative transportation voucher,
building covered bicycle loc kers and shower fac ilities as well as other ac tivities designed
to increase the number of employees using bicycles as their main source of transportation
to work.
Efficient building construction: This foc uses on the use of loc al building materials
thereby dec reasing energy needed for transportation as well as the utilization of rec ycled
materials for construction dec reasing energy demands for the manufac ture of new
building materials.

4.0 Market Analysis Summary

Green Power has segmented the market into two distinct target market groups. The first group is
architects who are building a structure either speculatively (infrequently) or for a client
(generally). The second c ustomer group is individual customers who desire environmental
elements designed into their building. The niche that Green Power has chosen to participate in
is a fairly new field. Green Power fac es competition from eco-architec ts as well as from the
loc al utilities that may have a small department that offers green energy consultation advice.
The industry often operates to satisfy clients; it is the end customer that typically requests
green energy designs and they either seek out a specific architect or they request their
architect to rec eive guidance from firms such as Green Power.

4.1 Market Segmentation

Green Power has segmented its target market into two different customer groups, both equally
attrac tive.
Architects
This customer group is made up of professional architec ts that design buildings and additions
for clients. Architec ts have developed a strategic relationship with Green Power to offer valueadded-services for their clients.

The architec t firms typically have two - nine partners.

Page 6

Green Power Consultancy

Offer both residential and commercial design work, however 67% of their work is
commercial.
The firms typically have only a handful of service providers that they work with. This
means that once they find someone they trust, they develop a long-term relationship
with that service provider.
Yearly revenue ranges from $200 thousand - $5 million.

Individual customers
This segment contains consumers who are either having a residential home, or a commercial
structure, designed. Due to their personal environmental concerns and a rec ognition that
it can be cost effective to have building dec isions with environmental considerations, they
have requested Green Power's assistance. They are generally working direc tly with Green
Power for their design needs and will likely then take this design criteria to their builder.

The individual is an environmentalist and they take into ac count how their ac tion will
impact the environment.
The age range of clients is 35-49.
Average household income is $65,000. Please note that while the overriding concern in
using Green Power's services is the positive impact on the environment, a cost benefit
analysis indicates that in the long term it is cost effec tive to adopt green energy
considerations.
89% of the group have at least an undergraduate degree, 26% have a graduate degree.

Table: Market Analysis

Market Analysis
Potential Customers
Architects
Individual customers
Total

Growth
7%
9%
9.00%

Year 1

Year 2

Year 3

Year 4

Year 5

23
16,009
16,032

25
17,450
17,475

27
19,021
19,048

29
20,733
20,762

31
22,599
22,630

CAGR
7.75%
9.00%
9.00%

Page 7

Green Power Consultancy

4.2 Target Market Segment Strategy

Green Power has chosen these two market segments for compelling reasons. The architects
have been foc used on bec ause they are the service providers that do the bulk of the design
work for residential and commercial structures. The architects are used as sales people for Green
Power's services, they are the ones that can then sell these services to their customers. It
benefits the architec ts bec ause they are able to offer a wider range of value-added-services
to their customers without spending capital of learning the information themselves. By aligning
itself with architec ts, Green Power is able to offer their services to a larger group of people.
Green Power will also serve individual customers. These are people who know that they want
environmental considerations made in the design of their structure and will seek out a firm such
as Green Power to have this work done. Burlington is a wonderful plac e to loc ate Green Power as
there is a high population of environmentally-consc ious people in this city. This provides Green
Power with a large market of interested customers. Additionally, this market group is attrac tive
bec ause people that have environmental tendencies are often voc al about their commitments
or causes. By offering green energy services, Green Power allows this group of people to ac t
on what they believe in on a personal level, adhering to the wise saying think globally, ac t
loc ally.

4.3 Service Business Analysis

The environmental power consultancy industry is fairly new. Only rec ently has there been an
emergence of firms that offer these services. This can be explained by several fac tors. First,
people are bec oming more environmentally aware these days, a function of many things including
the rec ent problems with the Middle East and Fundamental Islamists. These rec ent problems
have forced people to rec onsider America's dependence on oil and the need to maintain good
Page 8

Green Power Consultancy

relationships with Saudi Arabia only bec ause of their oil. Another fac tor that has contributed to
the growth of green power is that it has bec ome increasingly cost effective to make business
dec isions while taking into ac count the dec isions impact on the environment. For years an
environmental dec ision was based on personal consc iousness and ethics, not overriding ec onomic
fac tors. Now money can be saved when environmental impac ts are taken into ac count. Please
read the following section which will indicate the different players within the industry.

4.3.1 Competition and Buying Patterns

The competition generally takes two different forms:
Eco-architects
These are architec ts that specialize in environmental design considerations. Typically their entire
prac tice is based around structures that have environmental elements. Green Power could
ac tually be within this industry niche, however they are able to serve a larger customer baser,
therefore earn more revenue as well as make a positive impact in our world by offering its
services to both end consumers as well as regular architec ts as opposed to the business model
of only serving one set of customers.
Local utility
The loc al utilities often have a department that offers free consultation for environmental
design considerations. There are incentives for the utilities to attempt to curb their customer's
use of their energy. These incentives take the form of not needing to make as many capital
expenditures to develop the power delivery infrastructure to ac commodate the increased load for
energy demands. Therefore, the more the utility is able to get their customers to conserve, the
less money they have to spend on infrastructure improvements, the more money they earn. That
being said, the utility often has a small department that offers tips on energy conservation.
While these tips can be quite helpful, since they are offered for free for the power customers,
they are not nearly as comprehensive as they could be. So while they provide good initial tips,
the loc al utility is not a strong c ompetitor to serve a client who is committed to making as
much of a positive environmental difference as can be ac hieved by using a specialized firm.
The buying pattern for consumers is currently being defined as we speak, a function of how
new the industry is. Currently, purchasing dec isions are based on customers typically making
requests for these services from their architec t or they do a bit of research to determine who
offers these services. As the industry bec omes more mature, firms will bec ome more
established and reputation and visibility/awareness will shape buying dec isions. Since there is
a wide range of options regarding implementation, price is less of a consideration for the dec ision
since most of the service providers can offer a wide range of inexpensive to expensive options.

5.0 Strategy and Implementation Summary

Green Power's business strategy rec ognizes and will leverage the fac t that a lot of business
will be transacted through networking and word-of-mouth referrals. With this in mind, Green
Power will work diligently to build alliances with architec ts who can co-brand their services
with Green Power thereby increasing Green Power's potential qualified customers.
Green Power will rely on its competitive edge of adopting a cost effec tive environmental
solution so in addition to meeting environmental concerns of the customer, Green Power's
services will save the customer money over time.The marketing strategy will highlight both
Page 9

Green Power Consultancy

environmental attributes as well as economic ones.The marketing campaign will rec ognize the
existence of two distinct market customers. Lastly, the sales strategy will offer a compelling
ec onomic analysis of how the customer can save money by adopting Green Power's designs.

5.1 Competitive Edge

Green Power will use its competitive edge of economic justification to turn potential customers
into qualified sales customers. While some of the other similar companies often highlight the
positive environmental impact that their designs offer, Green Power will also offer economic
justifications for their designs. This is an important competitive edge as it provides evidence that
the customer can save money in the long term and make a positive impac t on the
environment. Providing a cost benefit analysis for the green design is important bec ause it makes
the potential market larger, moving from people that want to do good for the environment to
people that also want to save money. By offering an environmental solution that saves the
person or business money creates a compelling reason to adopt the suggestions. There are too
few people that will ac t only for environmental reasons, but when you save people money,
there are far more people interested.

5.2 Marketing Strategy

The marketing strategy is based on developing an awareness regarding Green Power's services to
both architec ts and the end use consumers. Green Power will strongly use networking as a
means to develop relationships with many of the city's architects. Although Burlington is a
reasonably-sized city, the architect community is fairly close knit. If one wanted, it is easy to
develop ac tive relationships with many of the different architec ts in Burlington. By developing
these relationships, Green Power will allow the firms to bec ome familiar with not only the services
offered by Green Power, but also the personalities involved, rec ognizing that much of business
is transacted by who you know. Advertisements will be plac ed in the loc al architect newsletter.
To reach the end user customers, Green Power will use Advertisements in the loc al paper as well
as within the yellow pages. As a means of increasing visibility of Green Power, GP will
participate in several community-based seminars that serve as a free source of information for
the citizens of Burlington. Green Power believes that participating in the seminars will be an
effective way of meeting many of the potential customers and allowing them to bec ome
familiar with Green Power expertise.

5.3 Sales Strategy

The sales strategy implicitly and explicitly takes into ac count the philosophy that the reason
that many of the people are attrac ted to Green Power is bec ause of its personal environmental
ethics. The sales strategy will leverage this desire with the fac t that environmental dec isions
can have positive economic impacts in the long term. Therefore the sales strategy will leverage
the competitive edge of economic justification as the method for turning sales leads into
customers. For this strategy to be effective, Green Power will present customers case studies
and quantifiable data proving ec onomic justification.

Page 10

Green Power Consultancy

5.3.1 Sales Forecast
Green Power has adopted a conservative sales forec ast for the business plan. By adopting a
conservative prediction, it is easier to hit sales goals and increase the likelihood that the
business plan is relevant to the business. If the sales forec asts was wildly off, it casts doubt
on the application of the plan for the business.
Sales will be slow for the first several months, a function of Green Power being a start-up
organization. As Green Power increases their customer pool and more architects bec ome
familiar with GP's services, business will grow. Growth will be forec asted and preferenced as
steady. The steadier it is, the easier it will be to deal with the incremental growth in work.
Please view the following table and charts for a graphical representation on monthly and yearly
sales.
Cost of sales for a consulting company are negligible, however, cost of architects sales will be
20%, since we will pay commissions to the architects for referrals.

Table: Sales Forecast

Sales Forecast
Sales
Architects
Individuals
Total Sales
Direct Cost of Sales
Architects
Individuals
Subtotal Direct Cost of Sales

Year 1

Year 2

Year 3

$41,060
$45,987
$87,047

$95,445
$106,898
$202,343

$112,454
$125,948
$238,402

Year 1
$8,212
$0
$8,212

Year 2
$19,089
$10,690
$29,779

Year 3
$22,491
$12,595
$35,086

Page 11

Green Power Consultancy

5.4 Milestones
Green Power has identified several milestones as a way of setting ac hievable
goals. Performance is likely to be improved through the quest of reaching the goals. This
phenomenon is well documented and is used in large corporations such as GE's Seven Sigma
Program as well as many state's benchmarked-based assessment testing systems. Green
Page 12

Green Power Consultancy

Power has identified the following milestones:

Business plan completion;

10th c ustomer;
Revenues exceeding $50,000;
Profitability.

Table: Milestones
Milestones
Milestone
Business plan completion
10th customer
Revenue exceeding $50,000
Profitability
Totals

Start Date
1/1/2003

End Date
2/15/2003

Budget
$0

Manager
Dan & Sue

1/1/2003
1/1/2003
1/1/2003

3/30/2003
8/30/2003
2/28/2004

$0
$0
$0
$0

Sue
Sue
Dan

Department
Business
planning
Sales
Sales
Accounting

6.0 Web Plan Summary

The website will be used as a marketing tool. It will offer a description of the services offered
as well as a listing of different clients served.

6.1 Website Marketing Strategy

The plan for marketing the site is fairly simple: submission to search engines such as Google and
Page 13

Green Power Consultancy

listing the website on all of the company's correspondence and printed marketing/sales media.

6.2 Development Requirements

Green Power will utilize a loc al programmer to build the site.

7.0 Management Summary

The company will be lead by the husband and wife team of Dan and Sue Lang. Dan grew up in
Oregon and attended the University of Oregon for his undergraduate education. Dan's major
was environmental studies and business. After graduation Dan worked for a year at an
environmental testing company. Through general networking, Dan was introduced to one of the
three principals of a company called The Seal Company. The business model for this company
was to make assessments for private and public companies as to their environmental
impact. His position with The Seal Company provided him with wonderful insight into the
industry of environmental assessment and helped provide him with a foundation of knowledge
regarding green energy, just one of the areas of assessment. After a year of this Dan enrolled
into the University of Oregon's Master's Architect program, taking course work in environmental
design. This degree would provide Dan with the skills to make a larger impac t in his community.
Sue went to the University of Burlington for undergrad and then moved out to Oregon to
attend Willamette University's MBA program. After her degree Sue moved up to Portland and
worked for the Bonneville Power Administration where she worked in their renewable resource
division. Much of her projec ts were marketing based, trying to gain public ac ceptance of
renewable energy sources.

Page 14

Green Power Consultancy

7.1 Personnel Plan
For the first three months of business the organization will be quite lean, consisting of just Dan
and Sue. Dan will be responsible for most of the business-related issues as well as doing
research and helping out with the work projec ts. Sue's responsibilities will be marketing and sales
based. She will work hard on developing visibility for the company as well as working with
prospec tive customers. Green Power has forec asted that on month four it will
need administrative assistance. The duties will be answering the phone, some input
ac counting, and other clerical functions. Initially this person will be part time but will move to full
time at the beginning of year two.

Table: Personnel
Personnel Plan
Dan
Sue
Associate consultant
Administrative assistant
Total People

Year 1
$24,000
$24,000
$0
$4,600
3

Year 2
$30,000
$30,000
$15,000
$18,000
3

Year 3
$36,000
$36,000
$30,000
$20,000
4

Total Payroll

$52,600

$93,000

$122,000

8.0 Financial Plan

The following sections will outline the important Financial Assumptions.

8.1 Important Assumptions

The following table details important Financial Assumptions.

Table: General Assumptions

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

Year 1
1
10.00%
10.00%
30.00%
0

Year 2
2
10.00%
10.00%
30.00%
0

Year 3
3
10.00%
10.00%
30.00%
0

Page 15

Green Power Consultancy

8.2 Break-even Analysis
The Break-even Analysis is indicated below.

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$7,333

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

9%
$6,641

Page 16

Green Power Consultancy

8.3 Projected Profit and Loss
The following table and charts will indicate Projec ted Profit and Loss.

Table: Profit and Loss

Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales

Year 1
$87,047
$8,212
$0
$8,212

Year 2
$202,343
$29,779
$0
$29,779

Year 3
$238,402
$35,086
$0
$35,086

Gross Margin
Gross Margin %

$78,835
90.57%

$172,565
85.28%

$203,317
85.28%

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

$52,600
$4,800
$1,800
$6,000
$2,400
$2,400
$7,890
$1,800

$93,000
$4,800
$1,800
$6,000
$2,400
$2,400
$13,950
$1,800

$122,000
$4,800
$1,800
$6,000
$2,400
$2,400
$18,300
$1,800

Total Operating Expenses

$79,690

$126,150

$159,500

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

($855)
$945
$0
$0

$46,415
$48,215
$0
$13,924

$43,817
$45,617
$0
$13,145

Net Profit
Net Profit/Sales

($855)
-0.98%

$32,490
16.06%

$30,672
12.87%

Page 17

Green Power Consultancy

Page 18

Green Power Consultancy

Page 19

Green Power Consultancy

8.4 Projected Cash Flow
The following table and chart indicate Projec ted Cash Flow.

Table: Cash Flow

Pro Forma Cash Flow
Year 1

Year 2

Year 3

Cash from Operations

Cash Sales
Subtotal Cash from Operations

$87,047
$87,047

$202,343
$202,343

$238,402
$238,402

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

$0
$0
$0
$0
$0
$0
$0
$87,047

$0
$0
$0
$0
$0
$0
$0
$202,343

$0
$0
$0
$0
$0
$0
$0
$238,402

Year 1

Year 2

Year 3

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations

$52,600
$30,707
$83,307

$93,000
$71,679
$164,679

$122,000
$83,201
$205,201

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

$0
$0
$0
$0
$0
$0
$0
$83,307

$0
$0
$0
$0
$0
$0
$0
$164,679

$0
$0
$0
$0
$0
$0
$0
$205,201

Net Cash Flow

Cash Balance

$3,740
$27,590

$37,664
$65,254

$33,201
$98,456

Cash Received

Expenditures

Page 20

Green Power Consultancy

Page 21

Green Power Consultancy

8.5 Projected Balance Sheet
The following table will indicate the Projec ted Balance Sheet.

Table: Balance Sheet

Pro Forma Balance Sheet
Year 1

Year 2

Year 3

Current Assets
Cash
Other Current Assets
Total Current Assets

$27,590
$0
$27,590

$65,254
$0
$65,254

$98,456
$0
$98,456

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

$9,000
$1,800
$7,200
$34,790

$9,000
$3,600
$5,400
$70,654

$9,000
$5,400
$3,600
$102,056

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$2,795
$0
$0
$2,795

$6,169
$0
$0
$6,169

$6,898
$0
$0
$6,898

Long-term Liabilities
Total Liabilities

$0
$2,795

$0
$6,169

$0
$6,898

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

$40,000
($7,150)
($855)
$31,995
$34,790

$40,000
($8,005)
$32,490
$64,485
$70,654

$40,000
$24,485
$30,672
$95,157
$102,056

Net Worth

$31,995

$64,485

$95,157

Assets

Page 22

Green Power Consultancy

8.6 Business Ratios
The following table contains typical Business Ratios of both Green Power as well as the
industry as a whole.

Page 23

Green Power Consultancy

Table: Ratios
Ratio Analysis
Year 1
n.a.

Year 2
132.45%

Year 3
17.82%

Industry Profile
8.18%

0.00%
79.30%
20.70%
100.00%

0.00%
92.36%
7.64%
100.00%

0.00%
96.47%
3.53%
100.00%

41.37%
75.36%
24.64%
100.00%

8.03%
0.00%
8.03%
91.97%

8.73%
0.00%
8.73%
91.27%

6.76%
0.00%
6.76%
93.24%

31.49%
16.85%
48.34%
51.66%

100.00%
90.57%
91.55%
0.00%
-0.98%

100.00%
85.28%
69.23%
0.00%
22.94%

100.00%
85.28%
72.42%
0.00%
18.38%

100.00%
100.00%
82.59%
1.16%
1.47%

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

9.87
9.87
8.03%
-2.67%
-2.46%

10.58
10.58
8.73%
71.98%
65.69%

14.27
14.27
6.76%
46.05%
42.93%

1.93
1.50
3.09%
59.56%
7.63%

Additional Ratios
Net Profit Margin
Return on Equity

Year 1
-0.98%
-2.67%

Year 2
16.06%
50.38%

Year 3
12.87%
32.23%

n.a
n.a

11.99
27
2.50

12.17
22
2.86

12.17
28
2.34

n.a
n.a
n.a

0.09
1.00

0.10
1.00

0.07
1.00

n.a
n.a

$24,795
0.00

$59,085
0.00

$91,557
0.00

n.a
n.a

0.40
8%
9.87
2.72
0.00

0.35
9%
10.58
3.14
0.00

0.43
7%
14.27
2.51
0.00

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

Sales Growth
Percent of Total Assets
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

Activity Ratios
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 24

Appendix
Table: Sales Forecast
Sales Forecast
Sales
Architects
Individuals
Total Sales
Direct Cost of Sales
Architects
Individuals
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%

$2,500

$2,654

$2,747

$3,212

$3,455

$3,525

$3,656

$3,787

$3,987

$3,902

$3,878

$3,757

0%

$2,800
$5,300

$2,972
$5,626

$3,077
$5,824

$3,597
$6,809

$3,870
$7,325

$3,948
$7,473

$4,095
$7,751

$4,241
$8,028

$4,465
$8,452

$4,370
$8,272

$4,343
$8,221

$4,208
$7,965

Month 1
$500
$0
$500

Month 2
$531
$0
$531

Month 3
$549
$0
$549

Month 4
$642
$0
$642

Month 5
$691
$0
$691

Month 6
$705
$0
$705

Month 7
$731
$0
$731

Month 8
$757
$0
$757

Month 9
$797
$0
$797

Month 10
$780
$0
$780

Month 11
$776
$0
$776

Month 12
$751
$0
$751

Page 1

Appendix
Table: Personnel
Personnel Plan
Dan
Sue
Associate consultant

0%
0%
0%

Administrative assistant
Total People

0%

Total Payroll

Month 1
$2,000
$2,000
$0

Month 2
$2,000
$2,000
$0

Month 3
$2,000
$2,000
$0

Month 4
$2,000
$2,000
$0

Month 5
$2,000
$2,000
$0

Month 6
$2,000
$2,000
$0

Month 7
$2,000
$2,000
$0

Month 8
$2,000
$2,000
$0

Month 9
$2,000
$2,000
$0

Month 10
$2,000
$2,000
$0

Month 11
$2,000
$2,000
$0

Month 12
$2,000
$2,000
$0

$0
2

$0
2

$0
2

$400
3

$400
3

$400
3

$500
3

$500
3

$600
3

$600
3

$600
3

$600
3

$4,000

$4,000

$4,000

$4,400

$4,400

$4,400

$4,500

$4,500

$4,600

$4,600

$4,600

$4,600

Page 2

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

Month 1
1
10.00%

Month 2
2
10.00%

Month 3
3
10.00%

Month 4
4
10.00%

Month 5
5
10.00%

Month 6
6
10.00%

Month 7
7
10.00%

Month 8
8
10.00%

Month 9
9
10.00%

Month 10
10
10.00%

Month 11
11
10.00%

Month 12
12
10.00%

Long-term Interest Rate

Tax Rate
Other

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

10.00%
30.00%
0

Page 3

Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Month 1
$5,300
$500

Month 2
$5,626
$531

Month 3
$5,824
$549

Month 4
$6,809
$642

Month 5
$7,325
$691

Month 6
$7,473
$705

Month 7
$7,751
$731

Month 8
$8,028
$757

Month 9
$8,452
$797

Month 10
$8,272
$780

Month 11
$8,221
$776

Month 12
$7,965
$751

$0
$500

$0
$531

$0
$549

$0
$642

$0
$691

$0
$705

$0
$731

$0
$757

$0
$797

$0
$780

$0
$776

$0
$751

Gross Margin
Gross Margin %

$4,800
90.57%

$5,096
90.57%

$5,274
90.57%

$6,167
90.57%

$6,634
90.57%

$6,768
90.57%

$7,020
90.57%

$7,271
90.57%

$7,655
90.57%

$7,492
90.57%

$7,446
90.57%

$7,213
90.57%

Expenses
Payroll

Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales

$4,000

$4,000

$4,000

$4,400

$4,400

$4,400

$4,500

$4,500

$4,600

$4,600

$4,600

$4,600

Sales and Marketing and Other

Expenses
Depreciation
Rent

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$150
$500

$150
$500

$150
$500

$150
$500

$150
$500

$150
$500

$150
$500

$150
$500

$150
$500

$150
$500

$150
$500

$150
$500

Utilities
Insurance
Payroll Taxes

$200
$200
$600

$200
$200
$600

$200
$200
$600

$200
$200
$660

$200
$200
$660

$200
$200
$660

$200
$200
$675

$200
$200
$675

$200
$200
$690

$200
$200
$690

$200
$200
$690

$200
$200
$690

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$6,200

$6,200

$6,200

$6,660

$6,660

$6,660

$6,775

$6,775

$6,890

$6,890

$6,890

$6,890

($1,400)
($1,250)

($1,104)
($954)

($926)
($776)

($493)
($343)

($26)
$124

$108
$258

$245
$395

$496
$646

$765
$915

$602
$752

$556
$706

$323
$473

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

($1,400)
-26.42%

($1,104)
-19.63%

($926)
-15.90%

($493)
-7.24%

($26)
-0.36%

$108
1.45%

$245
3.15%

$496
6.18%

$765
9.05%

$602
7.28%

$556
6.76%

$323
4.06%

Other
Total Operating Expenses
Profit Before Interest and Taxes
EBITDA
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

15%

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

$5,300
$5,300

$5,626
$5,626

$5,824
$5,824

$6,809
$6,809

$7,325
$7,325

$7,473
$7,473

$7,751
$7,751

$8,028
$8,028

$8,452
$8,452

$8,272
$8,272

$8,221
$8,221

$7,965
$7,965

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Other Liabilities (interest-free)

New Long-term Liabilities

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Sales of Other Current Assets

Sales of Long-term Assets
New Investment Received

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

Subtotal Cash Received

$5,300

$5,626

$5,824

$6,809

$7,325

$7,473

$7,751

$8,028

$8,452

$8,272

$8,221

$7,965

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

Expenditures from Operations

Cash Spending

$4,000

$4,000

$4,000

$4,400

$4,400

$4,400

$4,500

$4,500

$4,600

$4,600

$4,600

$4,600

$85

$2,551

$2,581

$2,604

$2,754

$2,801

$2,816

$2,857

$2,884

$2,937

$2,920

$2,915

$4,085

$6,551

$6,581

$7,005

$7,154

$7,201

$7,316

$7,357

$7,484

$7,537

$7,520

$7,515

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Other Liabilities Principal Repayment

Long-term Liabilities Principal Repayment
Purchase Other Current Assets

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$4,085

$0
$0
$6,551

$0
$0
$6,581

$0
$0
$7,005

$0
$0
$7,154

$0
$0
$7,201

$0
$0
$7,316

$0
$0
$7,357

$0
$0
$7,484

$0
$0
$7,537

$0
$0
$7,520

$0
$0
$7,515

$1,215
$25,065

($925)
$24,140

($758)
$23,383

($195)
$23,188

$171
$23,358

$272
$23,630

$434
$24,064

$671
$24,735

$968
$25,704

$735
$26,439

$701
$27,140

$450
$27,590

Bill Payments
Subtotal Spent on Operations

Purchase Long-term Assets

Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance

0.00%

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
Other Current Assets

$23,850
$0

$25,065
$0

$24,140
$0

$23,383
$0

$23,188
$0

$23,358
$0

$23,630
$0

$24,064
$0

$24,735
$0

$25,704
$0

$26,439
$0

$27,140
$0

$27,590
$0

Total Current Assets

$23,850

$25,065

$24,140

$23,383

$23,188

$23,358

$23,630

$24,064

$24,735

$25,704

$26,439

$27,140

$27,590

$9,000
$0
$9,000

$9,000
$150
$8,850

$9,000
$300
$8,700

$9,000
$450
$8,550

$9,000
$600
$8,400

$9,000
$750
$8,250

$9,000
$900
$8,100

$9,000
$1,050
$7,950

$9,000
$1,200
$7,800

$9,000
$1,350
$7,650

$9,000
$1,500
$7,500

$9,000
$1,650
$7,350

$9,000
$1,800
$7,200

$32,850

$33,915

$32,840

$31,933

$31,588

$31,608

$31,730

$32,014

$32,535

$33,354

$33,939

$34,490

$34,790

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable

$0

$2,465

$2,495

$2,513

$2,661

$2,708

$2,721

$2,761

$2,786

$2,839

$2,823

$2,818

$2,795

Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$0
$0
$0

$0
$0
$2,465

$0
$0
$2,495

$0
$0
$2,513

$0
$0
$2,661

$0
$0
$2,708

$0
$0
$2,721

$0
$0
$2,761

$0
$0
$2,786

$0
$0
$2,839

$0
$0
$2,823

$0
$0
$2,818

$0
$0
$2,795

Long-term Liabilities
Total Liabilities

$0
$0

$0
$2,465

$0
$2,495

$0
$2,513

$0
$2,661

$0
$2,708

$0
$2,721

$0
$2,761

$0
$2,786

$0
$2,839

$0
$2,823

$0
$2,818

$0
$2,795

Paid-in Capital

$40,000

$40,000

$40,000

$40,000

$40,000

$40,000

$40,000

$40,000

$40,000

$40,000

$40,000

$40,000

$40,000

Retained Earnings

($7,150)

($7,150)

($7,150)

($7,150)

($7,150)

($7,150)

($7,150)

($7,150)

($7,150)

($7,150)

($7,150)

($7,150)

($7,150)

Earnings
Total Capital
Total Liabilities and Capital

$0
$32,850
$32,850

($1,400)
$31,450
$33,915

($2,504)
$30,346
$32,840

($3,430)
$29,420
$31,933

($3,923)
$28,927
$31,588

($3,949)
$28,901
$31,608

($3,841)
$29,009
$31,730

($3,597)
$29,253
$32,014

($3,101)
$29,749
$32,535

($2,336)
$30,514
$33,354

($1,734)
$31,116
$33,939

($1,178)
$31,672
$34,490

($855)
$31,995
$34,790

Net Worth

$32,850

$31,450

$30,346

$29,420

$28,927

$28,901

$29,009

$29,253

$29,749

$30,514

$31,116

$31,672

$31,995

Page 6