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Legal Page
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Table of Contents

1.0 Executive Summary.....................................................................................................................1

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

Table of Contents

Chart: Profit Monthly.................................................................................................................15

Chart: Profit Yearly.....................................................................................................................15
Chart: Gross Margin Monthly.................................................................................................16
Chart: Gross Margin Yearly.....................................................................................................16
Table: Profit and Loss................................................................................................................17
8.4 Projected Cash Flow...............................................................................................................18
8.4 Projected Cash Flow...............................................................................................................18
Chart: Cash...................................................................................................................................18
Table: Cash Flow.........................................................................................................................19
8.5 Projected Balance Sheet......................................................................................................20
8.5 Projected Balance Sheet......................................................................................................20
Table: Balance Sheet.................................................................................................................20
8.6 Business Ratios........................................................................................................................20
8.6 Business Ratios........................................................................................................................20
Table: Ratios.................................................................................................................................21
Table: Sales Forecast...........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................7
Table: Balance Sheet...........................................................................................................................7

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Green Office

1.0 Executive Summary

Green Office addresses the market need of environmentally-friendly office supplies. Green
Office has been formed as an Illinois Corporation with Stan Cooksey as the main shareholder.
Green Office will service a wide range of customers including corporations and government
agencies.
Products
Green Office will sell eco-friendly products that use recycled materials, reuse
"recharged" existing parts, or use non-toxic alternatives. Green Office will sell recycled paper
ranging from notepads to envelopes to copier paper, a wide range of laser toner, inkjet
cartridges and common office supplies such as correction fluid.
Customers
Green Office has identified three market segments. The first is corporations, with an 8% growth
rate and 12,000 potential customers. The second is government agencies, with a 11% growth
rate and 7,886 possible customers. The last category is assorted customers with a 7% growth
rate and 56,888 possible customers.
Competitive Edge
Green Office will offer a complete range of office supplies, to become a one-stop shopping place
for supply needs. Green Office will offer an unprecedented level of customer attention. It
recognizes that shopping must be the the most trouble free, pleasant experience if it expects to
form long-term relationships with customers.
Management
Green Office will be lead by Stan Cooksey. Stan received his undergraduate degree from the
University of Chicago. Stan worked for Symantec Software as the Regional Sales Manager for
the Government Agency Unit. While working at Symantec, Stan received his Executive MBA.
Green Office is supported by a proven business model, carefully identified market segments,
and a top notch management team. Green Office has forecasted sales for year two of
$818,000, rising to $1,004,000 in year three. We will become profitable in the second year.

Page 1

Green Office

Chart: Highlights

1.1 Objectives

To become the premier source of environmentally-friendly office supplies.

To offer green office supplies that cost no more than a 10% price premium, often at the
same price as non "green" supplies.
Quickly grow in size and become a profitable business within the first two years.

1.2 Mission
It is Green Office's mission to become a leading vendor of environmentally-friendly office
supplies. Green Office will become a market leader offering a wide, price competitive selection
with the finest customer service.
1.3 Keys to Success

Offer environmentally-friendly office supplies at competitive prices.

Secure large contracts with corporations and government agencies.
Ensure fiscal efficiency through strict financial controls.

2.0 Company Summary

Green Office is an Illinois corporation founded by Stan Cooksey.

Page 2

Green Office

2.1 Start-up Summary

Green Office will incur the following start up expenses:

Office desk sets with chairs and assorted supplies (6)

Workstations and a central file server, two laser printers, and Internet connection (6)
Copier, fax machine
Assorted pieces of office furniture
Assorted shipping material
Unit phone system with answer service (7)
Shelving units for storage
Used fork lift
Intercom system
Warehouse build out

Start-up funds will be supported predominantly through equity investment, but in addition Stan
will obtain a $50,000 SBA backed loan to assist in the purchase of start-up inventory.
Table: Start-up

Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Insurance
Web Site Development
Research and Development
Other
Total Start-up Expenses

$3,000
$500
$500
$300
$5,000
$2,000
$30,000
$41,300

Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets

$128,700
$46,000
$3,500
$43,500
$221,700

Total Requirements

$263,000

Page 3

Green Office

Table: Start-up Funding

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

$41,300
$221,700
$263,000

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

$93,000
$128,700
$0
$128,700
$221,700

Liabilities and Capital

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

$0
$50,000
$0
$0
$50,000

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

$95,000
$68,000
$50,000
$0
$213,000

Loss at Start-up (Start-up Expenses)

Total Capital

($41,300)
$171,700

Total Capital and Liabilities

$221,700

Total Funding

$263,000

Page 4

Green Office

Chart: Start-up

2.2 Company Ownership

Green Office is a privately held corporation owned by Stan Cooksey. Green Office has been
incorporated in Illinois.
3.0 Products
Green Office offers a wide range of office supplies, all of which are environmentally
friendly, they either use recycled content materials, sustainable products, or substitute toxic
chemicals with non-toxic substitutes. Products include:

Recycled clip boards

Non-toxic correction fluid
Recycled note pads (small and legal size)
Recycled paper clips
Recycled copier and printer paper
Recycled envelopes
Erasable boards
Reusable coffee filters
Recycled, refillable laser toner cartridges and inkjet cartridges
Solar calculators
Refillable pens and pencils made out of recyclable materials
And many other items

Page 5

Green Office

4.0 Market Analysis Summary

Green Office believes that it faces a market with many opportunities and significant demand.
Green Office's three main customer segments will be corporations, government agencies, and
others which is a "catch all" category.
The office supply industry operates with several different large companies and many small
ones. Within the office supplies industry there exists a niche of environmentally-friendly
companies that Green Office competes against. Some of these companies serve local markets,
others are Web-based for broader coverage.
4.1 Market Segmentation
Green Office has identified three customer segments that it will go after:

Corporations: This customer group is composed of companies, typically with at least 35

employees. This customer group makes purchases for the entire organization, however
sometimes different groups within the same organization will make purchases individually.
These customers are interested in the purchase of environmentally-friendly supplies
because of a decision by the owners for personal/corporate belief reasons or as part of a PR
program that communicates to their customers that the business is committed to the
environment and makes procurements based on environmental factors.

Government Agencies: This segment is an ever expanding group. The foundation of this
segment is Former President Clinton's Executive Order (EO) 13101 entitled "Greening the
Government Through Recycling, Waste Prevention, and Federal Acquisition." This order
requires the federal government to buy recycled content and environmentally preferable
products.
The order directs the head of each executive agency to incorporate waste prevention and
recycling and to increase and expand markets for recovered materials. The bottom line of
this EO is that federal government agencies are forced to make environmentally-friendly
office supply purchases. In addition, the majority of states have enacted similar legislation
for their governmental agencies. These legislative requirements for environmentally-friendly
products has created a huge market for Green Office.

Other: This is a catch all segment that contains a wide range of entities such as small
companies, individuals, school districts, etc.

Table: Market Analysis

Market Analysis
Potential Customers

Growth

Corporations
Government Agencies
Other
Total

8%
3%
7%
6.77%

Year 1

Year 2

Year 3

Year 4

Year 5

12,009
7,886
56,888
76,783

12,970
8,123
60,870
81,963

14,008
8,367
65,131
87,506

15,129
8,618
69,690
93,437

16,339
8,877
74,568
99,784

CAGR
8.00%
3.00%
7.00%
6.77%

Page 6

Green Office

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy

As mentioned previously in the Market Segmentation section, three customer groups have been
identified. Two of these, corporations and government agencies are quite attractive as customer
segments. The third is used as a "catch all" category. The strategy will be the use of a targeted
sales campaign that uses specific sales agents each of whom are responsible for a specific
customer group.
The hiring process for these sales agents will be done with the specific group in mind. The agent
responsible for the government agencies will be chosen based on his past experience and
proficiency in selling to government agencies if possible. Green Office will therefore provide
each experienced sales person with an exclusive territory, assisting them in achieving high sales
marks for the respective customer group.
4.3 Industry Analysis
The broader industry that Green Office competes in the office supplies industry. Within that
industry there are several market leaders:

Staples
OfficeMax
Office Depot

All three of these companies offer both local retail stores as well as mail order/Internet sales.
These are the leaders with a combined 59% market share. The remaining players in the market
are made up of both mail order/Internet competitors as well as local retailers. Within this
market is a newly developed niche of environmentally-friendly suppliers. The majority of
companies competing in this niche are mail order/Internet based.

Page 7

Green Office

4.3.1 Competition and Buying Patterns

Competition comes from two sources, direct and indirect competitors. Direct competitors are
companies that offer similar lines of environmentally-friendly products. The main companies
are:

Ecomall
EcoProducts
The Good Humans

The indirect competitors are companies within the office supplies industry who offer eco
supplies, but do not concentrate on these products. Customers' buying patterns are based on
two main factors:

Price: Both a relative comparison to standard office supplies as well as eco-friendly ones.
Convenience: Ease of ordering, shipping schedule, variety of products.

5.0 Strategy and Implementation Summary

Green Office's goal of becoming a major vendor of environmentally-friendly office supplies is an
ambitious but achievable goal. Green Office will leverage its two part competitive edge to
achieve this goal. The first edge is an unbeatable selection of green office supplies.
This all inclusive product catalog creates a compelling one stop shopping venue. This wonderful
product selection will be supported by a customer-centric company culture. The marketing and
sales strategies support these two competitive edges.
The marketing strategy seeks to develop an awareness of Green Office and its ability to offer a
wide selection of eco-friendly office products. All products will be priced competitively, often at
the same low price as non eco-friendly products.
The sales strategy will use specially engineered economic incentives that channel account
manager behavior into the mode of ensuring, happy, long-term customers. This entire strategy
is based on the company's philosophy that it is far cheaper to maintain a current customer than
it is to attract new ones.
5.1 Competitive Edge
Green Office competitive edge is two fold, a wide selection of office supplies making it a one
stop shopping place and a strong customer service oriented organization where the customers
are assigned a specific sales agent/account manager to assist them.
By offering a strong product catalog, customers are able to place all of their office supplies
orders at one place instead of having to contact multiple vendors each week or month,
whatever the interval may be. Creating the perception that all of the company's office supply
needs can be met by one company, Green Office has a competitive edge.
The second edge is Green Office's focus on customer service. The company recognizes that if
long-term sustainable growth is desired, the customers must feel like that they are being
offered the finest service. This will ensure the building of a loyal customer base that will assist
Green Office in becoming a sustainable operation.

Page 8

Green Office

5.2 Marketing Strategy

The marketing strategy will be based on a communication effort that announces Green Office's
two competitive edges, their selection and customer service. To be able to order all of an
office's supply needs from one easy-to-work-with vendor is a significant value. Backing up the
extensive product catalog with top rate customer service will retain customers.
Green Office will undertake a marketing campaign that communicates its competitive edge. The
campaign will rely primarily on print advertising. The media outlets to be used will be
determined based on the readership levels and targeted companies. The campaign will develop
an awareness of Green Office to the targeted customers. The development of an awareness or
image of Green Office is the first step in the implementation strategy, the second step is the
sales strategy detailed in the following section.
5.3 Sales Strategy
Green Office's sales strategy will be based on the conversion of qualified sales leads into paying
customers. The key emphasis here is customer service. Green Office recognizes that customers
desire that their needs are taken care of.
Additionally, customers want a seemless experience where their expectations are managed.
Green Office will accomplish these lofty goals by assigning a specific account manager/sales
agent to each customer (assigned by the customer type). The sales agent receives a
commission not just for the individual sale but also using a complex formula that takes into
account long-term customer satisfaction of the client.
Green Office therefore has developed an economic incentive for its account managers to
develop long-term customers. This incentive based system is key to the sales strategy because
it creates an incentive for the sales agent to take into account Green Office's strategic survival,
not just the agents short-term compensation. In addition, long-term customers are more
profitable than new customers.
5.3.1 Sales Forecast
Green Office adopted a conservative forecast for the business plan. These conservative
estimates will help ensure that the company does not face any cash flow shortages within the
first couple of years The sales forecast also takes into account that Green Office is a start-up
organization and it will take time to generate a level of sustainable sales. Sales will increase at
a slow but steady rate. Please see the three following table and charts for graphical
representation of the sales forecasts.

Page 9

Green Office

Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

Corporations
Government Agencies
Other
Total Sales

$92,892
$107,470
$59,362
$259,724

$298,887
$358,664
$161,399
$818,950

$366,544
$439,853
$197,934
$1,004,331

Direct Cost of Sales

Corporations
Government Agencies
Other
Subtotal Direct Cost of Sales

Year 1
$47,380
$56,856
$25,585
$129,821

Year 2
$194,277
$233,132
$104,909
$532,318

Year 3
$238,254
$285,904
$128,657
$652,815

Sales

Chart: Sales Monthly

Page 10

Green Office

Chart: Sales by Year

5.4 Milestones
Green Office has identified four specific milestones that will serve as goals for the organization
to achieve. While the milestones are lofty in terms of qualitative standards and the timeline
deadline, they are achievable.

Business plan completion.

First major government agency account.
$200K in sales.
Profitability.

Table: Milestones

Milestones
Milestone
Business plan completion
First major government agency
account
$200K in sales
Profitability
Totals

Start Date
1/1/2004

End Date
2/15/2004

Budget
$0

Manager
Stan

1/1/2004

4/1/2004

$0

Sales Manager

Department
Business
Development
Sales

1/1/2004
1/1/2004

2/15/2005
6/1/2005

$0
$0
$0

Sales Manager
Stan

Sales
Entire company

Page 11

Green Office

6.0 Web Plan Summary

The website will be developed to offer customers a product catalog for online orders. The
overriding design philosophy of the site is ease of use. Green Office wants to make the process
of placing an order as easy and fast as possible thereby encouraging increased sales. Green
Office will incorporate special features such as a section that is specific to each customer so the
customer can easily make purchases of repeat items. Instead of going through the website
every month and locating their monthly needs, the site captures regularly ordered items for
that specific customer, significantly speeding up the ordering process. This ease-of-use feature
will help increase sales as customers become more and more familiar with the site and
appreciate how easy it is to place an order.
6.1 Website Marketing Strategy
The marketing strategy for the website will begin initially with a simple strategy of search
engine submissions and the use of pay-per-clicks which is a service of Google and Overture
where the company pays the search engine every time a surfer clicks through to the Green
Office site.
6.2 Development Requirements
Green Office has secured a start-up website design company to design and develop the site. As
a result, the company is able to negotiate a favorable rate for the development and
maintenance of the site.
7.0 Management Summary
Green Office is lead by Stan Cooksey. Stan received his undergraduate degree of business from
the University of Chicago. After graduation Stan accepted a position from The Symantec
Software Corporation as the regional sales manager for the government agency group. After
five years in this group Stan enrolled in an Executive MBA Program at Loyola University. At the
conclusion of this program Stan received an advancement to become a vice president of sales
for the United States. Stan left his position at Symantec to start Green Office.

Page 12

Green Office

7.1 Personnel Plan

Stan: Operations, business development, some finance, some accounting.

Willma (Stan's wife): Procurement, marketing.
Sales: Account manager functions.
Accounting: Part-time accounting clerk.
Shipping: Responsible for order filling.
Administrative/customer support.

Table: Personnel

Personnel Plan
Stan
Willma
Sales
Sales
Sales
Accounting
Shipping
Shipping
Shipping
Admin/customer support
Admin/customer support
Total People
Total Payroll

Year 1

Year 2

Year 3

$20,000
$20,000
$15,000
$12,000
$9,000
$6,400
$15,000
$12,000
$7,000
$10,000
$4,800
11

$22,000
$22,000
$16,500
$13,200
$9,900
$7,040
$16,500
$13,200
$7,700
$11,000
$5,280
11

$24,200
$24,200
$18,150
$14,520
$10,890
$7,744
$18,150
$14,520
$8,470
$12,100
$5,808
11

$144,320

$158,752

$131,200

8.0 Financial Plan

The following sections will outline important financial information.
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

Year 2

Year 3

1
9.00%
8.00%
30.00%
0

2
9.00%
8.00%
30.00%
0

3
9.00%
8.00%
30.00%
0

Page 13

Green Office

8.2 Break-even Analysis

The following table and chart show our break-even analysis.

Chart: Break-even Analysis

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$31,303

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

50%
$15,657

Page 14

Green Office

8.3 Projected Profit and Loss

The following table will indicate Projected Profit and Loss.

Chart: Profit Monthly

Page 15

Green Office

Chart: Profit Yearly

Chart: Gross Margin Monthly

Page 16

Green Office

Chart: Gross Margin Yearly

Page 17

Green Office

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

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

$259,724
$129,821
$0
$129,821

$818,950
$532,318
$0
$532,318

$1,004,331
$652,815
$0
$652,815

Gross Margin
Gross Margin %

$129,903
50.02%

$286,633
35.00%

$351,516
35.00%

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

$131,200
$2,400
$8,700
$12,000
$6,000
$2,400
$19,680
$5,500

$144,320
$2,400
$8,700
$12,000
$6,000
$2,400
$27,180
$6,500

$158,752
$2,400
$8,700
$12,000
$6,000
$2,400
$28,080
$7,500

Total Operating Expenses

$187,880

$209,500

$225,832

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

($57,977)
($49,277)
$3,854
$0

$77,133
$85,833
$3,731
$22,021

$125,684
$134,384
$3,500
$36,655

Net Profit
Net Profit/Sales

($61,831)
-23.81%

$51,381
6.27%

$85,528
8.52%

Expenses

Page 18

Green Office

8.4 Projected Cash Flow

The following chart and table will indicate Projected Cash Flow.

Chart: Cash

Page 19

Green Office

Table: Cash Flow

Pro Forma Cash Flow

Year 1

Year 2

Year 3

$64,931
$151,445
$216,376

$204,738
$520,877
$725,615

$251,083
$722,308
$973,390

$0
$0
$0
$0
$0
$0
$0
$216,376

$0
$3,000
$0
$0
$0
$0
$36,000
$764,615

$0
$0
$0
$0
$0
$0
$0
$973,390

Year 1

Year 2

Year 3

$131,200
$130,946
$262,146

$144,320
$601,458
$745,778

$158,752
$748,773
$907,525

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
$3,403
$0
$0
$0
$265,548

$0
$0
$0
$3,302
$0
$0
$0
$749,080

$0
$2,234
$0
$3,324
$0
$0
$0
$913,083

Net Cash Flow

Cash Balance

($49,173)
$79,527

$15,535
$95,062

$60,308
$155,370

Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from Operations
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
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

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Green Office

8.5 Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.
Table: Balance Sheet

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

$79,527
$43,348
$15,413
$3,500
$141,788

$95,062
$136,684
$34,260
$3,500
$269,506

$155,370
$167,624
$42,015
$3,500
$368,509

$43,500
$8,700
$34,800
$176,588

$43,500
$17,400
$26,100
$295,606

$43,500
$26,100
$17,400
$385,909

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$20,122
$0
$0
$20,122

$52,060
$3,000
$0
$55,060

$62,392
$766
$0
$63,158

Long-term Liabilities
Total Liabilities

$46,597
$66,719

$43,296
$98,356

$39,972
$103,131

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

$213,000
($41,300)
($61,831)
$109,869
$176,588

$249,000
($103,131)
$51,381
$197,250
$295,606

$249,000
($51,750)
$85,528
$282,779
$385,909

Net Worth

$109,869

$197,250

$282,779

Assets
Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities

8.6 Business Ratios

The following table shows common Business Ratios, specific to Green Office as well as to the
industry as a whole.

Page 21

Green Office

Table: Ratios

Ratio Analysis
Year 1

Year 2

Year 3

Industry Profile

n.a.

215.32%

22.64%

1.50%

Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets

24.55%
8.73%
1.98%
80.29%
19.71%
100.00%

46.24%
11.59%
1.18%
91.17%
8.83%
100.00%

43.44%
10.89%
0.91%
95.49%
4.51%
100.00%

38.65%
28.15%
18.82%
85.62%
14.38%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

11.39%
26.39%
37.78%
62.22%

18.63%
14.65%
33.27%
66.73%

16.37%
10.36%
26.72%
73.28%

43.40%
11.10%
54.50%
45.50%

100.00%
50.02%
96.00%
0.00%
-22.32%

100.00%
35.00%
31.88%
0.00%
9.42%

100.00%
35.00%
28.47%
0.00%
12.51%

100.00%
22.64%
13.42%
0.26%
1.70%

7.05
6.28
37.78%
-56.28%
-35.01%

4.89
4.27
33.27%
37.21%
24.83%

5.83
5.17
26.72%
43.21%
31.66%

1.77
1.07
5.52%
59.64%
13.69%

Sales Growth
Percent of Total Assets

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

Return on Equity

-23.81%
-56.28%

6.27%
26.05%

8.52%
30.25%

n.a
n.a

4.49
56
5.91
7.51
27
1.47

4.49
53
21.43
12.17
21
2.77

4.49
74
17.12
12.17
28
2.60

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

0.61
0.30

0.50
0.56

0.36
0.61

n.a
n.a

$121,666
-15.04

$214,446
20.67

$305,351
35.91

n.a
n.a

0.68
11%
4.13
2.36
0.00

0.36
19%
1.79
4.15
0.00

0.38
16%
2.52
3.55
0.00

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

Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
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 22

Appendix
Table: Sales Forecast

Sales Forecast
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
$0
$0
$0

$0
$0
$0
$0

$7,645
$8,774
$5,048
$21,467

$8,212
$9,454
$5,354
$23,021

$8,455
$9,746
$5,486
$23,687

$8,747
$10,096
$5,643
$24,487

$9,212
$10,654
$5,894
$25,761

$9,454
$10,945
$6,025
$26,424

$9,987
$11,584
$6,313
$27,884

$10,112
$11,734
$6,380
$28,227

$10,414
$12,097
$6,544
$29,054

$10,654
$12,385
$6,673
$29,712

Sales
Corporations
Government Agencies
Other
Total Sales
Direct Cost of Sales

0%
0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Corporations

$0

$0

$3,669

$4,038

$4,196

$4,386

$4,688

$4,845

$5,192

$5,273

$5,469

$5,625

Government Agencies

$0

$0

$4,403

$4,845

$5,035

$5,263

$5,625

$5,814

$6,230

$6,327

$6,563

$6,750

Other

$0

$0

$1,981

$2,180

$2,266

$2,368

$2,531

$2,616

$2,803

$2,847

$2,953

$3,038

Subtotal Direct Cost of Sales

$0

$0

$10,054

$11,064

$11,496

$12,016

$12,845

$13,276

$14,225

$14,447

$14,985

$15,413

Page 1

Appendix
Table: Personnel

Personnel Plan
Stan
Willma
Sales
Sales
Sales
Accounting
Shipping
Shipping
Shipping
Admin/customer support
Admin/customer support
Total People
Total Payroll

0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%

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
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0

$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0

$2,000
$2,000
$1,500
$0
$0
$0
$1,500
$0
$0
$1,000
$0
5

$2,000
$2,000
$1,500
$0
$0
$0
$1,500
$0
$0
$1,000
$0
5

$2,000
$2,000
$1,500
$1,500
$0
$800
$1,500
$1,500
$0
$1,000
$0
8

$2,000
$2,000
$1,500
$1,500
$0
$800
$1,500
$1,500
$1,000
$1,000
$0
9

$2,000
$2,000
$1,500
$1,500
$1,500
$800
$1,500
$1,500
$1,000
$1,000
$800
11

$2,000
$2,000
$1,500
$1,500
$1,500
$800
$1,500
$1,500
$1,000
$1,000
$800
11

$2,000
$2,000
$1,500
$1,500
$1,500
$800
$1,500
$1,500
$1,000
$1,000
$800
11

$2,000
$2,000
$1,500
$1,500
$1,500
$800
$1,500
$1,500
$1,000
$1,000
$800
11

$2,000
$2,000
$1,500
$1,500
$1,500
$800
$1,500
$1,500
$1,000
$1,000
$800
11

$2,000
$2,000
$1,500
$1,500
$1,500
$800
$1,500
$1,500
$1,000
$1,000
$800
11

$0

$0

$8,000

$8,000

$11,800

$12,800

$15,100

$15,100

$15,100

$15,100

$15,100

$15,100

Page 2

Appendix
Table: General Assumptions

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

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

10

11

Month 12
12

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

Page 3

Appendix
Table: Profit and Loss

Pro Forma Profit and Loss

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales

$0

$0

$21,467

$23,021

$23,687

$24,487

$25,761

$26,424

$27,884

$28,227

$29,054

$29,712

Direct Cost of Sales

$0

$0

$10,054

$11,064

$11,496

$12,016

$12,845

$13,276

$14,225

$14,447

$14,985

$15,413

Other Costs of Goods

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Cost of Sales

$0

$0

$10,054

$11,064

$11,496

$12,016

$12,845

$13,276

$14,225

$14,447

$14,985

$15,413

$0

$0

$11,414

$11,957

$12,190

$12,470

$12,916

$13,148

$13,660

$13,779

$14,069

$14,299

0.00%

0.00%

53.17%

51.94%

51.46%

50.93%

50.14%

49.76%

48.99%

48.82%

48.42%

48.13%

$0

$0

$8,000

$8,000

$11,800

$12,800

$15,100

$15,100

$15,100

$15,100

$15,100

$15,100

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

Gross Margin
Gross Margin %

Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation

$725

$725

$725

$725

$725

$725

$725

$725

$725

$725

$725

$725

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

Utilities

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

Insurance

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$0
$0

$0
$500

$1,200
$500

$1,200
$500

$1,770
$500

$1,920
$500

$2,265
$500

$2,265
$500

$2,265
$500

$2,265
$500

$2,265
$500

$2,265
$500

$2,625

$3,125

$12,325

$12,325

$16,695

$17,845

$20,490

$20,490

$20,490

$20,490

$20,490

$20,490

Profit Before Interest and Taxes

($2,625)

($3,125)

($911)

($368)

($4,505)

($5,375)

($7,574)

($7,342)

($6,830)

($6,711)

($6,421)

($6,191)

EBITDA

($1,900)

($2,400)

($186)

$357

($3,780)

($4,650)

($6,849)

($6,617)

($6,105)

($5,986)

($5,696)

($5,466)

$332

$330

$328

$326

$324

$322

$320

$318

$316

$315

$313

$311

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

($2,957)

($3,455)

($1,239)

($694)

($4,829)

($5,697)

($7,894)

($7,660)

($7,147)

($7,025)

($6,734)

($6,501)

0.00%

0.00%

-5.77%

-3.01%

-20.39%

-23.26%

-30.64%

-28.99%

-25.63%

-24.89%

-23.18%

-21.88%

Rent

Payroll Taxes
Website Maintenance
Total Operating Expenses

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

Cash Sales

$0

$0

$5,367

$5,755

$5,922

$6,122

$6,440

$6,606

$6,971

$7,057

$7,264

$7,428

Cash from Receivables

$0

$0

$0

$537

$16,139

$17,282

$17,785

$18,397

$19,337

$19,854

$20,922

$21,191

Subtotal Cash from Operations

$0

$0

$5,367

$6,292

$22,061

$23,404

$24,225

$25,003

$26,308

$26,911

$28,185

$28,619

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

New Other Liabilities (interest-free)

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$0

$0

$5,367

$6,292

$22,061

$23,404

$24,225

$25,003

$26,308

$26,911

$28,185

$28,619

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash Received
Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing

Expenditures

0.00%

Expenditures from Operations

Cash Spending

$0

$0

$8,000

$8,000

$11,800

$12,800

$15,100

$15,100

$15,100

$15,100

$15,100

$15,100

Bill Payments

$74

$2,248

$2,770

$3,928

$3,945

$4,854

$15,401

$18,659

$18,739

$20,139

$19,678

$20,511

Subtotal Spent on Operations

$74

$2,248

$10,770

$11,928

$15,745

$17,654

$30,501

$33,759

$33,839

$35,239

$34,778

$35,611

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$273

$275

$277

$279

$281

$283

$284

$286

$288

$290

$292

$294

Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$348

$2,523

$11,047

$12,207

$16,026

$17,936

$30,785

$34,045

$34,127

$35,529

$35,070

$35,905

($348)

($2,523)

($5,680)

($5,915)

$6,035

$5,468

($6,560)

($9,043)

($7,819)

($8,618)

($6,885)

($7,286)

Additional Cash Spent

Long-term Liabilities Principal Repayment

Subtotal Cash Spent

Net Cash Flow

Page 5

Appendix
Cash Balance

$128,352

$125,829

$120,149

$114,235

$120,270

$125,738

$119,177

$110,135

$102,316

$93,698

$86,814

$79,527

Page 6

Appendix
Table: Balance Sheet

Pro Forma Balance Sheet

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$128,700
$0
$46,000
$3,500
$178,200

$128,352
$0
$46,000
$3,500
$177,852

$125,829
$0
$46,000
$3,500
$175,329

$120,149
$16,100
$35,946
$3,500
$175,696

$114,235
$32,829
$24,883
$3,500
$175,447

$120,270
$34,455
$13,386
$3,500
$171,612

$125,738
$35,538
$12,016
$3,500
$176,792

$119,177
$37,074
$12,845
$3,500
$172,596

$110,135
$38,495
$13,276
$3,500
$165,405

$102,316
$40,071
$14,225
$3,500
$160,112

$93,698
$41,386
$14,447
$3,500
$153,032

$86,814
$42,255
$14,985
$3,500
$147,554

$79,527
$43,348
$15,413
$3,500
$141,788

$43,500
$0
$43,500
$221,700

$43,500
$725
$42,775
$220,627

$43,500
$1,450
$42,050
$217,379

$43,500
$2,175
$41,325
$217,021

$43,500
$2,900
$40,600
$216,047

$43,500
$3,625
$39,875
$211,487

$43,500
$4,350
$39,150
$215,942

$43,500
$5,075
$38,425
$211,021

$43,500
$5,800
$37,700
$203,105

$43,500
$6,525
$36,975
$197,087

$43,500
$7,250
$36,250
$189,282

$43,500
$7,975
$35,525
$183,079

$43,500
$8,700
$34,800
$176,588

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
$0
$0
$0

$2,157
$0
$0
$2,157

$2,639
$0
$0
$2,639

$3,797
$0
$0
$3,797

$3,795
$0
$0
$3,795

$4,344
$0
$0
$4,344

$14,779
$0
$0
$14,779

$18,036
$0
$0
$18,036

$18,067
$0
$0
$18,067

$19,484
$0
$0
$19,484

$18,995
$0
$0
$18,995

$19,817
$0
$0
$19,817

$20,122
$0
$0
$20,122

$50,000
$50,000

$49,727
$51,884

$49,452
$52,090

$49,175
$52,972

$48,896
$52,691

$48,615
$52,959

$48,333
$63,112

$48,048
$66,084

$47,762
$65,829

$47,474
$66,957

$47,183
$66,178

$46,891
$66,709

$46,597
$66,719

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

$213,000
($41,300)
$0
$171,700
$221,700

$213,000
($41,300)
($2,957)
$168,743
$220,627

$213,000
($41,300)
($6,411)
$165,289
$217,379

$213,000
($41,300)
($7,650)
$164,050
$217,021

$213,000
($41,300)
($8,344)
$163,356
$216,047

$213,000
($41,300)
($13,173)
$158,527
$211,487

$213,000
($41,300)
($18,870)
$152,830
$215,942

$213,000
($41,300)
($26,764)
$144,936
$211,021

$213,000
($41,300)
($34,424)
$137,276
$203,105

$213,000
($41,300)
($41,571)
$130,129
$197,087

$213,000
($41,300)
($48,596)
$123,104
$189,282

$213,000
($41,300)
($55,329)
$116,371
$183,079

$213,000
($41,300)
($61,831)
$109,869
$176,588

Net Worth

$171,700

$168,743

$165,289

$164,050

$163,356

$158,527

$152,830

$144,936

$137,276

$130,129

$123,104

$116,371

$109,869

Assets

Starting Balances

Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities

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