Energy Smarts Network

A template for a consumer-focused energy and energy retrofit forum, helping

homeowners to increase property values with energy solutions.
Draft version 0.60 Note: All financial data are just place holders. This is only a template of the overall business structure and plan.

Energy Smarts Network by Rogier Fentener van Vlissingen is licensed under

a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at
https://www.scribd.com/document/319042281/EnergySmartsNetworkTemplate.
Permissions beyond the scope of this license may be available at
www.dabxdemandsidesolutions.com.

2141 Starling Ave., #404

Bronx, NY, 10462
ENERGY SMARTS NETWORK - JULY 2016

p. 718 - 409 0293

f. 206 - 202 3818

DaBxDSSInc@gmail.com
www.dabxdemandsidesolutions.com
1

Table of Contents
I.

Executive Summary............................................................................................... 3
Highlights
Objectives
Vision Statement
Mission Statement
Keys to Success
Description of Business
Company Ownership/Legal Entity
Location
Interior
Hours of Operation
Products and Services
Suppliers
Service
Management
Financial Management
Start-Up/Acquisition Summary

II.

Marketing .............................................................................................................. 8
Market Analysis
Market Segmentation
Competition
Pricing

III.

Appendix ............................................................................................................... 11
Consent Management Principles, Meetings, Elections
Start-Up Expenses
Determining Start-Up Capital
Cash Flow
Income Projection Statement
Profit and Loss Statement
Balance Sheet
Sales Forecast
Milestones
Break-Even Analysis
Miscellaneous Documents

ENERGY SMARTS NETWORK - JULY 2016

Executive Summary
Energy Smarts Network is a procurement platform with a focus on increasing asset values with retrofits. It affords the
homeowner professional level advice and competitive procurement in the area of energy retrofits; it will be a sort of a
buying club for energy with the benefit of professional quality advice, as well as a dispute resolution provision that
protects consumers and vendors alike. Vendors gain the benefit of dealing with informed customers.

Highlights
The energy smarts network is a consumer market place for energy, energy retrofits and other environmental solutions,
which is geared to putting the homeowner in charge of procurement by providing them with the necessary expertise.
The central focus is on offering the consumer the support they need, either on a volunteer basis via the forum, or on a
professional basis, to do energy procurement for their homes, based on maximizing property values and minimizing
environmental impacts. A separate section for renters will help them to frame decisions appropriately from the
perspective of a renter.
The market is defined by the fact that the vast majority of residences nationwide do not even meet the 2009 Energy
Codes, so much so that Green Tech Media recently wondered aloud if this was the budding Volkswagen scandal of the
real estate development industry, a quote from the article:
Dorsi agrees that the 2009 code, which roughly half of U.S. states use today, was simple enough to have been
implemented nationwide. But an informal survey of building performance experts conducted for his
organizations Compliance Project suggests actual compliance with the mix of codes in use across the country
varies between 20 percent and 80 percent by jurisdiction. He says the true cost of non-compliance ultimately
lands on consumers.

FINANCIAL OVERVIEW
Sales

$120,000

Net Profit

Expenses
100000

$100,000

85000

$80,000
$60,000
$40,000

68000

60000

55000
45000
35000
20000

50000
35000

40000

23000

$20,000
$0
2011

2012

2013

2014

Objectives
This project provides a consumer focused on-line forum for smart decisions about residential energy usage, based on the
principle that smart management of energy assets will increase home values while decreasing environmental impact. It
will offer a combination of lay advice through the forum and relevant product information from vendors, as well as
professional advice where appropriate.
ENERGY SMARTS NETWORK - JULY 2016

This project is being launched as a pilot, on a very small scale at first, in New York State. We are currently developing
this first on a national basis in the USA as a pilot program, but we foresee doing this state-by-state eventually. We will
offer this program to interested parties globally on the basis of a Creative Commons License.

Vision Statement
Homeowners need support to make decisions about energy and water usage in their property in a way that maximizes
the long term value of their property, while minimizing environmental impact. Our central focus is on treating the
residence as the investment it is.
In terms of public policy, the guiding insight is that Adam Smiths invisible hand does work in this area on the basis that
the outcome should be a Pareto-optimal decision of maximizing property value and minimizing environmental impact.
The central mission of government should be to stimulate desirable outcomes for the commons, and the central mission
for property owners is to maximize property value, and not be confused by often misshapen incentives that have a
propensity for triggering the wrong decisions.

Mission Statement
To provide homeowners with the ability to successfully procure energy solutions for their home, by offering them an
environment where they are not sold to, but they can buy based on adequate information, and with respect for their
financial interests. A central feature will involve the financial modeling to help homeowners always maximize property
values while minimizing environmental impact. Reliable information and consumer protection are a right, not a luxury
on our platform. Correct economic modeling is at the center of everything, in particular so homeowners do not make
value-destroying decisions based on financial incentives, be it seductive financing options or various other incentives that
sometimes are focused on technologies, not outcomes for the property owner. Our central focus will be always property
values, environmental outcomes, not technologies results more so than how you get there.

Keys to Success
For consumer Members:
Being in charge of your destiny, and the procurement process specifically.
In the past, you have spent on energy efficiency like a chicken with its head cut off, and have little to show for it,
because you never realized that the question is not if a device saves energy compared to something else, but if in fact it is
the most appropriate solution for your property. In this forum we focus on adding to the long term value of your
property with retrofits, and energy has huge potential, but mistakes are easy to make, as has been shown by the
experience with solar PV PPA and Lease financing, which could reduce the resale value of a property by as much as 10%
compared to buying solar PV outright (assuming that solar PV is indeed the optimal solution for that property).
Because we provide built-in consumer protection, through private conflict resolution procedures, you have a higher
degree of protection on our network than you have outside of it, without sacrificing any of your rights as a consumer.
For Vendors:
This network will reduce your sales costs, because an educated consumer is your best customer. Also, because we
provide a conflict resolution program for any issues with consumers, we reduce your risk of ever getting sued. Our
process provides for a way to resolve issues in a low-key private session. Again, this reduces your long term costs.

ENERGY SMARTS NETWORK - JULY 2016

Pilot program:
Success of the network will depend on the value it creates, and to that effect we will launch this program nationwide in
the USA incrementally in pilot markets, based on support from a small number of vendors, whose products and services
are of universal value (they apply to EVERY home) and most importantly, have no engineering contra-indication since
they do not interfere with any other decisions. For now these include:

The Energy Smarts Residential EMI-noise Filter, which cancels out harmonic noise on A/C power circuits, and
produces 10-20% direct reduction in power bills, as well as extending the service life of all equipment, since
they will run cooler based on pure 50 Hz or 60 Hz power. The average household in the US, using 1,000
kWh/mo will see a payback of under two years.

Inflector radiant barrier window insulator, which eliminates 70% of window infiltration of cold or heat, and is a
better value in most cases than window replacement, if windows are mechanically sound. Any home can use
these shades to keep out the heat in summer and keep it in in winter, as they do not interfere with sight, though
they keep out the solar glare.

LED lighting (talks with manufacturers are in progress). Again, a simple retrofit that any home could use, and
needs to be addressed from an energy efficiency standpoint. Note that while very efficient, LEDs, like
electronic ballasts for fluorescent lighting, do represent a non-linear load, and therefore will increase EMI noise
on power circuits, and for that reason the LED decision should go hand in hand with the Energy Smarts
Residential EMI Filter. It should also be noted that not all LEDs are created equal, and cheap is often
expensive if it results in more energy wasted, or shorter service life.

The three of these together will tend to reduce energy demand in a home in the 40-60% range, and should be
mandatory before doing about generating local power, be it solar, wind, or CHP, or even hydrogen generators,
or fuel cells.

Note that we will make a distinction between Core Products (or services), which are virtually universal in their
application, and also do not pose any engineering complications with subsequent solutions, and Solutions, which are
more of a niche nature, and require more of a trade-off decision. For Solutions a long term outlook is needed, since
doing one thing now may lock you out of doing something else later, lest the property owner becomes saddled with
mounting sunk costs, which all reduce the value the owner could ultimately realize from the property.

Counterpoint
It should be noted that in the example of rooftop solar PV in particular, we have seen many cases where the decision is
made without properly considering other issues, including engineering interdependencies that could be regretted later on.
The whole point of the network is to help consumers avoid such disasters, because to most people, their home is their
biggest investment. Other bad examples include tank-less hot water heaters, which are often a bad idea if an energy
retrofit is considered later on, and Domestic Hot Water (DHW) emerges in retrospect as the cheapest way to harvest
energy, but the hapless homeowner just spent a lot of money eliminating DHW storage, not realizing they were throwing
out the batteries with the bath water.
Examples of the sins for Rooftop Solar include:

Bad financing decisions, basically when people are sold on the payments, not the investment, and also when
home owners end up between a rock and a hard place when selling a home with a lease or a PPA, and have to
get the buyers to assume now obsolete solar panels. Often times buyers end up either taking a discount on the
property directly or being saddled with the cost of buying out the lease or PPA, which could easily wipe out all

ENERGY SMARTS NETWORK - JULY 2016

of the presumed savings that sales people typically represent, based on an utterly misleading comparison of
the payments on a 20-year finance contract, with the month-to-month energy bills, which are cancelable
without penalty when you move.

Bad engineering decisions are frequently an unforeseen opportunity cost once a happy, shiny salesman gets in
the door, for one thing solar PV might lock the homeowner out of doing solar thermal, so they end up saving
an often dubious amount on their electric bills, not realizing that if 70% of their energy use is thermal and 30%
electrical, saving 10% on the electric bill is only 3% of their overall energy budget, but solar thermal might have
wiped out 80% of their heating and hot water needs instead. In other cases, heat pumps might be indicated as a
solution, and the homeowner should have gotten an even bigger array.

Often, even if solar PV is the best option for a given home, homeowners fail to first do optimal insulation,
including potential window treatment like the Inflector Window Insulator that will be recommended on our
network. Likewise, the EMI filter is often overlooked, and it would reduce electrical needs by possibly 15-20%,
directly reducing installed capacity needed by 50%. Unfortunately, most solar sales people benefit from selling
you more panels, not from solving your other energy problems, etc. Follow the money applies here, most sales
people will talk their book.

Description of Business
Not all forums are created equal, and what will make this project a success is combining the forum with:

The Energy Smarts Network is our business.

Vendors can participate if they agree to our vendor code of ethics, which is supervised and enforced by our
Vendor Relations Board.

There are two categories of products, Core products, which are by nature universal, and Solutions that are
more niche solutions where a homeowner needs to assess if the solution is best for their property.

Company Ownership/Legal Entity

This business will be incubated from within DaBx and eventually spun off into its own separate entity. The business will
be a benefit corporation (B-Corp), with a stated goal of donating 10% of profits to micro-finance institutions (or an
institution to be created for the purpose) for financially challenged homeowners who are unable to find suitable
financing for viable energy retrofits, seeking to fill the gap to help make projects happen that again create long-term
value for homeowners.
The company will be managed by Consent Management principles, based on the work of Dr. Gerard Endenburg of
Rotterdam, Holland and his system of Sociocracy.

Location
We will be based in New York, not just because we happened to be there, but because New York State, by virtue of the
REV (Reforming Energy Vision) initiative, and the work of NYSERDA is truly blazing a trail towards the energy
infrastructure of tomorrow.

Interior
We will seek to find spaces, as we grow, that honor the principles we teach and do what we can to use our work
environment as a demonstration tool.

ENERGY SMARTS NETWORK - JULY 2016

Hours of Operation
By nature of on-line operations, we will have to be a 24/7/365 enterprise, since we want to offer viable moderation of
our forum, to ensure the quality of the conversation.

Products and Services

Our product is the forum, and our service is to create a safe and supporting environment for consumers any hard
selling methods will not be tolerated. As a corollary to this, we offer vendors the advantage that they will deal with
educated consumers, in an environment where successes and failures are shared on-line, which removes a lot of friction
from the sales process.

Suppliers
The first supplier is www.freeforums.net where we are launching a pilot for our forum on an ad-supported basis, so later
we can shift to an ad-free version when revenues allow, and before our full-scale commercial launch.
An IT firm is being selected to develop the various plug-ins for sales of products and services into the network, either
for ourselves and for others.

Service
We facilitate procurement and we offer consumer protection. Vendors will have to abide by a set of rules whereby
consumer can buy, and receive information but they cannot be sold to or talked into buying anything. Consumers
likewise will abide by the rules of the network.

Management
Rogier Fentener van Vlissingen, BA Econ. is the founder. A management team is being developed.
We will have an independent board of directors, that will always include representation of the vendor and homeowner
members of our network via our Vendor Relations Board.

Financial Management
The nature of this program is that it must be rolled out slowly, and this roll out is planned to happen on the back of one
product launch in particular, the new Energy Smarts Residential EMI-noise Filter. The launch will be organized through
pilot markets, based on building a network of competent and manufacturer certified installers. As revenues grow, we will
build up a more formal organization, and ultimately spin this off into its own separate entity, but until then, it will be
incubated within DaBx.
The preliminary plan is to launch this program with an offer of $799 installed, but $699 if three customers within a 1
mile radius order installations the same day, note that one filter will be needed for each subpanel, and the point of this
offer is to make it worthwhile for the installers. The average household uses ca. 1,000 kWh/mo, and at more or less
average retail pricing of say $0.20/kWh all in, that means an $200/mo electrical bill and at a 20% savings adds up to
$40/mo and a 20 month payback. That is easily worthwhile, particularly once you realize you are also prolonging the life
of all equipment. Most households have so much electronics nowadays that these higher numbers are realistic.

ENERGY SMARTS NETWORK - JULY 2016

Another founding Vendor member will be Inflector Global, www.inflectorglobal.com, who offer a unique insulating
window shade that is reversible, and keeps heat out in summer and inside in winter. It is also a universal solution that
qualifies as a core product.

Start-Up/Acquisition Summary
The Start-up is based on free services (the ad-supported forum) and transaction fees from vendors. As we grow, we will
build up a permanent staff. The service is currently sponsored by DaBx Demand Side Solutions, but it will be spun off
from the company when revenues warrant it, so it can be staffed and operated independently.

Developing the Tools

Investments can be made incrementally, and what follows is a listing of the initial projects:

A website for the network to be rolled out in line with the time when we go from ad-support to paid
membership.

A plug-in website (page) for sales of the Energy Smarts Residential EMI-noise Filter, which will feature a credit
for the referring sales representative, and the ability to select a sales representative nearby.

A plug-in website (page) for the Inflector Shade.

A plug-in for Powerkiosk

Other plug-ins as we develop, where in all cases the pricing ON the Energy Smarts Network is exclusive to
members of the network.

For a 30-year energy plan for a residence, we will first develop a spreadsheet application, then maybe
instructional videos, and eventually possibly more sophisticated software tools.

In general we will be seeking to integrate a collection of valuable instructional videos in our network, with the
emphasis always on informing, not selling.

Marketing
Our marketing will be organic, starting out with a residential initiative for the Energy Smarts EMI-noise filter, where we
will give membership in the network as a freebie. Once we have momentum, there will be an annual fee for the network,
but the mission will be to always save people more than what they pay for their membership.

Market Analysis
The market analysis is one of experience, namely that consumer apathy about energy savings is caused by the many false
and misleading sales pitches, such as most recently rooftop solar panels, particularly if they are financed with long term
leases or PPAs, and then even more so if the utilities change the rules in mid-stream.
We believe that the idea of a network where people can discuss their actual results openly and vendors support this type
of open and honest approach will radically change the game of energy retrofitting in the residential market.

ENERGY SMARTS NETWORK - JULY 2016

Local Market Growth

% growth over prior period

40%

Potential Customers

35%

New Homes

30%

New Businesses

25%
20%
15%
10%
5%
0%
2008

2012

2016

Market Segmentation
The need for reliable information for consumers is universal. In terms of the products we provide there is definite
segmentation, and to take the example of the harmonics filter:

The average US household consumes ca 1,000 kWh/mo, at a price that averages ca $0.20. Evidently, we will
initially target the markets with high rates, like in the NorthEast and California, and Hawaii, and households
with high consumption, such as those with heat pumps and lots of A/C. Rates per kWh can be as high as $0.30
or $0.40 in some of those markets.

n short, the initial marketing push will be wherever the payback is below 2 years for the average household,
and then the focus should be on the larger, and thus above average households in those markets.

Gradually utility companies will start promoting this technology and offer incentives, once they realize they can
get federal subsidies for this technology, and we foresee that this will open up the market for smaller and
smaller customers. So if its not economical today, it probably will be in a year or two.

Market Segments
Discount
20%

Elite
25%

Average
55%

Competition
We have no competition, for all other vendors are SELLING solutions, we are always on the buyers side, and there will
be considerable network effects, that will be strengthened because of local considerations as we evolve into State-wide,
rather than nation-wide networks.

ENERGY SMARTS NETWORK - JULY 2016

Pricing
Our pricing policy is very simple. Apart from promotions there will be a cost to the network on the basis of an annual
subscription, which makes it worthwhile, and underwrites the basic operating costs. The mission would be to always
save people more money than its costing them, and the subscription fees can also be used to manage the membership.
The plan is to let the service be free initially, and then make it a subscription service, but rates can vary over time.
Tentatively, after the launch period, it might be $99/year, and then be gradually lowered to $79, $59, and eventually
maybe $29.
To complement the subscriptions, there will be contributions from the vendors, which could be either annual
contributions or transaction fees or a combination, as negotiated with individual vendors. The framework might become
more formalized as we grow.

License Fees
DaBx Demand Side Solutions, Inc., or its heirs or assigns, will receive royalties of 5% on all gross revenue transacted on
this network, paid monthly for the preceding month, and in the spirit of the Creative Commons License under which we
are offering this program to parties outside the USA, there will be an active sharing of information about ongoing
improvements to the model, including an annual audit of the licensees business by an independent attorney, appointed
by DaBx, and paid for by the licensee, to account for modifications. As to royalties, DaBx will be provided annually with
an independent review by a CPA/chartered accountant, and if it deems necessary will have the option to have an audit
performed at its expense, by a CPA/chartered accountant of its choosing, and if discrepancies greater than 10% are
found, the cost for such audit will be borne by the licensee, and remitted promptly with the next monthly royalty
payment, along with the

Advertising and Promotion

All our vendors can promote the network as a benefit and otherwise we will do mainly on-line marketing. In the
commercial context one constantly gets questions about could I do this at home? and this network could be the
perfect answer. We will also work with bundled pricing if new customers refer two neighbors for same day installation.
The Energy Smarts Residential EMI-noise filter will be private labeled just for the home market.

Strategy and Implementation

Critical to our success will be the implementation of the Consent Management Model, both to run the company itself,
and to run the relationships with Members and Vendors, including conflict resolution in case of trouble in any of the
dealings between Members and Vendors. Using the Consent Model will give consumers and vendors a protection, and a
fair, low cost way to settle disputes.

ENERGY SMARTS NETWORK - JULY 2016

10

Appendix
Consent Management Principles, Meetings, Elections
Consent Principles

Rule One: Consent Principles

All decision-making of a strategic, policy, and tactical nature, including appointments, or tasks assigned to people, and
any resolutions, are governed by the Consent Principles, otherwise any such decisions do not apply.
Consent is defined as the absence of reasoned objections.
N.B.: The need to state reasoned objections is the primary problem solving tool, because veto power
(as in consensus-based decision making) can cause a stalemate, consent enables problem solving, and
achieves complete buy-in.
Rule Two: Regular meetings
Regular meetings of Teams decide all strategic, tactical and policy issues (meaning how to do things, not what to do).
Meetings are at minimum monthly as stipulated in the body of this agreement, but can be convened more often as
needed.

Operating decisions (what to do) do not belong in Team meetings, but in private consultations, if there is any
doubt.
Any strategic, tactical, or policy decisions made outside of properly scheduled team meetings are invalid, and
Team members can make this known by withdrawing consent upon learning of any such decisions, at which
point they are taken up in the agenda of the next Team meeting.

Rule Three: Double Linkage

Every Team of five members or more is linked to the next higher one by means of a double link as follows
(meaning they are included in the Team meetings at the next higher level):

The Team Manager

A delegate chosen from among the members.

Rule Four:
Measurement
Teams should focus on effectiveness in terms of input, output, and measurement. Appropriate measurement and
feedback will be established at every level.

General Business Model

The consent model furthermore means that:

Decision making by consent, the absence of reasoned objections, is universal, and any other decisions shall be
invalid within the organization.

The entire organization is structured into a body of management meetings that are linked to each other by
means of a double link, consisting of their appointed manager, and a chosen delegate from that meeting group,
both of whom are include in the meeting at the next higher level.

ENERGY SMARTS NETWORK - JULY 2016

11

The capital model is based exclusively on active management participation in the company with a profit sharing
between capital providers and members. No passive investors will be permitted. Members who invest in the
company will be bought out upon retirement from the company. Terms to be developed.
o Returns to capital will be assessed annually based on the risk-free rate of return, being the 30-year TBill rate, and a profit sharing, based on the boards decision of what moneys are needed in the
business, and the remainder allocated 50/50 to returns to investors and bonuses to employees.

Meeting Procedures
Team meetings include the entire team, agendas is to be posted/circulated at least 3 working days in advance, and all
members must be present, or excused. In the case of excused absences members can assign their vote to another
member, provided they advise the Chair and the Secretary. Unexcused absences imply consent. Consent can be
withdrawn by any one at any time, requiring decisions to be revisited at the next meeting upon notice of the withdrawal
of consent to the meeting secretary or Chair. Teams of fewer than five are included in the next higher Team meeting.
Minutes are to be issued the next business day after a meeting and entered into the record after their adoption at the next
meeting, with signatures of the Chair and Secretary.
Model Team Meeting Agenda:
1.
2.
3.
4.
5.
6.

Opening: individual updates, last minute agenda additions, NO DISCUSSION

Approve minutes of prior meeting
Prioritize agenda, observe/accommodate time constraints
Agenda proper: in agreed order of priority, within time constraints
Schedule next meeting, based on progress
Closing round: feedback on effectiveness, closing comments, NO DISCUSSION

Corollary Rule About Task Assignments By Consent Election

All assignments of tasks or duties are for stated time periods, including those of Team Chair and Secretary (in other
words, the Team Manager is merely the party who recruited the team, but not necessarily Chair of the Team). Job
assignments may be permanent unless consent is withdrawn. All assignments are done by consent election, with the
following procedure:
1.
2.
3.
4.
5.
6.

An operational definition of the job/task

Complete Consent Ballots: person x chooses person y
Chair polls individual reasoning NO CROSSTALK
Open discussion, moderated by chair
Chair calls for election, and if no consent is achieved, returns to 4. Open discussion.
Repeat final two steps as necessary.

General Note:
By guaranteeing the entire operation of this venture to be performed according to the consent process, all participants
enjoy protections, safeguards and responsibilities. The purpose is to be as much as possible a self-regulating, and selforganizing entity, and to allow us to be a very responsive organization. The meeting format guarantees that everything is
on the record. Anything that is not on the record does not exist for the purposes of operating this entity.

ENERGY SMARTS NETWORK - JULY 2016

12

Minutes:
Minutes of meetings shall be action oriented and itemized by outcome (always a to do item), responsible party, and due
date. They are either resolutions (down), or recommendations (up).

Vendor Participation, Code of Ethics and Enforcement

Vendors will pay an appropriate contribution which may be either an annual fee, or a transaction based contribution to
the network, as agreed with the Vendor Relations Board specifically for each vendor.
The Code of Ethics for merchants on the Energy Smarts Network provides that:

Vendors inform and advise, but do not sell consumers buy. Absolutely no hardball sales tactics will be
tolerated. Specifically, Vendors will respect the fact that analytically, financing should not make the decision,
economics and engineering should. Special financing as a way of swaying the decision is not acceptable, and
should only enter into the equation after feasibility and appropriateness is assured from an engineering and
economic standpoint.

Vendors always have to respect the right of any prospective customer to evaluate not just the quality of the
product, but the appropriateness of it to their situation. Therefore, vendors need to assist people on any
questions related to the appropriateness of their solution in actual application.

The model used on the Energy Smarts Network is always a Net Present Value of a retrofit, meaning that we
teach our members to take into account any synergies or tradeoffs that may exist because of engineering
interdependencies, and in general the model is a 30-year capital budget for energy, based on energy audits and a
long-term engineering assessment of desirable energy infrastructure.

Fair pricing: Members of ESN will enjoy favored nation status meaning that any ESN Vendor guarantees
customer the lowest price at the time of transaction for similar quantity and quality of product by said Vendor.

Complaint handling: Any Vendor who has to appear before the Vendor Relations Board three times within a
year, will be suspended pending a review by the board of that Vendors complaint handling, and if it is found to
be inadequate the Vendor Relations Board will have the option to recommend removal of the said Vendor. At
such time a meeting will be scheduled for such removal, handled in like manner as the consumer complaint
procedure: Parties will present the issues in writing within 7 days of notice of permanent removal, and

Code of Ethics Violations Conflict Resolution

The Energy Smarts Network will have a Board of Vendor Relations, made up of a consumer member, one vendor
member, and one staff member from the network.
The board will have monthly meetings in accordance with the consent management procedures outlined herein, and all
vendor applications will need to be approved by this board. All disputes will be handled by this board, with the provision
that if any board members are affiliated with the parties to the particular dispute, independent members will be selected
in their place.

Member rights Consumers

Consumers who become members will agree to the following:

ENERGY SMARTS NETWORK - JULY 2016

13

An annual fee that will be advertised on the site, except for any promotional waivers that may apply from time
to time.

Respectful behavior towards others on the forum.

In case of any issues with Vendors on ESN, pertaining to a transaction with a forum member, and having been
transacted on the forum, member will:
o First request the vendor to address the problem
o Second: Failing resolution upon request, member will notify ESN and ESN will discuss problem with
the vendor and ask for appropriate correction.
o Third: Failing resolution by ESN, the matter will be referred to the Vendor Relations Board. Where
the matter will be swiftly addressed (within one calendar month from the date of the report) by means
of Consent Arbitration, in the form of a meeting to which the vendor and consumer both are invited,
and the agenda shall be made up of the written consumer complaint and the vendor response.
Failing resolution after the first meeting, a new meeting will be scheduled within 2 weeks,
and parties will re-present their case within 3 business days in writing, based on
o Consumer will not seek any other legal recourse unless and until resolution via ESN arbitration is
resolved, with the sole exception if

Start-Up Expenses
Business Licenses
Incorporation Expenses
Deposits
Bank Account
Rent
Interior Modifications
Equipment/Machinery Required:
Item 1
Item 2
Item 3
Total Equipment/Machinery
Insurance
Stationery/Business Cards
Brochures
Pre-Opening Advertising
Opening Inventory
Other (list):
Item 1
Item 2
TOTAL STARTUP EXPENSES

ENERGY SMARTS NETWORK - JULY 2016

14

Determining Start-Up Capital

1.

Begin by filling in the figures for the various types of expenses in the cash flow table on the following page.

2.

Start your first month in the table that follows with starting cash of $0, and consolidate your cash out expenses from your cash flow table under the
three main headings of rent, payroll and other (including the amount of unpaid start-up costs in other in month 1).

3.

Continue the monthly projections in the table that follows until the ending balances are consistently positive.

4.

Find the largest negative balancethis is the amount needed for start-up capital in order for the business to survive until the break-even point when all
expenses will be covered by income.

5.

Continue by inserting the amount of needed start-up capital into the cash flow table as the starting cash for Month 1.

Month 1
Starting cash

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

$0.00

Cash In:
Cash Sales Paid
Receivables
Total Cash In
Cash Out:
Rent
Payroll
Other
Total Cash Out
Ending Balance
CHANGE (CASH FLOW)

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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

Starting cash
Cash In:
Cash Sales
Receivables
Total Cash Intake
Cash Out (expenses):
Rent
Utilities
Payroll (incl. taxes)
Benefits
Loan Payments
Travel
Insurance
Advertising
Professional fees
Office supplies
Postage
Telephone
Internet
Bank fees
Total Cash Outgo
ENDING BALANCE

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Income Projection Statement

The Income Projection Statement is another management tool to preview the amount of income generated each month based on reasonable predictions
of the monthly level of sales and costs/expenses. As the monthly projections are developed and entered, these figures serve as goals to control operating
expenses. As actual results occur, a comparison with the predicted amounts should produce warning bells if costs are getting out of line so that steps can be
taken to correct problems.
The Industrial Percentage (Ind. %) is calculated by multiplying costs/expenses by 100% and dividing the result by total net sales. It indicates the total sales that
are standard for a particular industry. You may be able to get this information from trade associations, accountants, banks, or reference libraries. Industry
figures are a useful benchmark against which to compare the costs/expenses of your own business. Compare your annual percentage with the figure
indicated in the industry percentage column.
The following is an explanation for some of the terms used in the table that follows:
Total Net Sales (Revenue): This figure is your total estimated sales per month. Be as realistic as possible, taking into consideration seasonal trends, returns,
allowances, and markdowns.
Cost of Sales: To be realistic, this figure must include all the costs involved in making a sale. For example, where inventory is concerned, include the cost of
transportation and shipping. Any direct labor cost should also be included.
Gross Profit: Subtract the cost of sales from the total net sales.
Gross Profit Margin: This is calculated by dividing gross profits by total net sales.
Controllable Expenses: Salaries (base plus overtime), payroll expenses (including paid vacations, sick leave, health insurance, unemployment insurance and
social security taxes), cost of outside services (including subcontracts, overflow work and special or one-time services), supplies (including all items and
services purchased for use in the business), utilities (water, heat, light, trash collection, etc.), repair and maintenance (including both regular and periodic
expenses, such as painting), advertising, travel and auto (including business use of personal car, parking, and business trips), accounting and legal (the cost
of outside professional services).
Fixed Expenses: Rent (only for real estate used in business), depreciation (the amortization of capital assets), insurance (fire, liability on property or products,
workers compensation, theft, etc.), loan repayments (include the interest and principal payments on outstanding loans to the business), miscellaneous
(unspecified, small expenditures not included under other accounts or headings).
Net Profit/Loss (Before Taxes): Subtract total expenses from gross profit.
Taxes: Inventory, sales, excise, real estate, federal, state, etc.
Net Profit/Loss (After Taxes): Subtract taxes from net profit before taxes.
Annual Total: Add all monthly figures across the table for each sales and expense item.
Annual Percentage: Multiply the annual total by 100% and divide the result by the total net sales figure. Compare to industry percentage in first column.

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Ind. %

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Annual
Total

Annual %

Est. Net Sales

Cost Of Sales
Gross Profit
Controllable Expenses:
Salaries/Wages
Payroll Expenses
Legal/Accounting
Advertising
Travel/Auto
Dues/Subs.
Utilities
Misc.
Total Controllable Exp.
Fixed Expenses:
Rent
Depreciation
Insurance
Permits/Licenses
Loan Payments
Misc.
Total Fixed Expenses
Total Expenses
Net Profit/Loss Before Taxes
Taxes
NET PROFIT/LOSS
AFTER TAXES

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Profit and Loss Statement

This table essentially contains the same basic information as the income projection statement. Established
businesses use this form of statement to give comparisons from one period to another. Many lenders may
require profit and loss statements for the past three years of operations.
Instead of comparing actual income and expenses to an industrial average, this form of the profit and
loss statement compares each income and expense item to the amount that was budgeted for it. Most
computerized bookkeeping systems can generate a profit and loss statement for the period(s) required,
with or without budget comparison.

Profit and Loss, Budget vs. Actual: ([Starting Month, Year][Ending Month, Year])
[Starting Month, Year]
[Ending Month, Year]

Budget

Amount over Budget

Income:
Sales
Other
Total Income
Expenses:
Salaries/Wages
Payroll Expenses
Legal/Accounting
Advertising
Travel/Auto
Dues/Subs.
Utilities
Rent
Depreciation
Permits/Licenses
Loan Repayments
Misc.
Total Expenses
NET PROFIT/LOSS

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Balance Sheet
Following are guidelines for what to include in the balance sheet: (For use in established businesses)
Assets: Anything of value that is owned or is legally due to a business. Total assets include all net values;
the amounts that result from subtracting depreciation and amortization from the original cost when the
asset was first acquired.
Current Assets:
CashMoney in the bank or resources that can be converted into cash within 12 months of the date of
the balance sheet.
Petty CashA fund of cash for small, miscellaneous expenditures.
Accounts ReceivableAmounts due from clients for merchandise or services.
InventoryRaw materials on hand, work-in-progress, and all finished goods (either manufactured or
purchased for resale).
Short-term InvestmentsInterest or dividend-yielding holdings expected to be converted to cash within a
year; stocks, bonds, certificates of deposit and time-deposit savings accounts. These should be shown at
either their cost or current market value, whichever is less. Short-term investments may also be called
temporary investments or marketable securities.
Prepaid ExpenseGoods, benefits or services that a business pays or rents in advance, such as office
supplies, insurance or workspace.
Long-term InvestmentsHoldings that a business intends to retain for at least a year. Also known as longterm assets, these are usually interest or dividend paying stocks, bonds or savings accounts.
Fixed AssetsThis term includes all resources that a business owns or acquires for use in its operations that
are not intended for resale. They may be leased rather than owned and, depending upon the leasing
arrangements, may have to be included both as an asset for the value and as a liability. Fixed assets
include land (the original purchase price should be listed, without allowance for market value), buildings,
improvements, equipment, furniture, vehicles.
Liabilities:
Current Liabilities: Include all debts, monetary obligations, and claims payable within 12 months.
Accounts PayableAmounts due to suppliers for goods and services purchased for the business.
Notes PayableThe balance of the principal due on short-term debt, funds borrowed for the business.
Also includes the current amount due on notes whose terms exceed 12 months.
Interest PayableAccrued amounts due on both short and long-term borrowed capital and credit
extended to the business.
Taxes PayableAmounts incurred during the accounting period covered by the balance sheet.
Payroll AccrualSalaries and wages owed during the period covered by the balance sheet.
Long-term LiabilitiesNotes, contract payments, or mortgage payments due over a period exceeding 12
months. These should be listed by outstanding balance less the current position due.
Net WorthAlso called owners equity. This is the amount of the claim of the owner(s) on the assets of the
business. In a proprietorship or partnership, this equity is each owners original investment plus any
earnings after withdrawals.
Most computerized bookkeeping systems can generate a balance sheet for the period(s) required.
Note: Total assets will always equal total liabilities plus total net worth. That is, the bottom-line figures for
total assets and total liabilities will always be the same.

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Assets

Liabilities

Current Assets:

Current Liabilities:

Cash:

Accounts Payable

Petty Cash

Notes Payable

Accounts Receivable

Interest Payable

Inventory

Taxes Payable:

Short-Term Investment

Federal Income Tax

Prepaid Expense

State Income Tax

Long-Term Investment

Self-Employment Tax

Fixed Assets:

Sales Tax (SBE)

Land

Property Tax

Buildings

Payroll Accrual

Improvements

Long-Term Liabilities

Equipment

Notes Payable

Furniture

NET WORTH/OWNERS
EQUITY/RETAINED
EARNINGS

Automobiles/Vehicles
Other Assets:
Item 1
Item 2
Item 3
TOTAL ASSETS:

TOTAL LIABILITIES:

Sales Forecast
This information can be shown in chart or table form, either by months, quarters or years, to illustrate the
anticipated growth of sales and the accompanying cost of sales.

Milestones
This is a list of objectives that your business may be striving to reach, by start and completion dates, and
by budget. It can also be presented in a table or chart.

Break-Even Analysis
Use this section to evaluate your business profitability. You can measure how close you are to achieving
that break-even point when your expenses are covered by the amount of your sales and are on the brink
of profitability.
A break-even analysis can tell you what sales volume you are going to need in order to generate a
profit. It can also be used as a guide in setting prices.
There are three basic ways to increase the profits of your business: generate more sales, raise prices,
and/or lower costs. All can impact your business: if you raise prices, you may no longer be competitive; if
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you generate more sales, you may need added personnel to service those sales which would increase
your costs. Lowering the fixed costs your business must pay each month will have a greater impact on the
profit margin than changing variable costs.
Fixed costs: Rent, insurance, salaries, etc.
Variable costs: The cost at which you buy products, supplies, etc.
Contribution Margin: This is the selling price minus the variable costs. It measures the dollars available to
pay the fixed costs and make a profit.
Contribution Margin Ratio: This is the amount of total sales minus the variable costs, divided by the total
sales. It measures the percentage of each sales dollar to pay fixed costs and make a profit.
Break-even Point: This is the amount when the total sales equals the total expenses. It represents the
minimum sales dollar you need to reach before you make a profit.
Break-even Point in Units: For applicable businesses, this is the total of fixes costs divided by the unit selling
price minus the variable costs per unit. It tells you how many units you need to sell before you make a
profit.
Break-even Point in Dollars: This is the total amount of fixed costs divided by the contribution margin ratio.
It is a method of calculating the minimum sales dollar to reach before you make a profit.
Note: If the sales dollars are below the break-even point, your business is losing money.

Miscellaneous Documents
In order to back up the statements you may have made in your business plan, you may need to include
any or all of the following documents in your appendix:

Personal resumes

Personal financial statements

Credit reports, business and personal

Copies of leases

Letter of reference

Contracts

Legal documents

Personal and business tax returns

Miscellaneous relevant documents.

Photographs

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