Assingment B.plan 8

Cover Page
A BUSINESS PLAN ON ENVIRONMENTAL ENGINES TOYOTA CAR
AN ASSINGMENT
ON
PRACTICE OF PURCHASING (PDMKT 227)
SUBMITTED BY
UMAR ZULAI
FPN/PD/2017/2018/1000
SUBMITTED TO
MR. ELISHA PETER

COURSE LECTURER
DEPARTMENT OF MARKETING
SCHOOL OF TECHNICAL AND VOCATIONAL EDUCATION
FEDERAL POLYTECHNIC NASARAWA
JULY, 2017
Table of Contents
1.0 Executive Summary.....................................................................................................................1

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

Chart: Gross Margin Yearly.....................................................................................................20
Table: Profit and Loss................................................................................................................20
8.4 Projected Cash Flow...............................................................................................................21
Chart: Cash...................................................................................................................................21
Table: Cash Flow.........................................................................................................................22
8.5 Projected Balance Sheet......................................................................................................22
Table: Balance Sheet.................................................................................................................23
8.6 Business Ratios........................................................................................................................24
Table: Ratios.................................................................................................................................25
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
Page 2
Environmental Engines
1.0 Executive Summary
Environmental Engines Toyota Honda GM believes our future cars should save even more
energy and produce even less pollution. Led by Jack Anderson, mechanical engineer and
environmental guru; Jim Handy, public relations consultant; and Frank Lee Good,
environmental and corporate attorney, Environmental Engines Toyota Honda GM is going to
climb to the top of the auto sales industry. We invite everyone to join us in driving this exciting
new technology.
Our strategic focus will attract courageous early-adopters who envision themselves as "energy
pioneers," the younger generation, and environmentalists. Each of these groups has
outstanding projected growth rates, particularly the younger generation. Environmental Engines
Toyota Honda GM holds a competitive edge by specializing in zero emissions vehicles and has
franchised with every auto manufacturer that could offer any competition. Environmental
Engines Toyota Honda GM will stand out as the preferable alternative to fossil fuel burning
transportation systems. As visibility of our vehicles increases, sales among environmentalists
and the younger generation will increase by 50% each month thereafter.
Profits will initially be repaid to the business to finance any overhead costs related to
purchasing inventory, then to the rapidly expanding photovoltaic recharging station and
mechanic's garage, then to pay off the initial investments. Inventory will be purchased in
advance to stock the showroom floor and to outfit every executive, sales person, and mechanic
with a zero emissions vehicle to drive around town at their own cost. Their savings earned by
investing in a zero emissions vehicle will spread by word-of-mouth, attract more customers,
and bolster future growth at the same high rate of 50%.
The highlights chart that follows affirms how exciting an opportunity this really is: with GM an
anticipated a 50% monthly increase in sales starting small (selling six cars in the first month);
a modest gross margin within the first year, rising in the second and net profits being healthy in
years two and three.
Not only will the sky be cleaner through the success of our company, but the sky is the limit in
terms of our potential market dominance as well. All of these profits can then be fed back into
research and development opening the doorway to a secondary market role for Environmental
Engines Toyota Honda GM as a patent holding company and clearing house.
Page 1
Chart: Highlights
1.1 Keys to Success
The keys to success for Environmental Engines Toyota Honda GM are:
Marketing: dealing with barriers to entry and partnering with local consumer and
environmental groups, solving problems with major advertising and promotion budgets.
Product quality.
Management: products delivered on time, costs controlled, marketing budgets managed.
There is a temptation to fix on growth at the expense of profits.
1.2 Objectives
The objectives for Environmental Engines Toyota Honda GM during the first three years of
operation include:
1. To create a car dealership with a respectable gross margin in environmentally-friendlier

automobiles.
2. To develop a discerning and informed consumer base in new automobile buyers throughout
the surrounding metropolis who will exercise their buying power to support a 100% yearly
sales growth of automobiles with greater fuel efficiency standards and lower rates of carbon
monoxide emissions.
3. To achieve 1,000 unit sales of environmentally-friendlier automobiles in year one.
4. To stabilize the fuel efficient automobile market by increasing the market share by 15%
after three years.
Page 2
1.3 Mission
The mission of Environmental Engines Toyota Honda GM is to provide early adopters and the
younger generation within the Ann Arbor community with environmentally-friendlier automobile
choices and to convert traditional new automobile buyers into conscientious consumers who are
aware of external as well as internal costs associated with automobile transportation. We will
attract courageous early-adopters who envision themselves as "energy pioneers," the younger
generation, and environmentalists. When we adhere to these principles everything will fall into
place.
2.0 Company Summary
Environmental Engines Toyota Honda GM is an automobile dealership based in the Ann Arbor
area. It is founded as a consumer-oriented and environmentally-friendly dealership, and is
emphasizing consumer education to differentiate itself from less environmentally-concerned
dealerships.
2.1 Start-up Summary
Environmental Engines Toyota Honda GM's start-up costs will include dealership construction,
all equipment needed for the office, legal costs, consulting costs, website creation, and
advertising.
The inventory will be the largest chunk of start-up expenses. Start-up assets will include a
mixed floor inventory of 10 hybrid and zero-emissions automobiles from Honda, Toyota, and
GM. Construction costs will be second and will include a show room, three offices, fully-stocked
mechanic's garage, photovoltaic cells (charged by solar panels on the roof of the dealership),
car wash, and automobile lot. The office equipment includes three computers, a fax machine,
copier, four cellular phones, office supplies, additional land line, a DSL connection, and office
furniture.
Start-up expenses will also include advertising. Four methods will be used: an interactive B-2-B
website, the Yellow Pages, local newspapers, and direct marketing to local government,
consumer-protection and environmental organizations.
Page 3
Table: Start-up
Start-up
Requirements
Start-up Expenses
Construction $320,000
Mechanic's Equipment $1,500
Photovoltaic Cells $125,000
Legal $500
Stationery etc. $100
Brochures $1,000
Consultants $1,000
Insurance $1,200
Real Estate Purchase $120,000
Research and Development $1,000
Website creation $1,500
Office Equipment $500
DSL Installation $150
Advertising $180,000
Franchise Royalties $60,000
Total Start-up Expenses $813,450
Start-up Assets
Cash Required $3,610,050
Start-up Inventory $125,000
Other Current Assets $189,500
Long-term Assets $440,000
Total Assets $4,364,550
Total Requirements $5,178,000
Page 4
Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $813,450
Start-up Assets to Fund $4,364,550
Total Funding Required $5,178,000
Assets
Non-cash Assets from Start-up $754,500
Cash Requirements from Start-up $3,610,050
Additional Cash Raised $0
Cash Balance on Starting Date $3,610,050
Total Assets $4,364,550
Liabilities and Capital
Liabilities
Current Borrowing $2,000,000
Long-term Liabilities $1,500,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $178,000
Total Liabilities $3,678,000
Capital
Planned Investment
Jack Anderson $1,000,000
Jim Handy $150,000
Frank Lee Good $350,000
Additional Investment Requirement $0
Total Planned Investment $1,500,000
Loss at Start-up (Start-up Expenses) ($813,450)

Total Capital $686,550
Total Capital and Liabilities $4,364,550
Total Funding $5,178,000
Page 5
Chart: Start-up
2.2 Company Ownership
Environmental Engines Toyota Honda GM is a privately-held Michigan corporation. Jack

Anderson, Environmental Engines Toyota Honda GM's founder, is the majority owner. Several
members of the board of directors also hold minority stock positions.
Two of these are also vendors of outside services:
Jim Handy, public relations consultant.

Frank Lee Good, environmental and corporate attorney.
3.0 Products and Services
Environmental Engines Toyota Honda GM believes that driving our zero emissions vehicles and
hybrid automobiles around will be the best way to get other early-adopters, the younger
generation, and environmentalists involved with cleaner forms of transportation.
Environmental Engines Toyota Honda GM will showcase America's most popular alternative
vehicle, the four-door Toyota Prius. It runs on gasoline, like a regular car, but it also has an
electric motor under the hood, which supplements the gas engine and sometimes takes over
completely. The gas engine shuts off automatically whenever the Prius comes to a stop. The
electric motor powers it up when you press on the accelerator. Unlike every other car on the
highway, the Prius actually gets better mileage in stop-and-go city driving that while cruising at
high speed. It's in that stop-and-go driving than the car exhibits its most remarkable feature:
whenever it switches to electric power, the Prius is dead quiet.
Since Toyota introduced the Prius to the United States two years ago, it has sold around 20,000
of the compact cars. Demand still exceeds supply, and other auto makers, like Honda and GM,
have hybrid cars available or on the drawing board.
Page 6
Environmental Engines Toyota Honda GM believes our future cars should save even more
energy and produce even less pollution. To emphasize the point, members of the board of
directors will drive around in a totally electric automobile borrowed from the showroom - an all-
electric Toyota RAV4 sports utility vehicle. Instead of plugging into a standard outlet that
supplies electricity from a coal or gas power plant, Environmental Engines Toyota Honda GM's
automobiles' batteries will be recharged using photovoltaic cells - solar power. A solar-powered,
five passenger electric car like this conserves energy and our environment.
4.0 Market Analysis Summary
Environmental Engines Toyota Honda GM's customers can be divided into three groups: early-
adopters, the younger generation, and cost-conscious-new-automobile-buyers.
1. Early-adopters. Environmental Engines Toyota Honda GM's first customers will likely be
early-adopters. The reason for this is that these people will eagerly seek out the risks in
purchasing an automobile that operates on alternative fuels in exchange for the status of
being an automobile pioneer. This type of customer will range widely in age but will share
an interest in automobile engineering and maintenance. Therefore, these customers will be
most easily accessed by advertising in magazines marketed to automobile enthusiasts,
engineers, hobbyists, mechanics and scientists. Other members of this customer-group will
be attracted by consumer protection reports that have given favorable ratings to our
products.
2. The younger generation. The younger generation will be likely to purchase zero emission
automobiles because these automobiles affect their future. These automobiles will not
pollute their air or guzzle their gas. The reason for this is that after past generations have
ignored the warning signs of global warning, the younger generations are now witnessing
the cumulative and destructive effects that carbon-based-fuel systems are having on the
environment and global eco-political structures.
3. Environmentalists. Environmental Engines Toyota Honda GM's customers will also include
environmentalists. This category of customer exercises their purchasing power for the
obvious environmental benefits and future rewards of zero emissions transportation
systems. Therefore, these customers will be most easily accessed by direct marketing
campaigns to local conservation groups, outdoors athletic clubs, and environmentally-
sensitive political parties.
4.1 Market Segmentation
Early-adopters. Environmental Engines Toyota Honda GM's will be targeting early-adopters

who characteristically can be described as: over 28 years of age; either vocational (mechanical
education) or higher education (four-year college degree or higher); mechanical or professional
occupation earning a higher income (over $50,000); living within the city limits of Ann Arbor or
Detroit; attracted by consumer protection reports that have given favorable ratings to our
vehicles.
The younger generation. Environmental Engines Toyota Honda GM's will be targeting urban
youths between the ages of 14 and 27; who are athletically or academically active; come from
upper middle to upper class homes (household incomes over $50,000); tend to make big ticket
purchases; and need individual transportation.
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Environmentalists. Environmental Engines Toyota Honda GM's will be targeting

environmentalists who characteristically can be described as: over twenty-one years of age;
higher education (four-year college degree or higher); professional occupation earning a higher
income (over $50,000); living within the city limits of Ann Arbor or Detroit; tending to buy
organic and eco-friendly products; accessible by direct marketing to local conservation groups,
outdoors athletic clubs, and environmentally-sensitive political parties.
Table: Market Analysis
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Early-adopters 15% 625 719 827 951 1,094 15.02%
The younger generation 100% 365 730 1,460 2,920 5,840 100.00%
Environmentalists 50% 100 150 225 338 507 50.06%
Total 61.64% 1,090 1,599 2,512 4,209 7,441 61.64%
Chart: Market Analysis (Pie)
Page 8
4.2 Target Market Segment Strategy
Environmental Engines Toyota Honda GM's will be targeting early-adopters for four reasons.
1. Early-adopters will eagerly seek out the risks in purchasing an automobile that operates on
alternative fuels in exchange for the status of being an automobile pioneer.
2. Favorable reviews by these customers will lend credibility to zero emissions vehicles as not
only environmentally-friendly, but also as the economically preferable transportation option.
3. These customers will be most easily accessed by advertising in magazines marketed to

automobile enthusiasts, engineers, hobbyists, mechanics and scientists, and through good
ratings in consumer protection reports.
4. The younger generation will be attracted to zero-emissions vehicles once they see early-
adopters driving these automobiles around.
Environmental Engines Toyota Honda GM's will be targeting the younger generation for three
reasons.
1. The younger generation is not vested in perpetuating fossil-fuel-based transportation and

economic systems and therefore, requires less marketing to demonstrate the advantages of
zero-emissions vehicles.
2. The younger generation will be likely to purchase an automobile of some sort between age
sixteen and twenty-one. If the younger generation buys into the former gasoline-based
automobile market, there will be more gas-burning vehicles on the road. More gas guzzling
vehicles will pollute the air. Therefore, converting the next wave of vehicle consumers to a
non-fossil-fuel-dependent form of transportation will more likely achieve Environmental
Engines Toyota Honda GM's mission of a zero-emission transportation system nationwide.
3. Most importantly, investing in the future customer base of the younger generation will
ensure exponential increase in Environmental Engines Toyota Honda GM's sales for years to
come.
Environmental Engines Toyota Honda GM's will be targeting environmentalists for two reasons.
1. These people will accept the risks in purchasing an automobile that operates on alternative
fuels in exchange for the obvious environmental benefits and future rewards of zero
emissions transportation systems.
2. These customers will be accessible by direct marketing to local conservation groups,

outdoors athletic clubs, and environmentally-sensitive political parties.
Page 9
4.3 Service Business Analysis
Auto sales is one of the largest industries in the world.
The automobile industry is diversified into many large and small sub-groups, each supplied with
high concentrations of capital. Many sub-groups enjoy support from classic car and eclectic
engineering enthusiasts.
Services are bought and sold upon word-of-mouth recommendations and product image.
Specific competitors in the niche industry of zero emission vehicles will be franchised and
supportive of Environmental Engines Toyota Honda GM.
4.3.1 Competition and Buying Patterns
Auto sales is about transportation for the individual. Customers seem to choose their vehicle
based on their self image. One automobile maker's success depends on image and trends in
one part of the market, and on advertising and word-of-mouth recommendations in another.
Visibility, delivery, reliability, and features are critical. While price is less a factor in this
industry than delivery and reliability, materials used by manufacturers in volume must come
from reliable sources because the niche industry of zero emission vehicles should not be subject
to risky fluctuations in wholesale and subsequently retail values. Features will also be important
because our vehicles must be viewed as the highest technology.
Target customers choose between competing vehicles based on brand name image and word-
of-mouth. Vehicle performance and image are major factors in developing word-of-mouth
recommendations. Customers like that their choice of zero emissions vehicles protects the
environment.
5.0 Strategy and Implementation Summary
Environmental Engines Toyota Honda GM holds a competitive edge by specializing in zero

emissions vehicles and has franchised with every auto manufacturer that could offer any
competition.
Environmental Engines Toyota Honda GM will grow from three executives plus a small group of
three sales persons and one mechanic, all of who will bring their professional expertise and
contacts to provide a solid foundation of connections for future marketing ventures.
Environmental Engines Toyota Honda GM's media strategy will focus on direct marketing to
local groups and clubs, as well as advertising in magazines. Sales prospects will be finalized in
person, through mail-order, over the phone, and via the Internet.
As visibility of our vehicles increases, sales among environmentalists and the younger
generation will increase by 50% each month thereafter.
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5.1 Sales Strategy
The sales strategy of Environmental Engines Toyota Honda GM will optimize selling by focusing
on serving the immediate needs of the customer - foster the "energy pioneer" image, individual
transportation, reducing dependence on fossil fuels, and minimizing the automobile's impact on
the environment. Informed by the customer's immediate needs, our sales team will focus on
informing the customer of the benefits to driving our vehicles.
Sales prospects will be finalized in person, through mail-order, over the phone, and via the
Internet. Sales people will be compensated with a two percent commission. Sales persons will
be trained in Web-based publishing and database management to optimize order processing.
Prices, delivery and conditions of sale are negotiable within the bounds of profitability.
5.1.1 Sales Forecast
Beginning in January of the first year sales will start small (2 Toyota Priuses, 1 RAV4, 1 Honda)
among the early-adopters because the general market has not yet been developed.
As visibility of our vehicles increases, sales among environmentalists and the younger
generation will increase by 20% each month thereafter. As word spreads, this rate of increase
will maintain steady for at least ten years because the younger generation, one of our target
markets, will only continue to grow.
This high rate of growth is believable because the industry is in its start-up stage and will not
reach saturation at any foreseeable point in the future. Furthermore, if gasoline prices will
continue to rise our non-fossil fuel burning vehicles will only become more attractive. If gasoline
prices do not rise, then our sales team will focus on the obvious environmental benefits and
future rewards of zero emissions transportation systems.
Table: Sales Forecast
Sales Forecast
Year 1 Year 2 Year 3
Sales
Toyota Prius $5,937,075 $7,124,490 $8,549,388
Toyota RAV4 $2,770,635 $3,324,762 $3,989,715
Honda $989,513 $1,187,415 $1,424,898
GM $0 $0 $0
Mechanic Labor $395,805 $474,966 $569,959
Total Sales $10,093,028 $12,111,634 $14,533,960
Direct Cost of Sales Year 1 Year 2 Year 3

Toyota Prius $4,749,660 $4,987,143 $5,984,572
Toyota RAV4 $2,216,508 $2,327,334 $2,792,800
Honda $791,610 $831,191 $997,429
GM $0 $0 $0
Mechanic Labor $316,644 $332,476 $398,971
Subtotal Direct Cost of Sales $8,074,422 $8,478,144 $10,173,772
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Chart: Sales Monthly
Chart: Sales by Year
Page 12
5.2 Milestones
Environmental Engines Toyota Honda GM set 12 realistic milestones for itself within the first
year. Achievement of each of these organizational and marketing milestones will build
momentum within the organization. The culmination of our first year in the sale of 1,000
vehicles will feedback into our mission statement and reaffirm the purpose and success of
Environmental Engines Toyota Honda GM.
Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department

First Thousand Vehicles Sold 1/1/2003 1/1/2004 $0 Jack Anderson Management
First Marketing Campaign 1/1/2003 1/15/2003 $1,000 Jim Handy Marketing
Publishing Website 1/15/2003 2/15/2003 $1,000 Jim Handy Web
Receive First Internet Sale 2/15/2003 3/15/2003 $0 Sales Staff Web
Develop Employee Policies 1/1/2003 1/15/2003 $0 Frank Lee Good Legal
Service First Customer's Vehicle 1/1/2003 1/15/2003 $0 Mechanic Staff Mechanic
Refuel First Customer's Vehicle 1/1/2003 1/15/2003 $0 Jack Anderson Photovoltaics
First Consumer Protection 1/1/2003 3/15/2003 $0 Jack Anderson Management
Review
Second Marketing Campaign 2/15/2003 3/15/2003 $1,000 Jim Handy Marketing
Hire Sales and Mechanic 1/1/2003 1/15/2003 $0 Board of Directors Board of Directors
Totals $3,000
5.3 Marketing Strategy
Environmental Engines Toyota Honda GM's media strategy will focus on direct marketing to
local conservation groups, outdoors athletic clubs, and environmentally-sensitive political
parties, as well as advertising in magazines marketed to automobile enthusiasts, engineers,
hobbyists, mechanics and scientists, and through good ratings in consumer protection reports.
Impact will grow from three executives (Jack Anderson, Jim Handy, and Frank Lee Good) plus a
small group of three sales persons and one mechanic, all of who will bring their professional
expertise and avocational contacts to Environmental Engines Toyota Honda GM and provide a
solid foundation of connections for future marketing ventures.
Page 13
5.4 Competitive Edge
Environmental Engines Toyota Honda GM holds a competitive edge by specializing in zero

emissions vehicles and has franchised with every auto manufacturer that could offer any
competition. Environmental Engines Toyota Honda GM will stand out as the preferable
alternative to fossil fuel burning transportation systems. As visibility of our vehicles increases,
sales among environmentalists and the younger generation will increase by 50% each month
thereafter. As word spreads, this rate of increase will maintain steady for at least ten years
amongst our target market in the younger generation who will continue to grow and develop
over time.
Furthermore, our vehicles will readily attract new investment because we introduce the concept
of sustainability to individual transportation systems by bringing fuel efficiency, economy of
size, and environmentally friendlier alternatives to the market.
As the central distribution point of environmentally friendlier engines, Environmental Engines

Toyota Honda GM will bring unparalleled know-how and will also aim to serve as a clearing
house for product innovations and design patents.
6.0 Web Plan Summary
Environmental Engines Toyota Honda GM will host a site on the World Wide Web to serve as an
educational tool, offering a menu of custom vehicle options to potential walk-in and telephone
customers and as a B-2-B ordering site for a few very reliable purchasers, such as large
corporations and municipalities.
The menu of custom vehicle options will require as little bandwidth as possible while providing
as much photographic and text detail as possible to the potential customer. These potential
customers will be the early-adopters who will encounter the exciting prospect of being an
energy-pioneer, the younger generation surfing for the next cool look, and the environmentalist
in search of alternative transportation options.
The B-2-B site will be accessible through an account number and will allow large corporations
and municipalities with large bandwidth capacity to design large orders of vehicles to facilitate
customized mass production orders to be forwarded on to Toyota, Honda and GM. Our B-2-B
site can pivot off of the success of Toyota's, Honda's and GM's online ordering.
6.1 Website Marketing Strategy
Environmental Engines Toyota Honda GM will host a site on the World Wide Web to serve as an
educational tool, offering a menu of custom vehicle options to potential walk-in and telephone
customers and as a B-2-B ordering site for a few very reliable purchasers, such as large
corporations and municipalities.
6.2 Development Requirements
The menu of custom vehicle options will require as little bandwidth as possible while providing
as much photographic and text detail as possible to the potential customer.
Page 14
The B-2-B site will be accessible through an account number and will allow large corporations
and municipalities with large bandwidth capacity to design large orders of vehicles to facilitate
customized mass production orders to be forwarded on to Toyota, Honda and GM.
7.0 Management Summary
The founders and executive board of Environmental Engines Toyota Honda GM include such
industry leaders as Jack Anderson, Jim Handy, and Frank Lee Good.
Jack Anderson, the majority owner, is renowned in both scientific and environmentalist
communities throughout the nation. Jack Anderson earned two degrees from the University of
Michigan the first in mechanical engineering, the second in business. Though Jack Anderson
excelled academically, his sites were set even higher as president of the University of Michigan
Mountaineering Club. Through his contacts in the mountaineering club Jack Anderson also
developed an interest in consumer protection and environmentalism and served the
Environmentalists For Future Occupationally Responsible Technicians (EFFORT) as treasurer.
Through Jack's activism in EFFORT, he met Jim Handy and Frank Lee Good.
After college, Jack managed an Internet-based custom-ordering automobile-hobbyist

distribution company where he increased overall product sales by over 50% in three years.
During this time, Jack also developed correspondence with columnists at the New York Times,
the Scientific American, and Consumer Reports. In order to keep Jack as manager, the
company offered Jack a 10% interest in the company's stock, motivating Jack to increase the
company's value by 100% in the next five years. Throughout Jack's eight years of managerial
and ownership experience in auto sales, Jack has learned the finer points in eclectic car sales
and marketing as well as the technical side of automobile engineering.
Jim Handy, public relations consultant, and Frank Lee Good, environmental and corporate
attorney, can lend their professional services to the success of Environmental Engines Toyota
Honda GM and are also vendors of outside services through which they may also lend clients
and contacts for marketing purposes.
7.1 Personnel Plan
Jack Anderson will act as manager for the first three years for a minimal salary of $36,000 in
exchange for his commitment of energy and know-how.
The executive staff will be compensated for their services by a return of profits on their
investment.
Three sales staff will work the sales floor for the first year compensated solely by commissions
earned on a 5% pay scale.
Two mechanics, specializing in alternative energy vehicles, will be paid $3,200 monthly. The
mechanics' salaries will steadily increase every year by 5% to reflect the increased human
capital acquired by the mechanics' maintenance experience with our vehicles and our
photovoltaic cells.
The maintenance and secretarial staff will take care of administrative matters and sales room
decorum.
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Table: Personnel
Personnel Plan
Jack Anderson $36,000 $36,000 $36,000
Frank Lee Good $0 $0 $0
Jim Handy $0 $0 $0
Sales Person 1 $12,480 $13,104 $13,759
Sales Person 2 $12,480 $13,104 $13,759
Sales Person 3 $12,480 $13,104 $13,759
Sales Person 4 $0 $12,480 $13,104
Sales Person 5 $0 $0 $12,480
Sales Person 6 $0 $0 $12,480
Mechanic 1 $38,400 $40,320 $42,336
Maintenance $12,480 $13,104 $13,759
Secretary $12,480 $13,104 $13,759
Mechanic 2 $38,400 $40,320 $42,336
Total People 0 0 0
Total Payroll $175,200 $194,640 $227,532
8.0 Financial Plan
Environmental Engines Toyota Honda GM is expected to grow in sales at a rate of 20% per
month, starting from the conservative estimate of six cars sold. The financing will come initially
from the executive board, allowing plenty of opportunity for credit to cover unforeseen
expenses, if necessary. Growth will be rapid and produce profits almost immediately.
Profits will initially be repaid to the business to finance any overhead costs related to
purchasing inventory and to pay down the principal on outstanding debt, then to the rapidly
expanding photovoltaic recharging station and mechanic's garage, then to pay off the initial
investments.
Inventory will be purchased in advance to stock the showroom floor and to outfit every
executive, sales person, and mechanic with a zero emissions vehicle to drive around town at
their own cost. Their savings earned by investing in a zero emissions vehicle will spread by
word-of-mouth, attract more customers, and bolster future growth at the same high rate of
20%.
8.1 Important Assumptions
Environmental Engines Toyota Honda GM has made some important assumptions about the
costs of building business capacity and acquiring inventory. We will build our business capacity
steadily based on the assumption of roughly $175,000 in annual payroll, 10% current and long-
term interest rates, a 30% tax rate, and an available inventory totaling $9,616,733. Assuming
demand does not outstrip supply, these conservative assumptions project immediate success
for Environmental Engines Toyota Honda GM.
While we are prepared for our manufacturers to release new products during the next 12
months, drastic increases in the price of inventory could threaten the stability of our business.
Such fluctuations would only be threatening if they were industry-wide (i.e., Toyota, Honda and
GM all doubled the dealer's wholesale cost of purchasing inventory.) Barring monopolistic
manipulations of the supply of inventory, success is just around the corner.
Page 16
Table: General Assumptions
General Assumptions
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
8.2 Break-even Analysis
For our break-even analysis, we assume normal monthly running costs per month, as shown
below, which include our full payroll, lease, marketing, utilities, and an estimation of other
running expences. Payroll alone, at our present run rate, is only about $48,000 for two
mechanics while all sales staff operate on commission.
Margins are harder to assume as the average per unit costs do not include marketing costs,
promotions, or salesman commissions. Our overall average per unit revenue over per unit costs
is based on past sales from other dealerships. We hope to attain a margin that high in the
future.
The chart shows what we need to sell per month to break-even, according to these
assumptions. This is less than one percent of our planned 2003 sales level, and significantly
below last year's average dealership sales level, so we believe we can maintain it.
Chart: Break-even Analysis
Page 17
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even $203,450
Assumptions:
Average Percent Variable Cost 80%
Estimated Monthly Fixed Cost $40,690
8.3 Projected Profit and Loss
Environmental Engines Toyota Honda GM anticipates a heady monthly increase in sales starting
small (selling 6 cars in the first month). The gross margin within the first year will be modest,
rising in the second and third year.
Key budget items will include salary, rent, sales and marketing expenses, utilities (including
costs of photovoltaic cell maintenance), insurance, taxes and licensing.
Net profits will reach outstanding levels in the first year, escalating in the second and the third
year! All of these profits can then be fed back into research and development opening the
doorway to a secondary market role for Environmental Engines Toyota Honda GM as a patent
holding company and clearing house.
Chart: Profit Monthly
Page 18
Chart: Profit Yearly
Chart: Gross Margin Monthly
Page 19
Chart: Gross Margin Yearly
Table: Profit and Loss
Pro Forma Profit and Loss

Sales $10,093,028 $12,111,634 $14,533,960
Direct Cost of Sales $8,074,422 $8,478,144 $10,173,772
Sales Commission $504,651 $605,582 $726,698
Total Cost of Sales $8,579,074 $9,083,725 $10,900,470
Gross Margin $1,513,954 $3,027,908 $3,633,490

Gross Margin % 15.00% 25.00% 25.00%
Expenses
Payroll $175,200 $194,640 $227,532
Sales and Marketing and Other Expenses $180,000 $189,000 $198,450
Depreciation $14,400 $14,400 $14,400
Rent $60,000 $60,000 $60,000
Utilities (Including costs of photovoltaic cell maintenance) $18,000 $18,900 $19,845
Insurance $2,400 $2,400 $2,400
Payroll Taxes $26,280 $29,196 $34,130
Licensing $12,000 $12,000 $12,000
Total Operating Expenses $488,280 $520,536 $568,757
Profit Before Interest and Taxes $1,025,674 $2,507,372 $3,064,733

EBITDA $1,040,074 $2,521,772 $3,079,133
Interest Expense $304,500 $224,000 $140,000
Taxes Incurred $216,352 $685,012 $877,420
Net Profit $504,822 $1,598,361 $2,047,313

Net Profit/Sales 5.00% 13.20% 14.09%
Page 20
8.4 Projected Cash Flow
This table and chart show our exciting month-by-month cash flow for the next three years.
Chart: Cash
Page 21
Table: Cash Flow
Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $2,523,257 $3,027,908 $3,633,490
Cash from Receivables $5,004,070 $8,570,585 $10,284,702
Subtotal Cash from Operations $7,527,327 $11,598,494 $13,918,192
Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $7,527,327 $11,598,494 $13,918,192
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations

Cash Spending $175,200 $194,640 $227,532
Bill Payments $9,005,828 $10,611,078 $12,293,436
Subtotal Spent on Operations $9,181,028 $10,805,718 $12,520,968
Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $360,000 $360,000 $360,000
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $480,000 $480,000 $480,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $10,021,028 $11,645,718 $13,360,968
Net Cash Flow ($2,493,701) ($47,224) $557,224

Cash Balance $1,116,349 $1,069,125 $1,626,349
8.5 Projected Balance Sheet
The Balance Sheet includes all assets, liabilities, and capital of Environmental Engines Toyota
Honda GM.
Page 22
Table: Balance Sheet
Pro Forma Balance Sheet

Assets
Current Assets
Cash $1,116,349 $1,069,125 $1,626,349
Accounts Receivable $2,565,701 $3,078,841 $3,694,609
Inventory $1,667,311 $816,021 $1,119,115
Other Current Assets $189,500 $189,500 $189,500
Total Current Assets $5,538,860 $5,153,487 $6,629,573
Long-term Assets
Long-term Assets $440,000 $440,000 $440,000
Accumulated Depreciation $14,400 $28,800 $43,200
Total Long-term Assets $425,600 $411,200 $396,800
Total Assets $5,964,460 $5,564,687 $7,026,373
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $1,935,088 $776,954 $1,031,327
Current Borrowing $1,640,000 $1,280,000 $920,000
Other Current Liabilities $178,000 $178,000 $178,000
Subtotal Current Liabilities $3,753,088 $2,234,954 $2,129,327
Long-term Liabilities $1,020,000 $540,000 $60,000

Total Liabilities $4,773,088 $2,774,954 $2,189,327
Paid-in Capital $1,500,000 $1,500,000 $1,500,000

Retained Earnings ($813,450) ($308,628) $1,289,733
Earnings $504,822 $1,598,361 $2,047,313
Total Capital $1,191,372 $2,789,733 $4,837,046
Total Liabilities and Capital $5,964,460 $5,564,687 $7,026,373
Net Worth $1,191,372 $2,789,733 $4,837,046
Page 23
8.6 Business Ratios

The business ratios table is based on accurate research of a collection of standard business
ratios for a zero emissions car dealership specializing in hybrid and electric vehicles. Our
projections for this niche market are compared to a collection of standard business ratios for
other auto sales industries.
The variance between our ratios and those of other auto sales industries is a function of the
exact nature of Environmental Engines Toyota Honda GM.
Where market saturation has stifled our competitors' sales growth, our sales growth
reaches respecatable levels after the first year because this is a pre-boom market.
Environmental Engines Toyota Honda GM is an industry-pioneer in an auto sales market
that is about to experience tremendous growth.
Where our accounts receivable seem high relative to our competitors, we have targeted the
younger generation as one of our key growth markets and have calculated a high ratio of
sales on credit accordingly.
Our inventory will remain low, overcoming a weakness of other auto sales companies
because we emphasize customized vehicle design, ensuring each vehicle satisfies every
customer and limiting our overhead in inventory.
Each of these values are acceptable, and in fact, preferable to the ratios demonstrated by
industry competitors.
Page 24
Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 20.00% 20.00% 6.06%
Percent of Total Assets

Accounts Receivable 43.02% 55.33% 52.58% 14.27%
Inventory 27.95% 14.66% 15.93% 62.82%
Other Current Assets 3.18% 3.41% 2.70% 14.66%
Total Current Assets 92.86% 92.61% 94.35% 91.75%
Long-term Assets 7.14% 7.39% 5.65% 8.25%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 62.92% 40.16% 30.30% 40.75%

Long-term Liabilities 17.10% 9.70% 0.85% 8.35%
Total Liabilities 80.03% 49.87% 31.16% 49.10%
Net Worth 19.97% 50.13% 68.84% 50.90%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 15.00% 25.00% 25.00% 7.81%
Selling, General & Administrative Expenses 9.86% 11.49% 10.48% 3.80%
Advertising Expenses 0.00% 0.00% 0.00% 0.93%
Profit Before Interest and Taxes 10.16% 20.70% 21.09% 0.31%
Main Ratios
Current 1.48 2.31 3.11 2.16
Quick 1.03 1.94 2.59 0.56
Total Debt to Total Assets 80.03% 49.87% 31.16% 52.00%
Pre-tax Return on Net Worth 60.53% 81.85% 60.47% 2.74%
Pre-tax Return on Assets 12.09% 41.03% 41.63% 5.70%
Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 5.00% 13.20% 14.09% n.a
Return on Equity 42.37% 57.29% 42.33% n.a
Activity Ratios
Accounts Receivable Turnover 2.95 2.95 2.95 n.a
Collection Days 54 113 113 n.a
Inventory Turnover 10.91 6.83 10.51 n.a
Accounts Payable Turnover 5.65 12.17 12.17 n.a
Payment Days 27 52 26 n.a
Total Asset Turnover 1.69 2.18 2.07 n.a
Debt Ratios
Debt to Net Worth 4.01 0.99 0.45 n.a
Current Liab. to Liab. 0.79 0.81 0.97 n.a
Liquidity Ratios
Net Working Capital $1,785,772 $2,918,533 $4,500,246 n.a
Interest Coverage 3.37 11.19 21.89 n.a
Additional Ratios
Assets to Sales 0.59 0.46 0.48 n.a
Current Debt/Total Assets 63% 40% 30% n.a
Acid Test 0.35 0.56 0.85 n.a
Sales/Net Worth 8.47 4.34 3.00 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Page 25
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
Sales
Toyota Prius 0% $150,000 $180,000 $216,000 $259,200 $311,040 $373,248 $447,898 $537,477 $644,973 $773,967 $928,760 $1,114,513
Toyota RAV4 0% $70,000 $84,000 $100,800 $120,960 $145,152 $174,182 $209,019 $250,823 $300,987 $361,185 $433,422 $520,106
Honda 0% $25,000 $30,000 $36,000 $43,200 $51,840 $62,208 $74,650 $89,580 $107,495 $128,995 $154,793 $185,752
GM 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Mechanic Labor 0% $10,000 $12,000 $14,400 $17,280 $20,736 $24,883 $29,860 $35,832 $42,998 $51,598 $61,917 $74,301
Total Sales $255,000 $306,000 $367,200 $440,640 $528,768 $634,522 $761,426 $913,711 $1,096,453 $1,315,744 $1,578,893 $1,894,671
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Toyota Prius $120,000 $144,000 $172,800 $207,360 $248,832 $298,598 $358,318 $429,982 $515,978 $619,174 $743,008 $891,610
Toyota RAV4 $56,000 $67,200 $80,640 $96,768 $116,122 $139,346 $167,215 $200,658 $240,790 $288,948 $346,737 $416,085
Honda $20,000 $24,000 $28,800 $34,560 $41,472 $49,766 $59,720 $71,664 $85,996 $103,196 $123,835 $148,602
GM $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Mechanic Labor $8,000 $9,600 $11,520 $13,824 $16,589 $19,907 $23,888 $28,665 $34,399 $41,278 $49,534 $59,441
Subtotal Direct Cost of Sales $204,000 $244,800 $293,760 $352,512 $423,014 $507,617 $609,141 $730,969 $877,163 $1,052,595 $1,263,114 $1,515,737
Page 1
Appendix
Table: Personnel
Personnel Plan
Jack Anderson 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Frank Lee Good 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Jim Handy 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Person 1 0% $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040
Sales Person 2 0% $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040
Sales Person 3 0% $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040
Sales Person 4 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Person 5 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Person 6 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Mechanic 1 0% $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200
Maintenance 0% $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040
Secretary 0% $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040
Mechanic 2 0% $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200
Total People 0 0 0 0 0 0 0 0 0 0 0 0
Total Payroll $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600
Page 2
Appendix
Table: General Assumptions
General Assumptions
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
Page 3
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss

Sales $255,000 $306,000 $367,200 $440,640 $528,768 $634,522 $761,426 $913,711 $1,096,453 $1,315,744 $1,578,893 $1,894,671
Direct Cost of Sales $204,000 $244,800 $293,760 $352,512 $423,014 $507,617 $609,141 $730,969 $877,163 $1,052,595 $1,263,114 $1,515,737
Sales Commission $12,750 $15,300 $18,360 $22,032 $26,438 $31,726 $38,071 $45,686 $54,823 $65,787 $78,945 $94,734
Total Cost of Sales $216,750 $260,100 $312,120 $374,544 $449,453 $539,343 $647,212 $776,654 $931,985 $1,118,382 $1,342,059 $1,610,471
Gross Margin $38,250 $45,900 $55,080 $66,096 $79,315 $95,178 $114,214 $137,057 $164,468 $197,362 $236,834 $284,201
Gross Margin % 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00%
Expenses
Payroll $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600
Sales and Marketing and Other $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Expenses
Depreciation $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Rent $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Utilities (Including costs of $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
photovoltaic cell maintenance)
Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Payroll Taxes 15% $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190
Licensing $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Total Operating Expenses $40,690 $40,690 $40,690 $40,690 $40,690 $40,690 $40,690 $40,690 $40,690 $40,690 $40,690 $40,690
Profit Before Interest and Taxes ($2,440) $5,210 $14,390 $25,406 $38,625 $54,488 $73,524 $96,367 $123,778 $156,672 $196,144 $243,511
EBITDA ($1,240) $6,410 $15,590 $26,606 $39,825 $55,688 $74,724 $97,567 $124,978 $157,872 $197,344 $244,711
Interest Expense $28,583 $28,000 $27,417 $26,833 $26,250 $25,667 $25,083 $24,500 $23,917 $23,333 $22,750 $22,167
Taxes Incurred ($9,307) ($6,837) ($3,908) ($428) $3,713 $8,646 $14,532 $21,560 $29,958 $40,001 $52,018 $66,403
Net Profit ($21,716) ($15,953) ($9,119) ($999) $8,663 $20,175 $33,908 $50,307 $69,903 $93,337 $121,376 $154,941
Net Profit/Sales -8.52% -5.21% -2.48% -0.23% 1.64% 3.18% 4.45% 5.51% 6.38% 7.09% 7.69% 8.18%
Page 4
Appendix
Table: Cash Flow
Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $63,750 $76,500 $91,800 $110,160 $132,192 $158,630 $190,356 $228,428 $274,113 $328,936 $394,723 $473,668
Cash from Receivables $0 $6,375 $192,525 $231,030 $277,236 $332,683 $399,220 $479,064 $574,877 $689,852 $827,822 $993,387
Subtotal Cash from Operations $63,750 $82,875 $284,325 $341,190 $409,428 $491,314 $589,576 $707,492 $848,990 $1,018,788 $1,222,545 $1,467,055
Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $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 $63,750 $82,875 $284,325 $341,190 $409,428 $491,314 $589,576 $707,492 $848,990 $1,018,788 $1,222,545 $1,467,055
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations

Cash Spending $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600
Bill Payments $12,011 $360,007 $353,144 $416,911 $493,513 $585,516 $696,002 $828,667 $987,947 $1,179,164 $1,408,706 $1,684,239
Subtotal Spent on Operations $26,611 $374,607 $367,744 $431,511 $508,113 $600,116 $710,602 $843,267 $1,002,547 $1,193,764 $1,423,306 $1,698,839
Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
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
Subtotal Cash Spent $96,611 $444,607 $437,744 $501,511 $578,113 $670,116 $780,602 $913,267 $1,072,547 $1,263,764 $1,493,306 $1,768,839
Net Cash Flow ($32,861) ($361,732) ($153,419) ($160,321) ($168,685) ($178,803) ($191,026) ($205,776) ($223,557) ($244,976) ($270,761) ($301,784)
Page 5
Appendix
Cash Balance $3,577,189 $3,215,458 $3,062,038 $2,901,717 $2,733,032 $2,554,230 $2,363,203 $2,157,428 $1,933,871 $1,688,894 $1,418,133 $1,116,349
Page 6
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet

Assets Starting Balances
Current Assets
Cash $3,610,050 $3,577,189 $3,215,458 $3,062,038 $2,901,717 $2,733,032 $2,554,230 $2,363,203 $2,157,428 $1,933,871 $1,688,894 $1,418,133 $1,116,349
Accounts Receivable $0 $191,250 $414,375 $497,250 $596,700 $716,040 $859,248 $1,031,098 $1,237,317 $1,484,781 $1,781,737 $2,138,084 $2,565,701
Inventory $125,000 $224,400 $269,280 $323,136 $387,763 $465,316 $558,379 $670,055 $804,066 $964,879 $1,157,855 $1,389,426 $1,667,311
Other Current Assets $189,500 $189,500 $189,500 $189,500 $189,500 $189,500 $189,500 $189,500 $189,500 $189,500 $189,500 $189,500 $189,500
Total Current Assets $3,924,550 $4,182,339 $4,088,613 $4,071,924 $4,075,680 $4,103,888 $4,161,357 $4,253,856 $4,388,311 $4,573,030 $4,817,986 $5,135,143 $5,538,860
Long-term Assets
Long-term Assets $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000
Accumulated Depreciation $0 $1,200 $2,400 $3,600 $4,800 $6,000 $7,200 $8,400 $9,600 $10,800 $12,000 $13,200 $14,400
Total Long-term Assets $440,000 $438,800 $437,600 $436,400 $435,200 $434,000 $432,800 $431,600 $430,400 $429,200 $428,000 $426,800 $425,600
Total Assets $4,364,550 $4,621,139 $4,526,213 $4,508,324 $4,510,880 $4,537,888 $4,594,157 $4,685,456 $4,818,711 $5,002,230 $5,245,986 $5,561,943 $5,964,460
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $348,306 $339,332 $400,562 $474,117 $562,463 $668,556 $795,947 $948,895 $1,132,511 $1,352,930 $1,617,512 $1,935,088
Current Borrowing $2,000,000 $1,970,000 $1,940,000 $1,910,000 $1,880,000 $1,850,000 $1,820,000 $1,790,000 $1,760,000 $1,730,000 $1,700,000 $1,670,000 $1,640,000
Other Current Liabilities $178,000 $178,000 $178,000 $178,000 $178,000 $178,000 $178,000 $178,000 $178,000 $178,000 $178,000 $178,000 $178,000
Subtotal Current Liabilities $2,178,000 $2,496,306 $2,457,332 $2,488,562 $2,532,117 $2,590,463 $2,666,556 $2,763,947 $2,886,895 $3,040,511 $3,230,930 $3,465,512 $3,753,088
Long-term Liabilities $1,500,000 $1,460,000 $1,420,000 $1,380,000 $1,340,000 $1,300,000 $1,260,000 $1,220,000 $1,180,000 $1,140,000 $1,100,000 $1,060,000 $1,020,000
Total Liabilities $3,678,000 $3,956,306 $3,877,332 $3,868,562 $3,872,117 $3,890,463 $3,926,556 $3,983,947 $4,066,895 $4,180,511 $4,330,930 $4,525,512 $4,773,088
Paid-in Capital $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000
Retained Earnings ($813,450) ($813,450) ($813,450) ($813,450) ($813,450) ($813,450) ($813,450) ($813,450) ($813,450) ($813,450) ($813,450) ($813,450) ($813,450)
Earnings $0 ($21,716) ($37,669) ($46,788) ($47,787) ($39,124) ($18,949) $14,959 $65,266 $135,169 $228,505 $349,881 $504,822
Total Capital $686,550 $664,834 $648,881 $639,762 $638,763 $647,426 $667,601 $701,509 $751,816 $821,719 $915,055 $1,036,431 $1,191,372
Total Liabilities and Capital $4,364,550 $4,621,139 $4,526,213 $4,508,324 $4,510,880 $4,537,888 $4,594,157 $4,685,456 $4,818,711 $5,002,230 $5,245,986 $5,561,943 $5,964,460
Net Worth $686,550 $664,834 $648,881 $639,762 $638,763 $647,426 $667,601 $701,509 $751,816 $821,719 $915,055 $1,036,431 $1,191,372
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Cover Page

A BUSINESS PLAN ON ENVIRONMENTAL ENGINES TOYOTA CAR

PRACTICE OF PURCHASING (PDMKT 227)

MR. ELISHA PETER

FEDERAL POLYTECHNIC NASARAWA

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

Chart: Gross Margin Monthly.................................................................................................19

1.0 Executive Summary

1.1 Keys to Success

The keys to success for Environmental Engines Toyota Honda GM are:

1. To create a car dealership with a respectable gross margin in environmentally-friendlier

2.0 Company Summary

2.1 Start-up Summary

Total Requirements $5,178,000

Table: Start-up Funding

Liabilities and Capital

Loss at Start-up (Start-up Expenses) ($813,450)

Total Capital and Liabilities $4,364,550

Total Funding $5,178,000

2.2 Company Ownership

Environmental Engines Toyota Honda GM is a privately-held Michigan corporation. Jack

Two of these are also vendors of outside services:

Jim Handy, public relations consultant.

3.0 Products and Services

4.0 Market Analysis Summary

4.1 Market Segmentation

Early-adopters. Environmental Engines Toyota Honda GM's will be targeting early-adopters

Environmentalists. Environmental Engines Toyota Honda GM's will be targeting

Table: Market Analysis

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy

3. These customers will be most easily accessed by advertising in magazines marketed to

1. The younger generation is not vested in perpetuating fossil-fuel-based transportation and

2. These customers will be accessible by direct marketing to local conservation groups,

4.3 Service Business Analysis

Auto sales is one of the largest industries in the world.

4.3.1 Competition and Buying Patterns

5.0 Strategy and Implementation Summary

Environmental Engines Toyota Honda GM holds a competitive edge by specializing in zero

5.1 Sales Strategy

5.1.1 Sales Forecast

Table: Sales Forecast

Direct Cost of Sales Year 1 Year 2 Year 3

Chart: Sales Monthly

Chart: Sales by Year

Milestone Start Date End Date Budget Manager Department

5.3 Marketing Strategy

5.4 Competitive Edge

Environmental Engines Toyota Honda GM holds a competitive edge by specializing in zero

As the central distribution point of environmentally friendlier engines, Environmental Engines

6.0 Web Plan Summary

6.1 Website Marketing Strategy

6.2 Development Requirements

7.0 Management Summary

After college, Jack managed an Internet-based custom-ordering automobile-hobbyist

7.1 Personnel Plan

Total Payroll $175,200 $194,640 $227,532

8.0 Financial Plan

8.1 Important Assumptions

Table: General Assumptions

8.2 Break-even Analysis

Chart: Break-even Analysis

Table: Break-even Analysis