Executive Summary

Auto Tech Solutions is the desire of Nisar Ahmed and Muhammad Kaleem Khan who together has 25
years experience as auto mechanics, both have a dream of starting up their own company and offering
better service to their clients than competitors.

1.1 Objectives
The objectives over the next three years for Auto Tech Solutions are the following:

Sales revenues increase steadily through year three.

Institute a program of superior customer service through rigorous evaluation of service experience.
Hire three more mechanics.

1.2 Keys to Success

In the auto repair industry a company builds its client base one customer at a time and mostly through word
of mouth marketing. With this in mind, the keys to success for Auto Tech Solutions are:

High-quality work.
Constant contact with clients so as to keep them informed about the state of their automobile and
the repair job progress.
Knowledgeable mechanics that are friendly, customer oriented, and will take the time to explain to
customer the intricate nature of our business and our work.

1.3 Mission
The mission of Auto Tech Solutions is to provide high quality, convenient and comprehensive auto repair
at low cost. The most important aspect of our business is trust. It is the goal of our firm to have 100%
customer satisfaction in regards to quality, friendliness, time to completion and to discover new ways to
exceed the expectations of our clients.

Company Summary
The company will be a partnership with Nisar Ahmed and Muhammad Kaleem Khan each owning 50% of
the company. The company will be a limited liability company registered in the state of Qubec City's
picturesque neighborhoods. The firm will have facilities in Qubec City's picturesque neighborhoods.
The facilities will contain a two-bay garage, office space and storage space for tools, parts, etc.
The company is seeking a loan in order to finance the start of operations for the company.
Each of the owners will be putting up some of their own capital as equity.

2.1 Start-up Summary

The data obtained for the start-up comes from research done in the
area with other small
mechanic shops who have started their own business. Inflation has been taken into account between the
estimates of these fellow business owners (and when they started) and the current prices for expensed
items.
Much of the equipment to go into the facilities such as tools, air compressors, etc, are currently owned by
the two partners.

Start-up Requirements
Start-up Expenses
Legal
Stationery etc.
Advertising
Phone
Insurance
Rent
Utilities
Computer
Other
Total Start-up Expenses
Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets
Total Requirements

$500
$200
$600
$200
$800
$4,000
$200
$2,000
$600
$9,100
$2,900
$0
$0
$20,000
$22,900
$32,000

Start-up Funding
Start-up Expenses to Fund
$9,100
Start-up Assets to Fund
$22,900
Total Funding Required
$32,000
Assets
Non-cash Assets from Start-up
$20,000
Cash Requirements from Start-up
$2,900
Additional Cash Raised
$0
Cash Balance on Starting Date
$2,900
Total Assets
$22,900
Liabilities and Capital
Liabilities
Current Borrowing
$0
Long-term Liabilities
$20,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities
$20,000
Capital
Planned Investment
Nisar Ahmed
$6,000
Muhammad Kaleem Khan
$6,000
Other
$0
Additional Investment Requirement
$0
Total Planned Investment
$12,000
Loss at Start-up (Start-up Expenses)
($9,100)
Total Capital
$2,900
Total Capital and Liabilities
$22,900
Total Funding
$32,000

Auto Tech Solutions

Business Plan
Services
Auto Tech Solutions offers a wide range of services as outlined in the detailed sections below. It is
ultimately the goal of the company to offer a one-stop facility for all auto service needs, including brakes,
transmission, wheel alignment, etc. In this way the company can offer greater perceived value for the
customer than many other auto repair shops, which specialize in certain areas.
The industry is highly competitive with suppliers having a great deal of power in setting and negotiating the
prices of their products and services to repair shops. In addition, because the customers see the service as
undifferentiated and a "commodity" with little value separation between competitors, buyer power is also
very high. Finally, the barriers to entry are moderately low, and the large number of competitors in this
field, including substitutes (such as do-it-yourself work) mean that the pricing for such services are very
competitive. The only way to have an advantage in this industry is a low cost leadership principal applied
aggressively or to create higher switching costs through the building of strong business to customer ties.
Auto Tech Solutions will hire trained and certified mechanics who are able to prove they have superior
customer awareness and interaction. It is the company's professional people who will fulfill the firm's
contracts and goals. The largest part of the company's expenses will be in labor costs.

3.1 Service Description

Auto Tech Solutions provides a wide range of auto repair services. These include:

Scheduled maintenance.
Wheel alignments, tires and rims.
Brake repair.
Comprehensive engine repair.
Transmission.

Each job or project will be on a reservation basis, although we will accept a small percentage of drive in
repair work.

3.2 Competitive Comparison

The auto repair industry is highly competitive. Each company within this field has high capital costs, low
margins, and a high intensity of competition.
Suppliers have a great deal of power in setting and negotiating the prices of their products and services to
repair shops. This is due to the fact that the suppliers who absorb the greatest amounts of cash from repair
shops are large auto part companies. These companies are more consolidated that the repair industry, have
deeper pockets, an almost limitless number of substitute customers, and finally they are the single most
important supplier to Auto repair industry. Therefore, these companies can set whatever price they wish to.
Furthermore, labor is a supplier in this industry as well, and salaries for such individuals are well known
and not very flexible.
In addition, because the customers see the service as undifferentiated and a "commodity" with little value
separation between competitors (if they offer a suitable level of quality) buyer power is also very high.
Additionally, the costs of our services are not cheap, and buyers are willing to search for the most favorable
combination of price and acceptable service.
The barriers to entry and exit are moderately low in this industry. Switching costs are virtually nonexistent and the costs to entry and exist the market are low. The large number of competitors in this field
including substitutes mean that the pricing for such services are very competitive. The only way to have an
advantage in this industry is a low cost leadership principal applied aggressively to all aspects of the
business or to build up customer relations to a point where the switching costs are raised.

3.3 Technology
The technological revolution in computers has enhanced our abilities to diagnose and repair our clients
vehicles. Auto Tech Solutions will remain on the cutting edge by instituting the use of computer diagnostic
equipment in its shop. The company will continue to seek new ways to provide a better service through
technology.

3.4 Future Services

The company does not have any plans to create further services at this time.

Market Analysis Summary

Since Auto Tech Solutions will be able to service any vehicle on the road, including motorcycles and
campers, it does not make any sense to segment our market. Our potential customer includes every
household in Qubec City's picturesque neighborhoods that owns one or more vehicles. The industry does
not have any seasonality that affects it.

4.1 Market Segmentation

The following table and chart show the market analysis for Auto Tech Solutions.

Market Analysis
Year 1
Potential Customers
Number of cars in
Seattle
Other
Total

Year 2

Year 3

Year 4

Year 5

Growth

CAGR

3%

145,833

150,208

154,714

159,355

164,136

3.00%

0%
3.00%

0
145,833

0
150,208

0
154,714

0
159,355

0
164,136

0.00%
3.00%

4.2 Service Business Analysis

This section is covered in the Competitive Comparison section of the Plan.

4.2.1 Competition and Buying Patterns

While many customers looking to purchase automotive repair services are concerned with price, the
primary concern is with building a relationship of trust between themselves and their service provider. A
large number of people within the country have experienced or heard of bad service encounters within this
market. As a person's car is usually connected in one way or another with that individual's livelihood, a
dependable automobile is crucial. Therefore, many clients are willing to pay a little more for a mechanic
they feel does a quality job and understands their needs.
An automotive repair company that can anticipate, meet, and even exceed customer's needs can build a
defensible position within the market place and acquire market share at the expense of other rivals.

4.2.2 Main Competitors

As stated before, the automotive repair market is very fragmented. The chief competitors in this industry
for Auto Tech Solutions are the high quality automobile dealerships and licensed service reps, this includes
Toyota, Ford, Chrysler, and other major brand names. Within Auto Tech Solutions immediate service
vicinity, there is Toyota, Ford and Chrysler dealerships. Each of these direct competitors has a service
facility. These competitors dominate the market place, have the largest market share, and have advantages
such as specially trained personnel, access to lower priced parts and tools, and deep pockets. The other
competitors are mostly "mom & pop" style outfits that make up the majority of the competition for Auto
Tech Solution this includes Dave's Auto Repair, The Taller Mechanic, Kirkland Auto and Body, and
Vancouver Auto. The advantages of these firms is that they can seek a low cost leadership strategy due to
lower personnel costs. However, they have a much more fluid customer base and higher customer turnover.
Auto Tech Solutions will seek to compete initially in the low cost strategy. At the same time, it will seek to
provide a higher level of customer satisfaction by having more rigorous quality control and seeking ways to
enhance the entire service experience (not just repairing a person's car). In this way it will lock in a loyal
customer base on who value the client-service provider relationship.

4.2.3 Business Participants

The auto repair industry is highly fragmented. In fact, there are so many small providers that any company
in this industry is facing a purely competitive environment. It is very difficult to create a differentiation, or
niche, strategy in this environment and until Family is able to establish a reputation for quality, on time,
superior customer service, the company will seek a low cost role. Once it has achieved what management
believes to be a sufficient reputation for its services along with a profitable customer base, the company
plans to leverage this advantage into a differentiation strategy that will be able to charge more for its
services.

Strategy and Implementation Summary

The following section outlines the company's strategic focus in growing the business.

5.1 Competitive Edge

Auto Tech Solutions, auto's competitive edge lies in the vision of its partners, who understand better than
many of their rivals that a service visit does not just include repairing a client's car, it includes the entire
service experience from the first time a client talks to their mechanic until they decide to stop driving. The
long-term profitability of a service firm of this type lies in the repeat customer that finds Family services an
excellent experience, DESPITE the fact that they usually have suffered a inconvenient breakdown. The
company will seek to examine ALL aspects of the service experience to seek ways to improve its customer
satisfaction. In addition, all employees will be rigorously trained and retrained to think about customer
satisfaction in order to create a self-sustaining company culture that revolves around this issue.

5.1.1 Positioning Statement

It is the express purpose of Auto Tech Solutions to become the local leader in quality and service
experience of all the small (non-dealerships) automotive repair firms within the
area while
maintaining a low cost plan. Once a reputation for quality and service experience is created, and an ongoing
network of referrals is bringing in new business, the company plans to re-evaluate its strategy and
positioning within the market to see if a differentiation strategy is viable. If so, this will allow the company
to raise prices and increase profit margins in relation to its rivals. This in turn is expected to leverage longterm growth until Auto Tech Solutions can reach a regional scope of operations.

5.2 Marketing Strategy

The company has a modest program of marketing its services that include the following:

1.
2.
3.
4.
5.
6.

Flyers.
Direct mailers.
Discounts.
Newspaper ads.
Yellow pages.
Referrals through other local businesses.

Each of these marketing approaches has the advantage of being low cost and creating service awareness.
The company's long-term marketing goals are to use local radio and TV ads similar to the Les Schwab Tire
Center ads. The company is also investigating the possibility of having a grand opening program that
would feature discounts, food, a local radio disc jockey, and other promotional ideas.

5.2.1 Promotion Strategy

The principal owners of Auto Tech Solutions expect that a significant number of their pre-existing clients
(where Nasir and Muhamed worked) will desire to switch to Auto Tech Solutions to retain the services of
their personal mechanics. This will provide a sufficient income until Auto Tech Solutions can build up a
reputation and see its marketing program take effect.
This promotion strategy will take the form of flyers, direct mailers, price discounts, and advertisements in
newspapers and yellow pages. Auto Tech Solutions does not desire to spend a large amount on marketing
until the firm is ready to expand either into new facilities or open up new ones. It is estimated this will
occur sometime after year five.

5.2.2 Pricing Strategy

Auto Tech Solutions exists in a purely competitive environment where each firm must be a price taker. In
other words, the firm has no ability to affect the market price of its services, regardless of how many
automobiles it repairs. In this case, therefore, marginal revenue (the revenue incurred by producing or
servicing one more unit) is equal to the price charged. Furthermore, because the demand curve is
essentially horizontal, Auto Tech Solutions can service automobiles at total capacity without effecting, the
price.
What all of this means for Auto Tech Solutions is that the company must seek to charge its clients at the
market price (or lower). Research has shown that the average price is approximately $400 per vehicle. As
long as marginal costs do not exceed revenues, the method to maximize short-run profits is to service
automobiles at maximum capacity. This means that Auto Tech Solutions can expect an ROA of
approximately 4.5%

5.3 Sales Forecast

Since the automotive repair industry is, operationally, a job-shop environment, it is somewhat difficult to
estimate sales. For job-shops, each individual product or service is tailored or unique to that job, and is only
initiated once an order is made. However, the sales forecast reflect the professional opinion of Nasir in how
much sales he will make based on the following assumptions:

1. The number of clients Nasir and Muhamed can attract from their previous
companies.
2. The effect of planned promotions and word-of-mouth marketing.
3. Current prices and costs of doing business.
4. The types of automobiles and jobs that will occur in every month.
For the most part, sales for an automobile repair firm are steady year round and reflect little seasonality.
The table and charts below outline the sales forecast. Three years of annual sales and costs of sales are
shown. Twelve monthly tallies are included in the appendices.

Sales Forecast
Year 1
Sales
Routine maintenance
$51,000
Small repair jobs
$60,000
Large repair jobs
$67,800
Total Sales
$178,800
Direct Cost of Sales
Year 1
Routine maintenance
$5,100
Small repair jobs
$6,000
Large repair jobs
$6,780
Subtotal Direct Cost of Sales $17,880

Year 2

Year 3

$57,120
$67,200
$75,936
$200,256
Year 2
$5,712
$6,720
$7,594
$20,026

$62,261
$71,904
$81,252
$215,417
Year 3
$6,226
$7,190
$8,125
$21,542

Management Summary
Nasir began working as an apprentice mechanic in his father's shop in 1984. Since that time, he has worked
for a variety of automotive shops and dealerships and has numerous certificates in automobile repair.

6.1 Personnel Plan

Auto Tech Solutions initial staffing will consist of Nasir and Muhamed, plus Nasir wife who will act as a
part-time office manager. The company will seek two entry level mechanics to be hired within a few
months after the company is operating. Accounting, bookkeeping, and marketing services will be
outsourced. The company's intermediate goal is to have four full time, fully trained mechanics at the
original facility, plus a full-time office manager. However, management has decided to await future
developments before determining the best time to bring on such personnel.

Personnel Plan
Year 1
Year 2
Year 3
Mr. Nasir
$36,000 $36,000 $36,000
Mr. Muhamed
$36,000 $36,000 $36,000
Office manager (part time)
$14,400 $15,000 $15,000
Apprentice mechanic (part time) $6,900
$15,000 $15,000

Apprentice mechanic (part time)

Apprentice mechanic (part time)
Total People
Total Payroll

$0
$0
4
$93,300

$0
$0
4
$102,000

$15,000
$0
5
$117,000

Financial Plan
The following sections outline the financial plan for F & R Auto Repair.

7.1 Break-even Analysis

The company's Break-even Analysis is based on an average company's running costs within this industry,
including payroll, and

its fixed costs for such things as rent, utilities, etc.

Break-even Analysis
Monthly Revenue Break-even $14,564
Assumptions:
Average Percent Variable Cost 10%
Estimated Monthly Fixed Cost $13,107

7.2 Projected Profit and Loss

The following table and chart show the projected profit and loss for Auto Tech Solutions.

Pro Forma Profit and Loss

Year 1
Sales
$178,800
Direct Cost of Sales
$17,880
Other Production Expenses
$0
Total Cost of Sales
$17,880
Gross Margin
$160,920
Gross Margin %
90.00%
Expenses
Payroll
$93,300
Sales and Marketing and Other Expenses $6,000
Depreciation
$1,992
Leased Equipment
$6,000
Utilities
$4,800
Insurance
$7,200
Rent
$24,000
Payroll Taxes
$13,995
Other
$0
Total Operating Expenses
$157,287
Profit Before Interest and Taxes
$3,633

Year 2

Year 3

$200,256
$20,026
$0
$20,026
$180,230
90.00%

$215,417
$21,542
$0
$21,542
$193,875
90.00%

$102,000
$7,200
$2,000
$1,000
$5,000
$7,400
$24,000
$15,300
$0
$163,900
$16,330

$117,000
$7,400
$2,000
$1,000
$5,000
$7,400
$24,000
$17,550
$0
$181,350
$12,525

EBITDA
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

$5,625
$1,892
$522
$1,219
0.68%

$18,330
$1,700
$4,389
$10,241
5.11%

$14,525
$1,500
$3,308
$7,718
3.58%

7.3 Projected Cash Flow

The following table and chart are the projected cash flow figures for Auto Tech Solutins.

Pro Forma Cash Flow

Year 1

Year 2

Year 3

Cash Received
Cash from Operations
Cash Sales
$160,920
$180,230
$193,875
Cash from Receivables
$14,635
$19,636
$21,267
Subtotal Cash from Operations
$175,555
$199,867
$215,142
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
$175,555
$199,867
$215,142
Expenditures
Year 1
Year 2
Year 3
Expenditures from Operations
Cash Spending
$93,300
$102,000
$117,000
Bill Payments
$77,017
$86,232
$88,638
Subtotal Spent on Operations
$170,317
$188,232
$205,638
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
$0
$0
$0
Principal Repayment of Current Borrowing $0
$0
$0
Other Liabilities Principal Repayment
$0
$0
$0
Long-term Liabilities Principal Repayment $2,000
$2,000
$2,000
Purchase Other Current Assets
$0
$0
$0
Purchase Long-term Assets
$0
$0
$0
Dividends
$0
$0
$0
Subtotal Cash Spent
$172,317
$190,232
$207,638
Net Cash Flow
$3,238
$9,634
$7,504
Cash Balance
$6,138
$15,773
$23,277

7.4 Projected Balance Sheet

The following table shows the projected balance sheet

Pro Forma Balance Sheet

Assets
Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

Year 1

Year 2

Year 3

$6,138
$3,245
$1,815
$0
$11,198

$15,773
$3,634
$2,033
$0
$21,440

$23,277
$3,910
$2,187
$0
$29,373

$20,000
$1,992
$18,008
$29,206
Year 1

$20,000
$3,992
$16,008
$37,448
Year 2

$20,000
$5,992
$14,008
$43,381
Year 3

$7,088
$0
$0
$7,088
$18,000
$25,088
$12,000
($9,100)
$1,219
$4,119
$29,206
$4,119

$7,088
$0
$0
$7,088
$16,000
$23,088
$12,000
($7,881)
$10,241
$14,360
$37,448
$14,360

$7,303
$0
$0
$7,303
$14,000
$21,303
$12,000
$2,360
$7,718
$22,078
$43,381
$22,078

7.5 Business Ratios

The Business ratios give an overall idea of how profitable and at what risk level Auto Tech Solutions will
operate at. The ratio table gives both time series analysis and cross-sectional analysis by including industry
average ratios. As can be seen from the comparison between industry standards and Auto Tech Solutions
own ratios, there is some differences. Most of these are due to the fact that there is a very large variance in
assets, liabilities, financing, and net income between companies in this industry due to the vast differences
in company size.
Overall the company's projections show a company that faces the usual risks of companies in this industry
and one that will be profitable in the long-run. The company shows that it has higher SG&A costs than
other competitors, however management has deliberately overstated costs and minimized profits in order to
create a "safe" or "buffer" zone in case of hard times or other unforeseeable problems. Pre-tax return on net
worth and pre-tax return on assets appears to be very high, especially within the first two years, however
this is due to the fact that the company will be operating with fewer assets than most companies in the first
few years until it can build up enough cash to acquire the tools and facilities that are desired and go beyond
the "adequate" level.

Ratio Analysis

0.00%

12.00%

7.57%

Industry
Profile
7.00%

11.11%
6.21%
0.00%
38.34%
61.66%
100.00%
24.27%
61.63%
85.90%
14.10%

9.71%
5.43%
0.00%
57.25%
42.75%
100.00%
18.93%
42.73%
61.65%
38.35%

9.01%
5.04%
0.00%
67.71%
32.29%
100.00%
16.83%
32.27%
49.11%
50.89%

8.80%
9.60%
23.80%
42.20%
57.80%
100.00%
34.80%
24.70%
59.50%
40.50%

100.00%
90.00%

100.00%
90.00%

100.00%
90.00%

100.00%

89.32%

84.89%

86.42%

75.20%

1.34%
2.03%

1.50%
8.15%

1.39%
5.81%

1.30%
1.70%

1.58
1.32

3.02
2.74

4.02
3.72

1.17
0.65

Year 1
Sales Growth
Percent of Total Assets
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative
Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick

Year 2

Year 3

n.a.

Total Debt to Total Assets

Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios
Net Profit Margin
Return on Equity
Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

85.90%
61.65%
49.11%
59.50%
42.28%
101.88%
49.94%
1.80%
5.96%
39.07%
25.41%
4.60%
Year 1
Year 2
Year 3
0.68%
5.11%
3.58%
29.59%
71.32%
34.96%

n.a
n.a

5.51
57
10.91
11.87
27
6.12

5.51
63
10.41
12.17
30
5.35

5.51
64
10.21
12.17
30
4.97

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

6.09
0.28

1.61
0.31

0.96
0.34

n.a
n.a

$4,111
1.92

$14,352
9.61

$22,070
8.35

n.a
n.a

0.16
24%
0.87
43.41
0.00

0.19
19%
2.23
13.95
0.00

0.20
17%
3.19
9.76
0.00

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

Appendix
Sales Forecast
Mont
h1

Mont
h2

Mont
h3

Mont
h4

Mont
h5

Mont
h6

Mont
h7

Mont
h8

Mont
h9

Mont
h 10

Mont
h 11

Mont
h 12

Sales
Routine
mainten
ance

0
%

$4,00
0

$4,00
0

$4,00
0

$4,00
0

$4,00
0

$4,00
0

$4,50
0

$4,50
0

$4,50
0

$4,50
0

$4,50
0

$4,50
0

Small
repair
jobs

0
%

$4,50
0

$4,50
0

$4,50
0

$4,50
0

$4,50
0

$4,50
0

$5,50
0

$5,50
0

$5,50
0

$5,50
0

$5,50
0

$5,50
0

Large
repair
jobs

0
%

$4,80
0

$4,80
0

$4,80
0

$4,80
0

$4,80
0

$4,80
0

$6,50
0

$6,50
0

$6,50
0

$6,50
0

$6,50
0

$6,50
0

Total
Sales

$13,3
00

$13,3
00

$13,3
00

$13,3
00

$13,3
00

$13,3
00

$16,5
00

$16,5
00

$16,5
00

$16,5
00

$16,5
00

$16,5
00

Direct
Cost of
Sales

Mont
h1

Mont
h2

Mont
h3

Mont
h4

Mont
h5

Mont
h6

Mont
h7

Mont
h8

Mont
h9

Mont
h 10

Mont
h 11

Mont
h 12

Routine
mainten
ance

$400

$400

$400

$400

$400

$400

$450

$450

$450

$450

$450

$450

Small
repair
jobs

$450

$450

$450

$450

$450

$450

$550

$550

$550

$550

$550

$550

Large
repair
jobs

$480

$480

$480

$480

$480

$480

$650

$650

$650

$650

$650

$650

Subtotal
Direct
Cost of
Sales

$1,33
0

$1,33
0

$1,33
0

$1,33
0

$1,33
0

$1,33
0

$1,65
0

$1,65
0

$1,65
0

$1,65
0

$1,65
0

$1,65
0

Personnel Plan
Mont
h1

Mont
h2

Mont
h3

Mont
h4

Mont
h5

Mont
h6

Mont
h7

Mont
h8

Mont
h9

Mont
h 10

Mont
h 11

Mont
h 12

Mr. Ford

0
%

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

Mr.
Ronald

0
%

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

$3,00
0

Office
manager

0
%

$1,20
0

$1,20
0

$1,20
0

$1,20
0

$1,20
0

$1,20
0

$1,20
0

$1,20
0

$1,20
0

$1,20
0

$1,20
0

$1,20
0

Apprenti
ce
mechani
c (part
time)

0
%

$0

$0

$0

$0

$0

$0

$1,15
0

$1,15
0

$1,15
0

$1,15
0

$1,15
0

$1,15
0

Apprenti
ce
mechani
c (part
time)

0
%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Apprenti
ce
mechani
c (part
time)

0
%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total
People

Total
Payroll

$7,20
0

$7,20
0

$7,20
0

$7,20
0

$7,20
0

$7,20
0

$8,35
0

$8,35
0

$8,35
0

$8,35
0

$8,35
0

$8,35
0

General Assumptions
Mont
h1

Mont
h2

Mont
h3

Mont
h4

Mont
h5

Mont
h6

Mont
h7

Mont
h8

Mont
h9

Mont
h 10

Mont
h 11

Mont
h 12

10

11

12

Curre
nt
Intere
st
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
%

Longterm
Intere
st
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

Plan
Mont
h

Pro Forma Profit and Loss

Mont
h1

Mont
h2

Mont
h3

Mont
h4

Mont
h5

Mont
h6

Mont
h7

Mont
h8

Mont
h9

Mont
h 10

Mont
h 11

Mont
h 12

Sales

$13,3
00

$13,3
00

$13,3
00

$13,3
00

$13,3
00

$13,3
00

$16,5
00

$16,5
00

$16,5
00

$16,5
00

$16,5
00

$16,5
00

Direct
Cost of

$1,33
0

$1,33
0

$1,33
0

$1,33
0

$1,33
0

$1,33
0

$1,65
0

$1,65
0

$1,65
0

$1,65
0

$1,65
0

$1,65
0

Sales
Other
Producti
on
Expense
s

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total
Cost of
Sales

$1,33
0

$1,33
0

$1,33
0

$1,33
0

$1,33
0

$1,33
0

$1,65
0

$1,65
0

$1,65
0

$1,65
0

$1,65
0

$1,65
0

Gross
Margin

$11,9
70

$11,9
70

$11,9
70

$11,9
70

$11,9
70

$11,9
70

$14,8
50

$14,8
50

$14,8
50

$14,8
50

$14,8
50

$14,8
50

Gross
Margin
%

90.00
%

90.00
%

90.00
%

90.00
%

90.00
%

90.00
%

90.00
%

90.00
%

90.00
%

90.00
%

90.00
%

90.00
%

Payroll

$7,20
0

$7,20
0

$7,20
0

$7,20
0

$7,20
0

$7,20
0

$8,35
0

$8,35
0

$8,35
0

$8,35
0

$8,35
0

$8,35
0

Sales
and
Marketi
ng and
Other
Expense
s

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

Deprecia
tion

$166

$166

$166

$166

$166

$166

$166

$166

$166

$166

$166

$166

Leased
Equipme
nt

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

Utilities

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

Insuranc
e

$600

$600

$600

$600

$600

$600

$600

$600

$600

$600

$600

$600

Rent

$2,00
0

$2,00
0

$2,00
0

$2,00
0

$2,00
0

$2,00
0

$2,00
0

$2,00
0

$2,00
0

$2,00
0

$2,00
0

$2,00
0

$1,08
0

$1,08
0

$1,08
0

$1,08
0

$1,08
0

$1,08
0

$1,25
3

$1,25
3

$1,25
3

$1,25
3

$1,25
3

$1,25
3

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total
Operatin
g
Expense
s

$12,4
46

$12,4
46

$12,4
46

$12,4
46

$12,4
46

$12,4
46

$13,7
69

$13,7
69

$13,7
69

$13,7
69

$13,7
69

$13,7
69

Profit
Before
Interest
and

($47
6)

($47
6)

($47
6)

($47
6)

($47
6)

($47
6)

$1,08
2

$1,08
2

$1,08
2

$1,08
2

$1,08
2

$1,08
2

Expense
s

Payroll
Taxes

15
%

Taxes
EBITDA

($31
0)

($31
0)

($31
0)

($31
0)

($31
0)

($31
0)

$1,24
8

$1,24
8

$1,24
8

$1,24
8

$1,24
8

$1,24
8

Interest
Expense

$165

$164

$162

$161

$160

$158

$157

$156

$154

$153

$151

$150

Taxes
Incurred

($19
2)

($19
2)

($19
2)

($19
1)

($19
1)

($19
0)

$277

$278

$278

$279

$279

$279

Net
Profit

($44
9)

($44
8)

($44
7)

($44
6)

($44
5)

($44
4)

$647

$648

$649

$650

$651

$652

Net
Profit/S
ales

3.38
%

3.37
%

3.36
%

3.35
%

3.35
%

3.34
%

3.92
%

3.93
%

3.93
%

3.94
%

3.95
%

3.95
%

Pro Forma Cash Flow

Month
1

Month
2

Month
3

Month
4

Month
5

Month
6

Month
7

Month
8

Month
9

Month
10

Month
11

Month
12

Cash
Received
Cash from
Operations
Cash Sales

$11,97
0

$11,97
0

$11,97
0

$11,97
0

$11,97
0

$11,97
0

$14,85
0

$14,85
0

$14,85
0

$14,85
0

$14,85
0

$14,85
0

Cash from
Receivables

$0

$44

$1,330

$1,330

$1,330

$1,330

$1,330

$1,341

$1,650

$1,650

$1,650

$1,650

Subtotal
Cash from
Operations

$11,97
0

$12,01
4

$13,30
0

$13,30
0

$13,30
0

$13,30
0

$16,18
0

$16,19
1

$16,50
0

$16,50
0

$16,50
0

$16,50
0

$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
(interestfree)

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Longterm
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

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Additional
Cash
Received
Sales Tax,
VAT,
HST/GST
Received

0.00
%

Assets
New
Investment
Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal
Cash
Received

$11,97
0

$12,01
4

$13,30
0

$13,30
0

$13,30
0

$13,30
0

$16,18
0

$16,19
1

$16,50
0

$16,50
0

$16,50
0

$16,50
0

Expenditur
es

Month
1

Month
3

Month
4

Month
5

Month
6

Month
7

Month
8

Month
9

Month
10

Month
11

Month
12

Month
2

Expenditur
es from
Operations
Cash
Spending

$7,200

$7,200

$7,200

$7,200

$7,200

$7,200

$8,350

$8,350

$8,350

$8,350

$8,350

$8,350

Bill
Payments

$262

$7,797

$6,382

$6,381

$6,380

$6,379

$6,422

$7,677

$7,336

$7,335

$7,334

$7,333

Subtotal
Spent on
Operations

$7,462

$14,99
7

$13,58
2

$13,58
1

$13,58
0

$13,57
9

$14,77
2

$16,02
7

$15,68
6

$15,68
5

$15,68
4

$15,68
3

Sales Tax,
VAT,
HST/GST
Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal
Repayment
of Current
Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other
Liabilities
Principal
Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Long-term
Liabilities
Principal
Repayment

$167

$167

$167

$167

$167

$167

$167

$167

$167

$167

$167

$167

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

$7,628

$15,16
4

$13,74
9

$13,74
8

$13,74
7

$13,74
6

$14,93
8

$16,19
4

$15,85
2

$15,85
2

$15,85
1

$15,85
0

Net Cash
Flow

$4,342

($3,14
9)

($449)

($448)

($447)

($446)

$1,242

($3)

$648

$648

$649

$650

Cash
Balance

$7,242

$4,092

$3,644

$3,196

$2,750

$2,304

$3,546

$3,543

$4,190

$4,839

$5,488

$6,138

Month
3

Month
4

Month
5

Month
6

Month
7

Month
8

Month
9

Month
10

Month
11

Month
12

Additional
Cash Spent

Pro Forma Balance Sheet

Month
1

Month
2

Assets

Startin
g
Balanc
es

Current
Assets
Cash

$2,900

$7,242

$4,092

$3,644

$3,196

$2,750

$2,304

$3,546

$3,543

$4,190

$4,839

$5,488

$6,138

Accounts
Receivable

$0

$1,330

$2,616

$2,616

$2,616

$2,616

$2,616

$2,936

$3,245

$3,245

$3,245

$3,245

$3,245

Inventory

$0

$1,463

$1,463

$1,463

$1,463

$1,463

$1,463

$1,815

$1,815

$1,815

$1,815

$1,815

$1,815

Other
Current
Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total
Current
Assets

$2,900

$10,03
5

$8,171

$7,722

$7,275

$6,828

$6,383

$8,296

$8,603

$9,250

$9,899

$10,54
8

$11,19
8

Long-term
Assets

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

$20,00
0

Accumulat
ed
Depreciati
on

$0

$166

$332

$498

$664

$830

$996

$1,162

$1,328

$1,494

$1,660

$1,826

$1,992

Total
Long-term
Assets

$20,00
0

$19,83
4

$19,66
8

$19,50
2

$19,33
6

$19,17
0

$19,00
4

$18,83
8

$18,67
2

$18,50
6

$18,34
0

$18,17
4

$18,00
8

Total
Assets

$22,90
0

$29,86
9

$27,83
9

$27,22
4

$26,61
1

$25,99
8

$25,38
7

$27,13
4

$27,27
5

$27,75
6

$28,23
9

$28,72
2

$29,20
6

Month
1

Month
2

Month
3

Month
4

Month
5

Month
6

Month
7

Month
8

Month
9

Month
10

Month
11

Month
12

Long-term
Assets

Liabilities
and
Capital
Current
Liabilities
Accounts
Payable

$0

$7,584

$6,169

$6,168

$6,167

$6,166

$6,165

$7,433

$7,091

$7,090

$7,089

$7,088

$7,088

Current
Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other
Current
Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal
Current
Liabilities

$0

$7,584

$6,169

$6,168

$6,167

$6,166

$6,165

$7,433

$7,091

$7,090

$7,089

$7,088

$7,088

Long-term
Liabilities

$20,00
0

$19,83
3

$19,66
7

$19,50
0

$19,33
3

$19,16
7

$19,00
0

$18,83
3

$18,66
7

$18,50
0

$18,33
3

$18,16
7

$18,00
0

Total
Liabilities

$20,00
0

$27,41
8

$25,83
6

$25,66
8

$25,50
1

$25,33
3

$25,16
5

$26,26
6

$25,75
8

$25,59
0

$25,42
3

$25,25
5

$25,08
8

Paid-in
Capital

$12,00
0

$12,00
0

$12,00
0

$12,00
0

$12,00
0

$12,00
0

$12,00
0

$12,00
0

$12,00
0

$12,00
0

$12,00
0

$12,00
0

$12,00
0

Retained
Earnings

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

($9,10
0)

Earnings

$0

($449)

($897)

($1,34
4)

($1,79
0)

($2,23
5)

($2,67
9)

($2,03
2)

($1,38
3)

($734)

($84)

$567

$1,219

Total
Capital

$2,900

$2,451

$2,003

$1,556

$1,110

$665

$221

$868

$1,517

$2,166

$2,816

$3,467

$4,119

Total
Liabilities
and
Capital

$22,90
0

$29,86
9

$27,83
9

$27,22
4

$26,61
1

$25,99
8

$25,38
7

$27,13
4

$27,27
5

$27,75
6

$28,23
9

$28,72
2

$29,20
6

Net Worth

$2,900

$2,451

$2,003

$1,556

$1,110

$665

$221

$868

$1,517

$2,166

$2,816

$3,467

$4,119