5th Industrial Revolution (5IR) Bookkeeping

Business Plan

Kevin Scot

scot390@attglobal.net
 Confidentiality Agreement

The undersigned reader of 5IR Bookkeeping’s Business Plan hereby acknowledges that the information
provided is completely confidential and therefore the reader agrees not to disclose anything found in the
business plan without the express written consent of 5IR Bookkeeping.

It is also acknowledged by the reader that the information to be furnished in this business plan is in all aspects
confidential in nature, other than information that is in the public domain through other means and that any
disclosure or use of the same by the reader may cause serious harm and or damage to 5IR Bookkeeping.

Upon request this business plan document will be immediately returned to 5IR Bookkeeping.

This is a business plan. It does not imply an offer of any securities.

__________________________________________________

Signature

__________________________________________________

Printed Name

5IR Bookkeeping | Business Plan Page 2

 Overview

The rise of artificial intelligence (AI) technology has opened up endless opportunities and
use cases throughout many industries to capture date, create efficiencies, and minimize
costs. AI Technology is predicted to transform many industries and professional fields, with
the accounting and bookkeeping professions being one of the most critical. This technology
is expected to change the work that accountants are expected to perform, the level of
value they are adding for their clients, and creates new opportunities for professionals and
individuals. Accoutants/CPAs who harness the tools of AI to handle low value or ROI taks
while maintaining human relationships with clients and adding value through high-end
consulting services are paced to succeed in the ever changing accounting industry moving
forward.

5IR Bookkeeping is an accounting/bookkeeping company that uses the latest technology

including AI to reduce costs and to generate value for our customers and clients. 5IR will
focus on gig economy freelancers, micro businesses, small businesses and small enterprises
and will focus on targeting the competition’s blind spots by using AI, BPOs/KPOs, and
reducing human interaction, while offering services to 6 continents and over 10 languages.
5IR plans to move the industry away from data entry and compliance services and into
advisory, value-added services by leveraging the latest technology. 5IR will generate
revenue through fees for services and monthly flat fee agreements with clients, all while
outsourcing the majority of the work offshore via managed operations.

The following business plan outlines a five-year strategy of 5IR Bookkeeing along with
financial forecasts that anticipate a significant growth in revenue by the third year as the
business model and plan is scaled.

5IR Bookkeeping | Business Plan Page 3

 Table of Contents
Executive Summary ............................................................................................................... 5
Product Summary................................................................................................................................. 5
Market Summary ................................................................................................................................. 6
Three Year Objectives........................................................................................................................... 7
Keys to Success .................................................................................................................................... 7
Financing Summary .............................................................................................................................. 8

5IR Bookkeeping – Artificial Intelligence and Managed Operations ........................................ 8

Industry Overview ............................................................................................................... 10
Market Trends ................................................................................................................................... 10

Strategy & Implementation Summary .................................................................................. 12

Management Team ............................................................................................................................ 14
SWOT Analysis ................................................................................................................................... 14

Competitive Comparison ..................................................................................................... 15

Competitive Advantages ……………….…………………………………………………………………………………….17

Marketing Plan .................................................................................................................... 18

Pricing Strategy .................................................................................................................................. 18
Promotion Strategy..…………………………………………………………………………………………………………………………….18

Financial Forecasts .............................................................................................................. 19

Use of Funds ...................................................................................................................................... 19
Financial Highlights ............................................................................................................................ 20
Financial Indicators ............................................................................................................................ 21
Revenue Forecast ............................................................................................................................... 22
Projected Profit and Loss .................................................................................................................... 22
Projected Cash Flow ........................................................................................................................... 23
Projected Balance Sheet ..................................................................................................................... 24
Sensitivity Analysis ............................................................................................................................. 25
Appendix……………………………………………………………………………………………………………………………..26

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Executive Summary

The following business plan outlines the strategy of 5IR Bookkeeping. With advances in technology,
typical bookkeeping and general ledger accounting have become commoditized and margins have
decreased for individuals in the space. Over the past decade, cloud-based accounting firms and
bookkeeping companies have made significant strides. 5IR is a new entrant in the space that will focus
on using the latest technology to reduce costs and generate value for clients from solopreneurs and gig
economy freelancers to small businesses and micro enterprises. 5IR will offer services such as
bookkeeping, accrual accounting, CFO Advisory services, and small business consulting, but will
differentiate itself from the competition by remaining on the cutting-edge of industrial revolutions by
using artificial intelligence, managed operations outsourcing, and growth through strategic acquisitions.

5IR Bookkeeping will focus on small clients and try to scale their business model. 5IR Bookkeeping will
generate revenue through fees and recurring monthly agreements charged to customers/clients. By
using AI, concentrating on BPOs/KPOs and limiting the use of expensive labor, and developing
integrations and partnerships with other technology firms and applications, 5IR Bookkeeping will service
clients across 6 continents to become a dominant force in both the cash and accrual bookkeeping
markets.

Product Summary

5IR offers the following services: bookkeeping (cash and accrual), accounting and general ledger
management (accrual basis), CFO advisory, and consulting. The Company offers its services in 10 different
languages including English, Spanish, French, Chinese and Arabic. 5IR will use Americans for initial client
interactions and setup including on-boarding, customer service and advisory services. To reduce costs
and offer the services at a competitive price, 5IR will use offshore bookkeepers, accountants and CPAs
(BPOs/KPOs) to perform the ongoing services on a daily, weekly, and monthly basis, as necessary. The
goal of the services are to conquer the gig freelancer, micro and small business segments by offering a
superb product at an affordable price that is on the cutting-edge technology wise. 5IR’s services allow
business owners and freelancers to move away from data entry and monotonous tasks that add no return
on investment, and free up time for the business owner to succeed and generate revenue. 5IR will also
be able to offer value-added and advisory services to their existing client base once the bookkeeping data
is handled with as little human interaction and data entry as possible.

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Market Summary

5IR Bookkeeping is focused on the cloud-based accounting and bookkeeping markets. The global
bookkeeping services market was valued at $287 billion in 2017 and North America was the largest
geographic region accounting for $121.3 billion or around 42% of the global market for these services.
According to a recent market study, over the next five years the cloud accounting market (which
includes semi-automated software services) will register a 8.6% compound annual growth rate (CAGR) in
terms of revenue. The global market size is expected to be $2.63 billion in 2019 and reach $4.32 billion
by 2024. It is widely believed that by 2020, labor-intensive tasks like bookkeeping, tax preparation,
payroll, audits, and banking will all be fully automated mainly through the use of AI and machine
learning. This is expected to give accountants better access to a range of near real-time information.
According to studies from sources within the AI industry, it is projected that AI technology will be
prevalent in all new accounting products by 2020 and Tractica forecasts the global AI market to be
nearly $60 billion by 2025. 5IR believes there is tremendous opportunity to leverage the use of AI and
blend it with bookkeeping and advisory services to grab market share and become a dominant force
over the next five years.

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Three Year Objectives

5IR Bookkeeping has identified the following three year objectives:

 Leverage advanced technology and global services to provide quality bookkeeping services to gig
workers, entrepeneurs, small businesses and small enterprises
 Employ artifical intelligence and machine learning as much as possible to lower costs and provide
opportunities to achieve value-added services for clients
 Limit human interaction as much as technology allows and automate via advances in AI
 Expand business model by scaling and fine-tuning AI, machine learning, and outsourced labor, and
achieve growth through acquisitions and filling in the gaps left by competition

Keys to Success

5IR Bookkeeping has identified the following keys to success:

 Identify and establish relationships and leverage existing technology with other firms and software
applications
 Use the latest technology to reduce costs and generate value and return on investment for our
clients
 Concentrate on using Knowledge Processing Outsourcing (KPOs) and Business Process Outsourcing
(BPOs) offshore for higher knowledge and lower cost professionals
 Utilize American-based professionals for the initial onboarding and face-to-face client interactions
 Concentrate on competitors neglected areas or blind spots
 Service clients across 6 continents and focus on China and the top 1-10% of developing and less
developed countries
 Find low margin clients and take them from competition
 Growth through acquisition as well as maintaining an international focus

5IR Bookkeeping | Business Plan Page 7

Financing Summary

Startup Assets Startup Liabilities

Cash on Hand 87,000 Liabilities and Capital
Office Assets - Current Borrowing -
Long-Term Liabilities -
Total Startup Assets $87,000 Accounts Payable -
Other Current Liabilities -
Startup Expenses
Market Studies 15,000
Advertising Campaign 35,000
Legal Expenses 3,000
Design Expenses 5,000
Consulting 5,000
Startup Investments
-
Planned Investment 150,000
Total Startup Expenses $63,000 Total Planned Investment $150,000
Startup Funding
Total Requirements
Total Startup Expenses 63,000 Total Liabilities -
Total Startup Assets 87,000 Total Planned Investment 150,000
Total Requirements $150,000 Total Funding $150,000

5IR Bookkeeping | Business Plan Page 8

5IR Bookkeeping – Artificial Intelligence and Managed
Operations

5IR Bookkeeping is focused on launching a technology based bookkeeping and accounting services
company that uses advanced technology and outsourced professional skilled labor to offer quality,
reliable services at a competitive price. The Company will provide bookkeeping, accounting, virtual CFO
Advisory and consulting services to clients across 6 continents and in over 10 languages. 5IR seeks to
move the accounting industry and its client base away from performing data entry and manual tasks
through the use of artificial intelligence and machine based learning. In the transitional period, 5IR will
use managed outsourced operations that employ highly skilled BPOs/KPOs from MicroSourcing in the
Phillipines.

5IR Bookkeeping is an alternative to traditional bookkeeping services, local and national accounting firms,
CPAs and do-it-yourself cloud accounting software platforms. Several market entrants and competitors
include One Up, Bench, and KPMG Spark. 5IR Bookkeeping plans to use AI to eliminate errors, reduce
costs, increase efficiencies and provide a catalyst to additional advisory services that can be billed to the
client. 5IR will differentiate itself from the competition and become a dominant force in the accounting
and bookkeeping services industry by remaining on the cutting-edge of advanced technologies and
searching the world for the lowest labor costs. 5IR Bookkeeping is focused on gig freelancers,
entrepeneurs, small businesses, small enterprises, and micro businesses which are seeking affordable,
cutting-edge services that offer accurate financial data and value added services which increase their
bottom line.

5IR Bookkeeping | Business Plan Page 9

Industry Overview

The main industry that 5IR Bookkeeping serves is the global accounting market and bookkeeping services
industry wth a focus on gig freelancers, small and micro businesses, and small enterprises. As a result, an
in-depth look at the accounting and bookkeeping services industry and market for entrepeneurs, gig
freelancers, and small businesses and enterprises will be presented below.

Market Trends

Accounting and bookkeeping services is an industry that has seen tremendous change over the past two
decades in terms of how these services are being performed and delivered. However, these services are
a necessity to nearly every small business, gig freelancer, and entrepreneur. Accounting services are
always in demand and are needed on a recurring basis. The market size of the accounting services industry
in the U.S. alone is predicted to be $119.5 billion in 2019 and is expected to grow at a CAGR of 4.4% this
year. The market size has grown 4.8% per year on average between 2014 and 2019 and is expected to
continue that growth over the next 5 years and beyond due to the number of small businesses launching
throughout the U.S. and overall low revenue volatility.

Globally, the accounting market saw total revenue of $507 billion USD in 2018 and grew at an annual
growth rate of 3.5% between 2013 and 2018. The global accounting services industry is expected to grow
at a CAGR of 9.1% through 2022 and is expected to reach a value of nearly $868 billion by 2022. More
specifically, the global cloud accounting market size was nearly $2.62 billion at the start of 2019 and is
projected to reach $4.25 billion by the end of 2025. The cloud accounting market and use of advanced
technologies is more specific as this is the most in-demand for gig freelancers, micro businesses,
soloproneurs, small businesses and small enterprises.

According to Accountancy Age, 78 percent of small businesses will rely solely on cloud technology for their
accounting needs by 2020. According to a recent report by cloud accounting provider Xero, a lot of small
businesses believe that remote collaboration with accountants is the future. Fifty-eight percent said they
do not expect to meet with their accountants face to face anymore. Despite this, small businesses consider
accountants a significant asset. Fifty-six percent believe they’ll use an accountant’s help in other fields
than accountancy, and 30% place accountants at the top of their list of trusted advisors.

With these statistics in mind, small businesses, entrepeneurs, and gig freelancers are looking for
affordable, but quality services. Business Process Outsourcing (BPO) always cutting-edge firms to offer
these services at attractive prices by off-shoring professional and accounting tasks. The global BPO
services market is projected to expand at a CAGR of 11% between 2017-2023 and the valuation of the
global BPO services market size which includes professional accounting services is poised to reach $332.4

5IR Bookkeeping | Business Plan Page 10

billion by 2025. This is driven by the cost benefits achieved by outsourcing back-office administration as
well as the development and implementation of new generation technologies such as machine learning,
AI, process automation, big data analytics, and cloud services.The global knowledge process outsourcing
(KPO) market is expected to reach USD 124.29 billion by 2025, according to a new report by Grand View
Research, Inc. The outsourcing of knowledge processes facilitates the maximum utilization of resources
at much lower costs.

5IR Bookkeeping is also keenly focused on the freelancers and gig economy workers as well as small
businesses. Freelancers and the gig economy is predicted to become the majority of the U.S. workforce
within the next decade. Currently, a study done by the Freelancers Union for 2017 estimates that 57.3
million Americans are freelancing in some capacity (this represents 36 percent of the domestic
workforce) and they contribute $1.4 trillion annually to the economy. This is an increase of 30% from
the prior year, with that number expected to grow for the next decade. According to the U.S. Small
Business Administration, there are 30.2 million small businesses in the U.S. as of 2018. Globally, small
businesses represent the majority of global trade and imports/exports. According to the U.S. Census
Bureau, in the international trade arena in 2015, small- and medium-sized companies (those employing
fewer than 500 workers, including number of employees unknown) comprised 97.6 percent of all
identified exporters and 97.2 percent of all identified importers. SMEs accounted “for 32.9 percent and
32.0 percent of the known export and import value, respectively. Small and Medium Enterprises (SMEs)
play a major role in most economies, particularly in developing countries. Formal SMEs contribute up to
60% of total employment and up to 40% of national income (GDP) in emerging economies.

The artificial intelligence market is also a major focus of 5IR Bookkeeping as it was worth $21.5 billion
USD in 2018 and is expected to reach $190.61 billion by 2025, and grow at a CAGR of 36.6% over that
period. Major drivers for the market are growing big data, the increasing adoption of cloud-based
applications and services, and an increase in demand for intelligent virtual assistants. The major
restraint for the market is the limited number of AI technology experts. Critical challenges facing the AI
market include concerns regarding data privacy and the unreliability of AI algorithms. Underlying
opportunities in the artificial intelligence market include improving operational efficiency in the
manufacturing industry and the adoption of AI to improve customer service. North America is expected
to hold the largest share and dominate the artificial intelligence market between 2018 and 2025. Rapid
developments in infrastructure and the high adoption of digital technologies are the 2 major drivers of
the AI market in the region. Additionally, the region, a well-established economy, has also seen large-
scale investments in AI, as a result of which, both start-ups and well-established companies are
concentrating more on developing innovative AI-enabled solutions to cater to the various industry
verticals. The artificial intelligence market in Asia Pacific is expected to grow at the highest CAGR during
the forecast period.

5IR Bookkeeping | Business Plan Page 11

Strategy & Implementation Summary

5IR Bookkeeping plans to launch an outsourced bookkeeping and accounting services company that uses
the latest technology available while searching the world for the lowest labor costs for the highest
quality bookkeepers, accountants, and CPA. This will be obtained by using BPO/KPOs offshore and
outsourcing professional services to countries like the Phillipines, India, and other parts of the Asia-
Pacific region. The company’s strategy is to use on-shore, or American, workers to handle initial client
on-boarding, customer service, face-to-face or personal interactions, and the advisory services. Offshore
professionals will be used to handle the data entry, analysis, and daily/monthly tasks involved.
Additionally, 5IR wants to continually implement the use of artificial intelligence and machine learning
to reduce the amount of human involvement and drive down costs. A strategic decision by the Company
is to focus on areas such as fixed assets, credit card and general ledger reconciliations, clean up work
and roll forwards which are areas that are often neglected by the competition due to the low margins.
The Company also plans to implement their services and strategy by focusing on 6 continents, offering
their services in 10 languages, and growing rapidly through acquisitions as well as organically. Another
strategy for implementation is leverage industry relationships in artificial intelligency as well as other
industrial revolutions such as Cleantech (Nanotech) and Replication Machines (Molecular Fabrication) as
the business evolves and grows. 5IR seeks to integrate its services with advancing and existing
technologys, softwares, and other cloud based services.

Compared to competitors, 5IR’s strategy is to focus on a model that is based on A.I first and foremost,
using remote employes, and being internationally inclined for expansion. 5IR wants to be more
personable with their customers by having managed operations as well as onshore contacts in the U.S.,
and have the ability to scale with ease.

5IR Bookkeeping does not really care about bookkeeping because there is no value-add to providing this
service. With this, the cost to perform this work must be reduced to zero. Consequently, using the latest
technology and offshoring the balance of the work will drive down the cost. The Value-Add is in
providing Advisory Services.

5IR Bookkeeping | Business Plan Page 12

Management Team

Kevin Scot – Founder, Chief Executive Officer

Enter personal accomplishements and duties for the Company here……

TBD – Onshore Operations Manager

Responsible for client on-boarding, customer service, and value-added advisory services for
clients. Enter personal accomplishements and duties for the Company here……

Managed Operations – MicroSourcing Solutions

BPOs and offshore professionals in Phillipines. See organizational structure below.

Ti
Beginning Stage
tl
Ti
Offshore Organizational Structure
tl

S Director of Accounting
(Manager of Human
Controllers &
Casual Supervisors)

Senior Tax
Senior General Ledger Accountantt
Accountant

Bookkeeper

Bookkeeper

Bookkeeper

Note A: The Traditional Hierarchical Organizational Structure will be flatten out in termsof any and all positions that require day-to-day processing
will be either offshored or outsourced.

Note B: The processing of general ledger activity and tax work will be supervised by the The Director of Accounting/Manager of Human Controllers
and Casual Supervisors.
Note C: The Human Controllers and Casual Supervisors will consist of offshore bookkeepers, accountants and CPAs.

5IR Bookkeeping | Business Plan Page 13

SWOT Analysis

Strengths

 Early entrant and user of artificial intelligence and a technology-driven focus with eyes towards
5th, 6th, 7th, 8th, and 9th industrial revolutions
 Service is catered specifically to the growing and high demand, accounting services and artificial
intelligence markets
 Working within a market that is expected to grow exponentially with high CAGR rates over the
next 5 years
 Ability to leverage and use offshore labor and professionals through BPOs and KPOs
 High in-house know-how and knowledge about the market and competing services
 Ability to provide advisory services will be faster than competition due to use of technology and
AI
 Ability to have 3 shifts per day, 7 days per week with BPOs and KPOs offshore

Weaknesses

 Data security concerns and customer/client backlash or uneasiness over outsourced, offshored
labor
 Less face to face interaction with clients
 Bookkeeping is a low to zero value add for clients in terms of ROI and provides low margins for
5IR if client is not provided value-added advisory services as an upcharge
 Low visibility on the market due to age of product
 Company is small and will take time to saturate the market.
 Less management control as operations are managed overseas

Opportunities

 Become the go-to bookkeeping services company witwh the implementation and fine-tuning of
AI and machine learning as well as deep integrations and industry relationships
 Tap into a thriving market which is growing and in need of this service
 Capacity to compete and grow both domestically and internationally

Threats

 Other market entrants and stolen business model

 Contractual uncertainties and enforcements
 Instability within outsourced countries politically or economically

5IR Bookkeeping | Business Plan Page 14

Competitive Comparison

The three main and most well-known competitors to 5IR Bookkeeping are Bench, OneUp, and KPMG
Spark. All three offer bookkeeping and accounting services to small businesses and/or mid-size
companies and are using either offshoring or advanced technologies including artificial intelligence.

One Up – This company offers bookkeeping and accounting services at 5 price points and focus on gig
workers, freelancers, and the micro and small business markets. They are using artificial intelligence to
automate the processes of bookkeeping and data entry (95% of all transactions approx.) and to offer their
products at affordable rates. Their local bookkeepers work normal 8 hour day shifts and the presumption
is that the Company works only during normal business hours. It is our belief that the Company would
have to change its business model as it currently stands in order to offer value added advisory services.
Service rates are too low in order to service the small business and small enterprise markets efficiently
and effectively.

Bench – This company offers bookkeeping and accounting services at 5 price points and focus on small
businesses and enterprises. They are widely known throughout the industry and in the cloud accounting
services space. They are using artificial intelligence to automate the processes of bookkeeping and data
entry and claim that 95% of all transactions are automated via AI. Their local bookkeepers work normal 8
hour day shifts and the presumption is that the Company works only during normail business hours. It is
our belief that the Company would have to change its business model as it currently stands in order to
offer value added advisory services. Service rates tend to be at a higher price point than gig economy
workers and freelancers are willing to pay and some small or micro-size businesses.

KPMG Spark – This Company is focused on offering bookkeeping and accounting services to small
businesses, small enterprises and mid-size companies at 43 different price points. Rather than using
artificial intelligence like the other competitors, KPMG has the advantage of more resources, their
longevity in the market as a Big Four accounting firm, and expertise and reputation. They have the ability
to offshore and leverage their network and Company resources to fine-tune this business model. They
also use local bookkeepers and their costs tend to be too high to micro and small businesses, and out of
range for gig and freelance workers. They also have pressures on profitability due to not using artificial
intelligence or offshoring at the moment. Their local bookkeepers work normal 8 hour day shifts and the
presumption is that the Company works only during normail business hours. They do have the best name
recognition and historical dominance in the field of accounting over the rest of the competition and 5IR.

5IR Bookkeeping | Business Plan Page 15

 Dichotomy Between Accuracy of Improving A.I. and the Decreasing Number of
Needed (Offshore) Bookkeepers, Accountants, and CPAs
350 100.00%
# of (KPOs- Offshore) Bookkeepers and Accountants

99.50%
300

99.00%
250
98.50%

200
98.00%

150 97.50%

97.00%
100
96.50%

50
96.00%

0 95.50%
1 2 3 4 5 6 7
Accuracy of A.I.

Series1 Series2

Note 1: Bench and One Up both claim 95% A.I. Accuracy and they use local bookkeepers.

As A.I. accuracy increases, the number of (BPOs/KPOs-Offshore) bookkeepers, accountants and CPAs will decrease for
Note 2: data entry and processing purposes. In turn, more professionals providing advisory services will be utilize thus providing
the ability to charge higher fees and rates.

Traditional Competitors
Comparison of Competitors and Their Issues

Experiencing Employee High Job Position

Margin Negative Costs Personnel Inconsistency Suspect Too
Types of Accounting & Finance Squeeze Perception Too High Turn Over Issues Quality Specialized

CPA Firms X X X
Accounting Firms X X X
Tax Services X X
In House X X X X
Bookkeeping Services X X X X
Freelance Bookkeeping (Individuals) X X X X
Outsourced Accounting & Bookkeeping
A. Onshore-(Online) X
B. Nearshore X
C. Offshore X

5IR Bookkeeping | Business Plan Page 16

Competitive Advantages

5IR Bookkeeping will maximize the benefits of advancing technology combined with the advantages of
utilizing global labor at lower rates than domestic U.S. and intellectual arbitrage in providing quality
bookkeeping services to cash and accrual basis gig economy workers, freelancers, micro businesses, small
businesses small enterprises and mid-size companies markets.

Advancing technology almost always reduces the number of workers needed, as well as labor costs for
manually skilled workers while the labor costs for professionally skilled worker associated with the same
industry almost always increases. 5IR Bookkeeping will employ advancing technology and lowering labor
costs for professionally skilled workers (bookkeepers and accountants) by offshoring its work to high
knowledge based and lower costs countries and when those labor costs begin to increase in the initial
country, then 5IR Bookkeeping will move further down the ladder by continuing to locate and utilize
Knowledge Process Outsourcing (KPOs) and Business Process Outsourcing (BPOs) for higher knowledge and
lower cost professionals. 5IR Bookkeeping will continue this process until advancing technology improves to
the point, if and when, employing professional workers are no longer needed. As A.I. accuracy increases, the
number of (BPOs/KPOs-Offshore) bookkeepers, accountants and CPAs will decrease for data entry and
processing purposes. In turn, more professionals providing advisory services will be utilize thus providing the
ability to charge higher fees and rates.

Further, by offshoring to KPOs and BPOs countries, 5IR Bookkeeping will have a significantly increased
capacity of bookkeepers and accountants to support its growth in market share and profitability.
Consequently, 5IR Bookkeeping's bookkeepers and accountants will be of a higher quality and paid at a lower
hourly rate than their counter parts in the U.S. (and in other first world countries.) due to the offshoring. 5IR
will have 3 shifts per day, 7 days a week, by efficiently using offshore workers and managed operations which
sets it apart from the competition like One Up, Bench, and KPMG Spark who are essentially only offering
normal business hour work for U.S. Customers, in an 8-hour shift.

5IR also has competitive advantages in their use level and knowledge about Artitifical intelligence as well as
existing and growing industry relationships in both AI and accounting services. This allows the Company to
remain on the cutting edge and leverage the advantages of AI such as increased efficiencies, cost reduction,
reduction in data entry and coding, liability reduction and the elimination of errors, but most importantly, it
allows for the Company to offer value-added, higher cost advisory services to their clients. This sets 5IR apart
from the competition and we will be able to achieve this sooner than others with the implementation of our
business model and strategy. The Value-Add is in providing Advisory Services.

5IR also has a competitive advantage by using BPOs/KPOs offshore and managed operations that consist of
professional accountants, CPAs, and bookkeepers at controlled and affordable costs, as compared to the
competition that is only using basic-level and local bookkeepers. By focusing on areas that our competition
neglects like back work, clean-up work, fixed assets, and roll forwards, 5IR also differentiates itself.

5IR Bookkeeping | Business Plan Page 17

Marketing Plan

The marketing strategy for 5IR Bookkeeping will be a key component to the company’s initial and ongoing
success. The marketing plan will focus on three objectives:

1. Emphasize that 5IR leverages the latest technology and is continually improving to provide the
best service at the lowest rate
2. Emphasize that the Company provides high quality services performed by a professional
accountant, bookkeeper and CPA, but at a very affordable price
3. Market the company and its services to the gig economy, freelancers, entrepeneurs, micro and
small businesses and small enterprises.

Pricing Strategy

The strategy is to price our services and deliver on promises that add value to our clients, and maintain our
high-quality and customer satisfaction. The Company will focus more on the value added by mostly
automated and outsourced accounting and bookkeeping services. The Company will offer 25 price points
based on prices of our competition and the quoted outsourced proposal rates we received from
MicroSourcing in the Phillipines. We will also offer free 15 minute, once per month consulting to our clients
to help relieve their concerns about us working overseas and for data security issues and peace of mind. We
believe this will be a good marketing point and differentiate us from the competition.

Promotion Strategy

Online Advertising / Pay per Click

The online advertising and pay-per-click strategy of 5IR Bookkeeping will be to use Google AdWords to reach
target markets and keeping a cost-effective budget. Pay-per-click and online advertising allows for focused
advertising and is an efficient way to target our demographic and potential customers where they are already
spending time online.

Social Media

Social media will be a significantly effective way to target individual and enterprise consumers that are
seeking these types of services mainly via LinkedIn. These platforms are an effective and efficient way to
create a following behind the brand, track popular trends and new demands from consumers, in a cost-
effective manner. Using lead generation and content writing to attract customers to our webpage where
we can promote our services will help to build the brand and attract customers.

5IR Bookkeeping | Business Plan Page 18

Financial Forecasts

Use of Funds

Startup Assets Startup Liabilities

Cash on Hand 87,000 Liabilities and Capital
Office Assets - Current Borrowing -
Long-Term Liabilities -
Total Startup Assets $87,000 Accounts Payable -
Other Current Liabilities -
Startup Expenses
Market Studies 15,000
Advertising Campaign 35,000
Legal Expenses 3,000
Design Expenses 5,000
Consulting 5,000
Startup Investments
-
Planned Investment 150,000
Total Startup Expenses $63,000 Total Planned Investment $150,000
Startup Funding
Total Requirements
Total Startup Expenses 63,000 Total Liabilities -
Total Startup Assets 87,000 Total Planned Investment 150,000
Total Requirements $150,000 Total Funding $150,000

5IR Bookkeeping | Business Plan Page 19

Financial Highlights

Financial Highlights ($000)

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 40 40 40 47 47 47 48 48 48 49 49 49 554 1089 2377 3398 5229
Gross Margin 26 26 26 33 33 33 34 34 34 35 35 35 384 702 1991 2828 4515
Operating Expense 8 8 8 8 8 8 8 8 8 8 8 8 92 95 97 100 103
EBITDA 19 19 19 26 26 26 26 26 26 27 27 27 292 607 1893 2727 4412
Net Profit 19 19 19 26 26 26 26 26 26 27 27 27 292 607 1893 2727 4412

Gross Margin/Revenue 65% 65% 65% 70% 70% 70% 70% 70% 70% 71% 71% 71% 69% 64% 84% 83% 86%
EBITDA/Revenue 46% 46% 46% 54% 54% 54% 54% 55% 55% 55% 55% 55% 53% 56% 80% 80% 84%
Net Profit/Revenue 46% 46% 46% 54% 54% 54% 54% 55% 55% 55% 55% 55% 53% 56% 80% 80% 84%

Net Cash Flow 19 19 19 26 26 26 26 26 26 27 27 27 292 607 1893 2727 4412

Cash Balance - Ending 106 124 143 168 194 220 245 272 298 325 352 379 379 987 2880 5607 10019

Projected Operating Highlights By Year ($000) Projected Revenues By Year ($000)

6000 6000

5000 Revenue 5000

4000 4000
Gross Margin
3000 3000
EBITDA
2000 2000

1000 Net Profit 1000

0 0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
12000 5000
4500
10000 4000
Net Cash Flow
8000 3500
3000
6000 2500
2000
4000 1500
Cash Balance
1000
2000
500
0 0
Year 1Year 2Year 3Year 4Year 5 Year 1 Year 2 Year 3 Year 4 Year 5

5IR Bookkeeping | Business Plan Page 20

Financial Indicators

Financial Indicators
Year 1 Year 2 Year 3
Profitability %'s:
Gross Margin 69% 64% 84%
Net Profit Margin 53% 56% 80%
EBITDA to Revenue 53% 56% 80%
Return on Assets 77% 89% 98%

Financial Indicators
120%
Gross Margin
100%

80% Net Profit Margin

60%
EBITD A to Revenue
40%

20%
Return on Assets

0%
Year 1 Year 2 Year 3

5IR Bookkeeping | Business Plan Page 21

Revenue Forecast

Revenue Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue Forecast
Gig Freelancers / Soloproneur 94,400 189,980 379,960 664,930 1,163,628
Micro Businesses 95,461 265,170 530,340 928,095 1,624,166
Small Businesses 295,704 427,128 985,680 1,117,104 1,478,520
Small Enterprises 68,780 206,339 481,459 687,798 962,917
Total Revenue $ 554,345 $ 1,088,617 $ 2,377,439 $ 3,397,927 $ 5,229,231

Direct Cost of Revenue

Manged Operations - MicroSourcing 170,328 386,724 386,724 570,240 714,060
- - - - -
Subtotal Cost of Revenue $ 170,328 $ 386,724 $ 386,724 $ 570,240 $ 714,060

Projected Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3 Year 4 Year 5

Gig Freelancers / Soloproneur 1,600 3,220 6,440 11,270 19,723

Micro Businesses 540 1,500 3,000 5,250 9,188
Small Businesses 540 780 1,800 2,040 2,700
Small Enterprises 60 180 420 600 840
Revenue 554,345 1,088,617 2,377,439 3,397,927 5,229,231
Subtotal Cost of Revenue 170,328 386,724 386,724 570,240 714,060
Total Cost of Revenue $ 170,328 $ 386,724 $ 386,724 $ 570,240 $ 714,060

Gross Margin $ 384,017 $ 701,893 $ 1,990,715 $ 2,827,687 $ 4,515,171

Gross Margin/Revenue 69% 64% 84% 83% 86%

Expenses
Office Expenses & Supplies 3,000 3,090 3,183 3,278 3,377
Telephone, Internet, and Software 5,400 5,562 5,729 5,901 6,078
Advertising 72,000 74,160 76,385 78,676 81,037
Auto, Delivery, and Travel 7,200 7,416 7,638 7,868 8,104
Accounting and Legal 2,400 2,472 2,546 2,623 2,701
Insurance 1,800 1,854 1,910 1,967 2,026

Total Operating Expenses $ 91,800 $ 94,554 $ 97,391 $ 100,312 $ 103,322

Net Income $ 292,217 $ 607,339 $ 1,893,324 $ 2,727,375 $ 4,411,849
Net Income/Revenue 53% 56% 80% 80% 84%

5IR Bookkeeping | Business Plan Page 22

Projected Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3 Year 4 Year 5
Beginning Cash Balance $ 87,000 $ 379,217 $ 986,556 $ 2,879,880 $ 5,607,255
Cash Inflows
Income from Sales $ 554,345 $ 1,088,617 $ 2,377,439 $ 3,397,927 $ 5,229,231
Accounts Receivable $ - $ - $ - $ - $ -
Total Cash Inflows $ 554,345 $ 1,088,617 $ 2,377,439 $ 3,397,927 $ 5,229,231

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ - $ - $ -
Cost of Sales $ 170,328 $ 386,724 $ 386,724 $ 570,240 $ 714,060

Operating Activities
Fixed Business Expenses $ 91,800 $ 94,554 $ 97,391 $ 100,312 $ 103,322
Taxes $ - $ - $ - $ - $ -

Financing Activities
Loan Payments $ - $ - $ - $ - $ -
Line of Credit Interest $ - $ - $ - $ - $ -
Line of Credit Repayments $ - $ - $ - $ - $ -
Dividends Paid $ - $ - $ - $ - $ -

Total Cash Outflows $ 262,128.00 $ 481,278.00 $ 484,114.62 $ 670,552.34 $ 817,381.71

Cash Flow $ 292,217.00 $ 607,339.40 $ 1,893,323.98 $ 2,727,374.66 $ 4,411,849.24
Operating Cash Balance $ 379,217.00 $ 379,217.00 $ 986,556.40 $ 2,879,880.38 $ 5,607,255.04
Ending Cash Balance $ 379,217.00 $ 986,556.40 $ 2,879,880.38 $ 5,607,255.04 $ 10,019,104.28

Year 1 Cash
400,000

350,000

300,000
Net Cash Flows
250,000

200,000

150,000

100,000
Cash Balance

50,000

-
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

5IR Bookkeeping | Business Plan Page 23

Projected Balance Sheet
Assets
Current Assets
Cash
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
Common Stock
Retained Earnings
Total Capital
Total Liabilities and Capital
Cash
Other Current Assets
Long-Term Assets
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$-
Year 1
5IR Bookkeeping | Business Plan
Pro Forma Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5
$ 379,217 $ 986,556 $ 2,879,880 $ 5,607,255 $ 10,019,104
$ - $ - $ - $ - $ -
$ 379,217 $ 986,556 $ 2,879,880 $ 5,607,255 $ 10,019,104
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ 379,217 $ 986,556 $ 2,879,880 $ 5,607,255 $ 10,019,104
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ 87,000 $ 87,000 $ 87,000 $ 87,000 $ 87,000
$ 292,217 $ 899,556 $ 2,792,880 $ 5,520,255 $ 9,932,104
$ 379,217 $ 986,556 $ 2,879,880 $ 5,607,255 $ 10,019,104
$ 379,217 $ 986,556 $ 2,879,880 $ 5,607,255 $ 10,019,104
Year 1 Year 2 Year 3 Year 4 Year 5
$ 379,217 $ 986,556 $ 2,879,880 $ 5,607,255 $ 10,019,104
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
Assets
Cash Other Current Assets Long -Term Assets
Other Current Assets
Long- Term Assets
Year 2 Year 3 Year 4 Year 5
Page 24
Sensitivity Analysis

Best Case Scenario (Revenue Increase by 15%)

Year 1 Year 2 Year 3 Year 4 Year 5
Revenue $ 637,497 $ 1,251,910 $ 2,734,054 $ 3,907,616 $ 6,013,616
Cost of Goods Sold $ 195,877 $ 444,733 $ 444,733 $ 655,776 $ 821,169
Gross Margin $ 441,620 $ 807,177 $ 2,289,322 $ 3,251,840 $ 5,192,447
Gross Margin/Revenue 69% 64% 84% 83% 86%
Operating Expenses $ 91,800 $ 94,554 $ 97,391 $ 100,312 $ 103,322
Wages & Payroll $ 200,416 $ 206,428 $ 212,621 $ 219,000 $ 225,570
EBIT $ 149,404 $ 506,195 $ 1,979,310 $ 2,932,528 $ 4,863,555
EBIT/Revenue 23% 40% 72% 75% 81%

Worst Case Scenario (Revenue Decrease by 15%)

Year 1 Year 2 Year 3 Year 4 Year 5
Revenue $ 471,193 $ 925,325 $ 2,020,823 $ 2,888,238 $ 4,444,846
Cost of Goods Sold $ 144,779 $ 328,715 $ 328,715 $ 484,704 $ 606,951
Gross Margin $ 326,414 $ 596,609 $ 1,692,107 $ 2,403,534 $ 3,837,895
Gross Margin Revenue 69% 64% 84% 83% 86%
Operating Expenses $ 91,800 $ 94,554 $ 97,391 $ 100,312 $ 103,322
Wages & Payroll $ 200,416 $ 206,428 $ 212,621 $ 219,000 $ 225,570
EBIT $ 34,199 $ 295,627 $ 1,382,096 $ 2,084,222 $ 3,509,004
EBIT/Revenue 7% 32% 68% 72% 79%

Year 1 Year 2 Year 3 Year 4 Year 5

Best Case $ 637,497 $ 1,251,910 $ 2,734,054 $ 3,907,616 $ 6,013,616
Most Likely $ 554,345 $ 1,088,617 $ 2,377,439 $ 3,397,927 $ 5,229,231
Worst Case $ 471,193 $ 925,325 $ 2,020,823 $ 2,888,238 $ 4,444,846

Revenue
$7,000,000

$6,000,000
Best Case

$5,000,000

$4,000,000
Most Likely

$3,000,000

$2,000,000
Worst Case

$1,000,000

$-
Year 1 Year 2 Year 3 Year 4 Year 5

5IR Bookkeeping | Business Plan Page 25

Appendix

Year 1 Profit & Loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Gig Freelancers / Soloproneur 125 125 125 125 125 125 130 135 135 150 150 150
Micro Businesses 15 15 15 55 55 55 55 55 55 55 55 55
Small Businesses 45 45 45 45 45 45 45 45 45 45 45 45
Small Enterprises 5 5 5 5 5 5 5 5 5 5 5 5

Revenue 40,400 40,400 40,400 47,472 47,472 47,472 47,767 48,062 48,062 48,947 48,947 48,947
Subtotal Cost of Revenue 14,194 14,194 14,194 14,194 14,194 14,194 14,194 14,194 14,194 14,194 14,194 14,194
Total Cost of Revenue $ 14,194 $ 14,194 $ 14,194 $ 14,194 $ 14,194 $ 14,194 $ 14,194 $ 14,194 $ 14,194 $ 14,194 $ 14,194 $ 14,194

Gross Margin $ 26,206 $ 26,206 $ 26,206 $ 33,278 $ 33,278 $ 33,278 $ 33,573 $ 33,868 $ 33,868 $ 34,753 $ 34,753 $ 34,753
Gross Margin/Revenue 65% 65% 65% 70% 70% 70% 70% 70% 70% 71% 71% 71%

Expenses
Office Expenses & Supplies 250 250 250 250 250 250 250 250 250 250 250 250
Telephone, Internet, and Software 450 450 450 450 450 450 450 450 450 450 450 450
Advertising 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
Auto, Delivery, and Travel 600 600 600 600 600 600 600 600 600 600 600 600
Accounting and Legal 200 200 200 200 200 200 200 200 200 200 200 200
Insurance 150 150 150 150 150 150 150 150 150 150 150 150
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
Total Operating Expenses $ 7,650 $ 7,650 $ 7,650 $ 7,650 $ 7,650 $ 7,650 $ 7,650 $ 7,650 $ 7,650 $ 7,650 $ 7,650 $ 7,650

EBIT $ 18,556 $ 18,556 $ 18,556 $ 25,628 $ 25,628 $ 25,628 $ 25,923 $ 26,218 $ 26,218 $ 27,103 $ 27,103 $ 27,103
EBIT/Revenue 46% 46% 46% 54% 54% 54% 54% 55% 55% 55% 55% 55%

5IR Bookkeeping | Business Plan Page 26

 Year 1 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

Revenue
$ 40,400.4 $ 40,400.4 $ 40,400.4 $ 47,471.6 $ 47,471.6 $ 47,471.6 $ 47,766.6 $ 48,061.6 $ 48,061.6 $ 48,946.6 $ 48,946.6 $ 48,946.6
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Sale of Other Current Assets

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 40,400.4 $ 40,400.4 $ 40,400.4 $ 47,471.6 $ 47,471.6 $ 47,471.6 $ 47,766.6 $ 48,061.6 $ 48,061.6 $ 48,946.6 $ 48,946.6 $ 48,946.6

Expenditures

Expenditures from Operations

$ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0
Subtotal Spent on Operations
$ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0

Additional Cash Spent

Current Borrowing Repay

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0 $ 21,844.0

Net Cash Flow

$ 18,556.4 $ 18,556.4 $ 18,556.4 $ 25,627.6 $ 25,627.6 $ 25,627.6 $ 25,922.6 $ 26,217.6 $ 26,217.6 $ 27,102.6 $ 27,102.6 $ 27,102.6
Cash Balance
$ 105,556.4 $ 124,112.7 $ 142,669.1 $ 168,296.6 $ 193,924.2 $ 219,551.7 $ 245,474.3 $ 271,691.8 $ 297,909.4 $ 325,011.9 $ 352,114.5 $ 379,217.0

5IR Bookkeeping | Business Plan Page 27