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CONSULTING BUSINESS PLAN

Nova Southeastern University H. Wayne Huizenga School

of Business & Entrepreneurship

Assignment for Course: HRM 5385- Organization Consultation Submitted to: Dr. Bobby BarrettSubmitted by: Karen P. Vargas

N00576910 14828 S.W. 124th Ct Miami, FL 33186 (305)546-7462

Date of Submission: 11/27/2012

Title of Assignment: Consulting Business Plan

CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I have added quotes whenever I used more than three consecutive words from another writer. I also certify that this paper was prepared by me specifically for this course.

Student's Signature: /s/ Karen Vargas

*****************************************************************

Instructor's Grade on Assignment:

Instructor's Comments:

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Consulting Business Plan

Karen Vargas

HRM 5385- Organization Consultation

NOVA Southeastern University

November 27, 2012

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Business Plan

VARGAS CONSULTING GROUP1750 N. Bayshore Dr.Miami, Florida 33132

(305) 546-0150 (800) 545-0330

(305) 546-0151 Faxwww.vargasconsulting.com

Karen Vargas, Owner1750 N. Bayshore Dr.Miami, Florida 33132

[email protected]

Juan Vargas, Owner9111 SW 208 Terrace

Miami, Fl 33189305-555-6233

[email protected]

Plan prepared November 27, 2012by Karen Vargas

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Table of Contents

Executive Summary …………………………………………………….. 4-5

General Company Description ………………………………………….. 6-7

Products and/or services ………………………………………………… 7-9

Marketing Plan ………………………………………………………….. 9-13

Management Plan ……………………………………………………….. 13-15

Financial Plan …………………………………………………………… 15-23

References ………………………………………………………………. 24

Appendix ………………………………………………………………... 25-29

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Executive Summary

Vargas Consulting Group will be a local start-up consulting company specializing in the

area of leadership development and talent management. The initial office will be established in

the city of Miami, FL. and will be located in a home office to keep costs low.

We will offer the following services which are customized to serve our clients needs

including executive coaching, leadership development, customized training and coaching,

succession planning, and talent management. Our mission is to provide organizations valuable

insights and tools to meet their leadership development/talent management challenges. By our

innovative and quality approach we are committed to developing highly productive and effective

leaders and maximizing returns on the organization’s talent investment to drive business

performance and become leaders in the consulting industry.

Vargas Consulting Group will operate as a limited liability company (LLC) and will

consist of a team of two business consultants. Each consultant specializes and possesses vast

experience in the areas of recruitment, executive assessment, leadership development,

implementation of assessment centers, succession planning, and talent management.

The business consulting industry is very diverse. There are different areas of

specialization and different markets. Large consulting companies offer broad areas of service and

target larger businesses while many smaller, often more specialized firms, occupy their market

niches. Vargas Consulting Group will take advantage of this opportunity and offer specialized

services and target small and medium-sized new and existing companies, as well as professional

individuals throughout South Florida who need affordable consulting services. The company will

work with both private and public sectors, across every major industry.

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The key competitive advantage of Vargas Consulting Group are low overhead costs

compared to competitive consulting firms as well as the experience and expertise of both

consultants/owners and their focus on providing individual and specialized services to meet each

client's specific needs. In addition, the fact the office will be located in a home office will

maintain costs low and the physical location in the area of Downtown as there is easy access to

many companies, corporations and organizations.

Vargas Consulting Group will market its services by networking with local business

leaders and business associations or contacting the potential client directly. The company will

place an ad in the business journals, newspapers, and yellow pages, listing with all local business

and industry associations, and distribute the brochure they developed to lending institutions and

clients. Members will become active members of a number of business and consulting

associations, network with the local business community, and develop workshops and seminars

for small businesses. During the latter events, brochures will be distributed. In addition, they will

use social networking tools such as Blogs, Facebook, LinkedIn, and Twitter and a company

website will highlight key services, contact details and expertise to the potential clients.

The company owners, Karen Vargas and Juan Vargas, will provide $14,700 that will

cover the start-up expenses. These funds will be sufficient to cover the company's expenses

throughout the first year of operations. The revenues of Vargas Consulting Group are projected

to increase from $74,986 in the first year to $135,598 by the third year.

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General Company Description

Vargas Consulting Group will be a new, local consulting company specialized in the

service area of leadership development and talent management. The initial office will be

established in the city of Miami, FL. in the area of Downtown which is besides an urban

residential neighborhood, the central financial and business district, home to many companies,

corporations and organizations including public organizations and private companies, several

country consulates, and chambers of commerce (MiamiDDA, 2010). To keep the operating costs

low, Vargas Consulting Group will be located in a home office setting. A phone line and internet

service dedicated to the business will be added.

The company will work with organizations and individuals who lack professional

development opportunities to help them align their talent strategy with their business strategy,

which will position them for future success. The company will help successful leaders, their

management teams, and their organizations implement leading thinking through innovative

leadership practices and business practices necessary to thrive in this rapidly changing

environment. We will help you evolve your leadership practices and your organization by

providing practical tools and coaching based on the latest research. Our mission is to provide

organizations valuable insights and tools to meet their leadership development/talent

management challenges. By our innovative and quality approach we are committed to

developing highly productive and effective leaders and maximizing returns on the organization’s

talent investment to drive business performance.

All training and workshops will be held at the client's location. If not possible, the

facilities will be contracted with community facilities, colleges or universities.

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Vargas Consulting Group is a start-up consulting business that is scheduled to begin

operations in about two months.

Vargas Consulting Group will operate as a privately owned, limited liability company

(LLC) in order to protect its members’ personal property from liability for business decisions or

actions, have fewer restrictions on profit sharing, and save on taxes. It will be owned by two HR

professional consultants who own a 50% share in the company. The advantages of an LLC

include no limit to the number of owners, owners can report profit and loss on their individual

tax returns, and they are not required to hold annual meetings or record minutes (SBA.gov,

2012).

Products and/or Services

Effective leadership is a must for organizational success. Vargas Consulting Group

provides services to understand each company’s strategy and identify, develop, and retain future

leaders and teams. Also, the company helps to manage succession planning and create a plan

according to an organization’s strategy, goals and culture. Therefore, one of Vargas Consulting

Group’s challenges will be establishing itself as a real professional leadership development and

talent management company.

We offer the following services which are customized to serve our clients’ needs and

objectives:

Leadership Development

Individual Development- we help leaders identify gaps in perceived strengths,

weaknesses and capabilities and determine areas of focus to create a plan with strategies

to close those gaps and increase their effectiveness.

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Team Development- we assist newly formed teams to identify critical success factors,

gaps in current skills and actionable plans to achieve success. We provide training and

motivation through team sessions, incorporating tools such as 360 feedback scores,

interviews and self assessments. We offer retreats for leaders and senior managers to

clarify organizational vision, mission, and strategy, develop common goals, and work

with conflict.

Organization Development- we help our clients determine what competencies they need

in order to accomplish their strategic plan and move towards their business goals. We

develop competency models for individuals, teams, jobs or departments to ensure that

performance expectations remain consistent across the whole organization. A successful

organization will plan leadership and organizational development together.

We help clients anticipate leadership challenges and build talent by providing leadership

assessment, feedback, and coaching to increase skills and improve behavior and developing

leadership competency models.

Executive Coaching: Vargas Consulting Group provides one-on-one confidential guidance

tailored to your leaders’ learning style and goals including high potentials, middle leaders, and

top executives. We partner with you in the development of your organization’s coaching practice

and provide the tools to measure coaching success.

Talent Management

Succession Planning: We begin by identifying the client organization’s business strategy and

design a succession framework based on the critical roles within the organization. Then, we

identify, assess and evaluate the readiness of your talent pool against these specific roles and

your future needs. We utilize practices as lateral moves, assignment to special projects, team

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leadership roles, and both internal and external training and development opportunities for an

effective succession planning. Effective, proactive succession planning leaves your organization

well prepared for expansion, the loss of a key employee, filling a new, needed job, employee

promotions, and organizational redesign for opportunities. It builds an organization’s bench

strength (About.com, 2012).

Marketing Plan

To understand the market Vargas Consulting Group conducted a market research by

talking to local business leaders and entrepreneurs. It was concluded that as organizations

experience changes in strategy, technology and culture, mergers, and restructuring, they need to

make sure people who has been leading them, possess the competencies to ensure success in the

future. Their top people and emerging talent need their competencies to be aligned with the

business strategy and operating model. Also, as start-up businesses grow, they will need training

and assistance in leadership and talent management in order to increase their leaders’ knowledge

and skills, build bench strength and consequently, reduce the risk of poor management

performance and business failure. Client companies are in search of improving overall business

and operations efficiency.

In addition, Vargas Consulting read and collected research information from sources such

as Kennedy Consulting Research and Advisory and the United States Census Bureau to examine

the statistics for the Human Resources Consulting industry. Kennedy’s broadest, most in-depth

examination of global HR consulting (HRC) markets shows that, despite the lingering effects of

the weak global economy, HRC has rebounded and grown at a respectable rate and the outlook

for the forecast period is even more positive. The full study looks at how the role of the HR

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function is evolving as talent management and workforce planning rise in priority with

leadership (Kennedy Consulting Research & Advisory, 2012).

Thus, companies will require consultants for advice and guidance and Vargas Consulting

Group plans to offer strategic coaching, professional development, and counseling for small and

medium business owners, entrepreneurs and self-employed professionals.

The consulting industry is a multifaceted, global business sector that is facing many

challenges and evolving quickly. At the highest level of the business is management consulting,

the segment that advises top executives and boards of directors at Fortune 1000 firms on strategy

and organization. Global consulting industry revenues including HR, IT, strategy, operations

management and business advisory services will be about $391 billion in 2012, a reasonable

growth compared from $366 billion in 2011. Some of the most recognized companies are

McKinsey & Company, Inc., Bain & Company, Inc., and Boston Consulting Group, Inc.

(Plunkett Research, Ltd., 2012).

Such firms may charge their clients anywhere from $300,000 to $1 million in monthly

fees (Plunkett Research, Ltd., 2012). These large, multifaceted companies are facing competition

from smaller, niche companies including Vargas Consulting Group since they cannot cost

effectively service the small and medium-sized market. Small and medium-sized companies as

well as entrepreneurs and self-employed professionals usually cannot afford the high fees

charged by these large firms. Vargas Consulting Group services will be priced competitively

with other small consulting firms due to lower overhead costs. Our fees will remain the same for

all projects, but may vary depending on the time needed to complete the project as well as other

expenses involved as part of the project.

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The consulting company will target small and medium-sized new and existing companies

as well as entrepreneurs and self-employed professionals throughout South Florida in search of a

way to improve their performance, achieve change, drive execution, and sharpen leadership

skills using their talent. The company will work with both private and public sectors, across

every major industry.

One of the objectives during the first 12 months of operation is to become a recognized

consulting firm. To do this, a strong client base will be developed through a comprehensive

marketing program. The company plans to use its existing contacts to generate both short and

long-term consulting contracts. At first, the company will utilize marketing strategies to reach

the market such as personal networks including former employers, co-workers and supervisors,

colleagues, former faculty, service providers (doctors, dentists, lawyers, CPA). Also, will

network with local business leaders and business associations through the use of cold contacts or

contacting the potential client directly (decision-maker within the company: CEO, CFO,

manager) and offer its services via phone calls or direct mail which will involve mailing

postcards and company brochure (See Appendix E) to highlight information about the service

areas. The brochures will be distributed at our workshops and seminars to associations, key

business leaders, and all potential clients. Vargas Consulting Group will also take advantage of

today’s technological advances and use social networking tools such as Blogs, Facebook,

LinkedIn, and Twitter to share a great amount of information in a fast and cost-effective way. A

company website will highlight key services, contact details and expertise to the potential clients.

Also, we will maintain an active presence in the Chamber of Commerce and other traditional

business, civic organizations, and associations such as the Society for Human Resource

Management (SHRM) to enable potential clients to recognize us as a group of integrity and

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stability. In addition, we will attend business events the prospective clients from the target

industry are likely to attend including trade shows, seminars, conventions, and workshops and

volunteer to share our knowledge in leadership development top establish a reputation in the

field. Finally, we will become members of a consultancy association such as the Institute of

Management Consultants USA (IMC USA) and advertise in the most important business

journals, newspapers, and yellow pages in order to become well-known.

The competitive advantages of Vargas Consulting are the business's relatively low

overhead costs compared to competitive consulting firms as well as the experience and expertise

of both consultants/owners and their focus on providing individual and specialized services to

meet each client's specific needs. We will manage and monitor the specific progress of each

client to ensure appropriate development. The approach to counseling both employers and

employees is very unique and we expect a continuing growth from our commitment to individual

service.

Vargas Consulting Group will operate within a geographic area that is convenient to our

potential clients and besides, will offer its services through the internet 24/7. Therefore, another

competitive advantage is the physical location of our office. The fact the office will be located in

a home office will maintain costs low and the physical location in the area of Downtown will

give easy access to various companies. The area of Downtown is besides an urban residential

neighborhood, the central financial and business district, home to many companies, corporations

and organizations including public organizations and private companies, several country

consulates, and chambers of commerce (MiamiDDA, 2010). Downtown Miami is the fastest city

in the nation with a massive commercial Real Estate growth. According to Live Development

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LLC, there will be a 10 billion dollars investment plan for the next 8 years in Downtown Miami

Real Estate Development (YouTube, 2012).

With time, reputation and referrals, Vargas Consulting Group will gain an opportunity for

more business and new clients as well as regular price increases. In addition, we will participate

in training, seminars, and conferences in order to increase our knowledge and maintain current

on HR issues and laws and regulations. We will also broaden the areas of specialization to

remain competitive in the market.

Management Plan

Vargas Consulting Group initial management team depends on its two founders and

owners Karen Vargas and Juan Vargas. The two consultants own a 50% share in the company

and their income will be equal for both (See Table1).

Karen Vargas holds a Bachelor’s degree in Psychology from Universidad del Norte in

Colombia and a MS in Human Resource Management from Nova Southeastern University.

Karen’s areas of expertise include recruitment, executive assessment, leadership development,

and implementation of assessment centers. She has 10 years of experience in organizational

strategy, OD and leadership development, and human resources. She has designed competency

systems including leadership development programs, 360 feedback, executive coaching,

executive assessment, and succession planning. She is considered an excellent speaker in

leadership conferences and workshops and has experience in coaching individuals and teams on

practical organizational issues and challenges. Prior to Vargas Consulting Group, Karen was a

Manager of Human Resources at Adonel Concrete and an executive coach for different

companies.

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Juan Vargas obtained his bachelor's degree in Finance from The School of Management

at Boston College and a Ph.D. in Industrial/Organizational Psychology from the George

Washington University. Juan’s areas of expertise include the selection, development, and

retention of key leaders in order to help organizations build effective succession plans, leadership

skill building, and talent management. He has worked for 15 years designing assessment centers,

managerial development programs, and succession planning strategies. He also has experience in

Finance. Juan’s passion is presenting conferences and teaching graduate courses in Leadership

Development and Executive Coaching.

Both consulting professionals are members of SHRM (Society of Human Resources

Management) and offer experience developing and implementing talent solutions. The key

aspects of the company including sales, marketing, finances (bookkeeping, accounting),

customer service, legal, consulting services, etc. will be managed by both owners. If in the

future, they lack the experience to handle some of these areas, an expert will be subcontracted.

Table 1. Personnel Plan. The following table is the personnel plan for Vargas Consulting Group.

Personnel Plan Year 1 Year 2 Year 3

Owner 1 $22,250 $35,000 $35,000

Owner 2 $22,250 $35,000 $35,000

Total People 2 2 2

Total Payroll $44,500 $70,000 $70,000

Once the business is established and as the business grows, we will consider hiring a

consultant to offer other consulting services and probably, a financial officer to handle the

recordkeeping while we focus more on our sales and consulting practice. In addition, we will

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focus on our marketing plan and implement different and more advertising. As the firm grows in

service demands, additional staff support and consultants will be hired.

Financial Plan

The company’s objective during the first 12 months of operation is to develop a

profitable consulting business. The company owners, Karen Vargas and Juan Vargas, will

provide $14,700 that will cover the start-up expenses. These funds will be sufficient to cover the

company's expenses throughout the first year of operations. The revenues of Vargas Consulting

Group are projected to increase from $74,986 in the first year to $135,598 by the third year.

Figure 1. Start-up Expenses and Assets

Figure 1. Total start-up expenses will be $4,500. Start-up assets required include $2,000 in short-term assets and $7,500 in initial cash to handle the first three months of operations.

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Table 2. Start-up Requirements.

Start-up RequirementsStart-up Expenses Legal $1,000 Stationery, etc. $400 Insurance $900 Rent $0 Computer $1,500 Phone $100 Travel $500 Other $100 Total Start-up Expenses $4,500 Start-up Assets Cash Required $7,500 Other Current Assets $2,000 Long-term Assets $0 Total Assets 9500Total Requirements $14,000

Table 3. Start-up Funding. The start-up costs are to be financed by the two owners' personal

funds.

Start-up FundingStart-up Expenses to Fund $4,500

Start-up Assets to Fund $9,500

Total Funding Required $14,000

Assets

Non-cash Assets from Start-up $2,000

Cash Requirements from Start-up $7,450

Additional Cash Raised $750

Cash Balance on Starting Date $8,200

Total Assets $10,200

Liabilities and Capital

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Liabilities

Current Borrowing $0

Long-term Liabilities $0

Other Current Liabilities (interest-free) $0

Total Liabilities $0

Capital

Planned Investment

Owner $14,700

Investor $0

Additional Investment Requirement $0

Total Planned Investment $14,700

Loss at Start-up (Start-up Expenses) ($4,500)

Total Capital $10,200

Total Capital and Liabilities $10,200

Total Funding $14,700

Projected Income Statement (Profit and Loss)

The following tables and figures show the projected Income statement for Vargas Consulting Group. As the charts illustrate, the Company expects to continue its growth in profitability over the next three years of operations. The ratios are based in the market industry by the North American Industry Classification System, NAICS 541612 or Standard Industrial Classification, SIC 8742, Management Consulting 2011 (Naicscode.com, 2012).

Figure 2. Profit Monthly

17


Figure 3. Profit Yearly.

Figure 4. Gross Margin Monthly.

18


Figure 5. Gross Margin Yearly.

Table 4. Income Statement

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Income Statement Year 1 Year 2 Year 3

Sales $74,986 $111,009 $135,598

Direct Cost of Sales $7,920 $8,712 $9,583

Other Costs of Sales $0 $0 $0

Total Cost of Sales $7,920 $8,712 $9,583

Gross Margin $67,066 $102,297 $126,015

Gross Margin % 89.44% 92.15% 92.93%

Expenses

Payroll $44,500 $70,000 $70,000

Marketing/Promotion $3,250 $3,591 $4,184

Depreciation $0 $0 $0

Rent $0 $0 $0

Utilities $579 $637 $669

Insurance $885 $974 $1,071

Payroll Taxes $6,675 $7,676 $8,828

Other $0 $0 $0

Total Operating Expenses $55,889 $82,878 $84,751

Profit Before Interest and Taxes $11,177 $19,419 $41,264

EBITDA $11,177 $19,419 $41,264

Interest Expense $0 $0 $0

Taxes Incurred (30%) $3,353 $5,826 $12,379

Net Profit $7,824 $13,593 $28,885

Net Profit/Sales 10.43% 12.25% 21.30%

Figure 6. Projected Cash Flow

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Figure 6. The Cash Flow Statement shows how the company is paying for its operations and future growth, by detailing the "flow" of cash between the company and the outside world. Positive numbers represent cash flowing in; negative numbers represent cash flowing out.

Table 5. Cash Flow

Cash Flow Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $74,986 $111,009 $135,598

Subtotal Cash from Operations $74,986 $111,009 $135,598

Additional Cash Received

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 $ 74,986 $ 111,009 $ 135,598

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $63,718 $89,205 $107,046

Subtotal Spent on Operations $63,718 $89,205 $107,046

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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 $0 $0 $0

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $63,718 $89,205 $107,046

Net Cash Flow $11,268 $3,380 $2,366

Cash Balance $16,024 $19,229 $21,440

Table 6. Projected Balance SheetThe following table represents the Balance Sheet for Vargas Consulting Group. It shows a projected increase in Net Worth or Assets for the next three years.

Balance Sheet Year 1 Year 2 Year 3

Assets Current Assets

Cash $16,024 $19,229 $21,440

Other Current Assets $2,000 $2,000 $2,000

Total Current Assets $18,024 $21,229 $23,440

Long-term Assets

Long-term Assets $0 $0 $0

Accumulated Depreciation $0 $0 $0

Total Long-term Assets $0 $0 $0 Total Assets $18,024 $21,229 $23,440

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Current Borrowing $0 $0 $0

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Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $0 $0 $0

Long-term Liabilities $0 $0 $0

Total Liabilities $0 $0 $0

Paid-in Capital $14,700 $14,700 $14,700

Retained Earnings ($4,500) ($225) $1,125 Earnings $7,824 $2,504 $1,828

Total Capital $18,024 $21,229 $23,440 Total Liabilities and Capital $18,024 $21,229 $23,440 Net Worth $18,024 $21,229 $23,440

References

About.com. (2012). Human Resources. Succession Planning. Retrieved from

http://humanresources.about.com/od/glossarys/g/successionplan.htm

23


Kennedy Consulting Research & Advisory. (2012). HR Consulting Marketplace: Key Trends,

Profiles and Forecasts 2011 – 2014. Retrieved from http://www.kennedyinfo.com

/consulting/research/hr-consulting-marketplace-2011-2014?C=Pia5646g9W1ORqSv&G

=pTUcSZEhKreo9O3T

MiamiDDA. (2010). About The Miami Downtown Development Authority. Retrieved from

http://miamidda.com/main_about.asp

Naicscode.com. (2012). Industry search. Retrieved form http://www.naicscode.com/default.asp

?Q=consulting

Plunkett Research, Ltd. (2012). Introduction to the Consulting Industry. Retrieved from

http://www.plunkettresearch.com/consulting-market-research/industry-trends

SBA.gov. (2012). Starting a Business. Limited Liability Company. Retrieved from

http://www.sba.gov/content/limited-liability-company-llc

YouTube. (2012). Live Miami 2020. Ten billion dollar boom coming to Downtown Miami.

Retrieved from http://www.youtube.com/watch?v=GbUZ8fZkE2Q.

Appendix A

Sales Forecast

Month

1Month

2Month

3Month

4Month

5Month

6Month

7Month

8Month

9Month

10Month

11Month

12Sales

24


Workshops and Training 0% $700 $2,000 $3,000 $4,000 $4,500 $4,500 $5,600 $6,000 $6,500 $7,000 $6,800 $7,300

One On One/ Executive Coaching 0% $300 $350 $420 $420 $420 $500 $562 $562 $562 $600 $550 $500 Individual/Team Development Coaching 0% $250 $300 $630 $650 $650 $600 $700 $800 $750 $870 $850 $900

Succession Planning 0% $200 $350 $400 $350 $380 $300 $250 $220 $220 $250 $220 $250

Total Sales $1,450 $3,000 $4,450 $5,420 $5,950 $5,900 $7,112 $7,582 $8,032 $8,720 $8,420 $8,950

Direct Cost of Sales Month

1Month

2Month

3Month

4Month

5Month

6Month

7Month

8Month

9Month

10Month

11Month

12Royalties $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $330

Marketing $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $330

Subtotal Direct Cost of Sales $660 $660 $660 $660 $660 $660 $660 $660 $660 $660 $660 $660

Appendix B

Income Statement

Month

1Month

2Month

3Month

4Month

5Month

6Month

7Month

8Month

9Month

10Month

11Month

12 Total

Sales $1,450 $3,000 $4,450 $5,420 $5,950 $5,900 $7,112 $7,582 $8,032 $8,720 $8,420 $8,950 $74,986

Direct Cost of Sales $660 $660 $660 $660 $660 $660 $660 $660 $660 $660 $660 $660 $7,920

Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $660 $660 $660 $660 $660 $660 $660 $660 $660 $660 $660 $660 $7,920

Gross Margin $790 $2,340 $3,790 $4,760 $5,290 $5,240 $6,452 $6,922 $7,372 $8,060 $7,760 $8,290 $67,066

Gross Margin % 54.48% 78.00% 85.17% 87.82% 88.91% 88.81% 90.72% 91.30% 91.78% 92.43% 92.16% 92.63% 89.44%

Expenses

Payroll $0 $3,500 $3,500 $3,500 $3,500 $3,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $44,500

Marketing/Promotion $800 $150 $150 $150 $150 $150 $200 $300 $300 $300 $300 $300 $3,250

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Utilities $0 $50 $50 $50 $50 $50 $50 $70 $66 $45 $48 $50 $579

Insurance $0 $70 $70 $70 $70 $70 $80 $89 $90 $91 $92 $93 $885

Payroll Taxes 15% $0 $525 $525 $525 $525 $525 $675 $675 $675 $675 $675 $675 $6,675

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $800 $4,295 $4,295 $4,295 $4,295 $4,295 $5,505 $5,634 $5,631 $5,611 $5,615 $5,618 $55,889

Profit Before Interest and Taxes ($10) ($1,955) ($505) $465 $995 $945 $947 $1,288 $1,741 $2,449 $2,145 $2,672 $11,177

EBITDA ($10) ($1,955) ($505) $465 $995 $945 $947 $1,288 $1,741 $2,449 $2,145 $2,672 $11,177

Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Taxes Incurred (30%) ($3) ($587) ($152) $140 $299 $284 $284 $386 $522 $735 $644 $802 $3,353

Net Profit ($7) ($1,369) ($354) $326 $697 $662 $663 $902 $1,219 $1,714 $1,502 $1,870 $7,824

25


Net Profit/Sales -0.48% -45.62% -7.94% 6.01% 11.71% 11.21% 9.32% 11.89% 15.17% 19.66% 17.83% 20.90% 10.43%

Appendix C

Cash Flow Monthly

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 $1,450 $3,000 $4,450 $5,420 $5,950 $5,900 $7,112 $7,582 $8,032 $8,720 $8,420 $8,950

Subtotal Cash from Operations $1,450 $3,000 $4,450 $5,420 $5,950 $5,900 $7,112 $7,582 $8,032 $8,720 $8,420 $8,950

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 $1,450 $3,000 $4,450 $5,420 $5,950 $5,900 $7,112 $7,582 $8,032 $8,720 $8,420 $8,950

Expenditures Month

1Month

2Month

3Month

4Month

5Month

6Month

7Month

8Month

9Month

10Month

11Month

12

Expenditures from Operations

Cash Spending $1,457 $1,632 $4,096 $5,094 $5,253 $5,238 $6,450 $6,680 $6,814 $7,005 $6,919 $7,080

Subtotal Spent on Operations $1,457 $1,632 $4,096 $5,094 $5,253 $5,238 $6,450 $6,680 $6,814 $7,005 $6,919 $7,080 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 $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 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

26


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 $1,457 $1,632 $4,096 $5,094 $5,253 $5,238 $6,450 $6,680 $6,814 $7,005 $6,919 $7,080

Net Cash Flow ($7) $1,368 $354 $326 $697 $662 $662 $902 $1,218 $1,715 $1,501 $1,870

Cash Balance $8,193 $6,825 $6,471 $6,797 $7,494 $8,156 $8,818 $9,720 $10,938 $12,653 $14,154 $16,024

Appendix D

Balance Sheet Monthly

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Assets

Starting Balances

Current Assets

Cash $8,200 $8,193 $6,825 $6,471 $6,797 $7,494 $8,156 $8,818 $9,720 $10,938 $12,653 $14,154 $16,024 Other Current Assets $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Total Current Assets $10,200 $10,193 $8,825 $8,471 $8,797 $9,494 $10,156 $10,818 $11,720 $12,938 $14,653 $16,154 $18,024

Long-term Assets

Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Assets $10,200 $10,193 $8,825 $8,471 $8,797 $9,494 $10,156 $10,818 $11,720 $12,938 $14,653 $16,154 $18,024

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

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

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Paid-in Capital $14,700 $14,700 $14,700 $14,700 $14,700 $14,700 $14,700 $14,700 $14,700 $14,700 $14,700 $14,700 $14,700

27


Retained Earnings ($4,500)

($4,500) ($4,500)

($4,500)

($4,500)

($4,500)

($4,500)

($4,500)

($4,500)

($4,500)

($4,500)

($4,500) ($4,500)

Earnings $0 ($7) ($1,376)($1,729

)($1,403

) ($706) ($45) $618 $1,520 $2,738 $4,453 $5,954 $7,824 Total Capital $10,200 $10,193 $8,825 $8,471 $8,797 $9,494 $10,156 $10,818 $11,720 $12,938 $14,653 $16,154 $18,024 Total Liabilities and Capital $10,200 $10,193 $8,825 $8,471 $8,797 $9,494 $10,156 $10,818 $11,720 $12,938 $14,653 $16,154 $18,024

Net Worth $10,200 $10,193 $8,825 $8,471 $8,797 $9,494 $10,156 $10,818 $11,720 $12,938 $14,653 $16,154 $18,024

Appendix E

28

CONSULTING BUSINESS PLAN 29

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