February 2004
Confidentiality Confidentiality Agreement Agreement
The undersigne undersigned d reader reader acknowledge acknowledges s that the informat information ion provided provided by Austin Austin Kinetic in this business business plan is confidenti confidential; al; therefore, therefore, reader agrees not to disclose disclose it without without the express express written permission of an Austin Kinetic officer. It is acknowledg acknowledged ed by reader that information information to be furnished furnished in this business business plan is in all respects respects confidentia confidentiall in nature, other than informatio information n which is in the public public domain through through other means and that any disclosure or use of same by reader, may cause serious harm or damage to Austin Kinetic. Upon request, this document is to be immediately returned to any Austin Kinetic officer. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities.
Table of Contents 1.0 1.0
Exec Execut utiv ive e Sum Summa mary ry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1.1 Obje Objec ctiv tives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 1.3 Keys Keys to Suc Succe cess ss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 2 2 2
2.0 Com Compan pany Sum Summ mary ary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1 2.1 Comp Compa any Own Ownersh ership ip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.2 2.2 Sta Startrt-up Summ ummary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3.0 Serv Servic ice es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4.0 4.0
Mark Market et Anal Analys ysis is Sum Summa mary ry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 4.1 Mark Market et Segm Segmen enta tati tion on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 4.2 Targ Target et Mark Market et Segm Segmen entt Str Strat ateg egy y................................... 4.3 4.3 Serv Servic ice e Bus Busin ines ess s Ana Analy lysi sis s . .. . . . . . . . . . . .. . . . . . . . .. . . . . . . . . . . .. . . . . . 4.3. 4.3.1 1 Comp Compet etit itio ion n and and Buy Buyin ing g Pat Patte tern rns s............... ............. ..
8 8 9 9 9
5.0 5.0
Stra Strate tegy gy and and Imp Imple leme ment ntat atio ion n Summ Summar ary y.... ..... .... ..... .... ..... .... .. 5.1 5.1 Comp Compet etit itiv ive e Edge dge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 5.2 Mark Market etin ing g Str Strat ateg egy y . . . . . .. . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . .. . . . . 5.3 5.3 Sale Sa les s Str Stra ategy egy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3. 5.3.1 1 Sales ales Forec oreca ast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 5.4 Mile Miles stone tones s. . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . .. . . . . . . . . .
9 9 10 10 10 12
6.0 Web Web Pl Plan Su Summary mary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 6.1 6.1 Webs Websit ite e Mar Marke keti ting ng Stra Strate tegy gy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 6.2 6.2 Deve De velo lopm pmen entt Requ Requir irem emen ents ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 7.0 7.0
Mana Manage geme ment nt Sum Summa mary ry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 7.1 7.1 Pers Person onn nel Plan lan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Austin Kinetic 1.0 Executive Summary Austin Kinetic is an information technology consulting firm serving the Austin Metro area with top quality engineers who have a keen interest in customer satisfaction. The time is right for consulting companies to flourish. With the recent gains in the stock market, capital is again becoming available for IT infrastructure improvements. Austin Kinetic will position itself to win a good deal of that emerging business. The company has been incorporated in Nevada and has acquired an operating permit for Texas. Austin Kinetic anticipates a cumulative net profit of over $1M by the end of FY2008. The Market Austin is known as "little Silicon valley" due to its high percentage of technology companies. With its relatively low cost of living and ample space for expansion, Austin promises to be a strong market into the foreseeable future. There are currently over 7,000 companies that fit the aim of Austin Kinetic in the Austin Metro area, with only four major competitors. This combination provides a rich opportunity, bolstered by the current up-turn in the area and national economy. The Business Model Austin Kinetic will leverage the industry knowledge of its founding members to provide outstanding service to its customers. The company will initially have as little overhead as possible with its founders working out of their own homes, using their own transportation means to reach clients. The company will be developed with a "customer service and satisfaction first" mentality in an effort to build acceptance and a positive reputation in the local industry. The Management Team In order for the company to be successful, Austin Kinetic must fully leverage the experience and insight of its management team, which includes Adam Authortisement, Bob Borgware, Cary Curry, Dean Dri, and Edgar Extension. The team has over forty-eight cumulative years of experience in service operations management and information technology support They
Austin Kinetic
Highlights $2,500,000
$2,000,000
$1,500,000
Sales Gross Margin
$1,000,000
Net Profit
$500,000
$0 FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
1.1 Objectives Austin Kinetic's objectives for the first five years: 1. 2.
Establish and maintain at least twenty-four full time service contract customers. Establish an office in Austin, TX.
Austin Kinetic 2.0 Company Summary Austin Kinetic is incorporated in Nevada with an operating office in Austin, Texas. Initial staff will consist of a small group of experienced computer engineers who's skills and experience collectively cover a very broad segment of the open systems' distributed client/server field. The company's initial focus will be installation and configuration projects which will be developed into ongoing support contracts.
2.1 Company Ownership Austin Kinetic is incorporated. The major share holders are Adam Authortisement, Bob Borgware, Cary Curry, Dean Dri, and Edgar Extension.
2.2 Start-up Summary The start-up costs for the company are expected to be $11,00 and will be funded by the founder's personal funds. There will be only small initial equipment cost as the company will be greatly dependent upon its founders' resources. It is expected that each employee will initially cover the cost of transportation, cell phone, and incidentals that arise in the course of due business. The company will begin covering those costs as revenue streams are generated. Specific guidelines and policies will be developed prior to the sixth operating month.
Table: Start-up
Start-up
Austin Kinetic Table: Start-up Funding
Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets
$7,550 $4,550 $12,100 $0 $4,550 $0 $4,550 $4,550
Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities Total Liabilities
$0 $0 $0 $0 $0
Capital Planned Investment John Butler Eddie Hodges Sidney Johnson Darren Galatas Johnathan & Grace Panepinto Additional Investment Requirement Total Planned Investment
$2,500 $2,400 $2,400 $2,400 $2,400 $0 $12,100
Loss at Start-up (Start-up Expenses) Total Capital
($7,550) $4,550
Austin Kinetic 3.0 Services Austin Kinetic will offer several support options, including hourly support services, with the option to buy in blocks of 40 hours at a discounted rate. Blocks purchased will be valid for 180 days from date of purchase. Additionally, semi-annual service contracts will be available. Contract pricing will be negotiated on a per-contract basis. • Project work will be billed and estimated on a per-project basis. • Web and ASP hosting will be billed on a per-system basis. Operating systems supported (limited to current and three previous revisions): • • • •
Windows Novell NetWare Solaris Red Hat Linux
Hardware supported (hardware configurations must be validated by OEM): • All open desktop, server, storage, and network systems. • Dell, ADIC, Storagetech, and HP tape drives and libraries. • Additional hardware will have to be reviewed on a per-case basis. Software packages supported (Restricted to implementation and initial configuration): • • • • •
Microsoft Exchange Lotus Notes/Domino SUS Messaging Center Microsoft SQL server Oracle DBS Veritas Backup Exec / Net Backup
Austin Kinetic Basic Server Management*$350 per month Austin Kinetic provides professional management of operating systems, including Windows, NetWare, Red Hat Linux, and Solaris. This service is perfect for companies that want to manage their own applications, but not deal with the ongoing hassle of tuning, securing, and maintaining the operating system. We will take the burden of ensuring you get the proper services for your specific server and operating system. • A system audit to document your architecture and suggest improvements • 24/7 technical support of the server and operating system from experienced engineers • Security and bug patch notification for the operating system, and when approved, a service call will be scheduled for installation.* • Monitoring the network availability of one IP. • Monitoring the server's disk usage, processor usage and load average • Visibility into Austin Kinetic's trouble ticket system via a secure portal * Except for the initial system audit, service time to repair or otherwise service the monitored system is not included in this monitoring agreement. Application Server Management Services* $450 per month. Ensuring your applications are available and running at peak efficiency is a 24/7 responsibility. Austin Kinetic offers comprehensive application monitoring and management so your customers and employees will be able to use your applications without significant unscheduled interruption. We offer a complete range of management services tailored to remove the burden of ensuring your applications are up and getting the proper maintenance. • A system audit to document your architecture and suggest improvements • 24/7 technical support of the server, operating system and applications from experienced engineers • Security and bug patch notification for the operating system and applications, and when approved, installation • Monitoring application and network availability • Monitoring application response time
Austin Kinetic * Except for the initial system audit, service time to repair or otherwise service the monitored system is not included in this monitoring agreement. Network Device Management Services* $450 per month. Network devices - firewalls, load balancer, routers, switches and hubs - must be properly configured and maintained to ensure network security and reliable operation. Austin Kinetic offers a broad range of network management services and will take the burden of ensuring you get the proper services for your specific network. • • • • • • •
A network audit to document your topology and addressing scheme 24/7 technical support of the network devices from experienced engineers Security and bug patch notification, and when approved, installation Maintaining the security of firewalls Monitoring bandwidth usage Monitoring network device availability and performance Visibility into Austin Kinetic's trouble ticket system via a secure portal
* Except for the initial system audit, service time to repair or otherwise service the monitored system is not included in this monitoring agreement. Benefits of Security Management Services (Priced determined on a per-site basis.) Maintaining the security of your Internet-based systems is more important and more time consuming that ever. Austin Kinetic removes the burden of protecting your systems by offering 24/7 security management that combines intrusion detection and vulnerability scanning. We also will not burden your existing hardware as a pre-configured 1U server is installed in your network to handle the intrusion detection and vulnerability task. • Identify misconfigured firewalls • Catch attacks that firewalls legitimately allow through (such as attacks against Web servers) • Document hacker attempts that fail • Watch for insider hacking
Austin Kinetic 4.0 Market Analysis Summary The Information and Technology Service industry is expected to grow at 8.58% per year through 2010. --U.S. Department of Labor (2003) http://www.bls.gov/iag/iag.services.htm We will be primarily focusing on mid-sized companies with 500 or fewer employers. These companies typically do not have large internal IT departments and could benefit the greatest from our offerings.
4.1 Market Segmentation The information in the market analysis table gained from the U.S. Census Bureau, http://factfinder.census.gov/servlet/GQRGeoSearchByListServlet?ds_name=E9700A1 . Though the data is based upon 1997 data, it is representative of the local market's potential.
Table: Market Analysis
Market Analysis Potential Customers Retail trade Professional, scientific, & technical services Health care & social assistance Total
2004
2005
2006
2007
2008
Growth 8%
2,925
3,159
3,412
3,685
3,980
CAGR 8.00%
8%
3,128
3,378
3,648
3,940
4,255
8.00%
8%
1,705
1,841
1,988
2,147
2,319
7.99%
8.00%
7,758
8,378
9,048
9,772
10,554
8.00%
Market Analysis (Pie)
Austin Kinetic 4.2 Target Market Segment Strategy Austin Kinetic is interested in servicing companies that are large enough to show direct P&L benefit from information technology investment, but not large enough to maintain their own permanent IT staff. The business groups targeted in the market analysis table represent the largest groups in our target area that fit our interests.
4.3 Service Business Analysis Austin Kinetic is in the business of satisfying companies' information technology infrastructure needs. We will provide service at various levels from consulting to installation. Services will be sold on a per-customer/case basis with heavy personal interaction between Austin Kinetic sales representatives and prospective customers.
4.3.1 Competition and Buying Patterns In this industry that Austin Kinetic, word of mouth and reputation are king. While a limited amount of highly focused marketing will be effective, most contracts are gleaned from social contacts and networking.
5.0 Strategy and Implementation Summary Austin Kinetic's initial funding will be from its founders' personal funds. Word-of-mouth and
Austin Kinetic 5.2 Marketing Strategy Austin Kinetic's initial marketing strategy will be largely word-of-mouth and industry group networking. Our biggest initial challenge will be to get our name known in the local market. We will become involved in several industry specific organizations in the local community which will give us direct access to potential customers.
5.3 Sales Strategy Sales will focus a bit less on building relationships and more on solidifying confidence in Austin Kinetic's competencies and skills. Our primary focus will be to answer the question, "how can Austin Kinetic best meet a customer's information technology needs?" Delivering this answer in a clear, concise proposal allied with competitive pricing will be the key to closing deals.
5.3.1 Sales Forecast Sales are forecast with an emphasis on project work at the onset. In the first few months, we will be primarily occupied in conducting short-term one-day to one-week projects while building Austin Kinetic's reputation and brand name. Within the first six months, Austin Kinetic will have signed three annual service contracts, doubling that by the end of the year and each semi-annual period thereafter. Sales contracts will be set period contracts paid by monthly installments. As a service business, our only direct costs would relate to the time spent by employees in responding to customers' needs. Our employees are all paid a set salary, and not by hourly billing, so we have no direct costs of sales; these salaries can be found in the Personnel Plan.
Austin Kinetic
Sales Monthly $50,000 $45,000 $40,000 $35,000 $30,000 $25,000
Project related
$20,000
Service contract
$15,000 $10,000 $5,000 $0 Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec Jan
Sales by Year $2,500,000
$2,000,000
Austin Kinetic 5.4 Milestones Austin Kinetic will have very simple marketing milestones geared toward industry networking and beginning to build name recognition.
Table: Milestones
Milestones Milestone Join Austin's chamber of commerce Register with Austin Business Journal Obtain first service contract Open Office Totals
Start Date 2/1/2004
End Date 3/1/2004
Budget $0
Manager Adam
Department Marketing
2/1/2004
3/1/2004
$0
Adam
Marketing
5/30/2004 2/1/2004
6/5/2004 2/1/2005
$0 $3,500 $3,500
Bob and Dean Edgar
All Operations
Milestones
Join Austin's chamber of commerce
Register with Austin Business Journal
Obtain first service contract
Austin Kinetic 6.1 Website Marketing Strategy Austin Kinetic's Web presence will be utilized as a tool to assist the company's overall marketing strategy. It will serve as a point of reference for information about the company and its services, and in a small part, lend credibility to the marketing message.
6.2 Development Requirements Austin Kinetic's site will reside in a two-tier environment. A back-end database will be utilized to manage customer data. The site will be developed with the assistance of a contracted professional developer.
7.0 Management Summary At the outset, Austin Kinetic will maintain five part-time employees, its founders. These employees will be responsible for all aspects of the business and serve in both managerial as well as technical roles. As the business grows, additional engineers will be hired. We anticipate that during the fourth year of operation, the original five employees will be free from any technical duties and concentrate solely on their management responsibilities. At this time, Austin Kinetic will look to add a full-time sales and marketing manager as well.
7.1 Personnel Plan
Austin Kinetic Table: Personnel
Personnel Plan Profit Sharing - 5% net profits Adam Authortisement (CEO) Edgar Extension (COO) Cary Curry (CIO) Dean Dri (CFO) Bob Borgware (CTO) Secretary Sales/Marketing Technician-1 Technician-2 Technician-3 Technician-4 Technician-5 Technician-6 Technician-7 Technician-8 Technician-9 Total People
FY 2005 $0 $14,400 $14,400 $14,400 $14,400 $14,400 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
FY 2006 $7,923 $55,000 $55,000 $55,000 $55,000 $55,000 $30,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 6
FY 2007 $12,464 $63,000 $63,000 $63,000 $63,000 $63,000 $31,500 $0 $13,750 $0 $0 $0 $0 $0 $0 $0 $0 7
FY 2008 $23,621 $73,000 $73,000 $73,000 $73,000 $73,000 $33,000 $70,000 $55,688 $55,000 $55,000 $55,000 $55,000 $55,000 $45,833 $9,167 $0 15
FY 2009 $16,616 $83,600 $83,600 $83,600 $83,600 $83,600 $34,700 $73,500 $58,472 $57,750 $57,750 $57,750 $57,750 $57,750 $57,292 $55,458 $36,667 16
Total Payroll
$72,000
$312,923
$372,714
$877,309
$1,039,455
8.0 Financial Plan Austin Kinetic will initially grow with project work, beginning to build service contracts from the six month point forward. The company will increase its project work to 2,560 man hours per month and increase its service contracts count by six each year. The initial growth will be financed primarily out of the pockets of its founders. The company will fund all growth from the cash flow of the business, remaining debt-free.
Austin Kinetic Table: General Assumptions
General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other
FY 2005 1 10.00% 10.00% 30.00% 0
FY 2006 2 10.00% 10.00% 30.00% 0
FY 2007 3 10.00% 10.00% 30.00% 0
FY 2008 4 10.00% 10.00% 30.00% 0
FY 2009 5 10.00% 10.00% 30.00% 0
8.2 Break-even Analysis The table and chart below show our break-even analysis. As a service business, we have no direct cost of sales. Our break-even point ni the first year is therefore equal to the amount needed to cover our operating expenses, including payroll. We will reach break even at $9,435 per month, in the third month.
Table: Break-even Analysis
Break-even Analysis Monthly R evenue Break-even
$9,435
Assumptions: Average Percent Variable Cost Estimated Monthly F ixed Cost
0% $9,435
Break-even Analysis $15,000
Austin Kinetic 8.3 Projected Profit and Loss In the first year, we will be based out of the founders' homes. Adam Authortisement has renovated his garage for use as a meeting space and general office, when we need to get together as a group. Utilities in the first year represent the cost of home high-speed Internet access for all five employees ($45 each per month). This access is necessary for communications between personnel and for file transmission for all project and service work. After the first year, it will be more cost-effective and attuned to our growth to rent a space in downtown Austin, where we can consolidate equipment, combine utilities, and have a central location for our work and our secretary. Office space rented beginning FY2006 is forecast to be $2,500 per month. The Profit and Loss also includes a provision for charity donations, which we have deemed important to our mission, as well as to marketing and outreach in the community. Starting in the second year, 5% of net profits each will be set aside for charity on an annual basis based upon the previous year's performance. After the first month, Marketing and Promotion expenses are set at 5% of the previous month's and year's sales.
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales
FY 2005 $339,600 $0 $0 ------------
FY 2006 $813,600 $0 $0 ------------
FY 2007 $1,231,200 $0 $0 ------------
FY 2008 $1,648,800 $0 $0 ------------
FY 2009 $2,066,400 $0 $0 ------------
Austin Kinetic
Profit Monthly $25,000
$20,000
$15,000
$10,000
$5,000
$0 Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec Jan
Profit Yearly $500,000 $450,000 $400,000
Austin Kinetic
Gross Margin Monthly $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec Jan
Gross Margin Yearly $2,500,000
$2,000,000
Austin Kinetic 8.4 Projected Cash Flow We have no sales on credit; all service accounts and projects are paid in advance, in installments. We anticipate no problems with our cash flow. By staying debt free and keeping expenses down, we expect a cash balance over $180,000 by the end of the first year.
Table: Cash Flow
Pro Forma Cash Flow FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
$339,600 $339,600
$813,600 $813,600
$1,231,200 $1,231,200
$1,648,800 $1,648,800
$2,066,400 $2,066,400
$0
$0
$0
$0
$0
$0 $0 $0 $0 $0 $0 $339,600
$0 $0 $0 $0 $0 $0 $813,600
$0 $0 $0 $0 $0 $0 $1,231,200
$0 $0 $0 $0 $0 $0 $1,648,800
$0 $0 $0 $0 $0 $0 $2,066,400
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
$72,000 $91,591 $163,591
$312,923 $91,486 $404,409
$372,714 $439,238 $811,953
$877,309 $352,342 $1,229,651
$1,039,455 $618,253 $1,657,708
Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash spending Bill Payments Subtotal Spent on Operations Additional Cash Spent
Austin Kinetic
Cash $200,000 $180,000 $160,000 $140,000 $120,000 $100,000
Net Cash Flow
$80,000
Cash Balance
$60,000 $40,000 $20,000 $0 Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec Jan
8.5 Projected Balance Sheet Our Balance Sheet is quite solid. We will build our asset base slowly over the first five years, expensing most of our computer and hardware equipment to offset taxes, since they will need replacing every two to three years.
Austin Kinetic Table: Balance Sheet
Pro Forma Balance Sheet FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
$180,559
$584,750
$993,997
$0
$0
$0
$180,559
$584,750
$993,997
$0 $0 $0
$5,000 $714 $4,286
$15,000 $2,752 $12,248
$180,559
$589,036
$1,006,245
Liabilities a nd Capital
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities
$17,543 $0 $0 $17,543
$176,735 $0 $0 $176,735
$121,517 $0 $0 $121,517
$205,878 $0 $0 $205,878
$127,728 $0 $0 $127,728
Long-term Liabilities Total Liabilities
$0 $17,543
$0 $176,735
$0 $121,517
$0 $205,878
$0 $127,728
Paid-in Capital Retained Earnings
$12,100
$12,100
$12,100
$12,100
($7,550)
$150,916
$400,201
$872,628
$158,466
$249,285
$472,427
$163,016
$412,301
$884,728
$180,559
$589,036
$1,006,245
$332,324 $1,217,05 2 $1,422,93
$12,100 $1,204,95 2 $483,301 $1,700,35 4 $1,828,08
Assets Current Assets Cash Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets
Earnings Total Capital Total Liabilities and Capital
$1,408,14 $1,806,83 6 8 $0 $0 $1,408,14 $1,806,83 6 8 $20,000 $30,000 $5,216 $8,756 $14,784 $21,244 $1,422,93 $1,828,08 0 2
Austin Kinetic Table: Ratios
Ratio Analysis FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
0.00%
139.58%
51.33%
33.92%
25.33%
Industry Profile 5.93%
0.00% 100.00% 0.00% 100.00%
0.00% 99.27% 0.73% 100.00%
0.00% 98.78% 1.22% 100.00%
0.00% 98.96% 1.04% 100.00%
0.00% 98.84% 1.16% 100.00%
51.96% 71.50% 28.50% 100.00%
9.72% 0.00% 9.72% 90.28%
30.00% 0.00% 30.00% 70.00%
12.08% 0.00% 12.08% 87.92%
14.47% 0.00% 14.47% 85.53%
6.99% 0.00% 6.99% 93.01%
36.87% 15.50% 52.37% 47.63%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
47.42%
59.67%
73.67%
70.43%
69.19%
79.97%
5.00% 66.66%
2.09% 43.77%
3.30% 54.82%
3.73% 28.79%
3.99% 33.41%
1.53% 1.97%
Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets
10.29 10.29 9.72% 138.87% 125.38%
3.31 3.31 30.00% 86.37% 60.46%
8.18 8.18 12.08% 76.28% 67.07%
6.84 6.84 14.47% 39.01% 33.36%
14.15 14.15 6.99% 40.61% 37.77%
1.33 1.07 59.80% 3.73% 9.29%
Additional Ratios Net Profit Margin Return on Equity
FY 2005 46.66% 97.21%
FY 2006 30.64% 60.46%
FY 2007 38.37% 53.40%
FY 2008 20.16% 27.31%
FY 2009 23.39% 28.42%
n.a n.a
Sales Growth Percent of Total Assets 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
Activity Ratios
Austin Kinetic 8.7 Long-term Plan Austin Kinetic anticipates maintaining a steady profit percentage and plans to build cash reserves to an amount which would cover operating expenses for twelve months should any catastrophic event occur. This will be a moving target and be recalculated on an annual basis as the business cash flow changes. There has been no pre-set limit placed upon Austin Kinetic. Its founders see the possibility of expanding the company into a global force ranked equal to today's top Fortune 500 companies.
Appendix Appendix Table: Sales Forecast
Sales Forecast Sales Project related Service contract Total Sales Direct Cost of Sales Technician Salary Other Subtotal Direct Cost of Sales
0% 0%
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
$2,400 $0 $2,400
$4,800 $0 $4,800
$9,600 $0 $9,600
$19,200 $0 $19,200
$24,000 $0 $24,000
$26,400 $3,000 $29,400
$31,200 $3,000 $34,200
$33,600 $4,000 $37,600
$36,000 $4,000 $40,000
$38,400 $5,000 $43,400
$40,800 $5,000 $45,800
$43,200 $6,000 $49,200
Feb $0 $0 $0
Mar $0 $0 $0
Apr $0 $0 $0
May $0 $0 $0
Jun $0 $0 $0
Jul $0 $0 $0
Aug $0 $0 $0
Sep $0 $0 $0
Oct $0 $0 $0
Nov $0 $0 $0
Dec $0 $0 $0
Jan $0 $0 $0
Appendix Appendix Table: Personnel
Personnel Plan Profit Sharing - 5% net profits Adam Authortisement (CEO) Edgar Extension (COO) Cary Curry (CIO) Dean Dri (CFO) Bob Borgware (CTO) Secretary Sales/Marketing Technician-1 Technician-2 Technician-3 Technician-4 Technician-5 Technician-6 Technician-7 Technician-8 Technician-9 Total People Total Payroll
5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Feb $0 $100 $100 $100 $100 $100 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Mar $0 $200 $200 $200 $200 $200 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Apr $0 $400 $400 $400 $400 $400 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
May $0 $800 $800 $800 $800 $800 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Jun $0 $1,000 $1,000 $1,000 $1,000 $1,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Jul $0 $1,250 $1,250 $1,250 $1,250 $1,250 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Aug $0 $1,450 $1,450 $1,450 $1,450 $1,450 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Sep $0 $1,600 $1,600 $1,600 $1,600 $1,600 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Oct $0 $1,700 $1,700 $1,700 $1,700 $1,700 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Nov $0 $1,850 $1,850 $1,850 $1,850 $1,850 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Dec $0 $1,950 $1,950 $1,950 $1,950 $1,950 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
Jan $0 $2,100 $2,100 $2,100 $2,100 $2,100 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5
$500
$1,000
$2,000
$4,000
$5,000
$6,250
$7,250
$8,000
$8,500
$9,250
$9,750
$10,500
Appendix Appendix Table: General Assumptions
General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other
Feb 1 10.00% 10.00% 30.00% 0
Mar 2 10.00% 10.00% 30.00% 0
Apr 3 10.00% 10.00% 30.00% 0
May 4 10.00% 10.00% 30.00% 0
Jun 5 10.00% 10.00% 30.00% 0
Jul 6 10.00% 10.00% 30.00% 0
Aug 7 10.00% 10.00% 30.00% 0
Sep 8 10.00% 10.00% 30.00% 0
Oct 9 10.00% 10.00% 30.00% 0
Nov 10 10.00% 10.00% 30.00% 0
Dec 11 10.00% 10.00% 30.00% 0
Jan 12 10.00% 10.00% 30.00% 0
Appendix Appendix Table: Profit and Loss
Pro Forma Profit and Loss
Total Cost of Sales
Feb $2,400 $0 $0 -----------$0
Mar $4,800 $0 $0 -----------$0
Apr $9,600 $0 $0 -----------$0
May $19,200 $0 $0 -----------$0
Jun $24,000 $0 $0 -----------$0
Jul $29,400 $0 $0 -----------$0
Aug $34,200 $0 $0 -----------$0
Sep $37,600 $0 $0 -----------$0
Oct $40,000 $0 $0 -----------$0
Nov $43,400 $0 $0 -----------$0
Dec $45,800 $0 $0 -----------$0
Jan $49,200 $0 $0 -----------$0
Gross Margin Gross Margin %
$2,400 100.00%
$4,800 100.00%
$9,600 100.00%
$19,200 100.00%
$24,000 100.00%
$29,400 100.00%
$34,200 100.00%
$37,600 100.00%
$40,000 100.00%
$43,400 100.00%
$45,800 100.00%
$49,200 100.00%
$500 $200 $0 $0 $0 $225 $250 $75 $0 $0 -----------$1,250
$1,000 $120 $0 $0 $0 $225 $250 $150 $0 $0 -----------$1,745
$2,000 $240 $0 $0 $0 $225 $250 $300 $0 $0 -----------$3,015
$4,000 $480 $0 $0 $0 $225 $250 $600 $0 $0 -----------$5,555
$5,000 $960 $0 $0 $0 $225 $250 $750 $0 $0 -----------$7,185
$6,250 $1,200 $0 $0 $0 $225 $250 $938 $0 $0 -----------$8,863
$7,250 $1,470 $0 $0 $0 $225 $250 $1,088 $0 $0 -----------$10,283
$8,000 $1,710 $0 $0 $0 $225 $250 $1,200 $0 $0 -----------$11,385
$8,500 $1,880 $0 $0 $0 $225 $250 $1,275 $0 $0 -----------$12,130
$9,250 $2,000 $0 $0 $0 $225 $250 $1,388 $5,000 $0 -----------$18,113
$9,750 $2,170 $0 $0 $0 $225 $250 $1,463 $0 $0 -----------$13,858
$10,500 $2,290 $0 $0 $5,000 $225 $250 $1,575 $0 $0 -----------$19,840
$1,150 $0 $345
$3,055 $0 $917
$6,585 $0 $1,976
$13,645 $0 $4,094
$16,815 $0 $5,045
$20,538 $0 $6,161
$23,918 $0 $7,175
$26,215 $0 $7,865
$27,870 $0 $8,361
$25,288 $0 $7,586
$31,943 $0 $9,583
$29,360 $0 $8,808
$805 33.54%
$2,139 44.55%
$4,610 48.02%
$9,552 49.75%
$11,771 49.04%
$14,376 48.90%
$16,742 48.95%
$18,351 48.80%
$19,509 48.77%
$17,701 40.79%
$22,360 48.82%
$20,552 41.77%
Sales Direct Cost of Sales Other Costs of Sales
Expenses Payroll Marketing/Promotion Depreciation Rent Moving Expenses Utilities Insurance Payroll Taxes Expensed Computer Equipment Charity (5% of previous year net profit) Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales
5%
15% 0% 5%
Appendix Appendix Table: Cash Flow
Pro Forma Cash Flow Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
$2,400 $2,400
$4,800 $4,800
$9,600 $9,600
$19,200 $19,200
$24,000 $24,000
$29,400 $29,400
$34,200 $34,200
$37,600 $37,600
$40,000 $40,000
$43,400 $43,400
$45,800 $45,800
$49,200 $49,200
$0 $0 $0 $0 $0 $0 $0 $2,400
$0 $0 $0 $0 $0 $0 $0 $4,800
$0 $0 $0 $0 $0 $0 $0 $9,600
$0 $0 $0 $0 $0 $0 $0 $19,200
$0 $0 $0 $0 $0 $0 $0 $24,000
$0 $0 $0 $0 $0 $0 $0 $29,400
$0 $0 $0 $0 $0 $0 $0 $34,200
$0 $0 $0 $0 $0 $0 $0 $37,600
$0 $0 $0 $0 $0 $0 $0 $40,000
$0 $0 $0 $0 $0 $0 $0 $43,400
$0 $0 $0 $0 $0 $0 $0 $45,800
$0 $0 $0 $0 $0 $0 $0 $49,200
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
$500 $37 $537
$1,000 $1,114 $2,114
$2,000 $1,706 $3,706
$4,000 $3,079 $7,079
$5,000 $5,701 $10,701
$6,250 $7,281 $13,531
$7,250 $8,822 $16,072
$8,000 $ 10,242 $18,242
$8,500 $ 11,274 $19,774
$9,250 $ 12,140 $21,390
$9,750 $ 16,357 $26,107
$10,500 $ 13,839 $24,339
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0 $0 $0 $537
$0 $0 $0 $2,114
$0 $0 $0 $3,706
$0 $0 $0 $7,079
$0 $0 $0 $10,701
$0 $0 $0 $13,531
$0 $0 $0 $16,072
$0 $0 $0 $18,242
$0 $0 $0 $19,774
$0 $0 $0 $21,390
$0 $0 $0 $26,107
$0 $0 $0 $24,339
$1,864 $6,414
$2,686 $9,100
$5,894 $14,994
$12,121 $27,115
$13,299 $40,414
$15,869 $56,283
$18,128 $74,411
$19,358 $93,769
$20,226 $113,994
$22,010 $136,005
$19,693 $155,698
$24,861 $180,559
Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance
0.00%
