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Cover Page

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Legal Page
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Table of Contents

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

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

Table of Contents

.....................................................................................................................................................................16
8.3 Projected Profit and Loss......................................................................................................................17
Table: Profit and Loss.............................................................................................................................17
Chart: Profit Monthly..............................................................................................................................18
Chart: Profit Yearly.................................................................................................................................18
Chart: Gross Margin Monthly................................................................................................................19
Chart: Gross Margin Yearly...................................................................................................................19
8.4 Projected Cash Flow.............................................................................................................................20
Table: Cash Flow....................................................................................................................................20
Chart: Cash..............................................................................................................................................21
8.5 Projected Balance Sheet........................................................................................................................22
Table: Balance Sheet...............................................................................................................................22
.....................................................................................................................................................................22
8.6 Business Ratios.....................................................................................................................................23
Table: Ratios...........................................................................................................................................23
Table: Sales Forecast.........................................................................................................................................1
...........................................................................................................................................................................1
Table: Personnel................................................................................................................................................2
...........................................................................................................................................................................2
Table: General Assumptions.............................................................................................................................3
...........................................................................................................................................................................3
Table: Profit and Loss.......................................................................................................................................4
...........................................................................................................................................................................4
Table: Cash Flow..............................................................................................................................................5
...........................................................................................................................................................................6
Table: Balance Sheet.........................................................................................................................................7

Page 2

Green Power Consultancy

1.0 Executive Summary

Green Power Consultancy is a start-up organization in Burlington, VT that offers designs and
advice to architects and consumers regarding environmentally sensitive buildings as well as
energy consumption recommendations. Green Power has identified three keys to its success.
The first is the need to only offer solutions which are based on market demand. The second is
to ensure that all of its offerings are based on economic justifications; the solution should make
sense beyond the environmental considerations because it has long-term economic value.
Green Power will be targeting architects and individual consumers. Green Power will work
closely with several architects providing them the ability to offer environmental solutions
to their customers. This group is growing at 7% and there are 23 potential customers in the
area. The second customer group is individual consumers; an environmentally conscious
group that have sought out a service provider to help them implement their personal ethics into
the design of their new or existing structure.
Green Power is an environmental energy consultancy that offers a wide range of services:
advice regarding passive heating, grey water usage recommendations, renewable energy
considerations and employee transportation options.
Green Power will be led by the seasoned management team of Dan and Sue Lang. Dan received
a degree in environmental studies, business, and a Masters in architecture. Dan has several
years of work experience within the industry. The second part of the team is Sue Lang. Sue has
an MBA and work experience with the Bonneville Power Administration in their renewable
energy department. Through a combination of excellent education and good work experience,
Green Power's management team will be able to successfully execute on its business plan.
Green Power has conservatively forecasted sales of $202,343 for year two, rising to $238,402
for year three. Net profit will be reached in the second year. Through a combination of a proven
business model, a strong management team, and this comprehensive energy business plan to
guide the organization, Green Power will be long lasting, profitable business.

Page 1

Green Power Consultancy

Chart: Highlights

Highlights
$240,000
$210,000
$180,000
$150,000

Sales

$120,000

Gross Margin
Net Profit

$90,000
$60,000
$30,000
$0
Year 1

Year 2

Year 3

1.1 Mission
It is Green Power Consultancy's mission to provide the finest green energy solutions for new
constructions as well as existing building owners/lessors. Through careful analysis, attentive
customer support, and cost effective solutions, Green Power will become a stable business
serving the Burlington community.
1.2 Keys to Success
Green Power has identified several keys to success that will be instrumental in creating a
sustainable business. If these keys are followed, the likelihood of success will significantly
increase.
1. Offer solutions that are demanded by customers.
2. Ensure all of the solutions have economic considerations built into the respective models.
3. Only provide 100% customer satisfaction. All customers must have their expectations
exceeded.
1.3 Objectives
Green Power has identified three objectives that it will pursue for the long-term success of the
business:

Proven cost-benefit analysis environmental approaches to structure building, maintenance

and energy consumption.
Become the premier environmental energy consultancy in the state within five years.
Reach profitability within three years.

Page 2

Green Power Consultancy

2.0 Company Summary

Green Power is a Vermont-based L.L.C green energy consultancy. Green Power offers its
services both to architects who are constructing new businesses as well as existing building
owners/users who are looking to make their existing structure more environmentally sound.
2.1 Start-up Summary
Green Power will require the following equipment in order to begin operations:

Computer system including three workstations, standard laser printer as well as a wide
mouth printer, Internet access, and assorted software such as Microsoft Office, QuickBooks
and CadArchitect (the premier architect industry software).

Three work areas including two drawing tables and the assorted office supplies for the
standard workdesks as well as the drawing tables.

Various bookshelves, lights, and couches (for clients).

Bike storage unit/locker.

Refrigerator, microwave, and assorted utensils for the lunch room.

Page 3

Green Power Consultancy

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$7,150
$32,850
$40,000

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$9,000
$23,850
$0
$23,850
$32,850

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities

$0
$0
$0
$0
$0

Capital
Planned Investment
Investor 1
Investor 2
Additional Investment Requirement
Total Planned Investment

$20,000
$20,000
$0
$40,000

Loss at Start-up (Start-up Expenses)

Total Capital

($7,150)
$32,850

Total Capital and Liabilities

$32,850

Total Funding

$40,000

Page 4

Green Power Consultancy

Chart: Start-up

Start-up
$40,000
$36,000
$32,000
$28,000
$24,000
$20,000
$16,000
$12,000
$8,000
$4,000
$0
Expenses

Assets

Investment

Loans

Table: Start-up

Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Rent
Research and Development
Expensed Equipment
Total Start-up Expenses

$2,000
$200
$200
$500
$3,500
$750
$7,150

Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets

$23,850
$0
$9,000
$32,850

Total Requirements

$40,000

2.2 Company Ownership

The two principal owners of Green Power is Dan and Sue Lang.

Page 5

Green Power Consultancy

3.0 Services
Green Power offers a wide range of environmentally-conscious energy solutions related to new
and existing structures. The main areas of consulting that Green Power will offer are:

Passive heating: This applies to the construction of the new structures, designing the
structure to capture and utilize heat that is either generated naturally or as a by-product of
the building. Examples of passive heating include specific placement of the heating vents,
the design and placement of the building and the windows.

Grey water: This is the capture and utilization of grey water. Grey water is water that has
been used for some other source such as in the faucets or rain water that can no longer be
offered as potable, but still can be used for toilet flushing or land irrigation.

Renewable energy: This service offers customers the information needed to make
intelligent decisions regarding the use of renewable energy sources. Renewable energy
sources can be defined as sources of energy where the rate of energy depletion is not faster
than the production rate. Examples include: wind power, photovoltaics, hydro power,
biomass, solar energy.

Employee transportation: This service is to reduce the energy consumed by employees

traveling to work. Typical aspects of the plan are outlining public transportation options,
developing a company subsidized public/alternative transportation voucher, building
covered bicycle lockers and shower facilities as well as other activities designed to increase
the number of employees using bicycles as their main source of transportation to work.

Efficient building construction: This focuses on the use of local building materials thereby
decreasing energy needed for transportation as well as the utilization of recycled materials
for construction decreasing energy demands for the manufacture of new building materials.

4.0 Market Analysis Summary

Green Power has segmented the market into two distinct target market groups. The first group
is architects who are building a structure either speculatively (infrequently) or for a client
(generally). The second customer group is individual customers who desire environmental
elements designed into their building. The niche that Green Power has chosen to participate in
is a fairly new field. Green Power faces competition from eco-architects as well as from the local
utilities that may have a small department that offers green energy consultation advice. The
industry often operates to satisfy clients; it is the end customer that typically requests green
energy designs and they either seek out a specific architect or they request their architect to
receive guidance from firms such as Green Power.

Page 6

Green Power Consultancy

4.1 Market Segmentation

Green Power has segmented its target market into two different customer groups, both equally
attractive.
Architects
This customer group is made up of professional architects that design buildings and additions
for clients. Architects have developed a strategic relationship with Green Power to offer valueadded-services for their clients.

The architect firms typically have two - nine partners.

Offer both residential and commercial design work, however 67% of their work is
commercial.

The firms typically have only a handful of service providers that they work with. This means
that once they find someone they trust, they develop a long-term relationship with that
service provider.

Yearly revenue ranges from $200 thousand - $5 million.

Individual customers
This segment contains consumers who are either having a residential home, or a commercial
structure, designed. Due to their personal environmental concerns and a recognition that it can
be cost effective to have building decisions with environmental considerations, they have
requested Green Power's assistance. They are generally working directly with Green Power for
their design needs and will likely then take this design criteria to their builder.

The individual is an environmentalist and they take into account how their action will impact
the environment.

The age range of clients is 35-49.

Average household income is $65,000. Please note that while the overriding concern in
using Green Power's services is the positive impact on the environment, a cost benefit
analysis indicates that in the long term it is cost effective to adopt green energy
considerations.

89% of the group have at least an undergraduate degree, 26% have a graduate degree.

Table: Market Analysis

Market Analysis
Potential Customers

Growth

Architects
Individual customers
Total

7%
9%
9.00%

Year 1

Year 2

Year 3

Year 4

Year 5

23
16,009
16,032

25
17,450
17,475

27
19,021
19,048

29
20,733
20,762

31
22,599
22,630

CAGR
7.75%
9.00%
9.00%

Page 7

Green Power Consultancy

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Architects
Individual customers

4.2 Target Market Segment Strategy

Green Power has chosen these two market segments for compelling reasons. The architects
have been focused on because they are the service providers that do the bulk of the design
work for residential and commercial structures. The architects are used as sales people for
Green Power's services, they are the ones that can then sell these services to their customers.
It benefits the architects because they are able to offer a wider range of value-added-services
to their customers without spending capital of learning the information themselves. By aligning
itself with architects, Green Power is able to offer their services to a larger group of people.
Green Power will also serve individual customers. These are people who know that they want
environmental considerations made in the design of their structure and will seek out a firm such
as Green Power to have this work done. Burlington is a wonderful place to locate Green Power
as there is a high population of environmentally-conscious people in this city. This provides
Green Power with a large market of interested customers. Additionally, this market group is
attractive because people that have environmental tendencies are often vocal about their
commitments or causes. By offering green energy services, Green Power allows this group of
people to act on what they believe in on a personal level, adhering to the wise saying think
globally, act locally.

Page 8

Green Power Consultancy

4.3 Service Business Analysis

The environmental power consultancy industry is fairly new. Only recently has there been an
emergence of firms that offer these services. This can be explained by several factors. First,
people are becoming more environmentally aware these days, a function of many things
including the recent problems with the Middle East and Fundamental Islamists. These recent
problems have forced people to reconsider America's dependence on oil and the need to
maintain good relationships with Saudi Arabia only because of their oil. Another factor that has
contributed to the growth of green power is that it has become increasingly cost effective to
make business decisions while taking into account the decisions impact on the environment. For
years an environmental decision was based on personal consciousness and ethics, not
overriding economic factors. Now money can be saved when environmental impacts are taken
into account. Please read the following section which will indicate the different players within
the industry.
4.3.1 Competition and Buying Patterns
The competition generally takes two different forms:
Eco-architects
These are architects that specialize in environmental design considerations. Typically their
entire practice is based around structures that have environmental elements. Green Power
could actually be within this industry niche, however they are able to serve a larger customer
baser, therefore earn more revenue as well as make a positive impact in our world by
offering its services to both end consumers as well as regular architects as opposed to the
business model of only serving one set of customers.
Local utility
The local utilities often have a department that offers free consultation for environmental
design considerations. There are incentives for the utilities to attempt to curb their customer's
use of their energy. These incentives take the form of not needing to make as many capital
expenditures to develop the power delivery infrastructure to accommodate the increased load
for energy demands. Therefore, the more the utility is able to get their customers to conserve,
the less money they have to spend on infrastructure improvements, the more money they earn.
That being said, the utility often has a small department that offers tips on energy
conservation. While these tips can be quite helpful, since they are offered for free for the power
customers, they are not nearly as comprehensive as they could be. So while they provide good
initial tips, the local utility is not a strong competitor to serve a client who is committed to
making as much of a positive environmental difference as can be achieved by using a
specialized firm.
The buying pattern for consumers is currently being defined as we speak, a function of how
new the industry is. Currently, purchasing decisions are based on customers typically making
requests for these services from their architect or they do a bit of research to determine who
offers these services. As the industry becomes more mature, firms will become more
established and reputation and visibility/awareness will shape buying decisions. Since there is a
wide range of options regarding implementation, price is less of a consideration for the decision
since most of the service providers can offer a wide range of inexpensive to expensive options.

Page 9

Green Power Consultancy

5.0 Strategy and Implementation Summary

Green Power's business strategy recognizes and will leverage the fact that a lot of business will
be transacted through networking and word-of-mouth referrals. With this in mind, Green Power
will work diligently to build alliances with architects who can co-brand their services with Green
Power thereby increasing Green Power's potential qualified customers.
Green Power will rely on its competitive edge of adopting a cost effective environmental
solution so in addition to meeting environmental concerns of the customer, Green Power's
services will save the customer money over time.The marketing strategy will highlight both
environmental attributes as well as economic ones.The marketing campaign will recognize the
existence of two distinct market customers. Lastly, the sales strategy will offer a compelling
economic analysis of how the customer can save money by adopting Green Power's designs.
5.1 Competitive Edge
Green Power will use its competitive edge of economic justification to turn potential customers
into qualified sales customers. While some of the other similar companies often highlight the
positive environmental impact that their designs offer, Green Power will also offer economic
justifications for their designs. This is an important competitive edge as it provides evidence
that the customer can save money in the long term and make a positive impact on the
environment. Providing a cost benefit analysis for the green design is important because it
makes the potential market larger, moving from people that want to do good for the
environment to people that also want to save money. By offering an environmental solution
that saves the person or business money creates a compelling reason to adopt the suggestions.
There are too few people that will act only for environmental reasons, but when you save
people money, there are far more people interested.
5.2 Marketing Strategy
The marketing strategy is based on developing an awareness regarding Green Power's services
to both architects and the end use consumers. Green Power will strongly use networking as a
means to develop relationships with many of the city's architects. Although Burlington is a
reasonably-sized city, the architect community is fairly close knit. If one wanted, it is easy to
develop active relationships with many of the different architects in Burlington. By developing
these relationships, Green Power will allow the firms to become familiar with not only the
services offered by Green Power, but also the personalities involved, recognizing that much of
business is transacted by who you know. Advertisements will be placed in the local architect
newsletter.
To reach the end user customers, Green Power will use Advertisements in the local paper as
well as within the yellow pages. As a means of increasing visibility of Green Power, GP will
participate in several community-based seminars that serve as a free source of information for
the citizens of Burlington. Green Power believes that participating in the seminars will be an
effective way of meeting many of the potential customers and allowing them to become familiar
with Green Power expertise.

Page 10

Green Power Consultancy

5.3 Sales Strategy

The sales strategy implicitly and explicitly takes into account the philosophy that the reason
that many of the people are attracted to Green Power is because of its personal environmental
ethics. The sales strategy will leverage this desire with the fact that environmental decisions
can have positive economic impacts in the long term. Therefore the sales strategy will leverage
the competitive edge of economic justification as the method for turning sales leads into
customers. For this strategy to be effective, Green Power will present customers case studies
and quantifiable data proving economic justification.
5.3.1 Sales Forecast
Green Power has adopted a conservative sales forecast for the business plan. By adopting a
conservative prediction, it is easier to hit sales goals and increase the likelihood that the
business plan is relevant to the business. If the sales forecasts was wildly off, it casts doubt on
the application of the plan for the business.
Sales will be slow for the first several months, a function of Green Power being a start-up
organization. As Green Power increases their customer pool and more architects become
familiar with GP's services, business will grow. Growth will be forecasted and preferenced as
steady. The steadier it is, the easier it will be to deal with the incremental growth in work.
Please view the following table and charts for a graphical representation on monthly and yearly
sales.
Cost of sales for a consulting company are negligible, however, cost of architects sales will be
20%, since we will pay commissions to the architects for referrals.
Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

$41,060
$45,987
$87,047

$95,445
$106,898
$202,343

$112,454
$125,948
$238,402

Year 1
$8,212
$0
$8,212

Year 2
$19,089
$10,690
$29,779

Year 3
$22,491
$12,595
$35,086

Sales
Architects
Individuals
Total Sales
Direct Cost of Sales
Architects
Individuals
Subtotal Direct Cost of Sales

Page 11

Green Power Consultancy

Chart: Sales Monthly

Sales Monthly
$9,000
$8,000
$7,000
$6,000
$5,000

Architects

$4,000

Individuals

$3,000
$2,000
$1,000
$0
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12

Chart: Sales by Year

Sales by Year
$240,000
$210,000
$180,000
$150,000

Architects

$120,000

Individuals

$90,000
$60,000
$30,000
$0
Year 1

Year 2

Year 3

Page 12

Green Power Consultancy

5.4 Milestones
Green Power has identified several milestones as a way of setting achievable
goals. Performance is likely to be improved through the quest of reaching the goals. This
phenomenon is well documented and is used in large corporations such as GE's Seven Sigma
Program as well as many state's benchmarked-based assessment testing systems. Green Power
has identified the following milestones:

Business plan completion;

10th customer;
Revenues exceeding $50,000;
Profitability.

Table: Milestones

Milestones
Milestone
Business plan completion
10th customer
Revenue exceeding $50,000
Profitability
Totals

Start Date
1/1/2003
1/1/2003
1/1/2003
1/1/2003

End Date
2/15/2003
3/30/2003
8/30/2003
2/28/2004

Budget
$0
$0
$0
$0
$0

Manager
Dan & Sue
Sue
Sue
Dan

Department
Business planning
Sales
Sales
Accounting

Chart: Milestones

Milestones

Business plan completion

10th customer

Revenue exceeding $50,000

Profitability

Q1 `03

Q2

Q3

Q4

Q1 `04

Page 13

Green Power Consultancy

6.0 Web Plan Summary

The website will be used as a marketing tool. It will offer a description of the services offered as
well as a listing of different clients served.
6.1 Website Marketing Strategy
The plan for marketing the site is fairly simple: submission to search engines such as Google
and listing the website on all of the company's correspondence and printed marketing/sales
media.
6.2 Development Requirements
Green Power will utilize a local programmer to build the site.
7.0 Management Summary
The company will be lead by the husband and wife team of Dan and Sue Lang. Dan grew up in
Oregon and attended the University of Oregon for his undergraduate education. Dan's major
was environmental studies and business. After graduation Dan worked for a year at an
environmental testing company. Through general networking, Dan was introduced to one of the
three principals of a company called The Seal Company. The business model for this company
was to make assessments for private and public companies as to their environmental
impact. His position with The Seal Company provided him with wonderful insight into the
industry of environmental assessment and helped provide him with a foundation of knowledge
regarding green energy, just one of the areas of assessment. After a year of this Dan enrolled
into the University of Oregon's Master's Architect program, taking course work in environmental
design. This degree would provide Dan with the skills to make a larger impact in his
community.
Sue went to the University of Burlington for undergrad and then moved out to Oregon to attend
Willamette University's MBA program. After her degree Sue moved up to Portland and worked
for the Bonneville Power Administration where she worked in their renewable resource division.
Much of her projects were marketing based, trying to gain public acceptance of renewable
energy sources.

Page 14

Green Power Consultancy

7.1 Personnel Plan

For the first three months of business the organization will be quite lean, consisting of just Dan
and Sue. Dan will be responsible for most of the business-related issues as well as doing
research and helping out with the work projects. Sue's responsibilities will be marketing and
sales based. She will work hard on developing visibility for the company as well as working with
prospective customers. Green Power has forecasted that on month four it will
need administrative assistance. The duties will be answering the phone, some input accounting,
and other clerical functions. Initially this person will be part time but will move to full time at
the beginning of year two.
Table: Personnel

Personnel Plan
Year 1

Year 2

Year 3

Dan
Sue
Associate consultant
Administrative assistant
Total People

$24,000
$24,000
$0
$4,600
3

$30,000
$30,000
$15,000
$18,000
3

$36,000
$36,000
$30,000
$20,000
4

Total Payroll

$52,600

$93,000

$122,000

8.0 Financial Plan

The following sections will outline the important Financial Assumptions.
8.1 Important Assumptions
The following table details important Financial Assumptions.
Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Year 1

Year 2

Year 3

1
10.00%
10.00%
30.00%
0

2
10.00%
10.00%
30.00%
0

3
10.00%
10.00%
30.00%
0

Page 15

Green Power Consultancy

8.2 Break-even Analysis

The Break-even Analysis is indicated below.

Chart: Break-even Analysis

Break-even Analysis
$4,000
$3,000
$2,000
$1,000
$0
($1,000)
($2,000)
($3,000)
($4,000)
($5,000)
($6,000)
$0

$2,000
$1,000

$4,000
$3,000

$6,000
$5,000

$8,000
$7,000

$9,000

$10,000
$11,000

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$7,333

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

9%
$6,641

Page 16

Green Power Consultancy

8.3 Projected Profit and Loss

The following table and charts will indicate Projected Profit and Loss.
Table: Profit and Loss

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales

$87,047
$8,212
$0
$8,212

$202,343
$29,779
$0
$29,779

$238,402
$35,086
$0
$35,086

Gross Margin
Gross Margin %

$78,835
90.57%

$172,565
85.28%

$203,317
85.28%

Payroll
Sales and Marketing and Other Expenses
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Other

$52,600
$4,800
$1,800
$6,000
$2,400
$2,400
$7,890
$1,800

$93,000
$4,800
$1,800
$6,000
$2,400
$2,400
$13,950
$1,800

$122,000
$4,800
$1,800
$6,000
$2,400
$2,400
$18,300
$1,800

Total Operating Expenses

$79,690

$126,150

$159,500

($855)
$945
$0
$0

$46,415
$48,215
$0
$13,924

$43,817
$45,617
$0
$13,145

($855)
-0.98%

$32,490
16.06%

$30,672
12.87%

Expenses

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

Page 17

Green Power Consultancy

Chart: Profit Monthly

Profit Monthly
$800
$600
$400
$200
$0
($200)
($400)
($600)
($800)
($1,000)
($1,200)
($1,400)
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12

Chart: Profit Yearly

Profit Yearly

$32,000
$28,000
$24,000
$20,000
$16,000
$12,000
$8,000
$4,000
$0
Year 1

Year 2

Year 3

Page 18

Green Power Consultancy

Chart: Gross Margin Monthly

Gross Margin Monthly

$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
Month 1

Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12

Chart: Gross Margin Yearly

Gross Margin Yearly

$210,000
$180,000
$150,000
$120,000
$90,000
$60,000
$30,000
$0
Year 1

Year 2

Year 3

Page 19

Green Power Consultancy

8.4 Projected Cash Flow

The following table and chart indicate Projected Cash Flow.
Table: Cash Flow

Pro Forma Cash Flow

Year 1

Year 2

Year 3

$87,047
$87,047

$202,343
$202,343

$238,402
$238,402

$0
$0
$0
$0
$0
$0
$0
$87,047

$0
$0
$0
$0
$0
$0
$0
$202,343

$0
$0
$0
$0
$0
$0
$0
$238,402

Year 1

Year 2

Year 3

$52,600
$30,707
$83,307

$93,000
$71,679
$164,679

$122,000
$83,201
$205,201

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

$0
$0
$0
$0
$0
$0
$0
$83,307

$0
$0
$0
$0
$0
$0
$0
$164,679

$0
$0
$0
$0
$0
$0
$0
$205,201

Net Cash Flow

Cash Balance

$3,740
$27,590

$37,664
$65,254

$33,201
$98,456

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

Page 20

Green Power Consultancy

Chart: Cash

Cash
$30,000
$27,000
$24,000
$21,000
$18,000

Net Cash Flow

$15,000

Cash Balance

$12,000
$9,000
$6,000
$3,000
$0
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10 Month 12

Page 21

Green Power Consultancy

8.5 Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.
Table: Balance Sheet

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

$27,590
$0
$27,590

$65,254
$0
$65,254

$98,456
$0
$98,456

$9,000
$1,800
$7,200
$34,790

$9,000
$3,600
$5,400
$70,654

$9,000
$5,400
$3,600
$102,056

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$2,795
$0
$0
$2,795

$6,169
$0
$0
$6,169

$6,898
$0
$0
$6,898

Long-term Liabilities
Total Liabilities

$0
$2,795

$0
$6,169

$0
$6,898

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$40,000
($7,150)
($855)
$31,995
$34,790

$40,000
($8,005)
$32,490
$64,485
$70,654

$40,000
$24,485
$30,672
$95,157
$102,056

Net Worth

$31,995

$64,485

$95,157

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

Page 22

Green Power Consultancy

8.6 Business Ratios

The following table contains typical Business Ratios of both Green Power as well as the industry
as a whole.
Table: Ratios

Ratio Analysis
Year 1

Year 2

Year 3

Industry Profile

n.a.

132.45%

17.82%

8.18%

Other Current Assets

Total Current Assets
Long-term Assets
Total Assets

0.00%
79.30%
20.70%
100.00%

0.00%
92.36%
7.64%
100.00%

0.00%
96.47%
3.53%
100.00%

41.37%
75.36%
24.64%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

8.03%
0.00%
8.03%
91.97%

8.73%
0.00%
8.73%
91.27%

6.76%
0.00%
6.76%
93.24%

31.49%
16.85%
48.34%
51.66%

100.00%
90.57%
91.55%
0.00%
-0.98%

100.00%
85.28%
69.23%
0.00%
22.94%

100.00%
85.28%
72.42%
0.00%
18.38%

100.00%
100.00%
82.59%
1.16%
1.47%

9.87
9.87
8.03%
-2.67%
-2.46%

10.58
10.58
8.73%
71.98%
65.69%

14.27
14.27
6.76%
46.05%
42.93%

1.93
1.50
3.09%
59.56%
7.63%

Sales Growth
Percent of Total Assets

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

Return on Equity

-0.98%
-2.67%

16.06%
50.38%

12.87%
32.23%

n.a
n.a

11.99
27
2.50

12.17
22
2.86

12.17
28
2.34

n.a
n.a
n.a

0.09
1.00

0.10
1.00

0.07
1.00

n.a
n.a

$24,795
0.00

$59,085
0.00

$91,557
0.00

n.a
n.a

0.40
8%
9.87
2.72
0.00

0.35
9%
10.58
3.14
0.00

0.43
7%
14.27
2.51
0.00

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

Activity Ratios
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 23

Green Power Consultancy

Page 24

Appendix
Table: Sales Forecast

Sales Forecast
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$2,500
$2,800
$5,300

$2,654
$2,972
$5,626

$2,747
$3,077
$5,824

$3,212
$3,597
$6,809

$3,455
$3,870
$7,325

$3,525
$3,948
$7,473

$3,656
$4,095
$7,751

$3,787
$4,241
$8,028

$3,987
$4,465
$8,452

$3,902
$4,370
$8,272

$3,878
$4,343
$8,221

$3,757
$4,208
$7,965

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
Architects
Individuals
Total Sales
Direct Cost of Sales
Architects
Individuals
Subtotal Direct Cost of Sales

0%
0%

$500

$531

$549

$642

$691

$705

$731

$757

$797

$780

$776

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$751
$0

$500

$531

$549

$642

$691

$705

$731

$757

$797

$780

$776

$751

Page 1

Appendix
Table: Personnel

Personnel Plan
Dan
Sue
Associate consultant
Administrative assistant
Total People
Total Payroll

0%
0%
0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$2,000
$2,000
$0
$0
2

$2,000
$2,000
$0
$0
2

$2,000
$2,000
$0
$0
2

$2,000
$2,000
$0
$400
3

$2,000
$2,000
$0
$400
3

$2,000
$2,000
$0
$400
3

$2,000
$2,000
$0
$500
3

$2,000
$2,000
$0
$500
3

$2,000
$2,000
$0
$600
3

$2,000
$2,000
$0
$600
3

$2,000
$2,000
$0
$600
3

$2,000
$2,000
$0
$600
3

$4,000

$4,000

$4,000

$4,400

$4,400

$4,400

$4,500

$4,500

$4,600

$4,600

$4,600

$4,600

Page 2

Appendix
Table: General Assumptions

General Assumptions
Plan Month

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

10

11

Month 12
12

Current Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Long-term Interest
Rate
Tax Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

Other

Page 3

Appendix
Table: Profit and Loss

Pro Forma Profit and Loss

Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

$5,300

$5,626

$5,824

$6,809

$7,325

$7,473

$7,751

$8,028

$8,452

$8,272

Month 11
$8,221

Month 12
$7,965

$500

$531

$549

$642

$691

$705

$731

$757

$797

$780

$776

$751

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$500

$531

$549

$642

$691

$705

$731

$757

$797

$780

$776

$751

Gross Margin

$4,800

$5,096

$5,274

$6,167

$6,634

$6,768

$7,020

$7,271

$7,655

$7,492

$7,446

$7,213

Gross Margin %

90.57%

90.57%

90.57%

90.57%

90.57%

90.57%

90.57%

90.57%

90.57%

90.57%

90.57%

90.57%

Expenses
Payroll

$4,000

$4,000

$4,000

$4,400

$4,400

$4,400

$4,500

$4,500

$4,600

$4,600

$4,600

$4,600

Sales and Marketing and

Other Expenses
Depreciation

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$400

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

Rent

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

Utilities

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

Insurance

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$600
$150

$600
$150

$600
$150

$660
$150

$660
$150

$660
$150

$675
$150

$675
$150

$690
$150

$690
$150

$690
$150

$690
$150

Total Operating Expenses

$6,200

$6,200

$6,200

$6,660

$6,660

$6,660

$6,775

$6,775

$6,890

$6,890

$6,890

$6,890

Profit Before Interest and

Taxes
EBITDA

($1,400)

($1,104)

($926)

($493)

($26)

$108

$245

$496

$765

$602

$556

$323

($776)

Payroll Taxes
Other

15%

($1,250)

($954)

($343)

$124

$258

$395

$646

$915

$752

$706

$473

Interest Expense

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Taxes Incurred

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Net Profit

($1,400)

($1,104)

Net Profit/Sales

-26.42%

-19.63%

($926)
-15.90%

($493)

($26)

$108

$245

$496

$765

$602

$556

$323

-7.24%

-0.36%

1.45%

3.15%

6.18%

9.05%

7.28%

6.76%

4.06%

Page 4

Appendix
Table: Cash Flow

Pro Forma Cash Flow

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash Sales

$5,300

$5,626

$5,824

$6,809

$7,325

$7,473

$7,751

$8,028

$8,452

$8,272

$8,221

$7,965

Subtotal Cash from Operations

$5,300

$5,626

$5,824

$6,809

$7,325

$7,473

$7,751

$8,028

$8,452

$8,272

$8,221

$7,965

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$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

$5,300

$5,626

$5,824

$6,809

$7,325

$7,473

$7,751

$8,028

$8,452

$8,272

$8,221

$7,965

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$4,000

$4,000

$4,000

$4,400

$4,400

$4,400

$4,500

$4,500

$4,600

$4,600

$4,600

$4,600

$85

$2,551

$2,581

$2,604

$2,754

$2,801

$2,816

$2,857

$2,884

$2,937

$2,920

$2,915

$4,085

$6,551

$6,581

$7,005

$7,154

$7,201

$7,316

$7,357

$7,484

$7,537

$7,520

$7,515

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current

Borrowing
Other Liabilities Principal
Repayment
Long-term Liabilities Principal
Repayment
Purchase Other Current Assets

$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

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

$4,085

$6,551

$6,581

$7,005

$7,154

$7,201

$7,316

$7,357

$7,484

$7,537

$7,520

$7,515

Net Cash Flow

$1,215

($195)

$171

$272

$434

$671

$968

$735

$701

$450

Cash Received
Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing

0.00%

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

($925)

($758)

Page 5

Appendix
Cash Balance

$25,065

$24,140

$23,383

$23,188

$23,358

$23,630

$24,064

$24,735

$25,704

$26,439

$27,140

$27,590

Page 6

Appendix
Table: Balance Sheet

Pro Forma Balance Sheet

Month 1
Assets

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Starting
Balances

Current Assets
Cash
Other Current Assets
Total Current Assets

$23,850
$0
$23,850

$25,065
$0
$25,065

$24,140
$0
$24,140

$23,383
$0
$23,383

$23,188
$0
$23,188

$23,358
$0
$23,358

$23,630
$0
$23,630

$24,064
$0
$24,064

$24,735
$0
$24,735

$25,704
$0
$25,704

$26,439
$0
$26,439

$27,140
$0
$27,140

$27,590
$0
$27,590

$9,000
$0
$9,000
$32,850

$9,000
$150
$8,850
$33,915

$9,000
$300
$8,700
$32,840

$9,000
$450
$8,550
$31,933

$9,000
$600
$8,400
$31,588

$9,000
$750
$8,250
$31,608

$9,000
$900
$8,100
$31,730

$9,000
$1,050
$7,950
$32,014

$9,000
$1,200
$7,800
$32,535

$9,000
$1,350
$7,650
$33,354

$9,000
$1,500
$7,500
$33,939

$9,000
$1,650
$7,350
$34,490

$9,000
$1,800
$7,200
$34,790

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$0
$0
$0
$0

$2,465
$0
$0
$2,465

$2,495
$0
$0
$2,495

$2,513
$0
$0
$2,513

$2,661
$0
$0
$2,661

$2,708
$0
$0
$2,708

$2,721
$0
$0
$2,721

$2,761
$0
$0
$2,761

$2,786
$0
$0
$2,786

$2,839
$0
$0
$2,839

$2,823
$0
$0
$2,823

$2,818
$0
$0
$2,818

$2,795
$0
$0
$2,795

Long-term Liabilities
Total Liabilities

$0
$0

$0
$2,465

$0
$2,495

$0
$2,513

$0
$2,661

$0
$2,708

$0
$2,721

$0
$2,761

$0
$2,786

$0
$2,839

$0
$2,823

$0
$2,818

$0
$2,795

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$40,000
($7,150)
$0
$32,850
$32,850

$40,000
($7,150)
($1,400)
$31,450
$33,915

$40,000
($7,150)
($2,504)
$30,346
$32,840

$40,000
($7,150)
($3,430)
$29,420
$31,933

$40,000
($7,150)
($3,923)
$28,927
$31,588

$40,000
($7,150)
($3,949)
$28,901
$31,608

$40,000
($7,150)
($3,841)
$29,009
$31,730

$40,000
($7,150)
($3,597)
$29,253
$32,014

$40,000
($7,150)
($3,101)
$29,749
$32,535

$40,000
($7,150)
($2,336)
$30,514
$33,354

$40,000
($7,150)
($1,734)
$31,116
$33,939

$40,000
($7,150)
($1,178)
$31,672
$34,490

$40,000
($7,150)
($855)
$31,995
$34,790

Net Worth

$32,850

$31,450

$30,346

$29,420

$28,927

$28,901

$29,009

$29,253

$29,749

$30,514

$31,116

$31,672

$31,995

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