Wednesday, July 21, 2010

Sample Business Plan

Business Plan of
Adventure Technologies, Inc
For the course: Industrial Management
Course Code: MGT-301

Submitted by:
Moin Uddin, 0715CSE00149
Saiful Islam Bhuiyan, 0715CSE00145
Azharul Islam, 0715CSE00144
Md. Abdullah Al Musabbir, 0817CSE00156

Under the Supervision of:
Russel Ahmed Chowdhury
Lecturer in DBA
Manarat International University

Date of Submission: 21st July, 2010

Adventure Technologies, Inc.
22/A, North Badda,

Moin Uddin, President
Cha-22/A, North Badda
Gulshan, Dhaka-1212

Saiful Islam Bhuiyan, Vice-President
Cha-89/8, North Badda
Gulshan, Dhaka-1212

Azharul Islam, Treasurer
420, Tezkuni Para
Farmgate, Dhaka-1213

Md. Abdullah Al Musabbir, Secretary
31, Merul Badda
Rampura, Dhaka-1218

Adventure Technologies, Inc.
Executive Summary
Adventure Technologies, Inc. is a one-year-old outsourcing and technical support providing company, established in April 01 of 2009. The company is located at 22/A North Badda, Gulshan, Dhaka. Adventure technologies started to provide technological support to other organizations from September 2009. Projections for 2008 show that it is reasonable to expect expansion of its customer base to new markets and
territories. Cash Flow projections support the assumption that the company will have sufficient funds to
purchase equipment and hire additional employees to support implementation of the marketing programs.

Management: Adventure Technologies is managed by Saiful Islam Bhuiyan. He has three prior years of experience in the Freelance programming and providing technology support to different organization as a volunteer. Saiful has established a strong team of very dedicated people who love to work with nature. As manager his role is to identify new business, develop and implement marketing activities, and to negotiate and close new contracts.

Current Market: Today the business services 100 small business accounts, 12 medium business accounts and currently no large corporate accounts. The services include: networking, system development and maintenance, bug and problem solving of programs written in different language, web application development and outsourcing and server maintenance. The success of the company has been a direct result of our ability to provide personal service at a competitive rate, thus creating a dedicated customer base. Currently, the average cost for system maintenance of a small business is TK.125-130 per hour, medium or large corporate accounts are negotiated on a per contract basis. Cost of web application development or system implementation including networking is also negotiable on per contract basis.

Projected Market: The projected growth rate for the IT industry, based the previous years is 28%. We will be expanding our business with new equipment, marketing, and additional employees to meet and exceed that demand. We are expecting to grow our customer base by 50% based on our first year’s track record, our unique offering, and planned marketing activities.

Adventure Technologies, Inc.
I. The Organizational Plan
Summary Description of the Business
Adventure Technologies, Inc., established in April 2009 as a corporation, handles networking, system development and maintenance and application development and testing, of different types of businesses in all over the world. It began with 2 small business accounts. As of April 2010, the company
has grown to 90 small business accounts and 10 medium businesses, totaling TK.750,000 in revenue, a
growth of 520%.

Adventure ’s mission is to be perceived as the most valued provider of System engineering and
maintenance services of small network and internet. The company has been very successful due to the high standard of service and care provided to the customer and because of its reputation for quick response real time development.

Business Model
The company also offers a service of most secured system design with 24 hours online support. Today that service is offered in Dhaka only. Twenty-five of the 100
accounts have contracted for these highly secured systems. Our plan is to open markets in Chittagong
and Sylhet over the next 2 years. It is important to note that these systems are a not only
highly secured; they are also our premium high ticket service and provide a larger profit margin,
directly impacting the company’s bottom line.

The company’s growth strategy is to start new branches of our company as we expand the
business in to Chittagong and Sylhet and increase our Large Corporate accounts for
system development.

The company currently leases a 20,000 sq. ft. area, which includes a 4,000 sq. ft. building for the
main office, a large attached garage for trucks, maintenance equipment and supplies, two large
lots, one fenced in for storing equipment, swithces, servers, hubs and storage of wires and connectors, wirelesss devices, and PCs.

Products and Services
Adventure Technologies offers three categories of technical services to three varieties of customers. The
customers consist of individuals, small businesses, and large corporations. Each group has the
option of purchasing the same types of services. First type of service is to develop desktop or web application ordered by individual. System designing includes networking, software developing, service automation, data control, and software and system maintenance. Customized system design can be purchased on a contract basis, including specialties in secured servers, customized OS, and complete system design. We also have an arrangement to provide software testing and securing existing system as a consultant when there is a need for it.

Customer Profiles
The following are descriptions of the three types of customer and the services that are typically
purchased by each.

1. Individuals who has a great interest in online marketing or freelance service providing through internet demand some useful tools for making easy their tasks. These tools consists of social bookmarking or SEO tools to promote their blogs and freelance products as ebooks or tutorials. Customization of their own web sites and adding easy plug-ins to the web site is one of the great field of our service. Some part time employees who are studying in IT fields work in this section of our company under supervision of SEO expert team consists of Raju and Muntasir Rashid.

2. Small or medium business account or office system implementation is the second type of customer. They typically consist of banks, or small office buildings and require small LAN network with terminals served by a common server and system software. The authority comes to us with a contract to implement the system. The system maintenance service is also provided by our company until the system contract is expired. The maintenance is required about four hours by one of our engineer under the supervision of chief system engineer.

3. Large corporate account are the third type of customer. They require customized and strictly secured system with whole work hours maintenance. Our company provides secured Unix based system with the OS that the company needs. Development of the system needs about three to six months and the system is highly secured and easy to use as all terminals use same OS and stay in a single network with multiple servers and distributed processing environment. This service is provided by 24 hours online maintenance by expert system engineers and one system administrator for work hours of the serviced organization.

Administrative Plan

Legal Structure
Adventure Technologies, Inc. is a corporation filed under the same name. The legal and financial advisors
recommended a corporation as the most efficient structure based on the plan to start new branches in same city and other cities of the country. There have been 300 shares of stock applied for, and 100 issued to the sole shareholder (President) at the time of incorporation

Corporate Officers: Moin Uddin, President
Saiful Islam Bhuiyan, Vice President and Accountant
(see resumes in Azharul Islam, Treasurer
Supporting Documents) Md. Abdullah Al Musabbir, Secretary and Legal Counsel

The officers of the company determine the direction of the corporation through its board meetings.
Additionally, there is an incentive plan for board members to acquire company stock based on set
profit goals. It should be noted that the President is the only officer working in the day-to-day business. All other officers interact at the monthly board meetings as well as on an “as needed” basis. This allows the company to have access to expertise and advice at large cost savings, which has a direct impact on the
bottom line and growth of the company.

Management & Personnel
At present, Moin Uddin, is the President and sole shareholder in Adventure Technologiesg, Inc. Moin has five prior years of experience in the software outsourcing business, working as a freelance worker. Previously he worked in a variety of service industries developing and maintaining system and servers.
Adventure Technologies, Inc. has been incorporated for almost one year, realizing a 520% growth
rate between April to March. The growth rate is attributed to high standards set for customer service. Many customers shifted from the prior company because of their loyalty to Moin Uddin. He has set up an incentive plan for her employees that rewards them for outstanding customer service based on year-end survey results, or when contracts are renewed or new business is closed. Under Mr. Habib’s management, a strong team of very dedicated people who love to work with nature has been formed. As manager his role is to identify new business, develop and implement marketing activities, and to negotiate and close new contracts. The four supervisors manage the accounts and part-time workers. They also determine staffing and equipment needed to maintain the account. There are also two system specialists, one of which is specifically trained in system engineering and security management.

There are three full-time office employees - one office manager and two administrative assistants. Four supervisors and two design specialists work in the field. The remainder are parttime workers, numbering from four to twenty-five or more, depending on the time of the year and work load.

1. Owner-President: 2007 Guaranteed Salary TK.65,000 with yearly increases justified by profitability.
2. System Specialists: 2 in 2008; Salaries @ TK.25,000 + 5% commission on new business contracts.
3. Four Supervisors: Salaries @ TK.15,000 + 3% bonus per contract for excellent year-end customer surveys.
4. Office Manager: Salary @ TK.22,000 per year
5. Administrative Assistants (1 in 2007, 2 in 2008): Salaries @ TK.15,000 per year.
6. Part-time workers: 5-25 @ TK.7 per hour; (more added as volume increases).

All employees receive training from the President and the Supervisor in the following areas:
Given by the President
a. Company policies and procedures regarding the customers and company standards
b. System and software orientation at the time they are hired
c. Liability and safety procedures
d. Equipment care and theft policies

Given by the Supervisors
a. Overview of each account assignment
b. Equipment assignment and training - operation of server or system maintenance and supplies
c. Security threat precautions

Personnel Duties
1. President/Owner
a. Sets company policies and trains all new employees
b. Solicits, interviews and hires new employees
c. Assigns accounts to Supervisors
d. Negotiates new and large contracts
e. Approves the purchases of equipment and supplies
f. Handles customer service issues that can not be satisfied by Supervisor
g. Reviews and signs all checks
h. Follows up on Supervisor sales leads

2. Four Supervisors - report to President
a. Manages on average 25 individual accounts and 4 small business accounts
b. Will be managing 1-2 Large Corporate accounts
c. Responsible for training part-time help on account profiles and equipment
d. Forecasts supplies needed for each account
e. Forecasts and manages work schedules
f. Conducts second round of interviews of part-timers and approves
g. Handles account problems related to service and quality issues
h. Solicits new business leads to President.
i. Responsibility for inventory and equipment assigned to their team

3. Office Manager - reports to president
a. Manages account scheduling
b. Supports Supervisors - back-up supplies misc.
c. Takes account calls and passes to supervisors
d. Performs yearly customer survey
e. Answers phone
f. Dispatches and is in “beeper” contact with supervisors
g. Assigns and maintains equipment for supervisors

4. Administrative Assistant - reports to president
a. Responsible for Bookkeeping functions of:
Daily sales reconciliation
Accounts receivable and accounts payable
General Ledger
b. Computer Typing - 60 WPM, with software knowledge - WP/Excel/D-Base
c. 10- key adding machine
d. Access to safe
e. Tracks orders placed for equipment and supplies

5. Part-time Employees - report to supervisor
a. Assigned to work specific accounts
b. Application development, web design and manual server managements
c. Identifies any problems
d. Follows instructions from supervisor
e. Manages inventory of supplies

Employee Profile
All employees must be:
a. Hard working, having knowledge of UNIX system and neat in appearance
b. Like working outdoors
c. Good communicators
d. Team workers
e. Educated for full-time work with a minimum CSE degree
f. Able to follow directives and be a quick learner
g. Dedicated to doing an outstanding job
h. Responsible, regarding safety

Accounting and Legal
All bookkeeping is kept on computer, on a regular basis, by the Administrative Assistant on the
software “SystemInfo” developed ourselves. At the end of the year the files are printed and passed to
the accountant Abdul Karim, CPA who has been a personal friend for many years and has 35
years experience as a CPA. His fees are reasonable and there is a high level of trust in his input
to the business as he is the Vice President for the corporation as well.

The customer base and prospect database is kept on the software “ACT” from Contact Software
International that allows us to keep precise timelines of our scheduling and mange our accounts
accurately. We have our own developed WP and spreadsheet software.

All contracts and other legal matters are handled by Jamal Uddin, corporate officer and
board member. Jamal is the senior partner of a 20-year old law firm specializing in business
Carrier: Far East Agent: Kofil Uddin
111 Elephant Road, Dhaka
Type of Insurance:
Business/personal 600,000
Deductible 4,000
Liability 1,000,000
Equipment 40,000
Deductible 500
Liability 2,000,000
Vehicles 150,000
Deductible 1,000
Liability 1,000,000
Annual Premium TK.8,000
Monthly Premium 670
Workers Comp. 1.43 per/1k gross Payroll
Problems situations to be considered and protective measures to be taken:
1. Internal theft - Employee Dishonesty
a. Shoplifting - of supplies - (4) closed circuit cameras in garage recording 24 hours
b. Cash Theft - petty cash limit of TK.600. Daily receipt drop-off to bank of all receivable
c. Falsifying signatures - all checks signed by President at the end of the day
d. Employee orientation - to reduce theft and stress security procedures
e. Monthly Inventory - responsibility of the Supervisors
2. External Theft
d. Walk-in theft Cameras at each doorway exits (2)
e. Cameras in garage and on parking area, and fenced in plant lot
f. Break-in theft/robbery - Alarms set nightly and connected directly to local Police station

Adventure Technologies, Inc.
II. Marketing Plan
Author Note: The Marketing Plan for Adventure Technologies, Inc. focuses on three
of the basic elements presented in our marketing chapter for a smaller business—
Market Analysis (Target Markets and Competition), Sales Strategy, and
Advertising. This marketing plan has a special strength in the target marketing
area in that the company planned its strategy for each of its market segments by
evaluating the target in terms of who they are, what the company will do to
approach the target, when the campaign will take place, and where the campaign
will be positioned. Also, the Target Market Worksheet for Target #1 at the end of
this section is a great tool for analyzing and planning your own target marketing.
It is my suggestion that the marketing plan for your company should address the
components in a way that more closely follows the marketing plan outline in
Chapter 5. However, I think this marketing plan may provide you with an
organized means for developing your strategy for individual market segments.
Target Markets with Sales Strategies
Target #1
Large Corporate Facilities and Condominiums
Who: Corporations that are “outsourcing” the system and server maintenance of their facilities to
outside vendors, and condominium complexes. There are approximately 75 accounts that are
potential customers within a 50 mile radius. Our goal is to secure 5 in 2011.
What: Tele-market for background information, and send a direct mail with telemarketing
follow-up. Describe system engineering, server maintenance, security threat control and all other software development services, such as tree web design and software development. Provide a guarantee for the
services and show competitive comparison pricing from local companies.

When: Begin April to determine the bidding process and RFP schedule to determine the
timing of proposals. Call each account to determine the timing and arrange for an on-site
inspection, to determine the amount of work needed and special needs to develop an estimate.
If possible inquire what the previous years costs were and if the customer was satisfied with
the work of their current system engineering companies.
Where: Position joint services with local computer stores for promotions and advertising.

Target #2
Small Businesses
Who: All small businesses and offices that have networking for several computers that want to save
money, or are unhappy with their present networking company. In the 50 mile radius there are
approximately 125 accounts that are potential customers. Our goal is to add 15 new contracts
in this category in 2010.
What: Tele-market for background information and send a direct mail with telemarketing
follow-up. Describe all the same outsourcing and snow plowing services, referencing existing
satisfied customers. Provide a guarantee for services rendered, show the cost savings using
Adventure Technologies, Inc., and develop a plan for continued snow and system maintenance.
Offer the company’s quality guarantee, and comparison chart of competitive pricing.
When: Begin January to determine when existing contracts expire and provide information on
the company and services. Request an on-site evaluation to determine costs and uncover any
problem areas needing work.
Where: Position joint services with local computers stores for promotions and advertising.
Advertise in the local papers, Yellow Pages and Business to Business Directory.

Target #3
Who: Target individuals who are located anywhere of the world interested in online marketing and outsourcing or freelancing. Contact all existing customers with satisfaction survey, and solicit at the
same time for:
a. Additional business - renew contracts for next project
b. New customers - referrals
What: Develop and send company brochure that targets the individuals electronic mailing them
with information on all services offered by Adventure Technologies, Inc. with price comparisons.
When: Develop brochure of web application and desktop assistant software for individual interest and sent email to the targeted contracts.
Where: Position joint services with online forums and e-commerce web sites for promotions and advertising

Adventure technologies, Inc is in a high competitive field. There are a lots of companies running business in same field in local and international areas.

Methods of Distribution
Adventure Technologiesg sells directly to the customer, is primarily a service business, with the exception
of selling the outsourcing application comes by internet workplaces and forums.

Employees in the field - will be given an overview of the entire promotion to prepare
them for customers asking questions, while on the job.
Office staff - will receive training and instructions on how to answer to phone and track the
responses from the #800 and mailer. They will also be assisting on the pre and post
telemarketing activities.
Expenses: Will not exceed TK.3000. for the entire promotion.

* Average value per contract = 100K
* Response rate = 2.0 % on the Direct mail and 15-20% on the telemarketing or 1.5 responses
on the direct mail, and 10-14 on the telemarketing.
* “Hot” lead rate = 0.5% on the direct mail and 5%- 7% on the telemarketing or 3.5 leads on
the direct mail and 3.5-5 leads on the telemarketing
Lead tracking Process:
* All Direct mail responses will be tracked
* All Phone calls will be logged when responding on the # 800.
* All regular calls will be screened “are you calling regarding our direct mail promotion?”
Program review: 30 days after last tell-marketing follow-up call.

I. Adventure Technologiesg, Inc. is seeking a loan to increase its equity capital through real
estate investment:
A. By purchasing the buildings currently being leased by the company.
B. By purchasing the parcel of land on which the buildings now stand.
II. Adventure Technologiesg, Inc. has TK.100,000 in cash to invest. An additional amount of
TK.275,000 in loan funds is needed to complete the purchase.
Loan Fund Dispersal Statement
1. Dispersal of Loan Funds
Adventure Technologiesg, Inc. will utilize the anticipated loan in the amount of TK.275,000 to
purchase the facility (land and buildings) that it currently leases. The full purchase price is
TK.375,000. The present owner of the premises is John S. Strykker. The parcel and
accompanying buildings, located at 22 San Carlos Drive in Nashua, New Hampshire, are
currently owned by John S. Strykker.

2. Back-Up Statement
a. The land is currently appraised at TK.200,000. Attached buildings appraise at TK.175,000. The
owner, Mr. John S. Strykker is agreeable to close of escrow on or about April 15, 2008.
b. Adventure Technologiesg, Inc. has appropriated TK.100,000 in retained earnings to be used as a
capital investment in the facility. The additional TK.275,000 in loan funds will make up the full
purchase amount of TK.375,000.
c. The buildings sit on a 20,000 square foot parcel of land, centrally located in Nashua, New
Hampshire. The land is currently appraised at TK.200,000 and the buildings at TK.175,000. There
are two large lots. One is fenced in for parking equipment and also serves as a storage area for
trees, shrubs and plants. There is a 4,000 square foot building that serves as the main office
and a large attached garage to house trucks, maintenance equipment and supplies.
d. The TK.275,000 in loan funds are needed by April 1 in order to proceed with escrow. Loan
repayment can begin promptly on May 1st for a 15-year period. The company has a strong
cash flow and a rapidly-growing market. Early payoff is anticipated.
e. Adventure Technologiesg is currently paying TK.2850 in monthly rental expense. Payments on the
anticipated TK.275,000, 15-year loan @ 9% would amount to TK.2,789. Purchase of the land and
buildings will enable Adventure Technologiesg, with no additional expense, to repay the loan +
interest and to divert the current rental expense into equity growth.

2009 Cash Flow Statement
One-Year Cash Flow Projection and Cash Flow History
Adventure Technologiesg, Inc.
For the Year 2007 Projected for: Historical for:
A. Sales/Revenues TK.573,000 TK.777,864
1. Outsourcing - Individual 185,000 216,000
2. Outsourcing - Small Business 65,000 160,700
3. Outsourcing - Customized 174,000 199,374
4. Snow Removal - Individual 15,000 18,250
5. Snow Removal - Small Business 125,000 167,100
6. 5% Snow Removal contracts 5,000 8,500
7. Sale of Miscellaneous Accessories 4,000 7,940

C. Interest Income 1,250 1,250

A. Cost of goods to be sold
1. Fertilizer 20,000 19,000
2. Pesticide 10,000 11,000
3. Plants/Shrubs 18,000 23,000
4. Salt/Sand 5,000 8,030
5. Seed 45,000 45,000
Total Cost of Goods TK.98,000 TK.106,030
B. Variable Expenses (Selling)
1. Design Specialist Salary/Payroll Taxes 20,000 20,000
2. Machinery, Tools, Equipment 11,500 11,000
3. Marketing 5,411 5,400
4. Part-time Worker Salaries/Payroll Taxes 150,000 182,000
5. Sales Bonuses 1,500 2,000
6. Sales Commissions 8,000 10,800
7. Supervisor Salaries/Payroll Taxes 60,000 60,000
8. Travel Expense 9,500 10,400
9. Miscellaneous Selling Expense 1,000 1,200
Total Variable Expenses TK.266,911 TK.302,800
C. Fixed Expenses (Administrative)
1. Administrative Fees (Legal/Accounting) 3,050 3,050
2. Insurance (Liability, Casualty, Fire, Theft) 11,600 11,600
3. Licenses and Permits 4,200 4,200
4. Office Equipment 5,700 7,700
5. Office Salaries/Payroll Taxes 42,000 42,000
6. Owner's Guaranteed Payment 57,000 65,000
7. Rent Expense + Security Deposit 39,900 39,900
8. Utilities 4,320 4,320
9. Miscellaneous Administrative Expense 200 500
Total Fixed Expenses TK.167,970 TK.178,270
D. Interest Expense 1,386 5,535
E. Federal and State Income Tax 7,196 65,220
F. Other Uses 0 0
G. Long-term Asset Payments 17,334 15,081
H. Loan Payments 0 0
I. Capital Distributions 0 0
TOTAL CASH PAID OUT TK.558,797 TK.672,936
ENDING CASH BALANCE (December 31, 2001) TK.40,453 TK.131,178

2009 Profit & Loss (Income) Statement
Adventure Technologiesg, Inc.
For the Year: 2009 6-MONTH % of Total 12-MONTH % of Total
TOTALS Revenues TOTALS Revenues
1. Sales/Revenues 488,610 100.00% 777,864 100.00%
Outsourcing - Individual 138,000 28.24% 216,000 27.77%
Outsourcing - Small Business 104,000 21.28% 160,700 20.66%
Outsourcing - Customized 130,250 26.66% 199,374 25.63%
Bug Removal - Individual 14,300 2.93% 18,250 2.35%
Bug Removal - Small Business 96,800 19.81% 167,100 21.48%
Miscellaneous Accessories 5,260 1.08% 8,500 1.09%
5% Snow Removal Contracts 0 0.00% 7,940 1.02%
2. Cost of Goods to be Sold 91,030 18.63% 101,030 12.99%
a. Beginning Inventory 0 0.00% 0 0.00%
b. Purchases 91,030 18.63% 106,030 5.79%
(1) Components 13,000 2.66% 19,000 2.44%
(2) Bug Remover 8,000 1.64% 11,000 1.41%
(3) Pcs 22,000 4.50% 23,000 2.96%
(4) OS 3,030 0.62% 8,030 1.03%
(5) Wires 45,000 9.21% 45,000 5.79%
c. C.O.G. Available for Sale 91,030 18.63% 106,030 5.79%
d. Less Ending Inventory 0 0.00% 5,000 0.64%
3. GROSS PROFIT 397,580 81.37% 676,834 87.01%
1. Variable (Selling) Expenses
a. Design Specialist Salary 10,000 2.05% 20,000 2.57%
b. Machinery, Hand Tools, Equip. 9,000 1.84% 11,000 1.41%
c. Marketing 3,205 0.66% 5,400 0.69%
d. Part-time Worker Salaries 72,250 14.79% 182,000 23.40%
e. Sales Bonuses 2,000 0.41% 2,000 0.26%
f. Sales Commission 6,300 1.29% 10,800 1.39%
g. Supervisor Salaries 30,000 6.14% 60,000 7.71%
h. Travel Expense 6,700 1.37% 10,400 1.34%
i. Miscellaneous Selling Expense 900 0.18% 1,200 0.15%
j. Depreciation (Variable Assets) 7,598 1.56% 15,200 1.95%
Total Variable Expenses 147,953 28.23% 318,000 40.88%
1. Fixed (Administrative) Expenses
a. Admin. Fees- Legal/Acct. 2,048 0.42% 3,050 0.39%
b. Insurance (Liab,Cas,Fire,Theft) 5,802 1.19% 11,600 1.49%
c. Licenses and Permits 4,200 0.86% 4,200 0.54%
d. Machinery, Tools, Equipment 6,700 1.37% 7,700 0.99%
e. Office Salaries 21,000 4.30% 42,000 5.40%
f. Owner's Guaranteed Payment 32,502 6.65% 65,000 8.36%
g. Rent Expense + Security Dep. 22,800 4.67% 39,900 5.13%
h. Utilities 2,160 0.44% 4,320 0.56%
i. Miscellaneous Fixed Expense 400 0.08% 500 0.06%
j. Depreciation (Fixed Assets) 0 0.00% 0 0.00%
Total Fixed Expenses 97,612 19.98% 178,270 22.92%
Total Operating Expense 245,565 48.21% 496,270 63.80%
Net Income From Operations 152,015 33.16% 180,564 23.21%
Other Income (Interest) 625 0.13% 1,250 0.16%
Other Expense (Interest) 2,918 0.60% 5,535 0.71%
Net Profit (Loss) Before Taxes 149,722 32.69% 176,279 22.66%
Provision for Income Taxes
a. Federal 41,642 8.52% 51,999 6.68%
b. State 11,230 2.30% 13,221 1.70%
NET PROFIT (LOSS) AFTER TAXES 96,850 21.87% 111,059 14.28%

Adventure Technologiesg, Inc. has taken advantage of a rapidly-increasing marketplace, and has also neatly incorporated snow
removal services to increase revenues significantly during winter months. The company earned an unusually high 2007 net
profit for a start-up service business (TK.111,059). Debt Ratios (Debt:Assets, 30.93% and Debt:Equity, 44.77%) are better
than industry average. A 2008 beginning cash balance of TK.131,178, with no current liabilities other than TK.16,332 of notes
payable on a previous loan, give the company sufficient marketing funds to expand services into the corporate outsourcing
and design areas. The purchase of their present facility, currently under a lease agreement (using TK.100,000 cash + TK.275,000
loan funds) will not raise the Debt to Equity Ratio (projected at 87.55%) beyond a safe limit. Projections indicate high sales
growth with the acquisition of new personnel, vehicles, and equipment to service the increased customer base. The company
is experiencing rapid, but controlled growth. Financial projections indicate that the company will be more than able to fulfill
its obligations to repay the TK.275,000 loan with interest and still maintain good cash flow and increased profitability.

Financial Assumptions
TK.25,000 initial capital contribution by owner in corporation (not a loan).
5% required up front fees for all snow contracts.
5% Sales Commission to be paid to sales representatives..
Bonuses of TK.500 each to be paid for landing new corporate accounts.
Salaries for (4) Supervisors @ TK.15,000, totaling TK.60,000. (+ benefits and payroll taxes)
Salary for the President to be guaranteed @ TK.65,000 for 2001; projected raise to TK.82,000
for 2002.
Salary for the Office Manager @ TK.22,000 (+ benefits and payroll taxes).
Salary for Administration Assistants (1 in 2001, 2 in 2002) @ TK.15000 (+ payroll taxes and
Salary for part time people at TK.7.00 per hour. Hired as needed to meet volume
Licensing permit fees with City and State during the year.
Rent deposit at TK.5,700 for first and last month.
Heat and Electricity at TK.60 per sq. ft, totaling TK.360 per month, and TK.4.320 per year.
Fire and Liability Insurance at TK.50 per sq. ft, totaling TK.300 per month, and TK.3,600 per
All insurance at TK.8,000 per year. The total cost of insurance at TK.11,600.
2 Trucks purchased with 2001 loan: TK.60,000 @ 8%; interest 5-year period = TK.12,995.05
(see amortizing schedule A)
4 Large Mowers purchased with 2001 loan: TK.16,000 @ 8%; interest 3-year period =
TK.2049.79 (see amortizing schedule B)
State Income Taxes charges at 7.5% of net profits.
Federal Income Taxes based on Federal Corporation Tax Schedule (15%-25%-34%-39%
of net profits)
Estimated Taxes paid on schedule quarterly, based on actual and projected net profits
for 2007 and 2008.
Ending inventory: 2007 = TK.5,000; 2008 projected at TK.10,000


No comments: