Sample business plan ppsx

January 2002






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This is a business plan. It does not imply an offering of securities.
1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.0 Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.0 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.3 Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3.1 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.0 Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.3 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.4 Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.0 Web Plan Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.1 Website Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.2 Development Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.1 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

8.2 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.3 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.4 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.5 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.6 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table of Contents
1.0 Executive Summary
WorkChairs is an ergonomic product business located in Studio City, California that focuses
on selling hard-to-find ergonomic products to both the local community and through their
website online. WorkChairs is owned by Jake and Lisa Wilson, and is a corporation with one
other employee, Peter Wilson.
WorkChairs will use two sales channels and focus on selling niche products that solve
ergonomic health problems that have become more common as people use computers more
and more in their daily work days. By using traditional local marketing and sales techniques,
WorkChairs will establish a solid local customer base in the home office, small business, and
large business communities. To supplement the business and take advantage of
manufacturer relationships that include drop-shipping, WorkChairs will have a website that
has both an online store and an educational section to teach people about ergonomic
problems.
WorkChairs has a conservative financial plan with low expenses, low payroll, and a
conservative sales forecast. WorkChairs will always maintain a positive cash balance while
slowly growing the total cash and company net worth.

($50,000)
$0
$50,000
$100,000
$150,000
$200,000
$250,000

2002 2003 2004
Sales
Gross Margin
Net Profit
Highlights
WorkChairs Business Plan
Page 1
1.1 Objectives
• Becoming profitable after six months of operation.
• Be the market share leader of specialty ergonomic products in the local market. There
is no official measurement, but it should be relatively easy to guess how our few
competitors are doing.
• Have our website be one of the top five websites for specialty ergonomic products
measured by both traffic and sales. Unfortunately, we can't get sales statistics for
other competing sites, but we can judge by their traffic levels based on their search
engine placement, pay per click advertising, links in to their site, and Google
Pagerank. From there we can guess at how well their site converts visitors into sales.
• Have fun helping our customers work in a safer and more comfortable work
environment.
1.2 Mission
WorkChairs is a specialty ergonomic product retailer in both the local market and in the
online space. We aim to provide quality products to satisfy our customers desire to work in a
healthy work environment that keeps them injury and pain-free. Keeping our customers
happy and solving their problems by providing great products at an affordable price is our
goal.
We also take pride in educating our customers on ergonomic issues that they might not be
aware of, to prevent them from experiencing pain and discomfort in the future as well. We
find doing this is rewarding in a personal and business sense.
1.3 Keys to Success
• Provide specialty products that can't be found at "large box" retailers such as Office

Max, Office Depot, Staples, Costco, Ikea, and others. We want niche products that
can't be found at these stores, because we can't compete with them on price.
• Provide excellent customer service. It's difficult to find customers who are aware
enough of the health issues of standard office work to actually realize they need
ergonomic products. So once we find these customers, we need to keep them happy
and keep them coming back to us for future products they need.
• Keep our growth slow and organic so we can make sure we keep expenses low and
operate efficiently.
• Build an easy to use website that educates our customers and potential customers
while also selling our products effectively.
WorkChairs Business Plan
Page 2
2.0 Company Summary
WorkChairs is a small business based in Studio City, CA that sells specialty ergonomic
products to local businesses and home office workers while also selling those products on
their website online. The company is operated out of the home of owners Jake and Lisa
Wilson. Their son Peter also is part of the company.
2.1 Company Ownership
Workchairs is a private C corporation owned by Jake and Lisa Wilson. They each own 50% of
the company.
2.2 Start-up Summary
WorkChairs will require $3,825 in total start-up expenses. These expenses include $1,000 for
legal fees in setting up the business, $250 in stationery, $1,000 for sales brochures and
collateral, $500 in insurance, $1,000 in expensed computer equipment, and $75 for a domain
name.
Jake and Lisa Wilson will be investing $10,000 which will cover the start-up expenses while
also leaving a cash reserve of $6,175. We have no start-up liabilities or other assets to be
considered in our start-up phase.
$0
$1,000

$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Expenses Assets Investment Loans
Start-up
WorkChairs Business Plan
Page 3
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $1,000
Stationery etc. $250
Brochures $1,000
Insurance $500
Expensed Equipment $1,000
Domain Name $75
Total Start-up Expenses $3,825
Start-up Assets Needed
Cash Balance on Starting Date $6,175
Other Current Assets $0
Total Current Assets $6,175
Long-term Assets $0
Total Assets $6,175

Total Requirements $10,000
Funding
Investment
Jake and Lisa Wilson $10,000
Other $0
Total Investment $10,000
Current Liabilities
Accounts Payable $0
Current Borrowing $0
Other Current Liabilities $0
Current Liabilities $0
Long-term Liabilities $0
Total Liabilities $0
Loss at Start-up ($3,825)
Total Capital $6,175
Total Capital and Liabilities $6,175
3.0 Products
WorkChairs sells niche ergonomic products that are hard to find at standard office furniture or
office supply stores. Our primary products include:
• Chairs—There is a large number of specialty chairs that are built to solve various
physical problems caused by sitting in an office chair all day. These chairs aim to solve
back, hip, leg, neck, shoulder, arm, and wrist problems.
• Workstations—Computer and regular workstations that are specially designed to be
ergonomically correct.
• Computer Accessories—Special mice, keyboards, glare screens, keyboard trays,
wrist rests, monitor supports, and other computer accessories.
• Document Holders—Copy holders to allow the head to stay looking up at eye level.
• Foot Rests—A proper foot rest complements an ergonomic chair for better posture
alignment.
• Lighting—Various types of lighting to make things easier on the eyes while working.

• Back/Arm/Wrist Supports—Various supports for various reasons.
• Headsets/Microphones—For phone-related problems.
WorkChairs Business Plan
Page 4
4.0 Market Analysis Summary
As computer and office jobs get more and more common, the general working population will
experience more health problems caused by improper office working environments. It may be
it's their wrists aching from typing, their back hurting from their chair being bad, or their
eyes damaged from staring at a computer screen. Ergonomic products focus on solving these
problems. Unfortunately, these products are often hard to find at general furniture stores or
office supply stores. WorkChairs aims to supply these products to both our local market and
in the online space.
Specifically, we'll target a few different types of worker:
• The home office user.
• The small business office manager.
• The large organization purchasing manager.
4.1 Market Segmentation
We have broken down our target market into the following categories:
• Home Office—This segment is the huge market of people running businesses from
their home. We estimate there to be about 20,000,000 home office businesses in the
United States, with about a 5% growth rate. Since we can reach the whole United
States with our website, we can, potentially, reach the entire market.
• Small Office Managers—The small office market is also quite large, with a 5%
growth rate. Most of these businesses have office workers who would be in need of
ergonomic products.
• Large Office Purchase Managers—This market segment is much smaller in size,
but has huge potential for sales as purchase managers usually make bulk buying
decisions for multiple workers. It has a slower 2% growth rate due to fewer large
businesses being created.
Table: Market Analysis

Market Analysis
Potential Customers Growth 2002 2003 2004 2005 2006 CAGR
Home Office 5% 20,000,000 21,000,000 22,050,000 23,152,500 24,310,125 5.00%
Small Office Managers 5% 2,000,000 2,100,000 2,205,000 2,315,250 2,431,013 5.00%
Large Business Purchase
Managers
2% 500,000 510,000 520,200 530,604 541,216 2.00%
Total 4.94% 22,500,000 23,610,000 24,775,200 25,998,354 27,282,354 4.94%
WorkChairs Business Plan
Page 5
Home Office
Small Office Managers
Large Business Purchase Managers
Market Analysis (Pie)
4.2 Target Market Segment Strategy
The following are our market segments along with our reasoning for targeting each segment:
• Home Office—This segment is very large, and because most home offices now
involve people spending long hours on a computer, these people are prime targets for
needing ergonomic equipment. Since these offices are also in their home, they're
more likely to spend some money on nicer furniture and equipment they can use for
both home and work purposes.
• Small Business Managers—Most small businesses have a manager in charge of
equipment purchasing decisions. At some point, most of these managers usually have
an employee who suffers from a problem that can be solved with ergonomic
equipment. Even if they haven't, these people can usually be educated on the benefits
of an ergonomically-sound workplace. They are usually pretty careful with their money
though, as most small businesses try to keep their costs low. It's a good market,
especially locally, because these business often support other local small businesses.
• Large Business Purchase Managers—Large businesses usually have a purchase
manager who's sole job is making equipment and supply purchasers. It's usually

harder to reach these managers, and there are fewer large businesses, but they make
for very lucrative accounts. Once you can build a good relationship with a purchase
manager, they can be responsible for a lot of sales. Most purchasers buy equipment in
bulk, and they usually have budgets that allow them to buy good equipment.
WorkChairs Business Plan
Page 6
4.3 Service Business Analysis
The ergonomic industry is growing by leaps and bounds. As the use of computers increases in
offices, people are experiencing lots of health problems from repetitious use of computers all
day long. The ailments can really vary, but knowledge of ergonomic products is growing as
people realize these problems exist.
The ergonomic product manufacturing industry is also growing as more companies are
putting out new products for cheaper prices.
WorkChairs aims to sell locally to small and large businesses, while also serving those two
markets and the home office market on the Web. We believe this combination of local and
nationwide sales will provide a solid base for a business.
4.3.1 Competition and Buying Patterns
People shopping for ergonomic products choose their retailer based on the following criteria:
Product selection: They want to work with a company that provides a number of ergonomic
products to choose from, including competing brands.
Price: Nobody wants to pay more than they have to, and generally ergonomic products are
more expensive than people anticipate, so price is usually a big issue.
Customer Service: People usually have questions before purchasing an ergonomic product
because, for the most part, they have never seen or worked with the product before. This
means that our website must explain things well and make it easy to contact us. We also
must provide great customer service locally to keep our clients educated and happy.
5.0 Strategy and Implementation Summary
The primary strategies of WorkChairs are:
• Sell niche ergonomic products that are hard to find in normal sales channels and
usually take some education to understand and use.

• Educate our customers and nurture relationships with them by providing superior
customer service.
• Sell locally and online to maximize two different sales channels.
WorkChairs Business Plan
Page 7
5.1 Competitive Edge
The primary competitive edge of WorkChairs is our product selection and how we educate our
customers. We carry hard-to-find products that solve specific ergonomic needs. These are
products you can't find at local office furniture stores or superstores such as Office Depot,
Staples, etc. These products are only carried by a few ergonomic specialty retailers both
locally and online. In our local market, there are only a few small office supply stores that
carry these products, and they aren't very active in selling them or educating their customers
about them.
Online, we hope to educate our customers better than anyone else and show why they need
our products and how these will help solve their problems. There are lots of websites that
carry ergonomic products, but most of them just list the products and don't give much
information about them.
5.2 Marketing Strategy
Our marketing strategy has two categories that both hit our three target markets:
Local Marketing Strategy—We intend to hit our three target markets locally "the old
fashioned way."
• Cold Calls—Jake Wilson will call on local businesses both small and large to educate
them on our company and our ergonomic products.
• Yellow Pages—We will be listed in the local yellow pages under office products, office
furniture, etc.
• Business Groups—Jake and Lisa Wilson will each be joining a number of local business
groups in order to network and make contacts at local companies. We will use these
contacts to get a foot in the door to build relationships with new customers.
Online Marketing Strategy—Our online marketing strategy will be run by Peter Wilson who
is in charge of our website.

• Search Engines—We will pay to be listed in all the paid inclusion search engines and
directories, as well as submitting to all the free search engines. Peter Wilson is an
expert in this area, and will have our site optimized to do well in the engines.
• Pay-per-click Advertising—We will be spending a limited monthly budget on pay-per-
click advertising on Overture and Google for targeted ergonomic keywords.
• Link-building Campaign—Our website will be more than just an online store. We will
provide tons of information about ergonomics that will be educational for people trying
to solve health problems. This will make our site an ergonomic resource worth linking
to from other websites. We will have an ergonomic resources directory that will allow
us to do link exchanges with other websites.
• Affiliate Program—We will have an affiliate program for other websites to sign up and
earn a 10% commission on sales they refer to us.
• Word of Mouth—We will have features on our site to allow users to send pages from
our site to their friends or co-workers.
WorkChairs Business Plan
Page 8
5.3 Sales Strategy
Our sales strategy is broken down into two different areas:
• Local Sales—We will sell to local customers and employ a traditional local business
sales strategy. Jake Wilson will be our primary salesman, and he'll work in a normal
fashion of calling on local businesses and informing them about our company and our
products. Mr. Wilson will also join local business groups to network, and try to be the
kind of salesman people refer to others. He does not earn a commission, as he will be
working on salary as part owner. It's possible that an additional local salesperson will
be brought onto the team in the future.
• Online Sales—Obviously, selling online is different from selling locally. We'll rely on
our website to provide product information and answer the questions customers have
about their products. Jake and Lisa Wilson will be available by phone and email to
answer questions the site alone can't answer. Otherwise, it's a traditional e-commerce
setup where the customer orders the product and WorkChairs either ships out the

product themselves if it's in inventory, or alerts the manufacturer who will drop ship
the product.
5.3.1 Sales Forecast
The Sales Forecast table outlines sales and cost projections for our four product groups. We
expect to be able to sell products in the first month due to relationships we already have with
customers who have agreed to purchase our products. As our name grows in the local
community and as our website gets more links and better search placement online we feel
our sales will continue to grow.
Each product category has a different growth rate for the first year based on our projections
for how much growth there is in each area. We feel Chairs and Other will each see a 20%
growth rate. We feel that the growth rate of Workstations and Computer Accessories will be
slower at 15%.
After year one, we anticipate an overall growth rate of about 20%.
Table: Sales Forecast
Sales Forecast
Sales 2002 2003 2004
Chairs $79,161 $94,993 $113,992
Computer Accessories $11,601 $13,921 $16,705
Workstations $29,002 $34,802 $41,762
Other $19,790 $23,748 $28,498
Total Sales $139,554 $167,464 $200,957
Direct Cost of Sales 2002 2003 2004
Chairs $39,581 $41,560 $43,638
Computer Accessories $5,800 $6,091 $6,395
Workstations $14,501 $15,226 $15,987
Other $9,895 $10,390 $10,910
Subtotal Direct Cost of Sales $69,777 $73,266 $76,929
WorkChairs Business Plan
Page 9
$0

$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Chairs
Computer Accessories
Workstations
Other
Sales Monthly
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2002 2003 2004
Chairs
Computer Accessories
Workstations
Other
Sales by Year
WorkChairs Business Plan
Page 10
5.4 Milestones
The accompanying table is a list of our initial milestones for the launch of WorkChairs. It lists
the actual milestone, date that we start working on the milestone, the date the milestone
should be accomplished, the employee in charge, and the department. We are not rushed to

get this business going, but we still feel it's crucial to hit our milestones on time to get the
business going before the slow summer season hits. We'd like to use the summer season to
fine tune our website and make sure our relationships with our manufacturers are all solid
and working well. We will use the Plan vs. Actual feature of Business Plan Pro® PREMIER to
track our progress in getting everything done on time.
Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department
Corporation Formed 1/4/02 1/15/02 $1,000 Jake Executive
Product Selection Finalized 1/1/02 2/1/02 $0 Jake and Lisa Executive
Website 1/1/02 2/15/02 $75 Peter Web
Seach Engine Submissions 2/15/02 3/1/02 $500 Peter Web
Link Campaign 3/1/02 3/15/02 $0 Peter Web
Affiliate Program Launch 4/1/02 4/15/02 $0 Peter Web
Business Groups Joined 4/1/02 4/1/02 $0 Jake and Lisa Executive
Cold Calls Launch 4/1/02 4/1/02 $0 Jake Sales
Totals $1,575
Jan Feb Mar Apr
Corporation Formed
Product Selection Finalized
Website
Seach Engine Submissions
Link Campaign
Affiliate Program Launch
Business Groups Joined
Cold Calls Launch
Milestones
WorkChairs Business Plan
Page 11
6.0 Web Plan Summary

The WorkChairs' website will be more than just a brochure for our local business, it will be a
huge sales channel to the online world.
The focus of our site will be a combination of a store for our products and an ergonomic
educational resource.
The store section of our site will be a very clean design that is similar to most e-commerce
sites so users are familiar with the way things work. We'll provide lots of information about
our products and how they help solve people's problems. We'll also make it very clear to
users how they can contact us for individual sales support and customer service. We think
users might need some hand holding to choose the right product.
The ergonomic information section of our site will provide information about all the most
common health problems caused by office working conditions. It will outline the health
problems, the causes, and provide solutions in the form of positioning and posture, as well as
links to products that can be purchased. We feel this section of our site will validate
WorkChairs as experts in the field, and provide incentive for other websites to link to our
website.
6.1 Website Marketing Strategy
Our overall online marketing strategy falls into the following strategies:
• Search Engines—We will be paying for listings in the paid inclusion engines as well
as submitting to free engines like Google. Peter Wilson is an expert in this field and he
will be designing our site from the start to have keywords built into the copy and give
the site an overall search-engine friendly design.
• Pay-per-click Advertising—We'll have a limited monthly budget for pay-per-click
advertising on Google and Overture for selected targeted ergonomic keywords that fit
our products. We will monitor our return on investment closely here to make sure
we're profitable with this advertising.
• Link-building Campaign—The educational aspect of our site along with our
resources section will allow us to get links from other sites either through the quality
of our content or in a link exchange manner. We will try to get links from good sites in
ergonomics, furniture, office supplies, and other related areas.
• Affiliate Program—We will have an affiliate program that pays other websites 10%

for sales that they refer to our website. This will get us more links, and provide
incentive for other sites to market our products to their visitors.
• Word of Mouth—Our site will be set up so that's it's easy for visitors to send pages
of our site to their friends and co-workers. We also hope their satisfaction with our
products will lead them to tell others about us.
WorkChairs Business Plan
Page 12
6.2 Development Requirements
The development of the WorkChairs website will start on January 1st of 2002. The estimated
finish date of the website will be February 15, 2002. Peter Wilson will be developing all
aspects of the website.
• Front End—The front end of the website is the graphic user design and interface that
will be designed by Peter Wilson. The design will be simple with bland colors and
feature a similar interface of popular e-commerce websites.
• Back End—The back end of our system is also being developed by Peter Wilson. It
will feature a mySQL database and will use PHP as the programming language for the
site logic. The e-commerce package is in PHP and is a combination of a base package
and custom programming by Peter Wilson. The advantage of this setup is that we can
customize it, it's free, and it's extremely fast. The product information will be stored in
the database.
• Administration—It will be easy to add and edit content and product information on
the website due to the administrative interface programmed by Peter Wilson. Both
Jake and Lisa Wilson will be able to add/edit/delete products and content at any time.
• Future Development—As an employee of WorkChairs, Peter will be working part-
time developing new features for the website and marketing it online.
7.0 Management Summary
WorkChairs is owned and managed by Jake and Lisa Wilson. The only other employee is our
manager of the website, Peter Wilson. We don't initially plan on hiring any additional
employees, but there is a possibility of adding a local salesperson in the future.
• Jake Wilson—Jake has over 30 years experience in the office supply/furniture and

ergonomics industry. He owned his own local store for 25 years and worked as
President and the head of the sales division. Jake built up a huge knowledge of
products, developed relationships with manufacturers, and made many valuable local
contacts at businesses in the area which WorkChairs can use. Jake will work as the
President of WorkChairs as well as being the primary local salesperson and expert on
products.
• Lisa Wilson—Lisa also has over 30 years experience as she ran the local office store
with her husband Jake. Lisa has more experience in the accounting and organizational
aspects of the business, so she'll be taking that role with WorkChairs.
• Peter Wilson—Peter grew up working in the office store, but has since left that
industry and became a seasoned expert in Web development, online sales, and online
marketing. Peter will be in charge of the website and it's marketing for WorkChairs.
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Page 13
7.1 Personnel Plan
The accompanying Personnel Table explains the salaries of the three employees of
WorkChairs. Jake and Lisa Wilson will not be taking salaries until the business has sales up
and running in the middle of the year. Peter will be paid a modest salary for his part-time
work from the start and will remain consistent at that level until 2003 when he will see a
slight raise. Jake and Lisa Wilson will also see a raise in 2003 when the business has reached
a high enough level of sales to make that possible.
Table: Personnel
Personnel Plan
2002 2003 2004
Jake Wilson $21,000 $36,000 $36,000
Lisa Wilson $21,000 $36,000 $36,000
Peter Wilson $12,000 $12,000 $20,000
Total People 3 3 3
Total Payroll $54,000 $84,000 $92,000
8.0 Financial Plan

The financial plan of WorkChairs is very simple and conservative. We aim to keep our
expenses low while growing sales very slowly and under control. Because we don't have any
major expenditures to make, we don't need to have huge amounts of cash on hand. We just
need enough to pay our bills and our salary, and provide additional cushion to our account.
We expect to have a positive cash balance at all times.
We expect to be profitable in 2002 and 2004 while losing a little bit of money in 2003 as our
payroll growth jumps up.
We expect our cash on hand to be over $30,000 by 2004.
8.1 Important Assumptions
We assume that interest rates and tax rates will stay the same as can be seen in our general
assumptions table. We assume the economy will not become much worse than it is right now.
At the current level of the economy we believe our goals and projections are attainable.
Table: General Assumptions
General Assumptions
2002 2003 2004
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0.00% 0.00% 0.00%
Calculated Totals
Payroll Expense $54,000 $84,000 $92,000
New Accounts Payable $82,700 $89,466 $98,717
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Page 14
8.2 Break-even Analysis
Our Break-even Analysis is based on an average revenue per sale of $200. This is an average
because although we sell high-priced chairs that range from $200-$2,000, we also sell a
larger number of cheaper products like copy holders, mice, wrist rests, keyboards, keyboard
trays, monitor glare screens, and other products.

We aim to take a keystone mark-up on our products, i.e. 100%, which means our average
per-unit cost is $100.
Our fixed costs consist of three salaries and operating expenses which should total about
$20,000 per month.
This puts our break-even point at $40,000 in revenue per month.
Table: Break-even Analysis
Break-even Analysis:
Monthly Units Break-even 200
Monthly Revenue Break-even $40,000
Assumptions:
Average Per-Unit Revenue $200.00
Average Per-Unit Variable Cost $100.00
Estimated Monthly Fixed Cost $20,000
($20,000)
($15,000)
($10,000)
($5,000)
$0
$5,000
$10,000
$15,000
$0 $12,000 $24,000 $36,000 $48,000 $60,000
Monthly break-even point
Break-even point = where line intersects with 0
Break-even Analysis
WorkChairs Business Plan
Page 15
8.3 Projected Profit and Loss
The accompanying Profit and Loss table is a good example of how we will be keeping our
expenses and payroll low while we grow sales. This will cause us to lose a little money in

2003, but we'll be profitable from 2004 on. Our sales projections are very conservative, so
we're actually hoping that we'll be profitable in 2003 as well, but we're going with the
conservative estimates shown in the table.
We aim to keep our gross margin at 50% or above, and we think we can improve this over
time as we gain more customers because we won't have to battle on price with other retailers.
Table: Profit and Loss
Pro Forma Profit and Loss
2002 2003 2004
Sales $139,554 $167,464 $200,957
Direct Costs of Goods $69,777 $73,266 $76,929
Other Costs of Goods $0 $0 $0

Cost of Goods Sold $69,777 $73,266 $76,929
Gross Margin $69,777 $94,198 $124,028
Gross Margin % 50.00% 56.25% 61.72%
Expenses:
Payroll $54,000 $84,000 $92,000
Sales and Marketing and Other Expenses $1,200 $1,200 $1,200
Depreciation $0 $0 $0
Rent $0 $0 $0
Utilities $0 $0 $0
Insurance $1,200 $1,200 $1,200
Payroll Taxes $8,100 $12,600 $13,800
Web Hosting $1,200 $1,200 $1,200

Total Operating Expenses $65,700 $100,200 $109,400
Profit Before Interest and Taxes $4,077 ($6,002) $14,628
Interest Expense $0 $0 $0
Taxes Incurred $1,223 $0 $4,388
Net Profit $2,854 ($6,002) $10,240

Net Profit/Sales 2.04% -3.58% 5.10%
Include Negative Taxes TRUE FALSE TRUE
($3,000)
($2,000)
($1,000)
$0
$1,000
$2,000
$3,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Profit Monthly
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($8,000)
($6,000)
($4,000)
($2,000)
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2002 2003 2004
Profit Yearly
$0
$2,000
$4,000
$6,000

$8,000
$10,000
$12,000
$14,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Gross Margin Monthly
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Page 17
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2002 2003 2004
Gross Margin Yearly
WorkChairs Business Plan
Page 18
8.4 Projected Cash Flow
Our Projected Cash Flow table and chart show that we have little risk in this business as we'll
always keep a sizeable cash balance. We have a projected period of three months in the slow
summer period we're we'll see a negative net cash flow, but our balance will stay positive so
we'll be able to pay our bills and stay in the positive.
($5,000)
$0
$5,000
$10,000
$15,000

$20,000
$25,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Net Cash Flow
Cash Balance
Cash
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Table: Cash Flow
Pro Forma Cash Flow 2002 2003 2004
Cash Received
Cash from Operations:
Cash Sales $139,554 $167,464 $200,957
Cash from Receivables $0 $0 $0
Subtotal Cash from Operations $139,554 $167,464 $200,957
Additional Cash Received
Non Operating (Other) Income $0 $0 $0
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $139,554 $167,464 $200,957
Expenditures 2002 2003 2004
Expenditures from Operations:
Cash Spending $54,000 $84,000 $92,000
Payment of Accounts Payable $67,547 $86,435 $95,081
Subtotal Spent on Operations $121,547 $170,435 $187,081

Additional Cash Spent
Non Operating (Other) Expense $0 $0 $0
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $121,547 $170,435 $187,081
Net Cash Flow $18,006 ($2,971) $13,876
Cash Balance $24,181 $21,210 $35,086
WorkChairs Business Plan
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8.5 Projected Balance Sheet
WorkChairs is not looking to grow at a super-fast pace, but we do project to grow our net-
worth and cash slowly as time goes on. By 2004 we project to have over $30,000 of cash on
hand while still paying our three employees decent salaries for their work.
Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Current Assets 2002 2003 2004
Cash $24,181 $21,210 $35,086
Other Current Assets $0 $0 $0
Total Current Assets $24,181 $21,210 $35,086
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $24,181 $21,210 $35,086

Liabilities and Capital
2002 2003 2004
Accounts Payable $15,153 $18,183 $21,820
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $15,153 $18,183 $21,820
Long-term Liabilities $0 $0 $0
Total Liabilities $15,153 $18,183 $21,820
Paid-in Capital $10,000 $10,000 $10,000
Retained Earnings ($3,825) ($971) ($6,973)
Earnings $2,854 ($6,002) $10,240
Total Capital $9,029 $3,027 $13,267
Total Liabilities and Capital $24,181 $21,210 $35,086
Net Worth $9,029 $3,027 $13,267
8.6 Business Ratios
The following table outlines some of the more important ratios from the Office Furniture
industry. The final column, Industry Profile, details specific ratios based on the industry as it
is classified by the Standard Industry Classification (SIC) code, 5712.9904. Our Gross Margin
will increase from 2002-2004 as well are our profit ratio. Both will dip in 2003 as our expense
ratio grows from a payroll increase.
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Page 21
Table: Ratios
Ratio Analysis
2002 2003 2004 Industry Profile
Sales Growth 0.00% 20.00% 20.00% 2.90%
Percent of Total Assets
Accounts Receivable 0.00% 0.00% 0.00% 27.39%
Inventory 57.06% 78.07% 56.63% 34.98%
Other Current Assets 0.00% 0.00% 0.00% 22.82%

Total Current Assets 100.00% 100.00% 100.00% 85.19%
Long-term Assets 0.00% 0.00% 0.00% 14.81%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 0.00% 0.00% 0.00% 39.96%
Long-term Liabilities 0.00% 0.00% 0.00% 11.39%
Total Liabilities 0.00% 0.00% 0.00% 51.35%
Net Worth 100.00% 100.00% 100.00% 48.65%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.00% 56.25% 61.72% 33.55%
Selling, General & Administrative Expenses 47.96% 59.83% 56.62% 20.02%
Advertising Expenses 0.00% 0.00% 0.00% 2.63%
Profit Before Interest and Taxes 2.92% -3.58% 7.28% 0.94%
Main Ratios
Current 1.60 1.17 1.61 1.95
Quick 0.69 0.26 0.70 0.98
Total Debt to Total Assets 62.66% 85.73% 62.19% 55.92%
Pre-tax Return on Net Worth 45.15% -198.27% 110.26% 2.53%
Pre-tax Return on Assets 16.86% -28.30% 41.69% 5.73%
Business Vitality Profile 2002 2003 2004 Industry
Sales per Employee $46,518 $55,821 $66,986 $133,883
Survival Rate 65.98%
Additional Ratios 2002 2003 2004
Net Profit Margin 2.04% -3.58% 5.10% n.a
Return on Equity 31.61% -198.27% 77.18% n.a
Activity Ratios
Accounts Receivable Turnover 0.00 0.00 0.00 n.a
Collection Days 0 0 0 n.a
Inventory Turnover 0.00 0.00 0.00 n.a
Accounts Payable Turnover 5.46 4.92 4.52 n.a

Payment Days 28 816 887
Total Asset Turnover 5.77 7.90 5.73 n.a
Debt Ratios
Debt to Net Worth 1.68 6.01 1.64 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $9,029 $3,027 $13,267 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.17 0.13 0.17 n.a
Current Debt/Total Assets 63% 86% 62% n.a
Acid Test 0.69 0.26 0.70 n.a
Sales/Net Worth 15.46 55.32 15.15 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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