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Projected Financials DEVELOPMENT COSTS Ongoing operations are to be financed by the design consulting fees generated by Green Design Group LLC. One hundred fifty thousand dollars ($150,000) in financing is sought to fund office personnel and marketing activities. Key office personnel includes a sales manager and production manager. Marketing activities include promotional materials, direct sales efforts and development costs of sample designs. Individual projects are explained in Current Business Development. REVENUES The Company projects revenues of $285,500 in 1997. Revenues increase to $2,875,000 by year three. Included in this projection are sales revenues from Tee-Shirt design and manufacturing which is explained in Current Business Development. (A detailed four-year projected income statement can be found in Appendix F.) |
For the first three years, salaries and operating expenses are kept low to generate funds for growth and expansion. The business projects Earnings Before Interest and Taxes (EBIT) of $1,354,314 in year three, which is a net margin before taxes of 47%.
The largest expense other than employees is Marketing/Research and Development and Travel Expenses. It is anticipated in the start-up phase of the new business model that numerous proposals and expenses will be incurred in attempts to attract clients and accounts.
Financials including a Balance Sheet, Projected Income Statements and Projected Cash Flow Statements along with a Four-Year Projected Income Statement can be found in Appendices D, E, and F.
Industry Pricing Structure
As compared to a Traditional Branded Apparel Company
| Traditional Branded Co. | Branded Co. Client | Retail Chain Client | Promotional Client | |
| Manufacturer's FOB cost (materials and labor) | $20.00 | $20.00 | $20.00 | $20.00 |
| Production Commission by DG. | $1.25 | $3.60 | $6.66 | |
| Total FOB | $21.25 | $23.60 | $26.66 | |
| Landed Duty Paid (approximate) (cost to branded company) | $24.00 | $25.50 | $28.32 | $31.99 |
| Wholesale Price(cost to retailer) | $48.00 | $48.00 | $28.32 | $31.99 |
| 50% margins | 46% margins | |||
| Retail Price(cost to consumer before mark-downs) | $96.00 | $96.00 | $56.64 | $0.00 |
| 50% margins | 50% margins | 50% margins |
Balance Sheet - April 1, 1997
| Current Assets | |
| Cash | $46,139 |
| Accounts Receivable | $0 |
| Prepaid and other | $1,100 |
| Total Current Assets | $47,239 |
| Fixed Assets at Fair Market Value | |
| Computer Equipment | $10,756 |
| Computer Software | $2,266 |
| Office Equipment (Phones, Fax, Copier, etc.) | $1,500 |
| Office Furniture | $1,586 |
| Accumulated Depreciation | ($4,839) |
| Art Books 125 @ $45.00 each | $5,625 |
| Total Fixed Assets | $16,894 |
| Total Assets | $64,133 |
| Current Liabilities | |
| Accounts Payable | $1,848 |
| Taxes Payable on 4/15/97 | $4,619 |
| Total Current Liabilities | $6,467 |
| Shareholder Equity | |
| Common Stock | |
| Retained Earnings | |
| Total Shareholder Equity | $57,666 |
| Total Liabilities and Equity | $64,133 |
Projected Income Statement by Quarters for 1997
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th quarter | TOTALS | |
| Revenues | |||||
| Consulting Fees (a) | $41,500 | $27,500 | $68,750 | $41,250 | $179,000 |
| Production Royalties/Commission | $0 | $9,500 | $22,000 | $45,000 | $76,500 |
| Product Sales (c) | $0 | $0 | $0 | $25,000 | $25,000 |
| Total Revenues | $41,500 | $37,000 | $90,750 | $111,250 | $280,500 |
| Expenses | |||||
| General Office | $9,500 | $12,000 | $15,000 | $15,000 | $51,500 |
| Research and Development | $1,500 | $5,500 | $5,500 | $5,500 | $18,000 |
| Travel | $3,500 | $6,500 | $7,500 | $11,000 | $28,500 |
| Marketing Expenses | $0 | $15,500 | $18,000 | $8,500 | $42,000 |
| Misc. Expenses | $500 | $500 | $500 | $500 | $2,000 |
| COGS | $0 | $0 | $0 | $12,500 | $12,500 |
| Employees | $4,800 | $32,000 | $38,500 | $38,500 | $113,800 |
| Taxes and Govt. Fees | $1,440 | $9,600 | $11,550 | $11,550 | $34,140 |
| Commissions | $0 | $2,500 | $0 | $2,500 | $5,000 |
| Loan Payment | $0 | $0 | $0 | $0 | $0 |
| Total Expenses | $21,240 | $84,100 | $96,550 | $105,550 | $307,440 |
| EBIT per month | $20,260 | ($47,100) | ($5,800) | $5,700 | ($26,940) |
Projected Income Statement by Quarters for 1998
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th quarter | TOTALS | |
| Revenues | |||||
| Consulting Fees (a) | $68,750 | $55,000 | $55,000 | $41,250 | $220,000 |
| Production Royalties/Commis | $20,000 | $20,000 | $85,000 | $25,000 | $150,000 |
| Product Sales (c) | $85,000 | $110,000 | $190,000 | $125,000 | $510,000 |
| Total Revenues | $173,760 | $185,000 | $330,000 | $191,250 | $880,000 |
| Expenses | |||||
| General Office | $15,000 | $15,000 | $15,000 | $15,000 | $60,000 |
| Research and Development | $7,500 | $3,200 | $10,500 | $8,000 | $29,200 |
| Travel | $7,500 | $7,500 | $13,000 | $11,000 | $39,000 |
| Marketing Expenses | $12,500 | $5,500 | $15,000 | $12,000 | $45,000 |
| Misc. Expenses | $500 | $500 | $500 | $500 | $2,000 |
| COGS | $42,500 | $55,000 | $95,000 | $62,500 | $255,000 |
| Employees | $38,500 | $38,500 | $44,800 | $48,000 | $169,800 |
| Taxes and Govt. Fees | $11,550 | $11,550 | $13,440 | $14,400 | $50,940 |
| Commissions | $8,500 | $11,000 | $19,000 | $12,500 | $51,000 |
| Loan Payment | $0 | $0 | $0 | $0 | $0 |
| Total Expenses | $144,050 | $147,750 | $226,240 | $183,900 | $701,940 |
| EBIT per month | $29,700 | $37,250 | $103,760 | $7,350 | $178,060 |
Projected Cash Flow Statement by Quarters for 1997 - 1998
Does not Include $150,000 Investment Funds
| 1997 | 1998 | |||||||
|---|---|---|---|---|---|---|---|---|
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
| Sources | ||||||||
| Revenues | $41,500 | $27,500 | $68,750 | $66,250 | $113,750 | $160,000 | $250,000 | $256,250 |
| Cash From Principal | $0 | $29,760 | $22,000 | $45,000 | $0 | $0 | $0 | $0 |
| Investment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Outflows | ||||||||
| General Office | $9,500 | $12,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 |
| Research and Development | $1,500 | $5,500 | $5,500 | $5,500 | $7,500 | $3,200 | $10,500 | $8,000 |
| Travel | $3,500 | $6,500 | $7,500 | $11,000 | $7,500 | $7,500 | $13,000 | $11,000 |
| Marketing Expenses | $0 | $15,500 | $18,000 | $8,500 | $12,500 | $5,500 | $15,000 | $12,000 |
| Misc. Expenses | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 |
| COGS | $0 | $0 | $12,500 | $42,500 | $55,000 | $95,000 | $62,500 | $110,000 |
| Employees | $4,800 | $32,000 | $38,500 | $38,500 | $38,500 | $38,500 | $44,800 | $48,000 |
| Taxes and Govt. Fees | $1,440 | $9,600 | $11,550 | $11,550 | $11,550 | $11,550 | $13,440 | $14,400 |
| Commissions | $0 | $2,500 | $0 | $2,500 | $8,500 | $11,000 | $19,000 | $12,500 |
| Loan Payment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Outflows | $21,240 | $84,100 | $109,050 | $135,550 | $156,550 | $187,750 | $193,740 | $231,400 |
| Cash Position before Taxes | $20,260 | ($26,840) | ($18,300) | ($24,300) | ($42,800) | ($27,750) | $56,260 | $24,850 |
| Cumulative Cash Position | $20,260 | ($26,840) | ($45,140) | ($69,440) | ($112,240) | ($139,990) | ($83,730) | ($58,880) |
Projected Cash Flow Statement by Quarters for 1997 - 1998
Includes $150,000 Investment Funds
| 1997 | 1998 | |||||||
|---|---|---|---|---|---|---|---|---|
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
| Sources | ||||||||
| Revenues | $41,500 | $27,500 | $68,750 | $66,250 | $113,750 | $160,000 | $250,000 | $256,250 |
| Cash From Principal | $0 | $29,760 | $22,000 | $45,000 | $0 | $0 | $0 | $0 |
| Investment | $0 | $150,000 | $0 | $0 | $0 | $0 | $0 | $0 |
| Outflows | ||||||||
| General Office | $9,500 | $12,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 |
| Research and Development | $1,500 | $5,500 | $5,500 | $5,500 | $7,500 | $3,200 | $10,500 | $8,000 |
| Travel | $3,500 | $6,500 | $7,500 | $11,000 | $7,500 | $7,500 | $13,000 | $11,000 |
| Marketing Expenses | $0 | $15,500 | $18,000 | $8,500 | $12,500 | $5,500 | $15,000 | $12,000 |
| Misc. Expenses | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 |
| COGS | $0 | $0 | $12,500 | $42,500 | $55,000 | $95,000 | $62,500 | $110,000 |
| Employees | $4,800 | $32,000 | $38,500 | $38,500 | $38,500 | $38,500 | $44,800 | $48,000 |
| Taxes and Govt. Fees | $1,440 | $9,600 | $11,550 | $11,550 | $11,550 | $11,550 | $13,440 | $14,400 |
| Commissions | $0 | $2,500 | $0 | $2,500 | $8,500 | $11,000 | $19,000 | $12,500 |
| Loan Payment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Outflows | $21,240 | $84,100 | $109,050 | $135,550 | $156,550 | $187,750 | $193,740 | $231,400 |
| Cash Position before Taxes | $20,260 | $123,160 | ($18,300) | ($24,300) | ($42,800) | ($27,750) | $56,260 | $24,850 |
| Cumulative Cash Position | $20,260 | $123,160 | $104,860 | $80,560 | $37,760 | $10,010 | $66,270 | $91,120 |
Projected Four Year Income Statement 1997 - 2000
| 1997 | 1998 | 1999 | 2000 | |
| Revenues | ||||
| Consulting Fees | $179,000 | $220,000 | $218,875 | $525,000 |
| Production Royalties/Commissions | $76,500 | $150,000 | $450,000 | $950,000 |
| Product Sales | $25,000 | $510,000 | $950,000 | $1,400,000 |
| Total Revenues | $280,500 | $880,000 | $1,618,875 | $2,875,000 |
| Expenses | ||||
| General Office | $51,500 | $60,000 | $66,000 | $72,600 |
| Research and Development | $18,000 | $29,200 | $29,200 | $32,120 |
| Travel | $28,500 | $39,000 | $45,000 | $65,000 |
| Marketing Expenses | $42,000 | $45,000 | $55,000 | $75,000 |
| Misc. Expenses | $2,000 | $2,000 | $5,500 | $6,500 |
| COGS | $12,500 | $255,000 | $475,000 | $700,000 |
| Employees | $113,800 | $169,800 | $255,000 | $350,000 |
| Taxes and Govt. Fees | $34,140 | $50,940 | $66,222 | $79,466 |
| Commissions | $5,000 | $51,000 | $95,000 | $140,000 |
| Loan Payment | $0 | $0 | $180,000 | $0 |
| Total Expenses | $307,440 | $701,940 | $1,271,922 | $1,520,686 |
| EBIT per month | ($26,940) | $178,060 | $346,953 | $1,354,314 |
| Net Margin (before taxes) | -9.60% | 20.23% | 21.43% | 47.11% |
| Green Design Group, LLC | ||
| Table of Contents | Appendices | |
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1. Executive Summary 2. Company 3. Product & Services 4. Market 5. Sales & Marketing 6. Competitors 7. Management 8. Historical Financials 9. Projected Financials |
Business Model Industry Pricing Balance Sheet Projected Income Statements Projected Cash Flow Statements Projected 4 Year Income Statement Resume & Business | |
| © Green Design Group LLC. April 1,1997. | ||