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E-WORLD Market Feasibility Report E-World Web Design Company 12/7/2010 This market feasibility report will present

many aspects of system and business for web design company E-World. Report will examine the market, operational, and financial feasibility as well as internal and external analyzes. 0

Table of Contents Executive Summary .............................................................. ................................................................... 2 Market Fea sibility Idea .................................................................. ........................................................... 3 Description ...... ................................................................................ ........................................................ 3 Uniqueness .......... ................................................................................ ................................................... 3 External Analysis: Applica ble Strengths And Weaknesses ................................................... .................... 4 PEST Analysis ........................................... ................................................................................ .......... 4 SWOT Analysis ..................................................... ............................................................................... 5 Strengths .................................................................... ........................................................................ 5 Weakn esses .......................................................................... .............................................................. 5 Opportunities . ................................................................................ ..................................................... 6 Threats ................ ................................................................................ .............................................. 6 External Analysis: Feasibility of the Idea .................................................................... .............................. 6 Industry Analysis ............................. ................................................................................ ..................... 6 Five Porter Forces: .................................... ................................................................................ ....... 6 Competitor Analysis .................................................. ........................................................................... 8 Cu rrent Market for Services ...................................................... ............................................................ 9 Customer Analysis ............................................................................... ................................................ 9 External Analysis: Needed for Implementation ................................................................ ....................... 10 Managerial Structure:................................ ................................................................................ ............. 10 Financial Feasibility ......................................... ................................................................................ ...... 12 Break Even Analysis: ................................................. ........................................................................ 12 Proj ected Sales: ................................................................... .............................................................. 13 Income Stateme nt: ............................................................................ ................................................. 13 Cash Flow Statement: ...... ................................................................................ .................................. 15 Balance Sheet: ........................... ................................................................................ ........................ 17 Possible funding options: .......................... ................................................................................ .......... 18 References: ...................................................... ................................................................................ ..... 19 1

Executive Summary E-World is a small venture found in the commercial area of Kla ipeda, Lithuania. Company offers Internet and Web-based services to small busine sses in the city of Klaipeda. The services E-World offers consist of website dev elopment and design, hosting, maintenance and marketing. With an experience and knowledge in Web development and business-to-business sales, E-World believes th at it can provide a unique and better service to small businesses, in contrast t o the services being offered in the market. The growth rate and demand for the w eb design, development and promotion for the small businesses is high all the ti me, and according to the statistics does not show any evidence of decline. Furth ermore, it is an amazing fact that only a small number of web design companies h ave taken an advantage of this opportunity, because there is no leading company in this big market. E-World believes that this phenomenon of unoccupied market h appened due to the high project cost. Our company created a web design system th at reduces the cost of the projects. Thus, the E-World will offer same high-end web design services at much lower costs. This market feasibility report will pre sent many aspects of system and business for web design company E-World. Report will examine the market, operational, and financial feasibility as well as inter nal and external analyzes. 2

Market Feasibility Idea My idea for market feasibility study is start up web pag e creation and hosting company with future development opportunity to social net work and mail domain creation and maintenance. Description The main area of acti vity is the creation and promotion of Internet sites that can be used as sales t ool or tackle other tasks entrusted to it. Creation of web sites for commercial subjects (creation of corporate websites) and promotion is one of the most compe titive industries in the field of Internet sites development. Therefore developm ent team is required to have a developed marketing skills and practical experien ce. We commit ourselves to the task of creating technically ready to move in sea rch engine site, with a competent design, which will increase the recognition of the company and attract new customers. Therefore, we consider the development a nd manufacturing site, as the first stage of its successful promotion. Quality o f design can also greatly enhance the popularity of the company. At the creation stage we offer our customers three different design models from which he/she ca n choose one that he/she likes and it will be developed further. Manufacturing W eb sites in our studio involves the whole cycle of works from domain registratio n to hosting a site as well as providing graphic design. Uniqueness Our motto is "The sites that work", and they work not only in a technical sense, but also in economic terms. We will use an individual approach to each client, unlike the t emplate, it will give us solutions that will allow us to create sites that meet the requirements of both customers and their potential clients. The "Completed W ork" will allow customers to fully sense the style and quality of developed site s. We believe that the factor determining the success of our company will be the quality of work performed, evidenced by the feedback from our customers. Create a site can many, but to make an effective tool in the market of Internet space can only few. 3

External Analysis: Applicable Strengths And Weaknesses PEST Analysis Political factors Strengths Lithuania became independent and began the privatiza tion process. After joining the EU, began to promote competition, support for sm all and medium-sized businesses to reduce the influence of monopolies and oligop olies in markets (in accordance with the laws of the Republic of Lithuania, the entity is considered dominant if its market share is not less than 40 percent). The State and the EU is making efforts in order to further reduce the number of state-owned enterprises and monopolies, and increased surveillance. Lithuanian l aw is enforced racial, cultural and religious equality, which encourages foreign professionals to work in web design industry in Lithuania. Lithuania is a membe r of the EU, the World Trade Organization and other smaller regulating trade org anizations. These unions protect intellectual property, which is crucial to web design industry. Weaknesses Lithuania is a relatively young country, which is st ill only 16 years old. Frequent changes of government (now 14th, although in the ory should be changed every four years), political instability affects not only government actions, but the country and the economic environment complicates the establishment of a business and its development. Seimas of the Lithuanian Gover nment approved the draft laws. They often form their outright change in policy, laws and fees are regulated by their calculating procedures, company formation, accounting and control rules. These changes negatively impact the industry of we b design and software, which is closely related. Economic Factors Strengths Rapid GDP growth during 2006 has risen by 6.9 percent . Although now it is forecasted that GDP growth rate will slow down, but it shou ld remain high in the future (the Ministry of Finance forecasts - about 5 per ce nt. Per annum 2010). Average monthly gross wages and salaries in the public sect or increased by 19.1 percent and amounted to 1,802 LT and the private sector gre w 20.7 percent and amounted to 1,687 LT in year 2010 compared to 2009. Weaknesse s 1. Lithuania has noticeably higher the inflation rate than in other EU countri es. 2. Slow pace of the middle layer formation. 3. Lack of state support for SME development. 4. Lithuania does not meet the Maastricht inflation criterion. 4

Social Factors Strengths In Klaipeda, as in the rest of Lithuania, there is no r eligious fragmentation of the conflict. Klaipeda welcomes overseas products and services. Klaipedas has available entertainment niche. The number of unemployed pe ople is uniformly decreasing. Out of these factors as a trend, the demand for so ftware and web design is increasing for past 3 years. Weaknesses In Klaipeda reg ion has increased mortality rates. 2009 natural population has decline, per 1,00 0 population was 6.3 in 2010 6.9 (Lithuania respectively 3.2 and 3.9). The incre ased population migration was observed as a part of trend of the aging populatio n. It affects the region and the economic situation by increasing the number of pensioners. There is a growing crime rate, especially among young people. These factors can diminish the number of clients, because the typical client is 20 to 40 years old. Technology Strengths The State encourages people to purchase computers (to be re imbursed 33 percent of the purchase value), supports the use of cyberspace (tax payment; order the performance of banking operations, consultations on the Inter net, the achievement of all public institutions). Increase of Internet users in the group, there is still more of their goods and services to companies that adv ertise their web sites. Weaknesses We have the technical base of companies do no t provide an optimal work performance and attractive price / quality ratio. SWOT Analysis Strengths y y y y Weaknesses y Profound and broad understanding of industry. Superior experience and knowledge. Flexibility of time and projects The capability of meeting the client's desires with a custom-built, malleable solution. y y Limited number of served clients due to the one person venture (at least origina lly) The difficulty of building brand image. The inability to meet rapidly growi ng demand. 5

Opportunities y y y Threats y y Partaking in a rapidly growing market. High variety of sales opportunities as te chnology advances. Niche for selling templates y Future competition from authorized web design firms. Substantial leaps in comput er technology makes computers a lot easier to use, decreasing the demand for dev eloping web pages. A substantial increase in client's computer proficiency leads to selfmade web sites. External Analysis: Feasibility of the Idea Industry Analysis Internet industry is one of the most dynamic sectors of modern business. And, th erefore, is an area that provides opportunities for career growth and rising liv ing standards for talented professionals. At the moment we are seeing consistent development of the Lithuanian Internet and projected growth of an Industry for this year is 20%1. A significant proportion of the advertising market is moving from off-line to on-line, which entails increasing segment of the Internet marke t. Web site from a simple web-based tool of communication turned into a powerful industry that allows conducting business around the world. Internet gives basic but sufficient advantage for a business: y This is an opportunity to have busin ess partners in every corner of the globe. y Promote products, regardless of dis tance and language skills. y Conduct business remotely. y Receive information qu ickly and on time. Five Porter Forces: According to online encyclopedia Investop edia.com the Five Porter Forces for Internet Industry are: 1. Threat of New Entr ants. You do not need to look far to realize that the cost of entry has fallen f ast. It used to costs an arm and a leg to launch a portal. The price of computer software and servers and network bandwidth - of which portals consume a substan tial amount - was enormous. Yet costs are falling fast, as off-the shelf systems can now do what only customized technologies could do just a few of years ago a nd at a fraction of the price. At the same 1 Kiran C., Web Development 2010 6

time, brainy web developers, which were scarce at the height of the internet mar ket boom, are now much easier for new entrants to find and have become more affo rdable keep. However, the apparent success of companies like Amazon, is not base d on their low entry cost into book retailing, but the very large sums of money spent on promotion and growing their business. Entering a new market with a new brand still calls for deep pockets. 2. Power of Suppliers. Portals generally hav e little power over suppliers. Basically, this is because they don't actually ow n much. Most of the information and services they deliver to users is supplied b y outside companies stock brokerages, new magazines and the like. Expect content suppliers to enjoy growing power, especially considering portals will not able t o give content away forever. At the same time, internet portals rely on telecom network operators for a steady diet of internet bandwidth. Granted, the telecom bandwidth business is getting increasingly competitive and prices are falling fa st. But once systems are hooked up to telecom operator networks, it can be awful ly difficult to switch to a new supplier. 3. Power of Buyers. Internet portals have two sets of buyers: visitors and adver tisers. Both enjoy considerable power over portals. Competing sites are just a c lick away; URL bookmarking makes the job of switching to other sites even easier for users. In fact, portals are in constant danger of a mass desertion of users to other sites because in most cases, customers make no financial commitment to the service. Portals' heavy reliance on advertising dollars means that ad spend ers can squeeze increasingly better terms for banner space. 4. Availability of S ubstitutes. Internet portals must defend themselves from a raft of substitutes. The most obvious are other websites that offer the same, or similar, information and services. Most portals do little more than aggregate information and servic es that already exists on the internet; original content suppliers represent a r eadily available set of substitutes. In most cases, they are just a click away. There are more, less obvious substitutes as well, such as television and magazin es. Television's clear, moving images never suffer slow connections; magazines c an be rolled up and carried on the bus. Don't forget that the good old telephone directories - both white and yellow pages - are still very convenient business search tools. 5. Competitive Rivalry. Feeble barriers to entry, a slew of substi tutes and steadily increasingly buyer power combine to create a disturbing impac t: fierce competition and industry rivalry. 7

Portal competitors now must lure customers with lower prices and heavy investmen t in more exciting content services. All of this tends to drive industry profita bility down, threatening the survival of players who can't compete.2 Competitor Analysis Currently in Klaipeda there are only four web sites creating companies. They and t heir areas of activities are presented in table below. 3 WebMod company : Web site development services Competitor Name Edit Studija4: MMarius Company5: Emotion Company6: Web developme nt Web Design Web development E-commerce Web site promotion Content Management System (CMS) Web Design Three-dimensional graphics (3D) Onlin e Advertising Internet Advertising Web development Website Support Internet Advertising Internet Marketing y photo pages Flash/animation Services y Translation pages y name and online hos ting Create corporate Photography style Additional Services: Other Web N/A Solutions N/A Lt Starting from 400lt* Prices: Starting from 490lt* Starting from 490 lt* Starting from 400 lt* *with minimum tools and widgets included (basic level websites) 2 All information about Five Porter Forces was taken from the online encyclopedia www.investopedia.com Information about the services was taken from http://www.we bmod.lt/lt/paslaugos_svetainiu_kurimas_web_dizainas 4 Information about the serv ices was taken from http://www.e-dit.lt/#Paslaugos 5 Information about the servi ces was taken from http://www.mmarius.lt/ 6 Information about the services was t aken from http://www.emotion.lt/paslaugos 3 8

According to the services provided and the number of web sites created, companie s WebMod and Emotion are leading companies that provide good quality services fo r average industry price. Their price and quality ratio is above others in Klaip eda. Current Market for Services According to research made by the committee of development of the Informational society states that 35% of the businesses in Lithuania have their corporate webs ite and 42.8% do not have, but are willing to create one7. Following this demand , I will operate in a niche for website creation and development services. These services include website creation and promotion, both advertising the website a nd placing adverting on the website, providing Content Management System, 3D obj ect development, flash animation and flash site creation, taking pictures for cr eation of the website, selling website templates (html, xhtml, php, MySQL and et c.), creation of online galleries, creation of companys logo, providing hosting an d space on the server and registering the domain (name of the website). Also, if customer has need in keeping website maintenance, we will provide it. Customer Analysis The typical customer for the Web page creation company that creates the major se gment of operational income is business person, or commercial/marketing director with middle or high income, age gap is not considered to be a criterion, who wa nts to create the website for their company or any other project. Also there are customers of high variety of age and income, who want to create website or any featured object (3D or flash) for their personal use. 7 Information was taken from http://www.ivpk.lt/main-stat.php?cat=62&n=21 9

External Analysis: Needed for Implementation At first, most of the work will fal l on the individual entrepreneur, as well as the second office employee. These p eople can perform any services offered by our company, other than typing. Set of texts will be given to the contractor. To this reason, the firm can hire people of any age and gender, education also has no value. The only requirement is a g ood typing speed, responsible approach to work and the possibility of long-term access to a computer. In order to ensure the normal operation of the company, en trepreneur must keep in mind workers in amount several times more than needed. T his approach is driven by the need of nonstop operation of the company, as well as the fact that it does not require to pay wages for contract workers if they d o not work. Furthermore, additional contract workers can be involved in performi ng other services (for example: to repair, maintain, and modernize equipment; se t up and create software products). Unlike in the case of type writers, above me ntioned services require qualified professionals who unlikely will want to work on the contract for a fairly reasonable wage. However, the problem is easily sol ved. You can hire senior students with appropriate specialties. The main require ment for them is to have a good knowledge of the subject area and responsible at titude toward work. It is driven by the desire of many students to find a small salary in his/her spare time; we can safely assume that the problems with lack o f staff at the E-World will not have. The wage that an individual entrepreneur e arns is withdrawn from the profits of the firm. Employees who are working under the contract for each job receive an amount determined by the individual entrepr eneurs and specified in the work contract. Also additional reward for contractor s for good employment rates and innovations aimed at increasing the firm's profi ts are available. In the future (at the end of the year) the second office worke r will be transferred to a permanent position. Also on similar terms will be hir ed one or two technicians. The E-World is not going to abandon the workers on co ntract, because they are more beneficial to firms performance for the aperiodic jo bs. The distribution of jobs and control over the execution of all works will be carried out directly by an individual entrepreneur, who is the sole owner of th e company. Talking about hardware, company will need 4 PCs, one stable server and one mirroring server, plus wide optical internet access point. For creation and maintenance, company will need certain software packages. Managerial Structure: As a strategy for selecting components of information-anal ytical system, the E-World company bases on the principle of "Best-of-breed" - t o deploy best-in-class solution for each functional area. Principles for selecti on of the following criteria: y y y The system must be able to handle large volu mes of data, up to the transactional data The system must provide hundreds of us ers, including users in the central office and shops Ability to use sophisticate d analytical techniques required for solving the problems of retail business 10

To construct the data warehouse was selected database Sybase IQ, specifically de signed for analytic data warehousing; and as a means of data integration - Oracl e Data Integrator (Oracle Sunopsis), representing a relatively new class of to ols load data - ELT (Extract Load Transform). For reporting and data analysis pl atform was chosen MicroStrategy, allowing solving such important problems for th e retail business, as ABC analysis, market basket analysis (market basket analys is), etc. Company E-World has a system of corporate reporting and data analysis, which has become a source of complete, consistent and reliable information abou t the company, the opportunity for regular monitoring of the company, as well as analysis of the effectiveness of the company from different angles, levels, and non-financial indicators. In particular: y y y y Added the corporate reporting system, replacing several legacy systems accessible through the Web shopping Inc reased speed of data acquisition employees. If earlier to obtain the necessary d ata analyst had to wait hours, but now it is time seconds Users can create their own reports without IT services, based on a single directory business terms You can easily handle more complex tasks Business Intelligence solution allows employees to E-World to track key performa nce indicators of the company, as well as solve complex analytical problems by i dentifying relationships between its products, optimize product assortment, the analysis of marketing, sales on credit, on discount cards, with additional servi ces, with sets, etc. 11

Financial Feasibility Break Even Analysis: Break Even Report Units 0 1 2 3 4 5 6 7 8 9 Fixed Costs $700.00 $700.00 $700.00 $700.00 $700.00 $700.00 $700.00 $700.00 $700.00 $700.00 Total Costs $700.00 $750 .00 $800.00 $850.00 $900.00 $950.00 $1,000.00 $1,050.00 $1,100.00 $1,150.00 Tota l Revenue $0.00 $350.00 $700.00 $1,050.00 $1,400.00 $1,750.00 $2,100.00 $2,450.0 0 $2,800.00 $3,150.00 Profit ($700.00) ($400.00) ($100.00) $200.00 $500.00 $800. 00 $1,100.00 $1,400.00 $1,700.00 $2,000.00 12

Projected Sales: Sales Forecast Sales Website Development Result-based Marketing Maintenance Host ing Total Sales Year 1 15.000 Lt 19.000 Lt 14.000 Lt 10.000 Lt 58.000 Lt Year 2 19.000 Lt 20.000 Lt 16.000 Lt 12.000 Lt 67.000 Lt Direct Cost of Sales Website Development Result-based Marketing Maintenance Host ing Total Direct Cost of Sales Year 1 0 Lt 1.000 Lt 0 Lt 3.000 Lt 4.000 Lt Year 2 0 Lt 1.500 Lt 0 Lt 5.000 Lt 6.500 Lt Income Statement: Income Statement Revenue Gross sales Less sales returns and allowances Net sales Cost of Sales Be ginning inventory Plus goods purchased/manufactured Total goods available Less e nding inventory Total cost of goods sold Gross profit (loss) E-World 2010 % of Amount Sales $58.000 0 $58.000 100% 2010 % of Amount Sales $0 0% 4.000 $4.000 0 $4.000 $54.000 7% 7% 0% 7% 93% 2011 % of Amount Sales $67.000 0 $67.000 100% 2011 % of Amount Sales $0 0% 6.500 $6.500 0 $6.500 $60.500 10% 10% 0% 10% 90% 13

Operating Expenses Selling 2010 % of Amount Sales $0 $0 $1.800 $0 $1.800 $30.000 $1.200 $0 $0 $0 $0 $320 $0 $100 $0 $0 $0 $31.620 $33.420 $20.580 $4.528 $16.052 $0 $0 $16.052 0% 0% 3% 0% 3% 52% 2% 0% 0% 0% 0% 0% 1% 0% 0% 0% 0% 0% 55% 58% 35% 8% 28% 0% 0% 28% 2011 % of Amount Sales $0 $0 $2.500 $2.000 $4.500 $30.000 $1.200 $0 $0 $0 $2.000 $320 $0 $100 $0 $0 $0 $33.620 $38.120 $22.380 $4.924 $17.456 $0 $0 $17.456 0% 0 % 4% 3% 7% 45% 2% 0% 0% 0% 0% 3% 0% 0% 0% 0% 0% 0% 50% 57% 33% 7% 26% 0% 0% 26% Salaries and wages Commissions Advertising Depreciation Total selling expenses General/Administrative Salaries and wages Employee benefits Payroll taxes Insurance Rent Utilities Depr eciation and amortization Office supplies Travel and entertainment Postage Equip ment maintenance and rental Interest Furniture and equipment Total General/Admin istrative expenses Total operating expenses Net income before taxes Taxes on inc ome Net income after taxes Extraordinary gain or loss Income tax on extraordinar y gain Net Income (Loss) 14

Cash Flow Statement: Cash Flow Forecast Month: Cash sales Collections from credit sales New equity in flow Loans received Other Total Receipts Payments Cash purchases Payments to cre ditors Salaries and wages Employee benefits Payroll taxes Rent Utilities Repairs and maintenance Insurance Travel Telephone Postage Office supplies Advertising Marketing/promotion Professional fees Training and development Bank charges Misc ellaneous Owner's drawings 3.000 Lt 300 Lt 300 Lt 30 Lt 30 Lt 30 Lt 30 Lt 30 Lt 30 Lt 30 Lt 400 Lt 30 Lt 30 Lt 30 Lt 30 Lt 30 Lt 15000 lt 200 Lt 40 Lt 10 Lt 10 Lt 300 Lt 40 Lt 40 Lt 10 Lt 10 Lt 40 Lt 10 Lt 10 Lt 300 Lt 40 Lt 40 Lt 10 Lt 10 Lt 40 Lt 10 Lt 10 Lt 300 Lt 40 Lt 40 Lt 10 Lt 10 Lt 40 Lt 10 Lt 10 Lt 300 Lt 40 Lt 40 Lt 10 Lt 10 Lt 40 Lt 10 Lt 10 Lt 300 Lt 40 Lt 40 Lt 10 Lt 10 Lt 40 Lt 10 L t 10 Lt 300 Lt 40 Lt 1.214 Lt 500 Lt 50 Lt 10 Lt 10 Lt 5.000 Lt 3.000 Lt 100 Lt 100 Lt 100 Lt 100 Lt 100 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 2.500 Lt 100 Lt 50 Lt 50 Lt 5 0 Lt 50 Lt 50 Lt 50 Lt 50 Lt 50 Lt 400 Lt 0 Lt 30.000 Lt 1.200 Lt 0 Lt 5.000 Lt 3.000 Lt 600 Lt 1.214 Lt 500 Lt 490 Lt 120 Lt 320 Lt 1.800 Lt 240 Lt 0 Lt 3.700 Lt 660 Lt 0 Lt 0 Lt 40.000 Lt 4.600 Lt 4.700 Lt 4.700 Lt 4.700 Lt 5.000 Lt 4.700 Lt 4.700 Lt 5.200 Lt 6.200 Lt 5.700 Lt 5.200 Lt 7.200 Lt 40.000 Lt PreStart 1 1 .400 Lt 200 Lt 3.000 Lt 2 1.500 Lt 200 Lt 3.000 Lt 3 1.500 Lt 200 Lt 3.000 Lt 4 1.500 Lt 200 Lt 3.000 Lt 5 1.800 Lt 200 Lt 3.000 Lt 6 1.500 Lt 200 Lt 3.000 Lt 7 1.500 Lt 200 Lt 3.000 Lt 8 2.000 Lt 200 Lt 3.000 Lt 9 3.000 Lt 200 Lt 3.000 Lt 10 2.500 Lt 200 Lt 3.000 Lt 11 2.000 Lt 200 Lt 3.000 Lt 12 4.000 Lt 200 Lt 3.000 Lt Totals 24.200 Lt 2.400 Lt 36.000 Lt 40.000 Lt 0 Lt 102.600 Lt 15

Loan repayments Tax payments Capital purchases Other Total Payments Cashflow Sur plus/Deficit (-) Opening Cash Balance Closing Cash Balance 24.714 Lt 12.286 Lt 0 Lt 27.286 Lt 1.000 Lt 1.000 Lt 1.000 Lt 1.000 Lt 1.000 Lt 1.000 Lt 1.000 Lt 1.000 Lt 1.000 Lt 1.000 Lt 1.000 Lt 1.000 Lt 12.000 Lt 0 Lt 0 Lt 0 Lt 4.440 Lt 160 Lt 27.286 Lt 27.446 Lt 3.730 Lt 970 Lt 27.446 Lt 28.416 Lt 4.140 Lt 560 Lt 28.416 Lt 28.976 Lt 3.780 Lt 920 Lt 28.976 Lt 29.896 Lt 4.140 Lt 860 Lt 29.896 Lt 30.756 Lt 3.780 Lt 920 Lt 30.756 Lt 31.676 Lt 4.090 Lt 610 Lt 31.676 Lt 32.286 Lt 4.180 Lt 1.020 Lt 32.286 Lt 33.306 Lt 4.090 Lt 2.110 Lt 33.306 Lt 35.416 Lt 3.780 Lt 1.920 Lt 35.416 Lt 37.336 Lt 4.090 Lt 1.110 Lt 37.336 Lt 38.446 Lt 4.290 Lt 2.910 Lt 38.446 Lt 41.356 Lt 61.244 Lt 41.356 Lt 16

Balance Sheet: E-World Balance Sheet [December 30, 2010] Assets Current Assets: Cash Accounts Receivable Less: Reserve for Bad Debts Merchandise Inventory Prepaid Expenses Notes Receivable Total Current Assets Fixed Assets: Vehicles Less: Accumulated Depreciation 0 0 3500 0 15000 0 0 0 0 41356 2400 0 24 00 614 12714 0 57.084 Furniture and Fixtures Less: Accumulated Depreciation Equipment Less: Buildings Less: Land Total Fixed Assets Other Assets: Goodwill Total Other Assets 3500 Accumulated Depreciation 15000 Accumulated Depreciation 0 0 18.500 0 0 75.584 Lt Total Assets Liabilities and Capital Current Liabilities: Accounts Payable Sales Taxes Payable Payroll Taxes Payable Accrued Wages Payable Unearned Revenues 0 0 0 0 0 17

Short-Term Notes Payable Short-Term Bank Loan Payable Total Current Liabilities Long-Term Liabilities: Long-Term Notes Payable Mortgage Payable Total Long-Term Liabilities 0 0 $0 40.000 0 40.000 40.000 Total Liabilities Capital: Owner's Equity Net Profit 20.000 15.584 Total Capital Total Liabilities and Capital 35.584 75.584 Lt Possible funding options: E-World Companys funding will consist of owners investment 40,000.00lt and bank loan in amount of 40,000lt. Owners investment will come from savings account. Bank loa n will be taken with interest of 7-9%. 18

References: "The Industry Handbook: The Internet Industry." Investopedia.com - Your Source F or Investing Education. N.p., n.d. Web. 30 Oct. 2010. <http://www.investopedia.c om/features/industryhandbook/internet.asp>. Informacin s Visuomen s Pl tros Komitetas - Statistika. (n.d.). Informacin s Vis uomen s Pl tros Komitetas Prad ia. Retrieved November 1, 2010, from http://www.iv pk.lt/main-stat.php?cat=62&n=21 Kiran, C. (n.d.). Web Development. Articler. Ret rieved October 30, 2010, from www.articler.com/23205/The-Web-Development-Industr y-Is-Expected-To-Grow-Over20-By-2010.html 19