Mid Atlantic Recycling

March 2004
This sample business plan has been made available to users of Business Plan Pro, business planning software published by Palo Alto Software, Inc. Names, loc ations and numbers may have been changed, and substantial portions of the original plan text may have been omitted to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to resell, reproduce, publish, distribute or even c opy this plan as it exists here. Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at marketing@paloalto.com. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright Palo Alto Software, Inc., 1995-2007 All rights reserved.
Confidentiality Agreement The undersigned reader ac knowledges that the information provided by _______________ in this business plan is confidential; therefore, reader agrees not to disc lose it without the express written permission of _______________. It is ac knowledged by reader that information to be furnished in this business plan is in all respec ts confidential in nature, other than information which is in the public domain through other means and that any disc losure or use of same by reader, may cause serious harm or damage to _______________. Upon request, this document is to be immediately returned to _______________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities.
Table of Contents
1.0 Executive Summary.............................................................................................................................1 1.1 Mission........................................................................................................................................2 1.2 Keys to Success ........................................................................................................................3 1.3 Objectives ...................................................................................................................................3 2.0 Company Summary.............................................................................................................................3 2.1 Start-up Summary ......................................................................................................................3 2.2 Company Locations and Facilities ..........................................................................................5 2.2.1 Government Regulation..........................................................................................................5 2.3 Company Ownership .................................................................................................................5 3.0 Products and Services........................................................................................................................5 3.1 Product and Service Description .............................................................................................6 3.2 Competitive Comparison..........................................................................................................7 3.3 Sales Literature ..........................................................................................................................8 3.4 Technology..................................................................................................................................9 3.5 Future Products and Services ..................................................................................................9 4.0 Market Analysis Summary................................................................................................................10 4.1 Market Segmentation..............................................................................................................10 4.2 Target Market Segment Strategy...........................................................................................12 4.2.1 Market Growth.......................................................................................................................12 4.2.2 Market Needs .......................................................................................................................13 4.2.3 Market Trends .......................................................................................................................13 4.3 Service Business Analysis .....................................................................................................13 4.3.1 Business Participants ..........................................................................................................13 4.3.2 Distributing a Service...........................................................................................................14 4.3.3 Competition and Buying Patterns .......................................................................................14 4.3.4 Main Competitors .................................................................................................................14 5.0 Strategy and Implementation Summary..........................................................................................14 5.1 Value Proposition ....................................................................................................................15 5.2 Competitive Edge....................................................................................................................15 5.3 Sales Strategy..........................................................................................................................15 5.3.1 Sales Forecast .....................................................................................................................16 5.4 Marketing Strategy ..................................................................................................................18 5.4.1 Promotion Strategy ..............................................................................................................18 5.4.2 Positioning Statement..........................................................................................................19 5.4.3 Pricing Strategy ....................................................................................................................19 5.5 Milestones ................................................................................................................................19 6.0 Web Plan Summary ..........................................................................................................................20 6.1 Development Requirements ...................................................................................................20 7.0 Management Summary ....................................................................................................................21 7.1 Management Team .................................................................................................................21 7.2 Management Team Gaps .......................................................................................................22 7.3 Personnel Plan.........................................................................................................................22 8.0 Financial Plan ....................................................................................................................................22 8.1 Start-up Funding ......................................................................................................................23 8.2 Use of Funds ............................................................................................................................23 8.3 Important Assumptions............................................................................................................24 8.4 Break-even Analysis................................................................................................................24
Page 1
Table of Contents
8.5 Projected Profit and Loss .......................................................................................................25 8.6 Projected Cash Flow ...............................................................................................................28 8.7 Projected Balance Sheet ........................................................................................................31 8.8 Business Ratios .......................................................................................................................32
Page 2
Mid-Atlantic Recycling
1.0 Executive Summary
Mid-Atlantic Rec ycling, LLC's area of business will be to collec t, rec ycle/compost, and market waste from municipality waste proc essing plants for use use as a consumer good. This rec ycled product will meet two critical needs: 1. It will give municipalities a feasible and cost effec tive alternative to landfilling the waste, and 2. It will help meet the growing demand for organic soil enhancers and fertilizers. The material that will be rec ycled is human waste sludge. Our rec ycled waste will be targeted toward fertilizer manufac turers, nurseries, landscapers, farmers, government agencies, golf courses, and others. All of these potential customers will benefit from the compost's numerous soil enhancing charac teristics. Additionally, we will offer a service to waste proc essing plants owned by municipalities. Currently these plants fac e several issues regarding the disposal of human waste sludge. Landfills are filling up and costs of disposal are rising. Also, due to rec ent legislation, as of 2008 many landfills will no longer be able to ac cept human waste sludge. Mid-Atlantic Rec ycling will solve this problem by ac cepting this waste at a nominal charge and rec ycling it into a useful product. Mid-Atlantic Rec ycling is entering a niche market in that human waste sludge has not been rec ycled on any sizeable sc ale in West Virginia or the Mid-Atlantic region. This is a unique and viable concept that addresses the needs of various customers and reaches an untapped market with tremendous growth potential. One of the most attrac tive aspec ts is that the business is projec ted to attain a strong c ash position and ac hieve profitability in the first year of operation. Due to a large need for these products and services, and a lac k of direc t competition, our projec tion of quick profitability is attainable. Our in-depth research pertaining to human waste's positive soil enhancement charac teristics and its many potential uses is well advanced. The concept has been tested on a small sc ale and the results, upon analysis, were found to be a high quality compost. Research will be an ongoing proc ess for the company; one particular area of interest is the possibility of qualifying the product as a fertilizer. In this case, the profitability of the product would nearly double. MidAtlantic Rec ycling is working with the West Virginia University Cooperative Extension Service to investigate the feasibility of selling the material as fertilizer. We already have an advance order for 500 tons, and one fertilizer manufac turer and a large landscaper have committed to purchasing 600 tons of our product annually. Additionally, various municipalities have expressed keen interest in paying us to ac cept their waste.
Page 1
1.1 Mission
Mid-Atlantic Rec ycling's mission is threefold. Our first responsibility is to ensure the financial well being of the business. Second, is to provide municipalities with an economical, alternative for the disposal of human waste sludge. Third, is to provide a top quality, rec ycled material to the consumer so that they may benefit from compost's many good properties and organic elements. In addition, we hope to build in the consumer a positive feeling about the feasibility of using rec ycled human sludge as a fertilizer. Opportunity Rationale Human waste sludge has long been a waste problem for municipalities which operate waste proc essing plants. In metropolitan areas that handle large amounts of waste, human sludge is generally disposed in volume at municipal landfills. Driven by state and federal mandates, rec ycling and composting of municipal solid waste has increased dramatically during the past dec ade. There are nearly ten thousand curbside rec ycling programs in America, and nearly 15,000 drop-off centers for rec yclable material. Mid-Atlantic Rec ycling's business model presents an opportunity to rec ycle a landfill bound waste, save the landfill space, and give the consumer the opportunity to benefit from the many positive properties of the composted material. Human waste sludge contains a high nutrient value which c an be composted to produce a quality plant food and soil enhancer at far lower prices than c hemical fertilizers currently on the market.
Page 2
1.2 Keys to Success
The keys to success in our business are: Overcome perception issues that may exist with using compost made from human waste sludge. Establish and build relationships and trust with c ustomers to help shield from future competition. Expand rapidly to control the market. Offer reasonable prices. Get investment.
1.3 Objectives
1. Flush sales for the first twelve months of operations and growing eac h year thereafter. 2. Establish the rec ycling fac ility in Monroe County, WV; to include six composting units in 2004. 3. Open additional fac ilities in 2005 and 2006 to serve other areas of the state and the MidAtlantic region. 4. Continue to market Mid-Atlantic Rec ycling by contac ting and soliciting business from additional municipalities and compost using customers.
2.0 Company Summary

The legal name of the company will be Mid-Atlantic Rec ycling, LLC. Mid-Atlantic Rec ycling will be formed as a Limited Liability Company in West Virginia. Due to its tax benefits, a LLC will be advantageous.
2.1 Start-up Summary

Our start-up costs will be $1,000,000. The funds will be primarily used for the following: Capital Asset Purchases Proc essing Plants 2 x $190,460 $380,920 Proc essing Plants built in-house 2 x $80,000 $40,000 Sheds 48'x72' 4 x $18,500 $74,000 Skid Truck 2 x $73,000 (avg price) $146,000 Bac khoe $40,000 Front-end Loader 2 x $50,000 $100,000 Tandem Dump Trailer $6,000 Total $826,920 Detail of start-up assumptions are shown in the following tables and chart.
Page 3
Table: Start-up
Start-up Requirements Start-up Expenses Legal Phone/utilities deposits Licenses/tax deposit Insurance Brochures/sales literature Advertising Employee salaries Skid boxes, 15 @ $3,000 ea. Welding and cutting torch Furniture and supplies Website development Miscellaneous Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements
$500 $500 $4,000 $1,000 $500 $2,500 $16,680 $45,000 $10,000 $5,000 $1,500 $5,000 $92,180
$80,900 $0 $0 $826,920 $907,820 $1,000,000
Page 4
2.2 Company Locations and Facilities
Mid-Atlantic Rec ycling will operate in Monroe County, WV, near the community of Lindside, WV. The Lindside loc ation is approximately 10 miles from Peterstown, WV. The rec ycling fac ilities will be loc ated on a 58+ ac re property owned by company president, Oliver Pyne; 5 ac res will be set aside for the rec ycling fac ility set up and operation. This site is ideal as it provides ac cess to loc al municipalities and to Interstates 77 and 81. Also there is room for expansion as the business grows. Additionally, Mid-Atlantic Rec ycling's business loc ation is loc ated in a federally designated "historically underutilized business zone" or HUBZone. As disc ussed under the Competitive Comparison sec tion below, this designation gives Mid-Atlantic Rec ycling certain advantages in selling to the government. As the business expands to additional counties in subsequent years, we will need to lease property on which to site our fac ilities.
2.2.1 Government Regulation

Bec ause Mid-Atlantic Rec ycling rec ycles a waste product and incorporates it into an environmental product, the company is under the potential jurisdiction of the Environmental Protection Agency. The rec ycling and sale of human waste may be regulated by federal or state authorities. Mid-Atlantic Rec ycling will obtain all required federal and state permits and licenses to operate its fac ilities.
2.3 Company Ownership

Mid-Atlantic Rec ycling is owned by its founder and president, Oliver Pyne. Mr. Pyne will be an ac tive participant in management dec isions.
3.0 Products and Services

Our products and services offer needed solutions to municipalities and the market for organic soil enhancement products. Mid-Atlantic Rec ycling will be the market leader as the first company in the region to collec t, compost, and rec ycle human waste sludge for use as a fertilizer and a soil enhancer. Mid-Atlantic Rec ycling realizes that consumers today are more consc ious of rec ycling and of their environment. Bec ause of this trend, there is a growing trend among c onsumers to move away from traditional chemical based fertilizers more natural organic materials. We will offer one major service and major product. Our major service will be to offer municipalities an alternative means for disposing of human waste sludges generated in waste treatment plants. Our major product will be rec ycled (c omposted) human waste sludge for use as a fertilizer. A sample of our compost has been analyzed by the West Virginia University Agricultural Service Laboratory. A copy of their analysis is attac hed to this business plan; this analysis verifies the very high quality of the material we will produce. Ac cording to West Virginia University, this material may qualify as a fertilizer in which c ase the material's value is much higher than if it is considered a compost.
Page 5
3.1 Product and Service Description
Nationwide, many landfills are closing or exhausting their remaining capacity. However, due to environmental restrictions, zoning laws, and other regulatory and bureaucratic delays, very few new landfills are opening to offset the looming space crisis. Meanwhile municipal waste, including human waste sludge, continues to flow in greater volume. Handling their waste streams has bec ome a major problem for most municipalities. With more waste created daily, landfills nationwide are rapidly fac ing a capacity crisis. In West Virginia this situation has been made even more critical due to rec ent passage of legislation requiring that by 2008 only landfills lined with a very heavy duty liner will be able to ac cept human waste sludge. Thus, in the not too distant future, most landfills now ac cepting the sludge will no longer be able to ac cept it. Additionally, it will be very imprac tical, and cost prohibitive, to install the required liner in working landfills. Therefore, options for disposing of human waste sludge are about to bec ome very, very limited, which means disposal will bec ome much, much more costly. Considering this environment, we will offer municipalities an extremely valuable service -- an alternative means for disposal of their human waste sludge. Municipalities currently pay landfills a "tipping" fee to dispose of their waste. The tipping fee is typically $15 to $50 per ton; the average tipping fee in West Virginia is $32 per ton. As noted above, in the near future many landfills will stop rec eiving human waste sludge and prices are expec ted to increase dramatically due to simple supply and demand. Not only will tipping fees increase, but as municipalities have to go farther and farther afield to find ac commodating landfills, transportation costs for the waste will also increase. We will help them solve this problem, and ultimately save them, and their tax payers, money. We will plac e skid boxes at their waste treatment plants and remove the sludge for them. The tipping fee, a fee for skid box rental, and a fee for picking up and returning the skid boxes will be paid to Mid-Atlantic Rec ycling by the municipalities. This will be done at a price competitive with or lower than what they are now paying. Mid-Atlantic Rec ycling will rec eive the sludge and rec ycle it using an organic composter. This will be a 3-day rec ycling proc ess. At the end of the three days, the human waste sludge will be converted to a compost material safe for use in agricultural applications. Potential customers include turf farms, fertilizer manufac turers, golf courses, nurseries, landsc apers, Government agencies, and homeowners.
Page 6
3.2 Competitive Comparison
The Mid-Atlantic Rec ycling business model adds great value through both our service and our product. Our service, ac cepting human waste sludge from municipalities, partially relieves the burden on rapidly filling landfills, and provides an alternative disposal channel to municipalities fac ing a legislative deadline which threatens to cut off their traditional means of disposing of the waste. As noted earlier, there is a trend in the market away from chemical fertilizers toward more natural organic soil enhancements. Our product, composted human sludge, responds to this market trend. Compost has many advantages over traditional fertilizer. Traditional chemical fertilizer sells for approximately $250 per ton while our compost will be priced at around $50-$100 per ton. Our compost is similar to fertilizers; however, it reacts differently from most fertilizers. Compost releases nutrients over a long period of time, on average two to three months. The chemical reaction in present fertilizers takes plac e immediately and usually lasts no longer than three to four weeks. After three to four weeks, the customer may have to buy more fertilizer, costing both time and money. On golf courses, when c hemical fertilizer is applied, golf must cease for the day; however, when c ompost is applied, golf can continue uninterrupted. As demonstrated, compost has many advantages over traditional fertilizers. Our human sludge compost also has distinct advantages over other types of composts as well. To be a viable, lucrative, growing business, we must be a reliable source of compost supply to our customers. To serve the market and grow in it availability of our product cannot be intermittent or "hit and miss." We must be able to meet the demand every time within a reasonable delivery time. By the inherent nature of the business, human waste sludge will always be available for composting in large, dependable quantities, at one or a few loc ations, at a constant/stable quality and at a stable cost. Other composts cannot compete with this in that similar quantities are not available from so few loc ations which increases their labor and transportation costs related to collec tion. Additionally, if collec tion is from farms, they may use horse manure, poultry manure, cow manure, hog manure, etc. in varying quantities over time. This inherently will result in a product that constantly changes in c ontent and quality. In fac t customers view other composts as being of unpredictable availability and unpredictable quality. Mid-Atlantic Rec ycling's compost will not have these deficiencies and will be viewed as the superior compost product. In addition to the above, the following paragraphs describe federal small business programs that Mid-Atlantic Rec ycling intends to take advantage of. These programs are available to us due to our loc ation and the status of our owner as a Native American (minority). Mid-Atlantic Rec ycling will leverage these programs to ensure entry to the federal market. This information was taken from federal government Internet sites. The Historically Underutilized Business Zone (HUBZone) program: Firms in this program have the opportunity to negotiate sole source contrac ts and participate in restricted competition limited to HUBZone firms. Also, HUBZone firms are allowed a ten percent price evaluation preference in full and open competition. In such c ases, the price offered by a HUBZone firm will be determined lower than the price offered by a non-HUBZone firm as long as the HUBZone firm's price is not more than 10% higher than the price offered by the otherwise lowest, responsive offeror. Companies can apply on-line at SBA s website for expedited HUBZone program admission. Ac cording to research done by the Iowa Department of Natural Resources, government entities are the largest single buyer of compost products.
Page 7
Small Disadvantaged Business (SDB) program: This program offers several important incentives: 1. Price evaluation adjustment: qualified SDBs rec eive a price evaluation adjustment of up to 10 percent on proc urements where mandated by regulation. The price evaluation adjustment for SDBs bidding as primes bec ame effective October 1, 1998. Regulations mandate this approach in c ompetitive ac quisitions over the simplified ac quisition threshold (usually $100,000) where the SIC Code for the prime contrac t is authorized by U.S. Department of Commerce benchmarks. The price evaluation adjustment does not apply to 8(a) ac quisitions and small business set-asides. 2. Evaluation fac tor: qualified prime contrac tors can rec eive a credit when using SDBs as subcontrac tors. This evaluation fac tor for SDB participation bec ame effec tive January 1, 1999. The incentive applies only to competitive negotiated ac quisitions over $500,000, or $1,000,000 in c onstruction. Firms certified by the SBA as SDBs remain on the list of SDBcertified firms for a period of three years. The 8(a) Program: SBA s 8(a) program, named for a section of the Small Business Ac t, is a business development initiative that helps socially and ec onomically disadvantaged Americans gain access to economic opportunity. 1. Participants can rec eive sole-source contrac ts, up to a ceiling of $3 million for services. While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages them to participate in c ompetitive ac quisitions. 2. Federal ac quisition policies encourage federal agencies to award a certain percentage of their contrac ts to SDBs. To speed up the award proc ess, the SBA has signed Memoranda of Understanding (MOUs) with 25 federal agencies allowing them to contrac t direc tly with certified 8(a) firms. 3. Rec ent changes permit 8(a) firms to form joint ventures and teams to bid on contrac ts. This enhances the ability of 8(a) firms to perform larger prime contrac ts and overcome the effects of contrac t bundling, the combining of two or more contrac ts together into one large contrac t. Mid-Atlantic's owner is a Native American which will qualify him to participate in the SDB and 8 (a) programs. The federal market is particularly appealing bec ause the need for compost and fertilizer materials in highway and other federal construction projec ts is extremely large.
3.3 Sales Literature

We will prepare a general broc hure with information and maps about Mid-Atlantic Rec ycling's products and services for dissemination to potential customers, including both municipalities and compost users. Sales personnel will visit each potential customer with pricing, maps, and reminders of the fac ility. Sales literature will be very important, with the need to establish a high-quality look and feel in order to create a trusting sense of professionalism.
Page 8
3.4 Technology
Composting is biological dec omposition of organic materials. Bac teria, fungi, protozoans, insec ts, worms and other organisms typically play a part in the dec omposition proc ess. Composting is nature s means of rec ycling. It will turn grass clipping, leaves, vegetables, fruit and other organic materials into a very beneficial soil amendment. Composting is also an effec tive means of reducing the amount of solid wastes going into our nation s landfills. Mid-Atlantic Rec ycling's proc ess will greatly speed up the natural composting proc ess. As briefly described above, the human waste sludge used in Mid-Atlantic Rec ycling's proc ess will be picked up from municipalities in skid boxes provided by Mid-Atlantic Rec ycling. Ac cepting the waste, rental of the boxes, and transportation will all be sold as a service to the municipalities. Upon arrival at our rec ycling fac ility, the sludge will be plac ed into one of six organic in-vessel digesters. These vessels are proven for composting various types of animal manure. In addition, Mid-Atlantic Rec ycling's president, Oliver Pyne, has tested the unit' ability to successfully compost human waste. The material compost produced was tested by the equipment manufac turer (CV Organics, Inc. of White Springs, TN) and found to be a high quality compost. Additionally, the compost material was rec ently tested by West Virginia University Agricultural Service Laboratory and found to be an exceptional soil amendment. These rec ycling/c omposting units work as follows. The unit is 50 feet long. The sludge is plac ed into one end of the unit. To make compost, additional dry fibrous material such as sawdust, wood chips, or bark must be added. We will ac quire a steady supply of these from International Paper Company. The unit turns slowly, making four revolutions per hour, to ensure that adequate oxygen gets to all of the composting material. Also, the unit is set on a very slight, 2 degree, angle so that as the unit turns, the material slowly migrates toward the opposite end of the unit. During the composting proc ess, the material heats up (due to the natural reaction) to temperatures of approximately 140 degrees Farenheit; this kills any harmful bac teria in the composting material. Temperature can be controlled to ensure optimum composting environment. Also, the moisture levels can be controlled to ensure optimum composting. After three days, the material has reached the opposite end of the unit where it is removed. Advantages of this rec ycling/c omposting method are as follows: Rec ycling is completed rapidly in three days. Other methods take 90 plus days. Waste materials in the unit are isolated from the environment. The manager has prec ise control of moisture, temperature, and aeration during the proc ess to ensure the most efficient composting possible. In-vessel composting can maintain a rapid dec omposition proc ess year-round regardless of external ambient conditions. The material can be used for improvement of organic matter content and fertility of soil.
3.5 Future Products and Services

In the future, Mid-Atlantic Rec ycling plans to expand by opening additional rec ycling fac ilities throughout West Virginia and beyond. We ultimately intend to bec ome the method of choice for disposal of human sludges.
Page 9
4.0 Market Analysis Summary
There are customers at both ends of our supply chain that will benefit from our services and products. Municipalities will benefit from our service by having an alternative means of waste disposal. Other potential customers who will benefit from our compost product include turf farms, fertilizer manufac turers, nurseries, landscapers, golf courses, homeowners, and even the federal government for use in highway construction reseeding. Therefore, we have two basic market segments; those waste treatment fac ilities which will benefit from our services and consumers who will benefit from our product. The Worldwatch Institute reports that landfills are overflowing and the costs of disposing of sewage and garbage is rising. City leaders can relieve over extended municipal budgets, prevent the contamination of drinking water, and help farmers build healthier soils by rec ycling garbage and human waste bac k to farms. At least 13 U.S. states have 6 years or less before all of their landfills are completely full. (Paper 135: Rec ycling Organic Waste: From Urban Pollutant to Farm Resource.) We offer a service by which municipalities can dispose of their waste without it having to be land filled anywhere. This is of great value to this customer. At the other end of our proc ess are the users of our compost. Ac cording to Cornell University (www.cals.cornell.edu/dept/c ompost.feas.study.html) composting is experiencing a resurgence of ac tivity which is driven by increased understanding of the agronomic benefits of compost utilization, and rising disposal costs for municipal wastes. Also, ac cording to Purdue University (www.ctic.purdue.edu/Core4/Nutrient/ManureMgt/Paper35.html) consumption of compost in the commercial market is growing due to people looking for a more organic or natural substitute for traditional chemical fertilizers. Rec ycling is at the forefront of responding to this growth trend in the Mid-Atlantic USA. We will initially foc us on selling compost to fertilizer manufac turers, nurseries, and landsc apers. We already have commitments from a fertilizer manufac turer and a landscaper to purchase 600 tons per year or more of our compost material. Five major market segments for compost have been identified: Agriculture (for food and nonfood crops and sod farms). Landsc apers (for industrial and commercial properties; golf courses, cemeteries, and athletic fields; landfill covers; and damaged soils). Nurseries (for plant and forest seedling crops and reforestation projec ts). Public agencies (for highway median strips, parks, rec reational areas, and other public property). Residents (for home landscaping and gardening).
4.1 Market Segmentation

The following table shows information regarding the number of potential customers in our target markets. This data is based on information taken from superpages.com. As reflec ted in the table, there are approximately 34 waste treatment plants in West Virginia. These are all potential customers for our collec tion service and sources of material for compost proc essing. Additionally, there are a total of 1,779 potential customers in the initial target market for our compost product. This includes 11 fertilizer manufac turers, approximately 30 sod/turf farms, 324 nurseries, 483 golf courses, and 931 landscapers.
Page 10
Table: Market Analysis
Market Analysis 2004 Potential Customers Municipalities with treatment plant Compost users Other Total Growth 1% 5% 0% 4.91% 34 1,779 0 1,813 2005 34 1,868 0 1,902 2006 34 1,961 0 1,995 2007 34 2,059 0 2,093 2008 34 2,162 0 2,196 CAGR 0.00% 5.00% 0.00% 4.91%
Page 11
4.2 Target Market Segment Strategy
To target our customers, we examined the market trends. Mid-Atlantic Rec ycling's products target buyers of organic fertilizers and soil enhancers. This market has grown significantly in rec ent years and we expec t to capture a quarter of this multi billion-dollar market. This market growth is fueled by a more health c onsc ious consumer. People are better informed about the potential side effec ts associated with c hemical fertilizer products both to their health and to the environment. The growth of a more organic approach to gardening comes at a time when c hemical options are diminishing. In 2000, the federal Environmental Protection Agency reached agreement with the makers of two widely used pesticides Diazinon and Chlorpyrifos to phase them out bec ause of health problems associated with overexposure. Popular brands of Diazinon include Ortho and Spec trac ide; Chlorpyrifos is marketed under the trade name Dursban and is included in numerous familiar products, including Ortho Lawn Insect Spray (Washington Post, Thursday, May 10, 2001). Ac cording to an exec utive with the Sc otts Co. in Marysville, Ohio, the pac e of research into organic products continues feverishly, and their use is bound to increase. Sales of organic foods have risen sharply. Organic food sales at the retail level totaled $10.4 billion, ac cording to Katherine DiMatteo, exec utive direc tor of the Organic Trade Association. This year, retail sales of organic foods are expec ted to exceed $15 billion with more than $32 billion projec ted by 2009 (CNBC, Dec . 3, 2004). Findings from a 15-year study at the Kamlath Institute, Newton, Pa., might lead to a solution that could help reduce emissions of greenhouse gases. The researchers suggest that regenerative agricultural management systems based on organic fertilizer can preserve carbon and nitrogen in the soil, thus reducing emissions. Moreover, they maintain that organic methods can produce the same yields as conventional systems that use synthetic fertilizer. If the major corn/soybean growing region of the U.S. were to adopt these organic prac tices, they say, the percentage of estimated annual carbon dioxide released into the atmosphere from fossil fuel combustion in the nation could be reduced by one to two percent (USA Today, June 1999). Mid-Atlantic's products will help fill the growing need for organic fertilizers, and soil amendments, while helping to solve the problem of dwindling landfill space.
4.2.1 Market Growth

The possibility of growth in this market is realistically huge. Consider the following simple fac ts: Municipalities must have an alternative means for disposing of human waste; we offer a great alternative to meet that need. Market trends are skewing more and more toward organic soil enhancements and away from chemical fertilizers; we meet this need as well. We have no direc t competition in West Virginia and very little in the Mid-Atlantic region. All of this means that Mid-Atlantic Rec ycling is poised to see tremendous growth.
Page 12
4.2.2 Market Needs
Several companies compete in the fertilizer market. Their major selling points are performance and price. However, health c onsc ious consumers have created growing competition between chemical and organic products. Mid-Atlantic Rec ycling's competition can be divided into two forms: direc t and indirec t. Our direc t competitors would include other compost producers capable of producing sufficient product to supply the growing compost demand. There is no other compost producer in West Virginia that meets this need. Therefore, we have no direc t competition in the state. Additionally, there are only a handful in the entire Mid-Atlantic USA; therefore, our direc t competition on a regional basis is extremely limited. Our indirec t competitors are fertilizer manufac turers (who also are a part of our target market). As noted elsewhere in this business plan, the trend is away from chemical fertilizers, toward natural organic soil enhancers. Thus the market for chemical fertilizer is dec reasing while our market is increasing.
4.2.3 Market Trends

Current trends in the market greatly favor the start-up of our rec ycling business. Laws have been passed in West Virginia plac ing greater restrictions of the types of landfills which c an rec eive human waste sludge. These laws take effec t in 2008. Municipalities are already seeking alternative means of disposal as disposal prices are expec ted to skyroc ket as landfill space dec reases dramatically. Our rec ycling service solves this problem for municipalities. The organic industry now boasts sales in excess of $9 billion at retail, with growth forec ast to continue at 25% per year (http://lists.ibiblio.org/pipermail/marketfarming/2002October/000063.html). The demand for compost to use in organic farming and other applications is growing rapidly.
4.3 Service Business Analysis

Our service offers a feasible, even desirable, alternative to traditional means of disposing of human waste. Our product is a value added, soil enhancer that appeals to the growing environmental consc ientiousness among c onsumers. Direc t competition is almost nonexistent. We intend to position ourselves as the logical, ec onomical choice for human waste disposal and compost production in West Virginia and the Mid-Atlantic region.
4.3.1 Business Participants

Mid-Atlantic Rec ycling's direc t competition includes companies that produce an organic soil enhancement product. Organic soil enhancers are no longer a niche market. They have grown into a strong sub-market in the fertilizer and soil enhancement industry, and they now present significant competition for chemical fertilizer competitors. Major direc t competition includes FSH, makers of Holy Cow Compost, and Sc ott's, makers of Iron Bull. Other examples of competing products are Monkey-Doo, Roots Organic, and Milorganite, the original (75 years) sewage sludge based organic fertilizer.
Page 13
4.3.2 Distributing a Service
Indirec t competitors are those companies that offer only chemical soil enhancers and plant foods. Mid-Atlantic Rec ycling feels that these companies are an indirec t form of competition bec ause though the products they promote attempt to give the same results as our direc t competition, they fall far short of current market expec tations, and it will only be a matter of time until these companies' products will be out-dated. Even so, Mid-Atlantic Rec ycling does ac knowledge that as these companies' products bec ome outdated, many companies will be certain to phase-in their own organic substitutes in plac e of the chemicals. This, in itself, presents a potential market for our compost.
4.3.3 Competition and Buying Patterns

To be a player in the organic fertilizer and soil produce market, Mid-Atlantic Rec ycling identified market needs to gain an overall competitive advantage. The following explains our product's competitive advantages. Our product is: Organic: Our organic product allows us to be responsive to the dominant market trend. We offer all of the advantages that organic products have over chemical competitors. Comparable application times: Based on the West Virginia University laboratory analysis, our product is comparable in potency to chemical fertilizer. Thus the application time is also comparable, which saves money and labor since there is no need to purchase and apply additional products. Recycled: This part of our product has to do with marketing. We are a company that cares about the consumer and the environment. We offer a valuable product, at low cost, that saves landfill space.
4.3.4 Main Competitors

As noted earlier, direc t competitors are essentially non-existent in the Mid-Atlantic region. Our major indirec t competitors are chemical fertilizer manufac turers. However, their products are more costly and do not address the market's trend toward organic, natural soil enhancers. Some municipalities have begun composting operations in an attempt to deal with waste disposal issues. They typically use a method in which sludge is plac ed on the ground in windrows which are turned periodically for aeration. This is an inefficient method of composting primarily bec ause it is slow, taking 90 or more days, which means that availability is uncertain for consumers. Also, in this composting method high enough temperatures are not ac hieved to kill harmful bac teria and seeds that may sprout into weeds. Additionally, municipalities are not businesses, which means their marketing capabilities are limited. Their market primarily consists of loc al homeowners and businesses, which ignores the greater market. Also, this composting method requires a lot of ground space which restricts the operation. Finally, odor can be a problem for municipalities due to nearness of loc al residents or businesses. For these reasons, municipality composting efforts are not considered a competitive threat.
5.0 Strategy and Implementation Summary

We have clearly defined our target markets and have differentiated ourselves by offering a unique solution to our customers' needs. The primary foc us of our marketing strategy must be to increase sales and profitability business quickly. This can be ac hieved by fac e-to-fac e contac t, and an effec tive publicity and promotion campaign.
Page 14
5.1 Value Proposition
Our value proposition is two-fold. Value proposition for municipalities: We offer a service that is a cost effec tive, budget saving means to addressing a growing waste disposal problem. Value proposition for end users of compost material: Compost is a valuable soil amendment that improves many soil properties, such as porosity, structural and thermal stability, water retention, resistance to wind and water erosion, and tillage. Compost also dec reases soil crusting, regulates storage and release of nutrients, enhances the development of beneficial microorganisms, builds up plant resistance to parasites and disease, and promotes faster root development. Plants and crops treated properly with compost may produce higher yields and have less weed growth. Chemical fertilizers do not offer this value.
5.2 Competitive Edge

The competitive edges we have are summarized as follows. Cost: The price of our compost product is much less than c hemical fertilizers. Organic product: We offer an organic product which is responsive to current market trends. This includes all of the advantages organics offer over chemicals. Recycled: Rec ycled products charac terize a "caring company" and are more appealing to the customer's changing attitude toward organic fertilizer as opposed to chemical fertilizer. Elimination of disposal issues: Municipalities now have a waste that takes up landfill space. Our service rec ycles the waste which saves valuable landfill space. More effective between application times: Normal times between applications can range from two to four weeks. Our product lasts for many months, thereby saving the customer time and money (no additional expenditure for more product). HUBZone location: Provides advantage in selling to the government. SDB and 8(a) certifications: Provide additional advantages in selling to the government.
5.3 Sales Strategy

Mid-Atlantic Rec ycling's sales strategy is relatively straightforward. Get the word out about our products and services to potential customers, educate them as to the value added by our products and services, and the product/service will sell itself. Our present management team will bec ome the main sales force when operations begin. MidAtlantic Rec ycling's sales force will increase as business demand permits. In the first six to twelve months of operations, our sales team will foc us its efforts on municipalities, fertilizer manufac turers, farmers, small nurseries and other related companies. The team will promote the products based on their environmental strengths and extended duration. Mid-Atlantic Rec ycling will use other channels of selling after the first year. Fac e-to-fac e contac t and direc t mail selling are part of the selling plan.
Page 15
5.3.1 Sales Forecast
The table below outlines the sales forec ast and cost of goods sold. The forec ast is based on reasonable sales projec tions within this very large market. An additional revenue stream will be the collec tion and removal of sawdust, wood chip, and bark from the International Paper Company on a full time basis; the contrac t for this work has been won. The sawdust materials collec ted will be used in the composting proc ess. The high growth is based on our plans to expand by increasing operations in Monroe County and plac ing similar fac ilities in other areas of the West Virginia. We anticipate that by 2005 we will have two such fac ilities and by 2006 we anticipate having four. Thus our sales forec ast doubles in eac h of those years.
Table: Sales Forecast

Sales Forecast FY 2005 Unit Sales Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Total Unit Sales Unit Prices Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Sales Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Total Sales Direct Unit Costs Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Direct Cost of Sales Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Subtotal Direct Cost of Sales 13,440 10,640 14,776 38,856 FY 2005 $14.20 $18.00 $50.00 FY 2006 13,440 25,920 36,000 75,360 FY 2006 $14.77 $18.00 $52.50 FY 2007 13,440 51,840 72,000 137,280 FY 2007 $15.36 $18.00 $55.13
$190,848 $191,520 $738,800 $1,121,168 FY 2005 $0.71 $0.90 $7.00
$198,509 $466,560 $1,890,000 $2,555,069 FY 2006 $0.74 $0.90 $7.35
$206,438 $933,120 $3,969,360 $5,108,918 FY 2007 $0.77 $0.90 $7.72
$9,542 $9,576 $103,432 $122,550
$9,925 $23,328 $264,600 $297,853
$10,322 $46,656 $555,710 $612,688
Page 16
Page 17
5.4 Marketing Strategy
The marketing strategy is the core of the main strategy: 1. Emphasize high value, high quality products and services. 2. Build a relationship oriented business. 3. Foc us on municipalities, fertilizer manufac turers, landscapers, nurseries, and the federal government as key initial markets.
5.4.1 Promotion Strategy

Our promotional strategy will be two-fold: first phase promotion will foc us on before, during, and six months following our opening; the second phase of promotion will deal with the long term. The purpose of the first phase is to assist with rapid market entry to ensure early and sustained profitability. The purpose of the second phase is to ensure long-term growth and help propel us toward ac hieving our goal of expanding state wide and ac ross the Mid-Atlantic region. First Phase Promotions Publicity: We will send news releases to all of the major newspapers in West Virginia. Publication of news articles about Mid-Atlantic Rec ycling will lend great credibility and be an excellent way to let all target markets know about this new, innovative business and the solutions it provides for municipalities and users of compost or fertilizers. We will similarly seek publicity in the form of news stories from loc al (eastern West Virginia) radio and television stations. Advertising: We will utilize direc t mail and fac e-to-fac e promotional strategies to raise awareness about our products and services in the target markets. Newspaper advertising may also be used. Radio and television ads are not certain, we will evaluate their effectiveness before further implementation. Internet: We will have a content heavy website geared toward educating potential customers about the benefits of our products and services. All literature, business cards, etc. will include our website and e-mail address information. Alliances: We intend to form alliances with fertilizer manufac turers to use our product in their fertilizer and/or distribute our product for us. Second Phase Promotions Publicity: As the business grows and expands we will continue to seek publicity through news media to tout our successes. Advertising: We will continue to make fac e-to-fac e contac t with c ustomers and potential customers. Mail-outs will be done again within a few months of start up. The second round of mail outs will be updated to reflec t the benefits provided to customers thus far. Such mailouts will be sent periodically. Internet: We will continue to have a comprehensive website. The website will be updated to provide responses to frequently asked questions. After the first six months, and certainly after the first year, we will evaluate the viability of having target clients advertise on our site, and conversely, we will evaluate viability of advertising on our target clients websites (if applicable). Alliances: We will continue to seek mutually beneficial and complementary alliances with manufac turers where applicable.
Page 18
5.4.2 Positioning Statement
For municipalities seeking an answer to their waste disposal problems, Mid-Atlantic Rec ycling is the service of choice and trusted strategic ally who gives them a cost effec tive solution. For users of fertilizer and soil amendment products, Mid-Atlantic Rec ycling is a dependable provider of low cost and consistent high quality compost products.
5.4.3 Pricing Strategy

The going rate per ton for compost is $50 and up. This price is low enough to ensure rapid growth in the market yet still provide a very healthy profit, given that we have no direc t competition and chemical fertilizer is much more expensive. This is possible bec ause we are on the front end of the industry growth in this region. However, ac cording to the West Virginia University Cooperative Extension Service, we may be able to analyze and register our material as a fertilizer. In that case the price per ton will be in the $100 per ton range still well below the rate of $250 per ton charged for manufac tured chemical fertilizers; given this sc enario, the sales figures below are very conservative. Additionally, we will be priced at market rates for the waste disposal service we offer to municipalities. Tipping fees are generally $15 and up per ton. Additionally, we will charge competitive skid box rental fees and transportation costs.
5.5 Milestones
The following table lists important program milestones, with dates and managers in c harge, and budgets for eac h. The milestone sc hedule indicates our emphasis on planning for implementation.
Table: Milestones
Milestones Milestone Complete business plan Recieve all funding Site preparation Form LLC Composter set up Order/fabricate composters Hire staff Begin production Totals Start Date 10/7/2003 11/24/2003 3/1/2004 2/15/2004 3/15/2004 2/15/2004 3/1/2004 3/15/2004 End Date 12/1/2003 2/29/2004 3/15/2004 3/15/2004 3/30/2004 3/30/2004 5/30/2004 3/30/2005 Budget $0 $0 $0 $500 $0 $480,000 $16,680 $0 $497,180 Manager O. Pyne O. Pyne O. Pyne O. Pyne O. Pyne O. Pyne O. Pyne O. Pyne Department Department Department Department Department Department Department Department Department
Page 19
6.0 Web Plan Summary

Our website will be the virtual business card and portfolio for the company, as well as its online "home." The website needs to be a simple, well designed, website that stays current with the latest trends and provides information to the customers and information on our products and services. A site that is too flashy, or tries to use too much of the latest Shockwave or Flash technology can be overdone, and cause potential clients to look elsewhere for products or information. Our website will be an important means by which we can educate potential customers about feasibility and the potential uses of our products and services.
6.1 Development Requirements

Our website will be initially developed with few technical resources. A hosting provider will host the site and provide the tec hnical bac k end. A website design firm will design all website graphics and layout.
Page 20
7.0 Management Summary
Mr. Oliver Pyne is the mind behind Mid-Atlantic Rec ycling. He saw the need for human waste sludge to be rec ycled and used in several different and environmentally beneficial ways. With the development, determination, motivation, and persistence of everyone involved, Mid-Atlantic Rec ycling will be the leading producer of composted human waste sludge in West Virginia and a leader in the Mid-Atlantic region. The management team of Mid-Atlantic Rec ycling will be comprised of the following exec utive positions: President: Oliver Pyne. Mr. Pyne has a degree in Agriculture from West Virginia University and has spent 30 years in the farming and agriculture industry. He has extensively researched and tested this composting proc ess to ensure that it works with human waste sludge, and is thoroughly familiar with the proc ess from start to finish. Mr. Pyne has experience in the operation, fabrication and maintenance of heavy equipment. This ability will be critical to the success of the business. Operations Manager: Sam Cole. Mr. Cole has operated a landsc aping firm for 7 years and is intimately familiar with the uses of compost materials as well as the markets. Controller: Alexander Main. Mr. Main has a bac kground in business and management and will handle administrative details such as taxes, check writing and bookkeeping. At Mid-Atlantic Rec ycling, the management team believes that this unique way of rec ycling will change the way consumers look at fertilize and compost products. As with any company, the responsibilities and duties of the management team are very important and cannot be taken lightly. Mid-Atlantic Rec ycling's management will work together as a team to create a successful company.
7.1 Management Team

The responsibilities involved in the company Mid-Atlantic Rec ycling are great and abundant. MidAtlantic Rec ycling's main purpose is to appeal to municipalities by offering a human waste disposal alternative, and to environmentally consc ious minded consumers by developing products that include rec ycled human waste. Each exec utive member will have several responsibilities that are imperative to fulfill the duties in producing such unique products. As founder and president of Mid-Atlantic Rec ycling, Mr. Oliver Pyne will be responsible for the entire operation. Some of his duties will include overseeing the areas held by the other company exec utives, as well as the output produced by other employees. He will be in c harge of the company's public relations. He will also have the job of hiring dedicated people and ensuring employees put their best efforts into the production of Mid-Atlantic Rec ycling's products. He will have the lead role in making dec isions that concern the well being of Mid-Atlantic Rec ycling. Mr. Sam Cole has an important job as operations manager. His job will be crucial in the growth of Mid-Atlantic Rec ycling. He will ensure that day-to-day operations are conducted such that materials are rec eived, methods and proc esses are standardized, and production is maximized to ensure uniform production of compost materials. This duty will entail establishing a good working relationship with production line employees bec ause without them Mid-Atlantic Rec ycling's products will not be produced. Mr. Alexander Main will be responsible for Mid-Atlantic Rec ycling's financial management operations including ac counts payable, ac counts rec eivables, and bookkeeping. Page 21
7.2 Management Team Gaps
To assist in sales and marketing, Mid-Atlantic Rec ycling plans to utilize the services of Blevins Consulting, LLC, a management consultant firm based in West Virginia. Blevins Consulting specializes in business planning, marketing planning, training, website design and marketing, and marketing to the federal government. Marketing and sales will play an important role in c onvincing consumers to switch from their old products to Mid-Atlantic Rec ycling's products. Blevins will help create the need for our products and services while at the same time capturing the attention of the consumers' targeted. Some of Blevins duties will include writing press releases, coordinating print and radio press, monitoring the competition, making presentations to potential clients, and studying the markets to identify customers' needs and determine how to best appeal to those needs.
7.3 Personnel Plan

The Personnel Plan reflec ts the staffing levels required to manage and ac hieve the anticipated levels of production, and establish the customer base needed to ac hieve the revenues projec ted and reach profitability. We have projec ted a staff of 22 employees in 2004. This includes the owner, 2 managers, 3 truck drivers, 4 equipment operators, 2 laborers, 2 metal workers, and 1 secretary; this staff of 15 will operate the rec ycling fac ility. In addition, a staff of seven, including one supervisor and 6 laborers, will provide sawdust, wood chip, and bark removal at the International Paper Company on a full time basis; the contrac t for this work has been won. The sawdust materials collec ted will be used in the composting proc ess. In addition to the above, Mid-Atlantic Rec ycling plans to hire a loc al trucking firm to deliver compost materials to customers. This is expec ted to result in the creation of two additional jobs. Therefore, the total employment impact of this venture is expec ted to be the creation of 24 jobs in the first year of operation.
Table: Personnel
Personnel Plan Management/supervisory Production labor Sawdust collection team Other Total People Total Payroll FY 2005 $106,044 $186,889 $81,120 $0 22 $374,053 FY 2006 $250,992 $338,688 $176,646 $0 44 $766,326 FY 2007 $527,083 $711,245 $183,712 $0 88 $1,422,040
8.0 Financial Plan

Our financial plan is based on rec eiving several loans to purchase/fabricate the production equipment, provide initial operating capital, and establish the customer base. We will ac hieve profitability early in the first year and due to the expec ted high growth rate, we will realize strong profits on sales by year three.
Page 22
8.1 Start-up Funding
The start-up funding will be provided as follows: Owner equity investment of in the form of a loan from the Regional Council of Governments Revolving Loan Fund; this loan is secured by the owner's real estate assets. The Regional Revolving Loan Fund is an ec onomic development fund sponsored by three West Virginia counties: Mercer, Greenbrier, and Monroe. The balance of funding will be provided through an SBA guaranteed loan. Details of funding are shown in the table below.
Table: Start-up Funding

Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets $92,180 $907,820 $1,000,000
$826,920 $80,900 $0 $80,900 $907,820
Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Owner Other Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital
$0 $850,000 $0 $0 $850,000
$150,000 $0 $0 $150,000 ($92,180) $57,820
Total Capital and Liabilities Total Funding
$907,820 $1,000,000
8.2 Use of Funds

The bulk of our Start-up funding will be used for capital asset purchases, listed in the table below.
Page 23
Table: Use of Funds
Use of Funds Use Processing Plants 2 x $190,460 Processing Plants built in-house 2 x $40,000 Skid Truck 2 x $73,000 (avg price) Sheds 48'x72' 4 x $18,500 Backhoe Front-end Loader 2 x $50,000 Tandem Dump Trailer Total Amount $380,920 $80,000 $146,000 $74,000 $40,000 $100,000 $6,000 $826,920
8.3 Important Assumptions

The table below presents some assumptions used in the financial calculations of this business plan.
Table: General Assumptions

General Assumptions FY 2005 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 7.00% 7.00% 25.00% 0 2 7.00% 7.00% 25.00% 0 FY 2006 3 7.00% 7.00% 25.00% 0 FY 2007
8.4 Break-even Analysis

The chart and table below contain the break-even analysis for Mid-Atlantic Rec ycling.
Table: Break-even Analysis

Break-even Analysis Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 2,180 $62,905
$28.85 $3.15 $56,029
Page 24
8.5 Projected Profit and Loss

The following table summarizes our anticipated profit and loss for the first three years. A monthly profit and loss projec tion for the first year of operations is included in the appendices.
Page 25
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Goods Total Cost of Sales Gross Margin Gross Margin % FY 2005 $1,121,168 $122,550 $0 $122,550 $998,618 89.07% FY 2006 $2,555,069 $297,853 $0 $297,853 $2,257,215 88.34% FY 2007 $5,108,918 $612,688 $0 $612,688 $4,496,230 88.01%
Expenses Payroll Sales and Marketing and Other Expenses Depreciation Rent Utilities Insurance Payroll Taxes Maintanence and Repair Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales
$374,053 $12,000 $165,384 $0 $18,000 $18,000 $56,108 $4,800 $24,000 $672,345 $326,273 $491,657 $57,217 $67,264 $201,792 18.00%
$766,326 $24,000 $325,384 $40,000 $36,000 $36,000 $114,949 $9,600 $48,000 $1,400,259 $856,956 $1,182,340 $52,956 $201,000 $603,000 23.60%
$1,422,040 $48,000 $645,384 $100,000 $72,000 $72,000 $213,306 $20,000 $96,000 $2,688,730 $1,807,500 $2,452,884 $48,223 $439,819 $1,319,458 25.83%
Page 26
Page 27
8.6 Projected Cash Flow

The chart and table below projec t increasing cash flow throughout the first three years of plan implementation. The second and third years of operation reflec t large long-term asset purchases which reflec ts our intent to expand the business by opening additional fac ilities in those years. This expansion will be funded by business revenue with no anticipated need for outside financing. The row labelled "Long-term Liabilities Principal Repayment" reflec ts repayment of the SBA guaranteed 504 Debenture Program loan.
Page 28
Page 29
Table: Cash Flow
Pro Forma Cash Flow FY 2005 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance FY 2006 FY 2007
$448,467 $542,495 $990,962
$1,022,028 $1,366,516 $2,388,544
$2,043,567 $2,768,762 $4,812,329
$0 $0 $0 $0 $0 $0 $0 $990,962 FY 2005
$0 $0 $0 $0 $0 $0 $0 $2,388,544 FY 2006
$0 $0 $0 $0 $0 $0 $0 $4,812,329 FY 2007
$374,053 $357,477 $731,530
$766,326 $843,317 $1,609,643
$1,422,040 $1,684,617 $3,106,657
$0 $0 $0 $60,859 $0 $0 $20,000 $812,388 $178,574 $259,474
$0 $0 $0 $65,258 $0 $800,000 $30,000 $2,504,901 ($116,357) $143,117
$0 $0 $0 $69,976 $0 $1,600,000 $40,000 $4,816,633 ($4,303) $138,814
Page 30
8.7 Projected Balance Sheet
The following table projec ts healthy growth in sales and net worth.
Table: Balance Sheet

Pro Forma Balance Sheet FY 2005 Assets Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth FY 2006 FY 2007
$259,474 $130,206 $13,494 $0 $403,174
$143,117 $296,731 $32,796 $0 $472,644
$138,814 $593,320 $67,463 $0 $799,597
$826,920 $165,384 $661,536 $1,064,710 FY 2005
$1,626,920 $490,768 $1,136,152 $1,608,796 FY 2006
$3,226,920 $1,136,152 $2,090,768 $2,890,365 FY 2007
$35,957 $0 $0 $35,957 $789,141 $825,098 $150,000 ($112,180) $201,792 $239,612 $1,064,710 $239,612
$72,301 $0 $0 $72,301 $723,883 $796,184 $150,000 $59,612 $603,000 $812,612 $1,608,796 $812,612
$144,387 $0 $0 $144,387 $653,908 $798,294 $150,000 $622,612 $1,319,458 $2,092,070 $2,890,365 $2,092,070
Page 31
8.8 Business Ratios
The following table outlines some of the more important ratios from the Rec ycling, waste materials industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 4953.9905.
Page 32
Table: Ratios
Ratio Analysis Sales Growth Percent of Total Assets Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Inventory Turnover Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth 0.95 3% 7.22 4.68 0.63 4% 1.98 3.14 0.57 5% 0.96 2.44 n.a n.a n.a n.a FY 2005 0.00% FY 2006 127.89% FY 2007 99.95% Industry Profile 7.24%
12.23% 1.27% 0.00% 37.87% 62.13% 100.00% 3.38% 74.12% 77.50% 22.50%
18.44% 2.04% 0.00% 29.38% 70.62% 100.00% 4.49% 45.00% 49.49% 50.51%
20.53% 2.33% 0.00% 27.66% 72.34% 100.00% 5.00% 22.62% 27.62% 72.38%
4.89% 0.35% 31.71% 36.95% 63.05% 100.00% 18.58% 26.10% 44.68% 55.32%
100.00% 89.07% 72.77% 0.00% 29.10%
100.00% 88.34% 64.88% 0.00% 33.54%
100.00% 88.01% 61.97% 0.00% 35.38%
100.00% 34.70% 14.39% 0.25% 1.59%
11.21 10.84 77.50% 112.29% 25.27% FY 2005 18.00% 84.22%
6.54 6.08 49.49% 98.94% 49.98% FY 2006 23.60% 74.21%
5.54 5.07 27.62% 84.09% 60.87% FY 2007 25.83% 63.07%
1.10 0.89 63.47% 1.16% 3.16%
n.a n.a
5.17 57 10.91 10.94 27 1.05
5.17 51 12.87 12.17 22 1.59
5.17 53 12.22 12.17 23 1.77
n.a n.a n.a n.a n.a n.a
3.44 0.04
0.98 0.09
0.38 0.18
n.a n.a
$367,217 5.70
$400,344 16.18
$655,210 37.48
n.a n.a
Page 33
Dividend Payout 0.10 0.05 0.03 n.a
Page 34
Appendix
Table: Sales Forecast
Sales Forecast Mar Unit Sales Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Total Unit Sales Unit Prices Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Sales Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Total Sales Direct Unit Costs Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Direct Cost of Sales Sawdust collection services in hours Waste acceptance in tons Compost sales in tons Subtotal Direct Cost of Sales $795 $180 $1,939 $2,914 $795 $360 $3,885 $5,040 $795 $540 $5,831 $7,166 $795 $720 $7,777 $9,292 $795 $972 $10,500 $12,267 $795 $972 $10,500 $12,267 $795 $972 $10,500 $12,267 $795 $972 $10,500 $12,267 $795 $972 $10,500 $12,267 $795 $972 $10,500 $12,267 $795 $972 $10,500 $12,267 $795 $972 $10,500 $12,267 1,120 200 277 1,597 Mar $14.20 $18.00 $50.00 Apr 1,120 400 555 2,075 Apr $14.20 $18.00 $50.00 May 1,120 600 833 2,553 May $14.20 $18.00 $50.00 Jun 1,120 800 1,111 3,031 Jun $14.20 $18.00 $50.00 Jul 1,120 1,080 1,500 3,700 Jul $14.20 $18.00 $50.00 Aug 1,120 1,080 1,500 3,700 Aug $14.20 $18.00 $50.00 Sep 1,120 1,080 1,500 3,700 Sep $14.20 $18.00 $50.00 Oct 1,120 1,080 1,500 3,700 Oct $14.20 $18.00 $50.00 Nov 1,120 1,080 1,500 3,700 Nov $14.20 $18.00 $50.00 Dec 1,120 1,080 1,500 3,700 Dec $14.20 $18.00 $50.00 Jan 1,120 1,080 1,500 3,700 Jan $14.20 $18.00 $50.00 Feb 1,120 1,080 1,500 3,700 Feb $14.20 $18.00 $50.00
$15,904 $3,600 $13,850 $33,354 Mar $0.71 $0.90 $7.00
$15,904 $7,200 $27,750 $50,854 Apr $0.71 $0.90 $7.00
$15,904 $10,800 $41,650 $68,354 May $0.71 $0.90 $7.00
$15,904 $14,400 $55,550 $85,854 Jun $0.71 $0.90 $7.00
$15,904 $19,440 $75,000 $110,344 Jul $0.71 $0.90 $7.00
$15,904 $19,440 $75,000 $110,344 Aug $0.71 $0.90 $7.00
$15,904 $19,440 $75,000 $110,344 Sep $0.71 $0.90 $7.00
$15,904 $19,440 $75,000 $110,344 Oct $0.71 $0.90 $7.00
$15,904 $19,440 $75,000 $110,344 Nov $0.71 $0.90 $7.00
$15,904 $19,440 $75,000 $110,344 Dec $0.71 $0.90 $7.00
$15,904 $19,440 $75,000 $110,344 Jan $0.71 $0.90 $7.00
$15,904 $19,440 $75,000 $110,344 Feb $0.71 $0.90 $7.00
5.00% 5.00% 14.00%
Page 1
Appendix
Table: Personnel
Personnel Plan Management/supervisory Production labor Sawdust collection team Other Total People Total Payroll 0% 0% 0% 0% Mar $8,837 $11,168 $6,760 $0 15 $26,765 Apr $8,837 $13,401 $6,760 $0 18 $28,998 May $8,837 $14,900 $6,760 $0 20 $30,497 Jun $8,837 $16,380 $6,760 $0 22 $31,977 Jul $8,837 $16,380 $6,760 $0 22 $31,977 Aug $8,837 $16,380 $6,760 $0 22 $31,977 Sep $8,837 $16,380 $6,760 $0 22 $31,977 Oct $8,837 $16,380 $6,760 $0 22 $31,977 Nov $8,837 $16,380 $6,760 $0 22 $31,977 Dec $8,837 $16,380 $6,760 $0 22 $31,977 Jan $8,837 $16,380 $6,760 $0 22 $31,977 Feb $8,837 $16,380 $6,760 $0 22 $31,977
Page 2
Appendix
Table: General Assumptions
General Assumptions Mar Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 7.00% 7.00% 25.00% 0 2 7.00% 7.00% 25.00% 0 Apr 3 7.00% 7.00% 25.00% 0 May 4 7.00% 7.00% 25.00% 0 Jun 5 7.00% 7.00% 25.00% 0 Jul 6 7.00% 7.00% 25.00% 0 Aug 7 7.00% 7.00% 25.00% 0 Sep 8 7.00% 7.00% 25.00% 0 Oct 9 7.00% 7.00% 25.00% 0 Nov 10 7.00% 7.00% 25.00% 0 Dec 11 7.00% 7.00% 25.00% 0 Jan 12 7.00% 7.00% 25.00% 0 Feb
Page 3
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Goods Total Cost of Sales Gross Margin Gross Margin % Mar $33,354 $2,914 $0 $2,914 $30,440 91.26% Apr $50,854 $5,040 $0 $5,040 $45,814 90.09% May $68,354 $7,166 $0 $7,166 $61,188 89.52% Jun $85,854 $9,292 $0 $9,292 $76,562 89.18% Jul $110,344 $12,267 $0 $12,267 $98,077 88.88% Aug $110,344 $12,267 $0 $12,267 $98,077 88.88% Sep $110,344 $12,267 $0 $12,267 $98,077 88.88% Oct $110,344 $12,267 $0 $12,267 $98,077 88.88% Nov $110,344 $12,267 $0 $12,267 $98,077 88.88% Dec $110,344 $12,267 $0 $12,267 $98,077 88.88% Jan $110,344 $12,267 $0 $12,267 $98,077 88.88% Feb $110,344 $12,267 $0 $12,267 $98,077 88.88%
Expenses Payroll Sales and Marketing and Other Expenses Depreciation Rent Utilities Insurance Payroll Taxes Maintanence and Repair Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales
$26,765 $1,000 $13,782 $0 $1,500 $1,500 $4,015 $400 $2,000 $50,962 ($20,522) ($6,740) $4,930 ($6,363) ($19,089) -57.23%
$28,998 $1,000 $13,782 $0 $1,500 $1,500 $4,350 $400 $2,000 $53,530 ($7,716) $6,066 $4,901 ($3,154) ($9,463) -18.61%
$30,497 $1,000 $13,782 $0 $1,500 $1,500 $4,575 $400 $2,000 $55,254 $5,934 $19,716 $4,872 $266 $797 1.17%
$31,977 $1,000 $13,782 $0 $1,500 $1,500 $4,797 $400 $2,000 $56,956 $19,606 $33,388 $4,843 $3,691 $11,073 12.90%
$31,977 $1,000 $13,782 $0 $1,500 $1,500 $4,797 $400 $2,000 $56,956 $41,121 $54,903 $4,813 $9,077 $27,231 24.68%
$31,977 $1,000 $13,782 $0 $1,500 $1,500 $4,797 $400 $2,000 $56,956 $41,121 $54,903 $4,784 $9,084 $27,253 24.70%
$31,977 $1,000 $13,782 $0 $1,500 $1,500 $4,797 $400 $2,000 $56,956 $41,121 $54,903 $4,754 $9,092 $27,275 24.72%
$31,977 $1,000 $13,782 $0 $1,500 $1,500 $4,797 $400 $2,000 $56,956 $41,121 $54,903 $4,724 $9,099 $27,298 24.74%
$31,977 $1,000 $13,782 $0 $1,500 $1,500 $4,797 $400 $2,000 $56,956 $41,121 $54,903 $4,694 $9,107 $27,320 24.76%
$31,977 $1,000 $13,782 $0 $1,500 $1,500 $4,797 $400 $2,000 $56,956 $41,121 $54,903 $4,664 $9,114 $27,343 24.78%
$31,977 $1,000 $13,782 $0 $1,500 $1,500 $4,797 $400 $2,000 $56,956 $41,121 $54,903 $4,634 $9,122 $27,366 24.80%
$31,977 $1,000 $13,782 $0 $1,500 $1,500 $4,797 $400 $2,000 $56,956 $41,121 $54,903 $4,603 $9,129 $27,388 24.82%
15% 15%
Page 4
Appendix
Table: Cash Flow
Pro Forma Cash Flow Mar Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $0 $0 $0 $4,911 $0 $0 $0 $32,179 ($18,838) $62,062 $0 $0 $0 $4,940 $0 $0 $0 $49,198 ($28,189) $33,873 $0 $0 $0 $4,968 $0 $0 $0 $55,532 ($7,828) $26,045 $0 $0 $0 $4,997 $0 $0 $0 $62,783 $2,421 $28,466 $0 $0 $0 $5,026 $0 $0 $0 $68,673 $16,827 $45,293 $0 $0 $0 $5,056 $0 $0 $0 $77,550 $18,590 $63,883 $0 $0 $0 $5,085 $0 $0 $0 $74,394 $35,950 $99,834 $0 $0 $0 $5,115 $0 $0 $0 $74,401 $35,943 $135,777 $0 $0 $0 $5,145 $0 $0 $0 $74,408 $35,936 $171,712 $0 $0 $0 $5,175 $0 $0 $0 $74,416 $35,928 $207,640 $0 $0 $0 $5,205 $0 $0 $0 $74,423 $35,921 $243,561 $0 $0 $0 $5,235 $0 $0 $20,000 $94,431 $15,913 $259,474 $26,765 $503 $27,268 $28,998 $15,260 $44,258 $30,497 $20,067 $50,564 $31,977 $25,808 $57,785 $31,977 $31,670 $63,647 $31,977 $40,517 $72,494 $31,977 $37,331 $69,308 $31,977 $37,309 $69,286 $31,977 $37,287 $69,264 $31,977 $37,264 $69,241 $31,977 $37,241 $69,218 $31,977 $37,219 $69,196 0.00% $0 $0 $0 $0 $0 $0 $0 $13,342 Mar $0 $0 $0 $0 $0 $0 $0 $21,009 Apr $0 $0 $0 $0 $0 $0 $0 $47,704 May $0 $0 $0 $0 $0 $0 $0 $65,204 Jun $0 $0 $0 $0 $0 $0 $0 $85,500 Jul $0 $0 $0 $0 $0 $0 $0 $96,140 Aug $0 $0 $0 $0 $0 $0 $0 $110,344 Sep $0 $0 $0 $0 $0 $0 $0 $110,344 Oct $0 $0 $0 $0 $0 $0 $0 $110,344 Nov $0 $0 $0 $0 $0 $0 $0 $110,344 Dec $0 $0 $0 $0 $0 $0 $0 $110,344 Jan $0 $0 $0 $0 $0 $0 $0 $110,344 Feb Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
$13,342 $0 $13,342
$20,342 $667 $21,009
$27,342 $20,362 $47,704
$34,342 $30,862 $65,204
$44,138 $41,362 $85,500
$44,138 $52,002 $96,140
$44,138 $66,206 $110,344
$44,138 $66,206 $110,344
$44,138 $66,206 $110,344
$44,138 $66,206 $110,344
$44,138 $66,206 $110,344
$44,138 $66,206 $110,344
Page 5
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet Mar Assets Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth Starting Balances Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
$80,900 $0 $0 $0 $80,900
$62,062 $20,012 $3,206 $0 $85,280
$33,873 $49,858 $5,544 $0 $89,275
$26,045 $70,508 $7,883 $0 $104,436
$28,466 $91,158 $10,221 $0 $129,846
$45,293 $116,002 $13,494 $0 $174,789
$63,883 $130,206 $13,494 $0 $207,583
$99,834 $130,206 $13,494 $0 $243,534
$135,777 $130,206 $13,494 $0 $279,477
$171,712 $130,206 $13,494 $0 $315,412
$207,640 $130,206 $13,494 $0 $351,340
$243,561 $130,206 $13,494 $0 $387,261
$259,474 $130,206 $13,494 $0 $403,174
$826,920 $0 $826,920 $907,820
$826,920 $13,782 $813,138 $898,418 Mar
$826,920 $27,564 $799,356 $888,631 Apr
$826,920 $41,346 $785,574 $890,010 May
$826,920 $55,128 $771,792 $901,638 Jun
$826,920 $68,910 $758,010 $932,799 Jul
$826,920 $82,692 $744,228 $951,811 Aug
$826,920 $96,474 $730,446 $973,980 Sep
$826,920 $110,256 $716,664 $996,141 Oct
$826,920 $124,038 $702,882 $1,018,294 Nov
$826,920 $137,820 $689,100 $1,040,440 Dec
$826,920 $151,602 $675,318 $1,062,579 Jan
$826,920 $165,384 $661,536 $1,064,710 Feb
$0 $0 $0 $0 $850,000 $850,000 $150,000 ($92,180) $0 $57,820 $907,820 $57,820
$14,598 $0 $0 $14,598 $845,089 $859,687 $150,000 ($92,180) ($19,089) $38,731 $898,418 $38,731
$19,213 $0 $0 $19,213 $840,150 $859,362 $150,000 ($92,180) ($28,551) $29,269 $888,631 $29,269
$24,763 $0 $0 $24,763 $835,181 $859,944 $150,000 ($92,180) ($27,755) $30,065 $890,010 $30,065
$30,316 $0 $0 $30,316 $830,184 $860,500 $150,000 ($92,180) ($16,682) $41,138 $901,638 $41,138
$39,272 $0 $0 $39,272 $825,157 $864,430 $150,000 ($92,180) $10,549 $68,369 $932,799 $68,369
$36,088 $0 $0 $36,088 $820,102 $856,189 $150,000 ($92,180) $37,802 $95,622 $951,811 $95,622
$36,066 $0 $0 $36,066 $815,016 $851,082 $150,000 ($92,180) $65,077 $122,897 $973,980 $122,897
$36,044 $0 $0 $36,044 $809,901 $845,946 $150,000 ($92,180) $92,375 $150,195 $996,141 $150,195
$36,023 $0 $0 $36,023 $804,757 $840,779 $150,000 ($92,180) $119,695 $177,515 $1,018,294 $177,515
$36,001 $0 $0 $36,001 $799,582 $835,583 $150,000 ($92,180) $147,038 $204,858 $1,040,440 $204,858
$35,979 $0 $0 $35,979 $794,377 $830,356 $150,000 ($92,180) $174,403 $232,223 $1,062,579 $232,223
$35,957 $0 $0 $35,957 $789,141 $825,098 $150,000 ($112,180) $201,792 $239,612 $1,064,710 $239,612
Page 6

Mid Atlantic Recycling

Загружено:

Сведения о документе

Исходное описание:

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Mid Atlantic Recycling

Загружено:

Авторское право:

Доступные форматы

March 2004

2.0 Company Summary

2.1 Start-up Summary

$80,900 $0 $0 $826,920 $907,820 $1,000,000

2.2.1 Government Regulation

2.3 Company Ownership

3.0 Products and Services

3.3 Sales Literature

3.5 Future Products and Services

4.1 Market Segmentation

4.2.1 Market Growth

4.2.3 Market Trends

4.3 Service Business Analysis

4.3.1 Business Participants

4.3.3 Competition and Buying Patterns

4.3.4 Main Competitors

5.0 Strategy and Implementation Summary

5.2 Competitive Edge

5.3 Sales Strategy

Table: Sales Forecast

$190,848 $191,520 $738,800 $1,121,168 FY 2005 $0.71 $0.90 $7.00

$198,509 $466,560 $1,890,000 $2,555,069 FY 2006 $0.74 $0.90 $7.35

$206,438 $933,120 $3,969,360 $5,108,918 FY 2007 $0.77 $0.90 $7.72

$9,542 $9,576 $103,432 $122,550

$9,925 $23,328 $264,600 $297,853

$10,322 $46,656 $555,710 $612,688

5.4.1 Promotion Strategy

5.4.3 Pricing Strategy

6.0 Web Plan Summary

6.1 Development Requirements

7.1 Management Team

7.3 Personnel Plan

8.0 Financial Plan

Table: Start-up Funding

$826,920 $80,900 $0 $80,900 $907,820

$150,000 $0 $0 $150,000 ($92,180) $57,820

Total Capital and Liabilities Total Funding

8.2 Use of Funds

8.3 Important Assumptions

Table: General Assumptions

8.4 Break-even Analysis

Table: Break-even Analysis

$28.85 $3.15 $56,029

8.5 Projected Profit and Loss

8.6 Projected Cash Flow

$448,467 $542,495 $990,962

$1,022,028 $1,366,516 $2,388,544

$2,043,567 $2,768,762 $4,812,329

$374,053 $357,477 $731,530

$766,326 $843,317 $1,609,643

$1,422,040 $1,684,617 $3,106,657

$0 $0 $0 $60,859 $0 $0 $20,000 $812,388 $178,574 $259,474

$0 $0 $0 $65,258 $0 $800,000 $30,000 $2,504,901 ($116,357) $143,117

$0 $0 $0 $69,976 $0 $1,600,000 $40,000 $4,816,633 ($4,303) $138,814

Table: Balance Sheet

$259,474 $130,206 $13,494 $0 $403,174

$143,117 $296,731 $32,796 $0 $472,644

$138,814 $593,320 $67,463 $0 $799,597

$826,920 $165,384 $661,536 $1,064,710 FY 2005

$1,626,920 $490,768 $1,136,152 $1,608,796 FY 2006

$3,226,920 $1,136,152 $2,090,768 $2,890,365 FY 2007

100.00% 89.07% 72.77% 0.00% 29.10%

100.00% 88.34% 64.88% 0.00% 33.54%