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The accompanying table lists important milestones with dates and managers in charge. The milestone schedule also indicates our initial beta launch of the website at Georgia State University.
Table: Milestones
Milestones
|
|
|
|
|
|
|
|
|
|
|
|
Milestone
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Start Date
|
End Date
|
Budget
|
Manager
|
Department
|
Business Concept & Planning
|
6/1/2003
|
7/15/2003
|
$0
|
GLO, KM, AP
|
Management
|
Beta Site Development
|
7/1/2003
|
10/1/2003
|
$0
|
GLO, KM
|
Web
|
Beta Site Launch
|
10/1/2003
|
10/2/2003
|
$0
|
GLO
|
Web
|
Beta Site Promotional Campaign
|
10/1/2003
|
2/15/2004
|
$0
|
GLO, KM, AP
|
Marketing
|
Beta Site Analysis
|
10/15/2003
|
2/28/2004
|
$0
|
GLO, KM, AP
|
Web & Marketing
|
Secure Funding for Phase 1 Launch
|
7/1/2004
|
7/30/2004
|
$0
|
GLO
|
Management
|
Phase 1 - Site Development
|
2/1/2004
|
8/15/2004
|
$0
|
GLO, KM
|
Web
|
Phase 1 - Launch
|
8/15/2004
|
8/17/2004
|
$0
|
GLO
|
Web
|
Phase 1 - Promotional Campaign
|
8/15/2004
|
10/1/2004
|
$0
|
GLO, KM, AP
|
Marketing
|
Secure Funding for Phase 2
|
10/1/2004
|
10/30/2004
|
$0
|
GLO
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Management
|
Totals
|
|
|
$0
|
|
|
Chart: Milestones
9.0 Financial Plan
The following are the summarized points from The College Cafe's financial plan. All charts and tables supporting these results are included in the appendix at the end of the business plan:
The College Cafe will generate assertive revenues by the end of year one.
The College Cafe will start reporting sustained profits during the 9th month of the 1st year.
Sales and profits by year three will top 1.5x that of year one.
The College Cafe will require an initial investment in capital to finance the marketing campaign and launch strategy.
The College Cafe will require additional investment to fund additional Web development, sales and marketing efforts and general operating expenses.
The College Cafe will provide a complete student-to-student marketplace. Investment contacts have already been approached and their expressions of satisfaction and encouragement are numerous. We intend to continue our advances with more unique and effective business solutions for the the college market. Based on the attached financial projections, we believe that this venture represents a sound business investment.
The financial projections are based on the following assumptions and facts for the industry as outlined in our market analysis:
As of 2003, college students spend and estimated $200 billion annually.
There are over 15.8 million college students.
The founders have contributed significant capital.
The fee for posting textbooks will equal $3 per textbook.
The fee for posting classifieds will equal $5 per classified.
The sales margin for products sold will average 15% and vary based on product.
Table: General Assumptions
General Assumptions
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|
|
|
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Year 1
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Year 2
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Year 3
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Plan Month
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1
|
2
|
3
|
Current Interest Rate
|
9.00%
|
9.00%
|
9.00%
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Long-term Interest Rate
|
5.00%
|
5.00%
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5.00%
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Tax Rate
|
27.00%
|
27.00%
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27.00%
|
Other
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0
|
0
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0
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9.2 Start-up Funding
In order to implement The College Cafe Phase 1 marketing campaign and launch strategy, we are seeking an initial seed investment of $150,000. An additional investment of $1 million will be required for operational expenses, continuing marketing campaigns, additional website enhancements, maintenance and support as necessary to establish and maintain The College Cafe as the leading online student-to-student market place.
As detailed in the Cash Balance chart for one year, The College Cafe will be able to begin and sustain its operations with the above mentioned investments. We are confident the opportunities in the market place are so compelling that with year one cash flows, The College Cafe will grow and take advantage of the growth in the college market.
Table: Start-up Funding
Start-up Funding
|
|
Start-up Expenses to Fund
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$57,685
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Start-up Assets to Fund
|
$157,315
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Total Funding Required
|
$215,000
|
|
|
Assets
|
|
Non-cash Assets from Start-up
|
$155,000
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Cash Requirements from Start-up
|
$2,315
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Additional Cash Raised
|
$0
|
Cash Balance on Starting Date
|
$2,315
|
Total Assets
|
$157,315
|
|
|
|
|
Liabilities and Capital
|
|
|
|
Liabilities
|
|
Current Borrowing
|
$5,000
|
Long-term Liabilities
|
$0
|
Accounts Payable (Outstanding Bills)
|
$0
|
Other Current Liabilities (interest-free)
|
$0
|
Total Liabilities
|
$5,000
|
|
|
Capital
|
|
|
|
Planned Investment
|
|
Gerald Owens
|
$50,000
|
Andrea Powers
|
$5,000
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Kelley Mitchell
|
$2,500
|
Allison Elliott
|
$2,500
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Additional Investment Requested
|
$150,000
|
Additional Investment Requirement
|
$0
|
Total Planned Investment
|
$210,000
|
|
|
Loss at Start-up (Start-up Expenses)
|
($57,685)
|
Total Capital
|
$152,315
|
|
|
Total Capital and Liabilities
|
$157,315
|
|
|
Total Funding
|
$215,000
|
9.3 Use of Funds
Initial funding proceeds will be used primarily for marketing, additional website development and maintenance. All the equipment needed will be leased or purchased, and included in the operational expenses. The rest of the funds will be used as working capital to maintain the operations until revenues generated by The College Cafe will be at the point where we can sustain operational expenses.
9.4 Exit Strategy
The financial projections indicate that The College Cafe will have generated enough cash in the next five years to permit the exit of the outside investors if so desired. It is the founders' choice to continue with the company's profitable operations until The College Cafe is presented with a viable offer for acquisition or the opportunity of an IPO is contemplated.
9.5 Key Financial Indicators
The following chart shows changes in key financial indicators: sales, gross margin, and operating expenses.
Chart: Benchmarks
A break-even analysis table has been completed on the basis of average costs/prices.
Table: Break-even Analysis
Break-even Analysis
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|
|
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Monthly Revenue Break-even
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$133,362
|
|
|
Assumptions:
|
|
Average Percent Variable Cost
|
56%
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Estimated Monthly Fixed Cost
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$58,648
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Chart: Break-even Analysis
9.7 Sales Forecast
The table and charts below show our forecasts for sales and costs of sales. Annual figures for three years are shown. Monthly estimates for the first year are included in the appendix.
Table: Sales Forecast
Sales Forecast
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|
|
|
|
Year 1
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Year 2
|
Year 3
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Sales
|
|
|
|
Textbook Exchange
|
$741,000
|
$963,300
|
$1,252,290
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Classifieds
|
$596,000
|
$774,800
|
$1,007,240
|
Auctions
|
$291,000
|
$378,300
|
$491,790
|
Retail
|
$206,000
|
$267,800
|
$348,140
|
Advertisement
|
$278,500
|
$362,050
|
$470,665
|
Total Sales
|
$2,112,500
|
$2,746,250
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$3,570,125
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|
|
|
|
Direct Cost of Sales
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Year 1
|
Year 2
|
Year 3
|
Textbook Exchange
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$391,000
|
$430,100
|
$473,110
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Classifieds
|
$258,000
|
$283,800
|
$312,180
|
Auction
|
$170,500
|
$187,550
|
$206,305
|
Retail
|
$193,500
|
$212,850
|
$234,135
|
Advertisement
|
$170,500
|
$187,550
|
$206,305
|
Subtotal Direct Cost of Sales
|
$1,183,500
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$1,301,850
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$1,432,035
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