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This is a business plan. It does not imply an offering of securities.
Table of Contents
Page 1
1.0 Executive Summary .................................................................................................................................1
1.1 Objectives......................................................................................................................................2
1.2 Mission ..........................................................................................................................................3
1.3 Keys to Success ............................................................................................................................3
2.0 Company Summary .................................................................................................................................4
2.1 Company Ownership .....................................................................................................................4
2.2 Start-up Summary..........................................................................................................................4
3.0 Services ..................................................................................................................................................5
4.0 Market Analysis Summary .......................................................................................................................6
4.1 Market Segmentation.....................................................................................................................7
4.2 Target Market Segment Strategy...................................................................................................8
4.3 Service Business Analysis .............................................................................................................8
4.3.1 Competition and Buying Patterns ......................................................................................8
5.0 Web Plan Summary.................................................................................................................................9
5.1 Website Marketing Strategy...........................................................................................................9
5.2 Development Requirements ..........................................................................................................9
6.0 Strategy and Implementation Summary ...................................................................................................9
6.1 SWOT Analysis..............................................................................................................................9
6.1.1 Strengths ........................................................................................................................10
6.1.2 Weaknesses ...................................................................................................................10
6.1.3 Opportunities ..................................................................................................................10
6.1.4 Threats ...........................................................................................................................10
6.2 Competitive Edge.........................................................................................................................11
6.3 Marketing Strategy.......................................................................................................................11
6.4 Sales Strategy .............................................................................................................................11
6.4.1 Sales Forecast ................................................................................................................11
6.5 Milestones ...................................................................................................................................13
7.0 Management Summary .........................................................................................................................14
7.1 Personnel Plan ............................................................................................................................14
8.0 Financial Plan .......................................................................................................................................15
8.1 Start-up Funding .........................................................................................................................15
8.2 Important Assumptions ................................................................................................................16
8.3 Break-even Analysis ....................................................................................................................16
8.4 Projected Profit and Loss ............................................................................................................17
8.5 Projected Cash Flow....................................................................................................................20
8.6 Projected Balance Sheet .............................................................................................................22
8.7 Business Ratios ...........................................................................................................................23
JNT Computers Business Plan
Page 1
1.0 Executive Summary
JNT COMPUTERSis a new start-up IT Company. Owner and director, Jimmy Jordaan has over
fifteen years of experience in connectivity and network engineering. The country's economic
growth over the last two years has resulted in increased opportunity for Network Engineers.
JNT COMPUTERS is positioned to capitalize on the growing need of companies to better manage
their systems.
From 1996 to 2014, Jimmy Jordaan was a IT specialised for the Nedbank, GKD Computers,
Bytes Technology and Cell C. His primary responsibility was to travel to the customer's sites
and perform different related IT functions.
Ashraf Mohammed has been in the IT industry since 2001 which he travelled to various African
counties and has also been part of a huge project to launch Vodacom in Mozambique.
Ashraf has continued to pursue his career in the IT industry which he spent the last six years
as a senior technician for Vodacom Business. Responsibilities included custom wired and wireless
installations and support at customer premises, installations and maintenance of Cisco
products.Software and hardware support
JNT COMPUTERS is currently outsourcing their IT Skills to clients providing custom network
installation services to customers. and there is alsoSupport Contracts at R550 per Monthin
place that will cover the following:
Standard PC Service per month.
1 Critical Remote Service
Support of all core server functions, including email and file serving.
Telephone and remote support for end users with regards to Operating system
software and email.
Network connectivity onsite support.
Weekly Backup logging and verification.
24/7 Monitoring.
Backup Services.
JNT Computers Business Plan
Page 2
1.1 Objectives
Our business strategy will revolve around the need to provide quality servcies to our various
target customers. This shall be undertaken through the establishment of a professional team and
the provision of quality, custom-designed services, catering to the client's particular needs.
We need to attain the following objectives:
Development of a follow-up strategy to gauge performance with all our clients.
To instill a culture of continuous improvement in beating standards of customer
satisfaction and efficiency.
Increase revenue from new clientele from the current 20% to more than 40% after
the first year of operations.
Increase the company's growth margins by 15% by the second year of operation.
Our fundamental objective is to realize how we impact the community we do business in,
knowing that this will be our test in time if our current clientele approve of our services, thus
opening up opportunities for referrals which will be the key to our business growth over the
next few months of the first year.
JNT Computers Business Plan
Page 3
1.2 Mission
JNT Computers is committed to offering its clients a reliable, high quality alternative to in-house
resources for business development in network and support services. These shall be done
through the implementation of the following company values:
Provide services of uncompromising quality.
Become responsible corporate citizens fulfilling our obligagations as integral members of
society. Our business decisions will be given the appropriate weight and and
consideration to social and environmental impacts.
We intend to seek mutually beneficial and enduring relationships in the commitments
that we make, ensuring that they are straight-forward and honest. Our
communication will be open and accurate, both internally and externally.
We intend to promote the above company values, while encouraging our employees
to do likewise.
Through the implementation of the company values, we believe that we will be able to attain our
goals and objectives for the benefit of all concerned, and in particular the communities in
which we operate in.
1.3 Keys to Success
The keys to the business' success will undoubtedly be effective market segmentation through
the identification of several niche markets and implementation strategies. The key success
factors will be:
Excellence in fulfilling promise: Completely confidential, reliable, trustworthy expertise
and service(s) through the provision of uncompromising service. This dictates that
we have the latest technology, hardware, software and well trained personnel to
delivert his promise.
Timeous response to client's orders: we cannot afford to delay our clients for whatever
reason as this will give a negative bearing on our image, reputation and future
business. We need to continuously communicate with the client ensuring we provide
need-based solutions.
Skill and depth knowledge: Considering the nature of our services and the market, the
skill and depth of knowledge of our personnel is of utmost importance in provision of
service(s) to the end users. This is where the 15 year experience in the industry of our
directors will be an added advantage.
Clear services and marketing positioning: Not wanting to be associated with the
numerous vendors in the market, we intend to aggressively market our business and
the services we provide, so as to be at the top of our clients minds.
JNT Computers Business Plan
Page 4
2.0 Company Summary
JNT Computers is a new start-up limited IT company located in Durban, South Africa and
founded in March 2014 by owner and director, Jimmy Jordaan.
JNT Computers has been formed by an individual with exceptional experience in the IT areas of
expertise. The company provides a wide variety of services, specifically in the fields of
networking and support. JNT Computers works hand-in-hand with all its clients to provide
excellent services, as is required by its clientele.
2.1 Company Ownership
The company, JNT Computers is a (PTY) Ltd company incorporated by Mr. Jimmy Jordaan who
is currently the owner and director. Though the company is relatively new, the director realizes
the company's vast potential market and the opportunity for growth.
2.2 Start-up Summary
The company founder, Mr. Jimmy Jordaan will handle the day-to-day operations of the
business and will be assisted by Mr. Ashraf Mohammed who is an engineer, to ensure that this
business venture is a success.
It is estimated that the start-up costs will be R120,000 (including legal costs, signage and
related expenses). The bulk of this money (R90,000) will be used for salaries over the next 3
months. The company is looking to borrow a start-up loan to cater for these costs. The
company already has long-term assets funded by the director, Mr. Jimmy Jordaan totalling to
approximately R,350,000.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal R2,000
Stationery etc. R500
Insurance R1,000
Rent R16,500
Total Start-up Expenses R20,000
Start-up Assets
Cash Required R90,000
Other Current Assets R5,000
Long-term Assets R5,000
Total Assets R100,000
Total Requirements R120,000
JNT Computers Business Plan
Page 5
3.0 Services
JNT Computers will provide networking and support services to small, medium and large
businesses. the network systems and support services will include both PC-based Local Area
Network (LAN) systems and minicomputer server-based systems. Our services include design and
installation of network systems, training and support. The services on offer will include:
Administration - General Network Admin
Internet - Firewall security, firewall support, email delivery router support and more.
Wide Area Networks (WAN) - Data and Voice support and more.
Local Area Networks (LAN) - Design & Installation, backup servcies and more.
Co-located Managed Services - Web, email servers and application servers.
JNT Computers Business Plan
Page 6
4.0 Market Analysis Summary
What are some of the key outsourcing trends?
Service providers are finding themselves under increasing revenue pressure and are looking for
ways to maximize earnings under existing contracts. As a result, they now are less
accommodating when interpreting whether a new service falls within the scope of services set
forth in an existing agreement. Customers need to confirm that the statement of services fully
defines the service provider's responsibilities. Service providers also are pushing hard for clients
to accept standardized offerings, as opposed to customized packages where the margins can
be lower for the vendor. Companies need to determine whether a standardized offer meets
their business needs, or if the cost savings of adopting such a package will be outweighed by
the internal changes required to fit into service providers' models.
In addition, outsourcing types will continue to expand, especially as vendors move up the
value chain of services they offer. However, companies are increasingly circumspect about the
risks of outsourcing broad areas of business. As a result, we are seeing engagements that are
shorter in duration and more limited in scope. The 15-year "all-IT-services" outsourcing
agreements are far less commonplace. We also see more clients relying on captive entities or
entering into hybrid arrangements with vendors.
So Outsourcing IT services is a big industry. The services are used in numerous companies and
Approximately, 30% of the market is in a demand for the services and it is growing. It is
estimated that IT outsourcing will dominate the market.
Typically, with IT outsourcing, there is less costs for IT Staff. Most companies in the industry
offer these services to their customers or outsource the service to engineering firms with
expertise in their product line.
JNT COMPUTERS has extensive experience when it comes to Outsourcing IT skills.
The company's focus is to first meet the demands of getting referred customers. JNT
COMPUTERS will establish relationships with these clients and will work to receive referral
business from them over time. The company estimates that 80% of revenues will come from
outsourced clientele and 20% from new business. Over the next three years, JNT COMPUTERS
estimates that new business will constitute 40% of revenue.
JNT Computers Business Plan
Page 7
4.1 Market Segmentation
We will be focusing on proactive, market seeking organizations that want to ensure an efficient
and effective IT system that will assist in the realization of their business objectives.
At the onset, JNT Computers will rely on its vast network of already existing clientele for new
jobs and referrals. This will mostly inlcude companies that are large enough to require the high-
quality IT Networking and Support solutions we offer, but too small to have a separate computer
management staff.
We shall then target new business opportunities, 3 months into the runing of the business.
These new business opportunities will be targeted at business executives in large, medium and
small businesses who are in charge of various business decisions. These are the general
managers and other decision makers within the companies.
The main intention here will be to offer an attractive development alternative to the company
that is constrained and unable to address opportunities in new market segments due to
technological shortfalls.
Table: Market Analysis
Market Analysis
2014 2015 2016 2017 2018
Potential Customers Growth CAGR
Ourtsourced Clientele 15% 40 46 53 61 70 15.02%
New Business Clientele 25% 10 13 16 20 25 25.74%
Total 17.41% 50 59 69 81 95 17.41%
JNT Computers Business Plan
Page 8
4.2 Target Market Segment Strategy
Currently, JNT Computers serves pre-existing clients brought through by the directors current
networks. However, the company has recognized that its skills and quality capability, together
with its small size, allow it to compete in the higher end networking and support segments.
Targeting new business opportunities will improve profitability levels, especially with the strategy
of establishing a reputation among new clients which will stregthen the existing word of mouth
marketing strategy.
In essence, the marketing strategy will be based mainly on making the right service(s) available
to the right target customer. We will ensure that our services' prices take into consideration
the clients' budgets and that these people appreciate the service and know that it exists,
including where to find it. This is where our internet marketing campaign will come in as well as
web plan strategy.
4.3 Service Business Analysis
The Networks and Support services "industry" is pulverized and disoganized, with thousands of
smaller consulting organizations and indivisual netwroking consultants for every one of the well-
known companies.
Networking and Systems support participants range from major international name-brand
consultants to tens of thousands of individuals. One of JNT Computers challenges will be to
establish itself as a real networking and systems support company and position itself in the
relatively risk-free corporate channel segment.
Some of these computer consultant companies mainly specialize in the installation of new
systems and they charge very exorbitant consultation fees which are deemed rather high,
especially for the small and medium enterprises.
4.3.1 Competition and Buying Patterns
The vast majority of proactive, market-oriented businesses understand the value of having an
efficient computer system, as well as the concept of service and support. They are much more
likely to pay for them when the offering and benefits are clearly stated.
There is no doubt that we will compete more against the box pushers than other service
providers. We need to effectively compete against the idea that once a system is out-dated,
the business should buy new systems, when, with the ongoing service and support, they can
be upgraded.
The most important element of general competition, by far, is what it takes to keep clients for
repeat business. It is worth making huge concessions in any single service to maintain a client
relationship that brings the client back for future services.
JNT Computers Business Plan
Page 9
5.0 Web Plan Summary
JNT Computers intends to use the internet as one of the channels for selling its services as this
is a cost effective way of reaching a large number of clients, both regionally and
internationally. We also realize that customer/client research is needed before building an
effective website. This is something many companies rarely do, but JNT Computers wants to find
out how customers want to access information and journey through their website.
5.1 Website Marketing Strategy
We intend to promote our website on all our stationery as well as in all our communications.
After the launch of the website, JNT Computers will carry out an intensive Search Engine
Optimization campaign as well as a social media campaign targeting new clientele and positioning
the company's website at the top of the major search engine portals.
5.2 Development Requirements
JNT Computers intends to maintain a simple, classy, tey internet focused website. The
servcies of a web designer will be outsourced and they will work with the management team to
come up with an impressive and effective website. The management will manage the website
once it has been rolled out.
6.0 Strategy and Implementation Summary
Emphasize Service - We will differentiate ourselves with Service! We will establish our
business offering as a clear and viable alternative for our target market, from the scores of
networking and support service providers.
Build a relationship-oriented business - Build long-term relationships with customers, not just
single-visit deals. We shall become their service provider of choice by making them understand
the value of the relationship.
6.1 SWOT Analysis
Below we take an in-depth look at our strengths, weaknesses, opportunities and strengths. We
are in a highly lucrative market in a growing economy. We foresee our strengths as the ability
to respond to the market and provide custom designed technological services. Our key personnel
already have thorough knowledge of the technical services we intend to provide which will go a
long way towards penetrating the market. Below is a summary of the SWOT Analysis.
JNT Computers Business Plan
Page 10
6.1.1 Strengths
Knowledge - Our greatest stregnth is the knowledge that our competitors are retailers
pushing boxes; i.e, trying to sell the client a new product while we on the other hand
know systems,networks, connectivity and data management.
Relationship Selling - We intend to know our customers one by one. Our direct
sales efforts will seek to maintain and sustain a relationship with our customers.
Diversified market segments - The diversity of the services we intend to provide will
ensure lack of dependency on one service.
Combination of Skills and Implementation - In the long run the management intends
to build business strategy and long-term plans with strategic allies, having wide
experience in their respective markets as well as strong technical skills and business
know-how.
6.1.2 Weaknesses
A limited financial base compared to the current major players in the IT Industry.
A dependence on quickly changing technology which results in a cost factor due to the
need to keep up with state of the art hardware.
6.1.3 Opportunities
The Internet - The increasing opportunities on the internet offer us another
strength when compared to other service offerings. Our potential customer want
more help with the internet and we intend to position ourselves to offer this help.
Emerging Technologies - The rate of new products and services introduction in the
IT Sector presents unimaginable opportunities to be explored.
6.1.4 Threats
Innovation shortens life cycles and hence the need to act timeously on the market.
This will recoup new service introductions in a shorter time frame.
The slow adotion rate of technologies and products, especially in some organizatiosn
where the management is comfortable with what they currently have does not sit
well with our intended service offering.
JNT Computers Business Plan
Page 11
6.2 Competitive Edge
JNT COMPUTERS will sustain its competitive advantages to steadily gain market share. The
first advantage is based on extensive knowledge of Network and Support services. The second
advantage is an established network of contacts among numerous companies that utilize
Network Support.
JNT COMPUTERS' competitive edge is the fact that Jimmy and Ashraf have previously spent a lot
of time assisting clients with system related issues. Both have excellent reputations with
customers for quality work and effective communication skills. These established relationships
create a trust bond that is significant when it comes to generating new referrals.
By building a business based on long-standing relationships with satisfied clients, we will
simultaneously build defenses against competition. The longer the relationship stands, the
more we help our clients understand what we offer them and why they need it.
6.3 Marketing Strategy
The core element of our marketing strategy will be differentiating ourselves from our competitors.
In terms of promoting our services, we intend to sell ourselves as a strategic ally. We intend to
offer extremely reasonable prices in comparison to the competition and we need to be able to
sustain that. Market penetration through lower prices shall be undertaken where need be,
while premium pricing in the case of the upper-end of the market.
6.4 Sales Strategy
The sales forecast is based in the existing client base of the two principal officers of the
company and their ability to generate new sales based on their contacts. By bringing together
Mr. Jordaan's IT expertise and vast experience as well as Mr. Mohammed's engineering and
networking experience, the company will generate sales in both areas. Furthermore, the
company's growing marketing program will generate the growth the company needs to excel. It is
important to note that as we become establshed and known in the market, we project sales to
increase at a higher rate than the initial year.
6.4.1 Sales Forecast
As the following table shows, JNT Computers plans to deliver sales of approximately R690,000
in the first year with an additional 10% growth per annum. This is a conservative look at the
sales and will definitely be higher than this.
JNT Computers Business Plan
Page 12
Table: Sales Forecast
Sales Forecast
FY 2015 FY 2016 FY 2017
Sales
Products & Services R690,000 R759,000 R834,900
Other R0 R0 R0
Total Sales R690,000 R759,000 R834,900
Direct Cost of Sales FY 2015 FY 2016 FY 2017
Products & Services R111,000 R116,550 R122,377
Other R0 R0 R0
Subtotal Direct Cost of Sales R111,000 R116,550 R122,377
JNT Computers Business Plan
Page 13
6.5 Milestones
Our detailes milestones are shown in the following table and chart. The related budgets are
included with the expenses shown in the projected profit and loss statement, which is in the
financial analysis in Chapter 7 of this plan.
Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department
Creation of Company Website 7/1/2014 7/31/2014 R500 TBA Sales &
Marketing
SEO Campaign 7/31/2014 12/31/2014 R500 TBA Sales &
Marketing
Online visibil ity campaign 9/1/2014 30/11/2014 R1,000 ABC Department
TBA 7/1/2014 7/31/2014 R0 ABC Department
TBA 7/1/2014 7/31/2014 R0 ABC Department
TBA 7/1/2014 7/31/2014 R0 ABC Department
TBA 7/1/2014 7/31/2014 R0 ABC Department
TBA 7/1/2014 7/31/2014 R0 ABC Department
TBA 7/1/2014 7/31/2014 R0 ABC Department
TBA 7/1/2014 7/31/2014 R0 ABC Department
Totals R2,000
JNT Computers Business Plan
Page 14
7.0 Management Summary
The human resource element shall be an essential component in the delivery of the total service.
By having enthusiastic, capable and empowered people interacting with our clients, we intend to
build a competitive advantage of being able to comprehensively meet our clients' needs. Those
dealing with the clients will have enough leverage in decision-making to ensure that clients are
handled promptly and to reduce the lead time in service delivery.
It will be necessary to evaluate jobs and remuneration packages against market benchmarks
though at the onset, the management will pay themselves a small stipend as they wait for the
company to expand.
7.1 Personnel Plan
As the personnel plan shows, the company expects to make gradual investments in JNT
personnel over the next three years. After year three, a full review of the staff salaries will be
reviewed based on the growth of the company.
JNT Computers Business Plan
Page 15
Table: Personnel
Personnel Plan
FY 2015 FY 2016 FY 2017
Jimmy Jordaan - Director "Network Engineer R90,000 R94,500 R103,950
Ashraf Mohammed - Engineer R90,000 R94,500 R103,950
Kevin Golden - Marketing & Sales R90,000 R94,500 R103,950
Less Naidoo - Accountant R90,000 R94,500 R103,950
Total People 0 0 0
Total Payroll R360,000 R378,000 R415,800
8.0 Financial Plan
The business of JNT Computers does not require substantial outlays for inventory and virtually
75% of all sales are on cash basis, so increases in sales will not be accompanied by initial cash
flow deficits.
JNT Computers expects to borrow R120,000 as a 5-year loan to cater for salaries and other
basic expenses during the initial months of the business.
Our financial plan is based on conservative estimates and assumptions.
8.1 Start-up Funding
The start-up costs will consist primarily of salaries to help sustain the company over the next
three months as the company sets a footing into the market. The director has already
invested approximately R350,000 in assets, most of this computer equipment and a company
vehicle, which the company will use for a period of time.
This, and the company's current monthly income will be used to secure a loan facility totalling
R120,000 which will be repaid in a period of 5 years.
JNT Computers Business Plan
Page 16
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund R20,000
Start-up Assets to Fund R100,000
Total Funding Required R120,000
Assets
Non-cash Assets from Start-up R10,000
Cash Requirements from Start-up R90,000
Additional Cash Raised R0
Cash Balance on Starting Date R90,000
Total Assets R100,000
Liabil ities and Capital
Liabil ities
Current Borrowing R0
Long-term Liabil ities R120,000
Accounts Payable (Outstanding Bills) R0
Other Current Liabil ities (interest-free) R0
Total Liabil ities R120,000
Capital
Planned Investment
Owner R0
Investor R0
Additional Investment Requirement R0
Total Planned Investment R0
Loss at Start-up (Start-up Expenses) (R20,000)
Total Capital (R20,000)
Total Capital and Liabil ities R100,000
Total Funding R120,000
8.2 Important Assumptions
Table 7.1 summarizes key financial assumptions including 30-day average collection days, sales
entirely on invoice basis, expenses mainly on net 30 basis, 35 days on average for payment of
invoices, and present-day interest rates.
8.3 Break-even Analysis
The Break-even analysis is based on the average of the first-year figures for total sales of
services and by operating expenses. These conservative assumptions make for a more
accurate estimate of real risk.
JNT Computers Business Plan
Page 17
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even R43,805
Assumptions:
Average Percent Variable Cost 16%
Estimated Monthly Fixed Cost R36,758
8.4 Projected Profit and Loss
As the Profit and Loss table shows, the company expects to continue its steady growth in
profitability over the next three years of operations.
JNT Computers Business Plan
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Table: Profit and Loss
Pro Forma Profit and Loss
FY 2015 FY 2016 FY 2017
Sales R690,000 R759,000 R834,900
Direct Cost of Sales R111,000 R116,550 R122,377
Other Costs of Sales R34,500 R36,225 R38,036
Total Cost of Sales R145,500 R152,775 R160,413
Gross Margin R544,500 R606,225 R674,487
Gross Margin % 78.91% 79.87% 80.79%
Expenses
Payroll R360,000 R378,000 R415,800
Marketing/Promotion R5,500 R5,500 R5,500
Depreciation R0 R0 R0
Rent R66,000 R66,000 R66,000
Util ities R6,000 R6,000 R6,000
Insurance R3,600 R3,600 R3,600
Total Operating Expenses R441,100 R459,100 R496,900
Profit Before Interest and Taxes R103,400 R147,125 R177,587
EBITDA R103,400 R147,125 R177,587
Interest Expense R10,375 R7,000 R2,500
Taxes Incurred R27,908 R42,038 R52,526
Net Profit R65,118 R98,088 R122,561
Net Profit/Sales 9.44% 12.92% 14.68%
JNT Computers Business Plan
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JNT Computers Business Plan
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8.5 Projected Cash Flow
The cash flow projection shows that provisions for ongoing expenses are adequate to meet the
needs of the company as the business generates sufficient cash flow to support operations.
JNT Computers Business Plan
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Table: Cash Flow
Pro Forma Cash Flow
FY 2015 FY 2016 FY 2017
Cash Received
Cash from Operations
Cash Sales R517,500 R569,250 R626,175
Cash from Receivables R156,792 R188,179 R206,997
Subtotal Cash from Operations R674,292 R757,429 R833,172
Additional Cash Received
Sales Tax, VAT, HST/GST Received R0 R0 R0
New Current Borrowing R0 R0 R0
New Other Liabil ities (interest-free) R0 R0 R0
New Long-term Liabil ities R0 R0 R0
Sales of Other Current Assets R0 R0 R0
Sales of Long-term Assets R0 R0 R0
New Investment Received R0 R0 R0
Subtotal Cash Received R674,292 R757,429 R833,172
Expenditures FY 2015 FY 2016 FY 2017
Expenditures from Operations
Cash Spending R360,000 R378,000 R415,800
Bill Payments R240,489 R284,053 R295,419
Subtotal Spent on Operations R600,489 R662,053 R711,219
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out R0 R0 R0
Principal Repayment of Current Borrowing R0 R0 R0
Other Liabil ities Principal Repayment R0 R0 R0
Long-term Liabil ities Principal Repayment R30,000 R40,000 R50,000
Purchase Other Current Assets R0 R0 R0
Purchase Long-term Assets R0 R0 R0
Dividends R0 R0 R0
Subtotal Cash Spent R630,489 R702,053 R761,219
Net Cash Flow R43,803 R55,376 R71,953
Cash Balance R133,803 R189,179 R261,132
JNT Computers Business Plan
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8.6 Projected Balance Sheet
The balance sheet shows healthy growth of net worth and strong financial position. The monthly
estimates are included in the appendix.
JNT Computers Business Plan
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Table: Balance Sheet
Pro Forma Balance Sheet
FY 2015 FY 2016 FY 2017
Assets
Current Assets
Cash R133,803 R189,179 R261,132
Accounts Receivable R15,708 R17,279 R19,007
Other Current Assets R5,000 R5,000 R5,000
Total Current Assets R154,511 R211,458 R285,139
Long-term Assets
Long-term Assets R5,000 R5,000 R5,000
Accumulated Depreciation R0 R0 R0
Total Long-term Assets R5,000 R5,000 R5,000
Total Assets R159,511 R216,458 R290,139
Liabil ities and Capital FY 2015 FY 2016 FY 2017
Current Liabil ities
Accounts Payable R24,394 R23,253 R24,373
Current Borrowing R0 R0 R0
Other Current Liabil ities R0 R0 R0
Subtotal Current Liabil ities R24,394 R23,253 R24,373
Long-term Liabil ities R90,000 R50,000 R0
Total Liabil ities R114,394 R73,253 R24,373
Paid-in Capital R0 R0 R0
Retained Earnings (R20,000) R45,118 R143,205
Earnings R65,118 R98,088 R122,561
Total Capital R45,118 R143,205 R265,766
Total Liabil ities and Capital R159,511 R216,458 R290,139
Net Worth R45,118 R143,205 R265,766
8.7 Business Ratios
Business ratios for the years of this plan are shown below. We expect to maintain healthy
ratios for profitability, risk and return.
JNT Computers Business Plan
Page 24
Table: Ratios
Ratio Analysis
FY 2015 FY 2016 FY 2017 Industry Profile
Sales Growth 0.00% 10.00% 10.00% 7.44%
Percent of Total Assets
Accounts Receivable 9.85% 7.98% 6.55% 26.43%
Other Current Assets 3.13% 2.31% 1.72% 59.95%
Total Current Assets 96.87% 97.69% 98.28% 89.67%
Long-term Assets 3.13% 2.31% 1.72% 10.33%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabil ities 15.29% 10.74% 8.40% 30.47%
Long-term Liabil ities 56.42% 23.10% 0.00% 20.98%
Total Liabil ities 71.72% 33.84% 8.40% 51.45%
Net Worth 28.28% 66.16% 91.60% 48.55%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 78.91% 79.87% 80.79% 100.00%
Selling, General & Administrative Expenses 69.48% 66.95% 66.11% 75.92%
Advertising Expenses 0.80% 0.72% 0.66% 1.53%
Profit Before Interest and Taxes 14.99% 19.38% 21.27% 0.63%
Main Ratios
Current 6.33 9.09 11.70 2.00
Quick 6.33 9.09 11.70 1.58
Total Debt to Total Assets 71.72% 33.84% 8.40% 58.02%
Pre-tax Return on Net Worth 206.18% 97.85% 65.88% 3.88%
Pre-tax Return on Assets 58.32% 64.74% 60.35% 1.63%
Additional Ratios FY 2015 FY 2016 FY 2017
Net Profit Margin 9.44% 12.92% 14.68% n.a
Return on Equity 144.33% 68.49% 46.12% n.a
Activity Ratios
Accounts Receivable Turnover 10.98 10.98 10.98 n.a
Collection Days 29 32 32 n.a
Accounts Payable Turnover 10.86 12.17 12.17 n.a
Payment Days 27 31 29 n.a
Total Asset Turnover 4.33 3.51 2.88 n.a
Debt Ratios
Debt to Net Worth 2.54 0.51 0.09 n.a
Current Liab. to Liab. 0.21 0.32 1.00 n.a
Liquidity Ratios
Net Working Capital R130,118 R188,205 R260,766 n.a
Interest Coverage 9.97 21.02 71.03 n.a
Additional Ratios
Assets to Sales 0.23 0.29 0.35 n.a
Current Debt/Total Assets 15% 11% 8% n.a
Acid Test 5.69 8.35 10.92 n.a
Sales/Net Worth 15.29 5.30 3.14 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Appendix
Page 1
Table: Sales Forecast
Sales Forecast
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Sales
Products & Services R50,000 R50,000 R50,000 R55,000 R55,000 R55,000 R60,000 R60,000 R60,000 R65,000 R65,000 R65,000
Other R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Total Sales R50,000 R50,000 R50,000 R55,000 R55,000 R55,000 R60,000 R60,000 R60,000 R65,000 R65,000 R65,000
Direct Cost of Sales Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Products & Services R8,500 R8,500 R8,500 R9,000 R9,000 R9,000 R9,500 R9,500 R9,500 R10,000 R10,000 R10,000
Other R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Subtotal Direct Cost of Sales R8,500 R8,500 R8,500 R9,000 R9,000 R9,000 R9,500 R9,500 R9,500 R10,000 R10,000 R10,000
Appendix
Page 2
Table: Personnel
Personnel Plan
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Jimmy Jordaan - Director "Network Engineer R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500
Ashraf Mohammed - Engineer R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500
Kevin Golden - Marketing & Sales R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500
Less Naidoo - Accountant R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500 R7,500
Total People 0 0 0 0 0 0 0 0 0 0 0 0
Total Payroll R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000
Appendix
Page 3
Table: Profit and Loss
Pro Forma Profit and Loss
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Sales R50,000 R50,000 R50,000 R55,000 R55,000 R55,000 R60,000 R60,000 R60,000 R65,000 R65,000 R65,000
Direct Cost of Sales R8,500 R8,500 R8,500 R9,000 R9,000 R9,000 R9,500 R9,500 R9,500 R10,000 R10,000 R10,000
Other Costs of Sales R3,000 R3,000 R3,000 R3,000 R3,000 R1,500 R3,000 R3,000 R3,000 R3,000 R3,000 R3,000
Total Cost of Sales R11,500 R11,500 R11,500 R12,000 R12,000 R10,500 R12,500 R12,500 R12,500 R13,000 R13,000 R13,000
Gross Margin R38,500 R38,500 R38,500 R43,000 R43,000 R44,500 R47,500 R47,500 R47,500 R52,000 R52,000 R52,000
Gross Margin % 77.00% 77.00% 77.00% 78.18% 78.18% 80.91% 79.17% 79.17% 79.17% 80.00% 80.00% 80.00%
Expenses
Payroll R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000
Marketing/Promotion R1,000 R500 R0 R1,000 R0 R0 R1,000 R500 R0 R500 R0 R1,000
Depreciation R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Rent R5,500 R5,500 R5,500 R5,500 R5,500 R5,500 R5,500 R5,500 R5,500 R5,500 R5,500 R5,500
Utilities 15% R500 R500 R500 R500 R500 R500 R500 R500 R500 R500 R500 R500
Insurance R300 R300 R300 R300 R300 R300 R300 R300 R300 R300 R300 R300
Total Operating Expenses R37,300 R36,800 R36,300 R37,300 R36,300 R36,300 R37,300 R36,800 R36,300 R36,800 R36,300 R37,300
Profit Before Interest and Taxes R1,200 R1,700 R2,200 R5,700 R6,700 R8,200 R10,200 R10,700 R11,200 R15,200 R15,700 R14,700
EBITDA R1,200 R1,700 R2,200 R5,700 R6,700 R8,200 R10,200 R10,700 R11,200 R15,200 R15,700 R14,700
Interest Expense R979 R958 R938 R917 R896 R875 R854 R833 R813 R792 R771 R750
Taxes Incurred R66 R222 R379 R1,435 R1,741 R2,198 R2,804 R2,960 R3,116 R4,323 R4,479 R4,185
Net Profit R155 R519 R884 R3,348 R4,063 R5,128 R6,542 R6,907 R7,271 R10,086 R10,450 R9,765
Net Profit/Sales 0.31% 1.04% 1.77% 6.09% 7.39% 9.32% 10.90% 11.51% 12.12% 15.52% 16.08% 15.02%
Appendix
Page 4
Table: Cash Flow
Pro Forma Cash Flow
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Cash Received
Cash from Operations
Cash Sales R37,500 R37,500 R37,500 R41,250 R41,250 R41,250 R45,000 R45,000 R45,000 R48,750 R48,750 R48,750
Cash from Receivables R417 R12,500 R12,500 R12,542 R13,750 R13,750 R13,792 R15,000 R15,000 R15,042 R16,250 R16,250
Subtotal Cash from Operations R37,917 R50,000 R50,000 R53,792 R55,000 R55,000 R58,792 R60,000 R60,000 R63,792 R65,000 R65,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
New Current Borrowing R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
New Other Liabilities (interest-free) R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
New Long-term Liabilities R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Sales of Other Current Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Sales of Long-term Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
New Investment Received R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Subtotal Cash Received R37,917 R50,000 R50,000 R53,792 R55,000 R55,000 R58,792 R60,000 R60,000 R63,792 R65,000 R65,000
Expenditures Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Expenditures from Operations
Cash Spending R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000 R30,000
Bill Payments R662 R19,833 R19,469 R19,201 R21,628 R20,902 R19,992 R23,446 R23,081 R22,802 R24,902 R24,572
Subtotal Spent on Operations R30,662 R49,833 R49,469 R49,201 R51,628 R50,902 R49,992 R53,446 R53,081 R52,802 R54,902 R54,572
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Principal Repayment of Current Borrowing R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Other Liabilities Principal Repayment R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Long-term Liabilities Principal Repayment R2,500 R2,500 R2,500 R2,500 R2,500 R2,500 R2,500 R2,500 R2,500 R2,500 R2,500 R2,500
Purchase Other Current Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Purchase Long-term Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Dividends R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Subtotal Cash Spent R33,162 R52,333 R51,969 R51,701 R54,128 R53,402 R52,492 R55,946 R55,581 R55,302 R57,402 R57,072
Net Cash Flow R4,755 (R2,333) (R1,969) R2,091 R872 R1,598 R6,300 R4,054 R4,419 R8,490 R7,598 R7,928
Cash Balance R94,755 R92,422 R90,453 R92,544 R93,416 R95,015 R101,314 R105,369 R109,787 R118,277 R125,875 R133,803
Appendix
Page 5
Table: Balance Sheet
Pro Forma Balance Sheet
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Assets Starting Balances
Current Assets
Cash R90,000 R94,755 R92,422 R90,453 R92,544 R93,416 R95,015 R101,314 R105,369 R109,787 R118,277 R125,875 R133,803
Accounts Receivable R0 R12,083 R12,083 R12,083 R13,292 R13,292 R13,292 R14,500 R14,500 R14,500 R15,708 R15,708 R15,708
Other Current Assets R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000
Total Current Assets R95,000 R111,838 R109,505 R107,537 R110,836 R111,708 R113,306 R120,814 R124,869 R129,287 R138,986 R146,584 R154,511
Long-term Assets
Long-term Assets R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000
Accumulated Depreciation R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Total Long-term Assets R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000
Total Assets R100,000 R116,838 R114,505 R112,537 R115,836 R116,708 R118,306 R125,814 R129,869 R134,287 R143,986 R151,584 R159,511
Liabilities and Capital Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Current Liabilities
Accounts Payable R0 R19,184 R18,831 R18,479 R20,930 R20,239 R19,210 R22,676 R22,324 R21,971 R24,084 R23,731 R24,394
Current Borrowing R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Other Current Liabilities R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Subtotal Current Liabilities R0 R19,184 R18,831 R18,479 R20,930 R20,239 R19,210 R22,676 R22,324 R21,971 R24,084 R23,731 R24,394
Long-term Liabilities R120,000 R117,500 R115,000 R112,500 R110,000 R107,500 R105,000 R102,500 R100,000 R97,500 R95,000 R92,500 R90,000
Total Liabilities R120,000 R136,684 R133,831 R130,979 R130,930 R127,739 R124,210 R125,176 R122,324 R119,471 R119,084 R116,231 R114,394
Paid-in Capital R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0
Retained Earnings (R20,000) (R20,000) (R20,000) (R20,000) (R20,000) (R20,000) (R20,000) (R20,000) (R20,000) (R20,000) (R20,000) (R20,000) (R20,000)
Earnings R0 R155 R674 R1,558 R4,906 R8,969 R14,096 R20,638 R27,545 R34,816 R44,902 R55,353 R65,118
Total Capital (R20,000) (R19,845) (R19,326) (R18,443) (R15,094) (R11,031) (R5,904) R638 R7,545 R14,816 R24,902 R35,353 R45,118
Total Liabilities and Capital R100,000 R116,838 R114,505 R112,537 R115,836 R116,708 R118,306 R125,814 R129,869 R134,287 R143,986 R151,584 R159,511
Net Worth (R20,000) (R19,845) (R19,326) (R18,443) (R15,094) (R11,031) (R5,904) R638 R7,545 R14,816 R24,902 R35,352 R45,118