CPW Investments will operate within the City of Los Angeles, California. The Company will be offering a unique service to property investors, homeowners, and tenants. CPW Investments was registered as a limited liability company (LLC) within the state of California, and will abide by all city and state business laws. Mr. Reynolds will share ownership with the parent company, Dynamic Capital of China. His plan is to extend the parent company’s success to America by providing superior real estate service, quality structures, and competitively priced properties.
CPW Investments will initiate a two-phase program in order to implement its business model. The initial phase will include setting up the business. This will include locating office space, hiring an accountant/administrator to help with client calls, general office work, and accounting. In addition, Mr. Reynolds will establish phone, Internet, and power service to the new location. He will also purchase computers, printers, software, and office furniture to support daily business activities.
The second phase will include building long-term relationships. Since the industry resides in a people-oriented market, CPW Investments will focus daily on exceeding customer expectations through trust, integrity, and mutual respect. Relationships will be built through networking and focusing on real estate brokers, mortgage lenders, property management companies, real estate attorneys, insurance agents, appraisers, and property inspectors. These companies will be at the heart of what CPW Investments will need in order to meet both renter and investor demand.
Mr. Ray Reynolds will serve as owner and operator of the business. He has received a broad level of work experience and knowledge that has allowed him to be perfectly positioned to broaden the scope of his business entities. Currently, Mr. Reynolds is managing partner of Splendid Properties, LLC. He is also a real estate investor and realtor. His expertise is in acquiring undervalued and underperforming multifamily housing stock. Mr. Reynolds graduated from San Jose State University with a Bachelor’s Degree in Business Administration and attended David Lindahl’s educational seminars to further his education in commercial real estate investing.
CPW Investments’ primary service is the purchase and sale of investment properties. The company works diligently to locate properties that have a good valuation, require little repairs, and are in growing neighborhoods. Once a property has been purchased, CPW Investments will hold onto the property until the valuation increases by eight percent. This ensures that properties are sold and sizeable return is received. CPW Investments expects to generate a minimum eight percent return on each investment property or $350k on each one million dollars. In addition, CPW Investments will be responsible for legal tax, title work, insurance, escrow, and other requirements associated with the sale of a property.
For those properties purchased but not yet sold, CPW Investments will provide property management service that will include property maintenance and renter selection. CPW Investments will hire a property manager to manage each property before it has reached a set valuation. The ideal property manager will closely work with the property and ensure that all renters have met specific guidelines with respect to renter requirements.
Property investors will be the last stream of income. Typically, CPW Investments will receive ten percent commission for locating an available property that is not listed on any of the current property listing websites. Since very few real estate businesses offer this type of service, CPW Investments expects to use this as a key advantage. Mr. Reynolds expects property investors to reach out to the company once word-of-mouth has spread throughout the industry. This will be a win-win situation for both the property investor and for CPW Investments.
The demand for housing has been on the rise since the fall of 2008 when the housing sector began showing signs of economic weakness. As U.S. homeowners continue to brace for the possibility of a foreclosure, there has been a steady demand for rental properties, particularly multifamily units. In 2013, the average effective rent was $1,250 and it is expected to climb another 3.9 percent within the top 25 markets in the United States by the end of 2014.
Home buyers are finally moving back into the housing market as interest rates continue to be at their historic lows. First time buyers and those looking to reestablish their credit, are finding valuable properties in good neighborhoods, closely located to schools and shopping centers. Home prices are increasing moderately and are expected to remain at about five percent through 2015.
Property investors have been the most important aspect of the housing market. Their all-cash purchases have minimized the need for mortgages and helped increase property values simply by snapping up distressed or valuable structures. They will continue to help drive the market into 2015.
Marketing and Sales
Since real estate is a people-oriented business where direct contact is most effective, CPW Investments will utilize person-to-person contact, networking, and referrals as the main avenue of contact with its target market. The Company will also launch a website and mobile application that will further enhance the company’s position and drive demand. Through an aggressive online advertising campaign, CPW Investments will attract customers that are seeking to rent, buy, or purchase as an investment.
Mr. Reynolds realizes that, in the real estate business, it takes a great deal of time to purchase a property, renovate it, and wait to ensure valuations are within the company’s target amount. Therefore, this is expected to be a long-term business, meaning that it will take six months to a year before a property will sell. For those properties that do not meet the eight percent valuation, CPW Investments plans to rent the property until valuations are met and the company can sell.
Projected sales are expected to grow exceptionally well under the leadership of Mr. Reynolds. Based on his experience, Mr. Reynolds will be able to grow the business the first year by implementing an aggressive marketing campaign and word-of-mouth advertising as the primary sources of advertising. During the first year of operations, projected sales are expected to reach $1.5 million. The second year is projected to see a slightly smaller growth rate of 35 percent at $2.1 million, which is much stronger than the industry average. The third year’s growth rate will grow 24 percent to $2.6 million.
Profits will be equally impressive as Mr. Reynolds maintains costs while exploiting revenue growth. Although the projected profit structure will be comfortably high over the first five years of operations, the first year’s projection will see a positive profit during the first six months of the first year. After, profits will move consistently higher through the first three years of operations. Profits will be above 23 percent for the first three years. Cash will be in an equally good position as income from rental fees will support the first year of business. The balance sheet projects net worth to be solid for the first three years of this plan.
At this time, the only capital requirements that CPW Investments requires are the funds needed to purchase investment properties, renovate those properties, and list them for resale. The investment received will help pay acquisition fees and other expenses associated with the property. The $1 million from the parent company will help meet these expenses and provide a solid return for the company and the parent company.
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CPW Investments, LLC plans to establish itself in the United States as a startup business under the parent company, Dynamic Capital, LTD of China. Dynamic Capital will continue to own 50 percent of CPW Investments, with the remaining 50 percent owned by Mr. Reynolds. He will function as both the manager and an employee of the business, which will be located in Los Angeles, California, with one employee to help manage the customer service call center.
Dynamic Capital will contribute $1 million in funds over the next three years to help with the purchase of properties. The remaining amount will be through mortgages on the property. Income from rental units will also help increase the amount of cash available to purchase more properties. Lastly, a ten percent commission will be accessed on properties presented to investors, which will enhance CPW Investments’ cash position for future properties.
While China’s housing market continues to slow, the U.S. housing market continues to grow, with many markets experiencing an eight to nine percent growth rate. Property demand continues to rise as the residential construction sector continues to increase. CPW Investments will continue to capitalize on the growth of many U.S. markets with a high level of success for the company as well as for real estate investors.
CPW Investments is starting out as a small business owned and operated by Mr. Reynolds. He is a trained real estate professional who will strive to provide the very best in real estate development services. Mr. Reynolds will serve as a single owner and employee of CPW Investments. He will include an office manager/accountant to help with customer calls and overall service. As business begins to grow, Mr. Reynolds will hire a small staff to help with showing properties for rent or sale. He will also hire a marketing team that will reach out to property investors with properties at a value. Each increase in payroll expense will be offset by higher revenue and stronger profits.
Mr. Reynolds received his Bachelor’s degree in Business Administration from San Jose State University before attending David Lindahl’s educational seminars to further his education in commercial real estate investing. Since his graduation, Mr. Reynolds has worked for a real estate firm in Long Beach before accepting a real estate agent position with Coldwell Banker in 2004. After his Coldwell employment, Mr. Reynolds accepted a position with Dynamic Capital.
As stated previously, CPW Investments expects to receive $1 million from its parent company, Dynamic Capital, over a period of three years. Dynamic Capital will receive 25 percent of each sale in order to recoup the $1 million investment.
The exit strategy will allow CPW Investments to remove, eliminate, or payout investment amounts based on negotiated terms. It will be CPW Investments’ goal to satisfy the $1 million investment through liquidation, investor payout, or merger/acquisition. The payout amount will also include an appreciable rate of return for the investor(s).
Normal Exit: CPW Investments will continue to generate its expected profit structure once homes are renovated and sold to buyers. This will provide a positive cash flow during the next three years. This means that once spent, investment funds received will be fully recovered through the company’s cash balance and property values.
Merger/Acquisition: CPW Investments will seek a partner with a strong financial backing. This partner will be a company with a similar business or a competitor in the United States and function as a new single company owned and operated. Typically, the new company will be of equal size or larger and in a stronger financial position. The company’s investor equity will be repaid after the acquisition has been completed.
Project Failure: Should the company fail, CPW Investments will sell its property portfolio in order to return the entire $1 million back to the parent company. This means that the parent company will not have any difficultly reclaiming the amount invested into CPW Investments USA.
CPW Investments’ goal is to create a business model that places customers first with high quality and valuable properties. Superior service will be the company’s core value, which will be communicated to every client. This will help provide a steady stream of operating and passive investment income through rental and seller properties.
Company Locations and Facilities
As a real estate company, CPW Investments will need to relocate from its existing home office to an office space to conduct regular business activities. The ideal space will be in the Los Angeles area.
CPW Investments, in conjunction with Dynamic Capital, will be buying, selling, and locating investment properties for the company as well as for real estate investors. It will do so by utilizing several different exploratory channels for locating distressed properties that are listed as a value. This includes hidden, attractive real estate properties with very high cap rates (12%-18%) and deep discounts (30%-50%).
Much of the service provided by CPW Investments for real estate investors will be about working with investors, renters, homebuyers, and the properties that they find attractive. Service will also include meeting and working with mortgage lenders for the purpose of purchasing and selling properties. CPW Investments expects to provide the following services:
- Be an adviser and advocate during the entire property buying and renting process
- Take time to uncover the buyer’s needs and wants as well as what’s motivating their purchase
- Educate buyer’s on current market conditions, if they already unaware.
- Research homes within the U.S market and sort through active and inactive listings to make suggestions after cross-referencing buyer’s property expectations
- Aid buyers in narrowing their search until they have identified their top choices
- Handle the ins and outs of the negotiation process including the preparation of all necessary forms when making an offer and/or counteroffer
- Provide oversight and follow up for any inspections deemed necessary
- Counsel buyers on how to handle any repairs needed on the property
- Be present at closing to ensure that all the buyer’s interests are protected
Since real estate is effectively one of the most free market oriented businesses in the country, competition cannot be accurately categorized. While it is relatively easy to categorize the top 50 real estate firms, it is difficult to assess the entire U.S. real estate investment market. Mr. Reynolds understands there is a sizable amount of competitors offering one or more of the services that CPW Investments provides. Competition is size driven, which means larger businesses have economies of scale with respect to brand name recognition, financing, and broader reach.
Sourcing and Fulfillment
CPW Investments locates its properties through a variety of different channels. These include:
- Out in the Field – CPW Investments scouts neighborhoods looking for potential properties. Properties that are poorly maintained are a sign of a potentially distressed property. Lawns that are neglected or structural issues can be an indication that the owner can no longer maintain the property.
- For sale by owner – Some of the best deals that CPW Investments has found are those that have a FSBO sign in the front yard. These are often motivated sellers that are interested in avoiding foreclosure and saving their credit rating. They can often be highly flexible with offers.
- The Internet – It seems obvious, but there is no better place for locating a high volume of regular or distressed properties than the Internet. CPW Investments searches lists of available or distressed properties that have been compiled by others in the business. Some of the websites CPW Investments uses include:
- Classified Ads – Classified ads can be from any source and typically are a popular place for listings.
- Craigslist –org is a free online classifieds website that is currently the #51 most popular website in the world. Millions of people use Craigslist.org to buy, sell, trade, or give away products and services.
- RealtyTrac – RealtyTrac provides more foreclosures from any neighborhood than any national provider, with over 1 million listings nationwide.
- Advertise – CPW Investments utilizes signs such as, “I buy houses, any condition” to locate distressed properties. While this is a crude way to advertise, the idea of having motivated sellers come to CPW Investments is highly acceptable. Other options include local papers and handing out business cards at events.
IT is becoming a driving force necessitating change in the way real estate companies market to their clients. Companies that are quick to adapt will survive and those that delay will find it harder than ever to survive against IT savvy competitors. Corporate real estate executives must play a leadership role in the integration of resources and IT, thus easing the transition as the lines blur. This requires a blending of people, technology, and connectivity.
Technology changed the mobile industry from the moment the first computer hummed in an office, and mobile technology is reshaping the industry yet again—especially in the real estate sector. Smartphones and tablets are ubiquitous, and tech-savvy operators are self-professed geeks. “The Internet has reshaped how real estate is delivered to the consumer and how we as consumers manage our daily lives,” says Kathy Connelly, SCRP senior vice president of corporate services for Prudential Georgia Realty. “The use of online technology through mobile access and utilization of mobile devices is here and growing in popularity. It will continue to be as impactful as the Internet itself.”
CPW Investments’ target market strategy is based upon servicing commercial buildings, multifamily buildings, and single family properties that are being sought after by investors and families. CPW Investments will target three groups. The initial group includes those individuals or families looking for rental accommodations. This group is seeking rental vacancies due to a change in their employment or some other event that has left their home foreclosed. While the real estate collapse was six years ago, many homeowners are still finding it difficult to maintain their mortgage payments and other living expenses.
It will be difficult to characterize any specific tenant that will occupy the company’s properties. However, strict tenant quality and credit review procedures will be implemented to ensure the company’s revenues will not be interrupted by tenant default. Mr. Reynolds expects that the average renter/lessee will not have to pay more than 28 percent of their annual household income to rent.
The second group includes those who are seeking to purchase a property. This group may be first time home buyers or consumers seeking to reestablish their credit. In either case, CPW Investments will have an inventory of renovated properties to choose from that will fit within the client’s budget and family preferences. If a property is not available, CPW Investments will locate a property, renovate it, and prepare it at a value for the client.
The third group includes investors seeking attractive investment properties. While each will have a different property requirement, investors will be specific with the type, size, location, and price of the property. In addition, this group tends to purchase properties in cash, which minimizes the amount of documents required and the time it takes to transfer ownership.
Two groups that fit within the company’s target market include those who are seeking shelter and those who are seeking a valuable investment.
Those who are seeking shelter are interested in renting a home or multifamily unit in an area that is reasonably close to their foreclosed home. This is important, since as many remain at their jobs and their children’s schools are located within close proximity to their foreclosed home. Facing a foreclosure is a difficult situation to accept, but an even more challenging situation is moving away from jobs and schools to begin a new life in a new area. Parents very often are seeking a painless solution to a foreclosure for themselves as well as for their children.
Home buyers are also seeking shelter through the purchase of a single family home or condominium in a multi-unit structure. Similar to those seeking rental properties, home buyers are seeking a property that is relatively close to their school and work, avoiding the hassle of moving far away from their existing neighborhood or out of state. Also, employment tends to drive families to one home over another. Parents feel working close to home is important for the safety and well being of their children, and it is also beneficial for them to minimize the fatigue of driving great distances to and from work.
The second group is seeking a valuable investment property in a growing area and in reasonably good shape, limiting out-of-pocket capital required to renovate the structure to meet building codes for commercial and multifamily structures. This will improve the chances of selling an investment property in a shorter term. However, many critics believe that once a property is purchased, it will be a long-term consideration prior to the actual selling of the property for above the purchase price.
Although the real estate market is still suffering from a slow recovery, current businesses are still managing to make a profit. Over half of new entrants to the market are enthusiastic about their prospects for profitability. As the bounce back continues, real estate businesses should feel enthusiastic about the growing opportunities for profit.
Growing Sources of Capital
Capital is continues to flow more freely in the market. Sources new and old are looking for new opportunities to invest their capital. Some likely sources of capital include insurance companies, banks, wealthy investors, and real estate investment trusts. These sources of capital are looking to differentiate their portfolios with unique investments.
Market Moves Toward New Demographics
Businesses are beginning to notice the differing trends among the new generation of consumers. Young consumers are more likely to live in cities than suburban areas, and are seeking to limit their commutes. This new generation of consumers is estimated to have an enormous effect on the real estate market in cities.
The housing market in the U.S. has witnessed a cool down over the past few months. Compared to last year, housing prices have not increased as fast.
Many analysts forecast that this slowdown will continue into 2015 and possibly drop well below this year’s prices. As a result, the market will be quite favorable for young first-time buyers looking to invest in real estate. However, the share of first-time buyer is falling to year lows just above 30 percent. This share has been the lowest since the 1980’s. This trend is likely due to slowdown of wage increases and the growing amount of student debt being taken on. New entrants into the market can simply not afford the current housing prices.
In the United States, the top 50 companies that operate in a real estate investment capacity account for 85 percent of the real estate market by sourcing funds from private investors/banks with the intent to engage in real estate related activities including acquisition, rental, construction, and managing. Each year, these companies aggregately generate $192 billion dollars per year and provide jobs for more than 150,000 Americans. Payrolls for these employees have exceeded $5 billion dollars per year during the last five years.
During the next six months to two years, Mr. Reynolds expects that the number of agents in this market will slightly increase due to growth in some markets. While some market agents will be acquired by larger firms, others will enter the market with fresh cash to acquire undervalued or distressed properties through investment and loan funding.
Credit Market Environment
The mortgage and related credit markets are still difficult with respect to borrowing for real estate investments. The Federal Reserve has remedied these issues by concurrently increasing the size of the Fannie Mae mortgage acceptance (via an act of Congress) while keeping the federal funds and overnight borrowing interest rate at historic lows. This will continue to promote liquidity in the market while providing real estate investors with the credit facilities required to purchase foreclosed and “in trouble” properties.
Inflation is a modest concern for CPW Investments. As the inflation rate increases, the purchasing power parity of the American dollar decreases in relation to other currencies. This may pose a significant risk to the company should rampant inflation, much like the inflation experienced in the late 1970s, occur again. This event would not only significantly weaken the company’s ability to attract investors who wish to purchase real estate properties (potentially for hypothecation), but also would severely impact the gross margins of the business. However, inflation does increase the price of real estate significantly. In these instances of unusually high inflation, CPW Investments would slow the acquisition of real estate and focus its strategy on the generation of revenue from leases to tenants.
As stated in the Customer Analysis Summary, CPW Investment’s target customer will be those individuals and families seeking rental properties. They tend to be between the ages of 25 and 40, with a household income less than $50,000 per year. While some are single, others are families with one or two parents as the head of the household.
A second target group will be those seeking to buy. This group tends to be first time buyers in a neighborhood that is close to their employment or their child’s school. They tend to be between the ages of 25 and 40, with a household income over $50,000. While some are single buyers, others are families just starting out.
The third target group will be investors. CPW Investments realizes that the company can locate distressed properties to be renovated and sold to the company’s second target group or rented to the first target group. This group tends to have a household income of $100,000 per year and have been investing in real estate for quite some time. They are always seeking a valuable property and are looking for specific valuation for the property.
The marketing strategy for CPW Investments is to establish a strong presence with property investors and within the real estate market. While the company will be located in California, real estate marketing efforts will be made within all 50 states.
This positions the business as a leader in the real estate investment industry within the metropolitan area. Furthermore, establishing connections with investors, real estate brokers, mortgage lenders, property management companies, real estate attorneys, insurance agents, appraisers, and property inspectors will further enhance the company’s reputation and position within the industry.
CPW Investments will position itself as a leader in real estate property investment throughout the nation. The company will provide valuable investment properties to investors and quality housing to consumers with low, medium, and high income. Due to the continuous displacement of homeowners around the county, renting continues to be very strong in most markets, and buyers are beginning to move back into the market because interest rates are at historic lows.
It is important that CPW Investments sets fair prices for its available multifamily properties and its single family homes. Prices will reflect a similar pricing strategy on properties with the same square footage and floor plan.
One of the most important promotional strategies with respect to a property is providing an open house. Open house promotions help attract potential customers without scheduling a viewing. Open house promotions also allow potential buyers to view the home or condominium without the pressure of purchasing or showing interest in the property.
CPW Investments will focus on the following to further enhance its marketing strategy:
Developing a core-positioning message that will be included on all future printed material will be pivotal to business awareness and retention of consumers. Since one aspect of the company’s services is about appealing to the consumer market, much of the advertising budget will be allocated toward marketing the rental units to the general public, as well as for the homes for sale.
Online advertising includes a company website, Internet marketing, and online networking. The online market will be through various existing real estate sites and Craigslist. Craigslist has a huge following and is ranked in the top 100 websites in the world. In addition, Facebook and Twitter will be perfect advertising channels for the company’s online social media program. Lastly, Business.com and Google Adwords will be ideal for furthering awareness for the company website, which will penetrate the real estate investment market, as well as the consumer market.
As stated previously, private buyers, business-to-business relations, investment sales, and rental activity relies on networking and person-to-person contact. This is crucial, since most activity will be based on monthly rental income and large ticket sales from the sale of investment property. Negotiating on price and terms is important for person-to-person contact and for developing a long-term and strong relationship with targeted businesses and consumers. This will better position the company in the market place.
This will be a long-term business, which means revenue and profit will not generate in a quick manner. When CPW Investments purchases a property, it will likely take a couple years before some property valuations reach a level where profit can be obtained. Therefore, CPW Investments will make the necessary upgrades to bring the newly purchased property to code, then list it as a rental property for low, middle, or high income consumers. This could likely take six months to a year before income is received from either selling the structure or leasing it out to qualified renters.
Once a property has reached a preferred valuation, CPW Investments will sell the property. Depending on the value of the property and the price agreed upon, such a sale will add immediate profit to the business, minus real estate fees and charges.
CPW Investments will focus on three investment strategies: purchasing commercial, single family, and multifamily properties for the purpose of renting and selling, and locating valuable investment properties for real estate investors. By establishing connections with investors, real estate brokers, mortgage lenders, property management companies, real estate attorneys, insurance agents, appraisers, and property inspectors, CPW Investments will be able to further enhance the company’s reputation and position within the industry. These strategies are expected to produce broad awareness for the sake of producing rental income, commissioning revenue, and gaining profits from the sale of commercial and residential real estate units.
The milestones for CPW Investments are included to help keep the company on-track and in-line with its business goals and objectives.
Table 6.1: Milestones
|Milestone||Start Date||End Date||Budget|
|Move into Office Space||1/1/2015||1/31/2015||$0|
|Begin Purchasing Properties||2/1/2015||2/15/2015||$0|
The SWOT analysis provides CPW Investments with an opportunity to examine the internal strengths and weaknesses for the Investment Company. It also allows Mr. Reynolds to examine the opportunities presented to the business as well as potential threats. The following outlines the company’s strengths, weaknesses, opportunities, and threats.
- Experienced real estate investor
- Clear understanding of the market and its direction
- Several search avenues that will locate hidden opportunities
- Available investment capital
- A new company
- Thousands of competitors
- Lack of awareness among investors
- Strong demand for rental units
- A growing economy
- Capitalize on hidden properties
- A growing number of competitors with a similar version of the Company’s software program
- A slowing economy or double dip recession
- Shirking property valuations
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CPW Investments’ competitive edge is meeting a standard of excellence backed by a tradition of professionalism. Mr. Reynolds has the philosophy of a “hands-on-management” approach to managing the company’s properties, combined with a dedication to quality and innovation to achieve successful outcomes. CPW Investments uses real estate investments for the protection, preservation, and enhancement of invested capital. The company bases its reputation and foundation upon building a secure future in real estate investment for decades to come.
CPW Investments will collaborate with a variety of firms to help facilitate the company’s financial success and to provide lucrative investments for investors. These institutions will be attached to the overall real estate industry in one form or another. They will include real estate brokers, mortgage lenders, property management companies, real estate attorneys, insurance agents, appraisers, and property inspectors. All will provide CPW Investments with a sense of professionalism and experience that will parallel the company’s commitment to excellence and superior service. Mr. Reynolds will ensure that these strategic alliances will serve as professional, trusting, and long-term relationships.
Sales Forecast Table
|Year 1||Year 2||Year 3|
|Price Per Unit|
|Direct Cost Per Unit|
|Total Direct Cost||$502,222||$643,620||$788,488|
|Gross Profit %||62%||64%||64%|
Sales by Month
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|Year 1||Year 2||Year 3|
|Year 1||Year 2||Year 3|
|Employee Related Expenses||$23,639||$23,639||$23,639|
|Marketing and Promotions||$59,628||$59,628||$59,628|
|Professional Fees & Licensure||$6,129||$6,129||$6,129|
|Repairs and Maintenance||$27,000||$27,000||$27,000|
|Total Long-term Assets||$0||$0||$0|
|Other Current Assets|
|Total Other Current Assets||$0||$0||$0|
|Dividends and Distributions|
|Total Dividends and Distributions||$0||$0||$0|
Expenses by Month
Cash Flow Assumptions
Cash Flow Assumptions Table
|% of Sales on Credit||0%|
|% of Purchases on Credit||0 %|
|Avg Payment Period (Days)||0 days|
|Months to Keep on Hand|
|Minimum Inventory Purchase|
Profit and Loss Statement Table
|Year 1||Year 2||Year 3|
|Gross Profit %||62%||64%||64%|
|Employee Related Expenses||$23,639||$23,639||$23,639|
|Advertising and Promotion||$59,628||$59,628||$59,628|
|Business Licenses and Permits||$6,129||$6,129||$6,129|
|Repairs and Maintenance||$59,760||$59,760||$59,760|
|Expensed Portion of Other Current Assets||$0||$0||$0|
|Depreciation and Amortization||$0||$0||$0|
|Total Operating Expenses||$584,729||$584,729||$584,729|
|Other Expenses (& Other Income)|
|Loss (or Gain) on Sale of Asset||$0||$0||$0|
|Total Other Expenses (& Other Income)||$0||$0||$0|
|Income Before Income Tax||$240,108||$570,375||$798,472|
|Net Income / Sales||18%||32%||37%|
Gross Margin by Year
Net Profit (or Loss) by Year
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Balance Sheet Table
|As of Period’s End||Starting Balances||Year 1||Year 2||Year 3|
|Other Current Assets||$0||$0||$0||$0|
|Total Current Assets||$0||$240,108||$810,484||$1,608,956|
|Total Long Term Assets||$0||$0||$0||$0|
|Sales Taxes Payable||$0||$0||$0||$0|
|Total Current Liabilities||$0||$0||$0||$0|
|Profit and Loss – Current Period||$0||$240,108||$570,375||$798,472|
|TOTAL OWNER’S EQUITY||$0||$240,108||$810,484||$1,608,956|
|TOTAL LIABILITIES & EQUITY||$0||$240,108||$810,484||$1,608,956|
Cash Flow Statement Table
|Year 1||Year 2||Year 3|
|Depreciation and Amortization||$0||$0||$0|
|Gain or Loss on Disposal of Asset||$0||$0||$0|
|Change in Accounts Receivable||$0||$0||$0|
|Change in Inventory||$0||$0||$0|
|Change in Accounts Payable||$0||$0||$0|
|Change in Sales Taxes Payable||$0||$0||$0|
|Change in Other Current Assets||$0||$0||$0|
|Net Cash from Operating Activities||$240,108||$570,375||$798,472|
|INVESTING & FINANCING ACTIVITIES|
|Long-Term Assets Purchased or Sold||$0||$0||$0|
|Investments and Contributions Received||$0||$0||$0|
|Change in Short-Term Debt||$0||$0||$0|
|Change in Long-Term Debt||$0||$0||$0|
|Dividends and Distributions||$0||$0||$0|
|Net Cash from Investing & Financing||$0||$0||$0|
|Cash at Beginning of Period||$0||$240,108||$810,484|
|Net Change in Cash||$240,108||$570,375||$798,472|
|Cash at End of Period||$240,108||$810,484||$1,608,956|
Cash Flow by Month
Cash Flow by Year
Financial Ratio Table
|As of Period’s End||Year 1||Year 2||Year 3|
|Net working capital||$240,109||$810,484||$1,608,957|
|Gross profit margin||62%||64%||64%|
|Operating profit margin||18%||32%||37%|
|Net profit margin||18%||32%||37%|
|Debt to assets||0%||0%||0%|
|Debt to equity||0%||0%||0%|