January 2004

January 2004
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Table of Contents
1.0 Executive Summary.............................................................................................................................1
1.1 Objectives ...................................................................................................................................1
1.2 Mission........................................................................................................................................1
1.3 Keys to Success ........................................................................................................................1
2.0 Company Summary.............................................................................................................................2
2.1 Company Ownership .................................................................................................................2
2.2 Start-up Summary ......................................................................................................................2
3.0 Services................................................................................................................................................5
4.0 Market Analysis Summary..................................................................................................................6
4.1 Market Segmentation ................................................................................................................6
4.2 Service Business Analysis........................................................................................................7
4.2.1 Competition and Buying Patterns .........................................................................................8
4.3 Target Market Segment Strategy.............................................................................................9
5.0 Strategy and Implementation Summary ............................................................................................9
5.1 Competitive Edge ......................................................................................................................9
5.2 Marketing Strategy ..................................................................................................................10
5.3 Sales Strategy..........................................................................................................................10
5.3.1 Sales Forecast .....................................................................................................................11
5.4 Milestones ................................................................................................................................12
6.0 Web Plan Summary ..........................................................................................................................13
6.1 Website Marketing Strategy...................................................................................................13
6.2 Development Requirements ...................................................................................................13
7.0 Management Summary ....................................................................................................................13
7.1 Personnel Plan.........................................................................................................................14
8.0 Financial Plan ....................................................................................................................................14
8.1 Important Assumptions............................................................................................................14
8.2 Break-even Analysis................................................................................................................15
8.3 Projected Profit and Loss .......................................................................................................16
8.4 Projected Cash Flow ...............................................................................................................18
8.5 Projected Balance Sheet ........................................................................................................21
8.6 Business Ratios .......................................................................................................................22
Page 1
HandyMan Stan
1.0 Executive Summary
HandyMan Stan is a start-up organization offering residents of Duluth, Minnesota a complete
handyman service. By developing the reputation as a qualified, reasonably priced and trusted
service provider, HandyMan Stan will quickly generate market penetration and develop a solid
foundation of repeat customers.
The Market
HandyMan Stan's target market has been segmented into: home owners and property managers.
There are 24,090 potential customers in the home owner segment. This group has a 5% annual
growth rate. There are 1,243 potential customers in the property manager segment. This group
is growing at a 4% annual growth rate.
Services
As a handyman, Stan will offer a wide range of home repair services. The services are generally
fairly minor tasks, if the problem bec omes major a contrac tor is best suited to solve the
difficulty. HandyMan Stan will offer the value-added feature to pre-sc reen a contrac tor when
Stan is unable to perform the repair. This will develop a trust bond with the customer so that
when a more minor issue comes up the customer is more likely to call Stan due to his honesty
displayed earlier. Stan offers fix-it services for: plumbing, elec trical, fences, windows,
dec ks/patios, painting, weather proofing, floors.
Competitive Edge
HandyMan Stan will differentiate from the competition by offering: low price and low minimum
charge. Stan is charging a reasonable $30 per hour in an effort to encourage people to hire him
for tasks that they would otherwise try themselves of just ignore until it bec ame more of a
problem. The second element of the competitive edge is Stan's low one hour minimum. This
compares favorably with the other industry competitors who often have two to three hour
minimums. This edge also creates an incentive for the customer to call for Stan's assistance
earlier than they would with c omparable service providers.
1.1 Objectives
• Develop the business into full-time employment within 12 months.
• Generate steady revenue per year by the end of year two.
• Create over 20% of business from repeat customers.
1.2 Mission
HandyMan Stan's mission is to provide knowledgeable, convenient, and reasonably-priced
handyman service to the Duluth, Minnesota community. HandyMan Stan will provide every
customer with an honest day's work and will fix anything that is not done right.
1.3 Keys to Success
• Treat every customer as if they were the most important customer the business has.
• Honestly evaluate the needed skills for a job, passing it onto a contrac tor if it is too difficult
as opposed to taking on a job that cannot be completed perfec tly.
• Work hard, guarantee all work and promote 100% customer satisfac tion, if this is done
profitability will fall into plac e.
Page 1
HandyMan Stan
2.0 Company Summary
HandyMan Stan has been formed as a Minnesota Limited Liability Company (LLC) by Stan
Roberts. Stan will be the sole employee and owner of the company. The company will incur
certain start-up costs, primarily tools, detailed in the Start-up Summary section.
2.1 Company Ownership
Stan Roberts is the founder and owner of HandyMan Stan. The company will remain a one-man
operation for the foreseeable future.
2.2 Start-up Summary
HandyMan Stan will incur start-up costs associated with the beginning of the business. The
following table details the start-up costs as well as indicated the needed capital for initial
operations. Stan will be using his personal tools for jobs but will need to purchase the following
additional equipment/tools:
• Assorted plumbing tools including: slip wrenches, snakes, teflon tape, and assorted caps,
nuts, and bolts.
• Elec trical tools including: elec trical gauge meters, wire cutters, various wires and wire caps,
and soldering iron.
• Painting material including: paint brushes, paint roller, pneumatic paint sprayer, air
compressor, sand papers, spackle tools and masking tape.
• Pressure washer.
• Various general tools.
• Assorted power tools (drill, saw, sander, Dremel).
• Assorted nails, bolts, sc rews, and fixtures.
• Laptop with portable printer for mobile invoice printing and submission.
• Mobile phone.
Page 2
HandyMan Stan
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
$1,500
$28,500
$30,000
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets
$8,000
$20,500
$0
$20,500
$28,500
Liabilities and Capital
Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities
$0
$30,000
$0
$0
$30,000
Capital
Planned Investment
Investor 1
Other
Additional Investment Requirement
Total Planned Investment
$0
$0
$0
$0
Loss at Start-up (Start-up Expenses)
Total Capital
($1,500)
($1,500)
Total Capital and Liabilities
$28,500
Total Funding
$30,000
Page 3
HandyMan Stan
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Accountant
Brochures
Insurance
Total Start-up Expenses
$500
$500
$250
$250
$1,500
Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets
$20,500
$0
$8,000
$28,500
Total Requirements
$30,000
Page 4
HandyMan Stan
3.0 Services
HandyMan Stan offers the community of Duluth the finest home repair and maintenance for home
owners and property managers. All services start at just $30 per hour plus parts. HandyMan Stan
will give every customer at least one hour of work at their property.
All work is "handyman" work, for larger jobs that require a contrac tor, HandyMan Stan will presc reen a service provider free for the customer.
By providing only handyman services, HandyMan Stan will always attempt to repair the problem
first, replac ement is only an option if the item cannot be repaired. This differs from a contrac tor
philosophy which is generally to replac e everything first.
Repairing items is far less expensive for the consumer. HandyMan Stan offers a one year
guarantee for all of their work, if something goes wrong, HandyMan Stan will make it right. The
goal is to not have any unsatisfied customers.
Offered services include:
Minor plumbing
Leaky faucets, repair/replac e fixtures, sprinkler
repair, minor drain problems, garbage disposal
install, install ice maker lines.
Minor elec trical
Ceiling fan repair and install, elec trical plugs and
switches, vanity lights, motion lights, cable and
phone line installation.
Metal and wood fence repair and install, elec tric
dog fences, gate and latch install.
Small hole repair, door installation, window
maintenance and repair.
Dec k repair and maintenance, chemical
cleaning, pressure washing, wood replac ement,
handrail installation.
Interior and exterior (short of an entire exterior
of a house).
Weather stripping, caulking.
Carpet and hard wood repair.
Fence repair
Window, wall and door repairs
Dec ks and patios
Painting
Weather proofing
Flooring
Page 5
HandyMan Stan
4.0 Market Analysis Summary
HandyMan Stan has identified two distinct market segments, home owners and property
managers. These are the most attrac tive customer segments as they are the customers who
often have small repairs that are too small for a contrac tor but too complicated for the owner to
perform themselves.
The handyman industry competes with the contrac tor industry for home repair jobs. Handymen
are typically used for small items, contrac tors are typically called in for more extensive projec ts.
Customers will often call whatever service provider they are familiar with, regardless of the
appropriateness. For this reason, word of mouth referrals will be very important. Potential
customers will ask neighbors/friends and other property managers for rec ommendations on
handyman service providers. HandyMan Stan will capitalize on word of mouth marketing by going
the extra mile to keep customers satisfied. Exemplary service will result in new and repeat
business.
4.1 Market Segmentation
The market has been segmented into two distinct customer groups:
Home owners
• The value of the homes ranges generally between $150,000 - $650,00.
• 47% of home owners attempt to make small repairs themselves, often starting the repair and
realizing that they do not have the skills to complete it. The remaining 53% do not attempt
to repair it, they call a professional from the start.
• 62% have owned their home for more than two years.
• 73% wait until several small problems ac cumulate before they call a handyman. This behavior
can be explained by not wanting to incur a large upfront charge just to have someone fix one
thing.
Property managers
• Manage between three - 20 units.
• Typically do not have their own in-house repair man in an effort to reduce overhead
expenses.
• The range of monthly rental costs of their units is $350-$675.
Table: Market Analysis
Market Analysis
2004
Potential Customers
Home owners
Property managers
Total
Growth
5%
4%
4.95%
2005
24,090
1,234
25,324
2006
25,295
1,283
26,578
2007
26,560
1,334
27,894
2008
27,888
1,387
29,275
29,282
1,442
30,724
CAGR
5.00%
3.97%
4.95%
Page 6
HandyMan Stan
4.2 Service Business Analysis
Handymen operate within the general home repair industry. This industry encompass both
handymen as well as general contrac tors. The distinction between the two is as follows:
handymen can fix most minor problems, items that are not to extensively damaged nor do they
require expensive special tools.
Contrac tors are most useful for jobs that are very tec hnical in nature, extensive in the repair, or
require very specialized tools. A handyman is typically far more of a generalist, he can handle a
wider range of repairs whereas a contrac tor has a smaller realm of expertise.
Page 7
HandyMan Stan
4.2.1 Competition and Buying Patterns
HandyMan Stan will rec eive competition from several sources. The most well-known competitors
are detailed below:
Handymen
• Jack Of All Trades: This is a handyman company that employs six different workers as
handymen. This is a large company (for handymen) with a far less intimate customer
experience. If a customer used this service on four different oc cassions, they are likely to
rec eive four different people on the service calls.
• Fix-It-Up: This is a one man outfit that specializes in plumbing and elec trical problems.
Painting and patios are not serviced. In speaking with several customers regarding their
experience with this service, their impressions have been mixed.
Contractors (General)
• Duluth Contrac tors: This is a full-service general contrac tor. The organization is large with 17
employees. This company does a mixture of commercial and residential work. This company
has a eight hour minimum.
• Red Roc k Contrac tors: This is a small sized contrac tor of six employees. They concentrate on
residential jobs and have a smaller minimum of four hour projec ts.
The buying patterns of consumers are largely based on who they know. Either they know a
handyman or contrac tor whom they call or they will inquire with friends or neighbors as to who
they rec ommend. They will often stay with that person unless they are unhappy with the
service.
Stan plans to capitalize on word of mouth referrals, ac hieved by ensuring every customer has
their expec tations exceeded.
It is reasonable to expec t that some of the larger contrac ting companies would be able to offer
a better hourly rate due to economies of sc ale. This does not turn out to be the case since most
of the large contrac tors perform a wider range of specialized services, necessitating many more
tools and skilled workers, increasing overhead and therefore there billable rate.
Page 8
HandyMan Stan
4.3 Target Market Segment Strategy
The two customer segments, home owners and property managers have been targeted bec ause
they are the most likely consumer of handyman services.
Unless the home owner is particularly crafty, he/she does not have the skills, time or desire to
tac kle most jobs. Their preference is to hire someone and have them take care of it.
The property manager are also likely consumers bec ause they are managing a group rental
property which needs periodic maintenance. Property managers with less than 20 units rarely
have on-site maintenance personnel, it is less expensive to hire someone as needed.
It is rare that the property manager would have any maintenance skills themselves and those
that do usually do not have the time in the day to perform the repair.
It should be noted that the majority of business will be coming from residents and rental property
from within the Duluth c ity limits. As you venture farther out of town into the country people
tend to have more free time and more fix it skills and are therefore more likely to try to repair
things themselves.
5.0 Strategy and Implementation Summary
HandyMan Stan's strategy for quickly gaining market share will be leveraging the competitive
edge of reasonable hourly rates and a small, one hour minimum, encouraging more frequent
service trips.
The marketing strategy has been designed to raise awareness of HandyMan Stan services among
a community of people where there has already been a trust relationship established among the
community. This supports the idea that HandyMan Stan's business will be built on word of mouth
referrals. Lastly, the sales strategy will emphasize the wide repertoire of qualified skills,
encouraging current customers to use HandyMan Stan for a wider range of repairs.
5.1 Competitive Edge
HandyMan Stan's competitive edge is the offering of reasonable prices and a one hour minimum,
encouraging customers to call HandyMan Stan whenever a problem arises. A one hour ($30)
service call is reasonable (not excessively high) but long enough so that several small items can
be repaired in one visit.
90% of competing handymen have a two hour minimum creating a barrier for the customer to not
call bec ause the problem is too small to warrant two hours of paid work. HandyMan Stan's one
hour minimum develops a pattern of behavior for the customer to call anytime that they have
small repairs.
This competitive edge also applies to property managers (especially managers who operate lower
income property, typically less than $600 per month) who often balk at calling a handyman until
there is a list of different problems.
Page 9
HandyMan Stan
5.2 Marketing Strategy
HandyMan Stan will employ a marketing strategy that seeks to develop awareness regarding
HandyMan Stan's expertise, high level of trust, and reasonable rates among a community of
people. This will be ac complished by plac ing advertisements in organizational newsletters such as
the Lions Club, religious organizations, and other social and sport associations.
These organizations will be targeted with the advertisements bec ause once HandyMan Stan has
satisfied several different customers within an organization, there is an increased likelihood that
the organizational members will talk among themselves, sharing their good experience with
HandyMan Stan among their colleagues.
This is a likely sc enario bec ause in this industry it is very common for friends and neighbors to
ask friends for trusted service providers. When a person does not know a specific service
provider, they will often act upon a rec ommendation from a friend who had a positive experience
with one. These social, religious, or sport-based organizations tend to be quite social and often
share their trials and tribulations regarding service providers.
5.3 Sales Strategy
The sales strategy will be designed to convert a current customer from using just one or two of
HandyMan Stan's skills to employing Stan for a wide variety repairs. This will be ac complished
several ways. First, Stan will complete each repair with a level of professionalism which is
unexpec ted for a handyman.
Providing this aura of professionalism will help create a very positive impression for Stan's
services. Additionally, Stan will always be on the look out for problem areas within the home and
offer a solution that he believes will be attrac tive to the customer.
The key to generating increased tickets from an individual customer is based on the ability for
Stan to showcase qualified skills, reasonable prices, and a trustworthy nature, enough so that
the customer feels comfortable for Stan to be in the home even when they are not there. While
this strategy should assist the business in increasing individual ticket prices, it will at the same
time develop a voc al following for his services which will increase word of mouth referrals.
Page 10
HandyMan Stan
5.3.1 Sales Forecast
The sales forec ast has been developed in a conservative manner to increase the likelihood of
ac hieving the sales goals. The forec ast (detailed in the following table) breaks down sales based
on the ac tivity that HandyMan Stan will perform.
Needed parts will be billed additionally, there are certain "consumables" such as nails, caulk, and
etc., that Stan will be using that are included in the $30 hourly fee. These consumables are
captured in the direc t costs of goods as a percentage of the overall service charge. The
different services have different percentages assigned to each type of service.
While Stan performs a wide range of jobs, he bills out at the same hourly rate. The competition
typically bills out elec trical work at a higher rate, and painting at a lower rate. Stan has chosen
a single hourly rate to encourages customers to use him for multiple repairs on the same visit.
While he may not get as much painting work as he could bec ause his rate is above the market
rate, the variances in the long run average out and it creates an incentive for the customer to
call Stan and throw a wide range of projec ts to him while he is at the projec t site.
Table: Sales Forecast
Sales Forecast
Sales
Plumbing
Electrical
Fences
Windows
Decks
Paint
Weather proofing
Parts
Floors
Total Sales
Direct Cost of Sales
Plumbing
Electrical
Fences
Windows
Decks
Paint
Weather proofing
Parts
Floors
Subtotal Direct Cost of Sales
2004
2005
2006
$4,250
$3,698
$782
$1,360
$945
$2,508
$1,403
$850
$1,615
$17,410
$12,500
$10,875
$2,875
$4,000
$4,500
$7,375
$4,125
$2,500
$4,750
$53,500
$16,550
$14,399
$3,807
$5,296
$5,958
$9,765
$5,462
$3,310
$6,289
$70,834
2004
$298
$185
$23
$109
2005
$875
$544
$86
$320
2006
$1,159
$720
$114
$424
$38
$226
$84
$680
$65
$1,707
$180
$664
$248
$2,000
$190
$5,106
$238
$879
$328
$2,648
$252
$6,761
Page 11
HandyMan Stan
5.4 Milestones
HandyMan Stan has identified several specific milestones which will function as goals for the
organization. The milestones will provide a target for ac hievement as well as a mec hanism for
trac king progress. The following table will provide a timeframe for each milestone.
Page 12
HandyMan Stan
Table: Milestones
Milestones
Milestone
Business plan completion
First customer
Full time work threshold
Revenues exceeding $75,000
Totals
Start Date
1/1/2004
2/15/2004
3/15/2004
3/15/2004
End Date
2/15/2004
3/15/2004
6/30/2005
7/15/2005
Budget
$0
$0
$0
$0
$0
Manager
Stan
Stan
Stan
Stan
Department
Marketing
Department
Department
Department
6.0 Web Plan Summary
HandyMan Stan's website will serve as a basic catalog of offered services that will be provided.
In addition to a listing of the different skills that Stan possess, a list of testimonials and referrals
will be on the site. Stan believes that this will be quite effec tive at swaying unsure people who
have never heard about HandyMan Stan. More in depth inquires will be direc ted to Stan's phone
number.
6.1 Website Marketing Strategy
The marketing strategy will employ two distinct mec hanisms:
• Search engine submission: This will be most useful to people who are unfamiliar with
HandyMan Stan but are looking for a loc al handyman. There will also be searches from
customers who may know about HandyMan Stan but are seeking additional information.
• URL on all printed material: For every printed piec e of material that Stan offers, the site's
Web address will be listed, encouraging a visit to the site.
6.2 Development Requirements
The site will be developed by a friend under a barter agreement. Bec ause the value of the
development services will be less than $600, it will not have to be listed as a payout of 1099
income for tax purposes.
7.0 Management Summary
Stan Roberts is the founder and sole employee of HandyMan Stan. Stan began as a "fixer" out of
high sc hool when he secured a job with a general contrac tor. Bec ause he did not have any
formal contrac tor/c onstruction experience he was relegated as a helping hand, assisting in a
wide range of capacities.
Over ten years Stan bec ame quite proficient in a wide range of ac tivities, bec oming a
journeymen plumber and elec trician as well as developing a strong repertoire of general fixing
skills.
Stan enrolled in business courses at the loc al community college at night. Stan spent two years
taking classes, developing his business skills. Once he was completed with the course he began
to feel more comfortable with the idea of starting a new business.
Page 13
HandyMan Stan
7.1 Personnel Plan
HandyMan Stan is a one man business. Stan will perform all of the handyman ac tivities.
Additionally, Stan will be responsible for ac counting issues which will be ac complished using
Quicken. With a laptop computer and portable printer, Stan will be able to create, print, submit
and collec t invoices on site immediately following the completed projec t.
Table: Personnel
Personnel Plan
Stan
Other
Total People
2004
$20,000
$0
1
2005
$24,000
$0
1
2006
$30,000
$0
1
Total Payroll
$20,000
$24,000
$30,000
8.0 Financial Plan
The following sections will outline important financial information.
8.1 Important Assumptions
The following table details important Financial Assumptions.
Table: General Assumptions
General Assumptions
2004
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
1
2005
2
10.00%
10.00%
30.00%
0
2006
3
10.00%
10.00%
30.00%
0
10.00%
10.00%
30.00%
0
Page 14
HandyMan Stan
8.2 Break-even Analysis
The Break-even Analysis indicates what will be needed in monthly revenue to reach the breakeven point.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even
$2,860
Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost
10%
$2,580
Page 15
HandyMan Stan
8.3 Projected Profit and Loss
The following table and charts will indicate Projec ted Profit and Loss.
Page 16
HandyMan Stan
Page 17
HandyMan Stan
Table: Profit and Loss
Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales
2004
$17,410
$1,707
$0
$1,707
2005
$53,500
$5,106
$0
$5,106
2006
$70,834
$6,761
$0
$6,761
Gross Margin
Gross Margin %
$15,703
90.20%
$48,394
90.46%
$64,073
90.46%
Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
License fees (electrical & plumbing)
$20,000
$1,800
$1,596
$360
$24,000
$1,800
$1,596
$360
$30,000
$1,800
$1,596
$360
$2,400
$3,000
$1,800
$2,400
$3,600
$1,800
$2,400
$4,500
$1,800
$30,956
$35,556
$42,456
Profit Before Interest and Taxes
EBITDA
Interest Expense
Taxes Incurred
($15,253)
($13,657)
$2,740
$0
$12,838
$14,434
$2,279
$3,168
$21,617
$23,213
$1,808
$5,943
Net Profit
Net Profit/Sales
($17,994)
-103.36%
$7,391
13.82%
$13,866
19.58%
Insurance
Payroll Taxes
Gas/other incidentals
Total Operating Expenses
8.4 Projected Cash Flow
The following table and chart will indicate Projec ted Cash Flow.
Page 18
HandyMan Stan
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HandyMan Stan
Table: Cash Flow
Pro Forma Cash Flow
2004
2005
2006
Cash from Operations
Cash Sales
Subtotal Cash from Operations
$17,410
$17,410
$53,500
$53,500
$70,834
$70,834
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
$0
$0
$0
$0
$0
$0
$0
$17,410
$0
$0
$0
$0
$0
$0
$0
$53,500
$0
$0
$0
$0
$0
$0
$0
$70,834
2004
2005
2006
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
$20,000
$12,484
$32,484
$24,000
$20,150
$44,150
$30,000
$24,972
$54,972
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
$0
$0
$0
$4,868
$0
$0
$0
$37,352
$0
$0
$0
$4,688
$0
$0
$0
$48,838
$0
$0
$0
$4,727
$0
$0
$0
$59,699
($19,943)
$557
$4,662
$5,220
$11,135
$16,354
Cash Received
Expenditures
Net Cash Flow
Cash Balance
Page 20
HandyMan Stan
8.5 Projected Balance Sheet
The following table will indicate the Projec ted Balance Sheet.
Table: Balance Sheet
Pro Forma Balance Sheet
2004
2005
2006
$557
$0
$557
$5,220
$0
$5,220
$16,354
$0
$16,354
$8,000
$1,596
$6,404
$6,961
$8,000
$3,192
$4,808
$10,028
$8,000
$4,788
$3,212
$19,566
2004
2005
2006
$1,323
$0
$0
$1,323
$1,686
$0
$0
$1,686
$2,085
$0
$0
$2,085
$25,132
$26,455
$20,444
$22,130
$15,717
$17,802
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$0
($1,500)
($17,994)
($19,494)
$6,961
$0
($19,494)
$7,391
($12,102)
$10,028
$0
($12,102)
$13,866
$1,764
$19,566
Net Worth
($19,494)
($12,102)
$1,764
Assets
Current Assets
Cash
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
Page 21
HandyMan Stan
8.6 Business Ratios
The following table indicates Business Ratios specific to HandyMan Stan as well as industry ratios
for the Personal and Household Goods Repair and Maintenance industry, NAICS code 811490.
Page 22
HandyMan Stan
Table: Ratios
Ratio Analysis
2004
0.00%
2005
207.30%
2006
32.40%
Industry Profile
9.27%
Percent of Total Assets
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
0.00%
8.00%
92.00%
100.00%
0.00%
52.05%
47.95%
100.00%
0.00%
83.58%
16.42%
100.00%
27.35%
66.95%
33.05%
100.00%
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
19.00%
361.03%
380.03%
-280.03%
16.81%
203.88%
220.69%
-120.69%
10.66%
80.33%
90.98%
9.02%
22.05%
8.56%
30.61%
69.39%
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
100.00%
90.20%
193.55%
0.00%
-87.62%
100.00%
90.46%
76.64%
0.00%
24.00%
100.00%
90.46%
70.88%
0.00%
30.52%
100.00%
18.28%
5.96%
0.65%
67.63%
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
0.42
0.42
380.03%
92.31%
-258.49%
3.10
3.10
220.69%
-87.25%
105.30%
7.84
7.84
90.98%
1122.93%
101.24%
2.41
1.20
34.25%
244.58%
371.96%
Additional Ratios
Net Profit Margin
Return on Equity
2004
-103.36%
0.00%
2005
13.82%
0.00%
2006
19.58%
786.05%
n.a
n.a
10.44
27
2.50
12.17
27
5.34
12.17
27
3.62
n.a
n.a
n.a
0.00
0.05
0.00
0.08
10.09
0.12
n.a
n.a
($766)
-5.57
$3,534
5.63
$14,269
11.96
n.a
n.a
0.40
19%
0.42
0.00
0.00
0.19
17%
3.10
0.00
0.00
0.28
11%
7.84
40.15
0.00
n.a
n.a
n.a
n.a
n.a
Sales Growth
Activity Ratios
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
Dividend Payout
Page 23
Appendix
Table: Sales Forecast
Sales Forecast
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
0%
$0
$0
$100
$165
$150
$280
$305
$450
$525
$650
$775
$850
0%
0%
0%
$0
$0
$0
$0
$0
$0
$87
$23
$32
$144
$38
$53
$131
$35
$48
$244
$64
$90
$265
$70
$98
$392
$104
$144
$457
$121
$168
$566
$150
$208
$674
$178
$248
$740
$0
$272
Decks
Paint
Weather proofing
0%
0%
0%
$0
$0
$0
$0
$0
$0
$36
$59
$33
$59
$97
$54
$54
$89
$50
$101
$165
$92
$110
$180
$101
$162
$266
$149
$189
$310
$173
$234
$384
$215
$0
$457
$256
$0
$502
$281
Parts
0%
$0
$0
$20
$33
$30
$56
$61
$90
$105
$130
$155
$170
Floors
Total Sales
0%
$0
$0
$0
$0
$38
$428
$63
$706
$57
$642
$106
$1,198
$116
$1,305
$171
$1,926
$200
$2,247
$247
$2,782
$295
$3,038
$323
$3,137
Jan
$0
Feb
$0
Mar
$7
Apr
$12
May
$11
Jun
$20
Jul
$21
Aug
$32
Sep
$37
Oct
$46
Nov
$54
Dec
$60
Electrical
Fences
Windows
$0
$0
$0
$0
$0
$0
$4
$1
$3
$7
$1
$4
$7
$1
$4
$12
$2
$7
$13
$2
$8
$20
$3
$12
$23
$4
$13
$28
$4
$17
$34
$5
$20
$37
$0
$22
Decks
Paint
Weather proofing
$0
$0
$0
$0
$0
$0
$1
$5
$2
$2
$9
$3
$2
$8
$3
$4
$15
$6
$4
$16
$6
$6
$24
$9
$8
$28
$10
$9
$35
$13
$0
$41
$15
$0
$45
$17
Parts
$0
$0
$16
$26
$24
$45
$49
$72
$84
$104
$124
$136
Floors
Subtotal Direct Cost of Sales
$0
$0
$0
$0
$2
$41
$3
$67
$2
$61
$4
$114
$5
$125
$7
$184
$8
$214
$10
$266
$12
$305
$13
$329
Sales
Plumbing
Electrical
Fences
Windows
Direct Cost of Sales
Plumbing
Page 1
Appendix
Table: Personnel
Personnel Plan
Jan
$0
$0
Feb
$0
$0
Mar
$2,000
$0
Apr
$2,000
$0
May
$2,000
$0
Jun
$2,000
$0
Jul
$2,000
$0
Aug
$2,000
$0
Sep
$2,000
$0
Oct
$2,000
$0
Nov
$2,000
$0
Dec
$2,000
$0
Total People
1
1
1
1
1
1
1
1
1
1
1
1
Total Payroll
$0
$0
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
Stan
Other
0%
0%
Page 2
Appendix
Table: General Assumptions
General Assumptions
Jan
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
1
Feb
2
Mar
3
Apr
4
May
5
Jun
6
Jul
7
Aug
8
Sep
9
Oct
10
Nov
11
Dec
12
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
10.00%
30.00%
0
Page 3
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Jan
$0
$0
Feb
$0
$0
Mar
$428
$41
Apr
$706
$67
May
$642
$61
Jun
$1,198
$114
Jul
$1,305
$125
Aug
$1,926
$184
Sep
$2,247
$214
Oct
$2,782
$266
Nov
$3,038
$305
Dec
$3,137
$329
Other Costs of Sales
Total Cost of Sales
$0
$0
$0
$0
$0
$41
$0
$67
$0
$61
$0
$114
$0
$125
$0
$184
$0
$214
$0
$266
$0
$305
$0
$329
$0
0.00%
$0
0.00%
$387
90.46%
$639
90.46%
$581
90.46%
$1,084
90.46%
$1,181
90.46%
$1,742
90.46%
$2,033
90.46%
$2,516
90.46%
$2,733
89.95%
$2,807
89.51%
Gross Margin
Gross Margin %
Expenses
Payroll
$0
$0
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$133
$30
$133
$30
$133
$30
$133
$30
$133
$30
$133
$30
$133
$30
$133
$30
$133
$30
$133
$30
$133
$30
$133
$30
$200
$0
$150
$200
$0
$150
$200
$300
$150
$200
$300
$150
$200
$300
$150
$200
$300
$150
$200
$300
$150
$200
$300
$150
$200
$300
$150
$200
$300
$150
$200
$300
$150
$200
$300
$150
$663
$663
$2,963
$2,963
$2,963
$2,963
$2,963
$2,963
$2,963
$2,963
$2,963
$2,963
($663)
($530)
$247
($663)
($530)
$244
($2,576)
($2,443)
$240
($2,324)
($2,191)
$237
($2,382)
($2,249)
$234
($1,879)
($1,746)
$230
($1,782)
($1,649)
$227
($1,221)
($1,088)
$223
($930)
($797)
$220
($447)
($314)
$216
($230)
($97)
$213
($156)
($23)
$209
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Net Profit
($910)
($907)
($2,816)
($2,561)
($2,616)
($2,109)
($2,009)
($1,444)
($1,150)
($663)
($443)
($365)
Net Profit/Sales
0.00%
0.00%
-657.96%
-362.66%
-407.46%
-176.00%
-153.90%
-74.99%
-51.20%
-23.83%
-14.60%
-11.64%
Sales and Marketing and Other
Expenses
Depreciation
License fees (electrical & plumbing)
Insurance
Payroll Taxes
Gas/other incidentals
Total Operating Expenses
Profit Before Interest and Taxes
EBITDA
Interest Expense
Taxes Incurred
15%
Page 4
Appendix
Table: Cash Flow
Pro Forma Cash Flow
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$0
$0
$0
$0
$428
$428
$706
$706
$642
$642
$1,198
$1,198
$1,305
$1,305
$1,926
$1,926
$2,247
$2,247
$2,782
$2,782
$3,038
$3,038
$3,137
$3,137
Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Current Borrowing
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Other Liabilities (interest-free)
New Long-term Liabilities
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Subtotal Cash Received
$0
$0
$428
$706
$642
$1,198
$1,305
$1,926
$2,247
$2,782
$3,038
$3,137
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Expenditures
Expenditures from Operations
Cash Spending
0.00%
$0
$0
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
Bill Payments
$26
$777
$785
$1,112
$1,134
$1,127
$1,175
$1,183
$1,238
$1,266
$1,313
$1,349
Subtotal Spent on Operations
$26
$777
$2,785
$3,112
$3,134
$3,127
$3,175
$3,183
$3,238
$3,266
$3,313
$3,349
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
$0
$387
$0
$0
$391
$0
$0
$394
$0
$0
$397
$0
$0
$400
$0
$0
$404
$0
$0
$407
$0
$0
$411
$0
$0
$414
$0
$0
$417
$0
$0
$421
$0
$0
$424
$0
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
$0
$0
$413
$0
$0
$1,167
$0
$0
$3,179
$0
$0
$3,509
$0
$0
$3,534
$0
$0
$3,530
$0
$0
$3,582
$0
$0
$3,594
$0
$0
$3,652
$0
$0
$3,683
$0
$0
$3,734
$0
$0
$3,774
($413)
$20,087
($1,167)
$18,919
($2,751)
$16,169
($2,803)
$13,366
($2,892)
$10,473
($2,332)
$8,141
($2,277)
$5,865
($1,668)
$4,197
($1,405)
$2,792
($901)
$1,890
($696)
$1,194
($637)
$557
Additional Cash Spent
Net Cash Flow
Cash Balance
Page 5
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Starting Balances
Current Assets
Cash
Other Current Assets
$20,500
$0
$20,087
$0
$18,919
$0
$16,169
$0
$13,366
$0
$10,473
$0
$8,141
$0
$5,865
$0
$4,197
$0
$2,792
$0
$1,890
$0
$1,194
$0
$557
$0
Total Current Assets
$20,500
$20,087
$18,919
$16,169
$13,366
$10,473
$8,141
$5,865
$4,197
$2,792
$1,890
$1,194
$557
$8,000
$0
$8,000
$8,000
$133
$7,867
$8,000
$266
$7,734
$8,000
$399
$7,601
$8,000
$532
$7,468
$8,000
$665
$7,335
$8,000
$798
$7,202
$8,000
$931
$7,069
$8,000
$1,064
$6,936
$8,000
$1,197
$6,803
$8,000
$1,330
$6,670
$8,000
$1,463
$6,537
$8,000
$1,596
$6,404
$28,500
$27,954
$26,653
$23,770
$20,834
$17,808
$15,343
$12,934
$11,133
$9,595
$8,560
$7,731
$6,961
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
$0
$751
$748
$1,074
$1,097
$1,087
$1,135
$1,142
$1,196
$1,222
$1,268
$1,303
$1,323
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$0
$0
$0
$0
$0
$751
$0
$0
$748
$0
$0
$1,074
$0
$0
$1,097
$0
$0
$1,087
$0
$0
$1,135
$0
$0
$1,142
$0
$0
$1,196
$0
$0
$1,222
$0
$0
$1,268
$0
$0
$1,303
$0
$0
$1,323
$30,000
$30,000
$29,613
$30,363
$29,222
$29,970
$28,828
$29,902
$28,431
$29,527
$28,030
$29,118
$27,627
$28,762
$27,219
$28,361
$26,809
$28,005
$26,395
$27,617
$25,977
$27,246
$25,556
$26,860
$25,132
$26,455
Long-term Liabilities
Total Liabilities
Paid-in Capital
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Retained Earnings
($1,500)
($1,500)
($1,500)
($1,500)
($1,500)
($1,500)
($1,500)
($1,500)
($1,500)
($1,500)
($1,500)
($1,500)
($1,500)
Earnings
Total Capital
$0
($1,500)
($910)
($2,410)
($1,816)
($3,316)
($4,632)
($6,132)
($7,193)
($8,693)
($9,809)
($11,309)
($11,919)
($13,419)
($13,928)
($15,428)
($15,372)
($16,872)
($16,522)
($18,022)
($17,185)
($18,685)
($17,629)
($19,129)
($17,994)
($19,494)
Total Liabilities and Capital
$28,500
$27,954
$26,653
$23,770
$20,834
$17,808
$15,343
$12,934
$11,133
$9,595
$8,560
$7,731
$6,961
Net Worth
($1,500)
($2,410)
($3,316)
($6,132)
($8,693)
($11,309)
($13,419)
($15,428)
($16,872)
($18,022)
($18,685)
($19,129)
($19,494)
Page 6