1.3.Keys to Success5
4.Market Analysis Summary8
4.2.Service Business Analysis11
6.4.Projected Profit and Loss21
6.5.Projected Cash Flow24
6.6.Projected Balance Sheet26
8.Services – Graphic Art Design29
9.Services – Website Design29
12.System Standards and Integration31
PrintingSolutions.com is being designed as a global Internet printing services/print shop who is focused on reducing the overall printing price structure, in addition to enabling business-to-business transactions for printing presses and the graphic art design industry. PrintingSolutions.com will also attain a competitive edge by offering services such as website development and e-commerce, which have become essential for any business presence.
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PrintingSolutions.com intends to establish and operate an Internet print shop with services costing significantly less than the prices of its competitors, while supplying superior quality. Incorporating its website and graphic art services, Printing Solutions will enable both start-up and existing companies to reduce their printing and e-commerce costs.
Highlights of PrintingSolutions.com
•Breakthrough products. PrintingSolutions.com will develop a unique website that provides customers various ways to create business stationery, including business cards, envelopes, notepads, and door hangers. A graphic art design center will also be provided, enabling customers to create company logos and other designs essential to their company’s identity.
•Trademarks. The company plans to register a corporation under the name of PrintingSolutions.com and operate under the same name.
•Large markets. Recent studies by Forrester Research Inc. reveal that business-to-business (B2B) commerce will total $2.7 trillion in revenue by the year 2004. The data emphasize that e-marketplaces will be responsible for 53% of all online business trade.
•Seasoned management. The company’s management is highly experienced and qualified.
•Customers. The company will primarily target small and start-up businesses throughout the country. The company will also develop plans to negotiate deals with big businesses.
The biggest competitive threat for PrintingSolutions.com will come from iPrint.com. However, we will have a competitive advantage over iPrint.com by offering lower prices on all products and services. Customers in this industry are sensitive to both quality and price, and at PrintingSolutions.com they will benefit from both offerings.
PrintingSolutions.com has a world-class management team with direct knowledge of the industry, extensive research experience, and unique administration skills. The team will be led by Mr. Dalton Grant.
The company projects that between July 1, 2000 and December 31, 2000 it will generate revenues of $250,000. Projected revenues for 2001 and 2002 are $2.91 million and $5.82 million, respectively. PrintingSolutions.com is seeking $5 million in venture capital to be used for:
1.Establishing an organization and office presence in both the United States and overseas.
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2.Completing development of the Internet print shop.
3.Marketing the website and its services and products.
1.Sales of $850,000 in 2009 and $935,000 by the year 2010
1.Gross margin higher than 55%
1.Net income of more than 30% of sales by the second year
The mission of PrintingSolutions.com is to become a global company, utilizing the power of the Internet to become the market leader in providing online printing, website designs, graphic art designs, and a B2B portal for the untapped printing press and graphic art design industries. To accomplish this, the company will combine high-quality workmanship with the lowest costs in the industry.
1.3.Keys to Success
XXX’s keys to success include but are not limited to:
PrintingSolutions.com will be incorporated as a C-corporation, with principal offices located in Bluegene, Oregon. All operations, from administration to website development, will take place at this leased office location of approximately 1,000 square feet. The company also plans to establish an office offshore to facilitate, control prices, and monitor the quality of work.
XXX’s total costs for start-up are $113,300. Start-up expenses will account for about $13,300 and include legal fees, rent, and insurance deposit. The remaining $100,000 of costs will be attributed to establishing assets.
Other Administrative expenses$25,000
Research and development$1,500,000
Total Start-up Expenses$4,360,000
Other Current Assets$200,000
PrintingSolutions.com will be an online provider of printing and B2B print services, focusing on the business market. This will be fortified with the company’s graphic art and website design services.
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PrintingSolutions.com. The online print shop will offer customers a one-stop shop for addressing their printing needs. Customers will be able to easily design and order thousands of customized products, primarily small-quantity printed products. By automating and enhancing the print order process and electronically connecting our online printing services to carefully-selected commercial print vendors, it is believed, based on experience in the printing industry, that the company will significantly reduce the costs and inefficiencies associated with the traditional printing process. Our online print services are designed to be more convenient and cost-effective than printing alternatives provided through traditional print channels.
PrintingSolutions.com will simplify the design and ordering process in several ways, including the elimination of manual steps and handwritten forms used by traditional print shops. The company believes this will significantly reduce reprint-due-to-error costs and the associated print wastage incurred by commercial print vendors. Exact re-prints of previous orders will be available at a reduced cost. At the same time, the company will lower costs and improve capacity utilization for its commercial print vendors since it will electronically route orders to commercial print vendors that have idle capacity. PrintingSolutions.com also believes that these efficiencies, incorporated with lower overhead costs due to the online nature and automation, will allow the company to be more cost effective than traditional printing alternatives. Furthermore, the cost of printing will be greatly reduced by using the offshore printing press affiliate, Creative Designs and Printers.
In addition to providing customers with online print services directly through the PrintingSolutions.com website, the company will be conducting B2B through PrintingSolutionsB2B.com.
4.Market Analysis Summary
PrintingSolutions.com will focus on small and start-up business customers in the United States. We plan to aggressively pursue and acquire customers through direct business promotions and convert them into repeat paying customers. We will continually strive to provide consumers with more cost-effective avenues, offering substantial savings rather than just a few cents.
Table of Contents Purpose Statement 1 Executive Summary 2 Business Information 3 Personal Financial Statement 3 Business Description 3 Business History 4 Personnel and Organization 5 Marketing Information 6 Market Analysis 6 Market Research 6 Competitors 7 Market Segments 8 Target Market 8 Marketing Mix Strategy 9 Products/Services 9 Promotions 9 Distribution 9 Pricing 10 Suppliers 10 Marketing ...
PrintingSolutions.com will also be configured to stay ahead of, and capitalize on, emerging market trends such as integration of information/markets and increasing sophistication of online offerings. This will provide a continuously improving, superior customer experience and grow value.
There is a serious benefit deficiency in existing “brick and mortar” printing establishments that create inefficiencies in the ordering and production process. Utilizing the benefits of Internet selling will eliminate many of these problems and create a lower-cost environment.
At the present, PrintingSolutions.com faces major online competition from iPrint.com, which is an established online printer. However, iPrint.com does not offer the lowest cost products on the market, nor does it provide all of the printing services a business needs. Therefore, there is significant opportunity to gain market share.
The company will be primarily targeting small and start-up businesses in the United States; however the company plans to negotiate deals with big businesses. Vendors will include printers and graphic art designers around the world that will be able to help define these markets using the PrintingSolutions.com B2B portal. While the primary focus will be on business customers, PrintingSolutions.com’s ability to print in small quantities will allow the company to service the printing needs of individuals as well.
To ensure success, the company will continuously attract new customers, many of whom may have personal and long-standing relationships with traditional print and design shops, catalog vendors, office supply chains and stationery stores. Traditional print and design shops have many advantages which PrintingSolutions.com cannot offer its customers, including physical proximity and interpersonal business relationships. In addition, catalog vendors may be better able to combine orders to achieve economies of scale and may be more convenient for customers who also want to purchase non-printed products, such as office furniture.
PrintingSolutions.com plans to aggressively pursue and acquire customers through promotions and convert them into repeat paying customers. Direct business promotions are the most important vehicle that the company will use to acquire customers. These promotions may include providing the customer a product, such as a mailing label at no charge, or charging the customer only for shipping and handling, in order to introduce that customer to our products and services.
Marketing Plan for INTERNET CAF " ES IN Indictable Of Contents 1 Executive Summary 22 Situation Analysis 32. 1 Market Summary 42. 1. 1 Market Demographics 52. 1. 2 Market Needs 62.1. 3 Market Trends 72. 1. 4 Market Growth 92. 2 SWOT Analysis 102. 3 Competition 142.4 Services 142. 5 Keys to Success 162. 6 Critical Issues 162. 7 Macro Environment 173. 0 Marketing Strategy 173. 1 Mission 183.2 ...
PrintingSolutions.com plans to expand its business and customer base by offering business promotions on a continuous basis. PrintingSolutions.com will continually strive to provide consumers with more cost-effective avenues, offering substantial savings rather than just a few cents. Using offshore print companies as partners and having partners bid on jobs will be one avenue used to ensure the best prices for our customers.
The following chart and table express the projected number of potential customers in the United States by market segment. Although it is planned to make PrintingSolutions.com a global company, the initial phase of market penetration will focus on the domestic market.
Note: Although the large business segment consists of the smallest number of businesses, this group generates the largest sales and revenues of all three segments. Additionally, it is believed that the company’s ability to gain market share in the third category, “Individual customers,” will be relatively small in comparison with the other two. This is due to the primary concentration of marketing efforts on the business segments.
Potential CustomersGrowth CAGR
Small Businesses Utilizing Internet8%4,970,0005,342,7505,743,4566,174,2156,637,2817.50%
Large Businesses Utilizing Internet6%113,600119,848126,440133,394140,7315.50%
Individuals Utilizing Internet w/Printing Needs27%5,430,0006,896,1008,758,04711,122,72014,125,85427.00%
Market Analysis (Pie)
Market Analysis (Bar)
4.2.Service Business Analysis
Printing can be a major area of expenditure for small businesses. Based on data from CAP Ventures, Inc., an independent print research firm, sales in the United States printing industry totaled $292 billion in 1998, of which $58 billion was derived from commercial printing operations. Short-run, customized items, which include a wide range of business, promotional and general office products, as well as consumer items, comprise a significant portion of these commercial printing operations. This market is highly fragmented, with an estimated 50,000 local and regional commercial printers in the United States.
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The traditional process of purchasing short-run print items can be time consuming and error prone. Small businesses and consumers often lack the financial resources to create economies of scale when purchasing printed products. According to the International Data Corporation (IDC), the number of small businesses engaged in e-commerce will grow from 400,000 at the end of 1998 to nearly 2.8 million by the end of 2003.
The explosive growth of the Internet as a tool for global communications has enabled millions of people to interact electronically. The IDC estimates that there were 142 million Web users worldwide at the end of 1998, and expect this number will grow to approximately 502 million by the end of 2003. Rapid acceptance of the Internet as a communications platform, by both businesses and consumers, has created the foundation for significant growth in business-to-business and business-to-consumer e-commerce. IDC estimates that worldwide commerce over the Internet will increase from approximately $50 billion in 1998 to $1.3 trillion in 2003.
The Small Business Administration (SBA) estimates that more than 98% of all businesses in the United States have fewer than 100 employees. These businesses often lack the size and financial resources to create economies of scale. In particular, these organizations typically do not maintain dedicated procurement departments and often do not achieve significant purchasing leverage. That is why the Internet is so important for these businesses; it can provide small businesses and consumers with a number of advantages when making purchases, including:
•Wider selection of products and services.
Small businesses are taking advantage of the opportunities the Internet affords. The IDC estimates that the number of small businesses engaged in e-commerce will increase 47.1% annually, from 400,000 at the end of 1998 to almost 2.8 million at the end of 2003, signaling the broad adoption of the Internet by these small enterprises.
The widespread adoption of the Internet as a purchasing vehicle has created a wealth of opportunities for businesses that offer products and services to small businesses and consumers. Simultaneously, it has given both small businesses and consumers a wider variety of products from which to choose at competitive prices.
Highlights of Market
•Identifiable market sectors. Forrester Research estimates that there are approximately 70 identifiable vertical market sectors (i.e., manufacturing, insurance, stock brokerage, engineering, etc.) in the commercial business world today.
•High growth in e-commerce. Forrester Research also reports that B2B e-commerce will be a $1.3 trillion market by 2003 (Red Herring, December 1999).
This will surpass the business-to-consumer market by five to seven times.
•E-commerce market value. IDC, another market intelligence firm, predicts the market to be $633 billion by 2001. IDC also believes that the largest portion of new technology investments for businesses will be devoted to the study and implementation of e-commerce B2B initiatives. Compounded growth between 2001 and 2003 is expected to be 35%. IDC claims that those entrepreneurs that set their banner into e-commerce sectors will be the ones that reap the greatest profits and growth from 2001 and beyond.
•Internet services market. Gartner, and independent research firm, calls B2B e-commerce “the new millennium’s killer application.” The Internet services’ market will grow at a cumulative annual growth rate of 60% through 2003. IDC also claims that revenue in the worldwide Internet services market grew 71% in 1998 and is expected to grow at a cumulative annual growth rate of 60% through 2003, with revenues for Internet services approaching $80 billion.
IDC predicts that, of the estimated seven million small businesses in the United States, the percentage connected to the Internet will grow from approximately 40 percent in 1996 to almost 70 percent in 2000. IDC estimates the number of users in the US accessing the World Wide Web will increase from approximately 63 million at the end of 1998 to 177 million by the end of 2003.
The research shows that e-marketplaces will be responsible for 53% of all online business trade. Research also indicates that more companies are moving to make purchases and sales on the Internet and are looking to build deeper relationships with business partners. This research has also shown:
The B2B arena reshaping e-marketplaces. The initial wave of B2B e-commerce has been dominated by extranets that automate off-line processes between partners. However, the Net is now moving to a new business venue, e-marketplaces, where the dynamic many-to-many interactions will supplant stagnant one-to-one relationships. These new trading arenas will flourish because:
•Industry inefficiencies run rampant. In today’s business environment, comparing offerings across suppliers requires multiple phone calls to various suppliers or enlisting the costly support of a broker. Time-consuming practices like these are easy targets for the Net, where purchasing agents can gain instant access to comparisons of many different products.
•E-marketplace vendors will lower technology barriers. Today, B2B entrepreneurs can acquire sophisticated marketplace software from firms like Tradex, Ariba, and Commerce One, or entirely offload the building of their websites to a lengthening list of experienced e-commerce integrators like Vision Systems or Software Solutions Pakistan.
•Venture funding is shifting to business trade. High-profile B2B players like VerticalNet–whose market cap currently exceeds $4 billion–have caught the investor community’s attention. The result? Many venture capitalists are placing bigger bets on their business trade portfolio.
E-marketplaces will face a changing business environment. As more and more companies compete in the B2B market, there are going to be companies that will either have to sell or go out of business due to:
•Virgin markets disappearing. While most existing e-marketplaces are launched in a world devoid of serious competition, such as the printing business, these uncharted opportunities will quickly fade away; name recognition must be established.
•Feature-function races escalate. Functionality is currently not a big issue. But these websites will soon face stiff competition, and basic service offerings won’t be good enough.
PrintingSolutions.com will ensure our success by combining the most functionally-rich e-marketplace with the best prices for our customers. PrintingSolutions.com will aggressively pursue partnerships and develop a large customer base to get a strong foothold in the markets it ventures into. New vertical e-marketplace rules will emerge. As the competition increases in these vertical e-marketplaces, the operators will have to update their strategies and change their business paradigm to:
•Diversify beyond transaction fees. As vertical marketplace venues grow, websites will be pushed into competitive market share battles. To keep customers online, e-marketplaces will be forced to take a smaller percentage of the deal and expand their businesses by searching for new revenue streams.
•Expand through interconnections. Customers will begin to look for marketplaces to play dual roles: acting as both a one-stop shop for a variety of products as well as offering highly specialized industry-specific services. To accomplish this, alliances will need to be formed with other marketplaces who specialize in other vertical segments.
•Configure for specific buyer segments. Marketplaces serving industries like print or office supplies will no longer be able to treat all buyers alike. Marketplaces will need to begin offering service bundles to unique buyers–differentiating between decentralized, multinational corporations shipping overseas and local “Mom-and-Pop” shops.
As of the census of 2000, there were 182 people, 69 households, and 44 families residing in the CDP. The population density was 76.7 people per square mile (29.6/km²).
There were 77 housing units at an average density of 32.5/sq mi (12.5/km²).
The racial makeup of the CDP was 91.76% White, 4.40% from other races, and 3.85% from two or more races. Hispanic or Latino of any race were 8.79% of the population.
There were 69 households out of which 31.9% had children under the age of 18 living with them, 52.2% were married couples living together, 10.1% had a female householder with no husband present, and 36.2% were non-families. 26.1% of all households were made up of individuals and 8.7% had someone living alone who was 65 years of age or older. The average household size was 2.64 and the average family size was 3.30.
In the CDP the population was spread out with 26.9% under the age of 18, 6.0% from 18 to 24, 33.5% from 25 to 44, 18.1% from 45 to 64, and 15.4% who were 65 years of age or older. The median age was 36 years. For every 100 females there were 106.8 males. For every 100 females age 18 and over, there were 107.8 males.
The median income for a household in the CDP was $60,531, and the median income for a family was $36,375. Males had a median income of $28,155 versus $26,250 for females. The per capita income for the CDP was $36,804. None of the population or families were below the poverty line.
Residents of Short Pump generally believe that the boundaries for Short Pump are Church Road, the Goochland County divide,and the bridge crossing over interstate 64. Short Pump is home to several individual neighborhoods. The major neighborhoods include:
•Wythe Trace and Summerwood
The company seeks to establish a competitive edge in its new target market segment by increasing the level of customer contact and service that other competitors seem to oftentimes lack. Additionally, xxx possesses the necessary skills to produce the high quality janitorial services that are needed in this field. The establishment of the previously mentioned work processes that will ensure greater service will strengthen the contacts that promote word of mouth marketing and networking.
PrintingSolutions.com will strive to develop the most recognized and trusted brand for printing services on the Internet. To expand our customer base and to extend the image of the company, we plan to aggressively promote the PrintingSolutions.com brand through a combination of online and traditional media advertising, public relations and participation in trade shows. The company also plans to expand our affiliate and co-branded online website strategies through agreements with a range of destination websites.
The company will be promoting PrintingSolutions.com and PrintingSolutionsB2B.com over the Internet through:
•Providing a small percentage of the sales made through websites that list PrintingSolutions.com from which a customer makes a purchase.
Internet ads are an obvious choice because that is the nature of our business. Marketing will also be done through printed media such as national newspapers and magazines. Newspaper and magazine ads will be used since our customers include business people who read various publications. Television ads will be used in certain markets, as PrintingSolutions.com will be targeting large cities with a great number of businesses.
The company’s sales strategy will be relatively minimal since PrintingSolutions.com is offering distant, self-customizing services. It is expected that the company’s marketing efforts will bring customers to the website, and the benefits of convienence, customization and low price as advertised on the website will be the incentives to close a sale. Promotions and add-on products coupled with continuing low prices will create repeat business.
As the following table shows, the company plans to deliver sales of approximately $840,000 in the first year, $935,000 in the second year, and $1,075,250 in the third year plan implementation. The approximate cost of sales will be 40% on inventory and 5% on freight cost. As indicated in the table, sales are forecasted to increase, with an annual growth rate of approximately 10% for 2010 and 15% for 2011.
FY 2009FY 2010FY 2011
Internet Printing Products$250,000$2,910,000$5,820,000
Direct Cost of SalesFY 2009FY 2010FY 2011
Internet Printing Products$80,000$125,000$200,000
Subtotal Direct Cost of Sales$80,000$125,000$200,000
Sales by Year
Management will intially consist of Mr. Dalton Grant, president and CEO. Additionally, the company’s webmaster will act as assistant manager and oversee many of the day-to-day functions of the company. Additional management personnel, such as a marketing manager and product managers, will be hired as growth dictates.
The detailed monthly personnel plan for the first year is included in the appendix. The annual personnel estimates are included here.
FY 2009FY 2010FY 2011
Funding Requirements and Uses
The company will be raising $5 million for the purposes of:
•Establishing an organization and office presence within the USA and overseas.
•Completing the development of the Internet print shop.
•Marketing the website and its services and products.
•Providing a world-class customer service website.
The following table provides a breakdown of how the funds will be used.
Office Setup $525,000
Administrative, Other $25,000
Development of Internet Print Shop $1,500,000
Customer Service Website $200,000
XXX’s funding requirements total $115,000. These costs will be funded through a variety of sources, including a short-term loan, and a personal investment from the owner. The following charts and graphs provide additional information on the start-up funding and details of the start-up costs can be found in section 2.2 Start-up Summary.
Start-up Expenses to Fund$4,360,000
Start-up Assets to Fund$740,000
Total Funding Required$5,100,000
Non-cash Assets from Start-up$200,000
Cash Requirements from Start-up$540,000
Additional Cash Raised$0
Cash Balance on Starting Date$540,000
Liabilities and Capital
Accounts Payable (Outstanding Bills)$0
Other Current Liabilities (interest-free)$0
Additional Investment Requirement$0
Total Planned Investment$2,150,000
Loss at Start-up (Start-up Expenses)($4,360,000)
Total Capital and Liabilities$740,000
Total Funding $5,100,000
Nature and Limitation of Projections. This financial projection is based on sales volume at the levels described in the revenue section and presents, to the best of management’s knowledge and belief, the company’s expected assets, liabilities, capital, revenues, and expenses. The projections reflect management’s judgement of the expected conditions and its expected course of action given the hypothetical assumptions.
Nature of Operations. The company operates as an Oregon C-corporation.
Revenues. PrintingSolutions.com will generate revenues from the sale of a variety of printed products to end user customers. The company’s products and services will be available to customers through the PrintingSolutions.com and PrintingSolutionsB2B.com websites, managed PrintingSolutionsB2B.com affiliates and co-branded websites, and privately-branded websites.
The company will not recognize revenues until the product is shipped, collection of the receivable will be probable, and commercial print vendors have fulfilled all contractual obligations to the customer. PrintingSolutions.com will take title to all products that the company instructs its commercial print vendors to produce. PrintingSolutions.com believes that purchases by businesses will account for a majority of its revenues and will record sales net of discounts. The company will record the cost of promotional products that it will give away at no charge as a sales and marketing expense.
A significant portion of revenue will be generated through barter transactions with participants in the co-branded program in which PrintingSolutions.com will sell printed products in exchange for online advertising. Barter transaction revenues and related advertising costs will be recorded at the fair value of the goods or services provided or received, whichever will be more easily determined in the circumstances. The majority of revenues will be generated from sources within the United States; therefore, all sales will be in the United States dollar currency.
Expenses. The company’s expenses will be primarily those of salaries, sales commissions, and administrative costs. The company will categorize its operating expenses into research and development, sales and marketing, and general and administrative.
Research and development expenses will primarily consist of personnel costs, including costs related to consultants and outside contractors.
Sales and marketing expenses will consist of the cost of free promotional products, the cost of marketing programs including advertisements, costs to acquire email lists, personnel and related costs for our marketing staff and customer support groups, and participation in trade shows.
General and administrative expenses will primarily consist of personnel and related costs for corporate functions, including finance, accounting, legal, human resources, facilities, and management of commercial print vendor relationships.
Cost of sales. Cost of sales will primarily consist of direct expenses relating to printing products, rework and reprinting charges, shipping and handling fees, royalties on software licenses, and credit card processing fees.
The following chart and table outline the break-even analysis for PrintingSolutions.com.
Monthly Revenue Break-even$49,877
Average Percent Variable Cost32%
Estimated Monthly Fixed Cost$33,917
6.4.Projected Profit and Loss
PrintingSolutions.com is in the early stage of development; thus, initial projections have only been made on accounts that are believed to most drive the income statement. The following table provides Printing Solution’s projected income statements for 2000-2002. PrintingSolutions.com operates on a fiscal year ending in December. In order to reflect fiscal year projections of revenue and profit, only the last six months of year 2000 shows income. This reflects the projected launch date of the company.
Pro Forma Profit and Loss
FY 2009FY 2010FY 2011
Direct Cost of Sales$80,000$125,000$200,000
Total Cost of Sales$90,000$155,000$255,000
Gross Margin %64.00%94.67%95.62%
Sales and Marketing and Other Expenses$215,000$360,000$565,000
Legal and Professiona expense$10,000$10,000$10,000
Total Operating Expenses$407,000$647,000$922,000
Profit Before Interest and Taxes($247,000)$2,108,000$4,643,000
Gross Margin Monthly
Gross Margin Yearly
6.5.Projected Cash Flow
The following table has calculated that the company will have a negative cash outflow during the first year based on the start-up costs outlined in topic 2.0. However, the company will not begin financing or operations until July, 2000. In order to offset this supposed outflow, increases in the initial cash requirements in the Start-up table have been provided. The differences between calculated cash and actual needs will be used for other start-up costs. It is assumed that there will be no dividend payments for the first three years of business.
Pro Forma Cash Flow
FY 2009FY 2010FY 2011
Cash from Operations
Subtotal Cash from Operations$250,000$2,910,000$5,820,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received$0$0$0
New Current Borrowing$0$0$0
New Other Liabilities (interest-free)$0$0$0
New Long-term Liabilities$0$0$0
Sales of Other Current Assets$0$0$0
Sales of Long-term Assets$0$0$0
New Investment Received$0$0$0
Subtotal Cash Received$250,000$2,910,000$5,820,000
ExpendituresFY 2009FY 2010FY 2011
Expenditures from Operations
Subtotal Spent on Operations$718,309$1,115,038$1,456,483
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out$0$0$0
Principal Repayment of Current Borrowing$0$0$0
Other Liabilities Principal Repayment$0$0$0
Long-term Liabilities Principal Repayment$0$0$0
Purchase Other Current Assets$0$0$0
Purchase Long-term Assets$0$0$0
Subtotal Cash Spent$718,309$1,115,038$1,456,483
Net Cash Flow($468,309)$1,794,962$4,363,517
6.6.Projected Balance Sheet
The following table outlines some key financial information for PrintingSolutions.com.
Pro Forma Balance Sheet
FY 2009FY 2010FY 2011
Other Current Assets$200,000$200,000$200,000
Total Current Assets$285,025$2,087,487$6,463,504
Total Long-term Assets$0$0$0
Liabilities and CapitalFY 2009FY 2010FY 2011
Other Current Liabilities$0$0$0
Subtotal Current Liabilities$564,187$576,487$604,503
Total Liabilities and Capital$262,187$2,087,487$6,463,504
The table below provides key ratios in the Industry Profile column for the commercial printing industry, as found in the Standard Industry Classifications (SIC) index, code 2759. We have projected healthy ratios for the first three years of operation, and foresee a continuing upwards trend throughout the company’s life.
FY 2009FY 2010FY 2011Industry Profile
Percent of Total Assets
Other Current Assets70.17%9.58%3.09%23.60%
Total Current Assets100.00%100.00%100.00%62.30%
Percent of Sales
Selling, General & Administrative Expenses280.80%47.95%39.59%19.10%
Profit Before Interest and Taxes-98.80%72.44%79.78%2.40%
Total Debt to Total Assets1057.52%144.98%47.26%56.10%
Pre-tax Return on Net Worth19.86%-193.08%127.54%4.90%
Pre-tax Return on Assets-190.16%86.85%67.27%11.20%
Additional RatiosFY 2009FY 2010FY 2011
Net Profit Margin-216.80%62.30%74.71%n.a
Return on Equity0.00%0.00%127.54%n.a
Accounts Payable Turnover10.9212.1712.17n.a
Total Asset Turnover0.881.390.90n.a
Debt to Net Worth0.000.000.90n.a
Current Liab. to Liab.0.190.190.20n.a
Net Working Capital($279,162)$1,511,000$5,859,000n.a
Assets to Sales1.140.721.11n.a
Current Debt/Total Assets198%28%9%n.a
Acid Test 0.483.5810.64n.a
This will initially include:
8.Services – Graphic Art Design
PrintingSolutions.com will provide a graphic art design center where customers will describe their company to enable a graphic art designer to create a logo for them.
9.Services – Website Design
Customers will also be able to have website designers create effective websites for their company. Customers will choose from either a template or a customized website, whichever suits their business needs.
The challenges for an online print shop which are not typically faced by other electronic commerce vendors include:
2.Customer-driven product creation. Customers do not order from a static, pre-set product catalog. Rather, customers can create sophisticated desktop publishing design projects, requiring the ability to freely mix text, graphic images, fonts, styles, and colors on printed items.
3.Intensive customer interaction. Our websites are not presenting static content pages; customers are engaged in intensive design activities which require constant system monitoring and optimization as visitor traffic grows.
4.Integrating the process of typesetting with commercial printing. Typesetting is a precision science. PrintingSolutions.com will automatically convert an onscreen design into a resolution-independent electronic file that can be successfully reproduced by a variety of commercial print vendors, each with different printing processes and order management requirements.
5.Point-of-order pricing. Since each product created is a custom design consisting of various inks, papers, designs, and quantity attributes, PrintingSolutions.com must be able to provide accurate, real-time pricing information to its customers that can be calculated instantaneously from tens of thousands of price point combinations.
6.Re-orders. PrintingSolutions.com will retain each customer’s order specifications, including all designs, negatives, and print plates, for a limited time. This will enable us to charge a lower fee for an exact reprint of a previous order.
7.Intelligent order routing. Each of the commercial print vendors the company will work with has different capabilities and a unique set of requirements that are taken into account when determining how to fulfill an order. By considering account product type, pricing, geography, and shipping options, PrintingSolutions.com will strive to route each order individually to the vendor with the best combination of quality, delivery time, and price.
PrintingSolutions.com believes that, with our technology expertise, we will be able to address these challenges while also handling large numbers of customer design sessions and orders. We feel this represents a competitive advantage.
The software that supports the online print shop is a collection of integrated software modules that will enable PrintingSolutions.com to quickly create, maintain, modify, or replace individual components. PrintingSolutions.com will create its proprietary software modules using development and technical standards and practices, and without significant dependencies on specific operating systems, databases, or Web server technologies. As a result, the company will be able to move portions of its software between different databases, operating systems, and Web server products to upgrade capacity or take advantage of price or performance improvements, as they become available.
The following is a description of the key software modules that will be found on the PrintingSolutions.com website:
1.Design Workshop. This will incorporate features found in desktop publishing software that enables customers to easily create a wide variety of custom-printed products. The workshop will be designed such that what customers build on the screen is what they will receive in their hands. This is achieved by considering all aspects needed to produce on-screen images and transferring them directly to the final printed product. Since customers will be able to view and proof their orders before they are printed, we believe the percentage of orders that shall require reprinting due to design error will be significantly reduced.
1.Product and Pricing Engines. Our various engines will contain a wide range of product designs, features, and pricing information. To support the broad array of product variations and customization options offered, we will design these databases to be highly flexible. This will allow us to modify our records as the market dictates.
1.Secure Shopping Cart. We will provide a customized order basket designed to store and securely process orders. The Secure Shopping Cart will be integrated with the systems of members, thus reducing the need for human intervention in order to produce and complete an order. The company believes that by designing the system in this manner, the order and completion process will be vastly more efficient and are less error prone than current processes.
1.System Reporting and Diagnostics. This program is designed to track customer action on participating websites. PrintingSolutions.com will utilize this program in order to remain aware of industry and retail trends.
1.Custom Website Resources. By allowing participants in the private-brand program to customize and control their own print shops, we will eliminate the need for costly, time-consuming programming efforts. We will allow these participants to directly manage product prices, configurations, and sales tax assignments, which decreases customization and maintenance expenses for PrintingSolutions.com.
12.System Standards and Integration
PrintingSolutions.com will offer the following design standards:
•Optimized screens incorporating data from several modules on a single display.
•Great depth to handle the most sophisticated requirements.
•Tightly integrated standards to minimize errors, data entry, and time, and maximize the speed and information content on displays and printouts.
•Consistent look and feel, uniform prompts and similar data flow for every module.
•User-friendly. Rich in useful features such as help displays, pick boxes, numerous user-changeable flags and user-modified options.
Depth and Integration
PrintingSolutions.com will have depth, which means that the software will allow the customer to go beyond the basics. Depth will apply to each module individually: estimating, cost collection, and accounting. Software without depth is limited and can be frustrating to a consumer.
The company will have the ability to confirm customer information when processing an estimate. We will also be able to convert an estimate to a job and automatically allocate inventory, verify credit limits, allow for coverage, and put all outside buys on a ‘must buy’ list for purchasing and updating work-in-process. When a job is billed, all information will be fully automatic. Then, after billing, the work-in-process, job history, job archives, accounts receivable, sales tax, sales commission liability, sales revenue, production scheduling, active job file, and inventory files will all be automatically updated.
We will have depth in accounting. This implies the following:
•A job scan will be pre-billed or partially billed.
•The sales tax will be computed for all states taxes, including any county or local tax.
•More than one accounting period can be open at the same time.
•Allowing several bank accounts and classes of Accounts Receivable to automatically compute and track sales commissions and multiple plants with individual and consolidated financial statements.
Internet Printing Products0%$0$0$0$0$0$0$41,667$43,667$42,667$41,667$40,667$39,667
Total Sales $0$0$0$0$0$0$41,667$43,667$42,667$41,667$40,667$39,667
Direct Cost of Sales Apr-08May-08Jun-08Jul-08Aug-08Sep-08Oct-08Nov-08Dec-08Jan-09Feb-09Mar-09
Internet Printing Products $0$0$0$0$0$0$13,333$13,333$13,333$13,333$13,333$13,333
Subtotal Direct Cost of Sales $0$0$0$0$0$0$13,333$13,333$13,333$13,333$13,333$13,333
Total People 000000000000
Total Payroll $0$0$0$0$0$0$17,391$17,391$17,391$17,391$17,391$17,391
Pro Forma Profit and Loss
Direct Cost of Sales $0$0$0$0$0$0$13,333$13,333$13,333$13,333$13,333$13,333
Total Cost of Sales $0$0$0$0$0$0$15,000$15,000$15,000$15,000$15,000$15,000
Gross Margin $0$0$0$0$0$0$26,667$28,667$27,667$26,667$25,667$24,667
Gross Margin % 0.00%0.00%0.00%0.00%0.00%0.00%64.00%65.65%64.84%64.00%63.11%62.18%
Sales and Marketing and Other Expenses $0$0$0$0$0$0$35,833$35,833$35,833$35,833$35,833$35,833
Software/IS expense $0$0$0$0$0$0$7,500$7,500$7,500$7,500$7,500$7,500
Legal and Professiona expense $0$0$0$0$0$0$1,667$1,667$1,667$1,667$1,667$1,667
Bank charges $0$0$0$0$0$0$333$333$333$333$333$333
Total Operating Expenses $0$0$0$0$0$0$67,833$67,833$67,833$67,833$67,833$67,833
Profit Before Interest and Taxes $0$0$0$0$0$0($41,167)($39,167)($40,167)($41,167)($42,167)($43,167)
Interest Expense $24,583$24,583$24,583$24,583$24,583$24,583$24,583$24,583$24,583$24,583$24,583$24,583
Taxes Incurred $0$0$0$0$0$0$0$0$0$0$0$0
Net Profit ($24,583)($24,583)($24,583)($24,583)($24,583)($24,583)($65,750)($63,750)($64,750)($65,750)($66,750)($67,750)
Net Profit/Sales 0.00%0.00%0.00%0.00%0.00%0.00%-157.80%-145.99%-151.76%-157.80%-164.14%-170.80%
Pro Forma Cash Flow
Cash from Operations
Cash Sales $0$0$0$0$0$0$41,667$43,667$42,667$41,667$40,667$39,667
Subtotal Cash from Operations $0$0$0$0$0$0$41,667$43,667$42,667$41,667$40,667$39,667
Additional Cash Received
Sales Tax, VAT, HST/GST Received0.00%$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) $0$0$0$0$0$0$0$0$0$0$0$0
New Long-term Liabilities $0$0$0$0$0$0$0$0$0$0$0$0
Sales of Other Current Assets $0$0$0$0$0$0$0$0$0$0$0$0
Sales of Long-term Assets $0$0$0$0$0$0$0$0$0$0$0$0
New Investment Received $0$0$0$0$0$0$0$0$0$0$0$0
Subtotal Cash Received $0$0$0$0$0$0$41,667$43,667$42,667$41,667$40,667$39,667
Expenditures from Operations
Cash Spending $0$0$0$0$0$0$17,391$17,391$17,391$17,391$17,391$17,391
Bill Payments $819$24,583$24,583$24,583$24,583$24,583$27,209$102,914$90,025$90,025$90,025$90,025
Subtotal Spent on Operations $819$24,583$24,583$24,583$24,583$24,583$44,600$120,306$107,417$107,417$107,417$107,417
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0$0$0$0$0$0$0$0$0$0$0$0
Principal Repayment of Current Borrowing $0$0$0$0$0$0$0$0$0$0$0$0
Other Liabilities Principal Repayment $0$0$0$0$0$0$0$0$0$0$0$0
Long-term Liabilities Principal Repayment $0$0$0$0$0$0$0$0$0$0$0$0
Purchase Other Current Assets $0$0$0$0$0$0$0$0$0$0$0$0
Purchase Long-term Assets $0$0$0$0$0$0$0$0$0$0$0$0
Subtotal Cash Spent $819$24,583$24,583$24,583$24,583$24,583$44,600$120,306$107,417$107,417$107,417$107,417
Net Cash Flow ($819)($24,583)($24,583)($24,583)($24,583)($24,583)($2,934)($76,639)($64,750)($65,750)($66,750)($67,750)
Cash Balance $539,181$514,597$490,014$465,431$440,847$416,264$413,330$336,691$271,941$206,191$139,441$71,691
Pro Forma Balance Sheet
Other Current Assets$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000
Total Current Assets$740,000$739,181$714,597$690,014$665,431$640,847$616,264$626,663$550,025$485,275$419,525$352,775$285,025
Total Long-term Assets$0$0$0$0$0$0$0$0$0$0$0$0$0
Liabilities and Capital Apr-08May-08Jun-08Jul-08Aug-08Sep-08Oct-08Nov-08Dec-08Jan-09Feb-09Mar-09
Other Current Liabilities$0$0$0$0$0$0$0$0$0$0$0$0$0
Subtotal Current Liabilities$500,000$523,764$523,764$523,764$523,764$523,764$523,764$599,913$587,025$587,025$587,025$564,187$564,187
Total Liabilities and Capital$740,000$739,181$714,597$690,014$665,431$640,847$616,264$626,663$550,025$485,275$419,525$329,937$262,187