Mlm Cleaning Products Business Plan

Thanks for downloading a sample plan from Bplans.com

This sample business plan was created with Business Plan Pro, the best selling business planning software.

A sample plan is a great way to get started, but you can’t just print this out and turn it into the bank. You’re still going to have to put in all your own information and do all of your own financial forecasts.

With Business Plan Pro, you can easily edit this sample and create your own financial tables and graphs. You’ll also be able to:

• View and edit over 500 more sample plans • Save time with linked financial tables (the formulas are built in, so you don’t have to do the calculations!) • Benefit from tons of help, advice, and resources. • Present your plan with confidence, with automatic charts and graphs corresponding to your financial data.

Click here to redeem your $20 Business Plan Pro credit today!

http://www.paloalto.com/business_plan_software/?t=bplansdoc&utm_source=Bplans+List&utm_campaign=FreeSample+Download&utm_medium=email

Cover Page

This sample business plan has been made available to users of Business Plan Pro®, business planning software published by Palo Alto Software, Inc. Names, locations and numbers may have been changed, and substantial portions of the original plan text may have been omitted to preserve confidentiality and proprietary information.

You are welcome to use this plan as a starting point to create your own, but you do not have permission to resell, reproduce, publish, distribute or even copy this plan as it exists here.

Requests for reprints, academic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at [email protected]. For product information visit our website: www.paloalto.com or call: 1-800-229-7526.

Copyright © Palo Alto Software, Inc., 1995-2009 All rights reserved.

Legal Page

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by _________________________ in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to _________________________.

Upon request, this document is to be immediately returned to _________________________.

___________________ Signature

___________________Name (typed or printed)

___________________Date

This is a business plan. It does not imply an offering of securities.

Table of Contents

1.0 Executive Summary......................................................................................................................1Chart: Highlights............................................................................................................................2

1.1 Mission...........................................................................................................................................21.2 Objectives.....................................................................................................................................21.3 Keys to Success..........................................................................................................................2

2.0 Company Summary......................................................................................................................32.1 Start-up Summary.....................................................................................................................3

Table: Start-up Funding..............................................................................................................3Chart: Start-up...............................................................................................................................4Table: Start-up...............................................................................................................................4

2.2 Company Ownership................................................................................................................53.0 Products............................................................................................................................................5

3.1 Business Model...........................................................................................................................64.0 Market Analysis Summary.........................................................................................................6

4.1 Market Segmentation..............................................................................................................7Chart: Market Analysis (Pie)......................................................................................................8Table: Market Analysis................................................................................................................8

4.2 Target Market Segment Strategy........................................................................................84.3 Industry Analysis........................................................................................................................9

4.3.1 Competition and Buying Patterns................................................................................95.0 Strategy and Implementation Summary..............................................................................9

5.1 Competitive Edge....................................................................................................................105.2 Marketing Strategy.................................................................................................................105.3 Sales Strategy...........................................................................................................................10

5.3.1 Sales Forecast...................................................................................................................11Table: Sales Forecast.............................................................................................................11Chart: Sales Monthly..............................................................................................................11Chart: Sales by Year...............................................................................................................12

5.4 Milestones..................................................................................................................................12Table: Milestones........................................................................................................................12Chart: Milestones........................................................................................................................13

6.0 Web Plan Summary....................................................................................................................136.1 Website Marketing Strategy................................................................................................136.2 Development Requirements...............................................................................................13

7.0 Management Summary.............................................................................................................137.1 Personnel Plan..........................................................................................................................14

Table: Personnel..........................................................................................................................148.0 Financial Plan................................................................................................................................14

8.1 Important Assumptions.........................................................................................................14Table: General Assumptions...................................................................................................14

8.2 Break-even Analysis...............................................................................................................14Chart: Break-even Analysis.....................................................................................................15Table: Break-even Analysis.....................................................................................................15

8.3 Projected Profit and Loss......................................................................................................168.3 Projected Profit and Loss......................................................................................................16

Chart: Profit Monthly..................................................................................................................16

Page

Table of Contents

Chart: Profit Yearly.....................................................................................................................16Chart: Gross Margin Monthly..................................................................................................17Chart: Gross Margin Yearly......................................................................................................17Table: Profit and Loss................................................................................................................17

8.4 Projected Cash Flow...............................................................................................................18Table: Cash Flow.........................................................................................................................18Chart: Cash....................................................................................................................................19

8.5 Projected Balance Sheet.......................................................................................................20Table: Balance Sheet.................................................................................................................20

8.6 Business Ratios........................................................................................................................20Table: Ratios.................................................................................................................................20

Table: Sales Forecast...........................................................................................................................1Table: Personnel....................................................................................................................................2Table: Personnel....................................................................................................................................2Table: General Assumptions.............................................................................................................3Table: General Assumptions.............................................................................................................3Table: Profit and Loss..........................................................................................................................4Table: Profit and Loss..........................................................................................................................4Table: Cash Flow...................................................................................................................................5Table: Cash Flow...................................................................................................................................5Table: Balance Sheet...........................................................................................................................7Table: Balance Sheet...........................................................................................................................7

Page

Jay Limited

1.0 Executive Summary

Jay Limited is a start-up organization using the multi-level marketing (MLM) business model to sell environmentally friendly scent products. Jay Limited has been founded by john hammond. The company has been registered as an Illinois LLC.

The Products Jay Limited sells a complete line of non-toxic, environmentally friendly scent supplies for all possible household, office, car uses. Jay Limited is finalizing a contactual agreement with a california scent supply manufacturer for the supply of a complete line of California scent products. Product prices will be quite competitive since Jay Limited is buying direct from the manufacturer. Another feature of this relationship which is of significant value to Jay Limited is the willingness of the manufacturer to allow Jay Limited to sell and distribute in Ghana. Products that will be part of the initial product line include: all purpose soap, bathroom Limiteder, basin/tub and tile Limiteder, detergent, window Limiteder, bleach, laundry liquid and a variety of different air fresheners. Jay Limited is able to offer competitively priced products that are of the highest quality.

The Market Jay Limited will sell products to two customer segments. The first segment are individual consumers who are purchasing the products for personal (household, car, office) use. These individuals are environmentally conscious consumers who are looking for non-toxic scents for their home, car or office. Demographics for this group are younger, politically liberal people who are interested in making an individual contribution to the betterment of our environment.

The second target segment is a select group from within the first segment of individual customers. Some of these individuals will be recruited to become distributors of Jay Limited products. A distributor is a person who sells the Jay Limited products on their own to their own set of customers. This segment is taken from the actual consumers that purchase and use products. This creates a sales force that passionately believes in the products that they sell. The distributors that make up this segment receive a sales commission if they are able to recruit new distributors who then make sales. This is how the MLM business model works. Jay Limited sells to consumers, some of those consumers then become distributors earning revenue for Jay Limited as well as themselves. If these new distributors attract more people to sell, they then make money on their specific sales as well as money on everything that their recruited sales people sell.

1.1 Mission

Jay Limited's mission is the development of a environmentally friendly distribution company that uses grassroots and network marketing techniques to sell the product and make a meaningful contribution to the environment. Jay Limited exists to support its members and to support the environment.

1.2 Objectives

To create a profitable company that sells environmentally friendly scent products. Design an organization that compensates individuals for sales made by other people that

they recruit. Design a more efficient marketing machine that does away with the inefficient traditional

distribution systems.

Page 1

Jay Limited

1.3 Keys to Success

Distribute only quality, environmentally friendly products. Recruit new people to assist in the sales of the products. Build the company on a solid basis of integrity.

2.0 Company Summary

Jay Limited has been formed as an Ghana registered LLC. The company has been founded by john hammond. The company exists to distribute environmentally friendly scent supplies through an efficient, networking distribution system.

2.1 Start-up Summary

Jay Limited has incurred the following expenses for the start-up phases of the organization:

Storage space: This will be used for the storage of product inventory. While Jay Limited could get away with a smaller space such as a closet in Devon's home, he is able to achieve costs breaks by purchasing larger quantities and will take these discounts and place the inventory in storage.

Service provider fees: Jay Limited has incurred both accountant and attorney fees in the set up of the business. The accountant will set up the quickbooks accounting system and the attorney will develop and register the business formation as well as draft some sale agreements for distributors.

Computer system: The computer system will be used for correspondence, accounting purposes as well as to develop marketing and sales information. The system will include a laptop computer, printer, fax/scanner, and a broadband Internet connection. Jay Limited will use Microsoft Office and quickbooks Accounting as their preferred software.

Assorted types of paper and stationery: Personalized with a logo, return addresses, etc. for catalogs, and brochures.

Assorted office furniture and accessories: The office will be located in Devon's house.

Page 2

Jay Limited

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $9,140 Start-up Assets to Fund $40,860 Total Funding Required $50,000

Assets

Non-cash Assets from Start-up $5,000 Cash Requirements from Start-up $35,860 Additional Cash Raised $0 Cash Balance on Starting Date $35,860 Total Assets $40,860

Liabilities and Capital

Liabilities

Current Borrowing $0 Long-term Liabilities $20,000 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $20,000

Capital

Planned Investment

Family & Friends $20,000 D. McGregor $10,000 Additional Investment Requirement $0 Total Planned Investment $30,000

Loss at Start-up (Start-up Expenses) ($9,140)Total Capital $20,860

Total Capital and Liabilities $40,860

Total Funding $50,000

Page 3

Jay Limited

Chart: Start-up

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Expenses Assets Investment Loans

Start-up

Table: Start-up

Start-up

Requirements

Start-up Expenses

Professional service providers $4,000 Paper products $250 Website development $2,000 Storage rental $165 Expensed Equipment - Computer system $2,500 Insurance $75 Rent $150 Total Start-up Expenses $9,140

Start-up Assets

Cash Required $35,860 Other Current Assets $0 Long-term Assets $5,000 Total Assets $40,860

Total Requirements $50,000

2.2 Company Ownership

Jay Limited is solely owned by john hammond. In addition to his own investment john has received an investment from friends and family.

Page 4

Jay Limited

3.0 Products

Jay Limited sells a wide range of environmentally friendly scent products. All products are designed to be effective at fragrances, yet easy and non-toxic on the environment. Jay Limited has contracted with a large national producer of environmentally friendly products to supply products in Ghana. This vendor was chosen because of their quality products as well as their flexibility in offering low minimum orders ($150). The following are the initial products that Jay Limited will offer. As the company grows they will consider adding new items to the product list as demanded by the market:

All purpose soap: A concentrated formula for washing walls, floors, cabinets, and all other washable surfaces. Orange oil and sodium citrate based.

Bathroom Limiteder: Quickly and easily removes dirt and grime, Limiteding and deodorizing the entire house. An all vegetable-based Limiteding agent.

Basin, tub & tile Limiteder: Effective at removing soap scum from all surfaces. Citric acid, glycolic acid and orange oil.

Dishwashing detergent: Easy on hands, tough on Limiteding. A mild coconut oil based detergent.

Window Limiteder: A streak free Limiteder. Citrus based, either orange of lemon.

Oxygen bleach Limiteder: A wonderful Limiteder that works on sinks and bathtubs. Made from sodium percarbonate, calcium carbonate, soda ash, and sodium sulfate.

Laundry liquid: Concentrated, biodegradable, natural Limiteder for laundry. This is a vegetable-based surfactant detergent.

Air fresheners: Natural, healthful, eco-mists containing essential oils, emulsifiers, and water. Available scents include, wild cherry, vanilla and hazelnut, citrus, lavender, and natural fruit.

Environmental Limiteding products were chosen for a several reasons:

1. It allows the participating individuals to make a positive contribution to the protection of the environment.

2. The environmentally friendly Limiteding industry is in its infancy in terms of growth. It is on the verge of market wide acceptance as more and more people are participating in activities that take into account environmental impacts.

3. The MLM and environmental Limiteding products is a perfect combination as it combines emotional, and economic factors in a selling opportunity to friends and other network contacts. The seller has an emotional reason for selling the products. They also have an economic incentive because if they find additional people to help sell the product then they get additional commissions on product the new people sell.

Because Jay Limited buys private label goods direct from the manufacturer, even after paying out the sales commissions, their products are competitively priced. This is achieved through the private label procurement as well as the more efficient, grassroots system of distribution.

Page 5

Jay Limited

3.1 Business Model

Jay Limited will use a multi-level marketing approach (MLM) to the sale of these products. An MLM approach is a grassroots networking based approach where products are sold direct from an individual (distributor) to the end consumer. The distributor receives the products from Jay Limited who buys direct from the manufacturer. When a distributor is able to recruit a new person to sell these products (new distributor) then the "recruiter" receives a sales commission for all of the sales made by person #2. If person #2 is able to recruit another distributor (person #3) then both the original distributor and distributor #2 receive commissions from sales generated by person #3.

The MLM system in essence leverages peoples relationships and networking skills. It creates the ability to be your own boss, making sales pitches to friends and associates on your time schedule. It creates a common man, grassroots implementation of a real world distribution channel.

This arrangement differs significantly from pyramid schemes which are illegal in the United States. A pyramid scheme is a system where individuals sell products and get commissions from the recruitment of new people to also sell the products. The more people they recruit, the more money they make. Pyramid schemes are illegal and are broken up when they are found to exist. The regulatory analysis that is applied to determine if the business is a MLM or a pyramid scheme is as follows:

1. Is the compensation merely for introduction of additional participants into the program;2. Or is the compensation related to the sale of goods.

If regulators believe the business is more like #1 it will be found illegal, against public policy, and shut down.

As it stands, Jay Limited is clearly a MLM venture as participants get compensated for the products others sell, not for the specific recruitment of individuals.

4.0 Market Analysis Summary

Jay Limited has identified two distinct type of customers. The first customer type is the end user of the Limiteding products. These are people with an environmental consciousness in need of appropriate Limiteding supplies.

The second customer group is comprised of a select number of people from the first group with an interest in becoming distributors of the Limiteding products. The following sections will provide more detailed information regarding these two groups.

Page 6

Jay Limited

4.1 Market Segmentation

Jay Limited has identified two groups of customers who are the most attractive marketing prospects.

1. Consumers of environmentally friendly Limiteding products. 2. Members of the consumer group who are interested in being product distributors.

Individual consumersThese are people who are looking for products that will reduce their individual impact on the environment. Limiteding products are an excellent product category to concentrate on since they can be particularly abrasive to the environment. Some demographic information for this group is as follows:

Ages 23-48 Median household income of $41,000 22% of the people commute by bicycle or use mass transportation 97% of the people are active recyclers The majority routinely consider what consequences their choices or actions will have on the

environment. 41% are vegetarian 93% are registered Democrats

DistributorsA distributor is an individual consumer who is interested in also selling the products. In the world of MLM, the sellers are called distributors because they are essentially doing the activities that a distributor would do in a more traditional distribution channel. These individuals have a passion for the product and the time to sell the product to their friends.

89% of the people will take on the role of distributor in addition to their already existing part or full time employment.

They see the chance of selling Jay Limited as an opportunity to do something that they are passionate about (positive environmental actions) as well as a means of making supplemental income.

87% of the distributors will have the goal of signing up more distributors and establish an additional source of revenue.

Page 7

Jay Limited

Chart: Market Analysis (Pie)

Individuals

Distributors

Market Analysis (Pie)

Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Individuals 6% 2,455 2,602 2,758 2,923 3,098 5.99% Distributors 5% 2,455 2,578 2,707 2,842 2,984 5.00% Total 5.50% 4,910 5,180 5,465 5,765 6,082 5.50%

4.2 Target Market Segment Strategy

The two enumerated customer segments are particularly attractive because they represent people who are most likely to be consumers of environmentally friendly Limiteding supplies. The individual consumers have a sensitive perspective toward the environment and are looking for a way that they can have a positive impact on the environment. Recognizing that so many traditional Limiteding agents are toxic for the environment, it then becomes relatively easy for the individuals to make a positive contribution. This attitude follows the slogan "think globally, act locally." Buying these products allows them to do their part.

The distributors are individual consumers who have an even stronger conviction and belief in the products as well as the time to sell the products and find potential people to recruit into the distribution effort. To be a distributor does not require a huge sacrifice of time, the majority of distributors will have full-time jobs in addition to marketing Jay Limited. This makes the job of distributor all that more attractive, the person is able to balance their already existing job with another source of revenue and personal satisfaction.

Page 8

Jay Limited

4.3 Industry Analysis

Jay Limited arguably participates in two industries, the product industry of environmentally friendly Limiteding supplies and the business model industry of MLM. The environmentally friendly Limiteding supply industry is small but just now beginning to develop momentum. These supplies are typically sold in health food type stores. These stores generally sell a smaller variety than what Jay Limited sells, they have just the basics. Some larger retailers such as Safeway and Alberston's are beginning to carry one or two products, typically an all purpose Limiteder and a washing machine liquid. As the market demands more outlets for these products it is likely that more retailers will begin to sell environmentally friendly Limiteding products.

Jay Limited also participates within the multi-level marketing industry. However Jay Limited does not, per se, compete within this industry. Currently, market research has yet to find an MLM company that sells environmentally friendly Limiteding products. The largest and most well known MLM company is Amway which sells a wide range of products. Amway is different from Jay Limited in the sense that the majority of products that they sell are branded rather than private label products. While that is beneficial for Amway in that they are able to use the manufacturer's marketing efforts to assist in sales, Amway is often not that cost competitive.

4.3.1 Competition and Buying Patterns

Jay Limited faces competition from several sources:

1. Local and national health food stores: These stores typically have a small selection of Limiteding products. National competitors include:

o Whole Foodso Wild Oats

2. Large supermarkets: These competitors have a very limited selection

3. Mail order/Internet sales: These are remote retail companies that sell a range of products. More often than not these companies sell national brands as opposed to private label goods. Competitors include:

o mothernature.como thegoodearth.com

5.0 Strategy and Implementation Summary

Jay Limited will leverage their multi-pronged competitive edge of a quality product, competitive pricing, and a grassroots, non-corporate business model. These three advantages will resonate with the target market.

Jay Limited will have a marketing strategy that will focus on the green or environmentally friendly aspect of their products, the fact that profits go to support a green, grassroots organization instead of a large corporation, and lastly, the opportunity for the consumer to take a more active role with the company with the possibility for an additional source of income.

Jay Limited's sales strategy will focus on the high quality products offered and the ability to offer 100% customer satisfaction, ensuring a happy customer constituency.

Page 9

Jay Limited

5.1 Competitive Edge

Jay Limited's has identified a multi faceted competitive edge that will assist them in their fast market penetration.

Quality products: All of the products sold by Jay Limited are manufactured by a leading company, made for Jay Limited to their specifications. This allows Jay Limited to offer a very competitive product that meets the needs of the market.

Competitive pricing: Jay Limited is able to offer great pricing because they are purchasing the products directly from the manufacturer. While Jay Limited pays out sale commissions to the various layers of distributors, this grassroots distribution model is still more efficient than the traditional distribution channel, keeping prices competitive.

Grassroots, non-corporate business model: Instead of profits going to a large corporation, the profits are dispersed among the user distributors that assist Jay Limited. This arrangement is quite rare, and attractive for the targeted customer segment.

5.2 Marketing Strategy

The marketing strategy is based on the need to generate visibility for Jay Limited as a company that offers the following advantages:

A wide selection of green products. Profits that go to environmentally friendly people, not a large corporation. The opportunity for users to become distributors, realizing an additional source of revenue.

The marketing strategy is one based on grassroots networking. This strategy is most effective when the person selling the products is passionate about what they are selling. This is specifically why environmentally friendly Limiteding products were chosen, it is easy for people who care about the environment to be passionate about the products.

Networking is the key to increased visibility and distribution. Networking will take place in a number of venues including: the traditional work environment, social organizations (such as the Lions Club), religious organizations, and other gatherings/situations that bring people together. The distributor sets up a meeting with the prospective person (someone they generally already know and have some sort of relationship with), shows them the product catalog and provides them with samples. Once the consumer has had a chance to use the products and been impressed by them, another meeting can be scheduled to determine if the person is interested in making a purchase, and/or is interested in an additional source of income selling these environmentally friendly products.

Page 10

Jay Limited

5.3 Sales Strategy

Jay Limited's sales strategy will emphasize their high quality products and 100% customer satisfaction. By combining these two benefits, consumers are able to try the available products risk free. This provides them with the opportunity to test them out and determine if they are as good as they claim to be. Once the consumer has recognized the outstanding quality that Jay Limited offers, the option of becoming a distributor becomes all the more attractive. If the consumer truly believes in the product, then it becomes that much easier to convince them that there is an excellent opportunity available that allows them to sell a product that they believe in, obtain an additional source of revenue, and make a positive impact on the environment. All of this will be done on a grassroots, one-to-one level.

5.3.1 Sales Forecast

Jay Limited will be tracking both the sales to the individual consumers and the revenue received through commissions from sales from the various distributors. The forecast indicates that initially the bulk of revenue will be from sales to the individual customers. As time progresses and more distributors are secured, the amount of revenue from the distributors will increase. Jay Limited has adopted a reasonably conservative sales forecast. Please review the following table and charts for a graphical representation of sales.

Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3

Sales

Individuals $15,205 $29,650 $54,852 Distributors $4,706 $9,176 $16,975 Total Sales $19,911 $38,826 $71,827

Direct Cost of Sales Year 1 Year 2 Year 3Individuals $4,562 $8,895 $16,456 Distributors $1,412 $2,753 $5,093 Subtotal Direct Cost of Sales $5,973 $11,648 $21,548

Page 11

Jay Limited

Chart: Sales Monthly

Individuals

Distributors

$0

$400

$800

$1,200

$1,600

$2,000

$2,400

$2,800

$3,200

$3,600

$4,000

Month 1 Month 2

Month 3 Month 4

Month 5 Month 6

Month 7 Month 8

Month 9 Month 10

Month 11 Month 12

Sales Monthly

Chart: Sales by Year

Individuals

Distributors

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000


Sales by Year

Page 12

Jay Limited

5.4 Milestones

Jay Limiteding has identified several milestones which will be used as goals for the organization. Milestones were chosen to be as quantifiable as possible to aid in achievement. The following table details the specific milestones and provides a time frame for the accomplishment of each one.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager DepartmentBusiness plan completion 1/1/2003 10/1/2003 $0 Devon Business

DevelopmentContract finalization with manufacturer

2/1/2004 2/15/2004 $0 Devon Business Development

First sales customer 2/15/2004 3/1/2004 $0 Devon SalesEstablishment of first distributor 3/1/2004 5/1/2004 $0 Devon SalesSignificant recurring distributor revenue

5/1/2004 5/30/2005 $0 Devon Accounting

Profitability 5/30/2005 9/1/2005 $0 Devon SalesTotals $0

Chart: Milestones

Q1 `03 Q2 Q3 Q4 Q1 `04 Q2 Q3 Q4 Q1 `05 Q2 Q3

Profitability

Significant recurring distributor revenue

Establishment of first distributor

First sales customer

Contract finalization with manufacturer

Business plan completion

Milestones

Page 13

Jay Limited

6.0 Web Plan Summary

A website site will be created to offer viewers an extensive product catalog as well as information regarding the company and the availability of distributor options. The site will contain extensive information, however it will encourage viewers to contact Jay Limited for more information as Devon recognizes that he can be far more effective in sales if he as an opportunity to chat with the interested party. The website will be periodically updated with new information.

6.1 Website Marketing Strategy

The website will be marketed in two ways:

Submission of the site to various search engines to ensure that people looking for the site using a search engine such as Yahoo! will easily find www.JayLimited.com.

All printed material such as brochures, advertising, catalogs, price sheets, packaging, and all product labels will have the URL prominently displayed. This will be especially useful because it allows customers who may have only one product the opportunity to view the entire product selection through the convenience of the Internet.

6.2 Development Requirements

The website will be developed and periodically updated by a University of Chicago Computer Science student.

7.0 Management Summary

Jay Limited has been founded and will be run by Devon McGregor.

He has an undergraduate degree in business from Loyola University, and one year of post graduate course work in biology and pharmaceuticals.

Work experience includes eight years with Eli Lilly as a pharmaceutical sales representative, earning many sales leader awards.

Seeking a position in sales that offered the satisfaction of interpersonal interaction, a positive impact on society, and a minimal amount of travel, Devon began researching the multi-level marketing business model. After rejecting participation in other existing MLM businesses, he decided to establish his own organization and chose environmentally safe Limiteding supplies as his product line.

7.1 Personnel Plan

Devon McGregor will be the only employee of Jay Limited. Other individuals involved will be distributors and compensated in the form of sales commissions. The payment of the sales commission is recognized as a cost of sales under the sales forecast.

Page 14

Jay Limited

Table: Personnel

Personnel Plan


Devon $20,000 $24,000 $24,000 Other $0 $0 $0 Total People 1 1 1

Total Payroll $20,000 $24,000 $24,000

8.0 Financial Plan

The following section will outline important financial information.

8.1 Important Assumptions

The following table details important Financial Assumptions.

Table: General Assumptions

General Assumptions


Plan Month 1 2 3Current Interest Rate 10.00% 10.00% 10.00% Long-term Interest Rate 10.00% 10.00% 10.00% Tax Rate 30.00% 30.00% 30.00% Other 0 0 0

8.2 Break-even Analysis

The Break-even Analysis indicates that approximately $3,500 is needed in monthly revenue to reach the break-even point.

Page 15

Jay Limited

Chart: Break-even Analysis

$0

$500

$1,000

$1,500

$2,000

($500)

($1,000)

($1,500)

($2,000)

$0$600

$1,200$1,800

$2,400$3,000

$3,600$4,200

$4,800$5,400

$6,000$6,600

Break-even Analysis

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $3,542

Assumptions:

Average Percent Variable Cost 30% Estimated Monthly Fixed Cost $2,480

Page 16

Jay Limited

8.3 Projected Profit and Loss

The following table and charts illustrate the Projected Profit and Loss.

Chart: Profit Monthly

($3,000)

($2,700)

($2,400)

($2,100)

($1,800)

($1,500)

($1,200)

($900)

($600)

($300)

$0

Month 1 Month 2

Month 3 Month 4

Month 5 Month 6

Month 7 Month 8

Month 9 Month 10

Month 11 Month 12

Profit Monthly

Page 17

Jay Limited

Chart: Profit Yearly

$0

$3,000

$6,000

$9,000

$12,000

($3,000)

($6,000)

($9,000)

($12,000)

($15,000)


Profit Yearly

Chart: Gross Margin Monthly

$0

$300

$600

$900

$1,200

$1,500

$1,800

$2,100

$2,400

$2,700

$3,000

Month 1 Month 2

Month 3 Month 4

Month 5 Month 6

Month 7 Month 8

Month 9 Month 10

Month 11 Month 12

Gross Margin Monthly

Page 18

Jay Limited

Chart: Gross Margin Yearly

$0

$10,000

$20,000

$30,000

$40,000

$50,000


Gross Margin Yearly

Page 19

Jay Limited

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $19,911 $38,826 $71,827 Direct Cost of Sales $5,973 $11,648 $21,548 Other Costs of Goods $0 $0 $0 Total Cost of Sales $5,973 $11,648 $21,548

Gross Margin $13,937 $27,178 $50,279 Gross Margin % 70.00% 70.00% 70.00%

Expenses

Payroll $20,000 $24,000 $24,000 Sales and Marketing and Other Expenses $2,400 $0 $0 Depreciation $996 $996 $996 Rent $1,800 $1,800 $1,800 Utilities $660 $660 $660 Insurance $900 $900 $900 Payroll Taxes $3,000 $3,600 $3,600

Total Operating Expenses $29,756 $31,956 $31,956

Profit Before Interest and Taxes ($15,819) ($4,778) $18,323 EBITDA ($14,823) ($3,782) $19,319 Interest Expense $1,903 $1,730 $1,550 Taxes Incurred $0 $0 $5,032

Net Profit ($17,721) ($6,508) $11,741 Net Profit/Sales -89.00% -16.76% 16.35%

8.4 Projected Cash Flow

The following table and chart presents the Projected Cash Flow.

Page 20

Jay Limited

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $4,978 $9,706 $17,957 Cash from Receivables $9,199 $23,672 $44,367 Subtotal Cash from Operations $14,177 $33,379 $62,324

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 $14,177 $33,379 $62,324

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $20,000 $24,000 $24,000 Bill Payments $14,499 $20,803 $33,878 Subtotal Spent on Operations $34,499 $44,803 $57,878

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 $1,800 $1,800 $1,800 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $36,299 $46,603 $59,678

Net Cash Flow ($22,122) ($13,225) $2,646 Cash Balance $13,738 $514 $3,160

Page 21

Jay Limited

Chart: Cash

Net Cash Flow

Cash Balance

$0

$4,000

$8,000

$12,000

$16,000

$20,000

$24,000

$28,000

$32,000

$36,000

Month 1 Month 2

Month 3 Month 4

Month 5 Month 6

Month 7 Month 8

Month 9 Month 10

Month 11 Month 12

Cash

Page 22

Jay Limited

8.5 Projected Balance Sheet

The following table shows the Projected Balance Sheet.

Table: Balance Sheet

Pro Forma Balance Sheet


Assets

Current Assets

Cash $13,738 $514 $3,160 Accounts Receivable $5,734 $11,181 $20,685 Other Current Assets $0 $0 $0 Total Current Assets $19,472 $11,694 $23,844

Long-term Assets

Long-term Assets $5,000 $5,000 $5,000 Accumulated Depreciation $996 $1,992 $2,988 Total Long-term Assets $4,004 $3,008 $2,012 Total Assets $23,476 $14,702 $25,856

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $2,137 $1,672 $2,884 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $2,137 $1,672 $2,884

Long-term Liabilities $18,200 $16,400 $14,600 Total Liabilities $20,337 $18,072 $17,484

Paid-in Capital $30,000 $30,000 $30,000 Retained Earnings ($9,140) ($26,861) ($33,369)Earnings ($17,721) ($6,508) $11,741 Total Capital $3,139 ($3,369) $8,372 Total Liabilities and Capital $23,476 $14,702 $25,856

Net Worth $3,139 ($3,369) $8,372

8.6 Business Ratios

The following table details specific Business Ratios for Jay Limited. While Jay Limited sells Limiteding products, the organizational structure of multi-level merchandising falls within the Standard Industrial Classification code system under Nonstore Retailers - Direct Selling Establishments. We most closely match SIC industry class: Party-plan merchandising - 5963.9907

Page 23

Jay Limited

Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth n.a. 95.00% 85.00% 2.88%

Percent of Total Assets

Accounts Receivable 24.42% 76.05% 80.00% 18.38% Other Current Assets 0.00% 0.00% 0.00% 22.11% Total Current Assets 82.94% 79.54% 92.22% 78.80% Long-term Assets 17.06% 20.46% 7.78% 21.20% Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 9.10% 11.37% 11.15% 34.69% Long-term Liabilities 77.53% 111.55% 56.47% 13.42% Total Liabilities 86.63% 122.92% 67.62% 48.11% Net Worth 13.37% -22.92% 32.38% 51.89%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00% Gross Margin 70.00% 70.00% 70.00% 38.83% Selling, General & Administrative Expenses 158.62% 38.79% 30.20% 25.49% Advertising Expenses 0.00% 0.00% 0.00% 1.97% Profit Before Interest and Taxes -79.45% -12.31% 25.51% 2.02%

Main Ratios

Current 9.11 7.00 8.27 2.01 Quick 9.11 7.00 8.27 0.79 Total Debt to Total Assets 86.63% 122.92% 67.62% 55.49% Pre-tax Return on Net Worth -564.56% 193.17% 200.35% 3.89% Pre-tax Return on Assets -75.49% -44.26% 64.87% 8.75%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -89.00% -16.76% 16.35% n.aReturn on Equity -564.56% 0.00% 140.24% n.a

Activity Ratios

Accounts Receivable Turnover 2.60 2.60 2.60 n.aCollection Days 54 106 108 n.aAccounts Payable Turnover 7.78 12.17 12.17 n.aPayment Days 27 34 24 n.aTotal Asset Turnover 0.85 2.64 2.78 n.a

Debt Ratios

Debt to Net Worth 6.48 0.00 2.09 n.aCurrent Liab. to Liab. 0.11 0.09 0.16 n.a

Liquidity Ratios

Net Working Capital $17,335 $10,023 $20,960 n.aInterest Coverage -8.31 -2.76 11.82 n.a

Additional Ratios

Assets to Sales 1.18 0.38 0.36 n.aCurrent Debt/Total Assets 9% 11% 11% n.aAcid Test 6.43 0.31 1.10 n.aSales/Net Worth 6.34 0.00 8.58 n.aDividend Payout 0.00 0.00 0.00 n.a

Page 24

Appendix

Table: Sales Forecast

Sales Forecast

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Sales

Individuals 0% $0 $0 $0 $500 $625 $850 $1,200 $1,650 $2,100 $2,400 $2,650 $3,230 Distributors 0% $0 $0 $0 $0 $200 $272 $384 $528 $672 $768 $848 $1,034 Total Sales $0 $0 $0 $500 $825 $1,122 $1,584 $2,178 $2,772 $3,168 $3,498 $4,264

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Individuals $0 $0 $0 $150 $188 $255 $360 $495 $630 $720 $795 $969

Distributors $0 $0 $0 $0 $60 $82 $115 $158 $202 $230 $254 $310

Subtotal Direct Cost of Sales $0 $0 $0 $150 $248 $337 $475 $653 $832 $950 $1,049 $1,279

Page 1

Appendix

Table: Personnel

Personnel Plan


Devon 0% $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total People 0 0 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

Page 2

Appendix

Table: General Assumptions

General Assumptions


Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0

Page 3

Appendix

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $0 $0 $0 $500 $825 $1,122 $1,584 $2,178 $2,772 $3,168 $3,498 $4,264

Direct Cost of Sales $0 $0 $0 $150 $248 $337 $475 $653 $832 $950 $1,049 $1,279

Other Costs of Goods $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $0 $0 $0 $150 $248 $337 $475 $653 $832 $950 $1,049 $1,279

Gross Margin $0 $0 $0 $350 $578 $785 $1,109 $1,525 $1,940 $2,218 $2,449 $2,985

Gross Margin % 0.00% 0.00% 0.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00%

Expenses

Payroll $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Sales and Marketing and Other Expenses

$200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Depreciation $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83

Rent $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150

Utilities $55 $55 $55 $55 $55 $55 $55 $55 $55 $55 $55 $55

Insurance 15% $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 Payroll Taxes 15% $0 $0 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Total Operating Expenses $563 $563 $2,863 $2,863 $2,863 $2,863 $2,863 $2,863 $2,863 $2,863 $2,863 $2,863

Profit Before Interest and Taxes ($563) ($563) ($2,863) ($2,513) ($2,286) ($2,078) ($1,754) ($1,338) ($923) ($645) ($414) $122

EBITDA ($480) ($480) ($2,780) ($2,430) ($2,203) ($1,995) ($1,671) ($1,255) ($840) ($562) ($331) $205

Interest Expense $165 $164 $163 $162 $160 $159 $158 $157 $155 $154 $153 $152

Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit ($728) ($727) ($3,026) ($2,675) ($2,446) ($2,237) ($1,912) ($1,495) ($1,078) ($800) ($567) ($30)

Net Profit/Sales 0.00% 0.00% 0.00% -534.93% -296.47% -199.36% -120.71% -68.64% -38.89% -25.24% -16.22% -0.71%

Page 4

Appendix

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $0 $0 $0 $125 $206 $281 $396 $545 $693 $792 $875 $1,066

Cash from Receivables $0 $0 $0 $0 $13 $383 $626 $853 $1,203 $1,648 $2,089 $2,384

Subtotal Cash from Operations $0 $0 $0 $125 $219 $664 $1,022 $1,398 $1,896 $2,440 $2,963 $3,450

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $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 $125 $219 $664 $1,022 $1,398 $1,896 $2,440 $2,963 $3,450

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations

Cash Spending $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Bill Payments $22 $645 $654 $948 $1,095 $1,191 $1,280 $1,419 $1,596 $1,771 $1,888 $1,990

Subtotal Spent on Operations $22 $645 $2,654 $2,948 $3,095 $3,191 $3,280 $3,419 $3,596 $3,771 $3,888 $3,990

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 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150

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

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $172 $795 $2,804 $3,098 $3,245 $3,341 $3,430 $3,569 $3,746 $3,921 $4,038 $4,140

Net Cash Flow ($172) ($795) ($2,804) ($2,973) ($3,026) ($2,677) ($2,408) ($2,171) ($1,850) ($1,481) ($1,074) ($690)

Page 5

Appendix

Cash Balance $35,688 $34,893 $32,089 $29,116 $26,090 $23,413 $21,005 $18,833 $16,983 $15,502 $14,428 $13,738

Page 6

Appendix

Table: Balance Sheet

Pro Forma Balance Sheet


Assets Starting Balances

Current Assets

Cash $35,860 $35,688 $34,893 $32,089 $29,116 $26,090 $23,413 $21,005 $18,833 $16,983 $15,502 $14,428 $13,738 Accounts Receivable $0 $0 $0 $0 $375 $981 $1,440 $2,001 $2,782 $3,658 $4,386 $4,920 $5,734 Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Current Assets $35,860 $35,688 $34,893 $32,089 $29,491 $27,071 $24,852 $23,006 $21,615 $20,641 $19,888 $19,348 $19,472

Long-term Assets

Long-term Assets $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Accumulated Depreciation $0 $83 $166 $249 $332 $415 $498 $581 $664 $747 $830 $913 $996 Total Long-term Assets $5,000 $4,917 $4,834 $4,751 $4,668 $4,585 $4,502 $4,419 $4,336 $4,253 $4,170 $4,087 $4,004 Total Assets $40,860 $40,605 $39,727 $36,840 $34,159 $31,656 $29,354 $27,425 $25,951 $24,894 $24,058 $23,435 $23,476

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities

Accounts Payable $0 $624 $623 $911 $1,055 $1,148 $1,233 $1,366 $1,537 $1,708 $1,822 $1,916 $2,137 Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Current Liabilities $0 $624 $623 $911 $1,055 $1,148 $1,233 $1,366 $1,537 $1,708 $1,822 $1,916 $2,137

Long-term Liabilities $20,000 $19,850 $19,700 $19,550 $19,400 $19,250 $19,100 $18,950 $18,800 $18,650 $18,500 $18,350 $18,200 Total Liabilities $20,000 $20,474 $20,323 $20,461 $20,455 $20,398 $20,333 $20,316 $20,337 $20,358 $20,322 $20,266 $20,337

Paid-in Capital $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 Retained Earnings ($9,140) ($9,140) ($9,140) ($9,140) ($9,140) ($9,140) ($9,140) ($9,140) ($9,140) ($9,140) ($9,140) ($9,140) ($9,140)Earnings $0 ($728) ($1,456) ($4,482) ($7,156) ($9,602) ($11,839) ($13,751) ($15,246) ($16,324) ($17,124) ($17,691) ($17,721)Total Capital $20,860 $20,132 $19,404 $16,379 $13,704 $11,258 $9,021 $7,109 $5,614 $4,536 $3,736 $3,169 $3,139 Total Liabilities and Capital $40,860 $40,605 $39,727 $36,840 $34,159 $31,656 $29,354 $27,425 $25,951 $24,894 $24,058 $23,435 $23,476

Net Worth $20,860 $20,132 $19,404 $16,379 $13,704 $11,258 $9,021 $7,109 $5,614 $4,536 $3,736 $3,169 $3,139

Page 7

Mlm Cleaning Products Business Plan

Documents

Transcript of Mlm Cleaning Products Business Plan