Marketing Service Business Plan

BUSINESS PLAN Business Plan Prepared By Ms. Cynthia Truitt

2345 Market Lane Metro, State A 00000 800-333-3333

Date Prepared October 200A

Business Plan Table of Contents

EXECUTIVE SUMMARY

5

MANAGEMENT AND ORGANIZATION

7 7 7 7 8 8 8 8 9

Management team Compensation and ownership Board of directors/advisory council Infrastructure Contracts and franchise agreements Insurance Employee stock option plan and other incentives Organization charts

SERVICE PLAN Purpose of the service Unique features Stage of development Future research and development Trademarks, Copyrights Gover nment approvals Service limitations / service liability Related products/services and spin-offs P ro d u c t i o n Facilities Suppliers Environmental factors

10 10 10 11 11 11 11 11 12 12 12 12

MARKETING PLAN Industry profile Current size Growth potential Geographic location Industry trends Seasonality factors Profit characteristics Distribution channels Basis of competition Competition profile Customer profile Target market profile Pricing profile Gross margin on services Break-even analysis

13 13 13 13 14 14 14 14 15 16 17 17 18 18 18

2

Business Plan Table of Contents Market penetration Distribution channels Sales representatives / Direct-sales force Direct mail / telemarketing Advertising and promotion Packaging and labeling Service and warranties Trade shows Future markets

19 19 19 19 20 21 21 21 21

OPERATING AND CONTROL SYSTEMS Administrative policies, procedures, and controls Receiving orders Billing the customers Paying the suppliers Collecting the accounts receivable Reporting to management Staff development Inventory control Handling warranties and re t u rn s Monitoring the company budgets Security systems Documents and paper flow Planning chart Product / Service development Manufacturing Financial re q u i re m e n t s Marketing flow chart Market penetration Management and infrastructure Risk analysis Salvaging assets

22 22 22 22 22 22 22 23 23 23 23 23 24 24 24 24 24 24 24 25 25

GROWTH PLAN New of ferings to market Capital re q u i re m e n t s Personnel re q u i re m e n t s Exit strategy

26 26 26 26

3

A Firm Impression Business Plan Table of Contents

FINANCIAL PLAN Sales Projections Income Projections Cash Requirements Sources of Financing Projected Financial Statements Projected Cash Flow Statements Projected Year-End Income Statements Projected Year-End Balance Sheet Ratio Analysis

SUPPORTING DOCUMENTS

27 27 27 27

Appendix

Historical Balance Sheet Sales Projections Operating Expenses Projections Capital Budget Projection Equity & Debt Worksheet

4

Business Plan Executive Summary

Venture History A Firm Impression is a public relations and marketing firm that specializes in digital communications. We help our clients compete in the electronic era.

Venture Description We develop customized online directories (media, association and employee) and electronic communications, including electronic press kits, CD ROMs and multimedia presentations. We believe companies must leverage technology in their marketing communications to compete in today’s Web-driven world. A Firm Impression is entering its second year in business and ranks No. 19 on the Metro Business Journal’s Top 25 Pubic Relations Firms. We are staffed and equipped to manage larger projects more profitably, accurately and efficiently in the months ahead.

Venture Organization Our management team consists of President/CEO Ms. Owner and finance and quality control/process experts who preside on A Firm Impression’s Advisory Board. Ms. Owner is a seasoned and wellrespected marketing professional who adapts and uses new technologies with creative messages to the client’s benefit. The company operates as an LLC.

Venture Market The industry is growing and changing at a rapid rate. New technologies offer opportunities and challenges to traditional businesses. Keeping pace with this vibrant environment is vitally important to compete in a fast-moving marketplace. Business owners seek qualified professionals to help them position their firms to their ultimate and timely advantage. Our target market is growing businesses with annual sales of $5 to $25 million that have marketing budgets of $100,000 or greater. We primarily will target businesses in the telecommunications, energy (utility) industries. We also will target companies who support womenowned business enterprises. Our competition consists of a dozen smaller local agencies, most notably Thomasville Marketing Agency, Market Advantage, QRS Group, Inc. and Corporate Imagery. These companies have four to 10 employees and gross revenues ranging from $200,000 to $1 million.

5

Business Plan Executive Summary

Venture Operations A Firm Impression’s business objectives include: ◆ Growing its annual billings to $300,000 by 200C; $450,000 by 200D; and $650,000 by 200E. ◆ Becoming recognized as a top woman-owned business in Metro by 200E. ◆ Building a highly profitable agency that delivers excellence backed by sound business processes.

Venture Financing We are seeking a line of credit in the amount of $50,000. These funds will be used to cover cash shortfalls as we grow and develop a wider client base. We project needing to draw down approximately half of the $50,000 in the first half of 200B and repay it by year-end. The owner provided start-up capital in 200A.

6

Business Plan Management and Organization Plan

Management team The president and CEO, Ms. Cynthia Truitt, is in charge of day-to-day operations including financing, sales, management, and client retention. Ms. Truitt has 25 years of public relations, marketing and advertising experience (see attached resume Appendix X). She also has owned and operated two prior companies, Truitt Consulting, a sole proprietorship, and Best Foot Forward, where she served as Vice President. Mr. Ted Powell serves as manager of public relations. He oversees daily client work while Owner concentrates 30 percent to 50 percent of her time on new business.

Compensation and ownership The agency is a limited liability company, is registered in StateA and State B and is doing business as A Firm Impression. Ms. Truitt is 100 percent owner of A Firm Impression. Though she has been taking draws against the company, she will receive a $20K annual salary beginning in 200B.

Advisory Council A Firm Impression will begin holding quarterly advisory meetings beginning in 200B. The two-person council will consists of: Person

Expertise

Phone

Current/Past

Compensation

Sally Jones

Financial

000-0000

President of BSQ Advisors, former CFO of Horton & Duff

$100 quarterly per diem and dinner

000-000

President -Advantage Systems, for mer Editor for PR Digest

Same

Donald Holt P ro c e s s / Quality C o n t ro l

7

Business Plan Management and Organization Plan

Infrastructure A Firm Impression has established good relationships with outside counsel, including the firms and persons identified below. Firm Role Representative Compensation Quality Input, Inc.

Technical Support

Fran Patterson

$85 per hour

Able & Willing

A t t o rn e y

Robert Able

$125 per hour

MCT, Inc.

Accountant

Judy Cole

$60-$80 per hour

Safety Net, Inc.

Insurance/Financial Planning

Herbert Hart

Set premium rates at 1% commission

First Metro Bank

Banker

Earl Grant

N/A

Reliable Trust

Liability Insurance

Therese Zimmer

$200 annually

Contracts and franchise agreements A Firm Impression holds a one-year office lease with First Realty. Rent is $975 per month, for an annual commitment of $11,700. Also, one vehicle is leased for the company through GM Corporation. The lease is $308 per month or $3,598 annually.

Insurance Currently health insurance is provided for Ms. Truitt and Mr. Powell. The annual budget for this insurance is $3,500. A Firm Impression also carries a business insurance policy, which covers the following: ◆ ◆ ◆ ◆ ◆

Actual loss Business liability Medical payments Products-completed operations General aggregate

$10,000 $1,000,000 $5,000 $2,000,000 $2,000,000

Employee stock option plan and other incentives In time, a profit-sharing plan will be developed for the production staff. Right now, Ms. Truitt generates new business. As we grow, if sales representatives are employed, they will be on a commission program. 8

Business Plan Management and Organization Plan

Organization charts Ms. Cynthia Truitt is the president of A Firm Impression. Ms. Truitt has successfully owned and operated two prior companies before launching A Firm Impression and she is well respected in the communications industry. She holds several specialized accreditations in the public relations/communications industry and earned her master’s degree in media communications from StateA University. Mr. Ted Powell is the public relations manager. Mr. Powell formerly was an account manager at QRS Group, Inc. Manager earned a bachelor's degree in journalism from the University of StateB. Ms. Betty Bolton is A Firm Impression’s coordinator. She manages the office and its books as well as serving as account coordinator on projects. Ms. Bolton has assisted several agencies with their office management and bookkeeping. Prior to supporting agencies, Ms. Bolton was the office manager at Automated Data Processing. Mr. Tom Field has 12 years’ experience in art direction and has a graphic design degree from Metro Art Institute. He has won several local advertising awards. He is not an employee of A Firm Impression but works as a subcontractor.

M r. Tr u i t t President

Ms. Bolton Coordinator/Office Manager

M r. Power Public Relations Manager

9

M r. Field Art Director

Business Plan Service Plan

Purpose of the service We strive to provide corporations who seek growth and/or exposure strategies and programs to accelerate their success. A Firm Impression helps companies to achieve their business goals by gaining a solid understanding of their industry and by developing marketing solutions to distinguish their businesses in the eyes of influential audiences. To position clients for optimum success, we provide the following services: ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆

Copywriting and Design Consulting Employee Communications Marketing Communications Public Relations Media Relations Product Launches Website Development Sales Material Development

Unique features Clients are afraid to invest their marketing dollars when the outcome can’t be measured or guaranteed. A Firm Impression delivers quantifiable results and measurable returns on investments, unlike other public relations firms that deliver intangibles such as improving relationships, images and identities. Our average ROI is 8:1. We determine and implement strategies and tactics to support pre-determined business objectives. We measure outcomes in terms that CEOs and CFOs understand (attendance, exposure, ticket sales, leads, staying within budget, etc.) We also tie our clients to their key audiences through electronic solutions, including online employee directories and electronic communication media such as Websites, CD-ROMs, electronic postcards and newsletters.

Stage of development A Firm Impression is entering phase II of its business plan with an aggressive sales push. We are becoming known in the community and need to increase our client base. A consistent, sassy advertising and marketing effort will begin in January. Speaking appearances to professional groups as well as newspaper column submissions will supplement the campaign.

10

Business Plan Service Plan

Future research and development A Firm Impression will conduct an informal year-end customer satisfaction survey. The survey will rank our services based on responsiveness, accuracy, quality, results delivered and the value added to the overall marketing effort of each company we serve.

Trademarks, Copyrights Our name and logo is a registered trademark. We routinely include the copyright notice on our written, artistic, photographic, graphic materials, and Web sites.

Government approvals We have not yet had to address this issue. We, of course, recognize that we must be truthful in our advertising and not mislead the consumer. Some specialized industries are regulated in their advertising and PR efforts. If we work in those industries, we will research the government restrictions and act accordingly.

Service limitations / service liability A limitation of offering companies database-driven employee directories is that the company is dependent on A Firm Impression during the development and training stages. This dependence actually is a marketing advantage for A Firm Impression. If the database becomes corrupt and the data is lost, however, A Firm Impression could be held liable for the rebuilding of this information. While we strive for measurable results, we provide a service that in many instances cannot be guaranteed. We must be careful in what we promise and be certain to provide accurate and efficient service.

Related products / services spin-offs After a corporate database is constructed of employee information, several additional products can be produced: ◆ ◆ ◆ ◆

Employee name badges (with security features) Parking passes Reminder systems for service anniversaries and training compliance Intranet sites of employee listings and corporate information/organizational charts

11

Business Plan Service Plan

Production Internal staff will handle copywriting, proofing and production work. High-end graphic design, photography and website development will be hired out to subcontractors. All directory publishing work, except digital photography, will be handled internally.

Facilities A Firm Impression’s current office of 1,000 square feet is more than adequate for a staff of three and can easily accommodate up to five personnel with the right phone system upgrade and investments in professional cubicles. A Firm Impression invested in four Macintosh computer earlier this year and forecasts the need for an additional workstation and computer each year through 200E (when an entire office upgrade will be needed.)

Suppliers A Firm Impression is actively building a network of subcontractors. We have relationships with editors, proofreaders, writers and media-relations specialists. We will continue to build our pool of production personnel, graphic designers and Website developers so that we have a variety of professionals on hand.

Environmental factors A Firm Impression promotes the use of recycled paper and soy ink. Currently the office does not have a recycling initiative but will develop one. When we reprint our letterhead and envelopes the first of the year, we will use recycled paper.

12

Business Plan Marketing Plan

Industry profile C u r rent size The advertising, public relations and marketing industry is an $80 billion industry. Based on billings, Metro ranks No. 23. Nearly $700 million advertising dollars flow through Metro via the agencies that report income to Advertising Age magazine. The New Day Agency dominates the agency business in Metro with approximately $250 million in annual billings. G rowth potential Ten years ago the public relations industry consisted of approximately 4,400 firms and 345,000 employees. The Bureau of Labor Statistics has identified public relations as one of the fastest growing industries with an annual growth rate of 3.5 percent and employment levels from 716,000 six years ago to a projected 1,049,000 in 2005. Although all job categories within the public relations industry are forecasted to grow into the next century, many positions stand to be eliminated due to the increase in technology. The occupational category predicted to be most severely affected by this change is typist/word processors.1 ABC International continues to lead the big public relations agencies in growth. ABC earned a 25 percent increase in business in last year. In Metro, Donner & Kartz dominates the public relations market with $10 million in billings and a staff of more than 100. Geographic Locations New York, Chicago and Los Angeles are the three leading cities for advertising work. In this region, Noble ranks No. 37; Colstead No. 18; Metro No. 23; and Big Valley No. 29. Metro is a very competitive market with an onslaught of small and large agencies. A Firm Impression intends to target smaller markets with less competition such as Vanburg, Elton, Mortin and Noble.

1 Encyclopedia of American Industries, Second Edition

13

Business Plan Marketing Plan Industry Tre n d s The annual Thomas L. Harris & Co. Public Relations Agency Survey showed that media relations remained the most important capability of PR firms (97 percent). The second most frequent use of PR firms was for special events (93 percent), followed by international communications (92 percent), graphic design (89 percent) and community relations (88 percent). The use of the Internet continues to grow. This transition to interactive communications requires a change in thinking and offers new opportunities for this industry.2 Seasonality factors Seasonality is not generally an issue for advertising and PR providers. However, most corporations follow suit in (1) producing annual reports during third and fourth quarters of the year, (2) revamping marketing and media plans during fourth quarter, (3) gearing up for holiday sales during standard retail times. Product launches and announcements occur year round. P rofit characteristics “The standard profit for an agency used to be 20 percent pre-tax – now some agencies are working with 15 percent, some with 10 percent. Clients’ margins are squeezed, and there has been a decline in agency margin, too, no doubt about it.” 3 Public relations firms are emphasizing flexible billing to attract and keep clients.4 In traditional billing, ad agencies charged 15 percent commissions on ads placed within the media and a 17.65 percent mark-up on outside purchases. However, agencies are moving to straight hourly rates, fees, retainers, even tradeouts.5 Distribution channels Though the concept of distribution channels doesn’t apply to PR and marketing services, our industry does depend on referrals from competing agencies that are overbooked or unqualified to serve a client. Another tactic to increase sales (although less mainstream) is to pay referrers a 10% bird-dog fee for projects that come to fruition.

2 Encyclopedia of American Industries, Second Edition 3 Pittsburgh Business Times, v13 n4 p13 (2) 4 Denver Business Jour nal, v46 n4 p5B (1) 5 Denver Business Jour nal, v46 n4 p5B (1)

14

Business Plan Marketing Plan Basis of competition Competition is forcing accountability for big and small agencies. Customers are demanding more while holding agencies firm to their bids. Expectations vary, but generally the bigger the client and budget, the higher the expectations for service, turnaround and quality. Price tends to be secondary criteria for larger clients. Smaller clients (startups and firms that have never worked with an agency) tend to suffer from sticker shock. In other words, they need to be educated on the time and energy required for specific projects in order to be comfortable with the associated fee. Small or large companies demand status reports on lengthy projects including ROI results on applicable projects and a firm understanding of costs that weren’t originally outlined in estimates. To compete, an agency benefits from having a knowledgeable estimator as well as a charismatic sales force to continually generate new projects.

15

Business Plan Marketing Plan

Competition profile The Metro area supports nearly 200 small and large advertising, marketing and public relations agencies. The top 25 agencies gross from $6 million to more than $200 million. The top public relations agency, Donner & Kartz, grosses $10 million in local billings. A Firm Impression’s current competitors have annual billings of $200,000 to $350,000. The competitive analysis chart below summarizes key factors.

Agency

Annual Billings

Employees Price Range

Strengths

Weaknesses

Thomasville Marketing Agency

$330,000

6

$100 +

Owner’s reputation, connections, sales ability

Fragmented delivery, no office yet

Market Advantage

$200,000

18

$100 +

A niche, strong sales ability

More add focuses than full service PR

QRS Group, Inc.

$300,000

9

$90–$100 Good creative Staf f turnover niche

Corporate Imagery

$220,000

4

$100 +

A Firm Impression

$180,000

2

$80–$100 Savvy, Persistent, good image and sales ability, strong support network

16

Several key clients

Less established creative not s t ro n g Manpower, lack of internal graphics, i n e ff i c i e n t systems

Business Plan Marketing Plan

Customer profile A Firm Impression’s ideal customer is a privately or publicly held company with annual sales of $5-$25 million and a minimum marketing budget of $100,000. We prefer to serve companies that are experienced working with agencies and marketing firms. We also target companies with diversity initiatives that support woman-owned business enterprises. Though our firm serves a variety of customers, we specialize in serving energy and healthcare companies in the Midwest. The majority of our clients are in the greater Metro area, but we also serve clients in the High County area and Noble. Our largest client is a subsidiary of an $18 billion telecommunications company. Our second largest client is a $1 billion utility, with 2,000 employees and a marketing budget of $1 million. Our smallest clients include attorneys, nonprofit organizations, storage facilities and financial planners who do not budget for marketing, but rather work reactively to the marketplace.

Target market profile Ta rget Market 1 Publicly held companies in Vanburg, Elton, Noble and Mortin with annual sales of $5-$25 million in the energy, telecommunications and high-tech industries (getting SIC codes). Marketing Approach/Costs: Direct mail will be sent to regional companies fitting the above criteria. Twelve companies within driving distance of A Firm Impression will be hand selected for the premier promotion (yet to be developed). These companies will be heavily solicited with a high-end campaign. Companies under consideration are Veritech, Primo, and Glow Industries among others. Ta rget Market 2 Companies in the greater Metro area with 1,000 or more employees. More specifically we will approach companies with human resource leaders who would buy into the development of an electronically produced employee directory with photos that can be posted on the Intranet. Marketing Approach/Costs: Schedule face-to-face sales presentations with the human resource decision-maker. Show the finished product we did for Teknival of Metro along with a letter of recommendation from the Chief Operating Officer, Stan Lipton.

17

Business Plan Marketing Plan

Pricing profile A Firm Impression charges a flat rate of $80 per hour, which is higher than area freelance rates but lower than area agency rates. To cover our growing overhead (technology, personnel, new phone systems, increased rent), A Firm Impression will establish a fee range of $65 - $100 per hour to begin the first of the year. The adjusted rates will benefit clients who pay too much for administrative support and will benefit A Firm Impression.

Gross margin on services Service

GR Price

Outsourced Price

Margin

Industry Price

Copywriting

$80

$25-$60

32%

$60-$150

Design

$100

$65-$80

10-15%

$60-$125

Consulting

$80

N/A

100%

$60-$150

Media Relations

$80

$25-$60

15-30%

$60-$100

Production

$80

$45

$25

$40-$75

Account Service

$80

$30

$0-26% based on current vender

$60-$125

Break-even analysis We know that we have to do around $100,000 of revenue to cover our overhead including staff salaries (this does not include subcontracting). We watch the margins listed above to make sure that each project is bid to cover any subcontracting and leave us a reasonable margin. If we are not averaging at least $10,000 a month after subcontracting fees then we know we are going to suffer a loss.

18

Business Plan Marketing Plan

Market penetration Distribution Channel As a consulting service, A Firm Impression will not leverage standard retail distribution channels. However, it will build awareness of its services by assigning a staff member to become active in separate professional and civic associations. Sales re p re s e n t a t i v e s / d i rect sales forc e Ms. Truitt will continue to generate new business for A Firm Impression through (1) customer referrals, (2) direct mail and promotional efforts to energy and healthcare companies, and (3) by participating in select Request for Proposal/Qualifications processes. D i rect mail / telemarketing A Firm Impression builds a mailing list from the Metro Library’s online copy of Sorkins to target regional companies in the telecommunications, energy, healthcare and high-tech industries. A Firm Impression will continue to mail to, build on and update its internal database of 250 companies. Audience targeted

Geography

Number Design Mailed to Cost

Printing and Paper

List Purchase

Postage

Marketing Directors of Targeted Industries in Region

Vanburg Noble

300-500

$100 i n t e rn a l

$300

N/A

$350 for all three test mailings

Human Rsources Manageres of Companies with 500–1000 employees

Metro Noble

TBD

$100 i n t e rn a l

$300

N/A

TBD

D re a m Company Promo

Metro Vanburg Noble

10-hand selected

$200 design and speciality items

N/A

N/A

19

Business Plan Marketing Plan

Advertising and promotion Month

Activity

Cost

December

Send 65 select executives completed directories and invitations to discuss doing one for their division

$200 (postage)

January

Mail direct mail to targeted businesses in Vanburg, Metro and Noble (900 pieces). If a three-percent response rate isn’t achieved, materials will be revised.

Costs detailed in previous section $1,350

Each week throughout the year, send introduction letters to Metro’s Convention and Visitor’s Bureau convention leads (develop boiler plate letter)

Nominal postage costs

February

Submit editorial and ads to the Metro Business News for inclusion in Marketing & PR Tab

$650

March

Place advertising in HR World magazine to build employee directory business (purchase quarterly ads)

$1,450

April

Update Website and send electronic postcard to clientsand prospects to check it out.

$500

Submit materials for inclusion on Metro Biz Journal Top 25 Listing of Metro PR firms

N/A

May

Host client appreciation happy hour in the Town Market

$600

June

Place quarter page ad in PR & Marketing Resource Guide published by Metro Biz Journal; also write and submit article on when and why you need PR.

$800

July

Submit editorial in Metro Biz Journal "How to Choose an Ad or PR Agency" special tab

N/A

Drop 2 – direct mail to 3 markets

$750

Place editorial in the Metro Business Quarterly on "Your Media Plan Reflects You" [send reprints to clients and prospects]

$50

August

September Announce new clients and contracts in Vince Hugo’s Gazette column October

$75

TBD

November Send clients thank you gifts before Thanksgiving

$700

December

$500

Send clients, venders, and prospects holiday card 20

Business Plan Marketing Plan

Packaging and labeling A Firm Impression builds name recognition and its brand around an Impressionist artwork theme (Monet, etc.) We will continue with conservative, upscale packaging as we develop sales sheets that will complement our existing materials. See attached samples.

Service and warranties A Firm Impression does not provide any guarantees on its public relations and marketing work, as it is a business of controlling the uncontrollable. We do assure clients, however, that we will stick to budgets and timelines unless the client chooses to deviate from the original plan. We also take responsibility for any mistakes we make. If an error occurs in a printed piece and it was our mistake, we will pay to reprint the piece. If an error occurs that a customer has signed off on and missed, we often will split the cost with the customer to retain their business.

Trade shows We will not incorporate trade shows into our marketing effort at this time. Our goal is to respond quickly and effectively to leads we generate. A firm our size needs more controlled exposure at this stage of development.

Future markets Many opportunities exist in this fast-paced world of marketing. Several under consideration are listed below: ◆ Building an agency with a focus on quick turn around—like the Kinko’s of the agency world. ◆ Developing a two-tiered service approach. Tier 1 is standard marketing and public relations; Tier 2 is intelligence gathering and market monitoring: A Firm Impression would provide clients market forecasting and trend reports along with recommendations of potential marketing opportunities. ◆ Environmental PR ◆ Internet Marketing

21

Business Plan Operating and Control Systems

Administrative policies, procedures, and controls Receiving orders A potential client makes initial contact with Sales Representative. When a firm request for services is received, Sales Rep will schedule a meeting with the client. The Account Manager and possibly the Art Director will be present. Contracts or proposals will be prepared by the Account Manager and submitted to the client (via Sales Rep) within two weeks of this meeting. (Deadlines may vary and will be agreed to at the meeting.) Billing the customers The Coordinator will gather the hours, expenses and any other billable items from all employees and vendors each week. On a monthly basis, bills will be prepared for each client. Bills are to reach each client by the15th of the month. Paying the suppliers The Coordinator will pay bills in the first and third weeks of each month. As bills arrive they will be filed in our reminder system, so that each vendor is paid within 30 days of billing. Collecting the accounts receivable Clients are given 30 days to pay our bills. After the 30 days, we assess a 5% carrying fee. Our system includes a computerized calendar that prompts the Coordinator to send out a reminder notice on day 32. On day 45, the Coordinator places a reminder phone call. By day 50, if payment has not been received, the Owner places a call. On day 60 a collection notice is sent and all work on the project is stopped. Reporting to management We are still small and all employees and subcontractors ultimately report to the Owner. However, on a project basis, reporting may be to the Manager or Coordinator. Weekly meetings are held to ensure open communications. At this meeting, each member of the company is expected to provide a written update of progress on pertinent projects. Staff development As cash flow improves, we plan to implement a budget for staff to attend select seminars and trade shows. This program should be formalized by 200D. Until then, we make an effort to read the trade journals and copy interesting items for each other. We take advantage of software training offered by our vendors and make a concerted effort to network in our community.

22

Business Plan Operating and Control Systems Inventory control We are a service provider and don’t have an inventory tracking system.. Handling warranties and re t u rn s Our product is not something that can be returned. We do stand behind our work. If through our mistake or oversight, a client does not see a reasonable return on their marketing effort, we will redo or supplement the marketing effort at our expense. Monitoring the company budgets The Coordinator does the bookkeeping. By the 7th of each month, the prior month’s financial statements are submitted to the Owner for review. Any line item that is over 5% off projection, or has been trending in an unfavorable direction for over 2 months will be examined in detail. An outside accountant will be asked to review the books and offer advice every quarter. Security systems We are not overly concerned with physical security as we have no inventory and our equipment is minimal. Our main security concern is our creative output and client information. As such, we have a password system for each client’s computer files.

Documents and paper flow A backup file (both for computer files and paper files) is kept by the Coordinator. All correspondence with a client is funneled through the Manager. Contracts and proposals all go through the Owner. At the weekly meeting, current client files are checked and updated. As we grow and have more personnel to deal with, a more formal paperwork system will be put into place.

23

Business Plan Operating and Control Systems

Planning chart Product / service development Although we are a service provider and not a manufacturer, we do produce some tangible output (CD-ROMs, brochures, press releases etc.) For each client project we have a team meeting and develop a project timeline. Within that timeline, duties are assigned in house or to a subcontractor. Some projects take only a matter of days (such as a press release) while some may take up to a year (a fullfledged marketing campaign). The project manager is responsible for keeping the project on schedule and weekly meetings aid in that process. Manufacturing We are not a manufacturer. Our output is at first creative and conceptual. It is difficult if not impossible to systemize the creative process other than to require that it occur on time. The physical production of appropriate end product such as a brochure or a CD-ROM is outsourced. Financial re q u i re m e n t s Once we have our line of credit in place, we should be solvent for the next couple of years. The initial draw on that line of credit is projected for January of 200B. If we should land an exceptionally large contract, we would need to join forces with several subcontractors since we are not ready to increase our staff significantly at this time. In some cases, we may require a substantial retainer to begin a project, so that we can acquire the needed resources to perform the contract. Marketing flow chart Our marketing materials have been developed. Ms. Truitt is responsible for marketing activities with the help of the Coordinator as needed. Refer to the Marketing section under Advertising and Promotions for a timeline of marketing efforts. Market penetration Refer to Marketing section under Advertising and Promotions for timeline. Management and infrastructure The Owner and Manager are in place. We plan to bring an Art Director in house in January of 200D; the subcontractor will serve as art director until that time. Another Project Manager may be brought in house in 200D or 200E. Until the projects require a second Manager full time for nine consecutive months, we will subcontract additional project management as needed. We will consult with our accountant on a quarterly basis and as needed beyond that. Our attorney will be consulted as needed. These two functions will remain as outside consultants indefinitely. 24

Business Plan Operating and Control Systems

Risk analysis A Firm Impression faces the same business risk as any enterprise, such as a loss of important clients or a downturn in the economy. We are already carefully protected against our sales projections proving too ambitious. We are a lean staff with very little overhead. Our relationships with our subcontractors are strong and we continue to network and develop new contacts and skill sets. In a slump, we are prepared to offer ourselves as subcontractors to larger firms. These relationships and non-compete agreements are already being formulated. Another risk we face is a marketing campaign fraught with errors and ineffective in its delivery. Our defense against this is vigilance. We check and double-check all our work and facts. Clients must sign off on every piece of print work and copy for any project. If we do make an error that costs our client business, we will draw on our line of credit to produce a marketing campaign for that client free of charge. As technology continues to race forward and prices fluctuate in the marketplace, we will continue to scan our environment for the most innovative, cost-effective ways to market. If printing becomes too costly for some of our clients, we will explore using the Internet’s capabilities for them. One avenue we are exploring for our clients is matching them up with complementary businesses to share marketing costs. If we decide to branch out into Market Intelligence work, it would be easy for us to identify synergistic businesses that do not compete, but are after the same target market. We could then approach two to five companies with a win-win cooperative marketing campaign.

Salvaging assets As a service firm whose main asset is our creativity, we do not own a lot of salvageable assets. We keep our accounts receivable to a minimum. Our computer equipment and furniture could be sold, but the value would be so diminished as to render them negligible. The losses we face are mostly personal. Our only outstanding debt is to the owner and to the bank that holds our line of credit. As we assume the Ms. Truitt will have to sign personally on that note, the bank does not face huge risk and will probably not look to the assets of the business for repayment.

25

Business Plan Growth Plan

New offerings to market We are exploring the possibilities of adding a division that would be research oriented—Market Intelligence and Forecasting. The formation of this division might be accomplished through merging with another firm. Another attractive growth opportunity for us is in Internet marketing. Traditional advertising (banners) is not working effectively in this medium. Our challenge is to stay attuned to the technology and be ready to adapt and create innovative ways of marketing on the web for our clients.

Capital requirements The company was started with an investment and a loan from the Owner. Its immediate funding needs are for a $50,000 line of credit. Future funding may be needed if we decide to open an auxiliary company or gear up to target a larger market.

Personnel requirements In order to increase our profitability, we need to bring more art design work in house. In 200C we will hire a part-time designer. In 200D we will add a full-time designer as well as retaining the part-time help. By 200D or 200E we will also need another account manager and additional office support personnel.

Exit strategy When A Firm Impression is well established in the community and is being routinely solicited by new clients based on existing ad campaigns rather than contact with Ms. Truitt, then we can consider an exit strategy. An outright sale is an option, however, a merger with another public relations firm is a more likely scenario. Our sales will need to be in at least the $3 million range to make us attractive to the kind of firm with which this owner would want to join forces.

26

Business Plan Financial Plan

Sales Projections Sales are projected as follows: 200B $ 268,000 200C $ 402,000 200D $ 653,250 In our first full year of operations sales were close to $200,000. The 200B forecast is achievable if each staff member bills one-half of his or her time at the assigned hourly rates. We are becoming well known in town and our contacts are multiplying while our existing clients are utilizing us for increasingly larger budget projects. Print brokering numbers are not included, which provide an additional $10,000 of annual income or act as a cushion to make up for slower periods. Our relationships with our subcontractors are strong and provide us the ability to take on large projects without increasing our overhead. Established firms of our projected staff size commonly have sales up to $1 million annually.

Income Projections Net income projections are as follows: 200B $ 50,186 200C $ 99,788 200D $ 179,075 We posted a net loss for the year 200A of ($7,888). This was our start-up year and the loss was expected. A Firm Impression can easily net the $50,186 projected 200B profit by adjusting our design prices in accordance with those we subcontract. We will achieve greater margins by hiring a part-time designer and bringing more projects in house. Our projections show us hiring part-time design help in 200C and additional full-time design help in 200D. Subcontracting costs as a percentage of sales will decrease under this plan. The overhead costs associated with this level of additional staffing are minimal.

Cash Requirements The only cash required is to cover cash flows. $50,000 should suffice.

Sources of Financing A Firm Impression is seeking a Line of Credit at 10% interest to cover cash shortfalls.

27

A Firm Impression Cash Flow Statement 200B Cash In Cash Sales Collections from Accounts Receivables Equity Received Loans Received Other Cash In (receipts from other assets) Other Cash In (interest, royalties etc.) Total Cash In Total Cash Available Cash Out Inventory Expenditures Inventory/Raw Material (Cash) Inventory/Raw Material (Paid on Account) Production Expenses Operating Expenses Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Computer & Internet Equipment & Furniture Other Paid on Account Non-operating Costs Capital Purchases Estimated Income Tax Payments Interest Payments Loan Principal Payments Owner's Draw Other Cash Out Total Cash Out Monthly Cash Flow (cash in - cash out) Beginning Cash Balance Ending Cash Balance

Pre Start-up

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

TOTAL

4,612

2,750 3,390 12,000 18,140 22,752

2,750 8,140 7,000 17,890 26,729

7,500 7,950 3,000 18,450 31,658

5,250 22,290 27,540 37,296

5,250 15,540 20,790 34,888

7,500 15,450 22,950 35,725

5,250 22,290 27,540 34,482

5,250 15,540 20,790 27,809

7,500 15,450 22,950 34,296

5,250 22,290 27,540 36,444

5,250 15,540 20,790 40,746

7,500 15,450 22,950 46,583

67,000 179,320 22,000 268,320 272,932

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,350 120 20 125 35 300 4,345

650 120 20 125 35 300 4,345

1,450 120 20 125 35 300 11,850

120 20 500 125 35 300 8,295

120 20 600 125 35 300 8,295

800 120 20 125 35 300 11,850

750 120 20 125 35 300 8,295

120 20 50 125 35 300 8,295

120 20 75 125 35 300 11,850

120 20 75 125 35 300 8,295

120 20 700 125 35 300 8,295

120 20 500 125 35 300 11,850

5,000 1,440 240 2,500 1,500 420 3,600 105,860

-

5,166 179 275 975 320 366 145 -

5,166 179 275 975 320 366 145 250 -

5,166 179 275 300 975 320 366 145 -

5,166 179 275 975 320 366 145 500 -

5,166 179 275 975 320 366 145 -

5,166 179 275 300 975 320 366 145 -

5,166 179 275 975 320 366 145 1,300 -

5,166 179 275 975 320 366 145 -

5,166 179 275 300 975 320 366 145 350 -

5,166 179 275 975 320 366 145 -

5,166 179 275 975 320 366 145 -

5,166 179 275 300 975 320 366 145 -

61,992 2,148 3,300 1,200 11,700 3,840 4,392 1,740 2,400 -

-

192 13,913

250 13,521

275 21,901

643 234 5,000 23,198

192 5,000 22,113

4,641 167 3,000 28,784

92 9,000 27,463

92 16,463

4,698 92 25,391

92 16,488

92 17,113

5,073 92 10,000 35,841

15,056 1,862 22,000 10,000 262,190

4,612 4,612

4,227 4,612 8,839

4,369 8,839 13,208

(3,451) 13,208 9,756

4,342 9,756 14,098

(1,323) 14,098 12,775

(5,834) 12,775 6,942

77 6,942 7,019

4,327 7,019 11,346

(2,441) 11,346 8,904

11,052 8,904 19,956

3,677 19,956 23,633

(12,891) 23,633 10,742

6,130 4,612 10,742

-

A Firm Impression Cash Flow Statement 200C Cash In Cash Sales Collections from Accounts Receivables Equity Received Loans Received Other Cash In (receipts from other assets) Other Cash In (interest, royalties etc.) Total Cash In Total Cash Available

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

TOTAL

4,125 22,335 26,460 37,202

4,125 12,210 16,335 33,684

11,250 11,925 23,175 37,868

7,875 33,435 41,310 49,189

7,875 23,310 31,185 53,600

11,250 23,175 34,425 64,121

7,875 33,435 41,310 67,540

7,875 23,310 31,185 73,243

11,250 23,175 34,425 84,644

7,875 33,435 41,310 88,726

7,875 23,310 31,185 96,848

11,250 23,175 34,425 107,209

100,500 286,230 386,730 397,472

-

-

-

-

-

-

-

-

-

-

-

-

-

2,160 124 21 129 36 309 5,775

1,040 124 21 129 36 309 5,775

2,320 124 21 129 36 309 15,750

124 21 800 129 36 309 11,025

124 21 960 129 36 309 11,025

1,280 124 21 129 36 309 15,750

1,200 124 21 129 36 309 11,025

124 21 80 129 36 309 11,025

124 21 120 129 36 309 15,750

124 21 120 129 36 309 11,025

124 21 1,120 129 36 309 11,025

124 21 800 129 36 309 15,750

8,000 1,483 247 4,000 1,545 433 3,708 140,700

8,500 298 283 1,004 700 366 149 -

8,500 298 283 1,004 700 366 149 258 -

8,500 298 283 1,004 700 366 149 -

8,500 298 283 1,004 700 366 149 515 -

8,500 298 283 1,004 700 366 149 -

8,500 298 283 1,004 700 366 149 -

8,500 298 283 1,004 700 366 149 1,339 -

8,500 298 283 1,004 700 366 149 -

8,500 298 283 1,004 700 366 149 361 -

8,500 298 283 1,004 700 366 149 -

8,500 298 283 1,004 700 366 149 -

8,500 298 283 1,004 700 366 149 -

102,000 3,570 3,399 12,051 8,400 4,392 1,792 2,472 -

-

-

-

-

-

23,903

8,943 37,891

25,482

23,023

9,080 37,228

23,063

24,063

9,397 20,000 57,866

29,936 20,000 348,129

7,282 22,415 29,696

(3,466) 29,696 26,230

15,828 26,230 42,058

8,162 42,058 50,219

(2,803) 50,219 47,416

18,247 47,416 65,663

7,122 65,663 72,784

(23,441) 72,784 49,343

38,601 10,742 49,343

Cash Out Inventory Expenditures Inventory/Raw Material (Cash) Inventory/Raw Material (Paid on Account) Production Expenses Operating Expenses Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Computer & Internet Equipment & Furniture Other Paid on Account Non-operating Costs Capital Purchases Estimated Income Tax Payments Interest Payments Loan Principal Payments Owner's Draw Other Cash Out Total Cash Out

-

-

-

-

-

-

19,853

18,991

29,988

2,516 26,775

Monthly Cash Flow (cash in - cash out) Beginning Cash Balance Ending Cash Balance

6,607 10,742 17,349

(2,656) 17,349 14,693

(6,813) 14,693 7,879

14,535 7,879 22,415

-

A Firm Impression Cash Flow Statement 200D Cash In Cash Sales Collections from Accounts Receivables Equity Received Loans Received Other Cash In (receipts from other assets) Other Cash In (interest, royalties etc.) Total Cash In Total Cash Available

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

TOTAL

6,703 33,482 40,185 89,528

6,703 19,841 26,544 82,382

18,281 19,378 37,659 85,406

12,797 54,332 67,129 108,395

12,797 37,879 50,676 117,793

18,281 37,659 55,941 134,130

12,797 54,332 67,129 142,514

12,797 37,879 50,676 154,317

18,281 37,659 55,941 171,585

12,797 54,332 67,129 181,199

12,797 37,879 50,676 196,136

18,281 37,659 55,941 212,214

163,313 462,311 625,624 674,967

-

-

-

-

-

-

-

-

-

-

-

-

-

3,510 127 21 133 37 318 5,899

1,690 127 21 133 37 318 5,899

3,770 127 21 133 37 318 16,088

127 21 1,300 133 37 318 11,261

127 21 1,560 133 37 318 11,261

2,080 127 21 133 37 318 16,088

1,950 127 21 133 37 318 11,261

127 21 130 133 37 318 11,261

127 21 195 133 37 318 16,088

127 21 195 133 37 318 11,261

127 21 1,820 133 37 318 11,261

127 21 1,300 133 37 318 16,088

13,000 1,528 255 6,500 1,591 446 3,819 143,715

15,333 537 5,500 1,034 721 366 154 -

15,333 537 5,500 1,034 721 1,000 1,500 366 154 265 -

15,333 537 5,500 1,034 721 366 154 -

15,333 537 5,500 1,034 721 366 154 530 -

15,333 537 5,500 1,034 721 1,000 1,500 366 154 -

15,333 537 5,500 1,034 721 366 154 -

15,333 537 5,500 1,034 721 366 154 1,379 -

15,333 537 5,500 1,034 721 3,000 366 154 -

15,333 537 5,500 1,034 721 366 154 371 -

15,333 537 5,500 1,034 721 366 154 -

15,333 537 5,500 1,034 721 1,000 1,500 366 154 -

15,333 537 5,500 1,034 721 366 154 -

184,000 6,440 66,000 12,413 8,652 3,000 7,500 4,392 1,846 2,546 -

-

-

-

-

-

39,603

16,296 58,745

38,872

38,673

16,579 57,515

35,738

39,863

16,942 30,000 88,612

53,723 30,000 551,365

11,073 67,117 78,190

(2,804) 78,190 75,385

28,257 75,385 103,642

12,003 103,642 115,644

(1,574) 115,644 114,070

31,391 114,070 145,461

10,813 145,461 156,273

(32,671) 156,273 123,602

74,259 49,343 123,602

Cash Out Inventory Expenditures Inventory/Raw Material (Cash) Inventory/Raw Material (Paid on Account) Production Expenses Operating Expenses Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Computer & Internet Equipment & Furniture Other Paid on Account Non-operating Costs Capital Purchases Estimated Income Tax Payments Interest Payments Loan Principal Payments Owner's Draw Other Cash Out Total Cash Out

-

-

-

-

-

-

33,690

34,636

44,139

3,905 41,279

Monthly Cash Flow (cash in - cash out) Beginning Cash Balance Ending Cash Balance

6,495 49,343 55,838

(8,091) 55,838 47,747

(6,480) 47,747 41,267

25,850 41,267 67,117

-

A Firm Impression Year-End Income Statement (Projected) Net Sales (less returns & allowances) Cost of Goods Sold Gross Margin Operating Expenses Advertising Bad Debt Expense Bank Charges Depreciation & Amortization Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Computer & Internet Equipment & Furniture Other Total Operating Expenses Operating Income

$

$

200D 653,250 653,250

8,000 4,020 1,483 247 4,000 1,545 433 3,708 140,700

13,000 6,533 1,528 255 6,500 1,591 446 3,819 143,715

$

61,992 2,148 3,300 1,200 11,700 3,840 4,392 1,740 2,400 215,952

$

102,000 3,570 3,399 12,051 8,400 4,392 1,792 2,472 302,212

$

184,000 6,440 66,000 12,413 8,652 3,000 7,500 4,392 1,846 2,546 474,175

$

52,048

$

99,788

$

179,075

1,862 $

Income Taxes (if C Corp) Net Income

$

200C 402,000 402,000

5,000 2,680 1,440 240 2,500 1,500 420 3,600 105,860

Interest Expense Other Income (interest, royalties, etc.) Income Before Taxes

200B 268,000 268,000

50,186

$

$

50,186

99,788

$

$

99,788

179,075 -

$

179,075

A Firm Impression Year-End Balance Sheet (Projected) 200B

200C

200D

Assets Current Assets Cash & Equivalents Accounts Receivable Inventory Security Deposits Other Current Assets Total Current Assets

$

10,742 22,500 33,242

$

49,343 33,750 83,093

Fixed Assets Property, Plant & Equipment Less: Accumulated Depreciation Other Non-Current Assets Total Non-Current Assets

$

-

Total Assets

$

33,242

$

-

Long-term Liabilities Loans Mortgages Other Non-Current Liabilities Total Non-Current Liabilities Total Liabilities

Liabilities Current Liabilities Accounts Payable Line of Credit Other Current Liabilities Total Current Liabilities

$

123,602 54,844 178,446

$

-

$

-

$

83,093

$

178,446

$

-

$

-

$

11,000 11,000

$

11,000 11,000

$

11,000 11,000

$

11,000

$

11,000

$

11,000

$

5,000 42,298 (25,056) 22,242

$

5,000 142,085 (74,992) 72,093

$

5,000 321,161 (158,715) 167,446

$

33,242

$

83,093

$

178,446

Equity Equity Investments Retained Earnings Less: Owner's & Investor's Draws Total Equity

Total Liabilities and Equity

A Firm Impression Financial Ratios 200B

200C

200D

Profitability Ratios Gross Margin

Gross Income Net Sales

100.00%

100.00%

100.00%

Operating Income Net Sales

19.42%

24.82%

27.41%

Net Margin

Net Income Net Sales

18.73%

24.82%

27.41%

Return on Assets (ROA)

Net Income Total Assets

150.97%

120.09%

100.35%

Return on Equity (ROE)

Net Income Shareholders' Equity

225.64%

138.41%

106.95%

Operating Margin

Liquidity Ratios Current Ratio

Quick Ratio

Total Current Assets Total Current Liabilities

#DIV/0!

#DIV/0!

#DIV/0!

Current Assets - Inventory Current Liabilities

#DIV/0!

#DIV/0!

#DIV/0!

Risk Ratios Debt Ratio

Debt to Equity

Total Liabilities Total Assets

0.33

0.13

0.06

Total Liabilities Shareholders' Equity

0.49

0.15

0.07

Efficiency Ratios Inventory Turnover

Days Sales Outstanding (DSO)

Investment Turnover Ratio

Cost of Goods Sold Inventory

#DIV/0!

#DIV/0!

#DIV/0!

Accounts Receivable Net Sales/365

30.64

30.64

30.64

Net Sales Total Assets

8.06

4.84

3.66

Business Plan Supporting Documents

Appendix

Appendix

HISTORICAL BALANCE SHEET A Firm Impression 12/31/200/B Assets Current Assets Cash & Equivalents Accounts Receivable Inventory Security Deposits Other Current Assets Total Current Assets Fixed Assets Property, Plant & Equipment Computer Equipment Equipment/Machinery Furniture & Fixtures Vehicles Leasehold Improvements Building Land Less: Accumulated Depreciation (Do not enter a negative number) Other Non-current Assets Total Non-current Assets

Total Assets

Liabilities Current Liabilities Accounts Payable Line of Credit Other Current Liabilities Total Current Liabilities Long-term Liabilities Loans Real Estate Loans Other Non-current Liabilities Total Long-term Liabilities Total Liabilities

$

4,612 3,500 8,112

$

-

$

8,112

$

-

$

11,000 11,000

$

11,000

Equity Owners Equity Retained Earnings (Enter a negative number for a loss) Less: Owner's & Investor's Draws (Not for use by C Corporations)

5,000 (7,888) -

Total Equity

$

(2,888)

Total Liabilities and Equity

$

8,112

Appendix

YEAR 1 YEAR 1 YEAR 1 YEAR 1

SALES PROJECTIONS A Firm Impression Year 1 Sales Budget Public Relations Services Product/Service Category B Product/Service Category C Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Gross Sales Less: Returns & Allowances Net Sales Other Income Total Income Credit Management Sales (cash) Sales (credit) Received on Account Bad Debt Expense

YEAR 1 YEAR 1 YEAR 1

Year 1 Assumptions Public Relations Services Product/Service Category B Product/Service Category C Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Less: Returns & Allowances Other Income Sales (cash) Sales (credit) Received on Account Bad Debt Expense

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

TOTAL

11,000 11,000 11,000 11,000

11,000 11,000 11,000 11,000

30,000 30,000 30,000 30,000

21,000 21,000 21,000 21,000

21,000 21,000 21,000 21,000

30,000 30,000 30,000 30,000

21,000 21,000 21,000 21,000

21,000 21,000 21,000 21,000

30,000 30,000 30,000 30,000

21,000 21,000 21,000 21,000

21,000 21,000 21,000 21,000

30,000 30,000 30,000 30,000

268,000 268,000 268,000 268,000

2,750 8,250 3,500 110

2,750 8,250 8,250 110

7,500 22,500 8,250 300

5,250 15,750 22,500 210

5,250 15,750 15,750 210

7,500 22,500 15,750 300

5,250 15,750 22,500 210

5,250 15,750 15,750 210

7,500 22,500 15,750 300

5,250 15,750 22,500 210

5,250 15,750 15,750 210

7,500 22,500 15,750 300

67,000 201,000 182,000 2,680

sales projections based on each staff member billing 1/2 their time at assigned hourly rates--achievable based on sales in 200A

Appendix

YEAR 2 YEAR 2 YEAR 2 YEAR 2

SALES PROJECTIONS A Firm Impression Year 2 Sales Budget Public Relations Services Product/Service Category B Product/Service Category C Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Gross Sales Less: Returns & Allowances Net Sales Other Income Total Income Credit Management Sales (cash) Sales (credit) Received on Account Bad Debt Expense

YEAR 2 YEAR 2 YEAR 2

Year 2 Assumptions Public Relations Services Product/Service Category B Product/Service Category C Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Less: Returns & Allowances Other Income Sales (cash) Sales (credit) Received on Account Bad Debt Expense

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

TOTAL

16,500 16,500 16,500 16,500

16,500 16,500 16,500 16,500

45,000 45,000 45,000 45,000

31,500 31,500 31,500 31,500

31,500 31,500 31,500 31,500

45,000 45,000 45,000 45,000

31,500 31,500 31,500 31,500

31,500 31,500 31,500 31,500

45,000 45,000 45,000 45,000

31,500 31,500 31,500 31,500

31,500 31,500 31,500 31,500

45,000 45,000 45,000 45,000

402,000 402,000 402,000 402,000

4,125 12,375 22,500 165

4,125 12,375 12,375 165

11,250 33,750 12,375 450

7,875 23,625 33,750 315

7,875 23,625 23,625 315

11,250 33,750 23,625 450

7,875 23,625 33,750 315

7,875 23,625 23,625 315

11,250 33,750 23,625 450

7,875 23,625 33,750 315

7,875 23,625 23,625 315

11,250 33,750 23,625 450

100,500 301,500 290,250 4,020

growth projected based on additional personnel and higher dollar projects as we add new clients and garner more of our exisiting client's business

Appendix

YEAR 3 YEAR 3 YEAR 3 YEAR 3

SALES PROJECTIONS A Firm Impression Year 3 Sales Budget Public Relations Services Product/Service Category B Product/Service Category C Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Gross Sales Less: Returns & Allowances Net Sales Other Income Total Income Credit Management Sales (cash) Sales (credit) Received on Account Bad Debt Expense

YEAR 3 YEAR 3 YEAR 3

Year 3 Assumptions Public Relations Services Product/Service Category B Product/Service Category C Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Less: Returns & Allowances Other Income Sales (cash) Sales (credit) Received on Account Bad Debt Expense

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

TOTAL

26,813 26,813 26,813 26,813

26,813 26,813 26,813 26,813

73,125 73,125 73,125 73,125

51,188 51,188 51,188 51,188

51,188 51,188 51,188 51,188

73,125 73,125 73,125 73,125

51,188 51,188 51,188 51,188

51,188 51,188 51,188 51,188

73,125 73,125 73,125 73,125

51,188 51,188 51,188 51,188

51,188 51,188 51,188 51,188

73,125 73,125 73,125 73,125

653,250 653,250 653,250 653,250

6,703 20,109 33,750 268

6,703 20,109 20,109 268

18,281 54,844 20,109 731

12,797 38,391 54,844 512

12,797 38,391 38,391 512

18,281 54,844 38,391 731

12,797 38,391 54,844 512

12,797 38,391 38,391 512

18,281 54,844 38,391 731

12,797 38,391 54,844 512

12,797 38,391 38,391 512

18,281 54,844 38,391 731

163,313 489,938 468,844 6,533

growth projected based on additional personnel and higher dollar projects as we add new clients and garner more of our exisiting client's business

Appendix

YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1

OPERATING EXPENSE PROJECTIONS A Firm Impression Year 1 JAN Operating Expenses 1,350 Advertising Bank Charges Dues & Subscriptions 120 Insurance 20 Licenses & Fees Marketing & Promotion Meals & Entertainment 125 Miscellaneous Office Expense (postage) 35 Office Supplies 300 Outside Services 4,345 Payroll Expenses 5,166 Salaries & Wages Payroll Taxes 179 Benefits 275 Professional Fees Property Taxes Rent 975 Repairs & Maintenance Shipping & Delivery Telephone 320 Training & Development Travel Utilities Vehicle 366 Computer & Internet 145 Equipment & Furniture Other Total Operating Expenses 13,721

YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1

Assumptions - Year 1 Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense (postage) Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Computer & Internet Equipment & Furniture Other

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

TOTAL

650 120 20 125 35 300 4,345

1,450 120 20 125 35 300 11,850

120 20 500 125 35 300 8,295

120 20 600 125 35 300 8,295

800 120 20 125 35 300 11,850

750 120 20 125 35 300 8,295

120 20 50 125 35 300 8,295

120 20 75 125 35 300 11,850

120 20 75 125 35 300 8,295

120 20 700 125 35 300 8,295

120 20 500 125 35 300 11,850

5,000 1,440 240 2,500 1,500 420 3,600 105,860

5,166 179 275 975 320 366 145 250 13,271

5,166 179 275 300 975 320 366 145 21,626

5,166 179 275 975 320 366 145 500 17,321

5,166 179 275 975 320 366 145 16,921

5,166 179 275 300 975 320 366 145 20,976

5,166 179 275 975 320 366 145 1,300 18,371

5,166 179 275 975 320 366 145 16,371

5,166 179 275 300 975 320 366 145 350 20,601

5,166 179 275 975 320 366 145 16,396

5,166 179 275 975 320 366 145 17,021

5,166 179 275 300 975 320 366 145 20,676

61,992 2,148 3,300 1,200 11,700 3,840 4,392 1,740 2,400 213,272

based on monthly advertising schedule detailed in marketing section--costs researched with each vendor based on historical charges based on historical charges based on monthly advertising schedule detailed in marketing section--costs researched with each vendor based on historical budget for entertaining potential clients based on historical expense based on historical expense subcontracting costs based on hisorical percentage of sales (39.5%) owner-$20,000; manager-$24,000; coordinator-$18,000 based on historical rates health insurance for owner and manager - based on quote from agent fee for accountant to do quarterly review of books lease rate based on historical costs

car lease based on historical rates additional computer and workstation

Appendix

YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2

OPERATING EXPENSE PROJECTIONS A Firm Impression Year 2 JAN Operating Expenses 2,160 Advertising Bank Charges Dues & Subscriptions 124 Insurance 21 Licenses & Fees Marketing & Promotion Meals & Entertainment 129 Miscellaneous Office Expense (postage) 36 Office Supplies 309 Outside Services 5,775 Payroll Expenses 8,500 Salaries & Wages Payroll Taxes 298 Benefits 283 Professional Fees Property Taxes Rent 1,004 Repairs & Maintenance Shipping & Delivery Telephone 700 Training & Development Travel Utilities Vehicle 366 Computer & Internet 149 Equipment & Furniture Other Total Operating Expenses 19,853

YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2

Assumptions - Year 2 Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense (postage) Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Computer & Internet Equipment & Furniture Other

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

TOTAL

1,040 124 21 129 36 309 5,775

2,320 124 21 129 36 309 15,750

124 21 800 129 36 309 11,025

124 21 960 129 36 309 11,025

1,280 124 21 129 36 309 15,750

1,200 124 21 129 36 309 11,025

124 21 80 129 36 309 11,025

124 21 120 129 36 309 15,750

124 21 120 129 36 309 11,025

124 21 1,120 129 36 309 11,025

124 21 800 129 36 309 15,750

8,000 1,483 247 4,000 1,545 433 3,708 140,700

8,500 298 283 1,004 700 366 149 258 18,991

8,500 298 283 1,004 700 366 149 29,988

8,500 298 283 1,004 700 366 149 515 24,258

8,500 298 283 1,004 700 366 149 23,903

8,500 298 283 1,004 700 366 149 28,948

8,500 298 283 1,004 700 366 149 1,339 25,482

8,500 298 283 1,004 700 366 149 23,023

8,500 298 283 1,004 700 366 149 361 28,149

8,500 298 283 1,004 700 366 149 23,063

8,500 298 283 1,004 700 366 149 24,063

8,500 298 283 1,004 700 366 149 28,468

102,000 3,570 3,399 12,051 8,400 4,392 1,792 2,472 298,192

60% increase over prior year to promote growth 3% inflation rate over prior year 3% inflation rate over prior year 60% increase over prior year to promote growth 3% inflation rate over prior year 3% inflation rate over prior year 3% inflation rate over prior year subcontracting estimated at 36% of sales - more design work kept in house with part-time designer owner-$24,000; manager-$28,000; coordinator-$20,000; part-time designer-$30,000 Based on historical percentages 3% inflation rate over prior year 3% inflation rate over prior year 3% inflation rate over prior year based on quotes from vendor for upgraded phone system

car lease 3% inflation rate over prior year additional computer and workstation at 3% over prior year's cost

Appendix

YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3

OPERATING EXPENSE PROJECTIONS A Firm Impression Year 3 JAN Operating Expenses 3,510 Advertising Bank Charges Dues & Subscriptions 127 Insurance 21 Licenses & Fees Marketing & Promotion Meals & Entertainment 133 Miscellaneous Office Expense (postage) 37 Office Supplies 318 Outside Services 5,899 Payroll Expenses 15,333 Salaries & Wages Payroll Taxes 537 Benefits 5,500 Professional Fees Property Taxes Rent 1,034 Repairs & Maintenance Shipping & Delivery Telephone 721 Training & Development Travel Utilities Vehicle 366 Computer & Internet 154 Equipment & Furniture Other Total Operating Expenses 33,690

YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3

Assumptions - Year 3 Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense (postage) Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Computer & Internet Equipment & Furniture Other

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

TOTAL

1,690 127 21 133 37 318 5,899

3,770 127 21 133 37 318 16,088

127 21 1,300 133 37 318 11,261

127 21 1,560 133 37 318 11,261

2,080 127 21 133 37 318 16,088

1,950 127 21 133 37 318 11,261

127 21 130 133 37 318 11,261

127 21 195 133 37 318 16,088

127 21 195 133 37 318 11,261

127 21 1,820 133 37 318 11,261

127 21 1,300 133 37 318 16,088

13,000 1,528 255 6,500 1,591 446 3,819 143,715

15,333 537 5,500 1,034 721 1,000 1,500 366 154 265 34,636

15,333 537 5,500 1,034 721 366 154 44,139

15,333 537 5,500 1,034 721 366 154 530 37,373

15,333 537 5,500 1,034 721 1,000 1,500 366 154 39,603

15,333 537 5,500 1,034 721 366 154 42,449

15,333 537 5,500 1,034 721 366 154 1,379 38,872

15,333 537 5,500 1,034 721 3,000 366 154 38,673

15,333 537 5,500 1,034 721 366 154 371 40,936

15,333 537 5,500 1,034 721 366 154 35,738

15,333 537 5,500 1,034 721 1,000 1,500 366 154 39,863

15,333 537 5,500 1,034 721 366 154 41,669

184,000 6,440 66,000 12,413 8,652 3,000 7,500 4,392 1,846 2,546 467,642

65% increase over prior year to promote growth 3% inflation rate over prior year 3% inflation rate over prior year 65% increase over prior year to promote growth 3% inflation rate over prior year 3% inflation rate over prior year 3% inflation rate over prior year subcontracting budgeted at 22% of sales--new art director will produce more work in house owner-$30,000; manager-$32,000; coordinator-$22,000; part-time designer-$30,000; art director-$70,000 based on historical percentages health insurance for three employees 3% inflation rate over prior year 3% inflation rate over prior year based on quotes from vendor for upgraded phone system budget for seminar and trade show attendance travel budget to attend seminars and trade shows car lease 3% inflation rate over prior year additional computer and workstation at 3% over prior year's cost

Appendix

YEAR 1 YEAR 1 YEAR 1

CAPITAL BUDGET PROJECTIONS Year 1 Capital Budget Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Depreciation (existing assets) Capital Asset Purchases Depreciation (new purchases) Land

JAN

FEB -

MAR -

APR -

MAY -

JUN -

YEAR 1 YEAR 1 YEAR 1 YEAR 1

Assumptions - Year 1 Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Equipment Equipment Depreciation Furniture Furniture Depreciation Leasehold Improvements Leasehold Depreciation Vehicles Vehicle Depreciation Building Building Depreciation Land

Appendix

JUL -

AUG -

SEP -

OCT -

NOV -

DEC

10,000 Year 1 Total Depreciation

TOTAL 10,000 -

YEAR 2 YEAR 2 YEAR 2

CAPITAL BUDGET PROJECTIONS Year 2 Capital Budget Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Depreciation (existing assets) Capital Asset Purchases Depreciation (new purchases) Land

JAN

FEB -

MAR -

APR -

MAY -

JUN -

YEAR 2 YEAR 2 YEAR 2 YEAR 2

Assumptions - Year 2 Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Equipment Equipment Depreciation Furniture Furniture Depreciation Leasehold Improvements Leasehold Depreciation Vehicles Vehicle Depreciation Building Building Depreciation Land

Appendix

JUL -

AUG -

SEP -

OCT -

NOV -

DEC

20,000 Year 2 Total Depreciation

TOTAL 20,000 -

YEAR 3 YEAR 3 YEAR 3

CAPITAL BUDGET PROJECTIONS Year 3 Capital Budget Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Depreciation (existing assets) Capital Asset Purchases Depreciation (new purchases) Land

JAN

FEB -

MAR -

APR -

MAY -

JUN -

YEAR 3 YEAR 3 YEAR 3 YEAR 3

Assumptions - Year 3 Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Equipment Equipment Depreciation Furniture Furniture Depreciation Leasehold Improvements Leasehold Depreciation Vehicles Vehicle Depreciation Building Building Depreciation Land

Appendix

JUL -

AUG -

SEP -

OCT -

NOV -

DEC

30,000 Year 3 Total Depreciation

TOTAL 30,000 -

Equity Investment A Firm Impression Year 1 Year 2 Year 3 Real Estate Loans A Firm Impression Existing Balance New Borrowing Year 1 Outstanding balance Year 2 Outstanding balance Year 3 Outstanding balance Repayment Year 1 - principal Year 1 - interest Year 2 - principal Year 2 - interest Year 3 - principal Year 3 - interest

JAN

FEB -

MAR -

Loan 2 Borrowing Year 1 Outstanding balance Year 2 Outstanding balance Year 3 Outstanding balance Repayment Year 1 - principal Year 1 - interest Year 2 - principal Year 2 - interest Year 3 - principal Year 3 - interest

MAY -

JUN

JUL

-

-

AUG -

FEB -

JAN

MAR -

FEB -

JAN

MAR -

FEB 92 -

JAN

JAN

MAR

MAR

OCT -

NOV -

JUN

DEC -

TOTAL -

-

MAY

JUN -

JUL -

AUG -

-

Borrowing Year 1 Outstanding balance Year 2 Outstanding balance Year 3 Outstanding balance

JAN 12,000 12,000 -

FEB 7,000 19,000 -

MAR 3,000 22,000 -

APR 17,000 -

12,000 -

9,000 -

-

Repayment Year 1 - principal Year 1 - interest Year 2 - principal Year 2 - interest Year 3 - principal Year 3 - interest

JAN

FEB

MAR

APR 5,000 142 -

MAY 5,000 100 -

JUN 3,000 75 -

JUL 9,000 -

100 -

158 -

183 -

MAY

JUN

22,000 1,862 -

Appendix

JUL

SEP -

AUG

OCT -

SEP -

AUG

OCT -

SEP -

OCT -

DEC DEC -

-

TOTAL -

NOV

-

1,104 -

TOTAL

DEC

NOV

-

-

-

-

-

TOTAL

DEC

NOV

-

TOTAL

92 -

-

-

TOTAL

DEC

NOV

-

11,000 11,000 11,000

92 -

-

-

-

DEC

NOV

OCT -

DEC

11,000 11,000 11,000

92 -

TOTAL -

-

NOV

OCT

SEP -

NOV

11,000 11,000 11,000

92 -

DEC -

-

OCT

SEP

AUG -

OCT

11,000 11,000 11,000

92 -

NOV -

-

SEP

AUG

JUL -

SEP

11,000 11,000 11,000

92 -

OCT -

-

AUG

JUL

-

-

AUG

11,000 11,000 11,000

92 -

SEP -

-

JUL

JUN

MAY -

APR -

JUL

11,000 11,000 11,000

92 -

AUG -

-

JUN

MAY

APR

-

JUN

11,000 11,000 11,000

92 -

-

JUL -

-

MAY

APR

MAR

FEB

MAY

11,000 11,000 11,000

92 -

JUN -

-

APR

11,000 11,000 11,000

-

-

APR

MAR

FEB

MAY -

-

92 -

-

APR -

Line of Credit A Firm Impression Existing Balance

Year 1 - total principal paid Year 1 - total interest paid Year 2 - total principal paid Year 2 - total interest paid Year 3 - total principal paid Year 3 - total interest paid

SEP -

JAN

Traditional Business Loan and/or other Long-term Loans A Firm Impression Loan 1 Existing Balance 11,000 New Borrowing JAN FEB Year 1 Outstanding balance 11,000 11,000 Year 2 Outstanding balance 11,000 11,000 Year 3 Outstanding balance 11,000 11,000 Repayment Year 1 - principal Year 1 - interest Year 2 - principal Year 2 - interest Year 3 - principal Year 3 - interest

APR -

-

-

TOTAL 22,000 -

TOTAL 22,000 758 -