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 Table of Contents

1.0 Executive Summary......................................................................................................................1

Chart: Highlights............................................................................................................................1
1.1 Mission...........................................................................................................................................1
1.2 Objectives.....................................................................................................................................2
2.0 Company Summary......................................................................................................................2
2.1 Company Ownership................................................................................................................2
2.2 Start-up Summary.....................................................................................................................2
Table: Start-up...............................................................................................................................3
Table: Start-up Funding..............................................................................................................3
Chart: Start-up...............................................................................................................................4
3.0 Services.............................................................................................................................................4
4.0 Market Analysis Summary.........................................................................................................4
4.1 Market Segmentation..............................................................................................................5
Chart: Market Analysis (Pie)......................................................................................................5
Table: Market Analysis................................................................................................................5
4.2 Target Market Segment Strategy........................................................................................6
4.3 Service Business Analysis......................................................................................................6
4.3.1 Competition and Buying Patterns................................................................................6
5.0 Strategy and Implementation Summary..............................................................................6
5.1 Sales Strategy.............................................................................................................................7
5.1.1 Sales Forecast.....................................................................................................................7
Chart: Sales by Year.................................................................................................................8
Table: Sales Forecast...............................................................................................................8
Chart: Sales Monthly................................................................................................................9
5.2 Competitive Edge......................................................................................................................9
5.3 Milestones..................................................................................................................................10
Table: Milestones........................................................................................................................10
6.0 Management Summary.............................................................................................................10
6.1 Personnel Plan..........................................................................................................................11
Table: Personnel..........................................................................................................................11
7.1 Break-even Analysis...............................................................................................................12
Table: Break-even Analysis.....................................................................................................12
Chart: Break-even Analysis.....................................................................................................12
7.2 Important Assumptions.........................................................................................................13
Table: General Assumptions...................................................................................................13
7.3 Projected Profit and Loss......................................................................................................13
Table: Profit and Loss................................................................................................................13
Chart: Profit Monthly..................................................................................................................14
Chart: Profit Yearly.....................................................................................................................14
Chart: Gross Margin Monthly..................................................................................................15
Chart: Gross Margin Yearly......................................................................................................15
7.4 Projected Cash Flow...............................................................................................................16
Chart: Cash....................................................................................................................................16
Table: Cash Flow.........................................................................................................................17
7.5 Projected Balance Sheet.......................................................................................................18
Table: Balance Sheet.................................................................................................................18

Page
 Table of Contents

7.6 Business Ratios........................................................................................................................19

Table: Ratios.................................................................................................................................19
Table: Sales Forecast...........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................6

Page
 Ideal Business Support Services

1.0 Executive Summary

Ideal Business Support is a full-service support agency for the insurance industry. Ideal offers a
wide range of support services tailored for insurance agents. Ideal will specialize on a few
offerings, but can do almost anything. While the support service market is competitive, most
companies are generalists. Ideal will stand out by concentrating on the insurance niche.

Ideal has two strong competitive advantages. The first is industry knowledge of insurance.
Sarah Helpinghand, the owner, spent five years previous to Ideal working as an insurance
agent. This experience is priceless. Additionally, the value of networking based on Sarah's
previous insurance relationships will give Ideal a large leg up on the competition.

Lastly, Sarah will be designing an intensive training program to share her intellectual capital
regarding the insurance industry with the rest of her company. All employees with go through
this training.

Ideal is projected to reach profitability by month 11 and will have modest net profits by year
three.

Chart: Highlights

Highlights

$240,000

$210,000

$180,000

$150,000 Sales
$120,000 Gross Margin
$90,000
Net Profit
$60,000

$30,000

$0

($30,000)

Year 1 Year 2 Year 3

1.1 Mission

Ideal Business Support's mission is to provide the highest quality support services for insurance
agent industry. We exist to attract and maintain customers. When we adhere to this maxim,
everything else will fall into place. Our services will exceed the expectations of our customers.

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 Ideal Business Support Services

1.2 Objectives

The objectives for the first three years of operation include:

 To create a service-based company whose primary goal is to exceed customers'

expectations.
 The utilization of Ideal in at least 20 different insurance agents practices.
 To increase the number of clients served by 20% per year through superior performance.
 To develop a sustainable start-up business that is profitable.

2.0 Company Summary

Ideal Business Support Services, soon to be located in Salem, OR, will offer business support
services for the insurance industry. Ideal will concentrate on transcription, database
management, word processing and website development. These services will be offered to
insurance agents who do not have the staff to perform these functions. By providing these
services to the agents, the agents do not need to pay the overhead for the equipment,
personnel, and knowledge.

The business will be based in downtown Salem and will have four employees in addition to
Sarah Helpinghand, the founder and owner. Ideal is projected to reach profitability by month 11.

2.1 Company Ownership

Ideal Business Support Services is an Oregon corporation owned by Sarah Helpinghand.

2.2 Start-up Summary

Ideal Business Support Services have the following start-up expenses:

 Computer system with three workstations, a printer, CD-RW, Microsoft Office, and Microsoft
Access.
 Office furniture including four desks and chairs, three file cabinets.
 Legal fees regarding business formation and generating and reviewing contracts.
 Copier, fax, and two phone lines.
 Website development.
 Various office supplies.
 Two laptop computers with Pentium processors and Microsoft Office Professional version.
 Transcription machine.

Please note that any equipment that will be used for more than a year will be considered a long-
term asset and will be depreciated using the straight-line method.

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 Ideal Business Support Services

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $1,000
Stationery etc. $100
Other $0
Total Start-up Expenses $1,100

Start-up Assets
Cash Required $57,400
Other Current Assets $0
Long-term Assets $8,500
Total Assets $65,900

Total Requirements $67,000

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $1,100
Start-up Assets to Fund $65,900
Total Funding Required $67,000

Assets
Non-cash Assets from Start-up $8,500
Cash Requirements from Start-up $57,400
Additional Cash Raised $0
Cash Balance on Starting Date $57,400
Total Assets $65,900

Liabilities and Capital

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

Capital

Planned Investment
Sarah $67,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $67,000

Loss at Start-up (Start-up Expenses) ($1,100)

Total Capital $65,900

Total Capital and Liabilities $65,900

Total Funding $67,000

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 Ideal Business Support Services

Chart: Start-up

Start-up

$70,000

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0
Expenses Assets Investment Loans

3.0 Services

Ideal Business Support Services, as the name implies, offers support services for the insurance
industry. Ideal's service offerings will be diverse, however, it will be specializing in transcription,
database management, word processing, and website development and maintenance.

These services will be typically used by insurance agents who do not have the need to have a
full-time person on payroll and the equipment in overhead. Ideal will be able to come in on short
notice and perform the tasks that are needed by the agent.

4.0 Market Analysis Summary

Ideal will be focusing on a very specific part of the business market, the insurance industry.
Within the industry there are two types of agents, exclusive agents that represent one specific
company, and insurance brokers who represent multiple insurance companies.

Everyone needs insurance. Some types, such as car insurance is mandate by law. Other types,
such as homeowners, just make good fiscal sense. For these reasons alone, the insurance
industry is going to be around for a while and it makes sense to concentrate on them.

Salem has several support service companies but none as focussed as Ideal and none with the
same industry knowledge that Ideal has.

4.1 Market Segmentation

The insurance market that is in need of support services can be broken down into two
segments:

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 Ideal Business Support Services

 Exclusive agents: these agents represent only one type of insurance, such as State Farm.
While the selection here is limited, the advantage of the exclusive agent is that they have a
strong relationship with their representative company which is good for any claims issues.
The stronger the relationship the agent has with the insurance company, the more effective
of a cheerleader they can be for you.

 Insurance brokers: these agents do not have an exclusive contract with any one insurance
company. They can offer insurance from multiple companies. The advantage of this set up is
that they can offer a wider range of service offerings than an agent who only sells one brand
of insurance.

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Exclusive agents

Insurance brokers

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Exclusive agents 7% 78 83 89 95 102 6.94%
Insurance brokers 8% 123 133 144 156 168 8.11%
Total 7.66% 201 216 233 251 270 7.66%

4.2 Target Market Segment Strategy

Ideal Business Support Services is focusing on the insurance industry because the agents that
represent the insurance companies are often located in small offices. An insurance agent will
have one or two support staff in their office in addition to the agent. This is a perfect
atmosphere for a support agency because the services Ideal provides are typically out of the
field of expertise for the normal support staff.

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 Ideal Business Support Services

Another reason for focusing on a specific industry is that it is easier to be competitive when the
focus of a business is narrow. Too often a business will stagnate when they try to do to many
different things to too many customers. A narrow focus is very beneficial for a company,
particularly one that is just starting up.

For these reasons, Ideal Business Support Services will concentrate on the insurance industry to
be able to quickly grow and obtain market share.

4.3 Service Business Analysis

There are approximately 70-100 different insurance agents in the Salem area alone. While
some are in larger offices, many are one or two person agent offices. This high concentration of
small insurance agents is due to a previous historical trend where the service offering of
insurance was done at the local level by "someone you could trust." Recently there has been
the trend to offer insurance without an agent, via the phone or Internet. While this method of
service delivery has gained market share, there is no reason to believe that it will eclipse the
original agent-customer relationship. For many people, insurance is a very personal thing and
they are more comfortable to discuss insurance needs in person with an agent as opposed to
taking a chance and purchasing a commodity-like insurance over the phone or Internet. There is
significant value in having the agent who knows you personally as your advocate against the
insurance company if problems arise. For these reasons, the insurance agent will be around for
a long time to come.

4.3.1 Competition and Buying Patterns

The competition consists of many different support service companies that offer a very wide
range of service offerings. These companies replicate the offerings of Ideal, however none
target the insurance industry only.

The buying patterns of the agents mimic a long-term relationship. If they are happy they will
generally stay with the same service provider. The reasons for this is that there is generally a
break-in period where both parties spend time getting to know each other, and the different
needs each has. If this can be done up front once and never again, then it is more cost effective
then jumping through the hoops each time.

5.0 Strategy and Implementation Summary

Ideal will use its sustainable competitive advantages to steadily gain market share. The first
advantage is based on extensive inside industry knowledge of the insurance field. The second
advantage is an already established network of contacts within the industry.

While these competitive advantages currently reside in Sarah's head as intellectual capital, it
will be downloaded to the organization through intensive training courses that Sarah is
designing and putting all employees through.

5.1 Sales Strategy

Ideal's sales strategy will based on closing the deal through a persuasive spiel detailing how
Ideal can provide a superior service relative to the competitor. Because Ideal is intimately
familiar with the industry, they can provide a superior service for the same cost.

This approach will only work with agents that have already decided to forgo an in-house support
staff and are trying to decide between a specific support staff.

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 Ideal Business Support Services

Sarah will also be targeting newly registered agents who are making the decision whether to
have an in-house solution or to outsource the service. Although Sarah no longer sells insurance,
she has kept her license current. This allows her to be part of the various insurance associations
that agents typically belong to. By being an active member of the association, she is able to do
a lot of networking for her business. This develops new relationships with insurance agents that
she was not aware of before while in practice. Additionally, it allows her to maintain
relationships with all the agents that she was colleagues with previously. Sarah will turn this
access into contracts.

5.1.1 Sales Forecast

The first month will be used to set up the office. This will include choosing the site,
purchasing furniture, and setting up the computer network. During this first month Sarah will be
contacting some of her former colleagues

The first week of the second month will be used for an intensive training of two of the support
staff. The last three weeks of the month will see some sales activity. Sales will steadily increase
from this point.

Month five will see the hiring of the final two support staff. They will also be trained during the
first week of the month and then will take on a work load.

Chart: Sales by Year

Sales by Year

$240,000

$210,000

$180,000
Exclusive agents
$150,000
Insurance brokers
$120,000

$90,000

$60,000

$30,000

$0
Year 1 Year 2 Year 3

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Exclusive agents $51,049 $112,548 $121,458
Page 7
 7 M8
Month
Ideal Business Support Services

4 Month
Month 5 Month
6
Insurance brokers $59,812 $125,745 $134,745
Total Sales $110,861 $238,293 $256,203

Month
Direct Cost of Sales Year 1 Year 2 Year 3

3
Exclusive agents $7,657 $16,882 $18,219

1 Month
Insurance brokers $8,972 $18,862 $20,212

2
Subtotal Direct Cost of Sales $16,629 $35,744 $38,430

MonthMonth
Chart: Sales Monthly

Sales Monthly
$20,000
$18,000

$16,000
$14,000
$12,000 Exclusive agents
$10,000
Insurance brokers
$8,000
$6,000
$4,000

$2,000
$0

5.2 Competitive Edge

Ideal's competitive edge is a very specific, deep industry knowledge of insurance. While having
this specific knowledge will preclude a lot of the market, it makes a small part of the market
quite attractive to you and your customers.

This deep industry knowledge is based on Sarah's five years spent as an independent insurance
agent. Sarah will then gather all of this intellectual capital and process it into a training program
so is is shared knowledge throughout the organization.

This approach is somewhat backwards relative to the norm for the support service industry.
Generally, the background of the company owner is from the support staff industry. They then
apply the support staff proficiencies to the industry of their different customers. Sarah believes
that the intricacies of the insurance industry are far more complex then that of the support
agency. Her rationale is that she can pick up the few things she does not know about support
much quicker than having to learn about each industry.

Sarah's industry access is valuable for networking as well. Having spent time in the industry,
Sarah developed many strong relationships with agents. Having established these relationships
previously created a trust bond that is significant when it comes to attempting to transform the
professional insurance relationship to a support service based relationship.

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 Ideal Business Support Services

5.3 Milestones

Ideal will have several milestones early on:

1. Business plan completion. This will be done as a roadmap for the organization. While Ideal
does not need a business plan to raise capital, it will be an indispensable tool for the
ongoing performance and improvement of the company.
2. Office set up.
3. Training program. This will be the development of a training program for the employees.
4. Revenue of $50,000.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Business plan completion 1/1/2001 2/1/2001 $0 ABC Marketing
Office set up 1/1/2001 2/1/2001 $0 ABC Department
Training program 1/1/2001 2/1/2001 $0 ABC Department
Revenue of $50,000 1/1/2001 10/31/2001 $0 ABC Department
Totals $0

6.0 Management Summary

Sarah Helpinghand, founder and owner received her Bachelor degree in business management
from Willamette University. The summer of her last year she interned with State Farm Insurance
which has a large corporate headquarter in Salem. From this internship Sarah was able to learn
a lot about the insurance industry.

Upon graduation Sarah "fell into a job" through a contact at State Farm. Her friend knew an
insurance agent who was retiring and looking for someone to take over their practice. Sarah
came highly recommended and was offered the job. She readily accepted and spent five years
as an agent. Toward the end of her tenure as an agent she was getting a bit restless. She was
looking for a new challenge, something she could do all on her own. The idea one day dawned
on her that she could leverage her industry knowledge of insurance, and with the bit of
information she had about support services from college and create her own company.

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 Ideal Business Support Services

6.1 Personnel Plan

Sarah will be working full time for Ideal. Her responsibilities will be generating contracts,
training, payroll, customer service, and other back office tasks. During month two she will bring
on board two support specialists. The headcount will remain at three until month five when the
business generated will be too much for the two support staff and two more will be hired. The
support staff will be paid $12 an hour, several dollars more an hour than the market rate. The
purpose behind this is to protect Sarah's investment in training the staff. It costs too much for
her to invest time and money into training someone and have them leave after a few months.
Paying the staff more than market is her insurance to keep them with the company.

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
Sarah $30,000 $30,000 $30,000
Support staff $21,120 $23,040 $23,040
Support staff $21,120 $23,040 $23,040
Support staff $15,360 $23,040 $23,040
Support staff $15,360 $23,040 $23,040
Total People 5 5 5

Total Payroll $102,960 $122,160 $122,160

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 Ideal Business Support Services

7.0 Financial Plan

The following sections will outline the important financial assumptions, key financial indicators,
break-even analysis, profit and loss, cash flow, and the balance sheet.

7.1 Break-even Analysis

The break-even analysis indicates what is needed in monthly revenue to break even.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $13,445

Assumptions:
Average Percent Variable Cost 15%
Estimated Monthly Fixed Cost $11,428

Chart: Break-even Analysis

Break-even Analysis
$8,000

$6,000

$4,000

$2,000

$0

($2,000)

($4,000)

($6,000)

($8,000)

($10,000)

$0 $4,000 $8,000 $12,000 $16,000 $20,000

$2,000 $6,000 $10,000 $14,000 $18,000 $22,000

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 Ideal Business Support Services

7.2 Important Assumptions

The following table highlights some of the important financial assumptions for Ideal.

Table: General Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.3 Projected Profit and Loss

The following table will indicate projected profit and loss.

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $110,861 $238,293 $256,203
Direct Cost of Sales $16,629 $35,744 $38,430
Other $0 $0 $0
Total Cost of Sales $16,629 $35,744 $38,430

Gross Margin $94,232 $202,549 $217,773

Gross Margin % 85.00% 85.00% 85.00%

Expenses
Payroll $102,960 $122,160 $122,160
Sales and Marketing and Other Expenses $3,000 $2,500 $2,500
Depreciation $2,832 $2,832 $2,832
Leased Equipment $0 $0 $0
Utilities $1,500 $1,500 $1,500
Insurance $1,800 $1,800 $1,800
Rent $9,600 $9,600 $9,600
Payroll Taxes $15,444 $18,324 $18,324
Other $0 $0 $0

Total Operating Expenses $137,136 $158,716 $158,716

Profit Before Interest and Taxes ($42,904) $43,833 $59,057

EBITDA ($40,072) $46,665 $61,889
Interest Expense $0 $0 $0
Taxes Incurred $0 $10,958 $15,010

Net Profit ($42,904) $32,875 $44,046

Net Profit/Sales -38.70% 13.80% 17.19%

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 Ideal Business Support Services

Chart: Profit Monthly

Profit Monthly
$3,000

$2,000

$1,000

$0

($1,000)

($2,000)

($3,000)

($4,000)

($5,000)

($6,000)

($7,000)
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

Chart: Profit Yearly

Profit Yearly

$50,000

$40,000

$30,000

$20,000

$10,000

$0

($10,000)

($20,000)

($30,000)

($40,000)
Year 1 Year 2 Year 3

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 Ideal Business Support Services

Chart: Gross Margin Monthly

Gross Margin Monthly

$16,000

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

Chart: Gross Margin Yearly

Gross Margin Yearly

$210,000

$180,000

$150,000

$120,000

$90,000

$60,000

$30,000

$0
Year 1 Year 2 Year 3

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 Ideal Business Support Services

7.4 Projected Cash Flow

The following chart and table indicates projected cash flow.

Chart: Cash

Cash
$60,000

$50,000

$40,000

$30,000 Net Cash Flow

Cash Balance
$20,000

$10,000

$0

Month 1 Month 3 Month 5 Month 7 Month 9 Month 11

Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

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 Ideal Business Support Services

Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $38,801 $83,403 $89,671
Cash from Receivables $48,735 $128,079 $162,764
Subtotal Cash from Operations $87,536 $211,482 $252,435

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 $3,000 $0 $0
Subtotal Cash Received $90,536 $211,482 $252,435

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $102,960 $122,160 $122,160
Bill Payments $42,443 $79,346 $86,611
Subtotal Spent on Operations $145,403 $201,506 $208,771

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $145,403 $201,506 $208,771

Net Cash Flow ($54,867) $9,976 $43,664

Cash Balance $2,533 $12,509 $56,173

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 Ideal Business Support Services

7.5 Projected Balance Sheet

The following table indicates the projected balance sheet.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $2,533 $12,509 $56,173
Accounts Receivable $23,325 $50,136 $53,904
Other Current Assets $0 $0 $0
Total Current Assets $25,858 $62,645 $110,077

Long-term Assets
Long-term Assets $8,500 $8,500 $8,500
Accumulated Depreciation $2,832 $5,664 $8,496
Total Long-term Assets $5,668 $2,836 $4
Total Assets $31,526 $65,481 $110,081

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $5,530 $6,610 $7,164
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $5,530 $6,610 $7,164

Long-term Liabilities $0 $0 $0
Total Liabilities $5,530 $6,610 $7,164

Paid-in Capital $70,000 $70,000 $70,000

Retained Earnings ($1,100) ($44,004) ($11,129)
Earnings ($42,904) $32,875 $44,046
Total Capital $25,996 $58,871 $102,917
Total Liabilities and Capital $31,526 $65,481 $110,081

Net Worth $25,996 $58,871 $102,917

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 Ideal Business Support Services

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on
the NAICS code 524298, Other Insurance Related Activities, are shown for comparison.

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 114.95% 7.52% 3.95%

Percent of Total Assets

Accounts Receivable 73.99% 76.57% 48.97% 24.53%
Other Current Assets 0.00% 0.00% 0.00% 69.49%
Total Current Assets 82.02% 95.67% 100.00% 94.07%
Long-term Assets 17.98% 4.33% 0.00% 5.93%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 17.54% 10.10% 6.51% 29.76%

Long-term Liabilities 0.00% 0.00% 0.00% 9.55%
Total Liabilities 17.54% 10.10% 6.51% 39.31%
Net Worth 82.46% 89.90% 93.49% 60.69%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.00% 85.00% 85.00% 100.00%
Selling, General & Administrative Expenses 123.70% 71.20% 67.71% 60.33%
Advertising Expenses 1.62% 0.55% 0.51% 1.26%
Profit Before Interest and Taxes -38.70% 18.39% 23.05% 6.43%

Main Ratios
Current 4.68 9.48 15.36 2.23
Quick 4.68 9.48 15.36 2.00
Total Debt to Total Assets 17.54% 10.10% 6.51% 49.79%
Pre-tax Return on Net Worth -165.04% 74.46% 57.38% 7.52%
Pre-tax Return on Assets -136.09% 66.94% 53.65% 14.98%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -38.70% 13.80% 17.19% n.a
Return on Equity -165.04% 55.84% 42.80% n.a

Activity Ratios
Accounts Receivable Turnover 3.09 3.09 3.09 n.a
Collection Days 55 87 114 n.a
Accounts Payable Turnover 8.68 12.17 12.17 n.a
Payment Days 27 28 29 n.a
Total Asset Turnover 3.52 3.64 2.33 n.a

Debt Ratios
Debt to Net Worth 0.21 0.11 0.07 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios
Net Working Capital $20,328 $56,035 $102,913 n.a
Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.28 0.27 0.43 n.a
Current Debt/Total Assets 18% 10% 7% n.a
Acid Test 0.46 1.89 7.84 n.a
Sales/Net Worth 4.26 4.05 2.49 n.a

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 Ideal Business Support Services

Dividend Payout 0.00 0.00 0.00 n.a

Page 19
 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
Exclusive agents 0% $0 $1,001 $1,204 $2,145 $3,454 $3,658 $4,258 $4,987 $6,254 $6,985 $8,125 $8,978
Insurance brokers 0% $0 $1,325 $1,545 $2,785 $3,852 $4,141 $4,787 $6,235 $7,458 $8,325 $9,214 $10,145
Total Sales $0 $2,326 $2,749 $4,930 $7,306 $7,799 $9,045 $11,222 $13,712 $15,310 $17,339 $19,123

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
Exclusive agents $0 $150 $181 $322 $518 $549 $639 $748 $938 $1,048 $1,219 $1,347
Insurance brokers $0 $199 $232 $418 $578 $621 $718 $935 $1,119 $1,249 $1,382 $1,522
Subtotal Direct Cost of Sales $0 $349 $412 $740 $1,096 $1,170 $1,357 $1,683 $2,057 $2,297 $2,601 $2,868

Page 1
 Appendix

Table: Personnel

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sarah 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Support staff 0% $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
Support staff 0% $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
Support staff 0% $0 $0 $0 $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
Support staff 0% $0 $0 $0 $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
Total People 1 3 3 3 5 5 5 5 5 5 5 5

Total Payroll $2,500 $6,340 $6,340 $6,340 $10,180 $10,180 $10,180 $10,180 $10,180 $10,180 $10,180 $10,180

Page 2
 Appendix

Table: General Assumptions

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
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% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

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 Appendix

Table: Profit and Loss

Pro Forma Profit and Loss

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 $0 $2,326 $2,749 $4,930 $7,306 $7,799 $9,045 $11,222 $13,712 $15,310 $17,339 $19,123
Direct Cost of Sales $0 $349 $412 $740 $1,096 $1,170 $1,357 $1,683 $2,057 $2,297 $2,601 $2,868
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $349 $412 $740 $1,096 $1,170 $1,357 $1,683 $2,057 $2,297 $2,601 $2,868

Gross Margin $0 $1,977 $2,337 $4,191 $6,210 $6,629 $7,688 $9,539 $11,655 $13,014 $14,738 $16,255
Gross Margin % 0.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00%

Expenses
Payroll $2,500 $6,340 $6,340 $6,340 $10,180 $10,180 $10,180 $10,180 $10,180 $10,180 $10,180 $10,180
Sales and Marketing and Other $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
Expenses
Depreciation $236 $236 $236 $236 $236 $236 $236 $236 $236 $236 $236 $236
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125
Insurance $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Rent $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Payroll Taxes 15% $375 $951 $951 $951 $1,527 $1,527 $1,527 $1,527 $1,527 $1,527 $1,527 $1,527
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $4,436 $8,852 $8,852 $8,852 $13,268 $13,268 $13,268 $13,268 $13,268 $13,268 $13,268 $13,268

Profit Before Interest and Taxes ($4,436) ($6,875) ($6,515) ($4,662) ($7,058) ($6,639) ($5,580) ($3,729) ($1,613) ($255) $1,470 $2,987
EBITDA ($4,200) ($6,639) ($6,279) ($4,426) ($6,822) ($6,403) ($5,344) ($3,493) ($1,377) ($19) $1,706 $3,223
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit ($4,436) ($6,875) ($6,515) ($4,662) ($7,058) ($6,639) ($5,580) ($3,729) ($1,613) ($255) $1,470 $2,987
Net Profit/Sales 0.00% -295.57% -237.01% -94.55% -96.60% -85.12% -61.69% -33.23% -11.76% -1.66% 8.48% 15.62%

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 Appendix

Table: Cash Flow

Pro Forma Cash Flow

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 Received

Cash from Operations

Cash Sales $0 $814 $962 $1,726 $2,557 $2,730 $3,166 $3,928 $4,799 $5,359 $6,069 $6,693
Cash from Receivables $0 $0 $50 $1,521 $1,834 $3,256 $4,760 $5,096 $5,926 $7,348 $8,947 $9,995
Subtotal Cash from Operations $0 $814 $1,013 $3,247 $4,391 $5,986 $7,925 $9,024 $10,726 $12,707 $15,016 $16,689

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 $3,000 $0 $0
Subtotal Cash Received $0 $814 $1,013 $3,247 $4,391 $5,986 $7,925 $9,024 $10,726 $15,707 $15,016 $16,689

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 $2,500 $6,340 $6,340 $6,340 $10,180 $10,180 $10,180 $10,180 $10,180 $10,180 $10,180 $10,180
Bill Payments $57 $1,731 $2,627 $2,699 $3,047 $3,950 $4,028 $4,220 $4,548 $4,917 $5,159 $5,462
Subtotal Spent on Operations $2,557 $8,071 $8,967 $9,039 $13,227 $14,130 $14,208 $14,400 $14,728 $15,097 $15,339 $15,642

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $2,557 $8,071 $8,967 $9,039 $13,227 $14,130 $14,208 $14,400 $14,728 $15,097 $15,339 $15,642

Net Cash Flow ($2,557) ($7,257) ($7,954) ($5,793) ($8,835) ($8,145) ($6,283) ($5,376) ($4,002) $610 ($323) $1,047

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 Appendix
Cash Balance $54,843 $47,587 $39,632 $33,839 $25,004 $16,859 $10,577 $5,201 $1,199 $1,809 $1,486 $2,533

Table: Balance Sheet

Pro Forma Balance Sheet

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

Current Assets
Cash $57,400 $54,843 $47,587 $39,632 $33,839 $25,004 $16,859 $10,577 $5,201 $1,199 $1,809 $1,486 $2,533
Accounts Receivable $0 $0 $1,512 $3,248 $4,932 $7,847 $9,660 $10,780 $12,978 $15,964 $18,567 $20,890 $23,325
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $57,400 $54,843 $49,099 $42,880 $38,771 $32,851 $26,519 $21,356 $18,179 $17,163 $20,376 $22,376 $25,858

Long-term Assets
Long-term Assets $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500
Accumulated Depreciation $0 $236 $472 $708 $944 $1,180 $1,416 $1,652 $1,888 $2,124 $2,360 $2,596 $2,832
Total Long-term Assets $8,500 $8,264 $8,028 $7,792 $7,556 $7,320 $7,084 $6,848 $6,612 $6,376 $6,140 $5,904 $5,668
Total Assets $65,900 $63,107 $57,127 $50,672 $46,327 $40,171 $33,603 $28,204 $24,791 $23,539 $26,516 $28,280 $31,526

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 $1,643 $2,537 $2,599 $2,915 $3,816 $3,888 $4,068 $4,384 $4,745 $4,977 $5,271 $5,530
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 $1,643 $2,537 $2,599 $2,915 $3,816 $3,888 $4,068 $4,384 $4,745 $4,977 $5,271 $5,530

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $1,643 $2,537 $2,599 $2,915 $3,816 $3,888 $4,068 $4,384 $4,745 $4,977 $5,271 $5,530

Paid-in Capital $67,000 $67,000 $67,000 $67,000 $67,000 $67,000 $67,000 $67,000 $67,000 $67,000 $70,000 $70,000 $70,000
Retained Earnings ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100)
Earnings $0 ($4,436) ($11,311) ($17,826) ($22,488) ($29,546) ($36,185) ($41,764) ($45,494) ($47,106) ($47,361) ($45,891) ($42,904)
Total Capital $65,900 $61,464 $54,589 $48,074 $43,412 $36,354 $29,716 $24,136 $20,406 $18,794 $21,539 $23,009 $25,996
Total Liabilities and Capital $65,900 $63,107 $57,127 $50,672 $46,327 $40,171 $33,603 $28,204 $24,791 $23,539 $26,516 $28,280 $31,526

Net Worth $65,900 $61,464 $54,589 $48,074 $43,412 $36,354 $29,716 $24,136 $20,406 $18,794 $21,539 $23,009 $25,996

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Appendix

Page 1