Children’s Website Business Plan

InteliChild.com is a place for children to interact with each other, educators, and the world. It generates traffic, valuation for investors, and eventually profits. It is a healthy place for kids to play, parents and schools to buy, and employees to work.

The InteliChild.com e-commerce project is the next step in the company’s evolution. The site will market and sell toys, books, and software products. It will also create web products and applications to increase market share, promote name recognition, and maximize efficiency.

The present InteliChild.com is a start-up with four full-time employees. It is a California C corporation owned by its founders. (Name Omitted) Capital partners acquired 50% of the company. The initial website is at www.citruscoolkids.com.

Our competitive advantage is our in-house knowledge base. Our competitor spends five to 10 times the amount we do outsourcing services. The same will happen with the InteliChild.com website. We already have the SQL™ server and ColdFusion™ programming expertise, and we will be adding Flash™ integration to these skills.

InteliChild will offer three lines of products:

  • Toys and Games: carefully selected products for the target market, parents, and educators.
  • Books: a selection that appeals to parents and educators, as well as children.
  • Software: carefully selected software for the target market, parents, and educators.

Our strategy for future development is to remain flexible and adapt quickly to new technologies and changes.

The InteliChild.com market has been expanding with advancements in technology in the teaching sector. Approval and support from school communities are critical for our entrance into the market.

Our primary target markets include:

  1. Kids
  2. Parents
  3. Educational institutions for children of the upper class
  4. Self-teaching families

Our initial launch will focus on the American upper class. These clients appreciate the technology we have created and have high bandwidth connections. They value first-class design.

Our start-up costs are high due to our commitment to dominate the internet market. We expect to break-even in the first year.

The sales forecast is based on increasing website traffic and sales per user session. Sales are projected to rise exponentially from Year 1 to Year 3. We plan to lose money for at least three years while we build traffic and establish our position for the long-term future.

Children s Website Business Plan Example

Objectives

  • Traffic: 100,000 unique user sessions in June, Year 1; 450,000 in December, Year 1; 3.5 million in Year 2; and 5 million in Year 3.
  • Sell-through: $0.58 per unique visit in December of Year 1; increasing to $0.83 in Year 2; and $0.92 in Year 3.
  • Valuation: ability to bring in additional investment at economically feasible valuations. We need to attract moderate investment this year, and an additional large infusion in Year 2, with valuation performance that yields attractive internal rate of return (IRR) to investors. The financial section indicates IRR of more than 100% for all investors, with larger IRR for seed, declining slightly for first round and then second round.
  • Acquisition or Initial public offering (IPO) in Year 4, with a valuation of more than $20 million. This assumes the market valuations based on sales and earnings, which are relatively high as this plan is written.

Mission

InteliChild.com offers bright children an entertaining place to interact with each other, the Web, educators, and the world. It generates traffic, valuation for investors, and commerce and profits. It is a healthy place for kids to play, for parents and schools to buy, and a creative and fair work environment for employees.

Keys to Success

  1. We must retain customers. The website must be easy to use and quickly viewable. User satisfaction is a top priority.
  2. The project will succeed by capitalizing on InteliChild.com’s traffic and converting user sessions into dollars through the commerce site.
  3. The sales process must be easy to administer and flexible enough to accommodate InteliChild’s needs without increasing employee count.
  4. The e-commerce project should establish InteliChild.com as a technology leader, not just bringing back traffic but also attracting new visitors.

Company Summary

InteliChild.com is a start-up company with four full-time employees. We are a high-powered team of creative individuals. The company creates an Internet environment for bright kids and plans to sell toys, books, and software to kids, parents, and schools. Our products will be highly reviewed in our niche.

Start-up Summary

Our start-up costs reflect our commitment to dominate the Internet market place.

Our development costs are high, but our human resources costs are not as high as they might be since we are located in Oregon instead of the Silicon Valley. Marketing expenses are also high, but developing this site without appropriate promotion would make it difficult to gather the necessary traffic for success.

Our location leverages our partner potential, despite the premium we pay for space and talent due to development costs.

Children s Website Business Plan Example

Start-up Funding:

– Start-up Expenses to Fund: $33,750

– Start-up Assets to Fund: $499,000

– Total Funding Required: $532,750

Assets:

– Non-cash Assets from Start-up: $5,000

– Cash Requirements from Start-up: $494,000

– Additional Cash Raised: $0

– Cash Balance on Starting Date: $494,000

– Total Assets: $499,000

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:

– Owner: $0

– Investor: $0

– Additional Investment Requirement: $532,750

– Total Planned Investment: $532,750

– Loss at Start-up (Start-up Expenses): ($33,750)

– Total Capital: $499,000

– Total Capital and Liabilities: $499,000

– Total Funding: $532,750

Start-up Requirements:

– Start-up Expenses:

– Legal: $1,000

– Software: $2,500

– Design Work: $5,000

– Programming: $15,000

– Insurance: $250

– Rent: $500

– Research and Development: $1,000

– Hosting Setup: $3,500

– Other: $5,000

– Total Start-up Expenses: $33,750

– Start-up Assets:

– Cash Required: $494,000

– Start-up Inventory: $0

– Other Current Assets: $5,000

– Long-term Assets: $0

– Total Assets: $499,000

– Total Requirements: $532,750

Company Ownership:

The company was incorporated as a California C corporation owned by its principal founders at 25% ownership each. (Name Omitted) Capital partners acquired 50% of the company.

Company Locations and Facilities:

The company has a single office. The important website and Internet infrastructure situation will be explained in detail later in this plan. The initial website is at www.citruscoolkids.com.

Products:

InteliChild will offer three lines of products:

1. Toys and Games: carefully selected toys and games for the target market, parents, and educators.

2. Books: a selection of books for parents and educators of the target market, as well as books for children to read.

3. Software: carefully selected software for the target market, parents, and educators.

Product Description:

In the original plan, there was a detailed description of specific toys and games, books, and software. This level of detail was considered proprietary and was removed for purposes of illustration. Please insert a detailed list of your own products if you are using this sample plan as an example.

Competitive Comparison:

In the original plan, there was a detailed description and analysis of other channels and sources competitors where the target market, parents, and educators can purchase toys, games, books, and software. This level of detail was considered proprietary and was omitted from the plan for purposes of illustration. Please insert a detailed description of your competitors for your plan if you are using this sample plan as an example.

Sales Literature:

Our answer to sales literature is the web. Within six months, we should also have a printed catalog to send to customers who prefer a hard-copy catalog.

Sourcing:

In the real plan, this section referred in detail to distributors and the products they carried. This detail was considered proprietary and strategic and was omitted from the sample plan. Please provide a detailed discussion of how the products can be purchased from manufacturers and distributors in this section.

Technology:

The InteliChild.com e-commerce site will be built on a three-tier structure. The site will be coded mostly in ColdFusion™ and ASP™ and driven by SQL™ servers and an IIS™ Web server. Customer registration databases will be live to email updates on products and the website to customers. Customers will have the option to opt-out of the email list.

The information architecture will be based on four fundamental arenas – the free valuable information arena, the product detail arena, the final purchasing arena, and the purchase administration area.

The purchase arena will require a Verisign™ certificate and a Cybercash™ connection. The administrative arena will be hosted on mirror servers that query the live databases for migration into local databases. This server is hidden from Internet traffic and kept under high security.

The set-up will require five servers, two for in-house reasons and three for web hosting. Two of the web host servers will serve traffic through ColdFusion™ and ASP™ in cluster, and the third will be a dedicated SQL™ server.

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Future Products:

The Internet reinvents itself every three months. Our strategy for future development is to remain positioned with enough flexibility to adapt to new technologies quickly.

Market Analysis Summary:

The InteliChild.com market has been expanding exponentially with the advances of technology in the teaching sectors and the acceptance of technology as a teaching aid. Approval and support from the school communities, including teachers, the PTA, and special education programs, will be crucial to our entrance into the market.

Market Segmentation:

Our primary target markets include:

1. The kids themselves: ages 5-9 and ages 10-14 (10% of the total in each category).

2. Parents: 10% of the parents, assuming an average combined income above $100,000.

3. Educational institutions for children of the upper class, including day care and private schools (107,000 schools in the U.S.).

4. Self-teaching families: a group of established customers who teach their children from home.

Children s Website Business Plan Example

Market Analysis

Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR

——————— | —— | —— | —— | —— | —— | —— | ——

U.S. Kids 5-9 | 2% | 1,994,000 | 2,033,880 | 2,074,558 | 2,116,049 | 2,158,370 | 2.00%

U.S. Kids 1-14 | 2% | 1,961,200 | 2,000,424 | 2,040,432 | 2,081,241 | 2,122,866 | 2.00%

U.S. Parents | 2% | 12,000,000 | 12,240,000 | 12,484,800 | 12,734,496 | 12,989,186 | 2.00%

U.S. Schools | 1% | 107,000 | 108,070 | 109,151 | 110,243 | 111,345 | 1.00%

Home School Families | 40% | 5,000 | 7,000 | 9,800 | 13,720 | 19,208 | 40.00%

Non-U.S. Parents | 4% | 24,000,000 | 24,960,000 | 25,958,400 | 26,996,736 | 28,076,605 | 4.00%

Non-U.S. Schools | 0% | 225,000 | 225,000 | 225,000 | 225,000 | 225,000 | 0.00%

Total | 3.20% | 40,292,200 | 41,574,374 | 42,902,141 | 44,277,485 | 45,702,580 | 3.20%

Target Market Segment Strategy

Our initial launch will target the American upper class, as they appreciate our technology and have high bandwidth connections.

Market Trends

The market for technological teaching devices is growing rapidly, driven by salary increases in the technology sector, double-income households, and less leisure time. Research is increasingly happening online.

Market Growth

A strong web presence is crucial for InteliChild.com to survive and be a destination for research by double-income families in the technology sector.

Market Needs

The InteliChild.com website must be fun, easy to use, and informative, reflecting our product line. The design should promote a feeling of superior quality to appeal to parents and educators.

Industry Analysis

The website industry is experiencing significant growth.

Competition and Buying Patterns

Factors such as pricing, shipment, quality, and presentation are important in competition for website use by bright children ages 8-14.

Main Competitors

We are the second-best in dollar market share, with better reviews from industry leaders. This positions us to expand our business significantly.

Industry Participants

There are various companies addressing the same target market, selling products such as toys, books, or games.

Distribution Patterns

Multiple websites are addressing the same target market, each with its own business model and traffic.

Web Plan Summary

Our primary strategy is to build an impressive destination website that offers a great user experience. We will focus on revenue and market share growth through increased traffic.

Website Marketing Strategy

Our design and product quality will distinguish us as a dot-com company. We aim to be the best reviewed website in our category and provide a full learning center, not just a store front.

Development Requirements

We will use the latest technologies to impress visitors with excellent design and animation. The website will be built on a three-tier structure and require secure connections for purchases.

Strategy and Implementation Summary

We have developed an in-house knowledge base that gives us a competitive advantage. We will focus on sales strategies and forecast exponential growth based on increasing website traffic.

Competitive Edge

Our in-house expertise and more efficient use of resources give us a competitive advantage over our competitor.

Sales Strategy

Our sales strategy is proprietary and focused on capturing market share.

Sales Forecast

Sales are projected to rise exponentially based on increasing website traffic and sales per user session.

Children s Website Business Plan Example

Children s Website Business Plan Example

Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Toys and Games 17,622 61,250 112,500
Books 4,619 17,500 50,000
Software 3,604 17,500 50,000
Total Unit Sales 25,845 96,250 212,500
Unit Prices Year 1 Year 2 Year 3
Toys and Games $30.00 $30.00 $30.00
Books $20.00 $20.00 $30.00
Software $40.00 $40.00 $30.00
Sales
Toys and Games $528,660 $1,837,500 $3,375,000
Books $92,380 $350,000 $1,500,000
Software $144,160 $700,000 $1,500,000
Total Sales $765,200 $2,887,500 $6,375,000
Direct Unit Costs Year 1 Year 2 Year 3
Toys and Games $12.00 $12.00 $12.00
Books $8.00 $8.00 $8.00
Software $16.00 $16.00 $16.00
Direct Cost of Sales
Toys and Games $211,464 $735,000 $1,350,000
Books $36,952 $140,000 $400,000
Software $57,664 $280,000 $800,000
Subtotal Direct Cost of Sales $306,080 $1,155,000 $2,550,000

Sales Programs

This is sample text only. The original was very proprietary, describing the company strategy in detail. This is sample text only.

Marketing Strategy

This is sample text only. The original was very proprietary, describing the company strategy in detail. This is sample text only.

Distribution Strategy

This is sample text only. The original was very proprietary, describing the company strategy in detail.

Marketing Programs

This is sample text only. The original was very proprietary, describing the company strategy in detail. This is sample text only.

Positioning Statement

This is sample text only. The original was very proprietary, describing the company strategy in detail. This is sample text only.

Pricing Strategy

This is sample text only. The original was very proprietary, describing the company strategy in detail. This is sample text only.

Promotion Strategy

This is sample text only. The original was very proprietary, describing the company strategy in detail. This is sample text only.

Strategic Alliances

This is sample text only. The original was very proprietary, describing the company strategy in detail. This is sample text only.

Value Proposition

This is sample text only. The original was very proprietary, describing the company strategy in detail. This is sample text only.

Milestones

The milestones graphic illustrates key implementation activities. The most important milestone will be the design templates. During that time we will be putting together the back-end phases, and both milestones should be achieved at the same time. After that point, integration can begin between the back-end and the front-end phases. Our next milestone will be the beta release, followed by the full launch two weeks later.

Children s Website Business Plan Example

Management Summary

Sonny Cieliblu will lead the InteliChild.com project as the producer. Sonny will oversee all project activities, serving as the administrator, coordinator, and trainer for both partners and staff members. This multi-faceted role presents challenges and responsibilities as an employee, coach, and supervisor.

Organizational Structure

We require an agile organizational structure that promotes a seamless flow of ideas and implementation across sales, marketing, and website development. Rather than thinking of these functions as separate entities, we aim to foster a collaborative team environment. While maintaining clear decision-making power, we recognize the need for structure as we grow.

Management Team

Person 1: [Placeholder text describing the people involved and management structure.]

Person 2: [Placeholder text describing the people involved and management structure.]

Person 3: [Placeholder text describing the people involved and management structure.]

Person 4: [Placeholder text describing the people involved and management structure.]

Management Team Gaps

Currently, our team lacks experienced management professionals. We acknowledge this weakness and plan to recruit individuals with a wealth of expertise to strengthen our administrative and financial capabilities.

Personnel Plan

To support our growth, we have outlined a personnel plan. By the end of 2000, we aim to have 14 employees, expanding to 18 by the end of 2002.

Financial Plan

As an internet venture, our success relies on the financial prospects of the growing online world. To ensure financial viability, we aim to increase our valuation in line with our schedule and attract substantial additional investment. The investment offering for investors is detailed in the table below:

1. The exit strategy involves acquisition in 2003, valuing the company at over $20 million.

2. The equity plan and valuations at the time of exit are explained in the "Exit Strategy" section. The plan assumes an ending valuation of $20 million, an attractive proposition with an IRR of more than 100% for every investor.

Important Assumptions

The general financial assumptions are detailed in the following table. However, critical underlying assumptions include:

1. Continued growth of internet users, estimated to increase from 4% to 11% of the world’s population by 2005.

2. No major e-commerce disasters affecting credit card authorization, shipping, etc.

3. Ongoing support from financial markets, resulting in higher valuations for internet companies, even those operating at a loss. Increasing valuations are crucial to our financial strategy.

Key Financial Indicators

The following benchmarks demonstrate ambitious sales growth alongside corresponding increases in operating expenses. Our goal is to improve inventory ratios, payment terms, and collection periods. Leveraging internet technology as our primary sales and marketing channel allows for high sales growth without corresponding increases in operating expenses.

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Children s Website Business Plan Example

Break-even Analysis

The break-even analysis is a useful financial indicator. The table and chart below illustrate break-even based on monthly sales and fixed costs. With these assumptions, we reach break-even by the end of the first year.

Children s Website Business Plan Example

Break-even Analysis

—————————————-

Monthly Units Break-even: 8,948

Monthly Revenue Break-even: $264,916

Assumptions:

—————————————-

Average Per-Unit Revenue: $29.61

Average Per-Unit Variable Cost: $11.84

Estimated Monthly Fixed Cost: $158,950

Projected Profit and Loss

—————————————-

Despite the current trend of encouraging losses for website businesses, we believe that we can turn a profit by the third year. We also aim to significantly reduce losses in the second year, as shown in the following table. However, the investment in online and offline advertising is substantial, and the traffic justifies the loss.

Children s Website Business Plan Example

Children s Website Business Plan Example

Children s Website Business Plan Example

Children s Website Business Plan Example

Pro Forma Profit and Loss:

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $765,200 $2,887,500 $6,375,000
Direct Cost of Sales $306,080 $1,155,000 $2,550,000
Production Payroll $81,000 $225,000 $305,000
Fulfillment $45,845 $0 $0
Total Cost of Sales $432,925 $1,380,000 $2,855,000
Gross Margin $332,275 $1,507,500 $3,520,000
Gross Margin % 43.42% 52.21% 55.22%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $174,100 $315,000 $460,000
Online Advertising $640,880 $0 $0
Other Advertising $444,400 $0 $0
Collaterals $42,000 $0 $0
Events $20,000 $0 $0
Public Relations $27,000 $0 $0
Website Infrastructure $90,000 $0 $0
Other Sales and Marketing Expenses $12,000 $0 $0
Total Sales and Marketing Expenses $1,450,380 $315,000 $460,000
Sales and Marketing % 189.54% 10.91% 7.22%
General and Administrative Expenses
General and Administrative Payroll $176,700 $290,000 $370,000
Marketing/Promotion $0 $0 $0
Depreciation $2,000 $0 $0
Leased Equipment $9,000 $0 $0
Utilities $2,400 $0 $0
Insurance $500 $0 $0
Rent $42,000 $0 $0
Payroll Taxes $83,115 $163,800 $221,250
Other General and Administrative Expenses $0 $0 $0
Total General and Administrative Expenses $315,715 $453,800 $591,250
General and Administrative % 41.26% 15.72% 9.27%
Other Expenses:
Other Payroll $122,300 $262,000 $340,000
Consultants $0 $0 $0
Software & Equipment $19,000 $0 $0
Total Other Expenses $141,300 $262,000 $340,000
Other % 18.47% 9.07% 5.33%
Total Operating Expenses $1,907,395 $1,030,800 $1,391,250
Profit Before Interest and Taxes ($1,575,120) $476,700 $2,128,750
EBITDA ($1,573,120) $476,700 $2,128,750
Interest Expense $6,667 $32,750 $32,750
Taxes Incurred $0 $0 $0
Net Profit ($1,581,787) $443,950 $2,096,000
Net Profit/Sales -206.72% 15.37% 32.88%

Projected Cash Flow:

In this venture, cash flow is mainly supported by new capital from additional rounds of financing.

Children s Website Business Plan Example

Pro Forma Cash Flow

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash Sales $688,680 $2,598,750 $5,737,500
Cash from Receivables $30,364 $160,735 $427,137
Subtotal Cash from Operations $719,044 $2,759,485 $6,164,637
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $15,000 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $400,000 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $750,000 $0 $0
Subtotal Cash Received $1,869,044 $2,774,485 $6,164,637
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $554,100 $1,092,000 $1,475,000
Bill Payments $1,543,999 $1,864,092 $2,814,373
Subtotal Spent on Operations $2,098,099 $2,956,092 $4,289,373
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $15,000
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $80,000 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $2,178,099 $2,956,092 $4,304,373
Net Cash Flow ($309,055) ($181,607) $1,860,264
Cash Balance $184,945 $3,338 $1,863,603

Projected Balance Sheet

The balance sheet shows our projected financial position during the next three years. Obviously the key variable during this period, overall valuation, isn’t shown.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $184,945 $3,338 $1,863,603
Accounts Receivable $46,156 $174,171 $384,534
Inventory $122,342 $399,522 $516,071
Other Current Assets $5,000 $5,000 $5,000
Total Current Assets $358,443 $582,032 $2,769,209
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $2,000 $2,000 $2,000
Total Long-term Assets ($2,000) ($2,000) ($2,000)
Total Assets $356,443 $580,032 $2,767,209
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $369,230 $133,868 $240,045
Current Borrowing $0 $15,000 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $369,230 $148,868 $240,045
Long-term Liabilities $320,000 $320,000 $320,000
Total Liabilities $689,230 $468,868 $560,045
Paid-in Capital $1,282,750 $1,282,750 $1,282,750
Retained Earnings ($33,750) ($1,615,537) ($1,171,587)
Earnings ($1,581,787) $443,950 $2,096,000
Total Capital ($332,787) $111,163 $2,207,163
Total Liabilities and Capital $356,443 $580,032 $2,767,209
Net Worth ($332,787) $111,163 $2,207,163

Business Ratios

Our ratios, as projected here, are typical of the kind of growth company we project. The comparisons are based on NAICS code 454111, Electronic Shopping. We do expect our gross margin and sales per employee to be much higher than standard retail.

Sales Forecast:

Unit Sales:

Toys and Games: 0%, 0, 0, 0, 79, 213, 295, 610, 1,358, 1,957, 3,043, 4,314, 5,753

Books: 0%, 0, 0, 0, 0, 0, 0, 0, 272, 326, 761, 863, 2,397

Software: 0%, 0, 0, 0, 0, 0, 0, 0, 0, 326, 761, 1,079, 1,438

Total Unit Sales: 0, 0, 0, 79, 213, 295, 610, 1,630, 2,609, 4,565, 6,256, 9,588

Unit Prices:

Toys and Games: $30.00, $30.00, $30.00, $30.00, $30.00, $30.00, $30.00, $30.00, $30.00, $30.00, $30.00, $30.00, $30.00

Books: $20.00, $20.00, $20.00, $20.00, $20.00, $20.00, $20.00, $20.00, $20.00, $20.00, $20.00, $20.00, $20.00

Software: $40.00, $40.00, $40.00, $40.00, $40.00, $40.00, $40.00, $40.00, $40.00, $40.00, $40.00, $40.00, $40.00

Sales:

Toys and Games: $0, $0, $0, $2,370, $6,390, $8,850, $18,300, $40,740, $58,710, $91,290, $129,420, $172,590

Books: $0, $0, $0, $0, $0, $0, $0, $0, $5,440, $6,520, $15,220, $17,260, $47,940

Software: $0, $0, $0, $0, $0, $0, $0, $0, $0, $13,040, $30,440, $43,160, $57,520

Total Sales: $0, $0, $0, $2,370, $6,390, $8,850, $18,300, $46,180, $78,270, $136,950, $189,840, $278,050

Direct Unit Costs:

Toys and Games: 0.00%, $12.00, $12.00, $12.00, $12.00, $12.00, $12.00, $12.00, $12.00, $12.00, $12.00, $12.00, $12.00

Books: 0.00%, $8.00, $8.00, $8.00, $8.00, $8.00, $8.00, $8.00, $8.00, $8.00, $8.00, $8.00, $8.00

Software: 0.00%, $16.00, $16.00, $16.00, $16.00, $16.00, $16.00, $16.00, $16.00, $16.00, $16.00, $16.00, $16.00

Direct Cost of Sales:

Toys and Games: $0, $0, $0, $948, $2,556, $3,540, $7,320, $16,296, $23,484, $36,516, $51,768, $69,036

Books: $0, $0, $0, $0, $0, $0, $0, $0, $2,176, $2,608, $6,088, $6,904, $19,176

Software: $0, $0, $0, $0, $0, $0, $0, $0, $0, $5,216, $12,176, $17,264, $23,008

Subtotal Direct Cost of Sales: $0, $0, $0, $948, $2,556, $3,540, $7,320, $18,472, $31,308, $54,780, $75,936, $111,220

Personnel Plan:

Production Personnel:

VP Support: $0, $0, $0, $3,500, $3,500, $3,500, $3,500, $3,500, $3,500, $4,000, $4,000, $4,000

Support Engineers: $0, $0, $0, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000

Support Technicians: $0, $0, $0, $0, $0, $0, $0, $0, $3,000, $3,000, $3,000, $6,000, $6,000

Other: $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0

Subtotal: $0, $0, $0, $6,500, $6,500, $6,500, $6,500, $9,500, $9,500, $10,000, $13,000, $13,000

Sales and Marketing Personnel:

VP Sales & Marketing: $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000

Business Development: $0, $0, $0, $3,500, $3,500, $3,500, $3,500, $3,500, $3,500, $3,500, $3,500, $3,500, $3,500

Sales Systems: $0, $0, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000

Sales Technicians: $0, $0, $2,500, $2,500, $2,500, $2,500, $2,500, $3,000, $3,900, $5,200, $6,800, $9,200

Other: $0, $0, $0, $0, $0, $0, $2,000, $2,000, $2,000, $2,000, $2,000, $2,000, $2,000

Subtotal: $5,000, $5,000, $10,500, $14,000, $14,000, $14,000, $16,000, $16,500, $17,400, $18,700, $20,300, $22,700

General and Administrative Personnel:

CEO: $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000

CFO: $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000

General Admin: $0, $0, $0, $0, $0, $3,000, $3,300, $4,300, $5,500, $6,700, $7,900, $12,000

Other: $0, $0, $0, $0, $0, $2,000, $2,000, $2,000, $2,000, $2,000, $2,000, $2,000, $2,000

Subtotal: $10,000, $10,000, $10,000, $10,000, $10,000, $15,000, $15,300, $16,300, $17,500, $18,700, $19,900, $24,000

Other Personnel:

CTO: $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000, $5,000

Devel Systems: $0, $0, $0, $0, $0, $0, $4,000, $4,400, $5,100, $6,400, $7,900, $12,000

Devel Engineers: $0, $0, $0, $0, $0, $0, $0, $0, $3,000, $4,500, $6,000, $9,000

Other: $0, $0, $

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 $0 $0 $2,370 $6,390 $8,850 $18,300 $46,180 $78,270 $136,950 $189,840 $278,050

Direct Cost of Sales $0 $0 $0 $948 $2,556 $3,540 $7,320 $18,472 $31,308 $54,780 $75,936 $111,220 $135,808

Production Payroll $0 $0 $0 $6,500 $6,500 $6,500 $6,500 $9,500 $9,500 $10,000 $13,000 $13,000

Fulfillment $0 $0 $2,000 $2,079 $2,213 $2,295 $2,610 $3,630 $4,610 $6,565 $8,255 $11,588

Total Cost of Sales $0 $0 $2,000 $9,527 $11,269 $12,335 $16,430 $31,602 $45,418 $71,345 $97,191 $135,808

Gross Margin $0 $0 ($2,000) ($7,157) ($4,879) ($3,485) $1,870 $14,578 $32,852 $65,605 $92,649 $142,242

Gross Margin % 0.00% 0.00% 0.00% -301.98% -76.35% -39.38% 10.22% 31.57% 41.97% 47.90% 48.80% 51.16%

Operating Expenses:

Sales and Marketing Expenses

Sales and Marketing Payroll $5,000 $5,000 $10,500 $14,000 $14,000 $14,000 $16,000 $16,500 $17,400 $18,700 $20,300 $22,700

Online Advertising $5,000 $17,900 $22,000 $26,100 $29,535 $36,735 $46,335 $63,135 $81,135 $95,535 $105,135 $112,335

Other Advertising $0 $0 $11,535 $23,535 $34,435 $39,835 $44,335 $50,735 $54,235 $58,335 $61,885 $65,535

Collaterals $2,000 $0 $0 $10,000 $0 $0 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Events $0 $0 $0 $10,000 $0 $0 $10,000 $0 $0 $0 $0 $0

Public Relations $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Website Infrastructure $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000

Other Sales and Marketing Expenses $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Total Sales and Marketing Expenses $16,000 $26,900 $48,035 $90,635 $84,970 $97,570 $137,670 $151,370 $173,770 $193,570 $208,320 $221,570

Sales and Marketing % 0.00% 0.00% 0.00% 3824.26% 1329.73% 1102.49% 752.30% 327.78% 222.01% 141.34% 109.73% 79.69%

General and Administrative Expenses:

General and Administrative Payroll $10,000 $10,000 $10,000 $10,000 $10,000 $15,000 $15,300 $16,300 $17,500 $18,700 $19,900 $24,000

Marketing/Promotion $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,000

Leased Equipment $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750

Utilities $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Insurance $500 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Payroll Taxes 15% $3,000 $3,000 $3,825 $5,325 $5,325 $6,075 $7,020 $7,755 $8,625 $9,495 $10,815 $12,855

Other General and Administrative Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total General and Administrative Expenses $16,450 $15,950 $16,775 $18,275 $18,275 $24,025 $28,270 $30,005 $32,075 $34,145 $36,665 $44,805

General and Administrative % 0.00% 0.00% 0.00% 771.10% 285.99% 271.47% 154.48% 64.97% 40.98% 24.93% 19.31% 16.11%

Total Operating Expenses $39,450 $49,850 $71,810 $123,910 $110,245 $127,595 $174,940 $190,775 $218,945 $243,615 $263,885 $292,375

Profit Before Interest and Taxes ($39,450) ($49,850) ($73,810) ($131,067) ($115,124) ($131,080) ($173,070) ($176,197) ($186,093) ($178,010) ($171,236) ($150,133)

EBITDA ($39,450) ($49,850) ($73,810) ($131,067) ($115,124) ($131,080) ($173,070) ($176,197) ($186,093) ($178,010) ($171,236) ($148,133)

Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,500 $1,333 $1,167 $2,667

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

Net Profit ($39,450) ($49,850) ($73,810) ($131,067) ($115,124) ($131,080) ($173,070) ($176,197) ($187,593) ($179,343) ($172,403) ($152,800)

Net Profit/Sales 0.00% 0.00% 0.00% -5530.25% -1801.63% -1481.13% -945.74% -381.54% -239.67% -130.96% -90.81% -54.95%

Pro Forma Cash Flow

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 277.35% 120.78% 7.56%
Percent of Total Assets
Accounts Receivable 12.95% 30.03% 13.90% 12.42%
Inventory 34.32% 68.88% 18.65% 38.62%
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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 $0 $0 $2,133 $5,751 $7,965 $16,470 $41,562 $70,443 $123,255 $170,856 $250,245
Cash from Receivables $0 $0 $0 $0 $8 $250 $647 $917 $1,923 $4,725 $8,023 $13,871
Subtotal Cash from Operations $0 $0 $0 $2,133 $5,759 $8,215 $17,117 $42,479 $72,366 $127,980 $178,879 $264,116
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $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 $200,000 $0 $0 $200,000
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 $500,000 $0 $0 $0 $250,000 $0 $0 $0
Subtotal Cash Received $0 $0 $0 $2,133 $505,759 $8,215 $17,117 $42,479 $522,366 $127,980 $178,879 $464,116
Expenditures from Operations
Cash Spending $20,000 $20,000 $25,500 $35,500 $35,500 $40,500 $46,800 $51,700 $57,500 $63,300 $72,100 $85,700
Bill Payments $648 $19,797 $30,465 $49,999 $98,607 $88,207 $102,120 $149,869 $184,262 $224,360 $279,966 $315,699
Subtotal Spent on Operations $20,648 $39,797 $55,965 $85,499 $134,107 $128,707 $148,920 $201,569 $241,762 $287,660 $352,066 $401,399
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 $20,000 $20,000 $20,000 $20,000
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 $20,648 $39,797 $55,965 $85,499 $134,107 $128,707 $148,920 $201,569 $261,762 $307,660 $372,066 $421,399
Net Cash Flow ($20,648) ($39,797) ($55,965) ($83,366) $371,652 ($120,492) ($131,802) ($159,090) $260,604 ($179,680) ($193,187) $42,717
Cash Balance $473,352 $433,555 $377,590 $294,224 $665,876 $545,384 $413,582 $254,492 $515,096 $335,415 $142,228 $184,945

Pro Forma Balance Sheet

Business Plan Outline

  • Executive Summary
  • Company Summary
  • Products
  • Market Analysis Summary
  • Web Plan Summary
  • Strategy and Implementation Summary
  • Management Summary
  • Financial Plan
  • Appendix

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Balance Sheet
1 2 3 4 5 6 7 8 9 10 11 12
Assets Starting Balances
Current Assets
Cash $494,000 $473,352 $433,555 $377,590 $294,224 $665,876 $545,384 $413,582 $254,492 $515,096 $335,415 $142,228 $184,945
Accounts Receivable $0 $0 $0 $0 $237 $868 $1,503 $2,686 $6,387 $12,291 $21,261 $32,223 $46,156
Inventory $0 $0 $0 $0 $1,043 $2,812 $3,894 $8,052 $20,319 $34,439 $60,258 $83,530 $122,342
Other Current Assets $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Total Current Assets $499,000 $478,352 $438,555 $382,590 $300,503 $674,556 $555,781 $429,319 $286,198 $566,826 $421,934 $262,980 $358,443
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,000
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($2,000)
Total Assets $499,000 $478,352 $438,555 $382,590 $300,503 $674,556 $555,781 $429,319 $286,198 $566,826 $421,934 $262,980 $356,443
Liabilities and Capital
Current Liabilities
Accounts Payable $0 $18,802 $28,855 $46,700 $95,680 $84,857 $97,162 $143,770 $176,846 $215,067 $269,519 $302,967 $369,230
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 $18,802 $28,855 $46,700 $95,680 $84,857 $97,162 $143,770 $176,846 $215,067 $269,519 $302,967 $369,230
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $180,000 $160,000 $140,000 $320,000
Total Liabilities $0 $18,802 $28,855 $46,700 $95,680 $84,857 $97,162 $143,770 $176,846 $395,067 $429,519 $442,967 $689,230
Paid-in Capital $532,750 $532,750 $532,750 $532,750 $532,750 $1,032,750 $1,032,750 $1,032,750 $1,032,750 $1,282,750 $1,282,750 $1,282,750 $1,282,750
Retained Earnings ($33,750) ($33,750) ($33,750) ($33,750) ($33,750) ($33,750) ($33,750) ($33,750) ($33,750) ($33,750) ($33,750) ($33,750) ($33,750)
Earnings $0 ($39,450) ($89,300) ($163,110) ($294,177) ($409,301) ($540,381) ($713,451) ($889,648) ($1,077,241) ($1,256,584) ($1,428,987) ($1,581,787)
Total Capital $499,000 $459,550 $409,700 $335,890 $204,823 $589,699 $458,619 $285,549 $109,352 $171,759 ($7,584) ($179,987)

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