Business Plan

OWNERS: Adam Burnette, Erik Czajkowski, Nick Rondeau, Jake Smith

Business Name: Capital Mill Works

Street Address: 2220 East Main Street
City, State, ZIP: Richmond, VA, 23223
Telephone: 804-555-5678
Fax: 804-555-5679
E-Mail: info@capitalmillworks.com

Team Number: 9
Course Number and Section Number: MGNT 350-03
Course name: Owning and Managing a Small Business
Date Due: 11/16/2015

I. Table of Contents
Page No.
Business Plan Cover Sheet

Blank Page

I.

Table of Contents

II.

Executive Summary

III.

General Company Description

IV.

Products and Services

V.

Marketing Plan

VI.

Operational Plan

11

VII.

Management and Organization

13

VIII. Personal Financial Statement

14

IX.

Startup Expenses and Capitalization

15

X.

Financial Plan

16

XI.

Bibliography

17

XII.

Appendices

19

Ending page number

22

II. Executive Summary

Capital Mill Works developed a strategic business plan focusing on the quality of our products
and services in an effort to satisfy our client needs. Capital Mill Works is an eco-friendly company
that offers reclaimed wood; helping our environment by providing sustainable building materials to
give a unique style to our customers projects.
Our 4 owners joined forces in 2015 as students at Radford Universitys College of Business and
Economics with the commitment to customer service first, and to provide the highest quality
products second. We aim to service the small businesses and homeowners in the Richmond and
Tidewater areas who share our passion in helping our environment by using beautiful reclaimed
lumber.
Throughout this business plan you will discover that our short supply chain and production
processes allow us to generate high profit margins from the first quarter forward. Only small
upgrades would be needed to improve our efficiency in production and deliver a more diverse
product line to our customers.
Our objective with this business plan is to attract investors who value our passion, join our team,
and become part of the reclaimed movement. You will see that our leadership team brings a unique
level of commitment and knowledge across the management spectrum that sets us apart from our
competitors.
We are looking for investors to help us raise capital funds to acquire raw materials and the
equipment needed in our milling process. This funding will allow us to obtain the best products and
equipment needed to become very profitable by improving our efficiency in production; generating
returns on the investment very quickly.

III. General Company Description

A. Mission Statement: We are committed to achieving sustainable growth by providing
responsible and exceptional products and services to our customers while creating strong
relationships within our community.
B. Company Goals and Objectives: We aim to become the leading supplier of reclaimed lumber
in the Richmond and Tidewater areas in 5 years, while setting the standard for customer service.
C. Business Philosophy: We never compromise on customer satisfaction, environmental
responsibility, and product quality.
D. Principal Market: Our principal market will be upper class homeowners and small business
owners in the Richmond and Tidewater regions.
E. Industry: The millwork industry is mature (Imbruglia, M., 2015), but we foresee growth among
reclaimed lumber due to the historical significance of land and buildings in our principal market.
F. Important company strengths and core competencies: Strong marketing strategies, constant
evaluation of our costs, and a short supply chain will make our reclaimed lumber company
successful.
G. Legal form of ownership: Capital Mill Works will operate as a Limited Liability Company
(LLC), allowing our 4 members to state each members rights and responsibilities.

IV. Products and Services

A. Products and Services: Our wood products are reclaimed from the Mid-Atlantic and
Midwestern regions of the United States from the deconstruction of old barns, homes, and
commercial sites. Unlike our competitors, we will only harvest premium, #1, and #2 grade lumber
for the highest quality for our inventory. Typical products we will salvage are wood used for
flooring, wall paneling, framing, mantels, and beams.
B. Competitive advantages and disadvantages: Our team goes directly to the source of the wood
and salvages them on site. We try to limit purchasing inventory through brokers, although
sometimes it will be necessary based on the customer needs and lumber availability. By limiting the
supply chain, we are able to provide our customers high-quality products at a competitive price. Our
products are only milled once the specific needs of the customer are identified, which helps
eliminate waste of products. All by-products produced in the milling process are reused to heat our
facility!

C. Pricing:
Wood Products:
Flooring/General Lumber:

$16.00 /sq. ft. for Oak Products (Product 1)

$10.00 /sq. ft. for Pine Products (Product 2)

(Up to 2x7x96 due to mill constraints)

Mantels and Beams:

$10.00 /board-foot for Oak Beams (Product 3)

$6.25 /board-foot for Pine Beams (Product 4)

(Lengths up to 30, from 4x4 up to 13x17)

6

V. Marketing Plan
A. What is the total annual industry/market potential in dollars? The total annual revenue for
the lumber market is $7.09bn within the millwork industry, which has a total annual revenue of
$25.7bn. (Imbruglia, M., 2015)
B. What is your companys annual market potential in dollars? Based on the median expected
annual revenue of a local competitor, E.T. Moore, we estimate our annual market potential for
reclaimed lumber in our operating area at $2,500,000. (Costa Mesa, 2015)
C. What is your companys annual forecast in dollars? As a new company, we estimate our
market potential to be roughly half of the market share of a local Richmond competitor, E.T.
Moore. This estimated market share of 0.0175% in the lumber market gives us a forecast of
$1,250,000. (Imbruglia, M., 2015)
D. What are the trends in your target market? A boom in the craft beer market in Richmond and
Tidewater regions (Blackwell, J., 2015) has created a strong demand for reclaimed wood as a source
for aesthetically pleasing building materials in breweries and bars. Richmond also has many
historical sites that use antique wood.
E. What entry barriers do you face in entering this market with this company? One of the
biggest barriers will be creating a customer base in an area with a strong competitor. Our industry is
already very mature (Imbruglia, M., 2015) and it may be difficult to build strong brand awareness as
fast as wed like to. Building our initial inventory will also require a large amount of capital.
F. Features and Benefits: Features of our salvaged wood include customizable sizing in our mills,
variety of colors and ages, and a variety of applications for use. Benefits include possible tax
incentives for using sustainable building materials, pride of ownership, added value to a home, and
authenticity in historical applications. Business owners will benefit from the intangible value of the
7

elegant ambiance that their own customers will value. Our team will be there from the point of sale
to the final installation for support and follow-up to ensure complete customer satisfaction.
G. Customers: Our target customer will be local contractors buying product supplies for their
commercial and home building jobs. The Richmond and Tidewater markets are rich with historical
sites (Richmond Region Historic Sites, 2014), so the use of antique wood is not only popular, it is
often a necessity in repair or remodeling (Old & Historic Districts of Richmond, VA: Handbook
and Design Review Guidelines, 1999). Our end consumers are contractors, business owners, and
homeowners with a high income.
H. Competition: Our main competition is E.T. Moore Manufacturing INC, located at 3100 N
Hopkins Rd. STE 101, Richmond VA, 23224. (Heart of Pine Specialist, 2015) They will compete
with us on our products and services, as well as our locations and customer base. Other indirect
competitors include Lowes and Home Depot. Our product line is authentic antique wood, of the
highest quality, and Capital Mill Works offers a customer service unmatched by larger companies.
Research shows that of all the lumber companies in the United States, Virginia is only home to
2.6% of those, which gives us an indication that there arent enough companies to fill the demand.
This is promising, as Virginia is at the border of two regions which generate some of the highest
revenues in the lumber segment of the millwork industry, the Southeast (including Virginia) and the
Mid-Atlantic (Imbruglia, M., 2015).
I. Niche: Capital Mill Works will supply the rapidly growing craft brewery and bar market in the
metro Richmond and Tidewater regions. Trends in the use of reclaimed lumber will allow us to
become the exclusive supplier to these businesses for bar tops, flooring, wall paneling, etc.

J. Strategy:

Social media blasts

Local business owner meetings

Referral and incentive programs

Creating visual models in our showroom

Aggressive demolition and supply purchasing

K. Promotion: Capital Mill Works will have a presence on various social media outlets. Links to
our website will reveal a virtual showroom, photos of current inventory, and a growing testimonial
page. We will generate word of mouth by attending chamber of commerce meetings, business
owner meetups, contractor association meetings, and trade shows.
This strategy will keep our advertising expenses lower than
traditional print, TV and radio advertising. Our annual goal
expense for advertisement is $5,000. The logo we created evokes
the feeling of artisanal wood work, with a retro-vintage style. This
logo will be branded (burned) on our products as promotion.
L. Pricing: Reclaimed lumber is rare, unique and special. For this reason we can offer premium
price points. Our costs to acquire supply is variable, so this premium pricing gives us a cushion for
our margins. We still maintain similar pricing to our competitors, local and regional. We know that
pricing isnt our customers main purchasing factor (QuickFacts, 2013). They purchase based on
selection, quality, experience, and customer service.
M. Proposed Location: Capital Mill Works has selected to lease 18,000 sq./ft. at 2220 East Main
Street, Richmond, VA, 23223 as its home (Have Site Will Travel, 2015). The site is semi-furnished
with a variety of office furniture stored in the basement. The leasing agent offered to have a
9

showroom area renovated based on our needs. Nestled among the historic Tobacco Row (Richmond
Region Historic Sites, 2014), we will be conveniently located among many of our target consumers
with convenient parking, freight dock, and quick access to the interstate. Our location has a
showroom, inventory storage, offices, and mill production areas.

N. Distribution Channels: Customer orders will be placed either in person at our showroom, or
over the phone. Online clients will be prompted to fill out an inquiry form on our Purchase page
of our website. Next, one of our sales representatives will contact the customer via phone to finalize
the sale. Once the order is filled, we can ship product anywhere in the world via truck, train, or boat,
at the cost of the customer. Our sales force will also make outside sales calls in an attempt to move
bulk quantities of product to contractors.

10

VI. Operational Plan

A. Production: As a refining lumber mill, we provide our reclaimed lumber products by
deconstructing old structures to obtain their high quality, old-growth, antique lumber. There will be
fixed cost (rent, bills, and payroll) and overhead cost (bidding, equipment purchases/repairs) after
start-up.
B. Location: The experience we hope to offer our customers requires a comfortable and relaxed
workspace. We want our customers to feel welcomed when they come to shop with us. Our
building will feature renovated industrial space into an open plan showroom, examples of finished
products throughout, and full utilities plus Wi-Fi to create an at-ease, comfortable environment
C. Access: With one commercial garage and loading dock, a 100 car parking lot, and total space of
18,000sq/ft., our business will have plenty of access for our customers and employees. Capital Mill
Works sits among a highly bustling historic Richmond neighborhood only 6 blocks to the ramps for
Interstates 64 and 95.
D. Construction: We are planning to lease a building, as the costs of new construction are too
high. Small construction within our lumber yard will be a future investment for inventory and
equipment storage.
E. Costs: See Appendix II
F. Business hours: Capital Mill Works will be open Monday through Friday from 7:00am until
5:00pm, and on Saturdays from 8:00am until 3:00pm.
G. Legal Environment: The environmental laws that Capital Mill Works are legally obligated to
follow are the Clean Water Act (CWA), The Resource Conservation and Recovery Act (RCRA),

11

the Clean Air Act (CAA), the Cluster Rule and noise pollution control. We will also carry liability
coverage for accidents in the workplace.
H. Personnel: To start the business, we need only 10 employees. We will be looking for 2 or 3
skilled workers with a background in carpentry, milling, and other lumber related industries. The
remainder of our warehouse staff can be unskilled workers that we will train. We will require our
non-skilled employees to have the ability to read, write, and perform basic math. Young
professionals will be scouted for sales, marketing and accounting roles.
I. Inventory: We will stock roughly 25% more than our anticipated sales of our products for
inventory. We anticipate a turnover rate even with our industry standard (Imbruglia, M., 2015). Our
short product range gives us some flexibility through standardization by needing to only carry pine
and oak products. If a client requests something we dont have in stock, we will take a deposit and
start a search for the wood. If we cant obtain it in a reasonable time frame we will act as a broker
and find a supplier to fill the order.
J. Suppliers: A unique aspect of the Capital Mill Works business plan is that we keep our supply
chain small. We often act as our own suppliers by obtaining inventory from old homes, factories
and buildings by bidding to the owner, or purchasing collected property liens.
K. Credit Policies: Capital Mill Works will offer credit to our clients, which is customary to our
industry (Imbruglia, M., 2015), managing credit using Visa and MasterCard payment acceptance.
L. Managing Your Accounts Payable: Capital Mill Works will operate by paying cash to
suppliers in instances where we submit a bid to an owner of property we obtain wood from. When
we purchase property to collect inventory from through collected bank liens, we may pay using
borrowed funds depending on the size of the property.
12

VII. Management and Organization

A. Managers, Owners, Key Employees:

(Cadden, D., & Leuder, S., 2015)

B. Professional and Advisory Support:
Attorney- Cherry, Seymour & Baronian, P.C.
Accountant- Wells Coleman & Co
Insurance agent- Farmers Insurance, Cathryn Strayhorn

Banker- Greg Overholser, Business Services, Navy Federal Credit Union

Consultants- Consultant Business Incorporated

Mentors and key advisors - Small Business Administration, Richmond Branch

13

VIII. Personal Financial Statement

Erik Czajkowski has total contribution equaling $10,000 to invest in the company. His liabilities
include student loans and $3000 in consumer debt. He owns a 1988 Mazda RX7 as collateral.

Nick Rondeau has total contribution of $10,000 to invest in the company as well as a 2006 Honda
Civic worth $5,000 as collateral. His liabilities include $8,000 in student loan debt.

Adam Burnette has a total contribution of $10,000 to invest in the company. He has $8,000 in
savings as well as a 2008 Ford Ranger for collateral. His liabilities include $30,000 in student loan
debt.

Jake Smith has a total contribution of $9,000 to invest in the company. He also has a 2015 Nissan
Altima as collateral. His liabilities include $23,000 in student loan debt.

14

IX. Startup Expenses and Capitalization

A. Expenses: Capital Mill Works will have startup expenses in the form of rent for our building,
inventory acquisition, advertisements, and licensing.

See Appendix 2 for a more detailed description of the startup expenses.

B. Capitalization: Capital Mill Works will require mills and saws, work trucks, and hand tools at
the beginning. Sources for these funds will come in the form of business loans and grants.

See Appendix 2 for a more detailed description of the capitalization.

15

X. Financial Plan
A. Income Statement:
See Appendix 3 for the income statement.

B. Balance Sheet:
See Appendix 4 for the balance sheet.

Research Notes: Capital Mill Works performed extensive research of the millwork industry, and
performed a comparison of a major local competitor. This research revealed the market share that
our competitor holds in the industry. From there, we estimated that as a new company, we would
hold roughly half the market share of that competitor. Using these numbers, we were able to create
a forecasted income statement and balance sheet for our business. Research showed a 3.2% annual
increase in the price of lumber from sawmills (Imbruglia, M., 2015), and is projected to remain
steady. The average demand for lumber products shows an increase through 2020 of 2.3% annually.
With this information, our income statement revealed steady growth equal to the industry standard
that will allow us to expand our product line in the future. We find that our short supply chain has
created a low cost of goods sold, and thus, expansion of product lines will increase our growth
potential. This would allow us to add employees and assets that allow us to be more efficient,
making our profitability even higher.

16

XI. Bibliography
2014 General Liability Insurance Cost Analysis. (2015). Retrieved November 15, 2015, from
http://www.insureon.com/insureonu/costs/general-liability

Band Saws. (2015). Retrieved November 9, 2015, from

http://www.baileigh.com/woodworking/band-saws

Blackwell, J. (2015, July 25). Craft beer market still has room for growth. Retrieved November 15,
2015, from http://www.richmond.com/business/article_b6c6760a-d33f-5ec7-bd2b236caf10700f.html

Cadden, D., & Leuder, S. (2015). Small business management in the 21st century (p. 363).
Washington, D.C.: Saylor.org.

Census Search. (n.d.). Retrieved November 9, 2015, from

http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_13_5YR_S2
503&prodType=table

Commercial Truck Trader. (2015). Retrieved November 10, 2015, from

http://www.commercialtrucktrader.com/

Elmwood Reclaimed Timber. (2003). Retrieved November 9, 2015, from

http://www.elmwoodreclaimedtimber.com/

Costa Mesa: Experian Information Solutions, Inc. (2015) Business Profile: E.T. Moore. Retrieved
from http://search.proquest.com/docview/1603025020?accountid=13401

Granite Communications. (2014). Retrieved October 27, 2015, from

http://www.granitecomm.com/blog/bid/67170/How-Much-Does-a-Business-Phone-System-Cost

Have Site Will Travel (2015). Delivering Commercial Real Estate Results. Retrieved November 2,
2015, from http://www.havesitewilltravel.com/

17

XI. Bibliography continued

Heart of Pine Specialist. (2005). Retrieved November 9, 2015, from http://etmoore.com/

Imbruglia, M. (2015). IBISWorld Industry Report 32191. Millwork in the US. Retrieved November
9, 2015, from IBISWorld.

Virginia Film Office. (n.d.). Retrieved November 7, 2015, from http://va.reelscout.com/loc_detail.aspx?id=10081407

Old & Historic Districts of Richmond, VA: Handbook and Design Review Guidelines. (1999).
Retrieved November 9, 2015.

QuickFacts. (2013). Retrieved November 1, 2015, from

http://www.census.gov/quickfacts/table/PST045214/00

Richmond Region Historic Sites. (2014). Retrieved November 9, 2015, from

http://www.visitrichmondva.com/things-to-do/attractions/historic-sites/

Rocky Mountain Institute. (2015). Retrieved November 10, 2015, from

http://www.rmi.org/RFGraph-commercial_building_category_expenses

Staub, D. (2013). Limited Liability Company Center. Retrieved November 9, 2015, from
http://www.limitedliabilitycompanycenter.com/single_member_llc_vs_2.html

Tax Rates. (2015). Retrieved October 25, 2015, from http://www.co.richmond.va.us/tax-rates

18

XII. Appendices
1. Sales Projections:
Capital Mill Works
Sales Projections
Q1

Q2

Q3

Q4

Product Line #1
Units
Price
Gross Sales
Returns & allowances
Net Sales

$
$
$
$

7813
16.00 $
125,000 $
125,000 $

7813
16.00 $
125,000 $

7813
16.00 $
125,000 $

125,000 $

Product Line #2
Units
Price
Gross Sales
Returns & allowances
Net Sales

$
$
$
$

12,500
10.00
125,000
125,000

$
$
$
$

12,500
10.00
125,000
125,000

Product Line #3
Units
Price
Gross Sales
Returns & allowances
Net Sales

$
$
$
$

4688
10.00
46,875
46,875

$
$
$
$

4688
10.00
46,875
46,875

Product Line #4
Units
Price
Gross Sales
Returns & allowances
Net Sales

$
$
$

2500
$6.25
15,625 $
$
15,625 $

Total Sales

312,500 $

Year 1

Year 2

Year 3

31250
16.00 $
500,000 $
500,000 $

31969
16.51 $
527,868 $

32704
17.04
557,289

125,000 $

7813
16.00 $
125,000 $
$
125,000 $

527,868 $

557,289

$
$
$
$

12,500
10.00
125,000
125,000

$
$
$
$

12,500
10.00
125,000
125,000

$
$
$
$

50,000
10.00 $
500,000 $
500,000 $

51150
10.32 $
527,868 $

52326
10.65
557,289

527,868 $

557,289

$
$
$
$

4688
10.00
46,875
46,875

$
$
$
$

4688
10.00
46,875
46,875

$
$
$
$

18750
10.00 $
187,500 $
187,500 $

19181
10.32 $
197,951 $

19622
10.65
208,983

197,951 $

208,983

2500
$6.25
15,625 $
$
15,625 $

2500
$6.25
15,625 $
$
15,625 $

2500
$6.25
15,625
15,625

$
$
$
$

10000
6.25 $
62,500 $
62,500 $

10230
6.45 $
65,984 $

10465
6.66
69,661

65,984 $

69,661

312,500 $

312,500 $

312,500 $

1,250,000 $

1,319,670 $

1,393,223

19

XII. Appendices
2. Start-Up Costs and Assets:
Capital Mill Works
Estimated Start-Up Costs and Assets
Item
Start-Up Expenses
Certificates
Certifications
Expensed Equipment
Financial Institution Fees
Identity Set/Stationary
Insurance
Licenses
Marketing Materials
Payroll (with taxes)
Permits
Professional Fees - Accounting
Professional Fees - Legal
Professional Fees - Other
Rent
Research and Development
Supplies - Office
Travel
Utilities
Web Fees
Other
Total Start-Up Expenses
Start-Up Assets
Cash on Hand
Building (if purchased)
Equipment (including installation)
Furniture and Fixtures
Inventory - Raw Materials
Inventory - Semi-Finished Goods
Inventory - Finished Goods
Land (if purchased)
Leasehold Improvements
Machinery
Rent Deposit
Signage
Utility Deposits
Vehicle(s)
Other 1
Other 2
Total Start-Up Assets

Cost

Estimate or Actual

6,940 Estimate

722 Estimate

$
$
$
$

5,000 Actual
208,750 Actual
540 Actual
5,000 Estimate

$
$
$
$
$
$

63,000
500
3,500
40,500
-

334,452

Actual
Estimate
Estimate
Actual

$
40,000 Actual
$
$
45,000 Estimate
Fully Furnished
$
100,000 Estimate

$
$
$
$

5,000
1,000
2,000
20,000

213,000

Total Start-Up Requirements

547,452

Contingency Funds (10%)

54,745

Start-Up with Contingency

602,197

Actual
Estimate
Actual
Estimate

20

XII. Appendices
3. Income Statement:
Capital Mill Works
Income Statement
For the Period Ending
1Q

2Q

3Q

4Q

Year 1

Year 2

Year 3

Net Sales
Product Line #1
Product Line #2
Product Line #3
Product Line #4
Total Net Sales

$
$
$
$
$

125,000
125,000
46,875
15,625
312,500

$
$
$
$
$

125,000
125,000
46,875
15,625
312,500

$
$
$
$
$

125,000
125,000
46,875
15,625
312,500

$
$
$
$
$

125,000
125,000
46,875
15,625
312,500

$
$
$
$
$

500,000
500,000
187,500
62,500
1,250,000

$
$
$
$
$

527,868
527,868
197,951
65,984
1,319,670

$
$
$
$
$

557,289
557,289
208,983
69,661
1,393,223

Cost of Goods Sold

Product Line #1
Product Line #2
Product Line #3
Product Line #4

$
$
$
$

23,970
23,970
12,251
7,570

$
$
$
$

23,970
23,970
12,251
7,570

$
$
$
$

23,970
23,970
12,251
7,570

$
$
$
$

23,970
23,970
12,251
7,570

$
$
$
$

95,880
95,880
49,005
30,280

$
$
$
$

98,948
98,948
50,573
31,249

$
$
$
$

102,115
102,115
52,192
32,249

Total COGS

67,761 $

67,761 $

67,761 $

67,761 $

271,045 $

279,718 $

288,669

GROSS PROFIT

244,739 $

244,739 $

244,739 $

244,739 $

978,955 $

1,039,952 $

1,104,554

Operating Expenses
Selling Expenses
Sales salaries expense
Sales commissions

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$
$
$

100
1,250
1,000

$
$
$
$

100
1,250
1,000

$
$
$
$

100
1,250
1,000

$
$
$
$

100
1,250
1,000

$
$
$
$

400
5,000
4,000

$
$
$
$

400
5,000
4,000

$
$
$
$

400
5,000
4,000

$
$

550 $
2,900 $

2,266 $
11,666 $

2,334
11,734

Rent expense - selling space

Store supplies expense
Advertising expense
Travel
Depreciation expense store equipment
Total Selling Expenses
General &
Administrative Expenses
Salaries expense
Insurance expense
Rent expense
Office supplies expense
Utilities expense
Depreciation expense other equipment
Total G & A
Total Operating
Expenses

$
$
$
$
$

550 $
2,900 $

52,188
181
15,750
1,735
10,125

$
$
$
$
$

550 $
2,900 $

52,188
181
15,750
1,735
10,125

$
$
$
$
$

550 $
2,900 $

$
$
$
$
$

52,188
181
15,750
1,735
10,125

52,188
181
15,750
1,735
10,125

$
$
$
$
$

$
$

100 $
80,078 $

100 $
80,079 $

100 $
80,079 $

100 $
80,079 $

82,978 $

82,979 $

82,979 $

Earnings Before Interest

and Taxes (EBIT)
$

161,761 $

161,760 $

2,200 $
11,600 $

208,750
724
63,000
6,940
40,500

$
$
$
$
$

208,750
724
63,000
6,940
45,000

$
$
$
$
$

208,750
724
63,000
6,940
45,000

400 $
320,314 $

400 $
324,814 $

400
324,814

82,979 $

331,914 $

336,480 $

336,548

161,760 $

161,760 $

647,042 $

703,472 $

768,006

Other Expenses:
Interest expense

125 $

125 $

125 $

125 $

500 $

600 $

650

Total Other Expenses

125 $

125 $

125 $

125 $

500 $

600 $

650

Net Income before Taxes $

161,636 $

161,635 $

161,635 $

161,635 $

646,542 $

702,872 $

767,356

Taxes (25%)*

40,409 $

40,409 $

40,409 $

40,409 $

161,635 $

175,718 $

191,839

Net Income

121,227 $

121,226 $

121,226 $

121,226 $

484,906 $

527,154 $

575,517

* Taxes should not be calculated for periods with negative income. Loss carryforwards may apply. This version is for simplicity.

21

XII. Appendices
4. Balance Sheet:
Capital Mill Works
Balance Sheet

1Q

2Q

3Q

4Q

Year 1

ASSETS
Current Assets
Cash
Marketable Securities
Accounts Receivable
Inventory
Pre-paid Expenses
Total Current Assets

$
$
$
$
$
$

10,000
312,500
67,761
82,328
472,589

$
$
$
$
$
$

10,000
312,500
67,761
82,328
472,589

$
$
$
$
$
$

10,000
312,500
67,761
82,328
472,589

$
$
$
$
$
$

10,000
312,500
67,761
82,328
472,589

$
.
$
$

Long-Term Assets
Capital Equipment (net of depr)
Building (net of depr)
Land
Other Assets
Total Long-Term Assets
TOTAL ASSETS

$
$
$
$
$
$

44,500
44,500
517,089

$
$
$
$
$
$

44,500
44,500
517,089

$
$
$
$
$
$

44,500
44,500
517,089

$
$
$
$
$
$

LIABILITIES
Current Liabilities
Accounts Payable - Trade
Compensation Payable
Notes Payable - Bank
Taxes Payable
Current Portion of L-T Liabilities
Total Current Liabilities

$
$
$
$
$
$

150,089
200,000
40,571
2,000
392,660

$
$
$
$
$
$

150,089
198,000
40,571
2,000
390,660

$
$
$
$
$
$

150,089
196,000
40,571
2,000
388,660

$
$
$
$
$
$

Long-Term Liabilities (net of

current portion)
Building Mortgage Payable

Year 2

Year 3

10,000 $
$
312,500 $
25,000 $
82979 $
430,479 $

10,000
716,225
27,250
85,638
839,113

$
$
$
$
$
$

10,000
726,500
30,000
87,328
853,828

44,500
44,500
517,089

$
$
$
$
$
$

11,250
11,250
441,729

$
$
$
$
$
$

11,250
11,250
850,363

$
$
$
$
$
$

11,250
11,250
865,078

150,089
194,000
40,571
2,000
386,660

$
$
$
$
$
$

186,545
15,000
40,409
50,000
291,954

$
$
$
$
$
$

192,141
20,000
41,068
50,000
303,209

$
$
$
$
$
$

198,546
22,000
43,984
50,000
314,530

$
$

$
50,000 $

$
50,000 $

$
50,000 $

$
50,000 $

20,000 $

20,000 $

20,000

50,000 $

50,000 $

50,000 $

50,000 $

20,000 $

20,000 $

20,000

TOTAL LIABILITIES

442,660 $

440,660 $

438,660 $

436,660 $

311,954 $

323,209 $

334,530

EQUITY
Paid-in-Capital
Retained Earnings

$
$

$
121,714 $

$
121,714 $

$
121,714 $

$
121,714 $

8,549
121,226 $

$
527,154 $

530,548

TOTAL EQUITY

121,714 $

121,714 $

121,714 $

121,714 $

129,775 $

527,154 $

530,548

TOTAL LIAB. AND EQUITY

564,374 $

562,374 $

560,374 $

558,374 $

441,729 $

850,363 $

865,078

Equipment Loan Payable

Total Long-Term Liabilities

22