Aftermarket Internet Applications (Assumptions)

Executive Summary

Company Summary

Services

Market Analysis Summary

Strategy & Implementation Summary

Management Summary

Financial Plan

Assumptions

1. Sales forecast is based on the following rates per hour:

   i. E-Commerce	$130
   ii. Web Development	$90
   iii. Graphic Design	$40

   All forecasts assume a 70 percent efficiency, i.e., 30 percent of time spent will not be considered billable hours. Monthly sales figures are based in the number of available nonweekend workdays.

2. Salaries are based on market rates in the Indianapolis area. All hiring will be done in said area.
3. Salary increases are based in 5 percent per year.
4. Rent is based on $13.15 per square foot @ 1,000 square feet.
5. Phone expense is based on $150 per month ($35/month line, $7 x 4 rental units, $87 long distance charges). Subsequent years include a 10 percent increase for increased volume.
6. Insurance is based on the following:

   i.	Worker's Comp	$3.25 / $100 in salaries
   ii.	Liability	$5.25 / $1,000 in revenue

7. Utilities are included in the monthly rent.
8. Capital expenditures for computers in years 2 and 3 are based on the top of the line, most expensive retail machine available through Microwarehouse (http://www.warehouse.com).
9. Payroll tax expense based on the following:

   i. FICA: Social Security	6.2% capped @ $72,600
   ii. FICA: Medicare	1.45%
   iii. Unemployment: Federal	0.80%
   iv. Unemployment: State	5.51% (average)

10. Office expense based on $50 supplies per month plus $8 T-1 Internet connection through the Technology Towers. Subsequent years are based on 25 percent and 20 percent increases respectfully.
11. Vehicle expense is based on $0.30 per mile at an average of 300 miles per week for 50 weeks (2 weeks vacation).
12. Travel expense is based on 2 major travels of 800 and 400 miles spending 8 nights a month out of town. Breakfasts, dinners, hotels, and incidentals such as the occasional entertainment of customers estimated at $120/day. Subsequent years increase by one third/year.
13. Organization dues based on membership to the following:

    i. The HTML Writers' Guild	$100/yr
    ii. The International Webmasters Association	$50/yr

14. Advertising expense based on two ads @ $300 and $325 per month in industry publications to be determined. Subsequent year increases based on 10 percent increases annually.
15. Depreciation is calculated based on the direct method amortized over 5 years and is based on the following items:
    i. Year 1: 3 Compaqs, 1 Mac, 1 Color Laserjet Printer, 1 Storage
    ii. Year 2: 4 Compaqs, 1 Mac, 1 Color Laserjet Printer, 1 Storage
    iii. Year 3: 5 Compaqs, 1 Mac, 1 Color Laserjet Printer, 1 Storage
16. Taxes incurred are based on a 28 percent standard rate.
17. Interest expense based on 12 percent.
18. Accounts Receivable estimates based on 50 percent of sales on credit (50 percent is due up front).

Start-Up Costs:

1. Legal costs are based on an estimate from J. Christian Goeke of Goeke and Hilliard for startup costs and various "boilerplate" agreement documents.
2. Brochure costs based on an estimate from Mulligan Printing.
3. Salaries based on 3 months payments.
4. Furniture estimated based on retail prices from Office Max.
5. Rent based on 3 months payments plus 1.5 months deposit.
6. Software based on the following:

   i. Macromedia Dreamweaver UltraDev	$389.95
   ii. ColdFusion 4.5	$429.95
   iii. Adobe Publishing Collection	$949.95
   iv. Acid Pro 2.0	$279.95

7. Travel based on 3 months sales prospecting prior to startup.
8. Expensed equipment based on the following:

   i. Epson 800 Scanner	$699.95
   ii. Toshiba 2.14 megapixel Digital Camera	$499.95
   iii. HP Photosmart P100	$400.00
   iv. HP Laserjet 2100	$699.99
   v. 4 NIC Cards	$260.00
   vi. 1 HUB	$49.00

9. Long-term assets based on the following:

   i. 1 Procom	$10,675.00
   ii. 3 Compaq Presario 5888s	$6,597.00
   iii. 1 Macintosh	$3,000.00
   iv. QMS Magicolor 2 Laser Printer	$999.95

10. Start-up expense is comprised of $70 for filing with the state of Indiana, and $500 for recruitment on the web (Monster.com membership) and a weekly ad in the Post Dispatch.