Executive Summary

Batten-Hatchez Security is a startup security company founded by Chindit Batten, an experienced

former police sergeant and security company manager. Located in Coastalburg at its launch, the business will provide
security guards, security audits, and referrals to equipment providers to commercial buildings, retail businesses, and,
eventually special event venues and other clients. The business seeks to acquire capital from an angel investor and
will expand to additional cities in Ourstate and beyond if successful.
In the current political climate, with increasing fears of terrorist activity, and the current economic climate, which
promises an upswing in general and in outsourced services especially, this business is launching at the right time. The
business will target large retail stores and building management companies first in order to establish a strong base of
clients in Coastalburg.
Batten-Hatchez will grow its employee base of security guards carefully, based on client contracts, and use both full-time
and part-time guards. The business expects respectable sales of in the first year, almost doubling by the end of the third
year. Gross margins will be similar to the industry average, based on guard labor costs vs. billings. After the initial
investment and launch, a lean first year, and the establishment of an office and training space in the second year, the
business will be poised to expand through its own financing after three years. After the business is proved replicable in
additional cities, the business may be sold to provide an exit for the initial investor and founders.

Objectives
Batten-Hatchez Security will base its success on meeting the following objectives:
1. Employ 25 full-time equivalent security guards by the end of the third year of operation
2. Supply security guards to 15 buildings on a full-time basis by the end of the third year of operation
3. Earn $2 million in revenue with net profit over $300,000 in its third year of operation
Mission
Batten-Hatchez Security will remove worries for clients who require security guards for their buildings, facilities, and
events by providing excellent customer service for clients and in-depth training for their employees.
Keys to Success
Batten-Hatchez Security believes the keys to success in its industry include:
1. Listening carefully to client concerns and objectives to create customized security guard packages
2. Knowing what the client does not know (bringing deep security expertise as well as knowledge of legal regulations
and liability to the table)
3. Training security guards carefully and maintaining their training and certifications (e.g. to carry firearms)
4. Monitoring the quality of security guard service to offer quality assurance



Company Summary
Batten-Hatchez Security is a startup security company founded by Chindit Batten, a former police sergeant and security
company manager with fifteen years in law enforcement and ten years in security work. The business will provide security
guards to commercial buildings, retail businesses, and special events. The business will launch in Coastalburg but will
expand to additional cities if successful.
Company Ownership
Chindit Batten is CEO and founder of Batten-Hatchez Security. He currently owns 60% of the business and the remaining
40% of shares are owned by his partner and co-founder, Viipuri Hatchez, COO. The business is incorporated as an S
Corporation to enable additional investment for its launch. The founders shares will be diluted as up to 40% of shares will
be given to investors.
Start-up Summary
Batten-Hatchez Security will launch as a home-based business out of the home office of Chindit Batten. Initially, this will
reduce the cost of rent and equipment. Training for security guards will be provided in temporarily rented office space as
needed. Other start-up costs include the costs of incorporation and permits, such as concealed weapons permits,
business license, and police clearances (legal fees), the initial website and brochure design and printing, and the first
insurance premium for the business, including liability insurance for the guard's work and carrying of firearms.
Long-term assets include mobile phones and headsets for all guards and employees, as well as two-way radios for guards
working as teams.

Start-up Requirements
Start-up Expenses
Legal Fees $15,000
Surety Bond $1,200
Stationery $2,000
Insurance $10,000
Training $5,000
Website $2,000
Brochure $1,500
Total Start-up Expenses $36,700
Start-up Assets
Cash Required $40,000



Services
Batten-Hatchez Security will provide well trained guards for one or more of the following purposes:
To guard entrances and screen guests/employees
To monitor clients' premises with video surveillance equipment
To protect clients' assets, employees and guests
To deter crime with visual presence
To organize response in the case of fire, evacuation, or other emergency
To respond to customer and employee health emergencies and accidents
To eject unwanted customers or trespassers
To liaison with police and city emergency responders
In addition, the principals of the firm will offer the following:
Other Current Assets $0
Long-term Assets $1,000
Total Assets $41,000
Total Requirements $77,700
Security audits and recommendations for security plans
Referrals to providers of security technology (camera systems, etc.)
Batten-Hatchez will be a licensed, insured, and bonded business and will offer both armed and unarmed guards, based on
client needs and budgets. All guards will be certified for security work and to carry firearms.
Whenever possible, the same guards will be sent consistently to the same clients. However, substitutes will be necessary
from time to time and the business will ensure that detailed data about the job is transmitted to substitute guards on
those occasions. Batten-Hatchez Security will build trust with clients as a partner, rather than simply in the specific guard
or guards they grow comfortable with.
Guards will keep in constant communication with their team via portable two-way radios and with the Batten-Hatchez
office, as necessary through mobile phones. The Batten-Hatchez office will be not be staffed full-time at launch, but the
CEO and COO will be within reach by phone wherever they work. Guards who encounter criminal activity will alert the
authorities immediately rather than going through a communications center. Once the Batten-Hatchez office is
established outside of the home of Chindit Batten, it will be staffed full-time with a rotation of three call center
personnel who will cover the dispatches.
Guards will either be stationed at desks or patrol on foot at all facilities. Clients must provide vehicles if their jobs require
vehicle patrol (i.e., a facility with several buildings), but this will not be a focus of Batten-Hatchez Security.




Market Analysis Summary
The market for security guard services includes building management companies, retail businesses, event venues, and
other businesses. IBISworld.com reports that the security services industry as a whole was $29.7 billion in 2008. While
this number includes investigative services and armored car services, it is estimated that security guards accounted for
$22.3 billion. This represents approximately 540,000 employees in the security guard industry.
While market revenue has dropped 2% in 2008 due to the recession, it is expected that the market will rise again due to
increasing outsourcing of security services by companies who will delay hiring their own full-time employees as the
recession ends. The continuing and growing concerns about security brought on by international terrorism are also
expected to contribute to growth in the industry.
Of the potential targets available in Coastalburg Batten-Hatchez Security will focus on building management companies
and retail businesses at the outset. These businesses require steady security needs and serving them is simpler than
serving special events.
Market Segmentation
The market analysis table shows the market segmentation for Coastalburg among the major market segments for
security guard services. Growth is slow among these markets as new development is not prevalent in Coastalburg
currently.
Building management companies generally install surveillance equipment and employ security guards to monitor that
equipment, to staff front desks/security checks, and sometimes for general patrol. These companies often work with a
number of commercial or residential buildings and look to establish a relationship with one reliable vendor for all of their
security guard needs. While some buildings require night-shift guards, others require only day coverage.
Large retail businesses use security guards to deter theft and to provide safety. These include department stores and
other retail stores over 4,000 square feet, although some smaller stores may use security guards if they sell high-priced
items (designer fashion, jewelry, technology, etc.). Retailers require more guards during the day. Some simply lock the
store at night while some larger department stores use night patrols as well.
Event venues use security guards to monitor guest lists and fire capacities and to organize emergency response.
Nightclubs and bars may be included in this category. However, most nightclubs and bars employ their own security
personnel (or "bouncers") directly and do not use vendors. Event security has the same risks as other security, but there
is limited time for security audits and situations change fast, making this a higher stress business that requires better
trained guards. Events tend to happen in the evenings with weekday nights for corporate events and weekend nights for
private events.
Educational institutions, such as primary and secondary schools and colleges, generally employ security officers to
guard and patrol their buildings and campuses. Often these institutions employ their own in-house security staff, but they
will sometimes use outsources security vendors. These institutions require night and day patrols.




Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Building Management Companies 0% 500 500 500 500 500 0.00%
Large Retail Businesses 1% 900 905 910 915 920 0.55%
Event Venues 1% 100 101 102 103 104 0.99%
Educational Institutions 0% 75 75 75 75 75 0.00%
Total 0.38% 1,575 1,581 1,587 1,593 1,599 0.38%
Target Market Segment Strategy
Batten-Hatchez Security will target the first two of these target markets initially, building management companies and
retail businesses. Both segments require ongoing security vendors and are eager to establish long-term relationships.
Once relationships are established, good customer service, quality assurance, and competitive pricing can ensure that the
relationships are retained and that the security provider is considered a true partner in the protection of the building or
businesses' assets and people.
Furthermore, the other two target markets listed will be taken on at a later date, if at all. Event venues require more
specialized services and may be a slower market to tackle. Educational institutions are often eager to establish their own
security staffs, making this a difficult market to establish a strong foothold in as well.
Service Business Analysis
According to IBISWorld, there were 41,000 security services firms in the U.S. in 2008 running 56,000 establishments.
The average size of a firm was $700,000 revenue per year based on these numbers, meaning that the industry includes
both small and larger companies. There are few barriers to entry, as long as basic legal requirements are met, as the
capital investment in the business is very low. The industry depends on a supply of labor, often using retired police
officers as security guards.
As security guard services are sold business-to-business, marketing and advertisement is generally targeted on the
markets and industries the security companies seek to serve. Businesses generally search for security guard providers on
the Internet or through referrals from other companies they trust.
Competition and Buying Patterns
Top players in the industry include Securitas AB, Allied Security LLC, The Brink's Company, and G4S plc. Huge players
provide services for a huge range of markets, including governments, chemical and petrochemical, colleges and
universities, commercial real estate, financial institutions, health care facilities, manufacturing and industrial, residential
communities, shopping centers, and temporary security services.
Smaller security companies achieve success based on the expertise and reputation of their founding managers and the
growth of a team with a similar track record. The continued success of a company depends on client satisfaction, leading
to referrals.
Larger institutions and governments may receive several bids for security contracts, while smaller businesses (such as
many that Batten-Hatchez Security will target) often prefer to try out security companies and move on if they do not
meet expectations.
The smaller the amount of assets being protected, the more willing a company will be to risk their security on educated
hunches about a security company without feeling the need to do due diligence on a number of options.
IBISworld reports the following about the security industry:
While the public's perception of the rising crime rate assists revenue, the most significant factor
which increases the demand for this industry's services is a breach of an existing security system,
a break-in or a near break in. The economic crisis has hurt demand over the past two years but
things will soon begin to improve.
In Coastalburg, security guard service competitors include securityguard.com, Top Guard Security, US Security Guard
Services, and Trend Security Corporation.


Strategy and Implementation Summary
The key strategy for Batten-Hatchez Security is to build their operations and marketing around buildings and retail stores
that are large enough to have permanent, on-site security needs, but not so large that they can save significant money
by developing security staff in-house. To achieve this strategy, Batten-Hatchez will:
Train guards well for permanent check-in, patrol, and surveillance positions
Use advertising and targeted lists to locate and market to these customer markets
Focus specifically on guard services and high-level consulting audits, while outsourcing or referring to vendors for
security equipment and system needs
Competitive Edge
Batten-Hatchez Security will built a competitive edge through high levels of customer service and assurance. The
company will strive to not be a broker between clients and contracted security guards, as some security guard providers
become, but instead be a partner in the security and protection of client's assets, with security guards as a major tool in
that protection. This strategy will require Chindit Batten to carefully audit a client's security situation and to work with
them on plans to upgrade and maintain that security. He will continually check in with clients and with the guards sent to
client sites to learn about the challenges they are facing.
To develop good business strategies, perform a SWOT analysis of your business. It's easy with our free guide and template. Learn
how to perform a SWOT analysis
Marketing Strategy
To reach its target markets of building management companies and large retail businesses, Batten-Hatchez Security will
use the following tactics:
Development of a basic "brochure" website with services and contact information
Advertising in trade publications read by managers in these two industries
Advertising online with Google AdWords around keywords for security services and security guards, especially
associated with these two types of customers
Business cards and brochures for Chindit Batten to distribute on appointments and while networking with
Coastalburg-area business networking groups
Direct selling work based on purchasing or developing target lists
Direct mail of brochures and letters to these target lists of potential clients in Coastalburg
Sales Strategy
Chindit Batten will be the primary salesperson for Batten-Hatchez Security. He will meet with clients at their buildings to
perform an initial consultation and will create proposals for security services based on the client's needs. Batten will track
sales prospects and clients with ACT!, a client management database system.
Batten's sales strategy will be to listen carefully to the needs of the client and to provide assurance through stories of his
experience and a canny understanding of their needs and concerns. While his proposals may not be the lowest cost bids a
potential client receives, he will follow up with care and the same personal attention that clients will receive if they move
forward with using Batten-Hatchez Security.
Sales Forecast
Security guard sales will be recurring. Assuming a client retention rate of 90% annually, based on Chindit Batten's track
record in the business, total sales will escalate quickly. Sales will be a combination of clients requiring 24/7 coverage and
those with only daytime coverage. 40% of sales in dollars are expected from 24/7 clients. Sales are expected to meet the
objective of $1.75 million in the third year.
Direct costs of sales consist of supplies specific to each job, such as uniforms which must be purchased. Uniform may be
a branded Batten-Hatchez uniform, or contain the customer's branding to provide the visible presence of security at the
job site. Additional sets of uniforms must be purchased by the guards (at a discount) from the designated uniform
provider and laundry and cleaning of uniforms is the responsibility of the guards as well. Job supplies will include
materials related to security audits and specific equipment purchases for a job as well.

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Sales Forecast
Year 1 Year 2 Year 3
Sales

Security Guards $814,010 $1,221,015 $1,770,472
Security Audits $69,619 $97,467 $136,453
Commissions $49,370 $69,117 $96,764
Total Sales $932,999 $1,387,599 $2,003,690
Direct Cost of Sales Year 1 Year 2 Year 3
Job Supplies $40,701 $61,051 $88,524
Other $0 $0 $0
Subtotal Direct Cost of Sales $40,701 $61,051 $88,524
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Milestones
The budgets for creating the brochure/stationery and website come out of the start-up expenses, while the other
marketing costs detailed here come out of the first year operating budget as they occur after the business launch date.
Chindit Batten will manage all marketing and sales activities while Viipuri Hatchez will set up accounting and operating
systems and interview potential guards.


Milestone Start Date End Date Budget Manager Department
Website Development 11/1/2009 12/1/2009 $2,000 CB Marketing
Buy Industry Publication Ads 12/1/2009 12/15/2009 $2,000 CB Marketing
Create Brochure/Stationery 11/1/2009 12/1/2009 $3,500 CB Marketing
List Development 11/1/2009 12/1/2009 $1,000 CB Marketing
Direct Mail 12/1/2009 12/15/2009 $2,000 CB Marketing
Totals

$10,500


Management Summary
Chindit Batten, CEO, creates the vision and strategy of Batten-Hatchez Security. He brings with him knowledge of the
industry and sales skill. Batten will be personally responsible for marketing, sales, and ongoing client service. Batten will
also run training for guards.
Viipuri Hatchez, COO, will run the operations of the company. He will manage finances/accounting, hiring and human
resources. Hatchez has ten years of experience as assistant director of operations for a security systems company and
therefore has familiarity with operations management and the security industry as well.
Batten and Hatchez will be the only full-time employees at the launch of the company. Security guards will be employed
as client engagements are set and will be accounted for as a cost of sales. In the second year, three administrative/call
center assistants will be hired to work under the COO and to staff the office at all times for the purposes of dispatches
and maintaining communications with guards on-site.
Personnel Plan
The personnel table reflects the full-time office personnel of the business. Security guards will be a combination of full-
time and part-time guards and will be hired as sales increase. Guards will be hired either as daytime guards, night-shift
guards, and part-time guards who take a part-time load of either evening or daytime work. A business office must be
rented starting in year 2 when the administrative/call center assistants are brought on to provide 24 hour dispatch
support. These 3 assistants are paid $15 per hour.
Guards are hired after an independent background check is completed and interviews with both managers of the business
as well as checks with three references. Guards are eligible for health insurance and disability pay through the business
to protect them in the case of injury on the job or other problems.

Personnel Plan
Year 1 Year 2 Year 3
Chindit Batten $36,000 $50,000 $60,000
Viipuri Hatchez $36,000 $50,000 $60,000
Administrative/Call Center Assistants $0 $131,000 $140,000
Total People 2 5 5
Total Payroll $72,000 $231,000 $260,000

Financial Plan
Batten-Hatchez Security expects to produce excess cash after a lean first year of operation which can finance its
expansion to an office space along with a 5 year home equity loan to support significant growth of its employee base in
its second and third years to 25 FTE security guards (which can be estimated as 10 full-time guards and 30 part-time
guards). Future growth will be financed by the business and will include launching operations in other cities in Ourstate
and launching a line of security products.
Start-up Funding
The founders will each provide matching start-up funding. The balance of start-up funding will be provided by angel
investors who will be given up to 40% of shares in the business.

Start-up Funding
Start-up Expenses to Fund $36,700
Start-up Assets to Fund $41,000
Total Funding Required $77,700
Assets
Non-cash Assets from Start-up $1,000
Cash Requirements from Start-up $40,000
Additional Cash Raised $0
Cash Balance on Starting Date $40,000
Total Assets $41,000
Liabilities and Capital
Liabilities
Current Borrowing $5,000
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $5,000
Capital
Planned Investment
Louis Giordano $15,000
Jared Case $15,000
Angel Investor $42,700
Additional Investment Requirement $0
Total Planned Investment $72,700
Loss at Start-up (Start-up Expenses) ($36,700)
Total Capital $36,000
Total Capital and Liabilities $41,000
Total Funding $77,700
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Important Assumptions
The long-term interest rate is 6% for a home equity loan taken out in year 2 to cover the cash needs for a move to an
office space.
In addition to the assumptions shown in this table, the business makes the following assumptions:
That the security guard industry will experience an overall upswing in the next three years
That the sales record of Chindit Batten at his previous firm can be replicated at Batten-Hatchez

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 15.00% 15.00% 15.00%
Long-term Interest Rate 6.00% 6.00% 6.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
Break-even Analysis
The monthly break-even is low due to the cost savings by operating the office out of Chindit Batten's home in the first
year of operations. This allows for the business to become profitable quickly.

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Break-even Analysis
Monthly Revenue Break-even $24,475
Assumptions:
Average Percent Variable Cost 4%
Estimated Monthly Fixed Cost $23,407
Projected Profit and Loss
Security guard labor is estimated at 55% of sales in the first year, dropping slightly to 53% by the third year as prices
increase and cheaper labor becomes available due to the range of employees.
Marketing includes ongoing Web hosting and maintenance fees, continued revisions and reprinting of the brochure and
stationery, additional direct mail campaigns, ongoing advertising in trade publications, and online advertising for the
website.
Rent, utilities, and depreciation will be expenses beginning in the second year when an office space is required. Training
requires the use of larger meeting rooms for groups of guards which will have to be rented separately in the first year of
operations. Training cost will be reduced once an office is rented, as the business will choose a space with a conference
room or table to hold employee training at the office. Training will be an ongoing expense both due to turnover and due
to continued training and check-ins with employees. The surety bond must be renewed each year for the business.
Licenses and permits will include licenses for new guards to carry firearms and to operate, and continued renewals of
licensing and permits for the business each year.
Net profit will swing to a net loss in the second year due to the opening of an office space. Net profit will occur in year 3
again as the business scales up to cover these additional costs.

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Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $932,999 $1,387,599 $2,003,690
Direct Cost of Sales $40,701 $61,051 $88,524
Security Guard Labor $513,149 $763,180 $1,102,029
Total Cost of Sales $553,850 $824,230 $1,190,553
Gross Margin $379,149 $563,369 $813,137
Gross Margin % 40.64% 40.60% 40.58%
Expenses

Payroll $72,000 $231,000 $260,000
Marketing/Promotion $33,000 $30,000 $35,000
Depreciation $703 $11,133 $12,800
Rent $0 $24,000 $25,200
Utilities $0 $1,200 $1,260
Insurance $4,800 $15,000 $18,000
Surety Bond $1,200 $1,200 $1,200
Payroll Taxes $87,772 $149,127 $204,304
Employee Benefits $58,515 $99,418 $136,203
Training $6,000 $2,000 $3,000
Licenses and Permits $16,900 $20,000 $25,000
Total Operating Expenses $280,890 $584,078 $721,967
Profit Before Interest and Taxes $98,259 ($20,709) $91,169
EBITDA $98,962 ($9,576) $103,969
Interest Expense $555 $4,245 $7,200
Taxes Incurred $29,311 $0 $25,191
Net Profit $68,393 ($24,954) $58,779
Net Profit/Sales 7.33% -1.80% 2.93%
Projected Cash Flow
Excess cash from the first year of operation and a $150,000 five year home equity loan from the business' owners will be
used to finance the expansion to a rented office space in the second year, which will require the purchase of furniture,
additional computer and phone equipment, and some improvements to the space. This loan will be taken out by one or
both of the owners at 6% interest halfway through year 2 when cash is needed.
Cash flow is expected to become positive in the fifth month of operation due to the low fixed costs and launching without
a full-time call center/office. Continued investments in communications equipment will be needed throughout the first
year as additional guards join the business. In the second year, assets must be purchased for the office, including
computers and equipment, furniture, and a phone system. Communications equipment purchases will continue to grow in
the second year.
It is estimated that 70% of sales will be made on credit for payment within one month and 30% will be paid at or before
the time of service.

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Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $279,900 $416,280 $601,107
Cash from Receivables $509,793 $901,494 $1,307,953
Subtotal Cash from Operations $789,692 $1,317,774 $1,909,060
Additional Cash Received

Sales Tax, VAT, HST/GST Received $65,310 $97,132 $140,258
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $150,000 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $855,002 $1,564,906 $2,049,318
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations

Cash Spending $72,000 $231,000 $260,000
Bill Payments $673,180 $1,192,945 $1,630,876
Subtotal Spent on Operations $745,180 $1,423,945 $1,890,876
Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $65,310 $97,132 $140,258
Principal Repayment of Current Borrowing $2,400 $2,600 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $15,000 $30,000
Purchase Other Current Assets $0 $10,000 $5,000
Purchase Long-term Assets $2,400 $30,000 $5,000
Dividends $0 $0 $0
Subtotal Cash Spent $815,290 $1,578,677 $2,071,135
Net Cash Flow $39,712 ($13,771) ($21,817)
Cash Balance $79,712 $65,941 $44,124
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Projected Balance Sheet
The balance sheet demonstrates growth in net worth from retained earnings and cash held in the company for a future
expansion effort.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets

Current Assets

Cash $79,712 $65,941 $44,124
Accounts Receivable $143,307 $213,132 $307,762
Other Current Assets $0 $10,000 $15,000
Total Current Assets $223,019 $289,073 $366,887
Long-term Assets

Long-term Assets $3,400 $33,400 $38,400
Accumulated Depreciation $703 $11,836 $24,636
Total Long-term Assets $2,697 $21,564 $13,764
Total Assets $225,716 $310,637 $380,651
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities

Accounts Payable $118,723 $96,199 $137,434
Current Borrowing $2,600 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $121,323 $96,199 $137,434
Long-term Liabilities $0 $135,000 $105,000
Total Liabilities $121,323 $231,199 $242,434
Paid-in Capital $72,700 $72,700 $72,700
Retained Earnings ($36,700) $31,693 $6,738
Earnings $68,393 ($24,954) $58,779
Total Capital $104,393 $79,438 $138,217
Total Liabilities and Capital $225,716 $310,637 $380,651
Net Worth $104,393 $79,438 $138,217
Business Ratios
The ratio table compares the business over its three years of projections to the average for Security Guard and Patrol
Services, SIC code 7381, NAIC code 561612, of $1 - $5 million in annual revenues.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 48.72% 44.40% 2.05%
Percent of Total Assets

Accounts Receivable 63.49% 68.61% 80.85% 30.54%
Other Current Assets 0.00% 3.22% 3.94% 48.01%
Total Current Assets 98.80% 93.06% 96.38% 81.73%
Long-term Assets 1.20% 6.94% 3.62% 18.27%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 53.75% 30.97% 36.10% 48.40%
Long-term Liabilities 0.00% 43.46% 27.58% 30.72%
Total Liabilities 53.75% 74.43% 63.69% 79.13%
Net Worth 46.25% 25.57% 36.31% 20.87%
Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 40.64% 40.60% 40.58% 40.82%
Selling, General & Administrative Expenses 33.31% 42.40% 37.65% 18.68%
Advertising Expenses 0.08% 0.80% 0.64% 0.49%
Profit Before Interest and Taxes 10.53% -1.49% 4.55% 5.54%
Main Ratios

Current 1.84 3.00 2.67 1.27
Quick 1.84 3.00 2.67 1.21
Total Debt to Total Assets 53.75% 74.43% 63.69% 79.13%
Pre-tax Return on Net Worth 93.59% -31.41% 60.75% 108.30%
Pre-tax Return on Assets 43.29% -8.03% 22.06% 22.61%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 7.33% -1.80% 2.93% n.a
Return on Equity 65.51% -31.41% 42.53% n.a
Activity Ratios

Accounts Receivable Turnover 4.56 4.56 4.56 n.a
Collection Days 42 67 68 n.a
Accounts Payable Turnover 6.67 12.17 12.17 n.a
Payment Days 27 34 25 n.a
Total Asset Turnover 4.13 4.47 5.26 n.a
Debt Ratios

Debt to Net Worth 1.16 2.91 1.75 n.a
Current Liab. to Liab. 1.00 0.42 0.57 n.a
Liquidity Ratios

Net Working Capital $101,695 $192,874 $229,453 n.a
Interest Coverage 177.04 -4.88 12.66 n.a
Additional Ratios

Assets to Sales 0.24 0.22 0.19 n.a
Current Debt/Total Assets 54% 31% 36% n.a
Acid Test 0.66 0.79 0.43 n.a
Sales/Net Worth 8.94 17.47 14.50 n.a
Dividend Payout 0.00 0.00 0.00 n.a


Appendix

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
Security Guards $6,000 $10,800 $19,440 $34,992 $55,987 $78,382 $94,058 $96,880 $99,787 $102,780 $105,864 $109,040
Security Audits $500 $700 $980 $1,372 $1,921 $2,689 $3,765 $5,271 $7,379 $10,331 $14,463 $20,248
Commissions $0 $500 $700 $980 $1,372 $1,921 $2,689 $3,765 $5,271 $7,379 $10,331 $14,463
Total Sales $6,500 $12,000 $21,120 $37,344 $59,280 $82,992 $100,513 $105,916 $112,436 $120,490 $130,657 $143,750
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
Job Supplies $300 $540 $972 $1,750 $2,799 $3,919 $4,703 $4,844 $4,989 $5,139 $5,293 $5,452
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $300 $540 $972 $1,750 $2,799 $3,919 $4,703 $4,844 $4,989 $5,139 $5,293 $5,452
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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
Chindit Batten $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Viipuri Hatchez $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Administrative/Call Center Assistants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 2 2 2 2 2 2 2 2 2 2 2 2
Total Payroll $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000

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 $6,500 $12,000 $21,120 $37,344 $59,280 $82,992 $100,513 $105,916 $112,436 $120,490 $130,657 $143,750
Direct Cost of Sales $300 $540 $972 $1,750 $2,799 $3,919 $4,703 $4,844 $4,989 $5,139 $5,293 $5,452
Security Guard Labor $3,575 $6,600 $11,616 $20,539 $32,604 $45,646 $55,282 $58,254 $61,840 $66,270 $71,861 $79,063
Total Cost of Sales $3,875 $7,140 $12,588 $22,289 $35,403 $49,565 $59,985 $63,098 $66,829 $71,409 $77,155 $84,515
Gross Margin $2,625 $4,860 $8,532 $15,055 $23,877 $33,427 $40,528 $42,818 $45,607 $49,082 $53,503 $59,236
Gross Margin % 40.38% 40.50% 40.40% 40.31% 40.28% 40.28% 40.32% 40.43% 40.56% 40.73% 40.95% 41.21%
Expenses

Payroll $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000
Marketing/Promotion $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $2,000 $2,000 $2,000
Depreciation $28 $34 $39 $45 $50 $56 $61 $67 $72 $78 $84 $89
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Insurance $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Surety Bond $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Payroll Taxes 15% $1,136 $1,590 $2,342 $3,681 $5,491 $7,447 $9,492 $9,938 $10,476 $11,140 $11,979 $13,059
Employee Benefits 10% $758 $1,060 $1,562 $2,454 $3,660 $4,965 $6,328 $6,625 $6,984 $7,427 $7,986 $8,706
Training 15% $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Licenses and Permits $500 $600 $700 $700 $800 $800 $900 $900 $1,000 $1,000 $1,000 $8,000
Total Operating Expenses $10,422 $11,284 $12,643 $14,879 $18,001 $21,267 $28,782 $29,530 $30,532 $30,645 $32,049 $40,855
Profit Before Interest and Taxes ($7,797) ($6,424) ($4,111) $176 $5,875 $12,160 $11,746 $13,288 $15,075 $18,436 $21,454 $18,381
EBITDA ($7,769) ($6,390) ($4,072) $220 $5,926 $12,216 $11,807 $13,355 $15,147 $18,514 $21,537 $18,470
Interest Expense $60 $58 $55 $53 $50 $48 $45 $43 $40 $38 $35 $33
Taxes Incurred ($2,357) ($1,944) ($1,250) $37 $1,748 $3,634 $3,510 $3,974 $4,510 $5,520 $6,426 $5,505
Net Profit ($5,500) ($4,537) ($2,916) $86 $4,078 $8,479 $8,191 $9,272 $10,524 $12,879 $14,993 $12,844
Net Profit/Sales -84.61% -37.81% -13.81% 0.23% 6.88% 10.22% 8.15% 8.75% 9.36% 10.69% 11.48% 8.93%

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 $1,950 $3,600 $6,336 $11,203 $17,784 $24,898 $30,154 $31,775 $33,731 $36,147 $39,197 $43,125
Cash from Receivables $0 $2,427 $6,603 $11,805 $20,841 $34,330 $50,349 $64,635 $72,376 $76,575 $81,712 $88,139
Subtotal Cash from Operations $1,950 $6,027 $12,939 $23,008 $38,625 $59,228 $80,502 $96,410 $106,107 $112,723 $120,909 $131,264
Additional Cash Received

Sales Tax, VAT, HST/GST Received 7.00% $455 $840 $1,478 $2,614 $4,150 $5,809 $7,036 $7,414 $7,871 $8,434 $9,146 $10,063
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 $0 $0 $0
Subtotal Cash Received $2,405 $6,867 $14,418 $25,622 $42,775 $65,037 $87,538 $103,824 $113,978 $121,157 $130,055 $141,326
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 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000
Bill Payments $266 $8,123 $12,753 $20,438 $33,811 $51,796 $70,917 $84,405 $88,753 $94,029 $99,801 $108,088
Subtotal Spent on Operations $4,266 $12,123 $16,753 $24,438 $37,811 $55,796 $78,917 $92,405 $96,753 $102,029 $107,801 $116,088
Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $455 $840 $1,478 $2,614 $4,150 $5,809 $7,036 $7,414 $7,871 $8,434 $9,146 $10,063
Principal Repayment of Current Borrowing $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
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 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $5,121 $13,363 $18,631 $27,452 $42,361 $62,005 $86,353 $100,219 $105,023 $110,864 $117,347 $126,551
Net Cash Flow ($2,716) ($6,496) ($4,214) ($1,830) $414 $3,032 $1,185 $3,606 $8,954 $10,293 $12,708 $14,775
Cash Balance $37,284 $30,788 $26,575 $24,745 $25,159 $28,191 $29,376 $32,982 $41,936 $52,229 $64,937 $79,712

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 $40,000 $37,284 $30,788 $26,575 $24,745 $25,159 $28,191 $29,376 $32,982 $41,936 $52,229 $64,937 $79,712
Accounts Receivable $0 $4,550 $10,523 $18,704 $33,040 $53,695 $77,459 $97,470 $106,975 $113,305 $121,072 $130,820 $143,307
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $40,000 $41,834 $41,312 $45,279 $57,785 $78,854 $105,650 $126,845 $139,957 $155,240 $173,301 $195,757 $223,019
Long-term Assets

Long-term Assets $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 $2,600 $2,800 $3,000 $3,200 $3,400
Accumulated Depreciation $0 $28 $62 $101 $145 $196 $251 $313 $380 $452 $530 $614 $703
Total Long-term Assets $1,000 $1,172 $1,338 $1,499 $1,655 $1,804 $1,949 $2,087 $2,220 $2,348 $2,470 $2,586 $2,697
Total Assets $41,000 $43,006 $42,650 $46,778 $59,439 $80,658 $107,599 $128,933 $142,177 $157,588 $175,771 $198,343 $225,716
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 $7,706 $12,086 $19,331 $32,106 $49,447 $68,109 $81,452 $85,625 $90,712 $96,215 $103,995 $118,723
Current Borrowing $5,000 $4,800 $4,600 $4,400 $4,200 $4,000 $3,800 $3,600 $3,400 $3,200 $3,000 $2,800 $2,600
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $5,000 $12,506 $16,686 $23,731 $36,306 $53,447 $71,909 $85,052 $89,025 $93,912 $99,215 $106,795 $121,323
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $5,000 $12,506 $16,686 $23,731 $36,306 $53,447 $71,909 $85,052 $89,025 $93,912 $99,215 $106,795 $121,323
Paid-in Capital $72,700 $72,700 $72,700 $72,700 $72,700 $72,700 $72,700 $72,700 $72,700 $72,700 $72,700 $72,700 $72,700
Retained Earnings ($36,700) ($36,700) ($36,700) ($36,700) ($36,700) ($36,700) ($36,700) ($36,700) ($36,700) ($36,700) ($36,700) ($36,700) ($36,700)
Earnings $0 ($5,500) ($10,036) ($12,953) ($12,866) ($8,789) ($310) $7,881 $17,153 $27,677 $40,556 $55,549 $68,393
Total Capital $36,000 $30,500 $25,964 $23,047 $23,134 $27,211 $35,690 $43,881 $53,153 $63,677 $76,556 $91,549 $104,393
Total Liabilities and Capital $41,000 $43,006 $42,650 $46,778 $59,439 $80,658 $107,599 $128,933 $142,177 $157,588 $175,771 $198,343 $225,716
Net Worth $36,000 $30,500 $25,964 $23,047 $23,134 $27,211 $35,690 $43,881 $53,153 $63,677 $76,556 $91,549 $104,393


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