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United Protection Agency

Business Plan

United Protection Agency


1740 W 124th Street
Calumet Park, IL, 60827

United Protection Agency Business Plan | PAGE | 1


Confidentiality Agreement

The undersigned reader of United Protection Agencys Business Plan hereby acknowledges that the
information provided is completely confidential and therefore the reader agrees not to disclose anything found
in the business plan without the express written consent of GFCG.

It is also acknowledged by the reader that the information to be furnished in this business plan is in all aspects
confidential in nature, other than information that is in the public domain through other means and that any
disclosure or use of the same by the reader may cause serious harm and or damage to United Protection
Agency.

Upon request this business plan document will be immediately returned to United Protection Agency.

This is a business plan. It does not imply an offer of any securities.

Applicable Law

This contract shall be governed by the laws in the State of Illinois.

__________________________________________________

Signature

__________________________________________________

United Protection Agency Business Plan | PAGE | 2


Overview

United Protection Agency UPA will be a Chicago, IL based provider of armed and unarmed
guard protection services within the Greater Chicago area. Its combination of highly trained
guards serves a wide range of clients, including commercial property owners, construction
managers, business executives, politicians, and celebrities. This business plan is served to meet
the requirements for the SBA loan program and has been prepared over a three-year period.

United Protection Agency Business Plan | PAGE | 3


Table of Contents

Executive Summary ............................................................................................................... 5


Product & Service Summary ................................................................................................................. 6
Market Summary ................................................................................................................................. 6
Vision .................................................................................................................................................. 6
Three Year Objectives........................................................................................................................... 7
Keys to Success .................................................................................................................................... 7
Startup Summary ................................................................................................................................. 7

Product & Services ................................................................................................................ 8


Service Description ............................................................................................................................... 8

Industry Overview ................................................................................................................. 9


The Market .......................................................................................................................................... 9
Market Needs .................................................................................................................................... 10
Market Trends ................................................................................................................................... 10
Market Segmentation......................................................................................................................... 11

Strategy & Implementation Summary .................................................................................. 11


Management Team ............................................................................................................................ 13
SWOT Analysis ................................................................................................................................... 15
Value Proposition ............................................................................................................................... 16

Competitive Comparison ..................................................................................................... 16


Marketing Plan .................................................................................................................... 17
Promotion Strategy ............................................................................................................................ 17

Financial Forecasts .............................................................................................................. 18


Startup Summary ............................................................................................................................... 18
Financial Highlights ............................................................................................................................ 19
Personnel Forecast ............................................................................................................................. 20
Break-Even Analysis ........................................................................................................................... 21
Financial Indicators ............................................................................................................................ 22
Revenue Forecast ............................................................................................................................... 23
Projected Profit and Loss .................................................................................................................... 24
Projected Cash Flow ........................................................................................................................... 25
Projected Balance Sheet ..................................................................................................................... 26
Sensitivity Analysis ............................................................................................................................. 27

Appendix............................................................................................................................. 28

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Table of Figures

Figure 1: Organizational Chart ............................................................................... Error! Bookmark not defined.


Figure 2: Post-Financing Expenses ......................................................................... Error! Bookmark not defined.
Figure 3: Financial Highlights ................................................................................. Error! Bookmark not defined.
Figure 4: Financial Indicators ................................................................................. Error! Bookmark not defined.
Figure 5: Revenue Forecast.................................................................................... Error! Bookmark not defined.
Figure 6: Profit & Loss ............................................................................................ Error! Bookmark not defined.
Figure 7: Cash Flow ................................................................................................ Error! Bookmark not defined.
Figure 8: Wages & Payroll ...................................................................................... Error! Bookmark not defined.
Figure 9: Balance Sheet.......................................................................................... Error! Bookmark not defined.
Figure 10: Scenario Analysis .................................................................................. Error! Bookmark not defined.
Figure 11: Break-Even Analysis .............................................................................. Error! Bookmark not defined.
Figure 12: 12 Month Profit & Loss ......................................................................... Error! Bookmark not defined.
Figure 13: 12 Month Cash Flow Statement ........................................................... Error! Bookmark not defined.

United Protection Agency Business Plan | PAGE | 5


Executive Summary

Product & Service Summary

United Protection Agency UPA will be a Chicago, IL based provider of armed and unarmed guard
protection services within the Greater Chicago area. Its combination of highly trained guards serves a
wide range of clients, including commercial property owners, construction managers, business
executives, politicians, and celebrities.

This business plan is served to meet the requirements for the SBA loan program and has been prepared
over a three-year period. What sets UPA apart from its peers is its ability to train body guards in the most
sophisticated industry techniques to have the most professional staff in the industry.

Market Summary

According to a February 2016 report by IBIS World Industry Research, the security services industry
generated $32,000,000 in revenues in FY 2015, with annual growth of 3.1% year from 2011 2016 across
11,133 service providers. The state of Illinois accounted for an estimated 4.2% of industry revenue,
according to IBIS World Industry Research.

Although there are several major service providers, industry concentration is low, with companies
comprised of 0 4 employees accounting for 51.8% of the total market share and firms with over 500
employees accounting for just 2.1%. This partially reflects the low cost of capital required to enter the
industry and the local approach that the companies have in being awarded contracts.

Vision

The vision for UPA is to help make the city of Chicago and its citizens a safer place to work and live by
providing companies and individuals access to elite security protection services.

United Protection Agency Business Plan | PAGE | 6


Three Year Objectives

UPA has identified the following three year objectives as contributors to its success:

Acquire adequate working capital to cover the first six months of operation.
Be awarded at least one contract within the first month of operations.
Have a high contract renewal rate that is higher than industry average.
Focus on the Chicago area market and apply a local business development approach.
Invest in local sales & marketing across PPC/SEM and establish a referral network.
Grow the business as needed and hire new staff to fulfill the contract obligations.

Keys to Success

UPA has identified the following keys to success that it must achieve:

UPA must have a strong ability to compete for new security contracts.
UPA must be able to sustain a high renewal rate for contracts that it already has.
UPA must closely monitor its competitors for service and price changes.
Access to a multi-skilled and flexible workforce pool should be established.
A strong reputation should be developed and maintained as the company grows.
Efficiency in the operations should be established to maintain a low overhead cost structure.

Startup Summary

The startup period has assumed that that UPA will receive a loan from a small business lender under the
SBA program for a ten-year term at a seven percent interest rate. The estimated startup expenses are
basic office administration expenses, along with the acquisition of security vehicles, basic office furniture,
and equipment. Additional startup expenses have been determined to be the first six months of projected
operating costs in order to ensure that the company does not have liquidity issues during its most critical
startup period.

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Startup Assets Startup Liabilities
Office/Utilities Deposits 1,200 Liabilities and Capital
Furniture 2,500 Current Borrowing -
Equipment 3,000 Long-Term Liabilities 150,000
Vehicles 50,000 Accounts Payable -
Cash on Hand 89,650 Other Current Liabilities -
Total Startup Assets $ 146,350
Startup Investments
Startup Expenses Planned Investment
Rent 1,200 Owner -
Office Supplies & Expenses 450 Investor -
Transporation 450 Total Planned Investment $ -
Insurance 750
Postage 50 Startup Funding
Cleaning & Maintenance 250 Total Liabilities 150,000
Other SG&A 500 Total Planned Investment -
Total Startup Expenses $ 3,650 Total Funding $ 150,000

Total Requirements
Total Startup Expenses 146,350
Total Startup Assets 3,650
Total Requirements $ 150,000

Product & Services

Service Description

UPA provides two business units of unarmed and armed guard services that span across many different
sectors. These sectors include retail shop/mall security, construction sites, mobile patrol, special events,
and door supervisors. The specific details of each contract that UPA has may vary depending upon the
structure and nature of each agreement it has with companies.

Armed Guards

The armed guard services provide access to professionally trained guards who are licensed to carry
firearms. Although not all agreements for firearms may be needed, the armed guards may also carry
electric shock or alternative defense products that may thwart aggressors. These guards will have a
background and pre-existing qualifications in the responsibilities associated with defense weaponry.

Unarmed Guards

The unarmed guard market will comprise of a larger base of the contracts given that many security
personnel are in locations where an armed guard may stimulate unease through an ominous feeling rather
than the feeling of safety and protection. While the unarmed guards will be properly trained, they may
not require the same credentials and training as a guard carrying a firearm.

United Protection Agency Business Plan | PAGE | 8


Industry Overview

According to a report by IBIS World Industry Research, operators in the security services industry provides
security measures for businesses and public areas that have chosen to outsource security systems rather
than take on the logistical burden of protecting their facilities themselves. Therefore, as US corporate
profit levels increased after the recession, businesses had more funds available to spend on security
services. In addition, an increase in the number of new businesses during the past five years has led to an
expansion in the potential pool of clientele for industry services.

The Market

According to IBIS World Industry Research, since the mid-1990s, demand for the security services industry
has grown due to the corporate and government clients increasingly outsourcing. The industry depends
largely on security outsourcing by retail centers, and other businesses. In recent years, however, the
industry has had to battle greater competition from security technology and shrinking security budgets
due to the recession. Consequently, revenue has remained relatively flat the five years to 2012, decreasing
an estimated 0.2% annually on average to $28.2 billion.

United Protection Agency Business Plan | PAGE | 9


Market Needs

The primary needs to be fulfilled within this industry are the safety and protection of those that UPA has
been contracted to protect. Its clients essentially are seeking a company that have the ability to fulfill
contractual obligations by protecting either property, a general vicinity, or a specific group of individuals.
Although some markets are relatively price sensitive when selecting the winning bid among a variety of
prospective clients, the ability of staff to meet financing obligations is extremely important.

Market Trends

The market is increasingly being driven by companies choosing to outsource their security services rather
than keeping them in-house. This is demonstrative of a long-term market shift of companies focusing on
their core competency and outsourcing all non-core aspects related to their business operations.
However, security services are not something that may be easily outsourced offshore given the human
element, nor replaced by automated software given the requirement of having a human that has been
specially trained in the process of security services. Therefore, the market will continue to increase as UPA
benefits from greater regional outsourcing of private and public companies.

United Protection Agency Business Plan | PAGE | 10


Market Segmentation

In general, the majority of security services are focused around major corporations, retail clients, and
financial institutions. The smaller percentage of the market is comprised of residential and government
sector, which is often handled by more specialized firms. Therefore, UPA may focus on providing its
services to larger companies, retail businesses, and financial institutions. However, providing private body
guard and security services may also be a relatively under targeted area of the market by many companies
and UPA may introduce services to accommodate this market.

Strategy & Implementation Summary


The strategy of UPA is designed to acquire large and sustainable contracts for the security protection
sector. This generally includes a cycle of business development, proposal fulfillment, and account
management. The company will be in a constant cycle of acquiring new contracts, fulfilling them through
managing its network of employees and contractors, as well as maintaining relationships with those it
has a contract with so that they may consistently renew their contracts with UPA.

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Business Development

The business development process entails working with a team to ensure that the company has the
ability to win new contracts through sourcing of leads and establishing referrals and/or other
relationships that could lead to a request for proposal. At that point, UPA would need to perform bid
analysis in order to understand the cost of its services being fulfilled in order to provide the
prospective client with a competitive quote that is also profitable for the company and likely to be
selected.

Contract Fulfillment

The contract fulfillment requirements of the company entails working with the client and contractors
to ensure that the requirements in the agreement are being fulfilled. If the company is unable to
fulfill the requirements set forth in the agreement, it risks contract renewal and potentially even the
potential for lawsuits. Therefore, it is critical that contracts be fulfilled based on the acquiring,
training, and management of highly qualified body guard staff.

Account Management

In order to maintain high engagement levels and contract renewal rates, account managers may be
assigned to clients to ensure that their needs are met. In general, larger companies have smaller
clients and people that inquire frequently that may be sent to a department to handle such high
volume. However, larger clients require a more detailed and customized level of engagement than
most small companies. Therefore, account managers will serve the purpose of ensuring that the
needs of clients are fulfilled in a streamlined and organized manner.

United Protection Agency Business Plan | PAGE | 12


Management Team

John Doe Chief Executive Officer

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Susan Miller Chief Operating Officer


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Kevin Jones -Chief Financial Officer


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Adrian Wilcourt Legal Compliance


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United Protection Agency Business Plan | PAGE | 13


Organizational Chart

Adrian
Board/Investors
Wilcourt/Legal

John Doe/CEO

Susan Kevin
Miller/COO Jones/CFO

Marketing
Sales Director Accounting
Director

Sales Reps Collections

United Protection Agency Business Plan | PAGE | 14


SWOT Analysis

Strengths

UPA is based in a top metropolitan area with heavy business activity.


The owner has prior expertise around providing security services.
The owner is familiar with Chicago and the surrounding area.
The business has very low capital requirements and overhead costs.
The companys business model is highly scalable if it may consistently win contracts.
The revenue is generally stable month to month given that contracts are one year or longer.

Weaknesses

The market has relatively low barriers to entry compared to some other companies.
It may be challenging to win the first contract without branded references.
The level of competition in this industry is very high.
The amount of ability to gain distinct positioning is often small in the industry.
The industry is quite fractured outside of any specific geographic area.
UPA must acquire a small bank loan in order to effectively begin its operations.

Opportunities

An increasing number of companies are opting to outsource their security services division.
Security services require on-site staff; it cannot be offshored or replaced with software.
Companies that are based locally in the security services industry often have a competitive edge.
The market for security services has grown considerably over the past ten years.
Increased threats of terrorism may drive industry growth in the Chicago area.

Threats

It is possible that larger companies will have a cost advantage in this industry.
This industry entails a high degree of responsibility and client management.
The industry is labor intensive and requires investments into human capital.
The barriers to entry in the security protection services industry are relatively low.
It is possible that more sophisticated monitoring technology will increase machine efficiency.

United Protection Agency Business Plan | PAGE | 15


Value Proposition

The value proposition of UPA is designed to protect its clients by ensuring their long-term safety and the
safety of their property. Many security companies focus around describing what they do (I.e. providing
body guard services or security patrol services) rather why they do it and the benefits that they yield.
Therefore, UPA will focus on communicating its bottom-line value proposition of translating its value of
providing security services towards helping to protect people and their assets.

Competitive Comparison

In general, the industry has a very low level of concentration with the top company, Securitas AB,
accounting for just 12.6% of industry revenue and the top three companies combined accounting for
under 30% industry revenue. This partially reflects the difficulty of scaling a security companies due to the
ability of a local firm to maneuver the regional landscape by forming local strategic partnerships and
networking with firms at a greater level than large national companies. However, there are a few major
players in the industry that UPA will need to be aware of.

Securitas AB (Market Share 12.6%): The United States based security services firm is Securitas Security
Services USA, a subsidiary of a Swedish company called Securitas AB. The company provides security
guards, consultations, and investigations across an estimated six hundred offices.

Allied Security LLC (Market Share: 5.8%): This security services company is based in Pennsylvania and is
the largest US owned sercurity officer services company. The company has since been acquired by
Blackstone Private Equity group, providing it a solid financial backing, but its Pennsylvania base will make
it difficult to monopolize the local Chicago market.

G3S PLC (Market Share: 9.7%): This multinational security services provider formed based on a merger
between Securicor PLC and Group 4 Flack. It currently has over 125 offices globally, with its main base in
North America operating in manned security, but also minor involvements in cash transfers and security
systems. It is also likely that the companys lack of core focus in the Chicago area will make for a poor
competitor as it comes to maneuvering the regional landscape.

United Protection Agency Business Plan | PAGE | 16


Marketing Plan

The marketing strategy of UPA is designed to build the brand, fulfill request for proposals, and ensure that
all of the clients needs are fully met. The marketing strategy is segmented into several areas across
brand/reputation management, advertising, and business development. Each of these will play a role in
the success of UPA, as it will serve various levels of client needs and requirements depending upon their
size and scope of requirements.

Promotion Strategy

Strategic Partnerships

When it comes to efficiently winning contracts, strategic partnerships can be a reliable way to consistently
generate new business through a referral network. Some potential strategic partnerships may be formed
with existing companies, and this can be a rapid way to efficiently scale the business.

Public relations

There are many ways that the business may generate attention from the media, such as staging events to
demonstrate the ability and efficiency of staff at UPA, or getting engaged within the local community.
These factors build the local identity and image that regional companies identify with and can establish a
local brand that is more powerful than a company headquartered offshore.

Website & Internet Marketing

There are many digital marketing strategies that UPA may implement across pay-per-click, and direct
marketing for body guard or smaller event management services. However, these will not be emphasized
because these marketing techniques generally tend to result in smaller clients that would otherwise better
be approached through business development and a network of strategic partners.

Business Development

The business development aspect of the company is based around sourcing potential companies,
organizing a meeting, and converting the leads. This is often the most effective way to acquire request for
proposals from large firms, as few are often persuaded by digital marketing.

United Protection Agency Business Plan | PAGE | 17


Financial Forecasts

Startup Summary

Startup Assets Startup Liabilities


Office/Utilities Deposits 1,200 Liabilities and Capital
Furniture 2,500 Current Borrowing -
Equipment 3,000 Long-Term Liabilities 150,000
Vehicles 50,000 Accounts Payable -
Cash on Hand 89,650 Other Current Liabilities -
Total Startup Assets $ 146,350
Startup Investments
Startup Expenses Planned Investment
Rent 1,200 Owner -
Office Supplies & Expenses 450 Investor -
Transporation 450 Total Planned Investment $ -
Insurance 750
Postage 50 Startup Funding
Cleaning & Maintenance 250 Total Liabilities 150,000
Other SG&A 500 Total Planned Investment -
Total Startup Expenses $ 3,650 Total Funding $ 150,000

Total Requirements
Total Startup Expenses 146,350
Total Startup Assets 3,650
Total Requirements $ 150,000

Startup Asset Requirements

Cash on Hand

Vehicles

Equipment

Furniture

Office/Utilities Deposits

$- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000

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Financial Highlights

The financial highlights are how the company is projected to perform over the course of the next twelve months
and three to five years. The projections are based on comparable facilities based on estimated revenue range
and size, along with geographic location. We have assumed that for at least the first six-months of post-money
financing that expenses may be greater than revenues while the company invests into growth.

Financial Highlights ($000)


Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 Year 2 Year 3
Revenue 4 6 10 16 26 43 47 52 57 63 69 76 467 700 910
Gross Margin 3 4 7 12 19 32 35 39 43 47 52 57 350 525 682
Operating Expense 4 4 4 4 4 4 4 4 4 4 4 4 47 49 52
EBITDA (24) (22) (19) (14) (7) 6 9 13 16 21 25 31 35 73 108
Net Profit (25) (23) (21) (16) (8) 4 8 11 15 19 24 28 15 51 84

Gross Margin/Revenue 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75%
EBITDA/Revenue -676% -380% -201% -92% -26% 14% 19% 24% 29% 33% 37% 40% 7% 10% 12%
Net Profit/Revenue -720% -406% -217% -102% -32% 10% 16% 21% 26% 31% 35% 37% 3% 7% 9%

Net Cash Flow (25) (22) (19) (13) (3) 14 18 22 28 33 39 45 117 205 284
Cash Balance - Ending 65 43 24 11 9 22 40 63 90 123 162 207 207 412 697

Projected Operating Highlights By Year ($000) Projected Revenues By Year ($000)


1000 1000
900 Revenue 900
800 800
700 700
600 Gross Margin 600
500 500
400 400
300 EBITDA 300
200 200
100 100
Net Profit
0 0
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
800 90
700 80
600 70
Net Cash Flow 60
500
50
400
40
300
30
200 20
Cash Balance
100 10
0 0
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

United Protection Agency Business Plan | PAGE | 19


Personnel Forecast

Most expenses will be allocated towards development and sales. The employees will be paid competitive
wages so that the company can acquire and retain top talent and compete with large competitors. As the
company grows, it may work in options and bonuses into the salaries, but will focus on a straight full-time
salary with benefits for employees.

Personnel Forecast
Year 1 Year 2 Year 3
Personnel Count
Employees 3 6 8
Total Personnel 3 6 8

Personnel Wage
Employees $ 240,000 $ 360,000 $ 468,000
Payroll Expenses $ 28,478 $ 42,458 $ 55,040
Total Payroll Costs $ 268,478 $ 402,458 $ 523,040

United Protection Agency Business Plan | PAGE | 20


Break-Even Analysis

NET NET FIXED COST VARIABLE COST TOTAL COST TOTAL


- $0 $315,278 $0 $315,278 -$315,278
10 $45,000 $315,278 $1,350 $316,628 -$271,628
20 $90,000 $315,278 $2,700 $317,978 -$227,978
30 $135,000 $315,278 $4,050 $319,328 -$184,328
40 $180,000 $315,278 $5,400 $320,678 -$140,678
50 $225,000 $315,278 $6,750 $322,028 -$97,028
60 $270,000 $315,278 $8,100 $323,378 -$53,378
70 $315,000 $315,278 $9,450 $324,728 -$9,728
80 $360,000 $315,278 $10,800 $326,078 $33,922
90 $405,000 $315,278 $12,150 $327,428 $77,572
100 $450,000 $315,278 $13,500 $328,778 $121,222
110 $495,000 $315,278 $14,850 $330,128 $164,872
120 $540,000 $315,278 $16,200 $331,478 $208,522
130 $585,000 $315,278 $17,550 $332,828 $252,172
140 $630,000 $315,278 $18,900 $334,178 $295,822
150 $675,000 $315,278 $20,250 $335,528 $339,472
160 $720,000 $315,278 $21,600 $336,878 $383,122

Breakeven Analysis

$800,000

$700,000
COST-VOLUME-PROFIT

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0
10

20

30

40

50

60

70

80

90
0

100

160
110

120

130

140

150

NET UNITS

United Protection Agency Business Plan | PAGE | 21


Financial Indicators

The company believes that it can reach an increasing net profit margin due to economies of scale. Through
investments in capital expenditures, it may decrease its general and administrative expenses. Financial
indicators are based upon the performance of comparable companies in the same asset class, revenue
range and age both from publicly available information and our internal database of research.

Financial Indicators
Year 1 Year 2 Year 3
Profitability %'s:
Gross Margin 75% 75% 75%
Net Profit Margin 3% 7% 9%
EBITDA to Revenue 7% 10% 12%
Return on Assets 6% 11% 11%
Return on Equity 100% 77% 56%

Financial Indicators
80%

70%
Gross Margin
60%

50%
Net Profit Margin

40%

30% EBITDA to Revenue

20%

Return on Assets
10%

0%
Year 1 Year 2 Year 3

United Protection Agency Business Plan | PAGE | 22


Revenue Forecast

Revenue Forecast
Year 1 Year 2 Year 3
Revenue Forecast
Security Guard Services 466,560 699,840 909,793
Total Revenue $ 466,560 $ 699,840 $ 909,793

Direct Cost of Revenue


General COGS 116,640 174,960 227,448
Other - - -
Subtotal Cost of Revenue $ 116,640 $ 174,960 $ 227,448

Revenue By Year
1000
900
800
700
600
500
400
300
200
100
0
Year 1 Year 2 Year 3

Year 1 Revenues
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
10 11 12

United Protection Agency Business Plan | PAGE | 23


Projected Profit and Loss

The profit and loss assume that the company will have margins at a comparable level to companies within
its industry. While management might not have incurred exactly for future operating expenses, they have
been assumed to reasonable reach comparable profit margins to industry comparables. The management
will operate with minimal expenditures to focus on R&D and commercialization expenses until the
company has sufficient income to support dividend distribution.

Pro Forma Profit and Loss


Year 1 Year 2 Year 3

Revenue $ 466,560 $ 699,840 $ 909,793


Subtotal Cost of Revenue $ 116,640 $ 174,960 $ 227,448
Total Cost of Revenue $ 116,640 $ 174,960 $ 227,448

Gross Margin $ 349,920 $ 524,880 $ 682,344


Gross Margin/Revenue 75% 75% 75%

Expenses
Rent 14,400 15,120 15,876
Office Supplies & Expenses 5,400 5,670 5,954
Transporation 5,400 5,670 5,954
Insurance 9,000 9,450 9,923
Postage 600 630 662
Cleaning & Maintenance 3,000 3,150 3,308
Sales & Marketing 6,000 6,300 6,615
Other SG&A 3,000 3,150 3,308
Total Operating Expenses $ 46,800 $ 49,140 $ 51,597
Wages & Payroll $ 268,478 $ 402,458 $ 523,040
Depreciation, Amortization & Taxes $ 19,413 $ 21,790 $ 23,778
Net Income $ 15,230 $ 51,493 $ 83,930
Net Income/Revenue 3% 7% 9%

United Protection Agency Business Plan | PAGE | 24


Projected Cash Flow

Pro Forma Cash Flow


Year 1 Year 2 Year 3
Beginning Cash Balance $ 89,650 $ 207,044 $ 412,414
Cash Inflows
Income from Sales $ 466,560 $ 699,840 $ 909,793
Accounts Receivable $ - $ - $ -
Total Cash Inflows $ 466,560 $ 699,840 $ 909,793

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ -
Cost of Sales $ 116,640 $ 174,960 $ 227,448

Operating Activities
Salaries and Wages $ 268,478 $ 402,458 $ 523,040
Fixed Business Expenses $ 46,800 $ 49,140 $ 51,597
Taxes $ 1,324 $ 4,478 $ 7,298

Financing Activities
Loan Payments $ 20,900 $ 20,900 $ 20,900
Line of Credit Interest $ - $ - $ -
Line of Credit Repayments $ - $ - $ -
Dividends Paid $ - $ - $ -

Total Cash Outflows $ 349,165.84 $ 494,471.16 $ 625,579.57


Cash Flow $ 117,394.42 $ 205,369.24 $ 284,212.94
Operating Cash Balance $ 207,044.42 $ 412,413.66 $ 696,626.60
Ending Cash Balance $ 207,044.42 $ 412,413.66 $ 696,626.60

Year 1 Cash
250,000

200,000

Net Cash Flows


150,000

100,000

50,000
Cash Balance
-
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
(50,000)

United Protection Agency Business Plan | PAGE | 25


Projected Balance Sheet

The projected balance sheet assumes that there are no dividend draws and all cash flow is re-invested
back into the company at the end of the year. The balance sheet does not assume any line of credits or
account receivables that are outstanding at the end of the year and that the company will have paid off
all liabilities. Likewise, it assumes that all accounts will pay within thirty-days and there will be no
delinquency of payments.

Pro Forma Balance Sheet


Year 1 Year 2 Year 3
Assets
Current Assets
Cash $ 207,044 $ 412,414 $ 696,627
Other Current Assets $ 3,650 $ 3,650 $ 3,650
Total Current Assets $ 210,694 $ 416,064 $ 700,277

Long-term Assets
Long-term Assets $ 56,700 $ 56,700 $ 56,700
Accumulated Depreciation $ 7,929 $ 15,857 $ 23,786
Total Long-term Assets $ 48,771 $ 40,843 $ 32,914
Total Assets $ 259,465 $ 456,906 $ 733,190

Liabilities and Capital


Current Liabilities
Accounts Payable $ 104,976 $ 262,440 $ 467,143
Current Borowing $ - $ - $ -
Other Current Liabilities $ 139,260 $ 127,744 $ 115,395
Subtotal Current Liabilities $ 244,236 $ 390,184 $ 582,539

Long-term Liabilities $ 244,236 $ 390,184 $ 582,539


Total Liabilities $ 244,236 $ 390,184 $ 582,539

Common Stock $ - $ - $ -
Retained Earnings $ 15,230 $ 66,722 $ 150,652
Total Capital $ 15,230 $ 66,722 $ 150,652
Total Liabilities and Capital $ 259,465 $ 456,906 $ 733,190

United Protection Agency Business Plan | PAGE | 26


Sensitivity Analysis

Best Case Scenario (Revenue Increase by 15%)


Year 1 Year 2 Year 3
Revenue $ 536,544 $ 804,816 $ 1,046,261
Cost of Goods Sold $ 134,136 $ 201,204 $ 261,565
Gross Margin $ 402,408 $ 603,612 $ 784,696
Gross Margin/Revenue 75% 75% 75%
Operating Expenses $ 46,800 $ 49,140 $ 51,597
EBIT $ 355,608 $ 554,472 $ 733,099
EBIT/Revenue 66% 69% 70%

Worst Case Scenario (Revenue Decrease by 15%)


Year 1 Year 2 Year 3
Revenue $ 396,576 $ 594,864 $ 773,324
Cost of Goods Sold $ 99,144 $ 148,716 $ 193,331
Gross Margin $ 297,432 $ 446,148 $ 579,993
Gross Margin Revenue 75% 75% 75%
Operating Expenses $ 46,800 $ 49,140 $ 51,597
EBIT $ 250,632 $ 397,008 $ 528,396
EBIT/Revenue 63% 67% 68%

Revenue
$1,200,000

$1,000,000
Best Case

$800,000

$600,000
Most Likely

$400,000

$200,000 Worst Case

$-
Year 1 Year 2 Year 3

United Protection Agency Business Plan | PAGE | 27


Appendix

Year 1 Profit & 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
Revenue $ 3,500 $ 5,775 $ 9,529 $ 15,722 $ 25,942 $ 42,804 $ 47,085 $ 51,793 $ 56,973 $ 62,670 $ 68,937 $ 75,830
Subtotal Cost of Revenue $ 875 $ 1,444 $ 2,382 $ 3,931 $ 6,486 $ 10,701 $ 11,771 $ 12,948 $ 14,243 $ 15,667 $ 17,234 $ 18,958
Total Cost of Revenue $ 875 $ 1,444 $ 2,382 $ 3,931 $ 6,486 $ 10,701 $ 11,771 $ 12,948 $ 14,243 $ 15,667 $ 17,234 $ 18,958

Gross Margin $ 2,625 $ 4,331 $ 7,147 $ 11,792 $ 19,457 $ 32,103 $ 35,314 $ 38,845 $ 42,729 $ 47,002 $ 51,703 $ 56,873
Gross Margin/Revenue 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75%

Expenses
Rent 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Office Supplies & Expenses 450 450 450 450 450 450 450 450 450 450 450 450
Transporation 450 450 450 450 450 450 450 450 450 450 450 450
Insurance 750 750 750 750 750 750 750 750 750 750 750 750
Postage 50 50 50 50 50 50 50 50 50 50 50 50
Cleaning & Maintenance 250 250 250 250 250 250 250 250 250 250 250 250
Sales & Marketing 500 500 500 500 500 500 500 500 500 500 500 500
Other SG&A 250 250 250 250 250 250 250 250 250 250 250 250
Total Operating Expenses $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900

EBIT $ (1,275) $ 431 $ 3,247 $ 7,892 $ 15,557 $ 28,203 $ 31,414 $ 34,945 $ 38,829 $ 43,102 $ 47,803 $ 52,973
EBIT/Revenue -36% 7% 34% 50% 60% 66% 67% 67% 68% 69% 69% 70%

United Protection Agency Business Plan | PAGE | 28


Year 1 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

Revenue
$ 3,500.0 $ 5,775.0 $ 9,528.8 $ 15,722.4 $ 25,942.0 $ 42,804.3 $ 47,084.8 $ 51,793.2 $ 56,972.6 $ 62,669.8 $ 68,936.8 $ 75,830.5
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Other Current Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 3,500.0 $ 5,775.0 $ 9,528.8 $ 15,722.4 $ 25,942.0 $ 42,804.3 $ 47,084.8 $ 51,793.2 $ 56,972.6 $ 62,669.8 $ 68,936.8 $ 75,830.5

Expenditures

Expenditures from Operations


$ 26,360.7 $ 26,417.5 $ 26,511.4 $ 26,666.2 $ 26,921.7 $ 27,343.3 $ 27,450.3 $ 27,568.0 $ 27,697.5 $ 27,839.9 $ 27,996.6 $ 29,493.2
Subtotal Spent on Operations
$ 26,360.7 $ 26,417.5 $ 26,511.4 $ 26,666.2 $ 26,921.7 $ 27,343.3 $ 27,450.3 $ 27,568.0 $ 27,697.5 $ 27,839.9 $ 27,996.6 $ 29,493.2

Additional Cash Spent

Current Borrowing Repay


$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ 1,741.6 $ 1,741.6 $ 1,741.6 $ 1,741.6 $ 1,741.6 $ 1,741.6 $ 1,741.6 $ 1,741.6 $ 1,741.6 $ 1,741.6 $ 1,741.6 $ 1,741.6
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 28,102.3 $ 28,159.2 $ 28,253.0 $ 28,407.9 $ 28,663.3 $ 29,084.9 $ 29,191.9 $ 29,309.6 $ 29,439.1 $ 29,581.5 $ 29,738.2 $ 31,234.9

Net Cash Flow


$ (24,602.3) $ (22,384.2) $ (18,724.3) $ (12,685.4) $ (2,721.3) $ 13,719.4 $ 17,892.9 $ 22,483.6 $ 27,533.5 $ 33,088.3 $ 39,198.6 $ 44,595.6
Cash Balance
$ 65,047.7 $ 42,663.5 $ 23,939.3 $ 11,253.9 $ 8,532.5 $ 22,252.0 $ 40,144.8 $ 62,628.4 $ 90,161.9 $ 123,250.2 $ 162,448.8 $ 207,044.4

United Protection Agency Business Plan | PAGE | 29