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Somalia’s First Aviation Training, Maintenance and Engineering Consultancy Centre Business Plan By Mr Mohamed Yusuf


Legal Page Confidentiality Agreement The undersigned reader acknowledges that the information provided by Mr Mohamed Yusuf in this business plan is confidential; therefore, the reader agrees not to disclose it without the express written permission of Mr Mohamed Yusuf. It is acknowledged by the reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by the reader may cause serious harm or damage to Mr Mohamed Yusuf. Upon request, this document is to be immediately returned to Mr Mohamed Yusuf. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities.


Table of Contents

1.0 Executive Summary................................................................................................................................................................................................ 1 Chart 1: Highlights .................................................................................................................................................................................................... 2 1.1 Objectives ................................................................................................................................................................................................................... 2 1.2 Mission.......................................................................................................................................................................................................................... 3 1.3 Keys to Success ....................................................................................................................................................................................................... 3 2.0 Company Summary................................................................................................................................................................................................. 3 2.1 Company Ownership.............................................................................................................................................................................................. 4 2.2 Start-up Summary.................................................................................................................................................................................................. 4 Table 2.2: Start-up ................................................................................................................................................................................................... 5 Chart 2.2: Start-up ................................................................................................................................................................................................... 5 3.0 Services .......................................................................................................................................................................................................................... 6 3.1 Aviation Training...................................................................................................................................................................................................... 6 3.1.1 Types of Aviation Training ................................................................................................................................................................... 6 3.2 Aviation Consultancy Services .......................................................................................................................................................................... 8 3.2.1 Education and Training.......................................................................................................................................................................... 8 3.2.2 Advice from Experience ........................................................................................................................................................................ 8 3.3

Aviation Industry............................................................................................................................................................................................... 8 3.3.1 Continuing Airworthiness and Maintenance ................................................................................................................................ 8 3.3.2 Solutions Design, production and maintenance of aircraft and other aeronautical products and parts ........ 9 3.3.2.1 Engineering Competence ................................................................................................................................................................. 9 3.3.2.2 Interdisciplinary Competence ........................................................................................................................................................ 9 3.3.2.3 Technical Aviation English ............................................................................................................................................................... 9

4.0 Market Analysis Summary ............................................................................................................................................................................... 10 4.1 Socio-Economic Factors ..................................................................................................................................................................................... 10 4.2 Socio-Political Factors ......................................................................................................................................................................................... 10 4.3 Economic Sustainability...................................................................................................................................................................................... 11 4.4 Market Segmentation ..........................................................................................................................................................................................12 Table 4.4: Market Analysis .................................................................................................................................................................................. 13 Chart 4.4: Market Analysis (Pie) ...................................................................................................................................................................... 13

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Table of Contents

4.5 Target Market Segment Strategy .................................................................................................................................................................. 13 4.6 Service Business Analysis ................................................................................................................................................................................. 14 4.6.1 Competition and Buying Patterns ........................................................................................................................................................ 15 5.0 Strategy and Implementation Summary ............................................................................................................................................... 15 5.1 SWOT Analysis........................................................................................................................................................................................................ 17 5.1.1 Strengths ......................................................................................................................................................................................................... 17 5.1.2 Weaknesses.................................................................................................................................................................................................... 17 5.1.3 Opportunities ................................................................................................................................................................................................. 17 5.1.4 Threats.............................................................................................................................................................................................................. 17 5.2 Competitive Edge .................................................................................................................................................................................................. 18 5.3 Marketing Strategy ...............................................................................................................................................................................................18 5.4 Sales Strategy......................................................................................................................................................................................................... 19 5.4.1 Sales Forecast..........................................................................................................................................................................................20 Table 5.4.1: Sales Forecast ........................................................................................................................................................................... 20 Chart 5.4.1a: Sales Monthly ......................................................................................................................................................................... 21 Chart 5.4.1b: Sales by Year .......................................................................................................................................................................... 21 5.5 Milestones ................................................................................................................................................................................................................. 21 Table 5.5: Milestones ....................................................................................................................................................................................... 22 Chart 5.5: Milestones ....................................................................................................................................................................................... 22 6.0 Management Summary ...................................................................................................................................................................................... 23 6.1 Personnel Plan ........................................................................................................................................................................................................ 23 Table 6.1: Personnel ..............................................................................................................................................................................................23 6.2 Exit Strategy ............................................................................................................................................................................................................ 24 6.2.1 Assess your options .............................................................................................................................................................................. 24 6.2.2 Sticking with Survival .......................................................................................................................................................................... 24 6.2.3 Mergers ....................................................................................................................................................................................................... 25 6.2.4 Close............................................................................................................................................................................................................. 25 7.0 Financial Plan ........................................................................................................................................................................................................... 25 7.1 Start-up Funding ................................................................................................................................................................................................... 26

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Table of Contents

Table 7.1: Start-up Funding ............................................................................................................................................................................... 26 7.2 Important Assumptions ...................................................................................................................................................................................... 27 7.3 Break-even Analysis ............................................................................................................................................................................................27 Table 7.3: Break-even Analysis ........................................................................................................................................................................ 27 Chart 7.3: Break-even Analysis ........................................................................................................................................................................ 28 7.4 Projected Profit and Loss ................................................................................................................................................................................... 29 Table 7.4: Profit and Loss .................................................................................................................................................................................... 29 Chart 7.4a: Profit Monthly ................................................................................................................................................................................... 30 Chart 7.4b: Profit Yearly....................................................................................................................................................................................... 30 Chart 7.4c: Gross Margin Monthly ................................................................................................................................................................... 31 Chart 7.4d: Gross Margin Yearly ...................................................................................................................................................................... 31 7.5 Projected Cash Flow .............................................................................................................................................................................................32 Table 7.5: Cash Flow..............................................................................................................................................................................................32 Chart 7.5: Cash ........................................................................................................................................................................................................ 33 7.6 Projected Balance Sheet .................................................................................................................................................................................... 33 Table 7.6: Balance Sheet ..................................................................................................................................................................................... 34 7.7 Business Ratios ...................................................................................................................................................................................................... 35 Table 7.7: Ratios ...................................................................................................................................................................................................... 35 Table 1: Sales Forecast ................................................................................................................................................................................................. 1 Table 2: Personnel ........................................................................................................................................................................................................... 1 Table 3: Profit and Loss................................................................................................................................................................................................ 1 Table 4: Cash Flow ........................................................................................................................................................................................................... 2 Table 5: Balance Sheet.................................................................................................................................................................................................. 1

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Business Plan- Centre Of Aviation & Engineering Excellence

1.0 Executive Summary The Founder has decided to commence an aviation training, maintenance and consultation centre in Mogadishu, Somalia. This would be the first of its kind and the centre will be called Centre of Aviation & Engineering Excellence. The mandate of the business is to provide aviation educational training, technical knowledge and aircraft maintenance in Somalia. The reason for the decision to establish the centre in Somalia is due to the following factors: •

• • • • •

Strategic Geo-Economic Location – it’s closeness to Yemen, Dubai and other oil producing countries may facilitate awareness in those countries, thereby expanding the market share and dominance in that region. Infrastructure – some groundwork has been put in place by the Somali government to re-instate the aviation industry in Somalia. This presents a good opportunity for CAEE launch. Smart Taxation Policy - In 1986, income from trade and the professions was taxed at rates of up to 35%, however, in 2003, Somalia’s sales tax rate was 10%. Quality of the Work Force – Somalis are hardworking people, amidst the poverty and political instability Growth opportunities – Due to the growing nature of Somalia’s economy, it is the right time to launch into the market to become the leader in that market. Quantity of Customers –The population of Somalia as at 2003 was estimated by the United Nations at about 10 million, 53% of which were between ages 16 and 64.

Somalia is a suitable geographical location; it has a multilingual population - Somali and Arabic are the official languages of Somalia, both of which belong to the Afro-Asiatic family and Italian and English are the second or vehicular languages. As a result, it has prospects to be a very modern country with highly developed infrastructure and an excellent standard of living. It is projected to be the second biggest producer of oil after Sudan, making it one of the most economic viable countries of the world if properly administered. Being the horn of Africa, it can be a hub for transatlantic trade to Europe, Asia and other parts of the world; meanwhile it remains small enough to allow its inhabitants to enjoy the advantages of an average-sized country with a small population. The intention to start this business in Somalia is feasible because similar ventures have already been established in Africa and the middle east, and the founder believes that the company’s natural and organic way to expand the business further is to move into virgin lands in order for the company to stamp its mark in Somalia, if not Northern Africa. This is also with the intention of adding more centres in the next 15 years. This new aviation training & maintenance centre will help Somali’s economy by: • • • •

Providing training services to the country’s aviation industry Provide jobs for the economy Provide an initial over $300,000 investment to the economy and possibly further investments Add tax to the country

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Business Plan- Centre Of Aviation & Engineering Excellence

Chart 1: Highlights

1.1 Objectives Centre of Aviation & Engineering Excellence (CAEE) is a new venture that provides aviation educational training, technical knowledge and aircraft maintenance in Somalia. The objective of the new company is to build a technical and maintenance centre for Lufthansa. Our Training and Maintenance service will help enhance flight safety. They will be produced to the highest international standards of accuracy, reliability and quality assurance. Our Training and Maintenance service will be European Aviation Safety Agency (ESAS) certified. We pledge: •

Honesty

Ethical conduct

Fairness

Openness (Transparent business dealings)

Quality Assurance

Customer satisfaction

State-of-the-art technology

On-going feedback and discussion

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Business Plan- Centre Of Aviation & Engineering Excellence

1.2 Mission -

-

To establish a 21st century aviation technology centre to provide access to our customers and the use of our wealth of experience, recognised aviation licenses certification as well our skills in aviation technology. To provide a maintenance facility to repair aircraft companies that uses Somali main airport (Mogadishu Airport).

1.3 Keys to Success 1. Branding ourselves to show that we are different from our competitors. 2. Excellence in fulfilling the promise-completely confidential, reliable, trustworthy expertise and information. 3. Developing visibility to generate new business leads. 4. Leveraging from a single pool of expertise into multiple revenue generation opportunities: retainer staff, project consulting, market research and published reports. 2.0 Company Summary Centre of Aviation & Engineering Excellence is a new company that will be based in Somalia Mogadishu International Airport. The Company’s focus is to provide technical education for 21st century centre aircraft aviation training and aircraft maintenance approved by The European Aviation Safety Agency (EASA). The Company’s aim is to be network partners with a world renowned and established technical aviation and aircraft trainer like Lufthansa, to help assure the Company’s unique success and to set industry standards. The Lufthansa partnership will consist of training the Company’s founder Mr Mohamed Yusuf and its staff and provide aviation training equipment and expertise. The proposed location of the new venture is an old school premises in Mogadishu airport which with an approximated size of 300 metres by 300 metres, with the consideration of expansion should the need arise. Initially, we will be marketing our new business with aviation specifications which includes: Aeronautical Training: Providing Aircraft Vocational Training and Retraining, Basic Aircraft Knowledge Training and Aircraft Type Training to acquire certification and or license such as EASA PART66 Cat A, B, and C. Aviation Industry Solutions: Including, Engineering Computation training for certification, Interdisciplinary Competence for Aircraft Safety and Efficiency training and Technical Aviation English training Professional Development training: To help the trainee refresh on their profession or learn new equipment or technical processes that have been introduced to the industry. Consulting Services: To train professionals from various companies within the industry; helping them to have a better understanding of aircrafts and aviation. Maintenance: With Lufthansa’s approval and certification, we will also provide maintenance services such as aircraft maintenance, landing and take-off checks, electrical faults, repairing exterior of the aircraft, etc. (as required).

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Business Plan- Centre Of Aviation & Engineering Excellence

2.1 Company Ownership The company has been created and legally organised as a Company by Mr Mohamed Yusuf a qualified aviation with degree in aviation and engineering. He demonstrates high level intelligence and has quick innovation for new ideas and concepts whilst identifying key improvements to management practices. Operating Partner: •

Mr Ahmed Duale -The Principle Investor

Mr Hanad Mohamed -Finance & Branding Director

2.2 Start-up Summary The Company founder, Mr Mohamed Yusuf, will handle day-to-day operations of the business and will work collaboratively to ensure that this business venture is a success. The Start-up costs include: 

Centre layout (the training and maintenance)

Education Facilities (computers and classrooms)

Equipment

Opening inventory

Marketing

Legal costs

Contingence funds

Start-up costs will be financed Primarily by Mr Ahmed Duale. The start-up chart and table show the distribution of the planned funds. It is estimated that the start-up costs will be $130,000 (including legal costs, advertising, and related expenses). An additional amount of $30,000 will be required as start-up assets and $140,000 will remain as contingence funds. The start-up costs are to be invested by the Company partner Mr Ahmed Duale which will be required to be paid back with 5 years.

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Business Plan- Centre Of Aviation & Engineering Excellence

Table 2.2: Start-up Start-up Requirements Start-up Expenses Legal Stationery etc. Insurance Lease Agreement (Advance & Rent) Maintance & Renovations Inital Marketing Other Miscellaneous Total Start-up Expenses

$5,000 $1,000 $4,000 $50,000 $15,000 $10,000 $45,000 $130,000

Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets

$140,000 $0 $30,000 $170,000

Total Requirements

$300,000

Chart 2.2: Start-up

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Business Plan- Centre Of Aviation & Engineering Excellence

3.0 Services Centre of Aviation & Engineering Excellence (CAEE) offers services in three primary areas: 3.1 Aviation Training Partnering with Lufthansa, the vocational training is conducted in accordance with the Training Curriculum of the German Chamber of Industry and Commerce, as well as in accordance with the requirements for Lufthansa Technik trainees. During the technical Vocational Training, trainees will acquire the knowledge necessary to obtain the Cat A qualification (requirement for the authorisation to issue a Certificate of Release to Service of an aircraft in accordance with the European Aviation Safety Agency - EASA). Our vocational training meets the EASA standards and is recognised all over Europe. The training facilities offer high-quality equipment and only state-of-the-art techniques are applied in order ensure that our trainees acquire the same state-of-the-art knowledge. 3.1.1 Types of Aviation Training 

Aircraft Mechanic, Maintenance

Aircraft Mechanic, Engines

Aircraft Mechanic, Production Engineering

Aircraft Electronics Technician

Tool Mechanic

Galvaniser

3.1.2 Retraining We prepare you to start a career in civil aviation engineering or to become an aircraft mechanic (specialising in engine or maintenance practices) in accordance with the European Training Standard EASA Part-66 and obtain a degree from the German Chamber of Industry and Commerce. Maintenance and servicing organisations as well as suppliers of aircraft are potential employers for our graduates. Our retraining courses will be the foundation for your career in the civil aviation industry. You will acquire all necessary theoretical knowledge, and will develop your practical skills through several months of vocational training at an aviation organisation (for example, N3 Engine Overhaul Services). 3.2

Aircraft Maintenance

An impressive range of aircrafts would be maintained in our extensive facilities with highly skilled engineers working we can execute any requirements our customers have, from a rapid response casualty unit through to major maintenance and structural repairs. We are focused on safety, delivery, reliability and value.

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Business Plan- Centre Of Aviation & Engineering Excellence

Our services will include: 

A and B checks as per phase or block maintenance MPD items

Periodic and scheduled maintenance up to and including checks for Airbus 318, 319, 320, 321 and 380, Boeing 737, 757, 767 and 787 and up to D-checks for B747 and B777

Supplemental structural inspections

Major and minor structural repairs

Refurbishment, conversion and enhancement of cabin interiors

Aircraft modifications including service bulletin and airworthiness directive embodiment

Ageing aircraft inspections including corrosion prevention and control

Aircraft painting, including fabrication and application of decals and graphics

Aircraft storage including care and maintenance packages

AOG, casualty aircraft recovery and support

Crash/incident recovery

Landing gear and engine replacement

Aircraft washing

Engine compressor wash

Aircraft weighing

Components for fuel, hydraulic and pneumatic systems, and power generation units

Mechanical flying controls, wheels and brakes, radomes

Engine health, technical support and reliability monitoring

Flying control surfaces, engine cowls and thrust reverser repair

Extensive machining capability and full paint shop facility

Aircraft coverage: Airbus 318, 319, 320, 321, and Boeing 737, 747, 757, 767, 777 – most engine variants

We will provide mechanical component overhaul and all operators can benefit from our centre of excellence, component repair and overhaul expertise covering hydraulic, pneumatic and power generation units.

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Business Plan- Centre Of Aviation & Engineering Excellence

3.2 Aviation Consultancy Services CAEE Training offers consulting and support competence to deal with many challenges, experiences which we can adapt to client’s individual needs. Clients will benefit from Lufthansa’s many years of experience in education and training for experts and management in the aviation industry. As a training organisation, we are working in the context of design, production and maintenance of aeronautical products, parts and appliances and offer clients the opportunity to benefit from our experience. 3.2.1 Education and Training - Benefit from our experience of many years in the areas of training and further training in the aviation industry. - As an aeronautical company and maintenance organisation, we can offer you a specialised consulting portfolio. In addition to that, the needs for comprehensive personnel qualifications are further set out by aviation legislation, labour and economic requirements. 3.2.2 Advice from Experience Our consulting expertise supports the following areas of education and advanced training organisation.          

Analysis and selection of an appropriate business model - Provisioning of know-how Specification of required infrastructure - Know-how provisioning of infrastructure Selection and qualification of key personnel - Assistance in selection of key personnel Specification of tools and equipment - Provisioning of know-how Development and provisioning of training programs - Provisioning of the selected training specification Development and provisioning of training media - Provisioning and continuous maintenance Definition of training and quality management systems - Sub-licensing of an up-to-date Definition of examination and assessment systems - Update of aviation industry relevant examination Technical and economic operation - Keep track on purchasing Support in approval matters - Active support in discussions

3.3 Aviation Industry This involves the transfer of knowledge from the aviation industry to your company. We have established methods, standards, processes that can be successfully transferred to other industry sectors. 3.3.1 Continuing Airworthiness and Maintenance - For continuing airworthiness of an aircraft, the technical management must work in conjunction with the operators of the aircraft with the need to realise the optimisation of sometimes conflicting requirements in terms of efficiency, availability and reliability of flight operations. - The maintenance and overhaul of aircraft and their components are carried out by approved maintenance personnel. The scope of work varies significantly between the short-term, unplanned repairs on the ramp up to the planned complete dismantling and subsequent reassembly. In addition, modifications due to regulatory or economic needs are part of the aircraft's maintenance.

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Business Plan- Centre Of Aviation & Engineering Excellence

3.3.2 Solutions Design, production and maintenance of aircraft and other aeronautical products and parts Defined by a superior regulatory density, by quality requirements and process complexity. Each operative task requires particular capabilities to meet these demands according to the time frame scheduled and with sufficient quality. The qualification of the employees is a decisive factor in order to guarantee smooth business processes. However, newly employed aviation personnel do not necessarily have the capabilities which are needed for the fulfilment of these tasks. Furthermore, aviation legislation, labour law and economic requirements demand the necessity to qualify the employees profoundly. This is where we come in. Solution, in the Aviation Industry is divided into three parts: 3.3.2.1 Engineering Competence Aeronautical development activities aim to obtain the type certification, changes to type certification, supplemental type certification or the approval of repair design. The development process and verification that the development meets the applicable and respective valid requirements and specifications as well as the manufacture of the components involve major effort. As soon as aircraft, aeronautical products, components and appliances are released for operation, it must be ensured that their airworthy condition is being maintained at all times during operation. For this purpose aircraft and their components are regularly checked and maintained. 3.3.2.2 Interdisciplinary Competence In the safety, efficient and innovation conscious aviation industry, the technical, operational and individual requirements are continuously increasing. Qualified experts and managers are under constant pressure to perform increasingly efficient in an international context in order to compensate for the decreasing qualified resources. To apply their expertise target orientedly, leadership and communication skills are indispensable and always needed prerequisites for individual professional success, for sustainable functionality and the innovative ability of a business. 3.3.2.3 Technical Aviation English English is the worldwide aviation language. The increase of the strategic importance and globalisation of the supply chain in the aerospace industry and the nearly unlimited access to communication media require an adequate and professional command of the English language to master the tasks of one's daily working routine. Besides that, the role communication plays with respect to efficient performance of work in design, production and maintenance of aviation technological products must not be underestimated. Communication problems are the major cause for errors in aviation and there is an endless list of the results of the effects of these errors.

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Business Plan- Centre Of Aviation & Engineering Excellence

4.0 Market Analysis Summary CAEE would be working in Mogadishu, Somalia’s capital. Somalia, officially called the Federal Republic of Somalia, is a country located in the Horn of Africa. It is bordered by Ethiopia to the west, Djibouti to the northwest, the Gulf of Aden to the north, the Indian Ocean to the east, and Kenya to the southwest. Somalia has the longest coastline on the continent, and its terrain consists mainly of plateaus, plains and highlands. Hot conditions prevail year-round, along with periodic monsoon winds and irregular rainfall. There is minimal competition because there is a gap in the market due to Somalia being in turmoil for the last 22 years. All the aviation and aircraft maintenance facility in the country has be damage beyond repair and the aviation engineers in the country have mostly left the country or been killed during the civil unrest. The services CAEE will offer will be the first of its kind in the country as we will be the only company in the country that will provide this type of service. Our competitive differences also include professionally world class aviation knowledge to our students, license certification and maintenance practice. 4.1 Socio-Economic Factors Somalia has a population of around 10 million inhabitants. About 85% of local residents are ethnic Somalis who have historically inhabited the northern part of the country. Ethnic minority groups make up the remainder of the nation's population, and are largely concentrated in the southern regions. Somali and Arabic are the official languages of Somalia, both of which belong to the Afro-Asiatic family. Most people in the territory are Muslims, the majority being Sunni. In the past, Somalia was an important centre for commerce with the rest of the ancient world. During the Middle Ages, several powerful Somali empires dominated the regional trade, including the Ajuuraan State, the Adal Sultanate, the Warsangali Sultanate and the Geledi Sultanate. In the late nineteenth century, through a succession of treaties with these kingdoms, the British and Italians gained control of parts of the coast, and established British Somaliland and Italian Somaliland. In 1960, the two regions united as planned to form the independent Somali Republic under a civilian government. Mohamed Siad Barre seized power in 1969 and established the Somali Democratic Republic. In 1991, Barre's government collapsed as the Somali Civil War broke out. 4.2 Socio-Political Factors In the absence of a central government, Somalia's residents reverted to local forms of conflict resolution, consisting of civil law, religious law and customary law. A few autonomous regions, including the Somaliland, Puntland and Galmudug administrations, emerged in the north in the ensuing process of decentralisation. The early 2000s saw the creation of fledgling interim federal administrations. The Transitional National Government (TNG) was established in 2000 followed by the formation of its successor the Transitional Federal Government (TFG) in 2004, which re-established national institutions such as the Military of Somalia. In 2006, the TFG, assisted by Ethiopian troops, assumed control of most of the nation's southern conflict zones from the newly formed Islamic Courts Union (ICU). The ICU subsequently splintered into more radical groups such as Al-Shabaab, which battled the TFG and its allies for control of the region, with the insurgents losing most of the territory that they had seized by mid-2012. In 2011-2012, a Roadmap political process providing clear benchmarks leading toward the establishment of permanent democratic

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Business Plan- Centre Of Aviation & Engineering Excellence

institutions was launched. Within this administrative framework, a new Provisional Constitution was passed in August 2012, which designates Somalia as a Federation. Following the end of the TFG's interim mandate the same month, the Federal Government of Somalia, the first permanent central government in the country since the start of the civil war, was also formed. The nation has concurrently experienced a period of intense reconstruction, particularly in the capital, Mogadishu. Through the years, Somalia has maintained an informal economy, based mainly on livestock, remittance or money transfer companies, and telecommunications. The World Bank reports that electricity is now in large part supplied by local businesses, using generators purchased abroad. By dividing Somalia's cities into specific quarters, the private sector has found a manageable method of providing cities with electricity. A customer is given a menu of choices for electricity tailored to his or her needs, such as evenings only, daytime only, 24 hour-supply or charge per light bulb. 4.3 Economic Sustainability Somalia has untapped reserves of numerous natural resources, including uranium, iron ore, tin, gypsum, bauxite, copper, salt and natural gas. Due to its proximity to the oil-rich Gulf Arab states such as Saudi Arabia and Yemen, the nation is also believed to contain substantial unexploited reserves of oil. A survey of Northeast Africa by the World Bank and U.N. ranked Somalia second only to Sudan as the top prospective producer. American, Australian and Chinese oil companies, in particular, are excited about the prospect of finding petroleum and other natural resources in the country. An oil group listed in Sydney, Range Resources, anticipates that the Puntland province in the north has the potential to produce 5 billion barrels (790Ă—106 m3) to 10 billion barrels (1.6Ă—109 m3) of oil. As a result of these developments, the Somali Petroleum Company was created by the Federal Government. According to surveys, uranium is also found in large quantities in the Buurhakaba region. A Brazilian company in the 1980s had invested $300 million for a uranium mine in central Somalia, but no long-term mining took place. In 2001, there were, with only a few paved run ways. The aviation industry as a whole is a multi-billion industry, with 54 airports in Somali reaching over $20 billion. The Somali Civil Aviation Steering Committee (SCASC) set a three-year window for reconstruction of the national civil aviation capacity in 2012. It also requested the complete transfer of Somali civil aviation operations and assets from the CACAS caretaker body to the Somali authorities. Sales are expected to grow by 10% in 2015 to $22 Billion. The aviation industry has a myriad of segments that can be categorised by the service, participation, organisation and function. Since population growth and age groups distinctly impact training and maintenance, participation is expected. Our main segments are categorised by the type of training offered, the interest of the population in aviation training and the need for consultancy services. However, in terms of marketing, we will take different approaches to attracting the attention of potential customers based on their relation to training required. Customer Type - Our customers have needs based upon the type of role they play on their jobs. They would either need to be trained or retrained. For example, aviation ministry workers would need to be

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Business Plan- Centre Of Aviation & Engineering Excellence

trained on specific areas of aviation since the collapse of Somali Airlines in 1991. Some others who were experts would need retraining with newer systems. Individuals would also benefit as basic training is also available for those embarking on an aviation or aeronautic engineering career. Individuals here include young people aged 16-24, adults who want a career change, engineers from other fields, and also aviation technicians. On-site training - Due to the geographic and specific nature of the business it is understandable that there will be little or no online-training to avail students the opportunity for hands-on practical training. However, the different needs of our customers and students would be thoroughly identified and met as we operate. Local adverts appeal to the local market which consists of families with aspiring youths who want to have a sustainable career. The convenience factor is a nearby training location with great customer service, and a hands-on learning approach. We believe that CAEE is well positioned to strategically attract the market. We will first look to increase growth in the market segments we currently have and then look to aggressively penetrate and increase sales to other segments, especially those that cater to the career progression of indigenes of Somalia. There is great opportunity for growth in the "customer type" segments; we initially look to increase our exposure to the entire North and North-East African area. We will approach a wider group through our website, which will be enhanced with an improved user experience and an aggressive web marketing strategy. 4.4 Market Segmentation Market segmentation for CAEE has several layers and can be analysed and targeted from many different angles. The targeted customer market will be segmented in multiple layers as follows: Centre of Aviation & Engineering Excellence will be focusing initially on student interest in obtaining their aviation technical knowledge certification. These students will primarily come from implementing our unique marketing strategies through media such as television, newspaper, social media and radio advertising as well word of mouth advertising from our instructors, students and clients. The target markets for CAEE range from different age groups and generations, that is, from students leaving school to old matured students. However, it is anticipated that 50% of the market share will consist of young students ages 16-24, 40% Young adults from age 25 to 39 and 10% matured people ages 40-60. The aim of our strategies is to expose our Company to the 10 million population of the country. In the near future, CAEE’s market would be nationwide and worldwide via the internet and local, via our training centre in Mogadishu, Somalia.

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Business Plan- Centre Of Aviation & Engineering Excellence

Management Training In aviation, especially the technical and operational requirements are constantly changing. Practiceoriented management competence is a significant factor in being ahead of one’s competitors. Structured project management, efficient management and production control, targeted business management, future-oriented personnel management and the efficient use of information technologies are the primary goals of our courses for experts and managers. We also offer these courses for employees of other industries. Table 4.4: Market Analysis Market Analysis Potential Customers Students: Ages 16 to 24 Young Adults: Ages 25-39 Matured People Ages 40 to 60 Total

Growth 50% 40% 10% 42.46%

2014

2015

2016

2017

2018

7,000,000 9,500,000 1,500,000 18,000,000

10,500,000 13,300,000 1,650,000 25,450,000

15,750,000 18,620,000 1,815,000 36,185,000

23,625,000 26,068,000 1,996,500 51,689,500

35,437,500 36,495,200 2,196,150 74,128,850

CAGR 50.00% 40.00% 10.00% 42.46%

Chart 4.4: Market Analysis (Pie)

4.5 Target Market Segment Strategy We will focus our marketing to prospective students that are looking for training and qualification that will improve their chances of acquiring a job after qualification, qualified trainers and instructors and organisations that may require our services. We will then strategically target other participant segments to try and increase awareness during career open days, aviation industry and job fairs and other related events. This is a huge opportunity for growth for the company, as evidenced by the large number of participants present in these events.

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Business Plan- Centre Of Aviation & Engineering Excellence

In particular, the number of older (and more affluent) people in urban Somalia has increased rapidly in the past decade and we believe that by quickly moving into the market we would meet our sales goals. This segment is currently under-served in the aviation industry in the region and non-existent in Somalia due its socio-economic and socio-political instability. It is important to understand the market segmentation and demography on both an international and local level therefore, by having an internet presence in place, the company is in good position for financial support as well as awareness and sale of its services. The internet presence of CAEE will make substantial sales possible in the long-run. Our aggressive sales and marketing approach, and the quality and of our services will allow for anticipated significant increase in volumes. 4.6 Service Business Analysis Our consulting will be a very valuable asset for the country as a whole. Many parents have questions regarding the "correct" path for their children with regard to a career as a certified engineer in the aviation industry; this would be thoroughly explained through our simplified advertising channels. We would offer aviation training, EASA curricula and most importantly, an unbeatable cost. Unlike similar services, the cost of our services, being vital for the businesses will be very competitive. Our goal is to advise and offer our clients the best possible options, using our personal experiences. CAEE would offer support as an opportunity to work closely with clients and students. This will enhance their ability to develop a positive attitude towards their future. The long-term social goal of CAEE is to empower the community to break into unfamiliar careers like aviation. Effective publicity is essential to the success of any event or campaign. Since the power of community depends on people, therefore, getting the word out to the public is one of the most important things we would do. It requires a well-thought-out strategy based on the following. CAEE has four programmes that will help it involve the community and impact as many people as possible. They are: simplicity, language, positive approach, repetition.

Simplicity To keep our message short, understandable, and simple so that people can get a good idea of what we are doing with just a brief description, since our area of function is specialist. Clarifying our message has the added benefit of clarifying our mission as well. Language Not to use jargon, slogans, or acronyms without defining them. A complex issue would be explained in ways that everyone can understand. Positive Approach To balance criticism with positive alternatives. Repetition People should hear or read about any one of our events at least seven times, as a result, we would use several kinds of media - radio, TV, newspapers, internet, aviation specialist media, other trade organisations' newsletters, posters etc.

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Business Plan- Centre Of Aviation & Engineering Excellence

4.6.1 Competition and Buying Patterns The services CAEE will offer will be the first of its kind in the country as we will be the only company in the country that will provide this type of service. Our reputation offers the best qualify training facility and standards in the country at an affordable price. This will be our final and most respected selling medium. There is minimal competition because there is a gap in the market due to Somalia being in turmoil for about 22 years. All the aviation and aircraft maintenance facility in the country has be damage beyond repair and the aviation engineers in the country have mostly left the country or been killed during the civil unrest. However, the overall competitive environment remained fragmented in 2012, when talks begun about reviving the aviation industry in Somalia, having long been in the hands of independent companies like Puntair. 5.0 Strategy and Implementation Summary In today’s world, there is a rise in the number of competitors and imitation marketing. Everyone wants to be ahead of the competition but naturally, each market will only have one market leader and not several. To remain as the market leader, we will adopt the following strategies: 1) Covering the market globally and locally – we will activate a wide spread campaign across the world through the internet and some affordable online marketing tools. However, we will customise the marketing strategy of each one of our services according to the market that they are serving. 2) Expanding Smartly – Expanding just for the sake of growth can become disastrous therefore our strategists know that keeping an eye on the cash flow of the business is the most important thing for the growth of the Company. If our working capital is being used for expansion, this will affect even the business units which are actually showing growth thereby causing us to cut back on essential plans. Expansion is necessary for good business but it should not come on the cost of a skewed working capital or cash flow as both can affect our survival. 3) Control costs – we will look closely at the accounts of good companies to find ways by which strategies are being implemented to manage costs. There is one basic equation for profits - if we cut down our costs, our expenses automatically come down thereby increasing the overall profit. For example, Rentals, Trainers’ costs etc. are some expenses which are costlier even than the training materials which will be used to provide our services. Hence knowing each and every component of costing is crucial. A perfect example of the importance of cost control can be seen during an economic downturn. Whenever a company faces a tough economic environment, it needs to know where it can control the costs thereby curtailing expenditure. These are some methods used by companies to control costs during bad times. However, if proper methods are implemented during good times, our company will have more margins and deeper pockets to phase off the bad times instead of taking drastic measures. 4) Implementing good marketing plans – The crux of beating our future competitors is to have our own unique position in the mind of the consumers. This position would be highly attractive and

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Business Plan- Centre Of Aviation & Engineering Excellence

profitable; we will then gain advantage over time. There also needs to be a proper implementation of marketing plans. We would have a clear message of our Company. We would also change the message over time to bring more customers to our brand and alter the marketing so as to expand and gain more market share. Our vehicles of marketing communications will be through media (TV, radio, newspaper, magazines etc.) and the internet. We would take any emerging competitors as a frame of reference and redraft a marketing plan which is better than the competitors and helps us in achieving the numbers that we are targeting. The best way to implement a good marketing plan is to do a proper competitive analysis and see where we stand in the current market. Proper implementation of the marketing plan is the key to marketing success. 5) Get the right people and retain them – In the services industry, we are as good as the talent we have on board. We would keep a part of our margin aside so that we don’t lose key talented engineers when a project is complete. Our customer service manager and CEO would keep an eye not to lose our best employee or best performing managers -no company would like to let go of efficient employees. Our employees and stakeholders are our assets. 6) Focus on our customers – Several companies, while making profits, forget that the prime reason they are still working is because the customers like their products or services. We would be the best in this area - knowing our customers in and out. We will do regular market studies and consumer behaviour analysis to determine the mind-set of our customers. A new technology which was being underestimated by us, but has been implemented by a competitor, can attract our customers’ attention and take away even your most loyal customers. 7) Being Informed– we will know our competitors and their services. Our channels will be informed of the features of our product as well. There needs to be regular training to keep the channels in loop of the latest strategy being implemented by our Company. Thus, when customers visit our channel of sales or websites, our marketing activities would be in sync with what we offer. As a market leader, we know how to tap into a new market, hold current customers and win a good share of new customers. We would bring distinctive advantages to the target market in location, services and financing as we maintain our market dominance with our large market share. Being positioned as a market leader, we overcome the major target of attack by challengers, by assuming the trust of the market, getting untapped resources, and providing good quality and high value services. We would also enter new markets as they open up and define a growth path that does not invite competitive retaliation.

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Business Plan- Centre Of Aviation & Engineering Excellence

5.1 SWOT Analysis This is essential to understanding the different risk and rewards of any investment. 5.1.1 Strengths -

Being the only company that providers that services whole Somalia

-

Having a willing and interested partner in Europe.

-

Approved and licensed to operate from current governments.

-

There are no services that are functioning in that country currently similar to our services or close to it.

-

Our services are world class services with state of art facilities.

-

Our business partners will deliver all machinery and furniture

5.1.2 Weaknesses

-

Being new to this kind of business

-

Not many instructors in Somalia that can deliver the courses.

5.1.3 Opportunities -

No other company does this services

-

Gap in the market and services we offer, because Somalia was in turmoil for about 22 years

-

The facilities have been damaged beyond repairs

-

We can train a new and younger population - the engineers who were good aviation engineers have either left the country or are killed in civil war or are too old to do any job

-

There is no maintenance facility in Somalia; No maintenance is currently done inside Somalia.

-

There is a shortage of licence engineers in Somalia

5.1.4 Threats -

Unknown competition - There is no services that are functioning in the country currently similar to our services or close to it.

-

Unpredictable venue of centre -We are in processes of acquiring old aviation school premises in Mogadishu airport if we don’t get we have other land to build the centre.

-

Stability of economic and political environment in Somalia. The users are mostly low skilled people

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Business Plan- Centre Of Aviation & Engineering Excellence

5.2 Competitive Edge In July 2012, Mohammed Osman Ali, the General Director of the Ministry of Aviation and Transport, announced that the Somali government had begun preparations to revive the national carrier, Somali Airlines. The Somali authorities along with the Somali Civil Aviation Steering Committee (SCASC) - a joint commission composed of officials from Somalia's federal and regional governments as well as members of the other groups including UNDP, convened with international aviation groups in Montreal to request support for the on-going rehabilitation efforts. The SCASC set a three-year window for reconstruction of the national civil aviation capacity. It also requested the complete transfer of Somali civil aviation operations and assets from the CACAS caretaker body to the Somali authorities. Earlier in the year, in April 2012, former Somali Airlines pilots, Abikar Nur and Ahmed Elmi Gure, met with aviation officials at the Lufthansa Flight Training Centre in Phoenix, United States, to discuss the possibility of resuming the historic working relationship between Somali Airlines and Lufthansa. The meeting ended with a pledge by the school's chairman, Captain Matthias Kippenberg, to assist the Somali aviation authorities in training prospective pilots. With our decision to collaborate with Lufthansa Technical Training centre, we are ensuring that a tested organisation within familiar grounds is providing synergy with us on this front. In establishing a 21st Century aviation technology centre where we can give access to our customer to make use of our service wealth of experience, recognised aviation licenses certification as well us skills in aviation technology, we ensure an unbeatable customer service experience in Somalia. There is also provision for maintenance facilities to repair aircraft for companies that use Mogadishu airport. We delight in branding ourselves to show that we are different from other companies, getting prepared for whenever a competitor emerges to do what we do in Somalia. Our main competitive edge is in providing outstanding services to customers. It may not be possible to openly compete with market leaders but by providing services through employees that are well equipped, trust can be built so that the competitive edge can be realised. 5.3 Marketing Strategy There is a gap in the aviation market and in the services we offer, because the country was in turmoil for about 22 years, so there are no maintenance facilities in Somalia. We will have our own brochure to highlight each of our services and amplify the fact that technology is the main attractive side of our services, because we use European aviation safety agency standard. Our customers and target market is local aviation companies and government and their affiliating bodies by providing a much needed training and education to their employees.

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Business Plan- Centre Of Aviation & Engineering Excellence

Services: Connecting with the customer is a key focus for CAEE. It is our desire that customers look to us as their valued resource to obtain consultancy, get trained and get maintenance engineers to service their aviation products. Our internet portal will provide an avenue for prompt courteous service, and deliver responses at reasonable and expected time frames. Employees: Employees of CAEE will enjoy a friendly, fair and creative work environment, which respects diversity, new ideas and hard work. Development through experience and training will be a primary focus. It is our desire that employees are long-term, ensuring an expertise that will support the customer experience. Our employees will be a competitive advantage because their technical product and service knowledge will be superior to that of the competition. We want customers to form a relationship with us through our front end staff. 5.4 Sales Strategy The sales forecast monthly summary is included in the appendix. The annual sales projections are included here in Table 5.2. CAEE will approach sales from a sales person-customer relationship basis. All sales associates will be trained and encouraged to assist clients and students in a personal manner, utilising first names and asking the questions needed to provide the customers with the services they desire. Gathering key customer information and seeking performance feedback on the services offered will assist us in the following ways: •

Targeting our marketing efforts more effectively.

Offering merchandising formats that will increase sales.

Developing services that enhance the browsing experience (if online).

• Training and developing sales associates in order to effectively service the customer (client or student). • Increase awareness of Centre of Aviation & Engineering Excellence within the retail consumer marketplace. •

Develop future sales opportunities that allow for continued growth of the business.

We want our customers to come back and specifically ask for a salesperson by name, because they were so satisfied with the service previously provided. In order to provide the customer with the most up-to-date training on the market and a wide selection, we will attend trade shows which showcase all of the latest products within the aviation industry. Attending shows and seminars will not only allow us to ensure our product mix is current and up-to-date, but will also provide us with fresh ideas. To stay abreast of market and product trends, we will utilise trade publications, trade associations, and their associated websites.

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Business Plan- Centre Of Aviation & Engineering Excellence

It is the goal of CAEE to offer selection and quality at a value to the consumer. Our pricing structure will support a reasonable gross margin and position us competitively within the marketplace. Seasonal promotional offers and sale "events" will encourage additional sales and multiple training purchases. Employees of Centre of Aviation & Engineering Excellence are an integral part of the experience for the client or student, especially for younger students. All employees will be developed for growth and advancement, and compensated fairly with effective training that will enable them to confidently service and sell to the customer. Web sales are handled electronically via the website and sales team. Phone sales representatives taking calls will be thoroughly trained in service offerings and have good phone communication skills. They need to be trained to follow a general sales script when dealing with customers. Having good knowledge of services, its benefits and features on the website is critical to getting the customers to commit to an online purchase without talking with a sales representative. A functioning site search engine that helps customers locate services also needs to be added to the internet site. 5.4.1 Sales Forecast The Sales Forecast is divided up into the three major categories of Aviation training, Aircraft maintenance and Aviation consultancy. Unit sales include the yearly forecast of each unit per category. The sales also reflect a 10% increase on a year to year basis. The unit prices reflect the average cost per item, based on past pricing strategies. Since the company deals with providing custom services, this can vary wildly between items. Due to target market shift, estimated increase in unit prices is reflected in years 2014, 2015 and 2016. Direct unit costs reflect direct costs in equipment hire and other direct cost that might not have been taken into consideration. It is estimated that by year 2016, revenues will reflect a 75% market share of the Country. The following table and chart give a round down on forecasted sales. Table 5.4.1: Sales Forecast Sales Forecast 2014

2015

2016

Sales Aviation Training Aircraft Maintenance Aviation Consultancy Services Total Sales

$460,000 $230,000 $145,000 $835,000

$552,000 $330,000 $198,000 $1,080,000

$634,800 $396,000 $237,600 $1,268,400

Direct Cost of Sales Equipment Hire or Rental Other Direct Cost Subtotal Direct Cost of Sales

2014 $60,000 $120,000 $180,000

2015 $72,060 $144,000 $216,060

2016 $86,472 $172,800 $259,272

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Business Plan- Centre Of Aviation & Engineering Excellence

Chart 5.4.1a: Sales Monthly

Chart 5.4.1b: Sales by Year

5.5 Milestones The milestone table and chart show the specific details about actual programme activities that should be taking place during the year. Each one has its manager, starting date and ending date. During the

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Business Plan- Centre Of Aviation & Engineering Excellence

year, we will be keeping track of implementation against plan, with reports on the timely completion of these activities as planned. The accompanying milestone table highlights our plan with specific dates. This schedule reflects our strong commitment to organisation and detail. Milestone responsibility is assigned to the functional departments in the company - Sales, Marketing, HR, Operations, and President's Office. The Milestone table reflects critical dates for the acquisition and takeover schedule, systems reviews and upgrades, the website re-design and deployment, the retail store relocation, and new product identification and rollout. Table 5.5: Milestones

Milestones Milestone Partner with Airline Trainer Lease Premises Renovate Premises Managing Director Training Acquiring Equipments Marketing Program Starts Grand Opening Totals

Start Date 01/06/2013 01/07/2013 01/08/2013 01/06/2013 01/06/2013 01/01/2014 01/01/2014

End Date 30/06/2013 31/07/2013 01/11/2013 31/10/2013 30/09/2013 On Going On Going

Budget $0 $50,000 $15,000 $5,000 $40,000 $0 $0 $110,000

Manager Mohamed Yusuf Mohamed Yusuf Mohamed Yusuf Mohamed Yusuf Mohamed Yusuf Mohamed Yusuf Mohamed Yusuf

Department Founder/ Managing Director Founder/ Managing Director Founder/ Managing Director Founder/ Managing Director Founder/ Managing Director Founder/ Managing Director Founder/ Managing Director

Chart 5.5: Milestones

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Business Plan- Centre Of Aviation & Engineering Excellence

6.0 Management Summary The Founder and Managing Director of Centre of Aviation & Engineering Excellence (CAEE) is Mr Mohamed Yusuf. Mr Yusuf is a seasoned professional with over 10 years’ experience in the Aviation industry. Mr Yusuf will be joined by the following representation to help facilitate the success of CAEE Operating Partners: Mr Ahmed Duale -The Principle Investor Mr Hanad Mohamed -Finance & Branding Director The business requires other position such as:      

Training Manager Personal Assistant to Mr Yusuf Media & Advertising Manager Sales Staff Assistant General Manager All of these other vacant position will be filled by Somali citizens as the business wants to ensure that it has a local feel and to guarantee that customers will be more comfortable.

6.1 Personnel Plan It is anticipated that Mr Mohamed Yusuf will head the company to its success and as a result, Mr Yusuf is prepared to down size his income to $34,800 for the first year in order for the company to establish itself. Mr Hanad Mohamed will be heading the Finance and Marketing department and he is also intending to accept an $18,000 first year pay. The reason of wage payments is for instructor to training our students, administrative staff and general staff duties. We also feel that the Company should work with its current staffing projection for the first three years and after that, we will consider bringing new additions to the team. Table 6.1: Personnel Personnel Plan Mr. Mohamed Yusuf- Founder / Managing Director Mr. Hanad Mohmaed- Finance & Branding Instructor/ Trainer 1 Instructor / Trainer 2 Admin Staff 1 Admin Staff 2 General Staff 1 General Staff 2 Other Staff Ahmend Duale- Partner/ Investor Total People

2014 $34,800 $18,000 $18,000 $13,500 $12,000 $9,000 $4,500 $4,500 $4,500 $0 9

2015 $45,000 $35,000 $19,800 $19,800 $13,200 $13,200 $6,600 $6,600 $6,000 $0 9

2016 $60,000 $40,000 $21,780 $21,780 $14,520 $14,520 $7,260 $7,260 $7,260 $0 9

Total Payroll

$118,800

$165,200

$194,380

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Business Plan- Centre Of Aviation & Engineering Excellence

6.2 Exit Strategy This would be the worst situation for the management committee members (as well as for everyone else who is part of the organisation), but unfortunately, closure does happen. Sometimes companies are forced to close down because their funding has been cut, and no substitute money can be found. The following steps can be taken when faced with the option of closure. 1. 2. 3. 4.

Step Step Step Step

1 2 3 4

- Assess your options – Explore Survival – Explore Merging – Close

6.2.1 Assess your options It is essential that the management committee takes a long clear look at the current state of the organisation - perhaps with the help of an independent advisor - and identify the options for the short and long term. This assessment should include:       

The impact on the client group of change (e.g. a reduction in services or transfer of activities) or closure; Financial strengths and weaknesses, including assets (e.g. premises and equipment); Internal capacity - morale, skills and knowledge of staff and volunteers; External opportunities and threats, including identification of possible merger or transfer options where organisations provide similar services; Potential for rescue - by local authorities, government or major trusts; Legal and constitutional requirements - what does the governing document allow for at closure in terms of the process to be followed and re-distribution of assets? Timetable required - for change and consolidation, merger or closure.

Ultimately, it is up to the management committee to determine whether there are sufficient resources, and goodwill, to maintain core services, or whether the organisation must devise an exit strategy (i.e. plan for merger or closing down). If the decision is the latter, then is closure to be rapid, or delayed? 6.2.2 Sticking with Survival If the decision is to try and survive, we would seriously consider the following:    

Invest in realistic planning, implementation and review; Carefully construct a fundraising strategy; Neutralise any negative reputation, internally and externally; Prepare service users or local people to fight cuts or closure.

We would review the organisational structure and operations by asking: What lessons are there to be learnt from real life attempts by management committees at rescuing and restoring their organisations? It is certainly very hard work; it consumes a lot of time and energy, and at times will feel frustrating and unrewarding. Other people will not necessarily appreciate your actions, and you may not be thanked - at least in the short term. But the remarkable resilience of so many people in the voluntary and community sector comes from a long experience of forging change, despite the odds.

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Business Plan- Centre Of Aviation & Engineering Excellence

However, for an organisation in crisis to recover successfully, there are other essentials too. The process is dependent on the management committee members working together as a team. It is this cohesion that is at the heart of good governance, and which ultimately makes the difference when organisations face an uncertain fate. 6.2.3 Mergers When independent survival is not an option, we may find that we are able to continue delivery of some services and activities by merging functions with another organisation. This approach is difficult, but most frequently considered by organisations that remain focused on the impact that closure would have on their beneficiaries. When determining whether this is an option, we would discuss and consider whether: Another organisation is already providing similar services Another organisation is targeting similar beneficiaries The services of our company potentially complement another organisation Other companies are active in a similar geographical area or whether we could merge with another similar company to cover a larger geographical area. Such consolidation of resources, services and expertise, can ensure that beneficiaries are better served as the long term future of certain activities and services becomes more secure. Such rationalisation of activities makes more effective use of existing resources and may be more favourably regarded by future funders.    

6.2.4 Close If the decision is to close, we would consider:   

What our governing document says about dissolving the organisation (the how, what and when of winding an organisation depends on whether it is incorporated or unincorporated); The extent of the assets of the organisation and the options for disposing them, e.g. are there legal requirements about who should benefit from the disposed assets? The timetable required for seeing the process through. This includes stopping activities, dismissing staff, closing premises, paying bills, terminating contracts and, if appropriate, de-registering with the charity regulator; The cost implications, i.e. having the finances to cover the cost of the process of winding up. You also need to consider the implications for management committee members in terms of personal liability if the organisation cannot meet its financial obligations; Who is left, or best placed, to oversee the winding up and ultimate dissolution.

7.0 Financial Plan Mr Ahmed Duale will invest $300,000 into the business to ensure its success. The general start-up costs include legal fees for services in regards to the purchase of the business such as the letter of intent, the asset purchase agreement, due diligence activities, and the business organisation. The accounting fees are for services regarding the business evaluation and due diligence activities. Rent and insurance for the training facility must be prepaid before the business starts to trade. Raising money is ideally another aspect of building and maintaining our organisations. The founder and stakeholders are responsible for fundraising or investments in the company but ideally, everyone involved with an organisation should be seen as a potential fundraiser. As long as we remember that the people

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Business Plan- Centre Of Aviation & Engineering Excellence

who believe in our mission want to support it, especially with their money, it is just a question of deciding who is interested in our services and making them spend with us. With that in mind, our programme should always come first. As noted elsewhere in this business plan, our group needs to have a clear mission statement and a list of goals. Based on our programme, the finance director needs to project as accurately as possible the company's expenses for things like training, telephone calls, photocopying, programme or event expenses, staff pay, and rent. This will determine the amount of money to be raised. 7.1 Start-up Funding We have projected our start-up cost to be $300,000 and as a result, we have succeeded the full investment from an investor by the name of Mr Ahmed Duale. After investment Mr Duale will only be a board member and attend meetings. After the initial investment, Mr Duale anticipates to recoup his fund within 5 years. Our total start-up expense is $175,000 and we have made allowance of cash reserves of $125,000. Table 7.1: Start-up Funding Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required

$130,000 $170,000 $300,000

Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets

$30,000 $140,000 $0 $140,000 $170,000

Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities

$0 $0 $0 $0 $0

Capital Planned Investment Owner Investor Additional Investment Requirement Total Planned Investment

$0 $300,000 $0 $300,000

Loss at Start-up (Start-up Expenses) Total Capital

($130,000) $170,000

Total Capital and Liabilities

$170,000

Total Funding

$300,000

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Business Plan- Centre Of Aviation & Engineering Excellence

7.2 Important Assumptions It is assumed that the Somali government and community would whole heartedly receive us. The next step in the process is to conduct a preliminary assessment of community interest. The community piece of the assessment is rigorous and detailed and helps clarify any potentially damaging assumptions. Questions need to be asked include: What are the specific strengths and weaknesses of existing training centres (in other fields)? What do you wish they offered? Which issues and interests unite the community, and which divides it? Do you or anyone you know have an interest in aviation? More socio-economic questions should be asked like: What relationships and linkages already exist among the local corporations, banks, hospitals, charitable foundations, service agencies and government agencies? Is there a culture of learning in the community, or a history of inactivity or hostility with respect to learning and career progression in the community? The results of this assessment are subjected to careful analysis, and they will establish the basis for our strategy. 7.3 Break-even Analysis Our monthly breakeven point is anticipated to be $41,635. For our break-even analysis, we assume running costs which include payroll, rent, utilities, interest expense on the funding loan, and an estimation of other running costs. These estimations are based on real financial history data provided by the sellers of the business. Our sales forecast (5.4.1 & Appendix Table 1) indicates that monthly sales are expected to be much greater than the break-even point Table 7.3: Break-even Analysis Break-even Analysis

Monthly Revenue Break-even

$36,759

Assumptions:

Average Percent Variable Cost

22%

Estimated Monthly Fixed Cost

$28,835

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Business Plan- Centre Of Aviation & Engineering Excellence

Chart 7.3: Break-even Analysis

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Business Plan- Centre Of Aviation & Engineering Excellence

7.4 Projected Profit and Loss It is projected that business profitably will increase up to 15% net profit for the first 3 years with the anticipation of the company pushing 30% with 5years. Our projection also states that 25.90% profit is the lowest profit projection we anticipate over this amount in the coming years. Table 7.4: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales

2014 $835,000 $180,000 $0 $180,000

2015 $1,080,000 $216,060 $0 $216,060

2016 $1,268,400 $259,272 $0 $259,272

Gross Margin Gross Margin %

$655,000 78.44%

$863,940 79.99%

$1,009,128 79.56%

Expenses Payroll Marketing/Promotion Depreciation Rent Utilities Insurance Payroll Taxes Licences & Subscriptions Equipment Hire Telephone Consultancy Fee Miscellaneous

$118,800 $55,500 $7,200 $24,000 $12,000 $6,000 $17,820 $1,200 $18,000 $6,000 $12,000 $67,500

$165,200 $66,000 $7,920 $24,000 $13,200 $6,600 $17,820 $1,320 $19,800 $6,600 $12,000 $66,000

$194,380 $72,600 $8,712 $24,000 $14,520 $7,260 $19,602 $1,452 $21,780 $7,260 $12,000 $72,600

Total Operating Expenses

$346,020

$406,460

$456,166

Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred

$308,980 $316,180 $0 $92,694

$457,480 $465,400 $0 $137,244

$552,962 $561,674 $0 $165,889

Other Income Other Income Account Name Other Income Account Name Total Other Income

$0 $0 $0

$0 $0 $0

$0 $0 $0

Other Expense Other Expense Account Name Other Expense Account Name Total Other Expense

$0 $0 $0

$0 $0 $0

$0 $0 $0

Net Other Income Net Profit Net Profit/Sales

$0 $216,286 25.90%

$0 $320,236 29.65%

$0 $387,073 30.52%

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Business Plan- Centre Of Aviation & Engineering Excellence

Chart 7.4a: Profit Monthly

Chart 7.4b: Profit Yearly

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Business Plan- Centre Of Aviation & Engineering Excellence

Chart 7.4c: Gross Margin Monthly

Chart 7.4d: Gross Margin Yearly

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Business Plan- Centre Of Aviation & Engineering Excellence

7.5 Projected Cash Flow The cash flow suggests that the company’s net cash flow is reduced for the first six months. This is due to the implementation phase of the business as a lot of outgoing will take place. After the six months period, it is project that the company will pull itself out of with healthier cash in the bank. Table 7.5: Cash Flow Pro Forma Cash Flow 2014

2015

2016

Cash Sales

$835,000

$1,080,000

$1,268,400

Subtotal Cash from Operations

$835,000

$1,080,000

$1,268,400

Non Operating (Other) Income

$0

$0

$0

Sales Tax, VAT, HST/GST Received

$0

$0

$0

New Current Borrowing

$0

$0

$0

New Other Liabilities (interest-free)

$0

$0

$0

New Long-term Liabilities

$0

$0

$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

$835,000

$1,080,000

$1,268,400

Expenditures

2014

2015

2016

Cash Spending

$118,800

$165,200

$194,380

Bill Payments

$447,218

$583,922

$670,707

Subtotal Spent on Operations

$566,018

$749,122

$865,087

Non Operating (Other) Expense

$0

$0

$0

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

Principal Repayment of Current Borrowing

$0

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

Long-term Liabilities Principal Repayment

$0

$0

$0

Purchase Other Current Assets

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

Dividends

$0

$0

$0

Subtotal Cash Spent

$566,018

$749,122

$865,087

Net Cash Flow

$268,982

$330,878

$403,313

Cash Balance

$408,982

$739,859

$1,143,173

Cash Received Cash from Operations

Additional Cash Received

Expenditures from Operations

Additional Cash Spent

Page 32


Business Plan- Centre Of Aviation & Engineering Excellence

Chart 7.5: Cash

Page 33


Business Plan- Centre Of Aviation & Engineering Excellence

7.6 Projected Balance Sheet The project balance sheet has shown an increase in company net asset which enable the company to stabilise itself. Table 7.6: Balance Sheet Pro Forma Balance Sheet 2014

2015

2016

Current Assets Cash Other Current Assets Total Current Assets

$408,982 $0 $408,982

$739,859 $0 $739,859

$1,143,173 $0 $1,143,173

Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets

$30,000 $7,200 $22,800 $431,782

$30,000 $15,120 $14,880 $754,739

$30,000 $23,832 $6,168 $1,149,341

Liabilities and Capital

2014

2015

2016

Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities

$45,496 $0 $0 $45,496

$48,217 $0 $0 $48,217

$55,745 $0 $0 $55,745

Long-term Liabilities Total Liabilities

$0 $45,496

$0 $48,217

$0 $55,745

Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital

$300,000 ($130,000) $216,286 $386,286 $431,782

$300,000 $86,286 $320,236 $706,522 $754,739

$300,000 $406,522 $387,073 $1,093,595 $1,149,341

Net Worth

$386,286

$706,522

$1,093,595

Assets

Page 34


Business Plan- Centre Of Aviation & Engineering Excellence

7.7 Business Ratios The Business growth has shown an increase year on year 13.79% in 2015 and 20% in 2016. Table 7.7: Ratios Ratio Analysis Sales Growth

2014 0.00%

2015 29.34%

2016 17.44%

Industry Profile 0.00%

Percent of Total Assets Other Current Assets Total Current Assets Long-term Assets Total Assets

0.00% 94.72% 5.28% 100.00%

0.00% 98.03% 1.97% 100.00%

0.00% 99.46% 0.54% 100.00%

100.00% 100.00% 0.00% 100.00%

Current Liabilities Long-term Liabilities Total Liabilities Net Worth

10.54% 0.00% 10.54% 89.46%

6.39% 0.00% 6.39% 93.61%

4.85% 0.00% 4.85% 95.15%

0.00% 0.00% 0.00% 100.00%

Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes

100.00% 78.44% 52.54% 6.65% 37.00%

100.00% 79.99% 50.34% 6.11% 42.36%

100.00% 79.56% 49.04% 5.72% 43.60%

100.00% 0.00% 0.00% 0.00% 0.00%

Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets

8.99 8.99 10.54% 79.99% 71.56%

15.34 15.34 6.39% 64.75% 60.61%

20.51 20.51 4.85% 50.56% 48.11%

0.00 0.00 0.00% 0.00% 0.00%

Additional Ratios Net Profit Margin Return on Equity

2014 25.90% 55.99%

2015 29.65% 45.33%

2016 30.52% 35.39%

n.a n.a

Activity Ratios Accounts Payable Turnover Payment Days Total Asset Turnover

10.83 27 1.93

12.17 29 1.43

12.17 28 1.10

n.a n.a n.a

Debt Ratios Debt to Net Worth Current Liab. to Liab.

0.12 1.00

0.07 1.00

0.05 1.00

n.a n.a

Liquidity Ratios Net Working Capital Interest Coverage

$363,486 0.00

$691,642 0.00

$1,087,427 0.00

n.a n.a

Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout

0.52 11% 8.99 2.16 0.00

0.70 6% 15.34 1.53 0.00

0.91 5% 20.51 1.16 0.00

n.a n.a n.a n.a n.a

Page 35


Appendix

Table 1: Sales Forecast Sales Forecast Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Sales Aviation Training Aircraft Maintenance Aviation Consultancy Services Total Sales

$25,000 $10,000 $7,500 $42,500

$25,000 $10,000 $7,500 $42,500

$35,000 $15,000 $10,000 $60,000

$35,000 $15,000 $10,000 $60,000

$35,000 $15,000 $10,000 $60,000

$35,000 $15,000 $10,000 $60,000

$45,000 $25,000 $15,000 $85,000

$45,000 $25,000 $15,000 $85,000

$45,000 $25,000 $15,000 $85,000

$45,000 $25,000 $15,000 $85,000

$45,000 $25,000 $15,000 $85,000

$45,000 $25,000 $15,000 $85,000

Direct Cost of Sales Equipment Hire or Rental Other Direct Cost Subtotal Direct Cost of Sales

Jan $5,000 $10,000 $15,000

Feb $5,000 $10,000 $15,000

Mar $5,000 $10,000 $15,000

Apr $5,000 $10,000 $15,000

May $5,000 $10,000 $15,000

Jun $5,000 $10,000 $15,000

Jul $5,000 $10,000 $15,000

Aug $5,000 $10,000 $15,000

Sep $5,000 $10,000 $15,000

Oct $5,000 $10,000 $15,000

Nov $5,000 $10,000 $15,000

Dec $5,000 $10,000 $15,000

Jan $2,900

Feb $2,900

Mar $2,900

Apr $2,900

May $2,900

Jun $2,900

Jul $2,900

Aug $2,900

Sep $2,900

Oct $2,900

Nov $2,900

Dec $2,900

$1,500 $1,500 $0 $1,000 $0 $0 $0 $0 $0 4

$1,500 $1,500 $0 $1,000 $0 $0 $0 $0 $0 4

$1,500 $1,500 $0 $1,000 $0 $0 $0 $0 $0 4

$1,500 $1,500 $1,500 $1,000 $1,000 $500 $500 $500 $0 9

$1,500 $1,500 $1,500 $1,000 $1,000 $500 $500 $500 $0 9

$1,500 $1,500 $1,500 $1,000 $1,000 $500 $500 $500 $0 9

$1,500 $1,500 $1,500 $1,000 $1,000 $500 $500 $500 $0 9

$1,500 $1,500 $1,500 $1,000 $1,000 $500 $500 $500 $0 9

$1,500 $1,500 $1,500 $1,000 $1,000 $500 $500 $500 $0 9

$1,500 $1,500 $1,500 $1,000 $1,000 $500 $500 $500 $0 9

$1,500 $1,500 $1,500 $1,000 $1,000 $500 $500 $500 $0 9

$1,500 $1,500 $1,500 $1,000 $1,000 $500 $500 $500 $0 9

$6,900

$6,900

$6,900

$10,900

$10,900

$10,900

$10,900

$10,900

$10,900

$10,900

$10,900

$10,900

Table 2: Personnel Personnel Plan Mr. Mohamed Yusuf- Founder / Managing Director Mr. Hanad Mohmaed- Finance & Branding Instructor/ Trainer 1 Instructor / Trainer 2 Admin Staff 1 Admin Staff 2 General Staff 1 General Staff 2 Other Staff Ahmend Duale- Partner/ Investor Total People

Total Payroll

Page 1


Appendix

Table 3: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales

Jan $42,500 $15,000 $0 $15,000

Feb $42,500 $15,000 $0 $15,000

Mar $60,000 $15,000 $0 $15,000

Apr $60,000 $15,000 $0 $15,000

May $60,000 $15,000 $0 $15,000

Jun $60,000 $15,000 $0 $15,000

Jul $85,000 $15,000 $0 $15,000

Aug $85,000 $15,000 $0 $15,000

Sep $85,000 $15,000 $0 $15,000

Oct $85,000 $15,000 $0 $15,000

Nov $85,000 $15,000 $0 $15,000

Dec $85,000 $15,000 $0 $15,000

Gross Margin Gross Margin %

$27,500 64.71%

$27,500 64.71%

$45,000 75.00%

$45,000 75.00%

$45,000 75.00%

$45,000 75.00%

$70,000 82.35%

$70,000 82.35%

$70,000 82.35%

$70,000 82.35%

$70,000 82.35%

$70,000 82.35%

Expenses Payroll Marketing/Promotion Depreciation Rent Utilities Insurance Payroll Taxes Licences & Subscriptions Equipment Hire Telephone Consultancy Fee Miscellaneous

$6,900 $5,000 $600 $2,000 $1,000 $500 $1,035 $100 $1,500 $500 $1,000 $5,000

$6,900 $5,000 $600 $2,000 $1,000 $500 $1,035 $100 $1,500 $500 $1,000 $5,000

$6,900 $5,000 $600 $2,000 $1,000 $500 $1,035 $100 $1,500 $500 $1,000 $5,000

$10,900 $5,000 $600 $2,000 $1,000 $500 $1,635 $100 $1,500 $500 $1,000 $5,000

$10,900 $500 $600 $2,000 $1,000 $500 $1,635 $100 $1,500 $500 $1,000 $5,000

$10,900 $5,000 $600 $2,000 $1,000 $500 $1,635 $100 $1,500 $500 $1,000 $5,000

$10,900 $5,000 $600 $2,000 $1,000 $500 $1,635 $100 $1,500 $500 $1,000 $5,000

$10,900 $5,000 $600 $2,000 $1,000 $500 $1,635 $100 $1,500 $500 $1,000 $5,000

$10,900 $5,000 $600 $2,000 $1,000 $500 $1,635 $100 $1,500 $500 $1,000 $5,000

$10,900 $5,000 $600 $2,000 $1,000 $500 $1,635 $100 $1,500 $500 $1,000 $7,500

$10,900 $5,000 $600 $2,000 $1,000 $500 $1,635 $100 $1,500 $500 $1,000 $7,500

$10,900 $5,000 $600 $2,000 $1,000 $500 $1,635 $100 $1,500 $500 $1,000 $7,500

Total Operating Expenses

$25,135

$25,135

$25,135

$29,735

$25,235

$29,735

$29,735

$29,735

$29,735

$32,235

$32,235

$32,235

Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred

$2,365

$2,365

$19,865

$15,265

$19,765

$15,265

$40,265

$40,265

$40,265

$37,765

$37,765

$37,765

$2,965 $0 $710

$2,965 $0 $710

$20,465 $0 $5,960

$15,865 $0 $4,580

$20,365 $0 $5,930

$15,865 $0 $4,580

$40,865 $0 $12,080

$40,865 $0 $12,080

$40,865 $0 $12,080

$38,365 $0 $11,330

$38,365 $0 $11,330

$38,365 $0 $11,330

Other Income Other Income Account Name Other Income Account Name Total Other Income

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

Other Expense Other Expense Account Name Other Expense Account Name Total Other Expense

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

Net Other Income Net Profit Net Profit/Sales

$0 $1,656 3.90%

$0 $1,656 3.90%

$0 $13,906 23.18%

$0 $10,686 17.81%

$0 $13,836 23.06%

$0 $10,686 17.81%

$0 $28,186 33.16%

$0 $28,186 33.16%

$0 $28,186 33.16%

$0 $26,436 31.10%

$0 $26,436 31.10%

$0 $26,436 31.10%

15%

Page 1


Appendix

Table 4: Cash Flow Pro Forma Cash Flow Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

$42,500 $42,500

$42,500 $42,500

$60,000 $60,000

$60,000 $60,000

$60,000 $60,000

$60,000 $60,000

$85,000 $85,000

$85,000 $85,000

$85,000 $85,000

$85,000 $85,000

$85,000 $85,000

$85,000 $85,000

$0 $0 $0 $0 $0 $0 $0 $0 $42,500

$0 $0 $0 $0 $0 $0 $0 $0 $42,500

$0 $0 $0 $0 $0 $0 $0 $0 $60,000

$0 $0 $0 $0 $0 $0 $0 $0 $60,000

$0 $0 $0 $0 $0 $0 $0 $0 $60,000

$0 $0 $0 $0 $0 $0 $0 $0 $60,000

$0 $0 $0 $0 $0 $0 $0 $0 $85,000

$0 $0 $0 $0 $0 $0 $0 $0 $85,000

$0 $0 $0 $0 $0 $0 $0 $0 $85,000

$0 $0 $0 $0 $0 $0 $0 $0 $85,000

$0 $0 $0 $0 $0 $0 $0 $0 $85,000

$0 $0 $0 $0 $0 $0 $0 $0 $85,000

Expenditures

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations

$6,900 $1,111 $8,011

$6,900 $33,345 $40,245

$6,900 $33,520 $40,420

$10,900 $38,569 $49,469

$10,900 $37,710 $48,610

$10,900 $34,770 $45,670

$10,900 $38,065 $48,965

$10,900 $45,315 $56,215

$10,900 $45,315 $56,215

$10,900 $45,373 $56,273

$10,900 $47,065 $57,965

$10,900 $47,065 $57,965

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0 $0 $0 $8,011

$0 $0 $0 $40,245

$0 $0 $0 $40,420

$0 $0 $0 $49,469

$0 $0 $0 $48,610

$0 $0 $0 $45,670

$0 $0 $0 $48,965

$0 $0 $0 $56,215

$0 $0 $0 $56,215

$0 $0 $0 $56,273

$0 $0 $0 $57,965

$0 $0 $0 $57,965

$34,489 $174,489

$2,256 $176,744

$19,581 $196,325

$10,532 $206,856

$11,391 $218,247

$14,331 $232,577

$36,036 $268,613

$28,786 $297,398

$28,786 $326,184

$28,727 $354,911

$27,036 $381,946

$27,036 $408,982

Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Non Operating (Other) Income Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received

Additional Cash Spent Non Operating (Other) Expense Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance

0.00%

Page 2


Appendix

Table 5: Balance Sheet

Pro Forma Balance Sheet Assets

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Starting Balances

Current Assets Cash Other Current Assets Total Current Assets

$140,000 $0 $140,000

$174,489 $0 $174,489

$176,744 $0 $176,744

$196,325 $0 $196,325

$206,856 $0 $206,856

$218,247 $0 $218,247

$232,577 $0 $232,577

$268,613 $0 $268,613

$297,398 $0 $297,398

$326,184 $0 $326,184

$354,911 $0 $354,911

$381,946 $0 $381,946

$408,982 $0 $408,982

Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets

$30,000 $0 $30,000 $170,000

$30,000 $600 $29,400 $203,889

$30,000 $1,200 $28,800 $205,544

$30,000 $1,800 $28,200 $224,525

$30,000 $2,400 $27,600 $234,456

$30,000 $3,000 $27,000 $245,247

$30,000 $3,600 $26,400 $258,977

$30,000 $4,200 $25,800 $294,413

$30,000 $4,800 $25,200 $322,598

$30,000 $5,400 $24,600 $350,784

$30,000 $6,000 $24,000 $378,911

$30,000 $6,600 $23,400 $405,346

$30,000 $7,200 $22,800 $431,782

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities

$0 $0 $0 $0

$32,233 $0 $0 $32,233

$32,233 $0 $0 $32,233

$37,308 $0 $0 $37,308

$36,554 $0 $0 $36,554

$33,509 $0 $0 $33,509

$36,554 $0 $0 $36,554

$43,804 $0 $0 $43,804

$43,804 $0 $0 $43,804

$43,804 $0 $0 $43,804

$45,496 $0 $0 $45,496

$45,496 $0 $0 $45,496

$45,496 $0 $0 $45,496

Long-term Liabilities Total Liabilities

$0 $0

$0 $32,233

$0 $32,233

$0 $37,308

$0 $36,554

$0 $33,509

$0 $36,554

$0 $43,804

$0 $43,804

$0 $43,804

$0 $45,496

$0 $45,496

$0 $45,496

Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital

$300,000 ($130,000) $0 $170,000 $170,000

$300,000 ($130,000) $1,656 $171,656 $203,889

$300,000 ($130,000) $3,311 $173,311 $205,544

$300,000 ($130,000) $17,217 $187,217 $224,525

$300,000 ($130,000) $27,902 $197,902 $234,456

$300,000 ($130,000) $41,738 $211,738 $245,247

$300,000 ($130,000) $52,423 $222,423 $258,977

$300,000 ($130,000) $80,609 $250,609 $294,413

$300,000 ($130,000) $108,794 $278,794 $322,598

$300,000 ($130,000) $136,980 $306,980 $350,784

$300,000 ($130,000) $163,415 $333,415 $378,911

$300,000 ($130,000) $189,851 $359,851 $405,346

$300,000 ($130,000) $216,286 $386,286 $431,782

Net Worth

$170,000

$171,656

$173,311

$187,217

$197,902

$211,738

$222,423

$250,609

$278,794

$306,980

$333,415

$359,851

$386,286

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HIGHWOODS & ASSOCIATES