1. 1
1.0 Executive Summary..........................................................................................3
1.2 Mission.............................................................................................................
..............5
1.3 Keys to Success......................................................................................................... 5
.....
1.4 Risks................................................................................................................
...............6
2.0 Company Summary..........................................................................................7
2.1 Company Ownership.........................................................................
............................7
2.2 Start-up Summary......................................................................................
....................7
3.0 Products and Services....................................................................................11
3.1 Product and Service Description......................................................
...........................11
3.2 Competitive Comparison...........................................................................
..................12
3.3 Fulfillment............................................................................................................ 12
........
3.4 Technology............................................................................................................... 13
....
3.5 Future Products and Services.................................................................................... 13
...
4.0 Market Analysis Summary..............................................................................14
4.1 Market Segmentation.....................................................................................
..............14
4.3 Service Business Analysis......................................................................
.....................16
4.3.1 Competition and Buying Patterns...............................................................
..........16
5.0 Strategy and Implementation Summary.........................................................17

2. 2
5.1 Value Proposition..................................................................................................... 17
....
5.2 Competitive Edge..................................................................................................... 18
....
5.3 Marketing Strategy....................................................................................................18
...
5.3.1 Pricing Strategy............................................................................................. 18
........
5.3.2 Promotion Strategy......................................................................
.........................19
5.4 Sales Strategy..................................................................................................
.............19
5.4.1 Sales Forecast.................................................................................................. 20
......
6.0 Management Summary...................................................................................26
6.1 Personnel Plan..................................................................................................... 26
.........
7.0 Financial Plan.................................................................................................27
7.1 Important Assumptions......................................................................................
..........28
7.2 Break-even Analysis..................................................................................
..................29
7.3 Projected Profit and Loss.................................................................................
............30
7.6 Business Ratios.......................................................................................
.....................42

3. 3
1.0 Executive Summary
Stroll Net will provide a unique forum for communication and entertainment
through the medium of public Internet access. In the first year, we will set up 16
Internet-enabled pay-kiosks in public spaces throughout Tech City, in locations
frequented by business travelers and students, but with no nearby internet cafes
or other similar competition. Our flagship location will be next to the downtown
bus and train station, where, for less than a dollar, travelers can check email,
locate phone numbers, and look up directions on any of the multiple online-
mapping sites. They can also simply surf the net, as their time and budget allows.
By accepting both real money (coins and dollar bills) and credit cards, we can
catch both the casual browser and the traveler with money to burn.
Stroll Net is the answer to an increasing demand. Americans want access to the
methods of communication and volumes of information now available on the
Internet, at a cost they can afford, and in such a way that they aren't confined to
a bedroom or office desk. Stroll Net's goal is to provide the community with a
convenient and affordable way to access the Internet away from home and the
office.
This business plan is prepared to obtain financing in the amount of $299,671.
The supplemental financing is required to begin the purchase of public Internet
terminals, the purchase of an office warehouse, office equipment and supplies
and company vehicles, and to cover expenses in the first year of operations.
Additional financing has already been secured in the form of $10,500 of personal
savings from owners Cam Piotr and Bob Green, and a long-term loan of
$100,000.
Stroll Net will be incorporated as a Limited Liability Corporation. This will shield
the owners, Cam Piotr and Bob Green, from issues of personal liability and
double taxation. The investors will be treated as shareholders and therefore will
not be liable for more than their individual personal investment of $5,250 each.
The financing, in addition to the capital contributions from the owners, will allow
Stroll Net to successfully open and maintain operations through year one. The

4. 4
large initial capital investment will allow Stroll Net to provide its clients and
customers with the most innovative public Internet terminal available. A unique
and innovative product is required to provide the customers with a service that is
insurmountable by any competition. Successful operation in year one will provide
Stroll Net a customer base that will allow it to be self-sufficient in year two.
For an investment of $299,671, we project dividends of $100,000 in year two,
and $200,000 in year three, depending on cash flows. These projections are
based on actual business revenues from similar start-up customers of our
internet kiosk supplier in other states. In the first year, with a break-even point of
$42,599 per month, we expect revenues of $727,072 and net profit of 18.5%, or
$134,305. By year three, revenues will increase to $1,136,067, and the net worth
of Stroll Net will increase to $610,320. Dividends thereafter will depend on cash
flows; in year five, investors will have the option of being bought out by the
company owners.
Highlights

5. 5
1.1 Objectives
Stroll Net's objectives for the first year of operation include:
 The introduction of an innovative product that offers an affordable and
convenient way for Internet users to access the Internet away from home.
 The creation of a unique environment that allows traveling business
people access to their own files and programs.
 The placement of 100 public Internet terminals operating throughout the
North MyState area.
For the following two years our growth objectives includes:
 A growth in public Internet terminals placed by 20% each year.
 A growth in revenues by 25% per year.
1.2 Mission
As the popularity of the Internet continues to grow at an exponential rate, easy
and affordable access is quickly becoming a necessity of life. Stroll Net will
provide internet users and business travelers alike the ability to access the
Internet, via our public Internet terminals or a wireless WiFi connection away
from home and the office. For a minimal fee, internet users, young and old, will
be able to access the internet while they stay in hotels, wait at airports, shop in
shopping malls and so on.
We look to be the leader in introducing an innovative and quality public Internet
terminal to our current market. We will add value to our community by
maintaining a quality product and providing a valuable service. Our terminals will
utilize the most advance technologies and our staff will possess the utmost in
customer service experience.
1.3 Keys to Success
As a start-up company, new to the industry, we must be focused and work hard
to create an acceptance for ourselves and our products and services within the
marketplace. The keys to our success are:

6. 6
 The placement of an innovative product and quality service that is able to
both expand existing markets and create new ones.
 A steady, disciplined pattern of growth.
 The development of a good relationship with clients and customers.
1.4 Risks
The risks involved with starting Stroll Net are:
 Will there be a demand for the services offered by Stroll Net in Tech City?
 Will the popularity of the Internet continue to grow, or is the Internet a fad?
 Will individuals be willing to pay for the service Stroll Net offers?
 Will the cost of accessing the Internet from home drop so significantly that
there will not be a market for public Internet terminals?

7. 7
2.0 Company Summary
Stroll Net, soon to be located on the south side of Tech City, MyState, will offer
the community convenient and affordable way to access the Internet away from
home and the office. Stroll Net's public Internet terminals will provide full access
to email, video email, the Web and other applications, such as a prepaid
storefront. Stroll Net will provide clients and customers with a unique and
innovative product and service.
Stroll Net's public Internet terminals will appeal to individuals of all ages and
backgrounds. The ease-of-use and instructional menu will appeal to the audience
that does not associate themselves with the computer age. Great locations, such
as hotel lobbies and coffee shops, will provide business people with a convenient
way to access the Internet and office files away from the office.
2.1 Company Ownership
Stroll Net is a privately-held Limited Liability Corporation. Cam Piotr and Bob
Green, co-founders of Stroll Net, hold equal stock positions of 26% each as
majority owners. Investors will receive one share of Stroll Net stock for every
$6,244 of investment, up to 48%.
2.2 Start-up Summary
Stroll Net's start-up costs will cover the purchase of public Internet terminals (our
long-term assets), the purchase of an office warehouse, office equipment and
supplies, company vehicles, capital to cover losses in the first year, and capital to
cover any and all expenses required to operate business on a daily basis for the
first year.
Short-term Assets - Fixtures: 2 computers = $4,600, one printer = $1,000, one
scanner = $500, 4 tables w/chairs = $2,600, 2 computer desks w/chairs = $2,400,
three telephones = $300, for a total fixture cost of $11,400.

8. 8
In addition, we plan on a large initial marketing/design budget, to cover the kiosk
design and grand opening advertising.
Start-up
Start-up
Requirements
Start-up Expenses
Marketing/Advertising $4,000
Design Fee $14,100
Freight $6,250
Utilities $500
Professional Fees $1,500
Insurance $1,500
Supplies $500
Postage $111
Total Start-up Expenses $28,461
Start-up Assets
Cash Required $60,000
Other Current Assets $11,400
Long-term Assets $312,810
Total Assets $384,210
Total Requirements $412,671
Start-up Funding
Start-up Funding
Start-up Expenses to Fund $28,461
Start-up Assets to Fund $384,210
Total Funding Required $412,671
Assets
Non-cash Assets from Start-up $324,210
Cash Requirements from Start-up $60,000
Additional Cash Raised $0

9. 9
Cash Balance on Starting Date $60,000
Total Assets $384,210
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $2,500
Other Current Liabilities (interest-free) $0
Total Liabilities $102,500
Capital
Planned Investment
Mr. Cam Piotr $5,250
Mr. Bob Green $5,250
Additional Investment Requirement $299,671
Total Planned Investment $310,171
Loss at Start-up (Start-up Expenses) ($28,461)
Total Capital $281,710
Total Capital and Liabilities $384,210
Total Funding $412,671
Start-up

10. 10

11. 11
3.0 Products and Services
Stroll Net's public Internet terminals will provide customers full access to email,
video email, WWW and other applications such as a prepaid storefront. Stroll Net
will provide clients and customers with a unique and innovative product and
service.
3.1 Product and Service Description
Walk-up Internet Access: Customers pay with either cash or credit card and
receive a specific amount of time on the terminal in exchange for their payment.
Customers can surf the Internet, check email and send video email.
Wireless Internet Access: Away from the home, WiFi users can access the
Internet through our Wireless Hotspots.
Prepaid Storefront: An application that allows customers to purchase products
such as Prepaid Calling Cards, Prepaid Wireless Top-up, and Prepaid Mobile
Content (games, graphics, ring tones, etc.).
Multimedia Advertising: Local, regional, or national companies can advertise
using multimedia on-screen advertisements. Advertisements consist of full
motion video quot;commercials,quot; picture files, or twelve advertising buttons.
Technical Specifications

12. 12
 Wheelchair Accessible
 Front access for easy service and maintenance
 15.1 inch touch screen LCD monitor
 Industrial spill and vandal proof keyboard
 Web Camera with integrated microphone
 Bill Acceptor and Credit Card Reader
 Stereo Speakers
 Wireless Router
 Surfnet Premier
PC Specifications
 2.4GHz Celeron Processor
 40GB hard Drive
 256MB DDR-RAM
 52X CD-ROM
 Floppy Drive
 Windows XP Professional
 3-Year Hotswap
3.2 Competitive Comparison
Stroll Net will be first to place public Internet Terminals in Tech City. Stroll Net will
differentiate itself from other ISPs in Tech City by providing its customers with the
ability to access the Internet even when they are away from their own computer.
We do not expect to replace standard internet access options (home, school, and
work-based computers), but to supplement them; similar ventures, such as
Internet cafes, have seen great success.
3.3 Fulfillment
Stroll Net will obtain its public Internet terminals from Supplier One, Inc. located
in Vancouver, BC. Supplier One, Inc. will provide the locating service and the

13. 13
hardware required to run Stroll Net. Internet access and networking will be
provided through Supplier Two.
3.4 Technology
Stroll Net will invest in terminals with high-speed computers to provide its
customers with a fast and efficient connection to the Internet. The computers will
be reliable and fun to work with. Stroll Net will continue to upgrade and modify
the systems to stay current with communications technology. One of the main
attractions associated with public Internet terminals is the state of the art
equipment available for use. Not everyone has a Pentium PC in their home or
office.
3.5 Future Products and Services
To enhance our initial product line, we will look at a newer model of Supplier One
terminal that offers a greater variety of technologies.
As we increase our presence in the public Internet access business, we will
continue to seek out applications that will allow us to offer a greater variety of
services. A key component of this will be customer feedback.

14. 14
4.0 Market Analysis Summary
Stroll Net is faced with the exciting opportunity of being the first-mover in the
Tech City public Internet market. The attractiveness of convenience, combined
with the growing interest in the Internet, has been proven to be a winning concept
in other markets and will produce the same results in Tech City.
The explosion of the Internet has been well documented. The International Data
Corporation predicts that by 2004 there will be 210 million Internet users in the
U.S. alone. Our increasingly mobile society manes that a large percentage of
these users will access the Internet through public Internet terminals.
Research has confirmed that the demand for public Internet terminals is growing
exponentially and that the number of terminals in operation worldwide will reach
434,000 by 2006. By 2007 the number of wireless Hotspots in the U.S. is
expected to grow to 41,000 and generate in excess of $3 billion in revenue.
4.1 Market Segmentation
Stroll Net's clients can be described as individual business owners and medium
to large companies that provide a services to tourist and business travelers alike
as well as students and everyday Internet users. Such clients include, but are not
limited to; airports, hotels, truck stops and coffee shops.
Our customers can be divided into two groups. The first group is familiar with the
Internet and desires a convenient and affordable way to access the Internet away
from home and their offices. The second group is not familiar with the Internet,
yet, and is just waiting for the right opportunity to enter the online community.
Stroll Net's target market includes people between the ages of 18 and 65.
According to the 2000 U.S. Census, Tech County has roughly 490,693 residents
between the ages of 18 and 65. Of these, many are already internet-savvy.
Within this group, we will target two groups in particular:

15. 15
 Students
 Traveling Business People
Market Analysis
Market Analysis
2005 2006 2007 2008 2009
Potential
Growth CAGR
Customers
Students 2% 35,000 35,700 36,414 37,142 37,885 2.00%
Traveling
3% 24,000 24,720 25,462 26,226 27,013 3.00%
Professionals
Other 0% 900 900 900 900 900 0.00%
Total 2.38% 59,900 61,320 62,776 64,268 65,798 2.38%
Market Analysis (Pie)
4.2 Target Market Segment Strategy

16. 16
Stroll Net's public Internet terminals will be a magnet for local and traveling
professionals who desire to work or check their email messages away from the
office. These professionals will either use Stroll Net's terminals, or connect their
notebooks to our wireless WiFi Internet connection. Stroll Net's target market
covers a wide range of ages: from members of Generation X who grew up
surrounded by computers, to Baby Boomers who have come to the realization
that people today cannot afford to ignore computers.
4.3 Service Business Analysis
The explosion of the Internet has been well documented. Our increasingly mobile
society means that a large percentage of these users will access the Internet
through public Internet terminals. To be proactive and remain competitive it is
imperative for business travelers to have reliable high-speed access to e-mail,
the Internet and corporate networks. As such, it is becoming a standard for
business travelers to stay only at hotels with high-speed Internet access and
public Internet terminals.
Internet terminals with integrated Wi-Fi hotspots allow users to jump onto the
Internet as easily as they would use an ATM. Our Internet terminals allow the
public to experience rich multimedia content, that cannot be viewed on PDAs.
Internet kiosks will very quickly become a standard feature of all hotels. The
growth of Internet kiosks has very closely paralleled that of ATMs and
payphones.
The fact that there are no public Internet terminals operating in Tech City,
presents Stroll Net with a chance to seize this window of opportunity and enter
into a profitable niche.
4.3.1 Competition and Buying Patterns
The main competitors in the public Internet terminal segment are ATT and
BellSouth. However, these businesses have yet to establish a presence in Tech
City and the immediate surrounding areas.

17. 17
Competition from online service providers comes from locally-owned businesses
as well as national firms. Due to the nature of the Internet, there are no
geographical boundaries restricting competition. However, none of these online
service providers have public Internet terminals available for placement
5.0 Strategy and Implementation Summary
The important strategy focuses on pulling in power Internet users. Power Internet
users are extremely familiar with the Internet and its offerings. This group of
customers include students and business professionals.
The second strategy focuses on building a large loyal customer base. A large
loyal customer base will serve to attract large, medium and small companies as
clients for our interactive advertising service. All of the advertisements can
connect the user to the advertiser's web site. Due to the high traffic locations in
which our public Internet terminals will be placed, this advertising space will be in
high demand.
5.1 Value Proposition
WiFi hotspots offering public Internet access are everywhere you look today,
from cafes to hotels, from airports to marinas. Connectivity is what travelers
want, and more importantly, are coming to expect. Travelers are making
decisions on where to eat, sleep and work based on the availability of wireless
service.
Clients offering public internet access will be able to tap into new revenue
streams and new customers, and create loyalty.
Stroll Net's public Internet terminals make it easy to provide convenient and easy
access to wireless high-speed Internet connectivity. With Stroll Net's public
Internet terminals customers will be able to connect to their corporate networks
and the Internet via a high-speed wireless connection in common areas.

18. 18
5.2 Competitive Edge
Stroll Net will differentiate itself by providing the community with an innovative
product that offers a convenient and affordable way to access the Internet away
from home and the office. Stroll Net will enjoy the traditional benefits of being first
to the market. As a small company looking to establish itself, we will be attentive
and flexible in meeting our customers' demands.
5.3 Marketing Strategy
Stroll Net will position itself as an aggressive, innovative company that supplies
the market with an affordable way to access the Internet away from home and
the office. Stroll Net will use advertising as its main source of promotion. We will
acquire the services of Empire Communications Group and CyberMark
International, Inc. to launch a diverse advertising campaign placed on television,
radio, the Internet and in the local newspaper.
Stroll Net's brochures, letterhead and business correspondence will further
reinforce these concepts. We also recognize that it costs six times more to attract
a customer than to retain one. With this in mind, we will operate under the
principle that our best marketing is an exceedingly satisfied customer.
5.3.1 Pricing Strategy
Stroll Net bases its prices for Internet and wireless WiFi usage on the quot;retail profit
analysisquot; provided by our supplier, Supplier One, Inc. They have been in the
kiosk industry for 5 years and has developed a solid pricing strategy.
Determining a fair-market, per-transaction fee for Internet and wireless WiFi
usage is more difficult because there is no direct competition from another public
internet terminal business in Tech City. Therefore, Stroll Net considered two
sources to determine the hourly charge rate. First, we considered the cost to use
other Internet servers, whether it is a local networking firm or a provider such as
America Online. Internet access providers use different pricing schemes. Some

19. 19
charge a monthly fee, while others charge an hourly fee. In addition, some
providers use a strategy with a combination of both pricing schemes. Thus, it can
quickly become a high monthly cost for the individual. Second, Stroll Net looked
at how public Internet terminals in other markets, such as Miami and New York,
went about pricing Internet access. Evaluating these two factors resulted in the
following:
Walk-up Internet Access - Customers utilizing the terminals for internet access
will be charged a .25 per minute transaction fee.
Wireless Internet Access - Customers utilizing the wireless WiFi connection will
incur a fee of $3.95 per hour with a one hour minimum.
5.3.2 Promotion Strategy
Stroll Net will implement a pull strategy in order to build consumer awareness
and demand. Initially, Stroll Net has budgeted $5,000 for promotional efforts
which will include advertising with coupons for fifteen minutes of free Internet
time.
Stroll Net realizes that in the future, when competition enters the market,
additional revenues must be allocated for promotion in order to maintain market
share.
5.4 Sales Strategy
Stroll Net employs route operators to collect all sales transactions and to perform
routine maintenance on its terminals. Each route operator is responsible for
keeping the terminals on his route stocked, clean and operational. Computer
literacy is a requirement for Stroll Net employees. If an employee does not
possess basic computer skills when they are hired, they are trained by our full-
time technician. Our full-time technician is also available for terminals in need of
minor repairs. Stroll Net's commitment to prompt, dependable service is one of
the key factors that distinguishes Stroll Net from all other competitors.

20. 20
5.4.1 Sales Forecast
Our Sales Forecast is based upon real revenue reports from other customers of
Supplier One, operating in similar urban settings in nearby states. Prepaid
products and advertising will yield the greatest revenue per unit, but we expect
the greatest number of transactions will be in walk-up internet access and Wifi
access.
Sales Forecast
Sales Forecast
2005 2006 2007
Unit Sales
Walk-Up Internet
48,787 60,984 76,230
Access
Wireless WiFi
23,092 28,865 36,081
Access
Prepaid Products 19,677 24,596 30,745
Multimedia
5,854 7,318 9,147
Advertising
Total Unit Sales 97,411 121,763 152,203
Unit Prices 2005 2006 2007
Walk-Up Internet
$3.00 $3.00 $3.00
Access
Wireless WiFi
$3.95 $3.95 $3.95
Access
Prepaid Products $10.00 $10.00 $10.00
Multimedia
$50.00 $50.00 $50.00
Advertising
Sales
Walk-Up Internet
$146,361 $182,951 $228,689
Access
Wireless WiFi
$91,215 $114,017 $142,521
Access

21. 21
Prepaid Products $196,774 $245,963 $307,453
Multimedia
$292,721 $365,875 $457,344
Advertising
Total Sales $727,071 $908,806 $1,136,007
Direct Unit Costs 2005 2006 2007
Walk-Up Internet
$0.60 $0.60 $0.60
Access
Wireless WiFi
$0.40 $0.40 $0.40
Access
Prepaid Products $1.00 $1.00 $1.00
Multimedia
$5.00 $5.00 $5.00
Advertising
Direct Cost of
Sales
Walk-Up Internet
$29,272 $36,590 $45,738
Access
Wireless WiFi
$9,122 $11,402 $14,252
Access
Prepaid Products $19,677 $24,596 $30,745
Multimedia
$29,272 $36,588 $45,734
Advertising
Subtotal Direct
$87,343 $109,176 $136,470
Cost of Sales
Sales Monthly

22. 22

23. 23
Sales by Year
5.5 Milestones
The Stroll Net management team has established some basic milestones to keep
the business plan priorities in place. Responsibility for implementation falls on the
shoulders of Cam Piotr. This Milestones Table below will be updated as the year
progresses using the actual tables. New milestones will be added as the first
year of operations commences.

24. 24
Milestones

25. 25
Milestones
Milestones
Milestone Start Date End Date Budget Manager Department
Business
10/1/2004 11/15/2004 $1,000 Cam Piotr Admin
Plan
Licensing 11/22/2004 11/27/2004 $1,000 Cam Piotr Admin
Secure
Start-up 11/29/2004 1/1/2005 $1,000 Cam Piotr Admin
Funding
Site
1/15/2005 2/20/2005 $1,000 Cam Piotr Admin
Selection
Architect
3/1/2005 3/30/2005 $1,000 Cam Piotr Admin
Designs
Designer
4/1/2005 4/15/2005 $1,000 Cam Piotr Admin
Proposal
Technology
4/1/2005 4/15/2005 $1,000 Cam Piotr Admin
Design
Year 1 Plan 6/1/2005 6/9/2005 $1,000 Cam Piotr Admin
Personnel
7/1/2005 7/5/2005 $1,000 Cam Piotr Admin
Plan
Accounting
7/1/2005 7/5/2005 $1,000 Cam Piotr Admin
Plan
Totals $10,000

26. 26
6.0 Management Summary
Stroll Net is owned and operated by Cam Piotr and Bob Green. The company,
being small in nature, requires a simple organizational structure. Implementation
of this organizational form calls for the owners to make all of the major
management decisions in addition to monitoring all other business activities.
6.1 Personnel Plan
The staff will consist of 8 full-time route operators working forty hours a week at
$10.00 per hour. In addition, one full-time technician (who is more technologically
oriented to handle minor terminal repairs/inquiries) will be employed to work forty
hours a week at $12.00 per hour. This simple structure provides a great deal of
flexibility and allows communication to disperse quickly and directly. Because of
these characteristics, there are few coordination problems seen at Stroll Net that
are common within larger organizational chains. This strategy will enable Stroll
Net to react quickly to changes in the market.
Personnel
Personnel Plan
2005 2006 2007
Lorenzo Mitchell $42,889 $49,680 $59,616
Herman Albany $42,889 $49,680 $59,616
Technician $25,920 $27,040 $29,120
Route Drivers $172,800 $183,040 $199,680
Future Staff $0 $0 $49,920
Total People 11 11 13
Total Payroll $284,498 $309,440 $397,952

27. 27
7.0 Financial Plan
Sales: Stroll Net is basing their projected Internet usage sales on the financial
snapshot information provided to them by Supplier One, Inc. Internet usage was
estimated by calculating the average number of minutes each customer will
spend accessing the Internet and then generating a conservative estimate as to
how many transactions will be made per day.
Cost of Goods Sold: The cost of goods sold was determined by the quot;retail profit
analysisquot; we obtained from Supplier One, Inc. The cost of prepaid calling cards is
20% of the selling price. The cost of Internet access is $50 per month, paid to
Supplier Two for networking fees. The cost of terminal placement is 20% of total
internet access sales.
Salaries Expense: The founders of Stroll Net, Cam Piotr and Bob Green, will
receive a salary of $24,000 in year one, $26,400 in year two, and $29,040 in year
three.
Payroll Expense: Stroll Net intends to hire eight full-time employees at
$10.00/hour and a full-time technician at $12.00/hour. The total cost of employing
nine people at these rates for the first year is $14,720/month.
Rent Expense: Stroll Net is looking to purchase a 2200 square foot facility at
$104.74/sq. foot.
Utilities Expense: Stroll Net is responsible for the payment of utilities including
electric, water and garbage disposal. The basic monthly service charge for
utilities expense will be $168.04. The phone bill will generated by five phone
lines; one will be dedicated to a modem and four for business purposes. The
basic monthly service charge for each line provided by Bellsouth is
$59.95/month. Therefore, the total cost associated with the five phone lines is
estimated at $299.75/month.
Marketing Expense: Stroll Net will allocate $50,000 for promotional expenses at
the time of start-up. These dollars will be used for advertising on television, radio,

28. 28
the Internet and the local newspapers in order to build consumer awareness. For
additional information, please refer to section 5.0 of the business plan.
Insurance Expense: Stroll Net has allocated $1,500 for insurance for the first
year. As revenue increases in the second and third year of business, Stroll Net
intends to invest more money for additional insurance coverage.
Legal and Consulting Fees: The cost of obtaining legal consultation in order to
draw up the paper work necessary for client contracts is $1,500.
Depreciation: In depreciating our capital equipment, we used the Modified
Accelerated Cost Recovery Method. We depreciated our terminals over a three-
year time period.
Taxes: Stroll Net is an LLC and, as an entity, it is not taxed. However, there is a
10% payroll burden.
7.1 Important Assumptions
Basic assumptions are presented in the table below.

29. 29
General Assumptions
General Assumptions
2005 2006 2007
Plan Month 1 2 3
Current Interest
10.00% 10.00% 10.00%
Rate
Long-term Interest
11.50% 10.00% 10.00%
Rate
Tax Rate 25.00% 25.00% 25.42%
Other 0 0 0
7.2 Break-even Analysis
Break-even data is presented in the chart and table below. With estimated
monthly operating expenses at approximately $37,400, including everything from
payroll to rent and insurance to maintenance of the kiosks, and average direct
costs at roughly 90¢ for every $7.46 of sales, we reach break-even at
approximately 5,700 sales per month. We project reaching the break-even point
in the seventh month.

30. 30
Break-even Analysis
Break-even Analysis
Break-even Analysis
Monthly Units Break-even 5,707
Monthly Revenue Break-even $42,599
Assumptions:
Average Per-Unit Revenue $7.46
Average Per-Unit Variable Cost $0.90
Estimated Monthly Fixed Cost $37,481
7.3 Projected Profit and Loss
The following table contains our projections for profit and loss data. We anticipate
a net profit of approximately $134,300 in the first year, as the Stroll Net idea
catches on and sales increase. With a net profit margin of 18%, these projections
are well within a reasonable range.

31. 31

32. 32
Profit and Loss
Pro Forma Profit and Loss
2005 2006 2007
Sales $727,071 $908,806 $1,136,007
Direct Costs of
$87,343 $109,176 $136,470
Goods
Other $0 $0 $0
------------ ------------ ------------
Cost of Goods Sold $87,343 $109,176 $136,470
Gross Margin $639,728 $799,630 $999,537
Gross Margin % 87.99% 87.99% 87.99%
Expenses
Payroll $284,498 $309,440 $397,952
Sales and Marketing
$53,598 $59,174 $68,279
and Other Expenses
Depreciation $44,676 $45,000 $45,000
Utilities $5,613 $6,174 $6,792
Insurance $1,500 $6,000 $7,500
Maintenence/Repair
$3,500 $4,200 $5,800
s
Travel $13,717 $24,652 $29,961
Payroll Taxes $42,675 $46,416 $59,693
------------ ------------ ------------
Total Operating
$449,777 $501,056 $620,977
Expenses
Profit Before Interest
$189,951 $298,574 $378,560
and Taxes
EBITDA $234,627 $343,574 $423,560
Interest Expense $10,877 $8,500 $7,500
Taxes Incurred $44,768 $72,518 $94,311
Net Profit $134,305 $217,555 $276,749
Net Profit/Sales 18.47% 23.94% 24.36%

33. 33

34. 34
Profit Monthly
Profit Yearly

35. 35

36. 36
Gross Margin Monthly
Gross Margin Yearly

37. 37
7.4 Projected Cash Flow
Cash flow data for the first three years is presented in the chart and table below.
The table shows anticipated repayment of the long-term loan, as well as
projected dividends which will be paid to investors in years two and three. In year
three, we will purchase two more paykiosks terminals for new locations. The
more detailed monthly cash flow data can be found in the appendix.
Cash Flow
Pro Forma Cash Flow
2005 2006 2007
Cash Received
Cash from
Operations
Cash Sales $727,071 $908,806 $1,136,007
Subtotal Cash from
$727,071 $908,806 $1,136,007
Operations
Additional Cash
Received
Sales Tax, VAT,
$0 $0 $0
HST/GST Received

38. 38
New Current
$0 $0 $0
Borrowing
New Other
Liabilities (interest- $0 $0 $0
free)
New Long-term
$0 $0 $0
Liabilities
Sales of Other
$0 $0 $0
Current Assets
Sales of Long-term
$0 $0 $0
Assets
New Investment
$0 $0 $0
Received
Subtotal Cash
$727,071 $908,806 $1,136,007
Received
Expenditures 2005 2006 2007
Expenditures from
Operations
Cash Spending $284,498 $309,440 $397,952
Bill Payments $213,482 $361,737 $409,772
Subtotal Spent on
$497,980 $671,177 $807,724
Operations
Additional Cash
Spent
Sales Tax, VAT,
$0 $0 $0
HST/GST Paid Out
Principal
Repayment of $0 $0 $0
Current Borrowing
Other Liabilities
Principal $0 $0 $0
Repayment

39. 39
Long-term
Liabilities Principal $10,000 $10,000 $10,000
Repayment
Purchase Other
$0 $0 $0
Current Assets
Purchase Long-
$0 $0 $40,000
term Assets
Dividends $0 $100,000 $200,000
Subtotal Cash
$507,980 $781,177 $1,057,724
Spent
Net Cash Flow $219,091 $127,628 $78,283
Cash Balance $279,091 $406,719 $485,002
Cash
7.5 Projected Balance Sheet

40. 40
Our projected balance sheet is presented in the table below. As sales increase,
and we repay our long-term loan, the net worth of the company will increase from
$281,710 at start-up to over $610,000 by year three.

41. 41
Balance Sheet
Pro Forma Balance Sheet
2005 2006 2007
Assets
Current Assets
Cash $279,091 $406,719 $485,002
Other Current
$11,400 $11,400 $11,400
Assets
Total Current
$290,491 $418,119 $496,402
Assets
Long-term Assets
Long-term Assets $312,810 $312,810 $352,810
Accumulated
$44,676 $89,676 $134,676
Depreciation
Total Long-term
$268,134 $223,134 $218,134
Assets
Total Assets $558,625 $641,253 $714,536
Liabilities and
2005 2006 2007
Capital
Current Liabilities
Accounts Payable $52,610 $27,683 $34,217
Current Borrowing $0 $0 $0
Other Current
$0 $0 $0
Liabilities
Subtotal Current
$52,610 $27,683 $34,217
Liabilities
Long-term
$90,000 $80,000 $70,000
Liabilities
Total Liabilities $142,610 $107,683 $104,217
Paid-in Capital $310,171 $310,171 $310,171
Retained Earnings ($28,461) $5,844 $23,399

42. 42
Earnings $134,305 $217,555 $276,749
Total Capital $416,015 $533,570 $610,320
Total Liabilities and
$558,625 $641,253 $714,536
Capital
Net Worth $416,015 $533,570 $610,320
7.6 Business Ratios
The following table outlines some of the more important ratios from the Data
communications services industry. The final column, Industry Profile, details
specific ratios based on the industry as it is classified by the Standard Industry
Classification (SIC) code, 4899.9901.
Ratios
Ratio Analysis
2005 2006 2007 Industry Profile
Sales Growth 0.00% 25.00% 25.00% 1.63%
Percent of
Total Assets
Other Current
2.04% 1.78% 1.60% 53.65%
Assets
Total Current
52.00% 65.20% 69.47% 74.50%
Assets
Long-term
48.00% 34.80% 30.53% 25.50%
Assets
Total Assets 100.00% 100.00% 100.00% 100.00%
Current
9.42% 4.32% 4.79% 24.78%
Liabilities
Long-term
16.11% 12.48% 9.80% 18.28%
Liabilities
Total Liabilities 25.53% 16.79% 14.59% 43.06%
Net Worth 74.47% 83.21% 85.41% 56.94%

43. 43
Percent of
Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 87.99% 87.99% 87.99% 52.82%
Selling,
General &
73.78% 64.05% 63.63% 30.92%
Administrative
Expenses
Advertising
7.37% 6.51% 6.01% 0.82%
Expenses
Profit Before
Interest and 26.13% 32.85% 33.32% 6.18%
Taxes
Main Ratios
Current 5.52 15.10 14.51 1.84
Quick 5.52 15.10 14.51 1.60
Total Debt to
25.53% 16.79% 14.59% 54.39%
Total Assets
Pre-tax Return
43.04% 54.36% 60.80% 8.03%
on Net Worth
Pre-tax Return
32.06% 45.24% 51.93% 17.61%
on Assets
Additional
2005 2006 2007
Ratios
Net Profit
18.47% 23.94% 24.36% n.a
Margin
Return on
32.28% 40.77% 45.34% n.a
Equity
Activity Ratios
Accounts
Payable 5.01 12.17 12.17 n.a
Turnover

44. 44
Payment Days 27 44 27 n.a
Total Asset
1.30 1.42 1.59 n.a
Turnover
Debt Ratios
Debt to Net
0.34 0.20 0.17 n.a
Worth
Current Liab. to
0.37 0.26 0.33 n.a
Liab.
Liquidity Ratios
Net Working
$237,881 $390,436 $462,186 n.a
Capital
Interest
17.46 35.13 50.47 n.a
Coverage
Additional
Ratios
Assets to Sales 0.77 0.71 0.63 n.a
Current
Debt/Total 9% 4% 5% n.a
Assets
Acid Test 5.52 15.10 14.51 n.a
Sales/Net
1.75 1.70 1.86 n.a
Worth
Dividend
0.00 0.46 0.72 n.a
Payout