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Business Plan - CoViTek is an Atlanta based company that offers a unique value added service to the $11 billion dollars video rental industry.

Extracts from this document...

Introduction

Business Plan December 2000 Contacts: Michel Khoury, Sina Mouloud 400 E 66th St. 6E New York, NY 10021 To: Matthew Toboroff CONFIDENTIAL INFORMATION This business plan is the property of Reve-lution International LLC., DBA: CoViTek and is considered strictly confidential. It contains information intended only for the person to whom it is transmitted. With receipt of this plan, the recipient acknowledges and agrees that: 1) In the event the recipient does not wish to pursue this matter, this document will be returned to the address listed above as soon as possible; 2) The recipient will not copy, fax, reproduce, divulge, or distribute this confidential plan, in whole or in part, without the expressed written consent of Reve-lution International LLC.; 3) All of the information herein will be treated as confidential material with no less care than that afforded to your own company's confidential information. This document does not constitute an offer to sell, or a solicitation of an offer to purchase. Table of Contents Executive Summary............................................................ 3 Target Customer................................................................ 3 Market Growth Perspective................................................... 4 Competitor Differentiation.................................................... 5 Growth Opportunities.................................................... ...... 6 National Expansion...................................................... ...... 6 Specialized Machine Content.......................................... ...... 6 Investment Need......................................................... ...... 7 Management Team....................................................... ...... 8 Company Overview............................................................ 10 Operations........................................................................ 10 Machine Architecture........................................................... 13 Implementation Strategy....................................................... 15 Marketing Strategy.............................................................. 18 Suppliers.......................................................................... 20 Competitor Analysis..................................................... ....... 22 Charts and Figures Investment Need................................................................. 4 Market Growth Perspective.................................................... 4 Relative Competitive Factor................................................... 5 Start Up Cost Chart.............................................................. 6 First Year Time Line............................................................ 7 Available Models................................................................ 11 Expandable System Chart...................................................... 12 Machine Architecture Chart.................................................... 13 Credit Card Usage Chart......................................................... 16 CoViTek Locations Map................................................... 17 CoViTek Five Year Milestone............................................. 18 U.S Video Production Company Pie........................................... 21 Value Proposition Blockbuster VS. CoViTek........................... 24 CoViTek Consolidated Statement of Operations........................ 27 CoViTek Consolidated Statement of Cash Flows........................ 28 CoViTek Capital Expenditures and Fixed Assets Schedule............ 29 CoViTek is an Atlanta based company that offers a unique value added service to the $11 billion dollars video rental industry. ...read more.

Middle

Staffing Through the use of contacts, CoViTek will recruit talented college graduates in the fields of interactive technology and advertising. Specifically, CoViTek will hire students on the campuses the machines are on in order to help educated the student population on usage of the machines. The CEO and COO will be in charge of putting in the new movies, and taking out unpopular ones. As we expand our facilities and operation then the students who are delegated by us will do so accordingly. We will try not to have any unutilized videotape, as we will be very flexible to market demand, and we will transfer the movie from one machine to another that has a different type of demand. In order to implement our machines on university campuses and in urban locations, we will need to negotiate with each specific location where we would like to place the machines. University Campuses The university campuses will require us to negotiate a contract with them under which we would give them a percentage of our revenue or a fixed cost for property and phone line usage per month. The standard for a vending machine is 15%, but as our sales per machine will be significantly higher than any other type of vending machine, we will try to bring this number down to 10%. All the universities allow the presence of vending machines but we understand that certain university regulations might forbid us to implement a machine on campus. If this is the case we will try to find a location in a nearby area easily accessible to the students. We will also try to negotiate with universities to enable our machine to accept university cards. Almost two thirds of college students in Atlanta carry a credit card while spending an average of $1,213 per month, with up to 10% of expenditures on some form of entertainment, including video rentals. ...read more.

Conclusion

of affiliates - - - - - Add: other - - - - - Less: capital expenditures - - - - - Less: investments, acquisitions 450,000 1,350,000 3,300,000 3,300,000 3,600,000 Net cash provided by investing activities 450,000 1,350,000 3,300,000 3,300,000 3,600,000 Cash Flows from Financing Activities Add: proceeds from equity financing 1,500,000 - - - - - Add: proceeds from equity offering - - - - - Less: repurchase of outstanding equity - - - - - Add: proceeds from debt offering - - - - - Less: repayment of outside debt - - - - - Add: proceeds from bank debt - - - - - Net cash provided by financing activities 1,500,000 Increase (decrease) in free cash 360 -168,060 3,337,800 10,169,100 18,407,100 Summary of cash flows Beginning of period cash balance 1,500,000 1,540,000 1,214,000 2,486,000 2,130,000 5,790,000 Increase/decrease in cash during the year 150,000 -126,000 157,000 276,000 304,000 Free cash 26,000 -126,000 157,000 276,000 304,000 Increase/decrease in revolver 245,000 572,000 173,000 122,000 6,000 Ending cash balance -219,000 -698,000 -16,000 154,000 298,000 CoViTek - Capital Expenditures and Fixed Assets Depreciation Schedule At Close 2001E 2002E 2003E 2004E 2005E Fixed Assets Computer hardware 15,000 36,000 75,000 95,000 110,000 140,000 Computer software 8,000 30,000 60,000 87,000 96,000 115,000 Database 12,000 12,000 12,000 12,000 12,000 12,000 Office Equipment 30,000 35,000 50,000 75,000 94,000 120,000 In-house networking server 40,000 40,000 80,000 100,000 100,000 100,000 Total Fixed Assets 105,000 153,000 277,000 369,000 412,000 487,000 Depreciation Computer hardware 6,000 11,000 19,000 26,000 34,000 41,000 Computer software 1,500 3,500 7,000 12,000 17,000 23,000 Database 1,000 1,000 1,000 1,000 1,000 1,000 Office Equipment 3,000 5,000 7,000 12,000 18,000 24,000 Server 5,000 5,000 10,000 13,000 13,000 13,000 Total depreciation 16,500 25,500 44,000 64,000 83,000 102,000 Incremental additions to capital expenditures Computer hardware 27,000 27,000 27,000 27,000 27,000 Computer software 16,000 17,000 17,000 17,000 17,000 Database - - - - - Office Equipment 10,000 5,000 5,000 8,000 8,000 Server - 5,000 10,000 - - Total incremental additions 53,000 54,000 59,000 52,000 52,000 1 ...read more.

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