Cambridge Strategy Group

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Table of Contents
1.0 Executive Summary.............................................................................................................................1

Chart: Highlights ......................................................................................................................2
1.1 Keys to Success ........................................................................................................................2
1.2 Objectives ...................................................................................................................................3
2.0 Company Summary.............................................................................................................................3
2.1 Start-up Summary ......................................................................................................................4
Table: Start-up Funding ..........................................................................................................5
Chart: Start-up .........................................................................................................................6
Table: Start-up .........................................................................................................................6
3.0 Services................................................................................................................................................6
3.1 Service Description ...................................................................................................................7
3.2 Technology..................................................................................................................................8
3.3 Future Services ..........................................................................................................................8
4.0 Market Analysis Summary..................................................................................................................8
4.1 Market Segmentation ................................................................................................................8
Chart: Market Analysis (Pie)................................................................................................10
Table: Market Analysis .........................................................................................................10
4.2 Target Market Segment Strategy...........................................................................................10
4.2.1 Market Growth .............................................................................................................11
4.2.2 Market Trends .............................................................................................................12
4.2.3 Market Needs ..............................................................................................................14
4.3 Service Business Analysis .....................................................................................................14
4.3.1 Competition and Buying Patterns .............................................................................15
4.3.2 Business Participants.................................................................................................15
5.0 Strategy and Implementation Summary..........................................................................................16
5.1 SWOT Analysis ........................................................................................................................16
5.2 Value Proposition ....................................................................................................................17
5.3 Marketing Strategy ..................................................................................................................18
5.3.1 Positioning Statement ................................................................................................18
5.3.2 Pricing Strategy...........................................................................................................18
5.3.3 Distribution Strategy ...................................................................................................19
5.3.4 Promotion Strategy.....................................................................................................19
5.4 Sales Forecast.........................................................................................................................20
Table: Sales Forecast ..........................................................................................................20
Chart: Sales Monthly.............................................................................................................21
Chart: Sales by Year.............................................................................................................21
5.5 Milestones ................................................................................................................................22
Chart: Milestones ..................................................................................................................23
Table: Milestones..................................................................................................................23
5.6 Competitive Edge....................................................................................................................23
6.0 Management Summary ....................................................................................................................25
6.1 Organizational Structure..........................................................................................................25
6.2 Management Team .................................................................................................................25
6.3 Personnel Plan.........................................................................................................................26
Table: Personnel ...................................................................................................................26
7.0 Financial Plan ....................................................................................................................................27
7.1 Important Assumptions............................................................................................................27
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Table of Contents
Table: General Assumptions ...............................................................................................27
7.2 Key Financial Indicators ..........................................................................................................28
Chart: Benchmarks ...............................................................................................................28
7.3 Break-even Analysis................................................................................................................29
Chart: Break-even Analysis .................................................................................................29
Table: Break-even Analysis .................................................................................................29
7.4 Projected Profit and Loss .......................................................................................................30
Chart: Profit Monthly .............................................................................................................30
Chart: Profit Yearly................................................................................................................30
Chart: Gross Margin Monthly ...............................................................................................31
Chart: Gross Margin Yearly..................................................................................................31
Table: Profit and Loss ..........................................................................................................32
7.5 Projected Cash Flow...............................................................................................................33
Table: Cash Flow..................................................................................................................33
Chart: Cash ...........................................................................................................................34
7.6 Projected Balance Sheet ........................................................................................................35
Table: Balance Sheet ...........................................................................................................35
7.7 Business Ratios .......................................................................................................................36
Table: Ratios .........................................................................................................................37
7.8 Financial Risks and Contingencies .......................................................................................38
Table: Sales Forecast ...............................................................................................................................1
Table: Personnel ........................................................................................................................................2
Table: General Assumptions ....................................................................................................................3
Table: Profit and Loss ...............................................................................................................................4
Table: Cash Flow .......................................................................................................................................5
Table: Balance Sheet ................................................................................................................................6
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Cambridge Strategy Group
1.0 Executive Summary

Last year the doors to 898,000 new businesses opened in the United States for the first time.
Most of these businesses were created by entrepreneurs who envisioned an opportunity to
develop a new product or service, and pursued that vision in search of independence and
financial reward. While these visionaries started with solid ideas to form the foundation of their
new ventures, most do not have many of the skills nec essary to transform their ideas into
reality. Additionally, the scarcity of talent in today's market makes it extremely difficult for
small business owners to attrac t and retain those skills.
TARGET MARKET
The Cambridge Strategy Group (CSG), L.L.C. is dedicated to providing marketing and
management consulting services to small and emerging businesses looking for opportunities to
increase their potential for success. Unlike traditional management consulting firms that foc us on
analyzing problems for large customers, CSG works exclusively with small business clients to
develop concrete, prac tical, short-term ac tion plans that will start moving their businesses in the
right direction. The Cambridge Strategy Group takes advantage of the small business owners'
need for marketing and management skills, the sc arcity of those skills in the market, and the lac k
of any major competitor owning the concept of "small business consulting."
MANAGEMENT
The CSG management team brings a broad range of industry experience and training from both
energetic small firms and experienced industry leaders.
John B. Gordon, Executive Director: John has worked in marketing, business development, and
corporate strategy for a number of small and large firms, including EMC Corporation, IBM
Corporation, and Larsc om, Incorporated. John's participation on the North Carolina Council for
Entrepreneurial Development, plus his experience providing consulting services to small
businesses, catalyzed the formation of the Cambridge Strategy Group.
Todd D. Kuczaj, Managing Director: Todd has worked in Internet consulting, Web design/
development, financial services, and media publications for a variety of companies, including a
Big Five consulting firm, Integrated Information Systems Inc., SunAmerica Securities Inc., and
the Foothills Sentinel. Todd currently functions as an experienced analyst for a Big Five
consulting firm, working with Fortune 100 and Fortune e-50 firms to solve their business and
technology issues.
Ben S. Cordell, Managing Director: Ben has worked in business development, ac count
management, systems engineering, marketing, and product development positions at LifeServ
and ONE Co. (formerly DC Systems). Ben c urrently functions as a corporate strategy specialist
at LifeServ, disc overing and developing merger, ac quisition and strategic partnership
opportunities.
FINANCIAL SUMMARY
The market for Cambridge Strategy Group's services is enormous. Initially, the three founding
members intend to work part-time on this venture while maintaining full-time positions with other
corporations. As we determine how best to enlarge our operations, we will consider expanding
the business as defined in our strategy.
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1.1 Keys to Success

UNIQUENESS OF SERVICES
The Cambridge Strategy Group is foc used spec ifically on helping small and emerging businesses
maximize their potential for success. We combine Blue Chip training with small business
experience and loc al presence. We differentiate ourselves in the following ways:
1. Focus on small business. We plac e our best people on small business customers. Our
mission is to help small businesses of today bec ome the leading corporations of tomorrow.
Cambridge Strategy Group will attempt to own the words "small business" in the minds
of our potential clients.
2. Cost-effective personal interaction with local consultant presence. Personal

interac tion provides small businesses with a level of comfort not available with remote
consultants. There may be many oc casions where the small business founders may ask
the consultant to simply "stop by," to reac t to a new development, or to answer a
question. While this loc al presence and personal interac tion is highly valued, business
owners are often unable to afford the cost associated with bringing consultants to them
from other areas.
3. A diverse network of consultants and alliance partners. Solving the unique

problems that fac e small businesses today demands a wide range of skills and
experiences. By relying on a nationally distributed talent base coordinated to work
together remotely, Cambridge Strategy Group will be able to bring together the skills
required by a particular client without incurring the expense of physically bringing all of
the individuals together. In the book, 22 Immutable Laws of Marketing, authors Al Ries
and Jack Trout note that being first in the customer's mind is more important than being
the overall leader. In the world of small business, this is particularly true. With 898,000
small businesses starting eac h year, there is a significant opportunity for a consulting firm
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such as Cambridge Strategy Group to bec ome the "first" consulting firm dedicated
exclusively to small businesses in the minds of a number of these potential clients.
1.2 Objectives
The firm has very small capital requirements. Any capital that the firm obtains will be used to
promote the "small business foc us" of the firm and cover basic operational costs. For the firm
to realize its full potential, the founders would require compensation equivalent to full-time
employment while pursuing initial clients and creating a bac klog of work requests. This would
most likely need to cover at least one year's salary for eac h of the three managers.
Additionally, funding for initial marketing projects would help to ensure that the firm could
establish a claim to the "small business consulting" concept in the target market. In exchange for
the funding, CSG would provide an equity stake to the funding company. Ideally, we would like
to work with the funding company to help its other clients succeed.
2.0 Company Summary

BUSINESS DESCRIPTION
Cambridge Strategy Group is a North Carolina-based consulting firm that responds to

entrepreneurs' need for prac tical business and marketing services to turn their innovative ideas
into successful business ventures. Through interac tion with a number of aspiring entrepreneurs,
the founders of the Cambridge Strategy Group disc overed a ready market of clients who were
eager to take advantage of the founders' skills, understanding, and insight into their
businesses. The Cambridge Strategy Group is exclusively foc used on small businesses. Our goal is
to own the idea "small business" or "small business consulting" in the minds of our target market.
COMPANY ANALYSIS
The Cambridge Strategy Group has identified a real business opportunity that has been
neglected by earlier consulting firms due to its complex customer base. Below, we have identified
the opportunities and threats in the environment, as well as our particular strengths and
weaknesses that will enable us to succeed:
OPPORTUNITIES AND THREATS
The Cambridge Strategy Group has analyzed the market and believes that a real opportunity
exists to provide services to small businesses. The following paragraphs describe the
environment in which the company will compete, and the key success fac tors nec essary to
perform well.
Opportunities – The number of new businesses starting eac h year in the U.S. and specifically in
the Triangle Area of North Carolina create a sizeable market. Many of these businesses are
started by an entrepreneur with a solid idea, but little experience in c reating the formal
business strategies or marketing deliverables nec essary to turn their idea into a successful
business. With recent IPOs giving bac k much of their initial valuations, companies are now
being forced to demonstrate profitable business models in order to maintain strong valuations.
Venture capitalists need to foc us on making their existing companies successful instead of simply
prospec ting for the next great idea. To ac complish this, founders need to effectively define
and communicate their value propositions. Since this is not a core competency for many
entrepreneurs, there is an opportunity to provide this skill set through outsourcing arrangements.
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Additionally, founders need experience in sales and marketing to exploit market opportunities and
create early revenue wins. Finally, no business currently exists with dominant mind-share as a
"small business consulting" firm.
Threats – Businesses in the early stages of their life cycles, usually through the Angel funding
stage, tend to have extremely tight budgets. Once the business reac hes the venture-funded
stage, it often has more cash to devote to outsourcing of non-core competencies. Barriers to
entry in this market are extremely low. Successful consultants will have to work to earn a few
client successes and then aggressively build a reputation as the "small business consultants."
Building a reputation will require funding. High-profile consulting firms could quickly enter this
market. In order to keep costs low, it is assumed that they would begin out of a major office,
leaving the Triangle Area of North Carolina available. However, low cost of living in the Triangle
Area may fac ilitate expansion. Establishing area contac ts will be critical to hedge against new
firms entering the area.
2.1 Start-up Summary

The following chart and table show the start-up expenses for Cambridge Strategy Group.
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Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $4,650
Start-up Assets to Fund $110,850
Total Funding Required $115,500
Assets
Non-cash Assets from Start-up $3,000
Cash Requirements from Start-up $107,850
Additional Cash Raised $0
Cash Balance on Starting Date $107,850
Total Assets $110,850
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $500
Other Current Liabilities (interest-free) $0
Total Liabilities $500
Capital
Planned Investment
John Gordon $40,000
Todd Kuczaj $40,000
Ben Cordell $35,000
Additional Investment Requirement $0
Total Planned Investment $115,000
Loss at Start-up (Start-up Expenses) ($4,650)

Total Capital $110,350
Total Capital and Liabilities $110,850
Total Funding $115,500
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Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $200
Stationery etc. $100
Brochures $150
Insurance $200
Other $4,000
Total Start-up Expenses $4,650
Start-up Assets
Cash Required $107,850
Other Current Assets $3,000
Long-term Assets $0
Total Assets $110,850
Total Requirements $115,500
3.0 Services
The Cambridge Strategy Group portfolio is designed to provide targeted marketing and
management services to small businesses. From helping entrepreneurs define their business plans
to improve their chances for obtaining venture funding, to creating concrete marketing
deliverables to promote their original ideas, the Cambridge Strategy Group seeks to help small
businesses at various stages of development. Our services fall into four major categories.
1. Management consulting;
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2. Market planning;
3. Communication services;
4. Technology.
MANAGEMENT CONSULTING
The Cambridge Strategy Group helps entrepreneurs build a solid managerial foundation from
which the rest of their business can expand and grow. We construct organizational
development blueprints for young firms searching for a solid structure to build upon, and assist in
constructing business plans for fledgling companies to improve their chances of obtaining venture
funding. CSG offers insights and ideas for how small businesses can disc over and sustain their
competitive advantage in today's business landsc ape where a lac k of continuous and constant
innovation can be fatal. Furthermore, we offer expertise in other areas such as profit modeling to
assist small businesses in their future planning, especially in today's market where heavy
emphasis has been plac ed upon a company's ability to show profits rather than pure growth.
MARKET PLANNING
Deciding how to present an innovative idea to the market is critical. We have expertise in turning
that idea into a successful business venture. Our market planning services help small business
founders determine the best messaging for their companies through market and competitive
analysis.
We then take the information gained in our analyses and create an effective marketing mix
encompassing all of the elements of product or service definition. Finally, we can help our clients
develop a launch plan to give their product or service a good chance at success. When
nec essary, we will help to develop marketing or business development partnerships.
COMMUNICATION SERVICES
Through our past experience in media operations, CSG provides expertise in a variety of
communication formats. CSG composes professional press releases for the media as well as
business proposals of all types for both c lients and partners. Furthermore, with our
understanding of how important company name recognition is to the initial success of small
businesses, we help companies create and establish their image through proven branding
techniques. CSG can also create marketing/sales collateral, business cards, and other business
materials when needed by our clients.
3.1 Service Description

The Cambridge Strategy Group offers four types of services to help small and emerging
businesses at various stages of their business development. Our services range in scope from
helping to turn a business strategy into a detailed set of concrete ac tions and milestones, to
creating websites and writing collateral for businesses lac king marketing expertise. These tailored
services solve the problem of finding marketing talent while minimizing costs.
1. Management consulting: business strategy, organizational development, profit

modeling, sustainable competitive advantage identification;
2. Market planning: market analysis, value proposition creation, partnership
identification, marketing mix development, launch strategies, messaging;
3. Communication services: press release development, proposal writing, image
creation, marketing/sales collateral construction;
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4. Technology: website development, Web hosting, email enablement.
3.2 Technology
The Cambridge Strategy Group understands the importance of implementing the technological
components of a small business as soon as possible in order to fac ilitate communication between
the company and its clients, employees, and partners. Therefore, we offer assistance in email
enablement as well as phone and fax set-up. CSG also offers expertise in c onstructing an
Internet presence through Web development and Web hosting.
3.3 Future Services

STRATEGY
The Cambridge Strategy Group has a three-part strategy for managing business growth. Initially,
CSG will be based out of the Triangle Area of North Carolina, which was ranked #3 on the sixth
annual listing of Dun and Bradstreet's "Best Cities for Small Business" from Entrepreneur
magazine.
Starting from North Carolina, our three-part growth strategy is as follows:
1. Expansion of Consulting Team: We will add new consultants in other U.S. and foreign
cities to increase our skill base and provide more "points of loc al contac t" for our clients.
2. Introduction of New Services: New team members will bring new skills and potentially
allow us to offer new services to our small business clients. One possible example is
helping small businesses expand their operations overseas.
3. Evolution of Business Operations: While our initial clients will be obtained through our
consultants, ultimately we will create alliances with Venture Capital firms. Our goal is to
work with c lients and Venture Capital firms to help turn business ideas into successes.
4.0 Market Analysis Summary

The Cambridge Strategy Group intends to enter the market for providing marketing and
management consulting services to new and emerging small businesses. The sections below
disc uss our analysis of the environment, the target market, our competitors, and the company.
The environment is well suited for the Cambridge Strategy Group. While the market for startups
and skyroc keting IPOs appears to be cooling off, this slowdown provides an opportunity for
CSG to establish a presence in the small business arena before the next growth period.
4.1 Market Segmentation

ENVIRONMENTAL FACTORS
The following fac tors define the environment in which CSG hopes to succeed.
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1. Physical: New businesses are being formed ac ross the United States every day.
Providing consulting services to these businesses will require loc al presence. North
Carolina's Triangle Area has recently been rated as one of the top three metropolitan
areas for small businesses by Dun and Bradstreet's Entrepreneur magazine.
2. Legal: The creation of the Limited Liability Company has made it very simple for new
businesses to organize as formal business entities. Limited Liability Companies are ideal for
small businesses as they avoid the double taxation charac teristic of C Corporations, while
providing limited liability for the company members.
3. Economic: Current economic conditions are continuing to challenge investors' views

regarding the potential for return. The market is no longer rewarding entrepreneurs
solely on the strength of their ideas. Instead, business owners and Venture Capitalists
are expec ted to show profitability before they will be allowed to reap the rewards of their
hard work. While small business owners bring innovative ideas and possibly leadership
qualities to their organization, they will need to rely upon skills from other disc iplines,
including marketing, to succeed.
4. Social: Ac cording to a Small Business Administration report, U.S. small business is at an

all-time high (The Fac ts About Small Business, 1999) "interest in owning or starting a
small business has broken new records [between 1993 and 1998]." While recent stoc k
market corrections may have frightened a segment of potential entrepreneurs, the
opportunity for financial reward keeps many small business owners diligently chasing
their dreams.
5. Technological: Recent advances in technology have greatly enhanced the ability for
distributed teams to work together on common projects. The proliferation of the
Internet fac ilitates data sharing and communication. Voice-over-IP technology reduces
the cost of conversation between CSG members working ac ross the country.
With these conditions in mind, CSG will concentrate on initially building clients in the North
Carolina area before expanding into other areas. We will be concentrating on all businesses
that employ less than 100 individuals. CSG will not segment its market to any greater degree
since the company wants to build clients as quickly as possible. Therefore our market analysis
chart below reflects this initial strategy.
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Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Small businesses in North 5% 150,000 156,750 163,804 171,175 178,878 4.50%
Carolina
Other 0% 0 0 0 0 0 0.00%
Total 4.50% 150,000 156,750 163,804 171,175 178,878 4.50%
4.2 Target Market Segment Strategy

The target market is defined by the customer needs that create the market, the structural
forces that govern operation within the market, and the attrac tiveness of the market based on
strategic value, market size, market growth, and potential for profit. Each of these areas is
described below.
STRUCTURAL FACTORS
Particular market forces affect the ability of the Cambridge Strategy Group to succeed. These
forces are identified below:
1. Buyer Power: With almost 900,000 new businesses starting eac h year, there is ample
demand for consulting services. If any particular business chooses to work with another
consulting firm, there are still a large number of firms that can be targeted by CSG.
Buyers have power in this market, but the size of the market makes it unlikely that
buyer power will have any significant negative impac t on the consulting firm.
2. Threat of Conventional Competitors: No other conventional competitor owns the

idea of "small business consulting" in the minds of today's business owners. A number of
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high-profile management and marketing consulting firms exist, yet most of these firms
have a reputation for being expensive and much too theoretical for small business owners
who have prac tical, short-term concerns. Still, there is potential for these firms to open
distinct teams of consultants foc used on this market plac e. These teams would have
particular strength in an area where the competitors already have an established
consulting presence, such as the major U.S. cities. By beginning our efforts in the
Triangle Area of North Carolina, Cambridge Strategy Group will exploit an area that has
a very strong market of small businesses, yet does not have many high-profile competitor
offices outside of tax spec ialists. No smaller competitor has emerged in this area.
3. Supplier Power: Suppliers have minimal power over a consulting firm. The www.
cambridgestrategy.net website URL as well as all of the Cambridge Strategy Group email
addresses are owned by CSG. Our Web-hosting provider can be changed quickly in the
event of any disruption of service. CSG intends to work with third party alliance
partners to fulfill client projects. For example, CSG is in the proc ess of entering into an
agreement with a Web development firm. This supplier will provide website development
for the www.cambridgestrategy.net website in exchange for first right of refusal for
future client projects. Contrac tual stipulations have given the Group legal remedies to
terminate the contrac t due to cost, quality, or time issues with the supplier. By crafting
supplier contrac ts in a careful manner, we hope to limit our exposure to risk due to
suppliers' power.
4. Threat of Substitutes: Potential substitutes are a very real threat. Venture Capitalists
could add more consulting services to their portfolio in order to have more points of
contac t with the new business. Additionally, non-profit groups such as the Council for
Entrepreneurial Development offer basic business plan services, primarily foc using on
pre-Angel businesses. Cambridge Strategy Group intends to form relationships with eac h
of these potential substitutes. By working with Venture Capitalists, CSG is able to provide
a set of core competencies in marketing and business strategy that complements the VCs
funding and business model assessment competencies. Also, by bec oming more
involved with the Council for Entrepreneurial Development and other non-profit
organizations, CSG will gain access to a number of firms who will be potential prospec ts
for marketing consulting once they receive their initial funding.
5. Threat of New Entrants: This threat is significant as there are very few barriers to entry
in a consulting market. Consulting firms do not normally have significant intellectual
property that can be patented, and the requirements for creating these firms are minimal.
Fortunately, the size of the new business market should sustain a number of firms in
this area. The Cambridge Strategy Group will foc us on gaining ownership of the idea "small
business consulting" in the mind of the market. By owning that idea, CSG will minimize
its exposure to new consulting firms with similar targets. Owning this idea is an
expensive task that will have to start loc ally and move from one city to another as the
company expands.
4.2.1 Market Growth

Ac cording to recent research from the U.S. Small Business Administration office, a record number
of new small businesses opened their doors in 1998. This record was broken again in 1999 as the
overall small business market grew 1.5%. The growth of the market is not nearly as important
to the Cambridge Strategy Group as its size. CSG will need to foc us on how to capture the
most out of the existing market, even if it dec lines in size, before thinking about expanding.
Potentially, the low growth may dissuade some competitors from entering the market, providing
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the Cambridge Strategy Group with an opportunity to capture market- and mind-share before
more competitors enter.
MARKET ATTRACTIVENESS
The Cambridge Strategy Group is entering the market for small business marketing and
management consulting services. The growing number of small businesses in the United States,
particularly in the Triangle Area of North Carolina, constitute an enormous potential client base
that demands the skills provided by the Cambridge Strategy Group.
1. Strategic Value: The small business consulting market is a strategic, and available,
segment for the Cambridge Strategy Group. Many companies are able to get customers to
assoc iate a particular concept or idea with their firm. To date, there is no clear
assoc iation for "small business consulting." Over time, the Cambridge Strategy Group will
attempt to capture this association.
2. Market Size: The size of the market is an important fac tor. While the large number of
small businesses starting eac h year will make it difficult to gain significant share of the
market in the near term, it does help to ensure that there will be initial customers
available to the Cambridge Strategy Group.
3. Potential for Profit: The potential for profit in this segment is very high. The operating
costs required to address this segment are minimal, allowing a majority of service revenue
to be turned directly into profit. While the barriers to competitive entry may be fairly low,
no clear leader has gained the mind-share of the potential client market. Additionally,
based on the overwhelming size of the market and the distributed nature of the
potential clients, it is unlikely that any competitor will be able to dominate the market in
the near future.
Market Attractiveness Summary
Factor Weight Score Weighted Score
Strategic Value .3 9.0 2.7
Market Size .3 9.0 2.7
Market Growth .1 5.0 0.5
Potential for .3 9.0 2.7

Profit
Total: 8.6
4.2.2 Market Trends

INDUSTRY BACKGROUND
The industry is ideal for the emergence of a firm such as the Cambridge Strategy Group. The
following fac ts were listed in a November 1999 report published by the U.S. Small Business
Administration:
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· In 1998; 898,000 new businesses opened in the United States - the most ever.
· Interest in owning or starting a small business has broken new records over the last five
years and part-time entrepreneurs have dramatically increased.
· From 1994 to 1998, about 11.1 million net new jobs were added to the economy.
Ac cording to Cognetics, Inc., virtually all were generated by small firms with fewer than
500 employees. Microbusinesses with 1-4 employees generated 60.2 percent of the net
new jobs over this period; firms with 5-19 employees contributed another 18.3 percent.
· Of the 4.5 million workers in high-technology oc cupations (scientists, engineers, computer

programmers, and analysts), 37.9 percent worked in small firms in 1996.
· Firms were started for very traditional reasons. Entrepreneurs had a clear perception of
an opportunity to develop a business through a new product, coupled with a desire for
both independence and financial reward.
· The marketing strategy most frequently cited by respondents was either to be the first to
the market with a new product or to find a market niche and develop it. These companies
much less frequently wait for a market to develop.
Additionally, the fac t that the stoc k market has been slowing during the past year will likely take
some of the glitter off of the small business market. This will allow the Cambridge Strategy Group
to establish a market presence and prepare to grow during the next period of rapid investment.
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4.2.3 Market Needs

Within the small business market, there are a number of segments, eac h with distinct objectives,
resources, and needs.
Customer Objectives Resources Needs

Segmentation
Micro-businesses
(1 - 4 people)
Not funded Demonstrate viability of Initial ideas. Preliminary Help formulating
business plan. business plan. Few business plan to gain
people. No budgets. investor interest in
idea. Business
strategy.
Angel funded Gain second round of Qualified ideas. First Defined roadmap and
funding to start level business plan. milestones. Creation
executing fully. Find Few people. Small of initial messaging.
resources. budgets.
Venture funded Begin executing against Defined product/ Marketing
business plan in pursuit service. Basic deliverables. Sales
of revenue and profit. messaging. Few people. strategies.
Budgets and objectives Communication. More
to meet. people/resources.
Small businesses
(5 - 200)
Not funded Demonstrate viability of Initial ideas. Preliminary Help formulating
business plan. business plan. business plan to gain
People. No budgets. investor interest in
idea. Business
strategy.
Angel funded Gain second round of Qualified ideas. First Defined roadmap and
funding to start level business plan. milestones. Creation
executing fully. People. Small budgets. of initial messaging.
Venture funded Begin executing against Defined product/ Marketing
business plan in pursuit service. Basic deliverables. Sales
of revenue and profit. messaging. People. strategies.
Budgets and objectives Communication.
to meet. Experience, resources.
The Cambridge Strategy Group will initially target the funded segments of the small business
market to ensure that its bills will be paid. As CSG bec omes more sophisticated, it will consider
performing work for equity.
4.3 Service Business Analysis

CORPORATE FIT
The Cambridge Strategy Group is poised to take advantage of the trends identified above. By
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combining the marketing and management experience, small business foc us, and loc al presence
in key markets, the Cambridge Strategy Group will help the growing number of small businesses
increase their chances for success.
The Cambridge Strategy Group is a Limited Liability Company designed to offer limited liability to
the members. CSG is incorporated in North Carolina where it will initially foc us its operations. The
rapidly growing Triangle Area of North Carolina, which includes Raleigh, Durham, Chapel Hill, and
Research Triangle Park, was recently ranked #3 on the list of large metropolitan areas in Dun and
Bradstreet's Entrepreneur magazine's sixth annual listing of the "Best Cities for Small Businesses."
CSG's initial address is in Chapel Hill, North Carolina. However, with c onsultants distributed ac ross
the nation, CSG can easily expand its target client base to encompass other regions through the
use of existing and tested technology. Currently, our consultants live in or near Phoenix, AZ;
Chicago, IL; and Boston, MA in addition to Chapel Hill, NC.
4.3.1 Competition and Buying Patterns

Competitors to the Cambridge Strategy Group fall into four categories:
1. Segment Rivals: Segment Rivals offer the exac t same services as the Cambridge
Strategy Group. These firms must foc us exclusively on small businesses and offer
marketing and/or management strategy services. While the market is certainly large
enough to sustain multiple segment rivals, the Cambridge Strategy Group will attempt to
ensure that its name is well known in all its target markets.
2. Market Rivals: There are a number of available Market Rivals who compete with the
Cambridge Strategy Group while having slightly different business foc uses. Examples of
market rivals include start-up foc used branches of Big Five Consulting Firms, Management
Consulting Firms, and Venture Capitalists who also provide business services. The
Cambridge Strategy Group will attempt to compete with these firms by demonstrating its
foc us on "small business consulting."
3. Generic Rivals: Generic Rivals represent alternative solutions. The main alternative to
outsourcing work to a consulting firm is performing the work in-house. The Cambridge
Strategy Group will attempt to demonstrate the value of outsourcing marketing and
management work to a consulting firm in order to (1) utilize the core competencies of the
consulting firm and (2) reduce the costs associated with hiring full-time employees.
4. Structural Rivals: Structural Rivals are the forces inherent in the market through which
the firm must operate. These forces were described in the previous section entitled
Target Market Analysis.
4.3.2 Business Participants

A number of other firms will compete with the Cambridge Strategy Group. Due to the size of
the available market, it will be exceptionally difficult for any of these competitors to gain
significant market share. However, it will also be difficult for the Cambridge Strategy Group to
control the market.
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5.0 Strategy and Implementation Summary

The Cambridge Strategy Group has outlined a three-stage strategy for expanding its services
and operations. As CSG expands its offerings, it will constantly foc us on finding new ways to
help small businesses bec ome more successful.
1. Expansion of Consulting Team: As the existing team gains experience working together
ac ross time zones, CSG will add new consultants who bring various skill sets to the
company. We will open up additional offices in other cities and states to provide more
"points of loc al contac t" for our clients.
2. Introduction of New Services: New team members will bring new skills and potentially
allow us to offer new services to our small business clients. One possible example is
helping small businesses expand their operations overseas.
3. Evolution of Business Operations: While our initial clients will be obtained through our
consultants, ultimately CSG will evolve to create alliances with Venture Capital firms in
order to help the companies that they have funded bec ome successful.
5.1 SWOT Analysis

The following diagram summarizes how our SWOT analysis defines the Key Success Fac tors of
the market and Distinctive Competencies of the Cambridge Strategy Group.
Strengths Weaknesses Distinctive

Competencies
Skills in marketing, Founders working full- Large company skills
communications time jobs Small biz experience
Local presence in major Little experience in Foc us on Small Biz
market ac counting Good relationships
Small Biz foc us Few people initially limit Using technology to
Entrepreneurial serviceable market reduce client costs
relationships
Opportunities Threats Key Success Factors

Large # of businesses Small budgets Core strengths in
starting in United Low barriers to entry marketing/strategy
States Well funded Local presence
Business growth in competitors Small Business foc us
Triangle Area, NC Need for loc al presence Venture Capital
Lack of marketing skills relationships
Foc us on profit
STRENGTHS AND WEAKNESSES

The Cambridge Strategy Group has a number of strengths that will enable it to favorably
compete in this market. Its weaknesses are addressable and will be improved over time.
Strengths – The founders of the Cambridge Strategy Group have a broad bac kground in
marketing and communications that can easily be leveraged by a number of small business
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companies. The founders combine the training and knowledge gained at large firms such as
IBM, EMC, and SunAmerica with small business work experience at a number of technica and
consulting firms. CSG has a loc al presence in the Triangle Area of North Carolina, which has
recently been rated as the #3 metropolitan area for small businesses in the U.S. by Dun and
Bradstreet's Entrepreneur magazine. By using the latest technology to communicate among
consultants and work together on projects, CSG will be able to minimize its costs and fees
charged to its customers. CSG will stay foc used on small businesses in an effort to own the
category name. CSG also participates in the North Carolina chapter of the Council for
Entrepreneurial Development.
Weaknesses – Currently, the founders of CSG all have full-time positions in c onsulting, business
development or marketing strategy. All are working for CSG as a second job, preventing CSG
from taking full advantage of the opportunities available. In order to minimize out-of-poc ket
costs, CSG is only concentrating on businesses in the Triangle Area of North Carolina. With
consultants in Chicago, IL; Phoenix, AZ; and potentially Boston, MA; Portland, OR; and London,
England, the opportunity to expand into other high-growth areas is available, but will require
additional resources. CSG also does not have extensive skills in accounting and intends to find a
lead ac countant to either work on staff or as an outsourced contrac tor to provide services. With
only three to four founders, CSG is unable to handle more than one or two projects at a time.
This will be addressed as CSG bec omes more comfortable with their projects, and is ready to
expand the size of the team.
Distinctive Competencies – The distinctive competencies for the Cambridge Strategy Group
are:
· Local presence and contac ts in the Triangle Area of North Carolina with opportunities
for expansion into other major markets;
· Core competencies in marketing, strategy, consulting, and communication;
· Minimal fixed costs which will allow us to keep prices low while remaining profitable;
· Foc us on small businesses;
· Large company skill and small business experience.
5.2 Value Proposition

For small and emerging businesses looking for opportunities to increase their chance at
success, CSG offers a set of services designed to improve overall business execution. Unlike
traditional management consulting firms that concentrate on helping large clients identify
problems, CSG foc uses exclusively on working with small businesses to implement concrete,
prac tical, short-term ac tions designed to start moving their business in the right direction.
DIFFERENTIAL ADVANTAGE
The Cambridge Strategy Group will create a value proposition based on the following
differential advantage ideas:
· Foc us on helping small businesses to start moving in the right direction;

· Prac tical, ac tionable, short-term marketing and business strategy help;
· Local presence for availability and minimization of costs;
· Broad skill base combining Fortune 500 training with small business experience.
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5.3 Marketing Strategy

The Marketing Mix defined below explains the value that we will bring to our clients as well as
the channels, communication, and costs that will be associated with our services.
5.3.1 Positioning Statement

The Cambridge Strategy Group provides much needed skills and experience to small business
founders to help their businesses start moving in the right direction. Our services are tailored
specifically to the unique needs of small and emerging businesses and foc us on prac tical, short-
term ac tions that can improve overall business execution. With a shortage of available talent
plus the typical budget pressure usually associated with small businesses, our services provide
a cost-effective alternative to obtaining highly-skilled marketing and strategy resources.
The Cambridge Strategy Group will position itself as the leading marketing and management
consulting firm foc using exclusively on small businesses. The diagram below summarizes our
positioning:
5.3.2 Pricing Strategy

To simplify billing to clients, the Cambridge Strategy Group will work on a fixed pricing
structure. CSG will determine the standard pricing structure for eac h deliverable based on
hourly estimates and fees. This will be expressed to the client as a per-deliverable fixed price
in a quote. Clients can determine which deliverables they would like to purchase. CSG will charge
the quoted price even if we have underestimated hours, to maintain c redibility with budget-
consc ious small businesses. Pricing structure will be based on $90/hour multiplied by the
number of hours that it would take our most experienced consultant to finish the project. If
less experienced consultants participate on the project, it will likely take more time; however,
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the price of the deliverable to the client will not change.
In time, CSG may consider a cash-and-equity arrangement, or potentially all equity for spec ific
projects. Before we can begin with this stage of pricing, we will need more experienced finance
and ac counting skills to determine proper equity stakes that should be requested, etc.
Additionally, CSG will offer cost-effective Web-hosting services that will provide ongoing revenue
streams. It is anticipated that most clients will sign-up for our one- year contrac ts requiring
minimal ac counting.
5.3.3 Distribution Strategy

Our initial foc us will be in the Triangle Area of North Carolina. The Triangle Area was recently
rated #3 in Dun & Bradstreet's Entrepreneur magazine list of the best metropolitan areas for
small business. Once we secure our first client successes, we will expand to other regions
where we already have a consulting presence, such as Phoenix, AZ and Chicago, IL. Our
loc ations and foc us will expand as we add new consultants to our talent pool.
5.3.4 Promotion Strategy

We will use a number of relationships to promote the Cambridge Strategy Group.
Through participation in the North Carolina Chapter of the Council for Entrepreneurial
Development, we will make contac ts with key Venture Capitalists, small business founders, and
small businesses resources in the area. Once we have helped our first few clients, we will then
explore relationships with loc al newspapers. Participating in loc al chambers of commerce will
also help us to get increased exposure. In every method of communication, we will constantly
reinforce our differential advantage:
· Foc us on helping small businesses start moving in the right direction;

· Prac tical, ac tionable, short-term marketing and business strategy help;
· Local presence for availability and minimization of costs;
· Broad skill base combining Fortune 500 training with small business experience.
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5.4 Sales Forecast

FINANCIAL FORECASTS
The 2001 Income Forecast model below demonstrates our initial test of the business concept.
We have been c onservative in our estimates of expenses, project size, project number, and
income:
The short-term 2001 Income Forecast expec ts the Cambridge Strategy Group to complete a
total of four client projects, averaging 50 hours eac h during 2001. As we move into the Long-
term Income Forecast we assume that we have started working on more substantial projects
identified by both Venture Capital firms and their sponsored companies.
The 20 projects averaging 200 hours eac h listed in 2002 represents approximately two person-
years of work. However, additional time must be included for finding new clients and building
Venture Capitalist relationships. For this forecast to bec ome a reality, it will require either: (a)
additional consultants to join the firm or (b) some members of CSG to work full-time on group
ac tivities. Note that "projects" are not synonymous with "clients." Any given c lient may require
multiple projects from CSG.
Due to the low overhead assoc iated with c onsulting, the Cambridge Strategy Group should be
profitable in its first year of operations. The revenue potential of CSG is gated solely by the
founders need to provide a constant income while filling the pipeline of the firm. The revenue
figure in year 2003 represents less than five person-years of consulting work and could easily
be exceeded by a larger, fully-committed team.
Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Consulting Projects $18,000 $250,000 $450,000
Other $0 $0 $0
Total Sales $18,000 $250,000 $450,000
Direct Cost of Sales Year 1 Year 2 Year 3

Consulting Projects $2,340 $46,800 $77,220
Other $0 $0 $0
Subtotal Direct Cost of Sales $2,340 $46,800 $77,220
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5.5 Milestones
MILESTONES AND SCHEDULE
The milestones and sc hedule outlined below combine Cambridge Strategy Group's corporate
strategy and execution plan. Successful implementation will realize the financial projections
disc ussed above.
OBJECTIVES
The Cambridge Strategy Group is positioning itself for steady, sustainable growth. Forming long-
term, strategic partnerships with Venture Capital firms in the Triangle Area of North Carolina will
further the mission of CSG by filling the sales pipeline with targeted small businesses. An
established Venture Capital relationship will also open up new resources to CSG, materially
impac ting operations and service offering. New clients will be sought when Group resources are
available to provide the highest level of consulting service. CSG strives to ac hieve 100% client
satisfac tion in all projects undertaken; consequently, a significant percentage of clients and
projects will be generated from existing clientele. New consultant recruiting and hiring will always
be driven by client needs. Geographic and service offering expansion will leverage existing
client needs.
Summary
· Steady growth;
· Venture Capital firm partnership;
· 100% Client satisfac tion;
· Repeat clients;
· Logical expansion of both services and loc ations.
MAJOR MILESTONES
These milestones demarcate the growth of Cambridge Strategy Group and serve as a progress
report of how well CSG is executing its strategy, vision, and business model.
· Incorporation: established Cambridge Strategy Group as a going concern;

· Communication infrastructure: enable team email addresses, etc.;
· Create website: communicates Group's vision and value proposition;
· First clients: validates business model and market need;
· Strategic Relationship with Venture Capital firm: deepens sales pipeline, expands
resources and strengthens position within small business community;
· First employees: further business model validation demonstrating that demand has
exceeded the resources of CSG's management;
· Service expansion: signifies client satisfac tion and demand for greater breadth of service;
· Geographic expansion: demonstrates regional and national need for small business-
foc used consulting services.
SCHEDULE
The sc hedule below plots the Cambridge Strategy Group's execution timeline. By combining CSG's
strategy and objectives with our milestones and execution schedule, the financials disc ussed
above will be realized.
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Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department

Incorporation 1/1/2002 3/31/2002 $0 ABC Marketing
Communication Infrastructure 1/1/2002 3/31/2002 $0 ABC Marketing
Operating Agreement 1/1/2002 3/31/2002 $0 ABC Web
Website 4/1/2002 6/30/2002 $0 ABC Web
Clients 7/1/2002 12/31/2006 $0 ABC Department
Full-Time Work/Business 10/1/2003 12/31/2006 $0 ABC Department
Venture Capital Partnership 4/1/2004 6/30/2004 $0 ABC Department
Hire Employees 4/1/2004 12/31/2006 $0 ABC Department
Geographic Expansion 4/1/2005 6/30/2005 $0 ABC Department
Service Offering Expansion 7/1/2004 9/30/2004 $0 ABC Department
Totals $0
5.6 Competitive Edge

The Cambridge Strategy Group is foc used spec ifically on helping small and emerging businesses
maximize their potential for success. We differentiate ourselves in the following ways:
1. Focus on small business: Our mission is to help small businesses of today bec ome the
leading corporations of tomorrow. Cambridge Strategy Group will attempt to own the
words "small business" in the minds of our potential clients.
2. Cost-effective personal interaction with local consultant presence: We will target
new regions with loc al consultants, allowing us to personally interac t with small
businesses without needing to bring consultants to the region.
3. A diverse network of consultants and alliance partners: By relying on a nationally
distributed talent base coordinated to work together remotely, we will be able to bring
Page 23
together a variety of skills to meet the needs of our clients.
Key Success Factors: After exploring the opportunities and threats that permeate this
market, the following Key Success Fac tors emerge as the requirements to be successful at
providing marketing and management consulting services to small businesses.
· Local presence in a strong small business market;

· Affordable pricing structure/minimal costs;
· Clear value proposition, communicated into target market;
· Core competencies in marketing and strategy;
· Recognition as leading "small business consultants" or, no other firm claiming that title;
· Venture Capitalist relationships.
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6.0 Management Summary

The company is organized as a manager-managed Limited Liability Company. Initially, we will
have three members with equal equity stakes in the company making all voting dec isions. An
executive director who is one of the managers will be identified to run meetings and provide
some form of order to ongoing disc ussions. Additionally, we will hire consultants as needed to
help our clients. Consultants will be paid on a per-deliverable basis.
6.1 Organizational Structure

The structure of the company is defined below. Only managers have voting rights in the
company while all members are given equity stakes. Consultants have neither an equity stake
nor voting rights. They are compensated for the work they perform on behalf of the firm.
· Executive director managers;

· Managing director (2);
· Members;
· Principal consultants;
· Managing consultants;
· Senior consultants;
· Non-managers;
· Consultants.
6.2 Management Team

The CSG management team brings a broad range of industry experience and training from both
energetic small firms and experienced industry leaders.
John B. Gordon, Executive Director. John has worked in marketing, business development, and
corporate strategy for a number of small and large firms, including EMC Corporation, IBM
Corporation, and Larsc om, Incorporated. John's participation on the North Carolina Council for
Entrepreneurial Development plus his experience providing consulting services to small businesses
catalyzed the formation of the Cambridge Strategy Group, L.L.C. John also functions as the VP
of marketing, and serves on the board of directors for the Frame Relay Forum, a high-tech
industry organization whose members include Cisc o Systems, AT&T, Nortel Networks and many
other industry leaders. John is a magna cum laude graduate from the University of Notre Dame
and holds a BA degree in Philosophy and Computer Applications.
Todd D. Kuczaj, Managing Director. Todd has worked in Internet consulting, Web design/
development, financial services, and media publications for a variety of companies, including a
Big Five consulting firm, Integrated Information Systems, SunAmerica Securities, and the
Foothills Sentinel. Todd currently functions as an experienced analyst for a Big Five firm, working
with Fortune 100 and Fortune e-50 firms to solve their business and technology issues. Todd's
broad range of experiences, from designing Web solutions to composing front-page articles for a
loc al Phoenix newspaper, allows Cambridge Strategy Group, L.L.C. to interfac e with a wide
client base and offer a broad range of solutions. He holds a Bac helor of Arts degree from the
University of Notre Dame and a Master of Sc ience in Information Management from Arizona State
Page 25
University.
Ben S. Cordell, Managing Director. Ben has worked in business development, ac count
management, systems engineering, marketing, and product development positions at LifeServ
and ONE Co. (formerly DC Systems). He currently functions as a corporate strategy spec ialist
at LifeServ, disc overing and developing merger, ac quisition and strategic partnership
opportunities. Ben's diversity of experience and interest are leveraged in guiding the Cambridge
Strategy Group and its clients to success. He holds a Bac helor of Finance and Computer
Applications degree with honors from the University of Notre Dame.
6.3 Personnel Plan

ADVISORY BOARD
The Cambridge Strategy Group may create an advisory board to bring insight into new areas
including consulting management, finance and ac counting, venture capital, and loc al media.
The Founders of CSG have a number of contac ts that could certainly provide useful guidance
in our future operations. We will determine the value and compensation for the advisory board
in future disc ussions.
MANAGEMENT COMPENSATION
Managers will be compensated on the profit of the firm based on equity percentages.
Consultants will be paid ac cording to the deliverables that they create. Currently, manager
equity is divided as follows:
Manager Equity Stake

John Gordon, Executive Director 33 1/3%
Ben Cordell, Managing Director 33 1/3%
Todd Kuczaj, Managing Director 33 1/3%
Table: Personnel
Personnel Plan
John Gordon $30,000 $30,000 $50,000
Todd Kuczaj $30,000 $30,000 $50,000
Ben Cordell $30,000 $30,000 $50,000
Office Manager $0 $30,000 $35,000
Other Consultants $0 $0 $75,000
Total People 3 4 6
Total Payroll $90,000 $120,000 $260,000
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7.0 Financial Plan

SUMMARY OF FINANCIALS
The market for the Cambridge Strategy Group's services is enormous. Success in this market
will be limited only by the amount of time and effort that CSG spends on finding new clients
and managing growth. Since none of CSG members are able to work full-time on this project,
early growth will be stifled by lac k of commitment. However, if CSG is able to generate
substantial work in a pipeline, the members will then consider working for CSG full-time. This
will also force CSG to obtain stronger ac counting, legal, and financial skills than it currently has
available.
7.1 Important Assumptions

FINANCIAL ASSUMPTIONS
Below is a list of assumptions that define the short-term business model:
· 2001 will be spent preparing and learning how best to approach c lients and building
relationships with VCs;
· All managers will hold full-time positions with other companies;
· We will foc us on business opportunities in NC until we create sufficient revenue to open
foreign LLC's in other states;
· 2001 financial model represents only three managers;
· All revenue is realized when a project is finished;
· If model proves true in 2001, we will invest more heavily in 2002.
Table: General Assumptions

General Assumptions
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
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7.2 Key Financial Indicators

The following chart shows the planned benchmarks for Cambridge Strategy Group.
Page 28
7.3 Break-even Analysis

The following table and chart is the break-even analysis for Cambridge Strategy Group.
Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even $10,316
Assumptions:
Average Percent Variable Cost 13%
Estimated Monthly Fixed Cost $8,975
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7.4 Projected Profit and Loss

The following table and chart show the projected profit and loss for Cambridge Strategy.
Page 30
Page 31
Table: Profit and Loss

Pro Forma Profit and Loss
Sales $18,000 $250,000 $450,000
Direct Cost of Sales $2,340 $46,800 $77,220
Other Production Expenses $0 $0 $0
Total Cost of Sales $2,340 $46,800 $77,220
Gross Margin $15,660 $203,200 $372,780

Gross Margin % 87.00% 81.28% 82.84%
Expenses
Payroll $90,000 $120,000 $260,000
Sales and Marketing and Other Expenses $2,099 $26,000 $46,700
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $899 $2,000 $2,000
Insurance $1,200 $2,500 $2,500
Rent $0 $12,000 $12,000
Payroll Taxes $13,500 $18,000 $39,000
Other $0 $0 $0
Total Operating Expenses $107,698 $180,500 $362,200
Profit Before Interest and Taxes ($92,038) $22,700 $10,580

EBITDA ($92,038) $22,700 $10,580
Interest Expense $0 $0 $0
Taxes Incurred $0 $6,810 $3,174
Net Profit ($92,038) $15,890 $7,406

Net Profit/Sales -511.32% 6.36% 1.65%
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7.5 Projected Cash Flow

The following table and chart are the projected cash flow figures for Cambridge Strategy.
Table: Cash Flow

Pro Forma Cash Flow
Cash Received
Cash from Operations

Cash Sales $4,500 $62,500 $112,500
Cash from Receivables $11,288 $158,983 $312,917
Subtotal Cash from Operations $15,788 $221,483 $425,417
Additional Cash Received

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 $9,000 $9,000
Subtotal Cash Received $15,788 $230,483 $434,417
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations

Cash Spending $90,000 $120,000 $260,000
Bill Payments $18,857 $106,412 $176,965
Subtotal Spent on Operations $108,857 $226,412 $436,965
Additional Cash Spent

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 $4,000 $0
Purchase Long-term Assets $0 $4,000 $0
Dividends $0 $0 $0
Subtotal Cash Spent $108,857 $234,412 $436,965
Net Cash Flow ($93,069) ($3,929) ($2,549)

Cash Balance $14,781 $10,852 $8,303
Page 33
Page 34
7.6 Projected Balance Sheet

The following is the projected balance sheet for Cambridge Strategy Group.
Table: Balance Sheet

Pro Forma Balance Sheet
Assets
Current Assets
Cash $14,781 $10,852 $8,303
Accounts Receivable $2,213 $30,729 $55,313
Other Current Assets $3,000 $7,000 $7,000
Total Current Assets $19,993 $48,581 $70,616
Long-term Assets
Long-term Assets $0 $4,000 $4,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $4,000 $4,000
Total Assets $19,993 $52,581 $74,616
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $1,681 $9,379 $15,008
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $1,681 $9,379 $15,008
Long-term Liabilities $0 $0 $0
Total Liabilities $1,681 $9,379 $15,008
Paid-in Capital $115,000 $124,000 $133,000

Retained Earnings ($4,650) ($96,688) ($80,798)
Earnings ($92,038) $15,890 $7,406
Total Capital $18,312 $43,202 $59,608
Total Liabilities and Capital $19,993 $52,581 $74,616
Net Worth $18,312 $43,202 $59,608
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7.7 Business Ratios

Business ratios need to be explained. The industry standards are for the business consulting
industry. However, there are some deviation between CSG and the standards that reflect our
foc us on small businesses. First of all, CSG expec ts that its sales level will remain high as its
seeks to establish itself and expand into new regions. Furthermore, the company expec ts to
have a much higher current and quick ratio as it will need large amounts of cash to handle our
expansion. Finally we will keep our advertising costs high to fuel our growing clientele.
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Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 1288.89% 80.00% 8.60%
Percent of Total Assets

Accounts Receivable 11.07% 58.44% 74.13% 24.40%
Other Current Assets 15.01% 13.31% 9.38% 46.70%
Total Current Assets 100.00% 92.39% 94.64% 74.90%
Long-term Assets 0.00% 7.61% 5.36% 25.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.41% 17.84% 20.11% 42.80%

Long-term Liabilities 0.00% 0.00% 0.00% 17.20%
Total Liabilities 8.41% 17.84% 20.11% 60.00%
Net Worth 91.59% 82.16% 79.89% 40.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 87.00% 81.28% 82.84% 0.00%
Selling, General & Administrative Expenses 598.32% 74.92% 81.19% 83.50%
Advertising Expenses 4.99% 7.20% 6.60% 1.20%
Profit Before Interest and Taxes -511.32% 9.08% 2.35% 2.60%
Main Ratios
Current 11.89 5.18 4.71 1.59
Quick 11.89 5.18 4.71 1.26
Total Debt to Total Assets 8.41% 17.84% 20.11% 60.00%
Pre-tax Return on Net Worth -502.61% 52.54% 17.75% 4.40%
Pre-tax Return on Assets -460.35% 43.17% 14.18% 10.90%
Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -511.32% 6.36% 1.65% n.a
Return on Equity -502.61% 36.78% 12.42% n.a
Activity Ratios
Accounts Receivable Turnover 6.10 6.10 6.10 n.a
Collection Days 57 32 47 n.a
Accounts Payable Turnover 11.92 12.17 12.17 n.a
Payment Days 28 18 24 n.a
Total Asset Turnover 0.90 4.75 6.03 n.a
Debt Ratios
Debt to Net Worth 0.09 0.22 0.25 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $18,312 $39,202 $55,608 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 1.11 0.21 0.17 n.a
Current Debt/Total Assets 8% 18% 20% n.a
Acid Test 10.58 1.90 1.02 n.a
Sales/Net Worth 0.98 5.79 7.55 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Page 37
7.8 Financial Risks and Contingencies

FINANCIAL RISKS
Risks to the Cambridge Strategy Group in its current plan are minimal. While operating the firm as
a second job, the only expenses incurred by it are basic in nature and include the creation of
email ac counts, business cards, a website, and other basic communications mechanisms. There
are few ongoing expenses that are not directly related to revenue generation, and therefore
intrinsically profitable. If a Venture Capital firm elects to fund the Cambridge Strategy Group by
providing salaries to the founders of the firm, that firm risks the loss of its salaries if CSG is
unable to build an ongoing client base.
RISKS AND MITIGATION PLANS
Risks to the Cambridge Strategy Group in its current plan are relatively minimal. Organic growth
does not depend on capital market to remain viable. The small business space is largely
unattrac tive to Big Five and other larger consulting organizations. Disc ussed below are risk areas
and CSG's response to these forces:
Industry Competitors
Big Five consulting firms have extensive resources in both monetary and personnel. If they
choose to enter the small business consulting market, the Big Five firms could bring to bear
their name recognition, consulting staff, and financial clout to drive smaller firms out of the
market. Additionally, venture capital firms could choose to expand their internal service offering
and more ac tively manage portfolio companies. With tight public markets, the motivation for
Big Five consulting firms to seek out small growth firms as clients has substantially dec lined.
Without a public appetite for IPOs, growing firms cannot easily exchange services for equity.
Without an equity payment option, small firms cannot readily afford the services of the Big Five
firms. Venture capital firms are generally foc used on portfolio money management and business
plan evaluation. CSG seeks to partner with venture capital firms and offer a service of higher
quality at a lower price than they could produce internally. As previously mentioned, with
almost 800,000 new businesses starting every year, new demand for small business consulting
services is continually created.
Management
CSG's management is relatively inexperienced. Experienced management will be needed if

Cambridge Strategy Group is to grow into a multi-million dollar enterprise. Relationships with
veteran business contac ts will be sought and leveraged to provide additional, valuable insight
as CSG grows. Its strategy foc uses on steady, organic growth that will allow management to
ac curately measure the needs of management and then seek out candidates as needed.
Location/Lack of Clients
The Triangle Area of North Carolina could bec ome a less attrac tive city for small businesses.
Group resources have a loc al presence in other business hubs (Phoenix, AZ and Chicago, IL) to
limit the reliance on any single geographic area to produce an entrepreneur-friendly atmosphere.
Labor Market
National unemployment levels are currently near historical lows. The economic boom has
created a great demand for human capital, espec ially technology skills. The recent economic
cooling has made talent more affordable ac ross the board. Additionally, Group management will
leverage an extensive network to find and hire the best talent when the client demand for
Page 38
additional skills and resources is warranted. Client Financial Stability Small businesses fail
almost as quickly as new ones start. Consequently, small business can present a poor credit
risk to suppliers. By working with venture capital-bac ked firms, CSG targets clients with means
while minimizing delinquent ac counts.
Page 39
Appendix
Table: Sales Forecast
Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Consulting Projects 0% $0 $0 $0 $1,500 $1,500 $1,500 $3,000 $3,000 $3,000 $1,500 $1,500 $1,500
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $0 $0 $0 $1,500 $1,500 $1,500 $3,000 $3,000 $3,000 $1,500 $1,500 $1,500
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Consulting Projects $0 $0 $0 $260 $260 $260 $260 $260 $260 $260 $260 $260
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0 $260 $260 $260 $260 $260 $260 $260 $260 $260
Page 1
Appendix
Table: Personnel
Personnel Plan
John Gordon 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Todd Kuczaj 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Ben Cordell 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Office Manager 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Consultants 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 3 3 3 3 3 3 3 3 3 3 3 3
Total Payroll $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500
Page 2
Appendix
Table: General Assumptions
General Assumptions
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
Page 3
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss

Sales $0 $0 $0 $1,500 $1,500 $1,500 $3,000 $3,000 $3,000 $1,500 $1,500 $1,500
Direct Cost of Sales $0 $0 $0 $260 $260 $260 $260 $260 $260 $260 $260 $260
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $0 $260 $260 $260 $260 $260 $260 $260 $260 $260
Gross Margin $0 $0 $0 $1,240 $1,240 $1,240 $2,740 $2,740 $2,740 $1,240 $1,240 $1,240
Gross Margin % 0.00% 0.00% 0.00% 82.67% 82.67% 82.67% 91.33% 91.33% 91.33% 82.67% 82.67% 82.67%
Expenses
Payroll $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500
Sales and Marketing and Other $175 $175 $177 $174 $174 $176 $174 $174 $176 $174 $174 $176
Expenses
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $65 $65 $67 $78 $78 $78 $78 $78 $78 $78 $78 $78
Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Taxes 15% $1,125 $1,125 $1,125 $1,125 $1,125 $1,125 $1,125 $1,125 $1,125 $1,125 $1,125 $1,125
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $8,965 $8,965 $8,969 $8,977 $8,977 $8,979 $8,977 $8,977 $8,979 $8,977 $8,977 $8,979
Profit Before Interest and Taxes ($8,965) ($8,965) ($8,969) ($7,737) ($7,737) ($7,739) ($6,237) ($6,237) ($6,239) ($7,737) ($7,737) ($7,739)
EBITDA ($8,965) ($8,965) ($8,969) ($7,737) ($7,737) ($7,739) ($6,237) ($6,237) ($6,239) ($7,737) ($7,737) ($7,739)
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($8,965) ($8,965) ($8,969) ($7,737) ($7,737) ($7,739) ($6,237) ($6,237) ($6,239) ($7,737) ($7,737) ($7,739)
Net Profit/Sales 0.00% 0.00% 0.00% -515.80% -515.80% -515.93% -207.90% -207.90% -207.97% -515.80% -515.80% -515.93%
Page 4
Appendix
Table: Cash Flow
Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $0 $0 $0 $375 $375 $375 $750 $750 $750 $375 $375 $375
Cash from Receivables $0 $0 $0 $0 $38 $1,125 $1,125 $1,163 $2,250 $2,250 $2,213 $1,125
Subtotal Cash from Operations $0 $0 $0 $375 $413 $1,500 $1,875 $1,913 $3,000 $2,625 $2,588 $1,500
Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $0 $0 $375 $413 $1,500 $1,875 $1,913 $3,000 $2,625 $2,588 $1,500
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations

Cash Spending $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500
Bill Payments $549 $1,465 $1,465 $1,478 $1,737 $1,737 $1,739 $1,737 $1,737 $1,739 $1,737 $1,737
Subtotal Spent on Operations $8,049 $8,965 $8,965 $8,978 $9,237 $9,237 $9,239 $9,237 $9,237 $9,239 $9,237 $9,237
Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $8,049 $8,965 $8,965 $8,978 $9,237 $9,237 $9,239 $9,237 $9,237 $9,239 $9,237 $9,237
Net Cash Flow ($8,049) ($8,965) ($8,965) ($8,603) ($8,825) ($7,737) ($7,364) ($7,325) ($6,237) ($6,614) ($6,650) ($7,737)
Cash Balance $99,801 $90,836 $81,871 $73,268 $64,444 $56,707 $49,343 $42,018 $35,781 $29,167 $22,518 $14,781
Page 5
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet

Assets Starting Balances
Current Assets
Cash $107,850 $99,801 $90,836 $81,871 $73,268 $64,444 $56,707 $49,343 $42,018 $35,781 $29,167 $22,518 $14,781
Accounts Receivable $0 $0 $0 $0 $1,125 $2,213 $2,213 $3,338 $4,425 $4,425 $3,300 $2,213 $2,213
Other Current Assets $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Total Current Assets $110,850 $102,801 $93,836 $84,871 $77,393 $69,656 $61,919 $55,680 $49,443 $43,206 $35,467 $27,730 $19,993
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $110,850 $102,801 $93,836 $84,871 $77,393 $69,656 $61,919 $55,680 $49,443 $43,206 $35,467 $27,730 $19,993
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $500 $1,416 $1,416 $1,420 $1,679 $1,679 $1,681 $1,679 $1,679 $1,681 $1,679 $1,679 $1,681
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $500 $1,416 $1,416 $1,420 $1,679 $1,679 $1,681 $1,679 $1,679 $1,681 $1,679 $1,679 $1,681
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $500 $1,416 $1,416 $1,420 $1,679 $1,679 $1,681 $1,679 $1,679 $1,681 $1,679 $1,679 $1,681
Paid-in Capital $115,000 $115,000 $115,000 $115,000 $115,000 $115,000 $115,000 $115,000 $115,000 $115,000 $115,000 $115,000 $115,000
Retained Earnings ($4,650) ($4,650) ($4,650) ($4,650) ($4,650) ($4,650) ($4,650) ($4,650) ($4,650) ($4,650) ($4,650) ($4,650) ($4,650)
Earnings $0 ($8,965) ($17,930) ($26,899) ($34,636) ($42,373) ($50,112) ($56,349) ($62,586) ($68,825) ($76,562) ($84,299) ($92,038)
Total Capital $110,350 $101,385 $92,420 $83,451 $75,714 $67,977 $60,238 $54,001 $47,764 $41,525 $33,788 $26,051 $18,312
Total Liabilities and Capital $110,850 $102,801 $93,836 $84,871 $77,393 $69,656 $61,919 $55,680 $49,443 $43,206 $35,467 $27,730 $19,993
Net Worth $110,350 $101,385 $92,420 $83,451 $75,714 $67,977 $60,238 $54,001 $47,764 $41,525 $33,788 $26,051 $18,312
Page 6

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Copyright © Palo Alto Software, Inc., 1995-2008 All rights reserved.

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

1.0 Executive Summary.............................................................................................................................1

1.0 Executive Summary

1.1 Keys to Success

2. Cost-effective personal interaction with local consultant presence. Personal

3. A diverse network of consultants and alliance partners. Solving the unique

2.0 Company Summary

Cambridge Strategy Group is a North Carolina-based consulting firm that responds to

OPPORTUNITIES AND THREATS

2.1 Start-up Summary

Table: Start-up Funding

Liabilities and Capital

Loss at Start-up (Start-up Expenses) ($4,650)

Total Capital and Liabilities $110,850

Total Funding $115,500

Total Requirements $115,500

3.1 Service Description

1. Management consulting: business strategy, organizational development, profit

3.3 Future Services

Starting from North Carolina, our three-part growth strategy is as follows:

4.0 Market Analysis Summary

4.1 Market Segmentation

3. Economic: Current economic conditions are continuing to challenge investors' views

4. Social: Ac cording to a Small Business Administration report, U.S. small business is at an

Table: Market Analysis

4.2 Target Market Segment Strategy

2. Threat of Conventional Competitors: No other conventional competitor owns the

4.2.1 Market Growth

Market Attractiveness Summary

Factor Weight Score Weighted Score

Strategic Value .3 9.0 2.7

Market Size .3 9.0 2.7

Market Growth .1 5.0 0.5

Potential for .3 9.0 2.7

4.2.2 Market Trends

· Of the 4.5 million workers in high-technology oc cupations (scientists, engineers, computer

4.2.3 Market Needs

Customer Objectives Resources Needs

4.3 Service Business Analysis

4.3.1 Competition and Buying Patterns

4.3.2 Business Participants

5.0 Strategy and Implementation Summary

5.1 SWOT Analysis

Strengths Weaknesses Distinctive

Opportunities Threats Key Success Factors

STRENGTHS AND WEAKNESSES

5.2 Value Proposition

· Foc us on helping small businesses to start moving in the right direction;

5.3 Marketing Strategy

5.3.1 Positioning Statement

5.3.2 Pricing Strategy

5.3.3 Distribution Strategy

5.3.4 Promotion Strategy

· Foc us on helping small businesses start moving in the right direction;

5.4 Sales Forecast

Table: Sales Forecast