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6. Contingency Plans
There are several factors that might cause a business to go out of the market. Below are the possible solutions to solve those obstacles:
A. Lack of fund/cash shortage:
Originally the entire operation is designed to be funded by the three founders’
capital, membership fee received in advance and temporary receipts for partners of the service they offer to our members. If there is shortage in working capital, founders can inject another CNY one million in equity. The company also has a CNY one million line of credit from the Bank of China in Beijing.
B. Market share too small to allow business turn profit
1) Low market acceptance: The designed business model is new and not yet being implemented successfully in anywhere in China, so we will invest heavily in educating home buyers and sellers by organizing fairs and road shows in local communities in Beijing.
2) Keen market competition: The competition is unavoidable, so we will continue to provide authentic information and customer-orientated services to our members.
3) Lost entry barrier: The company will form an entry barrier by creating a prestigious brand recognition using the premium services with affordable cost to its members and partners.
C. Lack of talent people.
1) Technical skills unavailable: As the capital of China where dozens of universities located, technical talent labor supply is never a problem.
2) Can’t retain professional staff: The company offers premium salary and free on-job training to its staffs, which is rare in the Beijing job market. Employees are also required to sign at least two- year work contacts before eligible for the training.
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Glossary
商品房 Commercialized Buildings
The property usage right which owned by private or legal entity and can be traded publicly in the market. It includes residential property (住宅), indemnificatory housing (保障性住房), commercial property (商业营业用房) and office buildings (写字楼/办公楼).
住宅 Residential property22
The property specialized for citizens to live and can’t operate any business.
写字楼/办公楼 Office building23
The property specialized for office works which is normally several floors high and managed by the property management company.
商业营业用房 Commercial property
A property specialized for commercial business operation, such as shops, and has to pay higher rate for utility. The usage right is 40 years.
保障性住房 indemnificatory housing24
A special type of house or apartment only for the low income families and built by the regional government. It includes 廉租住房、公共租赁住房、经济适用住房 and 限价商品住房
旅游地产 Leisure property
The property or building is built for tourists, such as hotel or resort.
新房 Newly-constructed housing
The residential property is constructed and still own by the real estate developer, not the actual users
存量房 Residential property
The residential property that including unsold newly-constructed housing and residential property traded from one party to another
22 Defined by Baidu, http://baike.baidu.com/view/58553.htm, 2013/6/30
23 Defined by Baidu http://baike.baidu.com/view/277736.htm, 2013/6/30
24 Defined by Baidu, http://baike.baidu.com/view/1481486.htm, 2013/6/30
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ESCROW25
Escrow generally refers to money held by a third-party on behalf of transacting parties. It is best known in the United States in the context of real estate (specifically in mortgages where the mortgage company establishes an escrow account to pay property tax and insurance during the term of the mortgage). Escrow is an account separate from the mortgage account where deposit of funds occurs for payment of certain conditions that apply to the mortgage, usually property taxes and insurance.
Temporary Receipts (暂收款)
The accounting term means the payment received temporary by one company for its partners or 3rd parties from customers or suppliers. It will pay back to the original receiver within months.
25 Defined by Wikipedia, http://en.wikipedia.org/wiki/Escrow, 2013/6/30
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Reference
(English)
1. The perfect business plan made simple, William R. Lasher, New York : Broadway Books, c2005
2. Real estate brokerage : a management guide, 5th edition, John E. Cyr, Joan m.
Sobeck, Laurel D. McAdams, Chicago [Ill.] : Real Estate Education Co., 1999 3. Real estate principles ,11th ed , Charles J. Jacobus, Mason, Ohio : Cengage
Learning, c2010
4. Real Estate Apps, Zillow, http://www.zillow.com/mobile/
(Chinese)
1. Bule book of real estate, annual report on the development of China’s real estate (No.10) (房地產藍皮書 中国房地产发展报告 No.10), 1st edition, Beijing China, Social Sciences Academic Press (China), April 2013
2. iResearch China E-Commerce case study in Real Estate Research Report - EJU.com
(中国房地產電子商務行業典型企業案例研究報告-易居購房網 2012 年), iResearch Consulting Group, 2012/3/19
3. Trend of Chinese real estate e-commerce development and enterprise penetration strategy research ( 中 國 房 產 電 商 發 展 趨 勢 及 企 業 參 與 策 略 研 究 ) , http://www.chinadmd.com/file/zuocwzzoaz6cowuxvvzezesa_1.html, 2013/4/12 4. iResearch China E-Commerce of Real Estate Research Report (中国房地產電子
商務市場研究報告 2011 年), iResearch Consulting Group, 2012/3/19
5. A Business Plan for RICH Network & Technology Ltd., (睿誠網絡科技有限公 司創業計劃), Wang Jing(王君), Master Thesis, Xiamen University , 2009 April
6. 不動產仲介市場分析, 初版, 李春長, 臺北市, 文笙書局 , 2002
7. 《办法》实施将破解房地产经纪行业三大问题, Xinhua News (新華網),
http://news.xinhuanet.com/fortune/2011-01/28/c_121037052.htm, 2011-01-28 18:08:22,
8. 2012 China Internet Economics Summary Report (2012 年中國網絡經濟總結 報告), iResearch Consulting Group (艾瑞咨询) , 2013/January,
9. 艾瑞咨询：房地产网络营销持续升温 互联网广告成房地产企业新宠,
http://news.iresearch.cn/0402/20110311/134572.shtml, 2011/5/9,
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10. 地產快機 http://www.dichanphone.com/HTMLPage/webhelp/index.htm 11. 易居電商網, http://www.eju.com/
12. 搜房電子商務平台, http://pai.soufun.com
13. 北大法律英文網 http://www.lawinfochina.com/index.aspx
14. 2012 年 1-6 月 司 法 行 政 统 计 数 据 及 分 析 , 北 京 市 司 法 局 , http://www.bjsf.gov.cn/publish/portal0/tab83/info13348.htm (2013/5/20)
15. 北 京 市 2012 年 国 民 经 济 和 社 会 发 展 统 计 公 报 , 北 京 統 計 信 息 網 http://www.bjstats.gov.cn/xwgb/tjgb/ndgb/201302/t20130207_243837.htm (2013/5/20)
16. 2012 年 北 京 市 房 地 产 市 场 运 行 情 况 , 北 京 統 計 信 息 網 , http://www.bjstats.gov.cn/sjjd/jjxs/201301/t20130121_242365.htm (2013/5/20) Major government offices and professional associations
1. (中央) 中國普法網 http://www.legalinfo.gov.cn/
2. (地方機關) 北京市司法局
http://www.bjsf.gov.cn/publish/portal0/tab83/info13348.htm 3. (行業協會) 中国房地产估价师学会 http://www.cirea.org.cn/
4. (行業協會) 中國房地產經紀人學會 (中房學) http://www.agents.org.cn/
5. 北京市住房和城鄉建設委員會 (住建委)
http://www.bjjs.gov.cn/publish/portal0/tab2238/
6. 北京市存量房交易服務平台 http://210.75.213.188/shh/portal/bjjs/index.aspx
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Appendix A
Below are the five year detail sales and financial forecasts of Beijing Mobile Realty Inc.,
Year 1 Forecast
A forecasted sale for each product is as follow:
Product A: Advertisement Assumption: 1) First six months is free of charge as promotion 2) Annual Growth Rate 8.00%
Year 1 Monthly Advertisement Income (Unit: 10,000 CNY)
Area of Business in Beijing Market share \Month 1 2 3 4 5 6 7 8 9 10 11 12
Web Commercial of Residential house 6,757 1.00% - - - - - - 6 6 6 6 6 6 Ad. Of Commercial property 2,759 0.50% - - - - - - 1 1 1 1 1 1 Ad of office building 3,848 0.50% - - - - - - 2 2 2 2 2 2
- - - - - 9 9 9 9 9 9
- - - - - 9 18 27 36 45 54 Market Volume
in 2012
Monthly Subtotal Yearly Aggregated Total
Product B: Professional Memenbership Fee Time to Market: Assumption:1) Annual Growth Rate 8.00% 2) Annual income per user 200 Professional AdvisorsYear 1 Monthly Membership Income (Unit: 10,000 CNY)
Area of Business in Beijing 2012 Estimation (in person) Market share \Month 1 2 3 4 5 6 7 8 9 10 11 12
Licienced Real-Estate Biz Professional 100,000 3% - - - 5 5 5 5 5 5 5 5 5
- - 5 10 15 20 25 30 35 40 45 Yearly Aggregated Total
2013/10/1
Product C: Seller Membership fee (Unit: 10,000 CNY) 250 Assumption: Annual Growth Rate 8.00% 2) Each sellers pay 150 for one time Ad processing fee and 100 for 2 months Ad.
Potential Sellers Year 1
Area of Business in Beijing (2X of 2012 Close sales) Market share \Month 1 2 3 4 5 6 7 8 9 10 11 12
Residential house (存量房) 287,260 1.50% - - - 9 9 9 9 9 9 9 9 9
- - 9 18 27 36 45 54 63 72 81 Yearly Aggregated Total
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Product D:Buyers Membership fee (Unit: 10,000 CNY) 120 Assumption: 1) Buyer volume = Sell volume 2) Annual Growth Rate: 8.00% 3)Each buyer pay 120 for 3 months membership Potential Sellers Year 1
Area of Business in Beijing (2X of 2012 Close sales) Market share \Month 1 2 3 4 5 6 7 8 9 10 11 12
Residential house (存量房) 287,260 1.50% - - - 4 4 4 4 4 4 4 4 4 Yearly Aggregated Total - - - 4 8 12 16 20 24 28 32 36
Product X: Case Referral Commission (Unit: 10,000 CNY) Assumption: 1) 8% Annual Growth Rate
Year 1 Projectd Project
Area of Business in Beijing Market Volumn (Unit:100Million) Market Shared Income
Residential house 2012 Total Sales 3,308.00 Counselling fee: 0.05% Referal fee: 2.00% 1.00% 4 Commercial property 2012 Total Investment 275.90 Counselling fee: 0.20% Referal fee: 2.00% 0.20% -Office building 2012 Total Investment 384.80 Counselling fee: 0.20% Referal fee: 2.00% 0.20%
-Yearly Total 4
Pro d u ct Y: Sale Referral Co mmisio n (Un it: 1 0 ,0 0 0 CNY) Assumption: 1) 8 % Annual Growth Rate
Year 1 Projectd Project
Area of Business in Beijing Market Volumn (Unit:100Million) Market Shared Income
Residential house 2012 Total Sales 3,308.00 Comm. Rate: 1.00% Referal fee: 0.10% 1.00% 4 Commercial property 2012 Total Investment 275.90 Comm. Rate: 2.50% Referal fee: 0.50% 0.20% 1 Office building 2012 Total Investment 384.80 Comm. Rate: 2.00% Referal fee: 0.40% 0.20% 1
Yearly Total 6
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A projected salary plan, staff plan and salary expenditure is as follow:
Annual salary growth rate: 8% Annual headcount Growth Rate: 15%
Type Rank Title Base stock option Max Salary Mean Salary
O1 General 2,800 4,500 3,500
O2 Skill workers 5,000 8,000 6,500
O3 Professional 7,000 10,000 8,000
O4 Manager 8,000 11,000 8,500
O5 Vice President 10,000 contract base 12,000 11,000 O6 President 11,000 contract base 16,000 13,000
S1 Sales 1,500 5,500 5,000
S2 Senior Sales 2,000 8,000 6,000
S3 Asst. Sale Manager 2,500 10,000 7,000
S4 Sale Manager 3,000 10,000 8,500
S5 Sale Vice President 3,500 contract base 12,000 10,000 Sales
Office
Salary Plan Year 1
Office Type Position \ Month @Salary 1 2 3 4 5 6 7 8 9 10 11 12
A Clerical worker 3,780 3,780 3,780 3,780 7,560 7,560 7,560 11,340 11,340 11,340 11,340 11,340 11,340 A Vice President 11,880 23,760 23,760 23,760 23,760 23,760 23,760 23,760 23,760 23,760 23,760 23,760 23,760 A President/CEO 14,040 14,040 14,040 14,040 14,040 14,040 14,040 14,040 14,040 14,040 14,040 14,040 14,040 T CSR Staff 3,780 3,780 3,780 3,780 7,560 7,560 7,560 11,340 11,340 11,340 11,340 11,340 11,340 T Senior CSR/Tech. Eng. 7,020 14,040 14,040 14,040 14,040 14,040 14,040 21,060 21,060 21,060 28,080 28,080 28,080 T Professional Advisers 8,640 34,560 34,560 34,560 34,560 34,560 34,560 34,560 34,560 34,560 34,560 34,560 34,560 S Sales personal 5,400 16,200 16,200 16,200 21,600 21,600 21,600 21,600 21,600 21,600 27,000 27,000 27,000 S Sales Manager 9,180 - - -
-110,160 110,160 110,160 123,120 123,120 123,120 137,700 137,700 137,700 150,120 150,120 150,120 A Administrative 41,580 41,580 41,580 45,360 45,360 45,360 49,140 49,140 49,140 49,140 49,140 49,140 T Tech & Supprot 52,380 52,380 52,380 56,160 56,160 56,160 66,960 66,960 66,960 73,980 73,980 73,980 S Sales & Marketing 16,200 16,200 16,200 21,600 21,600 21,600 21,600 21,600 21,600 27,000 27,000 27,000 Subtotal
without Social Benefit
Total without Social Benefit Beijing Main
Office
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8%Projected Annual Growth Rate
( Unit: 10,000 CNY, except per share data) Q1 Q2 Q3 Q4 Total
Revenue
Advertisement (Product A) 0.00 0.00 27.00 27.00 54.00
Professional Memenbership fee (Product B) 0.00 10.00 10.00 10.00 30.00
Sellers Memenbership fee (Product C) 0.00 18.00 18.00 18.00 54.00
Buyers Memenbership fee (Product D) 0.00 8.00 8.00 8.00 24.00
Case Referral Commission (Product X) 1.00 1.00 1.00 1.00 4.00
Sale Referral Commission (Product Y) 1.50 1.50 1.50 1.50 6.00
Subtotal of Revenue 2.50 38.50 65.50 65.50 172.00
Cost of Domestic Sales
Depreciation of Computer HW & SW 2.58 2.58 2.58 2.58 10.32
IDC storage and internet Fee 43.80 43.80 43.80 43.80 175.20
Technical support staff salaries 22.47 24.09 28.73 31.74 107.03
Subtotal of Cost of Domestic Sales 68.85 70.47 75.11 78.12 292.55
Sales Tax (17%) 0.43 6.55 11.14 11.14 29.26
Gross Margin (66.78) (38.52) (20.75) (23.76) (149.81)
Opertion and Management Expense
Sales Related Staff Salary 6.95 9.27 9.27 11.58 37.07
Sales & Marketing Expense (1% of sales) 0.03 0.39 0.66 0.66 1.72
Transaction Insurance fee (0.02% ot quaterly sales) 0.01 0.08 0.13 0.13 0.34
Administrative Staff Salary 17.84 19.46 21.08 21.08 79.46
Office Rent 6.00 6.00 6.00 6.00 24.00
Office MISC Expense (1% of sales) 0.03 0.39 0.66 0.66 1.72
Subtotal of Operation and Management Expense 30.86 35.59 37.80 40.11 144.31 Earning Before Interest and Tax (EBIT) (97.64) (74.11) (58.55) (63.87) (294.12)
Interest (8% annual) 0.00 0.00 0.00 0.00 0.00
Earning Before Tax (EBT) (97.64) (74.11) (58.55) (63.87) (294.12)
Provision for income taxes (25% of EBT) 0.00 0.00 0.00 0.00 0.00
First Year By Quarter Income Statement Sheet Beijing Mobility Reality Inc.
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(Unit: 10,000 CNY, except per share data) Ope nning Q1 Q2 Q3 Q4
ASSETS
Cash and cash equivalents 28.40 200.02 156.49 88.53 42.24
Accounts receivable (Product A) 0.00 0.00 0.00 27.00 27.00
Cash in banks 20.00 20.00 20.00 20.00 20.00
Total Curre nt As s e t 48.40 220.02 176.49 135.53 89.24
Fixed Assets 51.60 51.60 51.60 51.60 51.60
Accumulated depreciation and amortization 0.00 (2.58) (5.16) (7.74) (10.32)
Ne t Fixe d As s e ts 51.60 49.02 46.44 43.86 41.28
Total As s e ts 100.00 269.04 222.93 179.39 130.52
LIABILITIES
Revenue received in advance (Product B) 0.00 0.00 15.00 30.00 45.00
Revenue received in advance (Product C&D) 0.00 0.00 13.00 13.00 13.00
Accrued interest payable 0.00 0.00 0.00 0.00 0.00
Income taxes payable 0.00 0.00 0.00 0.00 0.00
Temporary Receipts (Product X- full service fee) 0.00 16.67 16.67 16.67 16.67
Temporary Receipts (Product Y-0.5% downpayment) 0.00 250.00 250.00 250.00 250.00
Total curre nt liabilitie s 0.00 266.67 294.67 309.67 324.67
Long-term loan liabilities 0.00 0.00 0.00 0.00 0.00
Total Liabilitie s 0.00 266.67 294.67 309.67 324.67
EQUITIES
Shareholders' equity 100.00 100.00 100.00 100.00 100.00
Retained earnings-unappropriated 0.00 (97.64) (171.74) (230.29) (294.15)
Total s hare holde rs e quity 100.00 2.37 (71.74) (130.29) (194.15)
Total liabilitie s and s hare holde rs e quity 100.00 269.04 222.93 179.39 130.52 First Year By Quarter
Beijing Mobility Reality Inc.
Consolidated Balance Sheet
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( Unit: 10,000 CNY, except per share data) Q1 Q2 Q3 Q4 Total
1.Operating Activities, cash flows provided by or used in:
Net Income (97.64) (74.11) (58.55) (63.87) (294.15)
Depreciation and Amortization 2.58 2.58 2.58 2.58 10.32
Decr/(Incr) in Account Receivable (Prod. A) 0.00 0.00 (27.00) 0.00 (27.00)
Incr/(Decr) in Revenue received in advance (Prod. B) 0.00 15.00 15.00 15.00 45.00
Incr/(Decr) in Revenue received in advance (Prod. C&D) 0.00 13.00 0.00 0.00 13.00
Incr/(Decr) in Temporary Receipts (Prod. X) 16.67 0.00 0.00 0.00 16.67
Incr/(Decr) in Temporary Receipts (Prod. Y) 250.00 0.00 0.00 0.00 250.00
Incr/(Decr) in Income Tax payable 0.00 0.00 0.00 0.00 0.00
Net cash flow from operating activities 171.62 (43.53) (67.97) (46.29) 13.84 2.Investing Activities, cash flows provided by or used in:
Decr/(Incr) in Property and equipment expenditures 0.00 0.00 0.00 0.00 0.00
Cash used for investing activities 0.00 0.00 0.00 0.00 0.00
3.Financing Activities, cash flows provided by or used in:
Incr/(Decr) in Long-term Loan liabilities 0.00 0.00 0.00 0.00 0.00
Incr/(Decr) in Accured Interest Payable 0.00 0.00 0.00 0.00 0.00
Net cash flow from financing activities 0.00 0.00 0.00 0.00 0.00
Net Cash Flow 171.62 (43.53) (67.97) (46.29) 13.84
Cash and cash equivalents at beginning of year 28.40 200.02 156.49 88.53
Net increase (decrease) in cash and cash equivalents 171.62 (43.53) (67.97) (46.29) 13.84
200.02 156.49 88.53 42.24
Beijing Mobility Reality Inc.
Consolidated Statement of Cash Flow First Year By Quarter
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Year 2 Forecast
A forecasted sale for each product is as follow:
Product A: Advertisement (Unit: 10,000 CNY)
Year 2 Annual Advertisement Income Area of Business in Beijing Market Volume Market Share Yearly Income
Web Commercial of Residential house 7,881 2.50% 197
Ad. Of Commercial property 3,218 1.50% 48
Ad of office building 4,488 1.50% 67
Yearly Total 197
Product B: Professional Memenbership Fee (Unit: 10,000 CNY) 2 Annual membership income Area of Business in Beijing Advisors Market share Yearly Income Licienced Real-Estate Biz Professional 116,640 5% 117
Yearly Total 117
Product C: Seller Membership fee (Unit: 10,000 CNY) 2 Annual membership income Area of Business in Beijing Potential Sellers Market share Yearly Income Residential house (存量房) 335,060 3.00% 251
Yearly Total 251
Product D:Buyers Mem bership fee (Unit: 10,000 CNY) 2 Annual membership income Area of Business in Beijing Potential Buyers Market share Yearly Income Residential house (存量房) 335,060 3.00% 10
Yearly Total 10
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A projected staffing plan and salary expenditure is as follow:
Product X: Case Referral Commission (Unit: 10,000 CNY)
Year 2 Projectd Project Area of Business in Beijing Market Volumn (Unit:100Million)Market Volume Market Shared Income
Residential house 2012 Total Sales 3,858.00 2.00% 8
Commercial property 2012 Total Investment 322.00 0.50% 1
Office building 2012 Total Investment 449.00 0.50% 1
Yearly Total 10
Product Y: Sale Referral Commision (Unit: 10,000 CNY) Year 2 Projectd Project Area of Business in Beijing Market Volumn (Unit:100Million)Market Volume Market Shared Income Residential house 2012 Total Sales 3,858.00 2.00% 8
Commercial property 2012 Total Investment 322.00 0.50% 2
Office building 2012 Total Investment 449.00 0.50% 2
Yearly Total 12
Salary Plan Year 2
Office Type Position \ Month @ Salary 1 2 3 4 5 6 7 8 9 10 11 12
A Clerical worker 4,409 8,818 13,227 13,227 13,227 13,227 13,227 13,227 13,227 13,227 13,227 13,227 13,227 A Vice President 13,857 27,714 27,714 27,714 27,714 27,714 27,714 27,714 27,714 27,714 41,571 41,571 41,571 A President/CEO 16,376 16,376 16,376 16,376 16,376 16,376 16,376 16,376 16,376 16,376 16,376 16,376 16,376 T CSR Staff 4,409 13,227 13,227 13,227 17,636 17,636 17,636 17,636 17,636 17,636 22,045 22,045 22,045 T Senior CSR/Tech. Eng. 8,188 32,752 32,752 32,752 32,752 32,752 32,752 32,752 32,752 32,752 32,752 32,752 32,752 T Professional Advisers 10,078 40,312 40,312 40,312 40,312 40,312 40,312 50,390 50,390 50,390 50,390 50,390 50,390 S Sales personal 6,299 37,794 37,794 37,794 37,794 37,794 37,794 44,093 44,093 44,093 44,093 44,093 44,093 S Sales Manager 10,708 - - - - - - 10,708 10,708 10,708 10,708 10,708 10,708 176,993 181,402 181,402 185,811 185,811 185,811 212,896 212,896 212,896 231,162 231,162 231,162 A Administrative 52,908 57,317 57,317 57,317 57,317 57,317 57,317 57,317 57,317 71,174 71,174 71,174 T Tech & Supprot 86,291 86,291 86,291 90,700 90,700 90,700 100,778 100,778 100,778 105,187 105,187 105,187 S Sales & Marketing 37,794 37,794 37,794 37,794 37,794 37,794 54,801 54,801 54,801 54,801 54,801 54,801 Subtotal
without Social Benefit
Total without Social Benefit Beijing Main
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8%Projected Annual Growth Rate
( Unit: 10,000 CNY, except per share data) Q1 Q2 Q3 Q4 Total
Revenue
Advertisement (Product A) 49.25 49.25 49.25 49.25 197.00
Professional Memenbership fee (Product B) 29.25 29.25 29.25 29.25 117.00
Sellers Memenbership fee (Product C) 62.75 62.75 62.75 62.75 251.00
Buyers Memenbership fee (Product D) 2.50 2.50 2.50 2.50 10.00
Case Referral Commission (Product X) 2.50 2.50 2.50 2.50 10.00
Sale Referral Commission (Product Y) 3.00 3.00 3.00 3.00 12.00
Subtotal of Revenue 149.25 149.25 149.25 149.25 597.00
Cost of Domestic Sales
Depreciation of Computer HW & SW 3.10 3.10 3.10 3.10 12.38
IDC storage and internet Fee 47.52 47.52 47.52 47.52 190.08
Technical support staff salaries 37.02 38.91 43.23 45.13 164.29
Subtotal of Cost of Domestic Sales 87.64 89.53 93.85 95.75 366.75
Sales Tax (17%) 25.37 25.37 25.37 25.37 101.48
Gross Margin 36.24 34.35 30.03 28.13 128.77
Opertion and Management Expense
Sales Related Staff Salary 16.21 16.21 23.51 23.51 79.44
Sales & Marketing Expense (1% of sales) 1.49 1.49 1.49 1.49 5.97
Transaction Insurance fee (0.02% ot quaterly sales) 0.30 0.30 0.30 0.30 1.19
Administrative Staff Salary 23.96 24.59 24.59 30.53 103.67
Office Rent 6.00 6.00 6.00 6.00 24.00
Office MISC Expense (1% of sales) 1.49 1.49 1.49 1.49 5.97
Subtotal of Operation and Management Expense 49.45 50.08 57.38 63.32 220.24 Earning Before Interest and Tax (EBIT) (13.21) (15.73) (27.35) (35.19) (91.47)
Interest (8% annual) 0.00 0.00 0.00 0.00 0.00
Earning Before Tax (EBT) (13.21) (15.73) (27.35) (35.19) (91.47)
Provision for income taxes (25% of EBT) 0.00 0.00 0.00 0.00 0.00
Beijing Mobility Reality Inc.
Income Statement Sheet Second Year By Quarter
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(Unit: 10,000 CNY, except per share data) Q1 Q2 Q3 Q4
ASSETS
Cash and cash equivalents 267.31 254.68 230.42 198.33
Accounts receivable (Product A) 49.25 49.25 49.25 49.25
Cash in banks 20.00 20.00 20.00 20.00
Total Curre nt As s e t 336.56 323.93 299.67 267.58
Fixed Assets 61.92 61.92 61.92 61.92
Accumulated depreciation and amortization (13.42) (16.51) (19.61) (22.70)
Ne t Fixe d As s e ts 48.50 45.41 42.31 39.22
Total As s e ts 385.06 369.33 341.98 306.80
LIABILITIES
Revenue received in advance (Product B) 29.00 29.00 29.00 29.00
Revenue received in advance (Product C&D) 21.75 21.75 21.75 21.75
Accrued interest payable 0.00 0.00 0.00 0.00
Income taxes payable 0.00 0.00 0.00 0.00
Temporary Receipts (Product X- full service fee) 41.67 41.67 41.67 41.67
Temporary Receipts (Product Y-0.5% downpayment) 500.00 500.00 500.00 500.00
Total curre nt liabilitie s 592.42 592.42 592.42 592.42
Long-term loan liabilities 0.00 0.00 0.00 0.00
Total Liabilitie s 592.42 592.42 592.42 592.42
EQUITIES
Shareholders' equity 100.00 100.00 100.00 100.00
Retained earnings-unappropriated (307.36) (323.09) (350.44) (385.62)
Total s hare holde rs e quity (207.36) (223.09) (250.44) (285.62)
Beijing Mobility Reality Inc.
Second Year By Quarter Consolidated Balance Sheet
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( Unit: 10,000 CNY, except per share data) Q1 Q2 Q3 Q4 Total
1.Operating Activities, cash flows provided by or used in:
Net Income (13.21) (15.73) (27.35) (35.19) (91.47)
Depreciation and Amortization 3.10 3.10 3.10 3.10 12.38
Decr/(Incr) in Account Receivable (Prod. A) (22.25) 0.00 0.00 0.00 (22.25)
Incr/(Decr) in Revenue received in advance (Prod. B) (16.00) 0.00 0.00 0.00 (16.00)
Incr/(Decr) in Revenue received in advance (Prod. C&D) 8.75 0.00 0.00 0.00 8.75
Incr/(Decr) in Temporary Receipts (Prod. X) 25.00 0.00 0.00 0.00 25.00
Incr/(Decr) in Temporary Receipts (Prod. Y) 250.00 0.00 0.00 0.00 250.00
Incr/(Decr) in Income Tax payable 0.00 0.00 0.00 0.00 0.00
Net cash flow from operating activities 235.39 (12.63) (24.25) (32.09) 166.41 2.Investing Activities, cash flows provided by or used in:
Decr/(Incr) in Property and equipment expenditures (10.32) 0.00 0.00 0.00 (10.32)
Cash used for investing activities (10.32) 0.00 0.00 0.00 (10.32)
3.Financing Activities, cash flows provided by or used in:
Incr/(Decr) in Long-term Loan liabilities 0.00 0.00 0.00 0.00 0.00
Incr/(Decr) in Accured Interest Payable 0.00 0.00 0.00 0.00 0.00
Net cash flow from financing activities 0.00 0.00 0.00 0.00 0.00
Net Cash Flow 225.07 (12.63) (24.25) (32.09) 156.09
Cash and cash equivalents at beginning of year 42.24 267.31 254.68 230.42
Net increase (decrease) in cash and cash equivalents 225.07 (12.63) (24.25) (32.09) 156.09
Cash and cash equivalents at end of year 267.31 254.68 230.42 198.33
Beijing Mobility Reality Inc.
Consolidated Statement of Cash Flow Second Year By Quarter
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Year 3 Forecast
A forecasted sale for each product is as follow:
Pro d u c t A: Ad v e rtise m e n t (Un it: 1 0 , 0 0 0 CNY)
Year 3 Annual Advertisement Income
Area of Business in Beijing Market Volume Market Share Yearly Income
Web Commercial of Residential house 8,511 3.50% 298
Ad. Of Commercial property 3,475 2.50% 87
Ad of office building 4,847 2.50% 121
Yearly Total 506
Pro d u ct B: Pro fessio n al Memen b ersh ip Fee (Un it: 1 0 ,0 0 0 CNY) Year 3 Annual membership income Area of Business in Beijing Advisors Market share Yearly Income Licienced Real-Estate Biz Professional 125,971 7% 176
Yearly Total 176
Pr oduct C: Seller M ember ship f ee ( Unit: 10, 000 CNY) Year 3 Annual membership income Area of Business in Beijing Potential Sellers Market share Yearly Income Residential house (存量房) 361,864 4.50% 407
Yearly Total 407
P roduct D :Buyers M em bers hip fee (U nit: 10,000 CN Y ) Year 3 Annual membership income Area of Business in Beijing Potential Buyers Market share Yearly Income Residential house (存量房) 361,864 4.50% 195
Yearly Total 195
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A projected staffing plan and salary expenditure is as follow:
Pro d u ct X: Case Referral Co mmissio n (Un it: 1 0 ,0 0 0 CNY)
Year 3 Projectd Project Area of Business in Beijing Market Volumn (Unit:100Million)Market Volume Market Shared Income
Residential house 2012 Total Sales 4,167.00 3.00% 13
Commercial property 2012 Total Investment 348.00 1.00% 1
Office building 2012 Total Investment 485.00 1.00% 2
Yearly Total 16
Pro d u ct Y: Sale Referral Co mmisio n (Un it: 1 0 ,0 0 0 CNY) Year 3 Projectd Project Area of Business in Beijing Market Volumn (Unit:100Million)Market Volume Market Shared Income Residential house 2012 Total Sales 4,167.00 3.00% 13
Commercial property 2012 Total Investment 348.00 1.00% 4
Office building 2012 Total Investment 485.00 1.00% 4
Yearly Total 21
Salary Plan Year 3
Office Type Position \ Month @ Salary 1 2 3 4 5 6 7 8 9 10 11 12
A Clerical worker 4,762 14,286 14,286 14,286 14,286 14,286 14,286 14,286 14,286 14,286 14,286 14,286 14,286 A Vice President 14,965 44,895 44,895 44,895 44,895 44,895 44,895 44,895 44,895 44,895 44,895 44,895 44,895 A President/CEO 17,686 17,686 17,686 17,686 17,686 17,686 17,686 17,686 17,686 17,686 17,686 17,686 17,686 T CSR Staff 4,762 23,810 23,810 23,810 23,810 23,810 23,810 28,572 28,572 28,572 33,334 33,334 33,334 T Senior CSR/Tech. Eng. 8,843 35,372 35,372 35,372 35,372 35,372 35,372 35,372 35,372 35,372 35,372 35,372 35,372 T Professional Advisers 10,884 54,420 54,420 54,420 54,420 54,420 54,420 65,304 65,304 65,304 65,304 65,304 65,304 S Sales personal 6,802 54,416 54,416 54,416 54,416 54,416 54,416 68,020 68,020 68,020 74,822 74,822 74,822 S Sales Manager 11,564 11,564 11,564 11,564 11,564 11,564 11,564 11,564 11,564 11,564 11,564 11,564 11,564
256,449
256,449 256,449 256,449 256,449 256,449 285,699 285,699 285,699 297,263 297,263 297,263 A Administrative 76,867 76,867 76,867 76,867 76,867 76,867 76,867 76,867 76,867 76,867 76,867 76,867 T Tech & Supprot 113,602 113,602 113,602 113,602 113,602 113,602 129,248 129,248 129,248 134,010 134,010 134,010 S Sales & Marketing 65,980 65,980 65,980 65,980 65,980 65,980 79,584 79,584 79,584 86,386 86,386 86,386
Subtotal without Social Benefit
Total without Social Benefit Beijing
Main Office
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8%Projected Annual Growth Rate
( Unit: 10,000 CNY, except per share data) Q1 Q2 Q3 Q4 Total
Revenue
Advertisement (Product A) 126.50 126.50 126.50 126.50 506.00
Professional Memenbership fee (Product B) 44.00 44.00 44.00 44.00 176.00
Sellers Memenbership fee (Product C) 101.75 101.75 101.75 101.75 407.00
Buyers Memenbership fee (Product D) 48.75 48.75 48.75 48.75 195.00
Case Referral Commission (Product X) 4.00 4.00 4.00 4.00 16.00
Sale Referral Commission (Product Y) 5.25 5.25 5.25 5.25 21.00
Subtotal of Revenue 330.25 330.25 330.25 330.25 1,321.00
Cost of Domestic Sales
Depreciation of Computer HW & SW 3.72 3.72 3.72 3.72 14.86
IDC storage and internet Fee 47.72 47.72 47.72 47.72 190.88
Technical support staff salaries 48.74 48.74 55.45 57.49 210.42
Subtotal of Cost of Domestic Sales 100.18 100.18 106.89 108.93 416.16
Sales Tax (17%) 56.14 56.14 56.14 56.14 224.56
Gross Margin 173.94 173.94 167.23 165.19 680.28
Opertion and Management Expense
Sales Related Staff Salary 28.31 28.31 34.14 37.06 127.82
Sales & Marketing Expense (1% of sales) 3.30 3.30 3.30 3.30 13.21
Transaction Insurance fee (0.02% ot quaterly sales) 0.66 0.66 0.66 0.66 2.64
Administrative Staff Salary 32.98 32.98 32.98 32.98 131.92
Office Rent 6.00 6.00 6.00 6.00 24.00
Office MISC Expense (1% of sales) 3.30 3.30 3.30 3.30 13.21
Subtotal of Operation and Management Expense 74.55 74.55 80.38 83.30 312.80
Earning Before Interest and Tax (EBIT) 99.38 99.38 86.84 81.88 367.48
Interest (8% annual) 0.00 0.00 0.00 0.00 0.00
Earning Before Tax (EBT) 99.38 99.38 86.84 81.88 367.48
Provision for income taxes (25% of EBT) 24.85 24.85 21.71 20.47 91.87
Beijing Mobility Reality Inc.
Income Statement Sheet Thrid Year By Quarter
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(Unit: 10,000 CNY, except per share data) Q1 Q2 Q3 Q4
ASSETS
Cash and cash equivalents 655.21 758.31 848.87 934.47
Accounts receivable (Product A) 126.50 126.50 126.50 126.50
Cash in banks 20.00 20.00 20.00 20.00
Total Curre nt As s e t 801.71 904.81 995.37 1,080.97
Fixed Assets 74.30 74.30 74.30 74.30
Accumulated depreciation and amortization (26.42) (30.13) (33.85) (37.56)
Ne t Fixe d As s e ts 47.88 44.17 40.45 36.74
Total As s e ts 849.60 948.98 1,035.82 1,117.70
LIABILITIES
Revenue received in advance (Product B) 44.00 44.00 44.00 44.00
Revenue received in advance (Product C&D) 50.17 50.17 50.17 50.17
Accrued interest payable 0.00 0.00 0.00 0.00
Income taxes payable 24.85 49.70 71.41 91.88
Temporary Receipts (Product X- full service fee) 66.67 66.67 66.67 66.67
Temporary Receipts (Product Y-0.5% downpayment) 875.00 875.00 875.00 875.00
Total curre nt liabilitie s 1,060.69 1,085.54 1,107.25 1,127.72
Long-term loan liabilities 0.00 0.00 0.00 0.00
Total Liabilitie s 1,060.69 1,085.54 1,107.25 1,127.72
EQUITIES
Shareholders' equity 100.00 100.00 100.00 100.00
Retained earnings-unappropriated (311.09) (236.56) (171.43) (110.01)
Total s hare holde rs e quity (211.09) (136.56) (71.43) (10.01)
Consolidated Balance Sheet Beijing Mobility Reality Inc.
Third Year By Quarter
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( Unit: 10,000 CNY, except per share data) Q1 Q2 Q3 Q4 Total
1.Operating Activities, cash flows provided by or used in:
Net Income 74.53 74.53 65.13 61.41 275.61
Depreciation and Amortization 3.72 3.72 3.72 3.72 14.86
Decr/(Incr) in Account Receivable (Prod. A) (77.25) 0.00 0.00 0.00 (77.25)
Incr/(Decr) in Revenue received in advance (Prod. B) 15.00 0.00 0.00 0.00 15.00
Incr/(Decr) in Revenue received in advance (Prod. C&D) 28.42 0.00 0.00 0.00 28.42
Incr/(Decr) in Temporary Receipts (Prod. X) 25.00 0.00 0.00 0.00 25.00
Incr/(Decr) in Temporary Receipts (Prod. Y) 375.00 0.00 0.00 0.00 375.00
Incr/(Decr) in Income Tax payable 24.85 24.85 21.71 20.47 91.88
Net cash flow from operating activities 469.26 103.10 90.56 85.60 748.52 2.Investing Activities, cash flows provided by or used in:
Decr/(Incr) in Property and equipment expenditures (12.38) 0.00 0.00 0.00 (12.38)
Cash used for investing activities (12.38) 0.00 0.00 0.00 (12.38)
3.Financing Activities, cash flows provided by or used in:
Incr/(Decr) in Long-term Loan liabilities 0.00 0.00 0.00 0.00 0.00
Incr/(Decr) in Accured Interest Payable 0.00 0.00 0.00 0.00 0.00
Net cash flow from financing activities 0.00 0.00 0.00 0.00 0.00
Net Cash Flow 456.88 103.10 90.56 85.60 736.14
Cash and cash equivalents at beginning of year 198.33 655.21 758.31 848.87
Net increase (decrease) in cash and cash equivalents 456.88 103.10 90.56 85.60 736.14
655.21 758.31 848.87 934.47
Beijing Mobility Reality Inc.
Consolidated Statement of Cash Flow Third Year By Quarter
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Year 4 Forecast
A forecasted sale for each product is as follow:
Pro d u ct A: Ad v ertisemen t (Un it: 1 0 ,0 0 0 CNY)
Year 4 Annual Advertisement Income Area of Business in Beijing Market Volume Market Share Yearly Income
Web Commercial of Residential house 9,192 4.50% 298
Ad. Of Commercial property 3,753 3.50% 131
Ad of office building 5,235 3.50% 183
Ad of office building 5,235 3.50% 183