company History

BillCutterz.com was launched in May 2009 when Barry Gross decided to pursue a business opportunity presented to him by a close friend. During a visit with long-time friend and mortgage banker Mindy Niles, Gross asked if she could give him advice for lowering his mortgage payment. Niles told Gross he should request that his lender eliminate his PMI insurance requirement since the equity in his home had grown since the time of purchase. Gross called his lender and was able to save $180 per month. He thanked his friend and told her he had successfully negotiated reductions in his monthly cable and mobile phone bills and he could try to lower hers as well if she wished. Niles agreed and was later thrilled when she learned that Gross had reduced the amounts she was charged for the services by 50 percent. It was then that Niles pushed Gross to turn his negotiating skills into a business.

Billcutterz.coms business model and strategy

BillCutterz.com's customer value proposition was easy for potential customers to understand. The company would negotiate lower rates on their monthly bills for such services as electricity and utilities, Internet, phone, waste management, and cable or satellite television. No fee was charged for BillCutterz.com's services unless savings were negotiated on behalf of its customer. Once savings were obtained and the customer had received revised bills from providers, BillCutterz.com would receive one-half of the savings for the first year. Customers could elect to pay the fee to BillCutterz.com in a single payment or in 12 equal payments over one year. Customers paying in a single payment received a 10 percent discount on the bill negotiation fee. Service providers usually provided the discount for 12 months, at which time the discount could be renegotiated.The companys strategy was also keyed to gaining referrals from existing clients, asking clients to provide more bills to negotiate, and building name recognition through social media marketing. The exposure fromMens Health, ABC World News Tonight,and Fox Business News had resulted in tens of thousands of new enrolees in just a matter of weeks. Gross was excited about the rapid growth in clients but was also investigating the possibility of developing a referral system to produce a steady stream of new enrolees. The only drawback to free media exposure was that it had produced large spikes in enrolments that stressed the companys ability to serve new customers in a timely manner. Barry Gross believed that a referral system would provide predictable growth that would allow personnel to be added and trained on a planned schedule. The appeal of BillCutterz.coms business model and strategy had allowed its revenues to grow to $92,000 during the first five months of 2014. The companys income statements for 2013 through May 31, 2014, are presented in Exhibit 1. The companys balance sheets for 2013 and the first five months of 2014 are presented in Exhibit 2.

note: Financials have been disguised for confidentiality purposes but reflect actual growth rates and percentage composition.

EXHIBIT 1

Income Statements for BillCutterz.com, 2013 and Five Months Ending May 31, 2014

EXHIBIT 2

Balance Sheets for BillCutterz.com, 2013 and Five Months Ending May 31, 2014

Billcutterz.com Financial Analysis, Annual 2013, JanMay 2014 and Annualized 2014

QES

you should write no less than 500 words:

Conduct an analysis of Billcutterz.coms financial statements. Where is the company strong and/or growing? Where is the company weak? What is your opinion regarding why the company may be weak in this area?What is your overall assessment of the current financial condition of Billcutterz.com?

EXHIBIT 1 Income Statements for BIlICutterz.com, 2013 and Five Months Ending May 31, 2014 Jan-May 2014 2013 Revenues Wages Computeand Internet Merchant processing fees Office supplies Rent Telephone Other expenses Total expenses Net income $92170 76.496 656 2.686 5,037 4,066 1,164 2.028 92133 $ 37 $89.612 16.429 685 1,117 4.209 7188 1,830 568 32.027 $57,585 Note: Finanlals have been disquised for confidentialty purposes but renact acbual growth raes and percentage composition