Carpet and Upholstery Cleaning Services

Like New Carpet Cleaners is a local carpet-cleaning service in Fairfield County, Connecticut. Established in June 2009, Like New Carpet Cleaners was founded by Fred and Rebecca Smith and operates out of their home office in Danbury, CT.

Company Ownership

Fred and Rebecca Smith founded Like New Carpet Cleaners in June 2009 as an LLC. Each owns 50% of the company.

Start-up Summary

The startup expenses for the business primarily include:

  1. Website: Development and testing of a website with functionality for online ordering, scheduling, rescheduling, and customer support. ($30,000 estimate)
  2. Delivery Van: Purchase of a delivery van for transporting cleaning staff and equipment to customer homes. One van will be used to transport multiple cleaning crews during initial operations. ($15,000 estimate)
  3. Cleaning Equipment: 3 portable extractors and additional specialized equipment for cleanings. ($15,000 estimate)

The business will operate out of a home office, minimizing initial rent and overhead costs.

Carpet and Upholstery Cleaning Services Company Summary

Start-up Requirements

——————

Legal: $1,500

Stationery etc.: $1,000

Insurance: $2,000

Rent: $1,000

Website: $30,000

Other: $2,000

Total Start-up Expenses: $37,500

Start-up Assets

——————

Cash Required: $30,000

Other Current Assets: $0

Long-term Assets: $30,000

Total Assets: $60,000

Total Requirements: $97,500

Services

——–

Like New Carpet Cleaners services and products will include:

– Regular Carpet Cleaning

– Spot Treatment for Carpets

– Furniture Cleaning

– Leather Furniture Cleaning

– Area Rugs

– Gift Certificates

The company will focus on cleaning carpets, rugs, and upholstered items and will seek to build and maintain its expertise in this area; its services will not include hardwood floors or other home-cleaning services.

Through its website, the company will offer the service of easy scheduling and the set-up of automated recurring appointments for its regular customers.

Market Analysis Summary

———————-

The U.S. carpet and upholstery cleaning service sector was estimated at $5.3 billion in 2006 by Marketdata Enterprises. The market is broken into residential and commercial services. While only moderate growth is estimated for the next five years, the national market is highly competitive.

The initial market for Like New Carpet Cleaners is residential services in Fairfield County, CT, beginning with a five-mile radius of Danbury, CT. The population of Fairfield County is approximately 895,000 with 225,000 owner-occupied condos and homes. It is estimated that 40,000 of these owner-occupied homes and condos are within that five-mile radius. These 40,000 owners spend an estimated $4 million per year on carpet, upholstery, and other floor-cleaning services. For that reason, we have chosen this as our initial market.

Market Segmentation

——————-

Customers for this industry are broken into the following targets:

– Residences (including individuals, families, and landlords)

– Businesses (including small businesses, larger businesses, insurance companies, and commercial landlords)

Residences require a higher level of customer support, pay higher rates on average, and often include additional opportunities to sell related services to homeowners.

Businesses require less customer support and service, pay lower rates on average, and generally seek ongoing services which can repeat the same tasks without much room for upselling.

Carpet and Upholstery Cleaning Services Company Summary

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Potential Customers Growth

Large Homes 25% 10,000 12,500 15,625 19,531 24,414 25.00%

Medium Homes 25% 20,000 25,000 31,250 39,063 48,829 25.00%

Condos and Small Homes 25% 10,000 12,500 15,625 19,531 24,414 25.00%

Total 25.00% 40,000 50,000 62,500 78,125 97,657 25.00%

Target Market Segment Strategy

Like New Carpet Cleaners will focus on residential cleaning services instead of businesses. Residential customers are more likely to embrace technological advances and internet customer service. The market is divided into:

-Large homes (over 5,000 square feet) have many rooms needing regular service and upholstery and spot treatments.

-Medium homes (2,000 to 5,000 square feet) have a couple of rooms needing regular service and may require service as often or more often than large homes.

-Small homes and condos (under 2,000 square feet) generally have at least one carpeted room requiring regular service.

Service Business Analysis

The carpet-cleaning business consists of multiple local businesses and some national franchises serving towns. Each town can have from 10 to 20 businesses. Services are mostly managed from a central office, and delivery vans are used to transport equipment and cleaning crews. Large homes require on-site consultations for accurate quotes, while small businesses rely on phone conversations for pricing information.

Competition and Buying Patterns

The carpet and upholstery industry in the U.S. is comprised of 40,000 mostly small companies. Although large franchised organizations exist, they make up only 22% of the market. Customers choose between competitors based on brand name, positive references from trusted sources, and price. Small businesses are perceived to offer the same quality as known brands, making positive word-of-mouth more important.

Web Plan Summary

The website for Like New Carpet Cleaners will simplify the process of ordering cleaning services and offer customization options. It will include graphics and tutorials for booking and scheduling, client testimonials, explanations on pricing, a list of services, and an "About us" page. Current customers will have account management tools to schedule and reschedule cleanings and set up recurring appointments.

Website Marketing Strategy

The website will be marketed through search engine marketing and optimization. Like New Carpet Cleaners will use Google Adwords for local carpet cleaning keywords and retain a search engine marketing firm for optimization. Content, including informative articles, will be added to establish the website as a resource for carpet cleaning information.

Development Requirements

The website will require front-end pages for sales, service, scheduling, contact, and legal disclaimers. The back-end will allow managers to adjust pricing and service options and integrate scheduling and orders with accounting and calendar systems.

Strategy and Implementation Summary

Like New Carpet Cleaning aims to expand rapidly within Fairfield County, CT, focusing on residential customers and proving scalability. The priorities include ensuring high-quality service, keeping overhead low by operating from one office, and building the brand around the promise of making carpets look "like new."

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Competitive Edge

The online platform of Like New Carpet Cleaning offers complete sales, service, and scheduling applications, providing convenience for customers and reducing operating costs. Competitors will find it difficult to imitate due to the high cost of implementation.

Marketing Strategy

The marketing strategy is to build a base of residential customers within a five-mile radius of Danbury, CT. A direct mail campaign will target homeowners with large homes, and poster advertising will highlight how the company can make carpets look "like new." Web advertising through search engine marketing and optimization will convert local searches into sales.

Sales Strategy

Like New Carpet Cleaners will automate sales on its website, with target goals of conducting 75% of sales online in the first year and 90% by the fifth year. Owners will handle client queries that require personal attention, and no commissioned salespeople will be hired.

Sales Forecast

Revenue streams will come from carpet cleaning and intensive spot treatments. Rapid growth is anticipated as customer reviews come in, with a 25% annual growth rate. The main impediment to growth is customer reluctance to switch from existing services, which will be mitigated through incentives and trial prices. Competitors’ reliance on traditional sales models makes it unlikely for them to offer a similar web-based alternative.

(Source: Original text has been edited for clarity and conciseness.)

Carpet and Upholstery Cleaning Services Company Summary

Carpet and Upholstery Cleaning Services Company Summary

Sales Forecast

Unit Sales

– Carpet Cleaning: 3,054, 3,817, 4,772, 5,965, 7,456

– Furniture Cleaning: 2,310, 2,888, 3,609, 4,512, 5,640

– Intensive Spot Treatment: 3,054, 3,817, 4,772, 5,964, 7,456

– Area Rugs: 1,486, 1,857, 2,322, 2,902, 3,628

– Other Services: 1,486, 1,857, 2,322, 2,902, 3,628

– Total Unit Sales: 11,390, 14,237, 17,796, 22,245, 27,806

Unit Prices

– Carpet Cleaning: $100.00

– Furniture Cleaning: $25.00

– Intensive Spot Treatment: $50.00

– Area Rugs: $25.00

– Other Services: $25.00

Sales

– Carpet Cleaning: $305,395, $381,744, $477,180, $596,475, $745,593

– Furniture Cleaning: $57,750, $72,188, $90,234, $112,793, $140,991

– Intensive Spot Treatment: $152,691, $190,864, $238,580, $298,225, $372,781

– Area Rugs: $37,147, $46,434, $58,042, $72,553, $90,691

– Other Services: $37,147, $46,434, $58,042, $72,553, $90,691

– Total Sales: $590,130, $737,663, $922,078, $1,152,598, $1,440,747

Direct Unit Costs

– Carpet Cleaning: $30.00

– Furniture Cleaning: $7.50

– Intensive Spot Treatment: $22.50

– Area Rugs: $9.75

– Other Services: $11.25

Direct Cost of Sales

– Carpet Cleaning: $91,619, $114,523, $143,154, $178,942, $223,678

– Furniture Cleaning: $17,325, $21,656, $27,070, $33,838, $42,297

– Intensive Spot Treatment: $68,711, $85,889, $107,361, $134,201, $167,751

– Area Rugs: $14,487, $18,109, $22,636, $28,296, $35,369

– Other Services: $16,716, $20,895, $26,119, $32,649, $40,811

– Subtotal Direct Cost of Sales: $208,858, $261,072, $326,341, $407,926, $509,907

Milestones

The marketing program depends on timely completion of key tasks. Before public marketing begins, the website service must be well tested. This will take two months. Once completed, direct mail and poster/movie screen advertising will begin, aiming to inform local residents about the new business and its value proposition. Web advertising will follow, targeting locals searching for carpet cleaning to drive sales.

Carpet and Upholstery Cleaning Services Company Summary

Milestones:

Website Build: 8/1/2009 – 10/3/2009, $30,000 budget, RS as Manager, Operations Department.

Direct Mail Campaign: 10/3/2009 – 12/31/2009, $10,000 budget, FS as Manager, Marketing Department.

Public Advertising: 11/23/2009 – 12/31/2009, $20,000 budget, FS as Manager, Marketing Department.

Search Engine Advertising: 11/3/2009 – 12/31/2009, $10,000 budget, FS as Manager, Marketing Department.

Totals: $70,000 budget.

Management Summary:

Fred and Rebecca Smith will manage the business.

Fred Smith, CEO, will handle sales and marketing, make client appointments, and orchestrate all marketing activities.

Rebecca Smith, COO, will manage operations and finances, including bookkeeping, accounting, and financing. She will oversee the development of the Web service and handle sales work as necessary. She will also establish operations systems, hire cleaning crews, purchase equipment, and ensure quality assurance.

In the fourth year, experienced business managers will be hired to replace Fred and Rebecca Smith, preparing the company for franchising.

Personnel Plan:

After six months, a full-time administrative assistant will be hired to handle bookkeeping, accounts payable, and support sales and marketing. This will allow Fred and Rebecca Smith to focus on strategic endeavors. The assistant may transition into the role of administrative manager or be replaced by someone capable of management. After two years, an additional administrative assistant will be hired.

Personnel Plan:

Year 1, Year 2, Year 3, Year 4, Year 5

CEO: $60,000, $60,000, $60,000, $70,000, $75,000

COO: $60,000, $60,000, $60,000, $70,000, $75,000

Administrative Assistant/Manager: $18,000, $40,000, $50,000, $55,000, $60,000

Administrative Assistant 2: $0, $0, $40,000, $42,000, $45,000

Total People: 3, 3, 4, 4, 4

Total Payroll: $138,000, $160,000, $210,000, $237,000, $255,000

Financial Plan:

Like New Carpet Cleaning will add one new local base each year, financed by cash from existing locations and debt for vehicle and cleaning equipment purchases.

Start-up Funding:

Owner investment, investor funding, and a small amount of debt will be used for start-up funding. Owners will contribute $20,000 for website development, and investors will contribute $57,500 for a 30% share of the company.

Start-up Funding:

Start-up Expenses to Fund: $37,500

Start-up Assets to Fund: $60,000

Total Funding Required: $97,500

Assets:

Non-cash Assets from Start-up: $30,000

Cash Requirements from Start-up: $30,000

Additional Cash Raised: $0

Cash Balance on Starting Date: $30,000

Total Assets: $60,000

Liabilities and Capital:

Liabilities:

Current Borrowing: $0

Long-term Liabilities: $15,000

Accounts Payable (Outstanding Bills): $5,000

Other Current Liabilities (interest-free): $0

Total Liabilities: $20,000

Capital:

Planned Investment:

Owners: $20,000

Investor: $57,500

Additional Investment Requirement: $0

Total Planned Investment: $77,500

Loss at Startup (Start-up Expenses): ($37,500)

Total Capital: $40,000

Total Capital and Liabilities: $60,000

Total Funding: $97,500

Break-even Analysis:

The business will benefit from a low monthly break-even point due to assigning most costs directly to the cleaning service and leveraging the website to reduce administrative costs.

Carpet and Upholstery Cleaning Services Company Summary

Break-even Analysis
Monthly Units Break-even 705
Monthly Revenue Break-even $36,506
Assumptions:
Average Per-Unit Revenue $51.81
Average Per-Unit Variable Cost $18.34
Estimated Monthly Fixed Cost $23,586
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Projected Profit and Loss

The business will experience modest profits for its first three years of operation. This is due to building operations that can scale over a larger geographic region. In the fourth and fifth years, it will start to have healthy profits, proving the viability of the business model for franchise or statewide expansion.

Direct labor is estimated at 35% of sales revenue (the actual cleaning represents about a 280% markup of the labor). Direct labor is included in the cost of sales.

Carpet and Upholstery Cleaning Services Company Summary

Carpet and Upholstery Cleaning Services Company Summary

Carpet and Upholstery Cleaning Services Company Summary

Carpet and Upholstery Cleaning Services Company Summary

Pro Forma Profit and Loss

Sales:

Year 1: $590,130

Year 2: $737,663

Year 3: $922,078

Year 4: $1,152,598

Year 5: $1,440,747

Direct Cost of Sales:

Year 1: $208,858

Year 2: $261,072

Year 3: $326,341

Year 4: $407,926

Year 5: $509,907

Other Costs of Sales:

Year 1-5: $0

Total Cost of Sales:

Year 1: $208,858

Year 2: $261,072

Year 3: $326,341

Year 4: $407,926

Year 5: $509,907

Gross Margin:

Year 1: $381,272

Year 2: $476,590

Year 3: $595,738

Year 4: $744,672

Year 5: $930,840

Gross Margin %:

Year 1-5: 64.61%

Expenses:

Payroll:

Year 1: $138,000

Year 2: $160,000

Year 3: $210,000

Year 4: $237,000

Year 5: $255,000

Marketing/Promotion:

Year 1: $60,000

Year 2: $70,000

Year 3: $80,000

Year 4: $90,000

Year 5: $100,000

Depreciation:

Year 1: $6,000

Year 2: $10,000

Year 3: $12,000

Year 4: $18,000

Year 5: $30,000

Rent:

Year 1: $10,200

Year 2: $30,000

Year 3: $40,000

Year 4: $50,000

Year 5: $60,000

Utilities:

Year 1: $1,200

Year 2: $2,000

Year 3: $2,500

Year 4: $3,000

Year 5: $3,500

Insurance:

Year 1: $3,600

Year 2: $4,000

Year 3: $5,000

Year 4: $6,500

Year 5: $8,000

Payroll Taxes:

Year 1: $52,029

Year 2: $63,161

Year 3: $80,451

Year 4: $35,550

Year 5: $38,250

Website Maintenance/Hosting:

Year 1: $6,000

Year 2: $7,000

Year 3: $8,000

Year 4: $9,000

Year 5: $10,000

Other:

Year 1-5: $6,000

Total Operating Expenses:

Year 1: $283,029

Year 2: $353,161

Year 3: $445,951

Year 4: $458,050

Year 5: $514,750

Profit Before Interest and Taxes:

Year 1: $98,243

Year 2: $123,429

Year 3: $149,787

Year 4: $286,622

Year 5: $416,090

EBITDA:

Year 1: $104,243

Year 2: $133,429

Year 3: $161,787

Year 4: $304,622

Year 5: $446,090

Interest Expense:

Year 1: $688

Year 2-5: $0

Taxes Incurred:

Year 1: $29,267

Year 2: $37,029

Year 3: $44,936

Year 4: $85,987

Year 5: $124,827

Net Profit:

Year 1: $68,289

Year 2: $86,400

Year 3: $104,851

Year 4: $200,635

Year 5: $291,263

Net Profit/Sales:

Year 1: 11.57%

Year 2: 11.71%

Year 3: 11.37%

Year 4: 17.41%

Year 5: 20.22%

Projected Cash Flow

In the first year, cash flow will be supported by start-up funding and full customer payment in advance. Company vans will be purchased with auto loans. When expanding to new offices, additional vans and cleaning equipment must be purchased, which will be financed through debt, including a company credit line.

Carpet and Upholstery Cleaning Services Company Summary

Pro Forma Cash Flow:

Pro Forma Cash Flow
Year 1 Year 2 Year 3 Year 4 Year 5
Cash Received
Cash from Operations
Cash Sales $590,130 $737,663 $922,078 $1,152,598 $1,440,747
Subtotal Cash from Operations $590,130 $737,663 $922,078 $1,152,598 $1,440,747
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0
Subtotal Cash Received $590,130 $737,663 $922,078 $1,152,598 $1,440,747
Expenditures
Expenditures from Operations
Cash Spending $138,000 $160,000 $210,000 $237,000 $255,000
Bill Payments $308,546 $516,001 $585,861 $688,600 $850,715
Subtotal Spent on Operations $446,546 $676,001 $795,861 $925,600 $1,105,715
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $15,000 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0
Purchase Long-term Assets $18,000 $30,000 $30,000 $30,000 $30,000
Dividends $0 $0 $0 $0 $0
Subtotal Cash Spent $479,546 $706,001 $825,861 $955,600 $1,135,715
Net Cash Flow $110,584 $31,662 $96,218 $196,997 $305,032
Cash Balance $140,584 $172,245 $268,463 $465,460 $770,492

Projected Balance Sheet:

The net worth of the business will show healthy growth, even while liabilities increase due to the growth of the business and the need to purchase additional assets. Liabilities will decrease in the second year as accounts payable from the first large expansion are paid off. After that point, growth will be more even. A cash balance will be built up with the plan of financing expansion.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Cash $140,584 $172,245 $268,463 $465,460 $770,492
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets $140,584 $172,245 $268,463 $465,460 $770,492
Long-term Assets
Long-term Assets $48,000 $78,000 $108,000 $138,000 $168,000
Accumulated Depreciation $6,000 $16,000 $28,000 $46,000 $76,000
Total Long-term Assets $42,000 $62,000 $80,000 $92,000 $92,000
Total Assets $182,584 $234,245 $348,463 $557,460 $862,492
Liabilities and Capital
Current Liabilities
Accounts Payable $74,295 $39,556 $48,923 $57,285 $71,053
Current Borrowing $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0
Subtotal Current Liabilities $74,295 $39,556 $48,923 $57,285 $71,053
Long-term Liabilities $0 $0 $0 $0 $0
Total Liabilities $74,295 $39,556 $48,923 $57,285 $71,053
Paid-in Capital $77,500 $77,500 $77,500 $77,500 $77,500
Retained Earnings ($37,500) $30,789 $117,190 $222,040 $422,676
Earnings $68,289 $86,400 $104,851 $200,635 $291,263
Total Capital $108,289 $194,690 $299,540 $500,176 $791,439
Total Liabilities and Capital $182,584 $234,245 $348,463 $557,460 $862,492
Net Worth $108,289 $194,690 $299,540 $500,176 $791,439

Business Ratios:

The business will have higher SGA expenses as a ratio of sales compared to the carpet and upholstery cleaning industry due to the need for a more professional, senior-level staff during its first years. These years are crucial for establishing scalable systems and procedures. SGA as a percentage of sales will decrease below the industry average after this expansion, as the business can reduce staff and office overhead thanks to its web-based sales model. This savings will be invested in advertising to support rapid growth.

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Ratio Analysis
Year 1 Year 2 Year 3 Year 4 Year 5 Industry Profile
Sales Growth

Unit Sales

Carpet Cleaning: 60, 74, 92, 114, 142, 176, 218, 270, 335, 416, 516, 639

Furniture Cleaning: 40, 50, 64, 80, 101, 127, 160, 202, 254, 320, 404, 508

Intensive Spot Treatment: 60, 74, 92, 114, 142, 176, 218, 270, 335, 416, 516, 639

Area Rugs: 20, 26, 34, 44, 57, 74, 96, 125, 163, 212, 276, 358

Other Services: 20, 26, 34, 44, 57, 74, 96, 125, 163, 212, 276, 358

Total Unit Sales: 200, 251, 316, 397, 499, 627, 789, 994, 1,251, 1,576, 1,986, 2,504

Unit Prices

Carpet Cleaning: $100.00

Furniture Cleaning: $25.00

Intensive Spot Treatment: $50.00

Area Rugs: $25.00

Other Services: $25.00

Sales

Carpet Cleaning: $6,000, $7,440, $9,226, $11,440, $14,186, $17,591, $21,813, $27,048, $33,540, $41,590, $51,572, $63,949

Furniture Cleaning: $1,000, $1,260, $1,588, $2,001, $2,521, $3,176, $4,002, $5,043, $6,354, $8,006, $10,088, $12,711

Intensive Spot Treatment: $3,000, $3,720, $4,613, $5,720, $7,093, $8,795, $10,906, $13,523, $16,769, $20,794, $25,785, $31,973

Area Rugs: $500, $650, $845, $1,098, $1,427, $1,855, $2,412, $3,136, $4,077, $5,300, $6,890, $8,957

Other Services: $500, $650, $845, $1,098, $1,427, $1,855, $2,412, $3,136, $4,077, $5,300, $6,890, $8,957

Total Sales: $11,000, $13,720, $17,117, $21,357, $26,654, $33,272, $41,545, $51,886, $64,817, $80,990, $101,225, $126,547

Direct Unit Costs

Carpet Cleaning: 30.00%

Furniture Cleaning: 30.00%

Intensive Spot Treatment: 45.00%

Area Rugs: 39.00%

Other Services: 45.00%

Direct Cost of Sales

Carpet Cleaning: $1,800, $2,232, $2,768, $3,432, $4,256, $5,277, $6,544, $8,114, $10,062, $12,477, $15,472, $19,185

Furniture Cleaning: $300, $378, $476, $600, $756, $953, $1,201, $1,513, $1,906, $2,402, $3,026, $3,813

Intensive Spot Treatment: $1,350, $1,674, $2,076, $2,574, $3,192, $3,958, $4,908, $6,085, $7,546, $9,357, $11,603, $14,388

Area Rugs: $195, $254, $330, $428, $557, $723, $941, $1,223, $1,590, $2,067, $2,687, $3,493

Other Services: $225, $293, $380, $494, $642, $835, $1,085, $1,411, $1,835, $2,385, $3,101, $4,031

Subtotal Direct Cost of Sales: $3,870, $4,830, $6,030, $7,529, $9,403, $11,746, $14,678, $18,347, $22,939, $28,688, $35,889, $44,910

Personnel Plan

CEO: $5,000

COO: $5,000

Administrative Assistant/ Manager: $0, $0, $0, $0, $0, $0, $3,000, $3,000, $3,000, $3,000, $3,000, $3,000

Administrative Assistant 2: $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0

Total People: 2, 2, 2, 2, 2, 2, 3, 3, 3, 3, 3, 3

Total Payroll: $10,000, $10,000, $10,000, $10,000, $10,000, $10,000, $13,000, $13,000, $13,000, $13,000, $13,000, $13,000

Pro Forma Profit and Loss

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 $11,000 $13,720 $17,117 $21,357 $26,654 $33,272 $41,545 $51,886 $64,817 $80,990 $101,225 $126,547

Direct Cost of Sales $3,870 $4,830 $6,030 $7,529 $9,403 $11,746 $14,678 $18,347 $22,939 $28,688 $35,889 $44,910

Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $3,870 $4,830 $6,030 $7,529 $9,403 $11,746 $14,678 $18,347 $22,939 $28,688 $35,889 $44,910

Gross Margin $7,130 $8,890 $11,087 $13,828 $17,251 $21,526 $26,867 $33,539 $41,878 $52,302 $65,336 $81,637

Gross Margin % 64.82% 64.80% 64.77% 64.75% 64.72% 64.70% 64.67% 64.64% 64.61% 64.58% 64.55% 64.51%

Expenses

Payroll $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000

Marketing/Promotion $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Depreciation $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Rent $500 $500 $500 $500 $500 $500 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Utilities $50 $50 $50 $50 $50 $50 $150 $150 $150 $150 $150 $150

Insurance $200 $200 $200 $200 $200 $200 $400 $400 $400 $400 $400 $400

Payroll Taxes 15% $2,081 $2,225 $2,404 $2,629 $2,910 $3,262 $4,152 $4,702 $5,391 $6,253 $7,333 $8,686

Website Maintenance/Hosting 15% $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Other $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Total Operating Expenses $19,331 $19,475 $19,654 $19,879 $20,160 $20,512 $25,402 $25,952 $26,641 $27,503 $28,583 $29,936

Profit Before Interest and Taxes ($12,201) ($10,585) ($8,567) ($6,051) ($2,909) $1,014 $1,465 $7,587 $15,237 $24,799 $36,753 $51,701

EBITDA ($11,701) ($10,085) ($8,067) ($5,551) ($2,409) $1,514 $1,965 $8,087 $15,737 $25,299 $37,253 $52,201

Interest Expense $115 $104 $94 $83 $73 $63 $52 $42 $31 $21 $10 $0

Taxes Incurred ($3,695) ($3,207) ($2,598) ($1,840) ($895) $285 $424 $2,264 $4,562 $7,433 $11,023 $15,510

Net Profit ($8,621) ($7,482) ($6,063) ($4,294) ($2,087) $666 $989 $5,282 $10,644 $17,344 $25,720 $36,191

Net Profit/Sales -78.37% -54.53% -35.42% -20.11% -7.83% 2.00% 2.38% 10.18% 16.42% 21.42% 25.41% 28.60%

Pro Forma Cash Flow

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash Received

Cash from Operations

Cash Sales $11,000 $13,720 $17,117 $21,357 $26,654 $33,272 $41,545 $51,886 $64,817 $80,990 $101,225 $126,547

Subtotal Cash from Operations $11,000 $13,720 $17,117 $21,357 $26,654 $33,272 $41,545 $51,886 $64,817 $80,990 $101,225 $126,547

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 $0

New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Long-term Liabilities $0 $0 $

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