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, who operate the business from their home office in Danbury, CT.
Company Ownership
Fred and Rebecca Smith founded Like New Carpet Cleaners as an LLC in June 2009, each owning 50% of the company.
Start-up Summary
The startup expenses for the business primarily include:
- Website: Developing and testing a website with functionality for online ordering, scheduling, rescheduling, and customer support. ($30,000 estimate)
- Delivery Van: Purchasing a van to transport cleaning staff and equipment to customer homes. One van will suffice for multiple cleaning crews during initial operations. ($15,000 estimate)
- Cleaning Equipment: Acquiring 3 portable extractors and additional specialized equipment for cleanings. ($15,000 estimate)
The business will be based out of a home office, minimizing initial rent and overhead costs.
Start-up
Requirements
Start-up Expenses
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. Moderate growth is estimated for the next five years, but the national market is highly competitive.
The initial market for Like New Carpet Cleaners is residential services in Fairfield County, CT, within a five-mile radius of Danbury, CT. Fairfield County has a population of 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 the five-mile radius. These 40,000 owners spend an estimated $4 million per year on carpet, upholstery, and other floor-cleaning services. This is why we have chosen this as our initial market.
Market Segmentation
Customers for this industry are divided 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 that can repeat the same tasks without much room for upselling.
Market Analysis:
– Year 1
– Year 2
– Year 3
– Year 4
– Year 5
Potential Customers:
– Growth
– CAGR (Compound Annual Growth Rate)
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. The market is divided into:
– Large homes (over 5,000 square feet)
– Medium homes (2000 to 5000 square feet)
– Small homes and condos (under 2000 square feet)
Service Business Analysis:
The carpet-cleaning business is characterized by multiple local businesses and some national franchises. Each town can have from ten to twenty businesses. Services are generally ordered by phone. On-site consultations are given for large homes.
Competition and Buying Patterns:
The carpet and upholstery industry is comprised of 40,000 mostly small companies. The top ten franchises make up only 22% of the market. Customers choose between competitors based on brand name, positive references, and price.
Web Plan Summary:
The website for Like New Carpet Cleaners will convert Web users to ordering cleaning services because of its simplicity, customization, and ability to identify inquiries which require additional attention. The website will include graphics, tutorials, client testimonials, pricing explanations, services list, FAQs, and "About us" page. For current customers, the website will also allow scheduling and rescheduling cleanings, and setting up recurring appointments.
Website Marketing Strategy:
The website will be marketed through search engine marketing and search engine optimization, using Google Adwords. Like New Carpet Cleaners will retain the services of a search engine marketing firm to optimize its Google Adwords account. Search engine optimization will be based on the initial design of the website and building links to increase its Google ranking.
Development Requirements:
The front end of the website will require the previously mentioned pages, and the back end will include the ability to adjust pricing and service options, integration with accounting and calendar systems, and customer data storage.
Strategy and Implementation Summary:
The strategy is to expand rapidly within Fairfield County, CT, targeting residential customers only. Priorities include ensuring high-quality, moderately-priced service, keeping overhead low, and building the brand around making carpets look "like new."
Competitive Edge:
The website will offer complete sales, service, and scheduling applications online, reducing operating costs and providing a good customer experience. Customers can sign up for services any time, day or night.
Marketing Strategy:
The marketing strategy is to promote and build a base of residential customers within a five-mile radius of Danbury, CT. This includes a direct mail campaign, poster advertising, and web advertising via search engine marketing and search engine optimization.
Sales Strategy:
Sales will be automated through the website. 75% of sales in the first year will be conducted entirely on the website, increasing to 90% by the fifth year. Specific client queries will be handled by the owners through personal attention.
The primary revenue streams will be carpet cleaning and spot treatments. Average services are defined, and cost of sales is expected to be 35% for labor. Rapid growth is anticipated, with a 25% annual growth estimated.
Sales Forecast
| Sales Forecast | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| 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 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Carpet Cleaning | $100.00 | $100.00 | $100.00 | $100.00 | $100.00 |
| Furniture Cleaning | $25.00 | $25.00 | $25.00 | $25.00 | $25.00 |
| Intensive Spot Treatment | $50.00 | $50.00 | $50.00 | $50.00 | $50.00 |
| Area Rugs | $25.00 | $25.00 | $25.00 | $25.00 | $25.00 |
| Other Services | $25.00 | $25.00 | $25.00 | $25.00 | $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 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Carpet Cleaning | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 |
| Furniture Cleaning | $7.50 | $7.50 | $7.50 | $7.50 | $7.50 |
| Intensive Spot Treatment | $22.50 | $22.50 | $22.50 | $22.50 | $22.50 |
| Area Rugs | $9.75 | $9.75 | $9.75 | $9.75 | $9.75 |
| Other Services | $11.25 | $11.25 | $11.25 | $11.25 | $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 undergo comprehensive testing over a two-month period. Once this work is completed, direct mail and poster/movie screen advertising will start simultaneously, aiming to inform thousands of local residents about the new business and its value. Web advertising will follow, targeting locals searching for carpet cleaning to increase sales.
Milestones:
Website Build: 8/1/2009 – 10/3/2009, $30,000 budget, managed by RS, Operations
Direct Mail Campaign: 10/3/2009 – 12/31/2009, $10,000 budget, managed by FS, Marketing
Public Advertising: 11/23/2009 – 12/31/2009, $20,000 budget, managed by FS, Marketing
Search Engine Advertising: 11/3/2009 – 12/31/2009, $10,000 budget, managed by FS, Marketing
Totals: $70,000 budget
Management Summary:
The business will be managed by the owners, Fred and Rebecca Smith. Fred Smith, CEO, will handle sales and marketing. Rebecca Smith, COO, will handle operations and finances. She will also oversee the development of the website and sales work as needed. In the fourth year, experienced managers will be hired to take over the CEO and COO positions.
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. After two years, another administrative assistant will be hired.
Like New Carpet Cleaning will add a new local base each year, financed by cash generated from existing locations and debt. Start-up funding will come from owner investment, investor funding, and a small amount of debt.
Start-up Funding:
Start-up funding will come from owner investment, investor funding, and a small amount of debt. The owners will contribute $20,000, and investors will contribute $57,500 for a 30% share of the company.
Break-even Analysis:
The business will have a low monthly break-even point due to most costs being assigned directly to the cleaning service and the use of Like New’s website to reduce administrative costs.
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
Projected Profit and Loss:
The business will experience modest profits for its first three years of operation. This is because the organization’s operations will scale up over a larger geographic region. In the fourth and fifth years of operation, this will result in healthy profits, demonstrating the viability of the business model for franchise or statewide expansion.
Direct labor accounts for about 35% of sales revenue, with the actual cleaning representing a markup of approximately 280% of the labor cost. Direct labor is included in the cost of sales.
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: $0
Year 2: $0
Year 3: $0
Year 4: $0
Year 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: 64.61%
Year 2: 64.61%
Year 3: 64.61%
Year 4: 64.61%
Year 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: $6,000
Year 2: $7,000
Year 3: $8,000
Year 4: $9,000
Year 5: $10,000
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: $0
Year 3: $0
Year 4: $0
Year 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 prepayment by customers. Company vans will be purchased with auto loans. When the business expands to new offices, additional vans and cleaning equipment will be financed through debt, including a company credit line.
Pro Forma Cash Flow
| Pro Forma Cash Flow | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 business growth and the need for additional assets. Liabilities will decrease in the second year as accounts payable from the first expansion are paid off. After that, growth will be more even. A cash balance will be built up to finance further expansion.
| Pro Forma Balance Sheet | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Cash | $140,584 | $172,245 | $268,463 | $465,460 | $770,492 |
| Total Current Assets | $140,584 | $172,245 | $268,463 | $465,460 | $770,492 |
| 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 |
| Total Liabilities | $74,295 | $39,556 | $48,923 | $57,285 | $71,053 |
| 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 |
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 professional, senior-level staff during its early years. These years are crucial for establishing systems and procedures that can be scaled for expansion. SGA as a percentage of sales will decrease to below the industry average after this expansion due to the reduction in staff and office overhead allowed by its Web-based sales model. Savings from this will be allocated to advertising to support the rapid growth of the business.
| Ratio Analysis | ||||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Industry Profile | |
| Gross Margin | 64.61% | 64.61% | 64.61% | 64.61% | 64.61% | 59.56% |
| SG&A Expenses | 53.04% | 52.90% | 53.24% | 47.20% | 44.39% | 28.35% |
| Advertising Expenses | 10.17% | 9.49% | 8.68% | 7.81% | 6.94% | 1.21% |
| Pre-tax Return on Net Worth | 90.09% | 63.40% | 50.01% | 57.30% | 52.57% | 696.24% |
| Pre-tax Return on Assets | 53.43% | 52.69% | 42.98% | 51.42% | 48.24% | 52.41% |
| Net Profit Margin | 11.57% | 11.71% | 11.37% | 17.41% | 20.22% | n.a |
| Return on Equity | 63.06% | 44.38% | 35.00% | 40.11% | 36.80% | n.a |
Long-term Plan
The business’s financial strategy is to grow rapidly until it can demonstrate that its investment in its website and infrastructure generates much greater revenue than its competitors’ more traditional approach. At that point, the business will seek a second round of equity financing to expand regionally and then statewide. This will provide an opportunity for initial investors to cash out of the business.
Appendix
Sales Forecast
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:
| Pro Forma Profit and Loss | |||||||||||||
| 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:
| Pro Forma Cash Flow | |||||||||||||
| Cash Received | |||||||||||||
| 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 | |
| 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 | |
| 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 | $11,000 | $13,720 | $17,117 | $21,357 | $26,654 | $33,272 | $41,545 | $51,886 | $64,817 | $80,990 | $101,225 | $126,547 | |
| Expenditures | |||||||||||||
| Expenditures from Operations | |||||||||||||
| Cash Spending | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $13,000 | $13,000 | $13,000 | $13,000 | $13,000 | $13,000 | |
| Bill Payments | $5,304 | $9,173 | $10,768 | $12,762 | $15,254 | $18,370 | $22,271 | $27,258 | $33,356 | $40,989 | $50,541 | $62,500 | |
| Subtotal Spent on Operations | |||||||||||||
Hello!
I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
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