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 owns 50% of the company.

Start-up Summary

The startup expenses primarily consist of three strategic areas:

  1. Website: A website will be developed and tested, with functionality for online ordering, scheduling, rescheduling, and customer support. ($30,000 estimate)
  2. Delivery Van: One van must be purchased to transport cleaning staff and equipment to customer homes. This 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 be based out of a home office, which will limit initial rent and overhead costs.

Carpet and Upholstery Cleaning Services Strategy and Implementation Summary

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. 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 that can repeat the same tasks without much room for upselling.

Carpet and Upholstery Cleaning Services Strategy and Implementation Summary

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Potential Customers

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

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

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

Total 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, rather than businesses, as this market is more likely to accept technological advances and Internet customer service. Like New has divided the market into these segments:

Large homes (over 5,000 square feet) – Generally have many rooms needing regular service as well as upholstery and spot treatments. Service may require a full day of cleaning.

Medium homes (2000 to 5000 square feet) – Generally have a couple of rooms needing regular service and may require service as often or more often than large homes as each room experiences more wear and tear. Service may require half a day (four hours) of cleaning.

Small homes and condos (under 2000 square feet) – Generally have at least one carpeted room requiring regular service. Service may often be completed in two hours or less.

Service Business Analysis

The carpet-cleaning business is characterized by multiple local businesses serving a town or a few towns, and some national franchises. Each town can have from ten to twenty businesses.

Cleaning services are generally managed out of a central office. Delivery vans are used to transport equipment and cleaning crews to customer homes.

Services are generally ordered by phone. For large homes, on-site consultations are given to develop a more accurate quote for cleaning service, rather than quoting a price site unseen. Some online ordering is done, but most small businesses rely on phone conversations to gather the information needed to quote a price to customers.

Competition and Buying Patterns

Marketdata Enterprises reports that the carpet and upholstery industry for the U.S. is comprised of 40,000 mostly small companies and that the industry is relatively mature. Although some large franchised organizations exist, the top ten franchises make up only 22% of the market. These top competitors include Sears, Stanley Steemer, Chem-Dry, ServiceMaster Clean, ServPro, Duraclean, Heaven’s Best, Rainbow Intl., MilliCare Commercial Carpet Care, and Professional Carpet Systems.

Customers choose between these competitors based on brand name, positive references from trusted sources, and price. Most cleaning services do not compete specifically on price, although franchises sometimes use this lever. While brand name is important for some customers, many realize that small businesses use the same equipment and hire the same basic labor as the known brands and, therefore, that positive word-of-mouth is more important.

Web Plan Summary

The website for Like New Carpet Cleaners will convert Web users to ordering cleaning services because of the simplicity of the process, customization of services, and the ability of the online system to red flag inquiries that require additional attention.

For new customers, the site will include:

Graphics and tutorials to guide through the booking and scheduling process

Client testimonials

Explanations of how pricing is determined

A list of services

A “Frequently-asked questions” page to answer common questions and explain how the service works, what the time frame is to complete the work, etc.

“About us” page – details on the founders and mission of the company

For current customers, the website will also be an account management tool, allowing them to:

Schedule and reschedule cleanings

Set up automated, recurring appointments

The website will have the functionality to provide quotes to most customers, based on their entries about the services needed, size of their space, furniture, carpets, etc. For certain specifications, the system will be unable to provide a quote and will refer the inquiry to the sales department for further investigation. Clients will pay by credit card using a security protocol connection for sending credit card information over the Internet and can have their credit card saved on file for easier booking in the future.

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Website Marketing Strategy

The website will be marketed through search engine marketing and search engine optimization. Search engine marketing will require bidding on keywords relevant to carpet cleaning for the local market, with Google Adwords. Like New Carpet Cleaners will retain the services of a search engine marketing firm to set up and optimize its Google Adwords account.

Search engine optimization will be based on the initial design of the website to make it search-engine friendly and on building links over time from other related websites to increase its Google ranking. Content will also be added to the website, including informative articles about carpet cleaning, in order to increase the website’s standing on the Internet as a resource for information on carpet cleaning.

Development Requirements

The front end of the website will require the pages previously discussed in the summary as well as the standard contact page and legal disclaimers.

The back end of the website will require:

Ability for managers to adjust pricing and service options.

Automatic integration of scheduling and orders from the website to accounting and calendar systems, with alerts sent by email to relevant staff.

The website will be built over two months. A quote of $30,000 has been given for the needed functionality and has been verified by advisors with web development expertise as an appropriate rate. The two-month period will allow three weeks for testing and debugging at the end of the period.

The website will require ongoing maintenance, which is shown on the profit and loss statement as an operating expense. Either the same firm that created the site will be retained for ongoing maintenance and updates, or a new firm will be selected.

Strategy and Implementation Summary

The strategy of Like New Carpet Cleaning is to expand rapidly within Fairfield County, CT, targeting residential customers only, to prove its model as scalable on a statewide level. To that end, it will seek funding for its initial five years of growth and then an additional round of funding to support that growth after five years. The strategy includes the following priorities:

Ensure high-quality, moderately-priced service using a web-based model of sales and customer support.

Keep overhead low by operating out of one office and keeping full-time staff at a minimum.

Build its brand around the fact that carpets will look “like new” after cleanings, saving customers worry and expense.

Competitive Edge

The website of Like New Carpet Cleaning will offer complete sales, service, and scheduling applications online. This allows the business to reduce its operating costs, establish a business that can scale up quickly, and still provide a good customer experience. This online scheduling approach lets customers sign up for carpet cleaning services any time, day or night. This is a convenience that will be appreciated by the customer. It is an asset that will be difficult for competitors to imitate because of the high cost of implementation.

Marketing Strategy

The marketing strategy is to promote and build a base of residential customers within a five-mile radius of Danbury, CT.

This will include:

A direct mail campaign targeting homeowners with large homes (more than 5,000 sq. ft). This group spends a higher amount on carpet cleaning per home than the other target markets, and they are more likely to create positive word-of-mouth about the service.

Poster advertising built around the simplicity with which the company can make customer carpets look “like new.” Locations will include bus stops, public parks, the sides of buses and taxi cabs, and movie theater advertising.

The marketing campaign will then move to web advertising via search engine marketing (Google Adwords) and search engine optimization to capitalize on converting those searching for carpet cleaning services locally into sales.

Sales Strategy

Like New Carpet Cleaners will automate its sales on its website. In the first year, a target of 75% of sales will be conducted entirely on its website with minimal need for interaction with a salesperson. By its fifth year of operation, 90% of sales will be conducted entirely on its website. This includes customer entry of details on their needs, quoting of prices, client acceptance of the price and entry of a credit card, and scheduling of the services. The back-end of the website will store customer data and allow the owners to change pricing and services offered.

The owners, Rebecca and Fred Smith, will answer client queries that cannot be handled by the website service, based on specific emails that come in or website inquiries flagged as requiring personal attention. They will serve these clients with home estimates when necessary, using this experience to develop a stronger web-based model going forward. No commissioned salespeople will be hired, as the intention is to create a web-based model.

Sales Forecast

The primary revenue streams for Like New Carpet Cleaners will be carpet cleaning and intensive spot treatments. As the company will brand itself as the leader in making carpets look “like new,” these will be the drivers of growth. Additional services will be sold primarily to customers who seek out Like New for its carpet treatments.

Average services are defined as the following, for the purpose of the sales forecast:

Average carpet cleaning is two rooms (a small, semi-carpeted apartment)

Average furniture cleaning is one large couch

Average intensive spot treatment is one carpet

Average area rug cleaning is one area rug

Cost of sales is expected to be 35% for the labor of cleaning staff. The remaining 4-10%, depending on the service, is for cleaning supplies and gasoline applied to the job to transport crew and equipment.

Over the first year, rapid growth is anticipated month over month as customer reviews come in and the simplicity and assurance of the web model are tested by the customer. A 25% annual growth is estimated as the business expands to cover all of Fairfield County, with additional bases of operation throughout the county. Growth will be primarily through the company’s geographic expansion and secondarily through deeper penetration in each town as word-of-mouth grows.

The main impediment to this rapid growth would be the reluctance of customers to switch from their current carpet cleaning services. This risk will be mitigated by offering incentives to customers who switch and no-commitment trial prices. Competitors are unlikely to offer the same web-based model as their entire infrastructures are built around the use of salespeople, customer service reps, and in-person sales appointments.

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Carpet and Upholstery Cleaning Services Strategy and Implementation Summary

Carpet and Upholstery Cleaning Services Strategy and Implementation Summary

Sales Forecast

Sales

Carpet Cleaning: 3,054 in Year 1, 3,817 in Year 2, 4,772 in Year 3, 5,965 in Year 4, and 7,456 in Year 5.

Furniture Cleaning: 2,310 in Year 1, 2,888 in Year 2, 3,609 in Year 3, 4,512 in Year 4, and 5,640 in Year 5.

Intensive Spot Treatment: 3,054 in Year 1, 3,817 in Year 2, 4,772 in Year 3, 5,964 in Year 4, and 7,456 in Year 5.

Area Rugs: 1,486 in Year 1, 1,857 in Year 2, 2,322 in Year 3, 2,902 in Year 4, and 3,628 in Year 5.

Other Services: 1,486 in Year 1, 1,857 in Year 2, 2,322 in Year 3, 2,902 in Year 4, and 3,628 in Year 5.

Total Sales: $590,130 in Year 1, $737,663 in Year 2, $922,078 in Year 3, $1,152,598 in Year 4, and $1,440,747 in Year 5.

Direct Unit Costs

Carpet Cleaning: $30.00 in each year.

Furniture Cleaning: $7.50 in each year.

Intensive Spot Treatment: $22.50 in each year.

Area Rugs: $9.75 in each year.

Other Services: $11.25 in each year.

Direct Cost of Sales

Carpet Cleaning: $91,619 in Year 1, $114,523 in Year 2, $143,154 in Year 3, $178,942 in Year 4, and $223,678 in Year 5.

Furniture Cleaning: $17,325 in Year 1, $21,656 in Year 2, $27,070 in Year 3, $33,838 in Year 4, and $42,297 in Year 5.

Intensive Spot Treatment: $68,711 in Year 1, $85,889 in Year 2, $107,361 in Year 3, $134,201 in Year 4, and $167,751 in Year 5.

Area Rugs: $14,487 in Year 1, $18,109 in Year 2, $22,636 in Year 3, $28,296 in Year 4, and $35,369 in Year 5.

Other Services: $16,716 in Year 1, $20,895 in Year 2, $26,119 in Year 3, $32,649 in Year 4, and $40,811 in Year 5.

Subtotal Direct Cost of Sales: $208,858 in Year 1, $261,072 in Year 2, $326,341 in Year 3, $407,926 in Year 4, and $509,907 in Year 5.

Milestones

The marketing program relies on completing the key marketing tasks on time. Before public marketing can begin, the website service must be thoroughly tested. This testing process will take two months. After completing this work, direct mail and poster/movie screen advertising will start simultaneously, aiming to inform thousands of local residents about the new business and its value proposition. Web advertising will follow with the goal of converting local residents searching for carpet cleaning into sales.

Carpet and Upholstery Cleaning Services Strategy and Implementation Summary

Milestones:

Website Build 8/1/2009 10/3/2009 $30,000 RS Operations
Direct Mail Campaign 10/3/2009 12/31/2009 $10,000 FS Marketing
Public Advertising 11/23/2009 12/31/2009 $20,000 FS Marketing
Search Engine Advertising 11/3/2009 12/31/2009 $10,000 FS Marketing
Totals $70,000

Management Summary:

The business will be managed by owners, Fred and Rebecca Smith. Fred Smith, CEO, will handle sales and marketing, while Rebecca Smith, COO, will manage operations and finances. In the fourth year, experienced business 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. After two years, an additional administrative assistant will be hired.

CEO Year 1: $60,000 Year 2: $60,000 Year 3: $60,000 Year 4: $70,000 Year 5: $75,000
COO Year 1: $60,000 Year 2: $60,000 Year 3: $60,000 Year 4: $70,000 Year 5: $75,000
Administrative Assistant/ Manager Year 1: $18,000 Year 2: $40,000 Year 3: $50,000 Year 4: $55,000 Year 5: $60,000
Administrative Assistant 2 Year 1: $0 Year 2: $0 Year 3: $40,000 Year 4: $42,000 Year 5: $45,000
Total People Year 1: 3 Year 2: 3 Year 3: 4 Year 4: 4 Year 5: 4
Total Payroll Year 1: $138,000 Year 2: $160,000 Year 3: $210,000 Year 4: $237,000 Year 5: $255,000

Financial Plan:

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

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.

Start-up Expenses to Fund $37,500
Start-up Assets to Fund $60,000
Total Funding Required $97,500
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
Current Borrowing $0
Long-term Liabilities $15,000
Accounts Payable (Outstanding Bills) $5,000
Other Current Liabilities (interest-free) $0
Total Liabilities $20,000
Planned Investment Owners: $20,000
Investor $57,500
Additional Investment Requirement $0
Total Planned Investment $77,500
Loss at Start-up (Start-up Expenses) ($37,500)
Total Capital $40,000
Total Capital and Liabilities $60,000
Total Funding $97,500

Break-even Analysis:

The business benefits from a low monthly break-even point due to most costs being assigned directly to the cleaning service. The leverage of Like New’s website reduces administrative costs.

Carpet and Upholstery Cleaning Services Strategy and Implementation 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

Projected Profit and Loss:

The business will experience modest profits for its first three years of operation. This is due to building operations to scale up over a larger geographic region. In the fourth and fifth years, this will pay off with healthy profits, demonstrating the viability of the business model for franchise or statewide expansion.

Direct labor is estimated at 35% of sales revenue, with the actual cleaning representing about a 280% markup of the labor. Direct labor is included in the cost of sales.

Carpet and Upholstery Cleaning Services Strategy and Implementation Summary

Carpet and Upholstery Cleaning Services Strategy and Implementation Summary

Carpet and Upholstery Cleaning Services Strategy and Implementation Summary

Carpet and Upholstery Cleaning Services Strategy and Implementation Summary

Pro Forma Profit and Loss

Pro Forma Profit and Loss
Year 1 Year 2 Year 3 Year 4 Year 5
Sales $590,130 $737,663 $922,078 $1,152,598 $1,440,747
Direct Cost of Sales $208,858 $261,072 $326,341 $407,926 $509,907
Other Costs of Sales $0 $0 $0 $0 $0
Total Cost of Sales $208,858 $261,072 $326,341 $407,926 $509,907
Gross Margin $381,272 $476,590 $595,738 $744,672 $930,840
Gross Margin % 64.61% 64.61% 64.61% 64.61% 64.61%
Expenses
Payroll $138,000 $160,000 $210,000 $237,000 $255,000
Marketing/Promotion $60,000 $70,000 $80,000 $90,000 $100,000
Depreciation $6,000 $10,000 $12,000 $18,000 $30,000
Rent $10,200 $30,000 $40,000 $50,000 $60,000
Utilities $1,200 $2,000 $2,500 $3,000 $3,500
Insurance $3,600 $4,000 $5,000 $6,500 $8,000
Payroll Taxes $52,029 $63,161 $80,451 $35,550 $38,250
Website Maintenance/Hosting $6,000 $7,000 $8,000 $9,000 $10,000
Other $6,000 $7,000 $8,000 $9,000 $10,000
Total Operating Expenses $283,029 $353,161 $445,951 $458,050 $514,750
Profit Before Interest and Taxes $98,243 $123,429 $149,787 $286,622 $416,090
EBITDA $104,243 $133,429 $161,787 $304,622 $446,090
Interest Expense $688 $0 $0 $0 $0
Taxes Incurred $29,267 $37,029 $44,936 $85,987 $124,827
Net Profit $68,289 $86,400 $104,851 $200,635 $291,263
Net Profit/Sales 11.57% 11.71% 11.37% 17.41% 20.22%
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Projected Cash Flow

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

Carpet and Upholstery Cleaning Services Strategy and Implementation 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

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 initially decrease in the second year as accounts payable from the first large expansion are paid off. After that, growth will be more even. A cash balance will be built up to finance future expansion.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current 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

Business Ratios:

The business will have higher selling, general, and administrative 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 of operation. 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 will reduce staff and office overhead through its web-based sales model. The resulting savings will be allocated to advertising to support rapid growth.

Ratio Analysis
Year 1 Year 2 Year 3 Year 4 Year 5 Industry Profile
Sales Growth 25.00% 25.00% 25.00% 25.00% 25.00% -0.71%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 53.59%
Total Current Assets 77.00% 73.53% 77.04% 83.50% 89.33% 70.11%
Long-term Assets 23.00% 26.47% 22.96% 16.50% 10.67% 29.89%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Current Liabilities
Accounts Payable 40.69% 16.89% 14.04% 10.28% 8.24% 37.94%
Long-term Liabilities 0.00% 0.00% 0.00% 0.00% 0.00% 54.53%
Total Liabilities 40.69% 16.89% 14.04% 10.28% 8.24% 92.47%
Net Worth 59.31% 83.11% 85.96% 89.72% 91.76% 7.53%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 64.61% 64.61% 64.61% 64.61% 64.61% 59.56%
Selling, General & Administrative 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%
Profit Before Interest and Taxes 16.65% 16.73% 16.24% 24.87% 28.88% 8.19%
Main Ratios
Current 1.89 4.35 5.49 8.13 10.84 1.24
Quick 1.89 4.35 5.49 8.13 10.84 1.18
Total Debt to Total Assets 40.69% 16.89% 14.04% 10.28% 8.24% 92.47%
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%
Additional Ratios
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
Activity Ratios
Accounts Payable Turnover 5.09 12.17 12.17 12.17 12.17 n.a
Payment Days 28 43 27 28 27 n.a
Total Asset Turnover 3.23 3.15 2.65 2.07 1.67 n.a
Debt Ratios
Debt to Net Worth 0.69 0.20 0.16 0.11 0.09 n.a
Current Liab. to Liab. 1.00 1.00 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $66,289 $132,690 $219

Reviewing the provided text and eliminating redundant words and phrases to enhance readability and clarity:

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 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00

Furniture Cleaning $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00

Intensive Spot Treatment $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00

Area Rugs $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00

Other Services $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $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% $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00

Furniture Cleaning 30.00% $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50

Intensive Spot Treatment 45.00% $22.50 $22.50 $22.50 $22.50 $22.50 $22.50 $22.50 $22.50 $22.50 $22.50 $22.50 $22.50

Area Rugs 39.00% $9.75 $9.75 $9.75 $9.75 $9.75 $9.75 $9.75 $9.75 $9.75 $9.75 $9.75 $9.75

Other Services 45.00% $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25

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 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

COO $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $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:

Profit and Loss
Month Sales Direct Cost of Sales
1 $11,000 $3,870
2 $13,720 $4,830
3 $17,117 $6,030
4 $21,357 $7,529
5 $26,654 $9,403
6 $33,272 $11,746
7 $41,545 $14,678
8 $51,886 $18,347
9 $64,817 $22,939
10 $80,990 $28,688
11 $101,225 $35,889
12 $126,547 $44,910

Gross Margin:

Gross Margin
Month Gross Margin Gross Margin %
1 $7,130 64.82%
2 $8,890 64.80%
3 $11,087 64.77%
4 $13,828 64.75%
5 $17,251 64.72%
6 $21,526 64.70%
7 $26,867 64.67%
8 $33,539 64.64%
9 $41,878 64.61%
10 $52,302 64.58%
11 $65,336 64.55%
12 $81,637 64.51%

Expenses:

Expenses
Month Payroll Marketing/Promotion
1 $10,000 $5,000
2 $10,000 $5,000
3 $10,000 $5,000
4 $10,000 $5,000
5 $10,000 $5,000
6 $10,000 $5,000
7 $13,000 $5,000
8 $13,000 $5,000
9 $13,000 $5,000
10 $13,000 $5,000
11 $13,000 $5,000
12 $13,000 $5,000

Pro Forma Cash Flow:

Cash Flow
Month Cash Received Cash from Operations
1 $11,000 $11,000
2 $13,720 $13,720
3 $17,117 $17,117
4 $21,357 $21,357
5 $26,654 $26,654
6 $33,272 $33,272
7 $41,545 $41,545
8 $51,886 $51,886
9 $64,817 $64,817
10 $80,990 $80,990
11 $101,225 $101,225
12 $126,547 $126,547

Expenditures:

Expenditures
Month Cash Spending
1 $10,000
2 $10,000
3 $10,000
4 $10,000
5 $10,000
6 $10,000
7 $13,000
8 $13,000
9 $13,000
10 $13,000
11 $13,000
12 $13,000

Net Cash Flow:

Net Cash Flow
Month Net Cash Flow
1 ($5,554)
2 ($6,703)
3 ($4,901)
4 ($2,655)
5 $150
6 $3,652
7 $2,024
8 $10,378
9 $2,211
10 $25,751
11 $36,434
12 $49,797

Cash Balance:

Cash Balance
Month Cash Balance
1 $24,446
2 $17,743
3 $12,842
4 $10,187
5 $10,337
6 $13,988
7 $16,013
8 $26,391
9 $28,601
10 $54,353
11 $90,787
12 $140,584

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