Carpet and Upholstery Cleaning Services

Like New Carpet Cleaners is a local carpet-cleaning service in Fairfield County, Connecticut. Established in June 2009 as an LLC, Like New Carpet Cleaners was founded by Fred and Rebecca Smith and operates 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 start-up expenses for the business are primarily in 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: A van must be purchased to transport 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 be based out of a home office, limiting initial rent and overhead costs.

Carpet and Upholstery Cleaning Services Financial Plan

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. Services will not include hardwood floors or other home-cleaning services. Through its website, the company will offer easy scheduling and set-up of automated recurring appointments for 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 divided into residential and commercial services. While moderate growth is expected in 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, starting with a five-mile radius of Danbury, CT. Fairfield County has approximately 895,000 residents, with 225,000 owner-occupied condos and homes. It is estimated that 40,000 of these homes and condos are within the five-mile radius. These 40,000 owners spend about $4 million per year on carpet, upholstery, and floor-cleaning services. This is why we have chosen it as our initial market.

Market Segmentation

Customers for this industry are divided into the following targets:

– Residences (individuals, families, landlords)

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

Residences require higher customer support, pay higher rates on average, and offer additional opportunities to sell related services. Businesses require less customer support, pay lower rates on average, and generally seek ongoing services without much room for upselling.

Carpet and Upholstery Cleaning Services Financial Plan

Market Analysis

Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR

——————————————————–

Potential Customers

———————

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, rather than businesses, because it believes 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 is given more wear and tear by families. 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 from the central office 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 (friends, family, and colleagues, and customer-review websites, such as www.yelp.com), 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 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 which require additional attention.

For new customers, the site will include:

– Graphics and tutorials to go through the booking and scheduling process

– Client testimonials

– Explanations of how pricing is determined

– A list of services

– “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 (determined by the founders), 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.

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.

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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, written by the company founders and other experts, 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.

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, with an eye towards proving 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:

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

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

3. 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 which it 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 the customer entry of details on their needs, the 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 that are 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.

Carpet and Upholstery Cleaning Services Financial Plan

Carpet and Upholstery Cleaning Services Financial Plan

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.

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– 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 can begin, the website service must be well tested. This will happen over a two-month period. Upon completion, direct mail and poster/movie screen advertising will begin concurrently with the goal of making local residents aware of the new business. Web advertising will follow with the goal of converting local carpet cleaning searches to sales.

Carpet and Upholstery Cleaning Services Financial Plan

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 the owners, Fred and Rebecca Smith.

Fred Smith, CEO, will head sales and marketing. He will make client appointments and orchestrate all marketing activities when needed.

Rebecca Smith, COO, will oversee operations and finances. She will manage all financial aspects, including bookkeeping, accounting, and financing. She will project manage the development of the Web service (working with temporary programming help). She will also handle sales work under Fred Smith’s direction and be responsible for establishing operations systems, including hiring cleaning crews, purchasing equipment, and ensuring quality assurance.

In the fourth year of operation, experienced business managers will be hired to prepare the company for franchising. Fred and Rebecca Smith will then transition to entirely strategic roles.

Personnel Plan

After six months of operation, a full-time administrative assistant will be hired to take over bookkeeping, accounts payable, and support sales and marketing activities. This will allow Fred and Rebecca Smith to concentrate on strategic endeavors, including expanding to new bases of operation beyond their initial target area. This individual will transition into the role of administrative manager or be replaced by someone who can handle management responsibilities. After two years of operation, an additional administrative assistant will be hired.

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 at least one new local base each year, financed by cash generated from existing locations and debt to fund vehicle and cleaning equipment purchases.

Start-up Funding

Start-up funding will be provided by a combination of owner investment, investor funding, and a small amount of debt. The owners will contribute $20,000 for developing a prototype of the website. 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 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 will benefit from a low monthly break-even point due to assigning most costs directly to the cleaning service (gasoline, cleaning crew labor, and cleaning products) and leveraging Like New’s website to reduce administrative costs.

Carpet and Upholstery Cleaning Services Financial Plan

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, as it is designed to scale up over a larger geographic region. In the fourth and fifth years, this will result in healthy profits and demonstrate the viability of the business model for franchise or statewide expansion.

Direct labor is estimated to account for 35% of sales revenue, with the actual cleaning cost representing approximately a 280% markup of the labor. Direct labor is included in the cost of sales.

Carpet and Upholstery Cleaning Services Financial Plan

Carpet and Upholstery Cleaning Services Financial Plan

Carpet and Upholstery Cleaning Services Financial Plan

Carpet and Upholstery Cleaning Services Financial Plan

Pro Forma Profit and Loss

Pro Forma Profit and Loss
Year 1 Year 2 Year 3 Year 4 Year 5
$590,130 $737,663 $922,078 $1,152,598 $1,440,747
$208,858 $261,072 $326,341 $407,926 $509,907
$0 $0 $0 $0 $0
$208,858 $261,072 $326,341 $407,926 $509,907
$381,272 $476,590 $595,738 $744,672 $930,840
64.61% 64.61% 64.61% 64.61% 64.61%
$138,000 $160,000 $210,000 $237,000 $255,000
$60,000 $70,000 $80,000 $90,000 $100,000
$6,000 $10,000 $12,000 $18,000 $30,000
$10,200 $30,000 $40,000 $50,000 $60,000
$1,200 $2,000 $2,500 $3,000 $3,500
$3,600 $4,000 $5,000 $6,500 $8,000
$52,029 $63,161 $80,451 $35,550 $38,250
$6,000 $7,000 $8,000 $9,000 $10,000
$6,000 $7,000 $8,000 $9,000 $10,000
$283,029 $353,161 $445,951 $458,050 $514,750
$98,243 $123,429 $149,787 $286,622 $416,090
$104,243 $133,429 $161,787 $304,622 $446,090
$688 $0 $0 $0 $0
$29,267 $37,029 $44,936 $85,987 $124,827
$68,289 $86,400 $104,851 $200,635 $291,263
11.57% 11.71% 11.37% 17.41% 20.22%

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 Financial Plan

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
Year 1 Year 2 Year 3 Year 4 Year 5
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 will increase due to the growth of the business and the need to purchase additional assets. Liabilities will initially 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 of the business.

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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
Liabilities and Capital
Year 1 Year 2 Year 3 Year 4 Year 5
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 as it requires a more professional, senior-level staff during its first years of operation. These years are key to establishing the systems and procedures which can be scaled for expansion. SGA as a percentage of sales will drop to lower than 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 put into advertising to support the rapid growth of the business.

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%

Sales Forecast

Sales Forecast
1 2 3 4 5 6 7 8 9 10 11 12
Unit Sales 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

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

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

Personnel Plan

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

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 $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 $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 Sales
Subtotal Cash from Operations $11,000
Additional Cash Received Sales Tax, VAT, HST/GST Received
Subtotal Cash Received $11,000
Expenditures
Subtotal Spent on Operations Cash Spending
Subtotal Cash Spent $16,554
Net Cash Flow ($5,554)
Cash Balance $24,446

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