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Wy'East Law Firm

Executive Summary

Wy’East Law Firm (WLF) is a boutique technology law firm located in Portland, Oregon. The firm will be lead by Richard Bloom, a seasoned attorney previously with (name omitted)’s e-group. WLF will service all needs generated by technology firms, with specialization on mergers and acquisitions and qualified stock option plans; and handles both start-up and established companies.

In addition to WLF’s technology practice, we will offer public interest legal work at subsidized rates. The technology practice will allow the firm to be able to provide public interest organizations legal help at the cost of overhead.

WLF is a limited liability company founded and lead by Richard Bloom.

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1.1 Objectives

The objectives for WLF for the first three years of operation include:

  1. To create a law firm whose primary goal is to exceed customer’s expectations.
  2. To develop a client list that includes at least 20 companies, each with revenues of over $3 million.
  3. To increase the ability to serve public interest organizations each year.
  4. To be able to offer each year some legal services at a subsidized rate.

1.2 Mission

The mission of Wy’East Law Firm is to provide the Portland community with technological and public interest legal guidance. We exist to attract and maintain customers and to support the public interest community. When we adhere to this maxim, everything else will fall into place.

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Company Summary

WLF is a law firm serving technology companies and public interest organizations, and will subsidize its public interest work with local companies. WLF specializes in mergers and acquisitions as well as stock option plans, but can handle most legal needs for a technology company.

The technology work will subsidize the company’s public interest work which will be billed out at the cost of overhead.

2.1 Company Ownership

WLF is a limited liability company, owned solely by Richard Bloom.

2.2 Start-up Summary

WLF’s start-up costs will include all equipment needed for the home office, website creation, and advertising.

The home office equipment will be the largest chunk of the start-up expenses. This equipment includes 4 computers, a fax machine, copier, cellular phone, office supplies, additional land line, a DSL connection, and office furniture.

Start-up expenses will also include advertising. Two methods will be used: a content-only website and the Yellow Pages. 

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Start-up
Requirements
Start-up Expenses
Legal $0
Stationery etc. $100
Website creation $500
DSL installation $150
Office equipment $500
Rent $0
Research and development $0
Expensed equipment $0
Other $0
Total Start-up Expenses $1,250
Start-up Assets
Cash Required $18,750
Other Current Assets $0
Long-term Assets $5,000
Total Assets $23,750
Total Requirements $25,000
Start-up Funding
Start-up Expenses to Fund $1,250
Start-up Assets to Fund $23,750
Total Funding Required $25,000
Assets
Non-cash Assets from Start-up $5,000
Cash Requirements from Start-up $18,750
Additional Cash Raised $0
Cash Balance on Starting Date $18,750
Total Assets $23,750
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Investor 1 $25,000
Investor 2 $0
Other $0
Additional Investment Requirement $0
Total Planned Investment $25,000
Loss at Start-up (Start-up Expenses) ($1,250)
Total Capital $23,750
Total Capital and Liabilities $23,750
Total Funding $25,000

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Services

WLF will provide provide law services to two different groups of customers.

  1. Technology law services. WLF will provide legal services to high technology clients, to both start-up companies and established firms. While the firm excels in mergers, acquisitions, and qualified stock option plans, we also have experience in almost any legal field that a tech firm encounters. These clients, billed at market rate, will subsidize the public interest clients.
  2. Public interest law. WLF will serve regional public interest organizations, with a concentration on environmental and civil rights organizations. For most public interest organizations, good legal help is expensive. By using technology clients to subsidize the cost of legal fees for public interest firms, WLF is able to make significant contributions back to the community.
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Market Analysis Summary

WLF’s customers can be divided into two groups, technology firms and public interest organizations.

  1. Technology firms. New clients are likely to be from small technology firms or start-up companies. The reason for this is that the larger tech firms usually will go with one of the larger law firms in town because a large firm can offer them a wide range of services and do all of the different types of work that is needed. This type of customer sees an advantage for one firm handling all of their needs, and rightfully so. A smaller company has fewer overall legal needs and can be serviced by a boutique firm. A start-up might also be attracted to us because of our willingness to accept equity as partial payment for services rendered. Clients that were brought over to WLF from Richard’s old firm are typically small firms, but there are a few larger companies that are using this firm for some services and kept some other work at (name omitted), where Richard practiced before.
  2. Public interest organizations. These clients will be diversified, some are environmental organizations others are civil rights groups. While some public interest organizations receive their legal services for free (pro bono) from some attorneys, there is an extreme shortage of legal help for these organizations. Therefore, it is quite attractive to these organizations to have the possibility of receiving top legal help at a subsidized rate. Attracting these clients will not be the problem, the difficulty will be for Richard to select which organization will receive his help.
Law firm business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Technology companies 9% 345 376 410 447 487 9.00%
Public interest organizations 8% 278 300 324 350 378 7.98%
Other 0% 0 0 0 0 0 0.00%
Total 8.55% 623 676 734 797 865 8.55%

4.1 Target Market Segment Strategy

WLF will be targeting high technology companies for two reasons.

  1. Although the economy has taken a recent plummet, particularly technology firms, technology is still a growing sector of the economy. This is evidenced by the fact that 17 out of the top 25 fastest growing companies are technology firms, according to The Business Journal of Portland.
  2. Technology is Richard’s area of expertise. Richard practiced law at one of the top three law firms in Portland and was in their e-group, concentrating on technology firms. His experience, coupled with his network of colleagues within the industry, makes technology firms attractive customers.

WLF will be targeting public interest organizations for one simple reason, a desire to give back to the community. Public interest work is inherently altruistic to some degree. Generally, the person performing the work receives a good feeling for his/her contribution, but in today’s capitalistic society, someone who donates his/her time at far below market wages should be considered altruistic.

4.2 Service Business Analysis

The technology law practice is fairly competitive in Portland. Most larger, more prestigious firms have attorneys who specialize in technology. Some smaller firms also have attorneys who do work for technology companies. Lastly, there are boutique firms, like WLF. As a service-based industry, the practice of law is driven by personal relationships and reputation. Potential clients choose attorneys based on reputation and who they are familiar with or are recommended to. Therefore, if the attorney is providing better service to a client, the client is likely to form a long lasting business relationship with the client.

Clients typically switch attorneys only if they are unhappy with their current attorney. New companies find attorneys through networking: who they know or who their friends know.

WLF has the advantage that when Richard left (name omitted) he brought 15 of his clients, which, for now, are almost enough to survive on.

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Strategy and Implementation Summary

WLF will be courting new technology clients through networking and advertisements in the Yellow Pages, Business Journal of Portland, and other technology specific regional journals. As stated earlier, WLF has a sufficient amount of business at day one, however, more technology clients means the ability to perform more public interest work.

Richard will be attending the Portland Venture Group meetings as well as other informal gatherings of technology companies to network with the different technology firms in the region. These networking activities along with advertisements in appropriate media forms will allow WLF to steadily grow their list of clients.

5.1 Competitive Edge

WLF’s competitive advantage will be based on two factors, experience and specialization:

  1. Experience. Richard brings to WLF three years of practicing technology law at a top firm in Portland. Reputation carries a lot of weight and Richard’s time at (name omitted) means a lot in the Portland legal community and is very attractive to prospective clients. Additionally, beyond the reputation of working for a coveted firm, is the fact that the three years spent at (name omitted) provided Richard with big name clients.
  2. Specialization. As a boutique firm that concentrates on technology companies, WLF is in a desirable situation because it’s knowledge base is considerable, relative to other firms that practice a wide range of law.

5.2 Sales Strategy

WLF’s sales strategy will begin with months two through five with the goal of serving the existing customer base of clients. The absence of bringing in new clients during this time is purposeful, it allows WLF and the existing clients to form a new relationship at WLF, different from their previous relationship at (name omitted).

Month six will signal WLF’s conscious effort to generate new clients. Using the previously mentioned networking techniques, Richard, through personal communications, will convince prospective clients of the value of a boutique technology law firm, specifically the depth of knowledge and the close attention that the client will get when dealing with a small firm.

Regarding the public interest organizations, there will be less of a sale strategy, more of a choosing of the organizations that Richard wants to represent. There are so many needy public interest organizations that Richard will have to pick and choose those that he wishes to help out.

5.2.1 Sales Forecast

The first month will be spent setting up the home office. This will include setting up the office, a conference room, and all of the computer equipment. During the first month, Richard will also be serving some existing technology clients and some public interest clients. We project that if we spend 1/3 of our time on the technology clients, this would sufficiently subsidize the public interest clients so we would only have to cover overhead expenses.

By month six, Richard will begin actively soliciting new clients. Between months one and five he will continue networking, though will not be actively seeking customers. From month seven on and there will be a slight increase in clients taken aboard. There will be only a slight increase so as to create solid relationships with the new and existing clients. Richard will be cognizant of the possibility of growing too fast and not being able to offer the same quality service to his clients.

Law firm business plan, strategy and implementation summary chart image

Law firm business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Technology companies $174,096 $189,525 $195,747
Public Interest organizations $16,839 $22,578 $24,547
Total Sales $190,935 $212,103 $220,294
Direct Cost of Sales Year 1 Year 2 Year 3
Technology companies $0 $0 $0
Public Interest organizations $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0

5.3 Milestones

WLF will have several milestones early on:

  1. Business plan completion.
  2. Set up home office.
  3. First month of total technology subsidy.
Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2001 1/1/2001 $0 Richard Marketing
Set up ofifce 1/1/2001 1/1/2001 $0 Richard Department
First month of total technology subsidy 4/1/2001 4/1/2001 $0 WLF Department
Totals $0

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Management Summary

Wy’East Law Firm is an Oregon Corporation founded and run by Richard Bloom. Richard has a degree in Political Science from the University of Colorado, Boulder, and a J.D. from Lewis and Clark University. While at Lewis and Clark, Richard was the President of the school’s Public Interest Student Organization. It was through this organization that Richard became fond of public interest law. After graduation, Richard went to work for (name omitted) for three years in the e-group which concentrated on technology. While working in the e-group, Richard worked on technology issues with a number of well known start-up organizations and established companies.

One of the perks working at (name omitted) was his ability to do pro bono work which counted toward his required yearly billable hours requirement. Richard has spent a fair amount of time with 1000 Friends of Oregon and other public interest organizations. After three years however, Richard was feeling constrained and desired more autonomy. He decided to leave and start his own firm. Richard was able to bring a fair number of his clients from (name omitted) to his new firm, helping the transition from leaving an established practice to hanging out his own shingle and starting over. 

6.1 Personnel Plan

The staff will consist of Richard working full time. In addition to Richard, a part-time secretary and part-time paralegal will join WLF by month two. Month four will bring WLF a law clerk, and a second law clerk by month eight.

Personnel Plan
Year 1 Year 2 Year 3
Richard $66,000 $66,000 $66,000
Receptionist/ secretary $11,550 $12,500 $13,500
Paralegal $22,000 $23,000 $24,000
Law clerk $8,100 $11,000 $12,000
Law clerk $4,500 $11,000 $12,000
Total People 5 5 5
Total Payroll $112,150 $123,500 $127,500

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Financial Plan

The following sections will outline important financial information.

7.1 Important Assumptions

The following table details important assumptions.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Projected Profit and Loss

The following table and charts present the projected profit and loss.

Law firm business plan, financial plan chart image

Law firm business plan, financial plan chart image

Law firm business plan, financial plan chart image

Law firm business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $190,935 $212,103 $220,294
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $190,935 $212,103 $220,294
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $112,150 $123,500 $127,500
Sales and Marketing and Other Expenses $2,160 $2,160 $2,160
Depreciation $1,668 $1,666 $1,666
Leased Equipment $0 $0 $0
Utilities $1,500 $1,500 $1,500
Rent $2,400 $2,400 $2,400
Payroll Taxes $16,823 $18,525 $19,125
Other $0 $0 $0
Total Operating Expenses $136,701 $149,751 $154,351
Profit Before Interest and Taxes $54,235 $62,352 $65,943
EBITDA $55,903 $64,018 $67,609
Interest Expense $0 $0 $0
Taxes Incurred $13,210 $15,588 $16,761
Net Profit $41,024 $46,764 $49,182
Net Profit/Sales 21.49% 22.05% 22.33%

7.3 Break-even Analysis

The Break-even Analysis indicates what WLF will need in hours and revenue a month to reach the break-even point.

Law firm business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $11,392
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $11,392

7.4 Projected Cash Flow

The following chart and table show anticipated cash flow.

Law firm business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $47,734 $53,026 $55,074
Cash from Receivables $112,707 $155,697 $163,912
Subtotal Cash from Operations $160,441 $208,722 $218,986
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $160,441 $208,722 $218,986
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $112,150 $123,500 $127,500
Bill Payments $31,394 $41,570 $41,800
Subtotal Spent on Operations $143,544 $165,070 $169,300
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $143,544 $165,070 $169,300
Net Cash Flow $16,898 $43,652 $49,686
Cash Balance $35,648 $79,300 $128,986

7.5 Projected Balance Sheet

The following table displays the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $35,648 $79,300 $128,986
Accounts Receivable $30,494 $33,874 $35,183
Other Current Assets $0 $0 $0
Total Current Assets $66,141 $113,174 $164,168
Long-term Assets
Long-term Assets $5,000 $5,000 $5,000
Accumulated Depreciation $1,668 $3,334 $5,000
Total Long-term Assets $3,332 $1,666 $0
Total Assets $69,473 $114,840 $164,168
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,699 $3,302 $3,448
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $4,699 $3,302 $3,448
Long-term Liabilities $0 $0 $0
Total Liabilities $4,699 $3,302 $3,448
Paid-in Capital $25,000 $25,000 $25,000
Retained Earnings ($1,250) $39,774 $86,538
Earnings $41,024 $46,764 $49,182
Total Capital $64,774 $111,538 $160,721
Total Liabilities and Capital $69,473 $114,840 $164,168
Net Worth $64,774 $111,538 $160,721

7.6 Business Ratios

Industry profile ratios based on the NAICS code 541110, Offices of Lawyers, are shown in the table below.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 11.09% 3.86% 8.50%
Percent of Total Assets
Accounts Receivable 43.89% 29.50% 21.43% 8.60%
Other Current Assets 0.00% 0.00% 0.00% 66.90%
Total Current Assets 95.20% 98.55% 100.00% 75.50%
Long-term Assets 4.80% 1.45% 0.00% 24.50%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 6.76% 2.88% 2.10% 50.20%
Long-term Liabilities 0.00% 0.00% 0.00% 12.90%
Total Liabilities 6.76% 2.88% 2.10% 63.10%
Net Worth 93.24% 97.12% 97.90% 36.90%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 78.70% 77.95% 77.55% 58.20%
Advertising Expenses 0.13% 0.11% 0.11% 0.50%
Profit Before Interest and Taxes 28.40% 29.40% 29.93% 3.40%
Main Ratios
Current 14.08 34.28 47.62 1.54
Quick 14.08 34.28 47.62 1.09
Total Debt to Total Assets 6.76% 2.88% 2.10% 63.10%
Pre-tax Return on Net Worth 83.73% 55.90% 41.03% 12.30%
Pre-tax Return on Assets 78.07% 54.29% 40.17% 33.40%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 21.49% 22.05% 22.33% n.a
Return on Equity 63.33% 41.93% 30.60% n.a
Activity Ratios
Accounts Receivable Turnover 4.70 4.70 4.70 n.a
Collection Days 57 74 76 n.a
Accounts Payable Turnover 7.68 12.17 12.17 n.a
Payment Days 34 36 29 n.a
Total Asset Turnover 2.75 1.85 1.34 n.a
Debt Ratios
Debt to Net Worth 0.07 0.03 0.02 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $61,442 $109,872 $160,721 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.36 0.54 0.75 n.a
Current Debt/Total Assets 7% 3% 2% n.a
Acid Test 7.59 24.02 37.41 n.a
Sales/Net Worth 2.95 1.90 1.37 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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Appendix

Sales Forecast
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
Technology companies 0% $0 $8,005 $9,514 $13,587 $16,547 $16,874 $16,854 $17,525 $18,547 $18,752 $18,887 $19,004
Public Interest organizations 0% $0 $1,100 $1,200 $1,500 $1,545 $1,587 $1,584 $1,654 $1,666 $1,548 $1,741 $1,714
Total Sales $0 $9,105 $10,714 $15,087 $18,092 $18,461 $18,438 $19,179 $20,213 $20,300 $20,628 $20,718
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Technology companies $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Public Interest organizations $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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
Richard 0% $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500
Receptionist/ secretary 0% $0 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050
Paralegal 0% $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Law clerk 0% $0 $0 $0 $900 $900 $900 $900 $900 $900 $900 $900 $900
Law clerk 0% $0 $0 $0 $0 $0 $0 $0 $900 $900 $900 $900 $900
Total People 1 3 3 4 4 4 4 5 5 5 5 5
Total Payroll $5,500 $8,550 $8,550 $9,450 $9,450 $9,450 $9,450 $10,350 $10,350 $10,350 $10,350 $10,350

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

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 $0 $9,105 $10,714 $15,087 $18,092 $18,461 $18,438 $19,179 $20,213 $20,300 $20,628 $20,718
Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Gross Margin $0 $9,105 $10,714 $15,087 $18,092 $18,461 $18,438 $19,179 $20,213 $20,300 $20,628 $20,718
Gross Margin % 0.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Expenses
Payroll $5,500 $8,550 $8,550 $9,450 $9,450 $9,450 $9,450 $10,350 $10,350 $10,350 $10,350 $10,350
Sales and Marketing and Other Expenses $180 $180 $180 $180 $180 $180 $180 $180 $180 $180 $180 $180
Depreciation $139 $139 $139 $139 $139 $139 $139 $139 $139 $139 $139 $139
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125
Rent $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Payroll Taxes 15% $825 $1,283 $1,283 $1,418 $1,418 $1,418 $1,418 $1,553 $1,553 $1,553 $1,553 $1,553
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $6,969 $10,477 $10,477 $11,512 $11,512 $11,512 $11,512 $12,547 $12,547 $12,547 $12,547 $12,547
Profit Before Interest and Taxes ($6,969) ($1,372) $238 $3,576 $6,581 $6,950 $6,927 $6,633 $7,667 $7,754 $8,082 $8,172
EBITDA ($6,830) ($1,233) $377 $3,715 $6,720 $7,089 $7,066 $6,772 $7,806 $7,893 $8,221 $8,311
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred ($2,091) ($343) $59 $894 $1,645 $1,737 $1,732 $1,658 $1,917 $1,938 $2,020 $2,043
Net Profit ($4,878) ($1,029) $178 $2,682 $4,935 $5,212 $5,195 $4,974 $5,750 $5,815 $6,061 $6,129
Net Profit/Sales 0.00% -11.30% 1.66% 17.77% 27.28% 28.23% 28.17% 25.94% 28.45% 28.65% 29.38% 29.58%

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 $0 $2,276 $2,679 $3,772 $4,523 $4,615 $4,610 $4,795 $5,053 $5,075 $5,157 $5,180
Cash from Receivables $0 $0 $228 $6,869 $8,145 $11,390 $13,578 $13,845 $13,847 $14,410 $15,162 $15,233
Subtotal Cash from Operations $0 $2,276 $2,906 $10,641 $12,668 $16,006 $18,188 $18,640 $18,900 $19,485 $20,319 $20,413
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 $0 $2,276 $2,906 $10,641 $12,668 $16,006 $18,188 $18,640 $18,900 $19,485 $20,319 $20,413
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $5,500 $8,550 $8,550 $9,450 $9,450 $9,450 $9,450 $10,350 $10,350 $10,350 $10,350 $10,350
Bill Payments ($761) ($687) $1,458 $1,879 $2,841 $3,571 $3,660 $3,656 $3,724 $3,975 $3,999 $4,079
Subtotal Spent on Operations $4,739 $7,863 $10,008 $11,329 $12,291 $13,021 $13,110 $14,006 $14,074 $14,325 $14,349 $14,429
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $4,739 $7,863 $10,008 $11,329 $12,291 $13,021 $13,110 $14,006 $14,074 $14,325 $14,349 $14,429
Net Cash Flow ($4,739) ($5,587) ($7,102) ($688) $376 $2,985 $5,078 $4,634 $4,826 $5,160 $5,970 $5,984
Cash Balance $14,011 $8,424 $1,322 $634 $1,010 $3,995 $9,073 $13,707 $18,533 $23,693 $29,663 $35,648
Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $18,750 $14,011 $8,424 $1,322 $634 $1,010 $3,995 $9,073 $13,707 $18,533 $23,693 $29,663 $35,648
Accounts Receivable $0 $0 $6,829 $14,637 $19,083 $24,507 $26,962 $27,213 $27,752 $29,065 $29,879 $30,188 $30,494
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $18,750 $14,011 $15,253 $15,959 $19,717 $25,517 $30,958 $36,286 $41,459 $47,597 $53,573 $59,852 $66,141
Long-term Assets
Long-term Assets $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Accumulated Depreciation $0 $139 $278 $417 $556 $695 $834 $973 $1,112 $1,251 $1,390 $1,529 $1,668
Total Long-term Assets $5,000 $4,861 $4,722 $4,583 $4,444 $4,305 $4,166 $4,027 $3,888 $3,749 $3,610 $3,471 $3,332
Total Assets $23,750 $18,872 $19,975 $20,542 $24,161 $29,822 $35,124 $40,313 $45,347 $51,346 $57,183 $63,323 $69,473
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $0 $2,132 $2,521 $3,458 $4,184 $4,273 $4,268 $4,327 $4,577 $4,598 $4,677 $4,699
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $0 $2,132 $2,521 $3,458 $4,184 $4,273 $4,268 $4,327 $4,577 $4,598 $4,677 $4,699
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $0 $2,132 $2,521 $3,458 $4,184 $4,273 $4,268 $4,327 $4,577 $4,598 $4,677 $4,699
Paid-in Capital $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Retained Earnings ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250)
Earnings $0 ($4,878) ($5,907) ($5,729) ($3,047) $1,888 $7,100 $12,295 $17,270 $23,019 $28,835 $34,896 $41,024
Total Capital $23,750 $18,872 $17,843 $18,021 $20,703 $25,638 $30,850 $36,045 $41,020 $46,769 $52,585 $58,646 $64,774
Total Liabilities and Capital $23,750 $18,872 $19,975 $20,542 $24,161 $29,822 $35,124 $40,313 $45,347 $51,346 $57,183 $63,323 $69,473
Net Worth $23,750 $18,872 $17,843 $18,021 $20,703 $25,638 $30,850 $36,045 $41,020 $46,769 $52,585 $58,646 $64,774

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