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Contractor icon Construction Irrigation Business Plan

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Hass Irrigation Systems

Executive Summary

Hass Irrigation Systems will serve the irrigation needs of our customers. Hass Irrigation Systems will focus on the residential construction boom in Monroe’s Lake Charles section. The city has been growing by 9% annually for the past 10 years. With the population now at 900,000, the new construction in the Lake Charles section of the city is valued at $600 million in home sales next year alone.

Currently, Hass Irrigation Systems is a subcontractor with Bentwood Custom Homes, Greenridge Homes, and Landmark Homes to provide irrigation services to their new homes in the area. From this base, Hass Irrigation Systems will market its services to homeowners in the Lake Charles area.

The current population of the city’s Lake Charles area is 120,000 with an income range of $100,000 – $500,000. Hass Irrigation Systems is well positioned to capture a lion’s share of the irrigation business in this growing residential area.

Construction irrigation business plan, executive summary chart image

1.1 Objectives

The objectives of Hass Irrigation Systems are:

  • Capture the majority of the irrigation business in the Lake Charles area.
  • Offer our customers a superior service, at a low price.

1.2 Mission

Hass Irrigation Systems’ emphasis will always be customer satisfaction. Putting our customers needs first, we will build our customer base. We will not do business in the way as other irrigation companies. We will not disappear at the end of October and reappear in March, we will be here when our customers need us.

1.3 Keys to Success

The keys to success for Hass Irrigation Systems are:

  • Prompt and courteous service;
  • An expertise in irrigation unmatched by any other company;
  • Competitive pricing.
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Company Summary

Hass Irrigation Systems tailors solutions to customer’s irrigation needs. Currently, Hass Irrigation Systems is a subcontractor with Bentwood Custom Homes, Greenridge Homes, and Landmark Homes to provide garden carpentry services to their new homes in the Lake Charles area.

Hass Irrigation Systems firmly believes that “you get what you pay for.” Not only in terms of customer irrigation systems, but also in terms of staff and equipment. We have invested a great deal of time and effort in hand picking the most qualified employees and then gave them the tools and support they need to excel at their job. This philosophy also extends to the equipment and hardware we use. Everything is top-of-the-line and has been chosen specifically for its ability to meet our customer’s exacting standards.

Andrew Hass, owner of Hass Irrigation Systems, has spent over 15 years developing his own program and protocols. The result is a comprehensive, custom-designed program. His experience will meet the customer’s needs faster than any other company.

2.1 Start-up Summary

Andrew Hass will invest $60,000 in Hass Irrigation Systems. Andrew will also secure a $100,000 loan.

The following table and chart show projected initial start-up costs for Hass Irrigation Systems.

Construction irrigation business plan, company summary chart image

Start-up Funding
Start-up Expenses to Fund $57,300
Start-up Assets to Fund $102,700
Total Funding Required $160,000
Assets
Non-cash Assets from Start-up $90,000
Cash Requirements from Start-up $12,700
Additional Cash Raised $0
Cash Balance on Starting Date $12,700
Total Assets $102,700
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $100,000
Capital
Planned Investment
Andrew Hass $60,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $60,000
Loss at Start-up (Start-up Expenses) ($57,300)
Total Capital $2,700
Total Capital and Liabilities $102,700
Total Funding $160,000
Start-up
Requirements
Start-up Expenses
Legal $2,000
Stationery etc. $300
Brochures $3,000
Insurance $1,000
Rent $1,000
Equipment and Tools $20,000
Vans (2) $30,000
Total Start-up Expenses $57,300
Start-up Assets
Cash Required $12,700
Start-up Inventory $40,000
Other Current Assets $0
Long-term Assets $50,000
Total Assets $102,700
Total Requirements $160,000

2.2 Company Ownership

Hass Irrigation Systems is owned by Andrew Hass.

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Services

Hass Irrigation Systems tailors solutions to customer’s irrigation needs. Through precision system design, Hass Irrigation Systems professionals can custom design a system that meets the customer’s landscaping needs, assuring the ultimate end result–a beautiful, green lawn.

Hass Irrigation Systems uses products from all the premier manufacturers of the irrigation industry. This provides our customers with a system that has been customized to meet all of their individual property needs. By utilizing products from all of the leading manufacturers, Hass Irrigation Systems can choose products that definitively meets our customer’s specific needs.

With these tools, the design professionals at Hass Irrigation Systems are able to design a system that can meet each and every design challenge presented. Granted, a beautiful, green lawn is the first objective of any irrigation system. But, equally important is the investment our clients have made in bedding plants, shrubbery and trees. Each has its own unique water requirement that must be taken into consideration when developing any irrigation system design. Hass Irrigation Systems knows the inherent strengths and weakness of every product manufactured today.

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Market Analysis Summary

The city has been growing by 9% annually for the past 10 years. With the population now at 900,000, the new construction in the Lake Charles section of the city is valued at $600 million in home sales next year alone. New construction represents an important customer group for Hass Irrigation Systems.

The other significant customer group are the existing home owner in the Lake Charles area. The revitalization of the area has generated increase remodeling of existing homes. Last year, remodeling projects were up 20% over the previous year and accounted for $15 million paid for remodeling services in the area.

4.1 Market Segmentation

Hass Irrigation Systems will focus on two significant customer groups:

  • New home construction;
  • Landscaping projects.
Construction irrigation business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
New Home Construction 7% 2,000 2,140 2,290 2,450 2,622 7.00%
Landscaping Projects 5% 2,200 2,310 2,426 2,547 2,674 5.00%
Total 5.97% 4,200 4,450 4,716 4,997 5,296 5.97%

4.2 Service Business Analysis

The market for irrigation contracting services is very competitive. Among these, only five are competing for work in the Lake Charles area. These are small businesses with less than four full-time employees, except for J. Dodd Irrigation Services that has a staff of eight. Hass Irrigation Systems’ current niche is its strong relationship with Bentwood Custom Homes, Greenridge Homes, and Landmark Homes.

Andrew Hass’s unique landscaping program and protocols will also be a critical advantage in building Hass Irrigation Systems’ customer base.

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Strategy and Implementation Summary

Hass Irrigation Systems’ strategy is simple and ambitious. First, build its base with new home construction that is planned in the Lake Charles area. From this secure footing, Hass Irrigation Systems will begin to market to new customers.

5.1 Competitive Edge

Andrew Hass’ reputation for quality work and excellent customer skills has been a hallmark of his work history in irrigation. Starting his own company is just another step in his quest to deliver services to customers that were second to none. 

Andrew began his career in landscaping in 1985 with Burke Landscaping as a member of the installation crew. Within three years, Andrew was a Project Install Foreman. He held this position with Burke Landscaping for five years. His next position was with De Spain Irrigation. His initial position was Project Install Foreman but he was soon promoted to Field Operations Manager. In this position, Andrew began to develop his own program and protocols to improve irrigation services. Over the next five years, De Spain grew to become one of the biggest irrigation/landscaping businesses in Monroe.

5.2 Sales Strategy

For the first two months of operation, Hass Irrigation will focus on subcontract work with local builders. During that time period, we will be marketing our services to existing homeowners in the Lake Charles section.

We estimate that with current staff, Hass Irrigation can install up to six irrigation systems a month. Each system will, on average, generate $5,000 in sales. In most cases, the new irrigation system will be in place within 15 days of the order being finalized.

5.2.1 Sales Forecast

The following table will outline Hass Irrigation Systems sales forecast data.

Construction irrigation business plan, strategy and implementation summary chart image

Construction irrigation business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
New Home Construction $248,000 $262,000 $285,000
Landscaping Projects $63,000 $81,000 $93,000
Total Sales $311,000 $343,000 $378,000
Direct Cost of Sales Year 1 Year 2 Year 3
New Home Construction $68,600 $73,000 $80,000
Landscaping Projects $18,400 $22,000 $21,000
Subtotal Direct Cost of Sales $87,000 $95,000 $101,000

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Management Summary

Andrew Hass will manage the daily operations of Hass Irrigation Systems.

6.1 Personnel Plan

Hass Irrigation Systems will have a staff of four.

Personnel Plan
Year 1 Year 2 Year 3
Andrew Hass $30,000 $34,000 $42,000
Irrigation Crew Members (3) $90,000 $102,000 $124,000
Total People 0 0 0
Total Payroll $120,000 $136,000 $166,000

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Financial Plan

The following is the financial plan for Hass Irrigation Systems.

7.1 Break-even Analysis

The monthly break-even point is shown below, taking into account monthly running costs.

Construction irrigation business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $20,211
Assumptions:
Average Percent Variable Cost 28%
Estimated Monthly Fixed Cost $14,557

7.2 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 4971, Irrigation Systems, are shown for comparison.

The following is explanation of the plans divergence with industry ratio profile.

  • Sales Growth and Profit Before Interest and Taxes: will be double the industry average because of the increased housing development in the Lake Charles area over the next five years.
  • Short-term Assets: are higher than the average due the size of our start-up inventory.
  • Long Term Assets: are below the industry average but will be more in-line after additional equipment is purchased which is planned during the fourth year of operation.
  • Long Term Liabilities, and Expense of Sales: are higher than the industry average due to the start-up loan and the maintenance of a year-round staff.
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 10.29% 10.20% 4.70%
Percent of Total Assets
Accounts Receivable 18.84% 17.96% 18.26% 11.20%
Inventory 4.64% 4.38% 4.30% 1.40%
Other Current Assets 0.00% 0.00% 0.00% 36.30%
Total Current Assets 66.72% 73.93% 78.43% 48.90%
Long-term Assets 33.28% 26.07% 21.57% 51.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.57% 9.01% 8.87% 26.90%
Long-term Liabilities 65.52% 50.34% 40.65% 22.20%
Total Liabilities 74.09% 59.36% 49.52% 49.10%
Net Worth 25.91% 40.64% 50.48% 50.90%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 72.03% 72.30% 73.28% 64.10%
Selling, General & Administrative Expenses 63.05% 63.85% 67.37% 45.40%
Advertising Expenses 3.86% 4.37% 4.76% 0.20%
Profit Before Interest and Taxes 15.86% 14.55% 10.43% 5.20%
Main Ratios
Current 7.79 8.20 8.84 1.79
Quick 7.24 7.71 8.36 1.44
Total Debt to Total Assets 74.09% 59.36% 49.52% 49.10%
Pre-tax Return on Net Worth 111.96% 64.12% 36.71% 4.70%
Pre-tax Return on Assets 29.01% 26.06% 18.53% 9.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 8.97% 8.45% 5.91% n.a
Return on Equity 78.37% 44.88% 25.70% n.a
Activity Ratios
Accounts Receivable Turnover 9.01 9.01 9.01 n.a
Collection Days 58 39 39 n.a
Inventory Turnover 6.00 14.24 14.05 n.a
Accounts Payable Turnover 10.64 12.17 12.17 n.a
Payment Days 27 27 29 n.a
Total Asset Turnover 2.26 2.16 2.19 n.a
Debt Ratios
Debt to Net Worth 2.86 1.46 0.98 n.a
Current Liab. to Liab. 0.12 0.15 0.18 n.a
Liquidity Ratios
Net Working Capital $79,888 $103,167 $119,795 n.a
Interest Coverage 5.21 5.87 5.25 n.a
Additional Ratios
Assets to Sales 0.44 0.46 0.46 n.a
Current Debt/Total Assets 9% 9% 9% n.a
Acid Test 5.05 5.72 6.30 n.a
Sales/Net Worth 8.74 5.31 4.35 n.a
Dividend Payout 0.00 0.00 0.00 n.a

7.3 Projected Profit and Loss

The following table and chart highlights the projected profit and loss for three years.

Construction irrigation business plan, financial plan chart image

Construction irrigation business plan, financial plan chart image

Construction irrigation business plan, financial plan chart image

Construction irrigation business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $311,000 $343,000 $378,000
Direct Cost of Sales $87,000 $95,000 $101,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $87,000 $95,000 $101,000
Gross Margin $224,000 $248,000 $277,000
Gross Margin % 72.03% 72.30% 73.28%
Expenses
Payroll $120,000 $136,000 $166,000
Sales and Marketing and Other Expenses $18,000 $23,000 $28,000
Depreciation $4,284 $4,284 $4,284
Leased Equipment $0 $0 $0
Utilities $2,400 $2,400 $2,400
Insurance $0 $0 $0
Rent $12,000 $12,000 $12,000
Payroll Taxes $18,000 $20,400 $24,900
Other $0 $0 $0
Total Operating Expenses $174,684 $198,084 $237,584
Profit Before Interest and Taxes $49,316 $49,916 $39,416
EBITDA $53,600 $54,200 $43,700
Interest Expense $9,459 $8,501 $7,501
Taxes Incurred $11,957 $12,425 $9,575
Net Profit $27,900 $28,991 $22,341
Net Profit/Sales 8.97% 8.45% 5.91%

7.4 Projected Cash Flow

The following is the projected cash flow for three years.

Construction irrigation business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $77,750 $85,750 $94,500
Cash from Receivables $207,375 $254,588 $280,588
Subtotal Cash from Operations $285,125 $340,338 $375,088
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 $5,000 $0 $0
Subtotal Cash Received $290,125 $340,338 $375,088
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $120,000 $136,000 $166,000
Bill Payments $113,424 $171,757 $184,870
Subtotal Spent on Operations $233,424 $307,757 $350,870
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 $9,996 $9,996 $9,996
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $243,420 $317,753 $360,866
Net Cash Flow $46,705 $22,585 $14,222
Cash Balance $59,405 $81,990 $96,212

7.5 Projected Balance Sheet

The following is the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $59,405 $81,990 $96,212
Accounts Receivable $25,875 $28,537 $31,449
Inventory $6,380 $6,967 $7,407
Other Current Assets $0 $0 $0
Total Current Assets $91,660 $117,494 $135,068
Long-term Assets
Long-term Assets $50,000 $50,000 $50,000
Accumulated Depreciation $4,284 $8,568 $12,852
Total Long-term Assets $45,716 $41,432 $37,148
Total Assets $137,376 $158,926 $172,216
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $11,772 $14,327 $15,273
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $11,772 $14,327 $15,273
Long-term Liabilities $90,004 $80,008 $70,012
Total Liabilities $101,776 $94,335 $85,285
Paid-in Capital $65,000 $65,000 $65,000
Retained Earnings ($57,300) ($29,400) ($409)
Earnings $27,900 $28,991 $22,341
Total Capital $35,600 $64,591 $86,931
Total Liabilities and Capital $137,376 $158,926 $172,216
Net Worth $35,600 $64,591 $86,931

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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
New Home Construction 0% $19,000 $19,000 $19,000 $23,000 $27,000 $30,000 $29,000 $24,000 $19,000 $14,000 $11,000 $14,000
Landscaping Projects 0% $0 $0 $4,000 $6,000 $7,000 $9,000 $9,000 $8,000 $6,000 $4,000 $4,000 $6,000
Total Sales $19,000 $19,000 $23,000 $29,000 $34,000 $39,000 $38,000 $32,000 $25,000 $18,000 $15,000 $20,000
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
New Home Construction $5,000 $5,000 $5,000 $6,400 $7,800 $9,000 $8,000 $6,400 $5,000 $4,000 $3,000 $4,000
Landscaping Projects $0 $0 $1,000 $1,800 $2,200 $2,700 $2,700 $2,000 $1,800 $1,200 $1,200 $1,800
Subtotal Direct Cost of Sales $5,000 $5,000 $6,000 $8,200 $10,000 $11,700 $10,700 $8,400 $6,800 $5,200 $4,200 $5,800
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
Andrew Hass 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Irrigation Crew Members (3) 0% $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500
Total People 0 0 0 0 0 0 0 0 0 0 0 0
Total Payroll $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000

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% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
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 $19,000 $19,000 $23,000 $29,000 $34,000 $39,000 $38,000 $32,000 $25,000 $18,000 $15,000 $20,000
Direct Cost of Sales $5,000 $5,000 $6,000 $8,200 $10,000 $11,700 $10,700 $8,400 $6,800 $5,200 $4,200 $5,800
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $5,000 $5,000 $6,000 $8,200 $10,000 $11,700 $10,700 $8,400 $6,800 $5,200 $4,200 $5,800
Gross Margin $14,000 $14,000 $17,000 $20,800 $24,000 $27,300 $27,300 $23,600 $18,200 $12,800 $10,800 $14,200
Gross Margin % 73.68% 73.68% 73.91% 71.72% 70.59% 70.00% 71.84% 73.75% 72.80% 71.11% 72.00% 71.00%
Expenses
Payroll $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Sales and Marketing and Other Expenses $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Depreciation $357 $357 $357 $357 $357 $357 $357 $357 $357 $357 $357 $357
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Payroll Taxes 15% $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $14,557 $14,557 $14,557 $14,557 $14,557 $14,557 $14,557 $14,557 $14,557 $14,557 $14,557 $14,557
Profit Before Interest and Taxes ($557) ($557) $2,443 $6,243 $9,443 $12,743 $12,743 $9,043 $3,643 ($1,757) ($3,757) ($357)
EBITDA ($200) ($200) $2,800 $6,600 $9,800 $13,100 $13,100 $9,400 $4,000 ($1,400) ($3,400) $0
Interest Expense $826 $819 $813 $806 $799 $792 $785 $778 $771 $764 $757 $750
Taxes Incurred ($415) ($413) $489 $1,631 $2,593 $3,585 $3,587 $2,480 $862 ($756) ($1,354) ($332)
Net Profit ($968) ($964) $1,141 $3,806 $6,051 $8,366 $8,371 $5,786 $2,010 ($1,765) ($3,160) ($775)
Net Profit/Sales -5.10% -5.07% 4.96% 13.12% 17.80% 21.45% 22.03% 18.08% 8.04% -9.80% -21.07% -3.87%

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 $4,750 $4,750 $5,750 $7,250 $8,500 $9,750 $9,500 $8,000 $6,250 $4,500 $3,750 $5,000
Cash from Receivables $0 $475 $14,250 $14,350 $17,400 $21,875 $25,625 $29,225 $28,350 $23,825 $18,575 $13,425
Subtotal Cash from Operations $4,750 $5,225 $20,000 $21,600 $25,900 $31,625 $35,125 $37,225 $34,600 $28,325 $22,325 $18,425
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 $5,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $4,750 $10,225 $20,000 $21,600 $25,900 $31,625 $35,125 $37,225 $34,600 $28,325 $22,325 $18,425
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 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Bill Payments $154 $4,611 $4,636 $5,539 $6,842 $13,104 $22,015 $18,011 $13,246 $10,765 $7,616 $6,885
Subtotal Spent on Operations $10,154 $14,611 $14,636 $15,539 $16,842 $23,104 $32,015 $28,011 $23,246 $20,765 $17,616 $16,885
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 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833
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 $10,987 $15,444 $15,469 $16,372 $17,675 $23,937 $32,848 $28,844 $24,079 $21,598 $18,449 $17,718
Net Cash Flow ($6,237) ($5,219) $4,531 $5,228 $8,225 $7,688 $2,277 $8,381 $10,521 $6,727 $3,876 $707
Cash Balance $6,463 $1,244 $5,775 $11,002 $19,227 $26,915 $29,193 $37,574 $48,096 $54,823 $58,698 $59,405
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 $12,700 $6,463 $1,244 $5,775 $11,002 $19,227 $26,915 $29,193 $37,574 $48,096 $54,823 $58,698 $59,405
Accounts Receivable $0 $14,250 $28,025 $31,025 $38,425 $46,525 $53,900 $56,775 $51,550 $41,950 $31,625 $24,300 $25,875
Inventory $40,000 $35,000 $30,000 $24,000 $15,800 $11,000 $12,870 $11,770 $9,240 $7,480 $5,720 $4,620 $6,380
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $52,700 $55,713 $59,269 $60,800 $65,227 $76,752 $93,685 $97,738 $98,364 $97,526 $92,168 $87,618 $91,660
Long-term Assets
Long-term Assets $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Accumulated Depreciation $0 $357 $714 $1,071 $1,428 $1,785 $2,142 $2,499 $2,856 $3,213 $3,570 $3,927 $4,284
Total Long-term Assets $50,000 $49,643 $49,286 $48,929 $48,572 $48,215 $47,858 $47,501 $47,144 $46,787 $46,430 $46,073 $45,716
Total Assets $102,700 $105,356 $108,555 $109,729 $113,799 $124,967 $141,543 $145,239 $145,508 $144,313 $138,598 $133,691 $137,376
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 $4,458 $4,453 $5,318 $6,416 $12,366 $21,409 $17,566 $12,883 $10,510 $7,393 $6,479 $11,772
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 $4,458 $4,453 $5,318 $6,416 $12,366 $21,409 $17,566 $12,883 $10,510 $7,393 $6,479 $11,772
Long-term Liabilities $100,000 $99,167 $98,334 $97,501 $96,668 $95,835 $95,002 $94,169 $93,336 $92,503 $91,670 $90,837 $90,004
Total Liabilities $100,000 $103,625 $102,787 $102,819 $103,084 $108,201 $116,411 $111,735 $106,219 $103,013 $99,063 $97,316 $101,776
Paid-in Capital $60,000 $60,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000
Retained Earnings ($57,300) ($57,300) ($57,300) ($57,300) ($57,300) ($57,300) ($57,300) ($57,300) ($57,300) ($57,300) ($57,300) ($57,300) ($57,300)
Earnings $0 ($968) ($1,932) ($791) $3,016 $9,067 $17,433 $25,803 $31,589 $33,600 $31,835 $28,675 $27,900
Total Capital $2,700 $1,732 $5,768 $6,909 $10,716 $16,767 $25,133 $33,503 $39,289 $41,300 $39,535 $36,375 $35,600
Total Liabilities and Capital $102,700 $105,356 $108,555 $109,729 $113,799 $124,967 $141,543 $145,239 $145,508 $144,313 $138,598 $133,691 $137,376
Net Worth $2,700 $1,732 $5,768 $6,909 $10,716 $16,767 $25,133 $33,503 $39,289 $41,300 $39,535 $36,375 $35,600

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