Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Download for free

Free Business Planning Webinar:

AI and Your Plan Register Now

Dry Cleaning & Laundromat icon Dry Cleaning Home Delivery Business Plan

Start your plan

Columbia Cleaners

Executive Summary

Columbia Cleaners is a start-up enterprise to be established in Hillsboro, Oregon as a limited liability company owned by J.C. Copperbeech. The company will provide dry cleaning, laundry, and garment alterations, offered with regular home pick-up and delivery services. The company will have a production facility, but will not need a retail shop because of our pick-up and delivery service. However, we will need delivery vans, and customer service trained drivers.

Customers can choose payment either at the time of each delivery, or by monthly credit card billing. At the end of each month we will send statements to each contract customer, itemizing service fees and the charge for the service to their credit cards for payment.

The business provides a new door-to-door dry cleaning, laundry, and alteration service in Hillsboro, OR and surrounding neighborhoods that will surely attract customer attention. Working customers may find this service is convenient for them and want to try it. If they are satisfied with the service quality they will likely become repeat customers. When the patronage happens continuously, they become loyal customers of the service. These customers will recommend Columbia Cleaners to their friends and coworkers. As more and more customers use this service, Columbia Cleaners’ image is enhanced and we will gain more and more market share.

Sales forecast gradually increase over the first year and comprise total sales of $324,700. We project modest net profits the first year. Our second and third year net profits are expected to grow substantially.

Dry cleaning home delivery business plan, executive summary chart image

1.1 Objectives

In providing laundry and garment alteration services for customers in the Hillsboro area, Columbia Cleaners aims to:

  • Establish sustainable business by the end of the first year
  • Have first year total sales in excess of $324,000
  • Producing net profits

1.2 Mission

We will offer dry cleaning, laundry, and clothing alteration services with free home pickup and delivery. Our high quality and convenience will save time for working customers.

1.3 Keys to Success

  1. The business is entering the first year of operation, therefore, a comprehensive marketing strategy will be the key to success of the business.
  2. It is important to remember that the target customers have money and want to be provided high quality service, therefore, they will only use this service if they are entirely satisfied.
  3. Furthermore, the hours of operation must be convenient and service completion must be timely in order that customers are not harried after a long day working.
LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Create Your Plan

Company Summary

Columbia Cleaners is a start-up enterprise to be established as a limited liability company in Hillsboro, OR.  The company will provide dry cleaning, laundry, and garment alterations, offered with regular home pick-up and delivery services. The company will have a production facility, but will not need a retail store front because of our pick-up and delivery service. However, we will need delivery vans and customer service trained drivers. Initially, the production facility will be rented. Cleaning equipment will be leased with accompanying maintenance contracts.

Start-up financing will be through owner investment and bank loans, with a line of credit established for operations eventualities.

2.1 Company Ownership

The proposed legal form of business is a limited liability company, wholly owned by its founder J.C. Copperbeech. This is a small business and need not publicly disclose its finances. The registration procedures are quite simple and the business can start operations as soon as possible. The owner/founder will be the director and will initially handle the bookkeeping responsibilities.

2.2 Start-up Summary

Startup expenses, funded through a combination of owner’s equity capital and a commercial loan, are summarized in the table below.

Leasing equipment: Buying new machines costs approximately $50,000 as opposed to leasing which costs $20,000 per year including maintenance. Evaluating the leasing solution shows NPV higher than that of buying machines. Moreover, the business is new and has less experience in maintenance and repair of machine breakdown, therefore the optimal solution is leasing machines. The following machines will be leased:

  • 1 Washer – 38 lb capacity, high spin, microprocessor control, electric heat
  • 1 Tumble dryer – 40 lb capacity, stainless steel drum and gas heated
  • 1 Dry cleaning machine – 25 lb
  • 1 Roller Iron 40 x 12 inch, variable speed and vacuum exhauster
  • 1 Ironing table with steaming vacuum board, integral 2 gallon boiler, iron, water pump and light

Capital plan: The owner will invest $40,000 in the business. Additional capital for the business in the amount of $20,000 will be borrowed from a bank.

  • Buying a van, and office/facilities equipment (computer, printer, fax, telephone instrument, tables, chairs, shelving, work tables, racks, etc.) and initial leasing of laundry machines: approx. $27,000
  • Buying another van in April: $10,000 (see the Cash Flow Table later in the document)

Loan: Lending plan has to be completed and submitted to the bank 6 months before starting the business. Loan will be needed two months in advance. Annual interest of 10% has to be paid on the long-term loans secured with fixed assets.

Dry cleaning home delivery business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Legal $1,000
Stationery etc. $1,200
Brochures $3,000
Recruitment & training $1,000
Insurance $700
Rent $1,200
Utilities $700
Leased equipment $1,667
Expensed equipment $10,000
Other $2,533
Total Start-up Expenses $23,000
Start-up Assets
Cash Required $10,000
Start-up Inventory $2,000
Other Current Assets $0
Long-term Assets $15,000
Total Assets $27,000
Total Requirements $50,000

LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Create Your Plan

Services

Columbia Cleaners is going to provide the following services for customers with free home pick-up and delivery in the Hillsboro area:

  • Dry cleaning
  • Laundry for personal clothes and large items such as blankets, duvets, curtains, etc.
  • Alteration service

Operations plan

There are two ways for customers to take part in the service. Customers can sign contracts with Columbia Cleaners to get regularly scheduled service, or, if it is more convenient, they can order over the telephone or via e-mail.

Customers can choose payment either at the time of each delivery, or by monthly credit card billing. We will send statements to each contract customer, itemizing service fees and the charge for the service to their credit cards for payment, at the end of each month.

No retail shop will be rented in order to reduce the operation cost. An operations facility for installing machines and equipment, washing and cleaning activities, and storing not yet cleaned and cleaned garments and items is needed. The operations facility will require about 2,000 square feet divided into four main sections as following:

  1. Machine installation and cleaning activities
  2. Sorting and storage of dirty garments received
  3. Storing cleaned garments after finishing prior to delivery
  4. Garment alteration workroom

The whole operation process will be controlled and monitored by a laundry expert employee, and generally managed by the business owner.

LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Create Your Plan

Market Analysis Summary

It is necessary to establish the reasons for choosing the dry cleaning, laundry, and alteration service before doing the market research and marketing plan. “Laundries and Dry Cleaners rated in the top ten enterprises with the lowest failure rate.” http://www.mindspring.com/~jimgirone/cleanpage/desire.html

  • Payment for the service is by cash, check, or credit card.
  • No capital stagnancy, receive payment every month, easy to get instant profit.
  • Capital requirement for purchasing commercial laundry equipment is minimal, therefore the risk of this business is low.
  • This service only requires a few staff.
  • Supplies a needed service for customers’ frequent demand (laundry – clean clothes).
  • Customers use this service as there are few or no alternatives (dry cleaning, carpet cleaning…).
  • The demand for using service is increasing due to changing life styles, incomes, and the increase in clothing expenditure.

4.1 Market Segmentation

Columbia Cleaners will be primarily targeting customers in the Hillsboro-Beaverton area. We will start off by offering services to the Hillsboro residents but will also aim at extending our service offering to the residents of nearby towns west of Portland, OR, including Beaverton, Cedar Hills, Tigard, and Lake Oswego.

We will be targeting both full-time and part-time employed customers who would value the convenience of our service. Demographic research shows that the total population of the Hillsboro-Beaverton area is about 350,000, of which about 250,000 are in the labor force. Of the later, approx. 220,000 are employed full time, 20,000 are employed part time and the rest are unemployed, as summarized in the table below.

Dry cleaning home delivery business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Full-time employees 2% 220,000 224,400 228,888 233,466 238,135 2.00%
Part-time employees 2% 20,000 20,400 20,808 21,224 21,649 2.00%
Other 0% 10,000 10,000 10,000 10,000 10,000 0.00%
Total 1.92% 250,000 254,800 259,696 264,690 269,784 1.92%

4.2 Target Market Segment Strategy

The table in the previous topic shows estimated percentages of Hillsboro-Beaverton residents working full time in 2004, which is a lot higher than that of those working part-time. Employment, income, and GDP trends show an increase over the past several years as well. This results in increasing standard of living, which in turn leaves people having less time to do their housework (including laundry) in Hillsboro. They are often tired after the whole day of working and tend to spend money to hire someone else to do the housework for them. Moreover, the demand on clothes of these working people (particularly professionals) usually increases proportionately with their income. Buying more clothes, especially expensive clothes, makes them pay more attention to the care and cleaning of those garments. With careful research, this business focuses on working and professional class customers as a target segment market.

4.2.1 Market Needs

Research shows that one of the key factors in choosing a personal service, such as laundry and dry cleaning, is not price but the convenience of the service. As stated above, with the growth of discretionary income people tend to choose services based on how much time and effort the service will save them. Although there are several conventional drop-off dry cleaning/laundry service providers in the area, Columbia Cleaners will primarily market its convenient pickup/delivery service to those busy individuals who are willing to appreciate such service, as it saves them time for other endeavors.

4.3 Service Business Analysis

The personal service industry is very fragmented overall. The Metropolitan Portland area is no exception to that, with numerous small providers servicing the community’s needs for laundry and dry cleaning. In the city of Hillsboro there are about half-dozen dry cleaners, some of which also provide laundry and garment alteration services. However, almost none of them, except Convenient Door-to-Door Dry Cleaning, provide the convenience of the door-to-door service.

4.3.1 Competition and Buying Patterns

Competition in the dry cleaning/laundry business in the Hillsboro area is not fierce. Research shows that there are seven dry cleaners in the city of Hillsboro, almost all of them offering the traditional drop-off service. The only competitor offering the convenience of the door-to-door service is Convenient Door-to-Door Dry Cleaning that provides dry cleaning and shoe repair services. We believe that initially this will be our major local competitor. We also believe that we will be able to win customers from our regular, drop-off competitors by enhancing the clients’ peace of mind though a new level of convenience and saving their time.

LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Create Your Plan

Strategy and Implementation Summary

Evaluation

The following areas will be monitored to evaluate the business performance:

  • Monthly and annual sales
  • Monthly and annual profit
  • Repeat business
  • Customer satisfaction

The business success will depend on quality and convenience of the service, customer opinions, and competitor response.

Optimism

The business provides a new door-to-door dry cleaning, laundry, and alteration service in Hillsboro that will surely attract customer attention. Working customers may find this service is convenient for them and want to try it. If they are satisfied with the service quality they will likely become repeat customers. When the patronage happens continuously, they become loyal customers of the service. These customers will recommend Columbia Cleaners to their friends and coworkers. As more and more customers use this service, Columbia Cleaners’ image is enhanced and we will gain more and more market share.

If we attain monthly and annual sales at least as forecasted, total costs and expenses, including any unanticipated charges, will not exceed our estimates and therefore the monthly and annual profit will be satisfactorily achieved.

Difficulties and Risks

Columbia Cleaners is a start-up and as such has less experience and begins with no market share at all. Assertive, effective initial marketing efforts will be necessary to gain a customer base. If existing competitors see us as a major threat and they resort to overtly aggressive and debilitating actions it will be very difficult for us to become an established player in the marketplace. Risks caused by competitors are possible, therefore the business has to monitor and evaluate its performance frequently, and collect customer evaluations and suggestions in order to continually improve.

Worst Case Risks

The worst case scenario would be that the business cannot support itself on an ongoing basis. The costs of doing business may be under-estimated, or sales and profit may be less than expected, making the business difficult in finance. Moreover, in case of social economic recession, political changes, or inflation, the business may perform even worse than has been forecasted.

5.1 Competitive Edge

As the U.S. economy recovers and quality of life is increases, people tend to spend more time and money in leisure activities rather than doing their house work. They prefer that someone else does the cleaning work for them. Hillsboro has a population of 70,000 served by seven dry cleaning and laundry shops. These existing shops wait for customers to bring their garments in and pick them up later. Customers have to drive cars to town, find parking places, carry their clothes or large items, such as curtains, blankets, etc. to the shop, and wait to be served. Then they must repeat this boring process when they come to collect their items. Moreover, these shops are only open from 9am – 6pm, and close on Sunday, which are almost the same working hours of offices; most inconvenient for customers especially those with full-time jobs.

By understanding and addressing this need, our new dry cleaning, laundry and alteration service will be established, providing door to door service free of delivery charge. We make our customers’ lives simpler by saving them time, and eliminating waiting in queues, parking problems, forgetting to collect clothes, missing meals, and going home late.

The following is the SWOT analysis for Columbia Cleaners:

Strengths:

  • We offer a relatively new, door-to-door service for dry cleaning, and laundry, providing another choice for customers.
  • We provide quick and convenient service in order to save customer’s time.

Weaknesses:

  • Competition from already established competitors in Hillsboro.
  • Starting at no market share at all.
  • Less experience than competitors.

Opportunities:

  • Expenditures on clothing is increasing, including expensive clothes; therefore the demand for taking care of clothes also increases.
  • There are more and more women – who traditionally have done the laundry and cleaning work in the family – going to work outside the home. The target market of this business is working class and professional class customers, both men and women.
  • Average income of Hillsboro citizens is increasing.
  • People tend to spend more time on leisure activities rather than doing the house work.
  • Participation within a steadily growing service. The forecast of the dry cleaning and laundry service goes steadily up through 2010.
  • There is a high likelihood of repeat business.
  • The ability to decrease the fixed costs as the sales volume increases.

Threats:

  • If the business is successful, there will be new competitors who supply the same kind of service.
  • New technology changes may bring out new family washing machines for dry cleaning.

5.2 Marketing Strategy

Place: Dealing directly with customers, conveniently in the customers’ houses in Hillsboro. We are choosing to not rent a shop in the town center, thereby reducing costs. Columbia Cleaners will receive clothes from and return them to customers’ houses. Requests for urgent situation pickups and deliveries will be accommodated, and a nominal fee charged.

Product: Free home pickup and delivery service, coming to customers’ houses between 6 pm – 9 pm three times per week. We provide convenience and high quality dry cleaning, laundry, and alteration services.

Price: Normally, new businesses set their initial prices lower than their competitors. In our situation however,  the business has higher costs for our delivery service and promotions to increase customers’ awareness and establish our brand name. We will set our prices to match those of our competitors. The pricing scheme is based on a per service price. Moreover, the business targets working and professional customers who often pay less attention to price than the quality and convenience of service. Kelvin Clancy (in Kotler, 2003) shows that only between 15 and 35 percent of buyers are price sensitive. People with higher incomes are willing to pay more for features, customer service, quality, and convenience.

Promotion:

  • Advertise our new service in the local press, the Internet, public areas such as buses and train stations, shopping centers and supermarkets etc., and drop advertising material into families’ mailboxes.
  • Offer 10% discount as an incentive for customers who sign one-year contracts.
  • Issue coupons with lower price for loyal customers.

5.3 Sales Strategy

We will start off my matching our main competitor’s prices and we will be closely monitoring our financials to make sure that we develop a sustainable business without heavily discounting our services to win customers. All sales inquiries will be initially handled by the business owner. We will also train all our employees, especially those facing the customers, in customer service to make sure that our customers are fully satisfied, as such customers will not only stay longer with us but will also refer other customers to us. We will offer limited discounts to our customers with large recurring orders and also provide incentives for new customer referrals.

5.3.1 Sales Forecast

The sales forecast gradually increases over the year 2005 and comprises total sales of $324,700. However, in the last three months, October, November and December the sales remain almost level due to possible seasonal factors. Yearly forecasts are summarized in the table below.

Dry cleaning home delivery business plan, strategy and implementation summary chart image

Dry cleaning home delivery business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Dry Cleaning $116,892 $151,960 $197,548
Laundry $185,079 $240,603 $312,784
Alteration Services $22,729 $29,547 $38,412
Other $0 $0 $0
Total Sales $324,700 $422,110 $548,744
Direct Cost of Sales Year 1 Year 2 Year 3
Dry Cleaning $14,027 $18,235 $23,706
Laundry $14,806 $19,248 $25,023
Alteration Services $6,819 $8,864 $11,524
Other $0 $0 $0
Subtotal Direct Cost of Sales $35,652 $46,348 $60,252

LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Create Your Plan

Management Summary

The owner of the business will be director and accountant, working full time. A laundry expert will be employed and will be in charge of the operation and the quality of garment cleaning. Workers will report the laundry expert who reports to the owner.

6.1 Personnel Plan

Through consultations with a dry cleaning consultant, the term of reference of a laundry expert and workers are prepared. Employment information will be advertised in local newspapers. The laundry expert and two part-time workers who have experience in laundry work will be employed.

The laundry expert will be in charge of the operation and the quality of garment cleaning. Workers will be responsible for cleaning and classifying work and have duty to report daily work to the laundry expert. The expert has to report their working results and problems to the director.

Two part-time drivers for picking up and delivering clothes work from 5:30 pm – 9:30 pm three times a week.

The staff should be able to carry out working conditions and requirements:

  • Understand and apply dry cleaning and washing processes
  • Meet set standards by following instructions 
  • Work in hot, humid surroundings
  • Perform the same work continuously
  • Overtime may be required during peak seasons such as spring and autumn.

Number of staff and salary in the period of January to March 2005:

Description No of people Salary per hour ($) Working hours/week
Owner Full-time 1 23 40
Laundry expert Full-time 1 12 40
Workers Part-time 2 48
Drivers Part-time 2 7 24
Total 6 51 152

From April 2005, the business has more customers and becomes busier, thus new staff (a worker and a driver) are employed. The business prefers to hire extra part-time workers and drivers sharing the total needed working hours. In case one of them becomes sick or busy, other staff can replace him therefore the working process will not be effected.

An average 5% increase in all salaries is planned for the following two years of operations.

Personnel Plan
Year 1 Year 2 Year 3
Director/Accountant $48,000 $50,400 $52,920
Laundry expert $24,960 $26,208 $27,518
Worker-1 $11,232 $11,794 $12,383
Worker-2 $11,232 $11,794 $12,383
Worker-3 $8,424 $8,845 $9,287
Driver-1 $4,368 $4,586 $4,816
Driver-2 $4,368 $4,586 $4,816
Driver-3 $3,276 $3,440 $3,612
Other $0 $0 $0
Total People 8 8 8
Total Payroll $115,860 $121,653 $127,736

LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Create Your Plan

Financial Plan

The following topics, the cash flow statement, profit and loss account, and balance sheet have been built using forecasted information which is as accurate and realistic as possible. Sales increase gradually over the 12 months showing the positive trend of sales. Columbia Cleaners is steadily gaining market share. Gross profit and net profit rise proportionately to sales revenue. The financial statements show that the business runs quite well and achieves expected results.

7.1 Start-up Funding

Startup expenses will be funded through a combination of owner’s equity capital and a commercial loan, as summarized in the table below.

The owner will invest $40,000 in the business. Additional capital for the business in the amount of $20,000 will be borrowed from a bank.

The lending plan has to be completed and submitted to the bank 6 months before starting the business. The loan will be needed two months in advance. Annual interest of 10% has to be paid on the long-term loans secured with fixed assets.

Start-up Funding
Start-up Expenses to Fund $23,000
Start-up Assets to Fund $27,000
Total Funding Required $50,000
Assets
Non-cash Assets from Start-up $17,000
Cash Requirements from Start-up $10,000
Additional Cash Raised $10,000
Cash Balance on Starting Date $20,000
Total Assets $37,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $20,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $20,000
Capital
Planned Investment
J.C. Copperbeech $40,000
Other investors $0
Additional Investment Requirement $0
Total Planned Investment $40,000
Loss at Start-up (Start-up Expenses) ($23,000)
Total Capital $17,000
Total Capital and Liabilities $37,000
Total Funding $60,000

7.2 Break-even Analysis

The monthly break-even point of the business is calculated below. As revenue becomes higher than break-even point, the business starts to harvest the profit. As forecasted, the total demand on dry cleaning and laundry service continues to rise in the following years; therefore, if the service satisfies its customers, increases new customers and retains customer loyalty, the profit will continue to go up.

Dry cleaning home delivery business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $19,205
Assumptions:
Average Percent Variable Cost 11%
Estimated Monthly Fixed Cost $17,097

7.3 Projected Cash Flow

Cash flow increases gradually over the year creating the positive net worth. The first several months of operation will be of critical importance to the survival of the business, and we will be paying special attention to our cash flows. We plan to purchase one more van in April 2005 to accommodate for the growing business volumes. Initially, we do not plan to sell on credit, with all of our transactions being cash- or credit card based. We anticipate generating a sufficient customer base that will allow us to maintain healthy cash balances starting from the middle of the first year of operations, as summarized in the table below.

Dry cleaning home delivery business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $324,700 $422,110 $548,744
Subtotal Cash from Operations $324,700 $422,110 $548,744
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 $324,700 $422,110 $548,744
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $115,860 $121,653 $127,736
Bill Payments $133,714 $191,828 $245,003
Subtotal Spent on Operations $249,574 $313,481 $372,739
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 $334 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $10,000 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $259,908 $313,481 $372,739
Net Cash Flow $64,792 $108,629 $176,005
Cash Balance $84,792 $193,421 $369,426

7.4 Projected Profit and Loss

The table below outlines our projected profit and loss statements for the first three years of operation. In general, the business might meet some difficulties in the beginning months but after that the business grows as expected and produces a small profit at the end of the year. It is not necessary for the business to gain high profit in the first year. Nevertheless, we are expecting to make a small profit the first year. Our second and third year net profits are expected to grow quite a bit, as shown below.

Dry cleaning home delivery business plan, financial plan chart image

Dry cleaning home delivery business plan, financial plan chart image

Dry cleaning home delivery business plan, financial plan chart image

Dry cleaning home delivery business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $324,700 $422,110 $548,744
Direct Cost of Sales $35,652 $46,348 $60,252
Other Costs of Sales $0 $0 $0
Total Cost of Sales $35,652 $46,348 $60,252
Gross Margin $289,048 $375,762 $488,492
Gross Margin % 89.02% 89.02% 89.02%
Expenses
Payroll $115,860 $121,653 $127,736
Marketing/Promotion $2,250 $2,700 $3,000
Depreciation $4,500 $4,000 $5,000
Rent $14,400 $15,000 $16,000
Utilities $11,100 $12,000 $13,000
Telecommunications $4,800 $5,000 $5,500
Insurance $10,200 $11,000 $12,000
Payroll Taxes $0 $0 $0
Maintenance $1,200 $1,500 $2,000
Gas $5,250 $6,500 $7,500
Equipment lease $20,000 $20,000 $20,000
Office cleaning $3,600 $4,000 $5,000
Other $12,000 $20,000 $30,000
Total Operating Expenses $205,160 $223,353 $246,736
Profit Before Interest and Taxes $83,888 $152,409 $241,756
EBITDA $88,388 $156,409 $246,756
Interest Expense $1,967 $1,967 $1,967
Taxes Incurred $24,576 $45,133 $71,937
Net Profit $57,345 $105,310 $167,853
Net Profit/Sales 17.66% 24.95% 30.59%

7.5 Projected Balance Sheet

The table below shows the balance sheet annual figures for the first three years of operation. First year monthly figures are presented in the appendix.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $84,792 $193,421 $369,426
Inventory $4,008 $5,210 $6,773
Other Current Assets $0 $0 $0
Total Current Assets $88,800 $198,631 $376,199
Long-term Assets
Long-term Assets $25,000 $25,000 $25,000
Accumulated Depreciation $4,500 $8,500 $13,500
Total Long-term Assets $20,500 $16,500 $11,500
Total Assets $109,300 $215,131 $387,699
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $15,289 $15,810 $20,525
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $15,289 $15,810 $20,525
Long-term Liabilities $19,666 $19,666 $19,666
Total Liabilities $34,955 $35,476 $40,191
Paid-in Capital $40,000 $40,000 $40,000
Retained Earnings ($23,000) $34,345 $139,655
Earnings $57,345 $105,310 $167,853
Total Capital $74,345 $179,655 $347,508
Total Liabilities and Capital $109,300 $215,131 $387,699
Net Worth $74,345 $179,655 $347,508

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios for Commercial Drycleaning and Laundry Collection and Distribution Establishments, based on the Standard Industrial Classification code 7216.9903, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 30.00% 30.00% 4.37%
Percent of Total Assets
Inventory 3.67% 2.42% 1.75% 4.37%
Other Current Assets 0.00% 0.00% 0.00% 38.35%
Total Current Assets 81.24% 92.33% 97.03% 55.47%
Long-term Assets 18.76% 7.67% 2.97% 44.53%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 13.99% 7.35% 5.29% 22.38%
Long-term Liabilities 17.99% 9.14% 5.07% 24.56%
Total Liabilities 31.98% 16.49% 10.37% 46.94%
Net Worth 68.02% 83.51% 89.63% 53.06%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 89.02% 89.02% 89.02% 100.00%
Selling, General & Administrative Expenses 71.36% 64.07% 58.43% 77.90%
Advertising Expenses 0.00% 0.00% 0.00% 2.06%
Profit Before Interest and Taxes 25.84% 36.11% 44.06% 2.41%
Main Ratios
Current 5.81 12.56 18.33 1.70
Quick 5.55 12.23 18.00 1.28
Total Debt to Total Assets 31.98% 16.49% 10.37% 61.40%
Pre-tax Return on Net Worth 110.19% 83.74% 69.00% 4.39%
Pre-tax Return on Assets 74.95% 69.93% 61.85% 11.38%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 17.66% 24.95% 30.59% n.a
Return on Equity 77.13% 58.62% 48.30% n.a
Activity Ratios
Inventory Turnover 11.85 10.06 10.06 n.a
Accounts Payable Turnover 9.75 12.17 12.17 n.a
Payment Days 27 30 27 n.a
Total Asset Turnover 2.97 1.96 1.42 n.a
Debt Ratios
Debt to Net Worth 0.47 0.20 0.12 n.a
Current Liab. to Liab. 0.44 0.45 0.51 n.a
Liquidity Ratios
Net Working Capital $73,511 $182,821 $355,674 n.a
Interest Coverage 42.66 77.50 122.93 n.a
Additional Ratios
Assets to Sales 0.34 0.51 0.71 n.a
Current Debt/Total Assets 14% 7% 5% n.a
Acid Test 5.55 12.23 18.00 n.a
Sales/Net Worth 4.37 2.35 1.58 n.a
Dividend Payout 0.00 0.00 0.00 n.a

LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Create Your Plan

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
Dry Cleaning 0% $4,176 $5,364 $6,156 $8,280 $9,216 $9,720 $10,728 $11,520 $12,456 $12,924 $13,212 $13,140
Laundry 0% $6,612 $8,493 $9,747 $13,110 $14,592 $15,390 $16,986 $18,240 $19,722 $20,463 $20,919 $20,805
Alteration Services 0% $812 $1,043 $1,197 $1,610 $1,792 $1,890 $2,086 $2,240 $2,422 $2,513 $2,569 $2,555
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $11,600 $14,900 $17,100 $23,000 $25,600 $27,000 $29,800 $32,000 $34,600 $35,900 $36,700 $36,500
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
Dry Cleaning 12% $501 $644 $739 $994 $1,106 $1,166 $1,287 $1,382 $1,495 $1,551 $1,585 $1,577
Laundry 8% $529 $679 $780 $1,049 $1,167 $1,231 $1,359 $1,459 $1,578 $1,637 $1,674 $1,664
Alteration Services 30% $244 $313 $359 $483 $538 $567 $626 $672 $727 $754 $771 $767
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $1,274 $1,636 $1,878 $2,525 $2,811 $2,965 $3,272 $3,514 $3,799 $3,942 $4,030 $4,008
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
Director/Accountant 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Laundry expert 0% $2,080 $2,080 $2,080 $2,080 $2,080 $2,080 $2,080 $2,080 $2,080 $2,080 $2,080 $2,080
Worker-1 0% $936 $936 $936 $936 $936 $936 $936 $936 $936 $936 $936 $936
Worker-2 0% $936 $936 $936 $936 $936 $936 $936 $936 $936 $936 $936 $936
Worker-3 0% $0 $0 $0 $936 $936 $936 $936 $936 $936 $936 $936 $936
Driver-1 0% $364 $364 $364 $364 $364 $364 $364 $364 $364 $364 $364 $364
Driver-2 0% $364 $364 $364 $364 $364 $364 $364 $364 $364 $364 $364 $364
Driver-3 0% $0 $0 $0 $364 $364 $364 $364 $364 $364 $364 $364 $364
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 6 6 6 8 8 8 8 8 8 8 8 8
Total Payroll $8,680 $8,680 $8,680 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980

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 $11,600 $14,900 $17,100 $23,000 $25,600 $27,000 $29,800 $32,000 $34,600 $35,900 $36,700 $36,500
Direct Cost of Sales $1,274 $1,636 $1,878 $2,525 $2,811 $2,965 $3,272 $3,514 $3,799 $3,942 $4,030 $4,008
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $1,274 $1,636 $1,878 $2,525 $2,811 $2,965 $3,272 $3,514 $3,799 $3,942 $4,030 $4,008
Gross Margin $10,326 $13,264 $15,222 $20,475 $22,789 $24,035 $26,528 $28,486 $30,801 $31,958 $32,670 $32,492
Gross Margin % 89.02% 89.02% 89.02% 89.02% 89.02% 89.02% 89.02% 89.02% 89.02% 89.02% 89.02% 89.02%
Expenses
Payroll $8,680 $8,680 $8,680 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980
Marketing/Promotion $150 $150 $150 $200 $200 $200 $200 $200 $200 $200 $200 $200
Depreciation $250 $250 $250 $417 $417 $417 $417 $417 $417 $417 $417 $417
Rent $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Utilities $700 $700 $700 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Telecommunications $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Insurance $700 $700 $700 $900 $900 $900 $900 $900 $900 $900 $900 $900
Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Maintenance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Gas $250 $250 $250 $500 $500 $500 $500 $500 $500 $500 $500 $500
Equipment lease $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667
Office cleaning 15% $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Other $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Total Operating Expenses $15,397 $15,397 $15,397 $17,663 $17,663 $17,663 $17,663 $17,663 $17,663 $17,663 $17,663 $17,663
Profit Before Interest and Taxes ($5,070) ($2,133) ($174) $2,811 $5,126 $6,372 $8,865 $10,823 $13,138 $14,295 $15,007 $14,829
EBITDA ($4,820) ($1,883) $76 $3,228 $5,542 $6,789 $9,281 $11,240 $13,554 $14,712 $15,424 $15,246
Interest Expense $164 $164 $164 $164 $164 $164 $164 $164 $164 $164 $164 $164
Taxes Incurred ($1,570) ($689) ($101) $794 $1,489 $1,862 $2,610 $3,198 $3,892 $4,239 $4,453 $4,400
Net Profit ($3,664) ($1,608) ($237) $1,853 $3,473 $4,346 $6,091 $7,461 $9,082 $9,892 $10,390 $10,266
Net Profit/Sales -31.59% -10.79% -1.38% 8.06% 13.57% 16.10% 20.44% 23.32% 26.25% 27.55% 28.31% 28.12%

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 $11,600 $14,900 $17,100 $23,000 $25,600 $27,000 $29,800 $32,000 $34,600 $35,900 $36,700 $36,500
Subtotal Cash from Operations $11,600 $14,900 $17,100 $23,000 $25,600 $27,000 $29,800 $32,000 $34,600 $35,900 $36,700 $36,500
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $11,600 $14,900 $17,100 $23,000 $25,600 $27,000 $29,800 $32,000 $34,600 $35,900 $36,700 $36,500
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 $8,680 $8,680 $8,680 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980 $9,980
Bill Payments $202 $6,108 $7,526 $8,740 $11,419 $12,029 $12,452 $13,646 $14,418 $15,419 $15,763 $15,995
Subtotal Spent on Operations $8,882 $14,788 $16,206 $18,720 $21,399 $22,009 $22,432 $23,626 $24,398 $25,399 $25,743 $25,975
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 $334 $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 $10,000 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $9,216 $14,788 $16,206 $28,720 $21,399 $22,009 $22,432 $23,626 $24,398 $25,399 $25,743 $25,975
Net Cash Flow $2,384 $112 $894 ($5,720) $4,201 $4,991 $7,368 $8,374 $10,202 $10,501 $10,957 $10,525
Cash Balance $22,384 $22,496 $23,390 $17,671 $21,872 $26,863 $34,232 $42,606 $52,808 $63,310 $74,267 $84,792

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 $20,000 $22,384 $22,496 $23,390 $17,671 $21,872 $26,863 $34,232 $42,606 $52,808 $63,310 $74,267 $84,792
Inventory $2,000 $1,726 $1,636 $1,878 $2,525 $2,811 $2,965 $3,272 $3,514 $3,799 $3,942 $4,030 $4,008
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $22,000 $24,111 $24,132 $25,268 $20,196 $24,683 $29,828 $37,504 $46,120 $56,607 $67,251 $78,297 $88,800
Long-term Assets
Long-term Assets $15,000 $15,000 $15,000 $15,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Accumulated Depreciation $0 $250 $500 $750 $1,167 $1,583 $2,000 $2,417 $2,833 $3,250 $3,667 $4,083 $4,500
Total Long-term Assets $15,000 $14,750 $14,500 $14,250 $23,833 $23,417 $23,000 $22,583 $22,167 $21,750 $21,333 $20,917 $20,500
Total Assets $37,000 $38,861 $38,632 $39,518 $44,029 $48,100 $52,828 $60,087 $68,286 $78,357 $88,585 $99,213 $109,300
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 $5,858 $7,238 $8,360 $11,018 $11,615 $11,998 $13,166 $13,904 $14,894 $15,229 $15,468 $15,289
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 $5,858 $7,238 $8,360 $11,018 $11,615 $11,998 $13,166 $13,904 $14,894 $15,229 $15,468 $15,289
Long-term Liabilities $20,000 $19,666 $19,666 $19,666 $19,666 $19,666 $19,666 $19,666 $19,666 $19,666 $19,666 $19,666 $19,666
Total Liabilities $20,000 $25,524 $26,904 $28,026 $30,684 $31,281 $31,664 $32,832 $33,570 $34,560 $34,895 $35,134 $34,955
Paid-in Capital $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Retained Earnings ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000) ($23,000)
Earnings $0 ($3,664) ($5,272) ($5,508) ($3,655) ($182) $4,164 $10,254 $17,716 $26,798 $36,689 $47,079 $57,345
Total Capital $17,000 $13,336 $11,729 $11,492 $13,345 $16,819 $21,164 $27,255 $34,716 $43,798 $53,690 $64,080 $74,345
Total Liabilities and Capital $37,000 $38,861 $38,632 $39,518 $44,029 $48,100 $52,828 $60,087 $68,286 $78,357 $88,585 $99,213 $109,300
Net Worth $17,000 $13,336 $11,729 $11,492 $13,345 $16,819 $21,164 $27,255 $34,716 $43,798 $53,690 $64,080 $74,345

LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Create Your Plan