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

Home & Garden Retail icon MLM Water Filter Business Plan

Start your plan

Water Factory

Executive Summary

The Water Factory is a network marketing firm that sells Water Genie home water filtration systems. The Water Factory has chosen the network marketing business model as a way of creating a recurring revenue structure in a home business. Aitch Tuoo, the founder and owner, has done a significant amount of research and has determined the filtered water market is a large, quickly growing market. People are willing to pay up to five times the cost per gallon for water than they are for gasoline. 

By using the network marketing business model, Aitch Tuoo uses personal contacts as his target market. This is advantageous because a bond has already been established with these prospects, making it easier for Aitch to turn prospects into leads. Additionally, network marketing creates recurring revenue streams through commissions that Aitch earns for salespeople he recruits. Aitch also receives revenue for each salesperson his sales people recruit. This revenue stream then turns his job into a business, a way to earn money even if he is not working.

The Water Factory will reach profitability by month 12 and will have modest, but steady, profits by year three.

Mlm water filter business plan, executive summary chart image

Objectives

The objectives for the first three years of operation are outlined below:

  • To create a service-based company whose primary goal is to exceed customers’ expectations.
  • The utilization  of The Water Factory products by at least 10% of the local population.
  • To increase the number of sellers by 20% each year.
  • To develop a sustainable home-based business, surviving off of its own cash flow.

Mission

The Water Factory’s mission is to provide customers with the finest quality water filtration units. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall in to place. Our services will exceed the expectations of our customers. 

LivePlan Logo

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

Create Your Plan

Company Summary

The Water Factory, located in Albany, Oregon, is a network marketing business that sells water filtration units to end consumers. We exclusively sell Water Genie Brand filters for home use via the network marketing system, also known as multi-level marketing. The company will use personal contact recruiting to develop a sales force that will help sell more products.

The business will be based out of the owners home. It is forecasted that we will reach profitability by month 12, and we will earn modest profits by year three.

Company Ownership

The Water Factory is a sole proprietorship, founded and owned by Aitch Tuoo. 

Start-up Summary

The Water Factory’s start-up costs include the following items:

  • Office furniture, including a desk, chair, and filing cabinets
  • Computer system, including printer, CD-RW, Internet connections, Microsoft Office
  • Stationery
  • Brochures
  • Legal fees
  • Phone line, pager, cell phone
Mlm water filter business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Legal $200
Stationery etc. $200
Brochures $200
Other $0
Total Start-up Expenses $600
Start-up Assets
Cash Required $15,100
Other Current Assets $0
Long-term Assets $2,300
Total Assets $17,400
Total Requirements $18,000
Start-up Funding
Start-up Expenses to Fund $600
Start-up Assets to Fund $17,400
Total Funding Required $18,000
Assets
Non-cash Assets from Start-up $2,300
Cash Requirements from Start-up $15,100
Additional Cash Raised $0
Cash Balance on Starting Date $15,100
Total Assets $17,400
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 $18,000
Investor 2 $0
Other $0
Additional Investment Requirement $0
Total Planned Investment $18,000
Loss at Start-up (Start-up Expenses) ($600)
Total Capital $17,400
Total Capital and Liabilities $17,400
Total Funding $18,000

LivePlan Logo

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

Create Your Plan

Products

The Water Factory exclusively sells Water Genie brand home water filtration systems. Home water filters are used to improve the taste quality of the water as well as to remove harmful impurities in the water. Three different models will be sold:

  1. The Carafe- This model looks like a large water pitcher. When you fill up the pitcher the water passes through a filter, cleansing the water. When you pour the pitcher only the filtered water comes out. The price per gallon of water is $.26.
  2. The Faucet Mount- This model looks like a large bulb that mounts on the end of the water faucet. When you desire filtered water, you rotate the filter toward you and filtered water comes out of a small hole. When you want unfiltered water to pass through, you rotate the filter away from you and unfiltered water comes out of a large hole. Unfiltered water would be used to wash hands or dishes and pots. The price per gallon of filtered water is $.12.
  3. The Counter Mount- This model is a 12-inch tall cylinder that resides on the counter, up to 14 inches away from the sink. There is a button near where the water exits the faucet that you push to allow filtered water to pass through. When you no longer need filtered water you push the button again and unfiltered water comes out. The price per gallon of filtered is $.06.
LivePlan Logo

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

Create Your Plan

Market Analysis Summary

The Water Factory will be targeting personal contacts as the prospective customers. This is an ideal market segment because a positive relationship already exists with the personal contacts, making Aitch Tuoo’s job of selling the products significantly easier.

Market Segmentation

As a network marketing business, the company has an unusual market segment that it is targeting. With network marketing, sales and recruitment are done through personal contacts. Once these people are users, salespeople try to convert them from users to salespeople for the products. This is also called multi-level marketing. A company sells a product to a consumer (typically personal contacts) via direct selling methods, and recruits new people to help sell. The salesperson is then being compensated for the sales made as well as the sales of the people recruited.  

Because of this unusual business arrangement, the market will be segmented into personal contacts. Personal contacts typically take the form of the following groups (not an exhaustive list): past classmates, current and past neighbors, landlords, tenants, repair people, grocers, club members, sport partners, children’s teachers, children’s playmate parents, spouse contacts, and fellow congregation members.

This market segment that will be targeted will be called “personal contacts,” and makes up the majority of the market.

Mlm water filter business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Personal Contacts 9% 560 610 665 725 790 8.98%
Other 0% 0 0 0 0 0 0.00%
Total 8.98% 560 610 665 725 790 8.98%

Target Market Segment Strategy

The Water Factory is focusing on this portion of the market because to some degree a trust relationship has already been developed between the personal contacts. Due to the nature of this business, where you sell directly to the consumer, it helps considerably to have already established a relationship. With a relationship already established, it is far easier to then sell the product because the prospective customers skepticism has been lowered. This then creates an opportunity when The Water Factory can explain the cost advantages of home water filters relative to bottled water.

Additionally, this market is targeted because once the prosect is a customer, it is then easier to convert them into a sales agent for The Water Factory. The advantage to the company of having sales representatives is an extra income stream of sales commissions. The advantage to the customers becoming sales representatives is a lower cost for their own product and a revenue stream from the sales of filters to their clients. If their clients then become sales agents, the customers then get a second level of revenue. Lastly, for every new recruit that Aitch’s recruits bring in, Aitch gets a commission. So Aitch would get a commission for his sales, a commission for the sales of his recruits, and if they recruit someone, Aitch will get a commission off of them as well.

Industry Analysis

Network marketing, also known as multi-level marketing, is a growing industry. The large names in the industry are Amway, Shaklee, and Herblife. Other well-known companies that participate in the space are AT&T, Proctor & Gamble, and Coca Cola.

Several years, ago network marketing received a bad reputation because of it’s association with pyramid schemes. Make no mistake however, network marketing is far different from pyramid schemes. Pyramid schemes were also multi-level businesses, however they did not have a viable product or service. They just had a many levels of people paying money to become a part of the pyramid with the promise that people would be paying them to become a lower part of the pyramid.

In network marketing, personal care products and household products dominate. However, there are also other services and products that are sold, including travel arrangements, insurance services, pet care supplies, phone service, etc.

Competition and Buying Patterns

There are several different sources of competition:

  • Other network marketing companies selling water filters. There are four to seven other network marketing firms that also sell water filtration units. Prices can be competitive.
  • Water filters sold through traditional retailers. There are approximately ten different manufactures of home filtration units. These units can be competitively priced, however, there is not the option to become a sales agent and get lower purchase prices for yourself as well as a future revenue stream.
  • Office style water dispenser (typically leased). There are several companies that will lease these large, stand-alone water coolers. The equipment for this solution is more expensive, in part because you are leasing a refrigeration unit to cool the water, and the cost per gallon is also more expensive.
  • Bottled water. There are hundreds of companies that sell bottled water with the price ranging from $1-$5 a gallon, which is significantly more expensive. 
  • Soft drinks. While this is not a direct substitute for water, people consume soft drinks when they are thirsty. Besides the many negative health issues surrounding soft drink consumption, it is as pricey as bottled water.

Over the last five years the market for filtered water, typically in the form of bottled water, has exploded. It is ironic how people complain about the price of gas when they will pay up to five times the price for a gallon of water. Regardless, demand for filtered water has steadily grown, and home water filtration units offer huge price advantages relative to bottled water alternatives.

LivePlan Logo

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

Create Your Plan

Strategy and Implementation Summary

The Water Factory will be aggressively courting personal contacts. Once contacts have been turned into customers, Aitch Tuoo will then attempt to turn them into sales agents for him. The advantage for them is that they get products at wholesale and receive recurring revenue for sales people they recruit. The Water Factory benefits as it gets the recurring revenue for all sales that are made by Aitch’s customers or the sales agents of his customers. It is a win-win situation and can be easily presented as such.

Competitive Edge

The Water Factory’s competitive advantage over regular outlets of water filtration systems is the ability to generate revenue streams for sellers of the products. This is the virtue of the network marketing system. With network marketing, if buyers becomes sellers, they can receive their products at wholesale pricing and receive a commission for products that they sell. Additionally, if they recruit people to help them sell, they get a commission for every sale that their recruits make. At the same time, Aitch gets a commission of his recruits as well as his recruit’s recruits. This is a relatively easy way to create a recurring revenue stream and creates a competitive advantage that will help gain market share.

Sales Strategy

The Water Factory’s sales strategy will be based on leveraging personal contacts. Typically, an informal meeting will be set up with the prospective customer. A brochure will be introduced with product information about the water filters. Then, quantitative information will be introduced explaining really how much people are spending on bottled water and how much money could be saved by using a water filter. Additionally, Aitch Tuoo will explain how all problems, concerns, delivery, and billing will be handled by him. The ideal situation will be that Aitch Tuoo will be able to sign the customer up right then. 

During that initial meeting if the prospect is especially excited about the idea, or at a later date, Aitch Tuoo will introduce the option of becoming a member of The Water Factory. If the customer understands/believes the cost effectiveness of the Water Genie product, they will appreciate the option of getting the product at cost and making a commission on sales that they make, as well as commissions from sales that their recruits make.

Sales Forecast

The first month will be spent setting up the home office. There will be no sales activity. Additionally, Aitch Tuoo will be ordering products to use as samples.

The second month will be the first month of sales. During this month Aitch Tuoo will have signed people up and revenue will be trickling in. It will not be until month five when revenue begins to get strong. Month six will be the first month when the recurring revenue will come in from Aitch Tuoo’s recruited sales people.

Mlm water filter business plan, strategy and implementation summary chart image

Mlm water filter business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Personal contacts $39,091 $77,854 $82,547
Recurring revenue stream $2,189 $15,447 $19,874
Total Sales $41,280 $93,301 $102,421
Direct Cost of Sales Year 1 Year 2 Year 3
Personal contacts $19,546 $38,927 $41,274
Recurring revenue stream $0 $0 $0
Subtotal Direct Cost of Sales $19,546 $38,927 $41,274

Milestones

The Water Factory will have several milestones early on:

  1. Business plan completion. This will be done as a road map for the organization. While we do not need a business plan to raise capital, it will be an indispensable tool for the ongoing performance and improvement of the company.
  2. Office set up.
  3. First recurring revenue to come in.
  4. Profitability solely from recurring revenue.
Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2001 2/1/2001 $0 ABC Marketing
Office set up 1/1/2001 2/1/2001 $0 ABC Department
First recurring revenue to come in. 1/1/2001 5/1/2001 $0 ABC Department
Profitability solely from recurring revenue 1/1/2001 9/1/2001 $0 ABC Department
Totals $0

LivePlan Logo

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

Create Your Plan

Management Summary

Aitch Tuoo, the founder and owner, pursued his undergraduate business degree from the University of Washington. While at UW, Aitch worked for Circuit City as a sales representative because he thought the skill of sales was an important one to have.

Throughout his undergraduate studies, Aitch was unsure of what type of business he wanted to pursue. He decided on business as a major as he thought it would be a universal degree. During his third year he took an entrepreneur class. This class pointed out the distinction between having a job and having a business. The difference is that with a job you earn money when you work, compared to when you own a business, you make money while the business is operating, regardless if you are actually working or not. This point really sunk home for him. Aitch was interested in having a business as opposed to having a job. He wanted to make money regardless if he was working, this ideology truly appealed to him. Upon graduating, Aitch did a significant amount of research to determine what was the most promising market was. He was surprised to learn that the market for filtered water was huge and growing each year. He also came across the network marketing business model and decided to melt the two things together to create a business for himself.

Personnel Plan

As a home based business, Aitch will be the only person working and will receive a monthly salary. 

Personnel Plan
Year 1 Year 2 Year 3
Aitch Tuoo $36,000 $36,000 $36,000
Other $0 $0 $0
Total People 0 0 0
Total Payroll $36,000 $36,000 $36,000

LivePlan Logo

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

Create Your Plan

Financial Plan

The following sections will outline the important financial details.

Important Assumptions

The following table details the important financial 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

Break-even Analysis

The Break-even Analysis indicates what is needed in monthly revenue to break even.

Mlm water filter business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $7,025
Assumptions:
Average Percent Variable Cost 47%
Estimated Monthly Fixed Cost $3,699

Projected Profit and Loss

The following table indicates projected profit and loss.

Mlm water filter business plan, financial plan chart image

Mlm water filter business plan, financial plan chart image

Mlm water filter business plan, financial plan chart image

Mlm water filter business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $41,280 $93,301 $102,421
Direct Cost of Sales $19,546 $38,927 $41,274
Other $0 $0 $0
Total Cost of Sales $19,546 $38,927 $41,274
Gross Margin $21,735 $54,374 $61,148
Gross Margin % 52.65% 58.28% 59.70%
Expenses
Payroll $36,000 $36,000 $36,000
Sales and Marketing and Other Expenses $600 $600 $600
Depreciation $768 $768 $764
Leased Equipment $0 $0 $0
Utilities $900 $900 $900
Insurance $720 $720 $720
Rent $0 $0 $0
Payroll Taxes $5,400 $5,400 $5,400
Other $0 $0 $0
Total Operating Expenses $44,388 $44,388 $44,384
Profit Before Interest and Taxes ($22,654) $9,986 $16,764
EBITDA ($21,886) $10,754 $17,528
Interest Expense $0 $0 $0
Taxes Incurred $0 $2,497 $4,261
Net Profit ($22,654) $7,490 $12,503
Net Profit/Sales -54.88% 8.03% 12.21%

Projected Cash Flow

The following chart and table will indicate projected cash flow.

Mlm water filter business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $41,280 $93,301 $102,421
Subtotal Cash from Operations $41,280 $93,301 $102,421
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $5,000 $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 $46,280 $93,301 $102,421
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $36,000 $36,000 $36,000
Bill Payments $23,711 $48,467 $52,816
Subtotal Spent on Operations $59,711 $84,467 $88,816
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 $2,500 $2,500
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 $59,711 $86,967 $91,316
Net Cash Flow ($13,431) $6,334 $11,105
Cash Balance $1,669 $8,003 $19,108

Projected Balance Sheet

The following table will indicate the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $1,669 $8,003 $19,108
Other Current Assets $0 $0 $0
Total Current Assets $1,669 $8,003 $19,108
Long-term Assets
Long-term Assets $2,300 $2,300 $2,300
Accumulated Depreciation $768 $1,536 $2,300
Total Long-term Assets $1,532 $764 $0
Total Assets $3,201 $8,767 $19,108
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $3,455 $4,031 $4,369
Current Borrowing $0 $0 $0
Other Current Liabilities $5,000 $2,500 $0
Subtotal Current Liabilities $8,455 $6,531 $4,369
Long-term Liabilities $0 $0 $0
Total Liabilities $8,455 $6,531 $4,369
Paid-in Capital $18,000 $18,000 $18,000
Retained Earnings ($600) ($23,254) ($15,764)
Earnings ($22,654) $7,490 $12,503
Total Capital ($5,254) $2,236 $14,739
Total Liabilities and Capital $3,201 $8,767 $19,108
Net Worth ($5,253) $2,236 $14,739

Business Ratios

The following table contains ratios from the home water purification equipment industry, as determined by the Standard Industry Classification (SIC) Index code 3589, Service Industry Machinery, Not Elsewhere Classified.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 126.02% 9.77% 8.10%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 25.80%
Total Current Assets 52.15% 91.29% 100.00% 72.50%
Long-term Assets 47.85% 8.71% 0.00% 27.50%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 264.10% 74.50% 22.86% 35.50%
Long-term Liabilities 0.00% 0.00% 0.00% 21.30%
Total Liabilities 264.10% 74.50% 22.86% 56.80%
Net Worth -164.10% 25.50% 77.14% 43.20%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 52.65% 58.28% 59.70% 32.10%
Selling, General & Administrative Expenses 94.45% 45.91% 43.48% 17.80%
Advertising Expenses 0.00% 0.00% 0.00% 0.90%
Profit Before Interest and Taxes -54.88% 10.70% 16.37% 3.40%
Main Ratios
Current 0.20 1.23 4.37 2.12
Quick 0.20 1.23 4.37 1.20
Total Debt to Total Assets 264.10% 74.50% 22.86% 56.80%
Pre-tax Return on Net Worth 431.21% 446.60% 113.74% 4.50%
Pre-tax Return on Assets -707.62% 113.90% 87.73% 10.40%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -54.88% 8.03% 12.21% n.a
Return on Equity 0.00% 334.95% 84.83% n.a
Activity Ratios
Accounts Payable Turnover 7.86 12.17 12.17 n.a
Payment Days 27 28 29 n.a
Total Asset Turnover 12.89 10.64 5.36 n.a
Debt Ratios
Debt to Net Worth 0.00 2.92 0.30 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital ($6,785) $1,472 $14,739 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.08 0.09 0.19 n.a
Current Debt/Total Assets 264% 74% 23% n.a
Acid Test 0.20 1.23 4.37 n.a
Sales/Net Worth 0.00 41.73 6.95 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
Personal contacts 0% $0 $784 $1,025 $1,354 $3,204 $3,654 $3,841 $4,215 $4,687 $5,124 $5,325 $5,878
Recurring revenue stream 0% $0 $0 $0 $0 $0 $125 $135 $187 $265 $365 $458 $654
Total Sales $0 $784 $1,025 $1,354 $3,204 $3,779 $3,976 $4,402 $4,952 $5,489 $5,783 $6,532
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
Personal contacts $0 $392 $513 $677 $1,602 $1,827 $1,921 $2,108 $2,344 $2,562 $2,663 $2,939
Recurring revenue stream $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $392 $513 $677 $1,602 $1,827 $1,921 $2,108 $2,344 $2,562 $2,663 $2,939
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
Aitch Tuoo 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 0 0 0 0 0 0 0 0 0 0 0 0
Total Payroll $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

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% 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 $784 $1,025 $1,354 $3,204 $3,779 $3,976 $4,402 $4,952 $5,489 $5,783 $6,532
Direct Cost of Sales $0 $392 $513 $677 $1,602 $1,827 $1,921 $2,108 $2,344 $2,562 $2,663 $2,939
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $392 $513 $677 $1,602 $1,827 $1,921 $2,108 $2,344 $2,562 $2,663 $2,939
Gross Margin $0 $392 $513 $677 $1,602 $1,952 $2,056 $2,295 $2,609 $2,927 $3,121 $3,593
Gross Margin % 0.00% 50.00% 50.00% 50.00% 50.00% 51.65% 51.70% 52.12% 52.68% 53.32% 53.96% 55.01%
Expenses
Payroll $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Sales and Marketing and Other Expenses $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Depreciation $64 $64 $64 $64 $64 $64 $64 $64 $64 $64 $64 $64
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75
Insurance $60 $60 $60 $60 $60 $60 $60 $60 $60 $60 $60 $60
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Taxes 15% $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $3,699 $3,699 $3,699 $3,699 $3,699 $3,699 $3,699 $3,699 $3,699 $3,699 $3,699 $3,699
Profit Before Interest and Taxes ($3,699) ($3,307) ($3,187) ($3,022) ($2,097) ($1,747) ($1,644) ($1,405) ($1,091) ($772) ($579) ($106)
EBITDA ($3,635) ($3,243) ($3,123) ($2,958) ($2,033) ($1,683) ($1,580) ($1,341) ($1,027) ($708) ($515) ($42)
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($3,699) ($3,307) ($3,187) ($3,022) ($2,097) ($1,747) ($1,644) ($1,405) ($1,091) ($772) ($579) ($106)
Net Profit/Sales 0.00% -421.81% -310.88% -223.19% -65.45% -46.23% -41.34% -31.91% -22.02% -14.06% -10.00% -1.62%

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 $784 $1,025 $1,354 $3,204 $3,779 $3,976 $4,402 $4,952 $5,489 $5,783 $6,532
Subtotal Cash from Operations $0 $784 $1,025 $1,354 $3,204 $3,779 $3,976 $4,402 $4,952 $5,489 $5,783 $6,532
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 $5,000 $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 $784 $1,025 $1,354 $3,204 $3,779 $8,976 $4,402 $4,952 $5,489 $5,783 $6,532
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 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Bill Payments $21 $648 $1,031 $1,153 $1,343 $2,245 $2,465 $2,562 $2,750 $2,986 $3,200 $3,307
Subtotal Spent on Operations $3,021 $3,648 $4,031 $4,153 $4,343 $5,245 $5,465 $5,562 $5,750 $5,986 $6,200 $6,307
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 $3,021 $3,648 $4,031 $4,153 $4,343 $5,245 $5,465 $5,562 $5,750 $5,986 $6,200 $6,307
Net Cash Flow ($3,021) ($2,864) ($3,006) ($2,799) ($1,139) ($1,466) $3,511 ($1,160) ($798) ($497) ($417) $225
Cash Balance $12,079 $9,215 $6,209 $3,410 $2,271 $805 $4,316 $3,157 $2,358 $1,861 $1,444 $1,669
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 $15,100 $12,079 $9,215 $6,209 $3,410 $2,271 $805 $4,316 $3,157 $2,358 $1,861 $1,444 $1,669
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $15,100 $12,079 $9,215 $6,209 $3,410 $2,271 $805 $4,316 $3,157 $2,358 $1,861 $1,444 $1,669
Long-term Assets
Long-term Assets $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300
Accumulated Depreciation $0 $64 $128 $192 $256 $320 $384 $448 $512 $576 $640 $704 $768
Total Long-term Assets $2,300 $2,236 $2,172 $2,108 $2,044 $1,980 $1,916 $1,852 $1,788 $1,724 $1,660 $1,596 $1,532
Total Assets $17,400 $14,315 $11,387 $8,317 $5,454 $4,251 $2,721 $6,168 $4,945 $4,082 $3,521 $3,040 $3,201
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 $614 $993 $1,109 $1,268 $2,162 $2,380 $2,470 $2,651 $2,879 $3,090 $3,188 $3,455
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 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Subtotal Current Liabilities $0 $614 $993 $1,109 $1,268 $2,162 $2,380 $7,470 $7,651 $7,879 $8,090 $8,188 $8,455
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $614 $993 $1,109 $1,268 $2,162 $2,380 $7,470 $7,651 $7,879 $8,090 $8,188 $8,455
Paid-in Capital $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000
Retained Earnings ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600)
Earnings $0 ($3,699) ($7,006) ($10,193) ($13,215) ($15,312) ($17,059) ($18,702) ($20,107) ($21,197) ($21,969) ($22,548) ($22,654)
Total Capital $17,400 $13,701 $10,394 $7,208 $4,186 $2,089 $342 ($1,302) ($2,707) ($3,797) ($4,569) ($5,148) ($5,254)
Total Liabilities and Capital $17,400 $14,315 $11,387 $8,317 $5,454 $4,251 $2,721 $6,168 $4,945 $4,082 $3,521 $3,040 $3,201
Net Worth $17,400 $13,701 $10,394 $7,208 $4,186 $2,089 $342 ($1,302) ($2,706) ($3,797) ($4,569) ($5,147) ($5,253)

LivePlan Logo

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

Create Your Plan