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Recycling icon Plastics Recycling Business Plan

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Replay Plastics

Financial Plan

Forecast

Key assumptions

Key Assumptions: 

  • Replay has allowed for 30 days to collect receivables due to knowledge and experience with customers in the industry.
  • Inventory turnover is predicted at 12 times, which is extremely conservative.
  • The personnel burden includes contribution by the Company to employee health care.
  • We have allowed for Accounts Receivable financing of 70% at an interest rate of 12% per annum. 
  • It is assumed that additional extrusion lines will be added in the second year, with down payments of 33% at time of order and balance paid at time of shipment (see Cash Flow for details). These will be purchased as long-term assets out of the cash flows of the business.
  • General annual growth rates of 5% have been assumed on all sales prices and material and labor costs.

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Use of funds

Our start-up expenses are budgeted at $210,000, which is mostly for on-site contractor services during facility preparation. $50,000 has been set aside for legal and accounting, $25,000 for special consulting that may be required during start up and $50,000 each for local engineering and lab equipment and supplies. $30,000 has been set aside as a contingency for the start up period.

Our largest Start-up Requirement is the building of the recycling and extrusion facility. Its final value at completion is listed below as a long-term asset of $3,620,000 (excluding expensed items like consultants and engineering listed above). Aside from the building itself, we need $25,000 in machinery and fixtures, $500,000 of inventory (plastic bottle feed stock) and cash to cover us through the initial year.

Start-up Expenses

Legal & Accounting $50,000

Stationery etc. $5,000

Consultants $25,000

Lab Equipment $50,000

Local Engineering $50,000

Misc Start up $30,000

TOTAL START-UP EXPENSES $210,000

Sources of Funds

We will get a $800,000 dollar loan against our 3 million dollars of assets. Our Founders will put up a total of $1.5 million dollars. We will also have a group of VC investors that will put up the 2.7 million dollars. This will give replay plastics the 4.2 million that it needs to start. 

Statements

Projected Profit and Loss

2018 2019 2020
Gross Margin $3,960,171 $5,466,966 $5,466,966
Operating Expenses
Salaries & Wages $1,913,500 $2,561,832 $2,637,941
Employee Related Expenses $382,700 $512,366 $527,589
Lease $72,000 $72,000 $72,000
Marketing $357,839 $492,798 $492,798
Utilities $36,000 $36,000 $36,000
Insurance $36,000 $36,000 $36,000
Equipment Rental $178,920 $246,399 $246,399
Amortization of Other Current Assets $0 $0 $0
Interest Incurred $38,105 $33,837 $29,350
Depreciation and Amortization $241,333 $241,334 $241,333
Gain or Loss from Sale of Assets
Income Taxes $0 $0 $0
Total Expenses $17,188,181 $23,405,500 $23,492,343
Net Profit $703,774 $1,234,400 $1,147,557

Projected Balance Sheet

Starting Balances 2018 2019 2020
Cash $645,000 $1,506,676 $2,894,711 $4,191,415
Accounts Receivable $0 $0 $0
Inventory $500,000 $500,000 $500,000 $500,000
Other Current Assets $25,000 $25,000 $25,000 $25,000
Total Current Assets $1,170,000 $2,031,676 $3,419,711 $4,716,415
Long-Term Assets $3,620,000 $3,620,000 $3,620,000 $3,620,000
Accumulated Depreciation ($241,333) ($482,667) ($724,000)
Total Long-Term Assets $3,620,000 $3,378,667 $3,137,333 $2,896,000
Accounts Payable $0 $0 $0
Income Taxes Payable $0 $0 $0
Sales Taxes Payable $0 $0 $0
Short-Term Debt $83,431 $87,699 $92,186 $96,902
Prepaid Revenue
Total Current Liabilities $83,431 $87,699 $92,186 $96,902
Long-Term Debt $716,569 $628,870 $536,684 $439,782
Long-Term Liabilities $716,569 $628,870 $536,684 $439,782
Paid-In Capital $4,200,000 $4,200,000 $4,200,000 $4,200,000
Retained Earnings ($210,000) ($210,000) $493,774 $1,728,174
Earnings $703,774 $1,234,400 $1,147,557

Projected Cash Flow Statement

2018 2019 2020
Net Cash Flow from Operations
Net Profit $703,774 $1,234,400 $1,147,557
Depreciation & Amortization $241,333 $241,333 $241,333
Change in Accounts Receivable $0 $0 $0
Change in Inventory $0 $0 $0
Change in Accounts Payable $0 $0 $0
Change in Income Tax Payable $0 $0 $0
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt $4,268 $4,487 $4,716
Change in Long-Term Debt ($87,699) ($92,186) ($96,902)
Cash at Beginning of Period $645,000 $1,506,676 $2,894,711
Net Change in Cash $861,676 $1,388,035 $1,296,704