The purchase of Barton landfill at the onset is essential. Since Barton is currently operating, it allows GER the opportunity to augment the current waste stream by hauling from St. Louis and St. Charles, Missouri. The present owners of Barton have been ready to retire for several years and have lost interest in increasing this business. This affords GER the opportunity to build both businesses using Barton's cash flow and customer base. GER can solicit additional business in anticipation of Martin Creek's opening day. Prior to opening, waste would be transported to Barton. Thus, at Martin Creek's opening, there will be excellent revenue sources on the first day of business.
The financial plan depends on important assumptions, most of which are shown in the tables. GER expects a 30 to 45 day lag between services rendered and payment receipt because of the nature of the business. Interest rates, tax rates, and personnel burden are based on conservative assumptions.
Some of the more important underlying assumptions are:
This chart and table summarize the break-even analysis. GER expects to break even shortly after commencing operations as a result of GER personnel going to the hauler's transfer stations and using GER road tractors and divert the waste stream. Each trailer holds 80 yards. The monthly units refers to the number of trailer loads with approximately 27 tons (80 yards). Total truckloads for 690 tons daily is 673 loads per month, six days per week easily provided by seven road tractors.
GER projected profit and loss is shown on the following table, with sales at $6,354,720 the first year and increasing each year thereafter. Due to expenditures in the first year, initial profits are lower in comparison to the second year. Once Martin Creek landfill is fully constructed, profits rise dramatically. This chart reflects 940 tons per day to Barton. GER has verbal commitments to bring in this amount starting with the first day of ownership. The Martin Creek Profit & Loss Statement in the Appendix shows 600 tons per day diverted to Barton in the first year and in the 13th month delivered to Martin Creek. By hauling to Barton during Martin Creek's construction phase, GER will both increase profits and secure this business for Martin Creek at the time it is ready to accept its own waste stream. The additional 600 tons per day provides an additional sales potential of between $4,492,800 on the low side and $5,241,600 on the high side, depending on the length of contract with this transfer station agreed upon.
Cash flow projections are shown in the table below.
The following table shows the projected balance sheet for Good Earth Resources.
The following table compares the estimated ratios to the Standard Industry Code #4953, Solid Waste Landfill.