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ProjectionHub

Custom Revenue Model

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Need a customized revenue model?

We’ve got you covered! ProjectionHub offers a revenue projection model customized specifically for your business. All we need is some information about your business model, and we will create 5 years of revenue projections that you can then import into the web application at ProjectionHub.Com to create accurate and customized financial projections.

Take a look at this short video to see what you will be receiving for a one-time fee of only $99!

What is ProjectionHub?

ProjectionHub is a web application that helps entrepreneurs create customizable and easy-to-read financial projections to share with potential investors, lenders, or simply for internal planning. We also offer additional consulting services if your business model is more complex or you would like more customized and detailed projections. See our services page to view all of our offerings!

Finally, if you are in need of any of our services, please fill out the form below to let us know what you need and how ProjectionHub can help make your business a success!

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SaaS Revenue Model

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We are ProjectionHub, a software that assists entrepreneurs in creating customizable and easy-to-read financial projections unique to their business models.

Google Sheet Integration

One of the ways in which we do this is by creating and integrating Google Sheet revenue models for each business model template. We structure a revenue model specific to a business type and allow you, the business owner, to customize it according to your company. Then, the user has the ability to import those revenue projections into the ProjectionHub web application in order to create accurate and custom financial projections unique to his/her business.

SaaS Business Model

If you would like to read more about SaaS business models and how to use ProjectionHub.Com to create financial projections for your SaaS company, see “Financial Projections for a SaaS Company”. This blog post is specifically designed to inform users on how to utilize our Google Sheet integration.

Saas Revenue Model

In the video below, we will walk you through how to edit and import the SaaS Google Sheet revenue model into the ProjectionHub web application to generate your customized financial projections. But first, I will simply provide you with a list of steps to integrate your Google Sheet revenue model:

  1. Add the Software as a Service business model
  2. Go to the “Revenue” tab and click “Add Google Sheet Revenue Model”
    1. You may have to connect your Google account then click this button a second time
  3. Click the green spreadsheet icon next to the “New Revenue” line item
  4. Edit any of the assumptions highlighted in blue on the Google Sheet to match your company’s assumptions
  5. Go back to ProjectionHub.Com, hover over the 3 dots to the left of the “New Revenue” line item, and select “Import Google Sheet Revenue”
  6. Add any expenses, assets, liabilities, and investors
  7. View your financial projections by clicking on the Dashboard icon to the left of your page

We hope this post and the following video proves to be helpful as you create your very own financial projections for your Software as a Service business!

Happy Projecting!

Jimmy John’s Financial Projection Template

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In 2017 Jimmy John’s Gourmet Sandwiches was the #4 fastest growing franchise according to Entrepreneur.com.  There are now 2,657 Jimmy John’s franchises in the U.S. and 84 new stores were added in the last 12 months alone.

In order to open a Jimmy John’s franchise you are likely going to need financing, and often times the bank will require financial projections for any loan for a new startup franchise.

To help you complete your financial projections “freaky fast” we have developed a financial model template specifically for Jimmy John’s within our ProjectionHub web app.

This blog post is going to help explain how to use ProjectionHub to create financial projections for your 1st or 50th Jimmy John’s unit.

Signup Instructions

  1. Feel free to learn more about ProjectionHub in general before signing up.
  2. You can sign up for a free trial by selecting the “Jimmy John’s” template here.
  3. If you have any questions about the model as you go, please email support@projectionhub.com

General Business Info

Once you sign up and confirm your account you will be asked to complete some general business info as seen below:

Adding the Jimmy John’s Business Model

Once you save the general business info, you will be able to add a business model.  If you don’t already see a Jimmy John’s Business Model added on this page, you can click the add Business Model button as seen below to add your first Jimmy John’s unit.

Jimmy John’s Revenue

Next you can click the orange button to Add Revenue to get started with your sales projections.

You will now have 2 options as you see in the image below:

  1.  You can click “Add Revenue” which will give you the ability to add projected revenue numbers for each month for your store.
  2.  Or you can click “Add Google Sheet Revenue” as circled in red above.  We have created a special Google Spreadsheet template specifically for Jimmy John’s franchises that will give you more control in terms of adding assumptions for your average ticket price and number of customer orders each month.
  3. If you decide to utilize our Google Sheet template please see this guide on how to enable the Google Sheet Integration.  You can see a screenshot of the Google Sheet below:

As  you are working on your revenue projections the following article may be helpful – according to CNN Money the average Jimmy John’s franchise has annual sales of $1.2 million and profit of $280,000.   This will vary greatly based on your location, so you may need to make some adjustments based on your specific market.

Jimmy John’s Expenses

Once you complete your revenue projections you can move on to your expenses.  There are 2 primary types of expenses:

  1.  Startup Expenses
  2.  Ongoing Operating Expenses

If you are creating a set of projections for a startup Jimmy John’s location, this list of startup expenses and ranges comes directly from Jimmy John’s.  Some of the items listed as startup expenses should be entered as expenses on month 1 and some are actually cash spent on assets like:

  • Leasehold improvements
  • Equipment
  • Buildings

If you have any of these types of expenses you will want to add them later as an “Asset” instead of an “Expense” on this page.

Jimmy John’s Operating Expenses

On the Expenses page in ProjectionHub you will be able to add/update your operating expenses.  You will notice that the Expense page will come with a number of standard expense line items along with a default monthly expense for most of the line items.  Obviously you can change any of these default expenses to reflect your specific situation.

Some expenses will be a % of your total sales, instead of a fixed monthly amount.

So as you see in the image above you can click the check boxes next to those expense categories and then in the drop down box with a red circle around it you can select “Apply Industry Ratios” and then click “Apply”

ProjectionHub is assuming the following % ratios for the following expenses:

  • Advertising – 4.5%
  • Royalties – 6%
  • Food Costs – 30%
  • Labor Costs – 25%

So when you click “Apply Industry Ratios” the system will take your projected sales and multiply by 6% to come up with your royalty expense for example.  See how this should work below:

Jimmy John’s Assets

Next you can move on to the assets section.  You will notice that the Assets page comes pre-loaded with the default assets that you might have as a Jimmy John’s franchise owner.

To add an asset, hover over the row, see the 3 dots on the left of the asset name, hover over, and click edit.

Next you will be able to add your Kitchen Equipment as an example.

You can enter in the details of your assets as seen below:

Jimmy John’s Loans

Next you can move to the Liabilities page and add a loan.  If you are going to borrow to help fund your startup costs, you can “Add a Liability” as seen below:

Jimmy John’s Investors

Next you can add any personal investment you will be making as well as investment from outside investors.  One common situation may be that you pay the $35,000 franchise fee with your personal investment.  In the example below I assumed that you paid the $35,000 franchise fee as a personal investment, and I selected that the investment was pre-existing which means that the projections will assume that you already paid the $35k prior to the projections starting, so this will show up on your opening balance sheet as equity.

Reports

Once you enter in all of your assumptions you will be able to review a number of reports.  Here is a sampling of some of the reports, tables below:

On the Dashboard page you will be able to download your projection Income Statement, Balance Sheet and Cash Flow projections to share with your lender or investor.

Adding Multiple Jimmy John’s Units

Finally, let’s assume you want to add another Jimmy John’s store in the future.  All you need to do is go back to the “Business Model” page and add another “Jimmy John’s” business model.  You can then label it Jimmy John’s Unit 2 and you can repeat the process.  You can add as many units as you would like over time.

Again, you can get started by creating a ProjectionHub free trial account today.

As you complete your projections please don’t hesitate to reach out to us with questions at support@projectionhub.com

Good luck!

Financial Projection Template for a Subway Franchise

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In 2017 there were more than 44,000 Subway franchises throughout the world.  This makes Subway the most popular franchise in the world.  If you are looking to open your first Subway store or your 10th store, you will probably need to secure some financing from a bank or an investor.

In order to secure a business loan for a startup you will likely be asked to provide a set of financial projections.  So we have developed a financial projection template specifically for a new Subway franchise within the ProjectionHub web application.

Our goal with this blog post is to walk you through the Subway financial projection template that we have created, so this will effectively serve as your User Guide to the Subway Franchise financial model.

Signup Instructions

  1. Feel free to learn more about ProjectionHub in general before signing up.
  2. You can sign up for a free trial by selecting the “Subway” template here once you sign up.
  3. If you have any questions about the model as you go, please email support@projectionhub.com

General Business Info

Once you sign up and confirm your account you will be asked to complete some general business info as seen below:

Adding the Subway Business Model

Once you save the general business info, you will be able to add a business model.  If you don’t already see a Subway Business Model added on this page, you can click the add Business Model button as seen below to add your first Subway unit.

Subway Revenue

Next you can click the orange button to Add Revenue to get started with your sales projections.

You will now have 2 options as you see in the image below:

  1.  You can click “Add Revenue” which will give you the ability to add projected revenue numbers for each month for your store.
  2.  Or you can click “Add Google Sheet Revenue”.  We have created a special Google Spreadsheet template specifically for Subway franchises that will give you more control in terms of adding assumptions for your average ticket price and number of customer orders each month.
  3. If you decide to utilize our Google Sheet template please see this guide on how to enable the Google Sheet Integration.  You can see a screenshot of the Google Sheet below:

As you work on your revenue projections, it may be helpful to know that, according to Business Insider, the average Subway franchise has annual sales of $490,000.  But this will vary greatly based on your location, so you may need to make some adjustments. In this section you can assume an average order amount and a growth rate of that average order amount.  Then you can assume the # of monthly orders and a growth rate for that as well.

Subway Expenses

Once you complete your revenue projections you can move on to your expenses.  There are 2 primary types of expenses:

  1.  Startup Expenses
  2.  Ongoing Operating Expenses

Subway Startup Costs

This list of startup expenses and ranges comes from FranchiseDirect.

As you know more about your specific costs you can update these numbers. Some of the items listed as startup expenses should be entered as expenses on month 1 and some are actually cash spent on assets like:

  • Leasehold improvements
  • Equipment
  • Buildings

If you have any of these types of expenses you will want to add them later as an “Asset” instead of an “Expense” on this page.

Subway Operating Expenses

On the Expenses page in ProjectionHub you will be able to add/update your operating expenses.  You will notice that the Expense page will come with a number of standard expense line items along with a default monthly expense for most of the line items.  Obviously you can change any of these default expenses to reflect your specific situation.

Some expenses will be a % of your total sales, instead of a fixed monthly amount.

So as you see in the image above you can click the check boxes next to those expense categories and then in the drop down box you can select “Apply Industry Ratios” and then click “Apply”.

ProjectionHub is assuming the following % ratios for the following expenses:

  • Advertising – 4.5%
  • Royalties – 8%
  • Food Costs – 30%
  • Labor Costs – 25%

So when you click “Apply Industry Ratios” the system will take your projected sales and multiply by 8% to come up with your royalty expense for example.

Subway Assets

Next you can move on to the assets section.  You will notice that the Assets page comes pre-loaded with the default assets that you might have as a Subway franchise owner.

To add an asset, hover over the row, see the 3 dots on the left of the asset name, hover over, and click edit.

Next you will be able to add your Kitchen Equipment as an example. You can enter in the details of your assets as seen below:

Subway Loans

Next you can move to the Liabilities page and add a loan.  If you are going to borrow to help fund your startup costs, you can “Add a Liability” as seen below:

CIT Direct Capital is one lender that specifically provides financing to Subway franchises.

Subway Investors

Next you can add any personal investment you will be making as well as investment from outside investors.  One common situation may be that you pay the $15,000 franchise fee with your personal investment.  In the example below we assume that you paid the $15,000 franchise fee as a personal investment, and we selected that the investment was pre-existing which means that the projections will assume that you already paid the $15k prior to the projections starting, so this will show up on your opening balance sheet as equity.

Reports

Once you enter in all of your assumptions you will be able to review a number of reports.  Here is a sampling of some of the reports, tables below:

On the Dashboard page you will be able to download your projection Income Statement, Balance Sheet and Cash Flow projections to share with your lender or investor.

Adding Multiple Subway Units

Finally, let’s assume you want to add another Subway store in the future.  All you need to do is go back to the “Business Model” page and add another “Subway” business model.  You can then label it Subway Unit 2 and you can repeat the process.  You can add as many units as you would like over time.

Again, you can get started by creating a ProjectionHub free trial account today.

As you complete your projections please don’t hesitate to reach out to us with questions at support@projectionhub.com

Good luck!

An Example Restaurant Financial Projection for an SBA Loan Application

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image for restaurant example budget blogsIf you are looking for a bank loan or SBA loan for your restaurant concept, the bank is probably going to ask you to provide financial projections for your company.  If this is a startup restaurant and you don’t have historic financial results to base your projections on this can be a daunting task!

At ProjectionHub, thousands of business owners have used our app to create their own financial projections like our brewery financial plan, coffee shop sales projections, food truck templates, and more. What we have found is that thousands more are overwhelmed at the thought of creating their own projections without some help.

So we have started to provide some basic consulting to help clients create a custom financial projection model for their restaurant.  Here is an example of one of our recent projects, so that you can get an idea of what the finished product looks like.

There are 3 key things that the bank is looking for in your restaurant projections:

  1. You have an understanding of your finances, not just food.
  2. Your projections are realistic – they might look at some financial ratios and compare to industry averages like these.
  3. Do your projections show sufficient cash flow to repay the loan.

If you would like some help developing a financial model for your restaurant that will meet the standards that the bank expects to see, tell us more about your project here.

Best of luck!

Photo by Anna Tis from Pexels

4 Financial Projection Models for the 4 Restaurant Styles

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image of restaurant tableStarting a restaurant could be a daunting task, but knowing what you want your end product to look like provides purpose in the planning. The style of your restaurant should be your first decision, along with a concept. There are 4 styles of service in the restaurant industry:

  1. Fast Food – see our template
  2. Fast Casual – see our template
  3. Casual Dining – see our template
  4. Fine Dining – see our template 

Restaurants operate on thin margins, so it is vital to know the style of your restaurant when making projections. Each style of restaurant has a number of similarities and a number of differences when it comes to the financial model of the business.  In this blog post, I am going to outline how I would build a revenue projection model for each of the 4 restaurant styles.

Fast Food Restaurant Financial Projection Model

Let’s look at an example for a fast food restaurant. Because the style for this model is fast food, the average order amount is usually around $5-$7 for a meal. We will use $6 for our example. Next, think about the capacity of the restaurant. How many people will you serve? You would want to put the restaurant in a high traffic area that is easily accessible. Say the city you are putting it in has a population of 80,000 people, and half of those people would eat at a fast food restaurant once a week. Divide that between the 7 days in a week, and you have about 5,700 potential customers per day. Figuring out how many customers you could serve per day depends on your restaurant, brand, and kitchen/dining facilities. I assume that you will do 300 orders per day. So that means 300 orders per day X $6 per order X 7 days a week X 4 weeks per month is $50,400 per month in sales.

Here are the steps with the math I used in creating this revenue projection:

Total Addressable market

  1. City = 80,000 people
  2. People who eat at a fast food restaurant once a week = 40,000
  3. Divided by 7 days per week = 40,000 / 7 = 5,700 potential customers

Revenue Projection

  1. Restaurant capacity = 300 orders per day
  2. Average order amount = $6
  3. Average daily sales = $6 x 300 per day = $1,800
  4. Monthly sales = ($1,800 x 7 days) x 4 weeks = $50,400

Splitting that between food and beverage sales respectively results in the revenue sheet below using the ProjectionHub application:

 

Fast Casual Restaurant Financial Model

A fast casual restaurant should provide food in a short wait span, but it’s quality of food, ingredients, and experience is considered an upgrade from a fast food restaurant.  Meals usually cost between $7-$15. Chipotle, Five Guys, and Panera come to mind when thinking of restaurants in this category. Capacity for this model is similar to a fast food restaurant because customers typically order themselves; there is no server to seat them and place their order. They are typically open for lunch and dinner. For example 5 Guys is open from 11:00 am to 10:00 pm. This means it is open 11 hours, and say it can serve 50 customers every hour when it is busy, but it also would have slow hours. Using an estimate of 30 customers per hour, this means that ideally there would be 330 customers per day. However, to use a conservative estimate, I used 200 customers per day in my model.  An average order of $11 is used in my projections too. These restaurants also have catering available too, which varies per restaurant. This revenue projection can be found with math similar to below:

  1. Number of potential customers based on proximity= 10,000
  2. % of people who eat at fast casual restaurants = 40%
  3. Equals number of potential customers per day = 10,000 x 40% = 4,000
  4. % of market that will choose your restaurant = 5% or 200
  5. Average menu order = $11
  6. Average daily sales = $11 x 200 = $2,200
  7. Assuming $500 per week in catering
  8. Total monthly sales = (($2,200 per day x 7 days) + $500 in events per week) x 4 weeks per month = $63,600

These projections may be modest. If you are to purchase a franchise, it may have more success depending on the name and reputation of the restaurant.

Casual Dining Restaurant Revenue Model

Going down the line, the casual dining restaurant is more upscale than a fast casual restaurant. Prices typically range from $10-$20 for meals, and customers are seated while a waiter takes their orders. Restaurants may include a wine or bar menu as well. Common chains of casual dining restaurants include Olive Garden, Texas Roadhouse, Maggiano’s, and Chili’s Grill and Bar. Because it relies on customers eating within the restaurant, you have to consider additional factors in developing a revenue projection. What type of people will are trying to attract? Will the restaurant be open for breakfast? What will the layout of the restaurant look like? How much seating is available? How long will the average customer be at the restaurant? Here are some assumptions I made for my projections:

  • 130 seats in the restaurant
  • Average order is $16
  • Open for lunch and dinner (11:00 am to 10:00 pm)
  • At full capacity, will serve 130 for lunch and 100 for dinner

From here, we can do some math to project your revenue:

  • Average menu order = $16
  • Average daily sales = $16 x 230 = $3,680
  • Total monthly sales = ($3680 per day x 7 days)  x 4 weeks per month = $103,040

Keep in mind while this seems like more revenue compared to the previous two models, the costs of a casual restaurant may be higher than a fast food or fast casual restaurant as you need servers and have the task of keeping eating areas clean.

Fine Dining Restaurant Projection Model

A fine dining restaurant is usually at the top-of-line restaurant. Prices are the highest compared to other styles of restaurant, but the quality of food and level of service reflect the higher price. This article describes several items that factor into a more expensive dining option. The market of customers that will eat at a fine dining restaurant is also smaller than most other restaurant models, but price point of average orders can be much higher. For my revenue projections, I will assume the average order is $50. When will the restaurant be open from? I assume this fine dining restaurant will only be open for dinner. Another question to consider is how many customers will you have each night. This question-answer on Quora gives some good criteria to think about for the capacity of your restaurant. The following are some steps that I think are helpful:

  1. 80 seats in the restaurant
  2. 130 covers for dinner
  3. $50 per average order
  4. Total monthly sales = ((130 x $50) x 7 days per week) x 4 weeks = $182,000

In the revenue model I made on ProjectionHub, I added a third category for desserts because some customers may come just for dessert that the restaurant specializes in serving. The revenue split between food, beverage, and dessert is: 60% food, 20% drinks, and 20% desserts.

Hopefully these descriptions give you a good idea on what your revenue may be if you are starting a new restaurant! ProjectionHub has business models for all four styles that make starting your projections quick and easy as well as other food/dining templates including a coffee shop financial plan excel template and a donut shop financial projections template.

Photo by Valeria Boltneva from Pexels

How to Download Financial Projections into Excel with ProjectionHub

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ProjectionHub users are now able to download their projected income statements, cash flow statements and balance sheets into Excel.

We are excited to release this long awaited feature that will allow users to have more control, flexibility and the chance to customize their financial projections to meet their needs.

To Download your Projections in Excel

  1. Go to the Dashboard
  2. Click “View Report”
  3. Then Click “Download Excel”

See images below:

view-report

download-financial-projections-in-excel

Financial Projections for a Startup Medical Practice

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If you are looking to start your own medical practice you probably have a lot of questions.  There are a number of great resources on the web that will help guide you through the process of starting up or writing a business plan:

  1. Medical Economics – Going Solo: Startup Basics
  2. Bplans – Example Business Plan for a Medical Practice

In this blog post I am going to focus solely on how to create realistic financial projections for your practice.  If you are looking to secure a business loan or investor, you will probably be asked for a set of financial projections.  Rather than going to get an MBA, my hope is this post will get you through the basics of projections to satisfy any lender or investor.

The Goal of Projections

The purpose of your financial projections is not to perfectly predict exactly how many patients you will have, what your expenses will be and how much money you will make.  The purpose of your projections are often to help convince yourself, lenders and investors that investing in your practice will provide a return on investment and that you won’t go Bankrupt!

So what should be Included

You should have the following statements for at least 3 years in my opinion:

  1. A projected profit and loss statement
  2. A projected balance sheet
  3. And a projected cash flow statement

Getting Started

We created a Medical Practice financial model and home health care financial model for you to use with our financial projection software tool – ProjectionHub. I will use this model to demonstrate how to create financial projections for your business.

Revenue Forecast

The first step in the process of creating a financial forecast is to project your revenue/billings.  This article is very helpful in explaining the details behind what doctors can earn per patient and how many patients can be seen per hour etc.

As an estimate the above article suggests that you can bill and receive approximately $35 per patient, so the primary leverage point is how many patients you can see per hour.  The average doctor meets with 4 to 5 patients per hour, and can meet with patients 7 hours a day, 4 days a week.

Let’s say you can meet with 4.5 patients per hour.

4.5 patients x 7 hours x 4 days per week x 4 weeks per month x $35 per hour = $17,640 in revenue per month x 12 months = $211,680.

That is your total revenue before taking into consideration any of your expenses.

That total revenue amount is probably not too enticing for many primary care docs, so in reality what ends up happening is that many docs work more hours and spend less time with patients in order to increase revenue.

Expenses

Once you have your revenue projected, you can enter your expenses into ProjectionHub as well.  We have included a pre-set list of expenses in the financial model that should be useful for you.  Here is an example of the input screen:
general-expenses-screenshot

Startup Costs

According to this article, you can expect startup costs of $70,000 to $100,000, your startup costs will include:

  • Furniture
  • Equipment
  • Copiers
  • Computers
  • Telephones
  • Practice Management Software

Loans and Investors

If you need some capital to cover some of your startup expenses of the first few months of operating expenses, you might either seek investment from friends and family, or other doctors, or you could apply for a small business loan.

Some of the larger national banks have specific areas of focus for medical practice loans like Bank of America.  You can add a business loan or investment into your projections as well:

Friends and Family Loan for Photography Startup

Cash Flow is King for Medical Practices

I think the most important thing to remember with a startup medical practice is that cash flow is king!  It is going to take a lot of cash to get a startup practice off the ground because you will have your startup expenses, but then once you start seeing patients there will likely be a 90 day cycle before you get paid.  You will see a patient, bill insurance or Medicare/Medicaid etc and then you can expect to wait a few months before you start getting paid.  You might read that it should take a lot less time, and it probably should, BUT I have seen so many similar businesses wait and wait and wait to get paid the first time by Medicare or Medicaid, so just expect a long wait.  That means you need to have the cash to operate the business, pay your rent, employee payroll, utilities, etc for 3 months while you wait to get that first reimbursement for services, so make sure you have plenty of cash as a contingency.

Reviewing your Projections

Once you enter all of your projection information in you can download your Profit and Loss, Balance Sheet and Cash Flow Projections from the Dashboard and determine whether you should give this a go or not.

Profit and Loss at a Glance

Is it Worth It?

So the question is, is it worth it?  Should you start your own practice, or should you work for someone else?  Here are some of the most recent stats on what doctors can make working for someone else.  I think the answer is that you might be able to make more money working for yourself, but it is also a lot more risky, so you shouldn’t make your decision based on money you should make the decision based on all of the intangibles.  This article is excellent at outlining the pros and cons of owning your own medical practice.

Best of luck!

Of course, if you have any questions at all, please email us at support@projectionhub.com and we will be happy to help.

Startup Phone and Tablet Repair Company – A Financial Model Example

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The phone and tablet repair business is a hot business to get started in right now.  It came in as #4 on the list of Best New Businesses to Start according to Business News Daily.  There are also a host of chains and franchise stores popping up around the country like:

In this article I am not going to teach you how to start a phone and tablet repair business, there are plenty of great articles that already do that like this one.

Financial Projections for a Startup Phone and Tablet Repair Company

Instead I am going to focus this article on the financial model and what projections might look like for your startup based on your proposed business model.  I will be using our app ProjectionHub to create financial projections as we go, you can sign up for a free trial here.

Revenue Projections

We will start with your sales projections.  The great thing about this industry is that there are a ton of revenue opportunities.  I am going to briefly talk through the different types of revenue that are most common as well as the most common channels in which to sell.

Repairs vs. Device and Accessories Sales

There are basically 2 primary sources of income in the phone and tablet repair industry.

  1. Repairs – You can repair devices and bill customers for the parts and services.
  2. Devices and Accessories – You can sell refurbished devices and/or sell accessories like cases to keep devices from breaking in the future.

Customer Segments

There are 3 primary segments of customers.  In my experience the best companies in this space are able to sell in all 3 of these segments and each segment can actually help your succeed in another segment.

  1. Retail – You can open a retail shop where customers with broken phones and tablets can walk in for repair services
  2. Corporate – You can sell repair services to schools or corporations that often have a fleet of devices that will require repairs and servicing
  3. Online – You can acquire devices that may be broken, fix them, and resell online via Amazon or eBay

Typical Steps to get Started

I think a good model to follow to start in this industry is

  1. Start by purchasing some broken phones online, try to fix them and resell online.
  2. Once you are comfortable and have some built in revenue from repairing and selling devices, you could look to open a retail store.
  3. The retail store will provide an opportunity for walk in repair customers, but it will also allow you to buy broken devices from customers that you might want to fix yourself and sell online.
  4. Once you have a local presence with your retail location you can approach the local schools or larger companies that have fleets of devices and look to establish a repair services relationship or contract with that organization.

Revenue Example

So now I am going to use ProjectionHub to create some year 1 projections for a phone and tablet repair startup.  Here are my key assumptions:

  1. I am assuming that you only buy broken devices, fix them and sell them online for the first 6 months
  2. In month 6 I assume that you will open a new store, take out a $20,000 loan and build out a store

Here is a sales projections graph for the first 12 months of a phone and tablet repair business:

sales-projections-phone-repair-company

Projected Expenses

I added minimal expenses for the first 6 months since you can buy broken phones online, at home, and fix them and sell them again online.  It isn’t until month 6 and 7 that expenses really start to kick in when you open your first store.  Here are my projected expenses for the first year:

phone-repair-business-expenses

Projected Profitability

In the first 12 months I am projecting a profit of approximately $10,000 before any owner’s draws.  So if you want to pay yourself in year 1 you should subtract your salary from $10,000.  I project just under $60,000 in sales for the first 12 months.  phone-repair-business-ratios

I wanted to make sure that you didn’t think you would get rich in the first 12 months, but I have seen a number of these companies become highly successful over a period of several years.

If you have any questions please email me at adam@projectionhub.com

Want to Start Your Own Accounting Firm? Create Financial Projections First.

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BEFORE you leave your position at a large CPA firm and decide to jump out on your own and start your own accounting firm, create some financial projections with ProjectionHub and prove to yourself that this is a good financial decision.

The Challenge

I have worked with a number of small accounting firms lately and realized just how difficult it is to operate a successful, small accounting firm.  The challenge for a small CPA or accounting firm is that they big firms can offer excellent salaries and benefits for staff accountants.  It is going to be almost impossible to match the compensation package for a staff accountant at a small firm that serves small businesses and individual tax payers.

Right now it seems like most of the small accounting firms I know are really struggling to hire staff accountants.  It is relatively easy for a CPA to put up their own shingle and start their own firm, and you might even be able to grow by adding a partner or 2 to the firm, but once you need to start hiring non-partner staff accountants the math becomes difficult.  Larger firms have larger clients that they can charge a higher billable rate to, if your firm is working with smaller businesses and non high net worth individuals you won’t be able to charge as high of a billable rate per hour and it just becomes difficult to hire good talent.

SO… in this blog post I am going to create an example set of financial projections for a startup accounting firm to demonstrate the likely financial results during the first 5 years of a startup accounting firm.

Startup Accounting Firm Example Financial Projections

I am going to use the “Accounting Firm” business model on ProjectionHub to create a set of example financial projections for a startup accounting firm.

Sales Projections for Startup Accounting Firm

The Accounting Firm business model comes with 5 default revenue line items:

  1. Bookkeeping
  2. Tax Services
  3. Audit Services
  4. Payroll Services
  5. Other Services

Typically the lowest barrier to entry is to provide Bookkeeping and Tax Services, so in the 1st year of projections I would focus on those 2 services right from the get-go, then you can break into more specialty services like audit, payroll and other niche services.

Here is an example of revenue projections for a startup accounting firm where you the accountant are the only employee for the first year.  My example shows just $33,500 in revenue in the first year as you are ramping up.

So if you are planning to leave a high paying job you should expect to take a significant pay cut in the short term.

accounting-firm-year-1-revenue

Example Expenses for a Startup Accounting Firm

I have included typical expenses for a first year, 1 person accounting firm in the Accounting Firm business model.

accounting-firm-year-1-expenses

Assets, Liabilities and Investors

The final 3 sections of your financial projections will include assets, liabilities and investors.  As a 1 person, new accounting firm, all 3 sections should be pretty light.  I have included a computer and some furniture as assets for the default accounting firm startup, and a small loan.  I doubt that you will find any investors as an accounting firm is not typically a high growth, “investable” type of business.

Financial Projections for New Accounting Firm

So based on my example projections I show a first year, 1 person accounting firm bringing in about $33,500 in revenue and just under $20,000 in net income before paying yourself.  SO… if you are making more than $20,000 as an accountant today, before you jump out on your own, just be very aware of the challenge you have in front of you and go in with eyes wide open.

If you have any questions at all please feel free to contact us at support@projectionhub.com