Riviera Cleaners Financial Projections
Riviera Cleaners Financial Projections
6. FINANCIAL PROJECTIONS
6.1 Profit & Loss
| Year 1 | Year 2 | Year 3 | |
| Sales | $195,950 | $330,749 | $371,400 |
| Costs/Goods Sold | $5,410 | $6,001 | $6,100 |
| GROSS PROFIT
OPERATING EXPENSES |
$190,540 | $324,748 | $365,300 |
| Salary (Office & Overhead) | $129,600 | $267,500 | $303,500 |
| Payroll (taxes, etc.) | $10,640 | $12,110 | $12,560 |
| Outside Services | $4,000 | $6,560 | $5,450 |
| Supplies (Office & Operation) | $1,750 | $2,000 | $4,500 |
| Repairs & Maintenance | $3,730 | $4,120 | $4,570 |
| Advertising | $7,000 | $6,500 | $6,550 |
| Car, Delivery & Travel | $2,300 | $2,470 | $3,000 |
| Accounting & Legal | $1,300 | $1,300 | $1,300 |
| Rent | $0 | $0 | $0 |
| Telephone | $3,000 | $3,500 | $3,230 |
| Utilities | $1,300 | $1,300 | $1,300 |
| Insurance | $2,500 | $2,500 | $2,500 |
| Taxes (Real Estate, etc.) | $0 | $2,540 | $2,470 |
| Interest | $0 | $0 | $0 |
| Depreciation | $940 | $940 | $940 |
| Other Expenses | $0 | $0 | $0 |
| TOTAL EXPENSES | $167,760 | $310,800 | $349,400 |
| NET PROFIT BEFORE TAXES | $22,780 | $13,948 | $15,900 |
| Income Taxes | $2,110 | $2,540 | $2,470 |
NET PROFIT AFTER TAX |
$20,670 | $11,408 | $13,430 |
| Owner Draw/Dividends | $2,00 | $1,130 | $1,300 |
| ADJUSTED TO RETAINED | $18,670 | $10,278 | $12,130 |
6.5.1 Assumptions for Profit and Loss Projections
The profit and loss projections for Riviera Cleaners Company will depend on significant assumptions. For instance, interest rates and taxes depend on conservative assumptions. We assume the existence of a strong economy with minimal cases of major recession. Also, we assume that the changes in the economic policy would not make our services obsolete.
General Assumptions
| Year 1 | Year 2 | Year 3 | |
| Plan Months | 1 | 2 | 3 |
| Current interest rate | 10.00% | 10.00% | 10.00% |
| Long-term interest rate | 10.00% | 10.00% | 10.00% |
| Tax rate | 17.08% | 25.00% | 17.08% |
| Other | 0.00% | 0.00% | 0.00% |
The sales figures entail payment for cleaning services in areas such as bathroom, carpets, upholstery, hardwood floors, tiles and grouts, area rugs, windows, kitchen, and bedroom. Also, the figures include payment for post-construction clean-up, sewage and biohazard clean-up and air duct cleaning. The affluent elderly market, couples with young children and professionals with limited time are our target customers, and they will pay premium prices for the cleaning service, which will total to $195,950, $330,749 and $371,400 for the first, second and third years respectively.
The top five expenses that the company will incur include the following. First, the company will incur payroll expense. In the first year of operation, the company will pay its employees $129,600. In the second year, it will pay $267,500, and in the third year, employees will receive $303,500. Second, the company will incur sales and marketing expense. The company will incur $7,000, $6,500 and $6,550 as sales and marketing expenditures in the first, second and third year respectively. Third, the company will incur electricity and utility expense. We shall pay $1,300 for electricity and other utilities. The fourth expenses are supplies. The company will require chemicals and supplies to provide service; therefore, the company will incur $1,750, $2,000 and $4,500 in the first, second and third year of the operation respectively. The fifth expense is insurance. The company will pay $2,500 every year as insurance fees.
Elevator Pitch
Currently, I am studying business at Kaplan University. I have effective interpersonal and communication skills, and one of my strengths is my ability to deliver thoughtful and engaging presentations. My friends often compliment me for being a good leader and a role model. I am interested in starting a company that allows me to apply my business knowledge and leadership skills. Also, I would like to inspire my colleagues through my business.
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