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--- business_plan [2012/06/08 14:32]
zik
+++ business_plan [2017/04/05 00:38] (current)
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 The general outline is taken from: [[http://web.sba.gov/busplantemplate/BizPlanStart.cfm]]
+Another resource that School Factory pointed us at: http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
 Further material was taken from the MakeIt Labs business plan at http://www.wpi.edu/Pubs/E-project/Available/E-project-122210-154836/unrestricted/Founding_a_Hackerspace.pdf with the author's permission.
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 ---
 Joseph Schlesinger//
-===== Executive Summary =====
-This section should:
-  * Be written last.
-  * Provide an enthusiastic snapshot of your company, explaining who you are, what you do and why.
-  * Be less than 2 pages in length.
-After reviewing this section the reader should:
-  * Want to learn more about your business.
-  * Have a basic understanding about your company.
-Draft:
-===== Business Description and Vision =====
-This section should include:
-  * Mission statement (business purpose).
-  * Company vision (statement about company growth).
-  * Business goals and objectives.
-  * Brief history of the business.
-  * List of key company principals.
-After reviewing this section the reader should know:
-  * Who the business is and what it stands for.
-  * Your perception of the company’s growth & potential.
-  * Specific goals and objectives of the business.
-  * Background information about the company.
-Draft:
-===== Definition of the Market =====
-This section should:
-  * Describe your business industry and outlook.
-  * Define the critical needs of your perceived or existing market.
-  * Identify your target market.
-  * Provide a general profile of your targeted clients.
-  * Describe what share of the market you currently have and/or anticipate.
-After reviewing this section the reader should know:
-  * Basic information about the industry you operate in and the customer needs you are fulfilling.
-  * The scope and share of your business market, as well as who your target customers are.
-Draft:
-===== Description of Products and Services =====
-This section should:
-  * Specifically describe all of your products and services.
-  * Explain how your products and services are competitive.
-  * If applicable, reference a picture or brochure of your products, which would be included in the plan’s appendix.
-After reviewing this section the reader should know:
-  * Why you are in business.
-  * What your products and services are and how much they sell for.
-  * How and why your products & services are competitive.
-Draft:
-===== Organization and Management =====
-This section should:
-  * Provide a description of how your company is organized as well as an organization chart, if available.
-  * Describe the legal structure of your business (proprietorship, partnership, corporation, etc.).
-  * Identify necessary or special licenses and/or permits your business operates with.
-  * Provide a brief bio description of key managers within the company.
-After reviewing this section the reader should know:
-  * The legal form of ownership for your business.
-  * Who the leaders are in your business as well as their roles.
-  * The general flow of operations within the firm.
-Draft:
-===== Marketing and Sales Strategy =====
-This section should:
-  * Identify and describe your market – who your customers are and what the demand is for your products & services.
-  * Describe your channels of distribution.
-  * Explain your sales strategy, specific to pricing, promotion, products and place (4Ps).
-After reviewing this section the reader should know:
-  * Who your market is and how you will reach it.
-  * How your company will apply pricing, promotion, product diversification and channel distribution to sell your products and services competitively.
-Draft:
-===== Financial Management =====
-This section should include:
-  * For a New Business
-    * Estimate of start-up costs.
-    * Projected balance sheet (1 year forward).
-    * Projected income statement (1 year forward).
-    * Projected cash flow statement (12 months forward).
-  * For an Existing Business
-    * Balance sheets (last 3 years).
-    * Income statements (last 3 years).
-    * Cash flow statement (12 months).
-  * If Applying for a Loan (in addition to the above)
-    * Current personal financial statement on each principal.
-    * Federal tax return for prior year.
-After reviewing this section the reader should:
-  * Have a good understanding regarding the financial capacity and/or projections for your company.
-Draft:
-====== Draft Business Plan Starting From MakeIt Labs ======
-===== Executive Summary =====
-MakeIt Labs LLC. is an open-access workshop that will serve people in the North Boston/Merrimack
-Valley area. We will provide the equipment, classes and personal help to a membership community that
-allows them to prototype and develop any idea they can imagine. We are targeting people who have an
-interest in hands-on skills in a variety of design and manufacturing areas.
-We focus on developing and fostering a creative community of hands-on individuals, and providing them
-with the tools they need to succeed. The location will have equipment for welding, metalworking,
-woodworking, plastic-working, electronics, programming and many other skill sets. There will be regular
-classes over these areas that will train people to safely work with this equipment and how it can be used
-to realize their ideas.
-Owner Joseph Schlesinger is a Systems and Electrical Engineer with a long history of invention and self-
-started entrepreneurship. He has personal skills in machining, welding, electronics design and
-programming which he has used to complete numerous cross-disciplinary projects. He has started and
-run a Convenience store, businesses in Web Design, Defense/Aerospace Communications and Online
-Alternative Currency Trading. Invention, prototyping and teaching has been a life-long passion of the
-owner, and this business will allow him to utilize his skill set and passions into a successful venture.
-There will be a heavy focus on community. It is the belief and experience of the owner that a strong,
-active community fosters excitement, passion and innovation that drives members to both stay with the
-business and come out satisfied with continual completion of projects.
-Funding will come primarily from membership fees collected by those interested, and from classes held
-on various topics. Continual investment from the owner to make up initial revenue shortfalls. The
-business will eventually seek non-profit status and then donations from area business and equipment
-comes largely from the existing stock of the owner and initial generous members.
-===== Company Summary =====
-MakeIt Labs is an Open-Access workshop opening in Lowell, MA. MakeIt Labs is founded on the idea
-that designing and building your own ideas provides a level of satisfaction unmatched by many
-consumer activities. MakeIt Labs seeks to capitalize upon this by offering its members the equipment,
-facilities and knowledge necessary to build their ideas and projects of interest.
-===== Keys to Success: =====
-==== 1.1 Competitive Advantage ====
-The lack of similar locations in an area of the country known for its creative and inventive spirit offers a
-large, pent up demand for this service. Centralized control offers key competitive advantages over other
-similar spaces.
-Almost all similar businesses in this field are structured through a communal, non-profit structure. While
-the idea is to keep the space as free and creativity-fostering as possible, this structure slows capital
-acquisition, misallocates resources, breeds political infighting and leads to long reaction times to
-problems that arise.
-Because MakeIt Labs is structured as a business, and not a communally-organized space, there will be a
-greater emphasis on increasing revenue. Where research shows that many locations with a similar
-purpose shy away from increasing revenue for ideological reasons, and to avoid the political infighting
-that comes with money, the business-organized ownership of MakeIt Labs uses this to its advantage.
-This income can be effectively re-invested into the kinds of higher-cost, high-value equipment that
-attracts users.
-Our main keys to success include:
-  * Creation and maintenance of a strong, vibrant community
-  * Utilize existing online communities for marketing
-  * Variety of high-value tools otherwise inaccessible to customers
-  * Availability of proper training
-  * Flexible access and use of facilities
-  * Providing a work area free from intellectual property demands
-==== 1.2 Mission ====
-MakeIt Labs offers a productive environment that nurtures innovation. MakeIt Labs will provide the
-equipment, space and knowledge to attract the area's leading inventors, citizen scientists and general
-innovators. We offer classes and events that entice new members, while expanding into new areas to
-keep experienced members coming back, all while fostering a community that cements members into
-long-term bonds centered on MakeIt Labs.
-==== 1.3 Objectives ====
-The objectives of MakeIt Labs are the following:
-  * Achieve self-sustaining status within the first 6 months
-  * Provide a rich community of innovation
-  * Encourage collaboration among local innovators
-===== Operational Strategy =====
-==== 2.1 Company Ownership ====
-MakeIt Labs is a privately owned limited liability corporation operated by and under the sole ownership
-of Joseph Schlesinger.
-==== 2.2 Management Team ====
-MakeIt Labs is run solely by Joseph Schlesinger, its founder. Joseph is a life-long hobbyist and maker
-who has long identified strongly with the culture to which MakeIt Labs will be targeting. The creation of
-MakeIt Labs comes after Joseph searched for a similar space in the area, asking many of the people that
-would be interested in such a space, and found no such thing. Also being a life-long entrepreneur with
-several ventures under his belt, he decided to start MakeIt Labs to satisfy both his own personal need
-for a workshop, and to provide a way to share his passion for creation. His C.V is listed in the appendix.
-==== 2.3 Services and Activities ====
-MakeIt Labs will offer services to entice both existing and potential area innovators. MakeIt Labs will
-provide design, engineering and fabrication instruction in addition to the use of its facilities.
-=== 2.3.1 Membership ===
-Membership offers people the chance to have 24/7 access to the MakeIt Labs facilities. Members will
-receive discounts on all classes, have the ability to store their projects in on-site lockers and be allowed
-to come relax with other members at MakeIt Labs. Membership allows people who do not have the
-tools, space or support to come anytime and be involved in an active community of innovators. No
-formal qualifications are necessary, beyond a mandatory liability waiver and payment of membership.
-There will be two tiers of membership: regular and student/out-of-work. The idea is that students and
-those who are currently out of work, while able to contribute a great deal of enthusiasm and time to the
-MakeIt community, aren’t able to provide the financial contributions that full members would be, and
-should be given lenience, as well as the fact that a reduced membership provides more income than no
-membership whatsoever.
-=== 2.3.2 Classes ===
-MakeIt Labs will offer classes in large number of areas. Classes will be offered to both members (at a
-discount) and non-members (to draw interested people into membership). Instructors will be chosen on
-a class-by-class basis both from the member pool and the surrounding area based on their knowledge of
-the subject matter, experience in the field and ability to effectively teach. MakeIt Labs will focus on
-teaching the needed information in a casual, hands-on environment that adheres to its culture of strict
-safety. Classes will be offered both on a regularly scheduled group basis and special individual cases.
-These classes may or may not require material use charges.
-Fees for the classes will be based on a combination space usage, instructor, and material fees. Base cost
-of a class is $20 per session per person. This serves as a base level of income for MakeIt, to recuperate
-costs for running the event in the facility. This cost will be waived for members, as an incentive for
-membership. The rest of a cost of a class goes towards covering paying an instructor and/or any
-consumables used in the process of a class. Classes will be chosen based on the expected level of
-interest.
-The courses taught can be broken down into three basic types:
-== 2.3.2.1 Design/Engineering ==
-Design and engineering courses will focus on the planning and theoretical aspect of making things.
-These courses will provide the overarching concepts that will aid the attendees in analyzing how best to
-realize their projects, while practicing these skills with free-form hands-on exercises. They may either be
-short one-session classes, or multiple-session, multi-week courses depending on the complexity of the
-material. An example of this type of class would be Introduction to Micro-controllers
-== 2.3.2.2 Safety ==
-Because of the inherently dangerous nature of some of equipment at MakeIt Labs, some will require
-mandatory safety courses before use is allowed. These courses will be short, one-session introductory
-courses that focus on proper operation, cleaning and maintenance on either individual pieces or groups
-of equipment. They will require people knowledgeable in the field. Those who take these courses should
-at their end feel confident that they can safely begin to use the equipment for their projects. An
-example of this type of class would be Basics of Arc Welding. While no safety ‘course’ will be required
-for general membership, a brief overview of the safety policy of the lab will be given upon attaining
-membership.
-== 2.3.2.3 Fabrication ==
-Fabrication courses will offer advanced hands-on techniques and skills that go beyond the minimal level
-of operation taught by safety courses. These will require a master of the field to teach. They will allow
-members to begin to fully realize the potential that the area of the course offers. These courses will
-usually run multiple sessions over the span of several weeks. Students should feel increased confidence
-at the end of the course that they can use their new skills to tackle a wider variety of projects. An
-example of this type of class would be TIG Welding for Bicycles.
-==== Market Analysis Summary ====
-MakeIt Labs provides a service that is critically lacking in an area with large, pent-up demand. An initial
-small advertising campaign attracted dozens of potential customers in days. Completing projects is a
-satisfying experience, as any do-it-yourselfer can attest. Today's typical consumer lifestyle leaves many
-without much realization of this joy. Local innovators with projects that lack the proper equipment or
-space are often forced to either make due, leading to lack-luster results, or put off projects till 'some
-day'. The most many people can do is dream. There is no doubt that innovative types would flock at the
-chance to work on interesting projects, learn valuable new skills and collaborate with like-minded
-people.
-=== 3.1 Market Segmentation ===
-MakeIt Labs has determined that a large portion of potential members will come within a one hour
-travel time, estimating that 80% will come from within a 30- minutes travel time. The majority of
-interested people are expected to be people in the engineering profession.
-We will target engineers, students, artists and people in hands-on fields within 30-minutes of travel. We
-do not expect people to travel more than an hour to work on projects or take classes. Research into
-other hackerspaces shows that these are the most prevalent audiences. Age and gender vary wildly,
-with most coming from an engineering or artistic background.
-The area is host to an enormous engineering base. Major engineering employers within a 30 minute
-radius include, but not limited to: IBM, iRobot, Sun, Cisco, Intel, Adobe, Oracle, MIT Lincoln Labs and
-MITRE. Any one of these is filled with engineers without the multi-disciplinary facilities or freedom to
-create. Lowell is also home to a major engineering college, UMass Lowell. Lowell is also the center of a
-thriving art community that would enjoy exploring and creating with the equipment and skills that
-MakeIt Labs offers.
-Querying online social networking websites for users with related interests within this travel distance
-reveals 70,000+ people in the target market.
-=== 3.2 Service Business Analysis ===
-MakeIt Labs was started because the founder attempted to find something similar and couldn't find
-anything like it. There is no business in the area that offers a wide variety of hands-on classes in a casual
-environment, or offers the space and/or equipment to work on projects, let alone on a 24/7 basis. While
-there are clubs for specific interests (Ham Radio, RC models), there is no place in the area for general
-inventors and innovators to collaborate and create together.
-=== 3.3 Competition ===
-Little competition exists for this market in the target area. Vocational schools in the area serve at the
-secondary-education level and don't offer full use of their facilities. Colleges are limited to a narrow
-band of students, and don't make their equipment or facilities available. While local technical colleges
-offer the classes for the skills some may require, they are often targeted at employment. With this, the
-focus is on teaching certification rather than necessarily then focusing on practical skills. Those purely
-interested in the creative process are often dissuaded by the high cost and certification-focus of these
-classes. Employers often discourage working on personal projects at work in order to avoid liability
-issues. Even when employers allow this kind of activity, employees will often avoid using their facilities
-to avoid potential intellectual property issues down the line.
-Within our target market area of 30-minutes of travel time, no other direct competitors exist. The
-nearest competition is located in Boston, MA, nearly an hour away. For an active hobbyist, it is expected
-that this travel time is considered too much for a membership.
-The largest threat would result from a competing hackerspace opening in the nearby area. Because of
-the potency of bandwagon effect when it comes to hackerspace communities, the strategy is to firmly
-cement a strong MakeIt Labs-centric community.
-=== 3.4 Marketing Strategy ===
-We will use established networks and organizations to spread the word, including but not limited to
-professional engineering organizations such as IEEE and ASME, hobbyist clubs such as RC and Ham radio
-clubs, online inventors, 'Maker', 'DIY' and 'hackerspace' communities, both online and offline. The use
-of the label ‘hackerspace’ however, should be handled with care. While there is a strong community
-built up around the use of the term, the prefix of ‘hacker’ can give negative connotations to those who
-aren’t aware of its meaning. Therefore, the term should be used thoughtfully and selectively when
-advertising the purpose of the space.
-== 3.4.1 Online Social Networks ==
-Marketing will focus on targeting these communities as tightly as possible. Online advertising will be a
-key component. Using online social networks, advertisements can be delivered directly to people who
-already express interest in these types of activities.
-A brief, tightly-budgeted, limited-focus 3-day ad campaign on the social networking site Facebook.com
-attracted over two dozen interested people, 2 of which signed up almost immediately. It is believed
-that with a mildly expanded budget, better chosen interests, and a longer-running campaign, as well as
-advertising on a number of other targeted platforms, the results could be drastically improved. Initial
-results show that an effective initial campaign can be run on the order of $100/month. This can be
-achieved by focusing on only the most likely potential members, those with highly-aligned interests such
-as ‘hacking’ or ‘making’. As this pool becomes saturated, and revenue increases, the advertising target
-can be widened to less-aligned targets such as ‘welding’ or ‘programming’.
-Potential customers can also be advertised to via the websites they visit. Several online websites are
-particularly popular with people with the perquisite interests, including makezine.com,
-instructables.com and hackaday.com. However, these websites target a very large market
-geographically, unsuitable to a location-driven business. Their most effective use would be to create
-projects that would get posted on these sites, getting MakeIt free advertising.
-== 3.4.2 Affiliate Program ==
-Once sufficient interest has been generated from online advertising, and a broad enough network of
-customers has been established, affiliate programs can be started to recruit members. Members will be
-encouraged to recruit their friends by means of cash handouts upon recruitment (and payment of
-membership by) people they bring in. Payment will be proportional to the level of membership
-recruited. i.e. more paid for full members than student members.
-== 3.4.3 Media Publicity ==
-The idea of garage-style innovation easily captures media attention, especially when combined with
-demonstrable projects/inventions. Members will be actively encouraged to post the progress of their
-work online via the MakeIt Labs website (http://makeitlabs.com). Particularly interesting projects,
-especially those of media interest (green energy, etc) will have MakeIt Labs help in disseminating to the
-local press, whether it be newspapers, tv news, bloggers, special interest sites, etc.
-== 3.4.4 Open Houses ==
-MakeIt Labs will hold monthly open-house sessions where potential members will be encouraged to
-visit. While potential members will be encouraged to visit anytime, providing a set date for visits
-provides a no-stress atmosphere for people that would just want to “stop by” without having to
-announce beforehand. These open houses will be of a casual nature, and not require extensive planning,
-preparation or cost. They merely serve as an opportunity for people interested to satisfy their curiosity.
-These open houses will also provide a platform for members to show off their latest projects, providing
-the deadline that some members will need to motivate themselves.
-=== 3.5 Location ===
-The location of the facility was chosen based on access to necessary services and economy.
-A loading bay door was considered essential for means of carrying in/out heavy equipment and supplies.
-A door which could have an electronic access lock attached was also considered mandatory. While the
-preferred layout would have had two separate locations, one for office/electronics/computer work and
-another for dirtier metal/carpentry/plastics work, for reasons of economy this was not possible in the
-first location. It was considered more important to have a location that could accommodate the ‘dirtier’
-activities, as this is what most people lack in their own condos, apartment, etc.
-As far as nearby services, it was essential that the location be located nearby to hardware, general and
-food stores. The current location is down the street from a Target, less than a mile from a Lowes and has
-a 24/7 Walgreens and a dozen or so restaurants in the area, many open late at night for those night-owl
-inventors. It is also a quarter mile from the Route 3 Lowell Connector, the major thoroughfare in and out
-of the city.
-The street is in the industrial heart of Lowell, and boasts a steel foundry, rapid prototyping business,
-scrap yard, sheet metal fabrication show, and several automotive and welding businesses, opening up
-potential teaching and partnership opportunities.
-=== 3.6 Competitive Edge ===
-Targeted customers currently spend their time in their making-centric hobbies and projects. What
-MakeIt Labs provides them, beyond equipment and a knowledge base, is the ability to hang out and
-interact with other people with similar interests. The key to locking in a customer base will be focusing
-on establishing a strong MakeIt Labs-centric community. Bandwagon effect applies strongly to
-hackerspaces. Interesting people producing interesting projects attracts more people of the same type.
-Being the first open-access workshop in the area provides a firm foundation that potential competition
-will find hard to overcome.
-MakeIt Labs will achieve this by focusing on providing the infrastructure for projects and collaboration.
-Research of other similar ‘hackerspaces’ reveals that projects are largely self-formed by the members.
-Therefore, MakeIt Labs will focus on providing the proper environment. Collaboration area will set up
-with a couch, whiteboards, computers, projector, snacks and drinks and high-speed wireless internet
-access. The goal will be to make MakeIt Labs centric part of the creation experience to its members. All
-of these items are already owned by the owner, and will be transferred to MakeIt as part of the setup
-process, minimizing startup cost. Additional equipment, along with replacements for broken or
-damaged equipment,
-=== 3.7 Risk Factors ===
-This business poses certain risk factors:
-  * Sole Ownership
-  * Liability and Safety Issues
-  * Membership collection hassles
-We can minimize certain risk factors by:
-  * Delegating tasks to the established community
-  * Fostering a culture of safety
-  * Authoritative control of facilities
-  * Carrying adequate insurance
-  * Minimize collection costs through automated membership system
-== 3.7.1 Sole ownership ==
-The fact that MakeIt Labs is run by a single individual is both a key strength and a weakness. The singular
-point of contact and decision making leads to quick decision uniform to the overall strategy of MakeIt
-Labs, but leaves the business vulnerable if for some reason the owner is unavailable.
-Security and financial transactions are largely automated through the use of online billing and bill
-payment tools. This is to ensure that in the event of absence of the owner for a period of time, the space
-can continue to run smoothly with minimal intervention.
-As time progresses with MakeIt Labs, responsibilities for day-to-day operation will be delegated out
-amongst the more active members of the established community, either through direct election of
-positions by the owner, or by a more democratic process if deemed appropriate. This will help to further
-the sense of community within MakeIt Labs. Sole ownership will still be retained for the sake of being
-able to have swift, final decision making should the need arise, and to address liability/business
-concerns.
-== 3.7.2 Liability and Safety Issues ==
-MakeIt Labs possesses equipment that makes safety a key concern. Among the collection of equipment
-in the facility, there will be dangerous equipment that could pose a safety risk to people without the
-knowledge of how to use them properly.
-A focus will be on embedding the need for safety in the community. There will be constant reminders in
-all events/activities that safety is a top priority at MakeIt Labs. It will be made clear to members at
-multiple levels that this equipment will be off limits to those who cannot demonstrate the required
-safety knowledge. Safety courses will be provided by knowledgeable professionals to allow members to
-access this equipment.
-As part of the MakeIt Labs security system, multiple cameras will be in place, and gone over from time
-to time. It will be known to the membership that MakeIt Labs policy that anyone caught using
-equipment in an unauthorized or unsafe manner will be ejected from the premises and not allowed to
-return. This practice will be enforced by the owner. The membership will be made aware of the
-transgression, and new codes can be changed as soon as an issue occurs so the member will not be
-permitted access. These systems are part of the initial setup cost, and require no further purchases
-beyond routine repair and replacement
-The aspect that will most influence safety at MakeIt will be establishing a culture of safety. Members will
-be reminded from the beginning that safety takes priority over everything at MakeIt. Warnings will be
-posted around dangerous equipment reminded members of their needs for proper knowledge and
-caution before and during operation.
-Beyond this, liability waivers and insurance will be a key component to protecting MakeIt Labs from
-litigation should an accident occur. All members will be required to sign a statement understanding the
-MakeIt Labs safety policy, and disavowing MakeIt Labs of any and all liability from any harm to one’s self
-or property while performing MakeIt-related actions.
-== 3.7.3 Membership Dues Collection ==
-One of the issues with running a membership-based income model is the time-consuming process of
-collecting membership fees. Once membership is initially approved, the system will be entirely
-automated. Membership fees will be collected by a 3rd party online payment collection and the results
-transmitted to the MakeIt Labs security computer system. Access to the building is controlled by an
-electronic lock, also controlled by the same computer system. When membership expires, the code used
-by the member will cease working, requiring them to pay to re-activate it.
-==== Financial Plan ====
-=== 4.1 Start-up Funding ===
-The start-up expenses for MakeIt Labs are minimal. A number of tools are already largely owned by the
-founder, and tools from interested parties have been offered for use free of cost to MakeIt Labs. Both
-initial capital expenses and monthly deficits will be covered by the founder until break-even has been
-achieved.
-=== 4.2 Important Assumptions ===
-An important aspect of the operating model is that costs are highly scaled to membership levels. The
-two largest cost factors, leasing and energy consumption, are directly proportional to membership
-levels. Long-term capital investment is almost non-dependent on the membership size targeted for the
-initial growth period. This flexibility allows the business to scale its costs dynamically as membership
-revenue fluctuates, providing a resilient business model.
-As the shop and its use is the primary interest of the owner, funds will be directed towards growth and
-expansion of the shop. After the initial break-even period, there is no foreseeable need for outside
-funding. Additionally, while it is believed that the business is ripe for franchising opportunities, this is
-not part of the initial business plan. Effort will be instead be focused on creating a successful enterprise
-and lab space for the founder. The reasoning for having it remain for profit is two-fold: control and
-options. The eventual goal of is for it to later service as an incubation chamber for later business ideas
-and projects of the founder, as well as any that may crop up as a result of the community established.
-=== 4.3 Accounting, Legal and other services ===
-To keep operating costs low, accounting will be handled largely by the owner. This is also another
-reason why an LLC was chosen. Its simplified tax structure makes it easy for the owner to do his own
-accounting, keeping the costs of outside accounting minimal.
-Little to no legal expenses are anticipated beyond the initial setup fees. Because of this, the monthly
-budget for legal and accounting fees will be carried from month-to-month creating a slush fund for
-unforeseen needs, and will accumulate for a time when it is needed.
-Given the size of the facility, the need for other 3rd party services such as janitorial are eliminated.
-=== 4.4 Breakdown of Monthly Expenses ===
-Rent – Covers the cost of leasing the facilities. Includes ‘triple net’ real estate costs such as grounds
-maintenance, essential repairs to the building, plowing, etc. Does not cover infrastructure
-improvements.
-Internet – Cover the cost of internet service. Does not cover phone or television (not needed).
-Utilities – Covers the cost of electricity (including that involved in cooling) and heating. Costs are
-projected based on talks with other tenants in nearby units.
-Equipment Purchase – Covers the cost of both purchasing new equipment and replacing or repairing
-damaged equipment and infrastructure upgrades.
-Insurance – Covers the cost of insuring the business from property lost due to theft, and liability
-coverage against members.
-Legal/Accounting/Etc – Covers the needed end-of-year accounting assistance, Also covers unforeseen
-legal needs. Monthly budget for legal and accounting fees will be carried from month-to-month creating
-a slush fund for unforeseen needs, and larger expenses like the end-of-year tax preparation.
-Maintenance – Covers miscellaneous unforeseen expenses related to keeping the place running.
-Advertising – Covers the cost of advertising the business. Funds will initially mostly be consumed by
-online advertising, but maybe later include publicity stunts, contests and travel to relevant
-events/conferences.
-==== Appendix A. – Startup Costs ====
-Provided by Owner Value Cost
-Couch 400 0
-Drill Press 200 0
-Desks 300 0
-Oscilloscope 300 0
-Function Generator 200 0
-Power supply 200 0
-Mini-Fridge 150 0
-Computers 500 0
-Monitors 500 0
-Shelving 160 0
-Workbench 100 0
-Chairs 50 0
-Small Tables 20 0
-Printer 100 0
-Total 3180 0
-Acquired for Free Value Cost
-Welder 200 0
-Drill Press 300 0
-Microwaves 200 0
-Workbenches 300 0
-Chairs 150 0
-Air Conditioner 250 0
-Stereo 50 0
-Total 1450 0
-Purchased Value Cost
-Shelving 300 300
-Paint 100 100
-Painting supplies 75 75
-Toiletries 20 20
-Cleaning supplies 30 30
-Metal lockers 20 20
-Air Conditioner Installation 250 250
-Safety/Surveillance 300 300
-Legal Setup 800 800
-Total 1895 1895
-Grand Total
-Value
-Cost
-==== Appendix B. – Cash Flow Analysis ====
-==== Appendix C. - Projected Operational Earnings ====
-==== Appendix D. – Sensitivity Analysis - Projected Worst-Case Operational Earnings ====