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Now let’s assume that you are in the commercial lawn mowing business, so you spend the winter months going from business to business signing contracts for the coming year.Let’s assume you are able to get 50 business customers and the average customer will be charged for one hour of your service each time you mow.You were profitable in year 1 so you do have some cash, but is it enough.
Now I just need to enter in the number of hours I expect to provide each month.
To keep things simple I am going to assume that we provide service in increments of 50 hours, so in months where you only mow once, you will only provide 50 hours of service.
If it was not for the seasonality of the business, your cash balance would have remained positive, but you must remember that you won’t generate any revenue during certain months of the year, and you must built that into your financial projections.
is a lawn care corporation headquartered at 11 Seventh Street, Pelham, NY 10803 in a 100 square foot office.
Before I show you how I projected sales for the first two years, I also want to assume that in year two I will be able to sign a total of 75 clients to a year long contract.
Now that we have our sales projections input, it is time to move on toward expenses.The resulting Excel template will be an excellent guide for other seasonal businesses to create a set of financial projections. First we need to start with your sales projections.So I created Adam’s Lawn Care on Projection Hub, and started by adding our first and only service… So here you can see that I am assuming we will charge an hour for our service, it will take 40 days for the average customer to pay us, and finally I am assuming that all of our annual sales will occur in the 9 middle months of the year, from March to November.So let’s add a ,000 loan to your projections that we assume is from your friends and family.This solves your cash flow problem for a while, but the first year you were using your old truck and a fairly slow and limited lawnmower.You were able to start working in month 3, but then it takes 40 days on average to get paid by your customers, so you don’t actually receive any payment until month 4.With the current situation you run out of cash in month 2 and have a negative cash balance for the first 6 months as seen below: So at this point your best option is to seek a small business loan for your company.Our next order of business is to project our cost of goods sold.We are going to assume that you pay yourself an hour and you have an hour worth of fuel costs.We understand the difference between legal right to do and right thing to do keeping room for altruism We intend to seek mutually beneficial and enduring relationships in all commitments we make, ensuring that they are straightforward and honest.Hence our communication will be open and accurate both internally as well as externally.