Looking for an educational website business plan? You're in the right place.
A site that gives lessons away has to answer a different set of questions from one that sells them. How many visitors does it need before advertising covers the writers? What share of those visitors will pay for a membership? What does a teacher-resource marketplace keep from each sale, and how many sales does a free site actually send it? A blank template won't tell you what a believable answer looks like.
This article walks through a complete sample plan for an educational website in Lexington, Kentucky, from the executive summary to the five-year financials. The business is fictional, so you can see how the traffic, membership and marketplace numbers hang together and then change the figures to fit your own site.
What you'll get from it:
- The revenue model: see how advertising, a membership and a marketplace commission divide the income, so you can judge which one your site would lean on
- The traffic table: learn how monthly sessions turn into page views and ad revenue, and how the school calendar bends the curve
- The membership funnel: check how many visitors it takes to win a paying member, and how fast members leave
- The marketplace math: work out what a take rate is worth when a free site sends the buyers
- The three loss-making years: plan a reserve that covers the gap between the first lesson and the first profit
- The downside case: see what happens if search traffic drops 40%, and where the cash runs out
If you're planning a content site that earns from more than one source, read this before you build the spreadsheet. Every name and figure here is invented, so keep what fits and replace the rest.
In this plan
If you need a educational website business plan template for your own plan, start it in the Toolkit.
The Plan in Brief
Anchor Glen publishes free science and social studies lessons for grades 3 to 6 from Lexington, Kentucky. Frank Williams, a former fifth-grade teacher, started the site in July 2025 and owns it. By January 2027 it holds about 360 lessons, draws 84,000 sessions a month and has a free email list of 16,000 teachers and homeschooling parents. It has earned nothing so far. On 1 January 2027 three income lines switch on together: display advertising, a paid membership called Anchor Glen Plus, and a marketplace where teachers sell their own classroom resources and Anchor Glen keeps 30% of each sale.
The business needs $420,000: $90,000 of Frank's savings and $330,000 from two angel investors, with no debt. Of that, $354,500 is held as a cash reserve, $40,000 pays for the site rebuild and equipment, and $25,500 covers counsel, licensing and the launch push.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $99,923 | $189,439 | $330,404 |
| Net income after start-up costs | ($146,086) | ($136,804) | ($69,454) |
| Closing cash | $241,106 | $112,063 | $47,551 |
Revenue passes operating costs in Year 4, with net income of $10,278, and reaches $695,871 in Year 5. The first three years lose money because the lessons are free: readers arrive before they pay, and the editorial team is paid for months before the membership matures. The reserve carries that gap.
Membership is the largest line in every year, at 57% of Year 1 revenue and 52% of Year 5. Advertising brings in about a third, and the marketplace grows from 6% to 13%. All three depend on one number, monthly sessions, which the model lifts from 84,000 in January 2027 to 459,000 in December 2031. About 70% of those sessions arrive from organic search, which is the plan's main exposure.
That exposure is tested in the downside case. If search traffic falls 40% from 2028 and Frank cuts hiring, marketing and his own pay in response, cash runs out during Year 4. The break point is stated in the financials.
What Anchor Glen Publishes
Legal name: Anchor Glen, LLC, a Kentucky limited liability company. Ownership after the raise: Frank Williams 60%, two angel investors 40% in total. Base: a two-desk office in a coworking building in downtown Lexington. Stage: live and free since July 2025. Monetization begins 1 January 2027.
The site today
About 360 lessons: a 45-minute lesson plan, a student worksheet, a one-page answer key and a short reading passage for each topic, covering grade 3 to 6 science and social studies. Frank wrote them over 18 months at about 20 a month while still teaching. Every lesson names the Kentucky standard it supports. Kentucky publishes its own academic standards for each subject, and teachers search by standard code, which is why the tag matters.
Targets
- 117,000 sessions in December 2027 and 975 paying members, up from 500 founding members on day one.
- $189,439 of revenue in 2028, with the first full year of the curriculum editor on staff.
- Monthly revenue above monthly operating cost during 2030.
- No debt at any point, and no distributions to owners within the five years.
Three ways the site earns
| Income | How it works | Year 1 share |
|---|---|---|
| Anchor Glen Plus membership | $8 a month or $64 a year for ad-free pages, editable lesson files and full-year unit bundles | 57% |
| Display advertising | Banner and in-article placements on free lesson pages, sold through a managed ad network | 37% |
| Teacher-resource marketplace | Teachers list their own worksheets and units; Anchor Glen keeps 30% of each sale | 6% |
Lessons stay free to read. The membership sells convenience and editable files, and the marketplace sells other teachers' work, so the free library never shrinks to push people toward either.
Who the site answers to
Teachers and parents are the users; accounts are for adults only and the site collects no pupil data. Counsel reviews the privacy terms, the copyright takedown process and the seller agreement before launch. Kentucky counsel also confirms how sales tax applies to digital downloads and to sales through a marketplace, since those rules vary and change.
The Classroom Content Market
Who buys classroom materials
Teachers in public and private elementary schools, and parents who teach at home, spend personal time and money finding materials that fit a standard and a lesson slot. The model needs a share of the site's own visitors and not a market total, so it carries no dollar estimate of the market.
Why Kentucky standards matter to search
Kentucky publishes its academic standards through the Department of Education and revises them from time to time. A lesson tagged to the current standard answers a search a teacher actually types, and re-tagging after each revision is a recurring job for the editor hired in Year 2.
What a reader can use instead
| Alternative | What it offers | Why a teacher picks it | How Anchor Glen differs by design |
|---|---|---|---|
| Large teacher-resource marketplaces | Many paid and free files from individual sellers | Breadth and a trusted checkout | Fewer files, each tagged to a Kentucky standard, and free to read first |
| District and state resource libraries | Free, official, aligned materials | No cost and no doubt about alignment | A lesson, worksheet and key in one page, built for a teacher short of time |
| Video and creator channels | Free explanations and demonstrations | Easy for students to watch | Printable, editable files that run without a screen |
| Textbook publisher supplements | Materials matched to an adopted text | Already paid for by the school | Not tied to one adopted text, so usable whichever book the room has |
| Individual teacher blogs | Voice and personal trust | Feels like a colleague's shelf | A single searchable library with a consistent format |
The table describes what each category offers and how this site positions itself, not a ranking. Marketplace payout rates and plan prices change often and are not quoted here; each provider publishes its own.
SWOT
| Strengths | Weaknesses |
|---|---|
| A founder who taught the grades he writes for | Three income lines rest on one traffic number, 70% of it from search |
| 360 lessons and a 16,000-person email list before launch | Search traffic falls every June and July |
| Lessons tagged to the state standard | The membership and marketplace are new products with no sales history |
| Opportunities | Threats |
|---|---|
| Teachers moving from paper handouts to editable files | Search engines and AI answer tools responding to lesson queries without a click |
| Other teachers listing resources and sending their own followers | Ad rates moving with advertiser budgets |
| School-year bundles that raise revenue per member | Large marketplaces discounting to hold their sellers |
Who Uses the Site
The classroom teacher
A grade 3 to 6 teacher, 28 to 50, with a planning period of about 45 minutes and no budget for materials. Roughly seven visitors in ten are classroom teachers. They search the night before a unit starts, open one lesson, print the worksheet and leave.
The homeschooling parent
About two in ten visitors teach at home. They stay longer, return weekly and are the likeliest members, because a full-year unit bundle replaces a curriculum purchase.
The long tail
Tutors, librarians, after-school staff and student teachers make up the rest. They rarely pay but add page views, which is what advertising is paid on.
What brings them back
A lesson that works without edits. Teachers forgive a plain page but not a worksheet with a wrong answer, so a second person checks every lesson against its key from Year 2.
What makes someone join
Three triggers: wanting the Word or Google Docs version to edit, wanting to remove ads from a page that is printed or projected, and wanting a whole unit rather than one lesson. The model converts 0.8 new members for every 1,000 sessions.
How the Site Earns
Advertising, by the page view
Revenue is monthly sessions times 2.3 pages per session times the revenue per thousand page views (RPM). RPM is $13 in Year 1 and rises to $19 by Year 5. The site is expected to qualify for a managed ad network at launch, since it already draws 84,000 sessions a month; each network sets its own traffic minimums and payout rates, which need confirming before signing.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Sessions | 1,240,218 | 2,039,007 | 3,147,775 | 4,330,032 | 5,422,950 |
| Page views | 2,852,501 | 4,689,716 | 7,239,882 | 9,959,074 | 12,472,785 |
| RPM | $13 | $15 | $17 | $18 | $19 |
| Advertising revenue | $37,081 | $70,345 | $123,080 | $179,264 | $236,983 |
Membership, by conversion and churn
New members arrive at 0.8 per 1,000 sessions, plus 500 founding members from the email list in January 2027. Members leave at an average of 6.5% a month, with the rate following the school year: 13% in June and 10.8% in July, 4.3% in September and October. That works out to an average membership of about 15 months. Net revenue per member is $6.40 a month in Year 1, after annual-plan discounts and promotions, rising to $7.20 by Year 5.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| New members | 1,492 | 1,631 | 2,518 | 3,464 | 4,338 |
| Members at year end | 975 | 1,651 | 2,601 | 3,703 | 4,818 |
| Membership revenue | $56,890 | $103,434 | $171,062 | $262,491 | $365,179 |
Marketplace, by take rate
A new shop starts slowly. It sells 2.5 orders for every 1,000 sessions in Year 1, rising to 9 by Year 5 as the seller catalog fills. The average order is $6.40. Sellers keep 70% and Anchor Glen keeps 30%, or $1.92 an order, from which payment fees of about $0.48 come out because a fixed per-transaction fee weighs heavily on a small order. Revenue is the commission only, not the sales total.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Orders | 3,101 | 8,156 | 18,887 | 32,475 | 48,807 |
| Sales through the shop | $19,843 | $52,199 | $120,875 | $207,842 | $312,362 |
| Paid to sellers (70%) | $13,890 | $36,539 | $84,613 | $145,489 | $218,653 |
| Commission kept (30%) | $5,952 | $15,660 | $36,262 | $62,352 | $93,709 |
| Active sellers | 60 | 120 | 250 | 380 | 500 |
Year 1 payouts of $13,890 across 60 active sellers come to about $230 each. Sellers come first from ten Kentucky teacher-leaders given free Plus access and a referral link, then from the email list, before the shop opens. The shop has no sales history, so Year 1 is the least certain line in the plan.
Revenue per thousand sessions
The three lines together earn $81 per 1,000 sessions in Year 1 and $128 in Year 5. Most of the rise is membership stock building up and a higher RPM, not price rises.
Reaching Teachers
Where the marketing money goes
Year 1 marketing is $37,000: $15,000 of launch spend paid from start-up capital plus $22,000 of running cost. Spread over the 1,492 new members won in the year it is $25 each, or $37 each if the 500 founding members, who cost nothing to reach, are left out. The running budget rises to $48,000 by 2031 and falls from 22% of revenue in Year 1 to 7% in Year 5.
| Channel | What it does | Expected role |
|---|---|---|
| Search content | A new lesson every working day, each tagged to a Kentucky standard | Carries most of the traffic growth |
| Email list | A weekly "next unit" email and a summer-reset series in July | Converts founding members and drives August return |
| Pinterest and short video | Worksheet previews and classroom clips | A smaller feeder, strongest for homeschool parents |
| Teacher partnerships | Ten Kentucky teacher-leaders each get free Plus and a referral link | Seeds the marketplace with its first sellers |
| Back-to-school paid push | Search and social ads in August and September only | Brings in new members when teachers are looking |
Milestones
- January 2027: ads, membership and shop live; 500 founding members.
- June 2027: first full summer, with sessions about 30% below May's level.
- September 2027: the seasonal peak, 138,650 sessions.
- December 2027: 975 members, 117,000 sessions.
- During 2029: members pass 2,000.
Running the Publication
The workflow
A lesson goes from topic list to draft (a commissioned teacher-writer or Frank), to review against the state standard, to a worksheet and key, to a second-person check, to publication. Year 1 adds about 235 lessons: roughly 120 from Frank, now full time, and about 115 commissioned at an average $240, which the $28,000 freelance budget buys. Later years add 250 to 300, and the library passes 1,150 lessons by the end of Year 3.
The school calendar
Sessions fall about 37% below the Year 1 average in June and July and peak in August and September. The model applies the same pattern to every year, and membership churn follows it. Revenue is thinnest over the two summer months, and the reserve is sized to carry them.
Traffic dependence and the search risk
Search Console and Analytics have recorded the site's traffic since July 2025. Frank gives the investors and any future lender read access, so organic search can be checked against the plan month by month. About 70% of sessions come from organic search, 12% from email and 18% from direct visits, social media and referrals. Four things reduce the exposure to a search engine that answers lesson queries without sending a visit:
- the email list, an audience Anchor Glen owns, kept active with a weekly send and measured by open rate (the plan carries a 38% average, a figure to be tracked monthly);
- the membership, which sells editable files and unit bundles that a results page cannot deliver;
- printable worksheets and answer keys in a form built to be downloaded, not summarized;
- a monthly check of the organic share of sessions, with a trigger to cut hiring if it falls below 60%.
Platform and data
A content management system with a member area and card billing, a shop module that handles seller onboarding and payouts, an email service and an ad-management layer. Software costs $10,000 in Year 1 and $38,000 by Year 5. A contract developer works about 15 hours a week from month 1.
The marketplace's obligations
Seller payouts run through the payment processor's split-payment product, so seller money never sits in Anchor Glen's operating account. Sellers supply tax details when they join, and Anchor Glen's accountant confirms whether the company or the processor issues year-end forms to sellers, since that depends on the payment set-up and on thresholds that change. Sales tax on digital goods and marketplace sales is a Kentucky counsel question, flagged above. Each seller warrants that the work is original, and a takedown process removes disputed files within two working days.
Office
A two-desk office in a Lexington coworking building at about $650 a month ($7,800 in Year 1), moving to a four-desk room in Year 3 and costing $12,600 a year by Year 5. Editors work partly from home. Utilities are a separate $1,200.
Insurance and policies
- Terms of use and a seller agreement that puts the burden of originality on the seller.
- A written copyright takedown process, with a registered agent.
- Adult-only accounts and no collection of pupil data.
- Media liability, cyber, general liability and workers' compensation cover, $3,500 in Year 1.
The Team
Frank Williams, founder and publisher
Frank taught grades 4 and 5 for 11 years at a public elementary school in the Lexington area, mostly science, and holds a Kentucky teaching certificate. He began writing the lessons at night in 2025 and left the classroom in December 2026. He pays himself $62,000 a year, the highest salary on the team, and has put $90,000 of savings into the company.
Where the team is thin
Frank has not sold advertising, run a payments business or managed a marketplace. A managed ad network replaces direct sales, a platform vendor handles seller onboarding and card payouts, and an adviser who has built a membership site meets him quarterly. He has also not hired before, so each hire is timed to revenue and the first editor starts in month 13.
Hires
| Month | Role | Why then |
|---|---|---|
| 1 | Contract web developer, about 15 hours a week | Rebuild and keep the member area and shop running |
| 13 | Curriculum editor, a former classroom teacher | Frank cannot review 250 lessons a year himself |
| 25 | Seller and member support, 20 hours a week | Seller questions and refunds outgrow Frank's inbox |
| 40 | Senior curriculum editor | Adds grade 6 and the Kentucky re-tagging cycle |
| 52 | Second senior curriculum editor | Dropped first in the downside case |
Outside help
A Kentucky accountant handles tax, and a lawyer is on call for seller disputes.
Ownership and exit
The two angels put in $330,000 for a 40% stake, which values the company at $825,000 after the raise. Frank holds 60% together with the site he already owns. There is no plan to sell within five years. The investor agreement lets the angels ask for a sale process after year seven, and no distributions are modeled before then.
The Numbers
The tables run monthly through 2027 and yearly from 2028 to 2031. The inputs come before the results, so each figure has its reason beside it.
Raising $420,000 and where it goes
| Use of funds | Amount |
|---|---|
| Site build, member area, shop and billing integration | $32,000 |
| Laptops, camera and audio kit | $8,000 |
| Entity formation and Lexington business license | $1,500 |
| Counsel: terms, seller agreement, copyright policy, sales-tax advice | $9,000 |
| Launch: commissioned lessons for the fall calendar, brand, email list build | $15,000 |
| Cash reserve to carry the losses through Year 3 | $354,500 |
| Total uses | $420,000 |
| Source of funds | Amount |
|---|---|
| Frank Williams's savings | $90,000 |
| Two angel investors | $330,000 |
| Total sources | $420,000 |
Frank puts in $90,000 of savings and two angel investors put in $330,000. There is no debt. A site with no inventory and no income at launch gives a lender nothing to hold, and operating cash flow is negative for three years, so repayments would come out of the same reserve that keeps the site open. The $354,500 reserve is the largest line because cash from operations is negative in each of the first three years: ($138,894), ($129,042) and ($64,512), $332,448 together. Closing cash never falls below $47,551, reached at the end of Year 3. For the investors, $330,000 buys a 40% stake, which puts the company at $825,000 after the raise, with Frank holding the other 60% along with the site he already owns.
Inputs behind the forecast
- Monthly sessions rise in a straight line from 80,000 at the start of January 2027 to 130,000 in December 2027, then to 215,000, 320,000, 420,000 and 510,000 in each later December. Each month is then multiplied by a school-calendar index that runs from 0.60 in July to 1.18 in September, so January 2027 comes out at 84,167 sessions and December 2031 at 459,000. About 70% of sessions come from organic search, 12% from email and 18% from direct visits, social media and referrals. Traffic is the most demanding input, and the downside case tests it.
- Advertising earns 2.3 page views per session. RPM, the revenue per 1,000 page views, is $13 in Year 1, $15 in Year 2, $17, $18 and $19 after that. The site runs on a managed ad network from launch, since 84,000 monthly sessions is expected to clear network minimums; the networks set their own minimums and payout rates, so confirm both before signing. RPM moves with advertiser budgets and is a planning figure.
- The membership lists at $8 a month or $64 a year. After annual-plan discounts, promotions and card fees it nets $6.40 a member a month in Year 1, rising to $6.70, $6.80, $7.00 and $7.20. The site opens with 500 founding members from the 16,000-person email list, about 3.1% of it.
- After launch, new members arrive at 0.8 per 1,000 sessions, flat for five years. Members leave at an average of 6.5% a month, but the rate follows the school year: 4.3% in September and October, 5.4% in most other months, 13% in June and 10.8% in July when teachers cancel for the summer. An average membership lasts about 15 months. Members end each year at 975, 1,651, 2,601, 3,703 and 4,818.
- The shop sells 2.5 orders for every 1,000 sessions in Year 1, then 4, 6, 7.5 and 9 as the seller catalog fills. That is a slow start by design: a new shop has few listings, and buyers come only from the site's own pages. The plan counts 60 active sellers in Year 1, recruited from ten Kentucky teacher-leaders and the email list, then 120, 250, 380 and 500. The average order is $6.40, and sellers keep 70%. Anchor Glen's 30% take rate earns $1.92 an order. Revenue is commission only, so the sales total passing through the shop ($19,843 in Year 1, $120,875 in Year 3) does not count as revenue.
- Payment fees on shop orders are set at 25% of Anchor Glen's commission, about $0.48 on a $1.92 commission. Processors charge a percentage plus a fixed amount per transaction, and the fixed part weighs heavily on a $6.40 order; check current rates before launch. Other direct costs are 4.5% of membership revenue for card and billing fees and 5% of advertising revenue for ad-operations tools, so direct costs average 5.9% of revenue overall.
- Refunds and chargebacks run at about 2.5% of membership and shop revenue: $1,500 in Year 1 and $12,300 in Year 5.
- The site opens with about 360 lessons, written by Frank over 18 months at roughly 20 a month while he was still teaching. Year 1 adds about 235: roughly 120 from Frank, now full time, and about 115 commissioned from teacher-writers at an average $240, which the $28,000 freelance budget buys. Later years add 250 to 300 a year, so the library passes 1,150 lessons by the end of Year 3. A rise from 360 to 595 lessons in Year 1 supports a rise in sessions from 84,000 to 117,000.
- Running marketing is $22,000 in Year 1, plus $15,000 of launch spend paid from start-up capital. At 1,492 new members in Year 1 that is about $25 each, or $37 each for the 992 who do not come from the founding list. Search content carries most of the traffic and is mainly staff time, not ad spend.
- Payroll adds 27% to wages for payroll taxes, health cover and a retirement match (15% for the part-time support role, nothing for the contract developer). Workers' compensation sits in the insurance line. Wages in the personnel table are launch rates, and 3% annual pay raises are charged as a separate line from Year 2. Frank's $62,000 is the highest salary on the team; editors earn $50,000 to $58,000. The contract developer works about 15 hours a week at roughly $46 an hour.
- Receivables average 20 days across the business. Members and shop buyers pay by card at checkout, so receivables come only from ad networks, which pay on a monthly cycle. Twenty days is a cautious blend, and the real figure would be shorter. Annual memberships are recognized evenly across the year, though real cash would arrive earlier, with unearned revenue on the balance sheet.
- Rent is a two-desk coworking office at about $650 a month, a four-desk room at $900 from Year 3 and $1,050 by Year 5, with editors working partly from home. Software grows from $10,000 to $38,000 a year as traffic, member numbers and shop volume raise hosting, email and billing costs.
- Tax is charged at the federal corporate rate of 21% (26 U.S.C. section 11) and the Kentucky corporate rate of 5% (Tax Foundation, 2026), with losses carried forward. Cumulative results stay below zero to the end of Year 5, so the tax charge is nil throughout. An LLC would normally be taxed through its owners, and a Kentucky entity tax may also apply; the model leaves both out.
- No distributions are paid in the five years. Investor exits and further raises sit outside the model; the agreement gives the angels a sale process after year seven if they ask for one.
Revenue by income line
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Anchor Glen Plus membership | $56,890 | $103,434 | $171,062 | $262,491 | $365,179 |
| Display advertising | $37,081 | $70,345 | $123,080 | $179,264 | $236,983 |
| Teacher-resource marketplace commission | $5,952 | $15,660 | $36,262 | $62,352 | $93,709 |
| Total revenue | $99,923 | $189,439 | $330,404 | $504,107 | $695,871 |
| Growth on prior year | – | 90% | 74% | 53% | 38% |
Membership is the largest line, 57% of Year 1 revenue and 52% of Year 5. Advertising is 37% in Year 1 and 34% in Year 5, and the marketplace grows from 6% to 13% as the seller catalog fills. The three lines earn $81 per 1,000 sessions in Year 1 and $128 in Year 5, so revenue grows faster than traffic: sessions rise 4.4 times between Year 1 and Year 5, and revenue 7.0 times. Growth is 90% in Year 2 because the site starts earning from an audience it already has, then slows to 74%, 53% and 38%.
Month by month through 2027
| Month | Anchor Glen Plus membership | Display advertising | Teacher-resource marketplace commission | Total revenue | EBITDA |
|---|---|---|---|---|---|
| Jan 2027 | $3,631 | $2,517 | $404 | $6,552 | ($10,663) |
| Feb 2027 | $3,896 | $2,694 | $432 | $7,022 | ($10,221) |
| Mar 2027 | $4,178 | $2,876 | $462 | $7,516 | ($9,756) |
| Apr 2027 | $4,448 | $2,890 | $464 | $7,802 | ($9,487) |
| May 2027 | $4,634 | $2,774 | $445 | $7,853 | ($9,439) |
| Jun 2027 | $4,364 | $1,946 | $312 | $6,622 | ($10,597) |
| Jul 2027 | $4,228 | $1,958 | $314 | $6,500 | ($10,712) |
| Aug 2027 | $4,604 | $3,795 | $609 | $9,008 | ($8,352) |
| Sep 2027 | $5,115 | $4,146 | $666 | $9,927 | ($7,488) |
| Oct 2027 | $5,593 | $4,074 | $654 | $10,321 | ($7,117) |
| Nov 2027 | $5,961 | $3,913 | $628 | $10,502 | ($6,947) |
| Dec 2027 | $6,238 | $3,498 | $562 | $10,298 | ($7,139) |
Every month of 2027 loses money at EBITDA, from ($10,663) in January to ($6,947) in November. Revenue is lowest in June and July, at $6,622 and $6,500, when school is out, and jumps to $9,008 in August when lessons are searched again. Membership revenue dips from $4,634 in May to $4,228 in July as summer cancellations outrun new sign-ups, then climbs to $6,238 by December. Advertising and the shop follow the school calendar. The monthly view spreads costs evenly, so it shows direction and not hiring dates. Cash falls in every month of the year; the closing balance appears in the cash flow table.
Editorial and support hires
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and publisher | $62,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Contract web developer (about 15 hours a week) | $36,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Curriculum editor (former classroom teacher) | $50,000 | Month 13 | – | 1 | 1 | 1 | 1 |
| Seller and member support (part time, 20 hours a week) | $24,000 | Month 25 | – | – | 0.5 | 0.5 | 0.5 |
| Senior curriculum editor | $57,000 | Month 40 | – | – | – | 1 | 1 |
| Second senior curriculum editor | $58,000 | Month 52 | – | – | – | – | 1 |
| Total payroll incl. on-costs | $114,740 | $178,240 | $205,840 | $260,133 | $333,475 |
Frank runs the site in January with a contract developer. The curriculum editor starts in month 13, support for sellers and members in month 25, a senior curriculum editor in month 40 and a second senior editor in month 52. The support wage of $24,000 is a part-time salary. Frank's $62,000 starts in month one and is already in the costs, so every profit line is after he has been paid.
Income statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $99,923 | $189,439 | $330,404 | $504,107 | $695,871 |
| Direct costs (card and billing fees, ad-operations tools, shop payment fees) | ($5,902) | ($11,189) | ($19,516) | ($29,776) | ($41,103) |
| Gross profit | $94,021 | $178,250 | $310,888 | $474,331 | $654,768 |
| Payroll incl. on-costs | ($114,740) | ($178,240) | ($205,840) | ($260,132) | ($333,475) |
| Rent | ($7,800) | ($9,000) | ($10,800) | ($12,000) | ($12,600) |
| Utilities | ($1,200) | ($1,300) | ($1,500) | ($1,600) | ($1,700) |
| Marketing | ($22,000) | ($30,000) | ($38,000) | ($44,000) | ($48,000) |
| Insurance | ($3,500) | ($4,500) | ($5,500) | ($6,500) | ($7,200) |
| Professional fees | ($6,000) | ($6,000) | ($7,000) | ($7,500) | ($8,000) |
| Software subscriptions | ($10,000) | ($16,000) | ($24,000) | ($32,000) | ($38,000) |
| Freelance teacher-writers (commissioned lessons) | ($28,000) | ($36,000) | ($42,000) | ($46,000) | ($50,000) |
| Image, font and data licenses | ($3,000) | ($4,000) | ($5,000) | ($5,500) | ($6,000) |
| Refunds and chargebacks | ($1,500) | ($3,400) | ($5,800) | ($8,900) | ($12,300) |
| Phones, supplies and conference travel | ($4,000) | ($5,000) | ($6,000) | ($7,000) | ($7,500) |
| Equipment replacement and new-hire kit | $0 | ($3,000) | ($2,500) | ($5,000) | ($3,000) |
| Bad debt allowance (ad-network invoices) | ($200) | ($600) | ($1,200) | ($1,800) | ($2,400) |
| Annual pay raises (3% a year) | $0 | ($5,347) | ($12,536) | ($24,121) | ($41,854) |
| EBITDA | ($107,919) | ($124,137) | ($56,788) | $12,278 | $82,739 |
| Depreciation | ($12,667) | ($12,667) | ($12,667) | ($2,000) | $0 |
| Interest | $0 | $0 | $0 | $0 | $0 |
| Income tax | $0 | $0 | $0 | $0 | $0 |
| Net income before start-up costs | ($120,586) | ($136,804) | ($69,454) | $10,278 | $82,739 |
| Start-up costs expensed at opening (counsel, licensing, launch marketing) | ($25,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($146,086) | ($136,804) | ($69,454) | $10,278 | $82,739 |
Year 1 loses $120,586 before start-up costs and $146,086 after them. Year 2 loses $136,804, more than Year 1 before start-up costs, because the editor, higher marketing and more software arrive before the membership has built up. Year 3 narrows to a $69,454 loss, with EBITDA of ($56,788), a margin of -17.2%. Year 4 is the first profitable year at $10,278, and Year 5 earns $82,739 on an 11.9% margin. Payroll is 115% of Year 1 revenue and 54% of Year 5 revenue. The nil tax charge is explained under the inputs.
Where the cash goes
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($138,894) | ($129,042) | ($64,512) | $2,760 | $72,232 |
| Site build and equipment | ($40,000) | $0 | $0 | $0 | $0 |
| Funding received | $420,000 | $0 | $0 | $0 | $0 |
| Debt repaid (none) | $0 | $0 | $0 | $0 | $0 |
| Owner distributions | $0 | $0 | $0 | $0 | $0 |
| Net change in cash | $241,106 | ($129,042) | ($64,512) | $2,760 | $72,232 |
| Closing cash | $241,106 | $112,063 | $47,551 | $50,311 | $122,543 |
Cash stays positive at every year end. The lowest figure is $47,551 at the end of Year 3, the last year before the site covers its costs. No distributions are paid, so the cash that builds in Years 4 and 5 stays in the business. The debt rows are zero because the plan carries no borrowing.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $241,106 | $112,063 | $47,551 | $50,311 | $122,543 |
| Accounts receivable | $5,475 | $10,380 | $18,104 | $27,622 | $38,130 |
| Site build and equipment (net) | $27,333 | $14,667 | $2,000 | $0 | $0 |
| Total assets | $273,914 | $137,110 | $67,656 | $77,933 | $160,673 |
| Borrowings (none) | $0 | $0 | $0 | $0 | $0 |
| Paid-in capital | $420,000 | $420,000 | $420,000 | $420,000 | $420,000 |
| Retained earnings | ($146,086) | ($282,890) | ($352,344) | ($342,067) | ($259,327) |
| Total liabilities and equity | $273,914 | $137,110 | $67,656 | $77,933 | $160,673 |
Margins, break-even and payroll load
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -108.0% | -65.5% | -17.2% | 2.4% | 11.9% |
| Net margin (before start-up costs) | -120.7% | -72.2% | -21.0% | 2.0% | 11.9% |
| Payroll incl. pay raises as share of revenue | 115% | 97% | 66% | 56% | 54% |
| Revenue per full-time equivalent at year end | $99,923 | $94,720 | $132,162 | $144,031 | $154,638 |
| Average monthly revenue | $8,327 | $15,787 | $27,534 | $42,009 | $57,989 |
| Monthly revenue needed to cover operating costs | $17,885 | $26,781 | $32,563 | $40,922 | $50,661 |
| Debt service cover (EBITDA / interest + principal) | – | – | – | – | – |
The last two measures give the break-even test. In Year 3 the site averages $27,534 a month against $32,563 needed, short by $5,029 a month. Year 4 averages $42,009 against $40,922, a margin of $1,087, and the site covers its running costs only just in that year. The debt service row is empty because there is no debt.
If search traffic falls 40%
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $99,923 | $134,424 | $207,622 | $306,767 | $419,490 |
| Net income before start-up costs | ($100,438) | ($122,247) | ($131,936) | ($92,671) | ($68,472) |
| Net income after start-up costs | ($125,938) | ($122,247) | ($131,936) | ($92,671) | ($68,472) |
| Closing cash | $261,254 | $149,783 | $26,503 | ($69,601) | ($144,249) |
This case takes a search shock: organic sessions fall 40% from January 2028 and stay down, as they might if search engines answered lesson queries on their own results page. Advertising, new members and shop orders all follow sessions, and Year 1 revenue is as planned. The response starts in the same month: the curriculum editor joins in month 19 and support in month 31, the senior editor in month 46, the second senior editor is dropped, marketing is cut by 20%, Frank takes a 20% pay cut to $49,600, commissioned lessons fall by a quarter and software by 15% from Year 2, and rent rises only 3% a year. Even so, the site does not survive on this plan. Cash is $26,503 at the end of Year 3 and runs out during Year 4, ending Year 5 about $144,000 short. That is the break point: a 40% fall that does not recover needs about $145,000 of extra funding, or a team cut back to Frank and one editor, which this case does not model. The mitigations are listed under Running the Publication: the email list, the membership, printable files that a results page cannot supply, and a watch on the organic-search share of sessions.
Sources
Tax Foundation page The Kentucky Department of Education page could not be loaded when checked, so no figure is taken from it.
- 26 U.S.C. section 11, corporate tax rate of 21% of taxable income.
- Tax Foundation, Kentucky state tax data, flat 5.00% corporate income tax rate, 2026. A separate Kentucky entity tax may also apply to an LLC and is not in the model; confirm with a Kentucky accountant.
- Kentucky Department of Education, social studies standards page, as one place where the state publishes its standards. Science standards are published by the same department. No figure is quoted.
- Ad-network traffic minimums, RPM and payout rates, payment-processor fees, marketplace seller fee schedules, seller tax reporting and Kentucky sales-tax treatment of digital goods are not sourced here. They change often; each provider or agency publishes its own.
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