Looking for a farm machinery manufacturer business plan? You're in the right place.
A company that builds farm machinery has to answer a lender's hardest questions with numbers. How much steel, inventory and tooling does the shop carry before a machine ships? What does a bad harvest do to orders? How many welders does the order book justify, and when? A blank template cannot show what a sensible answer looks like.
In this article we'll walk through a complete sample plan for a farm machinery manufacturer in Portland, Oregon, section by section, ending with the five-year financials. We'll cover the executive summary, the SWOT analysis and the full set of statements.
Here's what you'll take away:
- The executive summary: see how to put machines, funding and the first three years on one page, so a lender knows what you are asking for
- The shop-hours table: learn how to match welders and assemblers to the hours each machine takes, so you hire before the shop is overloaded and not after
- The start-up budget: find out what machinery, tooling and inventory cost before the first sale, and how large a reserve the first harvest needs
- The first year, month by month: spot the quarters that lose money before you reach them, and plan cash around them
- The order book and marketing plan: see how a new builder turns demo days, dealers and trade shows into delivered machines
- The five-year statements: follow how inventory, receivables and payroll show up in profit, cash and the balance sheet
- The downside case: have an answer ready for "what if orders run 20% short?", with the steps the founder takes in response
If you're planning a machinery or fabrication business, read this before you write your own. The company is fictional, so take what fits your shop and change the rest.
In this plan
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Pacific Court at a Glance
Pacific Court builds hazelnut harvest equipment and vineyard and berry-field implements in a leased shop in Northeast Portland, Oregon. It opens on 1 January 2027, a short drive from the northern Willamette Valley where its customers farm. Founder and chief engineer Ingrid Halvorsen owns 62% of the company; three outside investors hold 38%.
The company needs $1,300,000: $250,000 of Ingrid's own money, $400,000 of preferred equity from two growers and one equipment investor, and a $650,000 SBA-backed term loan. Of that total, $395,000 buys machinery, vehicles and demonstration units, $85,000 fits out the shop, $149,000 pays for legal work, design review, prototype testing, permits and the launch, and $671,000 stays as cash for steel, components and the inventory that builds with every order.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $1,326,000 | $2,377,000 | $3,203,000 |
| Net income after start-up costs | ($412,024) | ($56,238) | $93,743 |
| Closing cash | $292,393 | $157,227 | $147,810 |
Nine harvest machines and 30 implements ship in Year 1. Four of the five sweepers are covered by signed orders with deposits before the doors open; the four harvesters are first-generation machines and ship only after the prototype passes field testing. Year 1 is a loss because the shop carries a crew of five by April, before most harvest machines ship, and nine of the twelve months run at an operating loss. Net income turns positive in Year 3 and stays positive through Year 5.
If orders run 20% short and Ingrid slows hiring, drops four planned positions, skips the demonstration units, buys inventory closer to order, cuts marketing and her own pay and pays no distributions, year-end cash stays positive in every year, with a low of $118,362 in Year 3.
The pitch is narrow. Pacific Court builds a small range of machines for the crops grown in its own backyard, quotes a delivery date it can keep, and holds parts for every machine it has sold on a shelf in Portland.
The Company and Its Machines
Legal name: Pacific Court Implements, LLC, an Oregon limited liability company that elects corporate tax treatment. Owners: Ingrid Halvorsen, 62%; three preferred-equity investors, 38% in total. Shop: 12,000 square feet of light-industrial space in Northeast Portland, on a ten-year lease. Start date: 1 January 2027, to build for the 2027 harvest. Stage: pre-launch. Two prototype sweepers ran in growers' orchards in the 2026 harvest. The lease is in draft and four sweeper orders are signed. The harvester has not been built; its prototype is funded in the start-up budget.
What the shop is for
Build harvest and row-crop machines that suit Oregon's specialty crops, deliver them when the grower needs them, and keep them running.
Where the company aims to be by the end of 2028
- 14 harvest machines and 52 implements delivered in 2028, up from 9 and 30.
- Revenue of $2,377,000 and EBITDA of $74,795, with net income still negative after interest and depreciation.
- Ten people on payroll, including a field service technician and a design engineer.
- Net income positive in 2029, the third year.
The four product lines
| Line | What it covers | Year 1 share of revenue |
|---|---|---|
| Hazelnut harvest equipment | Orchard sweepers and harvesters | 49.0% |
| Vineyard and berry-field implements | Under-vine mowers, cultivators and tool-carrier attachments | 32.8% |
| Parts, service and rebuilds | Wear parts, repairs, off-season rebuilds | 6.9% |
| Contract fabrication | Steel frames and trailer parts for other Portland manufacturers | 11.3% |
Rules the shop answers to
Oregon OSHA covers the shop floor. The Oregon Department of Environmental Quality and the City of Portland cover air emissions, painting and stormwater, and the plan budgets $6,000 for permits and registrations; whether an industrial stormwater permit applies is confirmed with DEQ before the lease is signed. Machine guards and operator safety are designed against the safety standards that apply to agricultural equipment, and the design review in the legal and engineering budget covers this. Counsel has also reviewed the invention-assignment terms of Ingrid's former employer, because she built the prototypes on her own time; that review sits inside the $38,000 legal budget.
Oregon Orchards, Vineyards and Berry Fields
The hazelnut base
Oregon State University reported in October 2024 that about 99% of U.S. hazelnuts are grown in Oregon, with an annual crop it values at about $110 million, citing the Oregon Employment Department, and an estimated 65,000 tons or more a year. The harvest is mechanical: nuts are collected from the orchard floor, and a sweeper and a harvester do the work in sequence in the fall. The plan depends on one crop for roughly half of revenue, which is a concentration risk a lender will weigh; implements, parts and contract work are the offset.
What labor costs here
The Bureau of Labor Statistics put the median welder, cutter, solderer and brazer at $53,750 a year in May 2025 and projects 2% employment growth from 2025 to 2035. Machinists had a median of $58,750 in the same month. Pacific Court pays $58,000 to $68,000 for welders and $52,000 for assemblers; Portland pay may run above the national medians.
What the plan prices at
A sweeper sells for $46,000 and a harvester for $105,000. Implements average $14,500 net of the dealer discount. These are the plan's own prices. Growers compare them with used machines, imported machines and local custom builds, and real prices vary by model and specification.
Who a grower could buy from instead
| Alternative | What it offers | Why a grower picks it | How Pacific Court differs by design |
|---|---|---|---|
| Full-line national brands | Wide range, financing programs | One dealer for the whole farm | A narrow range built for local crops and soils |
| Imported specialty machines | Purpose-built harvest machines | Proven designs | Parts on the shelf in Oregon, a technician within a day's drive |
| Used equipment | Lowest purchase price | Cash cost | New machines with a written warranty |
| Local custom fabricators | One-off builds | Price and proximity | A repeatable design, field-tested before it ships |
| Building it on the farm | Lowest cash cost | Control | Time returned to the farm in the harvest weeks |
The table describes categories and how the shop positions itself. It is not a ranking, and no brand is named because prices and ranges change.
SWOT
| Strengths | Weaknesses |
|---|---|
| A founder who has designed and field-tested the sweeper | One designer: if Ingrid is out, new designs stall |
| Parts and service within a day's drive of the customer | No brand yet; every grower is a first sale |
| Four signed sweeper orders before opening | Years 1 and 2 both lose money; the harvester is untested |
| Opportunities | Threats |
|---|---|
| Growers replacing aging harvest machines | Steel and component price swings |
| Dealers wanting a local implement supplier | A bad crop year pausing machine purchases |
| Contract work filling the winter | A larger builder cutting price to enter the segment |
Who Buys a Sweeper
The hazelnut grower with 150 to 600 acres
The buyer owns the orchard or leases it, usually runs a small crew, and uses a custom operator for part of the harvest. A sweeper pays back by saving the cost of hiring one in a tight harvest, and the buyer wants to know a harvest-week breakdown will be fixed in a day.
The vineyard or berry operator
An owner-operator with a few dozen acres of vines or berries buys implements before the growing season, often through a dealer, and values a tool-carrier attachment that fits the tractor already in the barn.
The equipment dealer
Three Willamette Valley dealers carry the implement line at a discount of about 12% and want a supplier that answers the phone and ships parts quickly.
What starts a purchase
A machine that failed in the last harvest, a farm expanding its acreage, a retiring operator's replacement, or a dealer's customer asking for a tool that is not on the lot.
What buyers ask of the shop
A price in writing. A delivery date that holds. A machine that works in wet fall soil. Parts they can get the same week.
Orders, Dealers and Delivery Dates
From quote to delivery
A sales call or field demo leads to a written quote valid for 30 days, then a signed order with a deposit. Sweepers take 8 to 12 weeks from order to delivery, so orders for the fall harvest close in May. Harvesters ship only after the prototype passes field testing, and the first four are sold with that condition written into the order. Each machine is tested at the shop before it ships and a technician sets it up on the farm.
The Year 1 order book
Nine harvest machines and 30 implements. Four of the five sweepers are signed before opening, with 30% deposits of $55,200 in total.
| Source | Harvest machines | Implements |
|---|---|---|
| Pilot growers with signed orders | 4 | 0 |
| Field demos and grower referrals | 3 | 10 |
| Trade shows and the website | 2 | 6 |
| Dealers | 0 | 14 |
How prices are set
A machine is priced from its direct cost plus shop hours: about 46% of the sale price is steel, engines, hydraulics and components. Implements are priced to dealers at a 12% discount from list. Quotes name a steel-price validity period, because a 10% move in input costs that cannot be passed on takes about 4.6 points off the gross margin. Prices rise 3% a year from Year 2.
Terms and warranty
Machines sell with a deposit on order and the balance on delivery, or through dealer terms of 30 days. A one-year warranty is budgeted at 1.5% of equipment sales. Parts orders ship the same day when stocked.
Keeping the base
Every machine sold produces parts and service revenue for years, which is why that line grows from $91,000 in Year 1 to $470,000 in Year 5. Growers who buy a sweeper are the natural customers for a harvester later.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Harvest machines delivered | 9 | 14 | 18 | 21 | 23 |
| Implements delivered | 30 | 52 | 68 | 78 | 85 |
Growth slows after Year 2 because shop hours become the limit. The hires follow the hours table, and the plan turns away contract work before it adds overtime the margin cannot carry.
Getting Machines in Front of Growers
What the first year costs
The Year 1 budget is $93,000: $45,000 of launch spending paid from start-up capital and $48,000 of running costs. That is 7.0% of Year 1 revenue and about $2,385 for each of the 39 machines and implements sold. The share falls to 2.2% of revenue in Year 2 and 1.7% in Year 3 as repeat buyers and dealers carry more of the sales.
| Item | Year 1 spend | What it is expected to do |
|---|---|---|
| Demo-day program on four farms (launch) | $15,000 | Working machines in front of neighbors; about 3 harvest machines and 10 implements |
| Trade-show booth build (launch) | $18,000 | A booth that works for three years of Oregon industry events |
| Website, video and brochures (launch) | $12,000 | A site with specifications, parts ordering and a quote request |
| Trade shows and events (running) | $14,000 | Hazelnut, wine-grape and berry industry events; about 2 harvest machines and 6 implements |
| Field days and grower visits | $10,000 | Follow-up demos with prospects from the winter |
| Dealer support and training | $10,000 | Product training and sales tools for three dealers; about 14 implements |
| Search and video | $6,000 | Searches for harvest equipment and implements in the Willamette Valley |
| Parts catalog and email | $4,000 | Reminders before the harvest and the pruning season |
| Sales travel and samples | $4,000 | Mileage and demonstration costs |
Milestones
- January 2027: four sweeper orders signed, deposits received.
- April 2027: first sweeper delivered; first demo day held.
- June 2027: harvester prototype passes field testing.
- September 2027: peak month, $269,000 of revenue, and the last harvester of the season delivered.
- December 2027: 30 implements delivered and a parts catalog for every model.
Inside the Shop
Where the work happens
Twelve thousand square feet in Northeast Portland at $1.05 a square foot a month, all in, which is $151,200 a year. The shop has three welding bays, a plasma table, a press brake, an overhead crane, a forklift and a small paint-prep area; powder coating is sent out until the paint operator is hired in month 49. The space is tight for the Year 5 volume, and a move would need fit-out and moving costs the model does not include.
How a machine is built
Ingrid or the design engineer prepares the drawings and cut files. The plasma table cuts parts, welders fabricate the frames, assemblers fit engines, hydraulics and drivetrains, and the machine is tested before it ships. Parts for the next machine are cut while the current one is assembled.
Hours and capacity
A sweeper takes about 120 shop hours, a harvester 240 and an implement 40. Year 1 needs about 4,390 shop hours against about 5,725 available, which is 77% use. Use rises to 86% in Year 3 and 88% in Year 4, so the third welder starts in month 25 and the third assembler in month 37. Summer months run above the annual average, and contract work is deferred to the winter to absorb the peak.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Hours needed | 4,390 | 7,840 | 10,400 | 12,100 | 13,400 |
| Hours available | 5,725 | 9,710 | 12,050 | 13,700 | 15,350 |
| Use | 77% | 81% | 86% | 88% | 87% |
Steel and components
Steel comes from regional service centers on 40-day terms. Engines, hydraulic pumps and drivetrain parts are bought from a few suppliers, with a second source named for each. Inventory is 22% of a year's direct costs, about 2.6 months, which turns a little over four times a year. A buyer and quality lead joins in month 34. The build ahead of the harvest peaks inside the year, so the plan also asks the lender for an undrawn $150,000 revolving line.
Safety, permits and insurance
Insurance of $46,000 in Year 1 covers product liability, property, business interruption, a commercial auto policy and key-person life and disability cover on Ingrid; workers' compensation sits in the 30% payroll load. Welding and cutting follow written safety procedures, with training budgeted at $6,000 in Year 1. Product liability is the exposure a lender asks about first, and the company carries cover from the day the first machine ships. A written recall procedure names who contacts owners and how.
Vendors and advisors on call
Two steel service centers, a powder coater, an engine distributor, an insurance broker who writes agricultural equipment and a patent attorney. Each has a named replacement.
Ingrid and the Floor Crew
Ingrid Halvorsen, founder and chief engineer
Ingrid has 15 years in agricultural equipment, nine as a design engineer and six as an engineering manager at a mid-size implement builder in the Willamette Valley. She holds a degree in mechanical engineering and designed both prototype sweepers on her own time. Her $250,000 is her savings and the proceeds of a home-equity line. She is leaving a salaried job to run a company where she still designs and tests the machines.
Where the team is thin
Ingrid has not run a sales operation or a payroll. The sales and dealer manager joins in month 7 to take dealer work, a bookkeeper on retainer handles accounts payable, and an outside CPA prepares quarterly statements. Ingrid has also not priced a full year of orders, so the quote template and the steel-validity clause are reviewed by an advisor.
If Ingrid is out
Ingrid is the only designer at launch, so the company carries key-person life and disability cover on her. The lead welder-fabricator knows every drawing, and the design engineer in month 22 gives a second person who can sign off a design change. Until then an outside engineer on retainer stamps drawings.
Outside help
A retired plant manager from the equipment industry reviews the shop's schedule and costs each quarter, and the company draws on a small-business advisory service for questions on hiring and permits.
Owners and the lender
Ingrid holds 62%. The three investors hold preferred equity with a 1x liquidation preference, a 38% stake and no board control. Ingrid gives the lender a personal guarantee, and the lender takes a lien on the machinery, which cost $395,000 at purchase against the $650,000 loan; the balance rests on receivables, inventory and the guarantee. The loan carries a covenant to deliver quarterly accounts and keep net worth above a floor.
Financial Plan: Steel, Inventory and Cash
The tables below come from one five-year model of the shop: month by month for 2027, one column per year after that. Funding and the shop figures come first, because a lender tests those before the results.
Machines, tooling and the opening loan
| Use of funds | Amount |
|---|---|
| Plasma table, press brake, band saw, mill and lathe (part used) | $170,000 |
| Welding stations, fixtures, jigs and hand tools | $55,000 |
| Forklift, overhead crane and compressed air | $62,000 |
| Service truck and equipment trailer | $68,000 |
| Demonstration sweeper and vineyard unit, built at cost | $40,000 |
| Three-phase power, ventilation, floor repair, welding bays and office | $85,000 |
| City permits, fire marshal and air-quality registrations | $6,000 |
| Legal (entity, dealer agreement, terms of sale), design review and provisional patent filings | $38,000 |
| Harvester prototype build, field testing and outside engineering review | $60,000 |
| Launch: demo days, trade-show booth, website and brochures | $45,000 |
| Cash reserve for steel, components and the pre-harvest build | $671,000 |
| Total uses | $1,300,000 |
| Source of funds | Amount |
|---|---|
| Ingrid Halvorsen's savings and home-equity proceeds | $250,000 |
| Two Willamette Valley growers and one ag-equipment investor (preferred equity) | $400,000 |
| SBA-backed equipment and working-capital loan | $650,000 |
| Total sources | $1,300,000 |
Ingrid Halvorsen puts in $250,000 of her own money. Three outside investors, two growers and one equipment investor, put in $400,000 of preferred equity for a 38% stake, with a 1x liquidation preference and no required dividend. An SBA-backed lender provides $650,000 over ten years at 10.75%, interest-only for the first 24 months. The rate and the interest-only period are planning figures and not a quote; the lender and the SBA set the real terms, and the lender is expected to ask the owners of 20% or more for personal guarantees. Equity is 50% of the $1,300,000. The $671,000 reserve is the largest line. It pays for steel and components ahead of the harvest build and for the inventory and receivables that grow with each order. Year 1 loses $412,024 after start-up costs and Year 2 loses a further $56,238. The model works at year-end balances only; the build ahead of the harvest peaks inside the year, so the plan also asks the lender for an undrawn $150,000 revolving line, which the figures do not use.
Shop figures behind the model
- Harvest equipment sells nine machines in Year 1: five sweepers at $46,000 and four harvesters at $105,000, which is $650,000. Sweepers deliver from April to August and the four harvesters from July to September, after the harvester prototype passes field testing in the spring. Machines reach 14, 18, 21 and 23 in Years 2 to 5, with the mix moving toward harvesters, and prices rise 3% a year from Year 2. These are the plan's own prices; real quotes for comparable machines vary by model and specification.
- Vineyard and berry-field implements (under-vine mowers, cultivators and tool-carrier attachments) sell 30 units in Year 1 at a net average of $14,500, after a dealer discount of about 12% on the 14 that sell through dealers. Units reach 52, 68, 78 and 85, with the same 3% annual price rise. Orders cluster in winter and spring and again before the fall pruning season.
- Parts, service and rebuilds earn $91,000 in Year 1, starting in April once the first machines are in the field, and peak from August to October. The line reaches $470,000 by Year 5 as the installed base grows. Contract fabrication for other Portland-area manufacturers, such as steel frames and trailer parts, fills the shop between machine builds: $150,000 in Year 1, falling to 6.5% of revenue by Year 5. It is the first work deferred when machine orders fill the shop.
- Direct costs are 46% of revenue on harvest equipment, 45% on implements, 40% on parts and 55% on contract work, which blends to 46.3% in every year and leaves a 53.7% gross margin before shop labor. They cover steel, engines, hydraulics, drivetrain parts, powder coating and welding consumables. A 10% rise in steel and component prices that cannot be passed on costs about 4.6 points of gross margin, which is why quotes carry a price-validity period.
- Shop labor is planned in hours. A sweeper takes about 120 shop hours, a harvester 240 and an implement 40. Parts and service work and contract work are counted at $75 of value added per shop hour. Hours needed are about 4,390 in Year 1, 7,840 in Year 2, 10,400 in Year 3, 12,100 in Year 4 and 13,400 in Year 5. Hours available count 1,650 productive hours per shop employee and 500 for Ingrid, and come to about 5,725, 9,710, 12,050, 13,700 and 15,350. Use is therefore 77%, 81%, 86%, 88% and 87%. Summer months run above the annual average, and contract work and overtime absorb the peak.
- Payroll adds 30% to wages for shop staff and 27% for office and engineering staff; workers' compensation on welding and assembly work is the reason for the higher shop rate. Wages in the roster are launch rates, and 3% annual pay raises are charged as a separate line from Year 2. Welders are paid $58,000 to $68,000 and assemblers $52,000, above the national medians the Bureau of Labor Statistics reports for welders and machinists. Local pay may differ, and the owner confirms it before hiring.
- Customers pay through a mix of deposits, delivery payments and dealer terms of 30 days, which averages 30 days of sales outstanding. There is no floorplan financing. Steel and component suppliers allow 40 days. Inventory is 22% of a year's direct costs, about 2.6 months, which is $135,003 at the end of Year 1 and $326,105 at the end of Year 3. It turns a little over four times a year.
- Rent is 12,000 square feet of light-industrial space in Northeast Portland at $1.05 a square foot a month, all in, which is $151,200 a year, with annual increases of 3%. Real asking rents vary by building and submarket, so this is the plan's own figure, and the lease is negotiated before the loan closes. Warranty and goodwill repairs are set at 1.5% of equipment sales, which is higher than a mature line would need because the harvester is a first-generation machine. Bad debt is about 0.3% of revenue.
- Insurance of $46,000 in Year 1 includes key-person life and disability cover on Ingrid. Professional fees of $36,000 in Year 1 cover the accountant, a bookkeeper on retainer, a patent attorney, an outside engineer who stamps drawings and legal work.
- The company is an LLC that elects corporate tax treatment because of the preferred investors. The model charges the 21% federal rate and 6.6% for Oregon, with the Year 1 and Year 2 losses carried forward in full; the real federal limit on loss carryforwards would bring the first tax bill forward. The Oregon rate is a planning figure that may change. The Oregon Corporate Activity Tax estimate of $1,000 to $14,500 a year is also a planning figure. An Oregon accountant confirms both. A $40,000 owner distribution is paid in Year 5 only.
Revenue by product line
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Hazelnut harvest equipment | $650,000 | $1,150,000 | $1,567,000 | $1,893,000 | $2,186,000 |
| Vineyard and berry-field implements | $435,000 | $777,000 | $1,046,000 | $1,236,000 | $1,387,000 |
| Parts, service and rebuilds | $91,000 | $210,000 | $330,000 | $410,000 | $470,000 |
| Contract fabrication | $150,000 | $240,000 | $260,000 | $270,000 | $280,000 |
| Total revenue | $1,326,000 | $2,377,000 | $3,203,000 | $3,809,000 | $4,323,000 |
| Growth on prior year | – | 79% | 35% | 19% | 13% |
Harvest equipment is the largest line at 49.0% of Year 1 revenue and 50.6% of Year 5, and it concentrates cash into the summer. Implements add 32.8% and keep the shop busy in the off-season. Parts and service grow fastest, from 6.9% of Year 1 revenue to 10.9% of Year 5, and carry a lower direct-cost share than the machines. Contract fabrication falls from 11.3% to 6.5% of revenue as machine orders take over the shop.
Month by month through 2027
| Month | Hazelnut harvest equipment | Vineyard and berry-field implements | Parts, service and rebuilds | Contract fabrication | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $0 | $0 | $0 | $0 | $0 | ($70,362) |
| Feb 2027 | $0 | $14,500 | $0 | $14,000 | $28,500 | ($55,051) |
| Mar 2027 | $0 | $43,500 | $0 | $16,000 | $59,500 | ($38,397) |
| Apr 2027 | $46,000 | $43,500 | $3,000 | $16,000 | $108,500 | ($12,074) |
| May 2027 | $46,000 | $43,500 | $5,000 | $12,000 | $106,500 | ($13,148) |
| Jun 2027 | $46,000 | $43,500 | $6,000 | $12,000 | $107,500 | ($12,611) |
| Jul 2027 | $151,000 | $29,000 | $9,000 | $10,000 | $199,000 | $36,544 |
| Aug 2027 | $151,000 | $29,000 | $14,000 | $10,000 | $204,000 | $39,231 |
| Sep 2027 | $210,000 | $29,000 | $18,000 | $12,000 | $269,000 | $74,150 |
| Oct 2027 | $0 | $43,500 | $16,000 | $14,000 | $73,500 | ($30,876) |
| Nov 2027 | $0 | $58,000 | $12,000 | $16,000 | $86,000 | ($24,161) |
| Dec 2027 | $0 | $58,000 | $8,000 | $18,000 | $84,000 | ($25,236) |
No machine ships in January, so the shop starts the year with payroll and rent and no revenue. Revenue sits near $108,000 a month from April to June on sweepers and implements, rises to $199,000 and $204,000 in July and August as the first harvesters ship, and peaks at $269,000 in September. It falls to $73,500 in October once the harvest is under way. EBITDA is positive only from July to September and negative in the other nine months. The monthly view carries no inventory or supplier credit, so it is not used to name a cash low point; the annual statements below include both.
Shop and office roster
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and chief engineer | $105,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Lead welder-fabricator | $68,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Welder-fabricator | $58,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Assembler-mechanic | $52,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Office and parts administrator | $50,000 | Month 4 | 1 | 1 | 1 | 1 | 1 |
| Sales and dealer manager | $80,000 | Month 7 | 1 | 1 | 1 | 1 | 1 |
| Second assembler-mechanic | $52,000 | Month 9 | 1 | 1 | 1 | 1 | 1 |
| Second welder-fabricator | $58,000 | Month 13 | – | 1 | 1 | 1 | 1 |
| Field service technician | $62,000 | Month 18 | – | 1 | 1 | 1 | 1 |
| Design engineer | $78,000 | Month 22 | – | 1 | 1 | 1 | 1 |
| Third welder-fabricator | $58,000 | Month 25 | – | – | 1 | 1 | 1 |
| Buyer and quality lead | $66,000 | Month 34 | – | – | 1 | 1 | 1 |
| Third assembler-mechanic | $52,000 | Month 37 | – | – | – | 1 | 1 |
| Paint and finishing operator | $48,000 | Month 49 | – | – | – | – | 1 |
| Total payroll incl. on-costs | $474,442 | $744,632 | $948,865 | $1,079,330 | $1,141,730 |
Ingrid, a lead welder-fabricator and a second welder open the doors in January. An assembler joins in month 3, an office and parts administrator in month 4, the sales and dealer manager in month 7 and a second assembler in month 9, which makes seven people at the end of Year 1. Year 2 adds a welder in month 13, a field service technician in month 18 and a design engineer in month 22. A third welder starts in month 25, a buyer and quality lead in month 34, a third assembler in month 37 and a paint and finishing operator in month 49. Headcount is 7, 10, 12, 13 and 14 at the end of the five years. Shop hires are timed to the hours in the shop figures. Ingrid's $105,000 is already in payroll, so profit here is what remains after she is paid.
What the shop earns and keeps
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,326,000 | $2,377,000 | $3,203,000 | $3,809,000 | $4,323,000 |
| Steel, engines, hydraulics, purchased components and shop consumables | ($613,650) | ($1,100,035) | ($1,482,293) | ($1,762,740) | ($2,000,610) |
| Gross profit | $712,350 | $1,276,965 | $1,720,707 | $2,046,260 | $2,322,390 |
| Payroll incl. on-costs | ($474,442) | ($744,632) | ($948,865) | ($1,079,330) | ($1,141,730) |
| Rent | ($151,200) | ($155,700) | ($160,400) | ($165,200) | ($170,200) |
| Utilities | ($27,000) | ($31,000) | ($35,000) | ($38,000) | ($40,000) |
| Marketing | ($48,000) | ($52,000) | ($56,000) | ($60,000) | ($63,000) |
| Insurance | ($46,000) | ($51,000) | ($58,000) | ($63,000) | ($67,000) |
| Professional fees | ($36,000) | ($34,000) | ($36,000) | ($38,000) | ($40,000) |
| Software subscriptions | ($18,000) | ($21,000) | ($24,000) | ($25,000) | ($26,000) |
| Warranty and goodwill repairs (1.5% of equipment sales) | ($15,700) | ($29,500) | ($39,500) | ($46,400) | ($51,800) |
| Freight out to farms and dealers (about two-thirds of 1% of sales) | ($8,000) | ($16,000) | ($22,000) | ($25,000) | ($28,000) |
| Tooling and equipment replacement | $0 | ($12,000) | ($18,000) | ($25,000) | ($25,000) |
| Oregon Corporate Activity Tax and state filings | ($1,000) | ($6,000) | ($10,000) | ($12,500) | ($14,500) |
| Safety training, Oregon OSHA compliance and dues | ($6,000) | ($7,000) | ($8,000) | ($8,500) | ($9,000) |
| Phones, vehicle fuel and supplies | ($9,000) | ($12,000) | ($14,000) | ($15,000) | ($16,000) |
| Bad debt allowance | ($4,000) | ($8,000) | ($11,000) | ($12,500) | ($14,000) |
| Annual pay raises (3% a year) | $0 | ($22,339) | ($57,786) | ($100,083) | ($143,297) |
| EBITDA | ($131,992) | $74,795 | $222,156 | $332,747 | $472,863 |
| Depreciation | ($61,157) | ($61,157) | ($61,157) | ($61,157) | ($61,157) |
| Interest | ($69,875) | ($69,875) | ($67,255) | ($61,130) | ($54,314) |
| Income tax | $0 | $0 | $0 | $0 | ($89,739) |
| Net income before start-up costs | ($263,024) | ($56,238) | $93,743 | $210,460 | $267,653 |
| Start-up costs expensed at opening (legal, design review and prototype testing, permits, launch marketing) | ($149,000) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($412,024) | ($56,238) | $93,743 | $210,460 | $267,653 |
Year 1 loses $263,024 before start-up costs and $412,024 after the $149,000 of legal, design, prototype testing, permit and launch spending. Year 2 earns $74,795 at EBITDA but loses $56,238 after depreciation and interest. Year 3 is the first profitable year at $93,743, with an EBITDA margin of 6.9%. Net income rises to $210,460 in Year 4 and $267,653 in Year 5, when income tax of $89,739 appears for the first time. The margin is modest for a manufacturer because payroll takes about 31% of revenue and rent, insurance and product-liability cover are fixed before the first machine ships.
Cash in and out of the shop
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($527,607) | ($135,166) | $44,805 | $190,844 | $260,300 |
| Machinery, vehicles and shop fit-out | ($480,000) | $0 | $0 | $0 | $0 |
| Funding received | $1,300,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | $0 | ($54,221) | ($60,346) | ($67,163) |
| Owner distributions | $0 | $0 | $0 | $0 | ($40,000) |
| Net change in cash | $292,393 | ($135,166) | ($9,417) | $130,498 | $153,137 |
| Closing cash | $292,393 | $157,227 | $147,810 | $278,309 | $431,446 |
Year-end cash stays above $100,000 in every year. It falls from $292,393 at the end of Year 1 to $157,227 at the end of Year 2 and $147,810 at the end of Year 3, as inventory and receivables grow with revenue and principal payments begin in Year 3. It then climbs to $431,446 by Year 5 after the first $40,000 distribution. Cash inside a year can run lower than these year-end figures because the model does not time the pre-harvest build, which is why the plan asks for a revolving line. The loan balance falls from $650,000 to $468,270 over the five years.
Balance sheet with inventory and payables
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $292,393 | $157,227 | $147,810 | $278,309 | $431,446 |
| Accounts receivable | $108,986 | $195,370 | $263,260 | $313,068 | $355,315 |
| Steel, components and work in progress | $135,003 | $242,008 | $326,105 | $387,803 | $440,134 |
| Machinery, vehicles and shop fit-out (net) | $418,843 | $357,686 | $296,529 | $235,371 | $174,214 |
| Total assets | $955,226 | $952,290 | $1,033,704 | $1,214,551 | $1,401,109 |
| Owed to steel and component suppliers | $67,249 | $120,552 | $162,443 | $193,177 | $219,245 |
| SBA-backed loan | $650,000 | $650,000 | $595,779 | $535,433 | $468,270 |
| Paid-in capital | $650,000 | $650,000 | $650,000 | $650,000 | $650,000 |
| Retained earnings | ($412,024) | ($468,261) | ($374,518) | ($164,058) | $63,595 |
| Total liabilities and equity | $955,226 | $952,290 | $1,033,704 | $1,214,551 | $1,401,109 |
Shop margins, break-even and debt cover
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -10.0% | 3.1% | 6.9% | 8.7% | 10.9% |
| Net margin (before start-up costs) | -19.8% | -2.4% | 2.9% | 5.5% | 6.2% |
| Payroll incl. pay raises as share of revenue | 36% | 32% | 31% | 31% | 30% |
| Revenue per full-time equivalent at year end | $189,429 | $237,700 | $266,917 | $293,000 | $308,786 |
| Average monthly revenue | $110,500 | $198,083 | $266,917 | $317,417 | $360,250 |
| Monthly revenue needed to cover operating costs | $130,975 | $186,481 | $232,456 | $265,801 | $286,899 |
| Debt service cover (EBITDA / interest + principal) | -1.9x | 1.1x | 1.8x | 2.7x | 3.9x |
Year 1 averages $110,500 of revenue a month against $130,975 needed to cover operating costs, so it loses money. Year 2 averages $198,083 against $186,481, and Year 3 averages $266,917 against $232,456, a 15% cushion. Debt service cover is negative in Year 1 and 1.1x in Year 2, which is under the 1.25x a lender usually looks for and is covered by the reserve and the interest-only period. It reaches 1.8x in Year 3. Revenue per employee reaches $266,917 in Year 3.
Orders 20% short
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,060,800 | $1,901,600 | $2,562,400 | $3,047,200 | $3,458,400 |
| Net income before start-up costs | ($283,150) | ($127,208) | ($5,284) | $138,325 | $302,666 |
| Net income after start-up costs | ($432,150) | ($127,208) | ($5,284) | $138,325 | $302,666 |
| Closing cash | $364,161 | $197,497 | $118,362 | $196,098 | $439,465 |
This case cuts every revenue line by 20% in every year. Direct costs fall with revenue. The response: the sales manager and the second assembler start six months later, every other hire from month 13 starts six months later, the design engineer, buyer, third assembler and paint operator are never hired, the demonstration units are not built, inventory is held to 17% of direct costs by buying closer to order, tooling replacement is deferred to Year 4, warranty and freight fall with sales, marketing is cut by 20%, Ingrid takes a 20% pay cut, the shop stays in its first building and no distributions are paid. On those terms cash never falls below $118,362 at a year end, the low point comes in Year 3, and the shop loses a further $5,284 that year before turning profitable in Year 4. Year 1 closes with more cash than the base case because the demonstration units are not built, inventory is lower and hiring is slower. Year 5 shows more profit than the base case only because the hires are dropped and the pay cut stays in place, so it describes the response and not a forecast. Equity ends Year 1 at $217,850, close enough to a net-worth covenant that Ingrid would speak to the lender before the first test date.
Sources
- Oregon State University, 99% of U.S. Hazelnuts Are Grown in These Eight Oregon Counties, October 27, 2024: Oregon's share of U.S. hazelnuts, an annual crop value of about $110 million citing the Oregon Employment Department, and OSU's estimate of more than 65,000 tons a year. The page does not list the counties.
- Bureau of Labor Statistics, Welders, cutters, solderers, and brazers, Occupational Outlook Handbook: median pay of $53,750 in May 2025 and projected 2% growth from 2025 to 2035.
- Bureau of Labor Statistics, Machinists and tool and die makers: median pay for machinists of $58,750 in May 2025.
- The Oregon corporate tax rate (6.6%), the Corporate Activity Tax estimate, SBA loan terms and the lender's guarantee requirements are planning figures; each is confirmed with an Oregon accountant and the lender.
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