Looking for a cell phones retailer business plan? You're in the right place.
A phone store sells handsets that earn little next to commissions, accessories and repairs that earn a lot, and a lender wants to know which is which. How much inventory does it carry? What do the carriers pay, and when? What happens in the months after the holidays, or if foot traffic drops 20%? A blank template won't answer any of that.
This article walks through a complete sample plan for an independent cell phone and accessories store in Tampa, Florida, section by section. It covers the executive summary, the SWOT analysis and, in particular, all of the financials.
Here's what you'll take away:
- The executive summary: see how to put a store with four income lines on one page, so a reader sees where the margin comes from
- The SWOT analysis: learn how to name a dependence on carriers honestly, without putting a lender off
- The start-up budget: find out how much goes on fixtures, opening inventory and a cash reserve before the first commission arrives
- The first year, month by month: spot the slow months before you open, and size your reserve to them
- The marketing plan: see what a new store might spend per activation, and which channels carry the load
- The five-year profit, cash flow and balance sheet: understand how inventory turn, chargebacks and each hire show up in the numbers
- The downside case: have an answer ready for the "what if sales are 20% short?" question, along with the steps the owner takes
If you're planning a phone store, read this before you write your own. The store is fictional, so take what fits your market and change the rest.
In this plan
- The Store in Brief
- Garbles Cellular and Its Plaza
- Phone Buyers and the Other Places They Shop
- Who Walks In and Why
- How a Sale Works Here
- Getting People Through the Door
- Running the Counter
- The Founder and the Floor Team
- Financial Plan: Commissions, Accessories and Inventory Turn
- Fixtures, inventory and who pays for them
- Figures behind the forecast
- Revenue by income line
- Who is on the floor, and from when
- Profit and loss
- Cash position across the five years
- Balance sheet: inventory on hand and what is owed for it
- Margins, inventory turn and the break-even line
- A year that comes in 20% light
- Sources
If you need a cell phones retailer business plan template for your own plan, start it in the Toolkit.
The Store in Brief
Garbles Cellular is an independent cell phone and accessories store that opens on January 1, 2027 in a 1,100-square-foot strip-center unit on a main road in Tampa, Florida. It sells prepaid and unlocked handsets, earns commission on carrier activations and prepaid refills, sells cases, protectors and chargers, and repairs screens and batteries at the counter. Andre Garbles owns 100% of the company.
The store needs $165,000: $90,000 of Andre's savings and a $75,000 bank term loan. Of that, $26,000 buys fixtures, point of sale and tools, $39,000 is opening inventory, $20,500 covers start-up costs and $79,500 is held as cash.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $454,500 | $668,928 | $792,970 |
| Net income after start-up costs | ($14,912) | $47,836 | $70,344 |
| Closing cash | $64,109 | $97,265 | $121,137 |
Four lines of income carry the store, with commissions shown as two rows in the tables. Commissions are 24.0% of Year 1 revenue and 44.0% of its gross profit. Accessories are 30.3% of revenue and 33.3% of gross profit. Handsets are the largest sales line, at 31.4%, and earn only 6.9% of gross profit. Repairs add 14.3% of revenue and 15.7% of gross profit. Net income is 1.2% of revenue before start-up costs in Year 1, rises to 8.9% in Year 3 as the fixed costs spread over more sales, peaks at 9.8% in Year 4 and eases to 8.1% in Year 5, when the assistant manager's first full year and the pay raises arrive.
Year 1 loses $14,912 after start-up costs. Monthly EBITDA is negative from January to June while the store builds trade, and positive from July. Net income is positive in every year from Year 2.
If every income line runs 20% below plan, hires are delayed, marketing and Andre's pay are cut and no distributions are paid, the store stays cash-positive in all five years and loses money only in Year 1.
Garbles Cellular and Its Plaza
Legal name: Garbles Cellular LLC, a Florida limited liability company. Owner: Andre Garbles, 100%. Premises: 1,100 square feet of leased frontage in a Tampa strip center, with a sales floor, a glass counter, a repair bench and a locked storeroom. Opening: January 1, 2027. Stage: pre-launch. The carrier dealer application is in review, and the landlord has agreed lease terms in principle.
What the store is for
Give people in the surrounding neighborhoods a place to start service, buy a phone they can afford and get a cracked screen fixed the same day, without waiting in line at a carrier-owned store.
Targets for the first two years
- 1,250 activations, upgrades and port-ins in 2027 and 1,800 in 2028.
- Monthly EBITDA positive from July 2027.
- 5,400 accessory sales in 2027 and 7,400 in 2028.
- 880 repair jobs in 2028, the year a part-time technician joins.
Four lines of income
| Line | How it is earned | Year 1 share of revenue |
|---|---|---|
| Activations, upgrades, port-ins, refills and bill pay | Commission paid by carriers and prepaid brands | 24.0% |
| Handsets: unlocked, prepaid, refurbished | About $255 average sale, 12% margin | 31.4% |
| Accessories | About $25.50 average sale, 60% margin | 30.3% |
| Repairs | About $125 average job, 60% margin | 14.3% |
Rules the store runs by
Postpaid phones financed through a carrier are not store revenue; the store earns the commission. Walk-in customers are not offered cash for used phones during the plan period. Counsel confirms Florida's secondhand-dealer rules before trade-ins begin.
Phone Buyers and the Other Places They Shop
Near-universal ownership
The Pew Research Center's 2025 survey found 98% of U.S. adults own a cellphone of some kind and 91% own a smartphone. Nearly every sale is therefore a replacement, a switch or a repair. A new store wins by giving an existing owner a reason to walk in: a lower bill, a cheaper handset, a broken screen. The plan does not size the Tampa trade area; a site-specific traffic count and population figure are the first things a lender would ask for.
The other places a customer could go
| Alternative | What it offers | Why a customer picks it | How Garbles differs by design |
|---|---|---|---|
| Carrier-owned stores | That carrier's plans and financed phones | Brand trust, financing | Several prepaid brands and the carriers the dealer agreements allow, and walk-in service |
| Other authorized dealers in nearby plazas | Activations and accessories | Convenience | Repairs done at the counter, and a full accessory wall |
| Big-box electronics and warehouse kiosks | Handsets, protectors, some activations | Price and parking | Staff who set the phone up and move the data |
| Online retailers and carrier websites | Handsets and plans | Price | Same-day help and no shipping wait |
| Independent repair shops | Screens and batteries | Price | Repair sits next to sales, so a broken phone can become a replacement on the spot |
The table describes the category and how this store positions itself. Plans and prices change often and are not quoted here.
SWOT
| Strengths | Weaknesses |
|---|---|
| Founder with years on a carrier-dealer sales floor | Dependence on carrier commission schedules |
| Four income lines, so no single one carries the store | No brand yet, one location |
| Accessory and repair margins sit well above handsets | Thin handset margin and heavy inventory needs |
| Opportunities | Threats |
|---|---|
| Customers who want help moving data and choosing a plan | A carrier cutting commissions or ending a dealer agreement |
| Repair as a reason to visit, then to buy | Carrier-owned stores and online channels competing on price |
| Storm-season and holiday demand for accessories | Hurricane closures and a weak holiday season |
Who Walks In and Why
The switcher
Someone whose bill has crept up and who wants a lower-cost prepaid or discount-brand plan. They arrive with a phone that works and leave with a new line, often a case and a protector.
The broken screen
A repair customer arrives for a repair, not a purchase. The plan expects about 55% to add a case or protector, and a handset that cannot be repaired can become a sale in the same visit.
The first phone, or the family refresh
Parents buying for children, and households replacing two or three phones at once. These are the largest tickets: several lines, several accessories.
The small business
A contractor or salon owner who needs several handsets and prepaid lines. A small share of customers, with no separate income line.
What they ask for
A clear price before they commit, data moved across before they leave, and someone who can say what is and is not worth repairing.
How a Sale Works Here
From the door to the line
An associate asks what the customer pays now and what they use the phone for, checks coverage on the carriers the store is authorized for, and quotes a monthly cost and the up-front price together. Activation, number port and data transfer happen at the counter.
Where the margin is added
Each activation or handset sale is followed by an accessory offer at the register: a protector fitted at the counter, a case, a charger. The plan expects about 60% of activation and handset customers to buy at least one.
Repair as a sales path
A repair quote is given in writing, with the price of a replacement beside it. Screens and batteries are done the same day where parts are in stock.
Pricing
Handsets are priced a small margin over cost. Accessories carry the store's margin. Repair prices are posted on the wall. Prices rise 3% a year from Year 2, and commissions, which the carriers set, are held flat.
Getting People Through the Door
Marketing spend and its payoff
Marketing in Year 1 totals $24,500 and breaks down as $8,500 of launch spend from start-up capital plus $16,000 of running costs. Against Year 1 revenue that is 5.4%, or 3.5% on running costs alone. By Year 3 running spend falls to 2.4% of revenue, which is $19,000, and it reaches $23,000 in Year 5. Divided by 1,250 activations, Year 1 costs about $20 per activation, 29% of one $68 planning commission, and the same spend also brings the accessory and repair customers.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Signage and window graphics (launch) | $5,000 | Visibility from the road and the plaza's main aisle |
| Local listings and opening-month offers (launch) | $3,500 | Maps and local search presence, and a first-month accessory offer |
| Google Business Profile and local search ads | $4,800 | Searches such as "phone repair near me" and "prepaid phone store" |
| Social ads and community posts | $3,200 | Neighborhood groups and short repair and deal posts |
| Apartment-complex and employer outreach | $2,000 | Flyers and a repair-day offer at nearby complexes and workplaces |
| Referral credits | $1,700 | A $10 accessory credit for each referred new customer |
| Fall and holiday promotions | $2,300 | New-handset launches and gift season |
| Text and email list tool | $2,000 | Repeat accessory and upgrade reminders |
Where customers are expected to come from
The plan expects about 40% of new customers to come from the storefront and plaza traffic, 25% from local search, 15% from referrals, 10% from apartment and employer outreach and 10% from social channels.
Marketing milestones
- January 2027: store open under signed dealer agreements.
- July 2027: monthly EBITDA turns positive.
- September 2027: first fall handset launch season.
- November 2027: monthly revenue peaks at $63,096.
Running the Counter
The storefront
The unit is 1,100 square feet at roughly $27 a square foot a year, all in, which is $29,700 in Year 1. The lease runs five years with a five-year renewal option, and Andre signs a personal guarantee. The unit has a glass counter, wall slat displays, a charging bar, a repair bench and a locked storeroom.
Inventory control
Handsets are counted weekly and reordered from two distributors. Accessories are reordered by sell-through. Opening inventory is $39,000, and year-end inventory is $55,540 in Year 1 and $74,651 in Year 5, which is about 3.7 turns a year in Year 1 and 6.0 in Year 5.
Carrier agreements and chargebacks
The store sells under dealer agreements with carriers and prepaid brands, and those agreements set commission schedules, chargeback terms and how long the store is paid after month end. Termination terms are a major contract risk, and the lawyer reviews them before signing. Carrier commission schedules are not published, so the $68 average per activation, the chargeback rate and the payment timing in this plan are the plan's own figures, not quoted carrier terms. The plan sets aside 9% of commission income for chargebacks on early cancellations and trains every associate on the carriers' customer-data rules.
Who is on the floor
Three people open the store: Andre, a full-time associate and a part-time evening and weekend associate. A second part-time associate joins in month 14, a part-time technician in month 20 and an assistant manager in month 46. The store trades seven days a week, about 66 hours.
Licenses and safeguards
- A local business tax receipt and a certificate of use for the premises, with requirements confirmed with the city and county before opening.
- Florida sales-tax registration. The treatment of repair labor and parts is confirmed with the Florida Department of Revenue.
- Insurance for general liability, inventory and customers' devices in the store's care, theft, cyber, and windstorm, flood and business-interruption cover, budgeted at $10,000 in Year 1.
- A camera system and locked cases for handsets.
The Founder and the Floor Team
Andre Garbles, owner and store manager
Andre has nine years selling wireless service and handsets, five of them as a store manager at a carrier-authorized dealer in the Tampa Bay area. His $90,000 investment is his savings. He takes a $48,000 starting salary, a planning figure below what an experienced manager might earn elsewhere, and receives only the plan's annual 3% raise.
Where the team is thin
Andre has not run his own inventory purchasing or negotiated dealer agreements as a principal. The plan covers this with two distributors on 25-day terms, a lawyer who reviews the dealer agreement before signing, and an inventory count every week.
If Andre is out
Until the assistant manager joins in month 46, the full-time associate holds keys and opens the store. Key-person cover on Andre is not budgeted separately, which a lender may ask for.
Outside help
A bookkeeper on a monthly retainer, included in professional fees, and an accountant who reviews the first-year numbers each quarter.
Ownership and the bank
Andre owns 100% of Garbles Cellular LLC and gives the bank a personal guarantee. The loan is secured on fixtures and inventory.
Financial Plan: Commissions, Accessories and Inventory Turn
Five years are modeled: 2027 month by month, then one column per year. The tables follow the money. They start with the funding and the figures behind each income line, then show revenue split by line and month, followed by payroll. Profit and loss, cash and the balance sheet come next; margins and inventory turn follow, and a year that comes in 20% light closes the section. Commission income carries no direct cost, so the 54.5% gross margin blends a thin handset margin with commission income at 100% and accessories and repairs at 60%. The engine holds that Year 1 blend in every year. Commission is flat while retail prices rise, so a separate line charges the drift from Year 4, $1,349 in Year 4 and $4,414 in Year 5.
Fixtures, inventory and who pays for them
| Use of funds | Amount |
|---|---|
| Fixtures: glass counters, wall slat displays, secure handset cases, charging bar, repair bench | $17,000 |
| Point of sale, label printer, camera system, tablets, screen-press and repair tools | $9,000 |
| Opening inventory: unlocked and prepaid handsets | $22,000 |
| Opening inventory: cases, screen protectors, chargers, cables, audio, power banks | $14,000 |
| Opening inventory: repair screens, batteries and parts | $3,000 |
| Business tax receipt, sales-tax registration, certificate of use | $900 |
| Legal: entity, lease review, dealer agreement review | $3,600 |
| Pre-opening rent, deposit and carrier certification training | $7,500 |
| Launch: signage, window graphics, local listings, opening-month offers | $8,500 |
| Cash reserve for the first-year loss, the inventory build and commission lag | $79,500 |
| Total uses | $165,000 |
| Source of funds | Amount |
|---|---|
| Andre Garbles's savings | $90,000 |
| Bank term loan | $75,000 |
| Total sources | $165,000 |
The bank lends $75,000 over seven years at 10.4%, with interest only for the first six months, and Andre Garbles supplies $90,000 of savings, 55% of the $165,000 raised. That rate is a planning figure, not a quote. Security is the fixtures and inventory, plus Andre's personal guarantee for the balance. Fixtures, point of sale and tools cost $26,000 and opening inventory $39,000. Start-up costs are $20,500. The remaining $79,500 is held as cash against the first six months of monthly losses, the fall inventory build, the lag before carriers pay commissions, and a downside year. It is sized so that the 20%-light case never reaches zero in the monthly view, where its low point is about $13,000 in August, and the owner's first lever in a weak year is to hold hires back. The lease is five years with a five-year renewal option, so the loan term of seven years sits inside the ten years the lease and option would cover.
Figures behind the forecast
- Commission income comes from two lines. Activations, upgrades and port-ins number 1,250 in Year 1, at a blended $68 a line, which is $85,000. Prepaid refills, SIM kits and bill-pay commissions add $24,000. Dealer commission schedules are set in private agreements and were not available for this plan, so the $68 blended rate is the plan's own figure, not a sourced rate. Schedules typically differ by carrier and plan, and the signed dealer agreement replaces it. Each $10 of commission per line is worth about $12,500 of Year 1 revenue and gross profit, and at $58 a line instead of $68 Year 3 gross profit would be about $20,600 lower (2,060 lines). Each $10 of commission per line is worth about $12,500 of Year 1 revenue and gross profit. The commission is held flat for five years, because the carrier sets it and it does not follow shop prices.
- Carriers can claw back commission when a line is canceled early, and the dealer agreement sets the terms. The 9% chargeback allowance ($9,810 in Year 1) and the 30 to 45 day payment lag are planning figures, not published carrier terms, and the signed agreements decide both. Commissions are 24% of revenue and arrive 45 to 60 days after the sale, so across all revenue the plan uses 15 days of receivables, $18,678 at the end of Year 1.
- Handsets are unlocked, prepaid and refurbished units: 560 in Year 1 at an average of $255, costing 88% of the ticket, a 12% margin. Postpaid phones financed through a carrier are not store revenue; the store earns the activation commission on them. Prices rise 3% a year from Year 2.
- Accessories are the margin line. Year 1 has 5,400 sales at an average $25.50, a mix of cases, protectors, chargers and audio, costing 40% of the ticket. About 60% of the roughly 1,700 customers who activate a line or buy a handset (a customer who does both counts once) add an accessory in the same visit, which is about 1,020 sales. About 55% of repair customers add a case or protector, which is 286, and the other 4,100 or so are walk-in purchases, about 11 a day over a seven-day week. The plan has every associate offer a protector and case at the register, and the charging bar draws walk-ins, so the attach rate is the first figure to test once the store is open.
- Repairs are an add-on: 520 jobs in Year 1 at an average $125, with parts costing 40% of the price, rising to 1,400 jobs by Year 5. The average reflects a mix weighted toward screens, which carry the larger tickets, with batteries and charge ports below them. A job takes about 0.75 hours including diagnosis and testing. The founder and associates cover Year 1. A part-time technician from month 20 also handles data transfers and the testing of refurbished handsets, and works at about 45% to 72% of capacity on repairs alone. The store does not buy used phones from walk-in customers in the plan period.
- Seasonality follows fall flagship launches, holiday gifts and storm season. September to December carry 55% of Year 1 handset revenue and 53% of accessory revenue, helped by a ramp that holds the early months down, and chargers and power banks lift August to October. The store ramps over its first twelve months, from 34% of full trade in January.
- Inventory is $39,000 at opening and grows to $55,540 by the end of Year 1 and $74,651 by Year 5, which is 3.7 turns a year on year-end inventory in Year 1, 5.3 in Year 3 and 6.0 in Year 5. Distributors are paid in about 25 days, so $14,161 is owed at the end of Year 1.
- Full-time employees cost 27% more than their wages once workers' compensation, health cover and payroll taxes are added, and part-timers cost 15% more. The personnel table lists launch wages. A 3% raise for every employee, Andre included, is charged on its own line from Year 2. Andre's $48,000 starting salary is a planning figure below what an experienced manager might earn elsewhere. Hourly rates run from about $15.63 for the evening associate to $16.35 for the second associate, above the $15 an hour that Florida's minimum wage is scheduled to reach on September 30, 2026. It is indexed to inflation after that, so confirm the rate in force at each hire.
- The 1,100 square feet of strip-center frontage cost about $27 a square foot a year, all in, or $29,700 in Year 1, with about 3% a year added after that. Rents quoted vary by corridor and plaza. Insurance of $10,000 covers general liability, inventory and customers' devices in the store's care, theft, cyber liability, and windstorm, flood and business-interruption cover for a Tampa location. Professional fees of $7,000 cover a bookkeeper on a retainer and quarterly accountant reviews. Card processing is 2.8% of retail and repair sales, and shrink and returns 1.5% of retail sales.
- The model taxes profit at the 21% federal rate and Florida's 5.5% corporate rate. It does not deduct the $20,500 of start-up costs, which is cautious, so Year 1 shows $1,897 of tax on a small operating profit. A single-member LLC is taxed as a pass-through by default, so the store's own tax would normally be paid on Andre's personal return; corporate rates are used here as a cautious stand-in.
- Owner distributions of $35,000, $45,000 and $45,000 are paid in Years 3 to 5, each below that year's net income. The loan stays in place rather than being repaid early, because the reserve is what protects a weak year.
Revenue by income line
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Carrier activations, upgrades and port-in commissions | $85,000 | $122,400 | $140,080 | $153,000 | $161,840 |
| Prepaid refills, SIM kits and bill-pay commissions | $24,000 | $34,000 | $39,000 | $42,000 | $44,000 |
| Handset sales (unlocked, prepaid and refurbished) | $142,800 | $204,867 | $238,066 | $267,500 | $292,745 |
| Accessories: cases, protectors, chargers, audio | $137,700 | $194,361 | $229,950 | $259,140 | $284,135 |
| Repairs: screens, batteries, charge ports | $65,000 | $113,300 | $145,874 | $172,105 | $196,964 |
| Total revenue | $454,500 | $668,928 | $792,970 | $893,745 | $979,684 |
| Growth on prior year | – | 47% | 19% | 13% | 10% |
Commissions are 24.0% of Year 1 revenue and 44.0% of its gross profit, which is why the activation count matters more than its share of sales suggests. Handsets are the largest sales line at 31.4% and earn 6.9% of gross profit, because the store buys at 88 cents on the dollar. Accessories are 30.3% of sales and 33.3% of gross profit. Repairs are 14.3% of Year 1 sales, 15.7% of its gross profit and 20% of Year 5 sales. Year 2 grows 47% because Year 1 carries the twelve-month ramp. Later years grow 19%, 13% and 10%.
The first twelve months, ramp included
| Month | Carrier activations, upgrades and port-in commissions | Prepaid refills, SIM kits and bill-pay commissions | Handset sales (unlocked, prepaid and refurbished) | Accessories: cases, protectors, chargers, audio | Repairs: screens, batteries, charge ports | Total revenue | EBITDA |
|---|---|---|---|---|---|---|---|
| Jan 2027 | $3,024 | $935 | $4,614 | $4,515 | $2,356 | $15,444 | ($10,609) |
| Feb 2027 | $3,558 | $1,100 | $5,040 | $5,312 | $2,771 | $17,781 | ($9,335) |
| Mar 2027 | $4,092 | $1,265 | $6,242 | $6,109 | $3,400 | $21,108 | ($7,521) |
| Apr 2027 | $4,714 | $1,458 | $7,192 | $7,038 | $3,917 | $24,319 | ($5,771) |
| May 2027 | $5,337 | $1,650 | $8,142 | $8,537 | $4,711 | $28,377 | ($3,559) |
| Jun 2027 | $6,357 | $1,958 | $9,741 | $9,533 | $5,571 | $33,160 | ($952) |
| Jul 2027 | $7,021 | $2,162 | $10,759 | $10,529 | $6,153 | $36,624 | $937 |
| Aug 2027 | $8,166 | $2,367 | $12,562 | $13,830 | $6,735 | $43,660 | $4,772 |
| Sep 2027 | $9,915 | $2,572 | $16,206 | $15,025 | $6,910 | $50,628 | $8,571 |
| Oct 2027 | $11,705 | $2,747 | $19,133 | $17,833 | $7,381 | $58,799 | $13,025 |
| Nov 2027 | $11,623 | $2,864 | $21,845 | $19,521 | $7,243 | $63,096 | $15,367 |
| Dec 2027 | $9,488 | $2,922 | $21,324 | $19,918 | $7,852 | $61,504 | $14,499 |
Revenue starts at $15,444 in January, passes $50,000 in September and peaks at $63,096 in November. Monthly EBITDA is negative from January to June and positive from July, reaching $15,367 in November. Cash is lowest at the end of Aug, at about $19,000, once 15 days of blended receivables are allowed for. That view leaves out supplier timing on the fall inventory build. Years 2 to 5 are annual, so a second January is not shown.
Who is on the floor, and from when
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and store manager | $48,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Sales associate (full time) | $34,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Evening and weekend associate (part time, about 24 hours a week) | $19,500 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Second sales associate (part time, about 30 hours a week) | $25,500 | Month 14 | – | 0.5 | 0.5 | 0.5 | 0.5 |
| Repair technician (part time, about 28 hours a week) | $27,000 | Month 20 | – | 0.5 | 0.5 | 0.5 | 0.5 |
| Assistant manager | $40,000 | Month 46 | – | – | – | 1 | 1 |
| Total payroll incl. on-costs | $126,565 | $166,384 | $186,940 | $199,640 | $237,740 |
Andre, a full-time sales associate and a part-time evening and weekend associate open the store and cover about 66 trading hours a week. A second part-time associate joins in month 14, as Year 2 traffic builds. A part-time repair technician starts in month 20, as repair jobs pass 700 a year. An assistant manager joins in month 46, so Andre is not tied to the counter every day. Payroll totals $126,565 in Year 1, then $166,384 in Year 2 and $186,940 in Year 3. Andre's $48,000 is part of those totals, so profit is measured after he is paid.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $454,500 | $668,928 | $792,970 | $893,745 | $979,684 |
| Direct costs (handset, accessory and repair-part cost) | ($206,744) | ($304,283) | ($360,708) | ($406,549) | ($445,641) |
| Gross profit | $247,756 | $364,645 | $432,262 | $487,196 | $534,043 |
| Payroll incl. on-costs | ($126,565) | ($166,384) | ($186,940) | ($199,640) | ($237,740) |
| Rent | ($29,700) | ($30,600) | ($31,500) | ($32,500) | ($33,500) |
| Utilities | ($5,400) | ($5,600) | ($5,800) | ($6,000) | ($6,200) |
| Marketing | ($16,000) | ($17,000) | ($19,000) | ($21,000) | ($23,000) |
| Insurance | ($10,000) | ($10,600) | ($11,200) | ($11,800) | ($12,400) |
| Professional fees | ($7,000) | ($6,000) | ($6,300) | ($6,600) | ($6,900) |
| Software subscriptions | ($5,400) | ($5,800) | ($6,200) | ($6,500) | ($6,800) |
| Card processing fees (about 2.8% of retail and repair sales) | ($9,674) | ($14,351) | ($17,189) | ($19,565) | ($21,668) |
| Carrier chargebacks on early cancellations (9% of commissions) | ($9,810) | ($14,076) | ($16,117) | ($17,550) | ($18,526) |
| Shrink, damaged inventory and return allowance (1.5% of retail sales) | ($5,183) | ($7,688) | ($9,208) | ($10,481) | ($11,608) |
| Phone, internet and counter supplies | ($2,400) | ($2,500) | ($2,600) | ($2,700) | ($2,800) |
| Training, certifications and license renewals | ($1,200) | ($1,300) | ($1,400) | ($1,500) | ($1,600) |
| Direct-cost mix adjustment (commission held flat while retail prices rise) | $0 | $0 | $0 | ($1,349) | ($4,414) |
| Fixtures and POS replacement | $0 | ($2,500) | ($3,000) | ($4,500) | ($3,500) |
| Annual pay raises (3% a year) | $0 | ($4,992) | ($11,385) | ($18,512) | ($29,838) |
| EBITDA | $19,424 | $75,254 | $104,423 | $126,999 | $113,549 |
| Depreciation | ($4,229) | ($4,229) | ($4,229) | ($4,229) | ($4,229) |
| Interest | ($7,711) | ($6,949) | ($5,969) | ($4,884) | ($3,679) |
| Income tax | ($1,897) | ($16,240) | ($23,881) | ($29,878) | ($26,775) |
| Net income before start-up costs | $5,588 | $47,836 | $70,344 | $88,009 | $78,867 |
| Start-up costs expensed at opening (legal, registrations, pre-opening rent and training, launch marketing) | ($20,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($14,912) | $47,836 | $70,344 | $88,009 | $78,867 |
Before start-up costs Year 1 earns $5,588; after the $20,500 of start-up costs the loss is $14,912. Net income is $47,836 in Year 2 and $70,344 in Year 3. Year 4 rises to $88,009. Year 5 falls to $78,867 because the assistant manager's first full year and the pay raises add $49,426 to payroll while gross profit grows $46,847. That is a net margin of 8.1% in Year 5, against 9.8% in Year 4. Income tax is $1,897 in Year 1 and larger in every later year. EBITDA margin is 4.3% in Year 1, then 11.3%, 13.2%, 14.2% and 11.6%.
Cash position across the five years
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($70,741) | $42,130 | $68,825 | $87,568 | $79,114 |
| Fixtures, point of sale and tools | ($26,000) | $0 | $0 | $0 | $0 |
| Funding received | $165,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($4,150) | ($8,974) | ($9,953) | ($11,039) | ($12,243) |
| Owner distributions | $0 | $0 | ($35,000) | ($45,000) | ($45,000) |
| Net change in cash | $64,109 | $33,156 | $23,872 | $31,529 | $21,870 |
| Closing cash | $64,109 | $97,265 | $121,137 | $152,667 | $174,537 |
In Year 1, operations use $70,741. That covers $39,000 of opening inventory and $20,500 of start-up costs. Funding of $165,000 less $26,000 for fixtures and tools, and $4,150 of loan principal, leaves $64,109 at the end of the year, the lowest year-end balance. Cash then rises to $97,265 in Year 2 and $121,137 in Year 3 after the first $35,000 distribution, and to $152,667 and $174,537 in Years 4 and 5. A lender will ask why a store holding that much cash still carries the loan. In Year 1 the reserve is the answer: it keeps the 20%-light case near $13,000 at its monthly low. Once Year 2 has passed, paying the loan down early is an option Andre can take.
Balance sheet: inventory on hand and what is owed for it
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $64,109 | $97,265 | $121,137 | $152,667 | $174,537 |
| Accounts receivable | $18,678 | $27,490 | $32,588 | $36,729 | $40,261 |
| Handsets, accessories and repair parts on hand, at cost | $55,540 | $63,343 | $67,857 | $71,524 | $74,651 |
| Fixtures, point of sale and tools (net) | $21,771 | $17,543 | $13,314 | $9,086 | $4,857 |
| Total assets | $160,098 | $205,641 | $234,896 | $270,005 | $294,306 |
| Owed to distributors | $14,161 | $20,841 | $24,706 | $27,846 | $30,523 |
| Bank term loan | $70,850 | $61,876 | $51,923 | $40,883 | $28,640 |
| Paid-in capital | $90,000 | $90,000 | $90,000 | $90,000 | $90,000 |
| Retained earnings | ($14,912) | $32,924 | $68,268 | $111,276 | $145,143 |
| Total liabilities and equity | $160,098 | $205,641 | $234,896 | $270,005 | $294,306 |
Margins, inventory turn and the break-even line
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | 4.3% | 11.3% | 13.2% | 14.2% | 11.6% |
| Net margin (before start-up costs) | 1.2% | 7.2% | 8.9% | 9.8% | 8.1% |
| Payroll incl. pay raises as share of revenue | 28% | 26% | 25% | 24% | 27% |
| Revenue per full-time equivalent at year end | $181,800 | $191,122 | $226,563 | $198,610 | $217,708 |
| Average monthly revenue | $37,875 | $55,744 | $66,081 | $74,479 | $81,640 |
| Monthly revenue needed to cover operating costs | $34,906 | $44,240 | $50,117 | $55,064 | $64,282 |
| Debt service cover (EBITDA / interest + principal) | 1.6x | 4.7x | 6.6x | 8.0x | 7.1x |
In Year 1 the store averages $37,875 of revenue a month against the $34,906 its running costs need, which clears the line by $2,969 a month on average, although January to June sit below it. From Year 2 to Year 5 it clears that line by $11,504, $15,964, $19,415 and $17,358 a month. Debt service cover is 1.6x in Year 1, then 4.7x in Year 2 and above 6x after that. Revenue per full-time equivalent at year end is $181,800 in Year 1 and $217,708 in Year 5. Gross profit per $1 of inventory held at year end is $4.5 in Year 1 and $7.2 in Year 5.
A year that comes in 20% light
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $363,600 | $535,142 | $634,376 | $714,996 | $783,747 |
| Net income before start-up costs | ($21,741) | $37,430 | $26,693 | $46,015 | $63,886 |
| Net income after start-up costs | ($42,241) | $37,430 | $26,693 | $46,015 | $63,886 |
| Closing cash | $40,992 | $65,729 | $82,100 | $117,569 | $170,255 |
A carrier promotion that pulls customers to its own stores, or a weak holiday for handsets, takes 20% off every income line in all five years. Management answers as follows. The second associate starts in month 20 instead of 14 and the technician in month 26 instead of 20, while the assistant manager is never hired. Marketing is cut 20%, Andre takes a 20% pay cut in every year and no distributions are paid. Card fees, chargebacks and shrink fall with volume. Under those moves the store keeps cash in the bank at every year end, never lower than $40,992, and Year 1 closes with equity of $47,759. Debt service cover is negative in Year 1, then 3.4x in Year 2 and 2.9x in Year 3, which is the thinnest of Years 2 to 5 because the delayed hires are all on payroll by then. The monthly view bottoms near $13,000 in August of Year 1. Only Year 1 loses money. Profit is $37,430, $26,693, $46,015 and $63,886 across Years 2 to 5, below the base case every year, and the Year 1 loss is deeper than the base case's. Both the pay cut and the missing assistant manager are permanent, so Years 4 and 5 lean on them.
Sources
- Pew Research Center, Mobile Fact Sheet: 98% of U.S. adults own a cellphone and 91% own a smartphone, from a survey run February to June 2025.
- Florida Department of Revenue, Corporate income tax: the rate is 5.5% for taxable years beginning on or after January 1, 2022.
- Carrier commission schedules, chargeback terms and payment timing are set in private dealer agreements and could not be sourced. The $68 blended activation commission, the 9% chargeback allowance and the 30 to 45 day payment lag are the plan's planning figures, and the signed agreements replace them.
- Wages, rents, commissions and prices in the plan are the plan's own figures, not quoted market data; confirm local figures before relying on them. The Florida minimum wage is scheduled to reach $15 an hour on September 30, 2026 and to be indexed to inflation after that; confirm the rate in force at each hire.
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