Looking for a computer software retailer business plan? You're in the right place.
A software shop has to answer questions that a clothing shop never gets asked. Who buys boxed software when everything can be downloaded? What earns the margin if the shelf does not? How much cash does an island location need to carry stock that arrives by freight? A blank template will not show what a sensible answer looks like.
In this article we'll walk through a complete sample business plan for a software retail, licensing and training shop in Kailua-Kona, Hawaii, section by section. We'll cover 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 retail-and-services business on one page, with the split between shelf and service stated up front
- The SWOT analysis: learn how to name a thin shelf margin and a one-technician team without putting a lender off
- The start-up budget: find out how much goes to stock, build-out and reserve, so the first August does not catch the shop short
- The first year, month by month: spot the months that lose money before you reach them, and plan your cash around them
- The marketing plan: see what a new shop might spend to win its first 40 business and school accounts
- The five-year profit, cash flow and balance sheet: understand how each hire, price and stock decision shows up in the numbers
- The downside case: have an answer ready for "what if demand is 20% short?", with the steps the owner takes in response
If you're setting up a software shop, read this before you write your own. The business is fictional, so take what fits your market and change the rest.
In this plan
- The Shop at a Glance
- How Pacific Bridge Earns
- Kona's Software Buyers
- Who Walks In and Who Signs On
- From Counter Sale to Seat License
- Reaching Kona's Offices, Schools and Visitors
- Keeping the Doors and the Classroom Open
- Who Runs It
- The Numbers Behind Pacific Bridge
- Stock, classroom and the cash that carries both
- Shop and classroom figures behind the forecast
- Revenue by shelf, seat and classroom
- Who is on the schedule
- Profit after the shelves, seats and classes
- Where the cash sits at each year end
- What the shop owns and owes, stock included
- Monthly revenue to break even, stock turns, loan cover
- A fifth less demand, every year
- Sources
Looking for a computer software retailer business plan template? The Toolkit builds yours with your own numbers.
The Shop at a Glance
Pacific Bridge is a software shop in Kailua-Kona, on the Big Island of Hawaii, opening January 1, 2027. It sells boxed and activation-card software over the counter, resells seat licenses to offices and schools by the month, teaches classes in a small classroom behind the store, and sends a technician to set up and migrate customers on site. Founder Marcus Tanaka owns 76% of the company and a family investor owns 24%.
The company needs $250,000: $80,000 of Marcus's savings, $70,000 from the investor and a $100,000 bank term loan. Of that, $136,800 is held as a cash reserve, $86,000 buys opening stock and the shop and classroom build-out, and $27,200 covers legal work, registrations, rent before opening, staff training and the launch.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $557,608 | $829,171 | $1,067,711 |
| Net income after start-up costs | ($82,294) | $34,717 | $71,566 |
| Closing cash | $63,546 | $82,900 | $139,127 |
The shelf is the front door, not the earner. Software and accessories on the shelf, resold seats and volume orders are 54% of Year 1 revenue and 22% of gross profit. Setup hours, classes, on-site training and the visitor help desk are 46% of revenue and 78% of gross profit. The plan is built around that split: a customer comes in for a security suite or a tax program, and the shop's margin comes from the afternoon a technician spends migrating that customer's office.
Year 1 is a loss because the shop carries a store lead, a part-time associate and a trainer before classes and accounts have filled the week. Year 2 is the first profitable year, at $34,717, and Year 3 earns $71,566, a 6.7% margin. That depends on Year 1 service prices of $125 a seat, $2,200 an on-site day and $145 an hour; at $115, $1,900 and $125, Year 2 would be a small loss and the downside case would run out of cash.
A fifth less demand in every year, met with a later second technician, no part-time assistant, shorter counter hours, a lower marketing budget and a pay cut for Marcus, leaves the shop with cash in the bank at every year end. The downside table in the financial section shows it.
How Pacific Bridge Earns
Legal name: Pacific Bridge, LLC, a Hawaii limited liability company that is taxed as a corporation for this plan (the owners would confirm the election with an accountant).
Address: about 1,500 square feet of ground-floor retail space in a Kailua-Kona shopping center, with a partitioned classroom of ten seats at the back.
Hours: Monday to Saturday, 9:00 a.m. to 6:00 p.m. Classes run on weekday evenings and Saturday mornings.
Between publisher and customer
Software reaches Hawaii by download, by mail and by freight, and the physical routes can carry a cost or a delay that a mainland buyer may not feel. The shop sits between the publishers and a customer who wants the right product, set up and working, from someone on the island.
Four ways the shop earns
| Line | How it is priced | Year 1 share of revenue |
|---|---|---|
| Shelf software, accessories and boxed media | Shelf price, 21% to 38% margin | 39% |
| Seat licenses, subscriptions and volume orders | Monthly per seat, or per order | 15% |
| Classes and on-site training | $125 a seat, $2,200 a day | 24% |
| Setup, migration, support and the visitor desk | $145 an hour, $55 a session | 22% |
Targets for the first two years
- 162 resold seats by December 2027, 215 on average through 2028.
- A second technician in October 2028, funded by setup and training revenue already booked.
- A profit in Year 2 and a net margin above 6% in Year 3.
- Bank loan repaid on schedule from month 10.
Who answers to whom in Hawaii
The company registers with the state and county and holds a general excise tax license. Hawaii levies that tax on gross receipts rather than as a sales tax, and the Department of Taxation lists a 4% retail rate plus a 0.5% Hawaii County surcharge, set through December 31, 2030, which makes 4.5% at the counter. Revenue in this plan is shown without it, and the rate may change.
Kona's Software Buyers
A small island market with two kinds of demand
North and South Kona hold a resident base of households, schools, clinics, contractors, property managers and small offices, and a second market that arrives by plane. Visitors and short-stay remote workers buy little software, but a traveler with a failed device or a lapsed license has no one to ask. The plan treats them as a small, steady line: a desk that takes about 380 sessions in Year 1.
What the shelf can and cannot do
Much software now sells by download straight from the publisher, and a shelf in Kailua-Kona competes with that on one point only: a person who will explain the difference between three similar products and set the one chosen up. The plan therefore sets the shelf margin low (21% on software, 38% on accessories) and treats the stock as a reason to be visited, not a source of profit.
Why the island raises the cost of goods
Hardware and boxed stock arrive by freight to the island, where surcharges and slower delivery can raise the landed cost of an accessory. The plan charges inbound freight at 6% of accessory sales and 1.2% of shelf software sales, keeps boxed stock small and turns it about three times a year. Resold licenses and training carry no freight.
Seasonality
Visitor traffic tends to peak in winter and in summer, school demand tends to peak in August and from September to November, and consumer tax software usually sells from January to April. The Year 1 monthly table shows a January low of $30,910 and an August peak of $62,242. The model spreads Years 2 to 5 evenly, so later years show no seasonal shape.
Who else sells to this customer
| Alternative | What it offers | Why a customer picks it | How Pacific Bridge differs by design |
|---|---|---|---|
| Publisher and marketplace storefronts online | Instant download, often the lowest price | Convenience | A person who sets it up and can be reached the same day |
| Large electronics and office retailers on the island | Software range that may be limited to boxed security and tax titles | Established location and traffic | Wider titles, seat licensing and training |
| Mainland managed-service providers | Remote support and licensing, billed monthly | One bill, large vendor bench | Local, on-site and able to teach staff in person |
| Independent IT consultants in Kona | Setup and repair hours | Known to the owner personally | A classroom, a shelf and a second person to cover absence |
| The owner's nephew | Free or cheap setup | Price | Documented licenses and a record of what was installed |
The table describes what each alternative offers and how this shop positions itself, not a ranking. Prices change often and are not quoted; each provider publishes its own.
SWOT
| Strengths | Weaknesses |
|---|---|
| Marcus has nine years running IT for a resort property group | One technician from month 4 until month 22 |
| Several lines (shelf, seats, classes, setup) cover for each other across the seasons | Shelf software earns a thin margin and depends on publisher terms |
| Nine months of interest-only loan payments while classes fill | Year 1 loses money and draws on the reserve |
| Opportunities | Threats |
|---|---|
| School and clinic upgrade cycles that need a local reseller | Publishers may move small customers to direct sales and cut dealer margin |
| Subscription seats growing from 162 to about 400 by Year 5 | A cut in school technology budgets |
| Visitors and remote workers needing help on short notice | Mainland providers bidding for island accounts remotely |
Who Walks In and Who Signs On
The small office
A dental practice, a property manager, a contractor or a church office with 4 to 15 computers. The person who handles IT also does something else, and finds out a license has lapsed when a program stops opening.
The school and the clinic
A charter school or private school with a technology coordinator who buys licenses once a year, usually in July and August, and needs training for teachers in September. A clinic needs software to be installed correctly and documented for its own compliance reviews.
The household and the student
A family buying tax software in February or a security suite after a scare. The student or parent is often the person who later signs up for a class.
The visitor
A traveler with a device that stopped working, a license to re-activate or a phone full of photos with no backup. The visit is short, and the shop's job is a fixed-price fix in half an hour.
What each one asks for
The right product, installed correctly, at a price that is no more than online by much, from someone who answers the phone.
From Counter Sale to Seat License
How a counter sale becomes an account
A customer buys a security suite for one computer. The store lead asks how many others in the household or office run the same program, quotes a seat price for the lot and offers a 30-minute setup. Most do not take it. The plan expects 21 subscription accounts by December 2027 from a base of walk-in customers, referrals and school outreach.
The Year 1 pipeline
About 40 new business and school accounts buy something beyond the shelf in Year 1.
| Lead source | New accounts | Share |
|---|---|---|
| Referrals from existing customers and from local IT consultants | 14 | 35% |
| Walk-ins who become accounts after a counter sale | 7 | 18% |
| School and charter outreach | 8 | 20% |
| Chamber and business association events | 7 | 18% |
| Local search and map listing | 4 | 10% |
How prices are set
Seats are priced from about $12 for a basic subscription to about $40 for a suite with security and backup; $24 is the blended average. Training seats are $125 for a three-hour class and an on-site training day is $2,200. Setup and support bill at $145 an hour with a one-hour minimum. These are Year 1 planning prices in a market where IT support often bills somewhere around $100 to $175 an hour (a range to confirm locally), and the service lines carry the profit. Prices stay flat in Year 1 and rise 3% a year from Year 2.
Keeping customers
The plan expects 12% of seat accounts to leave in a year, mostly small offices that close or switch. A customer who takes seats, a class and setup stays longest, so every quote prices the three together.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Average resold seats | 93 | 215 | 290 | 350 | 395 |
Year 1 is the average of the monthly seat counts (1,117 seat-months across 12 months). Growth slows after Year 3 because technician hours, not demand, become the limit.
Reaching Kona's Offices, Schools and Visitors
What the first year's budget buys
The first-year budget is $32,000: $12,000 of launch spend paid from start-up capital plus $20,000 of operating spend. That is 6% of Year 1 revenue, falling to 2% by Year 3 and by Year 5 as referrals and repeat classes take over. Spread over about 40 new business and school accounts, Year 1 costs about $800 per account.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Signage and storefront (launch) | $4,500 | A readable sign and window display on a shopping-center frontage |
| Website with class booking and quote request (launch) | $4,500 | Class sign-up, a quote form for seat licenses and a visitor help page |
| School and business open evenings (launch) | $3,000 | Three evenings for teachers, clinic managers and office owners |
| Local search and map listings | $3,500 | Searches such as "software store Kona" and "computer class Kailua-Kona"; about 4 accounts |
| Class promotion | $3,500 | Flyers, library and community boards, and a monthly email |
| Partner program with lodging and property managers | $3,000 | A card that lodging front desks hand to guests; feeds the visitor desk |
| Referral thank-yous and partner events | $3,000 | A coffee with each IT consultant and a gift for each referral; about 14 accounts |
| Chamber and association memberships | $2,500 | Two memberships and a table at two events; about 7 accounts |
| School and charter outreach | $2,500 | Meetings with principals and technology coordinators before the July budget; about 8 accounts |
| Email and event reminders | $2,000 | License renewal reminders and class announcements |
Milestones
- January 2027: doors open, 25 resold seats.
- April 2027: trainer starts, first full week of classes and on-site days.
- August 2027: first school renewal cycle, the Year 1 sales peak.
- December 2027: 162 seats and about $3,900 a month of resold subscriptions.
- October 2028: second technician starts.
- April 2030: part-time classroom and field assistant starts.
Keeping the Doors and the Classroom Open
The shop and classroom
About 1,500 square feet in a Kailua-Kona shopping center at $50,000 a year in Year 1 including shared charges, on a five-year lease with a personal guarantee. The retail floor takes about 900 square feet, the classroom about 400 and the back room about 200. The same room serves classes on weekday evenings and Saturday mornings.
How an order moves
Shelf stock and accessories are ordered from distributors weekly and arrive by freight. Seat licenses are provisioned through each publisher's partner portal on the day of the order. Volume orders are quoted in writing, ordered on a customer purchase order and installed by the technician. Every installation is recorded in a license register that goes to the customer.
Systems
A point-of-sale system with inventory counts, a class booking and payment page, a ticketing system for support hours and remote-support tooling, with software costs at $9,000 in Year 1 and $13,500 by Year 5. Customer data sits in a cloud service with two-factor sign-in, and the shop is careful to keep customer license keys separate from the shop's own.
Delivery capacity
Hours are counted one way: setup hours, 8 hours for each on-site day, 3.5 hours for each class (three of teaching and half an hour of preparation) and half an hour for each visitor session. Year 1 holds about 1,450 delivery hours. Marcus covers about 450 of them and the trainer, from month 4, about 1,000. Classes average six seats in a ten-seat room, so 560 seats means about 93 classes. Year 3 calls for about 3,200 hours; the store lead takes most of the roughly 290 visitor-desk hours, leaving about 2,910 against about 2,950 of technician and founder time. By Year 5 the count reaches about 3,620, or about 3,290 outside the visitor desk, which is why a part-time assistant joins in month 40 and adds about 800 billable hours. The second technician in month 22 is the hire that makes Year 3 possible.
Licenses, insurance and terms
- County business registration, state registration and a general excise tax license.
- Publisher partner agreements for each line resold, read for resale terms and margin before opening.
- General liability, cyber and errors-and-omissions cover for work done on customers' systems, budgeted with workers' compensation and property cover at $12,000 in Year 1.
- A written statement of work for every setup or migration, naming what is backed up and what is not.
Suppliers
Two software distributors, one accessory distributor and publisher partner portals. None is hard to replace, but a publisher's change to dealer terms would move the shelf margin.
Who Runs It
Marcus Tanaka, founder and owner
Marcus has nine years in IT for a resort and condominium group on the Kohala Coast, where he ran licensing and end-user support for several hundred seats and trained front-desk staff on new systems. He holds vendor certifications in productivity and security software. His $80,000 investment is eight years of savings.
Where the team is thin
Marcus has not run a shop floor, set dealer terms or managed a classroom calendar. The plan covers these with a store lead hired for retail experience, a partner-terms review with a lawyer before opening and a published class schedule set a quarter ahead.
If Marcus is out
The trainer and field technician is the second person who can deliver every setup and class. Until that role starts in month 4, the store lead handles the counter and visitor desk and service appointments are booked around Marcus's schedule.
Outside help
A retired retail manager who is also the family investor's contact reviews the numbers monthly. Marcus uses the Hawaii Small Business Development Center for pricing and marketing questions.
Ownership and the bank
Marcus owns 76% and the investor 24%. Marcus gives the bank a personal guarantee and carries life and disability cover for the amount of the loan. The loan carries a covenant to deliver quarterly accounts, and the plan expects a debt-cover test from Year 3. The five-year lease is shorter than the seven-year loan, so a renewal option is part of the lease negotiation. No partner agreement or school order is signed at the date of this plan; the Year 1 volume orders and on-site days are targets built from schools and offices Marcus knows, not contracts.
The Numbers Behind Pacific Bridge
A single five-year model produces each table below, month by month for 2027 and then annually. Funding and operating inputs are listed ahead of the results so any result can be followed back to its source. Revenue is shown net of Hawaii general excise tax, which the shop passes on to customers.
Stock, classroom and the cash that carries both
| Use of funds | Amount |
|---|---|
| Opening stock: boxed software, activation cards, accessories | $38,000 |
| Shelving, counter, classroom partition and wiring | $22,000 |
| Ten student laptops, projector, point of sale, loaner devices | $26,000 |
| County and state business registrations, GET license | $1,200 |
| Legal: entity, investor agreement, lease and publisher partner terms | $5,500 |
| Rent before opening and staff training | $8,500 |
| Launch: signage, website, school and business open evenings | $12,000 |
| Cash reserve for the first fall and the stock build | $136,800 |
| Total uses | $250,000 |
| Source of funds | Amount |
|---|---|
| Marcus Tanaka's savings | $80,000 |
| One family investor (24% of the company) | $70,000 |
| Bank term loan | $100,000 |
| Total sources | $250,000 |
The company raises $250,000. Marcus Tanaka puts in $80,000 of savings, a family investor buys 24% of the company for $70,000, and a bank advances $100,000 on an 84-month term at 10.75%, paying interest only through the first nine months. That 10.75% is a placeholder for modeling; no lender has quoted it. Marcus guarantees the loan personally, and the bank would take the laptops and point of sale as security; the shelving and partition have little resale value, so the guarantee does the real work. Opening stock and the build-out take $86,000 between them. The $136,800 reserve is the largest single use and is sized to the downside case below: it carries the shop through an $82,294 first-year loss, a $111,474 loss in the downside case, and the stock build each August before school orders arrive. The reserve is funded mostly by equity, so the loan stays at $100,000 and interest stays a small cost. Supplier terms are short for a new dealer account, so the plan buys opening stock for cash and pays distributors in 15 days.
Shop and classroom figures behind the forecast
- Shelf software (boxed titles, activation cards and keys) is counted in register sales: 2,700 in Year 1 at an average ticket of $62 (about nine a day across a six-day week), climbing to 3,450 by Year 5. The plan puts cost at 79% of the shelf price, which leaves a 21% gross margin, at the low end of what a dealer might expect and low enough that software alone cannot carry the shop. Dealer terms vary by publisher and would be confirmed in each partner agreement before opening. Consumer tax-preparation titles are seasonal and weight January to April.
- Accessories and boxed media (headsets, webcams, drives, cables, blank media) ring up 1,500 sales in Year 1 averaging $34, reaching 2,100 by Year 5, at a 38% gross margin. Inbound freight is charged separately at 6% of accessory sales plus 1.2% of shelf software sales. Island freight can cost more than the same parcel sent within the mainland, so carrier quotes would set the real figure.
- Seat licenses and subscriptions (productivity suites, endpoint security, backup) are resold monthly at a blended $24 a seat. Seats at month end climb from 25 in January 2027 to 162 in December, which is 1,117 seat-months and $26,808 in Year 1. Average seats are 215, 290, 350 and 395 in Years 2 to 5, with the price rising 3% a year. The line books gross billings and a 16% margin; the real margin depends on the partner program and is not something this plan can verify.
- Volume and site-license orders are one-off purchases for schools, clinics and offices: 20 in Year 1 at an average of $2,700 and 32 by Year 5, at the same 16% margin. Orders cluster in August and September, when schools and charter programs renew.
- Open classes run in a ten-seat classroom at $125 a seat, with an average of six seats filled: 560 seats in Year 1, about 93 classes, rising to 1,230 seats and about 205 classes by Year 5. Each class takes about three and a half hours of trainer time with preparation. Room supplies, certification vouchers and printed materials take 14% of the price. Other local class providers may charge less.
- On-site training for offices and schools bills at $2,200 for a working day: 30 days in Year 1 and 88 by Year 5. Travel to the Kohala side and to Hilo takes 12% of the price. The plan treats Kona as the base and does not book work off the island. A group training day at this rate is $275 an hour of delivery against $145 for a setup hour, so it is the price most likely to meet resistance from schools and clinics.
- Setup, migration and support hours bill at $145: 700 hours in Year 1, 1,700 in Year 3 and 1,870 in Year 5. Remote-support tooling takes 4% of the price. The rate is a planning figure and would be compared with what independent consultants in Kona charge before opening. Held at $115 a seat, $1,900 a day and $125 an hour, with the same volumes, Year 2 would lose about $6,900, Year 5 net margin would be about 4.6%, and the downside case would run out of cash in Year 2. The model has no price elasticity, so these rates only work if the volumes hold.
- The visitor help desk takes 380 half-hour sessions in Year 1 at $55, mainly license re-activations, photo and video backup and device setup for short-stay visitors and remote workers, rising to 650 by Year 5. Cloud-storage credits take 5% of the price.
- Across the whole shop the gross margin sits near 54% each year. Applying each line's own margin to Year 3 revenue would give about $656,000 of gross profit against the $580,259 shown, and the gap widens to about $92,000 by Year 5; the model holds the Year 1 blended cost percentage and so leaves that out on purpose. Because the model holds the Year 1 blended cost percentage in Years 2 to 5 and so gives no credit for the shift toward services. Shelf goods, resold seats and volume orders are 54% of Year 1 revenue but supply 22% of gross profit; setup, classes, on-site training and the visitor desk earn 86% or more of their price and supply the other 78%. Stock is carried at 5% of annual cost of goods on top of the $38,000 opening buy. Stock on hand at year end is $50,728 after Year 1 and $67,281 after Year 5, about 3.2 and 3.6 turns on the cost of shelf software and accessories.
- Delivery hours are counted one way throughout: setup hours, 8 hours for each on-site day, 3.5 hours for each class and half an hour for each visitor session. Year 1 comes to about 1,450 hours, Year 3 to about 3,200 and Year 5 to about 3,620. Marcus covers about 450 hours in Year 1; in Year 3 the store lead takes most of the roughly 290 visitor-desk hours, which leaves about 2,910 hours against about 2,950 of technician and founder time. Year 3 therefore runs at about 99% of technician capacity with no slack, which is tighter than field work usually runs, so any slip in Year 3 would cost revenue. A part-time assistant from month 40 adds about 800 billable hours, so Year 5 has about 3,290 hours outside the visitor desk against about 3,750 available.
- Receivables average 14 days: counter and class sales are paid by card on the day, while school and office accounts are invoiced on 30-day terms. Distributors and publishers are paid in 15 days on average. Card fees are charged at 2.5% of counter, class, setup and desk sales.
- Wages carry a 27% load covering payroll taxes, health coverage, injury insurance and paid time off; part-time roles carry 15%. Hawaii's Prepaid Health Care Act sets employer coverage for employees working 20 or more hours a week, so the 27% is a planning figure, and the 15% load on the 24-hour part-time roles may prove light; both are to be confirmed with the Department of Labor and Industrial Relations. Wages in the staffing table are opening rates, and 3% annual raises run as their own line from Year 2. Hawaii's statewide minimum wage is scheduled at $16 from January 2026 and $18 from January 2028; the part-time counter role opens at about $17.63 an hour and reaches about $18.16 in 2028 with the first raise, so the plan would set it at the minimum if the schedule moved.
- Rent covers about 1,500 square feet of retail floor, back room and a partitioned classroom at about $2.78 a square foot a month including shared charges, or $50,000 in Year 1, rising 3% a year. A local broker would confirm the figure for a given address. Utilities are $9,600 in Year 1 because island electricity can run well above mainland rates. Insurance is $12,000 in Year 1 for general liability, cyber, errors and omissions, property and workers' compensation. Prices rise 3% a year from Year 2.
- Hawaii's general excise tax is a gross-receipts tax, and the plan's revenue excludes the amount passed on at the counter (4.5% in Hawaii County at the rates the Department of Taxation lists). Income tax is charged at the federal corporate rate of 21% and a Hawaii corporate rate of 6.4%, a planning figure to confirm with the Department of Taxation. The Year 1 loss carries forward.
- No distribution is paid in the five years. Cash builds to $304,307 and retained earnings reach $213,501 by the end of Year 5; the investor's return is the value of a profitable shop unless the owners choose to start dividends.
Revenue by shelf, seat and classroom
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Boxed software, activation cards and keys | $167,400 | $197,966 | $217,060 | $230,347 | $240,746 |
| Accessories and boxed media | $51,000 | $63,036 | $70,338 | $76,163 | $80,361 |
| Seat licenses and subscriptions resold monthly | $26,808 | $63,778 | $88,606 | $110,147 | $128,038 |
| Volume and site license orders | $54,000 | $72,306 | $83,068 | $91,461 | $97,244 |
| Open classes in the shop classroom | $70,000 | $105,575 | $140,569 | $158,445 | $173,047 |
| On-site training for offices and schools | $66,000 | $117,832 | $172,715 | $197,128 | $217,899 |
| Setup, migration and support hours | $101,500 | $179,220 | $261,512 | $285,202 | $305,182 |
| Visitor help desk | $20,900 | $29,458 | $33,843 | $37,262 | $40,237 |
| Total revenue | $557,608 | $829,171 | $1,067,711 | $1,186,155 | $1,282,754 |
| Growth on prior year | – | 49% | 29% | 11% | 8% |
Shelf software is 30% of Year 1 revenue and 20% of Year 3. Setup hours, classes, on-site training and the visitor desk are 46% of Year 1 revenue and 57% of Year 3. Revenue grows 49% into Year 2, 29% into Year 3, 11% into Year 4 and 8% into Year 5. Year 2 is high because Year 1 trades below its stable level for the first eight months, and Year 3 gains from a second technician who makes more billable hours possible.
The first twelve months, month by month
| Month | Boxed software, activation cards and keys | Accessories and boxed media | Seat licenses and subscriptions resold monthly | Volume and site license orders | Open classes in the shop classroom | On-site training for offices and schools | Setup, migration and support hours | Visitor help desk | Total revenue | EBITDA |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 2027 | $11,679 | $2,420 | $600 | $2,184 | $3,859 | $2,700 | $5,747 | $1,721 | $30,910 | ($11,457) |
| Feb 2027 | $12,205 | $2,662 | $912 | $2,802 | $5,306 | $3,960 | $6,717 | $1,893 | $36,457 | ($8,442) |
| Mar 2027 | $12,613 | $3,112 | $1,200 | $3,057 | $5,788 | $4,860 | $7,759 | $2,066 | $40,455 | ($6,270) |
| Apr 2027 | $12,146 | $3,146 | $1,488 | $3,312 | $5,644 | $5,265 | $7,938 | $1,557 | $40,496 | ($6,247) |
| May 2027 | $10,628 | $3,146 | $1,776 | $3,566 | $3,377 | $5,040 | $8,046 | $1,257 | $36,836 | ($8,236) |
| Jun 2027 | $12,263 | $4,149 | $2,064 | $3,821 | $2,171 | $3,375 | $8,082 | $2,021 | $37,946 | ($7,633) |
| Jul 2027 | $13,723 | $4,604 | $2,352 | $4,561 | $2,267 | $3,525 | $8,441 | $2,345 | $41,818 | ($5,529) |
| Aug 2027 | $18,881 | $6,149 | $2,640 | $7,648 | $7,018 | $7,275 | $10,453 | $2,178 | $62,242 | $5,571 |
| Sep 2027 | $14,599 | $4,610 | $2,976 | $6,672 | $9,647 | $8,250 | $10,178 | $1,247 | $58,179 | $3,363 |
| Oct 2027 | $13,626 | $4,034 | $3,312 | $5,459 | $9,647 | $8,250 | $10,178 | $998 | $55,504 | $1,909 |
| Nov 2027 | $14,599 | $5,186 | $3,600 | $5,459 | $8,040 | $7,500 | $9,579 | $1,247 | $55,210 | $1,749 |
| Dec 2027 | $20,438 | $7,782 | $3,888 | $5,459 | $7,236 | $6,000 | $8,382 | $2,370 | $61,555 | $5,197 |
January is the lowest month at $30,910, and sales build through the spring on tax software and the first classes. Early summer is soft: visitors come, but classes and school orders do not. August is the peak at $62,242 as schools renew and class enrollment returns. Operating profit (EBITDA) is positive only from August to December and negative in the other seven months, which is why the reserve is large. The cash flow table shows the year-end result: $63,546 at the end of Year 1, after $135,606 of cash used in operations.
Who is on the schedule
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder, owner and buyer | $54,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Store lead and license desk | $44,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Counter associate (part time, 24 hours a week) | $22,000 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Trainer and field technician | $58,000 | Month 4 | 1 | 1 | 1 | 1 | 1 |
| Second trainer and technician | $56,000 | Month 22 | – | 1 | 1 | 1 | 1 |
| Part-time classroom and field assistant (24 hours a week) | $24,000 | Month 40 | – | – | – | 0.5 | 0.5 |
| Total payroll incl. on-costs | $205,005 | $241,200 | $294,540 | $315,240 | $322,140 |
Marcus, a store lead who runs the counter and license desk, and a part-time counter associate open the doors in January. A trainer and field technician starts in month 4, when classes and school visits begin to fill a week. A second trainer and technician joins in month 22 (October 2028), once setup hours and on-site days show that one technician cannot cover them, and a part-time classroom and field assistant follows in month 40 to cover the classes and on-site days that growth adds. Revenue per full-time equivalent rises from $159,317 at the end of Year 1 to $237,269 in Year 3 and stays at $237,231 in Year 4 when the assistant is added. Marcus's $54,000 salary starts in month one and is already in the costs, so profit here is what remains after he is paid. Wages are the same as in any version of this plan: profit comes from price and volume, not from paying people less.
Profit after the shelves, seats and classes
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $557,608 | $829,171 | $1,067,711 | $1,186,155 | $1,282,754 |
| Cost of goods and delivery (stock, resold seats, instructor materials) | ($254,570) | ($378,549) | ($487,452) | ($541,526) | ($585,627) |
| Gross profit | $303,038 | $450,622 | $580,259 | $644,629 | $697,127 |
| Payroll incl. on-costs | ($205,005) | ($241,200) | ($294,540) | ($315,240) | ($322,140) |
| Rent | ($50,000) | ($51,500) | ($53,000) | ($54,600) | ($56,200) |
| Utilities | ($9,600) | ($9,900) | ($10,200) | ($10,500) | ($10,800) |
| Marketing | ($20,000) | ($20,000) | ($21,000) | ($22,000) | ($23,000) |
| Insurance | ($12,000) | ($12,800) | ($13,600) | ($14,400) | ($15,100) |
| Professional fees | ($6,000) | ($6,500) | ($7,000) | ($7,500) | ($8,000) |
| Software subscriptions | ($9,000) | ($10,500) | ($11,500) | ($12,500) | ($13,500) |
| Card processing fees (2.5% of counter, class and desk sales) | ($10,270) | ($14,381) | ($18,083) | ($19,685) | ($20,989) |
| Freight and inter-island shipping on stock and loaner devices | ($5,069) | ($6,158) | ($6,825) | ($7,334) | ($7,711) |
| Shrink, returns and opened-box write-downs (1.2% of goods sold) | ($2,621) | ($3,132) | ($3,449) | ($3,678) | ($3,853) |
| Bad debt allowance (school and office accounts) | ($2,500) | ($3,500) | ($4,200) | ($4,600) | ($4,900) |
| Publisher partner fees, certifications and training materials | ($4,200) | ($4,800) | ($5,200) | ($5,600) | ($5,900) |
| Equipment replacement and loaner-device refresh | $0 | ($3,000) | ($4,000) | ($5,000) | ($5,000) |
| Phones, supplies and dues | ($2,800) | ($3,100) | ($3,300) | ($3,500) | ($3,700) |
| Annual pay raises (3% a year) | $0 | ($7,236) | ($17,937) | ($29,231) | ($40,431) |
| EBITDA | ($36,027) | $52,915 | $106,425 | $129,261 | $155,903 |
| Depreciation | ($8,343) | ($8,343) | ($8,343) | ($8,343) | ($8,343) |
| Interest | ($10,725) | ($9,855) | ($8,478) | ($6,946) | ($5,241) |
| Income tax | $0 | $0 | ($18,038) | ($29,697) | ($37,083) |
| Net income before start-up costs | ($55,094) | $34,717 | $71,566 | $84,275 | $105,236 |
| Start-up costs expensed at opening (legal, registrations, rent before opening, launch) | ($27,200) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($82,294) | $34,717 | $71,566 | $84,275 | $105,236 |
Year 1 loses $55,094 before start-up costs and $82,294 after them, with EBITDA at negative $36,027. Profit first shows in Year 2: EBITDA is $52,915 and net income is $34,717, a 4.2% margin, after interest and depreciation. Year 3 earns $71,566 (6.7%), Year 4 $84,275 (7.1%) and Year 5 $105,236 (8.2%). Tax is nil in Years 1 and 2 because the Year 1 loss is carried forward, then $18,038 in Year 3, $29,697 in Year 4 and $37,083 in Year 5. Pay raises reach $40,431 a year by Year 5, yet payroll falls from 37% of revenue in Year 1 to 28% in Year 5 as revenue per head rises. Margins are still modest for a shop, and the three service prices and the hours that fill them decide the result.
Where the cash sits at each year end
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($135,606) | $31,540 | $69,790 | $87,594 | $109,481 |
| Shelving, classroom build-out, laptops and point of sale | ($48,000) | $0 | $0 | $0 | $0 |
| Funding received | $250,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($2,848) | ($12,186) | ($13,563) | ($15,095) | ($16,800) |
| Owner distributions | $0 | $0 | $0 | $0 | $0 |
| Net change in cash | $63,546 | $19,354 | $56,227 | $72,499 | $92,681 |
| Closing cash | $63,546 | $82,900 | $139,127 | $211,626 | $304,307 |
The shop never ends a year short of cash; the low point is $63,546 after Year 1. Loan principal starts amortizing in month 10, so Year 1 repays $2,848 and Year 2 repays $12,186; net cash still rises $19,354 in Year 2 as the shop turns profitable. Cash is $139,127 in Year 3 and reaches $304,307 in Year 5. That is more than a stock shop needs, so from Year 4 the plan would let the owners choose between a dividend, early loan repayment and a second location; none is built into the numbers.
What the shop owns and owes, stock included
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $63,546 | $82,900 | $139,127 | $211,626 | $304,307 |
| Accounts receivable | $21,388 | $31,804 | $40,953 | $45,496 | $49,202 |
| Stock on the shelves and in the back room | $50,728 | $56,927 | $62,373 | $65,076 | $67,281 |
| Shelving, classroom build-out, laptops and point of sale (net) | $39,657 | $31,314 | $22,971 | $14,629 | $6,286 |
| Total assets | $175,319 | $202,945 | $265,424 | $336,827 | $427,075 |
| Publisher and distributor balances (accounts payable) | $10,462 | $15,557 | $20,032 | $22,254 | $24,067 |
| Bank term loan | $97,152 | $84,965 | $71,403 | $56,308 | $39,508 |
| Paid-in capital | $150,000 | $150,000 | $150,000 | $150,000 | $150,000 |
| Retained earnings | ($82,294) | ($47,577) | $23,989 | $108,265 | $213,501 |
| Total liabilities and equity | $175,319 | $202,945 | $265,424 | $336,827 | $427,075 |
Monthly revenue to break even, stock turns, loan cover
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -6.5% | 6.4% | 10.0% | 10.9% | 12.2% |
| Net margin (before start-up costs) | -9.9% | 4.2% | 6.7% | 7.1% | 8.2% |
| Payroll incl. pay raises as share of revenue | 37% | 30% | 29% | 29% | 28% |
| Revenue per full-time equivalent at year end | $159,317 | $184,260 | $237,269 | $237,231 | $256,551 |
| Average monthly revenue | $46,467 | $69,098 | $88,976 | $98,846 | $106,896 |
| Monthly revenue needed to cover operating costs | $51,992 | $60,984 | $72,657 | $79,026 | $82,990 |
| Debt service cover (EBITDA / interest + principal) | -2.7x | 2.4x | 4.8x | 5.9x | 7.1x |
Compare what the shop actually takes each month with what it must take to pay its operating costs. In Year 1 that is $46,467 against $51,992 required; Year 2 is $69,098 against $60,984, and Year 3 is $88,976 against $72,657. Loan cover is below zero in Year 1, 2.4x in Year 2 when principal repayments begin, 4.8x in Year 3 and 7.1x in Year 5. A lender would likely write a cover test into the loan, and Year 2 is the thinnest year that has to pass: in the downside case Year 2 ends with a net loss of $3,809, so a test set for Year 2 would not be met there and Year 3 is the more realistic start. Year-end stock turns about 3.2 times in Year 1 and 3.6 times in Year 5.
A fifth less demand, every year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $446,086 | $663,337 | $854,169 | $948,924 | $1,026,203 |
| Net income before start-up costs | ($84,274) | ($3,809) | $27,574 | $44,261 | $57,375 |
| Net income after start-up costs | ($111,474) | ($3,809) | $27,574 | $44,261 | $57,375 |
| Closing cash | $42,152 | $26,771 | $42,337 | $76,475 | $122,644 |
Here every revenue line falls 20% in all five years, the shape of a poor visitor season or a school budget cut. Management responds this way: the second technician arrives six months late (month 28 instead of 22), the part-time classroom and field assistant is never hired, the part-time counter associate works 60% of hours, marketing falls by 20%, Marcus takes a 20% pay cut, card fees, freight and shrink fall with sales, and the stock buffer shrinks to 3.5% of cost of goods from 5%. The first trainer still starts in month 4, because classes and on-site days cannot run without one. The shop loses money in Years 1 and 2, earns less than the base case throughout, and turns profitable in Year 3; every year closes with cash on hand, the lowest being $26,771. Equity ends Year 1 at $38,526. Year 3 income of $27,574 compares with $71,566 in the base case, and Year 5 income of $57,375 with $105,236. One technician and Marcus would be stretched covering the hours until April of Year 3. The case cuts volume only and leaves service prices where the base case has them; if the prices are not achieved, the shortfall would add to this case and cash would run out. The model has no cost for overtime or lost sales.
Sources
- Hawaii Department of Taxation, General excise tax rates and Hawaii County surcharge. Retail rate 4%; Hawaii County surcharge 0.5% from January 1, 2020 through December 31, 2030.
- State of Hawaii, Office of the Governor, Hawaii's minimum wage increases to $16.00 on January 1, 2026. The $18.00 step on January 1, 2028 follows Act 114 of 2022; confirm current rates with the Department of Labor and Industrial Relations.
- Hawaii corporate income tax: the plan uses 6.4% as a planning rate for income over $100,000. Rates change, so the figure is to be confirmed with the Department of Taxation.
- Hawaii Prepaid Health Care Act: employer cost is a planning figure to confirm with the Department of Labor and Industrial Relations.
- No population or visitor statistic is quoted; local demand figures would come from the county and the state tourism authority before opening.
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