Looking for a data recovery business plan? You're in the right place.
A recovery lab asks a lender hard questions. How much do the clean bench and tooling cost? What happens to cash when you only bill for files you get back? How many donor drives sit on the shelf before a case pays? A blank template won't show what a sensible answer looks like.
In this article we'll walk through a complete sample business plan for a hard-drive and device recovery lab in Portland, Oregon, section by section. We'll cover the summary, the SWOT analysis and, in particular, all of the financials.
Here's what you'll take away:
- The lab summary: see how to put the whole business on one page, so a banker knows what you are asking for within a minute
- The SWOT analysis: learn how to name weaknesses such as a single senior engineer without scaring a reader off
- Funding the bench: see what a clean bench, imaging tools and donor stock cost in this example, and how the plan splits them between equity and a loan
- The funnel from evaluation to invoice: understand how a no-recovery, no-fee promise shapes billed cases and bench hours
- The first year, month by month: spot the months that lose money before you get there and size the reserve to match
- The five-year profit, cash flow and balance sheet: see how hires, pay raises and donor stock show up in the numbers
- The downside case: have an answer ready for the "what if cases are 20% short?" question, with the steps the owner takes
If you're setting up a recovery lab, read this before you write your own. The company is fictional, so take what fits and change the rest.
In this plan
Looking for a data recovery business plan template? The Toolkit builds yours with your own numbers.
The Lab in Brief
Crest Haven is a data-recovery lab that opens in a leased 3,000-square-foot unit in Portland, Oregon, on January 1, 2027. Customers send in or drop off failed hard drives, SSDs, memory cards and phones. Technicians image what can be read, repair what cannot on a laminar-flow clean bench, and bill only if the files come back. Founder Tomas Reyes owns 60% of the company and two outside investors hold 40%.
Opening takes $535,000: $120,000 of Tomas's savings, $225,000 of investor equity and a $190,000 bank loan against the lab tooling. Tooling and build-out take $198,000, donor-drive stock $32,000, and legal work, registrations and the launch campaign $26,700. A second clean bench costs $46,000 in month 24, and the remaining $186,300 stays in the account as a reserve for the first two years of ramp.
| Year 1 | Year 3 | Year 5 | |
|---|---|---|---|
| Revenue | $490,996 | $1,246,055 | $1,677,901 |
| Net income after start-up costs | ($117,384) | $101,751 | $152,277 |
| Closing cash | $173,869 | $237,667 | $365,007 |
Billed cases run from 534 in Year 1 to 1,510 in Year 5. Year 1 loses money because four salaries, a lease and donor stock are paid before case volume covers them. Monthly operating profit turns positive in August 2027 and the first full-year profit arrives in Year 2. Year 5 net margin is 9.1% with the same full-time team throughout. A second run of the model takes 20% off every revenue line; with later hires, a smaller marketing budget, a founder pay cut and no distributions, cash stays above zero in all five years.
The lab competes on hands-on work and on who carries the risk. Mechanical failures are handled in house on the clean bench with a stock of matched donor drives, and a customer pays nothing when nothing is recovered.
Crest Haven at a Glance
Legal name: Crest Haven, LLC, an Oregon limited liability company. Owners: Tomas Reyes, 60%; two outside investors, 40% between them. Premises: a leased 3,000-square-foot light-industrial unit in the Portland area. Opening: January 1, 2027. Stage: pre-opening. The lease terms are agreed; the tooling is quoted but not yet ordered.
What the lab is for
Return a customer's files from a failed drive or device, and charge nothing if it cannot.
Goals through 2028
- Reach 534 billed cases in 2027 and 945 in 2028.
- Hire an intake coordinator in month 7 so that the bench is never answering the phone.
- Make the first monthly profit in August 2027 and the first full-year profit in 2028.
- Hold the equipment loan repayments on schedule and pay no distribution before 2030.
Three kinds of case
| Case | What is wrong | Fee | Year 1 share of revenue |
|---|---|---|---|
| Logical | Drive works; files are deleted, formatted or the file system is damaged | $540 | 38% |
| Mechanical | Failed heads, seized motor or damaged platters | $1,380 | 32% |
| SSD, flash and phone memory | Dead controller, worn chips, damaged card or phone storage | $1,120 | 18% |
Rush surcharges (50% of the case fee, on about 13% of cases) add 6% and return media for the recovered files adds 7%. Partial recoveries are quoted at a reduced fee agreed before work starts.
Rules the lab works under
Oregon has its own rules on how businesses protect personal information, and customers' drives often hold health, tax and client records. Counsel reviews the chain-of-custody form, the customer terms (which cap liability at the fee paid) and the data-handling policy before opening, and again at each lease renewal. No statute is named here; confirm the requirements with counsel.
Portland and the Mail-In Market
Failed drives are not a local-only problem. Crest Haven expects most customers to find a lab through a search and ship the drive, so its market is the Pacific Northwest first and the whole country second. The revenue line is built from case counts rather than a market-size figure.
Where else a failed drive can go
| Alternative | What it offers | Why a customer picks it | How Crest Haven differs |
|---|---|---|---|
| National mail-in labs | Large teams and published service tiers | Familiarity and scale | A local bench with a named engineer, and drop-off in Portland |
| Local computer repair shops | Quick check and a referral on | Convenient and cheap to try | Specialist tooling for the cases a shop cannot open |
| Do-it-yourself recovery software | Scans a drive that still works | Free or low cost | A lab for the drive that clicks, does not spin or is not detected |
| Managed service providers' own bench | Recovery bundled with support | Existing relationship | Overflow capacity with no minimum |
Each row describes an offer and where Crest Haven sits against it; it is not a ranking. Providers change prices often, so none is quoted.
SWOT
| Strengths | Weaknesses |
|---|---|
| Founder has run mechanical cases for nine years | A single senior engineer until month 12 |
| No recovery, no fee lowers a buyer's risk | Billing only on success puts the cost of failures on the lab |
| Donor-drive stock of matched models | New name; every customer starts from zero |
| Opportunities | Threats |
|---|---|
| Repair shops and IT firms handing over hard cases | Cloud backup shrinking the volume of local drives |
| Rising use of encrypted SSDs and phones needing new skills | Low-price national labs |
| Repeat work from IT firms and repair shops once a first case goes well | Hard-to-source donor parts for newer drives |
Who Sends Us a Failed Drive
The small-business owner
A dental office, a design studio or a contractor whose only backup is the drive that just failed. Cost matters less than getting a particular folder back. They rarely need a second recovery, but they tell their IT contact who rescued the drive.
The household
Family photos, a thesis, a music library. Usually one drive, usually a logical or mechanical case, and often sent on the advice of a repair shop.
The IT firm or repair shop
Managed service providers and repair shops open the easy cases themselves and pass on the rest. They send a few cases a month, want a quick answer on whether a drive is worth sending and expect trade terms. List fees do not change in Year 1; these accounts get faster turnaround and monthly invoicing on 30-day terms.
What triggers the call
A drive that clicks, does not appear on the computer, or stops after a drop. Many customers have already run a recovery program, which can reduce the chance of a clean result, so the intake call asks what has been tried.
What they ask of the lab
An honest answer on whether the drive can be saved, a fixed quote before work starts, and the files back in a form they can open.
From Evaluation to Invoice
The path of a case
Each drive gets a free evaluation. Customers ship on a prepaid label or drop off. The coordinator records the drive, its symptoms and its serial number, and a technician examines it and sends a fixed quote, usually within two business days. Work starts only after the customer accepts, and turnaround is 7 to 10 business days from acceptance. Direct customers pay by card or invoice before the recovered files are released; trade accounts are invoiced monthly.
The Year 1 funnel
About 730 drives are evaluated in 2027 and 534 are billed. The model sets the billed share of evaluated cases at 80% for logical, 62% for mechanical and 65% for flash.
| Source of billed cases | Cases | Share |
|---|---|---|
| Search and paid listings | 214 | 40% |
| IT firms, MSPs and repair-shop handoffs | 176 | 33% |
| Referrals and online reviews | 75 | 14% |
| Accountants, lawyers and insurance agents | 43 | 8% |
| Events and other | 26 | 5% |
Pricing
List prices are in the case table above and rise 3% a year from Year 2. Quotes are fixed before work begins. The rush option puts a drive at the front of the queue for a 50% surcharge on the fee and applies only where a technician can start inside one business day.
Repeat work
Repeat revenue comes mainly from IT firms and repair shops, which is why the coordinator keeps an account sheet for each.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Billed cases | 534 | 945 | 1,210 | 1,380 | 1,510 |
Where Cases Come From
Year 1 marketing is $62,000 of running cost plus $18,000 of launch work paid from start-up capital. That is 13% of Year 1 revenue for the running spend, and 7% by Year 5. Each billed case costs about $116 in running marketing in Year 1 and about $76 in Year 5; each evaluation costs about $85 in Year 1.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Paid search and local listings | $32,000 | Searches such as "hard drive recovery Portland" and "SSD not detected" |
| IT-firm and repair-shop program | $9,000 | Visits, a one-page triage guide and monthly invoicing for trade accounts |
| Guides and how-to content | $5,000 | Pages on drive noises, what not to do and how a case runs |
| Trade events and meetups | $4,000 | Portland-area IT and legal gatherings |
| Reviews and directories | $3,000 | Collecting and answering reviews |
| Accountant, lawyer and insurance-agent referrals | $4,000 | A short note on what to do when a client's drive fails |
| Open houses at the lab | $3,000 | Bench tours for referral partners |
| Website upkeep | $2,000 | Quote request form, case tracker |
Marketing milestones
- January 2027: website live, first referral partners signed.
- July 2027: 47 billed cases in the month, with operating profit within $1,600 of break-even.
- August 2027: first month of positive operating profit.
- December 2027: 73 billed cases in the month.
On the Lab Floor
The unit
About 3,000 square feet, rented at roughly $19 a square foot a year with common charges, comes to $57,000 in Year 1. It holds a clean-bench room with space for a second bench, an electronics bench, a storage room for customer drives, a donor-stock cage, a shipping area and an office. Access is by key card; customer drives are logged in and out.
The clean bench, described carefully
The bench is a laminar-flow workstation described as rated to ISO 14644-1 Class 5 for the bench volume. It is not a whole-room certified cleanroom, and the lab does not sell itself as one. A third party tests it at installation and each year, and the cost sits in calibration and consumables. Any marketing claim about air cleanliness is checked against the latest test report. A second bench is bought in month 24, when open-drive work approaches what one bench can carry.
Donor stock
Mechanical recovery needs a matched donor, often the same model and firmware family. The lab buys $32,000 of drives and parts at opening and replenishes through the year. Some donors fail and some are never used; those are written off at $3,500 in Year 1.
Tooling
Two imaging and firmware stations, a chip reader and rework station, a microscope, a head-swap kit, and a storage array that holds recovered data until delivery. The tool vendors' annual license fees sit under software at $14,000 in Year 1.
Who does the work
Four people at the end of Year 1: Tomas, a logical-and-imaging technician, a coordinator and an engineer for drive mechanics. A second technician joins in month 20, a flash and SSD engineer in month 30 and a second senior engineer in month 48, for seven by Year 4. About half of Tomas's paid time is on the bench through Year 3.
Insurance and safeguards
Insurance for general liability, property, technology errors and omissions, cyber, workers' compensation, key-person life insurance on Tomas and a bailee policy on customers' drives costs $17,000 in Year 1. Every drive has a written quote, a signed intake form and a return receipt.
The Bench Team
Tomas Reyes, founder and lead recovery engineer
Tomas has nine years in recovery labs, the last five as a lead engineer on mechanical cases at a mid-size lab in the Northwest. He holds a degree in electronics technology. His $120,000 is his savings. He is leaving to run a smaller lab where he works the bench himself.
Where the team is thin
He has not run payroll, bought insurance or built a sales funnel. An outside bookkeeper and a payroll service handle the first two, and the coordinator takes the front end of the third.
If Tomas is out
Until the recovery engineer starts in month 12, mechanical cases wait for Tomas. After that, two people can open a drive, and a key-person life policy protects the loan.
Advisers
A lawyer reviews customer terms and chain-of-custody forms. An accountant reviews the numbers each quarter. The investors sit on a quarterly review call.
Ownership and the bank
Tomas owns 60% and the investors 40%, although the investors supply $225,000 of the $345,000 in equity; the split credits Tomas's expertise and unpaid launch work. The bank's loan rests on a lien over the lab tooling and Tomas's personal guarantee, and requires quarterly accounts.
Five Years of Case Revenue
Every table below comes from one model: twelve months for 2027, then one column per year to 2031. Case counts, prices and lab hours come first so each revenue total can be rebuilt by hand.
Funding the bench
| Use of funds | Amount |
|---|---|
| Laminar-flow clean bench, enclosure and head-swap tooling | $46,000 |
| Imaging, firmware and PCB-repair tool suites (two stations) | $62,000 |
| Flash chip reader, rework and microscope stations | $24,000 |
| Case-storage array, workstations and network | $18,000 |
| Lab build-out: ESD flooring, air filtration, access control, fire suppression | $48,000 |
| Second clean bench and imaging station (bought in month 24 from the reserve) | $46,000 |
| Opening donor-drive and parts stock | $32,000 |
| City and state registrations | $1,200 |
| Legal: entity, customer terms, data-handling and chain-of-custody forms | $7,500 |
| Launch: website, local search listings, MSP and IT-shop outreach | $18,000 |
| Cash reserve for the first year of ramp | $232,300 |
| Total uses | $535,000 |
| Source of funds | Amount |
|---|---|
| Tomas Reyes's savings | $120,000 |
| Outside investor (two angel investors, common equity) | $225,000 |
| Equipment loan secured on the lab tooling | $190,000 |
| Total sources | $535,000 |
Tomas Reyes puts in $120,000 of savings and two outside investors add $225,000 of common equity, together $345,000 or 64% of the $535,000 raised. Investors take 40% of the company and Tomas 60%, which credits his years of bench experience and unpaid launch work. A bank lends $190,000 (36%) over seven years at a 9.75% planning rate, interest-only for six months, secured on the lab tooling with a personal guarantee from Tomas. That is about 78% of the $244,000 of tooling and build-out once the second bench is counted; a lender may ask for an SBA guarantee, and terms and rates vary. The $232,300 reserve is large next to the equipment budget on purpose. A lab that bills only when data comes back pays four salaries and buys donor drives for months before volume settles: operating cash flow is about negative $152,000 in Year 1, the second bench takes $46,000 in month 24, and the downside case needs the rest.
Case mix, prices and lab hours
- Fees per billed case start at $540 for a logical recovery (the drive spins but files are lost or the file system is damaged), $1,380 for a mechanical hard-drive recovery (head swap or platter work on the clean bench) and $1,120 for an SSD, USB, memory-card or phone-memory recovery. Fees rise 3% a year from Year 2. Lab prices vary widely and none is quoted here; these are Crest Haven's own list prices. Partial recoveries are quoted before work at a reduced fee agreed in advance.
- Billed cases are 534 in Year 1 (341 logical, 114 mechanical, 79 flash), then 945, 1,210, 1,380 and 1,510 across Years 2 to 5. Pricing is no recovery, no fee: the billed share of evaluated cases is set at 80% for logical, 62% for mechanical and 65% for flash, which means about 730 evaluations in Year 1 and 2,110 in Year 5. Those shares are the model's figures, not an industry statistic. December 2027 bills 73 cases, a run rate of about 880 a year, so the 945 in Year 2 continues the climb instead of restarting it.
- Rush work carries a surcharge of 50% of the case fee. About 13% of billed cases are rush, so rush surcharges equal 6.5% of case fees. Return media (a new or encrypted drive that carries the recovered files back) is billed at $62 a case, with direct cost at 70% of that.
- Direct costs average 14.4% of revenue: 3% of logical fees (cables, adapters, imaging storage), 20% of mechanical fees (donor drives and head stacks, including donors that fail), 12% of flash fees (donor boards and chips) and 70% of return media. Donor stock opens at $32,000 and then grows by 30% of each year's direct costs, which is about 275 days of direct costs on hand at the end of Year 1 and 158 days at the end of Year 5. Unusable or mismatched drives are written off as a separate operating cost.
- Hands-on time per case is 2 hours for a logical recovery, 7 for a mechanical one and 5 for a flash one, plus 0.75, 3 and 2 hours on each evaluation that is never billed. That is about 2,230 bench hours in Year 1 and 7,060 in Year 5. Productive hours per person are set at 1,750 a year, so Tomas (half his time on the bench until Year 3, 40% from Year 4) and the technicians and engineers supply about 2,770 hours in Year 1 and 9,450 in Year 5. Utilization is therefore about 81% in Year 1, 83% in Year 2, 78% in Year 3, 81% in Year 4 and 75% in Year 5. The second recovery technician starts in month 20, before Year 2 volume would otherwise overload the bench. About half of mechanical hours are open-drive work: roughly 1,800 hours a year in Year 5, against about 3,500 across two clean benches.
- Payroll carries a 27% load for payroll taxes, health coverage, Oregon paid-leave contributions and a retirement match; workers' compensation is in the insurance line. Wages in the personnel table are launch-year rates; 3% annual raises are charged on their own line from Year 2. No role is part time and no wage is trimmed in the base case.
- Rent is 3,000 square feet of light-industrial space in the Portland area at about $19 a square foot a year, all-in, rising 3% a year, on a first-floor unit with loading access. Utilities cover filtration and cooling. Insurance of $17,000 in Year 1 covers general liability, property, technology errors and omissions, cyber, workers' compensation, key-person life insurance and a bailee policy for customers' drives while they are in the lab. Customer terms cap liability at the fee paid; counsel confirms the wording.
- Operating costs also include prepaid shipping labels at about $16 per evaluation, card processing at 2.7% of revenue, and a local business license and tax allowance of 0.8% of revenue. The last is a planning figure: Portland, Multnomah County and Oregon each have business taxes and fees that depend on receipts, and rates should be confirmed with a tax adviser. Card disputes and bad debt are 0.6% of billings.
- The first clean bench is a laminar-flow workstation described as rated to ISO 14644-1 Class 5 for the bench volume. The lab is not marketed as a certified cleanroom, and an independent certifier tests each bench at installation and every year; the filter and testing cost sits in lab consumables and calibration. Data-handling and chain-of-custody terms are reviewed by counsel before opening.
- Receivables average 12 days. Direct customers pay by card or invoice before recovered files are released; IT firms and repair shops are invoiced monthly on 30-day terms and are about a third of cases. Parts suppliers are paid in about 24 days. Standard turnaround is 7 to 10 business days after the customer accepts the quote, and rush work starts within one business day.
- The model taxes the company at the 21% federal rate plus 6.6% for Oregon, with the Year 1 loss carried forward; the state rate is a planning figure and may change. An LLC taxed through its owners' returns would differ, and owners would then need tax distributions that this model does not show. Distributions of $50,000 in Year 4 and $100,000 in Year 5 are paid only from retained earnings, pro rata to ownership.
Revenue by kind of case
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Logical recoveries (deleted, formatted, corrupted) | $184,140 | $311,472 | $401,020 | $460,257 | $510,531 |
| Mechanical hard-drive recoveries (head swaps, platter work) | $157,320 | $348,243 | $468,493 | $565,486 | $644,579 |
| SSD, flash and phone-memory recoveries | $88,480 | $161,504 | $225,760 | $275,367 | $321,445 |
| Rush surcharges | $27,948 | $53,379 | $71,193 | $84,572 | $95,976 |
| Return media and handling | $33,108 | $60,348 | $79,589 | $93,494 | $105,370 |
| Total revenue | $490,996 | $934,946 | $1,246,055 | $1,479,176 | $1,677,901 |
| Growth on prior year | – | 90% | 33% | 19% | 13% |
Mechanical work takes the largest share of the growth, rising from 32% of revenue in Year 1 to 38% in Year 5, because its fee per case is the highest and the clean bench and head stock are what a mail-in customer is paying for. Logical recoveries fall from 38% to 30% of revenue as the mix moves toward harder cases. Rush surcharges and return media together stay near 12% of revenue. Year 2 revenue is 90% above Year 1 because Year 1 starts from near zero: the December 2027 monthly revenue of $67,617 annualizes to about $811,000, and Year 2 averages $77,912 a month.
Month by month in 2027
| Month | Logical recoveries (deleted, formatted, corrupted) | Mechanical hard-drive recoveries (head swaps, platter work) | SSD, flash and phone-memory recoveries | Rush surcharges | Return media and handling | Total revenue | EBITDA |
|---|---|---|---|---|---|---|---|
| Jan 2027 | $5,400 | $4,140 | $2,240 | $766 | $930 | $13,476 | ($27,039) |
| Feb 2027 | $7,020 | $5,520 | $3,360 | $1,034 | $1,240 | $18,174 | ($23,018) |
| Mar 2027 | $9,180 | $6,900 | $4,480 | $1,336 | $1,612 | $23,508 | ($18,453) |
| Apr 2027 | $10,800 | $8,280 | $4,480 | $1,531 | $1,860 | $26,951 | ($15,507) |
| May 2027 | $12,960 | $11,040 | $5,600 | $1,924 | $2,294 | $33,818 | ($9,630) |
| Jun 2027 | $14,580 | $12,420 | $6,720 | $2,192 | $2,604 | $38,516 | ($5,609) |
| Jul 2027 | $16,200 | $13,800 | $7,840 | $2,460 | $2,914 | $43,214 | ($1,588) |
| Aug 2027 | $18,360 | $15,180 | $8,960 | $2,763 | $3,286 | $48,549 | $2,978 |
| Sep 2027 | $19,980 | $17,940 | $10,080 | $3,120 | $3,658 | $54,778 | $8,309 |
| Oct 2027 | $21,600 | $19,320 | $11,200 | $3,388 | $3,968 | $59,476 | $12,329 |
| Nov 2027 | $23,220 | $20,700 | $11,200 | $3,583 | $4,216 | $62,919 | $15,276 |
| Dec 2027 | $24,840 | $22,080 | $12,320 | $3,851 | $4,526 | $67,617 | $19,297 |
Revenue builds from $13,476 in January to $67,617 in December. Operating profit is negative from January to July and positive from August, when monthly revenue reaches $48,549. The monthly view spreads costs evenly instead of placing each hire in its month, so the month profit turns is approximate. The lowest month-end cash comes in Aug, at about $145,000 once the 12-day collection lag is counted.
Bench payroll
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and lead recovery engineer | $96,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Recovery technician (logical and imaging) | $64,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Intake and customer coordinator | $52,000 | Month 7 | 1 | 1 | 1 | 1 | 1 |
| Recovery engineer (drive mechanics and clean bench) | $82,000 | Month 12 | 1 | 1 | 1 | 1 | 1 |
| Second recovery technician | $64,000 | Month 20 | – | 1 | 1 | 1 | 1 |
| Flash and SSD engineer (chip-off, firmware) | $88,000 | Month 30 | – | – | 1 | 1 | 1 |
| Second senior engineer (clean bench) | $92,000 | Month 48 | – | – | – | 1 | 1 |
| Total payroll incl. on-costs | $244,898 | $407,247 | $519,853 | $576,157 | $683,260 |
Tomas and a recovery technician open the lab. The intake and customer coordinator starts in month 7, when evaluations pass roughly 65 a month; a recovery engineer for drive mechanics and the clean bench joins in month 12. A second technician starts in month 20, a flash and SSD engineer in month 30 and a second senior clean-bench engineer in month 48. Headcount at year end is 4, 5, 6, 7 and 7. Tomas's $96,000 salary is in costs from January, so profit is what is left after he is paid.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $490,996 | $934,946 | $1,246,055 | $1,479,176 | $1,677,901 |
| Direct costs (donor drives, chips, parts and return media) | ($70,781) | ($134,781) | ($179,630) | ($213,236) | ($241,884) |
| Gross profit | $420,215 | $800,165 | $1,066,425 | $1,265,940 | $1,436,017 |
| Payroll incl. on-costs | ($244,898) | ($407,247) | ($519,853) | ($576,157) | ($683,260) |
| Rent | ($57,000) | ($58,700) | ($60,500) | ($62,300) | ($64,200) |
| Utilities | ($13,000) | ($13,500) | ($14,000) | ($14,500) | ($15,000) |
| Marketing | ($62,000) | ($80,000) | ($95,000) | ($106,000) | ($115,000) |
| Insurance | ($17,000) | ($20,000) | ($23,000) | ($25,500) | ($27,500) |
| Professional fees | ($6,500) | ($7,500) | ($8,500) | ($9,000) | ($9,500) |
| Software subscriptions | ($14,000) | ($19,000) | ($22,000) | ($24,000) | ($26,000) |
| Prepaid shipping labels, packaging and courier (about $16 per evaluation) | ($11,707) | ($21,598) | ($28,575) | ($33,673) | ($38,027) |
| Card processing fees (2.7% of revenue) | ($13,257) | ($25,244) | ($33,643) | ($39,938) | ($45,303) |
| Local business license and tax allowance (0.8% of revenue; planning figure) | ($3,928) | ($7,480) | ($9,968) | ($11,833) | ($13,423) |
| Lab consumables, ESD supplies and filter replacement | ($7,500) | ($11,000) | ($14,000) | ($16,000) | ($17,500) |
| Tool upgrades, calibration and equipment replacement | $0 | ($9,000) | ($12,000) | ($18,000) | ($16,000) |
| Donor-stock write-offs (unusable or mismatched drives) | ($3,500) | ($7,000) | ($10,000) | ($12,000) | ($13,500) |
| Training, vendor courses and certification | ($3,000) | ($4,500) | ($5,500) | ($6,500) | ($7,000) |
| Card disputes and bad debt (about 0.6% of billings) | ($2,580) | ($4,927) | ($6,572) | ($7,807) | ($8,859) |
| Phones, internet and miscellaneous | ($3,000) | ($3,300) | ($3,600) | ($3,900) | ($4,200) |
| Annual pay raises (3% a year) | $0 | ($12,217) | ($31,659) | ($53,425) | ($85,755) |
| EBITDA | ($42,656) | $87,953 | $168,055 | $245,407 | $245,990 |
| Depreciation | ($29,719) | ($35,469) | ($35,469) | ($35,469) | ($30,969) |
| Interest | ($18,309) | ($16,463) | ($14,105) | ($11,507) | ($8,645) |
| Income tax | $0 | $0 | ($16,729) | ($52,017) | ($54,099) |
| Net income before start-up costs | ($90,684) | $36,021 | $101,751 | $146,414 | $152,277 |
| Start-up costs expensed at opening (legal, licensing, launch marketing) | ($26,700) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($117,384) | $36,021 | $101,751 | $146,414 | $152,277 |
Year 1 loses $90,684 before start-up costs and $117,384 after them. Year 2 is the first profitable year, at $36,021, and pays no income tax because the Year 1 loss carries forward. Year 3 earns $101,751 on a 13.5% EBITDA margin. Year 4 reaches $146,414, a 9.9% net margin, and Year 5 earns $152,277, a 9.1% net margin: the senior engineer and accumulated pay raises take a little off the margin even as revenue grows.
Cash in and out
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($152,387) | $41,903 | $116,486 | $166,347 | $170,002 |
| Lab tooling, clean benches and build-out | ($198,000) | ($46,000) | $0 | $0 | $0 |
| Funding received | $535,000 | $0 | $0 | $0 | $0 |
| Equipment loan principal repaid | ($10,744) | ($23,117) | ($25,475) | ($28,073) | ($30,935) |
| Owner distributions | $0 | $0 | $0 | ($50,000) | ($100,000) |
| Net change in cash | $173,869 | ($27,214) | $91,012 | $88,274 | $39,066 |
| Closing cash | $173,869 | $146,655 | $237,667 | $325,941 | $365,007 |
Cash stays above zero at every year end. It falls to $146,655 in Year 2 as the second bench is bought and then rises each year. Loan principal repaid is $10,744 in Year 1 and between $23,117 and $30,935 in Years 2 to 5. Distributions wait until Year 4.
Balance sheet and donor stock
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $173,869 | $146,655 | $237,667 | $325,941 | $365,007 |
| Accounts receivable | $16,142 | $30,738 | $40,966 | $48,630 | $55,164 |
| Donor-drive and parts stock | $53,234 | $72,434 | $85,889 | $95,971 | $104,565 |
| Lab tooling, clean benches and build-out (net) | $168,281 | $178,812 | $143,343 | $107,874 | $76,905 |
| Total assets | $411,527 | $428,639 | $507,864 | $578,416 | $601,641 |
| Parts-supplier balances (accounts payable) | $4,654 | $8,862 | $11,811 | $14,021 | $15,905 |
| Equipment loan | $179,256 | $156,139 | $130,664 | $102,592 | $71,656 |
| Paid-in capital | $345,000 | $345,000 | $345,000 | $345,000 | $345,000 |
| Retained earnings | ($117,384) | ($81,363) | $20,389 | $116,803 | $169,080 |
| Total liabilities and equity | $411,527 | $428,639 | $507,864 | $578,416 | $601,641 |
Break-even and lab measures
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -8.7% | 9.4% | 13.5% | 16.6% | 14.7% |
| Net margin (before start-up costs) | -18.5% | 3.9% | 8.2% | 9.9% | 9.1% |
| Payroll incl. pay raises as share of revenue | 50% | 45% | 44% | 43% | 46% |
| Revenue per full-time equivalent at year end | $122,749 | $186,989 | $207,676 | $211,311 | $239,700 |
| Average monthly revenue | $40,916 | $77,912 | $103,838 | $123,265 | $139,825 |
| Monthly revenue needed to cover operating costs | $45,070 | $69,348 | $87,474 | $99,369 | $115,873 |
| Debt service cover (EBITDA / interest + principal) | -1.5x | 2.2x | 4.2x | 6.2x | 6.2x |
Average monthly revenue in Year 1 is $40,916 against $45,070 needed to cover operating costs, so the year ends in an operating loss and debt service cover is negative. From Year 2 revenue clears the bar every year and cover is 2.2x or better.
If cases arrive 20% short
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $392,797 | $747,957 | $996,844 | $1,183,341 | $1,342,321 |
| Net income before start-up costs | ($137,943) | ($43,514) | $22,534 | $12,712 | $32,426 |
| Net income after start-up costs | ($164,643) | ($43,514) | $22,534 | $12,712 | $32,426 |
| Closing cash | $133,155 | $32,322 | $48,264 | $55,943 | $77,808 |
This case takes 20% off every revenue line in every year. The response runs in the order an owner would pull it: hires from month 13 start six months later, marketing falls 20%, Tomas takes a 20% pay cut, tool upgrades are halved and no distributions are paid. The second senior engineer is still hired, so the later years carry a larger team on less revenue. Cutting marketing while cases are already short is a real cost, because fewer leads follow. Year 1 closes with equity of $180,357. The lab loses money in Years 1 and 2, is profitable from Year 3, and the lowest year-end cash is $32,322, in Year 2, which is where a bank would watch. Profit is lower than the base case in every year. Cash in the later years looks healthier than the profit suggests because distributions stop.
Sources
- ISO 14644-1, Cleanrooms and associated controlled environments, classification of air cleanliness by particle concentration, iso.org. The plan uses the class name only.
- Wages, prices, rents, case counts and success rates are Crest Haven's own figures. The Oregon corporate rate of 6.6% and the local business-tax allowance are planning figures; confirm both with a tax adviser.
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