Looking for a SaaS business plan? You're in the right place.
A software company has to answer questions that a product demo does not. How many paying accounts does the company need before it covers its payroll? How many leave each year? What does hosting and support cost per account, and when does the business turn a profit? A blank template will not show you what sensible answers look like.
In this article we'll walk through a complete sample plan for a niche B2B software company in Portland, Oregon, section by section. We'll cover the executive summary, the SWOT analysis and, in particular, all of the financials, so you can see how the numbers fit together before you write your own.
Here's what you'll take away:
- The executive summary: see how to put the product, the price and the ask on one page, so a reader knows what you want within a minute
- The pricing tiers: learn how a three-tier monthly price turns into one blended figure per account, and how that figure moves over five years
- The churn and account counts: find out how to show gross additions, accounts lost and year-end totals in one table, so a reader can check the growth
- The cost of serving each account: see how hosting and support headcount are priced against the account count, so the gross margin is not a guess
- The start-up budget and reserve: understand how much cash a company needs to bridge two loss-making years before it can pay for itself
- The five-year profit, cash flow and balance sheet: follow each hire and price change through to the bottom line
- The downside case: have an answer ready for "what if revenue is 20% short?", along with the steps the founders take in response
If you're planning a software company, read this before you write your own. The company is fictional, so take what fits your product and change the rest.
In this plan
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Summary: Northgate Wharf on One Page
Northgate Wharf, Inc. sells software to independent breweries and distilleries from an office in Portland, Oregon. The product covers production planning, raw-material and finished-goods inventory, and a reporting add-on that assembles regulatory data into drafts for the producer to review. Each producer pays one monthly fee set by tier. The company opens on January 1, 2027 with six pilot producers and two founders: Marcus Hale, chief executive, and Priya Raman, chief technology officer.
Opening takes $1,100,000: $100,000 of founder savings and $1,000,000 from angel investors. Of that, $1,030,500 is held as a cash reserve because the business is paid in monthly amounts of a few hundred dollars per account. Laptops and the office take $24,000, and legal work, licenses and the launch campaign take the remaining $45,500.
| Year 1 | Year 3 | Year 5 | |
|---|---|---|---|
| Revenue | $312,087 | $2,120,300 | $4,184,300 |
| Net income after start-up costs | ($495,409) | $74,114 | $604,953 |
| Closing cash | $577,055 | $347,961 | $1,455,976 |
| Paying producer accounts at year end | 100 | 410 | 660 |
Year 1 is a loss because an engineering team and a support specialist are paid long before 100 small accounts can cover them. EBITDA turns positive in Year 3. Net margin reaches 14.5% in Year 5, after income tax begins.
A second run of the model takes 20% off every revenue line and applies the founders' cost response: the last engineering hire is dropped, later hires slip six months, marketing is cut, the chief executive's pay falls and the office stays small. Profit is lower than the base case in every year, the first profitable year slips from Year 3 to Year 4, and year-end cash stays positive throughout.
The company's claim is narrow. Planning, stock and reporting data sit in one product built for people who run a brewhouse, and the price is set per producer and tier.
Northgate Wharf, Inc.
Legal name: Northgate Wharf, Inc., an Oregon corporation. Owners: the two founders and the angel investors; the split is left to negotiation. Premises: a leased office in Portland, with hybrid working for staff. Start date: January 1, 2027, with six pilot accounts. Stage: pre-launch. The product runs for the pilot producers; the self-serve trial and billing are still being finished.
What the company is for
The company exists to give small producers one place to plan the next brew, see what is in the cellar and warehouse, and collect the figures regulators ask for.
Targets for the first two years
- Reach 100 paying accounts by December 2027 and 255 by December 2028.
- Hold Year 1 monthly churn near 2% of accounts.
- Reach an annual run rate above $500,000 in recurring revenue (subscriptions and the reporting pack) by December 2027.
- Cover operating costs on a monthly basis during Year 3.
Tiers and the reporting pack
| Plan | Price per month | Who it fits |
|---|---|---|
| Starter | $229 | One site, one brewhouse, up to three users; inventory and basic planning |
| Standard | $499 | Tank and batch scheduling, accounting export, up to ten users |
| Plus | $949 | Multi-site producers, distilleries tracking spirits stock, API access |
| Compliance-reporting pack | $79 add-on | Draft report data for the producer's own review |
The Year 1 mix is 45% Starter, 40% Standard and 15% Plus, which blends to $445 a month. Contracts run month to month with 30 days' notice.
Where regulation touches the product
Producers of beer, wine and spirits answer to a federal regulator, the Alcohol and Tobacco Tax and Trade Bureau (TTB), and to a state body; in Oregon that is the Oregon Liquor and Cannabis Commission (OLCC). The forms, filing dates and thresholds that apply depend on the permit type and the volume made, and the rules change. The plan does not summarize them.
The reporting pack is a drafting aid, and until the compliance product specialist starts in month 26 the founders track regulator notices with outside counsel. It collects production, stock and removals figures into a layout the producer's staff or adviser can check. The producer files its own returns and stays responsible for them. The terms of service say so, and counsel reviews the wording before launch.
The Craft-Producer Market
Who the product is built for
Independent breweries, cideries and distilleries with one to three sites, a production team of two to twenty and an owner who still reads the monthly numbers. The Brewers Association publishes a brewery count table that lists 9,578 craft breweries for 2025, a single-source figure not verified against a second source. Year 5 reaches 660 paying accounts, about 7% of that count before any distilleries, which makes the growth target ambitious. The TTB also publishes permit counts that the plan does not quote.
How producers manage production today
Most start on spreadsheets and a whiteboard. As volume grows, the pain points are the same: knowing which tank is free, how much of a hop or malt lot is left, which kegs are out in the field, and having the right figures when a report is due. Producers who outgrow spreadsheets look at brewery-specific software, general inventory tools or a point-of-sale system with a stock module.
Alternatives, described by type
| Alternative | What it offers | Why a producer picks it | Where Northgate Wharf differs |
|---|---|---|---|
| Spreadsheets and paper | Free, flexible, familiar | No new tool to learn | Planning and stock live in one record, with data entered once |
| General inventory and accounting software | Stock and bookkeeping in one place | Already used by the bookkeeper | Built around batches, tanks and lots instead of generic items |
| Established brewery-specific software | Production and inventory tools | Long track record with larger producers | Built for the smallest producers, with a regional focus and a data-export promise |
| Point-of-sale and taproom systems | Sales and some stock tracking | Already runs the taproom | Starts from the brewhouse and cellar, not the till |
| A consultant or part-time cellar manager | Hand-built reports and planning | Personal attention | Software cost is a fixed monthly fee |
Each row describes a category. Vendors revise features and prices often, so none are named or priced here.
Strengths, gaps, openings and threats
| Strengths | Gaps |
|---|---|
| Founders who have run production and built stock software | Two founders carry product and sales until month 12 |
| Fixed monthly price by tier, easy to budget | No brand yet; every account starts from zero |
| Six pilot producers before launch | Year 1 loses money and draws on the reserve |
| Openings | Threats |
|---|---|
| Producers moving off spreadsheets as volume grows | Small producers close or are acquired, which raises churn |
| Referrals from bookkeepers and guild contacts | Better-funded vendors cutting prices |
| Reporting changes that make tidy records more valuable | A rule change that makes the reporting pack obsolete |
Inside the Producer's Office
The buyer
The usual buyer is an owner or head brewer at a producer with one to three sites. In a distillery the buyer is often the production lead. They are good at making and selling, and they have a deadline every quarter or month that depends on records nobody enjoys keeping.
What triggers a purchase
A missed tank slot, a stock count that is wrong at year end, a lender or investor asking for production figures, a bookkeeper who has left, or a second site that the spreadsheet cannot handle.
What the buyer asks
- Can the first brew be planned this week without a long set-up?
- Does the stock figure match the cellar when counted?
- Is the monthly fee fixed for the tier?
- Can the data be exported if the producer leaves?
Why accounts leave
The plan expects producers to close, sell or go back to spreadsheets. Churn is modeled in the financial section at 2% a month in Year 1 and 18% to 24% a year after that.
From Trial to Paid Account
The path
A producer signs up for a 30-day trial with no card. A support specialist offers a 20-minute setup call, and the producer imports recipes and opening stock from a spreadsheet template. Standard and Plus prospects get a call from a founder, and from month 12 from the account executive. About 12% of trials convert to a paid plan.
The Year 1 funnel
Year 1 needs 110 gross new accounts to end at 100 after 10 are lost to churn. At a 12% trial conversion that is about 920 trial sign-ups, or 76 a month.
| Lead source | Gross new accounts, Year 1 | Share (rounded) |
|---|---|---|
| Search and content | 24 | 22% |
| Paid search and newsletter sponsorships | 20 | 18% |
| Guild and trade events | 22 | 20% |
| Bookkeeper and adviser partners | 16 | 15% |
| Customer referrals | 14 | 13% |
| Founder outreach | 14 | 13% |
Accounts by year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Gross new accounts | 110 | 174 | 215 | 222 | 209 |
| Accounts lost to churn | 10 | 24 | 55 | 82 | 99 |
| Paying accounts at year end | 100 | 250 | 410 | 550 | 660 |
Gross additions level off after Year 3 because the sales team stays at two account executives, so growth in net accounts slows as churn grows with the larger base.
Pricing changes
List prices rise 3% each January from Year 2. With the drift toward Standard and Plus, the blended monthly price per account moves from $445 in Year 1 to $526 in Year 5.
Reaching Producers
What the budget pays for
Year 1 marketing is $72,000 of operating spend, plus $26,000 of launch cost funded from start-up capital. The operating figure is 23% of Year 1 revenue, 7% in Year 3 and 5% in Year 5. Across the 110 gross new accounts, Year 1 marketing and launch cost together come to about $890 per account, a little over two months of the blended $445 price. In Year 3 marketing alone is about $700 per new account, and about $1,900 once commissions and the two account executives' base pay are added.
| Channel | Year 1 spend | What it is meant to do |
|---|---|---|
| Website and self-serve trial flow (launch) | $17,000 | A clear site with pricing, a trial sign-up and a template for importing recipes |
| Launch events with local producers' guilds (launch) | $9,000 | Introductions to the first guild members and bookkeepers |
| Search and content | $20,000 | Production-planning guides and spreadsheet templates that answer what producers search for |
| Paid search and newsletter sponsorships | $16,000 | Trade-publication newsletters and search ads aimed at tank, stock and reporting questions |
| Guild and trade events | $14,000 | Sponsorships and a small booth at regional producers' events |
| Partner program for bookkeepers and advisers | $10,000 | A short guide and a one-time thank-you for each introduction |
| Customer referrals | $6,000 | One month free for the referring producer |
| Webinars and email | $6,000 | Monthly sessions on planning and records; keeps existing accounts engaged |
Milestones
- January 2027: six pilot producers convert to paid plans.
- June 2027: 41 accounts; the trial flow and billing meet real volume.
- September 2027: 69 accounts.
- December 2027: 100 accounts and $44,500 of monthly platform subscription revenue.
- Month 12: the first account executive starts.
How the Product Is Built and Supported
The office
A leased office in Portland, about $24,000 a year in Year 1 (a plan figure, not a quoted rent), with hybrid working. The company moves to a larger space in Year 4 as headcount heads toward 16, at $46,000 a year.
The platform
The product is a cloud-hosted web application on a major public cloud provider, shared by all customers, with daily backups and a monthly release cycle. Producers' data is small, which keeps hosting and delivery at about 7% of subscription revenue, or $31 per account per month in Year 1 and $37 in Year 5. Customers can export their data at any time.
Support and onboarding
Support is by email and chat, in business hours Pacific time, with an early start because production staff begin early. One specialist from month 6 handles the first 100 accounts with help from the founders. Further specialists start at months 16, 28, 42 and 54, which keeps the load at 125 to 138 accounts per specialist. Customer success managers start in months 20 and 50 to handle upgrades and at-risk accounts.
Security and data
A security review and an annual outside penetration test sit in the budget at $8,000 in Year 1. No formal certification is planned within the five years; the line covers testing and security tooling. Customers' production and stock data is private to each producer.
Risks the operations have to carry
- A bad release during a busy production week. Releases avoid the end of each month.
- Dependence on one cloud provider. Backups are stored with a second provider.
- Reporting rules that change. The compliance product specialist, hired in month 26, tracks regulator notices and updates the pack.
Founders and Early Hires
Marcus Hale, chief executive
Marcus spent eleven years in craft production, the last four as production manager at a Portland-area brewery. He keeps the first customers by phone and leads selling until the first account executive starts. He invests $50,000 and draws $100,000 a year.
Priya Raman, chief technology officer
Priya has built inventory and planning software for a regional distributor and leads engineering. She invests $50,000 and draws $120,000 a year.
Where the team is thin
The founders have not run a sales team, raised an institutional round or built a compliance product. Each gap has an answer: the first account executive starts at month 12, a finance and operations manager joins at month 40 and a compliance product specialist at month 26. Until the finance role is filled, an outside accountant keeps the books.
Advice and oversight
The angel investors receive quarterly accounts. Two of them have worked with producers. Counsel reviews the customer terms and the reporting-pack wording, and an accountant advises on tax.
If a founder is out
Priya holds the technical knowledge and Marcus the customer relationships. Key-person insurance is bought from the Year 1 insurance budget, and documentation of the code and the customer list is kept current.
The Numbers: Accounts, Churn and Payroll
The model starts from a count of paying producer accounts. Accounts times a blended monthly price give subscription revenue; an attach rate on the compliance-reporting pack and a one-time setup fee per new account give the other two lines. Churn comes off the opening count each year, and hosting, support and payroll are priced against the same counts. Year 1 is shown by month and Years 2 to 5 by year.
Raising $1.1 million
| Use of funds | Amount |
|---|---|
| Laptops, test devices, office fit-out | $24,000 |
| Oregon registration and business licenses | $1,500 |
| Legal: entity, customer terms, privacy policy, IP assignment | $18,000 |
| Launch: website, trial flow, brewery-guild events | $26,000 |
| Cash reserve for the build-out years | $1,030,500 |
| Total uses | $1,100,000 |
| Source of funds | Amount |
|---|---|
| Founders’ savings (two founders) | $100,000 |
| Angel investors (equity) | $1,000,000 |
| Total sources | $1,100,000 |
Opening takes $1,100,000: $100,000 of savings from the two founders and $1,000,000 from angel investors, who receive shares; the terms and ownership split are left to negotiation. There is no bank debt, so the cash tables carry no interest or loan repayments. Of the total, $1,030,500 (94%) is held as a reserve, because accounts pay a few hundred dollars a month each and the company carries a team of nine by the end of Year 2 before revenue covers it. Year 1 closes with $577,055. The lowest year-end balance, $297,461, comes at the end of Year 2.
Pricing, churn, hosting and support load
- Three tiers bill monthly by card or bank debit. Starter is $229 for one site, one brewhouse and up to three users, with inventory and basic planning. Standard is $499 and adds tank and batch scheduling, an accounting export and up to ten users. Plus is $949 for multi-site producers, distilleries with spirits stock, and an API. The fee is set per producer and tier, with user caps on the lower two. In Year 1 the account mix is 45% Starter, 40% Standard and 15% Plus, which blends to $445 a month. The blend rises about 4% a year to $526 in Year 5: a 3% list-price increase each January plus a drift toward Standard and Plus as producers add sites and staff.
- The compliance-reporting pack is an add-on at $79 a month in Year 1, rising to $89. It gathers production, stock and removals data into a draft that the producer’s own staff or adviser reviews before filing. The software files nothing for the customer, and no filing rule is stated here as fact: which reports apply, and how often, depends on the permit type and volume, so each customer confirms with the regulator or counsel. The share of accounts that buy the pack rises from 25% in Year 1 to 42% in Year 5.
- Setup is charged once, when an account goes live. Starter is self-serve and free; Standard pays a flat $450 for a guided import of recipes and opening stock; Plus pays about $1,500. Weighted by mix the average is $400 in Year 1, rising to $450 by Year 5. The six pilot accounts are already set up and pay no fee. Setup fees are 13% of Year 1 revenue and 2% of Year 5.
- Six pilot producers convert to paid plans in January 2027, and the account count reaches 100 by December. Churn is explicit. In Year 1, 2% of the prior month’s accounts leave each month (10 accounts in all, rounded to whole accounts), so 110 gross additions are needed to end at 100. From Year 2 a share of the opening count leaves each year: 24% in Years 2, 22% in Year 3, 20% in Year 4 and 18% in Year 5. That is 24, 55, 82 and 99 accounts lost in Years 2 to 5, against gross additions of 174, 215, 222 and 209. Small producers close, sell to a larger group or go back to spreadsheets, and the plan prices that in. Year-end accounts are 100, 250, 410, 550 and 660.
- Direct costs are 7% of platform subscription revenue, 4% of pack revenue and 20% of setup fees. The subscription rate covers cloud hosting, backups, monitoring, email and text delivery and card fees: about $31 per account per month in Year 1 and $37 in Year 5. Hosting stays modest because a producer’s data is small, recipes, batches and stock movements, not video or images. Setup fees carry the highest rate because a contractor helps with the larger Plus imports.
- Support is staffed by account count. One specialist from month 6 covers the first 100 accounts with help from the founders. Further specialists start in months 16, 28, 42 and 54, which holds the load at 125 to 138 accounts per specialist from Year 2. Customer success managers start in months 20 and 50. Support and onboarding pay sits in payroll, not in direct costs, so the 91% gross margin on the profit and loss page flatters the business: counting support wages as a direct cost would bring it well below that.
- The self-serve trial runs 30 days with no card required. About 12% of trials convert to a paid plan, so Year 1 needs about 920 trial sign-ups, or 76 a month, to produce 110 gross additions. Founders sell the Standard and Plus accounts until the first account executive starts in month 12.
- Account executives earn the base pay in the personnel table plus commission, which appears on its own line: about 10% of the first-year subscription value of accounts they close. The line is $4,000 in Year 1, $45,000 in Year 2, $80,000 in Years 3 and 4 and $85,000 in Year 5.
- Each salary carries a 27% load for employer payroll taxes, health coverage, Oregon paid-leave contributions and a retirement match. The two founders draw $100,000 and $120,000, below what an outside hire would cost. Raises of 3% a year begin in Year 2, appear on their own line and apply to every hire. No salary is trimmed or converted to part-time hours in any case.
- Receivables average 12 days because most customers pay by card or bank debit at the start of the month. Payables average 20 days, mostly hosting and software invoices. Bad debt reaches $10,000 by Year 5, small because accounts that fail to pay are suspended.
- The model taxes Northgate Wharf, Inc. as a C corporation at 21% federal plus 6.6% for Oregon, a planning figure for the state’s corporate excise tax; rates change, and higher rates may apply at higher income. Oregon also charges a corporate activity tax on gross receipts above a threshold, which the model leaves out. The loss carryforward in the engine covers operating losses but not the $45,500 of start-up costs, which makes Year 5 tax about $12,000 higher than it would be otherwise. Federal limits on carried-forward losses are also left out. An accountant would confirm all three. No distributions are paid in any year.
Revenue by line
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Platform subscriptions (Starter, Standard, Plus) | $258,990 | $972,300 | $1,912,700 | $2,903,000 | $3,818,800 |
| Compliance-reporting pack | $11,497 | $51,000 | $116,400 | $193,200 | $271,400 |
| Guided setup and data import | $41,600 | $71,700 | $91,200 | $97,000 | $94,100 |
| Total revenue | $312,087 | $1,095,000 | $2,120,300 | $3,193,200 | $4,184,300 |
| Growth on prior year | – | 251% | 94% | 51% | 31% |
Platform subscriptions are 83% of revenue in Year 1 and 91% in Year 5. Setup fees matter early, 13% of Year 1 revenue, because 104 of the 110 new accounts pay one. The December 2027 run rate is $46,475 a month in recurring revenue (subscriptions and the reporting pack), or about $557,700 a year, before any new account signs. Growth of 251% in Year 2 comes from a full year of billing on the 100 accounts live at the end of Year 1 plus 174 new ones. It slows to 31% by Year 5 as churn removes 99 accounts a year from a larger base.
Month by month in 2027
| Month | Platform subscriptions (Starter, Standard, Plus) | Compliance-reporting pack | Guided setup and data import | Total revenue | EBITDA |
|---|---|---|---|---|---|
| Jan 2027 | $2,670 | $119 | $0 | $2,789 | ($58,271) |
| Feb 2027 | $5,340 | $237 | $2,400 | $7,977 | ($53,531) |
| Mar 2027 | $8,010 | $356 | $2,400 | $10,766 | ($50,982) |
| Apr 2027 | $11,125 | $494 | $2,800 | $14,419 | ($47,644) |
| May 2027 | $14,685 | $652 | $3,600 | $18,937 | ($43,516) |
| Jun 2027 | $18,245 | $810 | $3,600 | $22,655 | ($40,118) |
| Jul 2027 | $22,250 | $988 | $4,000 | $27,238 | ($35,930) |
| Aug 2027 | $26,255 | $1,165 | $4,000 | $31,420 | ($32,109) |
| Sep 2027 | $30,705 | $1,363 | $4,400 | $36,468 | ($27,496) |
| Oct 2027 | $35,155 | $1,560 | $4,400 | $41,115 | ($23,250) |
| Nov 2027 | $40,050 | $1,778 | $5,200 | $47,028 | ($17,847) |
| Dec 2027 | $44,500 | $1,975 | $4,800 | $51,275 | ($13,966) |
Northgate Wharf loses money in every month of 2027, as a company with an engineering team and 6 pilot accounts at the start would. The monthly EBITDA loss narrows from $58,271 in January to $13,966 in December, while revenue climbs from $2,789 to $51,275. The cash table averages receivables across the year; counting the higher December balance gives a more cautious year-end cash figure of about $565,000.
Hiring order and pay
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Co-founder and chief executive | $100,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Co-founder and chief technology officer | $120,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Senior engineer | $135,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Support and onboarding specialist | $62,000 | Month 6 | 1 | 1 | 1 | 1 | 1 |
| Engineer | $118,000 | Month 9 | 1 | 1 | 1 | 1 | 1 |
| Account executive | $86,000 | Month 12 | 1 | 1 | 1 | 1 | 1 |
| Support and onboarding specialist (second) | $64,000 | Month 16 | – | 1 | 1 | 1 | 1 |
| Customer success manager | $76,000 | Month 20 | – | 1 | 1 | 1 | 1 |
| Engineer (second) | $122,000 | Month 22 | – | 1 | 1 | 1 | 1 |
| Compliance product specialist | $90,000 | Month 26 | – | – | 1 | 1 | 1 |
| Support and onboarding specialist (third) | $66,000 | Month 28 | – | – | 1 | 1 | 1 |
| Account executive (second) | $88,000 | Month 30 | – | – | 1 | 1 | 1 |
| Marketing manager | $86,000 | Month 38 | – | – | – | 1 | 1 |
| Finance and operations manager | $84,000 | Month 40 | – | – | – | 1 | 1 |
| Support and onboarding specialist (fourth) | $68,000 | Month 42 | – | – | – | 1 | 1 |
| Engineer (third) | $126,000 | Month 46 | – | – | – | 1 | 1 |
| Customer success manager (second) | $78,000 | Month 50 | – | – | – | – | 1 |
| Second senior engineer | $140,000 | Month 50 | – | – | – | – | 1 |
| Support and onboarding specialist (fifth) | $68,000 | Month 54 | – | – | – | – | 1 |
| Total payroll incl. on-costs | $555,837 | $928,582 | $1,354,243 | $1,701,800 | $2,197,735 |
Month 1 starts with the two founders and a senior engineer. A support and onboarding specialist joins in month 6, a second engineer in month 9 and the first account executive in month 12. Year 2 adds a second support specialist (month 16), a customer success manager (month 20) and a second engineer (month 22). Year 3 adds the compliance product specialist, a person with production or compliance experience at a producer (month 26), a third support specialist (month 28) and a second account executive (month 30). Year 4 adds a marketing manager (month 38), a finance and operations manager (month 40), a fourth support specialist (month 42) and a third engineer (month 46). Year 5 adds a second customer success manager, a second senior engineer (both month 50) and a fifth support specialist (month 54). Year-end headcount is 6, 9, 12, 16 and 19, all full-time. The founders’ pay sits inside the cost lines, so every profit line is after both have been paid.
Earnings by year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $312,087 | $1,095,000 | $2,120,300 | $3,193,200 | $4,184,300 |
| Direct costs (cloud hosting, email and text delivery, card fees, setup contractors) | ($26,909) | ($94,415) | ($182,819) | ($275,328) | ($360,784) |
| Gross profit | $285,178 | $1,000,585 | $1,937,481 | $2,917,872 | $3,823,516 |
| Payroll incl. on-costs | ($555,837) | ($928,582) | ($1,354,243) | ($1,701,800) | ($2,197,735) |
| Rent | ($24,000) | ($27,000) | ($30,000) | ($46,000) | ($50,000) |
| Utilities | ($3,000) | ($3,200) | ($3,400) | ($4,600) | ($4,800) |
| Marketing | ($72,000) | ($112,000) | ($150,000) | ($175,000) | ($195,000) |
| Insurance | ($12,000) | ($16,000) | ($21,000) | ($27,000) | ($32,000) |
| Professional fees | ($20,000) | ($22,000) | ($26,000) | ($30,000) | ($34,000) |
| Software subscriptions | ($24,000) | ($34,000) | ($48,000) | ($62,000) | ($76,000) |
| Penetration testing, security review and compliance tooling | ($8,000) | ($14,000) | ($20,000) | ($24,000) | ($28,000) |
| Sales commissions on new accounts | ($4,000) | ($45,000) | ($80,000) | ($80,000) | ($85,000) |
| Recruiting fees | $0 | ($10,000) | ($16,000) | ($14,000) | ($12,000) |
| Trade shows, guild dues and customer events | ($6,000) | ($10,000) | ($14,000) | ($18,000) | ($20,000) |
| Equipment replacement and new-hire kit | $0 | ($6,000) | ($8,000) | ($10,000) | ($12,000) |
| Bad debt allowance | ($1,000) | ($2,500) | ($5,000) | ($7,500) | ($10,000) |
| Annual pay raises (3% a year) | $0 | ($27,857) | ($82,473) | ($157,803) | ($275,835) |
| EBITDA | ($444,659) | ($257,553) | $79,364 | $560,169 | $791,146 |
| Depreciation | ($5,250) | ($5,250) | ($5,250) | ($5,250) | ($1,000) |
| Interest | $0 | $0 | $0 | $0 | $0 |
| Income tax | $0 | $0 | $0 | $0 | ($185,193) |
| Net income before start-up costs | ($449,909) | ($262,803) | $74,114 | $554,919 | $604,953 |
| Start-up costs expensed at opening (legal, licensing, launch marketing) | ($45,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($495,409) | ($262,803) | $74,114 | $554,919 | $604,953 |
Year 1 loses $449,909 before start-up costs and $495,409 after them. Year 2 loses $262,803. Year 3 is the first profitable year at $74,114, a 3.5% net margin. Year 4 earns $554,919 (17.4%) and Year 5 $604,953 (14.5%). Income tax appears only in Year 5, at $185,193, once the loss carryforward is used up; that is why net margin falls in Year 5 while the EBITDA margin rises from 17.5% to 18.9%. Payroll including raises is 178% of revenue in Year 1, falls to 68% in Year 3 and settles at 59% in Year 5, with no salary trimmed. Pay raises alone cost $275,835 in Year 5. Sales commissions, marketing and the two account executives together cost about $1,900 per new account in Year 3, under four months of that year’s blended price of $483.
Cash in and out
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($498,945) | ($279,594) | $50,500 | $529,964 | $578,051 |
| Laptops, test devices and office fit-out | ($24,000) | $0 | $0 | $0 | $0 |
| Funding received | $1,100,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | $0 | $0 | $0 | $0 |
| Owner distributions | $0 | $0 | $0 | $0 | $0 |
| Net change in cash | $577,055 | ($279,594) | $50,500 | $529,964 | $578,051 |
| Closing cash | $577,055 | $297,461 | $347,961 | $877,926 | $1,455,976 |
Closing cash is positive in every year. The engine reports year-end balances and spreads Years 2 to 5 evenly, so it does not show the monthly path. Because Year 3 begins near break-even, the true low point falls within a few months of the end of Year 2 and could sit somewhat below the $297,461 year-end figure; the reserve is sized with that gap in mind. Cash recovers through Years 3 and 4 and reaches $1,455,976 by Year 5, with no debt to repay and no distributions.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $577,055 | $297,461 | $347,961 | $877,926 | $1,455,976 |
| Accounts receivable | $10,260 | $36,000 | $69,708 | $104,982 | $137,566 |
| Laptops, test devices and office fit-out (net) | $18,750 | $13,500 | $8,250 | $3,000 | $2,000 |
| Total assets | $606,066 | $346,961 | $425,920 | $985,907 | $1,595,543 |
| Accounts payable (hosting and software invoices) | $1,474 | $5,173 | $10,018 | $15,086 | $19,769 |
| Bank loan | $0 | $0 | $0 | $0 | $0 |
| Paid-in capital | $1,100,000 | $1,100,000 | $1,100,000 | $1,100,000 | $1,100,000 |
| Retained earnings | ($495,409) | ($758,212) | ($684,098) | ($129,179) | $475,774 |
| Total liabilities and equity | $606,066 | $346,961 | $425,920 | $985,907 | $1,595,543 |
Margins and break-even
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -142.5% | -23.5% | 3.7% | 17.5% | 18.9% |
| Net margin (before start-up costs) | -144.2% | -24.0% | 3.5% | 17.4% | 14.5% |
| Payroll incl. pay raises as share of revenue | 178% | 87% | 68% | 58% | 59% |
| Revenue per full-time equivalent at year end | $52,015 | $121,667 | $176,692 | $199,575 | $220,226 |
| Average monthly revenue | $26,007 | $91,250 | $176,692 | $266,100 | $348,692 |
| Monthly revenue needed to cover operating costs | $66,559 | $114,738 | $169,454 | $215,015 | $276,542 |
| Debt service cover (EBITDA / interest + principal) | – | – | – | – | – |
Year 1 averages $26,007 of revenue a month against $66,559 needed to cover operating costs. Year 2 is still short, at $91,250 against $114,738. Year 3 clears the line with $176,692 against $169,454. The debt-service row is blank because the company has no debt.
Every revenue line 20% short
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $249,670 | $876,000 | $1,696,240 | $2,554,560 | $3,347,440 |
| Net income before start-up costs | ($467,144) | ($291,180) | ($42,432) | $258,058 | $444,015 |
| Net income after start-up costs | ($512,644) | ($291,180) | ($42,432) | $258,058 | $444,015 |
| Closing cash | $561,577 | $258,015 | $197,741 | $436,885 | $859,579 |
Revenue runs 20% under the base case on every line and year. Marcus and Priya respond in this order: the second senior engineer is never hired, every hire from month 13 starts six months later, marketing falls 20%, Marcus’s pay falls 20%, and the company stays in its first office. Year 1 hires are untouched because the product has to be built and the pilot accounts supported. Profit is lower than the base case in every year. Year 3 is a loss of $42,432 instead of a profit of $74,114, and the first profitable year slips to Year 4. Year-end cash bottoms at $197,741 in Year 3, and Year 1 equity is $587,356. A flat revenue cut does not test slower trial conversion or higher churn: churn of 30% a year instead of 24% would remove about 6 more accounts in Year 2 and about 15 more in Year 3. The cuts shown are the levers the founders would pull before asking investors for more.
Sources
- Alcohol and Tobacco Tax and Trade Bureau, ttb.gov, the federal regulator for alcohol producers. Named as the body whose requirements customers confirm; no rule, form or threshold is quoted.
- Oregon Liquor and Cannabis Commission, oregon.gov/olcc, the state regulator. Named for the same reason.
- Brewers Association, national beer stats. Its brewery count table lists 9,578 craft breweries for 2025. Single source; the table does not state whether the count is of operating breweries.
- Oregon Department of Revenue, oregon.gov/dor, for corporate excise and corporate activity tax rules. The 6.6% rate in the model is a planning figure that may change; the corporate activity tax is left out of the model.
- Bureau of Labor Statistics, Occupational Outlook Handbook, for software and customer-support pay ranges. Salaries in the model are the plan's own figures; no median is quoted.
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