# SNS Infrastructure — 12-Month Cash-Flow Model

**Purpose:** A simple, lender-ready month-by-month projection for Business #1,
based on the loan-funded runway + builder-operator + contractor-labor plan. Pairs
with [`operator-compensation-proposal.md`](./operator-compensation-proposal.md).
Editable version: [`cash-flow-model.csv`](./cash-flow-model.csv).

> Illustrative projection, not a guarantee. A lender will also want the operator's
> real pipeline. Adjust the assumptions in the CSV to model your own scenarios.

---

## Assumptions

| Input | Value | Notes |
|-------|-------|-------|
| Loan drawn (month 0) | **$75,000** | Payroll runway + startup + buffer |
| Operator loaded cost | **$9,600/mo** | $6,500 base + ~28% burden + $500 insurance + $500 vehicle + $300 software |
| Gross margin | **40%** | Revenue minus contractor labor + materials |
| Commission | **10% of gross profit** | Builder incentive, paid monthly |
| Loan repayment | **$1,400/mo, starting month 7** | Assumes 6-month deferral; ~$75k over ~6 yrs |
| One-time (month 1) | **$12,000** | Tools/certifier ($8k) + launch/marketing ($4k) |
| Build bonus | **$10,000 in month 7** | Milestone hit by month 6 (see below) |
| Owner draw | **$0** | Owner is part-time, unpaid, keeps a W-2 job |

**Contractor labor is inside the 40% margin** — it's paid from each project's
revenue and never drawn from the loan.

---

## Monthly Projection

Dollars. "Cash Balance" starts from the $75,000 loan draw.

| Month | Revenue | Gross Profit (40%) | Fixed OpEx | Commission | Loan Pmt | One-time / Bonus | Net Cash Flow | Cash Balance |
|------:|--------:|-------------------:|-----------:|-----------:|---------:|-----------------:|--------------:|-------------:|
| 0 (draw) | — | — | — | — | — | — | +75,000 | **75,000** |
| 1 | 0 | 0 | 9,600 | 0 | 0 | 12,000 | −21,600 | 53,400 |
| 2 | 7,000 | 2,800 | 9,600 | 280 | 0 | 0 | −7,080 | 46,320 |
| 3 | 14,000 | 5,600 | 9,600 | 560 | 0 | 0 | −4,560 | 41,760 |
| 4 | 22,000 | 8,800 | 9,600 | 880 | 0 | 0 | −1,680 | 40,080 |
| 5 | 28,000 | 11,200 | 9,600 | 1,120 | 0 | 0 | **+480** | 40,560 |
| 6 | 34,000 | 13,600 | 9,600 | 1,360 | 0 | 0 | +2,640 | 43,200 |
| 7 | 40,000 | 16,000 | 9,600 | 1,600 | 1,400 | 10,000 (bonus) | −6,600 | 36,600 |
| 8 | 44,000 | 17,600 | 9,600 | 1,760 | 1,400 | 0 | +4,840 | 41,440 |
| 9 | 48,000 | 19,200 | 9,600 | 1,920 | 1,400 | 0 | +6,280 | 47,720 |
| 10 | 50,000 | 20,000 | 9,600 | 2,000 | 1,400 | 0 | +7,000 | 54,720 |
| 11 | 52,000 | 20,800 | 9,600 | 2,080 | 1,400 | 0 | +7,720 | 62,440 |
| 12 | 54,000 | 21,600 | 9,600 | 2,160 | 1,400 | 0 | +8,440 | **70,880** |

**Year 1 totals:** Revenue **$393,000** · Gross profit **$157,200** · Commission
**$15,720** · Fixed OpEx **$115,200** · Loan payments **$8,400** · One-time
**$12,000** · Bonus **$10,000**.

---

## What the Model Shows

- **Cash never runs out.** Lowest point is ~**$36,600** (month 7, when the bonus +
  first loan payments land). The $75k loan carries the business comfortably.
- **Monthly break-even ~month 5** — gross profit first exceeds monthly costs.
- **Self-funding milestone hit by month 6** — gross profit ≥ the operator's loaded
  cost (~$8,300) for 3 straight months (M4–M6), triggering the **full $10k bonus**
  (paid month 7).
- **By month 12** the business throws off ~**$8k/month** of surplus to service the
  loan and build reserve — it's standing on its own, which is your green light to
  start Business #2.

---

## Downside Sensitivity (read this)

The ramp above assumes the builder-operator gains traction steadily despite a
part-time owner. Stress-test it:

- **At ~50% of this revenue ramp**, gross profit crosses the operator's cost closer
  to **month 9–10**, not 6. The loan still covers payroll through the runway, but
  the cushion gets thin by year-end and the bonus tiers down (the $6k/$3k tiers in
  the comp proposal exist for exactly this).
- **Biggest risks:** slower sales cycles (B2B jobs take 1–3 months to close),
  thinner margins on early jobs, or the operator being pulled into delivery instead
  of selling. Keep the **loan buffer** and don't spend the reserve early.
- **Best hedge:** land 1–2 **recurring** service/maintenance clients early —
  predictable monthly gross profit de-risks the whole ramp.

Model your own low/base/high cases by editing the Revenue and Gross-Margin columns
in the CSV.

---

## Formulas (for the spreadsheet)

- Gross Profit = Revenue × Gross Margin (40%)
- Commission = Gross Profit × 10%
- Fixed OpEx = $9,600 (constant; raise it when you add a W-2 tech)
- Net Cash Flow = Gross Profit − Fixed OpEx − Commission − Loan Pmt − One-time − Bonus
- Cash Balance = prior Cash Balance + Net Cash Flow