sns-network-solutions/businesses/01-networking/cash-flow-model.md

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. Editable version: 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.

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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.

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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.

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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.

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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.

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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