Cash Flow Projection
What breaks the model: delivery hours, not demand.
$0
Starting Cash
Bootstrapped
$800
Monthly Burn
Fixed costs
M4
Break-even
Base case
$25.8K
M12 Cumulative
Base case
| Assumption | Value | Conviction | Risk If Wrong |
|---|---|---|---|
| New customers/month | 0.5-1.0 (ramp) | LOW | Slower ramp = longer runway burn |
| Monthly growth rate | 25% MRR growth after first client | LOW | Linear growth more likely |
| Churn rate | 15%/month (6-month avg retention) | MEDIUM | Higher churn = no compounding |
| ARPU (Trail Builder) | $2,500/month | MEDIUM | Price elasticity untested |
| Fixed costs | $800/month | HIGH | Known: tools + hosting + insurance |
| Variable cost/client | $1,000/month (delivery labor) | LOW | 2x hours = $2,000 = kill scenario |
| Item | Monthly | Annual | Priority |
|---|---|---|---|
| Tools (CRM, analytics, email) | $200 | $2400 | KEEP |
| Hosting (Vercel, domain) | $50 | $600 | KEEP |
| Insurance (professional liability) | $150 | $1800 | KEEP |
| Content tools (AI, design) | $100 | $1200 | KEEP |
| Accounting/admin | $150 | $1800 | CUT FIRST |
| Reserve/misc | $150 | $1800 | CUT FIRST |
| Total | $800 | $9,600 |
12-Month Projection (Base Case)
Month 2 assumes one Berley Audit ($1,500). Retainer clients start Month 4. All numbers projected.
| Month | Clients | Revenue | COGS | OpEx | Net | Cumulative |
|---|---|---|---|---|---|---|
| 1 | 0 | $0 | $0 | $800 | $-800 | $-800 |
| 2(1 Berley Audit) | 0 | $1,500 | $600 | $800 | +$100 | $-700 |
| 3 | 0 | $0 | $0 | $800 | $-800 | $-1,500 |
| 4(First retainer) | 1 | $2,500 | $1,000 | $800 | +$700 | $-800 |
| 5 | 1 | $2,500 | $1,000 | $800 | +$700 | $-100 |
| 6(Break-even) | 2 | $5,000 | $2,000 | $800 | +$2,200 | +$2,100 |
| 7 | 2 | $5,000 | $2,000 | $800 | +$2,200 | +$4,300 |
| 8 | 2 | $5,000 | $2,000 | $800 | +$2,200 | +$6,500 |
| 9 | 3 | $7,500 | $3,000 | $800 | +$3,700 | +$10,200 |
| 10 | 3 | $7,500 | $3,000 | $800 | +$3,700 | +$13,900 |
| 11 | 4 | $10,000 | $4,000 | $800 | +$5,200 | +$19,100 |
| 12 | 5 | $12,500 | $5,000 | $800 | +$6,700 | +$25,800 |
Three Scenarios
All assume 60% gross margin. If delivery hours run 2x, margin drops to 20% and conservative never breaks even.
| Metric | Conservative | Base | Bull |
|---|---|---|---|
| Month 6 MRR | $2,500 | $5,000 | $7,500 |
| Month 12 MRR | $5,000 | $12,500 | $20,000 |
| Month 6 Clients | 1 | 2 | 3 |
| Month 12 Clients | 2 | 5 | 8 |
| Gross Margin | 45% | 60% | 65% |
| Founder hrs/wk | 40 | 35 | 30 |
| Break-even | Month 8 | Month 4 | Month 2 |
| 12mo Revenue | $30,000 | $75,000 | $135,000 |
Milestones
First dollar
First Berley Audit paid
Break-even (monthly)
Revenue exceeds OpEx
Positive cumulative
Cumulative cash turns positive
Freedom threshold
$15,000 MRR (replaces salary)
Cumulative cash still negative at Month 8
Threshold: Below conservative scenario
Action: Reduce scope or reprice
Delivery cost exceeds 80% of revenue
Threshold: Gross margin below 20%
Action: Stop taking clients, templatize
Zero revenue at Month 4
Threshold: No audit or retainer sold
Action: Re-evaluate demand hypothesis
Monthly burn exceeds $1,200
Threshold: 50% above plan without revenue
Action: Cut discretionary costs
Questions
Which assumption, if wrong by 2x, kills the business fastest?
- If conservative is reality, is $5,000 MRR still worth pursuing?
- At what client count does hiring a junior become cash-positive?
- Does the $100/hr opportunity cost belong in the cash flow or only in the decision?