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Painting invoice example for businesses

hey if you're looking to start a painting business and you need a set of financial projections maybe for an SBA loan application or a potential investor then you have come to the right place because we have created a financial projection template built specifically for a painting business and I'm going to walk through how this template Works how to fill it out and and what the deliverable is and make sure you feel comfortable before you go and present to potential lenders and investors uh so I'm going to put a link in the description of the video below to this particular template so you can grab that and follow along uh also if you stick around to the end of the video as our thank you to you for sticking around to the end uh we're going to give you access to a coupon code our most upto-date coupon code uh that you can use to take a discount on this template and before I jump into the template just a little bit more background on me my name is Adam hooka I'm the co-founder of projection hub and before starting projection hub I actually spent a decade as the executive director of an SBA lender where we made over 1500 SBA Loans during my time there um so I come to this process of creating projections from A lender perspective and you know during that SBA experience you know all a lot of our clients also had to raise Equity from investors as well so have a good understanding of of how to present a set of projections to potential investors as well okay so with that background out of the way let's go ahead and dive into how this template works okay so I am on the at a glance tab here this this is kind of the end of the process so wanted to kind of start with the end in mind here once you fill out all the assumptions you're going to see a profit and loss at a glance table here some summary data some graphs and charts that you'd be able to pull into a business plan or a pitch deck you're also going to get a an a five-year income statement summary a five-year cash flow summary a 5year balance sheet and then the income statement cash flow and balance sheet broken down by month for each of the five years so if you're applying for an SBA loan they're typically going to ask for monthly projections for at least the first couple of years in addition to the annual projections uh so we're going to give you the full five years just in case you need that all right so in order to produce those reports we have a little bit of work to do though and so I'm going to jump back here to our input assumptions Tab and kind of walk you through so the first thing you need to know is that any cell that's highlighted in blue is an assumption that you can change without breaking something in the model and the other thing I want to point out at this point is we actually have created two versions of this template or filled it out in two different ways and So when you buy the template you're going to get access to actually two different variations of the template it's really the same structural template but filled out a different way so the first way and the way I'm going to walk through here first is a single unit location or a single unit of the business so imagine you start a a painting business in one city and then maybe in the future you actually want to expand your market and and go into another city you know add multiple units of the business so this core template structure allows for that it allows you to add in uh multiple locations now for most folks and and probably if you are applying for an SBA loan for example you probably don't want to scare them away with your grand vision of you know how you're going to have 10 locations by the end of next year or something like that right so a lot of times what I recommend is for a loan application if you're just starting your first location do a projection just for that individual location but you can use this other variation that I'll show you at the end for a multi uh multi-unit business just for your own internal planning and kind of seeing how this scales and over time how you can plan for multiple locations so okay let's let's take a look at the the different input assumptions so you can set the projection start month if you have a current cash balance in the business bank account you can put a cash balance in here and now here's the location opening schedule and so again in this first example we're just going to have our one single location opening on month one on the accounts receivable side again we're assuming this is a startup here so we have zero on the accounts receivable balance and no accounts payable balance no inventory balance so all those you've got set to zero here on the accounts receivable section here this average Day sales outstanding this is how many days it takes after you provide the service to get paid and so this is probably going to depend on whether you're focused on residential or commercial if you are residential you're probably going to get paid right away or up front when you provide the service so if that was the case you could just put zero here cuz you're going to get paid on the same day if you're doing commercial work it might be that you provide the service and then you have to wait 15 days 30 days to get paid you might have to invoice and then wait to get paid so if you have a mix of both that's why we put 15 days in there maybe some of your residential customers pay right away some of the commercial customers take longer to pay so that's going to impact your cash flow and so that's an important assumption here on the accounts payable side this is on your your expenses how fast you pay your expenses so we put 15 days here we expect you know some of your expenses like when you fill up the gas tank with fuel you might put that on a credit card when you go get supplies when you get paint you might put that on a credit card and have some period of time you know 30 days after you charge that to actually pay that credit card bill so again that can kind of help your from a cash flow perspective starting inventory this would just be the amount of kind of initial inventory you would want want to have so this could be you know paint supplies really consumable items that you're going to use in the process of your jobs you might have some initial inventory on hand and then this is just make sure that you keep a a supply of inventory on hand at all times and so I'm going to just make that a small percentage because probably what you're going to do mostly is go buy the inventory for each individual job you're probably not going to hold a whole lot of inventory just on hand so we'll put a small amount there at 10% okay Equity investment so if you are looking for an SBA loan the SBA is going to expect that you have some Equity some skin in the game and so whether that's your personal investment that you're investing into the business or you've raised money from outside investors probably should have at least 10% of the total project cost as equity and a lot of times for startups you know lenders are going to want even more so in this example we we put in 50,000 in equity that we're putting into the business and then down here we have a a startup loan at 75,000 so for a total kind of startup cost that we're we're looking at of 125 okay so here we have our fixed assets and in this example I put in a section here for leasehold improvements now you may not have a office you may not rent a space or a showroom room or anything like that but I wanted to show if you for example let's say you did have a a showroom that you know would allow customers to come in look at different paint options maybe see what it looks like on a wall or something like that you you could you could have a showroom and you could let's say you rented that out and then let's say it was going to cost $225,000 to to remodel or get that showroom up to up to the level that you want to show off to customers so we have $25,000 there for leasehold improvements and then tools and equipment here we have 10,000 for tools and equipment now if you had uh Vehicles if you bought a vehicle you could put that vehicle here and fix assets as well I'm actually going to show in the model leasing the vehicle it's a little simpler to model and just kind of have some base assumptions on the lease cost but you could put in a a purchase of a vehicle as well okay so I've already showed the loan here and we're saying we close the loan in month one we've got to start our first payment in month two we've got 10% interest rate over a 10year term okay so down here you're going to see this green box that says how much cash do I need and you'll see your location here the cost of the fixed assets from up above how much working capital you're going to need which is based on the revenue and expense projections that we're going to work on here in a minute and so ultimately says hey you're going to need 35,2 30 bucks and we've got 50,000 invested here in equity and 75,000 in debt so we've got plenty of room 125,000 and so we can easily cover these these costs and you know it might make sense in this if this were the situation that you found yourself in you might say well maybe I don't need to borrow quite so much at the same time it might make sense if you're able to borrow you might want to have that extra cushion to help help you ramp up over a period of time okay let's go ahead and look at our Revenue tab now so in this box we're going to show when we hire painter one and two so we've got painter 1 and two here number of employees is two employees because we got both of those two painters and we're hiring them in month one then let's say we're going to expand we're going to hire two more painters here in month six and then an additional two in month 13 and maybe we think you know that's kind of the team we're going to we think for this location we're going to have six employees and then we can say Okay weekly work hours per employee is 40 hours we're going to pay them $20 an hour and then here is what percentage of their time is actually going to be billable so of those 40 hours how much are they actually going to be what percentage of that are they actually going to be on the job doing billable work and then here is is what is the average hourly Bill bow rate charged to customers so as you think about how you price your jobs obviously you're going to have the cost of materials and the cost of Labor are kind of the two things that you have going into pricing a job and my expectation is that as you're thinking about how to price the labor component you probably have a a goal an estimate in mind for kind of a an average billable hourly rate that you're hoping to bill for the team number so you're going to you're going to have some idea of okay here's the job we think it's going to take us 10 hours and so we we're going to charge 1,000 bucks for the job because we'd like to try to make $100 an hour for our for our labor you know so that that's kind of the idea here as we as we think about how to how to charge for this so I've got an average hourly billable rate charge your customers at $100 an hour we're saying the average hours per job is 24 hours for the average job so this gives you an idea of how many jobs per employee per week now you might have teams right so it could be that might not have just one painter might have two of them on one job or four of them on one job for example and then here's the average revenue per job the 24 hours times $100 an hour then here is the base Revenue per employee per week so in theory if the average employee is going to make have 36 billable hours per week they should be able to generate 100 time 36 hours so 3600 bucks a month or a week in billable Revenue here's where we can build up like a a ramp up period so and this is where that extra working capital could come in really handy so months to reach full billable potential per employee so as you hire new employees you may not have the sales immediately to get them like up to full capacity so for example we could say you know what it's going to take 4 months for us to kind of build up every time we hire new employees it's going to take four months to kind of get them up to that full 90% capacity so here we have our annual price increase that we're going to charge to customers here at 5% all right so then next we have a handful of calculations and then our cost of goods sold section we've already handled the direct labor portion because we have the the labor related to these assumptions we're paying the employees $20 an hour they're working 40 hours a week and we know how many employees we have so this is calculating based on that 20 an hour and 40 Hour Work Week the the average and then we also have taxes we estimated that to be 8% of their uh wages to go towards taxes and benefits and then we have a job materials per employee per month or really this you can just think of this about as you know what's your material cost average on a job so if we say you know we think typically 20% of the cost of the job is going to be spent on materials so we could put 20% in here so again think about this you've got we're charging $100 an hour 24 hours for the average job so the average jobs $2,400 now out of that is going to come your material cost right so you're going to you're going have to pay for labor you're going to have to pay for that material cost out of that 2400 for the average app so that's how that's going to work and then we also put in a variable cost uh Fuel per employee per month at 3% of total revenue spent on fuel driving around to jobs we said annual cost increase uh maybe we'll bring that down hopefully inflation is is at 3% okay so that's it on the revenue and cost of good sold side here is our operating expenses so we can set things like advertising and accounting and credit card processing fees and so you have a lot of flexibility here you can set different categories of expenses so you can create categories up here and then they'll show up in this drop down you can say Okay advertising is going to be sales and marketing and we can set a cost driver so you can set it as a percentage of Revenue a per location fixed dollar amount so if it's like phone that you're going to have at every every location it's 100 bucks and it's a per location expense so you could set per location and then corporate corporate expense would be um an expense that's not really tied to any individual location uh so it wouldn't matter if you have one location or five locations it's just the same fixed corporate level expense okay so different ways to handle that so accounting for example we set as a per location fixed expense at $500 a month because we think each new office you open or location or Market you go into you're probably going to have additional accounting expenses there we have rent here we have sales commissions um so if you're paying your your sales team a commission you can set that commission right here and then again for the vehicle we didn't put the vehicle on the fixed assets we we just put it in here as a percentage of revenue for a lease which is a little more scalable so as Revenue increases instead of trying to figure out okay now I need to get another vehicle here and another vehicle here this vehicle leasing cost is just going to scale and increase as your revenue and and business increases and then the last input tab here is our salaries and owner draw Tab and so here we can set let's say we have you know you as the owner you're going to take a $75,000 annual salary got employer taxes benefits of 10% and you're going to start in month one taking that salary and there is just one of you as an employee and then let's say we want to add a manager so we're going to add a manager in uh year three the beginning of year three so month 25 here we're going to add that manager at 55,000 a year and and that is really it on this single unit location so as we you know once we've completed that we can kind of see the results here kind of just breaking even in that first year and then ramping up over time to a little over you know 1.3 million in Revenue 233,000 in profit now let me show you quickly our multi-unit location template just so you can get an idea so it's the same template but we have just a couple we filled it out differently so you can get a quick idea if you wanted to model out opening multiple locations so here we've got location one two and three location two we're going to open in month 13 then location three in month 25 you could set Equity Investments tied to the particular location let's say we only need the equity investment for the first location then after that the startup costs of the new locations are just going to cash flow automatically you're not going to need to raise additional Equity investment on the fixed assets we can set the location you know leasehold improvements for each location and the equipment needed for each location and kind of layer that in now here's an important point this purchase month so this says purchase month relative to location opening month so since you have selected here that this Associated location is location 2 the models going to know from up here the location 2 is not opening until month 13 so when you select that you're going to have pay for lease hold and for um equipment here in month one of location 2 the model is automatically going to know that that means month 13 okay so think of this as like this is the month that it's opening relative to when the schedule it's the first month that the second location is open right and so it's going to automatically take care of that for you and then you can have a loan down here as well and the loan situation is the same thing so if you had multiple loans for those additional locations you pick month one but tie it to the associated you know second location it's going to know okay we're getting a loone when that location opens okay so you want to check this green box again if you're adding multiple locations to be able to see hey do I have enough cash here sufficient Cash open the location yes and what we see here is that you actually have enough cash to be able to open those new locations just from your internal cash flow and the profits of the first location help you open the second location profits of the first two locations give you the cash you need to open the Third location so that's how that is all working now just to show you how this would work again this is per location input so so it's assuming here that for the first location you're going to hire the first the six painters in this kind of this order on month one 6 and 13 for the second location you're going to follow that same the same pattern so you open the second location in the first month you're going to hire two employees and and so on right so the roll out is going to work kind of that exact same way all of this is really exactly the same you can see here now this Revenue as it ramps up as you add in a second location here month 13 now we see Revenue coming in from that second location and so on and then this is all exactly the same as well this looks exactly the same as well between the two variations now the salaries and owner draw tab there's just one extra little section down here for this multilocation idea where we can set a location manager for example and have them these would be people that would be hired as salary people for each location so when you open a new location ing to that schedule it's automatically going to add a location manager starting on month one when when you open that new location so um that is how this multilocation model will work if you have any questions about any of this feel free to reach out to us at support projection hub.com or if you are kind of watching this video and you're like you know I have I know what I want to do I just want someone to fill this out for me and I where I can just describe my plans and someone can fill it out for me we'd love to be able to help you with that we do offer a template fill out service where we could fill it out or customize it for your specific situation so feel free again to reach out at support projection hub.com and we can help with that all right thank you for sticking around to the very end here as as promised uh if you go down in the description of the video below you're going to see a link to a form if you click that link fill out that form we're going to email you our most upto-date coupon code that you'll be able to use and and take a discount as our thank you for sticking around to the end here and then finally if you found this video to be helpful in your process we'd love it if you like the video give us a thumbs up subscribe to our channel that helps us help more people so we appreciate you and want to hope the best for your projections here and just let us know how we can help thanks for