I started, but don't know if I'm going in the right direction:
Here is the information on the sheet:
Your carpet cleaning entrepreneurship:
Supposed that your hometown is Petoskey, Michigan. After college graduation you decided to go into business for yourself because you couldn't find a job that you liked in Petoskey and you desired to stay in the area. You decide to start a new type of cleaning business in Traverse City.
During the month of December, you borrow $20,000 from your father and agreed to pay him back $4,000 per year, beginning in year two with no interest. You also have received a girft of $5,000 from your grandfather's family trust and you decide to use it to start your business. Further, your have convinced your dad to allow you to start this business out of his garage. You want to draw a salary of $1,500 per month for the first year.
During December, you spend $18,000 for a new panel truck. In addition, you spend $1,250 for a steam cleaning, $800 for a heavy-duty commercial vacuum cleaner, and $100 for special brushed and attachments. The panel truck will be depreciated over a 5 year life, based on a straight-line method of depreciation. The steam cleaner, vacuum cleaner and brushes and attachments will be depreciated over a 3 year life, based on straight-line method of depreciation.
You also figured that you would have several monthly expenses when you start your business, beginning on January 1st.: $100 of cleaning solvents per month, $200 for insurance per month, $160 for fuel per month, and $500 per month for advertising in the local paper and on radio.
From your work experience while in college, you realized that you would be able to gross about $1,200 per month, except for May through August. During May through August, you would be able to gross $250 per day, working 6 days per week, or about $6,000 for each of these four months.
Can someone help me create it?
Based on the information provided, it seems like you are trying to create a financial plan for your carpet cleaning business. Here are some steps you can follow to create your plan:
1. Start by calculating your initial investments and financing:
- You borrowed $20,000 from your father, to be paid back at $4,000 per year, starting in year two with no interest.
- You received a gift of $5,000 from your grandfather's family trust.
- You spent $18,000 on a new panel truck, $1,250 on a steam cleaner, $800 on a vacuum cleaner, and $100 on brushes and attachments.
2. Calculate depreciation for your assets:
- The panel truck will be depreciated over a 5-year life using straight-line depreciation.
- The steam cleaner, vacuum cleaner, and brushes/attachments will be depreciated over a 3-year life using straight-line depreciation.
3. Determine your monthly expenses:
- Starting January 1st, you will have monthly expenses including $100 for cleaning solvents, $200 for insurance, $160 for fuel, and $500 for advertising.
4. Estimate your monthly gross income:
- You expect to earn $1,200 per month, except for May through August when you can earn $250 per day, working 6 days per week.
5. Calculate your net income and cash flow:
- Subtract your monthly expenses from your monthly gross income to determine your net income.
- Determine your cash flow by subtracting any loan payments and depreciation expenses from your net income.
By following these steps and performing the necessary calculations, you should be able to create a financial plan for your carpet cleaning business.