Graffiti Removal Service Business Plan
GRAFFITI, USA
8100 Los Ablos Blvd.
Boulder City, Nevada, 89700
Written for a graffiti cleaning business, this plan details the research and preparation that are required by both the franchisor and franchisee when opening franchises in a new territory, area, or city.
- EXECUTIVE SUMMARY
- THE CONCEPT
- MARKET ANALYSIS
- MANAGEMENT
- CUSTOMERS
- FORECASTING REVENUE
- UTILIZATION OF FUNDS
- CONCLUSION
- APPENDIX
EXECUTIVE SUMMARY
Graffiti, USA is a sole proprietorship business in formation. Our licensing agreement is with Hodan Enterprises, Incorporated dba Graffiti, USA, Houston, Texas. Our company offers various cleaning and stripping services using modified baking soda under pressure of water or air and a protective wall coating service. The company's primary goal is to establish premier graffiti removal, abrasive cleaning and coatings service in the Boulder City and Las Vegas areas.
To open Graffiti, USA, we are asking for a revolving line of credit of $ 30,000 to purchase capital equipment and a business supplies package including materials, stationery, and incidentals.
The company plans a phased opening beginning with the purchase and outfitting of the service van and the training of key personnel. Then, our marketing efforts will be streamlined to target our carry-over client base and to capture the Boulder City and Las Vegas graffiti removal market. Conceptually, the baking soda cleaning method will be combined with a waterproofing and protective coating service for walls to provide a complete graffiti and grime removal and prevention system.
Our market does not fully exist in these areas yet, but pressure washing and sandblasting customers closely resemble our clients. Applications for our services include graffiti removal, auto and aircraft paint removal, commercial kitchen and industrial plant cleaning, pressure washing or blasting of sidewalks and hotel valet areas, waterproofing residential development walls, and more. Based on our research, and from detailed information from Graffiti, USA in Houston, Texas, we predict this market will reach $ 200,000 or more in sales within the next two years.
Direct competition does not exist for our combined services. Individually, graffiti removal, pressure washing, wall restoration and coating, and soda blasting companies account for over $1.3 million dollars in annual sales in Boulder City and the Las Vegas valley. Our ability to remove with baking soda, coat and waterproof with environmentally safe products, and benefit the community by graffiti removal are unique in these areas.
The Graffiti, USA system has been a successful business opportunity for over three years in Houston, Texas. We will tap into their knowledge base and use the unique atmosphere of Nevada to force rapid growth and a competitive edge. Graffiti, USA's versatility and innovation will generate high-volume sales and a rapid return on investment.
THE CONCEPT
The science of graffiti removal can be considered to be in its "grass roots" developmental stage. Certain techniques of removal, such as muriatic acid treatments or "hydroblasting" with sand and water and using hydrochloric acid to clean concrete walkways, are common in Nevada. This old technology is not only ineffective but dangerous.
Product/Service Description
The principal method of operation and revenue generation for Graffiti, USA is abrasive cleaning and paint stripping through graffiti removal and abatement contracts. In theory and method, the systems and procedures offered will not only fill many current voids but will develop an industry altogether. Our combination of unique and effective services will attract statewide publicity, benefit the environment, and place Graffiti, USA in its own niche market.
Graffiti, USA uses the Harly Accustrip soda blaster as the principal means of abrasive cleaning and stripping. Complimenting the blaster is the Wand attachment for the Hydroblaster 3000 psi hot water pressure washer. This battery of soda blasting methods and the graffiti and grime abatement contract, developed by Graffiti, USA over two years ago, is more effective than conventional pressure washing and safer than sandblasting.
Abatement Contract
Once the cleaning and blasting are finished, Graffiti, USA completes the job by spraying a superficial coating on the application to make subsequent removal faster and significantly less expensive. Graffiti or tagging can be called in, or a long-term abatement contract will guarantee the property to be free of graffiti and grime with minimum participation from the client for a year or more. Under the contract, a weekly patrol is set up for the property and, when required, removal is scheduled and documented. The philosophy of the abatement contract is to be as relentless and determined as the problem, eliminating the high cost of repeated "reactive" removal.
Protective Coatings
In Nevada, the process of maintaining any size property involves heavy watering of the plants and landscaping. Consequently, over watering, translocation, and effluorescence reach and eventually destroy retaining walls, sidewalks, and other masonry. Protection through coatings and sealants has thus become a $ 300,000.00 annual industry.
As part of Graffiti, USA's versatility, we'11 use current assets and knowledge to bid and provide waterproofing and protective coatings services under contract. A commonality of equipment and service exists, and minimum training is required for our technicians to perform virtually any coating job.
Pressure Washing
Graffiti, USA's equipment assets include a powerful Hydroblaster 3000 psi hot or cold water pressure washer which allows for rapid and aggressive cleaning of cement, asphalt, and other applications. Pressure washing and steam cleaning account for nearly $ 500,000.00 in annual sales in the Boulder City and Las Vegas markets and are growing rapidly. Graffiti, USA will use pressure washing as a performance multiplier and to round out our current services.
Potential
Using the input of the three existing licensees in Texas, net profit margins of 15 to 20% can be expected beginning the first year. Ideally, Graffiti, USA will service the kitchens, schools, common walkways, parking areas, walls, frontages, and other areas of the many hotel/casinos and increasing industrial properties in the Las Vegas and Boulder City areas. In addition, our services will be involved in auto and boat prep and stripping, food plants, construction subcontracting, and residential property maintenance.
As two of the fastest growing cities in the nation, both cities' graffiti abatement market, about 30% of our estimated business, is poised for immediate expansion. Versatility, depth of coverage, and focus give Graffiti, USA excellent potential as a money-making opportunity.
Pay Back
For most customers, the Graffiti, USA method of service will pay for itself in terms of a quality clean never before demonstrated or known to be available. Other benefits include the fact that our method won't impact the underlying paint of the application or the substrate, overall abatement costs will be far less than continual removal services because of the superficial coating, and Graffiti, USA technicians will be on the property for less time than the nearest comparable method because of the greater aggressiveness of baking soda blasting. All Graffiti, USA products are safe, benign, and are friendly to the environment, which means no possibility of costly EPA or local fines and restrictions.
Planned Products/Services
Graffiti, USA will be in greater touch with the needs and desires of the community. We promise a strong orientation on product and service improvement to meet the needs and desires of both markets. New products on the drawing board include citrus-based solvents and cleaners, wider bands of baking soda media, and numerous non-chemical coatings and pre-treatments.
Financial Management
Monthly cash flow from sales will be used to service bank debt. The line of credit will be guaranteed by personal and company assets and receivables. Graffiti, USA will maintain a business checking account through the same institution and provide detailed financial statements on a recurrent basis.
Based on a 40% market share for our service, we estimate our return on investment measured in gross profits to be as high as 250% for the first year. The current indicators show the average monthly sales will involve approximate gross profits of 3 7% due to the low labor and material costs (cost of sales). Cash flow management, budget, payroll, and job cost control will be closely monitored and balanced.
All Graffiti, USA financial statements, budget, payroll, expenses, and other functions will be handled on computer spreadsheets and text programs. Financial data will be organized on a Lotus-style spreadsheet and contact management, accounting, and collections will utilize the ACT for Windows program. In the future, Graffiti, USA also plans to establish a networking "on-line" database and communication system for faster and more efficient corporate communication.
| Estimated Annual Sales | |
| Year 1 | $170,000 |
| Year 2 | $240,000 |
| Year 3 | $270,000 |
| Year 4 | $320,000 |
| Year 5 | $330,000 |
Concept for Growth
Graffiti, USA performs all service functions from a full-size van, referred to by the company as a mobile unit. Each complete van system, including the technician and a helper, generates $1,000.00 in daily sales. Service volume/sales increase can reach as high as 80% in just the first two years from multi-shift, multi-crew utilization and the addition of one service van.
We also plan a strong publicity campaign to earn the endorsements and support of the local police, scouting organizations, and community clean-up/awareness groups. Community volunteer work and special projects will earn high-quality free publicity from TV stations, newspapers, awareness groups, and other media.
Position for Growth
- Understand customers, competition and industry.
- Product/service/customer congruency.
- Service versatility.
- Balance people/management/business goals.
- Community orientation.
- Operate at 5 vs. 1 employees.
- Hire the best people.
Other objectives we have set for ourselves include expanding into other western cities as a future regional franchise distributor.
MARKET ANALYSIS
Marketing Concept
Since 1991, Las Vegas has been the fastest growing city in America and the second most popular tourist destination in the U.S., next to Disney World. Construction, tourism, conventions, and population growth in Las Vegas breed some of the most successful companies in America. Companies that bring sound ideas and new or better technology to this market experience minimum competition and high rewards.
Boulder City has also been expanding consistently since 1991, but not at the same rate as Las Vegas. Yet, the market here is untapped. Residential areas, schools and businesses all would benefit from our successful removal systems.
Users of cleaning and pressure washer services in Las Vegas and Boulder City are looking for quality and productivity improvements. The complete lack of development of the pressure washer and steam cleaning industry leaves the door wide open for new and better methods. Graffiti removal is another field that has suffered because of primitive methods and lack of dedicated services in both areas.
Our marketing concept is threefold: show how and why the baking soda blasting technology out cleans pressure washers and scrubbers, explain and sell the concept of a superficial wall coating for easy graffiti removal, and show how and why waterproofing and coating walls adds life and improves their overall appearance.
The National Market
The overall market for abrasive cleaning is projected to skyrocket by the year 2000. The area of greatest sustained growth in the soda blasting market is in the service of stripping and removing paint and surface coatings from various applications. This could be from automobiles, construction equipment, flooring, roads, structures, or other surfaces. Additionally, removal of fats, oils, and greases (FOG) in food serving and processing and certain construction applications will account for roughly 20-50% of the market.
The major national market segments are:
- Industrial manufacturing plants
- Industrial/commercial/residential properties
- Industrial/commercial kitchens
- Automotive paint and body services
- Graffiti and paint removal
- Construction and demolition
The Boulder City and Las Vegas Markets
Our own local research shows that there are about 10-18 steam cleaning/pressure washing services in Boulder City & Las Vegas, some calling themselves auto detailing services. There are also approximately 4 companies owning soda blasters and providing cleaning and stripping as their primary or peripheral service. The growth potential for soda blasting/graffiti removal specialty companies is high because of greater system reliability, continuity in method, focus, technology improvement, and dedication to the industry.
Business owners, school administrators, hotel engineers, painting contractors, property managers, bar and restaurant owners, and other professionals, polled unofficially, agree that the safe and effective baking soda blasting technology is a viable alternative to their current methods and resources. The growth and existence of large public access and commercial properties in both communities mean a greater market and increased concern for aesthetics, preservation, and cleanliness of walls, floors, machinery, and other assets.
Anticipated local applications include:
| •Graffiti removal | 30% |
| •Industrial properties | 20% |
| •Commercial kitchens | 15% |
| •School and commercial properties | 15% |
| •Auto/aviation | 10% |
| •Residential | 10% |
Graffiti Removal and Abatement Segment
This segment of the market is generally based on the more effective removal of graffiti and the application of superficial coatings under contract. The vast majority of sales in this category will be handled by "patrolling" client properties weekly and subsequent abatement under long-term contracts. The minority of sales will be through direct on-call channels.
Over the past three years, graffiti removal performances have shown that there is extensive need for improvement. These "competitive" companies have primarily focused on the use of chemicals, sandblasting, power washing, and over-painting to remove the graffiti. The sales potential for a service with a guaranteed removal and abatement package, which is what Graffiti, USA will offer, is approximately 150-300 thousand dollars annually.
Industrial Properties and Kitchens
This segment is based on the efficiency and effectiveness of blasting with FDA food grade, chemical-free baking soda in industrial applications. The majority of sales in this category will be handled by controlled blasting of kitchens, frontages, and other areas of hotels/casinos, industrial properties, and processing plants. The focus of sales and marketing efforts for these services is the establishment of long-term (1 or more years) contracts. The minority of sales in this segment will be on-call services or unique applications such as large boilers, items or property for repainting, and protective/preservative coatings.
The kitchen or restaurant owner will find greater convenience in soda blasting the parking lot and kitchen areas than the messy and slow pressure washer or elbow grease methods. The baking soda blasting method in the food service environment saves time and man hours and covers more than simple hand cleaning. There is less effort spent under and over the fryer, greater cutting power on cooked-in grease, and the baking soda media carries the fats, oils, and grease away instead of moving it aside (translocation).
School and Commercial Properties
Schools and large commercial property management and development companies have set high property cleanliness standards. Their sidewalks, common areas, and walls are coated and cleaned on a regular basis by subcontractors. We hope to capitalize heavily on our ability to accomplish these cleaning and coating contracts better than their current methods and services.
Auto/Aviation
Several companies in Boulder City & Las Vegas offer auto and/or aircraft stripping, detailing, and painting. Successful companies such as Sunset, Now Auto Paint, and Neil Rawls are currently using acid treatments, hand sanding, and wet sandblasting to prepare and strip the targeted surface. The baking soda blasting method will be marketed to these and other services, providing greater removal capabilities, less taping and preparation, increased user friendliness and safety, and easier cleanup.
Overall Strategy
As part of our package, Graffiti, USA will operate on a multi-shift service rotation. We plan to have the ability to work on regular applications during the daylight hours and provide a "swing" shift to fill the off-hours. The schools, construction, casino, industrial, and other industries will benefit significantly from a flexible multi-shift service operation.
Graffiti, USA will also exploit versatility as a competitive edge and customer benefit. By offering graffiti, grime, and mineral/alkaline removal, repainting, sacrificial, waterproofing, protective coatings and sealants, and concrete/asphalt cleaning, we'll fulfill many needs of our customers under one company name.
Graffiti, USA will advertise as the first dedicated graffiti abatement service company. We'll also be a strong volunteer and sponsor in the community, bringing a much-needed service for "tagged" neighborhoods and quality publicity. Our multi-state orientation as a national franchise will also allow us a sense of corporate affiliation and strength, as well as an open line to the techniques and markets that are hot and expanding nationally.
Marketing our system will be relatively easy. Our most powerful asset is a far greater variety of functions and programs designed around customer needs. We provide a graffiti abatement system, a property cleaning program, and coatings to preserve and extend the life of brick, cement, tile, marble, etc. Graffiti, USA is Nevada's first dedicated graffiti removal specialty service company with a commitment to the community and the environment.
MANAGEMENT
Graffiti, USA, a business opportunity, is sold by Hodan Enterprises, Incorporated of Houston, Texas. Essentially, our Boulder City and Las Vegas operations will be known as licensees of Graffiti, USA, allowing us to use the trademarked name and logo and allowing management unlimited training and assistance from the parent company.
Support Structure
Gerry Evans, President of Graffiti, USA in Houston, Texas, will play a significant role in assisting with marketing, operations, personnel, and virtually every other aspect of operations. Mr. Evans, as co-licensor of Graffiti, USA, will provide invaluable guidance and advise in the early stages of development.
Norm Collins, the Baking Soda, Inc. distributor in Houston and co-founder of Hodan Enterprises, Inc., the licensing entity for Graffiti, USA, will assist in forming, maintaining, and implementing a solid business and financial strategy.
The leadership and organization of Graffiti, USA, Boulder City and Las Vegas, is managed by Steve Rocklin. Together with Gerry Evans, Norm Collins, and the advice and guidance of other Graffiti, USA licensees, the Boulder City and Las Vegas offices will have a strong head start on success.
Staffing
Our Las Vegas operation will be staffed by a principal manager/salesman, an office person, and a technician. Daily duties place the manager/salesman in a comprehensive mobile marketing capacity. The office person will handle telephone inquiries, manage inventory flow, budgeting, basic accounting, bidding, and other clerical functions. The technician will drive the service van and provide primary on-call and scheduled removals, coatings, and consultations/demonstrations. Through time, the technician will gain the assistance of a "helper" and the office and sales staff will increase as the company grows.
Secondary Source of Loan Repayment
The sources of income for Mr. Rocklin leading into and in addition to Graffiti, USA include the Army Reserves and Sunlight Helicopters of Las Vegas. Mr. Rocklin has been a member of the Army Reserves actively for the past fourteen years as a flight officer and intends to maintain this status until eligible for retirement at age 60. Additionally, he has continued his civilian flying career as an on-call pilot for Sunlight Helicopters for the past three years.
Both methods of secondary employment have the potential of becoming full-time employment opportunities with estimated combined earnings of $45,000 annually. If required, these income sources could successfully continue servicing the debt with little adjustment or difficulty.
Monthly Payment Computation
$30,000 over 84 months @ 11% interest = $514.00 mo.
Army Reserve Average Monthly Salary = $660.00 mo.
CUSTOMERS
There is no typical Graffiti, USA customer. The variety of services and capabilities of the product line is limitless. In general, the Graffiti, USA customer base will follow closely to that of the pressure washing/steam cleaning, graffiti removal/masonry services, asbestos and lead-based paint abatement contractors, highway, road, and building service companies, and subcontractors services, especially painters, pavers and concrete contractors.
The most typical customer for our services is someone who has used cleaning or washing services for their property either on a regular basis or to remedy some immediate situation. It is likely that our future customers are going to be familiar with pressure washing, stripping and steam cleaning and that they will readily accept our new methods and supplemental services.
Case Study
A test was recently conducted at the local gas utility main offices. The area in question was a brick wall frontage where customers would pass enroute to the service entrance. This area not only served as a 4' high retaining wall for a grassy knoll, but was battered by sprinkler overflow several times a day. As a result of effluorescence and translocation, a rock hard white mineral residue was left on the red brick wall.
In an effort to remedy the situation, the facility manager for the multi-million dollar property asked several different contractors to perform a demonstration on a small sample area, with the winner gaining a contract for the entire property. After two years and twelve separate attempts using different methods, the management still had no safe, reliable, cost effective method to clean and restore the wall to its original red brick look.
Then the Hanly Soda Blaster was used on a small area of the wall by the local distributor. The baking soda media not only cut through the alkaline deposits that were previously attempted with other methods but cut rapidly and without any damage to the brick substrate. Blasting an area 10' by 10' took only three minutes compared to twenty minutes with the wet sand blasting technique.
Additionally, the soda blasting method was able to force the media further into the affected pores of the brick, where it pulverized and cleaned the previously inaccessible trapped alkaline and mineral deposits. After cleaning the wall and a thirty-minute drying period the wall was ready to be coated and treated with a protective waterproofing or the graffiti superficial coating.
Needless to say, the property manager was pleased to learn of the effectiveness and speed with which the Hanly safely cleaned the wall. He was also impressed with the limited clean-up involved and the complete absence of acids or chemicals which would have required recovery and proper disposal. Through this demonstration, the Hanly earned the waterproofing company a long-term preventive maintenance contract for all of the gas utility's properties.
Future Customers
The following list combines verbally-committed customers and carry-over clients from preliminary marketing surveys and ongoing feasibility studies. Initial marketing studies were conducted by introducing the Graffiti, USA system through video and on-site demonstrations, product brochures and industry articles and testimony. This list shows those prospects who have issued verbal commitments and permission to perform services and/or render demonstrations pursuant to awarding contracts.
| Customer | Application | Contact |
| University of Boulder City Arena and Bowl | Frontages | Ron Livingston |
| World Hotel and Theme Park | Frontages and Walls | Trevor Houston |
| Genie Hotel | Frontages and Walls | Don Alexis |
| Grovestand Hotel | Frontages and Walls | Tim Johnson |
| Lancelot Hotel | Frontages, Walls, Kitchens | Marian Brown |
| Cool Weather Water Park | Walks, Pools and Walls | Steve Hamel |
| Sands Property Management | Walks and Graffiti | Rachel Enright |
| Lake Front Marina | Boat Hulls | Joe Canducci |
| Indian Painting | Graffiti and Paint Prep | Selene Victor |
| National Beverage Plant | Walks and Prep Areas | Keith Niles |
| Allen Property Management Group | Walks and Walls | Oliver Holmes |
| World Resorts | Walks, Walls and Pools | John Holmes |
FORECASTING REVENUE
Graffiti, USA's revenue will be based on sales of contract services, on-call services, and peripheral services such as coatings, consultations, and product sales.
Graffiti Removal Pricing
Wand service costs $75.00 for the first 10 square feet (minimum), then $1.50 each additional foot.
The Maximum Strip costs $ 250.00 for the first 25 square feet (minimum), then $1.50 for each additional foot.
Sample graffiti removal bid:
Actual graffiti covered: 40 square feet of a 4000 square foot masonry wall.
Option 1. Wand Removal =$75.00
+ 15×$1.50 =$22.50
Option 2. Soda coating
4000×$.40 =$1,600.00
Option 3. Service option: 1 scheduled patrol per week plus any additional call outs for graffiti
removal at no additional charge at a rate of $ 150.00 per month.
Option 4. Individual call outs for graffiti removal at a rate of $75.00 (minimum) per call out. Includes
25' section, $1.50 each additional foot.
Pro Forma Cash Flow
| First Year | |||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Semi-Total | |
| Sales | 2,200 | 4,500 | 8,500 | 14,000 | 17,000 | 19,000 | 65,200 |
| Cash Sales | 500 | 700 | 2,100 | 2,500 | 2,300 | 3,000 | 11,100 |
| Less Rec. | (1,800) | (3,800) | (6,300) | 11,250 | (15,000) | (16,000) | (31,650) |
| Plus Collections | 0 | 1,800 | 3,800 | 6,300 | 11,500 | 15,000 | 38,400 |
| Less Bad Debts | 0 | 0 | 0 | (300) | (200) | 0 | (500) |
| Cash From Sales | 500 | 2,500 | 5,900 | 8,500 | 13,600 | 18,000 | 49,000 |
| Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | Year Total | |
| Sales | 21,000 | 22,000 | 20,000 | 18,000 | 17,000 | 19,000 | 182,200 |
| Cash Sales | 4,000 | 3,000 | 2,000 | 2,000 | 1,500 | 1,800 | 25,400 |
| Less Rec. | (17,000) | (19,000) | (18,000) | (16,000) | (15,500) | (17,200) | (134,350) |
| Plus Collections | 16,000 | 17,000 | 19,000 | 18,000 | 15,800 | 15,300 | 139,500 |
| Less Bad Debts | (300) | (200) | (300) | (500) | (200) | (200) | (2,200) |
| Cash From Sales | 19,700 | 19,800 | 20,700 | 19,500 | 17,100 | 16,900 | 162,700 |
| Second Year | |||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Semi-Total | |
| Sales | 17,000 | 17,000 | 18,000 | 20,000 | 22,000 | 23,000 | 117,000 |
| Cash Sales | 3,000 | 2,500 | 3,500 | 3,000 | 3,000 | 3,000 | 18,000 |
| Less Receivables | (15,000) | (14,500) | (14,500) | (17,000) | (19,000) | (20,000) | (100,000) |
| Plus Collections | 15,000 | 15,000 | 14,500 | 14,500 | 17,000 | 19,000 | 95,000 |
| Less Bad Debts | (300) | (300) | (200) | (300) | (500) | (700) | (2,300) |
| Cash From Sales | 17,700 | 17,200 | 17,800 | 17,200 | 19,500 | 21,300 | 110,700 |
| Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | Year Total | |
| Sales | 22,000 | 19,000 | 19,000 | 20,000 | 22,500 | 23,000 | 242,500 |
| Cash Sales | 2,000 | 2,000 | 2,000 | 2,000 | 2,500 | 2,000 | 30,500 |
| Less Rec. | (20,000) | (17,000) | (17,000) | (18,000) | (20,000) | (21,000) | (213,000) |
| Plus Collections | 20,000 | 20,000 | 17,000 | 17,000 | 18,000 | 20,000 | 207,000 |
| Less Bad Debts | (300) | (300) | (500) | (200) | (300) | (500) | (4,400) |
| Cash From Sales | 21,700 | 21,700 | 18,500 | 18,800 | 20,200 | 21,500 | 233,100 |
Pro Forma Expenses
Materials include the Hanly Blast Media, the Hanly Hydroflex Media, superficial coatings, and Terminator removal assist treatment, as well as freight costs.
Equipment includes rental of a 250 cfm or greater air compressor and a Hanly Maximum Strip soda blaster.
Equipment maintenance covers the preventive maintenance of the equipment and the van.
Van lease covers the monthly payment of a leased or purchased 1-ton new or used utility van.
Labor is the hourly wage(s) of a technician and helper and, when necessary, an office person.
Vehicle and washer gas are the monthly cost of fuels.
Phone includes the cost of the office phone and a field cellular phone service.
Mailbox is the monthly cost of a PO Box and business license posting fee at a private mailbox service.
Advertising covers a 1" local Yellow Pages ad with three other single listings.
Loan covers repayment of the line of credit.
License/Bond/Insurance covers business licenses, a bid or performance bond when necessary, and general liability/auto/life insurance premiums.
Office supplies combine the costs of business stationery, cards, fax paper, supplies, and processing fees.
Credit purchases are accounts payable on credit for materials and equipment rentals.
Credit payments will be made within 30-day terms covering the preceding calendar month's credit purchases.
| Sales and Expenses | |||||||||||||
| Forecast Expenses | |||||||||||||
| Month: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | Total |
| Materials | 440 | 900 | 1,700 | 2,800 | 3,400 | 3,800 | 4,200 | 4,400 | 4,000 | 3,600 | 3,400 | 3,800 | 36,440 |
| Equipment | 300 | 500 | 500 | 500 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 9,800 |
| Equip. Maint. | 20 | 50 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 1,070 |
| Van Lease | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 4,800 |
| Labor | 0 | 500 | 1,000 | 2,000 | 2,200 | 2,500 | 2,700 | 2,700 | 2,700 | 2,500 | 2,500 | 2,500 | 23,800 |
| Veh gas | 150 | 150 | 300 | 300 | 350 | 350 | 350 | 350 | 250 | 250 | 250 | 250 | 3,300 |
| Washer gas | 75 | 100 | 75 | 75 | 75 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 1,100 |
| Phone | 250 | 250 | 250 | 250 | 250 | 250 | 250 | 250 | 250 | 250 | 250 | 250 | 3,000 |
| Mailbox | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 360 |
| Advertising | 207 | 207 | 207 | 207 | 207 | 207 | 207 | 207 | 207 | 207 | 207 | 207 | 2,484 |
| Loan | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 12,000 |
| Lic/Bond/Ins | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 3,600 |
| Office supplies | 50 | 150 | 200 | 200 | 200 | 250 | 250 | 250 | 250 | 200 | 250 | 250 | 2,500 |
| Total | 3,222 | 4,537 | 6,062 | 8,162 | 9,512 | 10,287 | 10,887 | 11,487 | 11,187 | 10,337 | 10,187 | 10,587 | 106,454 |
| Less credit prch | (225) | (250) | (375) | (375) | (425) | (450) | (450) | (450) | (350) | (350) | (350) | (350) | (4,400) |
| Plus credit pymt | 0 | 225 | 250 | 375 | 375 | 425 | 450 | 450 | 450 | 350 | 350 | 350 | 4,050 |
| Expenses | 2,997 | 4,512 | 5,937 | 8,162 | 9,462 | 10,262 | 10,887 | 11,487 | 11,287 | 10,337 | 10,187 | 10,587 | 106,104 |
| Monthly CFS | 500 | 2,500 | 5,900 | 8,500 | 13,600 | 18,000 | 19,700 | 19,800 | 20,700 | 19,500 | 17,100 | 16,900 | 162,700 |
| Cash Flow | 2,497 | 2,012 | 37 | 338 | 4,138 | 7,738 | 8,813 | 8,313 | 9,413 | 9,163 | 6,913 | 6,313 | 56,596 |
Assumptions
Pressure washing jobs are billed competitively for .05 cents per square foot
Hydroblasting (washer and sand pot attachment) is billed at .50 cents per square foot
Superficial coatings are billed at .40 cents per square foot
Wand and Hanly soda blasting are billed at $1.30 per square foot
Labor is calculated at 40 hours a week at $10.00 per technician, beginning in the 5th month
First month includes securing 1 job, second month 2 jobs, thereafter 4 per month
Industry standard of 97% collection of receivables within 30 days
UTILIZATION OF FUNDS
Initial expenditures and purchases cover the equipment and basic supplies and operating capital necessary to support operations for at least four to six months.
| Equipment and Supplies Package | $14,000 |
| Used 1-Ton Utility Van | $10,000 |
| Computer and Laser Printer | $ 3,000 |
| Initial Baking Soda Inventory | $ 2,000 |
| Cellular Phone | $ 500 |
| Beeper | $ 100 |
| Sub-Total | $29,600 |
| Plus 4 months Operating Costs | $10,000 |
| Total Project Requirement | $39,600 |
| Availability of Funds | |
| Provided From Loan | $30,000 |
| Funds Committed by Applicant (= 32%) | $12,600 |
| Total Funds | $42,600 |
| Equipment and Supplies | |
| Hydroblaster Pressure Washer | $6,000 |
| Airless Paint Sprayer | $3,000 |
| Wand System | $ 500 |
| 55 Gallons Graffiti Avenger | $ 1,500 |
| 55 Gallons Americoat | $ 1,500 |
| Miscellaneous Supplies | $ 1,500 |
| Total | $14,000 |
CONCLUSION
Graffiti, USA is a new and much-needed enterprise in Boulder City and Las Vegas valley. We'll seek a niche market for graffiti removal and abatement, capitalize on service diversity and new baking soda cleaning technology, benefit the community, and be environmentally oriented.
To start Graffiti, USA in Boulder City and Las Vegas, we're asking for a bank line of credit of $30,000.00. These funds will help buy our capital equipment and vehicle assets, and help provide a working capital "buffer" for the first six months of business.
Our profit expectations are the results of a detailed analysis of the two markets and the actual financial reports of Graffiti, USA franchises in Houston. Our first year is expected to produce gross sales of $162,700 with costs of sales and expenses expected to be $106,104 leaving a net profit before interest and taxes of $56,596.
The starting schedule for Graffiti, USA is set for January 1, 1995. Our first two weeks will be occupied by capital equipment and materials acquisitions, training and installation, initial press releases and canvass marketing, and other events.
Graffiti, USA Boulder City and Las Vegas has been carefully researched, planned, and studied. We believe that our efforts and hard work will pay off better than our numbers indicate and will take less time to realize a positive cash flow. We look forward to establishing a long-term business relationship with an institution willing to accept our low risk and strong earning potential.
APPENDIX
Terms and Definitions
Abatement - For the purposes of this plan, this term refers to consistent removal and subsequent elimination of graffiti and alkalinity by a dedicated source or means. Technically speaking, true abatement would be catching the tagger in the act and ultimately arresting him.
Baking Soda Blasting - A process similar in theory and operation to sandblasting whereby a special machine (Hanly Accustrip System and or the Wand pressure washer attachment) is used to meter and distribute baking soda under air or water pressure. Either method uses about 50-100 psi pressure and propels the soda mixture towards the application where it explodes or is pulverized.
Media - A special mixture of baking soda four times the size of normal soda and sold in 50 lb bags by a local distributor. These mixtures include various biodegradable detergents, varying viscosities, or the basic pure mixture. The WAND system uses the Hydro formula and the Accustrip uses Hanly Blast Media. All forms of media are environmentally safe, non-toxic, USDA grade, and emulsify with fats, oils, grease, lead, and other chemicals.
Pressure Washing - Also called steam cleaning (230 degrees F or higher), water jetting, or power washing; any process or system using pressurized water (1000-5000 psi) for cleaning, demolition, paint and grime removal, and other applications. Graffiti, USA will use a 3000 psi hot water (up to 275 degrees F) pressure washer.
Superficial Coating - A safe, non-toxic wall sealer/coating often referred to as a micro-wax, applied by hand sprayer or paint sprayer. The coating is sprayed on a clean or recently blasted surface to form an easily removable barrier between new graffiti and the wall.
Tagger - A person who creates graffiti in any form illegally. Taggers could be considered "artists" because they are known more for their creativity in selecting locations and techniques than their gang affiliation. This is not to say that a gang member is not a tagger, more so it's to say that a tagger is not always a gang member. Taggers can be highly prolific and are often very persistent in a certain territory.
WAND - A pressure washer attachment which uses the Venturi effect to inject media into the water path. It was specifically designed for baking soda media.
Waterproofing - The process by which protective sealants and coatings are applied on cement and masonry to repel water and its harmful effects. All coatings and treatments use clear, environmentally safe, water-based, and non-toxic ingredients.