Local servicesU.S. scenario · USDIllustrative operating case
Machine shop startup costs and financial model
A leased approximately 4,000-square-foot four-machine CNC job shop with three vertical machining centers, one CNC lathe, inspection capability, paid operators and an owner responsible for estimating, sales and quality; the base case excludes mass production, additive manufacturing, heat treatment, plating and automotive repair.
Capital to open
$1,200,000
$450,000–$3,000,000 by launch scope
Year 3 revenue
$1,346,800
Annual modeled sales
Year 3 EBITDA margin
8.6%
Before interest, tax and depreciation
Operating break-even
Month 14
Base monthly ramp; not capital payback
This operating case allocates $1,200,000 to opening the business and forecasts $116,144 in Year 3 EBITDA. Payroll includes working-owner labor where applicable. These are planning assumptions; EBITDA is not cash available to the owner.
An editorial comparison of operating conditions, not a probability of success, a customer rating or a promise of returns. Read the evidence beside each assessment.
Weighted total
4.7 / 10
The total combines the five assessments below using the published weights.
A leased approximately 4,000-square-foot four-machine CNC job shop with three vertical machining centers, one CNC lathe, inspection capability, paid operators and an owner responsible for estimating, sales and quality; the base case excludes mass production, additive manufacturing, heat treatment, plating and automotive repair.
Barrier to entry
Higher means easier entry.
15% weight
4.0 / 10
CNC equipment, power, air, tooling, metrology, programming, safety and working capital make entry difficult even when the shop leases an existing industrial unit.
Evidence and assessment basis
Supported facts: Census defines job-order machining and BLS describes programming, setup and inspection work; OSHA establishes guarding, hazardous-energy and noise controls. Assumption: a suitable leased unit and serviceable equipment can be sourced. Judgment: favorable-direction anchor 4 because entry is possible, but technical capability and capital remain substantial.
Sources support the underlying facts. The numerical assessment is an editorial judgment.
Competition
Higher means more favorable competitive conditions.
20% weight
5.0 / 10
A job shop can specialize by material, tolerance, lead time and customer sector, but buyers can compare qualified suppliers and shift work across regions.
Evidence and assessment basis
Supported fact: CBP reports 17,156 U.S. employer establishments in NAICS 332710, a national context that does not measure the proposed catchment. Assumption: the shop competes on qualification, responsiveness and process capability as well as price. Judgment: anchor 5 until a named buyer, incumbent and RFQ audit is complete.
Sources support the underlying facts. The numerical assessment is an editorial judgment.
Demand stability
Higher means more stable demand.
25% weight
5.0 / 10
Repeat programs can stabilize work after approval, while customer concentration, program endings and industrial cycles can leave expensive machines underused.
Evidence and assessment basis
Supported sources establish the industry and national employer context but do not validate an order book. Assumption: the shop can win several recurring customers rather than one anchor account. Judgment: anchor 5 because repeat orders help, but backlog can change quickly and qualification takes time.
Sources support the underlying facts. The numerical assessment is an editorial judgment.
Margin ceiling
Higher means greater supported operating-profit potential.
20% weight
5.0 / 10
Specialized, well-utilized capacity can produce contribution, but setup, scrap, tooling, outside processing, inspection and downtime can erase quote margin.
Evidence and assessment basis
No source validates the authored $185 realized revenue per billable spindle-hour, 58% contribution or $55,417 monthly fixed cost. Judgment: anchor 5 because the Year-three case produces $116,144 before financing and tax with only a modest utilization buffer over operating break-even.
Sources support the underlying facts. The numerical assessment is an editorial judgment.
Owner dependency
Higher means less dependence on the owner's continuous involvement.
20% weight
4.0 / 10
Operators can run documented jobs, but a small shop usually depends on senior judgment for quoting, programming, quality, customer recovery and cash collection.
Evidence and assessment basis
Supported fact: BLS describes technical setup, programming and inspection work. Assumption: standard work, revision control and inspection plans permit some delegation. Judgment: favorable-direction anchor 4 because daily production can be staffed while commercial and quality exceptions remain owner-sensitive.
Sources support the underlying facts. The numerical assessment is an editorial judgment.
Who pays you, and what for
Review the customer, offer and operating scope behind the numbers before adapting them to your own plan.
Operating model
A leased four-machine CNC job shop with three vertical mills, one lathe, inspection capability and paid operators.
Revenue logic
Part families keep separate units and prices; the public billable spindle-hour is a capacity bridge and every job is counted once.
Year-three case
28 billable spindle-hours per day, $185 realized revenue per hour and $1.347 million annual revenue.
Operating threshold
About 23.9 billable spindle-hours per day at the base contribution and fixed-cost assumptions.
Primary gate
Qualified multi-customer backlog, controlled revisions, capable inspection and safe deliverable machine time before expansion.
Format
Leased approximately 4,000 sq. ft. CNC job shop with 3 vertical mills and 1 lathe
Revenue unit
One billable spindle-hour with customer revenue allocated once
Planning schedule
28 billable spindle-hours per day across 5 operating days per week
Year-three case
$185 realized revenue per billable spindle-hour and $1.347 million annual revenue
Primary gate
Qualified jobs, controlled revisions, inspection evidence and safe machine capacity before adding equipment
Who are you actually bidding against?
National employer data cannot identify local process capability, buyer demand, certifications, lead times, pricing, backlog or closures. A dated buyer, incumbent and RFQ audit remains required.
Local market assessment pending. The checklist below identifies research to complete; it is not a measured competitor sample.
Compare the questions across each row. Scroll the table horizontally on a small screen →
Competitor research checklist · no measured local sample
Offer to investigate
Compare like for like
Evidence to collect
Local job shops
Processes, envelopes, materials, tolerances, certifications, lead time, inspection and delivery.
Niche processes, automation, engineering support, freight, capacity and quality history.
Written quotes and delivery terms for the same controlled drawing and quantity.
Customer in-house capacity
Make-versus-buy cost, scheduling, capital, staffing and confidentiality.
Buyer interviews, approval path and reasons work is outsourced.
What supports the model, and what strains it
These are operating considerations for the scenario, not measured advantages over local competitors.
Potential strengths to validate
Capacity is measurable. Machine, setup, run, inspection, rework and downtime hours can be recorded by job and asset.
Repeat work can compound learning. Approved recurring parts can reduce quoting, programming and setup effort when revisions stay controlled.
Specialization creates a clear offer. Material, envelope, tolerance, lead-time and inspection capability can define a buyer-relevant niche.
Tradeoffs to plan around
Idle equipment still costs cash. Rent, debt, service, software and skilled payroll continue before machines are productively loaded.
Quality failures consume margin. Scrap, rework, sorting, replacement and customer recovery can exceed the value of a job.
Receivables lag production. Material and payroll may be paid before a customer accepts and pays the shipment.
Does this operating role fit you?
Evaluate the work you will do and the cost of replacing it. Review the owner responsibilities in the operating scope.
A fit to explore if you can…
Comfortable combining technical sales, drawings, quoting, process capability and cash collection.
Willing to measure realized contribution and capacity by job, machine and customer.
Prepared to stop a job when revision, material, tooling, guarding or inspection evidence is not ready.
Reconsider the plan if you need…
Expects passive income from machines without active quoting and customer qualification.
Treats all scheduled machine time as billable production.
Buys additional equipment before identifying a measured, funded bottleneck.
Where the $1,200,000 goes
The authored $1.2 million allocation assumes a leased industrial unit and a mix of serviceable new or used CNC equipment. The $450,000 low case requires unusually favorable equipment and facility conditions; the $3 million high case allows newer automation, heavier electrical and air work, added inspection capability and deeper reserve. Obtain machine-condition, tooling, rigging, power, air, coolant, waste, code, safety, insurance and financing terms before commitment.
Leasehold, power, compressed air, rigging, guarding and safety work
$220,000
Two vertical machining centers
$300,000
CNC lathe and bar-handling capability
$190,000
Inspection, CAD/CAM, computers and tool preset capability
$120,000
Tooling, workholding, coolant systems and opening raw stock
$110,000
Deposits, licensing, insurance and professional setup
$60,000
Preopening payroll, training and customer qualification
$70,000
Working capital and contingency
$130,000
TotalScenario range $450,000 – $3,000,000$1,200,000
Where does the money come from?
Price, daily volume and the operating calendar define this capacity scenario. Check the sold-unit definition in the operating scope.
Realized revenue per billable spindle-hour$185.00per sold unit
×
Billable spindle-hours per operating day across four machines28modeled daily volume
The $185 public driver is an authored allocation of customer revenue to accepted billable spindle-hours. The ledger keeps each part family, unit count, price, material, outside process, credit and rework record separate and never counts the same job twice.
Seasonality and the opening ramp
Industrial programs, annual shutdowns, customer budgets, new-product launches and program endings can move demand. Replace the annual average with a customer-and-part backlog, probability-weighted RFQs and a machine schedule.
What does the revenue have to cover?
Year 3 annual amounts from the income statement. The bars use the same revenue scale; EBITDA is the residual after the three operating expense lines.
Year 3 revenue$1,346,800
Material, tooling consumption, outside processing, freight, scrap and payment-linked costs$565,656
Paid owner-management, machinists, setup, inspection and administrative labor$420,000
Rent, utilities, maintenance, software, insurance, sales and overhead$245,000
EBITDA$116,144
Working-owner pay belongs in payroll. Interest, income taxes, loan principal, replacement equipment and changes in working capital affect cash available for distributions.
Five-year view · scroll the income statement horizontally to compare every year →
Five-year forecast
The authored five-year case grows from about 13 to 39 billable spindle-hours per operating day. Year three equals 28 hours × 5 days × 52 weeks × $185 realized revenue per billable spindle-hour, or $1,346,800. The public driver allocates job revenue once; the paid E21 model should retain distinct part families, units, prices and direct costs. Results exclude depreciation, financing, income tax, major replacement capital beyond the allowance, working-capital timing and distributions.
RevenueEBITDA
$620k
$980k
$1.3m
$1.6m
$1.9m
Year 1
EBITDA $-230.2k
Year 2
EBITDA $-66.2k
Year 3
EBITDA $116.1k
Year 4
EBITDA $230.8k
Year 5
EBITDA $333k
Machine Shop income statement · annual USD
Income statement
Year 1
Year 2
Year 3
Year 4
Year 5
Revenue
$620,000
$980,000
$1,346,800
$1,620,000
$1,880,000
Material, tooling consumption, outside processing, freight, scrap and payment-linked costs
−$285,200
−$431,200
−$565,656
−$664,200
−$752,000
Paid owner-management, machinists, setup, inspection and administrative labor
−$340,000
−$380,000
−$420,000
−$465,000
−$515,000
Rent, utilities, maintenance, software, insurance, sales and overhead
−$225,000
−$235,000
−$245,000
−$260,000
−$280,000
EBITDA
−$230,200
−$66,200
$116,144
$230,800
$333,000
EBITDA margin
-37.1%
-6.8%
8.6%
14.2%
17.7%
Annual forecast and calculator comparison
The annual forecast and calculator use separate scenarios. Their revenue ramp or cost allocations differ, as shown below. The calculator's break-even month does not reconcile the annual forecast.
Original base inputs · USD per year
Check
Annual forecast
Calculator inputs
Year 1 revenue
$620,000
$767,085
Year 1 operating result
−$230,200
−$220,094
Year 3 / mature annual operating result
$116,144
$115,539
Calculator figures use the original first 12 months and mature monthly result × 12; sliders do not change this comparison. Neither column measures cash flow or payback. Input basis.
Set the three inputs to your own plan. The ramp starts at 35.0% of mature volume and adds 4.0 percentage points a month.
Monthly revenue over the first 24 months. Darker bars clear the operating break-even line.
Operating break-even
Month 14
Revenue at maturity
$112,147 / mo
Break-even revenue
$95,547 / mo
Break-even volume
24 / day
Fixed costs
$55,417 / mo
Use the volume definition in the operating scope. This sensitivity keeps fixed costs and contribution margin constant; it does not rebuild the annual income statement. Operating break-even covers monthly fixed operating costs. It does not recover the opening investment.
Two numbers that decide the outcome
Price and daily throughput define the operating case. The range endpoints are sensitivity scenarios; test whether your location can support them.
Realized revenue per billable spindle-hour
$130.00$260.00
$185.00
this model
Billable spindle-hours per operating day across four machines
1638
28
this model
What if the schedule is lighter, or fuller?
Only daily volume changes. All three cases keep the invoice at $185.00, the schedule at 5 days per week, fixed costs at $55,417 per month and contribution margin at 58.0%.
Lower throughput
Use the low end to test a thinner schedule.
Billable spindle-hours per operating day across four machines
16
Mature monthly revenue
$64,084
Operating break-even
Not reached
Not reached in the 24-month ramp.
Base throughput
The current modeled daily schedule.
Billable spindle-hours per operating day across four machines
28
Mature monthly revenue
$112,147
Operating break-even
Month 14
First month contribution covers fixed costs.
Higher throughput
Validate the operating capacity first.
Billable spindle-hours per operating day across four machines
38
Mature monthly revenue
$152,200
Operating break-even
Month 8
First month contribution covers fixed costs.
Capital payback needs a cash-flow schedule. The current forecast has no cumulative cash balance after funding, taxes, debt principal and future capital spending. No payback date or lowest cash balance is reported.
What can go wrong, and what should you test?
Use these checks to challenge the operating assumptions before taking on commitments.
Unqualified backlog
Forecast work does not convert into approved, paid orders.
Check: Require controlled RFQs, win evidence and several customers before irreversible equipment commitments.
Quote error
Material, setup, cycle, tooling, inspection or outside processing is underpriced.
Check: Compare quoted and actual hours and cost on every early job and update standards.
Quality escape
A wrong revision, tolerance or process reaches the customer.
Check: Use controlled travelers, calibrated inspection, nonconformance quarantine and documented release.
Machine or utility downtime
A failure or inadequate power, air or coolant interrupts promised work.
Check: Verify infrastructure, maintain assets, hold critical spares and define vendor response.
Safety failure
Guarding, servicing, lifting, chips, fluids or noise harms a worker.
Check: Use equipment-specific procedures, training, lockout, measurement and current professional review.
Customer concentration
One program creates most backlog and ends or moves.
Check: Measure concentration and qualify multiple customers and part families before adding fixed cost.
What would invalidate this scenario?
Choose your own go/no-go thresholds before committing funds. The page does not establish a universal stop-loss rule.
Before site commitment
Do not sign a noncontingent lease without written use, power, air, rigging, floor, fire, ventilation, waste, noise and insurance findings for the actual equipment.
Before machine purchase
Do not accept a machine without condition, accuracy, controller, service, tooling, rigging and total installed-cost evidence.
Before production
Do not run a job without the controlled drawing, revision, material, quote, program, workholding, tool, inspection and release plan.
Before servicing
Do not service equipment without the applicable machine-specific hazardous-energy procedure and authorized-worker controls.
Before expansion
Do not add capacity until qualified backlog, measured utilization, staffing, quality, cash and the actual bottleneck support it.
What needs to be true before you proceed?
Treat this page as a starting case to verify. A favorable spreadsheet result is only useful when its price, capacity and cost assumptions can be supported.
Which buyer sectors and part families match the four-machine capability?
What are the current supplier-approval and certification gates?
What quote-to-win rate and lead time appear in paid RFQs?
What setup, cycle, inspection, scrap and rework occur by job?
How many machine-hours are staffed, available, accepted and billed?
What concentration exists by customer and program?
Which utility, guarding, lockout, noise and waste controls apply to the site?
What cash covers material, payroll, receivables and a major machine failure?
A four-machine CNC job shop can work when it wins repeat, technically suitable orders and converts machine time into accepted output, but equipment ownership alone does not create a qualified backlog or protect quote margin.
At maturity, 28 billable spindle-hours per day across five days produce $1,346,800 of Year-three revenue at $185 per hour; 58% contribution leaves about $781,144 before $665,000 of paid payroll and overhead.
The simplified operating threshold is about 23.9 billable spindle-hours per day. The 28-hour base day leaves roughly 4.1 hours of buffer, so setup, scrap, downtime and slow collection need close control.
The matched workbook's E21 engine fits only when each part family retains its own units, price and direct cost and the same job is not counted again through the public spindle-hour driver.
What could change the view
The main risk is buying capacity before securing qualified work: machines, rent, skilled payroll and service costs continue while customer approval, programming, first articles or receivables delay cash.
Who this format suits
The case suits an operator who can sell technical work, read drawings, challenge quotes, maintain revision and quality discipline and manage skilled production. It is a poor fit for a passive owner or anyone treating theoretical machine hours as saleable hours.
Before committing
Obtain written facility and machine findings for one site, then price and run representative paid jobs until at least 1,000 accepted billable spindle-hours show quote accuracy, setup, cycle, scrap, inspection, rework, delivery and collection across several customers.
What is planned for the editable workbook?
An illustrative worksheet layout using this page's inputs. It is not a screenshot or a download of a finished Excel file.
Billable spindle-hours per operating day across four machines
28
per day
Operating schedule
5
days / week
Fixed operating costs
$55,417
per month
Contribution margin
58.0%
input assumption
The published calculator and annual forecast are separate views. The downloadable workbook requires its own separate calculation review.
Product lines, units and prices
Uses the verified E21 manufacturing engine for a four-machine CNC job shop: each physical product line has an independent launch date, sold-unit volume and selling price, followed by seasonality and separately supported additional revenue.
A verified worksheet screenshot is not yet available.
Materials and direct production cost
Separates raw material, tooling consumption, outside processing, expedited freight, scrap, rework and sales-linked fees from paid payroll and fixed overhead so each billable spindle-hour has a visible contribution.
A verified worksheet screenshot is not yet available.
Production capacity and quality
Bridges independently entered sales to four CNC machines, staffed shifts, setup time, cycle time, inspection, secondary operations and maintenance, with setup, run, finishing, inspection, maintenance and downtime visible rather than assuming every scheduled hour produces saleable output.
A verified worksheet screenshot is not yet available.
Staffing and operating expenses
Schedules paid owner work, production and administrative roles, start dates, employer costs, occupancy, utilities, maintenance, software, sales and recurring overhead.
A verified worksheet screenshot is not yet available.
Startup uses, funding and scenarios
Schedules facility work, CNC equipment, inspection, software, tooling, workholding, stock and reserve, working capital and financing, then compares low, base and high unit, price, contribution and fixed-cost paths.
A verified worksheet screenshot is not yet available.
Statements and dashboard
Connects product-line revenue, direct production cost, payroll, operating expense, capital and funding schedules to five-year statements, cash flow, balance sheet, KPIs and a management dashboard.
A verified worksheet screenshot is not yet available.
The planned business plan has 10 pages. Its contents and the three file prices are listed below.
Get the editable files
Word for the written plan. Excel for the assumptions and calculations. One-time prices in USD. Bundle adds both products to one cart.
Confirm these items for your location and operating scope. This checklist does not assert that a particular license, insurance policy or employment arrangement is sufficient.
Site and asset evidence
Written use and utility review
Machine condition and installed-cost file
Guarding, energy, noise and waste controls
Customer and quality evidence
Named target buyers and approval paths
Controlled RFQs and drawing revisions
Inspection, nonconformance and calibration system
Capacity evidence
Setup and cycle observations
Machine and labor schedule
1,000 accepted billable spindle-hour pilot
Financial evidence
Equipment, tooling, rigging and insurance quotes
Material, outside-process and freight terms
Twenty-four-month cash and receivables calendar
Where could this model miss your situation?
Most financial inputs are author-selected assumptions. The source register explains what is supported and what still needs local validation.
Four-machine scope
The case does not represent a manual shop, repair shop, high-volume transfer line or heavily automated production plant.
Authored economics
The $185 realized revenue, 28-hour day, 58% contribution and $1.2 million budget are assumptions.
National context
Census and BLS figures do not establish local buyer demand, price, staffing or process capability.
Theoretical clock
Calendar machine-hours become saleable only after staffing, setup, maintenance, inspection, yield and customer acceptance.
Product adaptation
The paid CNC Machining plan and model have their own examples; E21 product lines must be replaced with controlled job evidence.
Evidence and editorial state
The site owner reviewed and approved this AI-assisted planning analysis for publication on September 28, 2026. That review does not establish local fieldwork, a local feasibility finding, an investment recommendation or applicability in a specific jurisdiction.
Extended analysis: editorial basis
Prepared September 28, 2026 from the cited public and product sources plus explicit StartFigures assumptions. The site owner reviewed and approved this nationwide leased four-machine CNC machining planning case for publication. It is not a local feasibility study, tolerance or customer-qualification determination, or investment recommendation.
Leased approximately 4,000 sq. ft. CNC job shop with 3 vertical mills and 1 lathe
Revenue unit
One billable spindle-hour with customer revenue allocated once
Planning schedule
28 billable spindle-hours per day across 5 operating days per week
Year-three case
$185 realized revenue per billable spindle-hour and $1.347 million annual revenue
Primary gate
Qualified jobs, controlled revisions, inspection evidence and safe machine capacity before adding equipment
We built this StartFigures case by defining a leased four-machine CNC job shop, checking the exact Census industry and national employer context, machinist duties and wage context, federal machine-guarding, hazardous-energy and noise requirements and the exact CNC Machining plan and model products. We then created a five-year billable-spindle-hour case and reconciled it to four machines, staffing, setup, inspection and downtime. Every budget, realized revenue, volume, contribution, payroll and ramp is an authored assumption. Local facility, equipment, customer, drawing, material, quality, safety, insurance, staffing and demand evidence must replace it before investment. The matched paid workbook uses the E21 manufacturing engine, so product-line units and prices remain separate and the public spindle-hour bridge is not counted again as revenue.
U.S. Census Bureau · primary · accessed September 28, 2026
Defines machine shops as establishments primarily engaged in machining metal and plastic parts on a job or order basis, generally using machine tools including computer numerically controlled equipment. It does not establish local demand, price, capability or profitability.
U.S. Census Bureau · primary · accessed September 28, 2026
The national file reports 17,156 employer establishments, 223,313 employees and $14.228 billion of annual payroll for machine shops. It excludes nonemployers and does not measure local job demand, quote value, utilization or quality performance.
U.S. Bureau of Labor Statistics · primary · accessed September 28, 2026
Describes blueprint, CAD/CAM, setup, CNC operation and inspection duties and reports May 2025 median annual pay of $58,750 for machinists. It does not set local offers, staffing, billable rates or employer burden.
Occupational Safety and Health Administration · primary · accessed September 28, 2026
Sets general federal machine-guarding requirements. It supports a guarding and safe-operation boundary but does not certify a particular CNC installation or procedure.
Occupational Safety and Health Administration · primary · accessed September 28, 2026
Sets federal workplace requirements for controlling hazardous energy during servicing and maintenance. Equipment-specific procedures, training and site review remain necessary.
Occupational Safety and Health Administration · primary · accessed September 28, 2026
Sets federal occupational-noise requirements. The standard supports a measurement and hearing-conservation boundary, not an assumption that a particular shop is compliant.
Internal Revenue Service · primary · accessed September 28, 2026
Provides federal employer payroll-tax guidance. State taxes, benefits, workers' compensation, unemployment insurance, overtime and local employer costs require separate calculation.
How should you compare another service business?
No measured national benchmark or comparable local sample is supplied here. Compare the actual operating scopes before comparing outputs.
Keep the comparison consistent
Opening budget and reserve coverage.
Paid owner labor and employer burden.
Daily units, travel time and operating days.
EBITDA versus cash available for distribution.
Available scenario comparisons
These compare illustrative models on StartFigures, not observed industry averages.
How much does the StartFigures machine-shop case cost to open?
The authored base allocation is $1.2 million, with a $450,000 low case and $3 million high case. These are scenarios for a leased four-machine CNC job shop, not machine, facility, rigging, tooling, insurance or financing quotes.
What is a billable spindle-hour in this case?
It is one accepted production hour on one CNC spindle with attributable customer revenue allocated once. Setup, inspection, maintenance, rework and unavailable time remain separately visible even when a customer quote does not bill them by the hour.
How many billable spindle-hours are needed for operating break-even?
At $185 realized revenue, 58% contribution and $55,417 monthly fixed cost, the continuous threshold is about 23.9 billable spindle-hours per operating day at five days per week.
Can four machines produce 96 spindle-hours in a day?
Four machines contain 96 calendar machine-hours in 24 hours, but the base case does not assume continuous staffing or uptime. Setup, inspection, maintenance, downtime and the chosen shift plan determine deliverable capacity.
What safety controls belong in the opening plan?
The site needs machine-specific guarding and operating procedures, hazardous-energy controls for servicing, measured noise review, material and lifting controls, coolant and waste procedures, housekeeping, training and current professional review.
What must change in the paid financial model?
Replace each part family with actual units, price, material, outside processing, setup, cycle, yield and launch timing; then reconcile it to machine, labor and inspection capacity without also counting the same revenue through spindle-hours.
Is the five-year forecast a profitability promise?
No. It uses authored assumptions and excludes depreciation, financing, income tax, major replacement capital beyond the allowance, working-capital timing and distributions.
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