# Temperate Mesh — Financial Projections

**Document purpose:** Lean startup budget and conservative year-1 P&L for partner planning.  
**All figures are estimates** for brainstorming—not tax, legal, or investment advice.  
**Assumptions:** Under $5k startup capital · Part-time partners · Ketchikan focus · June 2026 pricing

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## Summary headline numbers (conservative year 1)

| Metric | Conservative | Moderate stretch |
|--------|--------------|------------------|
| Device units sold | 25 | 40 |
| Paid setup jobs | 20 | 35 |
| Construction installs | 4 | 8 |
| **Gross revenue** | **~$8,500** | **~$16,500** |
| **COGS (hardware)** | **~$3,200** | **~$5,400** |
| **Gross profit (after COGS)** | **~$5,300** | **~$11,100** |
| **Operating expenses** | **~$2,800** | **~$3,500** |
| **Net before partner labor** | **~$2,500** | **~$7,600** |

**Interpretation:** Year 1 is **supplemental side income**, not full-time wages for two people—unless install volume and service attach rates beat projections. Partner labor is mostly sweat equity in year 1; paying yourselves hourly would show thinner or negative net.

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## Startup budget (under $5,000)

### One-time startup allocation

| Category | Low | High | Notes |
|----------|-----|------|-------|
| Initial inventory | $2,200 | $3,200 | See `01-product-pricing-catalog.md` |
| Tools & install consumables | $300 | $600 | Drill bits, sealant, fall gear amortized |
| Insurance (GL) | $400 | $800 | Shop around; both partners |
| Branding & print | $100 | $250 | Cards, one-page flyer |
| Web / domain / email | $50 | $150 | temperate.app exists |
| Business registration / misc | $100 | $300 | AK business costs vary |
| **Reserve (freight surprises)** | $500 | $800 | Critical for AK |
| **Total** | **~$3,650** | **~$5,100** | Trim inventory if over $5k |

**If over budget:** Drop Heltec stock; order on demand. Keep 8× T1000-E, 4× RAK, 1× solar node.

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## Per-unit economics (with Ketchikan freight)

### Device-only sale (no setup)—worst case margin

| SKU | Landed | Sell | Gross $ | Gross % |
|-----|--------|------|---------|---------|
| T1000-E | $55 | $69 | $14 | 20% |
| RAK basic | $37 | $49 | $12 | 24% |
| RAK GPS | $62 | $79 | $17 | 22% |
| Solar P1-Pro | $131 | $169 | $38 | 22% |

**Risk:** Customer buys device-only → you become unpaid tech support. **Policy:** Bundle setup by default; device-only + disclaimer.

### Device + basic setup (target sale)

| SKU | Landed | Device sell | Setup | Total revenue | Gross profit (excl. labor) |
|-----|--------|-------------|-------|---------------|----------------------------|
| T1000-E | $55 | $69 | $89 | $158 | $14 + $89 = **$103** |
| RAK GPS | $62 | $79 | $99 | $178 | $17 + $99 = **$116** |

Setup time ~45–90 min once templated → effective rate $60–120/hr if efficient.

### Install job (best case margin)

Example: Solar P1-Pro turnkey (~$1,000 customer total)

| Component | Customer pays | Our cost | Gross |
|-----------|---------------|----------|-------|
| P1-Pro device | $169 | $131 | $38 |
| 8 dBi antenna | $75 | $38 | $37 |
| Package B install | $750 | ~$200 materials + ~$0 partner labor* | ~$550 |
| **Total** | **$994** | **~$369** | **~$625** |

*Partner labor is profit to the partnership if not paid as wage—adjust in operating agreement.*

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## Year 1 conservative P&L (monthly build)

### Assumptions

- 25 devices over 12 months (~2/month winter, 3/month summer)
- 80% attach paid setup ($95 avg)
- 4 install jobs ($850 avg revenue)
- 2 workshops ($200 each)
- 3 maintenance plans sold mid-year ($150 avg annual)
- 2 private MQTT setups ($300 each)
- 5 support subscriptions avg 6 months ($10/mo)

### Revenue by stream

| Stream | Calculation | Revenue |
|--------|-------------|---------|
| Device sales | 25 × $72 avg sell | $1,800 |
| Setup fees | 20 × $95 | $1,900 |
| Construction installs | 4 × $850 | $3,400 |
| Accessories (antennas, etc.) | lump | $600 |
| Workshops | 2 × $200 | $400 |
| MQTT private setup | 2 × $300 | $600 |
| Maintenance plans | 3 × $150 | $450 |
| Support subscriptions | 5 × 6 mo × $10 | $300 |
| **Total revenue** | | **$9,450** |

*Rounded from summary table for transparency in line items.*

### Cost of goods sold (COGS)

| Item | Estimate |
|------|----------|
| 25 devices landed avg | ~$52 × 25 = $1,300 |
| Accessories landed | ~$350 |
| Install materials (4 jobs) | ~$800 |
| **Total COGS** | **~$2,450** |

**Gross profit:** ~$7,000

### Operating expenses (cash)

| Expense | Annual |
|---------|--------|
| Insurance | $600 |
| Shipping on reorders | $400 |
| Tools/supplies | $300 |
| Marketing (print, booth) | $150 |
| Software/subscriptions | $100 |
| Contingency | $400 |
| **Total opex** | **~$1,950** |

### Net before partner labor

**~$5,050** (conservative scenario with strong install attach)

If only **2 installs** instead of 4: revenue drops ~$1,700 → net ~**$3,350**.

If **device-only** sales dominate (low setup attach): net ~**$1,500–2,500**.

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## Moderate stretch scenario (40 devices, 8 installs)

| | Amount |
|---|--------|
| Revenue | ~$16,500 |
| COGS | ~$5,400 |
| Opex | ~$3,500 |
| **Net before labor** | **~$7,600** |

Requires consistent summer marketing and construction capacity—ambitious for part-time.

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## Break-even analysis

### Monthly fixed costs (minimal operation)

| Fixed | $/mo |
|-------|------|
| Insurance amortized | $50 |
| Web/email | $10 |
| **Total** | **~$60** |

Break-even on fixed alone: **1 setup fee** or **1 device+setup** every ~2 months.

### Inventory break-even

If $3,000 tied in inventory, need **~$3,000 gross profit** to recycle cash—roughly:

- 30 device+setup combos at ~$100 gross each, **OR**
- 5 install jobs at ~$600 gross each, **OR**
- Mix

**Cash flow risk:** Inventory sits unsold while bills due—favor made-to-order for expensive SKUs.

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## Partner labor & effective hourly (illustrative)

Estimate year 1 hours: **300–500 total** (both partners combined)

| Net before labor | Hours | Effective $/hr (combined) |
|------------------|-------|---------------------------|
| $2,500 | 400 | $6.25 |
| $5,050 | 400 | $12.60 |
| $7,600 | 500 | $15.20 |

**Honest framing:** Year 1 buys learning, reputation, and mesh density—not livable wages. Year 2+ improves if installs and subscriptions stack.

### Suggested partner draw policy year 1

- Reinvest 50% of net into inventory and tools
- Split remaining 50% as modest draws OR leave in business until 6-month review

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## Cash flow timing (seasonality)

| Season | SE Alaska pattern | Business impact |
|--------|-------------------|-----------------|
| Spring | Boating/fishing prep | Device sales up |
| Summer | Construction, hunting prep | Installs peak |
| Fall | Hunting season | T1000-E bundles |
| Winter | Slower outdoor; storms | Maintenance, indoor workshops |

**Plan:** Stock up Q1 for spring; don't over-order solar nodes before first install sold.

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## Revenue drop scenarios (quick sensitivity)

| Event | Revenue hit (est.) |
|-------|-------------------|
| Lose 2 install jobs | −$1,700 |
| 10 customers buy direct from Seeed | −$700 hardware + −$950 setup |
| Freight doubles on reorder | −$300–600 gross over year |
| Support overload (churn) | Reputation cost > direct $ |

Full risk write-up: `08-risks-and-challenges.md`

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## Year 2 growth levers (not in year 1 numbers)

- Expand to Wrangell, Petersburg, Metlakatla (travel install days)
- Juneau/Sitka requires ferry/flight logistics—quote separately
- Temperate Broker live → marketing hook, not direct revenue
- B2B: charter fleet packs, contractor retainers
- Certified training workshops on recurring schedule

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## Tracking spreadsheet (recommended columns)

**Sales log:** Date · Customer · SKU · Landed cost · Sell · Setup $ · Install $ · Referral source

**P&L monthly:** Revenue by stream · COGS · Opex · Net

**Inventory:** SKU · Qty · Landed unit · Reorder point

**Support log:** Customer · Issue · Minutes · Billable Y/N

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## Tax & legal reminders (non-advice)

- Alaska business license renewal
- Sales tax collection rules for tangible goods (verify borough/city)
- 1099 / self-employment considerations for partners
- Document revenue split in operating agreement

Consult local accountant before first sale.

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*Related: pricing `01-product-pricing-catalog.md` · Construction `02-construction-services.md` · Risks `08-risks-and-challenges.md`*