| Course | ENP-7320 Entrepreneurship |
|---|---|
| Module | Module 3 |
| Paper type | Final project part 3: financial and financing plans |
| Length | About 739 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | Master of Business Administration |
| Updated | October 2026 |
Free sample paper for ENP 7320 Module 3
Two Hundred Fifty Thousand Dollars and 840 Pounds a Week: The Financial Plan for Mill Hill Mushroom Company
Student Name
Master of Business Administration, Thomas Edison State University
ENP-7320: Entrepreneurship
Mentor Name
Month Day, Year
Two Hundred Fifty Thousand Dollars and 840 Pounds a Week: The Financial Plan for Mill Hill Mushroom Company
Startup Costs and Sources of Funds
The working capital reserve is sized to the projected first-year cash shortfall of about $36,000, with a margin for slower sales.
| Use of funds | Amount | Source of funds | Amount |
|---|---|---|---|
| Grow room build-out: insulation, climate control, humidifiers, shelving, pasteurization equipment | $145,000 | Founder equity | $60,000 |
| Refrigerated delivery van | $38,000 | Family investors, 15 percent equity | $40,000 |
| Initial substrate, spawn, packaging, lease deposits | $12,000 | SBA 7(a) loan, 10 years | $150,000 |
| Working capital reserve | $55,000 | | | |
| Total | $250,000 | Total | $250,000 |
Key Assumptions
Every projection rests on a few assumptions, and Timmons et al. (2015) advise founders to state them plainly so readers can test them.
Production rises from 600 substrate blocks a week in year one to 1,000 in year two and 1,300 in year three.
Each block yields 1.1 pounds of mushrooms over its harvests; 80 percent of the crop is sold in year one as accounts build and 88 percent after.
The average price is $10.50 a pound: 70 percent of volume to restaurants at $9 and 30 percent at farmers markets at $14.
Each block costs $2.10 in materials; packaging costs $0.40 a pound sold.
Technicians earn $19 an hour; payroll taxes and benefits add 10 percent.
Rent is $36,000 a year for 4,000 square feet; equipment is depreciated over seven years and the van over five.
Projected Income Statements
As an LLC, the company passes profit and loss through to the owners, so no entity-level income tax is shown. The first-year loss reflects a farm running well below capacity while carrying most of its fixed costs.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Pounds sold | 26,400 | 48,400 | 62,920 |
| Revenue | $277,200 | $508,200 | $660,660 |
| Materials and packaging | (73,560) | (124,360) | (161,668) |
| Gross profit | 203,640 | 383,840 | 498,992 |
| Gross margin | 73.5% | 75.5% | 75.5% |
| Wages, founders' salaries, payroll costs | (130,944) | (196,416) | (254,188) |
| Rent, utilities, insurance, van, marketing | (94,000) | (95,000) | (102,500) |
| Depreciation | (28,314) | (28,314) | (28,314) |
| Interest | (15,000) | (14,000) | (12,800) |
| Profit before owners' taxes | ($64,618) | $50,110 | $101,190 |
Cash Flow
Adding back depreciation, which uses no cash, the farm burns about $36,300 in year one and generates about $78,400 in year two and $129,500 in year three before loan principal. Principal payments on the 10-year loan, about $10,000 to $12,000 a year in the early years, are covered from year two. The lowest cash point comes around month eight, before the second technician's added output reaches full sale; the $55,000 reserve covers that trough and the first year's loan principal with roughly $9,000 to spare.
Break-Even Analysis
At year-two cost levels, fixed costs total about $333,700, and each pound sold contributes $7.93 after materials and packaging. Break-even is therefore about 42,100 pounds a year, or about 840 pounds a week, which is 87 percent of year-two output. That is a narrow margin of safety: losing six average restaurant accounts would wipe out the margin entirely. Two plan choices respond to it. The farmers market channel, at higher prices, lowers the volume needed, and contracts with restaurants for standing weekly orders make volume more predictable.
Sensitivity
Price is the most sensitive assumption, ahead of yield and sell-through. A 10 percent price cut would erase year-two profit, which is why the plan competes on freshness rather than price.
| Change from year-two plan | Effect on profit |
|---|---|
| Price 10 percent lower | about -$50,800 |
| Sell-through 80 percent instead of 88 | about -$44,400 |
| Yield 1.0 pound per block instead of 1.1 | about -$44,400 |
| One extra technician needed | about -$43,500 |
Financing Plan
The financing mix fits the venture's profile. The business has physical assets a lender can secure, predictable costs and a modest capital need, so debt is available and cheaper than equity. An SBA 7(a) loan offers a longer term than a conventional bank loan, keeping payments low during the ramp. Outside equity from angel investors would be costly for a business unlikely to grow fast enough to deliver venture-scale returns; Kerr et al. (2014) note that investors favor ventures whose experiments can reveal very large payoffs, which a single mushroom farm cannot. Family equity at 15 percent fills the gap between the founders' savings and what a lender will finance, and the founders' $60,000 shows the commitment a lender expects. Cassar (2004) found that start-ups with more tangible assets rely more heavily on debt, a pattern that fits a farm whose racks, climate controls and sterilization equipment can secure a loan.
References
Cassar, G. (2004). The financing of business start-ups. Journal of Business Venturing, 19(2), 261-283. https://doi.org/10.1016/S0883-9026(03)00029-6
Kerr, W. R., Nanda, R., & Rhodes-Kropf, M. (2014). Entrepreneurship as experimentation. Journal of Economic Perspectives, 28(3), 25-48. https://doi.org/10.1257/jep.28.3.25
Timmons, J. A., Spinelli, S., Jr., & Adams, R. J. (2015). New venture creation: Entrepreneurship for the 21st century (10th ed.). McGraw-Hill.
ENP 7320 Module 3 instructions, in plain terms
Part 3 of the plan, the money section, sits with the module on the financial plan; the four section parts share 10 percent. The course description calls for financial statements that support an investment in the enterprise. This part needs startup costs and their funding, three or more years of projected income and cash flow, a break-even point, the assumptions underneath and the financing plan. Spreadsheets usually support the written section. The venture and every figure on this page are a composite. Lenders and investors read this section most closely, so every figure should trace back to a stated assumption.
Inside the ENP 7320 Module 3 example
The section begins with a sources-and-uses table that balances to the dollar and ties the cash reserve to the first-year shortfall. Assumptions are listed before any statement, each specific enough to test. The income statement table builds each line from those assumptions across three years, followed by a cash flow paragraph that locates the lowest cash point. Break-even is computed in pounds per week and read as a margin of safety, a sensitivity table ranks the riskiest assumptions and the financing plan explains why debt and family equity fit better than angel investment. A short paragraph on financing research explains why debt suits a farm with tangible assets.
ENP 7320 Module 3 rubric: what earns full marks
The financial section is one of four business plan parts that share 10 percent of the ENP-7320 grade, and it is revised into the integrated plan worth 20 percent. Mentors look for statements that are internally consistent, assumptions that are stated and reasonable, a break-even analysis interpreted rather than just computed, and a financing plan that fits the venture's risk and size. Showing cash flow as well as profit, and testing how sensitive the results are, demonstrates the financial judgment the module is built to develop. Projections that balance, a cash flow that shows the low point and a sensitivity test on the key assumptions demonstrate the financial discipline the course expects. Mentors also check that the financing plan matches the business's risk profile.
ENP 7320 Module 3 help from the desk
Financial plans lose credit for hockey-stick revenue with no stated basis, for showing profit but not cash, for omitting the founders' own salaries and for pitching to venture investors a business too slow-growing to interest them. Write your assumptions first and build every line from them. Check that sources equal uses. Find the month when cash runs lowest. Compute break-even and compare it with your capacity. Fit the money to the venture: loans for steady firms with assets, investors for fast growers. A free first sample of your own ENP-7320 financial plan section is available on request. Build cash flow monthly for the first year, find the lowest cash point and size the reserve from it.
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This paper is an original model document written by our desk, not a submitted student paper and not an official Thomas Edison State University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
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ENP 7320 Module 3 questions, answered
Where can I find a free ENP 7320 Module 3 sample paper?
The mushroom farm financial plan above shows startup costs and sources, three-year income and cash flow projections, break-even, sensitivity and the financing choice.
What financial statements belong in a business plan?
Projected income statements, cash flow statements and balance sheets for three to five years, with startup costs, sources of funds and break-even analysis.
How do you calculate break-even volume?
Fixed costs over each pound's contribution after variable cost.
What is an SBA 7(a) loan?
A bank loan whose risk is partly carried by the U.S. Small Business Administration, often with longer terms than conventional loans.
Why show cash flow as well as profit?
Because a profitable plan can still run out of cash while sales ramp up, and the cash flow shows when that risk peaks.