# 05. Three-Year Financial Model & Itemized Budget ## Chew On This Basketball non profit Corporation **Financial Cycle:** Fiscal Years 2026, 2027, 2028 **Asset Baseline:** 16,500 Gross Sq. Ft. Dual-Court Facility (San Mateo County, CA) **Corporate Hybrid Model:** OpCo Commercial Yield + 501(c)(3) Foundation Giving **Pre-Launch Capital Reserve:** $\$600,000$ (CapEx + Ramp-Up Liquidity) --- ### 1. Consolidated 3-Year Pro Forma Statement ``` ┌──────────────────────────────────────┬──────────────┬──────────────┬──────────────┐ │ Financial Category │ Year 1 (2026)│ Year 2 (2027)│ Year 3 (2028)│ ├──────────────────────────────────────┼──────────────┼──────────────┼──────────────┤ │ Total Consolidated Revenues │ $1,138,400 │ $1,316,000 │ $1,474,000 │ │ Total Consolidated Operating Expenses│ $1,329,440 │ $1,389,031 │ $1,444,421 │ ├──────────────────────────────────────┼──────────────┼──────────────┼──────────────┤ │ Net Operating Cash Flow │ ($191,040) │ ($73,031) │ +$29,579 │ │ Pre-Launch Capital Reserve Balance │ $63,960 │ $25,929* │ $55,508 │ └──────────────────────────────────────┴──────────────┴──────────────┴──────────────┘ *Note: Includes minor secondary donor replenishment or retained operating cushion. ``` --- ### 2. Fully Itemized 3-Year P&L Statement | Detailed Line Item | Year 1 (Launch) | Year 2 (Growth) | Year 3 (Maturity) | Notes & Assumptions | | :--- | :--- | :--- | :--- | :--- | | **I. EARNED COMMERCIAL REVENUES** | | | | | | Corporate Tech Basketball Leagues | $\$307,200$ | $\$330,000$ | $\$355,000$ | 32 teams $\times$ $\$3.2\text{k}$ $\times$ 3 seasons; modest fee expansion | | Morning Pickleball Hub (Mon–Fri) | $\$180,000$ | $\$198,000$ | $\$210,000$ | 6 courts @ $\$15/\text{player}$, expanding to weekend mornings | | In-House Regional Tournaments | $\$259,200$ | $\$285,000$ | $\$310,000$ | 18 weekends $\times$ $\$14.4\text{k}$ gate/entry fees; growing to 20 | | Private Daytime Rentals & Clinics | $\$65,000$ | $\$75,000$ | $\$85,000$ | Off-peak floor rentals @ $\$225/\text{hr}$ | | Concessions, Apparel & Streaming | $\$42,000$ | $\$48,000$ | $\$54,000$ | On-site healthy concessions + automated video stream passes | | **Subtotal: Commercial Revenue Engine** | **$\$853,400$** | **$\$936,000$** | **$\$1,014,000$** | **Direct commercial yield** | | | | | | | | **II. PHILANTHROPIC REVENUES (501c3)**| | | | | | Peninsula Corporate Giving & Grants | $\$125,000$ | $\$175,000$ | $\$225,000$ | Tech & biotech matching grants (Gilead, Genentech, SVCF) | | Major Individual Donors & Board Circle| $\$100,000$ | $\$130,000$ | $\$150,000$ | High-net-worth founding patrons and travel fund donors | | Branded Gym Banners & Wall Board | $\$60,000$ | $\$75,000$ | $\$85,000$ | 12 gym wall sponsorship panels @ $\$5,000/\text{year}$ | | **Subtotal: Philanthropic Revenues** | **$\$285,000$** | **$\$380,000$** | **$\$460,000$** | **100% tax-deductible charitable support** | | **TOTAL GROSS OPERATING REVENUE** | **$\$1,138,400$**| **$\$1,316,000$**| **$\$1,474,000$**| | | | | | | | | **III. DETAILED OPERATING EXPENSES** | | | | | | **1. Facility Lease & Occupancy** | | | | | | Base Rent ($16,500\text{ sq ft} @ \$2.20/\text{mo}$)| $\$435,600$ | $\$448,668$ | $\$462,128$ | $3\%$ annual commercial escalation | | Triple Net (NNN) Fees (Taxes & CAM) | $\$89,100$ | $\$91,773$ | $\$94,526$ | $\$0.45/\text{sq ft}/\text{month}$ standard industrial flex rate | | High-Bay Utilities (HVAC, Power, Water)| $\$38,000$ | $\$40,000$ | $\$42,000$ | Climate-controlled courts and high-intensity LED | | Professional Janitorial Contract | $\$28,000$ | $\$29,500$ | $\$31,000$ | 6 nights/week commercial service | | Cleaning Chemicals & Machine Maintenance| $\$14,000$ | $\$14,500$ | $\$15,000$ | Tennant auto-scrubber pads, sanitizer, consumables | | Annual Hardwood Polyurethane Recoat | $\$7,500$ | $\$7,800$ | $\$8,100$ | Professional annual screening and protective coat | | **2. W-2 Personnel & Labor Overhead** | | | | | | Executive Director (Full-Time Exempt) | $\$150,000$ | $\$154,500$ | $\$159,135$ | Base salary with $3\%$ cost-of-living adjustment | | Director of Operations (Full-Time Exempt)| $\$120,000$ | $\$123,600$ | $\$127,308$ | Full-time facility manager | | Athletic Director & Head Coach (Exempt) | $\$115,000$ | $\$118,450$ | $\$122,004$ | Full-time head coach and child safety officer | | Operations Admin (PT — $\$28/\text{hr}$) | $\$36,400$ | $\$37,492$ | $\$38,617$ | 25 hours/week front-of-house coordinator | | 4 Assistant Coaches (PT — $\$32/\text{hr}$) | $\$66,560$ | $\$68,557$ | $\$70,614$ | 13 hours/week $\times$ 4 coaches $\times$ 40 weeks | | Lead Academic Tutor (PT — $\$35/\text{hr}$) | $\$21,000$ | $\$21,630$ | $\$22,279$ | 15 hours/week $\times$ 40 academic weeks | | Weekend Tournament Staff (PT — $\$24/\text{hr}$) | $\$23,040$ | $\$23,731$ | $\$24,443$ | 2 site workers $\times$ 24 hours/weekend $\times$ 20 events | | Employer Payroll Taxes & Mandated UI/SDI| $\$58,520$ | $\$60,341$ | $\$62,309$ | Calculated at $11\%$ statutory employer tax drag | | CA Workers' Comp (Sports Classification) | $\$37,240$ | $\$38,399$ | $\$39,651$ | High-hazard sports class code (7% blended rate) | | Executive Health Care Stipend Pool | $\$24,000$ | $\$25,200$ | $\$26,460$ | $\$8,000/\text{year}$ per full-time executive employee | | **3. Youth Programming & Scholarships**| | | | | | Out-of-State Travel (Vans, Flights, Hotel)| $\$55,000$ | $\$65,000$ | $\$75,000$ | Fully funds 3 elite travel rosters for national circuit | | National Tournament Registration Dues | $\$18,000$ | $\$20,000$ | $\$22,000$ | NCAA-certified live evaluation showcase entries | | Academic Tutoring Hardware, Books & Food | $\$10,000$ | $\$12,000$ | $\$14,000$ | Laptops, STEM software, daily healthy study hall snacks | | Game Uniforms, Shooting Shirts & Gear | $\$14,000$ | $\$15,000$ | $\$16,000$ | Provided 100% free to all participating youth | | **4. Technology, Insurance & Compliance**| | | | | | Commercial General Liability ($\$2\text{M}/\$4\text{M}$) | $\$16,000$ | $\$17,000$ | $\$18,000$ | Includes comprehensive youth abuse/molestation riders | | D&O Insurance + Cyber Breach Liability | $\$5,500$ | $\$5,800$ | $\$6,000$ | Protects board members and digital payment data | | Sports Management Software & Merchant Dues | $\$12,000$ | $\$13,000$ | $\$14,000$ | CourtReserve, LeagueApps, 2.9% merchant interchange | | Annual CPA Form 990 Prep & Legal Advisory | $\$14,000$ | $\$15,000$ | $\$16,000$ | Formal certified financial audit and state filings | | CA Live Scan Fingerprinting & Safety Training | $\$3,500$ | $\$1,500$ | $\$1,800$ | AB 506 state background registry accounts | | Basketball Equipment Replacements & Meds | $\$7,500$ | $\$5,000$ | $\$6,000$ | Wilson Evolution balls, first-aid, ice, training cones | | **TOTAL CONSOLIDATED EXPENSES** | **$\$1,329,440$**| **$\$1,389,031$**| **$\$1,444,421$**| | | | | | | | | **NET OPERATING CASH FLOW** | **($\$191,040)**| **($\$73,031)** | **$+\$29,579** | **Self-sustaining by Year 3** | --- ### 3. Capital Campaign & Cash Flow Bridge Strategy Because commercial facility launches incur initial negative cash flow while adult leagues and tournaments ramp up, the organization relies on a **$\$600,000$ Seed Capital Campaign**: ``` Pre-Launch Capital Pool: $600,000 ├── CapEx Buildout Allocation: $345,000 (Courts, Hoops, Classrooms, Permits) └── Working Capital Reserve Pool: $255,000 (Preserved in high-yield liquidity) Year 1 Operating Cash Flow: -$191,040 └── Absorbed by Working Capital Reserve -> Remaining Reserve at End of Year 1: $63,960 Year 2 Operating Cash Flow: -$73,031 └── Bridged by Year 2 Philanthropic Growth + $35,000 Sustaining Board Gifts -> Remaining Reserve: ~$25,000 Year 3 Operating Cash Flow: +$29,579 (Profitable Self-Sufficiency Achieved) ``` --- ### 4. Financial Sensitivity & Stress-Test Analysis * **Downside Scenario ($15\%$ drop in corporate leagues):** If tech companies cut recreational wellness budgets, corporate league revenue drops by $\$46,000$. *Mitigation:* Convert 2 evening slots into open high-demand adult recreational pickup play and expand morning pickleball into weekend morning hours, recouping $\$52,000$ in cash flow. * **Upside Scenario (Tech Foundation Endowment):** If a major Peninsula tech foundation awards a $\$250,000$ multi-year programmatic endowment, the organization becomes cash-flow positive in Year 1 and immediately expands the travel scholarship fund to include Middle School development rosters.