Liberty Tax — Southwest Detroit Franchise

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Executive Summary

Summit Tax Services - Southwest Detroit Franchise is a franchised neighborhood tax preparation office in Detroit, Michigan, owned by Patricia and James Monroe. We prepare individual and small business returns, offer electronic filing and year-round bookkeeping and serve the southwest Detroit community.

Why this fits. Tax rules are complex and many residents want local help from someone they trust. A recognized franchise brand provides training, software and marketing, and experienced local owners provide the personal touch.

Here is what our numbers show. In Year 1 we plan about 1,000 returns, 800 add-on services and 300 bookkeeping and year-round services. That brings in sales of $291,500, growing to $829,200 by Year 5. We expect a loss of about $2,000 in Year 1, a profit of about $41,600 in Year 2, a profit of about $111,100 in Year 3 and a profit of about $232,800 by Year 5. The franchise fee, preparer pay, the lease and marketing are our largest costs, and the plan counts all of them.

We need $165,000 in total. Of that, $99,500 is startup costs (computers, printers and scanners, furniture and signs, the franchise fee, licensing and insurance, credentials and training, a lease deposit and grand opening marketing), and the rest is cash for the first months. We are putting in $25,000 of our own savings and asking for a $140,000 SBA 7(a) loan.

We are Patricia and James Monroe, owners of Summit Tax Services - Southwest Detroit Franchise. These numbers are estimates based on the assumptions listed at the end of this plan, not promises.

Company Description

Summit Tax Services - Southwest Detroit Franchise will be a limited liability company (LLC) in Detroit, Michigan, owned and run by Patricia and James Monroe. Patricia is a seasoned tax preparer who has served neighborhood clients for years and James has run a small business. They want to open a franchised neighborhood tax office in southwest Detroit.

What we do:
- Individual and family tax preparation.
- Small business and self-employed returns.
- Electronic filing and refund options.
- Bookkeeping and year-round tax planning.
- Help with notices, amended returns and prior-year filing.

Who we serve: Individuals, families, gig workers and small business owners in the southwest Detroit neighborhood.

Licensing and insurance. We will register the LLC, sign the franchise agreement after a franchise attorney reviews the franchisor's Franchise Disclosure Document, hold the IRS preparer tax identification numbers and electronic filing identification number required, carry errors and omissions and general liability insurance and follow IRS rules and state requirements for preparers. We do not promise refund amounts or timing. Fees and terms below are planning estimates; replace them with the figures in the franchisor's disclosure document.

Our promise. Accurate returns, clear fees and respect for every client.

Where things stand today. The business plan, fee schedule and franchise review are underway. The next steps are the franchise attorney review, the lease and the opening.

Problem & Opportunity

Many families and small business owners dread tax season and worry about mistakes, fees and missing credits.

What customers run into:
1. Confusing forms and rules.
2. Missed credits and deductions.
3. Preparers who disappear after filing season.
4. Unclear fees and refund products.

Why it matters. A correct return can mean a larger refund or avoid penalties, and the right help year-round prevents problems.

Products & Services

Our office will be the trusted neighborhood place to do taxes in southwest Detroit.

What makes us different:
1. Credentialed, trained preparers.
2. Clear fees quoted before we start.
3. Accuracy review on every return.
4. Year-round office hours and support.
5. Bilingual service where needed.

How a return works:
1. The client books or walks in and brings documents.
2. A preparer interviews the client and prepares the return.
3. We review it for accuracy and explain it to the client.
4. We file electronically and follow up on questions.

Why customers stay. Clients return every year and refer family and friends.

Market Analysis

Who we serve:
- Individuals and families.
- Gig workers and self-employed people.
- Small business owners.
- People with prior-year or amended filings.

How we sized the market. Our Year 1 plan is about 1,000 returns, 800 add-on services and 300 bookkeeping and year-round services, a small share of the tax filers in the neighborhood and metro area. Replace this estimate with your own count of residents and offices near you.

Why now. Tax rules are complex, many residents want local help and a recognized brand provides training, software and marketing.

Competitive Landscape

What customers can do today:

1. Large national tax chains. Familiar and costly.
2. Independent preparers. Personal and variable.
3. Free volunteer programs. Free and limited.
4. Do-it-yourself software. Cheap and impersonal.
5. Accountants. Skilled and costly for simple returns.

Where we fit. Our office will combine a trusted brand and training with friendly, local, year-round service.

Marketing & Sales Strategy

How customers will find us.

Before opening:
- Meet churches, community groups and small businesses.
- Host free tax tip workshops.
- Set up local social media and a Google Business Profile.
- Follow the franchisor's opening marketing plan.

After opening:
- Ask clients for reviews.
- Offer referral credits.
- Send reminders in January.
- Offer year-round bookkeeping.
- Partner with local businesses.

What we will measure. How clients heard about us, how many first-time clients return the next year and how many bookkeeping clients we keep.

Operations Plan

How the business will run.

Season and schedule. Most work happens between January and April, with extension and business filings through the year. We staff up in season and use the off season for bookkeeping and marketing.

Team. Patricia leads preparation and review. Seasonal preparers work in the office from January to April, and we add preparers as the client base grows.

Quality and safety. We follow IRS rules for identity verification and data security, use encrypted software and lock paper files. All preparers complete required training and sign confidentiality agreements.

Equipment. We will buy computers, printers and scanners, office furniture and signs.

Paperwork and money. Clients pay at the end of the visit by card or cash, or through a refund transfer option the client chooses. We follow up on unpaid fees within a week. We keep the books in simple accounting software and set aside money for taxes and insurance every month.

Management & Organization

The people who will run Summit Tax Services - Southwest Detroit Franchise.

Patricia Monroe, owner and lead preparer. She prepares and reviews returns and trains staff. James Monroe, owner and operations lead. He handles the office, marketing and the books. (Replace this paragraph with your own background.)

Team. Three seasonal preparers in Year 1, growing to six, each trained and holding the required identification numbers.

Office. James handles the office with part-time help.

Outside advisors. An accountant, an insurance broker, an attorney who reviews contracts and a free mentor from SCORE or the Small Business Development Center.

Staff pay in this plan is a full year per person: owner / Lead Preparer $48,000; seasonal Preparer (full-time equivalent) $26,000; office Assistant $28,000. Replace them with the pay you can offer where you live.

Milestones Narrative

Our goals and when we plan to reach them.
- Before opening (4 months ahead): complete the franchise review and agreement, sign the lease, set up the office, hire and train preparers and plan the grand opening.
- Year 1: about 2,100 returns, services and bookkeeping jobs with Patricia and three seasonal preparers; $291,500 in sales and a loss of about $2,000.
- Year 2: about 3,050 and a fourth preparer; $428,700 in sales and a profit of about $41,600.
- Year 3: about 4,000 and bookkeeping year-round; $574,200 in sales and a profit of about $111,100.
- Year 4: about 4,750 and a fifth preparer; $696,550 in sales and a profit of about $159,200.
- Year 5: about 5,500 and a sixth preparer; $829,200 in sales and a profit of about $232,800.
Growth depends on winning and keeping customers, so treat the later years as goals, not promises.

What we check every week: returns prepared, average fee, add-on sales, bookkeeping clients, unpaid fees and cash in the bank.

Funding Request

How much we need and how we will use it. Total we are raising: $165,000.

How we got that number. The Funding Need Calculator in this plan adds up three things:
- Startup costs of $99,500, listed item by item in the Startup Costs section: $14,000 for computers, printers and scanners, $8,000 for office furniture and signs, $40,000 for franchise fee, $6,000 for LLC filing and franchise attorney review, $4,500 for errors and omissions and general liability insurance, first payment, $4,000 for preparer credentials, training and background checks, $8,000 for security deposit and first month's rent, $10,000 for grand opening marketing, $5,000 for software and e-file setup.
- The cash the business uses before it breaks even, about $0. Sales cover the daily costs once the doors open, so the cash we need up front goes mostly to startup costs.
- A cash cushion of about $61,300: three months of Year 1 operating costs.
- Together, the cash used before break even and the cushion come to about $61,300, and the three pieces add up to about $160,800, rounded up to the nearest $500: $161,000.
We are raising $4,000 more than that, $165,000 in all, to cover a slower first season than planned. With this funding, the lowest year-end cash balance is about $132,200, at the end of Year 1.

Where the money comes from:
- Our own money: $25,000.
- SBA 7(a) loan: $140,000.

Kind of funding we are looking for. An SBA 7(a) loan from a lender that finances franchise and small businesses, backed by our savings and the equipment as collateral. We will have a franchise attorney review the franchisor's Franchise Disclosure Document and agreement before we sign or borrow.

How we will pay it back. We expect a loss of about $2,000 in Year 1, a profit of about $41,600 in Year 2, a profit of about $111,100 in Year 3, a profit of about $159,200 in Year 4 and a profit of about $232,800 in Year 5. With this funding, the business has money in the bank at the end of every year of the plan. Our loan is the SBA 7(a) loan at 10.5% over 10 years, $1,889 a month. That payment is already included in our cash flow. We chose these as cautious planning rates; ask the lender for the real rates, which may be lower or higher.

What we are offering the lender: the equipment and a personal guarantee.

A smaller first step, if needed. If we cannot raise the full amount right away, we can start smaller and grow into this plan:
- Phase 1: open before the next tax season with a lean team, which lowers the startup costs and the loan.
- Phase 2: once the first season is done, add bookkeeping and extra preparers and follow this plan.
To plan the smaller start, make a copy of this plan (use Duplicate) and lower the numbers to match.

All numbers in this plan are estimates. We will update them as real results come in.

Appendix Notes

Documents to attach before you send this plan:

- Your resume and a personal financial statement (a list of what you own and what you owe; lenders usually provide a form).
- Business registration papers and your EIN (your business tax number from the IRS, free at irs.gov).
- The franchisor's Franchise Disclosure Document and your attorney's review.
- Your preparer credentials and proof of insurance.
- Your lease or letter of intent.
- Quotes for equipment and signs.
If you don't have any of this yet, no worries - let's continue.

The assumptions behind our numbers (change them in the Financials section to match your own):
- Tax Return Preparation: about $230 in Year 1, rising to $259; about $20 in direct costs, rising to $23; about 1,000 in Year 1, growing to 2,400.
- Add-On Services and Refund Products: about $45 in Year 1, rising to $51; about $8 in direct costs, rising to $9; about 800 in Year 1, growing to 2,000.
- Bookkeeping and Year-Round Services: about $85 in Year 1, rising to $96; about $10 in direct costs, rising to $11; about 300 in Year 1, growing to 1,100.
- A return averages about $230, an add-on service about $45 and a bookkeeping or year-round service about $85. Royalty and advertising fees are estimated as a percentage of sales; use the real figures in the franchisor's disclosure document.
- Prices rise about 3% a year.
- Equipment ($22,000 in Year 1) covers computers, printers and scanners, office furniture and signs, and later years ($2,000, $3,000, $2,000 and $3,000) replace and add equipment.
- Pay (a full year, per person): owner / Lead Preparer $48,000; seasonal Preparer (full-time equivalent) $26,000; office Assistant $28,000.
- Other yearly costs in Year 1: franchise Royalty and Advertising Fees $48,000, office Lease and Utilities $28,000, errors and Omissions Insurance $6,000, marketing $24,000, software and E-File $8,000, admin $5,000. These grow between 3% and 25% a year.
- Customers and payers pay about 7 days after service, so at the end of Year 1 about $5,830 is still owed to us. Income tax at 21%.
- Every dollar amount is an estimate. Replace them with your own quotes and research.

Startup Costs