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Legacy Soil & Stone — v3 Financials (DRAFT rev 2)
Companion to the v3 master proposal. Volume model rebuilt against Mark's grounded numbers — Year 1 = 10 Stream A orders/month + 3 Stream B orders/month. Operating expenses now itemized.
1. Stream A unit economics (Memorial Pearls)
COGS includes binder, pigments, cremains-slurry materials, sealant, polishing supplies, packaging, shipping carton, and apportioned aggregator consumables. Excludes Mark's labor (treated as operator draw, not COGS — see §5).
| Tier | Cremains | Pearls | Price | COGS (est.) | Gross profit | Margin |
|---|---|---|---|---|---|---|
| XS | < 0.5 lb | 1-3 | $250 | $22 | $228 | 91.2% |
| S | 0.5-1 lb | ~25 | $475 | $42 | $433 | 91.2% |
| M | 1-2 lb | ~45 | $695 | $68 | $627 | 90.2% |
| L | 2-4 lb | ~70 | $995 | $98 | $897 | 90.2% |
| XL | 4-9 lb | ~85 | $1,295 | $135 | $1,160 | 89.6% |
| Blended (mix-weighted) | ~$735 | ~$73 | ~$662 | ~90.0% | ||
Margin floor exceeds the ≥88% target across all five tiers. v3 lifts to ~90% blended on the simpler product mix (no concrete casting, no Marble Method finishing).
2. Stream B unit economics (Private NOR + Cedar Vessel)
Stream B restructured per April-11 research: 3 tiers, standardized 1.5 cu ft return + standardized hand-built cedar planter for every tier. Pricing scales with vessel cycle complexity (JK270 dual-chamber for Tiny vs JK400 for Small-Medium and Large), not output volume. COGS includes cedar planter materials + finish, NOR vessel consumables, soil packaging, shipping, certificate. v2's Bloom-tier baseline ($475 → $70 COGS at 85.3%) carried forward as the consistent cedar-piece cost.
| Tier | Pet weight | Vessel cycle | Return | Price | COGS (est.) | Gross profit | Margin |
|---|---|---|---|---|---|---|---|
| Tiny | < 10 lb | JK270 dual | 1.5 cu ft + cedar | $475 | $70 | $405 | 85.3% |
| Small-Medium | 10-30 lb | JK400 dual | 1.5 cu ft + cedar | $675 | $80 | $595 | 88.1% |
| Large | 30-40 lb | JK400 full | 1.5 cu ft + cedar | $895 | $95 | $800 | 89.4% |
| Blended (mix-weighted) | ~$634 | ~$78 | ~$556 | ~87.6% | |||
Mix weighting per Pet_Weight_Vessel_Sizing research: Tiny 35%, Small-Medium 52%, Large 13%. Stream B blended ~87.6%, just under the 88% all-line target. The Tiny tier (85.3%) is the floor — Tiny gets the same standardized hand-built cedar planter as the Large tier, so the planter cost is a fixed share of a smaller revenue base. Bumping Tiny to $525 lifts the floor to ~87% and the blended to ~88.4%; doable but raises the entry price. Mark to call.
Surplus from Large tier (where pet yields 2.5-3 cu ft vs 1.5 cu ft delivered) goes to the Unconditional Forest mother pile at the workshop. Operationally: shipping costs are contained (standardized box, predictable freight), surplus has a permanent home, brand gains a photographable on-site element.
3. Line 3 — Community Composting (pass-through to shelters)
| Item | Amount | Notes |
|---|---|---|
| Customer fee | $175 | Single price, no weight tier — communal vessel |
| Direct cost per participant | $30 | Intake handling, batch labeling, soil bag, packaging, shipping |
| Net proceeds donated to shelter partner | $145 | Year-end donation receipt totaled across program |
| Legacy retained margin | $0 | Operating costs absorbed; not booked as Legacy revenue |
4. Year 1-3 revenue projections (rebuilt against research-grounded volumes)
Volume baseline (Mark's call): Year 1 = 10 Stream A orders/month + 3 Stream B orders/month = 120 + 36 annually. Ramp: 2.5× into Year 2, ~2× into Year 3 (deceleration as the regional market saturates). The earlier 35 Stream A / 20 Stream B was undercutting the research; rebuilt here.
| Year | Stream A orders | Stream A revenue | Stream B orders | Stream B revenue | Total revenue | Gross profit (~88%) |
|---|---|---|---|---|---|---|
| Year 1 (Validation) | 120 | $88,200 | 36 | $22,824 | $111,024 | ~$99,400 |
| Year 2 (Ramp, 2.5×) | 300 | $220,500 | 90 | $57,060 | $277,560 | ~$248,400 |
| Year 3 (Maturity, ~2×) | 600 | $441,000 | 180 | $114,120 | $555,120 | ~$496,900 |
Stream A blended price ($735) × volume; Stream B blended price ($680) × volume. Mix assumption: Stream A weighted toward S/M/L, Stream B weighted toward Tiny/Small (pets in the 5-20 lb range = most of pet-cremation volume per the Pet_Weight_Vessel_Sizing research).
5. Operating expenses
| Line item | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Operator draw (Mark's salary) | $54,000 | $54,000 | $54,000 |
| Marketing budget | $5,000 | $8,000 | $12,000 |
| Insurance (general liability + memorial-services) | $1,500 | $1,800 | $2,200 |
| Misc operating (utilities, supplies, software, freight overhead) | $5,000 | $8,000 | $11,000 |
| Total operating expenses | $65,500 | $71,800 | $79,200 |
6. Net income projection
| Year | Revenue | Gross profit (~88%) | Operating expenses | Net income (pre-tax) |
|---|---|---|---|---|
| Year 1 | $111,024 | ~$99,400 | $65,500 | ~$33,900 |
| Year 2 | $277,560 | ~$248,400 | $71,800 | ~$176,600 |
| Year 3 | $555,120 | ~$496,900 | $79,200 | ~$417,700 |
Year 1 net is positive after Mark's $54K draw — the business covers his salary and produces ~$33K of additional retained earnings in the validation year. Year 2 is the inflection point: the business clears almost twice the operator draw in surplus. Year 3 maturity assumes regional saturation and a stable customer-acquisition rhythm.
7. Line 3 community-program flow (donations to shelters)
| Year | Community participants | Pass-through to shelters (donation total) |
|---|---|---|
| Year 1 | ~30 | ~$4,350 |
| Year 2 | ~80 | ~$11,600 |
| Year 3 | ~160 | ~$23,200 |
Line 3 numbers don't appear on Legacy's revenue ledger. These are donation-receipt totals to shelter partners — useful for the brand story, the academic-outreach narrative (Line 4), and the year-end shelter-partnership reports.
8. Capital — two paths
Dream path: $120,000 - $130,000 — the founder-funded scenario
The Dream path is the pitch when someone asks "what's your dream version of this?" A backer who believes in the work — a person who lost a dog, who has the means to fund the kind of business they wish had existed for them — underwrites the proper start.
The dream is not bigger margin or faster ramp. The dream is the land. Twenty to forty acres in the North Georgia foothills — pasture for the soil program, forest the soil itself feeds back into, a creek the workshop sits beside, a pond. A purpose-built workshop with the aggregator pan, the painting bench, the curing room, the cedar build station. Soil from the Community Composting line goes into the field. Cremains-fed pearls cure in a room that smells like cedar and wood polish.
Customers visit if they want to. Most never need to — the land does its work whether anyone watches or not.
What the Dream path buys: a permanent home for the workshop, the land asset itself as long-horizon collateral, and the time and quiet to build at the artisan pace this work asks for. What it doesn't buy: faster volume, higher margin, or any change in the business model. Same product, same pricing, same lines — just on the right ground.
9. Breakeven and capital recovery
On the Solid path, Year 1 net income (~$33,700) covers the lower bound of startup capital ($33K) within Year 1 if volumes hold. Year 2 net income (~$176K) recovers the full upper bound ($40K) several times over. The Solid path is operationally self-funding from Year 1 forward.
On the Dream path, the operating economics are unchanged from the Solid path — Year 1 still produces ~$33K net. The land asset is the additional collateral on the Dream path; it's not amortized through operating cash flow. If the backer's funding is structured as a long-horizon collateralized loan against the land, debt service comes out of Year 2-3 net income and is comfortably covered.
10. Open numbers — Mark to confirm
- Marketing $5K Y1 / $8K Y2 / $12K Y3 — Mark confirmed $5K Y1; Y2/Y3 ramps are scaled from there. Adjust if you have a different tempo.
- Operator draw $54K/year — Mark confirmed.
- Insurance $1.5K/year — Mark confirmed; modest annual adjustment for revenue scaling.
- Volume Y1 = 120 Stream A + 36 Stream B — Mark's call; rebuilt against research baseline.
- Y2 multiplier 2.5×, Y3 multiplier ~2× — Mark's ratio. If you want different decel, the table re-runs in seconds.
- Stream A blended margin ~90%, Stream B blended ~86.5%, all-line floor ≥88% on Stream A, slightly below on Stream B — the cedar-vessel cost is the gap.