Financial projections: 4 key tools
To build a sustainable recycling business, you need to plan your revenue, costs, cash flow, and profitability. This section outlines key financial considerations and shares some tips from our experience at The Flipflopi Project.
1. Revenue forecasting (money coming in)
Revenue can come from:
- Selling recycled plastic
- Offering waste collection services
- Selling products made from recycled materials
Key questions for revenue forecasting
Plastic collection volume
- How much plastic can you collect per month or year (kg/tonnes)?
- Where does the waste come from (households, businesses, clean-ups)?
- How does population density or geography affect collection and costs?
Price per kg of recycled plastic
- What are market prices for different plastic types (e.g. PET, HDPE)?
- How do prices fluctuate with supply and demand?
- How could price changes affect your revenue projections?
Product sales
- What products will you make (e.g. furniture, accessories, construction materials)?
- How much will you sell them for?
- How many units can you sell each month/year?
- What is your profit margin per product?
2. Cost forecasting (money going out)
Cost forecasting helps you plan expenses, set fair prices, and stay profitable.
Key cost areas
Operating costs (OpEx)
- Transport – fuel, maintenance, insurance.
- Salaries and benefits – wages, training, insurance.
- Utilities – electricity, water.
- Other expenses – PPE, office supplies, safety equipment.
Capital costs (CapEx)
- Vehicles for waste collection.
- Recycling facility setup – buildings, machinery, equipment.
- One-time setup costs – land, renovations, infrastructure (water, electricity).
- Financing – will you use loans, grants, or investment?
Variable costs
- Sorting, processing, packaging of plastic.
- Distribution costs – storage, transport, marketing.
- Labour and material costs that increase as production grows.
3. Cash flow projections (can you pay the bills?)
Cash flow tracks money coming in (sales, grants, investment) and money going out (expenses, salaries, rent, materials).
Key cash flow considerations
Monthly and annual cash flow
- What is your monthly and yearly revenue?
- What are your fixed and variable costs?
- How does the timing of payments affect your cash flow?
Seasonality impact
- Will plastic collection or sales fluctuate during certain months?
- How will you prepare for slow periods?
Funding needs
- When might you run short on cash? How much funding will you need?
- Will you use loans, grants, or investment to cover gaps?
- How will you ensure sustainable growth without over-relying on external funding?
4. Profit and loss statement (can you grow?)
A Profit and loss (P&L) statement tracks revenue, costs, and profits over a set period. It helps assess financial health and profitability.
Key P&L questions
Gross profit
- What is your total revenue from plastic sales and recycled products?
- What are the direct costs (raw materials, labour, processing)?
- What is your gross profit (revenue minus direct costs)?
Operating profit
- What are your operating expenses (rent, utilities, salaries, overheads)?
- How much of your gross profit is spent on operations?
Net profit
- What are your taxes, interest payments, and financial obligations?
- What is your final profit after all costs?
A well-maintained P&L statement helps with pricing, cost control, and investment decisions.
Read the next page: Key Tips for Financial Sustainability to see how we made key financial decisions at the Flipflopi Project.
