The model
Cerezeal reaches cash-flow breakeven on recurring alone by Year 3, and a $400–500K/yr majority-recurring business (~$200K take-home) in 3–4 years — on the existing $105K runway, no raise required, provided a second client lands while Sunset is still in build.
The engine: outcome packages (~$25K entry, built from the module library) plus a package-scaled platform fee, sold one vertical at a time through a compliance wedge on a shared reusable core. Each added package is a warm upsell, not a new-logo sale.
~11 months survival if Sunset stalls, ~22 months if it pays. A second client is required before the cushion thins.
A $10K/module build clears ~$120/hr — below the $150/hr floor. Builds are CAC; MRR is the business.
Warm-access expansion fills the pipeline fast and can fragment the reusable core in the same motion.
Runway
$105K on hand — $100K plus Sunset's $5K audit, already cleared and folded into the current position, not a forward line item. Personal draw is ~$8K/mo; business fixed costs run ~$20K/yr (~$1.7K/mo — GCP, tooling, subscriptions; client API tokens pass through at cost). Total burn ~$9.7K/mo.
Sunset's build pays $5K/mo × 12 starting November 2026 — not at signature. Jul–Oct 2026 sees zero Sunset cash beyond what's banked. The retainer starts on its own confirmed date, September 2027, independent of the build schedule.
| Scenario | Net monthly cash | $105K lasts |
|---|---|---|
| Sunset stalls (zero revenue) | −$9.7K/mo (draw + fixed) | ~11 months |
| Sunset pays on schedule (Nov 2026–Oct 2027) | −$4.7K/mo once started | ~22 months from Nov 2026 |
| Sunset + a 2nd client near breakeven | ~$0/mo | runway preserved |
Sunset's build cash alone doesn't clear Year-1 burn — the Jul–Oct 2026 gap plus the Sep 2027 retainer start leave a wider hole than build cash fills. A second client is survival, not expansion. "Raise more" is a lever, not a plan: deploy it against a specific missed milestone, not by default.
Positioning
Productized service — not SaaS, not bespoke consulting. The compounding asset is the repeatable pattern, module library, and legal scaffolding: operational leverage where Instance #2 costs a fraction of #1's hours, not a multi-tenant login. Per-client owned data plane, no shared gateway.
Sell line to a buyer: "we install your intelligent operations layer," never "log into our platform" — SaaS framing undercuts the ownership and kill-switch model.
Category to own: operations architect for regulated and non-technical operators. Not "AI Ops" (an IT-infra term, taken). Not "intelligent process automation" (generic).
The Google pedigree is a credibility opener plus operator-empathy proof — never a standalone claim. It anchors the audit price; it reads as "big-tech guy who's never made payroll" unless paired with the floor-level method (Silent Stopwatch, Pen+Plaud). It is not a moat — keep it out of the defensibility reasoning.
Pricing
| Layer | Model | Calibration | Why |
|---|---|---|---|
| Audit | $10K (Sunset's $5K cleared as first-client door-opener) | Nudge to $12–15K, credited toward build | Qualifier + build discovery, not a profit center. Never discounted again. |
| Build / packages | Outcome packages, ~$25K entry, more per additional package. $10K/module = internal costing basis | Package price must clear the module cost floor (3-module package ≈ $30K internal → $25K entry is a knowing wedge, recouped on recurring + package #2). Scope-capped in the SOW. | Sells an outcome, not a parts list — anchors higher, closes faster than Sunset's $60K. Still CAC for recurring. Packages map to the 7-domain catalog. |
| Recurring | Package-scaled platform fee. Sunset's $150/hr = legacy exception | $/package/mo rate + minimum floor, decoupled from build price; optional overage + gainshare | Land-and-expand ARR — recurring climbs with no new sale. Makes the business sellable, not just a job. |
Four disciplines on the recurring fee
A single-package client at a low rate can't cover a solo operator's support cost. Set ~$1.5–2K/mo [EST] regardless of package count.
Price the monthly on ongoing value, never as a % of the package fee — or a client who front-loads packages pays less to run more.
Fee sits below the labor it displaces. Sunset's layer offsets ~15–20 hrs/wk of Sam's $75/hr ≈ $5,500/mo — a fee under that clears CFO scrutiny at 1.25% margin.
Value-priced-up slows expansion; low-friction accelerates it. Decide deliberately when setting numbers.
Unit economics
| Instance #1 (Sunset, bespoke) | Instance #2+ (productized) | |
|---|---|---|
24-mo revenue (audit + build + ~$3K/mo [EST] platform fee) | ~$133,000 | ~$133,000 |
Hours [EST] | ~666 | ~331 |
| Gross contribution (vs. $150/hr opportunity cost) | ~$33,100 | ~$83,350 |
| Realized rate | ~$200/hr | ~$402/hr |
crz_core / the library vs. net-new; that ratio is the thesis. Warning sign: bespoke n8n flows for a client's ERP that never return to the library.
Land-and-expand: 1 package (~$25K build + ~$3K/mo [EST]) → 2–3 packages (~$6–7K/mo [EST]) roughly doubles ARR and books another build. Warm upsell, no new-logo cost.
Path to profitability
Two distinct breakevens govern the read:
- Good quarter — a quarter's revenue clears the ~$9.7K/mo burn (draw + $20K/yr fixed) once a build lands. First hit Q2 2027.
- Recurring-floor — recurring alone, zero new builds, clears burn every quarter. Requires 7 active packages at $1,500/mo (~$9,700 ÷ $1,500 ≈ 6.5, round up), reached ~Year 3.
5a. Quarter-by-quarter — next 24 months
Sunset's schedule is fixed across every scenario: $5K/mo × 12 from November 2026, retainer September 2027. What varies is how fast the second and third clients close.
| Quarter | Revenue | Partner comp | Your net | Net cash flow | Runway end |
|---|
5b. Years 1–5 — the mix shift
Plan-paced case, rolled up annually. The tell is recurring's share of revenue, not the top line.
| Year | Build rev | Recurring rev | Rec. % | Pkgs | State |
|---|---|---|---|---|---|
| Y1 Q3'26–Q2'27 | ~$77K | $0 | 0% | 0–1 | Zero Sunset cash Jul–Oct 2026; pre-recurring |
| Y2 Q3'27–Q2'28 | ~$57K | ~$37.5K | ~40% | 2–3 | Sep 2027 retainer + Instance #2 recurring both live; first hire triggers late-window |
| Y3 | ~$65K [EST] | ~$55K [EST] | ~46% | 4–6 | 7-package recurring-floor threshold hit around here (late Y3 / early Y4) |
| Y4 | ~$75K [EST] | ~$100K [EST] | ~57% | 8–10 | Recurring majority; contractor absorbs build + Tier-1 support |
| Y5 | ~$75K [EST] | ~$160K+ [EST] | ~68%+ | 12–15 | Majority-recurring, past the solo wall |
Build stays flat — each build costs real hours, yours or a contractor's — while recurring compounds. If recurring's share isn't visibly climbing year over year, the model isn't working regardless of total revenue. Y1/Y2 sit on Sunset's confirmed dates; Y3–Y5 are directional [EST] pending Instance #2/#3 timing and the package-price calibration ().
Interactive: the recomputes the saw-tooth and mix-shift live against real client-count pace, package price, recurring rate, and the partner comp cap. Its shipped defaults run closer to the Accelerated toggle above.
5c. Thresholds
| Threshold | Definition | Rec. MRR [EST] | Pkgs | Timing (plan-paced) |
|---|---|---|---|---|
| ① First good quarter | Revenue clears ~$9.7K/mo burn — proof of model | n/a | 1–2 | Q2 2027 · ~mo 11 |
| ② Recurring-floor stability | Recurring alone, zero builds, clears burn every quarter | ~$9.7K | 7 | ~Year 3 |
| ③ Real income | ~$200K take-home / ~$360K+ revenue | ~$25–30K | ~10 | Year 3–4 |
| ④ Durable / sellable | Majority-recurring (~65%+), ~70% margin, past solo wall | $40K+ | 12–15 | Year 4–5 |
- ① is proof-of-model, not survival — the next quarter can still be deeply negative.
- ② is the milestone that deserves the word "breakeven." Under the Cautious toggle it lands closer to Year 3–4; Accelerated pulls it toward Year 2.
- ③ and ④ are unreachable on Sunset's hourly retainer (caps at 3–4 clients / ~$180K forever). Only package-scaled recurring supports 10–15 instances on 25 hrs/wk plus the Phase-C contractor.
5d. What moves these dates
| Lever | Effect | Cost |
|---|---|---|
| Land Instance #3 before #2's build cash runs out (overlap) | Pulls ② forward 6–12 months | Contractor hired earlier than "Instance #3's signed audit" — a deliberate risk |
| Raise recurring rate / floor | Fewer packages to hit ~$9.7K/mo (e.g. $2K/mo/pkg → ~5, not 7) | Possible friction on smaller SMB deals |
| Raise package price above $25K | Thicker cushion per quarter | Slower close on price-sensitive SMBs |
| Draw on "can raise more" | Buys time without faster sales | Costs focus; external capital costs equity/control |
| A client slips a quarter | Pushes every milestone back ~1:1 | Modeled exactly as the Cautious toggle above |
Roadmap
~3.5–4 years · today = Q3 2026Phases B and C interleave — productize while landing #2, using #2 as the forcing function. Don't build the factory before the second unit sells.
Objective: Sunset signed, built, live, referenceable, and paying — runway protected the whole way.
- Moves
- Sign → attorney → countersign.
- Build FT-01 → CS-02 → CS-01 + Command Center on real data — labor runs before any Sunset cash arrives.
- Deploy n8n greenfield, client-GCP data plane, prove the kill-switch steady-state (DL-7 gap first).
- Author the case study the moment acceptance lands, well ahead of the Sep 2027 retainer start.
- Checkpoint
- The Jul–Oct 2026 zero-cash window is priced in by design. Once payments start, gate further build labor on installments staying on schedule — stop new build if a payment slips >15 days.
- Exit gate
- Accepted, in steady-state, paying recurring, referenceable.
- Top risk
- 1.25%-margin anchor; revenue already fell $235K→$175K MoM; an incoming distributor launching a competing product. Lock the case study the moment acceptance lands.
Objective: turn the bespoke Sunset build into a repeatable instance, proven by standing up #2 in a fraction of the hours.
- Moves
- Delivery Engine to 100% + P0 fixes.
- Full
crz_coreinversion. - Deployment runbook.
- Land Instance #2 — the fastest warm lead that clears the Core-Transfer Gate.
- Measure the hour-delta.
- Checkpoint
- #2's build lands one good quarter (Q2 2027); the quarter after dips again — threshold ② is still a year-plus out. Don't declare victory on one good quarter.
- Exit gate
- #2 built in ≤175 hrs, and audit→proposal→deploy ran off the tooling.
- Go / no-go
- Is there a reachable pipeline of 5–10 more instances? If not, pivot to depth-per-client.
Objective: land instances #3–#5 and break the solo fulfillment ceiling.
- The wall
- Hits at Instance #3, ~late 2027. 25 hrs/wk ≈ 100 hrs/mo total supply; each live instance adds 10–20 support-hrs/mo.
1 build + 2 retainers + 1 audit ≈ 150–190 hrs/mo— impossible solo. - The fix
- A 1099 contract implementation engineer, funded by client revenue, onboarded onto
crz_core+ the runbook, absorbing build + Tier-1 support. Trigger the hire on Instance #3's signed audit, not when underwater. No closer hire — the founder is the differentiator. - Exit gate
- 5 live instances; one build primarily contractor-delivered; recurring MRR covering draw + infra.
Objective: grow revenue faster than your hours.
- Options
- Phase-C unit economics pick the model:
- a productized subscription SKU
- a 2–4-person contractor bench
- licensing to adjacent verticals
- Milestone
- A quarter where revenue grows and build-hours don't. "Profitable boutique with a small bench" is a legitimate terminal state.
Vertical expansion
One reusable core; enter every industry through a compliance/pain wedge; sequence the next industry by warm access. Cannabis is vertical #1 — the hardest-mode proving ground (280E, ACH-only, Metrc-UI-only), not the whole market.
The Core-Transfer Gate
A warm lead becomes a new vertical wedge only if it clears all four:
Compliance burden + thin margins + tribal knowledge + a mandated system-of-record to reconcile against.
A meaningful chunk of the module library ports — not a from-scratch build.
One productizable pain to build an audit around, per 280E/Metrc.
≥5–10 reachable clients like it — a vertical, not a one-off.
Passes all four → build the wedge, reuse the core. Fails any → take the cash as a one-off, don't productize around it. Nearest neighbors that clear it easily: supplements (FDA CGMP, COA management — CS-02 ports near-directly) and food/bev (FSMA 204 traceability, a direct Metrc analog) — both larger, growing, without cannabis's federal-illegality banking drag. Payment-rail choice stays per-industry and un-assumed; Cerezeal never touches client payment flows.
SMB → mid-market (more packages per client, still a relationship sale) → enterprise, parked at Phase D+. The enterprise rung needs SOC 2, procurement-ready contracts, a reference base, and a team — nobody sells it solo. Revisit once 3–4 SMB instances prove the engine.
Customer acquisition
One client, won via a pre-existing relationship — not a repeatable motion. Building one is the core near-term project, and it's a trust-transfer and time-protection problem, not a lead-volume problem.
The wedge: productize the $10K audit as fixed-scope, compliance-led, ending in a recommended package ("start with Compliance, $25K"). Add a free Operations Leak Scorecard (30-min diagnostic → one-page PDF off the Delivery Engine) as the tripwire. Targets: Scorecard→audit ~25–35% [EST]; audit→build ≥50% (below 40% = under-scoped audit or the ROI isn't landing).
Channels, ranked for a solo operator
At the next milestone: sign-off on an anonymized, quantified case study (anonymized reads as more credible in cannabis) plus two named warm intros. Reciprocal-value incentive, never cash.
280E traps, Metrc↔Flourish recon failures. Amplifies referrals; batch it — 4 posts in a 2-hr block.
Leveraged but slower; hold partner one-pagers until Sunset is citable. Watch Flourish/Distru AI features as an existential signal, not industry news.
Risk register
| # | Risk | Severity | Mitigation |
|---|---|---|---|
| 1 | Runway + client concentration — ~11-month survival if Sunset stalls; 100% of revenue on one unsigned 1.25%-margin client | Fatal | Gate build labor on cleared payment #1; land a 2nd audit before #1 finishes; monthly runway gauge; "raise more" as deliberate insurance |
| 2 | Solo ceiling — sell + build + support + compliance on one person; recurring saturates the founder | Fatal to profit | Package-scaled fee + productize + 1099 contractor at Instance #3's signed audit; instrument the 25 hrs; runbooks/IaC as bus-factor insurance |
| 3 | Vertical-#1 concentration + core fragmentation — cannabis-CA shrinking/high-failure/ACH-only/280E; warm-access expansion can scatter the core | Serious | Core-Transfer Gate; keep compliance modules pluggable on a vertical-neutral core; monitor Sunset revenue / AR aging / rescheduling |
| 4 | Productization may be a myth — every operator's ERP/Metrc/tribal-knowledge stack may be bespoke enough to kill economies of scale | Serious | Measure #2's hours honestly; track library-reuse %; standardize discovery, not just code |
| 5 | Ownership / kill-switch — buyer fear + liability in the client's regulatory chain; DL-7 gap may not survive post-migration | Serious | Solve the post-acceptance steady-state before the SOW locks; narrow + lawful framing; MSA liability carve-out; 30-day cure + escrow option |
| 6 | Moat — ERPs can build this natively; the Google hook is a 6–18mo head start, not a moat | Manageable | Real moat = encoded client-specific compliance knowledge + switching cost; "auditable, immutable, DCC-defensible" positioning; watch the ERPs |
Decisions
Open
- Calibrate package + recurring pricing — name packages off the 7 domains, set the ~$25K entry + additional-package ladder, $/package/mo rate + floor, value-priced-up vs. low-friction. Sets §5's real dates.
- Confirm recurring-floor stability (threshold ②), not the first good quarter, as the near-term target — plan-paced to Year 3.
- Gate 2B build labor on Sunset's cleared payment #1 — hard rule?
- Second-client push — allocate the 5 hr/wk pipeline block to a non-relationship $10K audit before Instance #1 finishes?
- Bank the Core-Transfer Gate as a standing filter in
new-subproject-guide.md/ the module catalog?
Next actions
this quarter- Move the Sunset packet — signature → attorney → countersign now. Payments start November regardless; every week of signature slip adds to the zero-revenue gap.
- Set the runway gauge — monthly net burn + months remaining, Green/Yellow/Red.
- Define packages + pricing (decision 1) — name off the 7 domains, set entry + ladder + recurring rate + floor, then model the breakeven curve for real dates on ①/②.
- Stand up the wedge — productize the $10K audit one-pager + the free Scorecard; put the 5 hr/wk pipeline block on the calendar now.
- Solve the DL-7 kill-switch steady-state before the SOW language locks.