· Emailing Suppliers in China
Component | Price per product | Price (batch of 1000) |
USB Cable | £1.11 | £1,110.00 |
Micro SD Card | £6.15 | £6,150 |
Exchangeable Lens | £6.63 | £6,630 |
Twist Screw on Piece | £1.63 | £1,630 |
Wire in Centre | £1.80 | £1,800 |
Silicone Covering | £0.99 | £990 |
Fastening clips | £0.54 | £540 |
LED Lights | £1.05 | £1,050 |
Rubber Cap | £0.41 | £410 |
Packaging | £0.65 | £650 |
Wire Port | £1.74 | £1,740 |
Power Socket | £2.25 | £2,250 |
Recording Device | £12.34 | £12,340 |
Total | £37.29 | £37,290.00 |
· How will the Investor Make Money?
To start up the business, we will need a group investment of £30,000 and a further bank loan of £40,000. This is projected to have been paid back to the bank entirely by the end of the 7th month in business, thereafter we will be in profit which will steadily rise month after month. After the first year we have projected end cash availability, after paying back the bank loan, of £136,529.30.
· Key Figures?
The important figures that can be picked out of the budget sheet are as follows:
o It costs £37.29 per product to manufacture; based on figures from the China manufacturing quotes we were given.
o We want to sell to retailers at a mark up of just over 40% of the manufacture price which will be £69.99 (this can be adjusted dependant on the success of the product).
o The Recommended Retail Price is £99.99 (this can be adjusted dependant on the success of the product).
o By the end of year one, Gross Profit is projected at £64,650.70
o By the end of year one, Revenue/Turnover will be £1,497,786.00
o By the end of year one, End Cash Availability is projected to be 176,529.30.
· Intended Budget
The intended budget shows the company’s revenue and expenditure figures for the first year in business. In terms of Revenues, we begin in the first month with a batch of 1000 products split between 4 of our main retail targets, the main ones being Jessops and Dixons Retail. This figure then increases and by the end of year one we are producing 3000 products a month, set to rise year on year due to customer demand. In terms of expenditure, we have taken into account costs of direct labour (10 employed workers to manufacture and 6 members of our group as managers, promoters etc) materials and packaging, transport and shipping costs (parts shipped from China, products manufactured in the Southampton warehouse and then products transported to London via haulage lorry), overheads (such as accounting fees, advertising fee’s, insurance, legal fees and patenting costs, design copyrighting fees, warehouse rent, utility costs, repair costs and telephone bills), depreciation, capital expenditure, interest and tax.
