FINANCIAL PLAN

Financial plan



Financial plan

Introduction

We expect sales growth will slow to moderate, and cash flows will be consistent with annual sales projected to equal $ 143,800, $ 223,180 and $ 248,748 for the years 2005 to 2007 (Adams, 1989, 66).

Once the company reaches a sufficient level of profitability and builds up a cash reserve, which plans to invest 50% of profits in research and development of new products, existing products and operational improvements, and to expand marketing and sales efforts to foreign markets. 38% of the profits will be invested in low-risk financial instruments. 10% of the proceeds will be used for employee bonuses. 1% of the proceeds will be used to support nonprofit organizations that support the health and welfare of women in the United States. The remaining 1% is used to support nonprofit organizations that promote health and welfare of pets in the United States. These expenses are detailed in recent year's business plans.

In the event that the company did not make a profit, the additional funds are sought to fund research and development (R & D). 100% of the funds rose at the point of balance or loss of periods is used for R & D, while investment in financial instruments, employee premiums and charitable activities to be inevitable.

Competitive Edge

Our patented designs and technology is our competitive advantage. There are many elevated pet feeders on the market, but ours is the first * in the market with an integrated source, high and contemporary designs. With patent protection for high power with an integrated source that can potentially capture a significant market share for that class of products. As holders of technology patents, may also license other manufacturers to increase revenue and brand have the advantage of being the "original" and high food products integrated source (Coller, 1998, 33).

Another advantage is that our products offer a solution off the shelf "for owners of large breeds such as mastiffs, Newfoundland and Great Dane that, on average, about five inches taller than the larger model in the existing elevated feeders market. Our products also meet the needs of pet owners who live in small apartments, city and appreciate contemporary design.

General Assumptions

The general assumptions for this design are shown in the following table.

General Assumptions

Year 1

Year 2

Year 3

Plan Month

1

2

3

Current Interest Rate

10.00%

10.00%

10.00%

Long-term Interest Rate

10.00%

10.00%

10.00%

Tax Rate

30.00%

30.00%

30.00%

Other

0

0

0

Break-even Analysis

The following table breakeven analysis and graph show with an estimated average monthly cost of $ 7,325 fixed and variable cost of 28%, the company needs to generate approximately $ 10,000 in sales to break even.

Break-even Analysis

Monthly Revenue Break-even

$9,438

Assumptions:

Average Percent Variable Cost

28%

Estimated Monthly Fixed Cost

$6,839

Projected Profit and Loss

We will operate at a profit beginning in the first year on the basis of our worst case forecast sales. Although the projects that we operate at a loss for the first six months, we will compensate for losses in the second half of 2005 to pay the expenses for the ...