An in depth business plan for a school term project.

1. BUSINESS PLAN - MAY 2015 1
BUSINESS PLAN
MGIS 103 – Ochs
Spring 2015
THINK TANK INC.
ZACHARY SWEET
CHRISTIAN VANDERHOEF
KEVIN SWENSON

2. BUSINESS PLAN - MAY 2015 2
Table of Contents
I.
II.
III.
IV.
V.
VI.
VII.

3. BUSINESS PLAN - MAY 2015 3
VIII.
IX.
X.
XI.
XII.

4. BUSINESS PLAN - MAY 2015 4
1 Executive Summary
1.1 The Need
1.2 The Response
THINK TANK
1.3 THINK TANK’S Achievements to Date
THINK TANK
1.4 Financing
THINK TANK INC.

5. BUSINESS PLAN - MAY 2015 5
1.5 Keys to Success (Company Differentiation Points)
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2 The Company
2.1 Genesis of the Company
THINK TANK INC
2.2 The Team
THINK TANK’S
2.3 The Inspiration

6. BUSINESS PLAN - MAY 2015 6
THINK TANK
THINK TANK
THINK TANK
2.4 Discovery of the Market Opportunity
THINK TANK
3 The Market
3.1 Market Characteristics
3.1.1 Industry Description
THINK TANK
1 “

7. BUSINESS PLAN - MAY 2015 7
3.1.2 Target Customer Categories
3.1.2.1 Category A: Primary
3.1.2.2 Category B: Secondary
4 Market Analysis
4.1 Secondary Research
4.1.1 Methodology
THINK
TANK
THINK TANK

8. BUSINESS PLAN - MAY 2015 8
4.2 Primary Research
4.2.1 Methodology
4.2.2 Findings
4.3 Competitive Analysis
4.3.1 Types of Competitors
THINK TANK

9. BUSINESS PLAN - MAY 2015 9
THINK TANK
4.3.2 Position in the Local Market
THINK TANK
THINK TANK


HERE AT THINK TANK, WE ARE
FIRST AND FOREMOST, BUSINESS
PEOPLE.
WE HAVE THE LOCAL
CONNECTION TO GET THE BALL
ROLLING, THE MARKETING
EXPERTISE TO REACH THE CLIENTS
WE DON’T ALREADY KNOW, AND
THE TECHNICAL KNOW-HOW TO
DELIVER A PRODUCT THAT WILL
KEEP THEM COMING BACK FOR
MORE!

10. BUSINESS PLAN - MAY 2015 10
4.3.3 Position in the National Market
THINK TANK

11. BUSINESS PLAN - MAY 2015 11
4.3.4 SWOT Analysis
SWOT ANALYSIS
0
1
2
3
4
Interaction with
Client
Novel Approach
Business
Experience
Tech Savy/
Qualified
Customer Service
Save Client
Money
Relationships
Marketing
Experience
Angel Mentor
Product Design
STRENGTHS
0
1
2
3
No Established
Reputation
Lack of Time
Thing 2
Limited Personal
Financial
Resources
Undifferentiated
Product Line
WEAKNESSES
0
1
2
3
4
Trends
Niche Market
New Technologies
No Established
Market Leaders
(Locally)
Low Barriers to
Entry
Good Profit
Exclusive
Contracts
Education
Network
OPPORTUNITIES
0
1
2
3
4
Big Box
Competitors
Low Barriers to
Entry (for
Competition)
Product Lifecycle
Product
Obsolesence
Piracy
Org Resistence to
New Tech
THREATS

12. BUSINESS PLAN - MAY 2015 12
5 Products
5.1 Description of Products
5.1.1 Initial Products
5.1.2 Follow-up Products
5.2 Benefits for the Customer
6 Marketing Plan
6.1 Overall Marketing Strategy
THINK TANK

13. BUSINESS PLAN - MAY 2015 13
6.2 Strategic Alliances
THINK TANK
6.2.1 Angel Mentor
THINK TANK
6.2.2 White Acre Equities
6.2.3 Forefront Capital
THINK TANK’S
THINK TANK
6.2.4 Albatross Venture Capital

14. BUSINESS PLAN - MAY 2015 14
6.2.5 University Sports Medicine
THINK TANK
6.3 Marketing – Phase 1
THINK TANK
6.4 Marketing – Phase 2
THINK TANK THINK TANK

15. BUSINESS PLAN - MAY 2015 15
7 Product Development & Operations
7.1 Product Development Life Cycle – 20 working days
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7.2 Development Tool Selection
DEVELOPMENT
LIFE CYCLE
PLAN
DESIGN
DEVELOPDEPLOY
MAINTENANCE

16. BUSINESS PLAN - MAY 2015 16
7.3 Risk Analysis & Threat Mitigation
7.3.1 Illegal Copying of Products or Content
THINK TANK
THINK TANK
7.3.2 Product Obsolescence due Technological Advancements in the Industry
THINK
TANK
THINK TANK
7.3.3 Data Backup
 See start-up cost assumptions in section 9.1 of the financials (link: Start-up Costs)
AUTHORING TOOL FEATURES
1. Audio Integration
2. Graphics & Animation Features
3. Control Branching / Navigation
4. Video Integration
5. Themes, Skins, & Templates
6. Built-in Gamification / Simulation
7. Use of Scripts and Variables
8. Social Media Integration

17. BUSINESS PLAN - MAY 2015 17
7.4 Pricing Strategy


7.5 Expansion
THINK TANK’S
7.6 Exit Strategy
THINK TANK

18. BUSINESS PLAN - MAY 2015 18
8 Management & Staffing
THINK TANK
THINK TANK
8.1 Organizational Structure & Ownership
8.1.1 Chief Executive Officer
KEVIN SWENSON
8.1.2 Director of Marketing, Communications & P.R
CHRISTIAN VANDERHOEF
8.1.3 Director of Operations
ZACHARY SWEET
8.2 Future Staffing

19. BUSINESS PLAN - MAY 2015 19
9 Financial Plan
9.1 Start-up Costs
THINK TANK
START-UP COSTS

20. BUSINESS PLAN - MAY 2015 20
9.2 Ongoing Expenses
ON-GOING MONTHLY EXPENSES

21. BUSINESS PLAN - MAY 2015 21
9.3 Income Statement
Think Tank Inc. Total 1st Month 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th
Revenue
Sales Revenue $184,331 $5,000 $6,031 $7,176 $8,528 $10,123 $12,005 $14,226 $16,847 $19,939 $23,588 $27,894 $32,975
Expenses
Advertising 3,600 300 300 300 300 300 300 300 300 300 300 300 300
Wages 12,000 - 2,400 2,400 2,400 2,400 2,400
Payroll Taxes 9,240 700 700 700 700 700 700 700 868 868 868 868 868
Salaries 120,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Accounting & Bank Fees 1,500 125 125 125 125 125 125 125 125 125 125 125 125
Insurance 1,500 125 125 125 125 125 125 125 125 125 125 125 125
Office Supplies 600 50 50 50 50 50 50 50 50 50 50 50 50
Phone $- $- $- $- $- $- $- $- $- $- $- $-
Legal Fees 2,500 208 208 208 208 208 208 208 208 208 208 208 208
Rent $- $- $- $- $- $- $- $- $- $- $- $-
Utilities 1,200 100 100 100 100 100 100 100 100 100 100 100 100
Stock Image Subscription/ Usage Rights 1,950 163 163 163 163 163 163 163 163 163 163 163 163
Cloud Backup Service 24 2 2 2 2 2 2 2 2 2 2 2 2
Web Hosting Fees 120 10 10 10 10 10 10 10 10 10 10 10 10
Domain Name 10 10 - - - - - - - - - - -
Marketing 3,183 200 210 221 232 243 255 268 281 295 310 326 342
Merchant Services Processing Fees 5,069 138 166 197 235 278 330 391 463 548 649 767 907
TOTAL EXPENSES $12,130.33 $12,158.68 $12,200.68 $12,248.88 $12,304.32 $12,368.23 $12,442.07 $15,095.54 $15,194.65 $15,309.77 $15,443.69 $15,599.71
NET INCOME BEFORE TAXES $(7,130.33) $(6,127.92) $(5,024.41) $(3,720.90) $(2,181.32) $(363.11) $1,783.95 $1,751.15 $4,744.42 $8,278.31 $12,450.22 $17,375.09
PRO-FORMA INCOME STATEMENT (12 MONTH)

22. BUSINESS PLAN - MAY 2015 22
9.4 Cash Flow Statement
Cash Flow Projection - Year One
Begin Year 1
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Number of new Customers Added 2 - 1 - 1 - 1 - 1 - 1 -
Number of new Projects Added 2 2 3 3 4 5 5 6 8 9 10 12
No of Projects lost to churn 5.751
No of customers lost to churn
Total Active Projects 2 4 7 10 14 19 24 31 38 47 58 70
Total Customers 2 2 3 3 4 4 5 5 6 6 7 7
Project Income 5,000$ 5,900$ 6,962$ 8,215$ 9,694$ 11,439$ 13,498$ 15,927$ 18,794$ 22,177$ 26,169$ 30,880$
Service Contract Income -$ 131$ 214$ 313$ 429$ 566$ 728$ 919$ 1,145$ 1,411$ 1,725$ 2,095$
Cash Flow 5,000$ 6,031$ 7,176$ 8,528$ 10,123$ 12,005$ 14,226$ 16,847$ 19,939$ 23,588$ 27,894$ 32,975$
Cumulative Cash Flow 5,000$ 11,031$ 18,207$ 26,735$ 36,858$ 48,863$ 63,089$ 79,936$ 99,875$ 123,463$ 151,357$ 184,332$
Year One Sales 184,331.68$

23. BUSINESS PLAN - MAY 2015 23
9.5 Cost Benefit Analysis & Return on Investment -
THINK TANK
Benefits Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total
Sales -$ 184,332$ 634,157$ 1,036,120$ 1,326,193$ 1,685,362$
Total -$ 184,332$ 634,157$ 1,036,120$ 1,326,193$ 1,685,362$
HMS cost/benefit analysis Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total
Value of Benefits -$ 184,331.68$ 634,156.64$ 1,036,120.49$ 1,326,192.83$ 1,685,362.29$
Discount factor (7 %) 1 0.9346 0.8734 0.8163 0.7629 0.713
Present Value of benefits -$ 172,276$ 553,872$ 845,785$ 1,011,753$ 1,201,663$ 3,785,350$
Start-up Costs (50,000)$ (50,000)$
Ongoing costs (162,497)$ (230,868)$ (308,236)$ (317,068)$ (326,945)$
Discount factor (7 %) 1 0.9346 0.8734 0.8163 0.7629 0.713
Present Value of ongoing costs -$ (151,869)$ (201,640)$ (251,613)$ (241,891)$ (233,112)$ (1,080,125)$
PV of net of benefits less costs (50,000)$ 20,407$ 352,232$ 594,172$ 769,862$ 968,552$ 2,705,225$
Cumulative NPV (50,000)$ (29,593)$ 322,640$ 916,811$ 1,686,673$ 2,655,225$ 2,655,225$
1-Year Return on Investment (ROI):
5-Year Return on Investment (ROI):
7%
1 years 31 days
Cost Benefit Analysis - Think Tank Inc.
265% Discount Rate:
Payback Period: 1.084
187%

24. BUSINESS PLAN - MAY 2015 24
10 Bibliography

25. BUSINESS PLAN - MAY 2015 25
11Appendix

26. BUSINESS PLAN - MAY 2015 26

27. BUSINESS PLAN - MAY 2015 27

28. BUSINESS PLAN - MAY 2015 28
12Appendix B: Financials
12.1 Start-up Costs
Product/ Link Qty Unit Cost Cost
Corporation Formation
Forms & Fees
Financial Framework Set-up
Legal 2,500.00$
2,500.00$
Hardware
Servers
Lenovo ThinkServer TS140 Tower Server
System Intel Xeon E3-1225 v3 3.2GHz 4GB 2 185.00$ 369.99$
369.99$
Software
https://www.dreamspark.com/Product/Produ
ct.aspx?productid=77
2
-$
https://www.dreamspark.com/Product/Produ
ct.aspx?productid=93
3
-$
https://www.articulate.com/store/get-
storyline.php
2
699.00$ 1,398.00$
BUFFALO DriveStation 4TB USB 3.0
External Desktop Hard Drive HD-LC4.0U3
1
149.99$ 149.99$
1,547.99$
Misc
1 375.00$ 375.00$
375.00$
One-Time Initial Startup Costs
Description
4,792.98$TOTAL START-UP COST:
Server OS -- Windows Server 2012 from Dreamspark Account -
Student Account (no cost)
Integrated Development Environment IDE - Visual Studio 2013 -
Dreamspark Account - Student (no cost)
Articulate Storyline 2 - Student Discount (50%) (each instance can
be used on two machines***)
Back-up External Hard Drive - 4TB
Initial Purchase of Stock Images

29. BUSINESS PLAN - MAY 2015 29
12.2 Ongoing Expenses
Notes Annual Monthly Cost per month per unit per month per unit
Development Related
Stock images are going to be purchased in bundles costing $325. Usage
rights do not expire & therefore the cost will significantly taper off relative to
sales volume. We are estimating bi monthly purchases.
325.00$ 162.50$ F 162.50$ 40.63$
50.00$ 50.00$ V 50.00$ 12.50$
24 2.00$ 2.00$ F 2.00$ 0.50$
10.00$ 10.00$ F 10.00$ 2.50$
10 0.83$ 0.83$ F 0.83$ 0.21$
225.33$
Standard Business Expenses
Figure drawn from book. *will be updated if research returns a significantly
different amount
125.00$ 125.00$ F
125.00$ 31.25$
1,500.00$ 125.00$ 125.00$ F 125.00$ 31.25$
Personal phones will be used for at least the foundation period -$ -$
There will be no offical advertising expense for the foundation period, -$ -$
For the foundation period, formal marketing will be extremely limited. As
discussed in the planning document, initial marketing efforts will be
networking focused. The budget set aside here is intended for things like client
lunches and presentation materials. These dispersion of these funds will be the
pervue of the marketing director.
200.00$ 200.00$ F
200.00$ 50.00$
2,500.00$ 208.33$ 208.33$ F 208.33$ 52.08$
2.75% on all transactions using Square Reader -$ -$ V
-$ -$ V
Utilities During the foundation period, there will be no corporate utility account, this
budget wil be allocated to the residence housing the company servers to
cover the associated electric espense.
1,200.00$ 100.00$ 100.00$ V
100.00$ 25.00$
758.33$
Labor Costs
Salaries (equal for each partner $25,000) 75,000.00$ 6,250.00$ 6,250.00$ F 6,250.00$ 1,562.50$
Wages -$ -$ V
Payroll Taxes & Fees FICA - Worker's Comp - Unemployment Insurance 5,250.00$ 437.50$ 437.50$ F 437.50$ 109.38$
6,687.50$ 150.00$ 37.50$ 7,521.17$ 1,880.29$
VariableFixed
Total Recurring Costs: 7,671.17$
Advertising
Marketing
Legal Fees
Merchant Services
Taxes (VARIABLE)
On-going Monthly Expenses
Description
Insurance
Accounting & Banking Fees
Phone
Stock Image Subscription/ Usage
Rights
Materials & Office Supplies
Cloud Backup Service
Web Hosting Fees
Domain Name

30. BUSINESS PLAN - MAY 2015 30
12.3 Pro Forma Income Statement
Pro Forma Income Statement
Think Tank Inc. 1 Year Total 1st Month 2nd Month 3rd Month 4th Month 5th Month 6th Month 7th Month 8th Month 9th Month 10th Month 11th Month 12th Month
Revenue
Sales Revenue 184,331.68$ 5,000$ 6,031$ 7,176$ 8,528$ 10,123$ 12,005$ 14,226$ 16,847$ 19,939$ 23,588$ 27,894$ 32,975$
Expenses
Advertising -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Wages 12,000.00$ -$ 2,400.00$ 2,400.00$ 2,400.00$ 2,400.00$ 2,400.00$
Payroll Taxes 6,090.00$ 437.50$ 437.50$ 437.50$ 437.50$ 437.50$ 437.50$ 437.50$ 605.50$ 605.50$ 605.50$ 605.50$ 605.50$
Salaries 75,000.00$ 6,250.00$ 6,250.00$ 6,250.00$ 6,250.00$ 6,250.00$ 6,250.00$ 6,250.00$ 6,250.00$ 6,250.00$ 6,250.00$ 6,250.00$ 6,250.00$
Accounting & Bank Fees 1,500.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$
Insurance 1,500.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$ 125.00$
Office Supplies 600.00$ 50.00$ 50.00$ 50.00$ 50.00$ 50.00$ 50.00$ 50.00$ 50.00$ 50.00$ 50.00$ 50.00$ 50.00$
Phone -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Legal Fees 2,500.00$ 208.33$ 208.33$ 208.33$ 208.33$ 208.33$ 208.33$ 208.33$ 208.33$ 208.33$ 208.33$ 208.33$ 208.33$
Rent -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Utilities 1,200.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$
Stock Image Subscription/ Usage Rights 1,950.00$ 162.50$ 162.50$ 162.50$ 162.50$ 162.50$ 162.50$ 162.50$ 162.50$ 162.50$ 162.50$ 162.50$ 162.50$
Cloud Backup Service 24.00$ 2.00$ 2.00$ 2.00$ 2.00$ 2.00$ 2.00$ 2.00$ 2.00$ 2.00$ 2.00$ 2.00$ 2.00$
Web Hosting Fees 120.00$ 10.00$ 10.00$ 10.00$ 10.00$ 10.00$ 10.00$ 10.00$ 10.00$ 10.00$ 10.00$ 10.00$ 10.00$
Domain Name 10.00$ 10.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Marketing 3,183.43$ 200.00$ 210.00$ 220.50$ 231.53$ 243.10$ 255.26$ 268.02$ 281.42$ 295.49$ 310.27$ 325.78$ 342.07$
Merchant Services Processing Fees 2.75% 5,069.12$ 137.50$ 165.85$ 197.35$ 234.52$ 278.38$ 330.14$ 391.22$ 463.28$ 548.32$ 648.67$ 767.08$ 906.81$
TOTAL EXPENSES 7,817.83$ 7,846.18$ 7,888.18$ 7,936.38$ 7,991.82$ 8,055.73$ 8,129.57$ 10,783.04$ 10,882.15$ 10,997.27$ 11,131.19$ 11,287.21$
NET INCOME BEFORE TAXES (2,817.83)$ (1,815.42)$ (711.91)$ 591.60$ 2,131.18$ 3,949.39$ 6,096.45$ 6,063.65$ 9,056.92$ 12,590.81$ 16,762.72$ 21,687.59$
NOTES: 0.02 0.0165817 0.0139348 0.0117261 0.0098785 0.0083298 0.0070294 0.0059359 0.0050153 0.0042394 0.003585 0.0030326
Sales Revenue figures are divived directly from the cash flow statement.
0.91074% Utility cost as a percentage of sales, averaged over the first twelve months. Used as a benchmark percentage starting in month thirteen.
Marketing budget is paced to grow at a rate of five percent.
Wages based on $15/hr initial wage
Payroll Tax is projected as7% of overal labor expenses as recommended by the SBA
Salary assumptions are noted with the Ongoing Expenses document

31. BUSINESS PLAN - MAY 2015 31
12.4 Cash Flow
Cashflow
Begin Year 1 Begin Year 2
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15
Number of new Customers Added 2 - 1 - 1 - 1 - 1 - 1 - 2 - 2
Number of new Projects Added 2 2 3 3 4 5 5 6 8 9 10 12 12.72 13 13
No of Projects lost to churn 11.502 13.972 13.722 13.599
No of customers lost to churn
Total Active Projects 2 4 7 10 14 19 24 31 38 47 58 70 69 68 68
Total Customers 2 2 3 3 4 4 5 5 6 6 7 7 9 9 10
Project Income 5,000$ 5,900$ 6,962$ 8,215$ 9,694$ 11,439$ 13,498$ 15,927$ 18,794$ 22,177$ 26,169$ 30,880$ 31,806$ 32,760$ 33,743$
Service Contract Income -$ 131$ 214$ 313$ 429$ 566$ 728$ 919$ 1,145$ 1,411$ 1,725$ 2,095$ 2,058$ 2,039$ 2,036$
Cash Flow 5,000$ 6,031$ 7,176$ 8,528$ 10,123$ 12,005$ 14,226$ 16,847$ 19,939$ 23,588$ 27,894$ 32,975$ 33,864$ 34,799$ 35,779$
Cumulative Cash Flow 5,000$ 11,031$ 18,207$ 26,735$ 36,858$ 48,863$ 63,089$ 79,936$ 99,875$ 123,463$ 151,357$ 184,332$ 218,195$ 252,995$ 288,774$
Year One Sales 184331.6784
Average Project Cost 2,500.00$
29.99$
Project Churn 20.0%
Customer Churn 5.0%
Early Project Growth 118.0%
Customer Growth
Year 2 Growth 103.0%
Year 3 Growth 101.0%
$-
$2,000
$4,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
MONTHLY SERVICE CONTRACT INCOME
$-
$50,000
$100,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59
PROJECT INCOME
0
500000
1000000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49
ANNUAL SALES INCOME
$-
$10,000
$20,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
MONTHLY EXPENSES

32. BUSINESS PLAN - MAY 2015 32
12.5 Cost Benefit Analysis
Benefits Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total
Sales -$ 184,332$ 477,266$ 595,953$ 672,107$ 757,386$
Total -$ 184,332$ 477,266$ 595,953$ 672,107$ 757,386$
HMS cost/benefit analysis Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total
Value of Benefits -$ 184,331.68$ 477,266.46$ 595,953.29$ 672,106.52$ 757,385.71$
Discount factor (9 %) 1 0.9174 0.8417 0.7722 0.7084 0.6499
Present Value of benefits -$ 169,106$ 401,715$ 460,195$ 476,120$ 492,225$ 1,999,361$
Start-up Costs (50,000)$ (50,000)$
Ongoing costs (110,747)$ (170,425)$ (235,785)$ (238,733)$ (241,078)$
Discount factor (9 %) 1 0.9174 0.8417 0.7722 0.7084 0.6499
Present Value of ongoing costs -$ (101,599)$ (143,447)$ (182,073)$ (169,119)$ (156,677)$ (752,914)$
PV of net of benefits less costs (50,000)$ 67,507$ 258,268$ 278,122$ 307,002$ 335,548$ 1,246,447$
Cumulative NPV (50,000)$ 17,507$ 275,775$ 553,898$ 860,899$ 1,196,447$ 1,196,447$
1-Year Return on Investment (ROI):
5-Year Return on Investment (ROI):
9%
1 years 25 days
Cost Benefit Analysis - Think Tank Inc.
248% Discount Rate:
Payback Period: 1.0678
205%

33. BUSINESS PLAN - MAY 2015 33
12.6 Break-even Analysis
12.7
BREAKEVEN ANALYSIS
SALES
Sales Price per Unit $2,500.00
Sales Volume (Projects) 5
TOTAL SALES $12,500.00
VARIABLE COSTS
Materials & Office Supplies $12.50
Utilities $25.00
VARIABLE COSTS PER UNIT $37.50
TOTAL VARIABLE COSTS $187.50
UNIT CONTRIBUTION MARGIN 2,462.50
GROSS MARGIN $12,312.50
FIXED COSTS PER PERIOD
$7,521.17
TOTAL FIXED COSTS PER MONTH $7,521.17
NET PROFIT (LOSS) $4,791.33
RESULTS
BREAKEVEN POINT (UNITS): 3.05
SALES VOLUME ANALYSIS:
SALESVOLUMEPER PERIOD (UNITS) 0 1 1 2 2 3 3 4 4 5 5
SALESPRICE PER UNIT $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00
FIXED COSTSPER PERIOD $7,521.17 $7,521.17 $7,521.17 $7,521.17 $7,521.17 $7,521.17 $7,521.17 $7,521.17 $7,521.17 $7,521.17 $7,521.17
VARIABLECOSTS $0.00 $18.75 $37.50 $56.25 $75.00 $93.75 $112.50 $131.25 $150.00 $168.75 $187.50
TOTALCOSTS $7,521.17 $7,539.92 $7,558.67 $7,577.42 $7,596.17 $7,614.92 $7,633.67 $7,652.42 $7,671.17 $7,689.92 $7,708.67
TOTALSALES $0.00 $1,250.00 $2,500.00 $3,750.00 $5,000.00 $6,250.00 $7,500.00 $8,750.00 $10,000.00 $11,250.00 $12,500.00
NETPROFIT(LOSS) ($7,521.17) ($6,289.92) ($5,058.67) ($3,827.42) ($2,596.17) ($1,364.92) ($133.67) $1,097.58 $2,328.83 $3,560.08 $4,791.33
($10,000.00)
($5,000.00)
$0.00
$5,000.00
$10,000.00
$15,000.00
0 1 1 2 2 3 3 4 4 5 5
DOLLARS
SALES VOLUME (UNITS)
BREAKEVEN ANALYSIS CHART
FIXED COSTS PER PERIOD TOTAL COSTS TOTAL SALES NET PROFIT (LOSS)
33%
67%
VARIABLE COSTS PER UNIT
MATERIALS& OFFICE SUPPLIES UTILITIES
1%
99%
UNIT CONTRIBUTION MARGIN
VARIABLECOSTSPER UNIT UNIT CONTRIBUTIONMARGIN