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Gillette’s Sharp Razor Strategic Business Plan

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Executive Summary

Gillette’s parent organization is the multinational corporation Proctor and Gamble. Gillette being one of the company’s sells safety razors for both men and women and other care and shaving products. Gillette being termed as the number 29 World’s most valued brand in the Forbes magazine is one of the most reputable brand known worldwide. Gillette ensuring quality of it’s product worldwide with brand value of 19.2 $ billion in 2017 ensures strong financial position and prestige in the market place. Gillette existing for over 100 years has the experience to produce a workforce that will ensure the product’s market place. Since Gillette already has valued customers and the reputation which gives a high probability in terms of the success of this product. Gillette not only ensures a high profitability in the market, but it’s reputation ensures that the buyers get the best product there is amongst it’s competitors, making Gillette the only company suitable for this product.
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Strategic Management

Strategic Business Plan

Gillette’s manufacture sharp razor cleaning tools​​ 

 

 

 

 

 

 

 

 

Introduction

Gillette mainly focus on producing safety razors for men’s grooming and sometimes for women with other products which includes shaving creams,​​ deodorants, shower gels etc. Gillette owns 27 manufacturing facilities throughout the world with 200 countries exporting its products. According to Euromonitor it was estimated in 2017 750 million men used Gillette products, making it a strong contender in the men’s grooming business. For Gillette and​​ its​​ parent organization the quality of its razor’s matters a lot, with its slogan “the best man can get” they are constantly trying to improve the products that they produce. In this case we will use Porter’s 5 forces of competitive position to analyze our product. Since Proctor and Gamble conducts meticulous testing criteria to hire internees and employees all around the world, this ensures a great diversified workforce and different skills. The workforce is usually young professionals​​ whose innovative skills are celebrated in this company, who would readily consider all aspects of this product and give Gillette of entrepreneurship.​​ 

Business Concept

Gillette mainly focuses on producing men’s grooming products in affordable price with great quality, hence we will use its position in the global market place to focus on introducing a cleaning tool.​​ The cleaning tool has​​ two parts, a handle with which the user would grip on and the head which looks like a safety razor but it’s shape and size would vary also the arrangement of the blades are such as to remove or scrape off any imperfections without damaging the surface it is on, such tool is​​ not yet introduced by any company. Our product’s design will be simple, and its function will be appreciated by the customers.​​ The most practical design of this product will be favored, it belongs​​ to Gillette because of the similarity with Gillette’s world-class safety razor’s, due to this similarity and the raw materials already used to produce the safety razor’s we are using it to produce a cleaning tool, to explain it in a similar way, we are just enlarging and modifying the already produced razors​​ only​​ to make it a cleaning tool, this is why this cleaning tool belongs with Gillette because we want Gillette to produce this product due to its repute of the finest quality razor’s which is globally sold. And according to its slogan​​ which we will be focusing on to improve till it’s the best a man can get, according to the slogan.

Location

Since Gillette is United States of America based product we will mainly focus on providing this product to main cities such as New York City, San Francisco, Chicago and Los Angeles where mega construction projects are located hence enabling a huge market for our product.​​ 

Vision

Our vision is to provide safe and light weighted cleaning tool that does not need any sort of maintenance or​​ power​​ to​​ operate. That will be used to clean surfaces after post construction a manner as to not to damage fragile surfaces such as marble, glass and plastered walls, ceilings and hard to reach places. That is easy to use by it’s user.​​ 

 

Our Mission​​ 

From their website, “Gillette​​ has been at the hearts of men’s grooming for over 100 years. Each day, more than 800 million men around the world trust their faces and skin to Gillette’s innovative razors and shaving products. This commitment to giving men the very best is carried into our line of personal care products, including deodorants and body wash. All designed for the unique needs of men helping them look, feel and do their very best (Gillet Newsroom, 2018). This is their mission, and from this it’s evident that their mission is based on providing the best skin care, the best safety shaving blades and not only that but maintain their status in the competitive market of now and then upcoming new companies that have started producing the​​ same products.​​ Gillette globally is known for improvising products according to the socials habits off its country and spend millions on their marketing of their product. Our mission is to take the same attitude and pave the of our product in the market. First introducing it in the United States and after that in the European​​ countries and forth. Since​​ constructions takes place the most in​​ the first world countries, we want to use it to our advantage to mold our product and marketing in a way to take maximum benefit of this fact.​​ With this we want to develop a professional and diverse workforce that would focus on the entrepreneurship side of this product and a managerial staff that would enable a suitable working condition which would welcome their suggestions, so all aspects are considered. As we aim to produce quality tools that would be suitable to compete with it’s alternatives in the market place.​​ 

Business product and services

The products that will be manufactured by Gillette is a cleaning tool that would use sharp stainless razors to scrape off​​ imperfections left in the post construction or to correct a wrongly constructed, dirt or cement left on the surfaces. Automated scrubbers are heavy and require electricity to operate and yet is not operated on ceilings and hard to read areas. Which also makes it expensive compared to this product which is light weight compared to the heavy automated machinery. We want construction organizations to recognize the use of our product which will then be made available to departmental stores for individual buyers.​​ 

Business product and services

We are mainly focusing our business on​​ producing cleaning tools that is like a scraper, but the design will be such as that it’s strong and practical enough to scrape of tough imperfections through blades which will also be safe to use by any individual. The manufacturing products will be based have a specific criterion mainly highlighting the business aspect of the product such as production cost, profitability, social acceptance, new entrants, environmental considerations and alternatives.​​ 

We have considered every aspect of the team needed to bring this product in the competitive market which involves engineers such as structural engineering, entrepreneur experts and marketers. Bringing a team that consists of young creative but experienced skilled employees preferably who has some experience in the sector of the production of tools. Hence enabling Gillette to have a suitable workforce that who will have experience other than the production of razors. Which in return will enable us to consider every aspect of the product bringing its success in the marketplace.​​ 

The structural engineers, production engineers, mechanical engineers, tooling engineers to consider the design aspect of the product. Since the materials used are​​ compatible with the materials used to produce safety razors hence the environmental considerations will be the same as for the already produced products by Gillette.​​ 

Production cost and profitability of this product is one the main aspects of this product. We want to produce an affordable product that would make a good position in the market place compared to the industries that would copy it. But the cost considerations are such as that it does not compromise on the quality of the product and how safe it is to use.​​ 

Social acceptance of this product is a major aspect to consider since this product is not readily available in the market hence the use of this product should be highlighted in its marketing to attract customers.​​ 

Business environment​​ 

The business environment of the product is based on Porter’s five forces. Each of the specifics are discussed below

  • Bargaining power of buyers

Gillette’s bargaining power is high as its price sensitive.​​ Gillette has strong competitors in the men’s grooming business but since the company’s business will enter the market of construction tools it will be an​​ initiative that​​ is to​​ be​​ sought out according to the competitors of the construction industry.​​ Till this date it is reported to be that about 750 million men around the globe use Gillette product which proves it’s cost effectiveness around the globe. This organization’s approach is to improve according to the demands​​ of certain country for example in India, Gillette took great measure to improve their market.​​ Traditionally, Gillette relied on extensive research and development to create a single product for global distribution. The product was supported by a marketing premise that it would be equally valuable to customers globally. But Gillette set aside its global strategy in India and grew its market share dramatically. This​​ case looks​​ at how Gillette innovated by tailoring advertising and inventing a new product development process to reflect local shaving habits.

Using the same approach in this industry we can cater to the requirements and methods used in construction in different countries to modify our product according to it’s demand.​​ We would use​​ innovative ways to communicate with​​ the expected​​ consumers​​ to​​ attract​​ segments that might cause indifference.

We would provide safety and quality warrantee and guarantee to our customers, the customers would rather buy a product from Gillette than to buy it from a less reputable company, which is why we would expect to give a fair and affordable price for this product.​​ 

 

  • Bargaining power of suppliers

The bargaining power of suppliers is low.​​ Gillette products are sold around 200 countries and the product is varied from one country to another according to their shaving habits. Our product which consists of the razor body that is made from stainless steel and the plastic body that holds the razor, we expect to have prefabricated razors and plastic body and leave the final packaging to the suppliers of the different countries. This strategy would consume less shipping bulk and the cost of individual packaging will be reduced, allowing suppliers to choose their method of packaging but in accordance with the Gillette standards.​​ 

Conventionally Gillette would select the CSR criterion for it’s suppliers to which they would be expected to comply with.​​ 

Though this product by Gillette would face a strong challenge in the Asian market place​​ at​​ cheaper cost but Gillette would​​ reach a collaborative partnership with such markets and might direct invest as part of the conglomerate investment in foreign direct investment.

 

  • Threat of alternative products​​ 

The threat of alternative product​​ is low. The automated scrubbers could be the possible alternative​​ since automated scrubbers are bulky, consume power and cannot be lifted to reach corners or high ceilings,​​ which is why our product is most suitable in this situation. But since Gillette has never focused on producing a product other than the tools for men’s grooming, its suitable to assemble this product like a razor. But our product might be a threat to competing industries or alternatives, and these factors are listed below.

  • Asian industries such as China and India might produce a suitable alternative like this tool.

  • More variety of design that would suit the customer.

  • The local construction industries with greater success and partnership history.

  • The availability of a better designed product by the imitation industry, that might prove to be more innovative.​​ 

 

  • Threat of new entrants

The threat of the new entrant is low.​​ Although the threat of new entrants is low, and the legal barriers are not as strict since Gillette doesn’t need a license for this product. If the knowledge and regulatory barriers overcome, other industries will have a hard time to compete since Gillette already operates on an economic scale globally, as it’s reputation stands out. It’s 100 years of experience would benefit Gillette to put it in a strong position in the market, hence benefiting its expansion.

Franchising globally will be easy as Gillette is known globally.​​ 

 

  • Rivalry amongst competitors​​ 

The rivalry amongst the competitors is low.​​ In the industry of men’s razors, Gillette owns 60% of the market in the United States, although this tool is a cleaning tool Gillette’s partnership with construction company’s will ensure a dominant place in this industry. The strategy is to focus on cities in the United states where mega construction projects are being carried which will make it easier for this product to introduce, hence partnering with the construction companies responsible for these projects.

The raw materials needed to produce this product is already used by Gillette hence there’s no need to invest on raw material. Although some parts of the machinery or maybe an entire machine is needed to be purchased to produce this product. Geographically, we expect to target the construction industry in America, which was 824 billion dollars in 2015.​​ 

 

  • Business strategy and operating concept

The​​ four-main​​ concept of our strategy is based on four factors which are​​ marketing(advertisement), cost, distribution channels and developing collaboration.​​ 

 

 

 

  • Cost​​ 

 ​​​​ Our aim is to bring the lowest cost strategy with highest profitability​​ and the most practical design. On an economic scale the managing team will sought out a price criterion for the product​​ to​​ ensure​​ its affordability with great quality amongst its potential competitors. As the result of maximum​​ profitability,​​ the Gillette managerial team would work hard to ensure that the quality and safety of the product is not compromised.​​ 

  • Advertisement

This newcomer in the Gillette industry is unlike any product that Gillette has been producing the past 100 years, though its design and the material needed to produce this product might be the same, but the functionality of the product is entirely different than what the company aims to achieve. Although Gillette’s financial position has enabled the company to spend $800 million worldwide on advertisement hence​​ Gillette can easily produce and advertisement to launch its new product in the company. One factor that might add to the advantage of this product is that Gillette is widely known for it’s sport’s heritage and they have had strong partnerships with sportsmen and world class athletes to attract their consumers. Likewise​​ using the same advertising strategy partnering with construction companies and mega construction projects will be a medium of advertisement for this newcomer product.​​ 

Advertisement through social media such as Facebook, YouTube or Gillet’s very own twitter account. The marketing team could focus to use emotional approach of the success stories of certain construction projects or of common labors whose work has been made easy by this product.​​ 

  • Product differentiation

Different sizes of the cleaning tools with different razor heads ensures the differentiation of product. Since not all areas are wide different tools will be produced to ensure its wide range of functionality and maximum practicality. The products could be differentiation with not just flat heads but angled and curved heads to provide maximum safety of the surface on which is going to be used on.

The purpose of this cleaning tool is to provide maximum cleaning factor or to create a perfect surface without damaging the surface material such as glass, marble and plaster.​​ 

Alternatively, we expect to introduce this tool to the police department to remove the tinted papers on the glass windows of the car for security purposes, which would remove the tinted paper effectively without damaging the windows of the car.

  • Enhancing distribution channels​​ 

As mentioned, 200 countries import Gillette products, we would expect to introduce it to countries who are conducting mega construction projects. The management of the supple chain is the key factor to control the collaboration and partnership with known construction companies or corporate departmental stores such as Walmart in America that would ensure to introduce it and enable great market value. Conventionally Gillette does not compromise on its quality even if the product is pre-assembled or pre-fabricated the supply chains have the resources such as warehouses and other facilities to produce the best packaging for this product.​​ 

 

 

  • Developing collaborations​​ 

Our strategy here is to partner with construction companies and corporate departmental stores to introduce our product that could be bought in bulk or bought by individual buyers through the stores. We also expect to make collaborations with the public sector such as the police department as it might help in the safety of the traffic systems controlled by the police, by removing tinted glass windows of the car could help improve security overall.

We expect to give bundle offers one such example could be collaborating with a prominent cement factory that would enable us to give a free tool with a cement pack, so individual buyers could use to perfect the surfaces where the cement has caused imperfections on the surface.​​ 

Table 1.1 Risk Analysis

The table below shows identified risks, their impact and proposed mitigation measures.​​ 

Risk

Impact

Mitigation

Global financial crisis

Moderate​​ 

Find ways of minimizing costs​​ and increase profitability

Technical changes​​ 

Moderate​​ 

New machine is to be purchased​​ 

Hiring of new staff​​ 

Mismanagement ​​ 

Moderate​​ 

Policies to ensure maximum effectiveness in​​ the production, marketing and design

Lack of innovations​​ 

High

Managerial staff to welcome opinion of every employee

Encouraging staff through incentive

Economic crisis

Moderate​​ 

Seek consultancy services during economic crisis​​ and training

Sustainability of the business ​​ 

Moderate

Focus on increasing promotional strategies to increase the market share, such as bundle offers and whole sale price​​ 

 

Comments​​ 

Our strategy is to employ a team that would work hard to achieve a great quality product that would be of use for a long period of time. This would ensure​​ 

Table 1.2​​ SWOT Analysis​​ 

Internal

Strengths

Weaknesses

  • Solid financial position

  • Reputable​​ global brand​​ with over 200 countries importing

  • ​​ Over 100 years of experience

  • Supply chain integration

  • Constantly using innovations to drive costs down

  • Products is varied according to region

  • 27 manufacturing facilities

  •  New machinery

  • ​​ Entirely different advertising strategy needed

  • Advertising would cost money

 

External

Opportunities

Threats

  • Conglomerate investment hence​​ providing a newcomer in their already existing industry

  • Introducing a new service​​ 

  • Safe and lightweight tool for post construction, which doesn’t consume power

  • Competitors in this industry

  • Imitation companies

  • Laws of standard and metrology authority

  • Social​​ acceptability

 

Table 1.2​​ shows the SWOT analysis of the organization.​​ Our strengths​​ ensure​​ a good financial position for this product which is one of the most important aspects​​ in terms of​​ establishing the status of the product. The second aspect is that Gillette has a diverse marketing technique on their hands which we would use to promote our product.​​ The second most important aspect is that​​ Gillette being over 100 years has the tools and the means to produce a workforce that would effectively launch this product without a fail and​​ this​​ analysis help us to identify the capabilities and resources of Gillette Company to produce a new product since it was working on razors and shaving products since 1901 which is about 117 years.​​ The third most​​ important aspect is​​ this company enjoys strong brand recognition and its parent organization Procter and Gamble is one of the greatest multinational organization,​​ Gillette has​​ standard products​​ which is varied from region to region on consumer demand and overall habit of the region, innovative ideas and supply chain integration.​​ In the opportunities mentioned above, our priority is to focus on the external markets​​ since this investment is conglomerate.​​ Our second most important opportunity is the new service​​ through the same raw materials hence​​ including:​​ expansion in manufacturing of​​ cleaning tools that uses the same raw material and would only need machinery or some parts of the machinery that needs to be replaced. The company though faces challenges in terms of competitors and its overall social acceptability.

 

Figure 1.1 Basic design of construction cleaning tool by Gillette

Image result for construction cleaning toolsImage result for construction cleaning tools

The construction cleaning tools can be like these tools, as we can see that the plastic body is like safety razor in figure 1.2.​​ ​​ 

Figure 1.2 Safety Razor by Gillette​​ 

 

Action Plan

The action plan is based on five phases where each phase will cover 12 months. According to our strategy and plan we would expect to bring about the results according to our timeline.​​ The main aspects of action plan include development of research and development, design process, advertisement, engineering economics and overall outlook.​​ Since there are 700,000 number of construction companies in the United States of America, but probably not all the companies are expected to purchase our product initially. We expect to sell to about​​ 12000 units in the start​​ which is basically selling 12000 unites to 1.7% of the companies, this assumption lies with the fact that not all companies would be expected to order the same number of units​​ since each company is involved in different projects overall. As​​ 1-unit costs about average of 25.6$ and​​ from 12000 unit​​ generating an amount of 300,000$

Phase 1 – 1 to 12 months

Gillette’s main headquarters is in Boston, United States of America, we expect to develop a space in our already existing R&D facilities for the design of our product. With the development of the R&D facility we expect to expand the team consisting of mainly diverse employees and in the field of engineering; mainly structural, mechanical and materials engineers, a managerial staff, entrepreneur experts, marketing and finance experts and an executive body​​ dedicated solely for this product. Since Proctor and Gamble is known for it’s tedious hiring tests we expect to execute tests to bring about an​​ intelligent, young, skilled and experienced​​ expert team.​​ 

The machinery needed to produce this product will be purchased and the technicians will be trained on the operation and maintenance of the machine, the maintenance of the machinery is expected to start at the 5th​​ month.​​ 

Phase 2 -​​ 13​​ to 24 months

We have established the backbone of the business at this point and we need to consider​​ the.​​ The units produced will increase by the end of this month requiring additional labor of technicians which an estimate of $246 of daily cost​​ with the additional cost​​ daily rent would be​​ 100$. By the 8th​​ month we expect to have a fully maintained and operational machine and a staff trained fully on all aspects such as maintenance and safety of the machines. With the increase of the units produced the raw material needed to produce this product will increase too adding more cost. The number of unit which is decided by the managerial staff.​​ 

Phase 3- 25​​ months to 36 months

We expect to have a stable business and with the increase number of demand we will increase the number of our supplies, which in return would increase the cost for materials needed, labor, rent, maintenance and other miscellaneous cost. We expect to reduce the sunk cost in the present so in the future maximum profitability is achieved without and setbacks. We expect to produce our product of highest quality, as it can not be​​ compromised,​​ and we would take customer feedback on the product from our collaborated companies, so we improve our design and quality according to their demand.​​ 

Phase 4 – 37​​ months to 48 months

In this phase the general profitability of product is determined, and​​ increased profits will be​​ expected​​ during this stage since sales will be high than previous phase, if any setbacks in the profitability we expect to revisit our decisions and reduce the effects for the next phase. The workforce in the manufacturing facility might be increased with the increase of the materials needed. Which will eventually increase the total cost. We expect to improve our basic business strategy and add minor details which will eventually ensure the​​ finest quality available in the market.​​ 

Phase 5 – 49​​ months to 60 months

In the final phase the fixed cost for 1 unit will be finalized there will be no changes in the overall cost and there will be no changes overall. And the final cost is expected to be​​ 400$ per day by the end of this period​​ and the final revenue would be 160,060,000 by December. The total cost is expected to increase with the increase of the production.​​ 

 

 

 

Table 1.3 Activity and Timeline

Activity

Status

Person Responsible

Timeline

New business concept

100%

Name

 

Description of mission and vision

100%

Name

 

Products and services

100%

Name

 

Business Environment

100%

Name

 

Strategy and operating concept

100%

Name

 

SWOT Analysis

100%

Name

 

Risk Analysis

0%

Name

 

Action Plan

100%

Name

 

 

5-year financial projections

0%

Name

 

 

 

Table 1.4 Cost

Product​​ 

Price (USD)

Standard​​ Small size

21$

Standard​​ Medium​​ size

26$

Standard​​ Large​​ size

30$

 

Success Criteria​​ 

The success of our product launch is inevitable, since the reputation of the Gillette assures that the quality produced by Gillette will last for a long time than the other companies producing it, it’s a factor enough to establish its repute in the launch of this new product. The materials used in our product is environment friendly, stainless steel will allow the use of this product for a great period since Gillette’s razors are well​​ known in the market amongst it’s competitors. Other factors that makes Gillette stands out that Gillette traditionally values its customer feedback which is the key factor to determine how successful our product is. Hence positive feedback ensures that our product has gained the attention in the market place. The rate of increased sales and demand by the suppliers is another factor that will show the success of the product. Initially not many countries will import this product but as it’s reputation builds up amongst the multinational construction companies we expect to export Gillette to all the existing manufacturing facilities and eventually leading up to exporting to all the countries where Gillette is imported for it’s safety razors and grooming products. Since Gillette would produce an environment friendly product this will again increase its popularity as countries would export it for it’s durability and safeness for the environment. The overall sales statistics and the social media attention such as how many people have liked the page of this new product will give us a rough idea of it’s overall success.​​ 

 

 

Monitoring

Throughout the production the monitoring of the quality and the safety of manufacturing should be continued along the business. The experts or the consultancy of other departments might be revisit the whole strategy to​​ increase the overall effectiveness of our business plan. And monthly report from our marketing experts should be realized. New ways of advertising should be planned out nevertheless of the previous one.​​ 

 

NOTE: there was no financial report​​ 

Financial Summary

Gillette​​ is an organization that focuses on good financial management​​ to achieve the set goals. The increase of the revenue will be highly attributed to the sales. The management of Gillette recognizes that there will be expenses that are associated with running of the business. These expenses include paying salaries, buying the materials, maintaining the machines, utilities and rent. The cost salaries are based on assumptions that the annual salary of a chief executive officer, manager, engineer, sales person and technician are $80,000, $70,000, $55000, $50,000 and $45,000 respectively. Other cost assumptions are for utilities, rent and machine maintenance. In this case, the cost of utilities such as electricity, gas and water are 13 cents/kWh, $2/gallon and $1.50/1000 gallons respectively. The monthly cost of a store will be a minimum of $3000 and it will rise to $12000 by the end of 60 months due to expansion of the business.​​ 

 

Financial Summary projections

The projections will be based on period of 60 months. The production is assumed to start at the beginning of a new year. During the first month, there will be no revenues since it will be the start of production and the customers will not have gained trust with the products. The revenues will be high during spring and during the December holidays due to increased sales. In the first 12 months, highest revenue recorded will be $300,000. The second, third, fourth and fifth phases highest revenues projected will be $300,000, $520,000, $940,000 and $1660, 000 respectively. The highest net cash flows recorded are $239, 310, $344,320, $475, 410, $845, 400 and 1,550, 650 for year 1, 2,3, 4 and 5 respectively. Gradual increase in total costs will be realized throughout the period. The financial projections are presented in tables 1, 2, 3, 4, 5 and 6.​​ 

 

Table 1: summary of financial projections

Year​​ 

Revenue (USD)

Total costs (USD)

Net cash flow (USD)

1

300,000

60690

239310

2

420,000

75680

344320

3

520,000

85690

475410

4

940,000

94800

845400

5

1,660,000

103,350

1,556,650

 

Table 2: First year financial projections

Month​​ 

Revenue (USD)

Salaries (USD)

machine maintenance (USD)

Rent (USD)

Utilities (USD)

Materials (USD)

Total costs (USD)

Net cash flow (USD)

1

0

20840

0

4000

7050

15000

46890

0

2

 

50,000

20840

0

4000

8000

15100

47940

0

3

75,000

20840

1800

4000

8950

15200

50790

24210

4

150,000

20840

1850

4000

9900

15300

51890

98,110

 

5

300,000

20840

1900

4000

10850

15400

52990

247,010

 

6

260,000

20840

1950

4000

11800

15500

54090

205,910

 

7

240,000

20840

2000

4000

12750

15600

55190

184,810

 

8

220,000

20840

2050

4000

13700

15700

56290

163710

9

200,000

20840

2100

4000

14650

15800

57390

142610

10

180,000

20840

2150

4000

15600

15900

58490

121510

11

160,000

20840

2200

4000

16550

16000

59590

100410

12

300,000

20840

2250

4000

17500

16100

60690

239310

 

Table 3: Second year financial projections

Month​​ 

Revenue (USD)

Salaries (USD)

machine maintenance (USD)

Rent (USD)

Utilities (USD)

Materials (USD)

Total costs (USD)

Net cash flow (USD)

13

360,000

36,680

2300

8000

17550

17000

53,680

306,320

14

400,000

36,680

2350

8000

17600

19000

55,680

344,320

15

440,000

36,680

2400

8000

17650

21000

57,680

382,320

16

480,000

36,680

2450

8000

17700

23000

59,680

420,320

 

 

17

520,000

36,680

2500

8000

17750

25000

61,680

458,320

18

480,000

36,680

2550

8000

17800

27000

63,680

416,320

19

440,000

36,680

2600

8000

17850

29000

65,680

374,320

20

400,000

36,680

2650

8000

17900

31000

67,680

332,320

21

360,000

36,680

2700

8000

17950

33000

69,680

290,320

22

320,000

36,680

2750

8000

18000

35000

71,680

248,320

23

380,000

36,680

2800

8000

18050

37000

73,680

306,320

24

420,000

36,680

2850

8000

18100

39000

75,680

344,320

 

Table 4: Third year financial projections

Month​​ 

Revenue (USD)

Salaries (USD)

machine maintenance (USD)

Rent (USD)

Utilities (USD)

Materials (USD)

Total costs (USD)

Net cash flow (USD)

25

420,000

44,590

3450

12000

18150

40,000

84,590

375,410

26

460,000

44,590

3500

12000

18200

40,100

84,690

415,410

27

500,000

44,590

3550

12000

18250

40,200

84,790

455,410

28

540,000

44,590

3600

12000

18300

40,300

84,890

495,410

29

580,000

44,590

3650

12000

18350

40,400

84,990

535,410

30

540,000

44,590

3700

12000

18400

40,500

85,090

495,410

31

500,000

44,590

3750

12000

18450

40,600

85,190

455,410

32

460,000

44,590

3800

12000

18500

40,700

85,290

415,410

33

420,000

44,590

3850

12000

18550

40,800

85,390

375,410

34

380,000

44,590

3900

12000

18600

40,900

85,490

335,410

35

440,000

44,590

3950

12000

18650

41,000

85,590

395,410

36

520,000

44,590

4000

12000

18700

41,100

85,690

475,410

Table 5: Fourth year financial projections

Month​​ 

Revenue (USD)

Salaries (USD)

machine maintenance (USD)

Rent (USD)

Utilities (USD)

Materials (USD)

Total costs (USD)

Net cash flow (USD)

37

540,000

52,500

4000

16000

18800

41,200

93,700

446,300

38

580,000

52,500

4150

16000

18850

41,300

93,800

486,200

39

620,000

52,500

4300

16000

18900

41,400

93,900

526,100

40

660,000

52,500

4450

16000

18950

41,500

94,000

566,000

41

700,000

52,500

4600

16000

19000

41,600

94,100

605,900

42

640,000

52,500

4750

16000

19500

41,700

94,200

545,800

43

580,000

52,500

4900

16000

19550

41,800

94,300

485,700

44

520,000

52,500

5050

16000

19600

41,900

94,400

425,600

45

460,000

52,500

5200

16000

19650

42,000

94,500

365,500

46

400,000

52,500

5350

16000

19700

42,100

94,600

305,400

47

740,000

52,500

5500

16000

19750

42,200

94,700

645,300

48

940,000

52,500

5650

16000

19800

42,300

94,800

845,200

 

 

Table 6: Fifth year financial projections

Month​​ 

Revenue (USD)

Salaries (USD)

machine maintenance (USD)

Rent (USD)

Utilities (USD)

Materials (USD)

Total costs (USD)

Net cash flow (USD)

49

1,040,000

60,500

4000

16000

19800

42,300

102,800

937,200

50

1,140,000

60,500

4150

16000

19800

42,350

102,850

1,037,150

51

1,240,000

60,500

4300

16000

19800

 

102,900

1,137,100

 

 

52

1,340,000

60,500

4450

16000

19800

42,450

102,950

1,237,050

 

53

1,440,000

60,500

4600

16000

19800

42,500

103,000

1,337,000

54

1,140,000

60,500

4750

16000

19800

42,550

103,050

1,036,950

55

1,080,000

60,500

4900

16000

19800

42,600

103,100

976,900

56

1,020,000

60,500

5050

16000

19800

42,650

103,150

916,850

57

980,000

60,500

5200

16000

19800

42,700

103,200

876,800

58

920,000

60,500

5350

16000

19800

42,750

103,250

816,750

59

1,460,000

60,500

5500

16000

19800

42,800

103,300

1,356,700

60

1,660,000

60,500

5650

16000

19800

42,850

103,350

1,556,650

 

 

Conclusion

Final verdict on the production of the product is to use the same raw materials to produce safe cleaning tools that do not consumer power and is light weight, consumer less space. With variations in design and sizes according to different functionality of the product. Our business strategy is to achieve maximum profit and best quality amongst our competitors. The potential collaboration with the public sector such as the police​​ department we could use our product.

Appendix A

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