Business Plan - Term Project

BUSINESS PLAN - MAY 2015 1

BUSINESS PLAN

MGIS 103 – Ochs Spring 2015

THINK TANK INC.

ZACHARY SWEET

CHRISTIAN VANDERHOEF

KEVIN SWENSON


Table of Contents

I.

II.

III.

IV.

V.

VI.

VII.


VIII.

IX.

X.

XI.

XII.


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.


1.5 Keys to Success (Company Differentiation Points)

2 The Company

2.1 Genesis of the Company

THINK TANK INC

2.2 The Team

THINK TANK’S

2.3 The Inspiration


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 “


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


4.2 Primary Research

4.2.1 Methodology

4.2.2 Findings

4.3 Competitive Analysis

4.3.1 Types of Competitors

THINK TANK


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!


4.3.3 Position in the National Market

THINK TANK


4.3.4 SWOT Analysis

SWOT ANALYSIS

0

1

2

3

4

Interaction withClient

Novel Approach

BusinessExperience

Tech Savy/Qualified

Customer Service

Save ClientMoney

Relationships

MarketingExperience

Angel Mentor

Product Design

STRENGTHS

0

1

2

3

No EstablishedReputation

Lack of Time

Thing 2Limited Personal

FinancialResources

UndifferentiatedProduct Line

WEAKNESSES

0

1

2

3

4Trends

Niche Market

New Technologies

No EstablishedMarket Leaders

(Locally)

Low Barriers toEntry

Good Profit

ExclusiveContracts

EducationNetwork

OPPORTUNITIES

0

1

2

3

4

Big BoxCompetitors

Low Barriers toEntry (for

Competition)

Product LifecycleProduct

Obsolesence

Piracy

Org Resistence toNew Tech

THREATS


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


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


6.2.5 University Sports Medicine

THINK TANK

6.3 Marketing – Phase 1

THINK TANK

6.4 Marketing – Phase 2

THINK TANK THINK TANK


7 Product Development & Operations

7.1 Product Development Life Cycle – 20 working days

7.2 Development Tool Selection

DEVELOPMENT

LIFE CYCLE

PLAN

DESIGN

DEVELOPDEPLOY

MAINTENANCE


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


7.4 Pricing Strategy

7.5 Expansion

THINK TANK’S

7.6 Exit Strategy

THINK TANK


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


9 Financial Plan

9.1 Start-up Costs

THINK TANK

START-UP COSTS


9.2 Ongoing Expenses

ON-GOING MONTHLY EXPENSES


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)


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$


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%


10 Bibliography


11 Appendix




12 Appendix 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$

HardwareServers

Lenovo ThinkServer TS140 Tower Server

System Intel Xeon E3-1225 v3 3.2GHz 4GB 2 185.00$ 369.99$

369.99$

Softwarehttps://www.dreamspark.com/Product/Produ

ct.aspx?productid=772

-$

https://www.dreamspark.com/Product/Produ

ct.aspx?productid=933

-$

https://www.articulate.com/store/get-

storyline.php2

699.00$ 1,398.00$

BUFFALO DriveStation 4TB USB 3.0

External Desktop Hard Drive HD-LC4.0U31

149.99$ 149.99$

1,547.99$

Misc1 375.00$ 375.00$

375.00$

One-Time Initial Startup CostsDescription

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


12.2 Ongoing Expenses

Notes Annual Monthly Cost per month per unit per month per unit

Development RelatedStock 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 ExpensesFigure drawn from book. *will be updated if research returns a significantly

different amount

125.00$ 125.00$ F125.00$ 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 ExpensesDescription

Insurance

Accounting & Banking Fees

Phone

Stock Image Subscription/ Usage

Rights

Materials & Office Supplies

Cloud Backup Service

Web Hosting Fees

Domain Name


12.3 Pro Forma Income Statement

Pro Forma Income StatementThink 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

RevenueSales 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$

ExpensesAdvertising -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

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


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


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%


12.6 Break-even Analysis

12.7

BREAKEVEN ANALYSIS

SALESSales Price per Unit $2,500.00

Sales Volume (Projects) 5

TOTAL SALES $12,500.00

VARIABLE COSTSMaterials & 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

RESULTSBREAKEVEN POINT (UNITS): 3.05

SALES VOLUME ANALYSIS:SALES VOLUME PER PERIOD (UNITS) 0 1 1 2 2 3 3 4 4 5 5

SALES PRICE 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 COSTS PER 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

VARIABLE COSTS $0.00 $18.75 $37.50 $56.25 $75.00 $93.75 $112.50 $131.25 $150.00 $168.75 $187.50

TOTAL COSTS $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

TOTAL SALES $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

NET PROFIT (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 D

OLL

ARS

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

VARIABLE COSTS PER UNIT UNIT CONTRIBUTION MARGIN