Financial Projections

Assumptions

Price per sale = $29.90
Add-ons (assume 10%) = $2.99
Cost per terrarium set = $6.83
Logistic - 1 terrarium = 1 location = $3.00
Customer recovery discount - 10%
Shopify - USD$29.99 per month
Staff expenses - $10 per hour
Marketing expenses - 300 x 12 months (Y1), 9 months (Y2) and 6 months (Y3)

6 months Projections

The projected income statement for FY 2022-2024 shows that profitability will be achieved within the 1st year as we will exceed the break-even sales of 1,676 terrarium using the break-even analysis.

This is under a conservative projection of a consistent increase of 150 terrarium per quarter in the 1st year, 300 in the 2nd year and 500 in the 3rd year.

Projected Income Statement

The projected income statement for FY 2022-2024 shows that profitability will be achieved within the 1st year as we will exceed the break-even sales of 1,676 terrarium using the break-even analysis.

This is under a conservative projection of a consistent increase of 150 terrarium per quarter in the 1st year, 300 in the 2nd year and 500 in the 3rd year.

Best Case

Worst Case

Projected Cashflow

The statement of cash flow yield a positive upward trend, ensuring that we are able to sustain our operations within the first 3 years, with the potential for growth.

Associated Risks

It is likely that the numbers provided is might be optimistic. In reality, we might not be able to get anywhere near the consistent growth rate that we are aiming for. It could potentially just flatline and we are unable to get customers to take up our product at all. This really dependent on the reception of our target market.

From our current estimations, the net profit margin is around 25%. While the returns look very attractive, it is very likely that we have underestimated the costs we will be incurring, especially in the marketing area. In particular, the advertising costs to acquire new customers can easily be much higher than $300 per month.

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