Wk 6 - Apply: Signature Assignment: Financial Plan
ballplaya0019
b971aa9fdbbbc9e48e23e57e731514d3.pptxLife's A Lemon Squeezes
Presentation for Investors
FIN571
XX
Agenda
Executive Summary
Company Information
Market Plan
Competitor Analysis
3 Years Income Statement Projection
Assumptions: Sales Growth, Investment and Major Expenses
3 Years Proposed Finance Schedule
Break-Even Analysis
Global Expansion
Corporate Tax
Financing: Debt vs. Equity
References
EXECUTIVE SUMMARY
This drink will change your taste buds! The tangy mix of sweet and sour will remind you of all the positive that happens when you turn a bitter lemon into a refreshing drink.
The drink is a non-carbonated powered mix that is fused with fresh lemons.
The organic farms that cultivate these fresh lemons are free from harmful chemicals and fertilizers.
Our product is a true gift from nature, one that will be enjoyed by everyone.
COMPANY INFORMATION
For profit organization composed of a small team of entrepreneurs who want everything to experience a good lemonade
Mission: To bring back the natural and real taste that we are missing.
Values: Is to bring everyone together a remind them of that good old taste of Lemonade.
MARKET PLAN
Target market are school kids, starting at approximately 8 years old to young executives. Giving a healthy alternative to water.
Our lemonade packets will be a simply solution to on the go mixing with any base.
Many parents want a healthy alternative to soda and corn syrup loaded beverages. For kids, water may taste bland, what better way than to add a zing? The package provides a tasty drink that can be carried anywhere.
It is easy and convenient. The packages are perforated for easy opening, even young children can mix their own drinks. Mix shake and drink!
COMPETITOR ANALYSIS
| Top Industry Competitors | Price (each) |
| Crystal Light Lemonade | $1.05 |
| Tropicana | $1.45 |
| Simply Lemonade | $1.95 |
3 YEARS INCOME STATEMENT PROJECTION
| Performance statement All values are in (k) | 2020 ($) | 2021 ($) | 2022 ($) |
| Sales | $65 | $85 | $115 |
| Less: Cost of Goods Sold (COS) | $19 | $25 | $31 |
| GP | $39 | $55 | $66 |
| Operating Expense: | |||
| Salaries | $13 | $15 | $25 |
| Rent | $8 | $8 | $8 |
| Depreciation | $1 | $1 | $1 |
| Sales and marketing expense | $3 | $6 | $9 |
| Taxable income | $13 | $15 | $25 |
| Tax | $3 | $5 | $8 |
| Net Profit | $10 | $17 | $25 |
ASSUMPTIONS: SALES GROWTH, INVESTMENT & MAJOR EXPENSES
Assume sales growth in the first year is 46% and the second year is 23%.
Major Expenses:
Salaries are considered as significant expense
Advertising campaign
Tax rate is 15%
3 YEARS PROPOSED FINANCE SCHEDULE
Need 500 M to start business
As business continues to grow; look into capital investments
Use profits to continue to invest and grow Lemon Squeeze
BREAK-EVEN ANALYSIS
Fixed cost will include payroll, expenses, rent, company vehicle, and company cell phones these cost will all be accounted for as a monthly average in the first year.
Variable cost are inventory items that are used to produce different variations of different brews that will most likely be short releases to determine the success or failure of the product.
Cost bid pricing is used to determine how much it will cost to develop the type of beer and determine what the price of the beer will be to sell in a couple different sizes.
Price bid pricing is comparing local competitors prices to what P&P should set their own prices to be and what consumers will pay.
The break even analysis is as followed: breakeven point = fixed cost / (unit selling price – variable cost)
BE=FC/Per unit price-VC per unit
GLOBAL EXPANSION
Life's A Lemon Squeezes looks to expand into the global market.
In our current marketing plan, there is a period that is completely dedicated to an expansion package.
During this time, a specific team will go out and research the different target areas, such as Western Europe and part of South America.
Our initial research shows that these two regions accept organic, convenient ready to go drink mixes. The family construct and life style is very similar to that of the United States.
CORPORATE TAX RATE
Our company is fallen under the first schedule of Income Tax
The implementation of tax rate is 15%
FINANCING: DEBT vs. EQUITY
Financing through equity is more economical than using debt
The investment amount is $500,000
No future debt will be incurred as operating profits will be re-invested
References
Debt vs. Equity -- Advantages and Disadvantages - FindLaw. Findlaw. Retrieved 19 July 2017, from http://smallbusiness.findlaw.com/business-finances/debt-vs-equity-advantages-and-disadvantages.html
Kerin, R. A., & Hartley, S. W. (2017). Marketing (13th ed.). Retrieved from The University of Phoenix eBook Collection database.
