BUSINESS PLAN PRESENTED BY-GROUP:3 ATUL KUMAR KARN ----------------------------
Q1703A19
DEEPIKA BHAGAT ------------------------------
Q1703A13
DEEPKAMAL KAUR -----------------------------
Q1703A11
MANDEEP SINGH ------------------------------
Q1704A14
PRIYANKA GUPTA ------------------------------
Q1703A06
RAMANJEET KAUR ---------------------- -------
Q1703A14
CONTENTS
BUSINESS PLAN (GENERAL INFORMATION) FEASIBILITY ANALYSIS MARKETING PLAN OPERATIONS PLAN HR PLAN FINANCIAL PLAN
SUMMARY $25,000,000
$20,000,000
$15,000,000
Sales Gross Margin
$10,000,000
Net Profit
$5,000,000
$0 FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
OBJECTIVES
Sales revenue should be 200 crores for the first year. Establish long term relationships with suppliers of tyres and seat makers. Breakeven within two years of business. Net profit margin should be 10% in first year and increase it to 14% in second year achieving operational efficiency
MISSION
“To build a solar car, to benefit the mankind and environment
with
long
term
sustainability,
transforming the way this world moves with
innovation.
VISION
To be numero uno solar car company, keeping customers and environmental sustainability up front
OUR BUSINESS IDEA SOLAR WALKING CAR
SOLAR WALKING CAR
PRODUCT NAME: SUNSHINE
TAGLINE: “Move freely and move free, Its Sunshine’s promise”
SOLAR ENERGY AND OUR IDEA
Developing a solar energy driven car
Solar walking cars combine technology typically used
in
the
aerospace,
bicycle,
alternative
energy and automotive industries.
Solar cars are powered by the sun's energy. In fact, 51%
of
sunlight
atmosphere.
actually
enters
the
Earth's
PRODUCT SUMMARY
Suntech solar private limited will be selling two versions of solar walking car with top speed of 40KMPH (A) and 50KMPS (B). The price will be 1 lac for A version and 1.3 lac for B version. Product Description Solar car includes the following components along with repective cost: Solar Array and Power trackers : 40000 Batteries : 6000 Motor & Controller : 5000 Chassis, Seats and other components : 15000 Tires, Brakes and Hubs : 10000
PROPOSED DESIGN
LOGO AND SYMBOL
SUNSHINE represents the product name and act as symbol.
The middle circle represents the sun.
The orange and yellow colour of the sun represents the sun rays.
FEASIBILITY ANALYSIS
WHAT MAKES OUR SOLAR CAR FEASIBLE
Financial analysis (Profitable Business????) 1000 WATTS = 1.341 horsepower Solar panel cost per watt is around $1 without subsidy cost is roughly 50000 INR of solar panel alone for 1000 watt (1.341) International Manufacturers of solar panel Shanghai Tongjian Shike Solar Energy Co., Ltd. ($0.80-1.20 per watt) Jiaxing Feiya Lighting Electrical Co., Ltd. ($1.201.50 per watt)
Continued…..
Other equipments.. Electrical grid (15000 INR) Battery (5000) Tyres, seats,body (30000)
BUSINESS PLAN(GENERAL INFORMATION)
FUNCTIONAL AREA REPORTS
There are four essential elements required to test whether or not a potential business idea is feasible:
Marketing
Operations
HR
Finance
MARKETING PLAN
Market research will involve
What is the product and/or service that is the basis for the business?
Who is the customer likely to be?
What is the benefit of your product/service to the
customer?
How will the benefit be delivered?
CONTENTS
Product Features STP of Market Market Reasearch SWOT analysis Competitive Analysis Marketing tools and strategy
PRODUCT FEATURES
Shape and design Costing Weight capacity
KEY ADVANTAGES No running cost No registration required Reduced license requirements Environment friendly Using alternative source of energy No pollution certificate and insurance liability
SEGMENTATION,TARGETING,POSITIONING SEGMENTATION
TARGETING
Target customer: Middle class
Geographic segmentation
•
Weather
Differentiated targeting
•
Location
Target-market: rural and semi-
Demographic segmentation
urban customers. POSITIONING
•
Income based(middle class)
Small House hold car
Substitute
Behavioral segmentation
SWOT ANALYSIS Strengths Eco friendly No running cost Green project Weaknesses Cloudy days (can be overcome by electrical additions) Top speed 30-50 kms/h (two versions) Max run 30-40 kms after one charging Opportunities First mover High demand for eco friendly projects Subsidized solar panels Threat Easily imitable.
MAIN COMPETITORS IN SOLAR CAR INDUSTRY
They are not exactly the competitors because they are developing racing and high speed solar cars. But we are targeting on the solar walking car which is quite different from them: SUNRAYCER ALPHA CENTAURI AURORA ONGOING SOLAR PROJECTS
BUSINESS STRATEGY
BLUE OCEAN STRATEGY
A NEW PRODUCT IN EXISTING MARKET
DRIVEN BY INNOVATION AND PRODUCT LEADERSHIP
MEDIA TO BE USED
NEWSPAPER ADVERTISEMENT BUSINESS MAGAZINES TV AD RADIO AD
MARKETING TOOLS LAUNCHING A NEW BUSINESS OF SOLAR WALKING CAR: PRE-LAUNCH:
ROAD SHOW
LAUNCH:
TEST DRIVE
POST-LAUNCH: TV ADS,RADIO ADS,SOCIAL NETWORKING SITES MARKETING MEDIUM: The Hindu, Times of India CNBC AWAAZ,STAR NEWS.
HR AND OPERATIONS PLAN OF A SOLAR WALKING CAR “SUNSHINE”
Operations plan
Market research is prerequisite A hypothetical data is assumed (can’t spend money in real ) Operational plan will be based upon this research for demand of such products in the market Pilot testing will be done with not full setup for meeting the demand Demand is assumed to be 2000 cars in first month based on research.
Plant
Smaller setup 10 acre land near Jalandhar area Cost will be around 5 crores Suppliers are available here ( A similar company speedways is operating here) Assembly line, flooring, building and other infrastructure will add around 8 crore ( based upon speedways experience)
LEGAL AND ENVIRONMENTAL FEASIBILITY
A manufacturing unit for solar car is legally possible
Rather, Indian government environmental friendly venture
Company will get itself registered as private limited company, raising funds from venture capitalist and owner’s or director’s fund
will
support
a
LEGAL CONSTRAINTS
No direct legal constraints can be there Will be a private limited company under company act 1939 Board of directors will include founder members
Setting up a private limited company Procedure and mechanics
INCORPORATION OF COMPANY Step 1 : Application For DIN
The concept of a Director Identification Number (DIN) has been introduced for the first time with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006.
We need to file eForm DIN-1 in order to obtain DIN.
Step 2 : Acquire/ Register DSC Acquire DSC -A licensed Certifying Authority (CA) issues the digital signature. Register DSC -Role check for Indian companies is to be implemented in the MCA application. Role check can be performed only after the signatories have registered their Digital signature certificates (DSC) with MCA.
Step 3 : New User Registration To file an eForm or to avail any paid service on MCA portal, we are first required to register ourselves as a user in the relevant user category, such as registered and business user. Step 4 : Incorporate a Company Apply for the name of the company[ Suntech autos Pvt. Ltd.] to be registered by filing Form1A for the same.
DOCUMENT REQUIRED:
Form 1 : Application or declaration for incorporation of a company Form 32 : Particulars of appointment of managing director, directors, manager and secretary and the changes among them or consent of candidate to act as a managing director or director or manager or secretary of a company and/ or undertaking to take and pay for qualification shares. Once the form has been approved by the concerned official of the Ministry, you will receive an email regarding the same and the status of the form will get changed to Approved.
ROC OFFICE: PUNJAB, CHANDIGARH & HIMACHAL PRADESH Dr. RAJ SINGH CORPORATE BHAWAN,PLOT NO.4 B, SECTOR 27 B,MADHYA MARG, CHANDIGARH - 160019 PHONE: 0172-2639415,2639416 FAX: 0172-2639416
[email protected]
Other legal compliance: Validity period of the Name approved: With effect from 24th July, 2011,the approved name is valid for a period of 60 days from the date of approval.If,the proposed company is not incorporated within such period,the name shall be lapsed and will be available for other applicants.
Minimum number of directors required to form a company:Minimum no. of directors for Private Limited Company: Two Minimum Paid-up Capital at the time of registration :For Private Limited Company: Rs.1,00,000/-
Fees
Other Important aspects
Banker to the firm (for credit period and short term loan advancements) Layout will include a assembly line It will include various component to be mounted All these component will form the part of engineers Skilled workers and supervisor will work at this functional part
Board of directors
Raman Grewal Executive director PSR : 10%
Deepika Bhagat Chief operatin g officer (COO) PSR : 10%
Priyanka Gupta Marketing Head PSR : 10%
Deepkamal Sachdeva HR director PSR : 10%
Mandeep Bhullar Managing director and CFO PSR : 10%
Atul Kumar Karn Chief executive officer (CEO) PSR : 10%
BOD continued….
Private company: ownership lies with BOD Fund raising : venture capitalist, loans advanced by directors, loans from banks PSR = profit sharing ratio 60% with owners 35% with venture capitalist
COMPONENTS INCLUDE
1. Solar Array and Power trackers
2. Batteries 3. Motor & Controller 4. Instrumentation 5. Steering and suspension 6. Brakes 7. Tires and Hubs
1. Controller. 2. fans 3. power cable 4. AC motor 5. DC power cable
Cost of production per car S.NO
COMPONENT
COST( in INR)
1
Solar Array and Power trackers
20000
2
Batteries
6000
3
Motor & Controller
10000
4
Instrumentation (chassis)
20000
5
Steering and suspension
10000
6
Brakes , Tires and Hubs
6000
7
Other components
4000
MOTORS AND CONTROLLERS
Choosing a motor depend on how much power it has. Controllers usually drive a particular motor. We will use the
brushless motors because these will increase the efficiency of motor upto94-99 percent.
STEERING AND SUSPENSION
Front wheel steering as it tends to be more stable and safer.
In order to make proper suspension it will be soft enough to protect the car and solar array from unnecessary jolts and firm enough to provide a stable ride
DESIGN DIMENSIONS
Following are the design dimensions we set for “SUNSHINE”: Position Length (LTR) or Height from the ground Entire frame 5.8 m Wheels 25 cm diameter, 10 cm thickness Driver cabin height 90 cm Full height 1.48m Tail length 3.4m
HR plan
Will require a full fledge human resource even during initial setup Organizational hierarchy is given on next slide
ORGANIZATIONAL CHART CEO & PRESIDENT
VICE PRESIDENT
EXECUTIVE DIRECTOR
PRODUCTION DIRECTOR
FACTORY GM
R&D CENTER
OPERATIONS TEAM
QUALITY ASSURANCE TEAM
PRODUCTION TEAM
SALES DIRECTOR
MAINTAINENCE TEAM
SALES DEPTT
PURCHASING DEPTT
ACCOUNTS DEPTT
JOB DESCRIPTION JOB TITLE
QUALIFICATI ON
KEY SKILLS REQUIRED
EXPERIENC E REQUIRED
SALARY OFFERED
CEO/ PRESIDENT
MBA executive Leadership, 10-15 years Team building, project management, communicatio n skills
Rs. 1,00,000
VICE PRESIDENT
MBA executive Management skills in requisites, leadership, communicatio n skills
8-10 years
80,000
EXECUTIVE DIRECTOR
MBA executive Management of HR deptt, Quality and Operations
5-8 years
65,000
JOB TITLE
QUALIFICATI ON
KEY SKILLS REQUIRED
EXPERIENC SALARY E REQUIRED OFFERED
FACTORY GM
MBA
Training, Selecting, Motivating plant supervisory
4-5 years
50,000
PRODUCTIO MBA N DIRECTOR (operations)
Practical knowledge of working with production team
4-5 years
50,000
SALES DIRECTOR
Efficient managemen t of sales team, purchasing & accounts
4-5 years
50,000
MBA (marketing)
LEAVE POLICY
Earned leave: 18 per year (for permanent employee) Casual leave: 12 per year (@1 per month) Sick or medical leave: Temporary employee : 10 days (can extend upto two weeks Permanent employee : 15-18 days ( max 3 weeks in continuum)
FINANCIAL PLAN
INITIAL INVESTMENT Start-up Requirements Start-up Expenses Legal Insurance Rent Computer Other Total Start-up Expenses
$5,000 $10,000 $5,000 $10,000 $100 $30,100
Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets
$200,000 $30,000 $10,000 $2,000,000 $2,240,000
Total Requirements
$2,270,100
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0 Expenses
Assets
Inv estment
Loans
Sales forecast Sales Forecast Unit Sales Version A Version B Total Unit Sales Unit Prices Version A Version B Sales Version A Version B Total Sales
Direct Unit Costs Version A Version B Direct Cost of Sales Version A Version B Subtotal Direct Cost of Sales
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
2,000 1,500 3,500
2,900 2,200 5,100
5,000 3,000 8,000
6,500 3,500 10,000
7,000 4,000 11,000
FY 2013 $2,000.00 $2,600.00
FY 2014 $2,000.00 $2,600.00
FY 2015 $2,000.00 $2,000.00
FY 2016 $2,000.00 $2,000.00
FY 2017 $2,000.00 $2,000.00
$4,000,00 0 $3,900,00 0 $7,900,00 0
$5,800,00 0 $5,720,00 0 $11,520,0 00
$10,000,0 00 $6,000,00 0 $16,000,0 00
$13,000,0 00 $7,000,00 0 $20,000,0 00
$14,000,0 00 $8,000,00 0 $22,000,0 00
FY 2013 $1,300.00 $1,560.00
FY 2014 $1,300.00 $1,560.00
FY 2015 $1,300.00 $1,200.00
FY 2016 $1,300.00 $1,200.00
FY 2017 $1,300.00 $1,200.00
$2,600,00 0 $2,340,00 0 $4,940,00 0
$3,770,00 0 $3,432,00 0 $7,202,00 0
$6,500,00 0 $3,600,00 0 $10,100,0 00
$8,450,00 0 $4,200,00 0 $12,650,0 00
$9,100,00 0 $4,800,00 0 $13,900,0 00
Yearly Sales $25,000,000
$20,000,000
$15,000,000
Version A Version B
$10,000,000
$5,000,000
$0 FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Key financial Indicators 3.0 2.5 2.0 1.5 1.0
FY 2013 FY 2014 FY 2015
0.5 0.0
FY 2016 FY 2017
Break Even Analysis Break-even Analysis
Monthly Units Break-even Monthly Revenue Break-even
32 $72,506
Assumptions: Average Per-Unit Revenue
$2,257.14
Average Per-Unit Variable Cost
$1,411.43
Estimated Monthly Fixed Cost
$27,167
BE continued… $20,000 $15,000 $10,000 $5,000 $0 ($5,000) ($10,000) ($15,000) ($20,000) ($25,000) ($30,000) 0
10
20
30
Monthly break-ev en point
Break-ev en point = where line intersects with 0
40
50
Pro Forma Profit and Loss FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Sales
$7,900,000
$11,520,000
$16,000,000
$20,000,000
$22,000,000
Direct Costs of Goods
$4,940,000
$7,202,000
$10,100,000
$12,650,000
$13,900,000
$115,000
$128,000
$141,000
$152,000
$154,000
$20,000
$22,000
$23,000
$25,000
$30,000
------------
------------
------------
------------
------------
Cost of Goods Sold
$5,075,000
$7,352,000
$10,264,000
$12,827,000
$14,084,000
Gross Margin
$2,825,000
$4,168,000
$5,736,000
$7,173,000
$7,916,000
35.76%
36.18%
35.85%
35.87%
35.98%
$130,000
$160,000
$180,000
$195,000
$210,000
Advertising/Promotion
$20,000
$22,000
$25,000
$28,000
$30,000
Other Sales and Marketing Expenses
$30,000
$35,000
$37,000
$40,000
$45,000
------------
------------
------------
------------
------------
$180,000
$217,000
$242,000
$263,000
$285,000
2.28%
1.88%
1.51%
1.32%
1.30%
$100,000
$120,000
$130,000
$140,000
$150,000
Marketing/Promotion
$3,000
$3,200
$3,600
$3,700
$4,000
Depreciation
$5,000
$6,000
$7,000
$8,000
$9,000
$25,000
$30,000
$35,000
$40,000
$45,000
$7,000
$7,500
$8,000
$9,000
$10,000
------------
------------
------------
------------
------------
$140,000
$166,700
$183,600
$200,700
$218,000
1.77%
1.45%
1.15%
1.00%
0.99%
Production Payroll Other Costs of Goods
Gross Margin %
Operating Expenses
Sales and Marketing Expenses Sales and Marketing Payroll
Total Sales and Marketing Expenses Sales and Marketing %
General and Administrative Expenses General and Administrative Payroll
Rent Other General and Administrative Expenses
Total General and Administrative Expenses General and Administrative %
Other Expenses: Other Payroll Consultants Other Expenses
$0
$0
$0
$0
$0
$5,000
$6,000
$7,000
$8,000
$9,000
$1,000
$1,200
$1,500
$1,700
$1,800
------------
------------
------------
------------
------------
Total Other Expenses
$6,000
$7,200
$8,500
$9,700
$10,800
Other %
0.08%
0.06%
0.05%
0.05%
0.05%
------------
------------
------------
------------
------------
$326,000
$390,900
$434,100
$473,400
$513,800
Profit Before Interest and Taxes
$2,499,000
$3,777,100
$5,301,900
$6,699,600
$7,402,200
EBITDA
$7,411,200
Total Operating Expenses
$2,504,000
$3,783,100
$5,308,900
$6,707,600
Interest Expense
$221,510
$221,510
$221,510
$221,510
$221,510
Taxes Incurred
$683,247
$1,066,677
$1,524,117
$1,943,427
$2,154,207
$1,594,243
$2,488,913
$3,556,273
$4,534,663
$5,026,483
20.18%
21.61%
22.23%
22.67%
22.85%
Net Profit Net Profit/Sales
Profit Yearly $6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0 FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Gross Margin Yearly $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Projected Cash Flow Pro Forma Cash Flow FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Cash from Operations Cash Sales
$5,925,000
$8,640,000
$12,000,000
$15,000,000
$16,500,000
Cash from Receivables Subtotal Cash from Operations
$1,651,319 $7,576,319
$2,731,681 $11,371,681
$3,816,444 $15,816,444
$4,836,111 $19,836,111
$5,418,056 $21,918,056
$7,576,319
$11,371,681
$15,816,444
$19,836,111
$21,918,056
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Cash Spending Bill Payments
$345,000 $5,907,654
$408,000 $8,591,202
$451,000 $11,916,404
$487,000 $14,937,998
$514,000 $16,442,714
Subtotal Spent on Operations
$6,252,654
$8,999,202
$12,367,404
$15,424,998
$16,956,714
Subtotal Cash Spent
$6,252,654
$8,999,202
$12,367,404
$15,424,998
$16,956,714
Net Cash Flow Cash Balance
$1,323,665 $1,523,665
$2,372,478 $3,896,144
$3,449,041 $7,345,184
$4,411,113 $11,756,297
$4,961,342 $16,717,639
Cash Received
Additional Cash Received
Subtotal Cash Received
Expenditures Expenditures from Operations
Pro Forma Balance Sheet FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
$11,756,297
$16,717,639
Assets Current Assets Cash
Projected Balance $1,523,665
$3,896,144
$7,345,184
Accounts Receivable
$323,681
$472,000
$655,556
$819,444
$901,389
Inventory
$411,667
$600,167
$841,667
$1,052,083
$1,157,292
Other Current Assets
$10,000
$10,000
$10,000
$10,000
$10,000
Total Current Assets
$2,269,012
$4,978,310
$8,852,407
$13,637,825
$18,786,320
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$5,000
$11,000
$18,000
$26,000
$35,000
Total Long-term Assets
$1,995,000
$1,989,000
$1,982,000
$1,974,000
$1,965,000
Total Assets
$4,264,012
$6,967,310
$10,834,407
$15,611,825
$20,751,320
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Accounts Payable
$479,769
$694,154
$1,004,978
$1,247,733
$1,360,745
Current Borrowing
$100,000
$100,000
$100,000
$100,000
$100,000
$5,000
$5,000
$5,000
$5,000
$5,000
$584,769
$799,154
$1,109,978
$1,352,733
$1,465,745
Long-term Liabilities
$2,115,100
$2,115,100
$2,115,100
$2,115,100
$2,115,100
Total Liabilities
$2,699,869
$2,914,254
$3,225,078
$3,467,833
$3,580,845
Long-term Assets Long-term Assets Accumulated Depreciation
Liabilities and Capital Current Liabilities
Other Current Liabilities Subtotal Current Liabilities
Paid-in Capital
$0
$0
$0
$0
$0
($30,100)
$1,564,143
$4,053,056
$7,609,329
$12,143,992
Earnings
$1,594,243
$2,488,913
$3,556,273
$4,534,663
$5,026,483
Total Capital
$1,564,143
$4,053,056
$7,609,329
$12,143,992
$17,170,475
Total Liabilities and Capital
$4,264,012
$6,967,310
$10,834,407
$15,611,825
$20,751,320
Net Worth
$1,564,143
$4,053,056
$7,609,329
$12,143,992
$17,170,475
Retained Earnings
Pro Forma Balance Sheet FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
$1,523,665
$3,896,144
$7,345,184
$11,756,297
$16,717,639
Accounts Receivable
$323,681
$472,000
$655,556
$819,444
$901,389
Inventory
$411,667
$600,167
$841,667
$1,052,083
$1,157,292
Assets Current Assets Cash
Other Current Assets
$10,000
$10,000
$10,000
$10,000
$10,000
Total Current Assets
$2,269,012
$4,978,310
$8,852,407
$13,637,825
$18,786,320
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$5,000
$11,000
$18,000
$26,000
$35,000
Total Long-term Assets
$1,995,000
$1,989,000
$1,982,000
$1,974,000
$1,965,000
Total Assets
$4,264,012
$6,967,310
$10,834,407
$15,611,825
$20,751,320
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Accounts Payable
$479,769
$694,154
$1,004,978
$1,247,733
$1,360,745
Current Borrowing
$100,000
$100,000
$100,000
$100,000
$100,000
$5,000
$5,000
$5,000
$5,000
$5,000
$584,769
$799,154
$1,109,978
$1,352,733
$1,465,745
Long-term Liabilities
$2,115,100
$2,115,100
$2,115,100
$2,115,100
$2,115,100
Total Liabilities
$2,699,869
$2,914,254
$3,225,078
$3,467,833
$3,580,845
Long-term Assets Long-term Assets Accumulated Depreciation
Liabilities and Capital Current Liabilities
Other Current Liabilities Subtotal Current Liabilities
Paid-in Capital
$0
$0
$0
$0
$0
($30,100)
$1,564,143
$4,053,056
$7,609,329
$12,143,992
Earnings
$1,594,243
$2,488,913
$3,556,273
$4,534,663
$5,026,483
Total Capital
$1,564,143
$4,053,056
$7,609,329
$12,143,992
$17,170,475
Total Liabilities and Capital
$4,264,012
$6,967,310
$10,834,407
$15,611,825
$20,751,320
Net Worth
$1,564,143
$4,053,056
$7,609,329
$12,143,992
$17,170,475
Retained Earnings
Investment Analysis Start
Valuation
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Ending Valuation
$0
$0
$0
$0
$0
$17,591,000
Combination as Income Stream
$0
$0
$0
$0
$0
$17,591,000
10
10
10
10
10
2
2
2
2
2
Calculated Earnings-based Valuation
$15,940,000
$24,890,000
$35,560,000
$45,350,000
$50,260,000
Calculated Sales-based Valuation
$15,800,000
$23,040,000
$32,000,000
$40,000,000
$44,000,000
Calculated Average Valuation
$15,870,000
$23,965,000
$33,780,000
$42,675,000
$47,130,000
Percent Equity Acquired
35%
Net Present Value (NPV)
$9,929,661
Assumptions Discount Rate Valuation Earnings Multiple
Valuation Sales Multiple
10.00%
Justation or Payback period Payback
Projected Payback Calculation Investmen t Investment Cash Returns by Year
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
$100,000
$100,000
$100,000
$100,000
$100,00 0
$500,000
Combination as Income Stream
($500,000)
$100,000
$100,000
$100,000
$100,000
$100,00 0
Cumulative Net Cash Flow to Investors
($500,000)
($400,000 )
($300,000 )
($200,000 )
($100,000 )
$0
Payback Period
5 years
Payback cont… $500,000 $400,000 $300,000 $200,000 $100,000 $0 ($100,000) ($200,000) ($300,000) ($400,000)
