Medicine Dispenser Business Plan

Sunapto will manufacture and market an automated pill dispensing unit, the MedCabinet, and a monitoring service to address medication compliance in the United States. Elderly patients often have multiple disease states and consume an average of four to five prescription drugs and two over-the-counter drugs daily. Approximately 67% of elderly patients fail to follow dosage instructions, resulting in a nearly six-fold increase in hospitalization risk compared to the general population.

Sunapto’s mission is to improve and enhance people’s lives through the use of technology. They will provide home medical systems that prioritize safety, ease of use, and a strong partnership with healthcare providers. Their target market is the 65 and older age group, which currently consists of 35 million Americans and is growing at a rate of 1% annually. Sunapto aims to establish itself as a leader and innovator in the home healthcare device industry.

Sunapto’s marketing strategy will include industry/trade and physician/pharmacist awareness campaigns, as well as targeted executions for specific customer segments. They plan to sell the MedCabinet directly to consumers for $700, ensuring the right medication is taken at the right time.

In the medication compliance market, Sunapto faces competition from reminder devices, automated medication dispensers, and compliance services. The closest competitor is a similar product in the automated medication dispenser and compliance service market. However, this competitor suffers from high costs, limited dosing events, and weak marketing and distribution channels, making it susceptible to an improved alternative.

Sunapto, located in the Midwest, USA, is in the pre-start-up stage and will be established as a start-up LLC. The management team possesses experience in growth-oriented technology, finance, business unit development, and team leadership. Motivated by personal experiences with medication compliance issues in their families, the management team is committed to being part of the solution for the elderly. Sunapto is actively seeking individuals with sales, marketing, and medical device product development experience to join the team.

The MedCabinet is currently in the concept development stage, with a working prototype expected five months after plan initiation and sales starting 12 months after plan initiation. The initial sales projections are 11,077 units in Year 2 and 13,419 units in Year 3.

Sunapto requires significant investment to bring the MedCabinet to market and plans to seek two rounds of financing. The founders have committed personal financial contributions for Round 1 but are also looking for outside investors before launching the company. Round 1 funds will be utilized for management team additions, prototype development, and initial product marketing expenses. Round 2 funding will be necessary in the seventh month of operations to cover management team needs, prototype to product development, product marketing, and contract manufacturing expenses. Sunapto anticipates that Round 2 outside investors will see a respectable annual return over three years.

1.1 Mission

Sunapto is a home healthcare technology company dedicated to bringing healthcare home and improving people’s lives. They provide home medical systems that prioritize safety, ease of use, independent lifestyles, and strong partnerships with healthcare providers. Sunapto aims to achieve fair yet aggressive profitability while establishing its brand as a leader and innovator in home healthcare devices. The company plans to finance continued growth through a combination of equity investment and internally generated cash flow. Once their marketing platform is established, Sunapto will expand through new product extensions. The company fosters a strong and cohesive work environment, driven by a shared ethos and a passion to grow with unwavering belief.

Medicine Dispenser Business Plan Example

1.2 Keys to Success

Sunapto’s keys to success are:

  • Product Quality: A safe, reliable, easy-to-use product with a well-engineered design, quality workmanship, easy-to-follow programming, accurate dispensing, and uncomplicated use.
  • Marketing: Once a quality product is available, Sunapto’s success relies on effective marketing. The MedCabinet is a new product, and consumers must be educated to gain market penetration in a market with people who often have a harder time accepting new technology.
  • Partnerships: Sunapto is a management/marketing/technology company, not a manufacturing company. They will rely on partners for production and delivery. The establishment and maintenance of partnerships will be crucial.
  • Philosophy: Sunapto aims to earn a higher than normal return for its business partners. They will take a balanced approach in guiding the company, considering four perspectives: financial, customer, internal process, and learning & growth.

1.3 Objectives

  1. Increase sales to over 24,000 MedCabinet units by Year 3.
  2. Have seven percent of units subscribed to the monitoring and notification service by Year 3.

Company Summary

Sunapto is a start-up Limited Liability Company (LLC) located in the Midwest, USA. They will manufacture and market the MedCabinet automatic pill dispenser, targeting the 65 and over market segments. Initial market research has been completed, and this business plan will serve as the framework for bringing their product to market.

Sunapto is in the development stage, and its proposed operations are subject to all the risks inherent in the establishment of a new business enterprise, including the absence of an operating history. The likelihood of Sunapto’s success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the formation of a new business, as well as the competitive and regulatory environment in which Sunapto will operate. Although forecast revenues and expenses are set forth in this Plan, the actual amounts may vary substantially from those projected, and no assurance can be given that the results forecasted in this Plan will be achieved.

2.1 Start-up Summary

Sunapto’s start-up costs are expected to be minimal, including stationery, legal costs, and expenses associated with opening their first office. The start-up costs will be financed by direct owner investment. The assumptions are shown in the Start-up Table.

Medicine Dispenser Business Plan Example

Start-up Requirements

Start-up Expenses

Legal: $2,000

Stationery etc.: $500

Brochures: $0

Consultants: $0

Insurance: $0

Rent: $0

Research and Development: $0

Expensed Equipment: $0

Other: $213

Total Start-up Expenses: $2,713

Start-up Assets

Cash Required: $470,000

Start-up Inventory: $0

Other Current Assets: $0

Long-term Assets: $0

Total Assets: $470,000

Total Requirements: $472,713

Start-up Funding

Start-up Expenses to Fund: $2,713

Start-up Assets to Fund: $470,000

Total Funding Required: $472,713

Assets

Non-cash Assets from Start-up: $0

Cash Requirements from Start-up: $470,000

Additional Cash Raised: $0

Cash Balance on Starting Date: $470,000

Total Assets: $470,000

Liabilities and Capital

Liabilities

Current Borrowing: $0

Long-term Liabilities: $0

Accounts Payable (Outstanding Bills): $0

Other Current Liabilities (interest-free): $0

Total Liabilities: $0

Capital

Planned Investment

John P. Brush: $2,713

Founders: $50,000

Round 1 Investors: $420,000

Other: $0

Additional Investment Requirement: $0

Total Planned Investment: $472,713

Loss at Start-up (Start-up Expenses): ($2,713)

Total Capital: $470,000

Total Capital and Liabilities: $470,000

Total Funding: $472,713

Company Ownership

Sunapto will be structured as an LLC in MidWest, USA. Ownership will be distributed amongst the founding partners, who plan to sell limited ownership to outside private investors.

Company Locations and Facilities

Sunapto is currently operated out of the founder’s home. They plan to relocate to an office space in the greater MidWest, USA area. The initial office space will be small, serving management functions. As the company grows, they will acquire additional office space. Sunapto will search for a contract manufacturer for the MedCabinet, who will handle distribution.

Products and Services

Sunapto will develop and market the MedCabinet, an automatic pill dispensing system. The MedCabinet ensures medication compliance and solves common problems with medication usage. It dispenses the correct medication at the right time and notifies the user. The technology used in the MedCabinet is subject to patent protection.

Competitive Comparison

Current options for organizing daily medications include traditional weekly pillboxes and electronic versions. Both options require manual separation of pills and may not account for multiple medications with different intervals. Compliance aids, such as simple pillboxes, electronic devices, automated dispensers, computer programs and pagers, and telephone reminder services, are available. The cost varies widely.

Fulfillment

Sunapto develops product concepts and supplies the intelligence to these products through software development. They will partner with a contract manufacturer to develop and produce the MedCabinet. The contract manufacturer should have experience in the medical device field, dealing with the FDA, product development capabilities, manufacturing, order fulfillment, distribution, and depot and repair.

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Technology

Sunapto’s contract manufacturer should monitor and implement changes in manufacturing technology. The MedCabinet uses hardware and software technology, carefully selected to match price and performance. The companion monitoring and notification service relies on Internet and database technologies. The MedCabinet will contain patentable items.

Sales Literature

Sales literature for Sunapto and the MedCabinet is yet to be developed.

Future Products and Services

Sunapto plans to develop additional capabilities and enhancements to the MedCabinet product line. They aim to innovate and market their products, expanding into other healthcare and medical device areas.

Market Analysis Summary

Sunapto targets the 65 and over age group. The growth in this age category is expected to be high as baby boomers age. Medication compliance in home settings is a major unsatisfied need, which will only increase with medication usage and life expectancy. The MedCabinet serves as a major asset to this target market.

Market Segmentation

Sunapto’s potential customers include individuals 65 and over using medications in independent living, as well as those under 65 needing assistance in medication compliance. The 65 and over age group accounts for two-thirds of prescription and over-the-counter medication use. Sunapto will initially focus on this age group.

Medicine Dispenser Business Plan Example

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Potential Customers Growth CAGR

65 years and over 1% 35,303 35,676 36,052 36,432 36,816 1.05%

55 to 64 years 4% 26,113 27,229 28,393 29,607 30,872 4.27%

18 to 54 years 0% 147,955 148,625 149,298 149,975 150,655 0.45%

Under 18 years 0% 70,935 71,153 71,371 71,590 71,810 0.31%

Other 0% 0 0 0 0 0 0.00%

Total 0.87% 280,306 282,683 285,114 287,604 290,153 0.87%

4.2 Target Market Segment Strategy

Sunapto’s choice of target markets is strategic. The 65 and over market have difficulty with memory and complicated dosage instructions for multiple medications. They have a large unsatisfied medical compliance need. This is an expanding age group. The U.S. Census Bureau estimates the 65 and over segment of the population will grow 3.7% from 2001-2005 and 9.2% from 2005-2010.

4.2.1 Market Needs

The elderly often have multiple chronic conditions and consume over one-third of prescription medications in the United States. The average individual in Sunapto’s target market consumes four to five prescription drugs and two OTC drugs per day. The risk of hospitalization due to adverse medication outcomes in elderly patients is estimated at 17%, almost six times greater than the general population.

Cognitive impairment may play a major role in drug-related problems in the elderly, making it difficult to follow medication directions. Other factors include lack of help with medication management, financial considerations, and vision decline affecting reading directions. Nearly 67% of patients fail to follow medication dosage instructions. Negative outcomes from drug-related problems include additional healthcare encounters, emergency department visits, and death.

The main customer need is medication compliance. The MedCabinet will address this need.

4.2.2 Market Trends

The U.S. population is becoming older due to improvements in healthcare and an aging baby boomer generation.

4.2.3 Market Growth

The U.S. Census Bureau estimates the mean age of the population will increase to 36.7 years from 2001-2005. The 65 and over segment of the population will grow approximately 1% each year from 2001-2005.

Although the population is aging, more individuals are leading independent lives. The percentage of elderly persons residing in nursing homes has decreased to 5.2%.

4.2.4 Market Concept Test

Sunapto’s preliminary concept test showed a market penetration potential of 10%. Sunapto estimates an initial market penetration of 2%. Market penetration is determined using the top two box method in which individuals indicated they would definitely or probably buy the product. Awareness is measured based on the target market’s knowledge of the product. ACV (All Commodity Volume) is a measure of distribution reach.

4.3 Service Business Analysis

The medication compliance industry is fragmented with small companies selling both electronic and traditional pill dispensers. There are no major medical device companies making or distributing devices similar to the MedCabinet. Consumers rely on expert advice from physicians and pharmacists when making purchasing decisions.

4.3.1 Distributing a Service

Electronic devices are sold online and listed in medical order guides, while non-electronic devices are sold in retail outlets, pharmacies, and through mail order. Distribution patterns are determined by buying and influencing groups in the healthcare industry.

4.3.2 Competition and Buying Patterns

Buyers in the home medical device market rely on advice from primary care physicians, pharmacists, and healthcare insurance providers. They are concerned about cost and insurance coverage. Awareness of automated pill dispensers is low, but plastic pill holders are well-known.

4.3.3 Main Competitors

Home Medical Services LLC is the main competitor in the medication compliance market. They offer a similar product but have weaknesses in cost, limited dosage options, and marketing/distribution channels.

4.3.4 Business Participants

There are no major medical device companies making or distributing devices similar to the MedCabinet. The market is fragmented with smaller companies selling electronic and traditional pill dispensers.

Strategy and Implementation Summary

Sunapto will pursue specific market segments with a multi-tiered, multi-channel approach. Marketing will follow broad awareness campaigns to specific target customer campaigns. Sunapto will sell directly to customers directed to them from their marketing campaigns.

5.1 Value Proposition

Sunapto’s value proposition is unique. The MedCabinet addresses medication compliance issues in the target market and offers secure access to information for third parties.

5.2 Marketing Strategy

Marketing will begin with awareness campaigns and progress to targeted executions. Sunapto will work with healthcare providers and rely on word-of-mouth advertising. They will also consider retail partnerships for greater exposure and distribution.

5.2.1 Distribution Strategy

MedCabinet production will be outsourced, and an efficient ordering and delivery process will be implemented using internet technology. Initially, products will be shipped directly from the manufacturer. As demand increases, additional distribution centers may be considered.

5.2.2 Marketing Programs

Specific marketing programs are yet to be developed.

5.2.3 Pricing Strategy

The MedCabinet will be priced at $700 to encourage consumers with and without insurance to purchase the product. Sunapto plans to lobby insurance providers for coverage. The MedCabinet Monitor and Notification Service is priced at $19.95 per month.

5.2.4 Promotion Strategy

Public relations and industry media will help create awareness. Direct mail, advertisements, and sponsored events will target buying and influencing groups. Sunapto will work closely with physicians and home nursing professionals.

5.3 Competitive Edge

Sunapto has a competitive edge in technology, marketing/distribution, and their management team and advisory boards.

5.4 Positioning Statement

The MedCabinet helps individuals and caregivers avoid medication non-compliance by providing the right medication at the right time.

5.5 Sales Strategy

Sunapto will initially sell the MedCabinet directly to consumers. Once sales have reached a certain level, discussions with retail sales outlets will begin.

5.5.1 Sales Forecast

No sales are anticipated in Year 1. In Year 2, 11,077 MedCabinet units are expected to be sold, with 7% of customers purchasing companion services. Year 3 is projected to have 13,419 units sold, with 7% purchasing companion services. Sunapto estimates having 1,716 subscribers to the MedCabinet companion services by the end of Year 3.

Medicine Dispenser Business Plan Example

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
MedCabinet PMA 0 11,077 13,419
MedCabinet Monitor & Notification Service 0 776 940
MedCabinet M&N Service Renewal 0 0 776
Other 0 0 0
Total Unit Sales 0 11,853 15,135
Unit Prices Year 1 Year 2 Year 3
MedCabinet PMA $0.00 $700.00 $700.00
MedCabinet Monitor & Notification Service $0.00 $301.06 $301.06
MedCabinet M&N Service Renewal $0.00 $239.40 $239.40
Other $0.00 $0.00 $0.00
Sales
MedCabinet PMA $0 $7,753,900 $9,393,300
MedCabinet Monitor & Notification Service $0 $233,623 $282,997
MedCabinet M&N Service Renewal $0 $0 $185,774
Other $0 $0 $0
Total Sales $0 $7,987,523 $9,862,072
Direct Unit Costs Year 1 Year 2 Year 3
MedCabinet PMA $0.00 $420.00 $420.00
MedCabinet Monitor & Notification Service $0.00 $30.14 $30.14
MedCabinet M&N Service Renewal $0.00 $24.00 $24.00
Other $0.00 $0.00 $0.00
Direct Cost of Sales
MedCabinet PMA $0 $4,652,340 $5,635,980
MedCabinet Monitor & Notification Service $0 $23,386 $28,328
MedCabinet M&N Service Renewal $0 $0 $18,624
Other $0 $0 $0
Subtotal Direct Cost of Sales $0 $4,675,726 $5,682,932

5.5.2 Sales Programs

Direct sales will be done through personal contact, direct mail, public relations, and media targeting key industry and customer segments. Electronic marketing will also be used when it aligns with the buying and influencing patterns of specific groups. A website and e-commerce site will be utilized to facilitate direct sales to industry groups and end consumers.

5.6 Strategic Alliances

Sunapto will rely on strategic alliances in the following areas:

  • Contract sales organization for national healthcare market positioning and selling.
  • Contract design and manufacturing for quality product development and delivery.
  • Website developer and host for continuous customer access and support.

Web Plan Summary

The Sunapto MedCabinet website will serve as the company’s virtual business card, portfolio, and online "home." It will showcase the MedCabinet product and offer access to the monitor and notification service. The website is an integral part of Sunapto’s overall marketing strategy, providing information and service to existing customers and enabling new customers to make purchases online.

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The website should have a simple yet classy design that aligns with the latest trends in user interface design. It should prioritize ease of use and avoid excessive use of flashy or outdated technologies like Shockwave or Flash.

Sunapto plans to outsource the development and hosting of the initial MedCabinet website.

6.1 Website Marketing Strategy

The MedCabinet content/commerce site will focus on providing customer service, access to the MedCabinet Monitor and Notification service, products, and product information to the healthcare community, caregivers, and customer segments. It will also offer informational and educational content related to medication compliance/adherence issues.

Sunapto’s website will have a fast loading and user-friendly user interface (UI) that appeals to the target audience. The UI will be simple and clean.

6.2 Development Requirements

Sunapto will contract out the development and hosting of the initial MedCabinet website. They will work closely with a selected website developer to create a simple, classy, and internet-focused site that meets the needs of their target groups.

Management Summary

Sunapto is a small company owned and operated by its founders. Despite its loose style, the company operates with organization and logic. The management is based on the following principles:

  1. Build and maintain a cohesive leadership team.
  2. Create organizational clarity.
  3. Over-communicate organizational clarity.
  4. Reinforce organizational clarity through human systems.

While Sunapto has a good team to cover the main points of the business plan, they lack marketing capabilities to position their company and product in the medical marketplace, as well as technical capabilities to manage engineering aspects of product development. They plan to address these gaps by building two advisory boards and hiring key management positions.

7.1 Organizational Structure

The general organizational structure of Sunapto is illustrated in the chart below:

7.2 Management Team

John P. Brush, President: 41 years old, founded Sunapto in 2002 to focus on using technology to enhance home healthcare. John spent sixteen years at SCS, Inc. before obtaining his MBA. He was part of the management team that grew SCS from 4 to 55 employees with $5 million in sales. John holds an MBA from the University of Notre Dame’s Mendoza College of Business and a BS in Computer Science from Rose-Hulman Institute of Technology.

Resumes for the management team can be found in the appendix.

7.3 Management Team Gaps

Sunapto needs to strengthen their marketing capabilities to position their company and product in the medical marketplace. They also need technical expertise to manage the engineering portion of product development. To address these gaps, Sunapto plans to build two advisory boards consisting of experienced individuals in healthcare, medical devices, elder care, business development, growth, and medical device product development.

Key management positions that need to be filled include:

Sales and Marketing Director – Develops strategic sales and marketing objectives, manages sales territories and quotas, and oversees marketing programs and materials. Requires a bachelor’s degree with 7-10 years of sales and marketing experience, familiarity with medical and internet business models, and expertise in product/brand management.

Controller – Responsible for directing accounting functions, preparing financial reports, and presenting findings and recommendations. Requires a bachelor’s degree and 7 years of direct experience.

Engineering Manager – Plans and directs engineering activities. Requires a bachelor’s degree in engineering and 8-10 years of experience in various engineering fields.

7.4 Personnel Plan

The Personnel Plan reflects the need to strengthen Sunapto’s capabilities. They expect to have 10 employees in Year 1 and 16 by Year 3. Detailed monthly projections can be found in the appendix.

Personnel Plan
Year 1 Year 2 Year 3
Production Personnel
Engineering Manager $94,908 $97,755 $100,688
Software Engineer III $43,577 $67,332 $69,352
Software Engineer II $25,524 $52,583 $54,160
Database Administrator $28,656 $58,902 $60,669
Other $0 $0 $0
Subtotal $192,665 $276,572 $284,869
Sales and Marketing Personnel
Sales and Marketing Director $85,920 $88,498 $91,153
Other $0Medicine Dispenser Business Plan Example

Break-even Analysis:

Monthly Units Break-even: 624

Monthly Revenue Break-even: $412,750

Assumptions:

– Average Per-Unit Revenue: $661.00

– Average Per-Unit Variable Cost: $384.00

– Estimated Monthly Fixed Cost: $172,968

Projected Profit and Loss:

Barring unforeseen circumstances, Sunapto is expected to break-even by Year 2. Profits in future years will increase with higher sales volume, resulting in a good net profit in Year 2 and even better in Year 3.

Medicine Dispenser Business Plan Example

Medicine Dispenser Business Plan Example

Medicine Dispenser Business Plan Example

Medicine Dispenser Business Plan Example

Pro Forma Profit and Loss:

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $0 $7,987,523 $9,862,072
Direct Cost of Sales $0 $4,675,726 $5,682,932
Production Payroll $192,665 $276,572 $284,869
Research and Development $175,000 $180,250 $185,658
Other Production Expenses $0 $0 $0
Total Cost of Sales $367,665 $5,132,548 $6,153,459
Gross Margin ($367,665) $2,854,975 $3,708,613
Gross Margin % 0.00% 35.74% 37.60%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $85,920 $88,498 $91,153
Contract Sales Organization $50,000 $273,000 $312,000
Advertising/Promotions $143,775 $177,517 $216,284
Travel $6,000 $7,800 $10,140
Sales Commissions $0 $116,309 $140,900
Legal $12,000 $12,360 $12,731
Miscellaneous $2,400 $2,472 $2,546
Total Sales and Marketing Expenses $300,095 $677,955 $785,753
Sales and Marketing % 0.00% 8.49% 7.97%
General and Administrative Expenses
General and Administrative Payroll $212,936 $275,943 $308,646
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $36,000 $37,080 $38,192
Insurance $12,000 $12,360 $12,731
Office Equipment $30,000 $9,000 $9,000
Office Supplies $6,000 $6,180 $6,365
Rent $60,000 $61,800 $63,654
Payroll Taxes $154,287 $238,105 $280,063
Other General and Administrative Expenses $0 $0 $0
Total General and Administrative Expenses $511,223 $640,468 $718,652
General and Administrative % 0.00% 8.02% 7.29%
Other Expenses:
Other Payroll $22,770 $152,671 $248,876
Consultants $0 $0 $0
Contract/Consultants $0 $0 $0
Total Other Expenses $22,770 $152,671 $248,876
Other % 0.00% 1.91% 2.52%
Total Operating Expenses $834,089 $1,471,094 $1,753,281
Profit Before Interest and Taxes ($1,201,754) $1,383,881 $1,955,332
EBITDA ($1,201,754) $1,383,881 $1,955,332
Interest Expense $0 $0 $0
Taxes Incurred $0 $484,358 $676,219
Net Profit ($1,201,754) $899,523 $1,279,113
Net Profit/Sales 0.00% 11.26% 12.97%

Projected Cash Flow

The company’s cash flow will decline in the first year of operations due to capital investments and no sales. Sunapto expects negative net cash flows throughout Year 1 as they develop prototypes and prepare for production with their contract manufacturer. Two capital infusions will support Sunapto during this period, leading up to the start of production and sales in Year 2. A monthly breakdown of Year 1 cash flow can be found in the appendix.

Medicine Dispenser Business Plan Example

Pro Forma Cash Flow

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $0 $7,188,771 $8,875,865
Subtotal Cash from Operations $0 $7,987,523 $9,862,072
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $710,000 $0 $0
Subtotal Cash Received $710,000 $7,987,523 $9,862,072
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $514,291 $793,684 $933,544
Bill Payments $637,885 $5,826,554 $7,538,037
Subtotal Spent on Operations $1,152,176 $6,620,237 $8,471,581
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $1,152,176 $6,620,237 $8,471,581
Net Cash Flow ($442,176) $1,367,286 $1,390,491
Cash Balance $27,824 $1,395,110 $2,785,601

8.5 Projected Balance Sheet

The table below presents the Balance Sheet for Sunapto.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $27,824 $1,395,110 $2,785,601
Accounts Receivable $0 $0 $0
Inventory $0 $0 $0
Other Current Assets $0 $0 $0
Total Current Assets $27,824 $1,395,110 $2,785,601
Long-term Assets
Total Long-term Assets $0 $0 $0
Total Assets $27,824 $1,395,110 $2,785,601
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $49,578 $517,341 $628,719
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Total Current Liabilities $49,578 $517,341 $628,719
Long-term Liabilities $0 $0 $0
Total Liabilities $49,578 $517,341 $628,719
Paid-in Capital $1,182,713 $1,182,713 $1,182,713
Retained Earnings ($2,713) ($1,204,467) ($304,944)
Earnings ($1,201,754) $899,523 $1,279,113
Total Capital ($21,754) $877,769 $2,156,882
Total Liabilities and Capital $27,824 $1,395,110 $2,785,601
Net Worth ($21,754) $877,769 $2,156,882
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8.6 Business Ratios

The table follows with Sunapto’s main business ratios. The Industry figures come from the Standard Industry Classification (SIC) Index Code 3845, Electromedical Equipment.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 0.00% 23.47% 2.30%
Percent of Total Assets
Accounts Receivable 0.00% 0.00% 0.00% 26.40%
Inventory 0.00% 0.00% 0.00% 13.10%
Other Current Assets 0.00% 0.00% 0.00% 47.70%
Total Current Assets 100.00% 100.00% 100.00% 87.20%
Long-term Assets 0.00% 0.00% 0.00% 12.80%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities
Accounts Payable 0.00% 0.00% 0.00% 38.10%
Long-term Liabilities 0.00% 0.00% 0.00% 18.70%
Total Liabilities 0.00% 0.00% 0.00% 56.80%
Net Worth -78.18% 62.92% 77.43% 43.20%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 0.00% 35.74% 37.60% 53.30%
Selling, General & Administrative Expenses 0.00% 23.43% 22.90% 34.50%
Advertising Expenses 0.00% 3.42% 3.16% 1.80%
Profit Before Interest and Taxes 0.00% 17.33% 19.83% 4.70%
Main Ratios
Current 0.56 2.70 4.43 1.97
Quick 0.56 2.70 4.43 1.34
Total Debt to Total Assets 0.00% 0.00% 0.00% 56.80%
Pre-tax Return on Net Worth 5524.36% 157.66% 90.66% 4.10%
Pre-tax Return on Assets -4319.14% 99.20% 70.19% 9.40%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 0.00% 11.26% 12.97% n.a
Return on Equity 0.00% 102.48% 59.30% n.a
Activity Ratios
Accounts Receivable Turnover 0.00 0.00 0.00 n.a
Collection Days 0 0 0 Call Center Manager: $0, $0, $0, $0, $0, $0, $3,795 for months 7-12

-Customer Service Rep: $0 for all 12 months

-Webmaster: $0 for all 12 months

-Other: $0 for all 12 months

Subtotal: $0, $0, $0, $0, $0, $0, $3,795 for months 7-12

Total People: 4 for all 12 months

Total Payroll: $29,260, $29,260, $29,260, $29,261, $34,707, $40,799, $53,624 for months 1-12

General Assumptions:

Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Tax Rate 30.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss:

Month 1 2 3 4 5 6 7 8 9 10 11 12

Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Production Payroll $7,909 $7,909 $7,909 $7,910 $13,356 $13,356 $22,386 $22,386 $22,386 $22,386 $22,386 $22,386 $22,386

Research and Development $43,750 $0 $0 $43,750 $0 $0 $43,750 $0 $0 $43,750 $0 $0 $0

Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $51,659 $7,909 $7,909 $51,660 $13,356 $13,356 $66,136 $22,386 $22,386 $66,136 $22,386 $22,386 $22,386

Gross Margin ($51,659) ($7,909) ($7,909) ($51,660) ($13,356) ($13,356) ($66,136) ($22,386) ($22,386) ($66,136) ($22,386) ($22,386) ($22,386)

Gross Margin % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Operating Expenses:

Sales and Marketing Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales and Marketing Payroll $7,160 $7,160 $7,160 $7,160 $7,160 $7,160 $7,160 $7,160 $7,160 $7,160 $7,160 $7,160 $7,160

Contract Sales Organization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $25,000 $25,000

Advertising/Promotions $0 $0 $0 $47,925 $0 $0 $47,925 $0 $0 $47,925 $0 $0 $0

Travel $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Sales Commissions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $

Pro Forma Cash Flow

Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash from Operations
Cash Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash from Operations $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $710,000 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $0 $0 $0 $0 $0 $710,000 $0 $0 $0 $0 $0
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $29,260 $29,260 $29,260 $29,261 $34,707 $40,799 $53,624 $53,624 $53,624 $53,624 $53,624 $53,624
Bill Payments $2,491 $72,870 $18,978 $22,134 $110,552 $20,873 $32,124 $135,207 $26,287 $29,343 $115,740 $51,287
Subtotal Spent on Operations $31,751 $102,130 $48,238 $51,395 $145,259 $61,672 $85,748 $188,831 $79,911 $82,967 $169,364 $104,911
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $31,751 $102,130 $48,238 $51,395 $145,259 $61,672 $85,748 $188,831 $79,911 $82,967 $169,364 $104,911
Net Cash Flow ($31,751) ($102,130

Medicine Dispenser Business Plan Example

Business Plan Outline

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