Matrimony.com will utilize a transaction based revenue
model in which each piece of merchandise sold will generate a profit margin
for matrimony.com. Our markups for various merchandise items will vary
according to market demand. For purposes of our financial projections we
will utilize an overall average margin.
Income Statement Projections
We expect that matrimony.com will be unprofitable and generate
negative cash flows for the first 2 years of operations. This is due primarily
to three things:
- Costs associated with start-up
- Marketing costs with building a new brand image
- Higher cost of goods sold due to inability to buy
direct from manufacturers and get volume discounts and rebates.
Below are matrimony.com's proforma income statements
for the next five years.
| |
1st year |
2nd year |
3rd year |
4th year |
5th year |
| Est. revenue |
$
200,000 |
$
630,000 |
$
2,100,000 |
$
6,600,000 |
$
17,600,000 |
| Estimated COGS |
$
140,000 |
$
441,000 |
$
1,470,000 |
$
4,620,000 |
$
12,320,000 |
| Gross Margin |
$
60,000 |
$
189,000 |
$
630,000 |
$
1,980,000 |
$
5,280,000 |
| Depreciation |
$
64,667 |
$
64,667 |
$
64,667 |
$
200,000 |
$
200,000 |
| Operating expenses |
$
200,400 |
$
250,400 |
$
300,400 |
$
350,400 |
$
400,400 |
| Sales & Mktg |
$
10,000 |
$
31,500 |
$
105,000 |
$
330,000 |
$
880,000 |
| Profit loss |
$ (215,067) |
$ (157,567) |
$ 159,933 |
$ 1,099,600 |
$ 3,799,600 |
The following are notes on how the figures above were
derived. Note that all of these figures are estimates at best.
Estimated Revenue. This number is based on our total market forecasts.
In general, estimated revenues represent less than 1 or 2% of the total
market we calculated in the Market
Research-Market Size section of this plan.
Estimated COGS. Cogs are calculated as 70% of sales. This percentage
is based on our analysis of the margins reported by Federated,
JC Penney's, and Wal-Mart on their on-line EDGAR SEC form 10k's.
Note that COGS expense includes warehousing expenses.
Depreciation. Depreciation is based on the depreciation of our estimated
start up expenses divided by a three year depreciation period. See schedule
below of estimated start up expenses.
| Start-up capital equipment |
|
|
|
|
|
| |
|
|
|
|
|
| Servers |
$
100,000 |
|
|
|
|
| Computer/monitor/keyboards |
$
50,000 |
|
|
|
|
| Misc. supplies |
$
20,000 |
|
|
|
|
| Software |
$
4,000 |
|
|
|
|
| Wages for developers |
$
20,000 |
|
|
|
|
| |
|
|
|
|
|
| Total |
$
194,000 |
|
|
|
|
| |
|
|
|
|
|
Operating Expenses Includeds the following estimated expenses:
Rent $ 9,600 (800/month),Wages $180,000, Supplies $ 4,800 (400/month),
Utilities $ 2,400 (200/month), Misc. $ 3,600 (300/month), for a total of
200,400.
