Our financial plan anticipates one year of negative profits as we gain sales volume. We have enough investment to cover these losses, and have an additional credit line available if sales do not match predictions.
We are assuming approximately 50% sales on credit and average interest rates of 10%. These are considered to be conservative in case our predictions are erroneous.
Since Visigoth is an import/export broker, the firm has no variable costs associated with it.
Our break-even analysis is based on the assumptions that our gross margin is 100%. In other words, we will have insignificant direct cost of sales. Since each market segment is so completely different, it is difficult to assign an average per unit revenue figure. However, it is believed that during the first three years, average revenue per unit per month will be about $4.00, due to the fact that, initially, we may be working with smaller companies projects. We expect that about 3,500 units per month will guarantee break even.
The following table itemizes our revenues and associated costs. We expect to be paying higher costs in marketing and advertising than other companies as we attempt to build sales volume. We expect monthly profits to begin in April 2004 and yearly profits to occur in 2005.
The following is our cash flow table and chart. We do not expect to have any short-term cash flow problems even though we will be operating at a loss for the first year. Our short-term loan will be repaid in three equal payments in 2004-2006. Our long-term loan will be paid off in ten years.
The following table is the Project Balance Sheet for Visigoth Imports.
We have included industry standard ratios from the trade consultant industry for comparison. Our NAICS industry class is currently Miscellaneous Nondurable Goods Merchant Wholesale - 424990. Our projections indicate a healthy company that will be able to obtain and retain long-term profitability.