CASE CREATIONS
COMM 447
Juanita Wolfe
APRIL 9, 2015
Table of Contents
EXECUTIVE SUMMARY .................................................................................................................................. 4
INTRODUCTION ............................................................................................................................................. 5
INDUSTRY .................................................................................................................................................. 5
MISSION STATEMENT ............................................................................................................................... 6
GOALS AND OBJECTIVES ........................................................................................................................... 6
OPERATIONS PLAN ........................................................................................................................................ 6
LOCATION.................................................................................................................................................. 6
SITE PLAN .................................................................................................................................................. 7
FLOOR PLAN .............................................................................................................................................. 7
HOURS OF OPERATION ............................................................................................................................. 9
DAILY OPERATIONS ................................................................................................................................... 9
SUPPLY .................................................................................................................................................... 10
SERVICES ................................................................................................................................................. 10
CAPITAL BUDGET..................................................................................................................................... 10
WORKING CAPITAL.................................................................................................................................. 11
PROFIT MARGIN ...................................................................................................................................... 11
OPERATING EXPENSES ............................................................................................................................ 11
PRODUCTION PROCESS ........................................................................................................................... 13
HUMAN RESOURCES PLAN ......................................................................................................................... 14
ORGANIZATIONAL STRUCTURE ............................................................................................................... 14
JOB DESCRIPTION .................................................................................................................................... 15
EMPLOYEE EXPENSES .............................................................................................................................. 16
MARKETING PLAN ....................................................................................................................................... 16
PRODUCT ................................................................................................................................................ 17
PLACE ...................................................................................................................................................... 18
PRICING ................................................................................................................................................... 18
PROMOTION ........................................................................................................................................... 19
SEGMENTATION, TARGETING AND POSITIONING .................................................................................. 20
POSITIONING STATEMENT ...................................................................................................................... 21
COMPETITION ......................................................................................................................................... 21
POSITIONING MAP .................................................................................................................................. 22
MARKETING BUDGET .............................................................................................................................. 22
REVENUE PROJECTIONS .......................................................................................................................... 23
FINANCIAL PLAN.......................................................................................................................................... 23
FINANCIAL ANALYSIS ............................................................................................................................... 24
BREAKEVEN ANALYSIS............................................................................................................................. 25
SENSITIVITY ANALYSIS ............................................................................................................................. 26
OWNERS COMPENSATION ...................................................................................................................... 26
APPENDIX A: FINANCIAL MODEL ............................................................................................................... 29
Table of Figures & Tables
Figure 1 – The Centre Mall Floor Plan........................................................................................................... 7
Figure 2 – Case Creations Floor Plan............................................................................................................. 8
Figure 3 – Cell Phone Kiosk Example ............................................................................................................ 8
Figure 4 – Product Process.......................................................................................................................... 13
Figure 5 – Organizational Chart .................................................................................................................. 14
Figure 6 – Product Samples......................................................................................................................... 17
Figure 7 – Location…………………………………………………………………………………………………………………………………18
Figure 8 – Price Samples………………………………………………………………………………………………………………………..19
Figure 9 – Advertising Tools ........................................................................................................................ 20
Figure 10 – Target Markets……………………………………………………………………………………………………………………21
Figure 11 – Positioning Map ....................................................................................................................... 22
Figure 12 – Break Even Analysis……………………………………………………………………………………………………. ………25
Table 1 – Hours of Operation ........................................................................................................................ 9
Table 2 – Capital Budget………………………………………………………………………………………………………………………..10
Table 3 – Working Capital ........................................................................................................................... 11
Table 4 – Profit Margin ............................................................................................................................... 11
Table 5 – Operating Expenses ..................................................................................................................... 12
Table 6 – Hours of Work ............................................................................................................................. 16
Table 7 – Salary and Wage Expense............................................................................................................ 16
Table 8 – Marketing Budget ........................................................................................................................ 22
Table 9 – Revenue Projections .................................................................................................................... 23
Table 10 – Financing Budget ....................................................................................................................... 24
Table 11 – Payback...................................................................................................................................... 24
Table 12 – Sensitivity Analysis .................................................................................................................... 26
Table 13 – Owner’s Compensations ........................................................................................................... 26
EXECUTIVE SUMMARY
The smartphone and tablet industry is vastly growing and in abundant rates from year to year. Along
with this, the smartphone and tablet accessory industry is steadily growing from year to year. The
smartphone accessory industry sees very generous margins from year to year. As competition continues
to expand, the industry is continuously finding ways to stay successful. Case Creations will be the first of
its kind in Saskatoon and surrounding areas. Case Creations intends to set the bar in quality products
and excellent customer service. Case Creations will enable customers to express themselves freely
through a device that they often use and can’t live without, their smartphone and/or tablet.
Case Creations is conveniently located in The Centre Mall, a destination shopping centre with a wide
variety of services and amenities to suit various needs. The Centre Mall is located on the busy street of
8th Street in Saskatoon and the vehicle traffic alone accounts for 70,000 vehicles per day. The mall itself
is very busy and offers easy access to free parking underground and in the parking lot. The kiosk
location is near the food court, which will see a lot of foot traffic and is in a great location. The kiosk
location will be a great attraction for the target markets Case Creations is seeking. Besides being located
near the food court, it will be located by other important shops such as Shoppers Drug Mart, Chatters
Hair Salon and the trendy store Ardene’s.
Case Creations has the goal of being the first of its kind in the area, but also by providing its customers
with an experience that will keep them coming back or referring Case Creations to their friends and
family. Case Creations will offer outstanding customer service and stand by its product. Should issues
arise, Case Creations will do its best to make it right, if that means discounts or replacements.
$20,000 of Case Creations equity will be invested by the Manger/Owner of Case Creations, with the
other $26,500 in bank loans. From the completed financial model, it appears that Case Creations will
have a slow start, but in saying that will begin to pay out dividends in its third year of operations. Case
Creations is a small business and would require a large input from the Manager/Owner, with limited
part time help. The sensitivity analysis shows that Case Creations is very sensitive to changes in
customers per day. The base case is twelve customers per day at a $25.00 purchase per visit rate. It is
important that Case Creations meet that twelve customers per day as a change in negative direction
makes quit the difference in revenues. It should be noted that Case Creations would be quite a risk for
the person who is not committed to making it work. Such commitment is not reflected in the
Manager/Owner’s salary as it is only $40,000 per year. Perhaps, with a larger marketing budget and
resources, such as radio advertising, Case Creations would be able to flourish in its environment.
INTRODUCTION
Case Creations is a company that allows consumers to purchase custom smartphone and tablet
cases that will protect their devices while making a personal statement. Many consumers are
purchasing smartphones and tablets at accelerating rates, and in many cases consumers prefer
using their smartphone or tablet over a computer. The fact that smartphones and tablets are
expensive devices, consumers are spending money to protect those devices. It is true that
consumers will pay economical prices to high prices to keep their devices protected. Allowing
the consumer to add their own flair of uniqueness and identity to the case, adds personal value
to the case. Many consumers will purchase more than one case and change them as desired, as
they would change other accessories such as purses or shoes. Case Creations allows the
consumers to personalize their cases at a reasonable cost, while increasing its personal value.
INDUSTRY
The smartphone case industry has been steadily growing over the years, consumers continue to
spend to protect their devices. Smartphone designs are continually changing from year to year
and becoming thinner and more fragile; therefore protection is a necessity. In Canada, it is
estimated that cell phone users will raise 900% from 2013 to 2018 (Choma, 2013). Also, in 2013
wireless revenues generated were $20.2 Billion in 2013 (Choma, 2013). It is estimated that by
2017, the smartphone case industry will reach $38 Billion (Sundar, 2013). Currently, the
smartphone case industry is on the rise with generous margins, but as with every business its
competition is also on the rise.
With competition on the rise in the industry, Case Creations offers a way to differentiate itself
from that competition. Consumers can browse the competition and they will find that they will
come across the same cases over and over again. Through personalization, Case Creations
increases the personal value of their devices and consumers are willing to pay for that unique
experience.
MISSION STATEMENT
“Case Creations strives to become the smartphone/tablet outlet that consumers will prefer.
Case Creations offers consumers the freedom to express their unique and personal flair through
one of a kind cases that they create.”
GOALS AND OBJECTIVES
 To become the smartphone/tablet outlet of choice
 To gain a respectable and trustworthy reputation in the industry
 To increase market share within Saskatoon and community
 To offer quality services at affordable prices
 To offer freedom of expression to consumers wishing to be unique
 To offer outstanding customer service that will attract and retain consumers
 To gain profits after year one and into the future
OPERATIONS PLAN
Case Creations will be a sole proprietorship that will have one owner/manager. Case Creations
will build on the fact that it is the only kind of its type of establishment within Saskatoon and
surrounding areas. Case Creations will offer quality services at affordable prices. Case
Creations will create an environment where consumers will feel welcome, comfortable and
willing to return in the future, or refer our products to their friends. Case Creations will be
located where there is easy access to its products. All necessary steps in attaining business
licenses, leases and insurance will be taken to ensure Case Creations operates fully and
functionally without interruption.
LOCATION
Case Creations will be located at The Centre Mall located at 3510 – 8th St E, in the city of
Saskatoon, Saskatchewan. The Centre Mall serves as an ideal location for Case Creations as it is
a popular shopping destination with over 70,000 vehicle traffic per day on 8 th Street. The
Centre boasts over 90 shops with free parking and access to a variety of amenities within the
mall. The Centre Mall is located in the most dominant commercial area in Saskatoon.
SITE PLAN
Case Creations will be located in a kiosk inside The Centre Mall at location option #1 as follows:
Figure 1 – The Centre Mall Floor Plan
FLOOR PLAN
Case Creations will be a simple 10 x 10 customized kiosk as follows:
Figure 2 – Case Creations Floor Plan
Figure 3 – Cell Phone Kiosk Example
Case Creations has contacted various establishments that specialize in creating customized
kiosks. E2 Design and Fabrication has quoted the cost of a customized kiosk to suit Case
Creations business needs to be approximately $35,000, which includes shipping and set up
costs. The customized kiosk would very similar to the example in Figure 3 with locking cabinets
for equipment, inventory and other valuables.
HOURS OF OPERATION
Case Creations would operate the same hours as the The Centre Mall’s hours of operation. The
only days The Centre Mall closes is Christmas Day and Easter Sunday.
SUNDAY
11:00 am – 5:00 pm
MONDAY
9:30 am – 6:00 pm
TUESDAY
9:30 am – 6:00 pm
WEDNESDAY
9:30 am – 9:00 pm
THURSDAY
9:30 am – 9:00 pm
FRIDAY
9:30 am – 9:00 pm
SATURDAY
9:30 am – 6:00 pm
STATUTORY HOLIDAYS
11:00 am – 5:00 pm
Table 1 – Hours of Operation
DAILY OPERATIONS
Case Creations would require its manager and/or worker to open the store half an hour before
the mall opens for customers. This would allow for the manager and/or worker to prepare the
kiosk for operations. Such preparations would include unlocking all equipment and case
displays that require it and displaying signs and banners for the day. Also, all operating
equipment would need to be powered on for operation and preparation. Such equipment
would include printers, presses, computers, and cashier register. Finally, the cashier and float
would need to be prepared for the day. At the end of the day, all cash and reconciliation of
sales would need to be input into computer program. All equipment and inventory would once
again be locked for the night. Operating equipment, such as printers, presses, computers and
cashier would need to be maintained and powered down for the night. Also, the manager
and/or worker would ensure that all operations are prepared for the next day, such as floats,
inventory logs and restocking of inventory. Along with daily activities, the manager would keep
a weekly report of sales to track trends and inventory. The manager would also be responsible
for payroll processes and Canada Revenue Agency submissions. Also, monthly sales reports and
inventory reports would be generated for yearly tax purposes.
SUPPLY
Case Creations will receive its supply from Budget Electronics through online purchasing. In
addition to smartphone and tablet cases, Cases Creations will also provide a selection of cell
phone accessories. Such accessories would include chargers for different types of
smartphones. Budget Electronics provides wholesale prices for the cases, tablets and
accessories required for sales. The time required for shipping of supplies is four to five business
days. Case Creations has other suppliers to invest in should Budget Electronics cease to exist at
some point.
SERVICES
Case Creations is not required to pay utilities as it is covered in the cost of the lease agreement
with the Centre Mall. WIFI is also provided through the lease agreement. Case Creations would
be responsible for telephone services, which would be provided by a local provider. Also, a
point of sale system for debit/credit services would be negotiated with its bank.
CAPITAL BUDGET
Case Creations would operate on the following capital budget and start-up costs:
Capital Budget
2015
Sign
1,500
Kiosk
35,000
Furniture and Equipment
10,000
Total
46,500
Table 2 – Capital Budget
Furniture and equipment would include the purchases of computer, software, printers, presses,
inkjet toners, heating tools, sublimation paper, thermal tape, cashier register, stools for sitting,
and heat-resistant gloves.
WORKING CAPITAL
The following is the working capital for Case Creations:
Working Capital
2015
Cash
10,000
Inventories
2,000
Accounts Payables
0
Total
12,000
Total Capital Required
57,500
Table 3 – Working Capital
PROFIT MARGIN
The following outlines the profit margins expected within the first five years that Case Creations
is in operation. (See Appendix A for more detail).
Year
Sales Revenue
COGS
Gross Profit
Gross Profit Margin
2015
2016
2017
2018
2019
108,000
121,770
131,055
141,048
151,803
7,128
8,037
8,650
9,309
10,019
100,872
113,733
122,405
131,739
141,784
93%
93%
93%
93%
93%
Table 4 – Profit Margin
OPERATING EXPENSES
The following outlines the operating expenses for Cases Creations over the first five years of
operations. (See Appendix A for more detail). Included in the operating expenses are
accounting and legal expenses for yearly reconciliation of taxes by a professional accountant.
Also, included are the lease costs for the kiosk at the Centre Mall at $1800 per month, with the
exception of November and December when the lease cost increases to $4800/month. A
percentage of rent may be calculated at 15% of gross sales, if greater than minimum rent per
lease month.
Schedule 4: Operating Expenses
Accounting and Legal
Advertising (Marketing)
General Supplies
Insurance
Lease
Telephone
Repair and Maintenance
Wages
Employee Benefits (salaries)
Employee Benefits (wages)
Misc Variable Costs % Sales
Capital Cost Allowance
Debt Interest
Total Operating Expenses
Table 5 – Operating Expenses
2015
8.19%
13.96%
0.5%
1,500
1,000
500
500
27,600
500
500
56,464
3,276
2,298
540
2,700
1,855
99,233
2016
1,538
1,025
513
513
28,290
513
513
57,876
3,358
2,356
609
4,972
1,781
103,854
2017
1,576
1,051
525
525
28,997
525
525
59,322
3,442
2,415
655
4,197
1,702
105,459
2018
2019
1,615
1,077
538
538
29,722
538
538
60,806
3,528
2,475
705
3,568
1,618
107,268
1,656
1,104
552
552
30,465
552
552
62,326
3,616
2,537
759
3,057
1,527
109,254
PRODUCTION PROCESS
Figure 4 – Product Process
Step 1: Customer presents image at Case Creations
Step 2: The image is sized and placed on printing template, using computer software
Step 3: The image is printed on specialized printer and cut to fit case
Step 4: The printed image is then taped onto the case
Step 5: The case would be heated in sublimation machine or press
Step 6: Let cool, package case and deliver to customer
HUMAN RESOURCES PLAN
ORGANIZATIONAL STRUCTURE
MANAGER
SALES
ASSOCIATE
Figure 5 – Organizational Chart
Case Creations is a relatively small business and would require one part time sales associate in
order for the Manager to have time away from the kiosk. Full time employees are required to
work 1960 hours per year and in this particular case, Case Creations would require a part time
associate to work 0.8 of that time for that to happen (See Appendix A for further details). At
the discretion of the Manager, Case Creations may increase part time hours during peak times,
such as Christmas and vacation taken. Part-time associates will be paid minimum wage or
$10.50/hour.
JOB DESCRIPTION
Owner/Manager
 Hiring and firing of workers
 Training of product processes to new workers
 Ordering and tallying all inventory
 Payroll processes and other administrative duties as required
 Maintain relationship with suppliers
 Conflict resolution with customers as they arise
 Conflict resolution with part time workers as they arise
 Planning of any sales promotions or coupons
 Monthly review of sales, finances and projections
 Yearly review of sales, finances and projections
 Stock and organize inventory
 Receive and process all orders and shipments
 Cash processes with customers
 Cash balances at end of day
 Process custom orders as they arise
 Open and closing procedures of kiosk
Part Time Associate
 Stock and organize inventory
 Receive and process all orders and shipments
 Cash processes with customers
 Cash balances at end of day
 Provide excellent customer service
 Process custom orders as they arise
 Open and closing procedures of kiosk
 Other duties as required by Manager
Expected Hours Per Week
Manager/Owner
40 hours per week
Part Time Associate
13 hours per week
Table 6 – Hours of Work
EMPLOYEE EXPENSES
Case Creation’s employee expenses are shown for the operation in the first five years (See
Appendix A for details).
Salary and Wage Expense
Number of Employees:
Manager (full time)
Part time staff
Salaries/Wages
Manager Salary
Part time staff (wage rate/hr)
1
0.80
2,020
$
Salary and Wage Costs
Manager
Part time staff
Total Salaries and Wages
1
0.80
2,020
1
0.80
2,020
1
0.80
2,020
1
0.80
2,020
40,000
10.50 $
41,000
10.76 $
42,025
11.03 $
43,076
44,153
11.31 $ 11.59
40,000
16,464
56,464
41,000
16,876
57,876
42,025
17,297
59,322
43,076
17,730
60,806
44,153
18,173
62,326
Table 7 – Salary and Wage Expense
The salary and wage expenses show that the Manager/Owner is being paid a low salary of
$40,000 per year in order to keep other costs down. Case Creations is a very small business and
hiring more than one part time associate would have a high cost to the company, a cost that at
this time it would not be able to afford.
MARKETING PLAN
Case Creations has the advantage in that it would be the first smartphone/tablet image printing
kiosk in Saskatoon. Case Creations has the expectation that there will be a high demand and
customers willing to pay for its products. Case Creations would provide a product that is
unique to its customers and therefore it would be a novelty. It is true that there is a high
percentage of people who own smartphones and tablets. Case Creations will build on its
marketing mix to attract customers and a market share.
PRODUCT
Figure 6 – Product Samples
PLACE
Case Creations has the potential to reach a fair share of its target market in the location it will
be in. The Centre Mall has high traffic and is a destination centre for many people’s shopping
needs. Case Creations has the opportunity to reach its target market as well as those
customers who are just passing through. Case Creations will sell directly to its customer’s one
on one and face to face. Case Creations also has the opportunity to utilize direct marketing
tools in terms of printed flyers, coupons, and demonstrations right at the kiosk. People are
normally curious and the odds of them stopping to view products would work well for Case
Creations in making sales.
Figure 7 – Location
PRICING
Case Creations will focus primarily on making sales in smartphone cases, then tablets and finally
cell phone accessories. The prices are below competitor prices and add a further value to the
product, which is personalization. The cell phone cases will be priced at $25.00 per case and
the tablet cases will be priced at $35.00 per IPad Mini Case and $40.00 per IPad case. The
pricing strategy that will be used by Case Creations is cost-plus pricing as it buys the cases at
wholesale and sells them for a mark-up on the cost.
Figure 8 – Price Samples
PROMOTION
Case Creations intends to promote its products using direct marketing tools as well as social
media platforms. The direct marketing tools would include the printed materials such as
promotional cards and the banner onsite. Case Creations will also utilize a website operated by
Go Daddy.com at a low cost of $20.00 per month. Included in this cost is a free domain, 300
business and personal themes, unlimited pages, 50 GB disk space, 1000 GB bandwith, 10
busines email addresses, search engine optimization, social media manager and 1 year SSL
certificate. Go-Daddy also offers technical support and the option to include an online store if
desired. The social media platforms Case Creations intends to use are, Facebook, Twitter, and
Instagram. Social media has been proven to be very effective in advertising in terms of
reaching target audiences. Case Creations also intends to use Facebook ads as an advertising
tool. Advertising on facebook is a low cost, but effective way of promotion a product. The final
tool Case Creations will utilize is word of mouth advertising as it is also effective.
Figure 9 – Advertising Tools
SEGMENTATION, TARGETING AND POSITIONING
It is very important for Case Creations to segment as certain portion of the market as it would
be difficult to target everyone. Targeting everyone proves to be ineffective and costly. Case
Creations will target a younger audience, starting with youth ages 12 to 17. Reasons for this
target market is because youth at that age own a phone and will be the first to hone in on the
idea of having a unique case. Youth at that age are finding themselves and proving themselves
to be unique is ideal. Secondly, Case Creations will target the younger adults from ages 18-35.
Reasons for this target market is also because young adults strive to be unique and they are
also at an age when they are beginning to have serious relationships, getting engaged, getting
married, and starting families. Women especially pride themselves on showing pictures of their
children, partners or pets.
Figure 10 – Target Markets
POSITIONING STATEMENT
“Case Creations’ will provide its customers with an outlet to create unique and personal cases that
reveal their and what is important to them.”
COMPETITION
Currently, Case Creations has an advantage in the area of competition. Case Creations would be one of
a kind upon opening. London Drugs, Wal-Mart and Cost-Co offer the same product. However customers
must order it online or through sales associates and it takes 7-10 business days for the customer to
receive the product. Furthermore, the prices of the product start at $27.99 to as high as $39.99 for the
same product with a ten day wait time. Case Creations provides the cases within ten minutes and at a
lower price of $25.00 per case. Other competition includes the already existen cell phone case outlets
in the Centre Mall and surrounding areas. Their prices range dependent on the type of case purchased,
however they are not personalized or unique. (See Figure 11)
POSITIONING MAP
HIGH
VARIETY
HIGH
High
PRICE
Price
LOW
PRICE
Cellular Kiosks
Case Creations
Costco
London Drugs
Wal Mart
LOW
VARIETY
Low
Variety
Figure 11 – Positioning Map
MARKETING BUDGET
ITEMS
BANNER
FACEBOOK ADS
TOTAL PRICE
500
50
WEBSITE
250
PROMOTIONAL FLYERS
200
TOTAL
1,000
Table 8 – Marketing Budget
The marketing budget for Case Creations includes costs that can be limited if the
Manager/Owner takes some of the responsibility. For example, creating promotional flyers at
home rather than having them professionally made. The website cost is based on $20/month
for 12 months with Go-Daddy.com. The banner would be placed right at the kiosk and
strategically placed for full effectiveness. Facebook ads would be used more frequently during
peak seasons such as Christmas (See Appendix A for details).
REVENUE PROJECTIONS
Case Creations market revenue projections begin with twelve customers per day with an
average purchase per customer of $25.00. Case Creations intends to see a 10% increase in the
growth rate of customers, mainly because the product is new and the novelty is alive. The
growth rate will then decrease to 5% ever year after until the fifth year (See Appendix A for
details).
Schedule 2: Revenues
2015
Number of Customers/day
Number of Days/year
Average Purchase/customer
2017
2018
2019
12
13
14
15
15
360
360
360
360
360
$
25.00 $ 25.63 $
26.27 $ 26.92 $ 27.60
Growth Rate Number of Customers
Revenues
Cell Phone Cases
Tablet Cases
Accessories
Total Revenues
2016
80%
15%
5%
100%
86,400
16,200
5,400
108,000
10%
5%
5%
5%
97,416
18,266
6,089
121,770
104,844
19,658
6,553
131,055
112,838
21,157
7,052
141,048
121,442
22,770
7,590
151,803
Table 9 – Revenue Projections
FINANCIAL PLAN
Case Creations intends to seek 57% of the required capital through bank debt. The remainder
will come from personal savings and equity on behalf of the Manager/Owner. (See Table 10
(See Appendix A for details).
Schedule 6: Financing Budget
Bank debt
Equity
Total
57%
2015
26,500
20,000
46,500
Table 10 – Financing Budget
FINANCIAL ANALYSIS
Based on the average purchase of $25.00 per customer and 12 customers per day in year one,
Case Creations has the following expected return. (See Appendix A for details)
Payback
Table 11 – Payback
Gross
Net
146,099
126,099
BREAKEVEN ANALYSIS
Case Creations has analyzed its break even points and it requires an average of 12 customers
per day every year for five years in order to break even (See Appendix A for details).
Breakeven Analysis
Base Case Cust/day
Breakeven Cust/day
12
12
13
12
14
12
15
12
15
12
Number of Customers per day
Net Income Breakeven
18
16
14
12
13
14
15
15
12
10
12
12
12
12
12
8
6
4
Average 5 year Net Income =
14,871
Year 5 Owner Compensation =67,682
2
0
1
Figure 12 – Break Even Analysis
2
3
Year
4
5
SENSITIVITY ANALYSIS
When the sensitivity analysis was completed, it shows that even a difference of one customer
per day makes a large difference. Sensitivity based on numbers of customers/day is high. (See
Appendix A for details).
Sensitivity Analysis
Number Cust/day
8
9
10
11
12 (Base)
13
14
Average 5 Year 5 Owner's
year Profit Compensation Net Payback
(23,391)
(13,270)
(3,149)
6,065
14,871
23,676
32,482
44,153
44,153
44,153
56,685
67,682
77,179
86,676
(150,559)
(76,502)
(2,446)
61,677
126,099
190,522
254,944
Table 12 – Sensitivity Analysis
OWNERS COMPENSATION
Dividends are usually paid when there is enough retained earnings made by the business. In the
case of Case Creations, dividends start paying in year three of operations (See Appendix A for
details).
Average Owners' Compensation
Owner Salary
Dividends
Total Owners' Compensation
51,309
Table 13 – Owner’s Compensations
40,000
40,000
41,000
41,000
42,025
5,063
47,088
43,076
17,699
60,775
44,153
23,529
67,682
CONCLUSION
In the beginning, Case Creations has the potential to exceed revenue projections based on the
fact that it’s one of a kind in Saskatoon. Case Creations shows potential to become a profitable
business in the long run. There are many factors to consider, such as future competition and
possible introduction of new products in the same industry. The sensitivity analysis shows that
Case Creations relies heavily on its customers/day. Case Creations would require innovation in
its marketing ideas and attracting and retaining its customer base. Case Creations would
require a committed Manager/Owner that would be willing to give up a large portion of their
time to it for a lower salary. In the future, Case Creations has the potential to expand into
other areas of expertise, such as wood engraving cases, engraving metal cases and online retail.
Although these areas would require further investment into the company, they can take Case
Creations into new markets.
REFERENCES
http://cwta.ca/facts-figures/
http://consumeronomics.anoj.net/2013/11/smartphone-caseonomics-billion-dollar.html
APPENDIX A: FINANCIAL MODEL
SEE ATTACHED