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Table of Contents
1 Executive Summary ............................................................................................................................. 3
2 Product Idea ......................................................................................................................................... 3
2.1
The best and the suggested way of cleaning your teeth! ............................................................... 3
2.2
The idea in the simplest form:....................................................................................................... 3
2.3
Intellectual Property Right: Patent ................................................................................................ 4
3 Marketing ............................................................................................................................................. 4
3.1
Analysis of a sample market: UK ................................................................................................. 5
3.2
Targeted Market ............................................................................................................................ 6
3.3
Pricing ........................................................................................................................................... 8
3.4
Distribution ................................................................................................................................... 8
3.5
Advertisement and Promotions ..................................................................................................... 8
4 Management Team ............................................................................................................................... 9
4.1
Positions to be filled: .................................................................................................................. 10
5 Business System and Organization .................................................................................................... 11
5.1
Business System .......................................................................................................................... 11
5.2
Process Explanations .................................................................................................................. 12
5.3
Organization ................................................................................................................................ 14
5.4
Operating Locations .................................................................................................................... 14
5.5
Personnel Planning ...................................................................................................................... 14
6 Realization Schedule .......................................................................................................................... 15
6.1
Growth Estimation ...................................................................................................................... 15
6.2
Development Plan ....................................................................................................................... 15
7 Risks ................................................................................................................................................... 16
7.1
Policy risk ................................................................................................................................... 16
7.2
Patent risk.................................................................................................................................... 16
7.3
Market Risk ................................................................................................................................. 16
7.4
Financial risk ............................................................................................................................... 16
7.5
Management risk ......................................................................................................................... 16
7.6
Resource Risk ............................................................................................................................. 17
7.7
Technical risk .............................................................................................................................. 17
8 Financing ............................................................................................................................................ 17
8.1
Cost & Income Analysis ............................................................................................................. 17
8.2
Break-Even Point ........................................................................................................................ 21
8.3
Profit Loss Statement .................................................................................................................. 22
9 Appendixes ......................................................................................................................................... 23
9.1
Appendix A – Company Profiles ................................................................................................ 23
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Cylindrical Toothbrush is the next step in toothbrush sector thus in oral health field. Its innovative concept is the best solution that provides the most effective and healthy cleaning. In the following years, we believe that this new concept will replace the current electrical toothbrushes and cover the market shelves.
Considering the overall market size of current electrical toothbrushes, our product has a huge business opportunity. Being protected by a patent, we will be only player in this emerging market.
Even if we could not obtain a patent, being the first initiative, this business idea still embodies an important business opportunity.
Market researches in toothbrush industry reveals that there is a $578 million annual turnover in
Europe and USA of electrical toothbrush sector. We aim to take over %30 of total market within two years. According to our estimations, with $3 million investments, we expect $9 million net profit for the first two years.
Teeth care and oral health are one of the important parts of our health. People all around the world become more aware of teeth care and as a result tooth brush industry is getting bigger by the time.
There are different brushing styles used by people for cleaning teeth. However, when we ask dentists about the best way of brushing our teeth, we may get surprised. The best way of brushing teeth is neither horizontal (right-left direction) nor oral (circular direction) brushing. Both ways of brushing teeth damage the gum since the brush is used against the gum in some direction.
Dentists, at the other side, suggest separate brushing directions for upper and lower teeth. The suggested style is: when brushing upper teeth, up-to-down direction; and when brushing lower teeth, down-to-up direction. Unfortunately, using regular tooth brushes, this way of brushing is not feasible. Our cylindrical toothbrush is the exact solution that is designed to provide the best and the suggested way of brushing.
Cylindrical toothbrush is an electrical toothbrush which contains an engine and a cylindrical brush design. The simple idea can be seen in following picture:
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Figure 1: Cylindrical Toothbrush
The engine is used to turn the brush in cylindrical direction. It contains a switch button to change the turning direction. The brush is situated in a shield to prevent the brush touching the uraniscus. The brush can be replaceable to allow adults and children use different types of brushes. It even allows people to use customized versions of brushes.
All the opportunities that will be presented in this business plan are based on the assumption that this idea must be patented immediately.
In fact, the idea is inspected by several people for years but not seriously. The main obstacle that prevented the early pioneers to go further was the development difficulties of cylindrical brush. Placing enough bristles on cylindrical surface with very small diameter was very costly for years. However, with the developing technology the cost is being reduced gradually.
Additionally, cost-profit calculation was often made according to manual toothbrush prices.
However, there is another category that has many time high markup compared to cheap manual toothbrushes, that is electrical toothbrushes. Electrical toothbrushes are sold for a price that is many times more than manual toothbrushes. Even the production cost of the cylindrical brush is more than the regular toothbrushes, when use in electrical ones, cylindrical toothbrush compensates its high cost with total price of the combined product.
Therefore, what early pioneers who thought cylindrical brushes before, could not see is the idea of “utilizing cylindrical brush with electrical engine”. Because of the mentioned benefits of its shape, we believe that this product can take over the market share of current electrical toothbrushes.
The patent for this idea is the only guarantee that we will be alone selling this kind of product.
Only if we obtain a patent for this new idea, then we can make business without competitors and can benefit by licensing our patent as well.
Toothbrush industry is one of the broadest sectors whose market consists of the entire world.
No matter how different the cultures of different countries or which race they belong to, toothbrushes have customers all around the world. Additionally, with the increasing education
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level, people are getting more aware of oral health care and that is also a reason for toothbrush industry to enlarge.
Therefore, if we want to give a number for the size of targeted customers of toothbrush industry, we say the size of around 6 billion people which is the population of the World. However, it is very difficult to operate so much globally even for the most advanced companies. Careful plans and reasonable analysis need to be done to select most advantages countries that fit the company's capacity.
In this section of this business plan, we make a market analysis to guess the expected market and then present our plans for the marketing.
In order to have global market prediction, it is logical to start analysis with a country and then expand the findings.
UK, in this regard, is a good example country to inspect the toothbrush industry.
The current population of UK is expected to be around 62 million people.
1
Since toothbrushes are not used by very minors and very elders, we need to only consider the age range of 10-65.
In the UK statistics agency web site, the number of people for the mentioned age ranges is given as:
8 million for ages between 0 and 10;
10 million for ages 65 and above.
After we subtract the excluded ranges, we have 44 million people who are expected to brush their teeth. Dentists suggest renewing toothbrushes each three months. That means 44 million people must consume 132 million toothbrushes annually. Assuming the average price for a manual toothbrush is $4, we get ~500 million dollars of market size. This number overlaps with a Mintel report for 2004
2
, which estimates the toothbrush market value as 201 million pound in
2004. Estimating the profit is rather easy having overall sale amount. If we assume %30 revenue margin for one toothbrush, there is ~$150 million annual revenue for only UK.
Of course this numbers don't reflect the mount for electrical toothbrushes but is a good indicator for the opportunities generally and also for the brush part of our product, specifically. We can easily expand the estimation to Europe level and thus have reliable predictions.
More trustfully analysis requires reliable research reports in toothbrush sector which we could not obtain with our limited resources.
Although more detailed cost-income calculation is done in financing section, we would like to give you an overall idea about revenue:
With a limited market search, we found that that the retail prices of electrical toothbrushes for bulk sale, varies from 3.5$ for replaceable batteries to 9.5$ for complete rechargeable ones
3
.
The end user price, on the other hand varies from 20$ to 60$ in Europe markets.
Cost-revenue margin is fascinating! How many can it sell? With a good plan, we believe many!
1 http://www.statistics.gov.uk/cci/nugget.asp?id=6 )
2 http://oxygen.mintel.com/sinatra/oxygen/display/id=4193
3 http://www.healthcare-earlybird.com/se.asp?nowmenuid=500200
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Although all the people using any kind of toothbrushes are our candidate customers, users of current electrical toothbrushes best fit to our targeted market.
Providing medically the best brushing style, our product can take over the current market share of electrical toothbrushes. To guarantee our goal, we need to carefully analyze the reasons of people for using and not using current electrical toothbrushes. Then avoiding disadvantages and improving the advantages will not only lead us to top of the electrical toothbrush market but also increase the market share of electrical toothbrushes among total toothbrush industry.
The main reason for the users to select power toothbrushes despite their high price, without doubt, is that power toothbrushes provide more effective cleaning. Despite the higher price they have, people afford them for their health benefit. Since the cylindrical toothbrush is much more effective than current power toothbrushes, current users can easily continue with our product for exactly the same reason they have chosen power toothbrushes before.
A research result for USA, 2009, reveals important results to us
4
.
4 http://www.ionicproclean.com/pdf/Icon_pdf_big.pdf
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Table 1: Electrical Toothbrush Sales in USA
According to the report, in 2009, around 5 million power toothbrushes were sold in only drug stores and total turnover for USA was $222 million. Even if the total number of toothbrushes sold in USA is not given in the result, by using existing values, we can come up with the number of 21 million toothbrushes as being sold in USA. If we assume the user habits in USA and
Europe to be same, we can get the corresponding values for Europe proportionally. Considering the population of USA is around 311 million and Europe is around 500 million, we get around 33 million sales and $356 million turnover for Europe. Thus our new innovative product have a potential of total 54 million annual toothbrush sale and $578 million turnover in both Europe and
USA. In addition to this, thank to its much more effective cleaning ability, more people from manual toothbrush side can start using our product.
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As stated in product idea section, our product consists of two parts; a body part with an engine and battery, and a brush part.
Different pricing strategies can be applied for those different parts of the product. In the following paragraphs, we introduce different concerns and our proposed strategy.
We assume the average lifetime of the body part of electrical toothbrushes to be few years, say
2.5 years. That is also true for our product. That means a customer will buy our product (as a whole ) once in few years. At the other side, same customer has to renew the brush part each
3-4 months (say 3.5 months). Thus, we expect to sell brush parts 8.5 times more than body part.
Usually, there are two different pricing strategies for this kind dilemma.
● Make your profit from supporting product. That means, sell the main product for cheap and supporting products for rather expensive to get a good revenue margin.
● Make your profit from main product. That means, sell the main product for a satisfactory price and supporting products for reasonable price.
The production cost of cylindrical brush plays an important role in choosing the right pricing strategy. The first option presented above is usually the best option for our product type.
However, if the production cost of cylindrical brush head prevents us obtaining nice revenue, we might need to increase the price of body part a little. On the other hand, if we apply a totally different pricing, we may have difficulties establishing a customer base since customers of current power toothbrushes already got familiar with their pricing.
The main sale channels for any kind of toothbrushes today is shops with any size from groceries to gross markets; and Internet especially for comparatively expensive products.
We also plan to utilize these two channels to deliver our product to customers. Since the
Internet doesn't require much attention, we only need to focus on the delivery system for shops.
There are different delivery mechanisms for different kind of products. If you have to deliver your product to shops each day, then it could be better you establish your own distribution system.
However, if you only need to deliver your product few times in month, and if your product doesn't expire in short time, you may relay on third party distribution networks. Our product is best delivered by established distribution networks in each country. Usually, those distribution channels specialized for the category they operate. Personal care products such as shampoos, soaps and toothbrushes are delivered in same category usually. Utilizing those available distribution channels is the best economical option for cylindrical toothbrush.
We have a new type of product and people are not aware of it. Putting it on shelves doesn't sell it since people don't know about it, they must hear about our product first.
TV advertisements are the most effective but expensive advertisement way however it will definitely compensate its cost.
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The pricing of TV commercials changes very much depending on the time, the length and popularity of the channel. To get the best value of advertisement, careful research must be done to select the advertisement strategy.
Instead of expensive prime time commercials, we think that the morning period is more efficient for our product. Firstly, commercials in morning time are cheaper than the evening. Secondly, morning programmers are watched by women, especially by housewives who usually decide what to buy and shop for home. Women are also careful to their health than men. Therefore, showing the advertisements in morning will be cheaper and more effective.
Besides TV commercials, Internet media is another place which is much more cheaper than TV and still effective enough to be considered. Google advertisements are the first option. There are several pricing for Google advertisements such as per-click or per-showing.
Apart from Google advertisements, the advertisements in Internet shopping web sites must also be utilized. Campaigns for famous shopping sites will also work as advertisements since the web site will announce it at several sections of the site.
In addition to the digital advertisements, promotions in shopping malls will also bring us a quick entrance to the market. Selling with very small revenue for the first month can help us to make use of word-of-mouth. People buying our product for the first time, will definitely tell their friends about it since it is new in the market.
Including an explanatory brochure with our product can also convince people to buy it.
The Management team comprises of four highly qualified dedicated professionals with shared mission, goals, and vision and mile stones. Members of the management team come from different backgrounds and possess multiple skills and experience in different fields. The management team is young, motivated, energetic, focused and most of all ready to face the challenges and put up their best effort in order to be successful in market. The management
Team has been working together for last few months and team members have excellent understanding and knows each other strengths. The company will have a CEO and four executive heads of different departments, CEO will also be head of one of the department.
ABDULLAH ARSLAN : CEO & Head of Finance:
PROFILE: Mr. Abdullah Arslan is CEO and executive head of finance department. He is done his graduation in Computer Technology and information systems in 2006. The 30% of courses in the degree are management courses including accounting and economics. He has worked almost for 3 years in private and public sector. He has been involved in teaching .Net and database development courses at a private education company for 5 months. In past he tried to establish and run company with his friends, but gave up because of financial problems after half a year, He is in the last phase of his Masters in Software Engineering.
ZZAHOOR UL ISLAM : Head of Marketing and Advertisement Department:
Profile: Mr. Zahoor Ul Islam has done his Bachelors in information technology and also holds a
Masters degree in Political science and currently doing MS in software engineering. He has been working on several research projects both in industry and study projects. In Bachelor he
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has been worked on CRM application a customer focused Business strategy designed to optimize revenue, profitability and customer loyalty as a final project. He has studied management and marketing related courses at basic and advance level. He will be executive head of the marketing and advertisement department.
Mz Zhou : Head of Research & Development Department
Profile:Mr. Zhou is the head of Research & Development. He has done his bachelor in computer science and technology, and now is a master student of software engineering and management program in the University of Gutenberg. In the past, he has participated in a number of project research and development, and accumulated a rich experience, he has the ability to lead the
Research & Development of project and he will be nominated head of the Research and development department.
Mustafa Al-Zubaidi : Head of Sales Department
Profile: Mr. Mustafa Al-Zubaidi has a bachelor degree in Software Engineering Sciences.
Development the operating systems was the thesis for the graduating. He worked as a system developer for 3 years in a private company then started his studying a master program which is
Software Engineering and Management. Now He is in the last phase of his Masters in Software
Engineering.and he is the responsible for the Sales part as the head of sales.
The head office of the company will be set up in Europe and another office in USA. The company Head office will be comprised of four major department , every department will have an executive heads and will posses many skilled professional from the relevant fields. The salaries to hired professional will be given according to the country laws, their professional and technical skills and experiences. The job postings will be announced and interested personal will be interviewed by CEO and all executive heads of the departments.
1. Finance Department: CEO of the company will be the head of finance department. The department will hire two financial professionals with good experience and highly qualified skills and professional background in accounts and auditing. Department responsibilities include keeping all financial records including budgets, salaries, investments, profit, loss, and income, tax, auditing and managing all of them in an organized fashion.
2. Research & Development Department: The department in start will have a contract with industrial design company for the initial designs of the cylindrical toothbrush. The department will also be responsible for setting up an R&D LAB and infrastructure inside the company, building and developing innovative and advanced designs and models and also works on the feasibility study of the product, the department will be controlled by Executive head and further more department will hire three professional personal for R&D activities throughout the product life-cycle. The department will also be responsible for the coordination between industrial design company and the production company throughout the life cycle of the cylindrical toothbrush.
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3. Sales Department
The department will be supervised by executive head and will hire three professionals in order to control the sales of the product, track product such as supply demand activities and keep the records of sale in a professional way. The department will hire three professionals in order to control and keep records of the sales and other related activities.
After sale services will also be handled by this department. Those tasks contain customer relations and guarantee issues.
4. Marketing and Advertisement Department:
The department will be responsible for setting up the marketing strategy for the product, implementation and proper commercialization of the product in the market through various means. The department will have an executive head and will hire five more professionals in order to set up the marketing and advertisement policies. Five professionals will be hired for the marketing purpose and two media controllers for controlling advertisement and promotion of the product.
Name of Department Number of people Hired
1
2
3
4
Finance Department
Marketing Department
Research & Development
Department
Sales Department
2
7
3
3
Offered and Proposed
Salary per month will be decided according to country laws and professional skills and experience will be decided according to country laws and professional skills and experience will be decided according to country laws and professional skills and experience will be decided according to country laws and professional skills and experience
Table 2: Departments Staff
The company will focus on building flexible and innovative oral toothbrushes. The first design and model to work on will be an electrical cylindrical toothbrush. The mission of the company is to provide customers a complete oral protection and a product which is smart, light weight, flexible and much economical. The company will operate its services from a central head office, which will be setup in Europe. The company head office will be comprised of four major departments which all should be integrated and interlinked closely to work as a single unit. The head office will be responsible for organizing, controlling and managing all the internal and
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external organizational functions and business activities including manufacturing of the product and launching it. The company will start another office in USA to handle business activities for
USA. The Business system will be designed to run following activities through the life cycle of the product, the figure shows the business model of our company.
Figure 2: Business Model
The company will set up policies in order to eliminate the time wastage, making process more effective and efficient, improve productivity, sales and will continuously work on improving the market campaigns by effective means. The business will adapt a sustainable business model which will organize and manage all organs of the company as single unit. The figure shows the business model of our company. In following parts, we explain some of the processes contained in the figure 1.
This department will set up an advance lab. The professionals and experts will be collecting data and working on the feasibility study of the cylindrical brush to finalize the design in final shape. The raw material required for the production, general requirements and technical specifications, Quality standards will be finalized by R&D department. The final designing of the model, the developing and testing it will be done by R&D department by getting approval from
CEO and executive heads of all departments, further more department will also be working on the upgrading of the designs and finding new innovative means to lower the cost of the product and building advance and smart designs with high quality for future. The design and the
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production of all these toothbrushes will process in an effective and professional way so the final product should be cheap and long lasting and fulfill customer needs.
There are several companies that offer services for the production of electrical toothbrushes with high quality and at reasonable price. Our company will have a contract with one of the electrical brush manufacturing company. This will be finalized by CEO of the company after discussing with all heads of the departments. The company past record and good will in the market will be observed before finalizing the contracts. Once a contract is made, we will provide the product specifications including the design, desired model the features need to be added in cylindrical toothbrush. The international quality standards ISO 20127 for toothbrush part and all other proposed quality standards are required to be achieved in production, and there will be no compromise on the quality of the product. The brush will be manufactured in different handle and brush sizes. The finance department will take care of the legal and financial issues and all the contracts will be done under the company business laws. One of such company is operating from USA. We will give a preference to companies which accepts few months postponed payments.
The R & D department will provide the specifications and details of the raw material used in the production of cylindrical brush, the production company will generate it and send the samples of raw material to company lab for approval and if they are according to the international and required standards they will be approved for the production.
The manufacturing company will design samples of the cylindrical toothbrush according to the provided specifications and standards and send it for the check to the R&D department. The
R&D department will check it for quality, the design, specifications the functionality of the brush will test the product and will get final approval from CEO and send it for the final production.
The sale department will set up distribution policies; specify supply chain management activities in Europe and USA. The process of distribution will start by have contracts with the distribution companies. The Company acquired for the distribution purpose will be responsible for keeping the stock in the ware houses, and distribution it to the desired destinations as planned by the
Sales department. The sale order will receive distribution order from the market and contact the distribution company for the delivery of the products. The sub-contractors and retailers will be hired for the distribution of the product with mutual agreements. Our company will expand its business in Asia, Middle East, Russia and Africa and all other parts of the world and the distribution will be done by hiring franchisee. The franchisee will pay an initial fee and a fixed profit according to the sales of the cylindrical toothbrush. All the sales records will be kept at
Head office in sales department.
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The management team includes four members, which have head of finance, head of research and development, head of sales, head of market and advertisement, and the head of finance will be the CEO. This structure have mentioned in the “management team” section.
Figure 3: Organization Structure
Our company will be operated from a head office in Europe. To control and manage the business in USA, we plan to establish another small office in USA which only includes sales and marketing employees.
As a new company, we need to look for more people will take part in our team.
Table 3: Personnel Planning
All the members will work in one team, to cooperate with each other and help each other. To encourage the enthusiasm of the members, the entire member can get share in the finance development and profit-sharing. Company seeks to create a "the company is each staff's enterprise" this goal, so that employees can have a strong sense of identity and unremitting efforts.
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Initial few years are crucial newly established companies. Many companies go bankruptcy because of bad planning in their early lifetimes.
In order to be sure about success of our new business, we paid much attention to our first two years.
We intend to make a reasonable growth for first two years that is to reach %30 of electrical toothbrush market of USA and Europe. Considering the confidence that our patent provides us,
%30 is not much optimistic. Following figure shows our quarter based expectation for first two years.
Figure 4: Quarter Based Growth Expectation for Two Years
According to our estimates and plans, we aim to takeover %30 of overall market after two years.
After several sessions of discussions and reviews, we planned a action plan for the first two years. To summarize simply;
● in the first six months, we establish the company, make business agreements and come up with a ready to produce prototype.
● after six months, we will start with sales together with advertisements.
We expect to start working by July. Following Gantt chart shows our action plan visually.
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Figure 5: Development Plan
As the Toothbrush is one of the products which are in relationship to the health, in the different country or area, they have the different and specific policy.
To learn their policy or laws, and follow them.
The toothpaste is easy to copy.
Our team will try to protect our patent.
In the toothpaste market, have too much company, like Colgate, Oral-B, Glide, it is great competition.
we have to maintain our core competencies. We need the Ability to develop more new products and new services for the user needs, and whether this market develop as fast as we expect, and how the maturity of the market.
Marketing costs and human resource costs may be over budget and if the company cannot obtain the necessary investments, the company will face losing market share position or advantage.
We can establish a relatively effective financial early warning mechanism in order to analyze the errors and fluctuations of management lead to the business failure.
if the company management, cooperation have problems, it will affect the development of company and the expected income.
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Establishing and improving the company's management system, and according to the system and work procedures to work.
As a kind of health products, we have to ensure the quality of the toothbrush, we have to ensure the quality of raw materials we use is qualified.
Electric cylindrical toothbrush concern about safety issues.
Our products must pass the quality and technology that allows consumers to believe that our products.
Cylindrical Toothbrush project is a global project and requires huge amount of money for the first year. However, after one year, it will get a positive cash flow and after two years, it will generate profit. The project relays on capital that will be invested by a venture capitalist and the absolute size of the business depends on the money to be invested.
In this section, we breakdown the significant costs and make an analysis of investment versus revenue.
The most important cost items are;
● Research & development cost (including design)
● Advertisement cost
● Production cost
● Operating cost
Among those, research & development cost is fixed and cannot be reduced too much. However, advertisement and production costs are flexible and can be modified according to the invested capital. Before we continue with our detailed cost analysis, we want to present the expected trends in different cost items first.
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Figure 6: Cost trends
As seen from the graphics, research&development and advertisement, the costs are expected to be declined in second year as our product design is finished and the customers become aware of our product.
In the remaining parts of this section we list detailed cost predictions for two years, quarter by quarter. But first you will find a short description of cost items.
Research & Development
We have a research & development team of 3 people. However the task of this team is not the initial design and development. We plan to buy support from an industrial company for the initial design and prototype development. The candidate production company will accompany this process. The cost for this item only includes price of the design support. The salary of the employees is included in operational cost. Design process is expected to long two quarters and expected cost is given in detailed cost table.
Advertisement
How much amount we can spend on advertisement very much depends on the invested money we have. However, different levels of advertisement have different effects. First shown advertisements will have the most return value. Later the effectiveness will reduce which is visualized in following figure.
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Figure 7: Advertisement cost & effectiveness
The optimal advertisement level must provide awareness for 60% of targeted customers. We think that one month of TV advertisements and longer ongoing Internet advertisements will provide the desired awareness. Although, the price for TV commercials differs too much, we assumed the cost of one TV channel for one month as to be 20.000$. For European Union countries, we plan to have our commercials shown on 50 different channels. Thus, one month
TV advertisement cost for Europe is expected to be $1 million. Since, we can operate on lesser
TV channels in USA, we expect a cost of $300.000 for USA.
The Internet advertisement cost is expected to be $1000 for each month and we plan to use it continuously.
Production
We expect the production cost to be less compared to advertisement and operational cost.
Furthermore, we assume that, the production company will agree on paying 10% of the price at the delivery of product and remaining part to be paid two months later. Thus, the money from sales will make the process automatic. Thus only an initial amount of money is required to start the production process. We assume that $100.000 will be enough for that.
Operation
We plan to hire 15 employees. Assuming the average salary of one employee to be $3000, total employee cost will be $45.000 monthly for hired employees. Salary of $5000 is planned for the founders of new company. Apart from employees, two offices are needed, one in USA and one in Europe which is the head of the company. $10.000 for the rent and other operational cost is assumed for each office separately. Distribution cost is based on the product amount.
Therefore, it is reflected to the per-item profit calculation. The net profit margin per item is assumed to be %10 after taxes and all the costs including distribution.
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In the following table, we present total expected cost for the mentioned items.
Table 4: Detailed Cost Analysis
Total expected cost for two years, as seen from the table, is $3.544.000.
Income from Sales
In the marketing section of this business plan, we showed that the total turnover of electrical toothbrush industry in Europe and USA was $578 million for 2009.
We expect to increase our share in this total turnover gradually within two years. The figure previously given in Realization Schedule section, presented our estimation quarter by quarter for the following two years.
If we achieve the expected growth in our estimations then we can obtain a turnover that is shown in the following diagram.
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Figure 8: Quarter based turnover estimation
The total turnover within two years is $143.055.000. With a pessimistic assumption of %10 revenue, we expect $14.305.500 profit from sales within first two years.
The net profit for the first two years, after calculated total cost, is expected to be $10,761,500.
The break-even point which is the starting point of obtaining profit is crucial for the new companies. Especially from investor point of view, break-even point plays a very important role deciding to invest or not.
According to our estimates and realization schedule, we expect our break-even point to be the end of first year. After one year, we will obtain a positive cash flow. Following diagram visualizes our calculations for break-even point. Horizontal axis represents quarters and vertical axis represents the cumulative value for revenue and costs.
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Figure 9: Break-even point
As seen from the graphic, after six months of sale, in the first quarter of second year, our cumulative revenue passes the cumulative cost. Thus, the maximum amount of investment to pass the break-even point is about $2.77 million.
Although the net income is stated in previous sections, for the simplicity, we wanted to include a profit&loss statement.
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Table 5: Profit&Loss Statement

Basic Information
Company Name:
Business Type:
Product/Service
(We Sell):
Product/Service (We Buy):
Brands:
Number of Employees:
Guangzhou Sunway Industrial Co., Ltd.
Manufacturer
Packaging machine,packing machine,tube production line,tube making machine,paste making machine,injection machine,homogenize,filling and sealing machine,filling and capping machine,filling machine,sealing machine,laminated tube,plastic tube,aluminum tube,stainless steel tank,water purifier,toothpaste,toothpaste raw materials,laminate,PE spare parts
SUNWAY
101 - 500 People
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Trade & Market
Main Markets:
Total Annual Sales Volume:
Export Percentage:
Total Annual Purchase Volume:
Table 3. Basic Information
North America,South America,Southeast
Asia,Africa,Oceania,Mid East, Eastern Asia
US$5 Million - US$10 Million
61% - 70%
US$1 Million - US$2.5 Million
Table 4. Trade & Market
Factory Information
Factory Size (Sq.meters):
Factory Location:
QA/QC:
Number of R&D Staff:
Number of QC Staff:
Management Certification:
Contract Manufacturing:
10,000-30,000 square meters
Shanghai, Tongzhou and Guangzhou City
In House
11 - 22 People
20 - 30 People
ISO 9001:2000 Others
OEM Service Offered Design Service
Offered Buyer Label Offered
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