iRespond
Financial Plan
During the first week of each phase the project manager will assemble the
remaining required members for the project. The team members required are
listed in the staffing requirements section of this proposal. The salary for each
respective team member has been calculated based on a range obtained from
www.sarlary.com. The budget for each phase will be divided into three sections:
Staffing Requirements, Hard Resources and Total Budget.
Phase 1
The months that each employs works are broken down by phases and are
determined from the Ghantt chart of the WBS. The months worked for each
employee have been determined based on the Work Breakdown Structure
(Appendix P). The employee cost has been determined based on the annual
salary given for each employee and the months each employee will be needed.
The employee overhead is forty percent of the total employee salary. This figure
is based on Old Dominion’s employee overhead.
Personal:
Phase 1 Personnel
Employee
Project Manager
Task/Doc Specialist
Financial Specialist
Technical Specialist
Database Specialist
Marketing Specialist
Electrical Engineer
Webmaster
Total Salary
Employee Overhead (40%)
Total Employee Cost
Communications Consultant
Hardware Consultant
Network Consultant
Injection Molding Consultant
Total Consultant Cost
Months
Pay Rate
Cost
2.84
2.70
2.70
2.70
2.60
2.60
2.70
2.60
$30,000.00
$22,000.00
$24,000.00
$22,000.00
$24,000.00
$22,000.00
$60,000.00
$22,000.00
$7,100.00
$4,950.00
$5,400.00
$4,950.00
$5,200.00
$4,766.67
$13,500.00
$4,766.67
$50,633.33
$20,253.33
$70,886.67
Consultants
0.80
0.80
0.30
0.70
$50,000.00
$55,000.00
$60,000.00
$35,000.00
$3,333.33
$3,666.67
$1,500.00
$2,041.67
$10,541.67
Total
$81,428.33
Hard Resources:
The number of workstations, software, and network cables are based on the
number of employees that will be working at the same time. While the
consultants are assisting the team members, they will share workstations with
the team members if needed. Qualified personnel will assemble an iRespond
prototype unit with the resources listed below to felicitate future testing of the
unit.
Phase 1 Hard Resources
Resource
FOB Case Prototype
GPS Receiver
GPS Antenna
CDMA Radio Chip
Mobile Phone Antenna
Rechargeable Battery
Recharging Station
Flash Memory
Internal Circuits and Board
Solder
Soldering Iron
Database Server
Red hat Linux
Ethernet Cables CAT 6
Total Hard Resources Cost
Number of Units
1
2
2
2
2
2
2
2
2
4
4
2
2
4
Cost Per Unit
$10,000.00
$59.95
$17.95
$20.00
$3.00
$19.98
$38.94
$11.95
$1.47
$2.00
$10.00
$2,500.00
$0.00
$35.00
Total Cost
$10,000.00
$119.90
$35.90
$40.00
$6.00
$39.96
$77.88
$23.90
$2.94
$8.00
$40.00
$5,000.00
$0.00
$140.00
$15,534.48
Travel:
The iRespond team is all located in the same geographic location. This location
is also the site of our proposed office space. For these reasons, the only budget
item for travel is the trip to Project Manager will make to the agency granting
funding to our project. The funding for this trip is based on information received
from expedia.com.
Description
Days
Rental Car
Hotel
Meals
Travel
Cost Per Day
4.00
3.00
4.00
Total Cost
$35.00
$100.00
$60.00
Total Travel Cost
$140.00
$300.00
$240.00
$680.00
Total Budget:
The total budget is determined based on the hard resource cost and personnel
cost shown before.
Total iRespond Phase 1 Budget
Description
Personnel Cost
Hard Resource Cost
Travel Cost
Total iRespond Phase 1 Cost
Cost
$81,428.33
$15,534.48
$680.00
$97,642.81
Phase 2
All personnel required for Phase II are shown below along with their respective
salaries and duration of contract. During this phase, all employees will hold at a
minimum, a bachelor’s degree in their perspective field. The iRespond team has
allocated funds for legal counsel if needed.
Personnel:
Phase 2 Personnel
Employee
Project Manager
Task/Document Specialist
Financial/Accounting Director
Technical Specialist
Marketing Director
Networking Engineer
Electrical Engineer
Webmaster
Call Center Supervisor
Customer Service Manager
HR Manager
Traffic/Scheduling Analyst
Sales Director
Tester
Design Engineer 1
Database Admin/Designer
Database Engineer
Total Personnel Cost
Employee Overhead (40%)
Total Phase 2 Personnel Cost
Legal Consultant
Total
Months
8.25
4.00
4.00
4.00
4.00
3.00
8.00
2.00
3.00
3.00
3.00
4.00
5.00
3.00
8.00
6.00
6.00
Consultants
1.00
Pay Rate
$80,000.00
$22,000.00
$65,000.00
$45,000.00
$60,000.00
$62,000.00
$60,000.00
$28,000.00
$33,000.00
$55,000.00
$70,000.00
$35,000.00
$60,000.00
$32,404.00
$59,478.00
$60,000.00
$80,000.00
Cost
$55,000.00
$7,333.33
$21,666.67
$15,000.00
$20,000.00
$15,500.00
$40,000.00
$4,666.67
$8,250.00
$13,750.00
$17,500.00
$11,666.67
$25,000.00
$8,101.00
$39,652.00
$30,000.00
$40,000.00
$373,086.33
$149,234.53
$522,320.87
$80,000.00
$6,666.67
$528,987.53
Hard Resources:
During the first year of the Phase II, there will be nine additional employees than
in Phase I. For this reason, additionally workstations, office equipment, office
space, software, and network cables will be needed. Additionally testing
equipment will be required for this phase as well. FOB Case production will also
occur at this time.
Phase 2 Hard Resources
Resource
Call Center
Work Stations
Office Equipment
Phones
Network Equipment
Testing Equipment
Molds + Case Production + Assembly
Call Center Phone Number
Total Phase 2 HD Cost
Number of Units
1
20
20
20
1
1
100,000
2
Cost Per Unit
$42,000.00
$1,800.00
$230.00
$140.00
$80,000.00
$40,000.00
$0.17
$24.95
Total Budget:
Total iRespond Phase 2 Budget
Description
Personnel Cost
Hard Resource Cost
Total iRespond Phase 2 Cost
Cost
$528,987.53
$208,824.90
$737,812.43
Total Cost
$28,875.00
$36,000.00
$4,600.00
$2,800.00
$80,000.00
$40,000.00
$16,500.00
$49.90
$208,824.90
Phase 3, Budget Projection
The budget for Phase III is based on 1 year of production. The status of the
production will be reevaluated at this time and the budget adjusted accordingly
for the remaining years.
Personnel:
Phase 3 Personnel
Employee
Project Manager
Task/Document Specialist
Financial/Accounting Director
Technical Specialist
Marketing Director
Webmaster
Call Center Supervisor
Customer Service Manager
Training Specialist 1
Database Maintenance Staff
Customer Service Rep 1
Technical Support Rep
Help Desk Support
Network Systems Admin
HR Manager
HR Staff
Traffic/Scheduling Analyst
Sales Director
Tester
Database Admin
Total Personnel Cost
Employee Overhead (40%)
# Employees
1
1
1
1
1
1
3
1
2
1
20
10
1
1
1
2
2
1
2
1
Months
12.00
12.00
12.00
12.00
12.00
6.00
12.00
12.00
6.00
12.00
12.00
12.00
12.00
12.00
12.00
12.00
12.00
12.00
12.00
12.00
Pay Rate
$95,000.00
$30,000.00
$65,000.00
$45,000.00
$60,000.00
$28,000.00
$33,000.00
$55,000.00
$38,000.00
$81,791.00
$18,720.00
$24,960.00
$37,662.00
$50,000.00
$70,000.00
$45,000.00
$35,000.00
$60,000.00
$32,404.00
$60,000.00
Total Phase 2 Personnel Cost
Legal Consultant
Total
Cost
$95,000.00
$30,000.00
$65,000.00
$45,000.00
$60,000.00
$14,000.00
$99,000.00
$55,000.00
$38,000.00
$81,791.00
$374,400.00
$249,600.00
$37,662.00
$50,000.00
$70,000.00
$90,000.00
$70,000.00
$60,000.00
$64,808.00
$60,000.00
$1,709,261.00
$683,704.40
$2,392,965.40
Consultants
1
6.00
$80,000.00
$40,000.00
$2,432,965.40
Hard Resources:
Phase 3 Hard Resources
Resource
Call Center
Work Stations
Office Equipment
Phones
Testing Equipment
Shipping 10000 units
Shipping
Call Center Phone Number
Server UPC
Call Center Phone Number
Bulk Component Cost
Bulk Component Cost
Marketing Costs
Total Phase 3 HD Cost
Number of Units
1
10
10
10
1
100,000
500,000
2
2
2
100,000
500,000
1
Cost Per Unit
$42,000.00
$1,800.00
$230.00
$140.00
$40,000.00
$0.19
$0.13
$24.95
$1,000.00
$24.95
$22.66
34.65
$800,000.00
Total Cost
$42,000.00
$18,000.00
$2,300.00
$1,400.00
$40,000.00
$19,305.00
$65,000.00
$49.90
$2,000.00
$49.90
$2,266,000.00
$17,325,000.00
$800,000.00
$19,781,104.80
Total Budget:
Total iRespond Phase 3 Budget
Description
Personnel Cost
Hard Resource Cost
Total iRespond Phase 3 Cost
Cost
$2,432,965.40
$19,781,104.80
$22,214,070.20
Total Budget (Phase I through III):
The total budget for Phase I through Phase III is based on the total budget for the
Phase I, Phase 2 and the initial yearly budget for Phase III.
Personnel Cost
Description
Phase 1
Phase 2
Phase 3
Cost
$81,428.33
$528,987.53
$2,432,965.40
Total
$3,043,381.27
Resource Cost
Description
Phase 1
Phase 2
Phase 3
Cost
$15,534.48
$208,824.90
$19,781,104.80
Total
$20,005,464.18
Travel Cost
Description
Phase 1
Phase 2
Phase 3
Total
Cost
$680.00
$0.00
$0.00
$680.00
Total iRespond Budget
Description
Cost
Personnel Cost
$3,043,381.27
Resource Cost
$20,005,464.18
Travel Cost
$680.00
Total
$23,049,525.45
Product Cost:
The iRespond product will come packaged with instructions, user manual,
telephone cord, AC Adaptor and update/recharging unit. The total cost for this
package, including packaging and shipping fees is $34.80. Retail costs will vary.
Unit Cost Per Bulk Unit
Description
Cost Per Bulk Unit
Shipping Per Unit
Total
Cost
$34.65
$0.15
$34.80
Profit:
Yearly Profit
Description
Unit Profit @ $40.00 Each
Subscription Profit
Less Overhead Cost
Cost
$24,000,000.00
$55,308,015.00
$22,214,070.20
Total Profit
$57,093,944.80
Yearly Subscription Profit 600,000 Units
Description
Income
Yearly Fee @ 25% of Subscriptions
$14,998,500.00
Less 1% Inactive Units
$14,848,515.00
Monthly Fee @ 75% of Subscriptions
$53,946,000.00
Less 25% Inactive Units
$40,459,500.00
Total Without Inactive Units
Total
$68,944,500.00
$55,308,015.00
Unrealized Profit
$13,636,485.00
Initial Expected Profit
Profit Per Unit
Production Cost
Break Even Point
Units Sold Per Day
Percentage of the Market
$5.20
$22,214,070.20
555352 units
1543
0.26%
Out years Expected Profit
Profit Per Unit
$5.20
Subscription Profit Per Year
$55,308,015.00
Production Cost
$22,214,070.20
Units Sold Per Day
500
Profit Per Year From Units
$949,000.00
Profit Per Year from Subscription
$55,308,015.00
The iRespond team will profit from sales of the actual iRespond unit. The largest
profits will be generated from the subscription fees. The revenue generated from
the units alone is estimated at: twenty-four-million dollars. The subscription fees
will yield an annual profit in excess of fifty-five-million dollars with unrealized
profit included.
Total development cost from phase I, phase II and the initial production of Phase
III is $23,049,525.45. This includes all aspects of the project. The team would like
to turn a profit within the first year of production. The iRespond will break if
55,5352 iRespond units were sold within the first year. These figures do not
include the subscription fee for each respective unit. If 600,000.00 units were
sold the iRespond project would generate revenue in excess of $24,000,000.00.
In terms of units alone, on average 1543 units will have to be sold each day for a
year, (based on a 7 day work week). This figure would drop dramatically if
subscription fees are included. Additionally this figure only accounts for .26% of
our market.
After the development costs have been returned, the production cost per year is
estimated to be $3,495,000.00 per 100,000 units produced. The call center will
incur estimated costs of $20,000,000.00. This amount will need to be made up
each year in order for the team to realize a profit each year. Further estimation of
profit and cost beyond the first year cannot be determined without actual sales
data. This