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
Total
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
$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
Number of Units
1
2
2
2
2
2
2
2
2
4
4
2
2
4
Cost Per Unit
Total Cost
$10,000.00
$10,000.00
$59.95
$119.90
$17.95
$35.90
$20.00
$40.00
$3.00
$6.00
$19.98
$39.96
$38.94
$77.88
$11.95
$23.90
$1.47
$2.94
$2.00
$8.00
$10.00
$40.00
$2,500.00
$5,000.00
$0.00
$0.00
$35.00
$140.00
Total Hard Resources Cost
$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
Rental Car
Hotel
Meals
Total Travel Cost
Travel
Days
Cost Per Day
4.00
3.00
4.00
Total Cost
$35.00
$100.00
$60.00
$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
Cost
$80,000.00
$55,000.00
$22,000.00
$7,333.33
$65,000.00
$21,666.67
$45,000.00
$15,000.00
$60,000.00
$20,000.00
$62,000.00
$15,500.00
$60,000.00
$40,000.00
$28,000.00
$4,666.67
$33,000.00
$8,250.00
$55,000.00
$13,750.00
$70,000.00
$17,500.00
$35,000.00
$11,666.67
$60,000.00
$25,000.00
$32,404.00
$8,101.00
$59,478.00
$39,652.00
$60,000.00
$30,000.00
$80,000.00
$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
Total Cost
$42,000.00 $28,875.00
$1,800.00 $36,000.00
$230.00
$4,600.00
$140.00
$2,800.00
$80,000.00 $80,000.00
$40,000.00 $40,000.00
$0.17 $16,500.00
$24.95
$49.90
$208,824.90
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
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 Pay Rate
Cost
12.00
$95,000.00
$95,000.00
12.00
$30,000.00
$30,000.00
12.00
$65,000.00
$65,000.00
12.00
$45,000.00
$45,000.00
12.00
$60,000.00
$60,000.00
6.00
$28,000.00
$14,000.00
12.00
$33,000.00
$99,000.00
12.00
$55,000.00
$55,000.00
6.00
$38,000.00
$38,000.00
12.00
$81,791.00
$81,791.00
12.00
$18,720.00
$374,400.00
12.00
$24,960.00
$249,600.00
12.00
$37,662.00
$37,662.00
12.00
$50,000.00
$50,000.00
12.00
$70,000.00
$70,000.00
12.00
$45,000.00
$90,000.00
12.00
$35,000.00
$70,000.00
12.00
$60,000.00
$60,000.00
12.00
$32,404.00
$64,808.00
12.00
$60,000.00
$60,000.00
$1,709,261.00
$683,704.40
Total Phase 2 Personnel Cost
Legal Consultant
Total
$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
Cost Per Bulk Unit
$34.65
Shipping Per Unit
$0.15
Total
$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.