GREEN GADGETS A/S
Business Plan
42435 Knowledge based Entrepreneurship E10
10-12-2010
Group 24
Delivered by
s062001 Pia Michelsen
s061969 Lars Rask
s062347 Hildur Arna Magnúsdóttir
s061974 Line K. Svenstrup
s052619 Agnes Ástvaldsdóttir
Executive summary
Environmental thinking and sustainability has become the centre of attention within almost all aspects of
product development during the last years. The focus will only increase in the future and this calls for
increased awareness and thinking green. This is also the case when looking at festivals around Europe.
Having a green image is becoming more and more important, and therefore festivals are putting more
effort, time and financial resources into developing and using green solutions.
Nevertheless, festivals generate huge amounts of waste and experience problems when they need to
collect and dispose of it. Handling the waste represents a high financial cost for the festivals. At the Danish
festival, Roskilde Festival, this alone presents a two-digit million expense. A big part of the waste is made
up by left-behind pavilions that are used as gathering points in the camps at the festivals’ camping sites,
and that are discarded after only a limited period of use. At Roskilde Festival, 8.000 pavilions are left behind
and account for 50 tons equalling 5 % of the total waste.
Green Gadgets A/S has designed an environmentally friendly pavilion, the Green Pavilion, made from
recycled plastics, that reduces the festivals’ costs on handling the pavilions as waste and at the same time a
pavilion that boosts the festivals’ green image.
The music festival market is a rather homogeneous market with the same problems and needs. It is not a
competitive market, which should ease the expansion of the Green Pavilion. In Europe alone, there are
over 85 festivals with a total of 4.239.000 visitors every year. This means that there is a potential of
452.000 pavilions sold each year. The most vital criteria for success is to get sales agreements with the
festivals around Europe as fast as possible to make sure, that the Green Pavilion will be able to penetrate
the market.
The overall costs call for a total of DKK 3.500.000 in capital. Green Gadgets A/S seeks an investor with the
capital required for project support and production setup. After a period of six years, the investor, as well
as the founders, will have an exit opportunity with a return on investment exceeding a factor 10.
All five of the founders of Green Gadgets A/S are master students at DTU, studying Design and
Innovation/Management, and are B.Sc. from Design and Innovation/Industrial Engineering. The education
has provided the team with knowledge and experience from innovation processes and product
development.
Green Gadgets A/S is constructed as an “Aktieselskab”, initially holding a share capital of DKK 500.000.
Green Gadgets A/S is initially owned by 5 holding companies. Each of these holding companies is owned by
a founder. By providing enough capital to establish an A/S, the founding team aims to show their
willingness and firm belief in the business and its prospects.
[The detailed figures can be seen in appendix II - Budget model assumptions and III - Budget model].
Page 2 of 18
The Background
Company profile
Green Gadgets A/S has emerged from the environmental focus and the idea of thinking green. Green
Gadgets A/S focuses on a major problem that most of European festivals struggle with; the thousands of
pavilions that are left at the festivals each year, and that constitute a huge amount of waste that cannot be
optimally disposed of.
In collaboration with Green Gadgets A/S’ first customer, “Roskilde Festival”, the problem has been
explored, and the problem is very obvious! Each year, 8.000 pavilions are brought to Roskilde Festival and
left after ten days of music, partying and camping. These pavilions are fabricated in China and made from
metal and polyethylene plastics. The quality of the product is so low, that the tendency is that festival
visitors use it as a single-use product and leave it behind when they go home after the festival.
When the festival ends, the 8.000 pavilions (equalling 50 tons of waste) are a part of a huge amount of
waste of left behind chairs, tents, sleeping bags and other camping equipment spread all-over the festival
area. The pavilions constitute a huge problem during the gathering of the waste because they cannot be
properly handled by the machines cleaning the camping site. They also create a serious problem during the
incineration because of the mix of metal and plastic, which cannot be optimally processed. This huge
amount of waste represents a heavy, two-digit million DKK financial cost.
The problem is well-known, not only at festivals in Denmark, but also at festivals around the world, who are
struggling with the enormous implications of the cheap pavilions.
Green Gadgets A/S produces the “Green Pavilion”, a new environmental friendly pavilion made from more
sustainable materials with the possibility of reuse; recycled plastics and wood are manufactured into a
pavilion consisting of a skeleton and a cloth.
By establishing a re-use-system surrounding the pavilions at the festivals, the Green Pavilion helps solving
the waste issues that festivals around the world deal with when handling pavilions after use.
The Business Idea
The pavilion is one of the most visible artefacts on the festival. It rises above the tents and creates a
gathering point for the campsite visitors. This makes the pavilion an obvious target for emphasizing an
environmental friendly image for the festivals.
To ensure the penetration of the Green Pavilion at the festival sites, a ban against the old pavilions is
preferred. Introducing the Green Pavilion will ease the waste handling for the festivals and through that
foster economic gain. These facts should encourage the festivals to ban the existing pavilions. However a
ban is not a specific requirement for Green Gadgets A/S. The Green Pavilion can compete with the existing
discount-pavilions on properties like its durability and environmental advantages along with its many
design opportunities. It is therefore attractive for Green Gadgets A/S to make sales agreements with
festivals, even if a ban cannot be executed.
Because of the current focus on having a green profile, many of the festivals have chosen to ban the use of
pavilions, because they cause a huge financial expense. These festivals have expressed a wish to withdraw
the ban of pavilions, if they are able of offering an alternative pavilion to their camping guests.
Page 3 of 18
The pictures illustrate how the pavilions constitute both a negative and positive element at festivals.
The Green Pavilion is made from two major components: Poles and a cloth. To support the green image of
the pavilion, both components are made from recycled plastics and the poles can be reused.
To strengthen the free nature of the festivals, the idea is to provide them with a pavilion that is flexible
when it comes to size. The Green Pavilion comes in two different basic sizes, a small version and a big
version. The small pavilion is a set of two half pavilions which can also be used as an extension on the big
pavilion. The pavilion is a modular system where the users decide the final construction and size.
The figure shows how the Green Pavilion is module based.
The Green Pavilion will be sold to the festival visitors waiting in queue at the entry areas before entering
the festival. During a festival, Green Gadgets A/S will be present on the festival site to sell additional
pavilions and spare parts.
After the festival, trucks will drive around the camping area to pick up used pavilions, creating an easy
delivery system for the festival visitors to use. The trucks will play music and pass a positive vibe around
while handling the pavilions. The system will make it easier for Green Gadgets A/S to handle the gathering
Page 4 of 18
of pavilions scattered around the large festival area and enables an on-site quality check of parts, and
thereby preparing the next festival already when collecting the pavilions.
By handing in the used pavilions, visitors will receive a reward. The nature of this reward will be decided by
each festival, since they finance the rewards with a part of the many millions they save on waste handling.
When the pavilions have been gathered from the camping site, the functioning poles and joints are divided
into large containers and driven to a storage facility. The broken poles and joints not suitable for reuse as
well as the cloths will be transported to an incineration facility by Green Gadgets A/S. The cloth is not
suitable for reuse since it tends to get very damaged and filthy. Since not all poles can be reused from year
to year and new cloths also have to be fabricated, more raw material/plastic is required. This material
partly comes from other products used and disposed at the festivals.
The figure shows the system surrounding the Green Pavilion.
The technology and the product
The Green Pavilion is produced by using an already existing technology, which enables recycling of plastics.
The quality of those plastics can vary greatly (in coherence with the price). The aim is that the quality of the
pavilion will be robust and strong enough for festival use and reuse the following years.
Recent technological development has allowed the use of wood in recycled plastics (WPC, Wood Polymer
Composite), which will be used for producing the poles and joints. By using wood in the composite, less
plastics are needed. As a side-effect, this combination of materials provides a natural look, which goes well
with emphasizing a green image for the festival. Green Gadgets A/S has already started collaboration with
the Danish company Aage Vestergaard Larsen ApS that produces this material. The cloth, which needs to be
more flexible, is made from recycled plastics alone.
A temporary agreement has been made with the Danish company DKI Plast A/S to produce the poles of the
pavilion. They specialize in making plastic components by extrusion and injection moulding.
Page 5 of 18
Market analysis
Market segmentation
The primary customers for the Green Pavilion are the organisers of music festivals with camping facilities.
They plan the festivals and are responsible for all the practical arrangements before, during and after the
festival, as well as the financial aspect. The festivals will gain an economical advantage in terms of less
waste handling, they will promote their green profile and be able to offer their customers a new and better
product.
The end users of the Green Pavilion are the visitors of the festivals who stay at the camping facilities. These
visitors are customers of the festivals. The visitors use the pavilion as a gathering point for the individual
camps on the camping site, and the Green Pavilion fulfils this purpose better than the existing pavilion.
Market size
The market for music festivals is global. In Europe alone, there are over 85 festivals with a total of
4.239.000 visitors every year. This means that there is a potential of 452.000 pavilions sold each year. 1
The figure shows the North European market potential.
Green Gadgets A/S intends to start up on the Danish market with Roskilde Festival as a pioneer. With a
success at Roskilde Festival, the plan is to quickly expand to the European music festival market and maybe
even further to other continents in the long-range future.
1
This number is calculated based on Roskilde Festival where it is known that there are 8.000 pavilions per 75.000
visitors. The potential number is found by dividing the number of visitors in Europe (4.239.000) by number of visitors
per pavilion (9,375).
Page 6 of 18
Market trends
Awareness of environmental friendly products is global and the music festival industry is no exception.
Festivals in Europe have a central focus on environmental issues, and therefore launch many different
green initiatives. The European Festival Association nominates festivals with a green profile every year and
chooses the winner of the “Green´n´Clean”-award. In England, a festival is chosen as the year’s “Greener
Festival”.
Competitors
On the global market, there seems to be no solution focusing on an environmental friendly profile. The
most widespread pavilions at festivals are pavilions fabricated in China made from metal and plastic. This
model consists of steel poles as well as joints and cloths made from polyethylene plastics. The construction
of the pavilion is very fragile, which means that the users at the festivals secure the joints by using tape to
prevent the pavilion from falling apart, as well as repairing cuts in the cloth. The strength and green profile
of the Green Pavilion will therefore make up two important parameters when competing with other
pavilions.
Intellectual Property Rights
Due to the fact that many pavilion solutions exist on the market, seeking a patent is not the solution for
Green Gadgets A/S. However, to secure the market penetration of the Green Pavilion, it is Green Gadgets
A/S’ goal to apply a first-mover strategy.
Green Gadgets A/S seeks to protect the Green Pavilion through design protection. Registering the design
provides the exclusive right to the design in the territory in which it is registered. Design protection can be
applied for all the countries that are members of the European Union, including Denmark, and lasts for 25
years. Generally, an application will take about three months to take effect. A design protection means that
it will be prohibited to directly copy the design of the Green Pavilion.
The design protection will ensure that competitors must spend time on developing their own design before
launching a competing product. This will provide time for Green Gadgets A/S to enter the market and gain a
relative market share.
Strategic Market Entry
Market entry execution
In order to obtain a fast time to market, it is vital to make arrangements with other festivals around Europe
as soon as possible. By this, the company creates an advantage regarding its strategic position as the initial
occupant on the market, as well as gaining access to resources and capabilities that a follower cannot
match [see Appendix I on Porter’s Five Forces]. Sales agreements with other festivals outside Denmark will
be initiated after the pavilions have been tested at Roskilde Festival or even before.
The test year at Roskilde Festival provides an opportunity to invite other festival organisers to observe the
Green Pavilion in use – thereby convincing them to implement the concept of the Green Pavilion at their
own festival and cooperate with Green Gadgets A/S.
The music festival market is a rather homogeneous market with the same problems and needs. It is not a
competitive market, which should ease the expansion of the Green Pavilion. European festivals work
together and many are connected through the European Festival Association. They share their knowledge
and have a lot of common initiatives.
Page 7 of 18
Green Gadget A/S’ intention is to reach break-even in cooperation with Danish music festivals, before
entering the European music festival market. That way the company will have gained financial advantages
as well as experiences with the product, the market and the customers.
2011:
Prototypes
at Roskilde
Festival
2012:
Sales at
Roskilde
Festival
2013:
Sales now
include
other
Danish
festivals
2014:
Expanding
to the
English
market
2015:
Sales now
include
more
festivals in
England
2016:
Sales now
include
even more
festivals in
England
2017:
Expanding to
Germany.
Starting
development
of new
products
The figure shows the market entry execution from Roskilde Festival to Europe.
Prospects
In order to make sales agreements with music festival organisers abroad, the company will appoint a
marketing manager that will be responsible for meeting the organisers and making the necessary
arrangements, e.g. gathering statistics on the number of pavilions expected to be sold and making sure that
the festival has the right facilities for selling the Green Pavilion at the camping site. This will help to secure a
fast time to the European market.
Marketing Strategy
Green Gadgets A/S’ marketing strategy relies on close cooperation with the festivals. Festivals aim to
promote themselves with green profile initiatives, and it is Green Gadgets A/S’ objective to make the Green
Pavilion an initiative they will choose. By gathering the pavilions after use, the festivals cut down on their
waste handling expenses. The festivals can use the initiative to raise the visitors’ awareness of the amount
of waste being left at the festival and the environmental consequences that arise.
The visitors are primarily young people who seek information online. Green Gadgets A/S will have its own
webpage where visitors can get information on the company profile, the products and get in contact with
the company. The sales agreements offer the advantage of using the festivals’ own websites as additional
sales channels. This will make it possible to sell the pavilions before the festivals actually begin and thereby
both make it possible to estimate the amount of pavilions needed as well as reduce the sales pressure at
the festival.
Having the pavilion available at the campsite during the festival provides an opportunity to attract more
customers who want to buy a pavilion or extra modules. It also offers an opportunity for Green Gadgets A/S
to promote the company.
Page 8 of 18
Pricing
The most widespread existing pavilion used at festivals sets the pricing standard on the market. This
pavilion is considered the main competitor and can be found to a selling price of DKK 100.
The selling price for the Green Pavilion is set to DKK 300 for the big pavilion, DKK 200 for the small one and
DKK 100 for an extension module (half a small pavilion). The customers get a better product which justifies
the increased price. It is also common that festival visitors share expenses when buying a pavilion for a
camp, which makes the product less price-sensitive.
Risks and barriers
The largest risk lies within conquering the European market by making sales agreements. The strategy will
be to seek out the largest and most dominating music festivals first to set the standard and thereby making
other festivals follow. To have Roskilde Festival as an alliance already provides Green Gadgets A/S with a
solid starting position. Roskilde Festival is a known music festival around the world and with a success many
others are interested in following.
Even if Green Gadgets A/S does not manage to conquer the entire European market, the business is still
sustainable. Break-even is located during the second year where the business has expanded from Roskilde
Festival to also include other Danish festivals.
Another risk factor lies within testing the first prototypes. It is important that they meet the users’
expectations and are capable of being reused. It is important to establish a trustworthy relationship with
the festivals and the users in form of a reliable product and a system that works. This is important for a
successful startup.
The Green Pavilion sales are seasonal, and Green Gadgets A/S is very dependent on the production
facilities. If a production fails, it can have fatal consequences for the business. Not being able to deliver to a
festival at time (or deliver at all) will decrease the revenue and the long time between potential sales
makes this a very sensitive area. The test year at Roskilde Festival will, however, give the production facility
in Denmark an opportunity to gain experience in producing the pavilions. In case of a production failure or
delay, Green Gadgets A/S holds the production facility responsible. This is a part of the terms and
conditions stated in the contracts with the production facilities. The production facility will in this case pay
a financial compensation that will minimize Green Gadgets A/S’ losses.
The risk of not being able to conquer the European market, having success in testing prototypes and secure
the production is hard to fully hedge against. But to make sure that running into one of these barriers will
not bring down the business and at the same time be able to pay unforeseen costs, the cash-in-hand is set
to a minimum of DKK 800.000, and this margin is maintained throughout the budget model.
Operational Plan
Company outline
Green Gadgets A/S is constructed as an “Aktieselskab”, initially holding a share capital of DKK 500.000.
Green Gadgets A/S is initially owned by 5 holding companies. Each of these holding companies is owned by
a founder. By providing enough capital to establish an A/S, the founding team aims to show their
willingness and firm belief in the business and its prospects. The choice of a holding company is a way of
protecting the founding team from claims against Green Gadgets A/S, along as making it more easy to sell
the company and use the capital for new business, in case of a wish to leave the business.
Page 9 of 18
The required capital and the shares will be equally distributed between the founding members. However,
there is need for more capital from investors, in order to launch the company and make it safe through the
first three years. Three capital injections from investors are needed, in order to maintain a reasonable
buffer of capital. They are described below.
Funding
Initially there is a need for DKK 2.000.000 in order to launch, because of the initial investments outlined
later in this document. We are looking for one investor to provide this capital, who will thereby get
ownership as stated in the table below.
Investment goal:
Kilo DKK 2.500
Share Price:
DKK 1,00 per share class A
DKK 10,00 per share class B
(Kilo DKK)
Shares
Contribution
Ownership Ratio
Founding Team, cash
500.000
500
Investor A
200.000
2.000
Total
700.000
2.500
Total cash contribution at kick-off:
71,43% Class A
28,57% Class B
100,00%
2.500
Funding round 1
During 2013, three production facilities are initiated, and capital of DKK 1.000.000 is needed to invest in
production tools and initiation of the new production facilities. The ownership and share distribution is
stated below.
Valuation pre-money:
Kilo DKK 8.000
Investment goal:
Kilo DKK 1.000
Share Price:
(Kilo DKK)
DKK 11,43 per share
Shares ante
OR ante
Value ante
Contribution
New shares
Value post
Shares post
OR Post
Founding Team
500.000
71,43%
5.714
0
0
5.714
500.000
63,49%
Investor A
200.000
28,57%
2.286
1.000
87.500
3.286
287.500
36,51%
8.000
1.000
87.500
9.000
787.500
100,00%
Total
700.000
100,00%
Capital expansion from DKK 700.000 - to - DKK 787.500
Funding round 2
In the second quarter of 2014, just before a major launch in England, an extra investment of DKK 500.000 is
needed. The budget on cash-flow states that there is room for handling if something should go wrong, but
entering such a big marked with three new production facilities involves a certain amount of risk, which
there is made extra room for.
Investor A is again asked for capital, and the share distribution and ownership is outlined below. After this
point the founding team holds ownership majority of 60 %.
Valuation pre-money
Kilo DKK 10.000
Funding goal:
Kilo DKK 500
Share Price:
DKK 12,70 per share
(Kilo DKK)
Shares ante
OR ante
Value ante
Contribution
New shares
Value post
Shares post
OR Post
Founding Team
500.000
63,49%
6.349
0
0
6.349
500.000
60,47%
Investor A
287.500
36,51%
3.651
500
39.375
4.151
326.875
39,53%
Total
787.500
100,00%
10.000
Capital expansion from DKK 787.500 - to - DKK 826.875
500
39.375
10.500
826.875
100,00%
Page 10 of 18
After the third and final injection, the investor has ownership of 40 %, while the founding team maintains
the share majority.
Business Management
Because of the choice of an A/S, a board is needed. The board will consist of the five founders, and the
investor will be offered two seats on the board. The roles of the founding team are shown below.
BOARD
7 seats
CEO
Will be appointed
Key Account
Manager
Hildur Magnúsdóttir
Marketing
Project
Manager
Agnes Ástvaldsdóttir
Line K. Svenstrup
Financing and
Administration
Lars Rask
R&D
Pia Michelsen
The figure shows Green Gadgets A/S’ management, board and the roles of the founding team.
The founding team
The qualifications of the founding team are an important resource for the company. All five of the founders
are master students at DTU, studying Design and Innovation/Management, and are B.Sc. from Design and
Innovation/Industrial Engineering. The education has provided the team with knowledge and experience
from innovation processes and product development.
The founding team will work in the following fields:
Agnes Ástvaldsdóttir: Will take part in R&D work, but will mainly focus on presenting the product on site as
well as sales and marketing, because of her wide experience in sales.
Hildur Arna Magnúsdóttir: She will be in charge of optimizing and customizing the production process. She
will also be the company’s face towards the festivals and handle their demands.
Pia Michelsen: Founder of the design team and original inventor of the Green Pavilion. She will be in charge
of the process of R&D, because of her experience in product development and executing projects.
Line Kagenow Svenstrup: Founder of the design team and the original inventor of the Green Pavilion. She
will be the project manager and thereby responsible for the quality of the product development.
Lars Christian Rask: Lars’ background in accounting and annual reporting makes him responsible for the
financial management and administration.
One of the most important phases of establishing Green Gadgets A/S is the initial phase of product
development. The founding team considers itself to be well qualified to take on the challenges that the
team will encounter in the process of creating the first prototypes and testing them at Roskilde Festival
2011. With the launch and further expansion, Green Gadgets A/S will assess the upcoming tasks and hire
employees or external consultants with relevant qualifications in sales and management when needed. The
figure below describes the founding team’s competencies in seven dimensions. The needed employees or
external consultants will provide Green Gadgets A/S with a more complete company profile which is
needed as the business grows.
Page 11 of 18
The figure shows the qualifications of the founding
team as well as the future complete company profile.
Finances
Financial considerations
As mentioned previously, the most vital criteria for success is to get the sales agreements with the festivals
around Europe as fast as possible to make sure, that the Green Pavilion will be able to penetrate the
market. Because of this, many of Green Gadgets A/S’ expenses will be within this area. Especially in the
beginning but also in the long run, money will be needed to expand the business. When sales agreements
with festivals outside Denmark have to be made, financial room for travel, prototypes, sales personnel and
a legal adviser will be needed. Also when sales agreements have been established, the relationship with the
festival must be nursed to secure future sales agreements. The key account manager will control this
activity.
In order to make sure that the sales proceed as planned, it will be necessary to hire more salesmen when
the portfolio of festivals increases. The volunteers at each festival site will be used as cheap workforce
when selling the pavilions, since a large number of pavilions must be sold over a short period of time.
To get the business up and running, an office is required. The office will be located close to Roskilde given
that a lot of close collaboration with Roskilde Festival will take place. Also, investments in a car will be
made in order to make visits at festivals more accessible amongst other things. This car will be an electrical
car, to boost Green Gadgets A/S’ green profile. [The detailed figures can be seen in appendix II: Budget
model assumptions, and III: Budget model].
Page 12 of 18
KILO DKK
INITIAL INVESTMENTS
600
Tools
500
Travel
Internet
400
Materials
300
Electric car
200
Lawyer and auditor fees
Software
100
Computers
0
Costs
Assets
Production
tools
Furniture
Deposit
The graph shows the distribution of the initial investments in costs,
assets and production tools (also assets) respectively.
Green Gadgets A/S does not produce the Green Pavilion itself. Instead, external production facilities are
used. In order to initiate a production unit, there will be one-time expenses for the tools (extrusion and
injection molding) that the production facility needs to start a production of pavilions. Due to the current
hard financial period, Green Gadgets A/S does not expect that the production facility will be willing to
finance the start-up. Setting up a production will cost DKK 540.000. First, a production facility will be set up
in Denmark. Later, three local production facilities will be established in England and two in Germany. Since
the technology is mastered by many potential production sites and is not advanced, sites will be easy to
find. Having local production facilities will make logistics cheaper, create savings on the environment and
minimize risk regarding transportation.
As mentioned above, Green Gadgets A/S will finance the startup costs in relation to the production of the
pavilions. With regards to the payment of the pavilions, Green Gadgets A/S will make credit agreements
with the production facilities, so that the payment of tools will be up-front, but payment of the products
themselves will be due in the third quarter of each year where Green Gadgets A/S sells the pavilions.
Page 13 of 18
COSTS 2012-2017
Percentage of overall costs
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2012
2013
2014
2015
2016
2017
Production
1.082
2.221
6.535
11.632
15.971
21.701
Salaries
1.000
1.100
1.560
2.720
3.220
4.280
Rent
120
120
120
240
240
300
Storage
132
264
796
1.412
1.320
2.480
Transportation
90
180
540
960
1.320
1.800
Travels
50
40
40
40
40
66
Depreciations
198
522
522
522
594
594
The graph shows how the costs during year 2012 to 2017 are distributed
and how much they each account for in the percentage of overall costs.
Financial outline
The costs mentioned above calls for a total of DKK 3.500.000 in investments. The business case has a
potential of repaying the investor by 14 times in six years. The financial strategy is elaborated below,
focusing on the main considerations regarding the first six years of Green Gadgets A/S.
Year 0 (2011)
The final considerations regarding product development are made. Prototypes are manufactured and
presented at Roskilde Festival to include the end-users in the final design. The financial costs in relation
with finishing the prototypes are sponsored by Roskilde Festival and outlined below.
Development of prototypes
Final dimension and optimization of construction, 1 prototype:
Optimization on the basis of user feedback, 30 full-scale prototypes:
In all
DKK 50.000
DKK 150.000
DKK 200.000
Roskilde Festival has an interest in getting the Green Pavilion ready for production and testing. Because of
this, they are willing to make a contribution of DKK 200.000 without wanting any long-term part in the
company.
Green Gadgets A/S searches for an investor with emphasis on the positive results of the prototyping
experience at Roskilde Festival. Capital is found to invest in manufacturing equipment and other initial
costs.
Year 1 (2012)
Pavilions are produced, stocked and sold at Roskilde Festival. The production and storage takes place a few
months before the festival, since it takes time to produce the needed 8.000 pavilions. When the festival is
Page 14 of 18
over, 70% of the pavilions are stocked for reuse along with plastics gathered at the festival, providing
material for next year’s additional production.
To cover initial costs and get the production running, an investment of DKK 2.000.000 is needed.
Year 2 (2013)
Three additional Danish festivals are now included in the client portfolio, which again calls for production
and storage of pavilions. Every time a new festival is included as a client, more production materials are
needed for the production of the first year’s pavilions. The next year, collected plastics are put into
production of the missing 30% of the needed pavilions. The turnover from last year is used to produce and
stock new pavilions.
Since year 1 has resulted in a loss and further production units are needed to expand into the English
market, an investment of DKK 1.000.000 is needed. Break-even occurs during year 2.
Year 3-5 (2014-2016)
Three of England’s more than 20 festivals are included in the client portfolio in the year 2014. During 20152016 more English festivals are included in the client portfolio. Local production and storage is found.
To secure setting up the production facilities in England a small cash injection of DKK 500.000 is needed in
the second quarter of year 3.
Year 6 (2017)
Two of Germany’s largest festivals are included in the client portfolio and local production and storage is
found. Product development of new products is initiated.
Sales scenario
The total sales figures can be seen on the graph below. The figures are divided in countries and show, how
the different markets are penetrated.
CASH IN (from sales)
60000
KILO DKK
50000
40000
30000
20000
10000
0
2012
2013
2014
2015
2016
2017
Denmark
2400
4900
5600
6300
6300
6300
England
0
0
8940
19680
29500
36600
Germany
0
0
0
0
0
5600
The graph shows how the cash in from sales increases as the market
expands from Denmark to England and Germany throughout the years.
Page 15 of 18
Profit-loss
The net profit-loss of the business case is shown below. Since all the festivals are taking place within a short
period of time each year, and the sales therefore are very much based on season-sales, it would not make
sense to look at a break-even based on quarterly figures. Instead, we focus on the annual figures and have
located break-even below.
NET PROFIT-LOSS
14.000
12.000
10.000
KILO DKK
8.000
6.000
4.000
Break Even
2.000
0
-2.000
NET PROFIT-LOSS
2012
2013
2014
2015
2016
2017
-552
398
3.174
5.989
8.869
12.287
The graph shows how the net profit-loss plays out and where break-even is located.
Equity capital
The progress of the equity capital is shown below. Green Gadgets A/S’ activities are very much based on
season sales, which is reflected in the graph.
EQUITY CAPITAL
45000,0
40000,0
Kilo DKK
35000,0
30000,0
25000,0
20000,0
15000,0
10000,0
5000,0
,0
2012
2013
2014
2015
2016
2017
Year 2012 +
The graph shows how the equity capital evolves during the first six years of the business.
Page 16 of 18
Exit Strategy
At the end of the presented period of six years, Green Gadgets A/S will have equity of approximately DKK
34.000.000. Additionally, Green Gadgets A/S has a potential to further expand and gain market shares in
more European countries. During 2017, new product development is initiated and again provides Green
Gadgets A/S with an opportunity to expand the business. Green Gadgets A/S seeks to establish a company
that in the long run can function and perform on its own without dependency of the founding team –
which, in case of selling the business, makes it easier to sell the company at a high price.
After a period of six years, the investor as well as the founders will have an exit opportunity with a return
on investment exceeding a factor 10.
Exit Opportunity
Price/Earnings ratio (P/E) at exit: 5
Share value
Company value
2012
n/a
n/a
2013
4.599
6.254
2014
24.354
30.205
2015
44.198
56.560
2016
64.561
85.306
2017
88.297
121.923
2012
n/a
2013
2.502
2014
12.082
2015
22.624
2016
34.122
2017
48.769
n/a
1
3
6
10
14
Investors Return On Investment (ROI)
With OR = 40%
Yield
ROI
Obvious buyers of Green Gadgets A/S could be the production company DKI Plast A/S which is the
production facility used for production to the Danish market. Another obvious buyer could be an
environmental foundation which could have great interest in the branding value that the pavilions can offer
throughout Europe.
The Moment of Truth
In today’s society, people are becoming more and more aware of the environmental impact from consumer
products. The tendency is green and the focus is on more sustainable products that political rules and
regulations tend to support. The Green Pavilion is a product that meets the growing demand for
environmental friendly solutions. The festival market potential is large and ready to embrace this kind of
product, which does not already exist on the market.
Green Gadgets A/S is aware of the attractiveness of the market. Therefore, it can be expected that many
competitors would find it desirable to enter the market once the idea has been intercepted. Hence, it is
important to establish a reliable collaboration with the festivals as well as the production facilities in a rapid
pace. Furthermore, the image of the company is a part of maintaining this relationship and attracting new
portfolio clients.
Even though our research shows that there are the same tendencies abroad, there is always a risk in
expanding to other countries. The cost, culture and the way of doing business might differ from the
underlying assumptions in the business plan. However, there are expansion opportunities within the Danish
market. The usage situations can be expanded to flea markets, parties and big events like weddings and
confirmations etc. There also exists an opportunity of expanding the product portfolio with chairs, tents,
cutlery etc. made from the same material as the Green Pavilion.
Page 17 of 18
Furthermore, the pavilions stand out on the campsite as they rise above the tents and would make an
evident advertising opportunity. This opens the possibility for additional cooperation with some of the
festivals’ sponsors or other interested parties. Sponsor deals covering advertisement on the large surfaces
(which are visible to millions of people) can provide a supplementary income to Green Gadgets A/S.
The Green Pavilion is a desirable product. The festivals save money on waste collection and treatment, such
as incineration costs and at the same time promote their green image. The end-users get a more robust
and appealing pavilion that fits their needs. It provides a good venture case with economic prospects for
the founders as well as the investors.
Page 18 of 18
Appendix I - Porter‘s Five Forces
Porter’s five forces give a framework for industry analysis and business strategy
development, by Michael E. Porter, Harvard Business School in 1979. It uses concept
developing, industrial organisation economics, to derivate five forces that determine the
competitive intensity and the attractiveness of a market. The tool is a simple way to
understand where power lies in a business situation, which is useful for understanding the
strength of current competitive position and the strengths needed for a business who
wishes to enter the given market.
Threat of
substitute
products
Bargaining
power of
Customers
Competitive
Rivalry
within an
industry
Threat of
New
Entrants
Bargaining
Power of
Suppliers
The figure shows Porters five Forces.
Competitive Rivalry
 The existing pavilion used at Roskilde Festival
 In Denmark it´s mainly bought in Harald Nyborg and Jysk
 Other products that provide ‘shelter’ for rain and a get-together place:
 Bamboo solutions
 Sunshades
 Wooden solutions
Threat of new entrants
 Other green solutions (especially if they include cheaper material and production
solutions)
 Large start-up cost for the production
 Finding investors
The threat of substitute products
 There are no identified substitute products which offer a better solution for the
problems that the existing pavilion creates at festival sites.
 The pavilion creates a common ground for the festival customers and this need
cannot be fulfilled by products that do not offer shelter and the possibility of having
a gathering point, as a pavilion does.
The bargaining power of customers
 If given a better product the festival customers are willing to pay more for a pavilion
than the 100 DKK the existing cheap discount solution costs.



Roskilde Festival is willing to contribute money in order to get the business started
since the Green Pavilion will be able to help them with their waste problems.
The bargaining power of the Green Pavilion is higher than for the existing discount
pavilion since it offers a better product for the users in regards to durability, reuse
and environmental considerations.
The bargaining power of the Green Pavilion is also higher because it offers a better
solution to a need that the festival customers are not willing to compromise on.
The bargaining power of suppliers
 Suppliers do not necessarily depend on upon producing the Green Pavilions which
gives Green Gadgets A/S low bargaining power.
 In regard to the material use, Green Gadgets A/S has higher bargaining power since
the producers of recycled plastics are looking to find a ways to use/sell the material.
 It will be necessary to produce new production equipment since the design of the
Green Pavilion is unique.
Marketing and Distribution
 The target market is festivals that have a camping site. It is therefore crucial to enter
into sales agreements with the festivals.
 Marketing Strategy
 Collaboration with other business’ that sell equipment to festival customers.
 Collaboration with other Festivals
 Setting a price range that suits the market and the customers.
 The Green Pavilions are going to be distributed by truck throughout Denmark. When
entering the European market local production facilities will be established in order
to be able to use trucks in the given countries and thereby diminish distribution
distances.
2
Appendix II – Budget Model Assumptions
Budget Model
This appendix contains the financial considerations that form the basis for the budget model for The Green
Pavilion.
Initial Costs
 Office facilities: In Roskilde, expenses: 10.000 DKK/month – office hotel with mutual facilities as well as
private office space.
 Deposit: 2x rent = 20.000 DKK
 http://www.lokalebasen.dk/kontorlokaler/leje/4000-roskilde/hersegade/emne-1381
 Furniture: 15.000 DKK (desk + chairs for 5 persons)
 Computers: 5x 5000 DKK = 25.000 DKK
 Software: 50.000 DKK (Cad-Cam + CS4)
 Company car: Better Place: 205.000 DKK Renault Fluence ZE + battery subscription (works likes tanking
fuel)
 http://danmark.betterplace.com/danmark-faq-pris
 Lawyer fees: Making contracts between shareholders (shareholder agreements) and sales agreements
with festivals.
 Expenses: 2000-2500 DKK per hour. 7 days of work: 100.000 DKK
 Money for prototyping: We need 5 units so that we have one each, within the team. 20.000 DKK
 http://www.davinci.dk/rapid-prototyping-rpt/hvad-koster-prototyper-hos-davinci.html
 Website: We need one which offers different languages. 50.000 DKK
 Important features:
 To send the right message, represent the company in the right way
 Who are our customers and collaborators
 Promote our sponsors
 Up-to-date
 Digital procurement system for online purchases
 Available in several language (Danish, English, German)
 The site should associate to music festivals
 The website should have links to collaborating music festivals and vice versa.
 Travel expenses: Travels to UK and Germany.
 http://www.easyjet.com
 UK, London; 300-400 DKK each way. Hotel, London (Radisson Hotel); 90 £ per night. Car rent: per
day 300 DDK (excl. fuel).

Travel expenses for the 3 largest festivals in England: 10 trips, to and from London (7000 DKK) +
Hotel for 15 nights (13.500 DKK) + Car 15 days (7000 DKK (2500 DKK for fuel))) = 27.500 DKK
 A trip for two representatives from the three largest festivals in England to Roskilde Festival in
Denmark to observe the pavilions. Expenses: 4200 DKK for flight + 6 persons for 1 night in
double rooms 3000 DKK =7200 DKK
 In all costs of 34.700 DKK to which is added an extra accommodation cost of 15.300 DKK for
food, client nursing (dinners ect.) and so on.
 Germany, Berlin 150-200 DKK each way: Hotel Berlin: 450 DKK per night. Car rent: 1000 DKK per
day (excl. fuel).
 6 trips, to and from Berlin (2400 DKK) + Hotel for 7 nights (3150 DKK) + Car 7 days (7000 DKK) =
12.550 DKK
Salary
 Key Account Manager: Two persons from 2015 (When the market is expanded)
 The tasks for the Key Accountant are
 Customer (festival organisers) responsibility
 Nurture the collaboration with the customers
 Have the market under control
 Make budget, and responsible for financial tasks etc.
 Sales clerks: Their role is to control the sales sites on the festivals and makes sure that everything
functions as planned.
 The sales clerks are not accounted as employees in the rent
 Engineering: Employed in 2017 to develop the new product line
 Production: The production is outsourced and the team has the relevant production knowledge for the
design process. Therefore, there is no need for extra employment. The Key Accountant can be
responsible for the inspection of the production facilities.
 Volunteers: year 1: 20 persons, year 2: 40 persons, year 3: 120 persons, year 4: 220 persons, year 5:
320 persons, year 6: 430 persons (estimated from the needed number of volunteers at Roskilde
Festival). A volunteer earns ca. 2000 DKK, which corresponds to the price of a Roskilde Festival ticket.
 The volunteers are not accounted as employees in the rent
 Administration: With the expansion of the company there is a need to attract to employees with core
competences. Hence, the salaries should increase accordingly.
 Rent: 15.000 DKK per Qt. (Sales clerks and volunteers are not included in this number, since they do not
need the accommodation).
Production material
 The company does not possess any production facilities and the production is outsourced. However,
there are initial production start-up expenses for extrusion and injection molding tools. Today, it is
custom that these expenses are paid by Green Gadget ApS, as their customer.
 Engineering expenses due to design of extrusion and injection molding tools: The team possess the
relevant competences (it is therefore part of the salary).
 Installing and calibration are included in the production tool expenses. (Total price is expected from the
collaborating production company).
 340.000 DKK for starting up the production (same cost in all three countries: Denmark, UK and
Germany)
 One extrusion tool costs: 10.000 DKK (informed by DKI). Four pieces needed.
 One injection molding tool costs: 250.000 DKK (informed by DKI). Two pieces needed.
 Three local production facilities in England.
 Two local production facilities in Germany.
 Local production facilities have to be identified. This should not be difficult, thus the production
method is common.
 Local production should be situated close to the festivals. This will minimize the logistic costs.
Unit costs
 The Green Pavilion is available in two sizes: small and large.
 We do not differ between the numbers of pavilions sold in the unit price, since the market demand
only calls for deliverables of a certain size.
 It is possible to buy an extension to the large pavilion, which is half of the small one. (Extensions are
included in the sales of the small pavilions).
 Packaging and transportation of the cloths from China to Denmark is included in the unit price of the
products.
Market entry scenario
 Payments are conducted in the same quarter as the pavilions are sold, hence all sales are cash sales.
 Time and money is invested in the production start-up (production tools). However, agreements with
the collaborating production companies are made, where the payment of the production is conducted
in the same quarter as the sales.
 The payment agreement is particularly important in start-up phase. However, when the business is
running they are not as important since the company possesses the necessary cash in hand.
Cash flow
 Transportation cost in Denmark, England and Germany. The amount transported to the festivals is
divided on trucks and then multiplied by two because we have to transport both to the festivals and
afterwards to the storage facility. The price per truck is 3000 DKK (local transport in Denmark and
abroad).
 1st year: 15 trucks, 90.000 DKK.
 2nd year: 30 trucks, 180.000 DKK.
 3rd year: 90 trucks, 540.000 DKK.
 4th year: 160 trucks, 960.000 DKK.
 5th year: 220 trucks, 1.320.000 DKK.
 6th year: 300 trucks, 1.800.000 DKK.
 Travel: The Key Accountant manager has regularly travel expenses to maintain a good collaboration
with existing customers as well as establishing new ones. The expenses are set to 20.000 DKK in both
3rd and 4th quarter from 2013.
 Storage: 100 square metre: 6.800 DKK per month. In order to store 8.500 pavilions two rooms are
needed. Per quarter equaling: 40.800 DKK minus WAT (20%) = 33.000 DKK for 2012.
For the years 2013-2017 the total production of pavilions each year is divided by 4250 pavilions/room
and multiplied by 16.500 DKK per room.
 To make sure that running into a barrier will not bring down the business and at the same time to be
able to pay unforeseen expenses the cash-in-hand is set to a minimum of 800.000 DKK and this margin
is maintained throughout the budget plan.
Loan
 It is not reasonable to take bank loans since the company does not intend to start up own production,
and therefore does not possess any valuables. Therefore, it is not considered realistic to take loans in
the first couple of years.
Appendix III – Budget Model
Profit and Loss
Profit and Loss
kilo DKK
REVENUE
Rev./employee, 1000*unit/yr
2012
2.400
1,2
2013
4.900
2,5
2014
14.540
7,3
2015
25.980
6,5
2016
35.800
9,0
2017
48.500
9,7
COSTS
2.754
3.980
9.669
17.140
22.888
30.841
EBITDA
-354
920
4.871
8.840
12.912
17.659
0
198
0
198
0
522
0
522
0
522
0
522
0
522
0
522
0
594
0
594
0
594
0
594
-552
398
4.349
8.318
12.318
17.065
Cummulated earnings
-552
-153
TAX
0
0
28% Annual taxpayment on Earnings Before Tax (EBT)
4.196
1.175
12.514
2.329
24.832
3.449
41.898
4.778
NET PROFIT-LOSS
FINANCIAL ENTRIES
Interest
Depreciations
Amortisation
FINANCIAL ENTRIES
Earnings Before Tax (EBT)
-552
398
3.174
5.989
8.869
12.287
CASH-IN-HAND end yr
1.356
1.656
5.852
12.362
20.745
33.626
Accum investments
2.000
3.000
3.500
3.500
3.500
3.500
n/a
n/a
5
4.599
6.254
24.354
30.205
44.198
56.560
64.561
85.306
88.297
121.923
EXIT OPPORTUNITY
Price/Earnings ratio (P/E) at exit:
Share value
Company value
INVESTORS RETURN ON INVESTMENT (ROI) with OR =
Yield
n/a
2.502
12.082
ROI
n/a
1
3
Venture Case?
n/a
No
No
Budget
10-12-2010
40% :
22.624
6
No
(OR = Ownership Ratio)
34.122
10
No
48.769
14
Yes
Green Gadgets A/S
Assets Liabilities
Budget on Assets & Liabilities / Aktiver & Passiver
Budget
kilo DKK
ASSETS
IPR
Production tools
Other initial investments
Debtors
Cash
Other
ASSETS
2012
0
405
188
0
1.356
0
1.948
2013
0
1.566
125
0
1.656
0
3.347
2014
0
1.107
63
0
5.852
0
7.021
2015
0
648
0
0
12.362
0
13.010
2016
0
1.134
0
0
20.745
0
21.879
2017
0
540
0
0
33.626
0
34.166
LIABILITIES
Loan
Creditors
Other
Equity
LIABILITIES
2012
0
0
0
1.948
1.948
2013
0
0
0
3.347
3.347
2014
0
0
0
7.021
7.021
2015
0
0
0
13.010
13.010
2016
0
0
0
21.879
21.879
2017
0
0
0
34.166
34.166
10-12-2010
Green Gadgets A/S
Assets and Liabilities, quarterly
Assets and Liabilities, quarterly
kilo DKK
Opening
ASSETS
IPR
Production tools
Other initial investments
Debtors
Cash
Other
ASSETS Total
LIABILITIES
Loan
Creditors
Other
Equity
LIABILITIES Total
2012
1. Qt
2. Qt
3. Qt
2013
1. Qt
4. Qt
2. Qt
3. Qt
4. Qt
2014
1. Qt
2. Qt
3. Qt
2015
1. Qt
4. Qt
2. Qt
3. Qt
4. Qt
2016
1. Qt
2. Qt
3. Qt
4. Qt
2017
1. Qt
2. Qt
3. Qt
4. Qt
500
0
101
47
0
1.650
0
1.798
0
101
47
0
800
0
948
0
101
47
0
1.671
0
1.819
0
101
47
0
1.356
0
1.504
0
392
31
0
1.008
0
1.431
0
392
31
0
1.660
0
2.083
0
392
31
0
2.834
0
3.256
0
392
31
0
1.656
0
2.078
0
277
16
0
1.175
0
1.467
0
277
16
0
1.194
0
1.486
0
277
16
0
7.590
0
7.883
0
277
16
0
5.852
0
6.144
0
162
0
0
4.935
0
5.097
0
162
0
0
4.018
0
4.180
0
162
0
0
15.628
0
15.790
0
162
0
0
12.362
0
12.524
0
284
0
0
11.314
0
11.598
0
284
0
0
10.266
0
10.550
0
284
0
0
25.865
0
26.149
0
284
0
0
20.745
0
21.029
0
135
0
0
19.389
0
19.524
0
135
0
0
18.032
0
18.167
0
135
0
0
39.794
0
39.929
0
135
0
0
33.626
0
33.761
500
500
0
0
0
1.798
1.798
0
0
0
948
948
0
0
0
1.819
1.819
0
0
0
1.504
1.504
0
0
0
1.431
1.431
0
0
0
2.083
2.083
0
0
0
3.256
3.256
0
0
0
2.078
2.078
0
0
0
1.467
1.467
0
0
0
1.486
1.486
0
0
0
7.883
7.883
0
0
0
6.144
6.144
0
0
0
5.097
5.097
0
0
0
4.180
4.180
0
0
0
15.790
15.790
0
0
0
12.524
12.524
0
0
0
11.598
11.598
0
0
0
10.550
10.550
0
0
0
26.149
26.149
0
0
0
21.029
21.029
0
0
0
19.524
19.524
0
0
0
18.167
18.167
0
0
0
39.929
39.929
0
0
0
33.761
33.761
500
Equity capital
45.000
40.000
35.000
Kilo DKK
30.000
25.000
20.000
15.000
10.000
5.000
0
2012
2013
2014
2015
2016
2017
Year 2012 +
Budget
10-12-2010
Green Gadgets A/S
Profit and Loss quarterly
Cash flow quarterly
Budget on Profit and Loss, quarterly
kilo DKK
2012
1. Qt
TURN OVER
Sales
TURN OVER
COSTS
Production
Salaries
Rent
Storage
Transportation
Initial investments (costs)
Miscellaneous
Travels
2012
2. Qt
3. Qt
2013
1. Qt
4. Qt
2013
2. Qt
3. Qt
2014
1. Qt
4. Qt
2014
2. Qt
3. Qt
2015
1. Qt
4. Qt
2015
2. Qt
3. Qt
2016
1. Qt
4. Qt
2016
2. Qt
3. Qt
2017
1. Qt
4. Qt
2017
2. Qt
3. Qt
4. Qt
0
0
0
0
2.400
2.400
0
0
2.400
2.400
0
0
0
0
4.900
4.900
0
0
4.900
4.900
0
0
0
0
14.540
14.540
0
0
14.540
14.540
0
0
0
0
25.980
25.980
0
0
25.980
25.980
0
0
0
0
35.800
35.800
0
0
35.800
35.800
0
0
0
0
48.500
48.500
0
0
48.500
48.500
0
240
30
33
0
240
30
33
1.082
280
30
33
90
0
240
30
33
0
240
30
66
0
240
30
66
2.221
380
30
66
180
0
240
30
66
0
240
30
199
6.535
780
30
199
540
0
300
30
199
0
480
60
353
11.632
1.280
60
353
960
0
480
60
353
0
480
60
484
15.971
1.720
60
484
1.320
0
540
60
484
0
630
75
620
21.701
2.390
75
620
1.800
0
630
75
620
19
20
12
20
12
0
12
0
39
20
15
20
24
0
24
0
64
20
24
20
24
0
24
0
86
20
27
20
15.971
3.220
240
1.936
1.320
0
161
40
0
630
75
620
12
0
11.632
2.720
240
1.412
960
0
136
40
0
480
60
484
12
0
6.535
1.560
120
796
540
0
78
40
0
480
60
353
12
0
2.221
1.100
120
264
180
0
55
40
0
240
30
199
14
0
1.082
1.000
120
132
90
280
50
0
32
0
32
0
120
33
32
33
21.701
4.280
300
2.480
1.800
0
214
66
140
140
12
12
(In initial investm.)
COSTS
455
455
1.529
315
2.754
348
348
2.916
368
3.980
481
481
8.143
564
9.669
917
917
14.369
937
17.140
1.048
1.048
19.661
1.131
22.888
1.357
1.357
26.738
1.390
30.841
EBITDA
-455
-455
871
-315
-354
-348
-348
1.984
-368
920
-481
-481
6.397
-564
4.871
-917
-917
11.611
-937
8.840
-1.048
-1.048
16.139
-1.131
12.912
-1.357
-1.357
21.762
-1.390
17.659
PROFIT MARGIN
n/a
n/a
Depreciations
EARNINGS BEFORE TAX
36% n/a
-15% n/a
n/a
40% n/a
19% n/a
n/a
44% n/a
33% n/a
n/a
45% n/a
34% n/a
n/a
45% n/a
36% n/a
n/a
45% n/a
36%
49
49
49
49
198
130
130
130
130
522
130
130
130
130
522
130
130
130
130
522
149
149
149
149
594
149
149
149
149
594
-504
-504
821
-364
-552
-478
-478
1.853
-498
398
-611
-611
6.266
-694
4.349
-1.047
-1.047
11.480
-1.067
8.318
-1.197
-1.197
15.991
-1.280
12.318
-1.505
-1.505
21.613
-1.538
17.065
Cash flow
kilo DKK
2012
1. Qt
Opening
2012
2. Qt
3. Qt
2013
2. Qt
3. Qt
2014
1. Qt
4. Qt
2014
2. Qt
3. Qt
2015
1. Qt
4. Qt
2015
2. Qt
3. Qt
2016
1. Qt
4. Qt
2016
2. Qt
3. Qt
2017
1. Qt
4. Qt
2017
2. Qt
3. Qt
4. Qt
0
0
2.400
0
2.400
0
0
4.900
0
4.900
0
0
14.540
0
14.540
0
0
25.980
0
25.980
0
0
35.800
0
35.800
0
0
48.500
0
48.500
CASH OUT
From costs (above)
455
455
1.529
315
2.754
348
348
2.916
368
3.980
481
481
8.143
564
9.669
917
917
14.369
937
17.140
1.048
1.048
19.661
1.131
22.888
1.357
1.357
26.738
1.390
30.841
270
125
270
125
810
810
1.620
0
0
540
540
1.080
0
0
0
0
0
0
1.175
1.175
2.329
2.329
3.449
3.449
4.778
4.778
850
850
1.529
315
3.544
348
348
3.726
1.178
5.600
481
481
8.143
1.739
10.844
917
917
14.369
3.266
19.469
1.048
1.048
20.201
5.120
27.417
1.357
1.357
26.738
6.168
35.619
-850
-850
871
-315
-1.144
-348
-348
1.174
-1.178
-700
-481
-481
6.397
-1.739
3.696
-917
-917
11.611
-3.266
6.511
-1.048
-1.048
15.599
-5.120
8.383
-1.357
-1.357
21.762
-6.168
12.881
From investment in assets
Production tools (assets)
Initial investments (assets)
IPR (R&D, patents)
540
250
0
Tax
CASH OUT TOTAL
NET CASH FLOW before investors
From investor A
Budget
2013
1. Qt
4. Qt
CASH IN
From sales (above)
2.000
0
0
0
1.000
0
0
0
0
0
0
500
CASH IN
500
2.000
0
0
0
0
0
1.000
0
0
0
0
500
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Cash in Hand, end qrt
500
1.650
800
1.671
1.356
1.356
1.008
1.660
2.834
1.656
1.656
1.175
1.194
7.590
5.852
5.852
4.935
4.018
15.628
12.362
12.362
11.314
10.266
25.865
20.745
20.745
19.389
18.032
39.794
33.626
33.626
10-12-2010
Green Gadgets A/S
Product unit costs
Product unit costs
kilo DKK
Large pavillon
Item
Pieces
1. Arch small
0
2. Arch medium
24
3. Arch large
8
4. Cross joint
17
5. Base joint
4
6. Cloth small
0
7. Cloth large
1
8. Packaging
1
Product unit price
Price per vehicle (Bill of Materials = BOM)
Unit price
0,0016
0,0021
0,0026
0,0021
0,0032
0,0037
0,0084
0,0021
Small pavillon
Item
Pieces
Unit price
1. Arch small
24
0,0016
2. Arch medium
8
0,0021
3. Arch large
0
0,0026
0,0021
4. Cross joint
17
5. Base joint
4
0,0032
6. Cloth small
2
0,0037
7. Cloth large
0
0,0084
8. Packaging
1
0,0021
(Covers costs of big boxes distributed to all the units in the box)
Product unit price
Product unit price
0,000
0,051
0,021
0,036
0,013
0,000
0,008
0,002
0,131 (kilo DKK)
130,51 DKK
Product unit price
0,038
0,017
0,000
0,036
0,013
0,007
0,000
0,002
0,000
0,113 (kilo DKK)
112,62 DKK
There is no distinction based on production quantity, because
we always need a large number of products produced.
Budget
10-12-2010
Green Gadgets A/S
Initial investments
Initial investments / Etableringsinvesteringer
Production tools / Produktionsmateriel
kilo DKK
kilo DKK
Location
Deposits
Remodelling
Other
Total
Costs
Assets
20
0
0
20
Production tools
0
Production
Tools
0
Item no.
1.
2.
3.
4.
5.
6.
Description
Extrusion tool
Extrusion tool
Extrusion tool
Extrusion tool
Casting mould
Casting mould
Engineering Procurement Installing
0
10
0
10
0
10
0
10
0
250
0
250
0
0
0
0
0
0
0
0
540
Total
Total
0
Business equipment
Furniture
Computers
Software
Lawyer and auditor fees
Electric car
Total
0
540
0
540
Total production tools
540
This value is used as the default initial investment on a production unit
15
25
50
100
140
200
250
0
Marketing
Bureau
Materials
Internet
Travel
Total
0
20
50
50
120
0
0
Other categories
0
0
0
250
540
TOTAL INITIAL INVESTMENT
280
(Costs)
(Assets)
The total initial investments are distributed in the
Budget on Profit and Los / Cashflow as shown below
Initial
Initial
Production
Investments
Investments
Tools
(Costs)
(Assets)
(Assets)
2012 1. Qt.
140
125
2012 2. Qt.
140
125
Budget
Running in
0
0
0
0
0
0
270
270
10-12-2010
Green Gadgets A/S
Market Entry Scenario
Salesbudget
Market entry scenario / Salgsbudget
2012
1. Qt
Unit sale
Large pavillon
Roskilde festival
Denmark
England
Germany
Total
2. Qt
3. Qt
2013
1. Qt
4. Qt
2. Qt
3. Qt
7.000
0
Small pavillon
Roskilde festival
Denmark
England
Germany
Total
0
Cash out, production
0
0
3. Qt
7.000
0
0
0
0 14.000
0
0
0 43.000
0
0
0 78.000
0
0 109.000
0
0
0
0
8.200
0
0
0 12.900
0
0
0 15.500
0
0
2.000
2.500
15.000
4.000
0 23.500
6.535
0
0
0
2.000
2.500
8.400
0
4. Qt
7.000
11.000
112.000
16.000
0 146.000
2.000
2.500
11.000
0
11.632
0
0
0
15.971
0
0
0
21.701
2.400
0
0
0
4.900
0
0
0
14.540
0
0
0
25.980
0
0
0
35.800
0
0
0
48.500
0
0
0
0
4.900
0
0
0
14.540
0
0
0
25.980
0
0
0
35.800
0
0
0
48.500
0
0
0
0
3. Qt
2.400
100% Creditors paied due
0
2. Qt
7.000
11.000
91.000
0
0
2.221
0
2017
1. Qt
4. Qt
0
0
0
0
3. Qt
0
0
0
0
2. Qt
7.000
11.000
60.000
2.000
2.000
4.200
3.500
2016
1. Qt
4. Qt
0
Ingoing cash, sales
0
0
3. Qt
Cash in, sales
Deptors, paying 1 qt. late
1.082
0
2. Qt
7.000
9.000
27.000
2.000
1.500
1.500
2015
1. Qt
4. Qt
Registered sales
100% Paid due time (all sales are cash sales, no period deferment)
0
2. Qt
7.000
7.000
1.500
0
2014
1. Qt
4. Qt
2.400
0
0
0
4.900
0
0
0
14.540
0
0
0
25.980
0
0
0
35.800
0
0
0
48.500
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2.400
0
0
0
4.900
0
0
0
14.540
0
0
0
25.980
0
0
0
35.800
0
0
0
48.500
0
0
21.701
0
1.082
0
0
0
2.221
0
0
0
6.535
0
0
0
11.632
0
0
0
15.971
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Outgoing cash, production
0
0
1.082
0
0
0
2.221
0
0
0
6.535
0
0
0
11.632
0
0
0
15.971
0
0
0
21.701
0
Net cash flow from sales & production
0
0
1.318
0
0
0
2.679
0
0
0
8.005
0
0
0 14.348
0
0
0 19.829
0
0
0 26.799
0
Creditors(late payment to subcontr.)
End year:
2012
2013
2014
2015
2016
2017
Deptors
0
0
0
0
0
0
Creditors
0
0
0
0
0
0
Net outstanding
0
0
0
0
0
0
Since all sales are cash sales, there is never made
sales on credit, and there are no outstanding
Net cash flow from sales & production
Sales in numbers sold per quarter
30.000
160.000
140.000
25.000
Kilo DKK
Kilo DKK
120.000
100.000
80.000
60.000
20.000
15.000
10.000
40.000
5.000
20.000
0
0
2012
2013
2014
2015
2016
2017
2012
2013
2014
Year
Large pavillon
2015
2016
2017
Year
Small pavillon
Contribution margin
Budget
Large pavillon
Sales price
Unit costs
Contribution margin
Contribution ratio
kilo DKK
0,30 300,00 DKK
0,13 130,51 DKK
0,17 169,49 DKK
56%
Small pavillon
Sales price
Unit costs
Contribution margin
Contribution ratio
0,20 200,00 DKK
0,11 112,62 DKK
0,09 87,38 DKK
44%
10-12-2010
Green Gadgets A/S
Organisation
Salaries
Organisation / Lønninger
kilo DKK
Head count, Head Quarter
Key account manager
Engineering
Administration
Total
2012
1. Qt
2. Qt
3. Qt
2013
1. Qt
4. Qt
2. Qt
3. Qt
2014
1. Qt
4. Qt
2. Qt
3. Qt
2015
1. Qt
4. Qt
2. Qt
3. Qt
2016
1. Qt
4. Qt
2. Qt
3. Qt
2017
1. Qt
4. Qt
2. Qt
3. Qt
4. Qt
1
0
1
2
1
0
1
2
1
0
1
2
1
0
1
2
1
0
1
2
1
0
1
2
1
0
1
2
1
0
1
2
1
0
1
2
1
0
1
2
1
0
1
2
1
0
1
2
2
0
2
4
2
0
2
4
2
0
2
4
2
0
2
4
2
0
2
4
2
0
2
4
2
0
2
4
2
0
2
4
2
1
2
5
2
1
2
5
2
1
2
5
2
1
2
5
1
0
1
1
0
1
1
20
21
1
0
1
1
0
1
1
0
1
2
40
42
1
0
1
1
0
1
1
0
1
6
120
126
2
0
2
2
0
2
2
0
2
8
220
228
2
0
2
2
0
2
2
0
2
12
320
332
3
0
3
3
0
3
3
0
3
18
430
448
3
0
3
240
240
280
240
240
240
380
240
240
240
780
300
480
480 1.280
480
480
480 1.720
540
630
630 2.390
630
Rent
30
30
30
30
30
30
30
30
30
30
30
30
60
60
60
60
75
Rent per employee per qt.
15 kilo DKK
Head count, volunteers and sales
Sales department/sales clerks
Volunteers
Total
CASH BURN on HEADS
Salaries
Per employee, incl. social expenditures
Key account manager
Sales dept.
Engineering
Volunteers
Administration
Budget
60
60
60
60
75
75
75
Per qt. Per month
90,0
30,0 kilo DKK
60,0
20,0 kilo DKK
90,0
30,0 kilo DKK
2,0
0,7 kilo DKK
90,0
30,0 kilo DKK
10-12-2010
Green Gadgets A/S
Depreciations
Depreciations / Afskrivninger / Anlægskartotek
kilo DKK
2012
Production tools
Value
Depreciation
Depreciated value
2013
Production tools
Value
Depreciation
Depreciated value
2014
Production tools
Value
Depreciation
Depreciated value
2015
Production tools
Value
Depreciation
Depreciated value
2016
Production tools
Value
Depreciation
Depreciated value
2017
Production tools
Value
Depreciation
Depreciated value
25%
2012
2013
2014
2015
2016
2017
540
135
405
405
135
270
270
135
135
135
135
0
0
0
0
0
0
0
2012
2013
2014
2015
2016
2017
1.620
324
1.296
1.296
324
972
972
324
648
648
324
324
324
324
0
2013
2014
2015
2016
2017
0
0
0
0
0
0
0
0
0
0
0
0
2014
2015
2016
2017
0
0
0
0
0
0
0
0
0
2015
2016
2017
1.080
270
810
810
270
540
2016
2017
20%
2012
25%
2012
2013
25%
2012
2013
2014
25%
2012
2013
2014
2015
0
0
0
25%
Production tools, summary
2012
135
405
2013
459
1.566
2014
459
1.107
2015
459
648
2016
594
1.134
2017
594
540
25%
250
63
188
188
63
125
125
63
63
63
63
0
0
0
0
0
0
0
25%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2012
198
593
2013
522
1.691
2014
522
1.170
2015
522
648
2016
594
1.134
2017
594
540
Depreciation
Total depreciated value
Initial investments
Value end year
Depreciation
Depr. Value
IPR
Value end year
Depreciation
Depr. Value
DEPRECIATIONS SUMMARY
Depreciation
Depreciated value
Budget
10-12-2010
Green Gadgets A/S