Investment
The investment that will be made for edifying this mobile app made especially for visually
impaired people will be $40,000 CAD. The investors of the company will consist of Shareholders
or the owners of the company which will be $25,000 CAD, Angel investors investing
approximately $10,000 CAD, and Start-up accelerators costing $15,000 CAD.
Financials
We have represented the sources of financing which are in the form of share capital, bo
owings
in the forms of loans acquired from banks and financial institutions, and other sources of finance
which will be from the directors and promoter of the company. The total sources of finance
equired for starting this mobile app for the visually impaired are $40,000 CAD.
Further, the application of funds will be $30,000 CAD and will be in the form of repayment of the
loan to the amount of $20,000 CAD and administrative expenses to the amount of $10,000 CAD.
The loan repayment of $20,000 CAD will be done within a period of 3 years and the administrative
expenses will be written off by paying the salary of employees etc.
Sources of funds XXXXXXXXXXCAD
Share capital $20,000
Bo
owings
Crowdfunding
$10,000
Other sources $10,000
Total $90,000 CAD
Application of funds XXXXXXXXXXCAD
Loan repayment $20,000
Administrative expense $10,000
Cost of Subscription
The app can be downloaded free of cost but for availing various in-built features the visually
impaired clients needs to subscribe to it. There will be three subscription options available which
will be for 3 months; 6 months and 1 year. The prices of each of these subscriptions will be 3-
months$25/6-months$50/1-year$95 respectively.
Customer growth rate
The target customer will be 250 visually impaired clients in Year 1 followed by a 10% growth in
the 2nd year, 15% growth in the 3rd, 18% in the 4th, and 25% in the 5th year.
Estimated Profits & Loss for 5 years:
Profit & Loss A/c
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Sales $2,50,000 $2,75,000 $3,16,250 $3,73,175 $4,66,469
Expenses $1,50,000 $1,57,500 $1,6,525 $1,85,378 $2,13,184
Profits $1,00,000 $1,17,500 $1,47,725 $1,87,798 $2,53,285
The estimated profits for the company in Year 5 will be $2,53,285. Further, the loan to the amount
of $20,000 will be repaid within Year 1 by the company as the profits in this year will be $100000.
Thus, My Vision’s profitability growth rate will be 153.29%. This is huge growth for the company.
Further, these funds can be utilized by the company for expansion in other countries of the world.
Variable Cost
Materials
Monthly Rental
Taxes : business and employees taxes
Salary/Wages
Utility Expenses
Electric, Water, Waste
Insurance
Benefits and compensation
Cleaning and Maintenance
Communication Bills
Telephone, Wifi
CONTRIBUTION INCOME STATEMENT
Sales Revenue
Less: Variable Costs
Contribution Margin
(Sales Revenue-Variable Costs)
Less: Fixed Costs
Net Operating Income
(Contribution Margin-Fixed Costs)
CALCULATE CONTRIBUTION MARGIN TO BREAK-EVEN
Per unit price
Less: Variable Costs
Contribution Margin
(Sales Revenue-Variable Costs)
Less: Fixed Costs
Calculate
eak even point (Fixed costs/CM per unit)
CONTRIBUTION INCOME STATEMENT
Sales Revenue
Less: Variable Cost
Contribution Margin
(Sales Revenue-Variable Costs)
Less: Fixed Costs
Net Operating Income
(Contribution Margin-Fixed Costs)
CONTRIBUTION INCOME STATEMENT
Sales Revenue
Less: Variable Cost
Contribution Margin
(Sales Revenue-Variable Costs)
Less: Fixed Costs
Net Operating Income per unit
(Contribution Margin-Fixed Costs)
PROJECTION CONTRIBUTION INCOME STATEMENT
Sales
Less: Variable Cost
Contribution Margin
(Sales Revenue-Variable Costs)
Less: Fixed Costs
Net Operating Income
(Contribution Margin-Fixed Costs)
STRATEGIC DECISION MAKING
Sales
Less: Variable Cost
Contribution Margin
(Sales Revenue-Variable Costs)
Less: Fixed Costs
XXXXXXXXXXAdd: $3,000 advertisement cost
Net Operating Income
(Contribution Margin-Fixed Costs)
CM RATIO
Sales Price (per unit)
Less: Variable Costs
Contribution Margin
(Sales Revenue-Variable Costs)
Contribution Margin Ration
Or CM Ratio
CM Per Unit
Sales Price per unit
Calculate
eak even point (Fixed costs/CM per unit)
BREAK EVEN POINT SALES
Break even sales $ (using
eak even point in units) Break even units X Sales per
unit
Break even sales $ (using
eak even point in units)
Break even sales $ (using CM Ration) FC/CM RATIO
Break even sales $ (using CM Ration)
Break even sales $ (using CM Ration)