Financial Assumptions and Projections
The cost of starting up the business (Fixed Costs) and labour costs are estimated to be around $3200 (First 14 Day Start-Up. This is relatively low as this is an online business and does not need rental of a space.)
Our calculated materials cost will be around $6.75 per unit made. Our products will be marketed at $40, to cover the running cost and to profit for future business expansion, this is not too expensive for the consumer.
Our projected profit after 14 days of trading, will be around $1200 with 140 units sold. We aim to have sold 4000 units within 1 year and 10,000 the following year.
The fixed costs per week is currently $1682.5 and will increase as demand increases. We are going to need to hire 2 staff, though extra staff may be required when sales increase.
Marketing
We will be marketing our product on a website while also advertising on social media platforms, which means it will be cost free. Having our advertisement online, we are also able to analyze and target our advertisements to our specified audiences.
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Here is our Prototype video advertisement.
Competitors and KPIs
As this is an new product on the market, there are very few similar products on the current market. Clipsal by Schneider Electric, an Australian based business, specializes in selling electronic smart home accessories and other electrical home products. Although this is a big competitor, we believe the uniqueness of our product, will make them less of a direct competitor. WeMo/ Belkin have a big share in the smart home devices market, they sell smart lights, security camera and lots of phone accessories. Compared to other similar products on the market they are slightly more expensive. Our products are part of the home automation category, our difference is the affordability and the new design of our product.
Arlec an Australian electrical business sells retractable cables and other electrical goods. Their pricing is fairly low compared to our other competitors, which mean we will have to differentiate ourselves with the uniqueness of our product to get customers. Our pricing is not too high compared to Arlec.
Their websites: www.clipsal.com
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Our 3 main KPIs we will focus on is number of customer complaints, net profit and number of sales. Since our customer satisfaction is essential for future sales.
Net profit and the number of sales are linked, since the net profit is partially dependent on the amount we sell in a specified period of time. If our net profit and number of sales are reaching our exceeding our goals, this will help for future business expansion.