essay about 85c Bakery
5-6 pages about the media plan.
And 2-3 CRM Strategy
And the points and sample included in the slides that I attached.
Capstone Course
Project “85c Bakery Café”
Business Plan
Zihan Kong
1
1
Agenda
Business Plan
Executive Summary
Operation
Marketing Analysis
Marketing Plan
Financial Plan
2
2
85C
Bakery Cafe
Plan:
Expand new store in NYC and offering new meal plan and food delivery service in 2021
In 2022-2023, expand new service to all US stores.
Products: Beverage & bakery
Service: Food delivery
Location:
New York City in 2021
All US in 2022 and 2023
Price: Affordable
Target: Young adults, busy workers, college student.
Mission: “offering various, high quality bakery and beverage with affordable price. Give convenient lifestyle and warm welcoming service.”
3
EXECUTIVE SUMMARY
85 bakery has reputation in the US market, and it has plan to expand its brand awareness into East Coast. Expanding 85c bakery into NYC in 2021 while offering meal plan and food delivery service. And launching new service all over the US in next two year.
New Yorkers have the longest average working week among the 30 major cities in the United States.
Satisfy the demand of healthy and fast food for young student and professionals.
Distribute though 85c bakery store and website, as well meal plan are daily and monthly with membership and promotions .
Multichannel campaign strategy and cooperation strategy
Stable capacity will be funded by headquarter
Obtain positive increase in New York store
Sale revenue increase 10% end of 2023, reach 0.2 billion
4
Problem
New Yorkers More Crowed
People cannot have enough time to enjoy their breakfast or lunch.
Many people, especially young people, or young mothers, don’t know how to match nutrition
Waste time in process of ordering
5
We offer customized (DIY) meal plans as weekly and monthly, also we hire professional nutritionist to design meals.
Affordable price with high quality and nutrition
We offer delivery service as weekly, or monthly depend on your meal plan.
Own storage warehouse and delivery system of raw materials to ensure every materials are fresh and non-reused
Offer both instore and online service that save people ordering time
Solution & Value Proposition
Product Development
In 2021, The company plan to open a new store in NYC and offer meal plan with food delivery service both online and instore
In 2022 and 2023 launch the new service all US
Manufacturing & Sourcing (Supply Chain)
Every raw material will be offered by our own warehouse directly from industry.
The raw materials will be processed in the store
Sale directly to customers
Pricing:
Bakery: $3-7
Drinks: $2.75 to 4.25
6
Delivery fee
Weekly plan – $7.99/week ($1.14 per day)
Monthly plan – $17.99/month ($0.6 per day)
Membership
$2.99/Week
$9.99/Month
Operating Model
7
Inventory Management
Order
Material list
Production
Quality Assurance
Safe production
Partially Prepared Products/
Finished product
Customer feedback
Instore
Shipment
ADMINISTRATIVE STRUCTURE
Location:
Online and offline
Legal Formation:
A Branch store of 85C Bakery
Intellectual Property (patents, trademarks, copyrights, etc.)
85C Bakery ,
8
Strategic Partners:
Nutritionist:
Joel Fuhrman
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Management:
9
Wu Cheng-Hsueh: CEO
He graduated from National Taiwan University of Science & Technology with a master’s degree. Currently, He has more than 20 years of management experience and talent training. He is responsible for the operation, decision-making and development of the whole group.
Ricky Avello: Supervisor
He is Success-driven sales and account management professional with more than 20y ears of expertise in multiple products. Bilingual/Fluent: English and Spanish. Self-directed salesperson with exceptional communication and management skills.
Bruce Zhang: Director in New York Store
He graduated from University of Warwick-Warwick Business School with Management and Organization Analysis, master’s degree. He is good at strategic business acumen focusing on how to make a successful business for foreign companies in China. helping Chinese enterprises going global
Organization Chart
10
85C Bakery Administrative Team
Meal Nutritionist Designer
Marketing
Production
Manager
R&D
Beth Warren MS RD CDN
Marissa Lopez
HR: Rhea Manansala
Production: Bjorn W
Connie Banning
YuLai Jin
Gonzalo Huerta
Marketing: Jillian Richman
Lexi Henkel
Logistics and Finance
Market Analysis of Bakery and Cafe Industry
11
Economy
Revenue for the Bakery Cafes industry has grown over the five years to 2020, $11.1 billion in 2020
Social
There are 8,920 Bakery Cafes businesses in the US as of 2020.
The number of businesses in the Bakery Cafes industry has grown 1.8% per year between 2015 – 2020.
Large Target market
Trend
A 2.8% growth of commercial bakery product consumption in the U.S.
Increasing health awareness
Political
Many regulations about business license, sanitation, customers’ rights and business contracts.
Trend:
25 % consumers visit bakery-cafés at least once a week, 54 % bakery-café consumers visit these locations more so for their food or a specific food product, and 25 % visit these locations more so for their beverages or a particular beverage.
Increasing health awareness will continue to impact consumer preferences.
Social
The United States has about 30% population aged between 15 and 40
11
Market Analysis of Food Delivery Service
Economy
Revenue in the Online Food Delivery segment is projected to reach $26 billion in 2020 , annual revenue growth rate of 5.1%.
The Largest service segment is Restaurant-to-Consumer Delivery market volume of $15 billion
Social
Most online food delivery users is 25-34 years old.
Increasing Food delivery companies upward of 3,000 cities and Serve 70% of the U.S. population.
People would like to save ordering time
Trend
In the digital world, the growth of internet users,
A projected market volume of $32 billion Sby 2024
In the Platform-to-Consumer Delivery segment, the number of users is expected to 69.9m by 2024 and growth to 30 billion by 2027
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Economy
Revenue in the Online Food Delivery segment is projected to reach $26 billion in 2020.
Revenue is expected to show an annual growth rate (CAGR 2020-2024) of 5.1%.
The market‘s largest segment is Restaurant-to-Consumer Delivery with a projected market volume of US$15 billion in 2020.
Social
In the year 2019 a share of 31.5% of online food delivery users is 25-34 years old.
Food delivery companies such as DoorDash, Uber Eats, Postmates and Grubhub serve upward of 3,000 cities, or more than 70% of the U.S. population.
People would like to save ordering time and eat out often, since they rarely have time to cook before or after work and commute.
Trend
A projected market volume of US$32 billion by 2024
In the digital world, ordering food from online has become a trend.
In the Platform-to-Consumer Delivery segment, the number of users is expected to amount to 69.9m by 2024.
The growth of internet users, change in lifestyles and increasing disposable incomes are some of the drivers of growth for the online food delivery
It is expected to grow over USD 30 billion by 2027
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85Cafe Market Analysis (PEST)
13
Political (New York)
Many regulations about business license, sanitation, customers’ rights and business contracts.
Political status is stable.
Following the NY employment law and many local(NY) laws, even taxes.
Economical
Great economy potential.
Economy growth positively.
NYC dominates the economy of New York state.
The sales of US market has 22% of global market with $0.12 billion
Net income is more than $32 million, and financial leverage is 1.18 in 2019
The US inflation rate in 2019 is 1.81%
Social
This is a densely populated area with small apartments for most people.
People would like to save time and get healthy food, since they rarely have time to cook before or after work and commute.
Large mix of immigrants who have brought a wide variety of cuisines, so the population is used to experimenting.
Trendy, styles conscious consumers.
There are 18 million population in NYC
Technology
More than 81% New Yorkers are internet users
Government has spent over 1 billion in New York’s technology.
Promotions on social media will be welcomed
Completed ordering and supply chain management and communications between stores will be easy with the current infrastructure available
13
Political
Many regulations requirement
Economical
Great economy potential.
Technology
More than 81% New Yorkers are internet users
Social
Huge target customer base
Political status is stable.
Following the NY employment law and many local(NY) laws, even taxes.
Economy growth positively.
Enough Capacity
The sales in US market has 22% of global market with $0.12 billion
Net income is more than $32 million, and financial leverage is 1.18 in 2019
Convenience and healthy life-style
Large mix of immigrants
Trendy, styles conscious consumers.
Government support development of technology.
Multiple Media publicity channels
Easy reach
SWOT
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Strength
Unique and Convenient Service
Opportune
Enough Capacity
Threat
High-Cost of Expansion
Innovative menu, differentiated product, continuous addition of new items and seasonal offerings
Nutritious Suggestion
Multiple Order Options
Low Brand Awareness in Eastern Coast
Limited Market Share
Low Social Media Influence
Shortage of skilled labor
Government continue to promote
Quickly Expansion
Quickly Service
Large Customer Base
Inflationary Pressure
Strong Competitive Pressure
Maintain High Quality
Weakness
Multiple Immigrants
Current Market Competitors – direct
15
Bakery & café store
Target market :
Both men and women
Ages of 25-44, 18-24 young adults, officers, college student
Middle income
Urban dwellers
Current Market Competitors – indirect
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Food Delivery App
Target Market
Both men and women
Age of 18-40, young adults, busy workers and college student
Less-dense suburban communities
Lower and middle income
Marketing Strategy
17
Differentiation
New ideas for varying product characteristics for various user segments
Promotions
Campaigns
Social media
Back-to-school
Competitive Advantage
Quality, 85c Bakery make sure to delivery the best quality products to their customers
Freshness, keep fresh from raw material to finished products,
Price, offer the reasonable and afford price in the market
Distribution, 85c bakery have good supply chain, product monitors, and already have 44 stores in US
Target market and customer profile
The company focus on the young adults who are college student and young workers
Urban Citizen
Trendy products
Price sensitive
Convenience life-style
Media savvy
Connie Banning
https://www.linkedin.com/in/conniebanning/
YuLai Jin
https://www.linkedin.com/in/yulai-jin-82bb825b/
Gonzalo Huerta
https://www.linkedin.com/in/gonzalohuertapastrychef/
Bjorn W
https://www.linkedin.com/in/bjorn-w-b706713/
Jillian Richman
https://www.linkedin.com/in/jillian-richman-92144b87/
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Branding
85 C Bakery Café
The coffee is finished and served to the customers, the temperature should be controlled at 85 degrees Celsius, which means that they take the enjoyment of the customers as their standard.
Red color represents fearlessness and youth.
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Start
Consideration Business
Ideas
Marketing Research
Consider new store location, how to launch new service and New Products
Hire and Training Employees
Advertising
Open New Store and Launch Service
Evaluation of operation and performance
Promotion and Campaign
Estimate Cost
Operation Model
Meet Goal
And Feedback
Improve Product and Service
Project Methodology
19
Business Model
B2C
Bundling: package related goods and services together.
Low price with high quality
Membership Policy
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SMART GOALs
Specific
Place order online on Apple and Android products via an App
Advocate, advertising and upload new products and promotions on Instagram and Twitter quarterly
Create new hashtag every month
Launch new product every 45 days
Measurable
Social media traffic level: Focusing on engagement such as conversation rate. Growing the followers on Instagram to 500,000 and Facebook to 1M by the end of 2023
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Achievable
Brand Awareness: Increase 200% brand awareness by the end of 2023
Relevant
Customer Experience/Service Satisfaction: improve user experience/customer service satisfaction by 15% every year (Metrics: Reviews, Twitter and ratings from Yelp, Instagram, Twitter and Website)
Increase sale revenue in 2020
Timely
Increase 10% sale revenue in 2023 in US market
Marketing Plan
Customer Analysis
22
Demographic Age 16-39,
Students or young professionals, working moms
Medium income and high income
Geographic US, City area
Psychographic Urban dwellers
Price-performance focused, taste-oriented but also price-sensitive
Healthy & organized lifestyle with busy schedule
Trend-chaser, interested in new “hit” food
Use-based Everyday food, quick breakfast or afternoon tea, daily drinks, cakes for leisure time
Benefit convenience, time-saving, high performance price ratio
Persona 1
23
Persona 2
24
Market Mix
Products
High product quality, cleanliness and sanitation
All bakery and beverage use quality ingredients, including gluten-free diet, high-fiber breads
Creating new product flavors
Meal plan as weekly or monthly
Delivery service
Presale:
Reasonable and afford price
Price lower than competitors
25
Place:
Concentrated in the business district on the west coast
Expand to downtown, Manhattan, New York
Online ordering system
Promotion:
Membership
Free samples of the tasty treats
Coupon
PR Package for business community or influencers
Gantt Chart
26
Main Activity
Sub Activity
Less Important Activity
Sales Projection
Average Price: $9/Order
27
Year 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Units Total Revenue
Unit Sold 1000000 1000000 1000000 1500000 1500000 1500000 2000000 2000000 1960000 2400000 2700000 2500000 21060000
Revenue 9000000 9000000 9000000 13500000 13500000 13500000 18000000 18000000 17640000 21600000 24300000 22500000 $189,540,000
Year 2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Units Total Revenue
Unit Sold 1000000 1000000 1000000 1500000 1500000 1500000 2000000 2000000 2566000 3000000 3200000 2900000 23166000
Revenue 9000000 9000000 9000000 13500000 13500000 13500000 18000000 18000000 23094000 27000000 28800000 26100000 $208,494,000
Year 3 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Units Total Revenue
Unit Sold 1100000 1100000 1100000 1650000 1650000 1650000 2200000 2200000 2822600 3300000 3520000 3190000 25482600
Revenue 9000000 9000000 9000000 13500000 13500000 13500000 18000000 18000000 23094000 27000000 28800000 26100000 $229,343,400
Personnel
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2021(Year 1) 2022(Year 2) 2023(Year 3)
Operating Cost: $ (30,000,000) $ (37,500,000) $ (47,500,000)
Advertising Cost $ (23,680,000) $ (20,200,000) $ (20,200,000)
OOH $ (13,500,000) $ (9,000,000) $ (9,000,000)
Event&Campaign $ (5,000,000) $ (5,000,000) $ (5,000,000)
Social Media $ (1,500,000) $ (2,000,000) $ (2,000,000)
Website $ (1,000,000) $ (1,000,000) $ (1,000,000)
Paid Search $ (2,500,000) $ (3,000,000) $ (3,000,000)
Email $ (180,000) $ (200,000) $ (200,000)
Employee Cost $ (40,500,000) $ (44,550,000) $ (50,625,000)
Equipment $ (9,000,000) $ (9,000,000) $ (9,000,000)
Customer Service Cost $ (1,000,000) $ (1,000,000) $ (1,000,000)
Depreciation 0 $ (800,000) $ (800,000)
R&D Expense $ (5,000,000) $ (5,000,000) $ (5,000,000)
Average employee cost is $2750/ month
Straight line method for depreciation
Packaging cost including in COGS
28
Media Plan
29
Year 1-3 Time Platform Activity Goal
Social Media Jan-Dec (continuous) Instagram
Facebook
Tiktok
Twitter
85c Bakery App Upload new products
Promotion
Campaigns
Short video
Product Menu Increase 200% brand awareness
Increase social media traffic level
Website Jan, Apr, July, Oct 85c Bakery Website
Gifts Upload new products
Seasonal products, events,
Adverting
Menu
Customer service Customer Experience/Service Satisfaction
Increase Revenue
Paid Search Aug-Dec Google Pay-Per-Click Ad
Banner Ad Launch new product
Campaigns
Promotions
Increase brand awareness
Increase campaign engagement
Increase conversion Rate
Email Jan-Dec 85c Bakery official Email Launch new product
Campaigns
Promotions
Thanks/Birthday/Holiday coupon
Customer Feedback Increase brand awareness
Increase customer satisfaction
Improve innovation
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Media Plan
30
Year 1 Reach $/Reach Conversion Customers
Social Media 70,000,000 $0.10 0.70% 490000
Website 40,000,000 $0.05 1.95% 780000
Paid Search 50,000,000 $0.04 1.95% 975000
Email 50,000,000 $0.13 3.19% 1595000
Total Sale: 3840000
Year 2 Reach $/Reach Conversion Customers
Social Media 100,000,000 $0.10 0.70% 700000
Website 60,000,000 $0.05 1.95% 1170000
Paid Search 90,000,000 $0.04 1.95% 1755000
Email 90,000,000 $0.13 3.19% 2871000
Total Sale 6496000
Year 3 Reach $/Reach Conversion Customers
Social Media 110,000,000 $0.10 0.70% 770000
Website 60,000,000 $0.05 1.95% 1170000
Paid Search 100,000,000 $0.04 1.95% 1950000
Email 100,000,000 $0.13 3.19% 3190000
Total Sale: 7080000
85c Bakery CRM
85c Bakery Sweet Reward
The 85c App
Scan upon checkout — Get points each time
Choose your reward – Pick your favorites
Redeem in Store – Your rewards, your way
Shipping Membership
Monthly
Weekly
1. Select your shipping plan
2. Free shipping
31
Customer Service Center
Contact US
Website page
Social Media Platforms
Phone number
Profit & Loss Statement
32
Except any stocks/bunds/equity/inflation
Financial Analysis
33
2019 2020 2021 2022 2023
Revenue $ 180,049,003 $ 146,230,893 $ 189,540,000 $ 208,494,000 $ 229,343,400
Net Income $ 7,258,608 $ 2,448,868 $ 8,487,220 $ 11,793,292 $ 11,042,809
Growth Rate -19% 30% 10% 10%
Profit Margin Ratio 4% 2% 4% 6% 5%
CAGR 8%
NPV $ 31,361,783
KPI
34
Short-term
Brand awareness increase 80%
Long-term
Brand awareness increase 150%
Increase social media engagement
Instagram follower increase to 500,000
Twitter follower increase to 500,000
Facebook follower increase to 1M
Revenue growth 10%
Obtain positive income
Increase customer satisfactions
Reading 13 Anatomy of a Business Plan – Linda Pinson – 7th. Edition – Chapter 11: Financing your business
According to the article, ask funding is an important part to implement the business plan. First you should consider about your situation about your plan and make decision to choose your funding options. Moreover, business should think about how much should plan need that the most optimistic. And remember to show that your industry has good potential for profit. You will also have to present a strong case for the ability to manage your company through the period of debt.
Key concepts that you got from the reading:
I think that I need to consider about the 85C bakery’s financial situation. Is it need to loan funds or where should I earn investment. After research I know that 85c bakery financial situation is stable and have enough capacity to support expand service.
Insights from this reading to your Business Plan (What and how can you apply this reading to your Business Plan?)
After reading article, I learn that the more approach to have more investment. For the 85c bakery I would like to use equity financing because 85c bakery is high percentage of debt to equity
35
Thank You
36
reference
https://www.85cafe.com/file/original/yearreport/merged_compressed
https://www.statista.com/statistics/270000/age-distribution-in-the-united-states/#:~:text=Age%20distribution%20in%20the%20United%20States%202019&text=In%202019%2C%20about%2018.55%20percent,over%2065%20years%20of%20age.
https://www.masterfoxconsultinggroup.com/reports/product/online-food-delivery-market
https://www.ibisworld.com/united-states/market-research-reports/bakery-cafes-industry/
https://www.statista.com/outlook/374/109/online-food-delivery/united-states
37
Reading 9-01 Anatomy of a Business Plan – Linda Pinson – 7th. Edition – Chapter 6 Part III: Financial Documents
Executive Summary of the Reading
There are four sections of financial document. It shows the physical setup of your operation and your plans for finding and reaching your customers. And Well-executed financial statements will provide you with the means to look realistically at your business in terms of profitability.
2. Key concepts that you got from the reading:
I know that he can understand the development level of a company, whether it keeps good development, whether it is profitable, and the future enterprise specifications. Through him, I can make my business plan and improve the return on investment as much as possible
3. Insights from this reading to your Business Plan (What and how can you apply this reading to your Business Plan?)
I could analyze the company’s financial document to get the status of the 85c Bakery. And it 4 type statements that help me to allocate the budget and business plan.
38
1
BUSINESS PLAN PROPOSAL
KINE PAULSEN
CAPSTONE
SPRING 201
4
Date last updated: Thursday, May 8, 20
14
New York University School of Continuing Studies – Integrated Marketing Program
2
Table of Contents
EXECUTIVE SUMMARY …………………………………………………………………………………………….
3
BUSINESS …………………………………………………………………………………………………………………. 4
Concept ……………………………………………………………………………………………………………………………………………….. 4
Target audience …………………………………………………………………………………………………………………………………….
5
Value Proposition …………………………………………………………………………………………………………………………………. 5
Project Management and Milestones …………………………………………………………………………………………………… 5
Legal structure ………………………………………………………………………………………………………………………………………
6
Exit Strategy …………………………………………………………………………………………………………………………………………. 6
TEAM …………………………………………………………………………………………………………………………
7
Organization chart ……………………………………………………………………………………………………………………………….. 7
Administrative Team ……………………………………………………………………………………………………………………………. 7
Strategic partners ………………………………………………………………………………………………………………………………….
8
Advisory board ……………………………………………………………………………………………………………………………………
10
OPERATIONS …………………………………………………………………………………………………………..
11
Location ……………………………………………………………………………………………………………………………………………… 11
Equipment and supplies ……………………………………………………………………………………………………………………… 11
Personnel …………………………………………………………………………………………………………………………………………….
12
Product formula and manufacturing …………………………………………………………………………………………………..
16
INDUSTRY ANALYSIS ……………………………………………………………………………………………..
20
Industry Overview ……………………………………………………………………………………………………………………………… 20
PEST …………………………………………………………………………………………………………………………………………………….
21
Porter’s Five Forces …………………………………………………………………………………………………………………………… 21
COMPETITOR ANALYSIS ………………………………………………………………………………………..
23
MARKET ANALYSIS …………………………………………………………………………………………………
25
Market Overview ……………………………………………………………………………………………………………………………….. 25
Size of Potential market ……………………………………………………………………………………………………………………..
26
SWOT …………………………………………………………………………………………………………………………………………………
27
MARKETING PLAN ………………………………………………………………………………………………….
28
Overview ……………………………………………………………………………………………………………………………………………. 28
Marketing Objectives …………………………………………………………………………………………………………………………. 28
Brand Positioning ……………………………………………………………………………………………………………………………….. 28
Marketing Acquisition ………………………………………………………………………………………………………………………… 2
9
Marketing Budget ………………………………………………………………………………………………………………………………..
37
FINANCIALS ……………………………………………………………………………………………………………
38
Sales Forecast …………………………………………………………………………………………………………………………………….. 38
Estimated Profit & Loss Statement …………………………………………………………………………………………………….
39
Projected Cash-Flow Statement …………………………………………………………………………………………………………
46
Break Even …………………………………………………………………………………………………………………………………………..
49
Sources of Cash …………………………………………………………………………………………………………………………………. 49
Net Present Value Calculation
…………………………………………………………………………………………………………..
50
Conservative and Optimistic Cases ………………………………………………………………………………………………….. 50
Risk factors ………………………………………………………………………………………………………………………………………….
51
Conclusion ……………………………………………………………………………………………………………….. 51
SUPPORTING DOCUMENTS …………………………………………………………………………………..
52
3
EXECUTIVE SUMMARY
In 2014, everyone wants to customize and slightly change the “stuff” they buy, be it socks or
water bottles1. Through the upswing of the 1980s invention of 3D printers, personalization on a larger
scale is now possible. Companies no longer have to pay large mold fees to produce a prototype or
order high quantities of an unsold product to keep costs low. Instead organizations can get feedback
from the customer during the ordering process, and then produce items with a proven demand.
Although 3D printing was invented almost thirty years ago, it was not until half a decade ago
that it started receiving commercial attention2. Unlike the normal ink printers that we all have in our
homes and offices, 3D-printers can use a variety of materials, including plastic, metals and even food3.
When a 3D model file is sent to the printer, the printer will gradually build material up, creating a three-
dimensional object, for examples see supporting document #1. Today there are an increasing number of
3D printer manufacturers and 3D modeling education programs.
3D printing has the potential to solve many challenges faced in a wide number of industries,
including the eyewear industry. One of the ongoing issues in this industry, like other retail businesses, is
the high inventory required to meet people’s needs4. The glasses might fit, but the color might be slightly
off the person’s preference. As a result, each year eyewear stores are left with a high inventory of
unsold glasses and sunglasses, and not all eyewear designers will purchase these frames back.
INGRI:DAHL was founded by Norwegian twins Kine and Einy Paulsen in Los Angeles in 2011.
Through bootstrap investments the company designed and developed designer 3D glasses suitable for
the passive 3D technology found in many movie theaters and TVs. After many requests from customers,
the company also launched a line of sunglasses, a line of interchangeable 3D and sunglasses, and recently,
a line of anaglyph 3D glasses. Now the company sees an opportunity to move into 3D printed eyewear.
1 http://www.huffingtonpost.com/annie-jie-xu/7-ecommerce-trends-small-_1_b_4557164.html
2 http://www.pcmag.com/slideshow_viewer/0,3253,l=293816&a=289174&po=1,00.asp
3 http://www.3dsystems.com/press-releases/3d-systems-sweetens-its-offering-new-chefjettm-3d-printer-
series
4 IBIS World Report
4
BUSINESS
Concept
INGRI:DAHL aim to launch a line of high-quality 3D printed eyewear that can be customized
through an online experience on ingridahl.com in January 2015. All the materials used are 100% made in
the U.S. and parts of the proceeds from this collection will go to the charity, Girls Effect. Girls Effect
have multiple education efforts for women in the third-world countries, but INGRI:DAHL will especially
support financial education classes.
The customer experience will begin on ingridahl.com, where there will be 15 different designs
to choose from. After picking one of the designs, the customer will be given the opportunity to change
the color, the size, and patterns. One advantage of this technology is that INGRI:DAHL can offer
virtually unlimited combinations.
In order to combat potential returns, there will be extensive size guides on the website and
customers can try on the glasses through a virtual fitting room. Once the order has been submitted,
INGRI:DAHL will send the design to the 3D printer and order sunglass lenses from the optical store.
INGRI:DAHL
customs
5
The entire production will find place in the US (see illustration below).
Target audience
INGRI:DAHL will launch this new line in Southern California, especially focused on women and
men aged 18-30 years. The target audience interests expand to fashion, technology and trends. From
past experience as well as observations from industry experts, INGRI:DAHL will specially target women
and men with “narrower face shapes” and specific personalization interests, such as team colors or
slogans, because of the unfilled demand5. The company will also target customers with specific, more
unusual, color preferences.
Value Proposition
Through a line of customized 3D-printed sunglasses INGRI:DAHL offers high-end, personalized
comfort for less. The products address the factors that most customers look for when buying
sunglasses: fit, uniqueness and style6. The frames will be printed using PLA plastic filament, because of
this material’s resistance to wear and tear. The lenses are made of mineral, because of it’s high optical
quality and scratch resistance. The virtual online experience will enable the customer to not only take
part of the design process, but also know how he or she will wear it before buying the product.
Project Management and Milestones
The company plans to launch this new product line with an extension of the website and 15 new models
finished before January 2015. If the sunglasses line is successful, the company will file for an optical
dispensers license and expand into prescription glasses. The following table demonstrates project
management and milestones:
5 Lasse Thuestad, licensed optometrist and owner of Synsenteret Opticians
6 The Vision Council Report 2011 Questionnaire about Consumer Preferences
Designs made by
in-house 3D
designer
Order received Designs sent to
3D printer
and optical store
Supplies arrive at
we work
Product is
assembled and
shipped out to
customer
6
Before Launch Year 1 Year 2
Year 3
Oct: Hire web team
Nov: Hire assembly
and logistics person.
Dec: Finish website
Jan: Launch party in
LA at the we-inspire
showroom
Feb: Evaluation of
operations and
performance, update
procedures and
website accordingly
Mar: Surpass
$10,000 in sales
June: Evaluate and
update website
Oct: Employee
evaluations
Dec: Have at least 10
showroom
Jan: Negotiate bulk
discounts for frames
and lenses
Feb: Evaluation of
operations and
performance, update
procedures and
website accordingly
June: Introduce
more add-on features
(nose pads etc)
July: Have more than
30 showrooms
Nov: Reach break-
even point
Dec: Reach 200,000
visits on ingridahl.com
Jan: Evaluation of
operations and
performance, update
procedures and
website accordingly
Feb: Obtain optical
license for dispensing
prescription glasses
June: Celebrate
INGRI:DAHL’s 5 year
anniversary
Nov: Launch
INGRI:DAHL
customized 3D
printed prescription
glasses.
Dec: Report first
profitable year
Legal structure
This will be an subdivision of IngriOlsen Inc. (INGRI:DAHL).
Exit Strategy
The subdivision fits into INGRI:DAHL’s overall exit strategy to sell to a competitor. In case this
division doesn’t meet financial expectations, the division will be liquidated to avoid negative impact on
the rest of the company.
7
TEAM
Organization chart
The new subdivision of INGRI:DAHL will be reporting directly to the INGRI:DAHL
administration. The organization chart below demonstrates the relationships.
Administrative
Team
Einy Paulsen is co-founder of INGRI:DAHL. Einy graduated from University of
Southern California with a business degree and emphasis on Finance in 2010 and with a
Masters of Accounting in 2011. She has a diverse experience with a background in sales,
marketing and accounting. Einy is a Certified Public Accountant. Her responsibilities will include
accounting and legal.
Haavard Hana is one of the partners in INGRI:DAHL. Haavard graduated from
University of Stavanger with an Engineer degree with a focus on Media Engineering in 1995
and continued at Musicians Institute in 1996. He has a diverse background in music, film and
product development, and received multiple awards for his work. His responsibilities will
include visuals, video and design.
INGRI:DAHL
Adminstrative
Team
Website
Experience
Web
Developer
3D Graphic
Designer
Marketing and
Logistics
Marketing Assembly
8
Kine Paulsen is Co-Founder of INGRI:DAHL. She was born and raised in Norway before
she moved to Spain and later the US. Kine graduated from University of Southern California with
a business degree and emphasis on Finance in May 2011. After her bachelor, Kine continued her
education at New York University with a Masters in Integrated Marketing with a focus on Digital
Marketing. She has a diverse experience with a background in sales, marketing online and offline,
web development and investment management. Her responsibilities include Operations, E-commerce
and Design.
Strategic partners
INGRI:DAHL aims to build strategic partnerships with the organizations listed below. For the
3D printing services and optometrists listed below INGRI:DAHL will offer promotion in return for
advice. INGRI:DAHL will also offer unique, hands-on internships to professors and teachers at the listed
education organizations in return of guest lectures and other resources that benefit the students’
education. For example, many students with a computer science background struggle to find
organizations that trust the candidates enough to program new features. INGRI:DAHL has given this
responsibility to interns in the past, and discovered that the advantages surpass the disadvantages. These
interns have become great ambassadors for the company even after they moved on.
For the remaining partners, INGRI:DAHL has designed a mutual benefit plan, where these
companies will showcase INGRI:DAHL Customs samples at their locations to increase foot traffic to
their businesses. Since the customer has to design and order the product online, these locations will
work strictly as showrooms, where customers can look at examples of the product. These partners
align with either the INGRI:DAHL brand or target audience. For example, we-inspire is a fashionable
tech company like INGRI:DAHL, while Element8 is an upscale tattoo parlor that caters to people who
want a unique, personalized product.
3D printing service
9
Optical lab and eye wear stores
Internships and employment
Showroom and mutual promotion
10
Advisory board
The company is very proud of having established a very experienced advisory board with
invaluable amounts of knowledge combined.
Lasse Thuestad founded Synsenteret Opticians in Stavanger, Norway, more than 25 years ago.
Not only is he a licensed optician, but he also has several years experience designing, assembling and
repairing eyewear.
Anne Karin Asgautsen is the founder and owner of aka graphic design. She has been running the
design company for more than twenty years in Stavanger, Norway. She has a wide experience from
multiple industries, including startups.
Sigurd M Paulsen has 36 years experience gained from positions such as Investment director with
Statoil Technology Invest investing in and following up equity ownership positions in oil/gas/renewable
technology companies. Extensive investment and divestment experience as the previous Head of Statoil
Corporate M&A as well as responsibility for Statoil’s pension fund investments in private equity funds.
Work experience from Norway, USA and Germany. Board member of Sekal AS, Silixa Ltd., Chairman of
Sarsia Seed AS. Education: Finance and accounting, Universität St. Gallen – Hochschule für Wirtschafts-,
Rechts- und Sozialwissenschaften
Brian Shields is co-founder of #IncubateNYC, a product development venture in partnership with
Google, Columbia University and Abyssinian Development Corporation. #IncubateNYC pairs
corporate innovation needs and mentors with entrepreneurial talent and technology to solve issues
relevant to urban communities. Prior to #IncubateNYC, Brian worked in investment banking, private
equity and business development and product development for a large corporation.
11
OPERATIONS
Location
Business operations will be done out of we work in West Hollywood7. we work is a co-working
office space with the opportunity to rent a private office space with many amenities, including:
• Scanner, Printer and Copy Machine
• WI-FI Internet
• On-Site Parking Garage
• Outdoor areas
• Screening Room
• Conference Rooms
• Game Lounge
• Lounges
• Coffee and Purified Water
• Private Phone Booths
• Weekly events focused on learning new business skills and networking with other entrepreneurs.
INGRI:DAHL will initially rent a space for one person, which is $750 per month. As the
company hires more people, INGRI:DAHL will rent a larger space for three people, which is priced at
$900 per month. This space is strategically chosen, because it is close to both the 3D printing services
and the optical lab, so that the potential travel time to pick up last-minute materials are kept at a
minimum.
The office will also act as a showroom where potential customers can book appointments to try
on eyewear. If the customer would like to design his or her order at the showroom, this will be possible
as well through a designated ipad.
Equipment and supplies
Since the operations will be done from a crowd-sourced workspace, the company will only need
7 www.wework.com
12
to provide office supplies. The employees will also be expected to bring their personal laptops.
Expenses that will need to be covered by INGRI:DAHL:
– iP phone services (average $10 a month, $ 200 a year8)
– Hot Air Machine for assembly of glasses
– Office supplies including ink, printer and paper
– Packaging materials in form of a bubbler wrap envelope (250 pcs/$39 9)
Personnel
The customizable sunglasses line will, like previously mentioned, be a subdivision of the existing
company. INGRI:DAHL will hire one person responsible for marketing and one person responsible for
assembly. In addition, the company will contract one web developer and a 3D designer. The annual
expenses for personnel are listed below. For monthly overview, please see the Financials.
Marketing Representative
INGRI:DAHL will hire a person to assist the existing team to oversee the marketing efforts for
the new line. The Marketing Representative will be paid $10 per hour. Since this is a full-time employee,
INGRI:DAHL is required to give the person benefits, including social security, Medicare and insurance.
8 www.phone.com
9 www.uline.com
Marketing and Sales representative
Assembly and Shipping (Part-time/Full-time)
Assembly and Shipping (Part-time/Full-time)
Total Operations and Logistics
Web Developer (Contractor)
3D graphic designer (Contractor)
Total Website Experience
Total Personnel Expenses
INGRI:DAHL Personnel Expenses
Year 1 Year 2 Year 3 Total
14,400 14,400 19,200 48,000
8,400 9,600 9,600 27,600
7200
22,800 24,000 36,000 82,800
600 600 600 1,800
300 300 300 900
900 900 900 2,700
23,700 24,900 36,900 85,500
INGRI:DAHL Personnel Expenses
13
The team is seeking a person who is a fast learning multi-tasker, who communicates well. This
person will be given extensive guidelines for his or her work tasks. He or she will also be assisted by
interns that INGRI:DAHL will hire. A typical week for this employee is demonstrated below:
Monday (9-5pm) 9-9:30am: Monitor and improve Google Adwords
9:30-10am: Twitter and Google Plus
10-12pm: Write a blog post and share on social media
12-12:30pm: Lunch
12:30-1:30pm: Work on the upcoming e-mail campaign
1:30-3pm: Creating Pinterest boards
3pm-5pm: Reaching out to potential partners on
Tuesday (9-5pm) 9-10:30am: Monitor and improve Google Adwords
9:30-10am: Twitter and Google Plus
10-12pm: Reach out to bloggers and press
12-12:30pm: Lunch
12:30-3pm: Reach out to bloggers and press
3pm-5pm: Update and initiate conversations on Instagram, Twitter, Google
Plus and
Wednesday (9-5pm) 9-9:30am: Monitor and improve Google Adwords
9:30-10am: Twitter and Google Plus
10-12pm: Reach out to bloggers and press
12-12:30pm: Lunch
12:30-3pm: Work on the SEO of ingridahl.com
3pm-5pm: Update and initiate conversations on Instagram, Twitter, Google
Plus and Facebook
Thursday (9-5pm) 9-9:30am: Monitor and improve Google Adwords
9:30-10am: Twitter and Google Plus
12-12:30pm: Lunch
12:30-1:30pm: Work on the upcoming e-mail campaign
2pm-3pm: Plan and write a direction for the Founders YouTube video
3pm-5pm: Update and initiate conversations on Instagram, Twitter, Google
Plus and Facebook
Friday (9-5pm) 9-9:30am: Monitor and improve Google Adwords
9:30-10am: Twitter and Google Plus
10-12pm: Evaluate and improve website for SEO
12-12:30pm: Lunch
12:30 -1:30pm: Outline the next months blog posts
1:30-3pm: Send out emails to PR contacts
3pm-5pm: Update and initiate conversations on Instagram, Twitter, Google
Plus and Facebook
14
Assembling and shipping
INGRI:DAHL will hire one person to assemble the 3D printed frames and sunglasses as the
supplies arrive, print packaging slips and pack the orders. This person will be hired as a part-time
employee and be paid $10 an hour, which is slightly more than minimum wage in the State of California.
No health insurance or benefits are required for part-time employees. It is estimated that three pairs
can be assembled per hour meaning that with the estimated 80 hours a month this person will have free
time where he or she will be given other tasks, including marketing and customer service. The number
of pairs assembled per hour will most likely decrease over time due the learning curve. Below is an
overview of how many hours the person will be using to assemble and prepare sunglasses pr. month.
The person is scheduled to work more than the minimum required assembly hours to deal with
unexpected high demands. The company will also hire an additional part-time employee when the
demand starts to near the first employees full capacity. According to the sales forecasts, the second
employee will be needed at some mid-year in year 3. To avoid a bottleneck should the part-time
employee be sick, all of the INGRI:DAHL employees will be trained for these tasks.
Web Development
The person INGRI:DAHL is looking to hire must be able to program an online personalization
platform. The company expects to pay the person $50 an hour, which is the industry average for a
Year 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Nov Dec
Number of glasses 46 46 25 18 19 34 35 21 23 24 27 29
Glasses pr. hour 3 3 3 3 3 3 3 3 3 3 3 3
Hours needed pr month 15 15 8 6 6 11 12 7 8 8 9 10
Year 2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Number of glasses 34 35 36 37 38 76 77 79 46 49 52 55
Glasses pr. hour 3 3 3 3 3 3 3 3 3 3 3 3
Hours needed pr month 11 12 12 12 13 25 26 26 15 16 17 18
Year 3 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Number of glasses 56 57 59 62 95 98 102 84 81 86 91 101
Glasses pr. hour 3 3 3 3 3 3 3 3 3 3 3 3
Hours needed pr month 19 19 20 21 32 33 34 28 27 29 30 34
15
project like this10. The total hours of this project, including wire framing, development and testing, is
estimated at 100 hours. Because this is a contract worker, no benefits will be paid. The company
predicts to be able to most of the maintenance through existing team, but will allocate one hour per
month for maintenance over the following years.
3D graphic designer
The company is looking to hire an industrial product designer with 3D modeling skills on a
project basis. The first project will include 15 designs. The industry hour rate for this type of project
lasting for more than three months is $25.11 The total hours of this project, including brainstorming
with INGRI:DAHL team, development and testing, is estimated at 120 hours. Because this is a contract
worker, no benefits will be paid. INGRI:DAHL has also budgeted for an additional hour a month for
maintenance and additional designs for the custom line.
Interns
From the beginning INGRI:DAHL has given college students an opportunity to learn the ropes
of a startup in return of academic credit. Unlike many other internships, the intern is always asked
before starting what he or she wants to learn, and their internship is designed accordingly. INGRI:DAHL
has a long tradition of always making sure that when a new routine or tool is implemented that either
the intern or another team member writes a detailed guide for future use. The company and the interns
both find these guides helpful in the intro phase. For example, instead of having to explain social media
use for the 100th time, the intern is given the “How to Use Social Media at INGRI:DAHL”-guide. This
process makes the transitions between interns more smooth.
In addition, interns are asked to work from home and asked to set their own hours, which is a
perk for the average college student. To ensure motivation and performance, INGRI:DAHL posts
assigned tasks on a digital to-do-list called Asana. Through Asana the intern can check off tasks that are
completed, ask more questions regarding the task or upload files for approval. INGRI:DAHL will
10 Rates based on current offerings from www.elance.com
11 Rates based on current offerings on www.freelance.com
16
primarily seek marketing and sales, web design and product development interns. The company will post
listings on the career forums of University of Southern California, Pasadena Art and Design School and
General Assembly, as well as share personally with selected professors at these institutions.
Product formula and manufacturing
The INGRI:DAHL custom line will offer three different customized sunglass packages: Choice of
Color, Choice of Size, and Choice of Color and Size. All packages are offered with an additional
personalization feature, which allows the user to add a name, slogan or comment on the sunglasses. The
glasses are made with a very sturdy PLA plastic and mineral sunglass lenses resulting in a high-quality
product. For every pair of sunglasses sold, INGRI:DAHL will donate $1 from every sale to Girl Effect.
Domestic orders are offered with free shipping, while international shipping is $4.99. Every
order comes with a 30-day money back guarantee, no question asked. The following table shows the
price offering of the customs line:
Customized sunglasses based on color of frame $89
Customized sunglasses based on size of frame $89
Customized sunglasses based on size and color $99
Include name on frame $9
International shipping* $4.99
INGRI:DAHL customizable sunglasses pricing
*International shipping rates average at $6, but through A/B testing INGRI:DAHL has established anything above
$4.99 is a deal breaker.
Because this division is centered on building a product after ordering, no inventory will be on
hand except for returned order. After an order is received, the company will send instructions to the
optical lab and the 3D printing service. The lenses will be delivered shaped to fit the ordered design
within 5 to 7 days. The delivery time from the 3D printing service is expected to be four business days.
However, due to 3D printing being a new, sometimes unstable, technology, INGRI:DAHL will estimate
the delivery time to be one week to hedge against any delays. Delivery time of the glasses will be
17
advertised as 2 weeks, but on the back end the goal will be to get the glasses out as soon as possible.
Supply chain
The supply chain for the 3D printed sunglasses utilizes materials and manpower from in-house,
suppliers, and third-party companies. The process starts with in-house 3D modeling of 15 sunglasses
that can be further customized on ingridahl.com. The shopping experience is hosted by Shopify.com,
which takes care of the ordering and payment processing as a part of the monthly subscription fee. The
unique web-experience for this project of this business case will be developed by a contracted web-
developer. TryLive, an online software developer, will deliver the virtual eyewear fitting room for 2000
euros per 10,000 try-ons12. When the order is received, the two suppliers, the 3D printing service and
the optical shop, will be notified. Both suppliers are located close to the INGRI:DAHL office in case of
unforeseen events it will be possible to visit the locations physically. When the materials arrive at the
INGRI:DAHL office a part-time worker will assemble to the frame and lenses, as well as prepare for
shipment. A logistics service will then ship out the orders. This company will also handle any issues in
regards to missing items, damaged goods or delayed delivery. Any questions regarding the product and
other customer service related issues will be handled by INGRI:DAHL employees.
12 www.trylive.com
18
3D-printing supplier
Since 3D printing is a new still-evolving technology, INGRI:DAHL will work with multiple suppliers
for the frames to avoid technology hiccups and bottlenecks. The suppliers are chosen based on quality,
experience, short delivery time and proximity to the West Hollywood headquarter.
The following suppliers all meet these criteria:
1. Primitiv3design
a. $0.50 per cube centimeter
b. 9 colors
c. Located in West Hollywood
d. 4 days delivery
e. High-quality, high print resolution
2. Harrison’s
a. $.65 per cube centimeter
b. 11 colors
c. Located in Central Los Angeles
d. 4 days delivery
e. High-quality, high print resolution
3. Martin-Chino
a. $0.65 per cube centimeter
b. 5 colors
c. Located in Central Los Angeles
d. 3 days delivery
e. High-quality, high print resolution
INGRI:DAHL will pay a significant premium at these suppliers before the company can bargain
for economic of scale discounts. If INGRI:DAHL made the investment of a 3D printer and did the
printing in-house, prices per print could be made as low as $3 per frame. However, INGRI:DAHL
19
believes that by working with multiple, experienced suppliers, the company can offer a higher quality
product and reasonable delivery times.
The price per frame is estimated on a volume per print basis:
Front: 5.5” *2” *.01” = 1.1 cubic inches
Leg: 6” *0.5” *.01” x 2 = 0.6 cubic inches
Frame: 1.6 cubic inches = 27.7 cubic centimeters
Total price per the entire frame is estimated to $16. Since the price is centered on volume and not
details, the add-on feature does not actually cost INGRI:DAHL more to make glasses with additional
features.
Lenses suppliers
INGRI:DAHL will work with Elite Optical, because of its great reputation, references and
proximity to the company’s headquarters. The optical lab will receive the order design and grind lenses
to fit the designed frames. The current pricing per lense is $10. The lenses used for this customs line is
top quality, optical correct and scratch-resistant. This quality is a higher quality than what
INGRI:DAHL’s competitors use.
20
INDUSTRY ANALYSIS
Industry Overview
Currently the Eyewear and Contact Lenses industry, defined by retail establishments that
provide optical services and sell glasses, contacts and sunglasses, grosses about $9.5 billion in revenue13.
Close to 8% of this revenue is contributed by the sunglasses segment. The sunglasses industry alone is
expected to grow by 8.3% annually the next five years14. This Eyewear industry has over 7,500 vendors,
but four companies contribute to more than half of the industry earnings. Italian Luxottica S.p.A makes
up for 28.8% alone. On average an eyewear store employs five people, which can assemble more than
150 glasses in addition to foot traffic for eye exams and browsing per week. This illustrates that a great
number of orders can be processed by a smaller group of people.
In addition to the retail establishments that sell eyewear, about 14.8% of the $278.5 billion E-
commerce and Online Auction industry revenue is attributed to “clothing, footwear, accessories and
jewelry” category. There has been a slight decline in this category, because there is a desire to try on
the items before purchase. However, the incline of online eyewear companies, such as Warby Parker
and Glasses.com, indicate that people are comfortable ordering glasses if the right return system and
virtual fitting room is introduced.
13 IBIS World Report Eyewear and Contact Lenses in the US
14 Grand View Research Report on Plano Sunglasses 2013
21
PEST
Politics
• There haven’t been many regulations
affecting the eyewear industry over the last
few years, but Obama-care included
multiple benefits for vision. 15
• The e-commerce tax laws require any sale
made in the state that the business
operates will be charged a sales tax. There
have been proposals to require sales tax
on all states, but there hasn’t been made
any decisions yet. 16
Economics
• Over 60% of the US needs either glasses or
lenses to correct their vision. The demand for
this glasses and lenses therefore isn’t affected by
an economic downturn, but the price sensitivity
is increased.
• California was severely hit by the recession, but
has been able to pick up a lot of the losses.
• In 2012 the state had top five GDP growth rate
in the country at 3.5%.17
Social
• With increased education around the
importance of protecting skin and eyes
from hurtful UV-rays, there is an increased
demand for sunglasses18.
• With an increased use of computers, many
now require a second pair of glasses for
using with computer. Many companies will
cover any costs related to computer
glasses.
Technological
• 3D printing is a new technology, and with that
comes many advantages as well as disadvantages.
By outsourcing the actual 3D printing service
company that already have made and used 3D
printers for many years, INGRI:DAHL will avoid
maintenance and operation problems.
• The major benefit of the technological advances
that are expected from 3D printers is that
INGRI:DAHL can down the line introduce other
materials that hasn’t been used in making
eyewear yet.
Porter’s Five Forces
Bargaining Power of Customers
The buyer has many alternatives to sunglasses, and therefore has a quite high bargaining power.
The INGRI:DAHL eyewear line will not be lower-end glasses, and if the market does not accept the
proposed pricing, the company will be forced to lower the prices.
15 IBIS World Report Eyewear and Contact Lenses in the US
16 National Conference of State Legislature: Collecting E-Commerce Taxes – E-Fairness Legislation
17 California Economy by The Numbers – Governor’s Office of Business and Economic Development
18 The Vision Council
22
Bargaining Power of Suppliers
The supplier for 3D printing services will have very high bargaining power, because there are a
very limited number of 3D printing services in the US. Over time as more companies offer these
services and as more people buy 3D printers for homes and offices, the bargaining power will decrease.
On the other hand, the bargaining power for optical lenses is quite low. There are many competitors in
this space, and wholesalers control their supplies.
Threat of New Entrants
The barriers to entry are not that high for sunglasses in general. However, the high quality
To set up a 3D printing services company is getting less challenging with the advance of commercial 3D
printer for home and office use. However, the maintenance and operation issues with the current
models are significant, which makes it impossible to rely on these without extensive knowledge of how
the technology works.
Threat of Substitute Products
For sun protection the substitutes would include caps and contact lenses with UV-protection. In
other words, there are not many substitutes to sunglasses.
Competitive Rivalry within Industry
There is a lot of competition in the sunglasses industry, but so far there are not much
competition in the customizable 3D printing sunglasses area. The customer will usually buy sunglasses
based on quality perception, usage, and branding.
23
COMPETITOR ANALYSIS
The major competitors in the sunglasses space when considering quality, price and
customization, include OTIS, CRAP, Made Eyewear, Warby Parker, Luxottica, and Shapeways.
OTIS is an online sunglass company that was founded in Australia in 2010. The
company offers high-quality polycarbonate frames with mineral glass lenses and start at $159. OTIS finds
inspiration from the surf community, music, art and fashion. The brand sells their eyewear online
through their own website as well as through representation at 12 retailers in the US.
CRAP Eyewear was founded by a group of surfers in Los Angeles in 2009. The
beach community and slang heavily inspire the sunglasses and the brand name. The sunglasses have
polycarbonate frames and plastic lenses and start at $59. No customization is available. The brand sells
their sunglasses online and in a few select retailers in the US, Europe and Asia.
MadeEyewear was established in August of 2012. The company enables visitors to
customize the color of the frame, lense and case, and markets themselves with the possibility
of 1,000,000 unique combinations. The company website does however have a lot of images
that won’t bring the customer further after purchase. With the high number of options to customize,
the experience is very overwhelming and confusing. Their eyewear starts at $59. The company also has
a license to sell prescription glasses and sunglasses. The eye exam results have to be obtained
somewhere else.
Neil Blumenthal, Andrew Hunt, Jeffrey Raider, and David Gilboa established Warby
Parker in 2010. The company reinvented the eyewear industry by introducing high-quality designer
eyewear that was sold at an affordable price. They were able to do so by designing and manufacturing
the eyewear themselves, and therefore avoiding paying a high licensing fee to the major players in the
industry, including Luxottica. Warby Parker gives one pair of sunglasses for one pair of sunglasses sold.
Warby Parker has 12 locations in the US were potential customers can come and try on the glasses,
mostly in hotel lobbies.
24
Luxottica S.p.A., the largest eyewear company in the world, was established
by Leonardo Del Vecchio in 19611920. The company, headquartered in Milan, has
80% of all brands licenses in the eyewear industry, and has closer to a third of the of
the eyewear market in the US. Luxottica have design and licenses agreements with
some of the most famous eyewear brands, including Chanel, Prada, Giorgio Armani,
Burberry and Versace.
Shapeways was founded by Peter Weijmarshausen, Robert Schouwenburg,
Marleen Vogelaar in Holland in 200721. The company has since moved their
headquarters to New York, but remain operative in Eindhoven, as well as Seattle. Shapeways is an online
platform, where anyone can upload their 3D designs and get these design and others users designs
printed. Similar to Etsy, users can establish their own online store. Currently there are about 70
different frames sold on the site, but none of these are offered with the lenses included. Also these
designs being offered are not foldable by design, meaning you cannot close the pair of glasses. Some
designers offer a solution with instructions of glue and metal hinges. Prices range from to $12 to $200.
19 IBIS World Industry Reports – Eye Glasses and Contact Lenses
20 www.luxottica.com
21 www.shapeways.com
25
MARKET ANALYSIS
Market Overview
With a strong geographic presence in Los Angeles, INGRI:DAHL would like to pursue the
Southern California market in the first phase. This location also makes sense in terms of weather and
lack of seasonality.
A preliminary research study performed by INGRI:DAHL, showed that more than the 90% of
the seventy participants use sunglasses22. The survey also showed that in terms of customization the
majority would seek a product that was customizable, especially in terms of color and size. A few
responders also desired the ability to add details to the sunglasses, such as “diamonds” and name. The
glasses will therefore be offered in the first run with the option to customize color and size, and
additional personalization with the inclusion of a name, slogan or comment. Knowing that there is a lot
of competition in the sunglasses industry, INGRI:DAHL will launch this line targeting two unique target
groups:
Luting
Age: 25-30 years old
Education: College degree
Lives: Orange County, Santa Monica and Culver City
Style image: Women looking for products with a smaller fit, especially
sunglasses designed for a narrower face. She finds that it is a common issue
that the glasses that fit are not the right design, color or customized to her
style.
Dan
Age: 19-26
Education: Enrolled or recent alum
Lives: Downtown LA, Manhattan Beach and Santa Monica
Style image: Proud alum of university and would love to flaunt the colors and
school name. Loves to be stylish and show what the latest technology can
offer.
22 INGRI:DAHL Eyewear survey powered by SurveyMonkey
26
Size of Potential market
The demand for plano (non-RX) sunglasses is significant as illustrated by 86% of the American
population wear them23. Of these 207 million people more than sixty percent wear their sunglasses the
majority of the time spent outside in the sun. INGRI:DAHL will as previously mentioned focus on
Southern California. There are more than 22 million people in this area that includes all the areas in
California below Santa Barbara24. Overall there were 95 million sunglasses sold in the US in 2012, which
means that one of three bought sunglasses that year. Considering that the rest of the country won’t
wear sunglasses as much as people do in sunny Southern California, the average purchase per person is
slightly higher.
The INGRI:DAHL study that was previously mentioned, showed that 86.96% of the participants
would be attracted to a pair of customizable sunglasses indicating that there is a significant interest for
this new product line. According to a research study with 9,571 participants completed by The Vision
Council 70% of sunglass purchases are made based on fit. Close to 25% chose their pairs based on
uniqueness and 19.7% chose their sunglasses based on colors of their wardrobe. These are all factors
that can be customized in the INGRI:DAHL design experience. This results in a market size of 7.6 M
people, but to be conservative a 40% correlation is subtracted. However, since the average amount
spent on sunglasses is $39 dollars, INGRI:DAHL also subtracts 50% of the market who wouldn’t buy
sunglasses at $89.
With this we estimate that the potential market for sunglasses in Southern California is
14,600,000 people, in which INGRI:DAHL aims at getting a 0.03% market share within the third year.
23 The Vision Council “Sunwear Update: How does America Protect Their Eyes?”
24 U.S. Census Bureau 2010 Population Statistics
27
SWOT
Strengths
– Three year old existing eyewear company with
relevant experience
– Website with solid traffic
– Highly engaged audience through social media
– Numerous established strategic partnerships
– People often think of 3D printing when they
hear about the existing 3D glasses
– Utilizing technology to meet customer needs in
e-commerce with the virtual “fitting room”
Weaknesses
– Returns of goods, because of unsuitable fit
– No optical license to dispense prescription
eyewear
– Limited customization at first
– 3D printing is an evolving technology, which
can be unstable
– No current relationship to optical lab, which
can result in higher prices for mineral lenses
Opportunities
– If successful with sunglasses, INGRI:DAHL can
move into prescription eyewear, including
eyeglasses and sunglasses
– The company can also be a pioneer in
introducing other materials that haven’t been
utilized in the eyewear industry (for example:
recycled materials or stone)
– Can offer further customization, such as
additional nose bridges for people with a thinner
nose wall.
Threats
– Bigger existing companies could copy the
business model
– Barriers to enter industry are medium
28
MARKETING PLAN
Overview
INGRI:DAHL has focused solely on digital strategies in the past, and will continue to do so through paid
search, eMail campaigns, search engine optimization and social media. The company’s marketing budget
will be relatively higher in the first year compared to the two consecutive years. INGRI:DAHL will aim
all marketing efforts at Southern California, but expects this marketing to “bleed” over to more markets
just because of the digital nature.
Marketing Objectives
In year 1, the goal is to raise brand awareness for the new line and convert traffic. The two consecutive
two years, the objective is to educate and convert customers.
Specific Measurable Achievable Realistic Time-sensitive
Increase
engagement on
social media
Look at
performance
number, such as
number of
pictures uploaded
and online
conversations
compared
previous period
Be active and visible in
social media and constantly
encourage customers to
share their purchases, and
reward the ones that do by
highlighting these activities
on INGRI:DAHL’s own
social media.
Yes End of year 1
Increase Brand
Awareness by 30%
Recall research
study before and
after launch in
target market
Ensure you have the
resources required.
INGRI:DAHL will have a
marketing representative
and significant marketing
budget to achieve this goal.
Yes End of year 2
Reach 3% of
potential market
Compare number
of customers to
estimated
potential market
The sales forecasts are
based on the marketing
budget, which estimates
that this is achievable.
Yes End of year 3
Brand Positioning
INGRI:DAHL will offer a high-quality, tailored product at low-to-medium prices.. There are many
established sunglasses company present in the target, which makes it a competitive market for
INGRI:DAHL to compete in. However, through strategic partnerships and constant brand awareness
29
campaigns, the INGRI:DAHL brand will very likely grow stronger. In order to differentiate the company
from lower-end, mass products, such as sunglasses sold at a gas station, the pricing will be kept at the
mid-level range.
Marketing Acquisition
INGRI:DAHL will use an integrated marketing plan to acquire new customers. The marketing
representative will be responsible for all the marketing channels in the beginning, but will be assisted by
multiple interns and the management. More detailed information about how INGRI:DAHL will promote
the new line according to channel, as well as time allocation, traffic and conversions estimations, is
provided below. In addition to these marketing efforts, INGRI:DAHL expects to get traffic through
word-of-mouth, which translates into 5 sales in the first year, 12 in the second year and 19 sales in the
third year. Though the company has a historic conversion rate of 1.5%, for the sake of planning
INGRI:DAHL
customs
Quality
Price
30
INGRI:DAHL has assumed a 0.8% conversion rate in the base case scenario. INGRI:DAHL’s media
schedule divided into daily, weekly, bi-weekly and monthly activities is illustrated below:
Search engine strategy
In order to be visible online, INGRI:DAHL will put a lot of effort into optimizing the sites devoted to
this new line of eyewear. In addition to making sure that the code and content is designed with search
engine algorithms in mind, the company will work hard on building links. INGRI:DAHL is an ethical
company, and will not take part in any black hat search engine optimization techniques, such as paying
for links and anchor texts. To maintain a steady organic search flow, INGRI:DAHL will also write blog
posts on relevant topics that link back to the product pages.
INGRI:DAHL will at least once a week blog about topics either directly or indirectly related to
sunglasses. All blog posts will be optimized with strategic keywords placed in the Page Title, Meta
Description, Image File Name, Alt Description, H1 and H2 titles (if suitable).
Sample blog titles:
– 5 ways to protect yourself in the sun
– How to find the right sunglasses for your face
– 7 unique customizations of sunglasses
– How to take care of your sunglasses
31
– 11 essentials for the beach
The company expects that the marketing representative will allocate 20% of his or her time to
search engine optimization. From the efforts INGRI:DAHL expects to get 1,528 vistitors the first year,
which translates into 12 conversions. It is expected that the traffic will grow search engine traffic by 15%
monthly growth rate in year 2 and 10% monthly growth rate in year 3.
Paid search
After the company has completed search engine optimization for all the relevant sites for the project,
INGRI:DAHL will launch paid search campaigns. Through paying for specific search terms through the Bing and
Google search and display network, the company will present the products when inquired about. The campaigns
will only focus on the Southern California geographic target, and the goal will to be long-tail keyword phrases that
have a low cost-per-click and medium traffic.
The campaigns will only be centered on non-branded keywords. Some of the targeted keywords and
negative keywords (keywords associations that the company doesn’t want to be associated with) are listed below:
Targeted Keywords Negative Keywords
High-quality custom sunglasses
High-quality 3D printed sunglasses
Customizable 3D printed sunglasses
Customizable designer sunglasses
Customizable mineral sunglasses
Customizable outside eyewear
Design your own shades
Free
Profanity
Oakley
Ray Ban
Cheap
Bad quality
3D printer
Mockup of a paid search advertisement is illustrated below:
The marketing representative is expected to spend 5% of his or her time on monitoring and
altering the paid search campaigns. It is expected that in year 1 the company can pay an average of 55
cents per click, in year 2 an average of 50 cents per click, and in year 3 an average of 45 cents per click.
32
The cost per click estimates are based on INGRI:DAHL historic results, and under the assumption that
the pages will be 100% optimized by the time of the paid search campaigns launches.
Email campaign
INGRI:DAHL uses the free e-mail marketing service, MailChimp, as of today, and will continue
to use this for this project. Below are some mockups of the email marketing campaign, both mobile and
desktop version. The company starts off with a list of 3,000 contacts including previous and potential
customers. Based on industry rates e-commerce e-mails have a 17.35% open rate and a 3% click-
through-rate, INGRI:DAHL expects to get close to 800 visitors and 6 conversions from email in the first
year. The company estimates that the traffic from email will grow 7% monthly in year 2 and 5% monthly
in year 3. The marketing representative is expected to allocate 6% of his or her time to email marketing.
33
Social Media
Social media has since the very beginning been a huge part of the INGRI:DAHL awareness and
acquisition costs. With over 5000 combined followers (see detailed distribution of following below),
excluding overlapping, there is an existing engaged audience. Using these channels to “leak” images of
sketches, planning meetings, etc, I:D will create awareness of the brand before launch in a very
inexpensive, yet effective way. Below is the number of followers on the different social media channels:
943 2100 47 1070 500
The company expects the marketing representative to allocate 34% of his or her time to internal social
media. From these efforts the company aims to get 406 visitors from social media, which translates into
3 sales. INGRI:DAHL expects the social media traffic to grow by 20% in year 2 and 3% in year 3.
Twitter has from the beginning of the company been a major source of traffic. Not only have
links been shared organically through this channel, but it has also been a great way to connect with
strangers. A lot of the press, for example TechCrunch and Vogue, as well as big sales, such as The Great
Gatsby World Premiere, can be contributed to Twitter. This channel presents an informal alternative to
“cold calling”. The company will therefore continue to use this channel on a daily basis.
The sample tweet below is an example of how the company would use Twitter to share the
message about the new line, asks open-ended questions to engage others and address specific Twitter
users with reference to relevant links.
34
Google+
Though Google’s announcement of their own social network and the actual engagement rate
has been somewhat controversial, INGRI:DAHL has been able to harvest quite a lot of traffic from
Google+. The channel has also proven to help with organic search traffic, so INGRI:DAHL will use this
medium to share content to the public, with individuals and existing Google+ groups.
From INGRI:DAHLs experience Facebook advertisement will not attract a lot of traffic to the
main page or even the Facebook page that has a store enabled on the platform. The company will
therefore continue to use this channel to share content that has been created on ingridahl.com. Past
analytics reports has shown that posting too many times only annoys the followers. INGRI:DAHL will
therefore only use this channel on a weekly basis. It is very important to take advantage of tags and
groups on Facebook, which the company plans to do. Below is a mockup of a Facebook banner
promotion within the Facebook guidelines for using banners for advertising.
Instagram is a growing visual medium for INGRI:DAHL, and it will be a natural element of
promoting the new line. Though historically Instagram hasn’t brought too much direct traffic to
35
ingridahl.com, it has shown to be a great brand awareness tool. With the high number of people who
search the INGRI:DAHL brand name, it is also suspected that people will access the site in different
sessions from a tablet or desktop.
Pinterest is a great visual tool, which is a great asset in marketing the new sunglass line. All
pictures from the website and blog will be pinned to the INGRI:DAHL Pinterest. In addition to the
existing boards that INGRI:DAHL currently has, the company will make one centered around beach,
crazy sunglass designs and user generated content.
All blog posts that are written on INGRI:DAHL website will be shared on LinkedIn through the
company’s profile and the employees profiles. The employees will not be forced to share the content,
but rather encouraged.
YouTube
The founders will make bi-monthly video posts from places around INGRI:DAHL. These will be
shot with the company’s Canon DSLR and will be an informal update about the company. The videos
will also showcase possible color, size and customizations in a happy, funny way. This outlet is a great
way to gain search traffic from YouTube, which is considered the second largest search engine. All
videos will be optimized with strategic keywords and will link back to specific product pages.
Social Media Partners
INGRI:DAHL will have paid and unpaid partnerships with social media influencers that align with the
brand. Paid partnerships are usually found through exploring social media channels to find the right fit in
terms of following, affinity and engagement. Unpaid partnerships are usually established through cold e-
36
mailing or through social events. For both kinds of partnerships returned goods will be used as samples.
The marketing representatives will allocate 14% of his or her time to scout and maintain relationships
with the social media influencers. Some of the social media influencers that INGRI:DAHL would like to
partner with are as follows:
Kickstarter
Through fund raising for one of the collections through the crowdfunding website in 2012,
INGRI:DAHL has access to 331 avid supporters of the company. Once the product launch, this is an
avenue to promote to the new line to already avid supporters. The marketing representative will be
spending 1% or less on Kickstarter efforts, but with an expected traffic of 315 visitors from Kickstarter
on annual basis, this channel brings 3 sales per year.
Public Relations
All press features in the past, including Vogue, TechCrunch, Glamour, have been done through
cold-emails and networking by the management team. Though the company is looking to outsource this
element to right company, this will be done by the marketing representative until that INGRI:DAHL
finds the right partner for the job. Due to bad experience with cost efficiencies with PR agencies in the
past, INGRI:DAHL knows that the right PR-representative will have to be vetted and tested for an
extensive time, before the company can fully delegate this area. The marketing person will spend 20% of
his or her time sending out emails to journalists and other media influencers. With these efforts and
paid digital press wires from PR Web, INGRI:DAHL expects to get 1979 visitors and 16 sales in the first
year from PR.
Paid Social Media Partners Unpaid Social Media Partners
WeWoreWhat
The Canadian Twins
Camilla Pihl
Carlee
Nick Sabatalo
Modsun
37
Marketing Budget
The following table shows a summarized marketing budget for the first three years of operation. More
detailed monthly marketing budget can be located in the Financial section.
Year 1 Year 2 Year 3 Total
Paid Search 19,220 18,720 19,220 57,160
Search Engine Optimization 2,880 2,880 2,880 8,640
Social Media (INGRI:DAHL) 4,896 4,896 4,896 14,688
Social Media (partners) 3,816 4,016 4,816 12,648
PR 2,880 2,880 3,130 8,890
Word of mouth – – – –
Email marketing 864 864 864 2,592
Kickstarter 144 144 144 432
Total Marketing Expenses 20,300 20,050 21,550 61,900
Expected Traffic 43,193 76,753 121,437 241,383
INGRI:DAHL Marketing Budget
Please note that the Marketing Analyst expense is allocated under Personnel Expenses in the Financial
Statements, but for the above budget the time spent on each channel has been allocated in dollar
amount based on the following assumptions.
Customer Lifetime Value
The average value is sale is probably a little higher than $89, but since this is predictive of what
sales would be this is number is kept conservative. Since more than 50% of people own two pairs or
more, we do expect there to be some repeat transactions, and have evaluated the number of repeat
transactions to 1.2. The average retention time for a typical customer is set at 1 year, due to the lack of
information before launching the product line.
Average Value of Sale 89
Number of Repeat Transactions 1.2
Average Retention Time in Years for a Typical Customer 1
Customer Lifetime Value 107
Customer Life Time Value
Paid search 5%
Search Engine Optimization 20%
Social Media (INGRI:DAHL) 34%
Social Media (partners) 14%
PR 20%
Email marketing 6%
Kickstarter 1%
Time allocated for Marketing representative
38
FINANCIALS
Detailed Monthly and Yearly Financial Statements below, including Marketing Expenses, Personnel
Expenses, Estimated Sales Forecasts, Estimate Profit & Loss Statement, Cash Flow Statement, and Break-
Even Statement are based on the base case scenario. Conservative and Optimistic scenarios follow.
Sales Forecast
The Sales Forecast shows the estimated volume of sunglasses, add-on sales and international shipping.
Sales are based on a 0.8%25 conversion rate of the estimated traffic from the marketing budget.
INGRI:DAHL Sales ForecastINGRI:DAHL Sales ForecastINGRI:DAHL Sales ForecastINGRI:DAHL Sales Forecast
Customized sunglasses based on color
of frame
Customized sunglasses based on size of
frame
Customized sunglasses based on size
and color
Total Units Sold
Include name on frame (add-ons)
International Shipping
Total Add-on and Shipping
Customized sunglasses based on color
of frame
Customized sunglasses based on size of
frame
Customized sunglasses based on size
and color
Include name on frame (add-ons)
International Shipping
Total revenue
Number of units
Sales ($)
Year 1
69
121
155
346
138
3
142
Year 1
$ 21,627
$ 16,732
$ 19,355
$ 57,714
$ 3,006
$ 1,0
48
$ 61,767
Number of units
Sales ($)
Year 2
123
215
276
614
246
6
252
Year 2
$ 61,855
$ 41,118
$ 76,874
$ 179,8
47
$ 8,865
$ 4,716
$ 193,427
Number of units
Sales ($)
Year 3
194 386
340 676
437 869
971 1,931
493 877
493 503
986 1,379
Year 3
$ 143,112 226,594$
$ 59,630 117,480$
$ 165,825 262,053$
$ 368,567 $ 606,127
$ 19,026 30,897$
$ 5,005 10,768$
$ 392,598 $ 647,792
Number of units
Sales ($)
25 INGRI:DAHL’s current conversion rate has historically been higher, but this conversion rate
reflects the introduction of a new product.
39
Estimated Profit & Loss Statement
Sales
Sales are based on Sales Forecast presented in the previous section. Based on industry trends,
INGRI:DAHL expects to have a 12% return of goods. Industry reports show that the ecommerce
platforms that sell soft goods often experience a return rate of 20-30%, while platforms that focus on
hard goods often only experience less than 10% of goods returned. Eyewear falls in the ladder category,
but has adjusted for an additional 3% to include shipping costs expected with returns.
The losses due to returns will include revenue gained through sunglasses, add-on sales, and international
shipping. INGRI:DAHL hope to be able to decrease the return rate through the virtual fitting room and
a high-quality design process. Returned products will be re-used for marketing purposes.
Cost of Goods Sold
The Cost of Goods sold consists of three components, cost of mineral lenses, cost of 3D
printed frames, and cost of add-on personalization for frames. Most eyewear companies only offer
plastic sunglass lenses, but INGRI:DAHL Customs will be sold with high mineral glass lenses. Mineral
glass lenses are not only extremely resistant to scratches and have multiple optical advantage, but being
made from natural elements the lenses are more nature friendly than the typical plastic lenses.
The 3D printed frames will be printed by a 3D printing service in Los Angeles. The frames will
be printed at a price of $0.5 pr cm3, which translates to an average of $15 per pair of sunglasses. This
average is based on a larger-size design of the current designs that INGRI:DAHL carry, and will be used
throughout the financials for conservative estimations. With the expected sales volume, this price is
expected to drop significantly over the three years.
As a part of the INGRI:DAHL offering is an addition of a name, comment or slogan for the price
$9. Although the add-on customization is a part of the 3D printing process, the cost is separated from
the frames to create a better overview of the allocation of Cost of Goods Sold. Since the add-on feature
is sold for $9, but doesn’t actually cost anything to make, this feature therefore alone brings a gross
margin of $8.
Expenses
The Variable Expenses include Domestic and International Freight, Packaging Costs, Virtual
Fitting Room Costs, and Misc Selling Expenses.
Variable Expenses
All domestic sales are offered with free shipping and all international sales are offered with a
shipping of $9.99. For the financials an average price of $2.25 is used, which is based on USPS
Stamps.com rates. This price is based on a weighted average of the price for 1-ounce shipments up to
shipments up for 6 ounces (1.93*95% one pair buyers + 2.25*5%). Customers who buy more than 3
pairs, a weight of 6 ounces, will dealt with as they come. The international shipping expense is estimated
to $. This price is based on a weighted average of the price for 1-ounce shipments up to shipments up
for 6 ounces (6.16*95% one pair buyers + 10.94*5%).
Packaging costs are estimated to $0.67, which includes packaging slips, mailers, and fabric
pouches for the sunglasses. The price of each packaging slip is $0.02. This price includes mailers which
40
are priced at $0.15, based on U-Line rates for 6×10” Self-Seal Bubble Mailers that can fit up to three
pairs of glasses. Like the current eyewear lines by INGRI:DAHL the sunglasses will be sold with an
inclusive fabric pouch, which costs $0.5 each.
Instead of building a virtual reality experience from scratch, INGRI:DAHL will outsource this
service to TryLive for 2,000 euros for 10,000 tries, or in other words $.13 pr try.
INGRI:DAHL will give $2 from each sale to the charity Girl Effect.
The Miscellaneous Expense will include unforeseen events related to number of units sold.
Fixed Expenses
Marketing is based on the marketing budget below presented month-by-month below. Please
note that the Marketing person expense is allocated to Personnel expenses.
Year 1:
Paid Search (based on an average CPC of $0.625) 3,000
Search Engine Optimization
–
Social Media (INGRI:DAHL) –
Social Media (partners) 500
PR –
Word of mouth –
Email marketing –
Kickstarter –
Total Marketing Expenses
3,500
Total Expected Traffic
Estimated Conversions
Marketing Budget for Customized Sunglasses Jan
3,000
–
–
200
–
–
–
–
3,200
Feb
1,500
–
–
200
–
–
–
–
1,700
Mar
1,000
–
–
100
–
–
–
–
1,100
Apr
1,000
–
–
100
–
–
–
–
1,100
May
2,000
–
–
100
–
–
–
–
2,100
Jun
2,000
–
–
100
–
–
–
–
2,100
Jul
1,000
–
–
100
–
–
–
–
1,100
Aug
1,000
–
–
100
–
–
–
–
1,100
Sep
1,000
–
–
100
–
–
–
–
1,100
Oct
1,000
–
–
100
–
–
–
–
1,100
Nov Dec
1,000
–
–
100
–
–
–
–
1,100
Total Budget Total Traffic
18500 33,636
0 1,528
0 406
1800 3958
0 1979
0 580
0 792
0 315
20,300
43,193
346
Year 1
Year 2:
Year 3:
Paid Search (based on an average CPC of $0.5) 1,000
Search Engine Optimization –
Social Media (INGRI:DAHL) –
Social Media (partners) 100
PR –
Word of mouth –
Email marketing –
Kickstarter –
Total Marketing Expenses 1,100
Total Expected Traffic
Estimated Conversions
Marketing Budget for Customized Sunglasses Jan
1,000
–
–
100
–
–
–
–
1,100
Feb
1,000
–
–
100
–
–
–
–
1,100
Mar
1,000
–
–
100
–
–
25
1,125
Apr
1,000
–
–
300
–
–
–
1,300
May
3,000
–
–
300
–
–
–
–
3,300
Jun
3,000
–
–
300
–
–
–
25
3,325
Jul
3,000
–
–
300
–
–
–
–
3,300
Aug
1,000
–
–
100
–
–
–
–
1,100
Sep
1,000
–
–
100
–
–
–
–
1,100
Oct
1,000
–
–
100
–
–
–
–
1,100
Nov Dec
1,000
–
–
100
–
–
–
–
1,100
Total Budget Total Traffic
18,000 40,000
– 13,579
– 2,503
2,000 10,962
– 5,431
– 1,454
– 2,749
50 75
20,050
76,753
614
Year 2
Paid Search (based on an average CPC of $0.625) 1,000
Search Engine Optimization –
Social Media (INGRI:DAHL)
Social Media (partners) 100
PR –
Word of mouth –
Email marketing –
Kickstarter –
Total Marketing Expenses 1,100
Total Expected Traffic
Estimated Conversions
Marketing Budget for Customized Sunglasses Jan
1,000
–
100
–
–
–
–
1,100
Feb
1,000
–
100
–
–
–
–
1,100
Mar
1,000
–
100
–
–
–
–
1,100
Apr
3,000
–
500
–
–
–
–
3,500
May
3,000
–
500
–
–
–
–
3,500
Jun
3,000
–
500
250
–
–
–
3,750
Jul
1,500
–
500
–
–
–
–
2,000
Aug
1,000
–
100
–
–
–
1,100
Sep
1,000
–
100
–
–
–
–
1,100
Oct
1,000
–
100
–
–
–
–
1,100
Nov Dec
1,000
–
100
–
–
–
–
1,100
Total Budget Total Traffic
18,500 34,222
– 51,242
– 6,682
2,800 14,711
250 6,785
– 2,328
– 5,288
– 180
21,550
121,437
971
Year 3
41
Salaries are based on the following personnel expenses shown month-by-month for the first three years
below:
Year 1:
Year 2:
Year 3:
Insurance
Insurance covers the Marketing person benefits and cost $50 pr month.
Miscellaneous expenses
Miscellaneous expenses includes CPA administration costs, gas for pick-up from suppliers etc.
Taxes
Federal Income Tax is estimated at 35% and a Local California Tax at 7.5%.
Personnel Expenses for Customized Sunglasses Hourly rateMonthly hours Year 1
pr. monthJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Marketing and Sales representative 11 160 1,760 1,760 1,760 1,760 1,760 1,760 1,760 1,760 1,760 1,760 1,760 1,760 21,120
Assembly and Shipping (Part-time) 10 80 500 500 500 500 800 800 800 800 800 800 800 800 8,400
Total Operations and Logistics 2,260 2,260 2,260 2,260 2,560 2,560 2,560 2,560 2,560 2,560 2,560 2,560 29,520
Web Developer (Contractor) 55 50 2,750 2,750 55 55 55 55 55 55 55 55 55 55 6,050
3D graphic designer (Contractor) 25 60 1,500 1,500 25 25 25 25 25 25 25 25 25 25 3,250
Total Website Experience 4,250 4,250 80 80 80 80 80 80 80 80 80 80 9,300
Total Personnel Expenses 6510 6510 2340 2340 2640 2640 2640 2640 2640 2640 2640 2640 38820
Personnel Expenses for Customized Sunglasses Hourly rateMonthly hours Year 2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Marketing and Sales representative 11 160 1760 1760 1760 1760 1760 1760 1760 1760 1760 1760 1760 1760 21120
Assembly and Shipping (Part-time) 10 80 800 800 800 800 800 800 800 800 800 800 800 800 9600
Total Operations and Logistics 2560 2560 2560 2560 2560 2560 2560 2560 2560 2560 2560 2560 30720
Web Developer (Contractor) 55 1 55 55 55 55 55 55 55 55 55 55 55 55 660
3D graphic designer (Contractor) 25 1 25 25 25 25 25 25 25 25 25 25 25 25 300
Total Website Experience 80 80 80 80 80 80 80 80 80 80 80 80 960
Total Personnel Expenses 2640 2640 2640 2640 2640 2640 2640 2640 2640 2640 2640 2640 31680
Personnel Expenses for Customized Sunglasses Hourly rateMonthly hours Year 3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Marketing and Sales representative 11 160 1760 1760 1760 1760 1760 1760 1760 1760 1760 1760 1760 1760 21120
Assembly and Shipping (Part-time) 10 80 800 800 800 800 800 800 800 800 800 800 800 800 9600
Additional Assembly and Shipping (Part-time) 10 60 600 600 600 600 600 600 600 7200
Total Operations and Logistics 2560 2560 2560 2560 2560 3160 3160 3160 3160 3160 3160 3160 37920
Web Developer (Contractor) 55 1 55 1 55 1 55 1 55 1 55 1 55 1 336
3D graphic designer (Contractor) 25 1 25 1 25 1 25 1 25 1 25 1 25 1 156
Total Website Experience 80 2 80 2 80 2 80 2 80 2 80 2 492
Total Personnel Expenses 2640 2562 2640 2562 2640 3162 3240 3162 3240 3162 3240 3162 38412
42
The Base Case Estimated Sales and Net Profit for all three year is illustrated below, followed by month-
by-month estimates.
Pro Forma for Product Expansions of 3D Printed Optical Line
Year 1 Year 2 Year 3
INCOME
Sales 29,541 52,494 94,381
COST OF GOOD SOLD 3,455 4,421 6,218
Lenses 3,455 4,421 6,218
Add-ons – – –
GROSS PROFIT ON SALES 26,086 88% 48,073 92% 88,163 93%
Year 1 Year 2 Year 3
VARIABLE (Selling) 1,522 2,462 4,080
a. Freight 578 875 1,476
b. International Freight 24 37 62
c. Packaging Costs 232 295 558
d. Virtual fitting room 7 44 70
e. Social Mission 346 614 971
g. Misc Selling Expenses 336 597 944
FIXED (Adminstrative) 53,936 55,147 68,994
a. Insurance 600 600 600
b. Personnel Expenses 22,800 24,000 36,000
c. Website Expenses 900 900 900
d. Rent Expense 9,000 9,000 9,000
e. Misc Fixed Expenses 336 597 944
f. Marketing 20,300 20,050 21,550
EXPENSES 55,458 57,608 73,074
NET INCOME (29,372) (9,535) 15,089
NET PROFIT (29,372) (9,535) 15,089
TAXES
1. Federal – 26 6,331
2. Local – 6 1,357
NET PROFIT AFTER TAXES (29,372) (9,535) 7,401
43
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
26,500
REVENUE 3,393 3,373 1,845 1,362 1,401 2,486 2,539 1,562 1,636 1,725 1,832 1,968
Sunglasses 3,288 3,269 1,788 1,320 1,358 2,409 2,461 1,514 1,586 1,672 1,776 1,907
Units projected 35 35 19 14 15 26 26 16 17 18 19 21
Add-on sales 95 95 52 38 39 70 71 44 46 49 52 55
Units 11 11 6 4 4 8 8 5 5 5 6 6
International Shipping 9 9 5 4 4 6 7 4 4 4 5 5
Units 2 2 1 1 1 1 1 1 1 1 1 1
RETURNS 407 405 221 163 168 298 305 187 196 207 220 236
Total Revenue 2,986 2,968 1,624 1,199 1,233 2,187 2,234 1,374 1,440 1,518 1,612 1,732
COST OF GOODS SOLD
1. Lenses 354 352 192 142 146 259 265 163 171 180 191 205
2. Frames 566 562 308 227 234 414 423 260 273 288 305 328
3. Add-on – – – – – – – – – – – –
Total Cost of Goods 354 352 192 142 146 259 265 163 171 180 191 205
VARIABLE EXPENSES
1. Freight 57 56 31 23 23 42 42 26 27 29 31 33
2. International Freight 12 12 7 5 5 9 9 6 6 6 7 7
3. Packaging Costs 24 24 13 10 10 17 18 11 11 12 13 14
4. Virtual Fitting Room 1 1 1 0 0 1 1 1 1 1 1 1
5. Social Mission 35 35 19 14 15 26 26 16 17 18 19 21
6. Marketing 3,800 3,450 1,700 1,100 1,100 2,100 2,100 1,100 1,100 1,100 1,100 1,100
5. Misc Expenses 102 101 55 41 42 75 76 47 49 52 55 59
Total Variable Expenses 4,031 3,680 1,826 1,193 1,195 2,269 2,273 1,206 1,211 1,218 1,225 1,234
FIXED EXPENSES
1. Insurance 50 50 50 50 50 50 50 50 50 50 50 50
2. Rent expenses 750 750 750 750 750 750 750 750 750 750 750 750
4. Salaries 1,900 1,900 1,900 1,900 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200
5. Misc Adm Expenses 102 101 55 41 42 75 76 47 49 52 55 59
Total Fixed Expenses 2,802 2,801 2,755 2,741 3,042 3,075 3,076 3,047 3,049 3,052 3,055 3,059
Net Profit before Tax (4,201) (3,864) (3,150) (2,877) (3,151) (3,416) (3,380) (3,042) (2,991) (2,931) (2,859) (2,766)
TAXES
Federal Income Tax – – – – – – – – – – – –
Local Tax – – – – – – – – – – – –
Net profit after tax (4,201) (3,864) (3,150) (2,877) (3,151) (3,416) (3,380) (3,042) (2,991) (2,931) (2,859) (2,766)
INGRI:DAHL Estimated Sales and Net Profit Year 1
44
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
REVENUE 3,290 3,387 3,476 3,598 3,734 7,342 7,515 7,711 4,479 4,732 5,020 5,368
Sunglasses 3,167 3,260 3,346 3,463 3,594 7,066 7,233 7,421 4,311 4,554 4,831 5,166
Units projected 34 35 36 37 38 76 77 79 46 49 52 55
Add-on sales 122 126 129 133 138 272 278 286 166 175 186 199
Units 14 14 14 15 15 30 31 32 18 19 21 22
International Shipping 2 2 2 2 2 4 4 4 2 2 3 3
Units 0 0 0 0 0 1 1 1 0 0 1 1
RETURNS 395 406 417 432 448 881 902 925 537 568 602 644
Total Revenue 2,896 2,981 3,059 3,166 3,286 6,461 6,613 6,786 3,942 4,164 4,417 4,724
COST OF GOODS SOLD
1. Lenses 244 251 258 267 277 544 557 571 332 351 372 398
2. Frames 356 366 376 389 404 793 812 833 484 511 543 580
3. Add-on – – – – – – – – – – – –
Total Cost of Goods 244 251 258 267 277 544 557 571 332 351 372 398
VARIABLE EXPENSES
1. Freight 48 50 51 53 55 108 110 113 66 69 74 79
2. International Freight 2 2 2 2 2 5 5 5 3 3 3 3
3. Packaging Costs 16 17 17 18 18 36 37 38 22 23 25 27
4. Virtual Fitting Room 2 3 3 3 3 5 6 6 3 4 4 4
5. Social Mission 34 35 36 37 38 76 77 79 46 49 52 55
6. Misc Expenses 33 34 35 36 37 73 75 77 45 47 50 54
Total Variable Expenses 136 140 143 148 154 303 310 318 185 195 207 222
FIXED EXPENSES
1. Insurance 50 50 50 50 50 50 50 50 50 50 50 50
2. Rent expenses 750 750 750 750 750 750 750 750 750 750 750 750
4. Salaries 2,075 2,075 2,075 2,075 2,075 2,075 2,075 2,075 2,075 2,075 2,075 2,075
6. Marketing 1,100 1,100 1,100 1,125 1,300 3,300 3,325 3,300 1,100 1,100 1,100 1,100
5. Misc Adm Expenses 33 34 35 36 37 73 75 77 45 47 50 54
Total Fixed Expenses 4,008 4,009 4,010 4,036 4,212 6,248 6,275 6,252 4,020 4,022 4,025 4,029
Net Profit before Tax (1,492) (1,419) (1,352) (1,285) (1,357) (635) (529) (356) (595) (404) (187) 76
TAXES
Federal Income Tax – – – – – – – – – – – 26
Local Tax Rate – – – – – – – – – – – 6
Net profit after tax (1,492) (1,419) (1,352) (1,285) (1,357) (635) (529) (356) (595) (404) (187) 44
INGRI:DAHL Estimated Sales and Net Profit Year 2
45
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
REVENUE 4,531 4,545 4,796 5,078 7,444 7,749 8,098 6,918 6,811 7,260 7,749 8,505
Sunglasses 4,391 4,405 4,649 4,922 7,215 7,511 7,849 6,706 6,602 7,037 7,511 8,243
Units projected 47 47 50 53 78 81 84 72 71 76 81 89
Add-on sales 127 128 135 143 209 218 228 195 192 204 218 239
Units 14 14 15 16 23 24 25 22 21 23 24 27
International Shipping 12 12 12 13 19 20 21 18 18 19 20 22
Units 2 2 2 3 4 4 4 4 4 4 4 4
RETURNS 544 545 576 609 893 930 972 830 817 871 930 1,021
Total Revenue 4,531 4,545 4,796 5,078 7,444 7,749 8,098 6,918 6,811 7,260 7,749 8,505
COST OF GOODS SOLD
1. Lenses 378 379 400 423 621 646 675 577 568 605 646 709
2. Frames 529 531 560 593 869 905 945 808 795 847 905 993
3. Add-on – – – – – – – – – – – –
Total Cost of Goods 378 379 400 423 621 646 675 577 568 605 646 709
VARIABLE EXPENSES
1. Freight 75 75 79 84 123 128 134 115 113 120 128 141
2. International Freight 16 16 17 18 27 28 29 25 25 26 28 31
3. Packaging Costs 31 31 33 35 51 54 56 48 47 50 54 59
4. Virtual Fitting Room 4 4 4 4 6 7 7 6 6 6 7 7
5. Social Mission 47 47 50 53 78 81 84 72 71 76 81 89
6. Marketing 1,400 1,350 1,100 1,100 3,500 3,500 3,750 2,000 1,100 1,100 1,100 1,100
7. Misc Expenses 91 91 96 102 149 155 162 138 136 145 155 170
Total Variable Expenses 1,664 1,615 1,380 1,396 3,934 3,952 4,223 2,404 1,497 1,524 1,552 1,596
FIXED EXPENSES
1. Insurance 50 50 50 50 50 50 50 50 50 50 50 50
2. Rent expenses 750 750 750 750 750 750 750 750 750 750 750 750
4. Salaries 2,480 2,402 2,480 2,402 2,480 3,002 3,080 3,002 3,080 3,002 3,080 3,002
5. Misc Adm Expenses 45 45 48 51 74 77 81 69 68 73 77 85
Total Fixed Expenses 3,325 3,247 3,328 3,253 3,354 3,879 3,961 3,871 3,948 3,875 3,957 3,887
Net Profit before Tax (837) (697) (311) 6 (466) (729) (761) 67 798 1,257 1,593 2,312
TAXES
Federal Income Tax – – – 2 – – – 23 279 440 558 809
Local tax – – – 0 – – – 5 60 94 119 173
Net profit after tax (837) (697) (311) 3 (466) (729) (761) 38 459 723 916 1,329
INGRI:DAHL Estimated Sales and Net Profit Year 3
46
Projected Cash-Flow Statement
The projected cash-flow is based on previous Sales Forecasts, Estimated Profit and Loss Statements,
Personnel Expenses and Marketing. Payout time for Shopify, the e-commerce platform that
INGRI:DAHL uses, is three days. From this it is expected that 95% of revenues flow in the same month.
The remaining 5% is paid out the following month. Cost of Goods Sold is all 30 day payable, and
therefore reflected in the preceding month’s cash outflow. All expenses are paid out the month that
these occur. Taxes are transferred to a savings account the month that these occur.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
BEGINNING CASH BALANCE 26,500 28,925 28,498 26,634 24,731 22,994 21,976 20,709 18,503 16,637 14,831 13,103
CASH RECEIPTS
A. Sales/Revenues 3,967 4,142 2,364 1,711 1,724 2,992 3,118 1,982 2,012 2,118 2,248 2,413
Sunglasses 3,845 4,015 2,292 1,658 1,671 2,900 3,022 1,921 1,950 2,053 2,179 2,339
Units projected 44 43 24 17 18 32 33 20 21 22 23 25
Add-on sales 112 117 67 48 49 84 88 56 57 60 63 68
Units 13 13 7 5 5 10 10 6 6 7 7 8
International Shipping 10 11 6 4 4 8 8 5 5 6 6 6
Units 2 2 1 1 1 2 2 1 1 1 1 1
RETURNS 501 498 272 201 207 367 375 231 242 255 271 291
TOTAL CASH AVAILABLE 29,966 32,569 30,589 28,143 26,248 25,619 24,719 22,461 20,274 18,500 16,809 15,226
CASH PAYMENTS
A. Cost of Goods to be Sold
1. Lenses – 435 433 237 175 180 319 326 200 210 221 235
2. Frames – 696 692 379 280 288 510 521 321 336 354 376
3. Add-on – – – – – – – – – – – –
Total Cost of Goods – 1,132 1,125 615 454 467 829 847 521 546 575 611
B. Variable Expenses (Selling)
1. Freight 70 69 38 28 29 51 52 32 34 36 38 41
2. International Freight 15 15 8 6 6 11 11 7 7 8 8 9
3. Packaging Costs 29 29 16 12 12 21 22 13 14 15 16 17
4. Virtual Fitting Room 1 1 1 1 1 1 1 1 1 1 1 1
5. Social Mission 44 43 24 17 18 32 33 20 21 22 23 25
6. Marketing 3,800 3,450 1,700 1,100 1,100 2,100 2,100 1,100 1,100 1,100 1,100
7. Misc Expenses 125 125 68 50 52 92 94 58 60 64 68 73
Total Variable Expenses 116 115 63 46 48 85 87 53 56 59 62 67
C. Fixed Expenses (Adminstrative)
1. Insurance 50 50 50 50 50 50 50 50 50 50 50 50
2. Rent expenses 750 750 750 750 750 750 750 750 750 750 750 750
4. Salaries 0 1,900 1,900 1,900 1,900 2,200 2,200 2,200 2,200 2,200 2,200 2,200
5. Misc Adm Expenses 125 125 68 50 52 92 94 58 60 64 68 73
Total Fixed Expenses 925 2,825 2,768 2,750 2,752 3,092 3,094 3,058 3,060 3,064 3,068 3,073
Total COGS and Expenses 1,041 4,071 3,956 3,412 3,254 3,644 4,009 3,958 3,637 3,668 3,705 3,751
Federal Income Tax – – – – – – – – – – – –
Local Tax – – – – – – – – – – – –
TOTAL CASH PAID OUT 1,041 4,071 3,956 3,412 3,254 3,644 4,009 3,958 3,637 3,668 3,705 3,751
CASH BALANCE/DEFICIENCY 28,925 28,498 26,634 24,731 22,994 21,976 20,709 18,503 16,637 14,831 13,103 11,475
ENDING CASH BALANCE 28,925 28,498 26,634 24,731 22,994 21,976 20,709 18,503 16,637 14,831 13,103 11,475
INGRI:DAHL Estimated Cash Flow Statement Year 1
47
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
BEGINNING CASH BALANCE 10,118 9,506 10,355 11,427 12,560 14,139 17,049 19,687 21,821 24,349 27,750 31,589
CASH RECEIPTS
A. Sales/Revenues 5,323 5,812 6,092 6,228 6,787 8,563 8,769 8,360 8,582 9,743 10,677 11,765
Sunglasses 5,132 5,612 5,883 6,200 6,563 8,269 8,455 8,072 8,288 9,409 10,310 11,361
Units projected 66 68 71 75 79 101 107 97 100 114 125 138
Add-on sales 174 183 191 10 203 269 287 263 270 306 335 370
Units 20 20 21 22 24 30 32 29 30 34 37 41
International Shipping 16 17 18 19 20 25 27 24 25 28 31 34
Units 3 3 4 4 4 5 5 5 5 6 6 7
TOTAL CASH AVAILABLE 15,441 15,318 16,447 17,655 19,347 22,701 25,817 28,047 30,403 34,092 38,426 43,354
CASH PAYMENTS
A. Cost of Goods to be Sold
1. Lenses 686 524 543 568 599 634 806 852 776 800 913 998
2. Frames 1,440 779 808 845 891 944 1,198 1,268 1,154 1,190 1,357 1,485
3. Add-on 10 10 10 11 11 12 15 16 15 15 17 19
Total Cost of Goods 2,136 1,313 1,361 1,425 1,502 1,590 2,019 2,137 1,945 2,005 2,287 2,502
B. Variable Expenses (Selling)
1. Freight 110 95 98 103 108 115 146 154 140 144 165 180
2. International Freight 24 21 21 22 24 25 32 34 31 31 36 39
3. Packaging Costs 46 35 36 38 40 43 54 57 52 54 61 67
4. Virtual Fitting Room 2 5 5 6 – 6 8 9 8 8 9 10
5. Social Mission 69 66 68 71 75 79 101 107 97 100 114 125
6. Marketing 3,165 1,067 1,105 1,157 1,219 1,291 1,640 1,735 1,580 1,628 1,857 2,032
7. Misc Expenses 177 162 175 183 187 204 260 263 250 258 294 322
Total Variable Expenses 182 156 161 169 172 188 239 253 231 238 271 297
C. Fixed Expenses (Adminstrative)
1. Insurance 50 50 50 50 50 50 50 50 50 50 50 50
2. Rent expenses 750 750 750 750 750 750 750 750 750 750 750 750
4. Salaries 2,640 2,640 2,640 2,640 2,640 2,640 2,640 2,640 2,640 2,640 2,640 2,640
5. Misc Adm Expenses 177 54 58 61 62 68 87 88 83 86 98 107
Total Fixed Expenses 3,617 3,494 3,498 3,501 3,502 3,508 3,527 3,528 3,523 3,526 3,538 3,547
Federal Income Tax – – – – 32 366 346 308 355 574 741 940
Local Tax – – – – 7 78 74 66 76 123 159 201
TOTAL CASH PAID OUT 5,935 4,963 5,021 5,094 5,208 5,653 6,131 6,226 6,054 6,343 6,838 7,286
CASH BALANCE/DEFICIENCY 9,506 10,355 11,427 12,560 14,139 17,049 19,687 21,821 24,349 27,750 31,589 36,068
ENDING CASH BALANCE 9,506 10,355 11,427 12,560 14,139 17,049 19,687 21,821 24,349 27,750 31,589 36,068
INGRI:DAHL Estimated Cash Flow Statement Year 2
48
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
BEGINNING CASH BALANCE 36,068 39,249 42,830 46,658 50,633 54,718 59,269 63,141 67,371 71,510 75,810 80,391
CASH RECEIPTS
A. Sales/Revenues 11,909 11,934 12,137 12,378 12,770 13,411 13,164 13,969 13,782 14,066 14,416 14,384
Sunglasses 11,501 11,525 11,727 11,961 12,715 12,978 12,704 13,498 13,302 13,593 13,933 13,889
Units projected 139 139 141 144 154 157 160 163 160 164 168 167
Add-on sales 374 375 375 381 19 395 421 431 440 433 442 453
Units 42 42 42 43 46 47 48 49 48 49 50 50
International Shipping 35 35 35 35 36 38 39 40 41 40 41 42
Units 7 7 7 7 8 8 8 8 8 8 8 8
TOTAL CASH AVAILABLE 47,977 51,184 54,967 59,035 63,403 68,130 72,433 77,110 81,153 85,576 90,227 94,776
CASH PAYMENTS
A. Cost of Goods to be Sold
1. Lenses 1,100 1,109 1,111 1,131 1,154 1,229 1,252 1,278 1,305 1,281 1,312 1,345
2. Frames 1,637 1,552 1,555 1,584 1,616 1,721 1,753 1,789 1,827 1,793 1,836 1,882
3. Add-on 21 12 12 13 13 14 14 14 15 14 15 15
Total Cost of Goods 2,758 2,674 2,679 2,728 2,783 2,964 3,019 3,081 3,147 3,089 3,163 3,242
B. Variable Expenses (Selling)
1. Freight 199 220 221 225 229 244 249 254 259 254 261 267
2. International Freight 43 48 48 49 50 53 54 55 56 55 57 58
3. Packaging Costs 74 92 92 94 96 102 104 106 108 106 109 111
4. Virtual Fitting Room 11 11 11 11 – 12 13 13 13 13 13 14
5. Social Mission 138 139 139 141 144 154 157 160 163 160 164 168
6. Marketing 1,475 1,478 1,505 1,535 1,635 1,666 1,700 1,736 1,704 1,745 1,789 1,781
7. Misc Expenses 355 357 358 365 360 396 404 395 421 413 423 433
Total Variable Expenses 327 371 372 379 375 412 419 428 437 429 439 450
C. Fixed Expenses (Adminstrative)
1. Insurance 50 50 50 50 50 50 50 50 50 50 50 50
2. Rent expenses 750 750 750 750 750 750 750 750 750 750 750 750
4. Salaries 2,640 2,640 2,562 2,640 2,562 2,640 3,162 3,240 3,162 3,240 3,162 3,240
5. Misc Adm Expenses 119 119 122 120 132 135 132 140 138 141 144 144
Total Fixed Expenses 3,559 3,559 3,484 3,560 3,494 3,575 4,094 4,180 4,100 4,181 4,106 4,184
Federal Income Tax 1,716 1,749 1,775 1,735 2,033 1,910 1,760 2,050 1,959 2,067 2,127 2,138
Local Tax 368 375 380 372 436 409 377 439 420 443 456 458
TOTAL CASH PAID OUT 8,728 8,353 8,309 8,402 8,685 8,861 9,292 9,739 9,643 9,766 9,835 10,014
CASH BALANCE/DEFICIENCY 39,249 42,830 46,658 50,633 54,718 59,269 63,141 67,371 71,510 75,810 80,391 84,762
ENDING CASH BALANCE 39,249 42,830 46,658 50,633 54,718 59,269 63,141 67,371 71,510 75,810 80,391 84,762
INGRI:DAHL Estimated Cash Flow Statement Year 3
49
Break Even
With a break-even point of total 634 units, INGRI:DAHL expects to break-even in year 2. The break-
even point is based on an expected sales mix. Detailed calculations below:
Break Even Analysis
Color Size Color and Size
Sales Price pr. Unit $89 $89 $99
Variable Cost pr. Unit 6 6 6
Contribution Margin Unit $83 $83 $93
Sales Mix Percentage 0.20 0.35 0.45
Weighted Average Unit Contribution Margin
Weighted Average Unit Contribution Margin pr. unit $17.50 $30.63 $39.38
Total Fixed Cost
Break-Even Point in Units of Sales Mix
Product Units at Break-Even Point 123 216 277
Product Sales in Dollars $10,972.06 $19,201 $27,461
Break-Even Point in Dollars
$87.50
53,936
616
$57,634
Sources of Cash
INGRI:DAHL will fund this project with cash from current operations, as well as an additional capital
investment from the investors.
Cash on Hand
Invested Capital
Owner Loans 15,000$
Owner Equity 15,000$
Contributed Capital (Corporation) 5,000$
Total Invested Capital 35,000$
Website investment 8,500$
Total Cash Available 26,500$
50
Net Present Value Calculation
Assuming a 10% discount rate (based on 3% consumer interest loan rate) , INGRI:DAHL expects a net
present value of $44,583.
Conservative and Optimistic Cases
The conservative case expects no economies of scale for costs of goods sold, a conversion rate of 0.5%,
and remains the same expenses as the base case.
Conservative Case: Estimated Sales and Net Profit Year 1-3
Year 1 Δ Year 2 Δ Year 3 Δ Year 4 Δ Year 5
Sales (in units) 259 461 729 1,360 1,768
Sales ($) 22,156 78% 39,370 80% 70,786 40% 99,100 30% 128,830
Cost of Goods Sold ($) 2,592 42% 3,684 58% 5,829 50% 8,743.47 50% 13,115
Expenses ($) 54,993 3% 56,844 26% 71,818 25% 89,773 20% 107,727
Net Profit ($) (35,429) (21,157) (6,862) 584 7,987
Net Profit after Tax ($) (35,429) (21,157) (6,862) 368 5,032
The optimistic case expects significant economies of scale for cost of goods sold, a conversion rate of
1%, and remains the same expenses as the base case.
Optimistic Case: Estimated Sales and Net Profit Year 1-3
Year 1 Δ Year 2 Δ Year 3 Δ Year 4 Δ Year 5
Sales (in units) 432 768 1214 1,360 1,768
Sales ($) 36,927 78% 65,617 80% 117,976 40% 165,166 30% 214,716
Cost of Goods Sold ($) 4,319 14% 4,912 38% 6,800 50% 10,200.71 50% 15,301
Expenses ($) 55,922 4% 58,373 27% 74,309 25% 92,886 20% 111,463
Net Profit ($) (23,315) 2,332 36,867 62,080 87,952
Net Profit after Tax ($) (23,315) (115) 19,924 39,110 55,410
Discount rate 10%
PV Factors:
Year 1 = 1 ÷ (1 + 18%)^1 ≈ 0.8475 0.91
Year 2 = 1 ÷ (1 + 18%)^2 ≈ 0.7182 0.83
Year 3 = 1 ÷ (1 + 18%)^3 ≈ 0.6086 0.75
Year 4 = 1 ÷ (1 + 18%)^4 ≈ 0.5158 0.68
Year 5 = 1 ÷ (1 + 18%)^5 ≈ 0.5000 0.62
Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Inflow (11,232) 9,187 24,211 33,896 44,064
x Present Value Factor 0.91 0.83 0.75 0.68 0.62
Present Value of Cash Flows (10,211) 7,593 18,190 23,151 27,360
Total Cash Inflow 66,083
– Intitial Investment 21,500
Net Present Value 44,583
Net Present Value Calculation
51
Risk factors
Competition: There is a possibility of other competitors coming into the market. To combat this risk,
INGRI:DAHL will have multiple additional features already planned for introduction. The day a
competitor release a similar product, INGRI:DAHL will hit the release button for these new features
including nose-pads and decorations.
Pricing strategy: The customers might not accept the price point in which INGRI:DAHL will need to
lower the price. In that case INGRI:DAHL will start by lowering the price of the add-on feature, and if
necessary the sunglasses. In the ladder case, the company will attempt to gain money from shipment that
will be free.
3D Printing issues: 3D printing has not been a commercial service for that long, so there might be some
issues with the technology that the company cannot predict. To hedge against technology risks,
INGRI:DAHL will be working with multiple 3D printing suppliers.
Conclusion
INGRI:DAHL is excited to take on this new business opportunity and is confident that by taking advantage of new
technology and solution the company can solve a problem that people who wear sunglasses and glasses are so
familiar with. Following the designed base case timeline, the company is confident that it can break-even in the end
of year 2, and be profitable in year 3.
52
SUPPORTING DOCUMENTS
Examples of 3D printing
Figure 1: Plastic cup made by
3D printing, Airwolf3D.com
53
Previous INGRI:DAHL features
54