As mentioned in the business proposition, considerable monetary and the time investment is needed for this business to flourish. In the effort to correctly run a business, the investments and potential purchases made for its growth need to be calculated, evaluated, and understood. For this exact purpose, businesses conduct and create spreadsheets and excel tables. This particular paper will serve as the basis for a pro forma sheet, outlining the future business projections and plans for the continued operation of the company.
While it is difficult to estimate exactly how much money will go into a developing business, it is possible to average out the potential costs of equipment, spaces rented, products, and human labor that goes into it. During the initial starting period of the company, the expenses should be accounted for and calculated. In terms of expenses, the major portion of them will go into buying the supply of available safety devices, with the rest being spent on the rent, hosting services, promotion, and other various activities to support the business. Additionally, proper licenses and accreditation should be obtained. To determine the correct way of managing a starting company, one needs first to understand how much time it will take to begin this project.
The process of procuring bulk amounts of security devices such as cameras and hands-free devices would take from one to two months, considering shipping options and the prices available. The average cost of car backup cameras is $10 per piece. This means that with the modest projection of 100 initial products bought the cost for the cameras would go up to $100. In regards to hands-free devices, the number of units bought will be around the same, with the total cost of 100 pieces ranging from $250 to $300. Once ordered, it would make the products more than a month to arrive, the time which should be used to prepare for and organize a space to store them.
Since the initial batch of safety devices is rather small, it is possible not to use a storage unit or a warehouse in the initial consideration for expenses. However, moving forward, the purchase of rented storage space may be necessary as well. The average cost of a mini storage unit is around $45 per month. With the purchase and arrangement of products covered, now the consideration shifts to other expenses.
The most prominent expense for the next category would be website hosting and the promotion of our business. Website Hosting prices for a month range wildly, starting with around $15 a month minimum while also having more expensive alternatives for more robust hosting options. During the initial start-up process, the employees will be expected to work from home, as a way to save on renting an office space. In terms of marketing, the amount of money spent on it should be calculated by spending on the overall revenue of the venture, taking up about 8 or 10% overall.
During the initial stage of the business, around $50 or less should be spent on online advertising as the main avenue for promotion, as it is the most convenient and least cost expensive option out there. With proper recognition and promotion, the business will likely recuperate its costs within a month. The monthly profits coming from retail sales would cover the initial investment and spending allowing for further spending on promotion and a larger amount of bulk products. Graphic design and the presentation of the company will also have the ability to be improved with additional funding, using any available resources to hire A graphic designer and a promotion specialist for the company.
Depending on the circumstances of the employees and the leader, it may also be necessary to buy computers or other equipment to further operate the business. Currently, it is not expected that additional computers would be needed as most of the work done should be possible to accomplish from mobile phones or personal use computers. After taking into account the projected outcomes and profits of the first month, the inventory of Product Security devices and cameras can be further expanded, including more expensive options for those willing to pay for them. It is crucial to also consider the wages of employees as an expense that should be taken into account.
If the initial estimations of profitability are correct, the business should make more than $1000 in the month. At least 10% or more of it will be spent on taxes. With around half of the sum being spent on advertisement, replenishing the stock, and maintaining services, The rest can be spent to pave ages for employees and hire different promotional or advertisement services along the way. If not the full stock of the product spot will be sold in the first month, it is still expected that the initial cost of investment will be covered as the prices were relatively low. In such a scenario, the wages of employees and founders would be foregone for the starting period.