Xi’an JIAOTONG-LIVERPOOL UNIVERSITY 交 物 浦 学 Coursework Submission Cover Sheet Name 1 Ma Chenghao Name 2 Nguyen Amanda Mai Vy Name 3 Patel Abhishek Name 4 Rolfes Frederik Student Number 1 1200902 Student Number 2 1406993 Student Number 3 1406980 Student Number 4 1303081 Programme Business Administration Module Title Entrepreneurship Module Code MAN208 Assignment Title Business Plan Submission Deadline May 21 st 2015 Module Leader Alex Goldsborough By uploading or submitting this coursework submission cover sheet, I certify the following: • I have read and understood the definitions of PLAGIARISM, COLLUSION, and the FABRICATION Of DATA, as outlined in the Undergraduate Student Handbook of Xi’an Jiaotong-Liverpool University and as posted on the University Website. • This work is my own, original work produced specifically for this assignment. It does not misrepresent the work of another person or institution as my own. Additionally, it is a submission that has not been previously published, or submitted to another module. • This work is not the product of unauthorized collaboration between myself and others. • This work is free of embellished or fabricated data. I understand that PLAGIARISM, COLLUSION and the FABRICATION OF DATA are serious disciplinary offences. By uploading or submitting this cover sheet, I acknowledge that I am subject to disciplinary action if I am found to have committed such acts. Signature …….…………………………………… Date ………………………………………………… Signature …….…………………………………… Date ………………………………………………… Signature …….…………………………………… Date ………………………………………………… Signature …….…………………………………… Date ………………………………………………… For Academic Office use: Date Received Days Late Penalty
1. Xian JIAOTONG-LIVERPOOL UNIVERSITY Coursework Submission
Cover Sheet Name 1 Ma Chenghao Name 2 Nguyen Amanda Mai Vy Name 3
Patel Abhishek Name 4 Rolfes Frederik Student Number 1 1200902
Student Number 2 1406993 Student Number 3 1406980 Student Number 4
1303081 Programme BusinessAdministration Module Title
Entrepreneurship Module Code MAN208 Assignment Title BusinessPlan
Submission Deadline May21st2015 Module Leader AlexGoldsborough By
uploading or submitting this coursework submission cover sheet, I
certify the following: I have read and understood the definitions
of PLAGIARISM, COLLUSION, and the FABRICATION Of DATA, as outlined
in the Undergraduate Student Handbook of Xian Jiaotong-Liverpool
University and as posted on the University Website. This work is my
own, original work produced specifically for this assignment. It
does not misrepresent the work of another person or institution as
my own. Additionally, it is a submission that has not been
previously published, or submitted to another module. This work is
not the product of unauthorized collaboration between myself and
others. This work is free of embellished or fabricated data. I
understand that PLAGIARISM, COLLUSION and the FABRICATION OF DATA
are serious disciplinary offences. By uploading or submitting this
cover sheet, I acknowledge that I am subject to disciplinary action
if I am found to have committed such acts. Signature . Date
Signature . Date Signature . Date Signature . Date For Academic
Office use: Date Received Days Late Penalty
2. Feedback on the strength of the work Feedback on the
weakness that needs to be improved 1st Marker Date Mark 2nd Marker
Date Mark (if applicable) Students: Please start your assignment on
the next
3. 3 SustainableFreshness ReadyforInvestment
4. TableofContents 1.0 Executive
Summary................................................................................................5
2.0 Company
Description................................................................................................6
2.1Description............................................................................................................................................................................6
2.2Mission....................................................................................................................................................................................6
2.3Values......................................................................................................................................................................................6
3.0 Opportunity Analysis and
Research......................................................................6
3.1IndustryAnalysis................................................................................................................................................................6
3.2Environmentalanalysis:PESTLE................................................................................................................................8
3.3Competitiveanalysis:SWOT&PortersFiveForces...........................................................................................8
PortersFiveForces...................................................................................................................................................................9
3.4MarketOpportunity.......................................................................................................................................................10
4.0 Marketing Strategy and
Plan................................................................................11
4.1Product.................................................................................................................................................................................11
4.2Price......................................................................................................................................................................................12
4.3Place......................................................................................................................................................................................13
4.4Promotion...........................................................................................................................................................................14
4.5Philanthropy......................................................................................................................................................................15
5.0 Management Team and
Operations....................................................................15
5.1ManagementTeam.........................................................................................................................................................15
5.2PhysicalLocation.............................................................................................................................................................17
5.3Facilities..............................................................................................................................................................................17
5.4ProductionandQualityAssurance..........................................................................................................................17
Ourmanufacturingprocess:..............................................................................................................................................19
5.5InventoryandProductDelivery...............................................................................................................................19
6.0 Financial Analysis and
Projections......................................................................20
6.1CashFlowProjections...................................................................................................................................................20
6.3BalanceStatementProjections..................................................................................................................................21
6.4IncomeStatementProjections...................................................................................................................................22
6.5BreakevenAnalysis.......................................................................................................................................................22
7.0
Funding......................................................................................................................23
8.0
Appendices................................................................................................................24
Appendix1(RentalspaceinSIP).....................................................................................................................................24
Appendix2(OurMakeyourownpotInitiativeprototype).................................................................................25
Appendix3(MeetingLog)..................................................................................................................................................26
Appendix4(DetailedFinancials)...................................................................................................................................27
5. 5 1.0 Executive Summary E-Vita, a sustainable household
products brand headquartered in SIP, Suzhou, is now looking for
capital for their new eco-friendly fridge. E-Vita hopes to service
happy customers and a happy planet by offering sustainable,
attractive and affordable household products. As the large
population of Chinese consumers is becoming more and more wealthy,
many are starting to follow the green trend that is evident in many
Western countries. E-Vita is primarily targeting the increasing
middle class consumer who wants to enjoy a cool beverage on their
patio, or at a campsite without the need for electricity. E-Vitas
FreshBox uses ancient technology of clay and sand to create a
natural cooling mechanism that keeps fruits, drinks, even medicine,
at cool temperatures while it is hot outside. Many people on the
planet are in need of an electricity-free cooling apparatus, such
as rural Africa or India, who serve as E-Vitas secondary target
market. Using a fridge like FreshBox will enable families to keep
produce up to a week and have fewer trips to the distant markets,
saving valuable time or them to earn money. E-Vita wants to
contribute to society by working with NGOs and local governments to
sell FreshBoxes in large quantities and low margins and ultimately
helping those in need. Through mainly online channels, E-Vita will
sell products directly on an electric storefront and create
awareness and buzz for the product through social media. Media
coverage can be obtained for free, fueled by a new focus on
philanthropic practices and trend for all things green. Secondary
sources of distribution are through large supermarkets like IKEA
and Auchan that sell a large number of home appliances and can
attract customers who are browsing for related products. Another
way E-Vita is combining corporate social responsibility with
raising awareness is through donating one FreshBox for every 100
sold and initiatives to help bottom of the pyramid populations in
the remotest parts of the world create their own. There are very
few competitors in this niche market, and none of which have opened
sales in China or expanded around Asia. There is an opportunity
here to promote green living in the increasingly aware and
increasingly concerned Asian middle class, through aesthetically
pleasing, functional household products. E-Vitas executive team has
each invested 50,000 CNY into the company and is hoping to raise
funds to help kick start their first product.
6. 6 2.0 Company Description 2.1 Description E-Vita is a new
company that was founded with the hopes of providing high quality
eco- friendly products to both middle class markets and people in
need around the world. E-Vita is working on strategic alliances
with other environmentally friendly companies and NGOs, to
strengthen capabilities and flexibility within the market sphere.
E-Vita is a partnership firm, each partner with 20% equity with
50,000 yuan invested from personal savings. 2.2 Mission To provide
sustainable freshness around the world E-Vita strives to spread
sustainability and to inspire environmentally friendly innovation
throughout the world by constantly providing high quality products.
2.3 Values Sustainable living We understand that this world we live
in is ultimately borrowed and that we need to behave in such a way
that will ensure clean air, clean water and a high quality of life
for everyone on the planet and for future generations. Equality We
believe that everyone and everything on earth is made equal and
deserves fair treatment. We encourage female leadership, cultural
diversity and always being open to new perspectives. Authenticity
and ethical practices We value integrity in every process, and fair
treatment of workers, suppliers and customers. From beginning to
end, our product will be made without corruption, or exploitation,
and with the highest quality materials. Entrepreneurial Spirit We
put great importance on entrepreneurial attitudes and traits; being
able to think outside the box, willingness to take calculated
risks, flexibility when things get rough, and the passion to work
extremely hard for what we believe in. 3.0 Opportunity Analysis and
Research 3.1 Industry Analysis Our primary industry to focus on
when starting up the business will be the Home Appliances, and
Outdoor Home Appliances market in China, focusing on a niche of
ecofriendly refrigerators.
7. 7 RootCauseAnalysis
8. 8 3.2 Environmental analysis: PESTLE Political Political
regulations have some relevant affects on the firms likelihood to
succeed. The main issue is that the Chinese Government requires
foreign start-ups to initially invest 300 000 Chinese Yuan into the
company, the issue being that it may be difficult to raise these
kind of funds. On the other hand, China has enjoyed a stabilizing
political environment; a great labor force supported by lenient
employment laws and good safety regulations to support a stable
future for the company in China. Furthermore, trade regulations
such as free trade zones as well the high amount of export going
out of China make it suitable to distribute our product all over
the world. Economical Economically China is a great place to start
up this business. Chinas economy has been constantly growing over
the past 20 years. The country shows a lot of promise to enjoy a
great era of wealth. China also has a great labor force with low
wages. Furthermore the Chinese currency has been rising in value,
therefore making it a stable and valuable currency to work with in
the future. Social Chinas demographics are rapidly changing. The
population is aging due to the one child policy, which may not be
optimal for our purposes, as our product is more to be appreciated
by younger environmentally conformed people. On the upside, Chinese
lifestyles have been changing over recent years and consumer habits
to purchase have been increasing. Therefore although our product is
in many cases not a necessity, people will still want to buy it for
convenience. Furthermore our product is environmentally friendly
and with the increasing air pollution people are developing an
environmental consciousness and will be more likely to purchase
environmentally friendly products in the future. Technological As
our product is electricity free we will only need a mold and
standard production machinery to mass-produce our product.
Technological advancements therefore will not affect the companys
ability to supply. Furthermore it is unlikely that our product will
need technological advancements, as the idea behind it is that it
doesnt need electricity. 3.3 Competitive analysis: SWOT &
Porters Five Forces SWOT Analysis
9. 9 Strengths The product is environmentally friendly, made
from ecological materials and does not require any electricity to
operate and can therefore be used anywhere, power consumption is
zero when in use and uses water as the refrigerant, as opposed to
CFC (Chlorofluorocarbons). Normal refrigerators have compressors,
which use a large amount of power, with low efficiency. Ordinary
fridges also have higher risk of CFC vapors, which is linked to
depleting the ozone layer. Freshbox is cheap to produce in
comparison to its electric counterparts and can be bought at lower
prices. Weaknesses The product cannot cool down as much as an
electric refrigerator and is made of fragile clay components, which
require careful handling. Opportunities Growing environmental
conscious in the world helps our cause and will likely increase
popularity. We are an early mover in the market. China specifically
as our first market yields high potential from the growing amount
of target consumers. In terms of corporate social responsibility,
many new jobs can be created with local production. Threats Easy
entrance to market, can lead to high risk of competition. Also,
people may not accept that the product doesnt work as well as an
electric refrigerator. Porters Five Forces Barriers of entry Low
barriers of entry as we do not have any patented technology and the
start up cost is reasonably low. This might lead to a lot of
competition if our product is successful as people will try and
mimic the success. Bargaining power of buyers The product is
creative and new with a possibly large market. Many environmentally
conscious people may want to purchase one, leading to low
bargaining power of buyers. Bargaining power of suppliers There is
a low amount of competition in the field. The only serious
competition charges high prices and doesnt operate in our initial
market. This may lead to a high bargaining power of suppliers Risk
of substitutes The risk of substitutes in the industry is
relatively low, as it is a niche market
10. 10 Competitor Rivalry As our product serves a niche market
in the industry, the number of competitor firms in almost low to
non-existent. Therefore, creating brand loyalty at the early stages
would prove to be a significant factor towards our growth. 3.4
Market Opportunity Green manufacturing is a relatively new concept
developed in recent years. Markets are shifting towards a
sustainable and socially responsible development model for modern
manufacturing industries. An emerging niche market for innovation
and non-electricity based products within the home appliances
market. Target Market With improving standards of living and rise
in the income, it is observed that the new growing middle class in
China follows the new model of buying sustainable and socially
responsible products. Access to alternate and cheap sources of
energy and products is becoming necessary for Chinas booming
population; therefore there is a shift towards eco-friendly
products, which are proximate to Chinas culture and heritage which
makes middle class families, working class aged 23-35 and students
who cannot afford to buy a refrigerator due to its unnecessary
operating cost. Our target market is further segmented into people
in the BOP (bottom of the pyramid) who live on less than 30 Yuan
per day. Our product would be of significant utility for this
target market. Lastly, we would also focus on customers involved in
outdoor, adventure, military and camping segments. Increasedcostof
livingdueto energyconsuming products Explosiveincrease indemandfor
GreenProducts Emergenceof Sustainableand Socially responsible
industries OurProduct
11. 11 4.0 Marketing Strategy and Plan Goal Bring the right
product to the right place at the right price with the right
promotion 4.1 Product Brand name: E-Vita Brand Colors: Blue (color
of the sky and sea, symbolizes depth, stability, trust, and
frostiness) & Green (color of earth and nature, symbolizes
ecology, freshness, calm and sustainability) First product name:
Freshbox (590mm*300mm*470mm) Our Unique Selling Proposition Giving
you effective, elegant and eminently distributable technology and
products. Usefulness FreshBox stores up to 30kg food and keeps it
fresh up to 20 days, while costing only 120 RMB to produce. This
product uses a cooling mechanism that is reliant on nature and has
zero energy waste when used. This can be kept outside to keep food
or medicine fresh. DesignandTechnology FreshBox is an appliance as
well as home dcor, which is recyclable, affordable and saves space.
FreshBox is an elegant, stylish and beautiful product with the
utility of storing food while being low maintenance. FreshBox has
the ability to weather natural disasters and maintain livable
conditions in the aftermath of disruptive events. For example,
almost all systems require electricity to operate even if their
primary fuel is oil, gas, or wood pellets; systems that allow
operation even if grid electricity is not available are more
resilient in the event of power outages. After a disastrous event
where cool storage for a type of medicine or product is required
and there is no power, this product proves extremely useful.
12. 12 Quality Our eco-friendly product also strives to
minimize the use of any potential toxins or harmful chemicals in
the production, which in our case is zero percent. We use
terracotta clay, which also provides its natural earthly benefits
to the food stored in our product. Normal refrigerators have CFC
(chlorofluorocarbons), which are highly toxic and are also one of
the major reasons for the ozone layer depletion. We believe in
Responsible sourcing creating sustainable industry generating
employment in an area where artisans and clay makers are losing
their art due to less demand for their handcrafted services.
Packaging For our primary market, we would encourage young
enthusiastic artists and painters to provide their services in
enhancing the aesthetic appearance of our product. Also, we would
integrate customization into the mix by offering over thousands of
copyrighted abstract paint and spray paints samples and tools which
would engage our customers to have their fridge reflect their
individual styles. Service/SupportandWarranty Our product is simple
to use, thus customers wont need considerable after-sales support.
The product is durable and can be used for many years. 4.2 Price
Costs Materials used: Machinery to press, shape and mold, Builders
sand, Clay, water, Paint Holders, and promotional costs. It takes 7
kg clay & 2kg sand to produce one Freshbox. Cost of clay: Red
Earthenware clay=2.5 Yuan/kg Cost of sand: 2 Yuan/kg Average labor
cost: 25yuan/hour 2 refrigerators produced per employee per hour
Average 100 Refrigerators will be produced per month in Year 1.
Glass door: 40 Yuan/unit Estimated production cost incl. labor=120
Yuan/refrigerator Retail price: 299 Yuan Wholesale: 150 Yuan Profit
Margin: 249% Competition Mitticool refrigerator: cost = 588 Yuan In
comparison to our main competitor, our price point is marginally
lower and should give us an competitive cost and differentiation
advantage
13. 13 PricingStructure We will use a prestige pricing strategy
for our primary market, which sends a message of uniqueness and
premium quality to our target customers. The price would be set at
299 RMB, which would also make Freshbox psychologically priced as
well due to its 99 factor at the end. For our secondary and
tertiary market, a personalized pricing strategy would be used. We
want to work with NGOs and other organizations as a part of our
corporate strategy; therefore we would offer Cost+ 25% markup
pricing, which would be around 150 RMB. 4.3 Place Channelmembers
Onlinechannels Primarily the product will be sold online, as the
margins are much higher and it is an easy market to enter.
Platforms such as Alibaba and Taobao are perfect opportunities to
start selling our product. Going into wholesale may become a little
more difficult in the Chinese market, as there are limited large
wholesalers specified on the outdoor and appliances industry
IKEAandAuchan Large supermarkets or retailers would be a perfect
place to distribute our product as they sell many appliances of all
different kinds and have a very large amount of customers walking
through their aisles. Furthermore IKEA would be a perfect place to
sell our product as it fits into their model. However in order to
get into IKEA, we would have to pass IKEAs testing and go through
their channels NonprofitOrganizationsinDevelopingCountries By
working with these organizations, there can be a simple channel of
product to people in need. The products would be taken from our
facilities and sent in bulk straight to the areas in question.
MarketCoverage IKEA would cover: Suzhou, WUXI, and their
neighboring cities. Online: Specific targeted areas such as major
cities in China with high density of our target segments. NGOs and
Organizations: Covering global market and poverty driven regions
such as South Asia and Africa. For our primary market we would
focus on selling directly through our website and various online
channels to our customers (B2C). Also, we are in talks with IKEA
Wuxi to
14. 14 secure floor space and negotiate terms and conditions
with them. IKEA is very close to our suppliers and production
facility therefore its very convenient and faster for us to deliver
our product. 4.4 Promotion Basically a hybrid push and pull
strategy: pushing our products through NGOs and organizations and
pulling more and more customers towards our selling channels
(online and IKEA) to generate more buzz and garner attention. Our
IMC plan would follow the principle of AIDA Attention Interest
Desire Action Therefore; We would tactically focus on creating
awareness and generating attention about our product. Our most
essential tool is that our company is Highly Eco-friendly and
socially responsible, we are highly reliant on nature i.e. Going
green, supporting CSR, also we are cultivating a sustainable
industry and also generating employment in an area where artisans
and clay makers are losing their art due to less demand for their
handcrafted services. We are also addressing the need for using
renewable energy, our leadership focuses on encouraging women to
hold core management positions. Therefore, we would use all these
to our advantage, which would result in promoting our product free
of cost. This would generate more credibility, goodwill and
appreciation from the society, which is crucial for our branding.
This will spontaneously generate more interest towards our product,
thus making it easier for us to engage and partner with
distribution channels NGOs and other charitable organizations due
to our credibility and goodwill, which we attained in the first
stage. We would further use the credibility and reputation of our
partner NGOs and charities to our advantage, thus making it easier
to build trust with our primary target market and drive traffic
through brand spiraling. Our customers by now have became aware and
interested in buying our product, they now desire to buy the
product and thus to convert this desire into an action, i.e. actual
purchase we would use these channels, which we secured in the
second stage to make the product available in the market for people
to purchase. We also plan to launch Create your own clay pot
initiative where we would teach people in the remotest area of the
world to create their own pot. The pot is round and smaller in size
and the physical prototype can be found in the appendices. Also,
for every 100 freshboxes bought one is donated to a family without
electricity (serves the purpose of appealing to the ecofriendly
market, also serves as a good CSR strategy which can immensely
drive publicity as well as sales)
15. 15 Other possible promotions could include green billboards
and green ads, which capture the attention of people on social
media. Furthermore regular updates and a good social media presence
can gain us inexpensive publicity. Lastly we will have to advertise
the product at tradeshows regarding the outdoor as well as home
appliances market to build a name for the brand in the industry.
Thus, this encompasses our PR, publicity and viral marketing
strategy. Since our primary market is based in China use of
television, radio, magazine and newspaper advertisement would not
prove to be fruitful. Therefore, we would use non-paid form of
print and non-print; online and offline advertising through the
following sources, i.e. using CSR, women in leadership, generating
employment, and encouraging sustainability as tools for our PR and
publicity campaigns that would highlight us in media, newspapers,
and recognized bodies. Marketing budget would include: Website
domain purchase, events, guerrilla marketing, trade shows and
targeted Internet advertisements other misc. promotional expenses.
4.5 Philanthropy Our product also serves a segmented target market
of people in BOP (bottom of the pyramid) who live on 35 RMB a day.
Our product would have a significant amount of functional utility
for this target market. Therefore, a cause related marketing would
be executed in partnership with the NGOs and other charitable
organizations, which will not only bring additional customers but
also support our CSR policy to ultimately promote our product to
the masses for a conveniently affordable discounted price. 5.0
Management Team and Operations 5.1 Management Team CEO Amanda
Nguyen is in the middle of completing a Bachelor in International
Business all while being a forward thinker and entrepreneur. Amanda
has always been interested in socially responsible companies and
products. When the idea of bringing ecological, nonelectric fridges
came into existence, it was clear that this was a path that needed
to be taken by a group that had enough intention to go through with
it, and there needed to be someone to help keep clear intentions.
Amanda has extensive leadership experience in global organizations
and has learned to work on virtual teams. Using her strong
interpersonal skills, she will be the glue of the E-Vita team,
keeping morale high and always striving for better targets.
16. 16 Marketing & PR Abhishek Patel studies Business
Administration in the UK and is currently on exchange in China. He
had always known about the concept of clay fridges from his
relations with India, but little did he know that this was an
opportunity for a three P company. One that benefits all three Ps:
Profit, People, and Planet. Abhishek has shown his expert knowledge
in business administration and marketing through his exemplar
projects, presentations and constant review of current events.. He
has been itching to utilize his marketing expertise in Asia and has
acknowledged the Green trend that is slowly making its way East
from other developed countries. Abhishek has already thought of
market campaigns for expansion and seeks to imprint E-Vita as an
eco-friendly brand the world will remember. Finance Frederik Rolfes
is currently taking a Bachelor in Business Administration in China.
Being a critical thinker he understood that this startup venture
will be costly and risky, but he believes that he can use his
personal experience and mentors to alleviate this risk and make
smart decisions and smart budgets. He takes meticulous care into
each endeavor and understands the value of money, which makes him
most suitable to manage the finances of E-Vita. Operations Chenghao
Ma is also taking a Bachelor in Business Administration in China
and is prepared to oversee the entire E-Vita process, including
supplier management, manufacturing, quality control, and
distribution. Throughout Chenghaos academic career, he has proved
to be a logical, detail oriented and highly diligent individual. He
will use these capabilities and his fluency in Mandarin to create
strong relationships with local suppliers and other companies in
the industrial areas. He is committed to providing products of the
highest quality in the market through thorough testing and ethical
methods. Chenghao intends to make sure all operations run smoothly,
from beginning to end. Research and Development Steve is an
accomplished undergrad of Industrial Design and is seeking to
utilize his skills to create an intelligent and attractive product
using the new program SolidWorks. He has been commended for his
recent public bus handle design for its combination of creativity
and functionality. Steve understands the scientific mechanisms of
clay refrigerators and has designed a tasteful, economically sized
E-Vita for the energy- saving home. Steve will keep improving the
design to be as cost efficient in terms of materials, energy
efficient in terms of product creation and of course to meet the
needs of the consumer.
17. 17 5.2 Physical Location Our headquarters will be in
Suzhou, SIP, close to our target market. We believe that this is a
prime location where we can conduct our research, meetings, and
foster an entrepreneurial community. The physical location of our
manufacturing plants will be strategically placed near the target
markets in Asia. This is essential as our product has the fragile
component of clay and the less geographical distance it has to
travel, the better. Many cities in China and other Asian countries
have Industrial parks or clusters where businesses are flourishing
and can facilitate accessing the local distribution systems. Our
first plant will be located as close as possible to headquarters
within the constraints of reality, it may be in a neighboring city
such as Wuxi. 5.3 Facilities Because we are a start up and doing
our best to reduce expenses, we will not have rent an office space,
and can use whatever space is available to us without extra
expenses. This could mean one of our apartments, a friends
apartment or, public spaces such as coffee shops or libraries. The
space we need can be modest in size and interior, there only needs
to be a space to make and field calls, and work efficiently on our
own personal devices so no need for much office equipment or office
supply investment. The first step in the process of creating the
E-Vita fridge is to use the molds to make the clay shells, and
plastic components. Then there is assembly, testing, and painting
the outer shell of aesthetic purposes. There needs to be a section
of the facilities for each step and enough space for a smooth
workflow. A suitable space was found for rent in SIP at a
reasonable price. 5.4 Production and Quality Assurance PotMechanism
As water from the wet sand slowly diffuses through the porous outer
part, the water evaporates into the drier outside air and cools the
system. For this to work effectively, the fridge must be placed in
a dry, ventilated space. This cooling effect keeps the food in the
smaller pot fresh by slowing decomposition and thus keeping
nutrients intact. However the mechanisms of a simple looking device
can be quite complex based on principles of evaporation and
thermodynamics Sweat evaporation occurs from the surface of a
liquid into a gaseous phase that is not saturated with the
evaporating substance. The amount of heat that is needed to
evaporate the liquid is drawn partly from the air and evaporating
surface. Thus the surface becomes cooler. Evaporative cooling
occurs at the surface. The heat needed to change phase is drawn
from the surface and thus it can be used to cool without using much
energy like common refrigerators.
18. 18 ProductResearch Our scientific research concluded
answers to the following questions: How long will food stay fresh
in our product compared to an electric refrigerator? Does the size
of our product make a difference in the lowest temperature
achieved? How does the amount of water in the sand affect the
temperature? What effect does the amount of sand have on the
temperature? How does increasing the surface area of the outer part
affect the temperature change?
19. 19 Our manufacturing process: We will purchase two metal
mold to create the two different sized clay shells. Then, it shall
be assembled together with the sand and other components, painted
for aesthetic reasons and sent to quality testing. Our product
performs its cooling function under certain humidity. We will take
one from every ten fridges and perform a quick cooling exam to
verify that our fridges meet working conditions. We will check what
temperature the fridge is able to achieve and it passes the test,
it moves on to packaging. 5.5 Inventory and Product Delivery In
order to deliver high quality products, we will focus on carefully
selecting our materials, employees, suppliers, and delivery
methods. To meet customer demands we will have __ amount of pieces
in inventory at all times. The products in inventory will be kept
stacked to the side of our rented facility. The clay and materials
will be kept safe with foam/ paper and covered in plastic to
prevent dust. Further packaging with air filled plastic packaging
will be used to encase the final product during transport. The
product will be fitted inside labeled and branded cardboard boxes
and shipped directly to customers buying through the online shop or
in large quantities to partnering NGOs. Our company email will be
constantly monitored for valuable complaints and feedback that will
help us pinpoint weak spots in our product or customer service.
Moldclayshells Assembleclay shellswithsand Assembleplastic
components ontofridge Paintclay exterior Qualitytesting Engage
suppliers Create Product Delight Customer Gain pro]its Investand
innovate
20. 20 6.0 Financial Analysis and Projections 6.1 Cash Flow
Projections E-Vita Cash Flow Projections Year 1 Year 2 Year 3 CASH
RECEIPTS Total Total Total Cash Sales 287,040 344,448 413,338
Collection of Accounts Receivable Loan Proceeds Owner's Equity
Contributions 250,000 Sales of Assets Other Total Cash Receipts
537,040 344,448 413,338 CASH DISBURSEMENTS Purchase of Material
Assets 79,950 95,940 115,128 Purchase of Fixed Assets 120,000
Owner's Salaries Employee Wages 72,000 72,000 72,000 Employee
Benefits Advertising and Promotion 75,000 75,000 75,000 Rent 24,000
24,000 24,000 Utilities 3,000 3,000 3,000 Other Office Expenses
Income Tax Payments 93,488 67,485 43,500 Other Total Cash
Disbursements 467,438 337,425 332,628 Increase (Decrease) in Cash
69,602 7,023 80,711 Opening Cash Balance 98,107 77,890 86,041
Closing Cash Balance 76,536 86,041 166,753
21. 21 6.3 Balance Statement Projections EVita Expected Balance
Sheet Assets() Beginning Year 1 Year 2 Year 3 Current Assets:
Accounts Receivable 0 143520 107640 71760 Cash 250000 120500 321160
530000 Inventories 0 28800 0 15840 Other Current Assets 0 25800
25800 32250 Total Current Assets 0 318620 346960 722050 PROPERTY
& EQUITPMENT 0 120000 120000 120000 Total assets: 250000 438620
466960 842050 Liabilities() 2015.01 2015.12 2016.12 2017.12 Current
Liabilities: Short-Term Debt 0 0 0 0 Accounts Payable & Accrued
Expenses 0 0 0 0 Other Current Liabilities 0 0 0 0 Current Portion
of Long-Term Debt 0 0 0 0 Total Current Liabilities 0 0 0 0
LONG-TERM DEBT 0 0 0 0 Short-Term Debt 0 0 0 0 Accounts Payable
& Accrued Expenses 0 0 0 0 Other Current Liabilities 0 0 0 0
Owner's Equity() Retained earnings 250000 438620 466960 842050
Total Equity: 250000 438620 466960 842050 Total Equity and
liabilities: 250000 438620 466960 842050
22. 22 6.4 Income Statement Projections Projected Income
Statement YEAR 1 YEAR 2 YEAR 3 INCOME Revenues Sales 287,040.00
344,448.00 413,218.00 Net sales revenue 287,040.00 344,448.00
413,218.00 Less COGS Opening stock 287,040.00 344,448.00 413,218.00
Cost of Goods Sold 129,600.00 141,120.00 154,920.00 Gross profit
157,440.00 203,328.00 258,298.00 EXPENSES Equipment 120,000.00 0.00
0.00 Depreciation 12,000.00 10,800.00 9,720.00
Advertising/promotions 75,000.00 75,000.00 75,000.00 Utilities
3,000.00 3,000.00 3,000.00 Rent 24,000.00 24,000.00 24,000.00 Total
Expenses 234,000.00 112,800.00 111,720.00 Net Profit -76,560.00
90,528.00 146,578.00 6. 5 Breakeven Analysis
GraphofBreakEvenAnalysis Figure 6.5.1 is the calculation for how
many units it would take to breakeven. Figure 6.5.2 is the visual
representation of the slow rise to profitability. 0 100000 200000
300000 400000 500000 600000 700000 800000 900000 80 480 880 1280
1680 2080 2480 Fixedcost TotalCost Salesrevenue
23. 23 BreakevenAnalysis Sales SalesPriceperUnit 299
SalesVolumeperPeriod 80 TotalSalesAmount 3000 Variablecosts
RawMaterials 60 TotalVariablecostperUnit 60
TotalVariablecostperPeriod 4800 ContributionperUnit 239 GrossMargin
19120 FixedCostperPeriod Salary 6000 Rent 2000 Marketingexpenses
6250 TotalFixedCostperPeriod 14250 NetProfit(Loss) 4870
TotalFixedcost Equipment&Machinery 120000 Total 120000
BreakevenPoint(Units) 1972 7.0 Funding Internal funding The five
owners of E-Vita will each contribute equal amounts of 50,000 CNY
to the company each buying 20% of the company. External Funding
There are many grants to apply for when starting a business. One
that we could meet the criteria for is the Leadership Grants for
small businesses, which goes to Canadian or American Citizens. The
grants range from $1000 to $100000, depending on the business and
if the company has the ability to match the grant funds. This
amount is uncertain but will hopefully help fund E-Vita. Apart from
that we also look forward to apply for women in leadership grants,
sustainable businesses grants and so on. 20% (4% from each owner)
of the business is left for investors looking to collaborate and
engage in this emerging sustainable enterprise.
24. 24 8.0 Appendices Appendix 1 (Rental space in SIP) Space
rental for a reasonable price
http://su.58.com/fangchan/21787890363426x.shtml?PGTID=14309030173660.9753443623662
951&ClickID=2&adtype=3 (Accessed: 05 May 2015) Funding
Request Leadership Grants for Canadians and Americans
http://www.leadershipgrants.com/smallbusiness/funding_guidelines.jsp
(Accessed: 09 May 2015)
25. 25 Appendix 2 (Our Make your own pot Initiative
prototype)