Section 1

Team 7
Fall 2018

Business Plan
Business Name: Slim Technologies, LLC
Business Idea: Pop-Mouse

Our product is a computer mouse that is easier than most to take with you on-the-go. The mouse’s soft, silicone
exterior shell collapses to fold virtually flat and locks into place. Then, a button found on the side of the mouse will
release the springs which makes the mouse expand to original size. This allows for not only greater portability, but
the ability to easily take your mouse anywhere with your laptop. The portable, precise computing experience is
perfect for professionals and students of all ages whose computing needs are becoming increasingly mobile. This
mouse’s collapsing functionality offers efficiency and portability while the soft shell provides a one of a kind
ergonomic feel to the consumer’s hand.

Team Members:
Jake Biggar biggarjr@dukes.jmu.edu
Ian Dworak dworakim@dukes.jmu.edu
Bradley Harmon harmonbc@dukes.jmu.edu
Prayag Patel patel5ps@dukes.jmu.edu
Ryan Sullivan sulli3rp@dukes.jmu.edu
Luke Sweigart sweigalm@dukes.jmu.edu
 Executive Summary
Slim Technologies LLC.
Prayag Patel
2327 Winnie Street, Galveston TX, 77550
Phone: 774-571-4199
E-mail: patel5ps@jmu.edu

Management: Business Description: Slim Technologies LLC is taxed as a

Titles: General Manager, Marketing Manager, Operations C Corporation and is manufacturing business that produces
Manager wireless computer mice. Slim Technologies will have one
distinct location in Galveston, TX, where the collapsible
Industry: Other Computer Peripheral Equipment silicone top and plastic base will be manufactured, and
Manufacturing assembly of the final product will be conducted. The final
NACIS: 334118.02 product will also be shipped directly out of this location.
Revenues are expected to be $3,416,560 in Year 1 from
Number of Employees: 16 employees – all full time selling 97,616 units.

Amount of Financing Sought: $1,025,000 Products/Services: One product: Computer mouse with
the name “Pop-Mouse”. The selling price is $35. COGS is
Investment Sources: $12.32 per unit in year one.
8.8% Founding Investors – $90,000
75.6% Bank Loan – $775,000 Competitive Advantage: The patented, collapsible design
15.6% Sale of Equity to Venture Capitalists– $160,000 of our mouse offers a combination of portability and
ergonomics that can’t be provided by the traditional wireless
Use of Funds: Our funds will be primarily used to purchase mouse. This dynamic design aligns with current market
our facility, manufacturing equipment, and raw materials to trends as computing needs have become increasing mobile.
produce our product. They will also be used to pay
employees and overhead. Markets: Professionals who travel for business and use
laptops, the potential market size is 35,538,462 and it is
Product/service selling price: $35 expected to grow about 1% each year for the next four
years. Students in higher education in which the target
market is 19,830,000 and the market is expected to grow
about 1.5% over the next five years. Students in grades 5-12
which is about 30,185,000 and is expected to grow 1.49%
the next five years.

Distribution Channels: Amazon Web-Services for the sales of the product. Strictly B2C sales. USPS will be used for
shipping throughout the country. Advertising primarily is primarily online (Google Ads, YouTube, and Facebook).
Competition: Logitech, which is the largest distributer of computer mice in the world. Microsoft “Arc-Mouse” which is
the closest product to us in terms of portability and ergonomic ability (Microsoft, Microsoft Arc-Mouse).
Financial Projections (Unaudited): (dollars in thousands)

2019 2020 2021 2022 2023

Revenue: $3,416 $6,354 $7,498 $8,998 $10,528

EBIT: $ 722 $2,394 $3,065 $3,952 $4,797
Elevator Pitch: From the traveling professional to students and educators of all levels, mobile

computing on laptops and notebooks is an ever-growing sector of the computing market. Currently,

most of these users settle for less efficient touch pads built into their computers. In addition to

being more efficient, users also generally prefer mice over touchpads. A study was conducted which

polled 219 consumers finding that almost three-quarters of respondents prefer using a mouse to a

touchpad. Only 19% of laptop users like touchpads, stating that the built-in scroll pads require no

extra cables or peripheral attachments (IOGEAR, Laptop Users Prefer Mice Over Touchpads). The Pop-

Mouse brings the precise, effective use of a traditional computer mouse in a portable design to the

market. Pop-Mouse offers the ergonomic design of a full-size mouse but features a soft silicone shell

which can fold virtually flat for easy, on-the-go storage. In the increasing mobile nature of the

computer accessories market, we at Pop-Mouse believe that size does matter.

Product Description: The Pop-Mouse is a collapsible computer mouse with a hard-plastic base

covered by a soft silicone shell. Our standard sized (4.3” x 2.5” x .75”) wireless mouse collapses

virtually flat for easy transport and storage. Our proprietary design is the collapsing nature of the

silicone shell, which uses rings of telescoping silicone folds to collapse flat against the mouse’s hard

plastic base. The mouse will have a spring locking mechanism which supports the silicone shell and

can be released by the press of a button, which is found on the side of the plastic base. Our product

will have a rechargeable battery in its base that can be charged by a micro-USB cable.

Competitive Advantage: The patented, collapsible design of our mouse offers a combination of

portability and ergonomics that can’t be provided by the traditional wireless mouse. Using a mouse

rather than built in touch pads can greatly increase computing speed and accuracy. Our collapsible

shell folds flat allowing the mouse to be transported easily before “popping” back up to provide a

full-sized mouse experience to the mobile computer user. This dynamic design aligns with current

market trends as computing needs have become increasing mobile.

Value Proposition: With the rapid increase of mobile computing in recent years, many users today,

if given the choice, would opt for a computer mouse over a trackpad, as shown by the study

mentioned earlier (IOGEAR, Laptop Users Prefer Mice Over Touchpads). We are entering a rapidly

growing sector of the already well-established computer peripherals market. We can deliver this

product with relatively low overhead and unit costs, allowing us to capture high profit margins. This

will allow us to give our investors high return to compensate for the risks associated with our

product.

Business Strategy: Our business strategy revolves mainly around product differentiation. We are

producing our unique design in house to maintain our proprietary design and protect it from

competitors. Due to its material and collapsing function, we can market our product as unique from

the current computer mouse market.

Business Location: We chose to incorporate our business in Galveston, Texas for two reasons.

Firstly, Texas has low minimum wages and a large pool of employees to hire. The second biggest

factor in our choice was the proximity of Houston, and the multitude of ports available. These easily

accessible ports will allow us to import our raw materials and components from our suppliers

overseas with lower lead times.

Outsourced Functions: Most of our production process and assembly is done in-house, with only

the raw materials and individual electrical components being provided by overseas suppliers. Mailing

and distributing of our product are outsourced because it would not be feasible for us to individually

deliver each product sold and the infrastructure for such an operation would be enormously

expensive. The other function we outsourced is the web-based services used to sell our product.

Outsourcing the materials allows us to increase our margins, due to COGS per unit being lower, and

the usage of web-based selling allows us to skip hiring sales consultants and an IT department,

which will help us save on our overall payroll.

Exhibit 1: Organizational Chart (Year 2)

*At the end of Year 1 we will hire 2 Team Assemblers, 1 for Workstation #1 and 1 for Workstation
#2, and 1 Production Worker.
*At the end of Year 2 we will hire 3 Team Assemblers, one for Workstation #1, Workstation #2,
and Workstation #3.
*At the end of Year 4 we will hire 1 Team Assembler and 1 Production Worker.
Exhibit 2: Employee Cost Chart (Year 2)

Notes for Cost Chart:

1) Pay ranges obtained from www.onetonline.org
2) Health insurance cost obtained from the Agency for Healthcare Research and Quality
3) Pay range percentiles and reasoning:
General Manager in the 63rd percentile - Higher than average because we wanted to attract above average talent.
Marketing Manager in the 45th percentile - Higher pay because they will be managing our large advertising budget and key to the
success of our organization.
Operations Manager in the 32nd percentile - We chose this percentile because of our operations is a relatively simple process.
Customer Service Representative in the 26th percentile - Since we only have one, we need someone that can handle customer
service singlehandedly.
Team Assembler in the 7th percentile - Turnover for these workers will be higher, so this pay range will be on the lower side. We
will offer performance-based raises as decided by the GM.
Production Worker in the 6.8th percentile - Turnover for these workers will be higher, so this pay range will be on the lower side.
We will offer performance-based raises as decided by the GM.
Warehouse Staff in the 2.5th percentile - Turnover for these workers will be higher, so this pay range will be on the lower side. We
will offer performance-based raises as decided by the GM.
4) Benefits:
o Gold includes health insurance, 401k contribution which is 5% of salary, 2 weeks paid vacation
o Silver includes health insurance, 1 weeks paid vacation
o Bronze includes health insurance, 2 weeks unpaid vacation
Exhibit 3: Market Segmentation Analysis/Target Market Selection
Exhibit 4: Market Quantification

Market Potential:
Determined our Market Potential Customers, which was 85,553,462 by adding market segmentations (35,538,462,
19,830,000, 30,185,000). This potential was then multiplied by our unit price, $35. Finally, to account for the fact
that potential customers will not buy a new mouse each year, we lowered our potential sales by using a multiplier of
0.5.

Actual Market/Market Potential Growth Rate:

Determined by taking the 5-year potential growth rate of the mouse market, 5.71% (PRNewswire, 2016). By
finding the 4th root of this number, we can find the yearly compounding growth rate over our 5-year forecast,
1.014%.

Market Share:
Determined by taking our Projected Annual Revenue of 3,416,560 and dividing by our Market Potential, which we
found to be 4,235,657,318. This yielded the market share of 0.08%.

Unit Forecast for 12 month and 5-year Forecasts:

Determined by taking the Logitech first month unit mouse sales in 1985, which was 800 (Logitech History, 2007).
To adjust for the first month unit sales to current years we multiplied 800 by 15.25, which gave us 12,202. 15.25
accounts for the market growth by dividing the current households
in the U.S. with access to a computer by that of 1985, 86 x
126,220,000 / .082 (U.S. Census Bureau, 2018) x 86,790,000. While
we acknowledge that the computer market has changed since 1985
with the use of touch pads and touch screens, we decided to leave
these potential customers in our forecast as we are targeting these
kinds of computer users. Then we multiplied 12,202 by 8 (8
months of unit sales due to the first 4 months of no sales) to give
us year 1-unit sales of 97,616 and $3,416,560 Annual Revenue
(97,616 x $35). For year 2 through year 5, we used average growth
of start-ups, which were 24%, 18%, 20% (Girardi G., 2016) for
years 2, 3, and 4 respectively and multiplied that by the previous
year unit sales. For year 5-unit sales, we assumed a 17% rate to reflect us becoming a more mature company with
less rapid growth. From there we multiplied by our Unit price to get Year 2 - 5 Annual Revenue. For Market
Potential Customers in Years 2 -5 we multiplied our customers by the growth projection 1.01%, which was then
multiplied by $35 to get Market Potential Revenue. Finally, we divided the new Annual Revenue by the new Market
Potential Revenue to get our Market Share.
Average monthly sales for the first year were projected to be 12,000 units by dividing year 1 forecast by 12. In order
to account for monthly growth (10% taken from average startup growth), we began the first month with 8,000 in
unit sales to reflect a 10% monthly compounding growth rate. We then accounted for outlying monthly sales in
August and December, as computer peripheral products are especially popular during back-to-school and holiday
seasons.
Exhibit 5: Positioning / Competitive Analysis

Positioning Statement:

Pop-Mouse satisfies the portable computing needs of anyone ranging from adults to school aged students. Pop-

Mouse stands out from the rest of the wireless mouse market by providing the perfect combination of portability

and full-sized mouse ergonomics.

SWOT:

Strengths - Design, portability, ergonomics

Weaknesses: Don't have economies of scale, new entry to market, no touch sensing or other high-tech features

Opportunities: Take market share from competitors, capitalizing on fidget/stress relief market with the soft design

Threats: Popularization of touch-mouse market, bigger companies who can produce at a higher quantity for lower

prices.
Exhibit #6: Marketing Mix
Product/Service Branding:
Our branding emphasizes that we are the portable mouse that has an ergonomic design focused on delivering a satisfying
computing experience to the customer. We plan to accomplish these strategies, which highlight how our popping design can
deliver one of a kind portability and ergonomics by emphasizing our competitive advantage and superior user productivity.
This relates to our positioning because we are the only collapsible, portable mouse that can provide the desired, full-sized,
ergonomic design.

We are using a value-based

pricing strategy, as our
customers are somewhat
price sensitive. Our price is
higher than the majority of the wireless mouse market, but less than the other name brand portable mice with similar adaptive
structures (Microsoft and Apple). We plan to take advantage of the room in the mouse market for an original, adaptive,
portable mouse, which does not cost the premium price that other competitors are charging. We can accomplish this by
forgoing flashy tech features such as touch functionality and haptic feedback, and instead choosing to focus on our portability
and satisfying, ergonomic feel of our product. These components and our pop-up design can be achieved at a low production
cost.
Distribution/Location Strategy:
We have elected to use Amazon Web Services to curate our online sales to consumers. This cuts the up-front costs of an
online store, as we do not need to maintain a website or build a distribution network to brick and mortar retailers. This uses
the Producer, Retailer, Consumer model to distribute or product to customers. It also gives us access to the large, rapidly
expanding online market of consumer computing peripherals through the most popular web-based shopping platform today.
In addition, we are using AWS because our target markets will go to a more recognizable brand/company such as Amazon for
their computer accessories. Our target segments use mobile computing devices and are therefore likely to look online for their
next mouse purchase. AWS also offers database and logistics services which we expect to take advantage of. We will use
USPS small flat rate boxes to distribute our mice to our customers, with the customer paying for the shipping label and box. If
there are any discrepancies with the product and the product needs to be shipped back to us, we will cover the shipping costs
to return the product.
We found our advertising budget
by taking Logitech's advertising
expense from 2007 and dividing
it by their sales to get the cost of
advertising per sales dollar. We
then multiplied that ratio by our
expected sales to find our advertising budget for each year. Advertising expense will use the majority of our promotional
budget, followed by back to school and holiday sales promotions. The goal for our back to school sales is to capitalize the
school year starting up again and the higher demand. Our key message is that our product collapses to provide unmatched
portability with an ergonomic design. We plan to spend around 20% of our advertising expense on YouTube ads. YouTube
will only charge us when the ads are actually viewed at around .20 cents per view. We will also advertise on Facebook, which is
$7.19 per 1,000 views. We are also going to advertise using Google Ads to reach the customers searching for computer mice
specifically. The average cost for a Google Ads package is about $9,000 a month. Our PR budget will be primarily spent on
event sponsorships/donations around the holiday season. We plan to have a corporate partnership with a The Salvation Army
and their back-to-school fundraisers and Christmas charity. The "other" expense will be used as a buffer in case one area of
our strategy needs more allocation of cash. Our brand promise is to offer the only fold flat, portable mouse that can provide a
full-size ergonomic feel. We will not have any salespeople, considering that we will be strictly be performing e-commerce sales.
Exhibit 7: Flow Chart

For each major quality step:

Quality What is measured? How often? How will you ensure quality?
Step
Q1 Raw materials for the Take a sample from Each production worker checks raw silicone and plastic
mouse every shipment of inputs (consistency and color) before feeding into injection
received from suppliers molding machine. Operations manager takes samples
of other inputs and checks functionality
Q2 Plastic Base, Silicon Top, Upon passing through Production worker will visually check subassemblies
Assembled Motherboard the assemble line and
injection machines
Q3 Final product Every mouse Visually check if springs lock and mouse “pops”
For each critical failure point:
Failure Brief description How will you prevent How will you recover if this failure occurs?
Point this failure?
F1 After the motherboard is By having quality Identify where the machine failed and make
assembled. Finished checkpoints among the adjustments or if the Motherboard fails identify which
subassemblies subassemblies part in the assembly line failed and make changes
F2 Finished Pop-Mouse By having a quality check Disassemble finished product to find the cause of the
point after it is assembled failure by identifying which part in the process failed
Exhibit 8: Quality Assurance
Indicate the Why is this dimension important, given your industry & Identify the Quality
Dimensions of target market? Step(s) on the Process
Quality on Flowchart / Service
which you will Blueprint to which this
focus. corresponds.
Aesthetics Our mouse’s soft silicone shell provides a uniquely comfortable Q1, Q2, and Q3
computing experience. This sets us apart from the competitors
in the portable mouse market as they sacrifice ergonomics in
favor of more sleek, folding designs. Furthermore, the
compacting “pop” mechanism provides a satisfying and
enjoyable experience, which will appeal to our market segments.
Special Convenience: Our product collapses to around a half inch for Q3
Features easy stowing away in a pocket, bag, or laptop sleeve. This
feature sets our product apart from the majority of our other
competitors.
Performance Our product needs to perform like a regular computer mouse to Q3
even be considered by a consumer and the pop mechanism needs
to function properly.

Use the space below to describe any additional Proactive Quality Assurance Plans that are not connected
to a specific activity on your Process Flowchart / Service Blueprint.
A majority of proactive quality assurance responsibilities will lie with the operations manager and production
workers. The operations manager will need to work with suppliers and warehouse staff to insure quality inputs and
distribution. Additionally, the operations manager will need to coordinate with assembly and manufacturing staff to
conduct regular testing of the finished product and analysis of production process.
Describe any reactive quality assurance plans. Include a recovery plan should a customer receive poor
quality goods and/or services.
If a defective product is found, the customer will file a claim on our website. If the claim is found to be legitimate by
our customer service staff, we will send a prepaid shipping label for the returned mouse and send a replacement
product. The production staff will also investigate the defective unit to find the root cause of these defects.

If you will utilize a quality/process improvement methodology, indicate which:

☐ NA ☐ TQM ☒ Six Sigma ☐ ISO ☐ Benchmarking
☐ Other (specify what):
Note: You will not use all of them; only those with highest relevance.
Provide a specific explanation of how your chosen quality methodology relates to your business and how
it will be applied:
We chose Six Sigma because our internal technology is being bought from other suppliers. Our external design is our
main focus, but if our mouse does not work it would make our product useless. Over time, we will strive to improve
the performance of our product while reducing our overall costs.
Exhibit 9: Inventory, Supplies & Distribution
RAW MATERIAL INVENTORY & SUPPLIER SELECTION If your organization does not have raw material inventory, please check this box: ☐NA

Item(s) Supplier Name & Reason for selecting this supplier Supplier Frequency of System of Mode(s) of
Location (City, State, lead time replenishment (in Management Transportation
Country) (in days) days)
Rechargeable Dongguan Uli-power E- They offered the cheapest price for a battery small and 32-33 30 Fixed Order Interval ☒ Highway ☐ Rail
Battery technology Ltd., strong enough to power our product.
Guangdong, China ☒ Waterway ☐ Air
Micro USB Opensmart, Guangdong, They offered us the cheapest price for the product we 33-35 30 Fixed Order Interval ☒ Highway ☐ Rail
Charging Module China desired.
☒ Waterway ☐ Air
Springs Wen’an County Peng Fei They offered a low price and allowed us to select exactly 37 30 Fixed Order Interval ☒ Highway ☐ Rail
Spring Products, Hebei, how many springs we wish to order.
China ☒ Waterway ☐ Air
Raw Silicone Hong Ye Silicone, They offered us a supply of silicone in bulk for the 35 30 Fixed Order Interval ☒ Highway ☐ Rail
Rubber Guangdong, China cheapest price.
☒ Waterway ☐ Air
ABS Raw Plastic Union J. Plus, Bangkok, They offered us the best price and allowed us to order in 44 30 Fixed Order Interval ☒ Highway ☐ Rail
Thailand bulk by the ton.
☒ Waterway ☐ Air
Motherboard Hangzhou Frankever They can manufacture the motherboard which we need in 60 30 Fixed Order Interval ☒ Highway ☐ Rail
Electric Co., Ltd. mass quantities at the lowest price.
☒ Waterway ☐ Air
FINISHED GOODS INVENTORY If your organization does not have finished goods inventory, please check this box: ☐NA

Finished goods produced Frequency of shipping Average level of finished goods inventory on Amount of safety stock on site
(per hour) finished goods site At service level of 60%
At the end of Year 1 53 Daily 212 1
514= 0.84 × 2737 × √
20

At the end of Year 2 94 Daily 376 514

At the end of Year 3 112 Daily 448 514
At the end of Year 4 133 Daily 532 514
At the end of Year 5 155 Daily 620 514

What is the lifespan of your finished goods ☐NA We estimate that the pop-mouse will have a lifespan of 2 years since technology is rapidly advancing. Thus, technology found in the pop-mouse may
inventory? become outdated in 2 years

How will you manage perishability of ☐NA At the end of year 2 we plan to evaluate technology found in the Pop Mouse, compare it to technology in the market after year 2, and adjust
Finished Goods Inventory? accordingly. If technology is outdated, we will upgrade the technology accordingly.

DISTRIBUTION If your organization does not require distribution, please check this box: ☐NA

Name of transportation provider/carrier Reason(s) for selecting this provider/carrier Frequency of Pick Up / Drop off
United States Postal Service We chose this provider because they offered us the cheapest price and because our customers are going to Daily
be paying for the shipping themselves.
Exhibit 10: Capacity

Demand Capacity Utilization Hours of Operation Bottleneck name and How will you manage /adjust the bottleneck to
(per hour) (per hour) (%) description ensure you can appropriately serve or supply your
customers?
At the end of Year 1 49 Units + 60 Units 88.33% 2,088 hours a year Workstation 3 We will add one worker to the bottleneck to double the
4 Units for (261 working days a throughput rate
Safety Stock year x 8 hours a day)
=53
At the end of Year 2 90 Units + 120 Units 78.33% 2,096 hours a year Workstation 3 We will add one worker to the bottleneck to increase the
4 Units for (262 working days a throughput rate again.
Safety Stock year x 8 hours a day)
=94
At the end of Year 3 108 Units + 160 Units 70% 2,088 hours a year Workstation 3 We will not adjust after year 3 because we are still
4 Units for (261 working days a producing more than our daily demand.
Safety Stock year x 8 hours a day)
=112
At the end of Year 4 129 Units + 160 Units 83.13% 2,080 hours a year Workstation 1 We will hire another worker for Workstation 1 to increase
4 Units for (260 working days a the throughput rate
Safety Stock year x 8 hours a day)
=133
At the end of Year 5 151 Units + 180 Units 86.11% 2,080 hours a year Workstation 3 We will hire additional workers when utilization reaches
4 Units for (260 working days a 90%.
Safety Stock year x 8 hours a day)
=155
Show your calculations for the following parameters at the end of Year 1.

Hours of Demand/month Demand/hour Capacity/month Capacity/hour Utilization

operation/month
160 hours/month 97,616 units / 12 months 97,616 units / 205 = 391 units a 60 per hour x 8 hours x 20 3600 seconds / 60 seconds = 60 53 / 60 = 88.33%
= 8,135 units day / 8 = 48.875 or 49 units an days = 9,600 units units
hour + 4 Safety Stock = 53

Additional resources (beyond your bottleneck) must be allocated appropriately to support operations. Identify which resources have a significant impact on capacity at start up and
describe why these are appropriate amounts of resources at start up.
We need to add another worker to workstation 1 at the end of year 1, and 2 so they can keep up with demand. We need to add another worker to workstation 2 and the end of year 2. Furthermore,
we need to buy a new machine at the end of year 1 and 4; also we will need to hire workers to run those machines.
Describe adjustments you will make as resource requirements vary with time. Be, specific regarding which key resources (beyond your bottleneck) will be adjusted, when and how.
If you will make multiple adjustments, explain each.
We will continue looking for the best deals on supplies to keep costs down. After adding new injection molding machines (at the end of years 1 and 4) raw silicone and plastic will have to be
distributed separately by the workers operating those machines.
How will you manage seasonality? If your organization does not have seasonal demand, please check this box: ☐NA

We will make more computer mice and order more raw materials to keep up with spikes in the seasonality demand found in back to school sales and holiday sales. Since we have, a flexible operation process
this can be managed by hiring part time worker if current through rates cannot produce expected demand. Another alternative is we could increase our hours of operation.
Exhibit 11a: Income Statement
Exhibit 11b: Income Statement Notes
Direct Materials: Table 1 (All from Alibaba) Unit cost multiplied by forecasted unit sales per year.
Table 1
Component Cost per unit
Battery $1.64
Charging $0.40
Module
Springs (5) $1.05
Motherboard $0.10
Raw Silicone $0.03
Plastic $0.57
Total $3.79
Direct Labor: Labor costs of all production workers and team assemblers ($26,683 per employee originally, times a 2%
inflation rate compounded yearly).
Manufacturing Overhead: Calculated by adding Warehouse staffing costs ($73,572 increasing at 2% inflation rate), $13,423
in factory property tax, estimated $42,000 in utility costs, other inputs of $0.10 per unit, $10,751 from the Straight-line
depreciation (39 year) on our manufacturing space (table 2), and the depreciation on manufacturing equipment (Table 3).
Office Building Depreciation Expense: Office portion of building (30%) Table 2 at 39-year straight line.
Office Supplies Expense: 200 yearly per each of 11 office workers.
Mortgage Interest Expense: Refer to table 4.
Income Tax Expense: We are an LLC being taxed as a C corp. Our income tax rate is the national 21% rate plus a 1%
Texas state rate.
Table 2 Total Building Manufacturing building Office Building
Depreciation depreciation (70%) Depreciation (30%)
Yearly Depreciation $15,389 $10,751 $4,607

Table 3 Manufacturing Equipment Depreciation Office Equipment

Depreciation
Year 1 $8,645 $1,101
Year 2 $14,820 $1,888
Year 3 $10,585 $1,349
Year 4 $7,561 $963
Year 5 $5,401 $688

Table 4 Payment Total Payment on Interest Payment on Principal

Year 1 $102,085 $43,022 $59,063
Year 2 $102,085 $39,535 $62,550
Year 3 $102,085 $35,842 $66,243
Year 4 $102,085 $ 31,931 $70,154
Year 5 $102,085 $27,789 $74,296
Remaining due $510,425 $178,119 $332,306
Exhibit 12a: Balance Sheet
Exhibit 12b: Balance Sheet Notes
Accounts Receivable: We have no Accounts Receivable as we are an online store and transaction will only take 2-
3 days to be converted into cash.
Machinery and Equipment: Calculated by taking the cost of each our machines ($8,099) then multiplying it by the
number of machines. Next, we added the cost of each molds ($12000) times the number of molds used to the cost
of the machines. Finally, we added the rest of the equipment cost such as conveyer belts.
Building: We purchased our warehouse/office building and it cost $775,000. We split the cost between building and
land so that the building was $600,000.
Land: $175,000 was the remaining amount after $600,000 went to building.
Less: Accumulated Depreciation: Straight Line depreciation was used on the Building over 39 years. MACRS over
7 years was used on all equipment valued over $100.
Accounts Payable: We have no Accounts payable as we are buying our raw materials in cash.
Accrued Salaries and Wages: Taking into consideration that employees are paid biweekly (1st and 15th) an average
of 4% of salaries and wages will be accrued to the following period.
Accrued Payroll Taxes and Benefits: Taxes and benefits will be paid as due.
Current Maturity: Amount paid on principal in each period, outlined in Table 4.

Issuance of Common Stock: Issuing 500 shares at $320 to raise $160,000 in initial capital and equipment and the
founders will retain 9,500 shares. Company was valued at $6,556,351 using Gordon Growth Model. Valuation was
halved for initial venture capital offering to account for risk of a startup and so that substantial equity was given to
investors.
Exhibit 13a: Cash Flow Statement
Exhibit 13b: Cash Flow Statement Notes

Depreciation: Our company capitalization is a Straight line, 39-year depreciation of facilities (table 2) and 7-year
MACRS depreciation of all office and manufacturing equipment valued greater than $100(table 3).

Accounts Receivable: All sales are done online, so we do not have any accounts receivable.

Inventory: Equal to Safety Stock because orders are shipped daily.

New Product Development: Applying excess capital to development of new product in years 4 and 5. Accounted
as intangibles.

Accrued Salaries and Wages: Estimated 4% from wages of prior year.

Fixed Asset Purchases: $775,000 facility, $60,123 in office and manufacturing equipment.

Long Term Investments: Excess capital will be invested in iShares S&P 500 Growth ETF.

Long Term Debt Borrowings: Initial borrowing of $775,000 financing facility at 5.75% over 10 years with
monthly payments of $102,085 (table 4). Interest expense on Income Statement and principal payments accounted
in current maturity.

Long Term Debt Payments: Payments on principal of above mortgage, increasing as interest expense is
decreased.

Dividends Paid to Stockholders: Paying 30% of net income to shareholders each year.

Exhibit 14: Financial Ratios & Analysis

*Used Logitech Ratios obtained data from Yahoo Finance
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 Meet the Team
Section 1, Team 7
My name is Jake Biggar and I’m from
Fredericksburg, VA. I am a Finance major and I
want to get into financial advising working with
securities after school. In my free time on
campus I like to go to the gym and help out the
community through my fraternity.

My name is Ian Dworak and I am from Jefferson,

NJ. I am currently a Marketing major and my
goal is to have a career in Digital Advertising. In
my free time I love to be outdoors and relax on
my boat.

My name is Bradley Harmon and I was born and

raised on the Eastern Shore of Maryland. I am
currently a Finance major and hope to become a
Financial Advisor someday. In my free time I
enjoy helping out with Best Buddies, which is an
organization on campus that helps people with
developmental disabilities.
Hey, I’m Prayag Patel and I transferred from
Tidewater Community College last semester. I
am currently majoring in Finance. When I have
free time, I enjoy exercising and just being
outside.

I am Ryan Sullivan and I am from Ashburn, VA.

I am a CIS major and strive to have a career in
Cyber Security one day. In my free time I enjoy
writing.

My name is Luke Sweigart and I’m a Finance

major from Bridgewater, VA. I’m interested in
financial algorithms and economics. In my free
time, I enjoy playing sports and listening to
music.