Start up plan – Financial Pro-forma

The project is about a startup plan regarding a new business (Business idea is attached in additional materials)


Financial Pro-forma (Year 1-5: Annual)
1. Financial Assumptions/ Bottom-up Sales Projections (tied to Market Analysis)
2. Initial Sources & Uses
3. Balance Sheet

–> the financial pro-forma should also include written notes to the power point slides
The fact sheets for point 1.,2. and 3. are uploaded on additional materials

· Currently: Startup (NO SALES; Product ready for sale – R&D FINISHED; PROTOTYPE READY);
· Reach at least $3-5 million in annual sales in 3-5 years.
· Maximum amount raised from equity and debt: $600,000
Company Name:
DropBox Gift Baskets

Elevator Pitch:
DropBox Gift Baskets is the revolutionized way of wishing a happy birthday, giving thanks, or saying I love you. Our experienced decorative team have combined their skills with technology, efficiency, and the element of surprise. We offer all types of standard and custom made gift baskets, that will be delivered to any location you are in via drone! Combining the gift of giving with astonishment!

Executive Summary:
Products & Services: DropBox provides a series of themed gift baskets for holidays, birthdays, ect. and customizable gift baskets. DropBox gift baskets can contain anything from fruits, to chocolate, candies, pasteries, beer/wine, or stuffed animals. DropBox also has an exclusive agreement with Amazon, where you can purchase items from Amazon and include them in your gift basket. DrobBox then delivers the customer’s gift baskets at a time and location of their choosing via drone. Customers must make purchase within 24 hours. What makes the product different is obvious with our unique delivery methods, however, what makes the method effective is that we cut delivery costs by delivering by drones. Cutting our overhead cost will allow our profit margins to grow exponentially. This along with our delivery methods will allow us to continue to grow in South Florida and into other markets. Some competitors are Edible Arrangements, Pistils and Petals, Gift Services Inc. We will continue to compete and grow into other markets by stealing market share because of our low prices and innovative services. Pricing varies with basket size and whether they are themed or customized. Customized baskets do not have a set price because they depend on whatever the customer wants to include. Themed baskets range $30-$70, which is below the industry average in South Florida. Year round our target market will be people in relationships between their 20s-30s. However, during holiday seasons, we are mainly targeting married couples as well as they would have more interest in getting themed baskets. Customers tend to normally be in a relationship and this provides a more sincere gesture than just holding a basket in your hand. We will be a fully online store where customers will buy products via website or app. Customers should expect for baskets to be safe and intact and arrive at the proper location in a timely manner.

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Business Positioning & Strategy:
DropBox will be self funded as there is not much upfront cost. It is a fully online company with no inventory to hold other than its drones. There will be one central warehouse, where baskets will be made and shipped. Baskets will are priced 70% more than the aggregate price of the items in the basket. We are expecting to make $50,000 in sales in its first year, an increase of 5% in the second, 15% in the third, 20% in the fourth, 25% in the fifth. DropBox will be single-segmented, and focus on people in their 20s-30s by gathering information from different data brokers (average of $84 per 1000 people). During major holidays such as Valentine day and Christmas we will also target married couples from all age ranges. What separates us from other competitors is our unique delivery method. It allows us to profit higher margins because our overhead and employee expenses will be low.

Sales & Marketing Strategy:
Our marketing team would seek the market referenced above. However, they will focus their marketing on the delivery and the lower prices compared to other competitors as those are our sales drivers. The marketing scheme would be to promote a better experience for the person you are gifting the basket to and saving money. We are marketing this way because what separates us isn’t the product we are selling but the service that comes with the product. We will conduct social media, search engine ads, television, and magazine ads; mainly concentrating on social media as our target market is millennials. Sales will either be done online or by phone order.

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Management Needs & Description:
The manager will need superior expertise in marketing and acquiring customers. There already is a market for gift baskets in Miami, however, it will be the manager’s job to steal the market share by advertising our unique service. The manager will have to be efficient with internal processes and have exceptional skills with logistics as punctuality is very important for customer satisfaction. The internal team will be the manager, the gift basket designer, the pilot, and a customer service representative. In an effort to keep costs low, we will be outsourcing marketing needs for advertising and IT needs for website and apps to other firms. To find members of the team, we will hire a recruiter to find people who have worked in each type of industry. For example the manager would have had to have worked in an logistics company prior, and customer service rep would have needed to have experience in that are as well.,

The customer will make their order online or via app. Upon completion of their order they will attach a pin of the exact location of where they want the basket to be dropped off. The company will start off with one basket designer and pilot, until the company grows large enough where a second one is necessary. These basket designers will then design the basket and hand it to the pilot. The pilot will then attach the basket to the drone and will fly the drone to the exact location. Breakeven point is $3,075 (employee salary and warehouse monthly cost). Products that will go in the gift basket will be purchased and added to the overall price of the basket. No cost will be incurred on materials. Cost are low because overhead is our only cost.

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Risks, Strategic Assumptions:
The biggest assumption this company is making is that we are assuming we will be able to take market share from established competitors based off our research and marketing. Another risk this company takes is the weather. Drones can only fly in specific weather and gift baskets have the risk of getting damaged. Therefore, there are certain days where we cannot fly baskets and will have to deliver them with a vehicle. The product will continue to grow with trends of gift baskets, however, our sales driver is our delivery method. This has space to grow which can continue to spark business. As technology continues to grow, drones will have the ability to add new features. Growth rate profitability can fall, however, that is why it is important for us to take market share substantially in Miami first and then expand to other markets and dominate there, to sustain growth.