Friday, March 6, 2009

Budget for a company for a year, or two

Now a budget for year one:
-$500 incorporate
-$500 website
-$6000-30,000 for 1-3 utility patents and legal fees
-$18,000 for me, I'm not sure I could live in an apartment on much less
-$51,100 Material/Manufacturing (200 of #1, 2000 of a #2, 200 of #3, and 50 of #4) ($1000 extrusion die for #1, $2000 extruded beam for #1, $4000 hot forged steel for #1, $8,000 extruded/hot forged bar stock for #2, $10,000 CNC 3 axis mill to do in house machining, $100 Sewing machine, $12,000 for #3 fabric, $3000 for #4 fabric, $2000 misc. plastic and metal for #4,  $9,000 for extruded tube for #4)
+$45,000 Income (assuming selling only half of manufactured products because of testing/free demonstration) ($15,000 from #1, $7500 from #2, $15,000 from #3, $7500 for #4)

=-$30,600 to -$54,600 assuming I do all the machining, packaging, customer service and customers pay for shipping.

This is unrealistic in several senses because well my price estimates are on bulk materials so not as specific as I would like and short run or low quantity pricing. Materials would probably end up being slightly cheaper. So The more I buy the cheaper my costs are. This is also assuming that my sole means of marketing for the entire year is to send stuff to climbing magazines and other well known gear testers and reviewers to get them to write stuff up without me ever taking out an ad in any of their stuff. The upside is that after the products are initially established the destructive testing will be a much smaller percentage of the total so there would be more income. Also buying a CNC machine is a one time cost. So year two could look something like:

-$500 website
-$5,000 marketing
-$0-20,000 for 0-2 utility patents and legal fees
-$24,000 for me, student loans...
-$60,000 Material/Manufacturing (300 of #1, 3000 of a #2, 300 of #3, and 75 of #4) ($3000 extruded beam for #1, $6000 hot forged steel for #1, $12,000 extruded/hot forged bar stock for #2, $18,000 for #3 fabric, $4500 for #4 fabric, $3000 misc. plastic and metal for #4, $13,500 for extruded tube for #4)
+$121,500 Income (assuming selling 90% manufactured products) ($40,500 from #1, $20,250 from #2, $40,500 from #3, $20,250 for #4)

=+$12,000 to $32,000 assuming I do everything myself again and none of the patents have other applications.

But really this doesn't factor in stuff like hiring more people to do this or taking on more or less of the processing. Or true production numbers. Allegedly there are 2.5 million carabiners sold in the US every year. I would also not be the best at sewing and would probably find some shop to do that. The goal for now is a working prototype of everything by the time I leave for Gasherbrum II so that I can test stuff out. 

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