Refine the detailed income statement for your venture for two years (at six month intervals) or a more appropriate time scale. Explicitly state the assumptions that underlie your financial model.
Please click the link for the most detailed information. The assumptions below are summarized using information from the document above.
- Sales Projections: Period is 160 days each, each muffin is being sold for SLL1500, 500 units of each product will be sold per day, products will be sold at the bakery and at kiosks
- Period 1:
- 500 muffins/day in Makeni
- Revenue = SLL120,000,000
- Period 2:
- 1,000 muffins/day in Makeni, 500 muffins/day in Freetown Location 1
- Revenue = SLL360,000,000
- Period 3:
- 1,200 muffins day in Makeni, 1000 muffins/day in Freetown Location 1,500 muffins/day in Freetown Location 2
- Revenue = SLL648,000,000
- Period 4:
- 1,500 muffins/day in Makeni, 1500 muffins/day in Freetown Location 1, 1,000 muffins/day in Freetown Location 2
- Revenue = SLL960,000,000
- Period 1:
- Raw materials (ingredients) = SLL156/Unit
- 500 units of each product will be produced per day = SLL78,000/Day
- Raw materials (ingredients) = SLL156/Unit
- Production costs = SLL485/Unit
- 500 units of each product will be produced per day = SLL242,500/Day
- Helpers’ Wages = SLL5,823,000
- ~2 Helpers/500 Muffins
- Bakery Specialist Wages = SLL8,734,500
- 1 additional specialist per location (bakery already has 1, so we will have a total of 2 per location and only have to pay the additional one ourselves)
- Operating Expenses:
- Supervisor salary per period is SLL38,820,000
- Supervisor associate salary per period is SLL7,277,031
Refine the Business Model for your venture based on your revenue model. You may use the Osterwalder BMC to refine your business model but prepare one or more visuals that explain how your venture will work and accomplish your BHAG.
The graphic below shows how our venture is going to work. The supervisor and supervisor associate oversee all activities – setting up manufacturing, building partnerships, looking at social and economic outcomes in long term. Betteh Bakery will have helpers who are in charge of purchasing and processing ingredients, while the specialist ensures the muffin recipe is done to completion. Muffins can be purchased at the bakery directly, at kiosks the bakery will be setting up throughout the city, or through the street vendor network. Through those distribution methods, we will be able to reach communities.
Develop an M&E plan for your venture.
- Clearly list all assumptions.
- Identify short-term and long-term success metrics.
- Identify specific methods to measure the metrics.
In order to succeed in monitoring and evaluating our venture, we have split success metrics between sales and reduced malnutrition. Our long-term metric is successfully decreasing the malnutrition rate in Sierra Leone by 13% in five years, so the rate goes from 38% to 25%. Our metrics for success in the short term are dependent on our sales. If we are able to achieve our sales projections, we will succeed in terms of business operations. In order to do this, we have to hire a supervisor, supervisor associate, baking specialists, and bakery helpers. By dividing the laborious aspect of our venture between bakers and helpers, we will be able to have the employees necessary to work in producing the food products, and the supervisor will monitor our progress over time. Newtrition helpers will assist in sourcing and processing ingredients through peeling and cutting vegetables, and other labor-intensive tasks. Baking specialists will be responsible for working inside Betteh and baking the muffins.
In order to keep track of our sales, our supervisor will oversee how many muffins we are able to sell from our initial production number of 500. Since we will be selling muffins from the bakery and through market kiosks we set up, the supervisor will be responsible for distributing muffins amongst our different sale locations and tracking overall sales. They will also be responsible for marketing our product. The supervisor associate will be responsible for shadowing and assisting the supervisor so that when we are able to expand into a different area such as Freetown, they understand the nature of the work they must put in to succeed. Once we can track our sales, we will be able to gauge the frequency behind the consumption of the muffins prior to scaling. Though our venture is primarily focused on reducing malnutrition, we have to establish a system that allows our muffins to become consumed regularly and gain desirability as we scale and our venture becomes more well known. Through achieving this first assumption, we can proceed to measure the long term metric of reduced malnutrition through collecting periodic data analysis of the change in micronutrient deficiencies once we have steady-state operations.
Through our partnership with World Hope, we will leverage their connections to government affiliates and health clinics to designate a data collector who will aid in providing and managing testing for future Newtrition students to analyze. With an increase in sales, we can assume that there is an increase of consumption of our products; this positive trend can be used to determine consumption habits and understand if we are reaching our target demographic of children under 5. We can approach this through conducting monthly screenings through the communities we have set up bakeries and kiosks within. As we are able to screen and inform mothers about their children’s health, we can promote our product as an affordable method of feeding their children with the nutritional value they need for healthy development. Logging the mothers who arrive with their children will allow us to maintain a record of the success of our products; weight gain and gradual health development, and help us get a sense of the effectiveness of our products.