3-1 Milestone Two - Financial Analysis and Pricing Structure (Artifact 2)
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3-1 Milestone Two: Financial Analysis and Pricing Structure Memo (Artifact 2)
Muhammad Lewis
Southern New Hampshire University
MKT 700: Marketing Capstone
Instructor: Kayla Pierce
2
Financial Analysis and Pricing Structure
Memo:
Date: December 23, 2023
To: Jamie Green - Jamie’s Floral Delights
From: (Mo) Muhammad Lewis Subject: Financial Analysis and Pricing Structure
Financial Forecasts
Annual Sales and Revenue
According to the Society of American Florists, a retail floral shop generates an average of $362,318 in annual revenue, but many florists most likely bring in $200,000 or less in annual sales (Cho, 2020). Since Jamie’s Floral Delights is a start-up venture the sales and revenue for the first year will be projected at $200,000. Additionally, based on the compound annual growth rate (CAGR) of 6.34% provided by Mordor Intelligence (2023) the projected sales and revenue for year two will be $212,680. $200,000 x 6.34% = $12,680
$200,000 + $12,680 = $212,680
Year 1 Annual Sales
CAGR
Year 2 Annual Sales
$200,000
6.34%
$212,680
3
Market Share
As of 2022, there were 33,477 florist businesses in the US which was a decline of -0.5% from 2021 (IBISWorld, 2023). While there is a decline in the number of florist shops in the US the biggest issue when it comes to market share is that 32% of the market revenue is generated by four companies (IBISWorld, 2023). This does not leave Jamie’s Floral Delights with much room,
so the projected market share for the business would be less than 1%. The focus should be more on how the business can grow annual sales and revenue which will eventually lend to an increase
in market share over time.
Expected Annual Return on Investment
To create a projected profit and loss statement for the year ending 12/31/2024, consider the projected sales income for the year and other income that could come from delivery fees and consult fees. The total income for 2024 would be $220,000. Now the average start-up cost for a floral business is between $10,000 - $50,000 (Soard, 2019). Along with expenses for website/advertising, supplies, equipment, and inventory, there are expenses for taxes and other miscellaneous items. The total expense for 2024 would be $87,500 which would generate a net income of $132,500. The expected annual return on investment would be 151.4%. Profit and Loss Statement for the Year Ending 12/31/2024
INCOME
% of Total Income
Sales Income
$200,000 91%
Other Income
20,000
9%
Total Income
$220,000 100%
EXPENSES
Website/Advertising
$5,000 6%
Supplies (Vases, Ribbon, etc.)
5,000
6%
Equipment
10,000
11%
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