3-1 Milestone Two - Financial Analysis and Pricing Structure (Artifact 2)

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Southern New Hampshire University *

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MKT-700

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Marketing

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Feb 20, 2024

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1 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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