Hula Island

Startup an online retail shop - buy Hawaiian-themed products to sell online

Invest $30,000 cash savings for start up expenses and "working capital. " (In an emerge
Use $15,000 during organizing period for business including deposit for warehoue and
Buy merchandise throughout year for average $10.5/ piece
Additional variable cost per piece sold for packaging, transportation and taxes is $4.099
Labour cost is $1.25/piece
Rent, Utilities, (fixed costs) - $2,000/month - $24,000 per year"Fixed Cost"
Sell to customer for average $21/piece

Two B2B propositions

Option 1:
Assume monthly steady number of sales to a business customer
Sell every month 2500 pieces, receive payment two months after order,
Pay merchandise purchased COD

Option 2:
Progressive increase in sales over the months:
Jan/ Feb/ March = 2500
April/ May/ June = 4500
July/ August/ Sept = 6000
Oct/ Nov/ Dec = 12000

receive payments two months after order

pay merchandise COD
ell online
pital. " (In an emergency, owner can use credit card up to $30,000 and can borrow up to anothe
sit for warehoue and storage equipment (rent-basis) etc

n and taxes is $4.099/piece

ed Cost"
borrow up to another $80,000 from friends and family)
 Scenario 1- Assume steady unit sales of 2500 pieces per month

first order placed in January, first product delivered in February, first cash payment received in April

Scenario 1 - Profit and Loss Statement - Calculated Monthly

Profit & Loss (P&L) Statement OrganizingJanuary February March April May
Unit Sales (in pieces) 2500 2500 2500 2500 2500
Sales Revenue 0 52500 52500 52500 52500 52500

COGS 0 $26,250 $26,250 $26,250 $26,250 $26,250

Labour 0 3125 3125 3125 3125 3125
Shipping/Taxes 0 $10,248 $10,248 $10,248 $10,248 $10,248
Rent 0 $2,000 $2,000 $2,000 $2,000 $2,000
Total expenses $41,623 $41,623 $41,623 $41,623 $41,623

Net Profit (calculated monthly) 0 $10,877 $10,877 $10,877 $10,877 $10,877

Aggregate Profit 0 $10,877 21754 32631 43508 54385

Scenario 1 - Cash Flow Statement - Calculated Monthly

Statement of Cash Flows [SimplOrganizingJanuary February March April May
Unit Sales (in pieces) 2500 2500 2500 2500 2500
Cash Received 30000 52,500 52,500 52,500
Start up -$15,000
Rent - fixed expense/month $2,000 $2,000 $2,000 $2,000 $2,000
Variable Expense for current month's pro $39,623 $39,623 $39,623 $39,623 $39,623
Total cash expenses $41,623 $41,623 $41,623 $41,623 $41,623
Net Cash flow for Month 15000 ($41,623) ($41,623) $10,878 $10,878 $10,878

Cash on Hand 15000 ($26,623) -68245 ($57,368) -46490 -35612.5

June July August September October November December
2500 2500 2500 2500 2500 2500 2500
52500 52500 52500 52500 52500 52500 52500

$26,250 $26,250 $26,250 $26,250 $26,250 $26,250 $26,250

3125 3125 3125 3125 3125 3125 3125
$10,248 $10,248 $10,248 $10,248 $10,248 $10,248 $10,248
$2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
$41,623 $41,623 $41,623 $41,623 $41,623 $41,623 $41,623

$10,877 $10,877 $10,877 $10,877 $10,878 $10,878 $10,877

65262 76139 87016 97893 108770.5 119648 $130,525

June July August September October November December

2500 2500 2500 2500 2500 2500 2500
52,500 52,500 52,500 52,500 52,500 52,500 52,500

$2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

$39,623 $39,623 $39,623 $39,623 $39,623 $39,623 $39,623
$41,623 $41,623 $41,623 $41,623 $41,623 $41,623 $41,623
$10,878 $10,878 $10,878 $10,878 $10,878 $10,878 $10,878

-24735 -13857.5 -2980 7897.5 18775 29652.5 $40,530

 Scenario 2- Growth:

first order placed in January, first product delivered in February, first cash payment received in April

Scenario 2 - Profit and Loss Statement - Calculated

Profit & Loss (P&L) Statement [Simplified] Organizing PeJanuary February

Unit Sales (in pieces) 2500 2500
Sales Revenue 52500 52500

COGS $26,250 $26,250

Labour 3125 3125
Shipping/Taxes $10,248 $10,248
Rent $2,000 $2,000
Total expenses $41,623 $41,623

Net Profit (calculated monthly) 0 $10,878 $10,878

Aggregate Profit 0 $10,878 $21,755

Scenario 2 - Cash Flow Statement - Calculated Mont

Statement of Cash Flows [Simplified] Organizing PeJanuary February
Unit Sales (in pieces) 2500 2500
Cash Received 30000
Start up -$15,000
Rent - fixed expense/month $2,000 $2,000
Variable Expense for current month's production $39,623 $39,623
Total cash expenses $41,623 $41,623
Net Cash flow for Month 15000 ($41,623) ($41,623)

Cash on Hand 15000 -26622.5 -68245

received in April

t and Loss Statement - Calculated Monthly

March April May June July August September

2500 4500 4500 4500 6000 6000 6000
52500 94500 94500 94500 126000 126000 126000

$26,250 $47,250 $47,250 $47,250 $63,000 $63,000 $63,000

3125 5625 5625 5625 7500 7500 7500
$10,248 $18,446 $18,446 $18,446 $24,594 $24,594 $24,594
$2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
$41,623 $73,321 $73,321 $73,321 $97,094 $97,094 $97,094

$10,878 $21,180 $21,180 $21,180 $28,906 $28,906 $28,906

$32,633 $53,812 $74,992 $96,171 $125,077 $153,983 $182,889

Flow Statement - Calculated Monthly

March April May June July August September
2500 4500 4500 4500 6000 6000 6000
52,500 52,500 52,500 94,500 94,500 94,500

$2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

$39,623 $71,321 $71,321 $71,321 $95,094 $95,094 $95,094
$41,623 $73,321 $73,321 $73,321 $97,094 $97,094 $97,094
($41,623) ($20,821) ($20,821) ($20,821) ($2,594) ($2,594) ($2,594)

-109867.5 -130688 -151508.5 -172329 -174923 -177517 -180111

October November December
12000 12000 12000
252000 252000 252000

$126,000 $126,000 $126,000

15000 15000 15000
$49,188 $49,188 $49,188
$2,000 $2,000 $2,000
$192,188 $192,188 $192,188

$59,812 $59,812 $59,812

$242,701 $302,513 $362,325

October November December

12000 12000 12000
126,000 126,000 126,000

$2,000 $2,000 $2,000

$190,188 $190,188 $190,188
$192,188 $192,188 $192,188
($66,188) ($66,188) ($66,188)

-246299 -312487 -378675