Shoe Guru Financial Competition

Overview

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 Company Overview and Financial
Highlights
Shoe Guru intends to be a popular destination that exists to create experiences where

creativity and affordability come together. Shoe Guru was founded with a unique spirit and to be

the brand that truly stepped out of the box. Our company specializes in customizing shoes while

ensuring our prices are accessible to the masses. We have become experts at personalizing shoes

for our valued customers to help them emulate their creativity.

Shoe Guru filed as an S Corporation with a loan of $100,000 for 6 months with an

interest rate of 4.75%. With the loan processed, we officially became a business on October 21st,

2019. Part of Virtual Enterprises International, Shoe Guru plans on attending many tradeshows

to increase our revenue and continue to become a popular brand.

We have established a culture that supports our employees, so they can provide

exceptional service to our valued customers. As a result, Shoe Guru allows its employees to

design Air Force Ones for our customers, and for every shoe that is sold from the pre-set list the

employee receives a portion of the sales.

The company’s target market consists of VEI students, who are usually 17-18 years old.

Over 15 million people in the United States fit into this category and are looking to blend

creativity and uniqueness into their outfits. As a result, Shoe Guru encourages customers to build

self-confidence by allowing them to design their own shoes, or choose from pre-set designs.

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 Our target market is perfect for Shoe Guru, as more than half of Nike’s sales for Air

Force Ones are from individuals ages 17-18. Since most of VEI students are in this age group,

we expect our sales to increase.

Shoe Guru always goes the extra mile and places customers first. Due to this, we will

replace wrong orders free of charge. Keeping customers satisfied is important, and we want to

adopt the holiday spirit by adding seasonal products and lowering prices to boost sales. In

addition, our clients can enter their designs into our competitions and have the possibility of their

design being available for other clients.

So far Shoe Guru has made many sales, however we did not make enough in order to

make a profit. Considering that we have bills, loans, and employees to pay we had to raise our

prices to $349.99 for the low tops since those sell best, so we can potentially break even. So far

we have a loss of $40,601.02. We are going to drop a series bundle that’ll drive customers to

purchase more from us, it will cost $899.97.

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 Break-even Analysis
X Y Y Y Y
Units Sold Revenue Variable Cost Fixed Cost Total Cost
100 $29,499.00 $2,805.00 $491,495.04 $494,300.04
200 $58,998.00 $5,610.00 $491,495.04 $497,105.04
300 $88,497.00 $8,415.00 $491,495.04 $499,910.04
400 $117,996.00 $11,220.00 $491,495.04 $502,715.04
500 $147,495.00 $14,025.00 $491,495.04 $505,520.04
600 $176,994.00 $16,830.00 $491,495.04 $508,325.04
700 $206,493.00 $19,635.00 $491,495.04 $511,130.04
800 $235,992.00 $22,440.00 $491,495.04 $513,935.04
900 $265,491.00 $25,245.00 $491,495.04 $516,740.04
1000 $294,990.00 $28,050.00 $491,495.04 $519,545.04
1100 $324,489.00 $30,855.00 $491,495.04 $522,350.04
1200 $353,988.00 $33,660.00 $491,495.04 $525,155.04
1300 $383,487.00 $36,465.00 $491,495.04 $527,960.04
1400 $412,986.00 $39,270.00 $491,495.04 $530,765.04
1500 $442,485.00 $42,075.00 $491,495.04 $533,570.04
1600 $471,984.00 $44,880.00 $491,495.04 $536,375.04
1700 $501,483.00 $47,685.00 $491,495.04 $539,180.04
1800 $530,982.00 $50,490.00 $491,495.04 $541,985.04
1900 $560,481.00 $53,295.00 $491,495.04 $544,790.04
2000 $589,980.00 $56,100.00 $491,495.04 $547,595.04
2100 $619,479.00 $58,905.00 $491,495.04 $550,400.04
2200 $648,978.00 $61,710.00 $491,495.04 $553,205.04
2300 $678,477.00 $64,515.00 $491,495.04 $556,010.04
Average selling price per sale: 294.99
Average cost of goods sold per sale: 28.05
Average profit rate: 90.49%
Annual fixed cost: 491,495.04
Total sales at break even: 543,141.24 (average
profit rate/annual fixed costs)
Break Even points in units: 1841.22 (fixed
cost/(average selling price per unit-average
variable cost per unit)

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 Summary Profit and Loss
Statement

Projected Total Revenue: ​$589,980

- Based off of 2000 projected unit sales in Break Even Analysis
Costs of Goods Sold: ​$56,100
- Average cost of goods sold per sale is $28.05
- $28.05 * 2000 = $56,100
Gross Profit: ​$533,880
- Total Revenue - Cost of Goods Sold
- $589,980 - $56,100 = $533,880
Gross Profit Margin %: ​90.49%
- Gross Profit / Total Revenue
- $533,880 / $589,980 = .9049
Operating Expenses: ​$491,495.04
- Annual fixed cost from Break Even Analysis
Net Income: ​$42,384.96
- Gross Profit - Operating Expenses
$533,880 - $491,495.04 = $42,384.96

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 Balance Sheet
Shoe Guru

Balance Sheet

December 30, 2019

Assets

Current Assets:

Cash $ 280,832.07

Merchandise Inventory- High Tops $ 4,465.00

Merchandise Inventory- Low Tops $ 7,560.00

Supplies $ 3,300.00

Total Current Assets $ 296,157.07

Plant Assets:

Office Equipment $ 1,406.00

Accum. Depr. -- Office Eq. $ 527.25 $ 878.75

Furniture and fixtures $ 1,495.00

Accum. Depr. -- furniture and fixtures $ 560.63 $ 934.37

Computers $ 4,145.00

Accum depr- computers $ 1,554.38 $ 2,590.62

Total Plant Assets $ 4,403.74

Total assets $ 300,560.81

Liabilities

Current Liabilities:

Accounts Payable $0.00

Withholding Tax Payable - Fed $ 9,569.66

Withholding Tax Payable- State $ 5,086.99

Soc. Sec. Pay $ 12,139.61

Medicare Tax Payable $ 2,839.10

Sales Tax Payable $ 7,240.16

Unemp. Tax Pay-Fed $ 6,069.81

Unemp. Tax Pay-State $ 5,286.61

Loan Payable $ 250,000.00

Total Liabilities $ 298,231.94

Stockholders' Equity

Capital Stock $ 20,000.00

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Retained Earnings $ 17,671.13

Total Stockholders' Equity $ 2,328.87

Total Liabilities & Equity $ 300,560.81

Sales Projections

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 Of our 2000 projected unit sales, approximately 63% of these sales will come in the
months of November, December, and February. Why we saw these three months being our most
successful is due to trade shows and holidays. Shoe Guru took a trip to Tennessee in November,
and Rosemont in February, where we hope to make connections with other firms in order to
increase our sales. Similar to any other retail company, we thought a large amount of our sales
will come in December due to the holiday season. We hope to take advantage of the holidays as
we plan to make design unique seasonal shoes.

Looking at our overall sales for November, we had a projection of 425 custom air forces
and our actual sales for that month were 212. We projected 49.9% higher than we actually were.
In December we made 62 sales, whereas we projected to have 400.

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Shoe Guru’s Bank Balance as of
December 31