Financial Write-Up and More

BAM Technologies has many expenses, which are costly. The good news, though, is that many of these expenses are one-time expenses. Things like our equipment in order to produce the technologies and the building are two expensive items that need not be paid for every month. We offer a variety of products that each have different features as well as a subscription plan that is paid for by customers monthly. We calculated the average selling price of our products as well as added in the subscription price because these will be our main source(s) of income. The average value of each unit and the operating expenses were calculated as fixed, for simplicity, with the exception of cost of goods sold. The projected expenses includes salaries, rent, depreciation, payroll tax, advertising, insurance, supplies, and utilities, which totaled up to $306,866.67 per month. We researched the average interest rates for commercial loans, which is about 2 to 2.5 percent higher than the mortgage rate in the general area. The average loan rate in Kansas is 3.98 percent, so we added 2 percent to this, which added up to a 5.98 percent interest rate for 10 years. The years were set to 10 because we would like to continue adding building and new equipment. For a building, it costs about $18 per square foot to build a commercial building, so we multiplied this by our total square feet. To calculate our expenses, we researched prices for advertising (commercials, billboards). Billboards are about $10,000; we want about 100, so it would be approximately $1,000,000 (varying locations). The average cost of a commercial (which also varies locations) is about $1,000 for a 30-second commercial. Each commercial runs many times a day, so if we get 2,000 running yearly (5 times a day), BAM Technologies would get proper exposure to be known. Other expenses were calculated through research. The cost of goods sold are a variable expense that take up 30 percent of every unit sold, respectively. In order to breakeven, or cover the necessary expenses, roughly 468 units must be sold and roughly $414,684.69 has to be made in sales and subscriptions. Sales projections demonstrate that BAM Tech. will break-even during our second to fourth year as a business. Because of this fact, it is expected that BAM Tech.’s first year as a business will be a rough one (because it will be difficult to become known). Our outreach is also a very specific market. Though, our first year will be productive. BAM Technologies will succeed.