Team:UCL E/Business/Financials

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Retail Price

Our manufacturing cost is upwards of £120 per unit therefore the Darwin Toolbox will have to retail upwards of £400 for the revenue to cover the total cost, including yearly overheads as well as unit production cost.

Operating expenses

Break-even Analysis

At this point in the start-up, our financial predictions are estimates. We modelled the break-even point based on 3 different scenarios with combinations of our total cost - considering unit production cost and overheads - and revenue.

Table 1. Break-even point analysis

The ideal scenario for our start-up would be low total cost with high return, allowing us to break-even with the production of 450 boxes a year.

Graph 1. Break-even point analysis of low total cost, high return

Limitations

There are several limitations to our modelling of the break-even point:

• We assume that our overheads will be constant, whereas this is very unlikely as within the first year we will be manufacturing boxes ourselves and conducting focus groups to improve the product.
• We have excluded reagent supply to avoid making a multi-product prediction and assuming that the amount of reagents and boxes would both be constant.
• We have not made allowances for changing financials environment