Design and Innovation: Business Plan Project Report - University Name

This project presents a comprehensive business plan for a Domestic Pet Care product, detailing development costs, product expenditure breakdowns, and wholesale pricing strategies. The plan includes a break-even analysis, projecting sales volumes and profitability, along with sensitivity analysis to assess the impact of changing costs and prices. A product risk analysis, utilizing a risk matrix, evaluates potential market and technological challenges. The business plan covers fixed and variable costs, break-even points, and potential profits based on projected sales. Reference to business process management, strategic management, corporate finance, and financial accounting theory are made. The analysis considers various scenarios, including changes in break-even costs and wholesale prices, to gauge the product's financial viability and potential risks in the market. The project incorporates the application of financial models and market research to validate the feasibility and sustainability of the proposed business venture.

Running head: DESIGN AND INNOVATION
Design and Innovation
Name of the University
Name of the Student
Authors Note
Course ID

1DESIGN AND INNOVATION
Table of Contents
Business Plan:............................................................................................................................2
Development Cost:.....................................................................................................................2
Product expenditure breakdown:................................................................................................2
Wholesale Product and Sale Price:............................................................................................3
Break-Even Analysis:.................................................................................................................3
Break-even Analysis: 450 units per month................................................................................4
Sensitivity Analysis:...................................................................................................................5
Product Risk Analysis:...............................................................................................................6
Reference List:...........................................................................................................................7

2DESIGN AND INNOVATION
Business Plan:
Development Cost:
Development Cost
Particulars Amount ($)
Cost of Design Engineers 34965
Cost of Training 1850
Cost of Assembly Jigs 1250
Cost in Production Line Setup 4500
Prototype 450
Total Cost Incurred 43015
The above stated table represents the summary related to the developmental cost that
is associated with the design of Domestic Pet Care Product. The developmental cost that will
be incurred is stated below with appropriate breakdown of each elements of cost that is
associated with the cost of developments (Jeston and Nelis 2014).
Product expenditure breakdown:
Table Representing Summary of the Product Cost:
Production Expenditure Breakdown
Particulars Amount ($)
Cost of per Materials 8.5
Cost of Distribution 1.25
Labour Cost 16.5
Total Cost Incurred 26.25
The above stated table represents the production cost that is related with the
production of one single unit. From the above stated table it is understood that cost of
materials, distribution cost and labour cost associated with the production of product has been
stated below.

3DESIGN AND INNOVATION
Wholesale Product and Sale Price:
The Domestic Pet Care feeder will be entirely sole at the wholesale price of $75.
According to the market research performed it is representing that products are generally
priced around $75 over the period of two years. The figure that is derived from the probable
market size and the percentage of market captured by the Domestic Pet Care feeder (Wheelen
and Hunger 2017).
Break-Even Analysis:
In the current context a breakeven analysis has been performed to understand the
financial viability of the business. The above stated figure represent that break-even point of
the venture with minimum amount of sales volume at $75 per product. As a result of this
around 1766 units is required to be sold by the company to cover the cost of fixed cost
(Fleischmann et al. 2015). Similarly, if the company sells an anticipated unit of 2200 then the
anticipated profit that stands $21150.
Breakeven Analysis
Minimum Sales Volume
Particulars Amount ($)
Total Fixed Cost 86030
Variable Cost per Unit 26.25
Selling Cost 75
Quantity 2200

4DESIGN AND INNOVATION
Figure 1: Break Even Analysis
(Source: As created by author)
Break-even Analysis: 450 units per month
The conservative amount of projected sales volume has been estimated to be around
450 units each month in accordance with the probable market size (Ross et al. 2012). The
above stated figure represents that breakeven point is approximately around 6 months. (2700
units approximately) that has been determined with the anticipated volume of sales of 450
units per month with a wholesale price of $75 per unit. Following the end of 24-month period
it is estimated that around 10800 units is anticipated to be sold and would ultimately result in
a profit of 507,600. With the help of thee parameters sales volume is anticipated to be met
and $75 per unit of wholesale price. It is noteworthy to denote that government grant has
been taken into the considerations that has been included in the cost of development in the
form of fixed cost (Saywell et al. 2015).

5DESIGN AND INNOVATION
Total Cost Total Profit
0
100000
200000
300000
400000
500000
600000
Cost and Income
Sensitivity Analysis:
If the decision is undertaken to increase the breakeven cost by 20% the breakeven
point might shift to 7 months and would require around 2640 units to be sold to reach at the
breakeven (Deegan 2013). The break-even point might shift to approximately three months
and might require around 1800 units to be sold to reach at the break even. On the contrary, if
the wholesale price is reduced to 20% then this would significantly increase the cost of units
that is required to be sold to reach the breakeven and this will lead to delay in breakeven
point.
Profit 20% Increase No Increase 20% Decline
0
100000
200000
300000
400000
500000
600000
700000
Sensitivity Analysis

6DESIGN AND INNOVATION
Product Risk Analysis:
The product risk matrix has been adopted from the Harvard Business Review so that it
can assess the present concept of product in terms of the marketing and technological risk
that are involved in the launching of product and probability of the failure that is associated
with the launch of the product (Deegan 2013). There is always the risk of launching the new
product in the market with a contour regions probability of failure begins from time period of
25-40%. The risk matrix provides probability be evaluating the major categories such as the
intended market and product technology. For the current project the product risk matrix is
assumed to be medium keeping in mind the potential market forces and demand for the
product.
Figure 2: Product Risk Matrix
Source (Ross et al. 2012)

7DESIGN AND INNOVATION
Reference List:
Jeston, J. and Nelis, J., 2014. Business process management. Routledge.
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.
Fleischmann, B., Meyr, H. and Wagner, M., 2015. Advanced planning. In Supply chain
management and advanced planning(pp. 71-95). Springer Berlin Heidelberg.
Ross, S.A., Westerfield, R.W. and Jaffe, J.F., 2012. Corporate Finance.
Saywell, R.M., Cordell, W.H., Nyhuis, A.W., Giles, B.K., Culler, S.D., Woods, J.R., Chu,
D.K., McKinzie, J.P. and Rodman, G.H., 2015. The Use of a Break‐even Analysis: Financial
Analysis of a Fast‐track Program. Academic emergency medicine, 2(8), pp.739-745.
Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia.