Fixed Costs Details
Fixed costs refer to the costs that do not change with the unit of production. It is the cost that is required to pay even the business is stopped. These costs are the obligations of the owner of the business even at zero production level. The fixed costs of Cancer coach is provided in the table below.
The costs of the components are based on market research that is estimated costs of assets and expenses are collected from the market analysis. The high cost is allocated for equipment as it is the main thing required in the cancer center. However, rent is to be paid in advance for the year and it is considered as the fixed expense that has to pay irrespective of the increase or decrease in production.
Variable Costs
Variable costs are the type of costs that changes with the change in the units of production. These costs have a direct link to the product that is it increase or decrease with the increase or decrease in the product. There are two types of variable costs of Cancer Coach that need to be paid according to the use.
Salaries are the main expenses of any business. It is considered as the revenue expenditures that are necessary to bring growth in the business. The high amount of this cost if allocated to salaries and wages as a large number of employees will work in this organization. The business also depends on effective marketing that requires huge amount of advertising and promoting the product in the market. Marketing is essential element that cannot be ignored as it is significant for increasing the volume of sales for business.
Start-up Location
There are two locations to start the business that the company has chosen from the list. They are provided in the table below along with the costs associated with it.
It can be noticed that to start a new business is in New York is relatively easy than London. However, there are many factors such as high rate of inflation, political instability, government restrictions and others that result in the difference of costs between them. Cancer Coach has chosen these two countries for starting a business but has always prepared expansion plan to move to other countries in future. In fact, the registration fees for entering the new markets are also paid by the organization. The details of the registration costs are provided in the table below.
The above-mentioned countries are selected from the shortlist of emerging markets. The reason for the selection of these five countries is the availability of technological resources and skilled workforce that can provide long-term benefits to the company. The market analysis of these countries has done to identify the feasibility of investment while operating in these five countries. The external analysis and market research show that these countries or markets are preferable for such business, and high growth is expected in future. It is the reason why Cancer Coach has paid registration fees for working in these five countries in future. To avoid any complications and delay in the coming years, the management has paid the additional expenditures to remain focusing on the current operations of business.
Revenue Streams
The revenue stream is the form of income that describes the areas or functions that will provide potential revenue to the organization.
The subscription collection is low due to the small subscription fees that will be demanded from trainees. The retail partnership income is high due to the spread of products and services through retail channels. Retailers are the main source of income for the organization so there should be a strong relationship with them for ensuring future growth of the organization. Insurance deals also provide benefits to the organization at large.
Market share for each revenue stream
The market share of each revenue streams represents that the organization earns high revenue from retail partnerships as compared to insurance and subscriptions. The trend prevailing in the market shows that retail partnership is the significant source of revenue for this type of business.
It should be noted that the amount of $580,000 would be borrowed from the bank. The mount of the equity of investors is $420,000 that indicates the total amount of investment required is $1,000,000. The burn rate is 165, and the capital expenditure of the company amounted $90,000. It shows that huge amount of investment is required for the project, but the growth is expected in the coming years that ensure high return on investment. The projected income statement is provided below.
