The capital contribution upon creation of SUREST has been used exclusively to develop and perfect the PILO product offer.
The company has no debt to date. The business model combines a structure of low costs, a broad market and significant added value, especially for online sales.
The accounts as of 31/12/2016 are interim, as SUREST closes its accounts as of 30/06.
The business will be profitable as of the first year.
The funds raised are intended to finance production and marketing. The team has carefully prepared these two operations.
The three-year financial plan developed by the SUREST management is set out below.
The sales projections, established on the basis of reliable statistics and adopting a conservative and prudent approach, are the result of years of experience, reviewed and challenged by other professionals in the sector.
Turnover is provided by sales of PILO via three distribution channels:
1 - sales in independent pharmacies
2 - sales via pharmacy groups
3 - internet sales
The retail price of PILO is € 59, all taxes included (case + application).
Online sales: estimate of the market at the European level
In order to assess the market addressed by the internet distribution channel, a study was conducted making use of the statistical tools of Facebook. This approach allows precise figures to be obtained on the most relevant European markets.
SUREST has a potential clientele of 30,800,000 patients among the eight largest European markets.
The success of the business is based on a simple principle: cost control and ambitious business strategy. We have developed the financial plan of SUREST on the basis of observance of these principles.
The table below itemises the items taken into account in calculating the cost of sales. The manufacturing item covers the raw materials, assembly and packaging. The moulds are amortised over 100,000 units produced. The ‘fulfilment’ operations (processing of orders from the website, storage, shipping to the various types of customers) are provided by Amazon Logistics Europe. The e-commerce and digital marketing items take into account the costs of electronic payments on the e-commerce platform (Shopify) and the financial intermediary that provides transactions by bank card.
The financial plan below is based on marketing of PILO beginning in Sept 2017. No revenue will be generated until then.
Tangible assets: purchase of two moulds annually, the cost of which is 15K EUR each, amortised over three years.
Intangible assets: all the study services and development of the case as well as development of the application. Expenses related to the patent are also included.
Commercial receivables: the average period for collection of receivables is 60 days end of month. One hundred percent of the sales are produced in pharmacies and groups of pharmacies in Belgium in year 1 (21% VAT). In year 2, 60% of sales in BE, 40% in FR (no VAT). In year 3, 20% of sales in BE, 80% outside Belgium.
Commercial debts: the average period for payment of debts is 30 days.
Stock necessary: restocking orders requires two months.
Formula: 29,000 (year 1 sales volume)/6 = 4833 units per order. The value of the stock necessary is therefore 4833x6 (orders) ~ 29,000 EUR.
The break-even point will be reached in 149 days, which will allow investment in development of expansion of the product range (extra-slim version for use other than storage of medications, and expansion of the models of smartphone eligible for the product) as of the second year.
The level of profitability achieved by SUREST reflects the business model adopted: a niche product, marketed on a large scale (mass market).
Break even volume
In the first year, the break-even point is reached when the turnover is 422,091 EUR, or in 149 days.