CGI expects to profit from retail consumption
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CGI expects to profit from retail consumption and sales, memberships, Internet sales, private events, direct to venue placements and specific channels of distribution. We project each store at over $500,000USD annual sales with 30% average profit. Start-up cost including licenses, permits, and inventory is $150,000USD per location; running cash requirement for the first year is calculated at $150,000USD per store. We expect to break-even by the 8 th month in business and minimum 500% increase in bottom line within 3 years. CGI will launch its 1 st store in Beijing by end of mid 2011 and a minimum of 7 stores within 3 years in business. p.20
Worst Case Scenario
This plan is organized on a "worst case scenario" basis. We have calculated all causes of potential failures to avoid financial lost. Should sales performance not meet projection numbers by end of 1
st business year, we will seize the operation and take a loss on freight cost, China duty plus taxes, start-up investment, 12 months of operating expenditure, and cash reserve, total estimated figure is $315,000. Of this figure, we expect to recover $15,000 from the start-up expenditure plus 30% of the gross profit at about $70,000, and $30,000 cash, total of $115,000, taking a $200,000 loss.
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