Will it fly?
Price Point: $ PASS!
A product under $99 this is a product that can be afforded by almost everyone. This is feasible and easy to prove its value. If this is $99 - $199 this could be mass market, but will have to have some consideration as to what gets the consumer to pay over the $99 threshold.
Cost: $ PASS!
You have all the major cost drivers of your product, and you have adding enough value through low-cost mechanisms to deserve your price point. This gives you enough margin to ensure that you can compensate your distribution channel and a buffer in case there are cost increases.
Margin: $ FAIL!
Percentage Margin: %
You have not added more value that the cost of the inputs and you are not making any margin. Without adding value, you cannot possibly make a enough profit. You must either add value to increase the customer's willingness-to-pay (page 20) OR you need to decrease some of your costs (page 67). Chapters 2 and 3 dive into these topics.
Cost of Being in Business: $ PASS!
Just make sure that you have a plan to get all of this upfront money. Is it from savings, family, friends, angel investors, venture capitalists, or banks? Make sure that you have a reserve fund as if you run out of cash your business is sunk.
Salary Expectations: $ PASS!
Your salary expectations are reasonable for a start-up, but you must be still aware that you might not be able to make any profit this first year. Can you still survive?
Working Days: FAIL!
Starting your own business takes a LOT of time. It is not a quick way to get rich. Be careful with your expectations here. Page 92 to 95 details all of the work involved in starting a business.
Time Spent on Delivering Break-even Sales: PASS!
It is extremely important that you leave enough extra time for extra details, administration work, and marketing initiatives. You never know what will come up!
Time Spent on Delivering Salary Meeting Sales: PASS!
It is extremely important that you leave enough extra time for extra details, administration work, and marketing initiatives. You never know what will come up!
Annual Break-even Sales:
Daily Break-even Sales:
Annual Sales Required to Meet Salary Expectations:
Daily Sales Required to Meet Salary Expectations:
Are these realistic? Are there enough people in your target market to sustain these numbers? Be honest! Page 59 to 65 discusses how best to use this number and its implications.