DEC 9 - DEMAND CREATION

According to the market size analysis we did on our project, we estimated that this is a 18 million euros market in the optimistic way, and 9 million euros market in the very pessimistic way. Therefore, the market do exist, and right now there are very few players.

Let´s say, we have an initial expense of 50.000€ for developing the infrastructure, platform, and marketing. Our plan is to expand the business to a second city by the second year, then to a third, fourth, and fifth city in the third year, and then more cities in the fourth year of the business. We assume that the number of booking per offer per year is 12, and we will be charging 10% on the average offer price of 30 euros, and from the second year on, we will charge a bit more for companies who want to be on our platform. This is the reason why we make the assumption of charging 4 euros in average for each offer from the second year on. We took the example of our competitor and we saw more or less the trend of growing offers in other cities, and this is how we forecasted the offer growth for the second, third, and fourth year. 

We also assume that for the second year we will have fewer expenses than in the first year, because the platform is already implemented. But for the following two years the expenses will increase again due to the marketing campaigns in the new locations. Cost of employees for the first year will be none because we won´t be hiring new employees for the company, but then we assume for the following years a growth of number of employees in the company due to the marketing and maintenance purpose, keeping in mind the average monthly salary of 1200 euros. These previous facts will have a direct impact on the numbers on the financial forecast. 


Therefore, we forecast the sales for the first 4 years would be the following...

We see clearly that our break-even point is in the very end of the second year of the business. The total cost goes almost flat from the third year, The Total Earning seems exponential, and it starts taking off from the third quarter of the second year. The EBITDA line goes nevative during the first three years, but then it takes off with a similar scope than the Total Earning.