Break Even analysis

As seen from the graphic, after six months of sale, in the first quarter of second year, our
cumulative revenue passes the cumulative cost. Thus, the maximum amount of investment
to pass the break-even point is about $2.77 million.

Cost and Income analysis

Toothbrush project is a global project and requires huge amount of money for the first year.
However, after one year, it will get a positive cash flow and after two years, it will generate
profit. The project relays on capital that will be invested by a venture capitalist and the
absolute size of the business depends on the money to be invested.
In this section, we breakdown the significant costs and make an analysis of investment
versus revenue.
The most important cost items are;
Research & development cost (including design)
Advertisement cost
Production cost
Operating cost
Among those, research & development cost is fixed and cannot be reduced too much.
However, advertisement and production costs are flexible and can be modified according to
the invested capital. Before we continue with our detailed cost analysis, we want to present
the expected trends in different cost items first.

As seen from the graphics, research&development and advertisement, the costs are
expected to be declined in second year as our product design is finished and the customers
become aware of our product.

Income from Sales

In the marketing section of this business plan, we showed that the total turnover of electrical
toothbrush industry in Europe and USA was $578 million for 2009.
We expect to increase our share in this total turnover gradually within two years. The figure
previously given in Realization Schedule section, presented our estimation quarter by
quarter for the following two years.
If we achieve the expected growth in our estimations then we can obtain a turnover that is
shown in the following diagram.

The total turnover within two years is $143.055.000. With a pessimistic assumption of %10
revenue, we expect $14.305.500 profit from sales within first two years.
The net profit for the first two years, after calculated total cost, is expected to be
$10,761,500.