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BaboBox

BaboBox

Business Plan Sam Bohmiller

Allie Duncan

Manuela Iragorri

Brenda Ongko

Alyssa Reisner

Ken Rotunno

Naman Rungta

John Russolillo

Sarita Sasson

Brandon Schwartz

Rishin Shah

Julia Strickler

Xavier Trahan

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BaboBox

Table of Contents

1. Executive Summary 3

2. Company Overview 4

3. Marketing 6

4. Operations 10

5. Startup Phase 13

6. Information Technology 15

7. Corporate Social Responsibility 16

8. Human Resources 17

9. Financials 19

10. Risk 26

11. Entrepreneurial Thought & Action 27

12. Appendix 28

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BaboBox

Executive Summary ‘BaboBox’, is a student run business established in Babson Park, Massachusetts, in

2013, to meet the business project requirements of Foundations of Management and

Entrepreneurship course at Babson College. ‘Babobox’ plans to work in the food

industry and aims to restrict its market to specifically Babson students and parents. The

company provides small care-packages to students, that can be ordered online or at

booths set up across campus. These care-packages can also be delivered to the room

of a student at an extra premium cost. The results of a survey conducted by the

marketing team yielded promising results and has led us to believe that there is

widespread demand for our product on campus. Furthermore, the marketing team also

did a focus group experiment and noticed that these packages need to be aesthetically

pleasing and need to be marketed differently to parents and students. Moreover, the

survey also revealed that there is a demand for a variety of items in every box.

Therefore, the operation team plans to incorporate at least six different types of product

in every box and it plans to have 5 different kinds of boxes. Given that we plan to sell

our product during the first four months of 2014, the sales team anticipates great

demand for our product around certain holidays and festivals. Therefore we plan to

provide specialty boxes during these holidays and festivals. After taking into account the

above plans, the financial team created the company financials and found that this

would be a profitable venture. With a startup cost of $1400. the company anticipates to

make a profit of $1000 dollars before tax. The team uses the prudential concept of

accounting to calculate the above account and has not taken into account profits the

company was not sure about (delivery charges), but has taken into account all possible

expenses/loses (delivery expenses). Therefore, the business hopes to earn a profit of

more than $1000.The company realizes that to function effectively, all the various

sections of the committee must work together in perfect harmony. There is potential of a

conflict of interest within various departments or lack of motivation within employees.

Therefore, the company also has a Human resource department which will deal with all

the above problems. The company is comprised of five departments which are

supervised by two CEOs. The company plans to work for the wellbeing of Babson

students and parents, and would undertake all measures to make sure that it remains

true to its goal.

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BaboBox

Company Overview

‘BaboBox’, is a student run business established in Babson Park, Massachusetts, in

2013. The company’s mission statement is to provide affordable and convenient

packages, created by Babson students for Babson students.

The company is part of the food industry and plans to provide internal care-packages to

students at Babson. These internal care-packages are called BaboBoxes and have a

variety of food items in them, such as nutritional bars, candy, chips, pretzel etc. Each

box contains 6 different kinds of food articles and will be sold at a price of $6. There are

5 different varieties of boxes – Study Box, Midnight Munchies Box, Birthday Box, Study

Box, Natural box and Date night Box. Each box has a different set of food articles in

them, keeping in mind the preferences of Babson students and parents. These boxes

would be sold online and at booths set up at various locations across campus. Students

can either manually pick up these boxes or can have them delivered to their room for an

extra premium.

The business’s competitive advantage is that it operates at those periods of time, when

other food sources on campus are unavailable or inaccessible. Moreover, the company

provides the benefit of delivery, a service which is not provided by any other food

company on campus. Furthermore, these boxes are created by Babson students for

Babson students, keeping in mind their preferences and wellbeing. In light of the above

points, the company is hopeful that the target customers would realize the benefit the

company is offering and would make full use of it.

The business’s competitive advantage is that we have food available when no other

businesses on campus are available that provide the same thing as we do. Moreover

these boxes are created keeping in mind what college students want, so we plan to

provide assortment of goods that are usually not available to Babson students.

The company’s main goal is to have satisfied customers and employees. The company

wishes to provide convenience and affordability to students through its product and

hopes that their product helps the students on campus. Moreover the company desires

to make a minimum profit of $1000 through its business venture.

The company hopes to have a positive impact on the society and on the environment.

The company uses 100% recyclable boxes for its product and plans to promote healthy

eating habits amidst students. Moreover the company plans to promote awareness

about social causes (such as breast cancer awareness) in the society through labels on

its product. The company would also donate any residual inventory to charity after the

end of company’s venture. The company would so donate all the profit it made during its

business venture to ‘Cradle to Crayons ‘, Boston, Massachusetts.

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BaboBox

The business holds the values of honesty, respect and team spirit at utmost importance.

The company hopes to foster a team that values each other’s time and appreciates the

effort put in by each and every one.

Our goal is to be a successful company, whose members are satisfied and learn

something from the business. The business also desires to provide convenience and

affordability to students.

Code of Conduct:

Our team defines success in FME as coming together as a team to explore, learn, and

grow together. We will collaborate to achieve the best results in our business and

growth.

We follow will follow this code of conduct in order to reach the hallmarks of success:

Achieve Desired Results

Find Satisfaction

Learn Something

We expect these behaviors and actions from each other:

Respect to all members ideas, values, and well-intended actions

A positive attitude for assignments, activities, meetings, and problem-solving

Show up to class and meetings prepared and with a smile

Think critically and creatively when faced with a problem

Be ready to put in hard work and perseverance to be the best team we can be

When these expectations are not met:

Team members will be clear to each other if someone is not positively

impacting the team

Issues will be discussed rather than argued

Decisions will be made by:

Discussing within the team

Coming to a general consensus or vote

No team member making important decisions without inquiring from the rest

of them team

We commit to following this code of conduct to work towards success as a team!

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BaboBox

Sophomore, 450

Junior, 90

Senior, 45

Parents, 45

Freshmen , 675

Marketing

BaboBox’s target market is 900 students and will consist only of Babson students

and their parents. To obtain the target market size, BaboBox utilized feedback from the

focus group and survey results. Based off of these results and by using the team’s input

it was decided that 75% of freshman, 50% of sophomores, 25% of juniors, 10% of

seniors, and 5% of parents would make up the target market. The decline in demand as

grade level increases is attributed to the fact that many upperclassmen have their own

kitchens and can more easily access other sources of snack goods.

BaboBox’s direct competition includes Amazon.com, Reynolds, Trim, Dunkin

Donuts, Roche Brothers, Whole Foods and the vending machines placed around

campus. However, BaboBox’s competitive advantage is that they are created by

Babson students for Babson students to satisfy the need for quick and tasty snacks on

the go or delivered straight to the dorm when other food sources are either closed or

inaccessible to students. Therefore the business provides benefits that the competitors

do not offer

The price of a single Babobox will be $6. This price was determined by

comparing the results from the focus group and survey with the cost of goods/services

going into creating a BaboBox.

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BaboBox

BaboBox plans to utilize a combination of online and onsite promoting. Online

promoting includes: social media blasts (through outlets like Facebook, Twitter, and

Instagram), and school-wide E-mail blasts. Onsite promoting includes: flyers handed

around campus, posters up on campus, chalk art, newsletters sent to parents, having

representatives at sporting events to entice parents, and advertising through Babson

Radio and Babson TV. Each individual BaboBox will also have a sticker with the official

BaboBox logo on it.

Products will be sold at booths outside of Horn Library and inside Reynolds

Student Center, and during sporting games and events. There will also be a chance for

customers to buy products online which would be available for pick up at one of our

booths or can also be delivered at a higher cost once a week. For online purchases an

E-commerce service called PayPal will be available through Babson. Employees will

undergo a 30 minutes long crash course in selling - teaching them about BaboBox

(products and services involved) and motivating them to be passionate about BaboBox.

For this, BaboBox will not be exploring any alternative outlets of selling and instead we

will be contacting the customer directly. Each employee will work in the selling and

distributing of BaboBox.

Based on the projected expenses on vistaprint.com for flyers, posters, and loyalty

cards we have estimated $200 for our marketing expenses.

Since we need to sell 523 BaboBoxes in order to break even, each member of

the team will need to sell a minimum of four boxes in order to break even. Every

member will sell four boxes per week, excluding one team member, Brenda, because

she is not on campus as much as the other members. Brenda will sell two boxes per

week, and Allie will sell six boxes in order to break even.

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BaboBox

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BaboBox

Since customers are able to purchase online BaboBox will make sure that our

website is consistent with the design and layout of flyers, banners etc. (specifically

dealing with colors and our logo). It will also contain the mission statement along with

information on prices and delivery times. The website will change often advertising new

seasonal products. For example, in February our website will feature a Valentine’s Day

box while in March it will feature a St. Patrick’s Day box.

In order for BaboBox to measure the effectiveness of our marketing strategies

and techniques, BaboBox plans to implement a “how did you hear about us” feature on

the website. This will prompt customers at checkout, through a drop a box of choices

like: through a friend, on campus advertising, social media, or other in order to figure out

what are the most effective and ineffective ways to market the product.

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BaboBox

Operations

BaboBox will begin running on January 21st and all sales must be completed by April 18th. We will be doing our community service at Cradles to Crayons on February 7th. Reports will be given at the various Pulse Report dates, midterm, and final.

BaboBox use various business processes throughout the chain of operations.

We have to order inventory, create BaboBoxes, manage food products and completed box inventory, distribute the product through different methods, record and analyze change in inventory, and much more. Processes are developed by CEOs and VPs and they will be executed by relevant team member

Operations:

Suppliers:

The suppliers we will work with include Costco, Amazon, Oriental Trading, and

Equal Exchange for box components; Nashville Wraps provides eco-friendly boxes and

Print Runner for BaboBox branding stickers. These suppliers were chosen based on

their low prices and availability of products that will need to be purchased. We also

considered of the product quality relative to price and whether the required quantity

matched with our inventory need. Backup suppliers are Packing Source for the boxes

and Printing for the stickers. We do not feel the need for backup suppliers for Amazon

and Costco because they are well established companies with that continue to provide

consistent customer satisfaction. Our suppliers do not require contracts because we are

Order Inventory

Create Boxes

Distribute

Boxes

Analyze Data

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BaboBox

buying products through their stores or online. All of them will ship using either FedEx or

the US Postal System.

BaboBox chose to use suppliers that contribute to helping the environment and

local communities. Each Costco warehouse engages in philanthropy by providing grants

to local organizations that support children, education, health, and human service.

Amazon uses environmentally friendly packaging that is 100% recyclable and donates a

portion of its profits to local and national nonprofit organizations. Oriental Trading

focuses its Corporate Social Responsibility on education, youth, health care, and human

services. They engage in environmentally sustainable practices by partnering with

paper mills that promote reforestation. Equal Exchange establishes relationships with its

sellers, encouraging fair trade practices and the economic growth of farmers and

workers. Nashville Wraps prides itself on utilizing the Greenway (Trademark) method of

developing 100% recyclable, eco-friendly products. Print Runner uses vegetable-based

inks and an incredibly efficient printing press to produce its products.

Inventory and Manufacturing:

To acquire the inventory needed to sell BaboBoxes, we will put in orders to

Amazon, Oriental Trading, Equal Exchange, Nashville Wraps, and Print Runner. We will

drive to Costco to purchase remaining inventory. It is approximated that Amazon will

deliver the products within 3-5 days of placing the order, and any materials from Costco

can be obtained within the same day. The stickers from Print Runner are approximated

ship within 3-5 business days of the order placement and shipping will be 3 days.

Nashville Wraps delivers its orders within one week. All suppliers use FedEx and/or

UPS to ship their products. We plan to stock inventory for 50 of each type of box.

Additional inventory will be ordered based on weekly and monthly sales analysis. New

inventory will mirror the demand for the most popular boxes. This method is possible

because of our quick receiving shipment times and almost completely free shipping

costs. We already have a schedule from our forecasting that we will reorder inventory in

the first week of March.

BaboBoxes will be partially manufactured during team meetings and others will

be assembled by the supply manager if needed. This will be set up by the Supply

Manager to efficiently create the boxes. Before the business begins selling, fifty

BaboBoxes of each variety will be prepared to sell. In addition to the primary

components, the BaboBoxes will contain packing lists and thank you notes to add

personality to the business.

Inventory will be held in our FME office, which will be rented from Babson

College for $50 for the entire FME period.

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BaboBox

Inventory will be audited before and after each session of BaboBox building.

Counts of remaining BaboBox components as well as the counts of each type of box will

be recorded and analyzed alongside sales projections. Communication with the sales

team will help determine the need to purchase more goods necessary to construct the

boxes. An account of the frequency of each box’s sales guides the supply of certain

inventory. Each sale from the website is recorded through a spreadsheet generated by

a web product we are using called Quick Shopping Cart to maintain a consistent stream

of orders that can easily be organized into groups identifiable by the type of box

ordered. We will also manually insert orders from on campus sales onto this same

spreadsheet. This provides a more efficient means to build the boxes so we avoid

building an overwhelming surplus.

Distribution: We will have several different methods to deliver our product to customers. One

way we will deliver our product is by directly selling to the customer during promotional

sessions at booths. Customers will have the option to select both the type of box and

the number of boxes they want at the booth. We offer a free pick-up option where

customers can come at a set time once a week to get the product from our FME office.

They will have to present an ID as proof of purchase. Additionally, we offer delivery

options once a week. Customers will have the option to have their order personally

delivered to their dorm room by the BaboBox team for a small premium.

The first two options stated are simple in execution that the customers will be

picking up their order themselves, leaving little potential mistakes in terms of delivery.

For the actual delivery service we offer, each member of the business will be

responsible for two shifts for the duration of the operation period. These shifts will be

overseen and delegated by the Distribution Manager. We will have teams of two people

delivering at a time to the dorms. We will be delivering once per week, but we are

flexible to expand if there is a high enough demand when the business is running.

Data Collection: The Operations team will need to collect data for:

Inventory Tracking

Selling Tracking

Matching with Financial Sheets

The shopping cart program we are using, Quick Shopping Cart, will also be used

for operations. It has a feature to help with product inventory that we will be utilizing to

manage how much inventory we currently have and project what we need. The Supply

Manager will be specifically responsible for overseeing the program.

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BaboBox

We will use this data to function within the Operations team. However, we will

also need to report outflow of inventory to the sales team and financial team and report

relationship with suppliers.

Startup Phase

BaboBoxes has a total startup cost of $1,300. The initial inventory purchase is

$1000. There are two initial marketing expenses for flyers, and banners and loyalty

cards. There will be flyers and banners for the normal product, as well as for the

specialty boxes for holidays. The team’s loyalty cards will be buy 10 BaboBoxes, get the

11th one free. These are expenses of $100 and $50, respectively. Initial office supplies

will be $15 for a receipt book. There will also be two expenses for the website creation.

The domain name will cost $14, while the additional software to allow purchases from

mobile devices will cost $10. The software is called GoDaddy Quick Shopping Cart. It

will help with the bookkeeping of online transactions, as well as inventory inflows and

outflows. This software also makes the payments from the customer more secure. The

hard costs total $1,185. The business will account for contingency costs of

approximately $120. The company must purchase the initial inventory by January 7,

2014, in order for the shipment to arrive by January 21, 2014. The team will also take

preorders before the first week of sales, including during winter break. The team

members in charge of preorders will be Julia, Alyssa, and Allie. The team must solidify

the suppliers that will be used. The team must also set up the website for sales before

New Year’s Day. The sales distribution manager must set up the calendar for who will

be delivering on what days.

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BaboBox

$996.00

$150.00

$15.00 $24.00

$118.00

Startup Costs

inventory

marketing

office supplies

website

contingency

Start-Up Item Start-Up Cost Inventory $996.00

Marketing $150.00

Office Supplies $15.00

Website $24.00

Contingency $118.00

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BaboBox

Information Technology

Web presence is essential for BaboBox’s success, as it will be the main method

for purchasing by direct consumers. For this reason, the IT department must work

closely with the marketing department to ensure that the website meets the satisfaction

of the consumers and is designed in the most appropriate and effective way. For

example, the website should have a green and white color scheme to represent Babson

College, and other similar features. The marketing department also consists of an online

marketing section, which will employ the benefits of social media in order to reach out to

its consumers- an effort that will also be supported by the IT department.

BaboBox understands the importance of security in terms of payment, which is

why sales purchased online will be monitored and secured through the employment of

GoDaddy Quick Shopping Cart and PayPal. The first is an e-commerce software which

features numerous designs and bookkeeping- two very important features necessary for

a successful website. The bookkeeping feature will help the sales and operations

department with monitoring online sales and transactions, and inventory. The cost for

this particular software is $10, a cost that has been accounted for in the financial

statements. PayPal is a service that BaboBox will utilize to secure online payments,

which is key to online sales so that consumers feel safe purchasing the business’s

products online. PayPal aims to secure payment since it allows limited access to

transactional information and offers three different types of business accounts. BaboBox

will be using the advanced business account by PayPal, which charges the business

$5/month. The financial statements have accounted these costs under the name

“website.”

The development of the website will be outsourced to Alex Reisner, the brother

of one of BaboBox personnel. Due to his relationship to the business, he will be

developing the website without a fee and will also be responsible for the technical

support of the website. If in the future any problem arises with the business’ website or

any modifications must be implemented, Alex Reisner will be -responsible for it.

Although the business will be hosting the website off-campus, there will be no cost for

this due to the help of him. Furthermore, Brenda Ongko –manager of online sales- will

also be in charge of the daily running of the website. Any future problems regarding the

website will be communicated to Alex Reisner through her. Moreover, the BaboBox

website will be registered a domain name from GoDaddy (www.baboboxes.com), which

will cost approximately $14. This registration has also been accounted for in the

financial statements of the business.

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BaboBox

Corporate Social Responsibility

Benefits:

BaboBox strives to create value for the Babson community in all spheres and dimensions by providing essential food services. By facilitating quick delivery of food, we intend to improve the overall effectiveness and productivity of Babson students by saving student time to get hold of a quick meal. This time can be invested in more essential activities to further the holistic development of our students.

The option of purchasing our product as a gift to another person is aimed at promoting a friendly co-existing atmosphere on our campus to improve feelings of unity and consolidation as members of a single community.

Additionally, BaboBox has pledged to donate the surplus inventory to Food Banks in the Massachusetts area, in line with our company’s mission to promote philanthropic endeavors.

Our boxes and promotional materials are intended to be made of recyclable materials in order to further our goal of creating social value.

Risks:

BaboBox could cause a negative impact on the environment through the shipping

of inventory and waste created by packaging of individual snacks and the box. These

risks can be managed by encouraging recycling. In each box there will be a “Please

Recycle” message on the thank you card. Shipping impact will be handled because both

FedEx and UPS are becoming more and more efficient to minimize the negative impact

that can be caused by the transportation of so many items.

BaboBox will also manage risks to health and safety because food brings up

much of these concerns. The main issue could be with allergies of the consumers. This

risk will be minimized by clearly marking which items have any allergy concerns on our

website and order forms. Each snack is marked for resale, which includes an additional

disclaimer for allergies or even other health concerns.

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BaboBox

Human Resources

Company Guidelines:

To ensure respect and professionalism are practiced when dealing with issues, the HR division and other members of the team have come up with the following list of guidelines all members must follow:

1. Respect other members ideas and values 2. Complete group and class assignments completely and in a timely manner 3. Uphold a professional attitude when conflict arises 4. Treat all team members the same 5. Accept responsibility for your own actions 6. Attend all meetings and classes unless a reasonable excuse is given 7. Represent Babson and FME with pride and dignity when dealing with customers,

vendors, suppliers, other groups and the external community

Any breach of contract rules will be reported to the HR division for further investigation. If the investigation shows evidence of an issue beyond the authority of HR, the Head of HR and the CEOs will bring the issue to the mentors and professors. They can then issue consequences as they see fit. Any issue that cannot be resolved, where both parties cannot come to a conclusion, will be decided by HR with opinions from the CEOs. Any issues regarding the HR and CEOs decision must be brought about in a peaceful and respectful manner. If an issue is warranted for penalty, penalties such as more sales duties, temporary absence from team meetings and discussions, bringing the food for the next meeting or demotion of position can be issued to the offender. A public and personal apology is not required but expected from any member who breaks any of the rules listed above. The rules were put in place to provide a safe working environment for every member, and any member causing another member to feel at risk of emotional or physical harm will be dealt with accordingly. The BaboBox team feels as though our success is greatly based on each member following the rules above and takes the breaking of these rules extremely seriously. Each member is aware of the list and has no excuse for misconduct.

Performance Appraisals:

Three separate performance appraisals will be completed during the spring semester. The first on the last day of February, the next on the last day of March and the last on the final day the team is together. Different factors will go into how each team member’s performance is measured. Attendance at meetings and class, completing responsibilities, attitude towards other team members and following company guidelines will all weigh heavily during the completion of appraisals. Any question or issue regarding unhappiness in how your performance appraisal turned out should be directed personally to HR. HR will notify the CEOs of the problem so they can be present during the discussion. If majority of the team is unsatisfied with their appraisals, the CEOs will look over the appraisals to see if the unhappiness is justified. If this is the case CEOs will discuss the matter with the HR for an explanation and look into stripping the HR of their performance appraisal duty. If the CEOs feel as though

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lifting the HR of this duty is needed, the CEOs will take over the remaining appraisal obligations.

Talents:

The BaboBox team is supported by a variety of different talents that flourish

through each team member's role in the business. Each member was assigned to their

position based on what they do well and where their talents will help the team the most.

From CEOs down to managers, BaboBox believes each individual was fairly placed into

the role the individual not only wanted but also will benefit the team the most. BaboBox

believes each member has a special talent that is useful and was placed into the role

that will allow their talent to be brought to its full potential. With this said, the talents

needed to launch BaboBox are all present and available within each member. Following

company guidelines closely and giving a complete effort on every task should not only

keep the team happy but also assure Babobox's success.

Communication:

Electronic communication will be used for team members to keep in touch about

ideas, meeting times and any questions that may arise. The device called “GroupMe”, a

system used to connect more than two people in the same thread, has been set up for

our team to communicate. Each member is required to check their phone daily in order

to not miss changes in meeting times or other important discussions. It is each

individual’s responsibility to be conscious enough to check the thread and be aware of

any changes to meeting times. Any member who is not receiving the messages

because of phone failure or other reasons needs to let the team know so we can adapt

accordingly. Email will also be part of our communication to send documents and other

important items not available to be sent through GroupMe. Non face to face

communication is critical to keeping everyone in the team on the same page and we

believe our methods of communicating will help us achieve our goal.

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Financials

Table 1: BaboBox Forecast of Unit Sales

BaboBox plans to purchase approximately 4,658 units upfront at an estimated

price of $995.58. Per week, the company estimates to sell 654 sales units, which

accounts for every individual item within one of the products. In week one of March,

according to the projected sales, the company will need to purchase additional inventory

of approximately 3,380. The company plan to sell approximately 7,848 individual units,

and will donate any extra items that is left after termination of the business.

Date Beginning Inventory

(Units)

Purchases (Units)

Purchases (In Dollars)

Projected Unit Sales

Ending Inventory

(Units)

Jan- Wk 3 4,658 4,658 $995.58 654 4,004

Jan- Wk 4 4,004 0 $0.00 654 3,350

Feb- Wk 1 3,350 0 $0.00 654 2,696

Feb- Wk 2 2,696 0 $0.00 654 2,042

Feb- Wk 3 2,042 0 $0.00 654 1,388

Feb- Wk 4 1,388 0 $0.00 654 734

March- Wk 1 734 3,380 $726.41 654 3,460

March- Wk 2 3,460 0 $0.00 654 2,806

March- Wk 3 2,806 0 $0.00 654 2,152

March- Wk 4 2,152 0 $0.00 654 1,498

Apr- Wk 1 1,498 0 $0.00 654 844

Apr- Wk 2 844 0 $0.00 654 190

Total 0 $1,721.99 7,848

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0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Jan- Wk1

Jan- Wk2

Feb- Wk1

Feb- Wk2

Feb- Wk3

Feb- Wk4

Mar-Wk 1

Mar-Wk 2

Mar-Wk 3

Mar-Wk 4

Apr- Wk1

Apr-Wk2

Beginning Weekly Inventory

Figure 1: BaboBox Projected Chart of Beginning Weekly Inventory

BaboBox projects to sell an average amount of inventory per week without any

significant changes. Possible significant changes that the projections have not

accounted for include holidays (i.e. Valentine’s Day, Holi) and other high-volume events

(i.e. Basically Babson Day).

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Table 2: BaboBox Cash Budget

BaboBox forecasts to collect the same amount of cash (receipts) per week, with

fluctuation in total disbursements. The reason for March week 1 to have high total

disbursements is because of anticipation of purchasing additional inventory. February

week 3 and March week 3 are off by $10.00 from the usual $21.30 because of company

bonding expenses. January week 3 has higher total disbursements because of the initial

travelling expense.

Date Beginning Cash

Ending Cash

∆ in Cash

Cash Receipts

Total Disbursements

Jan- Wk 3 $0.00 $256.00 $256.00 $297.00 $41.00

Jan- Wk 4 $256.00 $542.00 $286.00 $297.00 $11.00

Feb- Wk 1 $542.00 $828.00 $286.00 $297.00 $11.00

Feb- Wk 2 $828.00 $1,114.00 $286.00 $297.00 $11.00

Feb- Wk 3 $1,114.00 $1,390.00 $276.00 $297.00 $21.00

Feb- Wk 4 $1,390.00 $1,676.00 $286.00 $297.00 $11.00

March- Wk 1 $1,676.00 $1,135.00 -$540.00 $297.00 $838.00

March- Wk 2 $1,135.00 $1,421.00 $286.00 $297.00 $11.00

March- Wk 3 $1,421.00 $1,697.00 $276.00 $297.00 $21.00

March- Wk 4 $1,697.00 $1,983.00 $286.00 $297.00 $11.00

Apr- Wk 1 $1,983.00 $2,269.00 $286.00 $297.00 $11.00

Apr- Wk 2 $2,269.00 $2,555.00 $286.00 $297.00 $11.00

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$0.00

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

$3,000.00

Jan-Wk 1

Jan-Wk 2

Feb-Wk 1

Feb-Wk 2

Feb-Wk 3

Feb-Wk 4

Mar-Wk 1

Mar-Wk 2

Mar-Wk 3

Mar-Wk 4

Apr-Wk 1

Apr-Wk 2

Change in Cash: Beginning vs. End Cash

Beginning Cash

Ending Cash

Figure 2: BaboBox Change in Cash

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BaboBox

Table 3: BaboBox Pro-Forma Income Statement

BaboBox expects a steady revenue stream of approximately $110 - $125 per

week, with the exceptions of January week 1, and March week 1. January week 1 has a

negative net income (before tax) because we must consider the following: the initial

inventory; our initiation fee for using PayPal and our website, all of which are irregular

expenses. Therefore, the only expected “cash burn” period is during January week 1,

and we are forecasting a positive cash flow by January week 2 (the last full week of

January).

Jan- Wk3

Jan- Wk 4

Feb-Wk1

Feb-Wk2

Feb-Wk3

Feb-Wk4

Mar-Wk1

Mar-Wk2

Mar-Wk3

Mar- Wk4

Apr- Wk1

Apr- Wk2

Projected Unit Sales

654 654 654 654 654 654 654 654 654 654 654 654

Sales $297.00 $297.00 $297.00 $297.00 $297.00 $297.00 $297.00 $297.00 $297.00 $297.00 $297.00 $297.00

Cost of Goods Sold

$163.20 $163.20 $163.20 $163.20 $163.20 $163.20 $163.20 $163.20 $163.20 $163.20 $163.20 $163.20

Gross Margin

$133.80 $133.80 $133.80 $133.80 $133.80 $133.80 $133.80 $133.80 $133.80 $133.80 $133.80 $133.80

Operating Expenses

Marketing Expenses

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $50.00 $0.00 $0.00 $0.00 $0.00 $0.00

Company Bonding

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $50.00 $0.00 $0.00 $0.00 $0.00 $0.00

Office supplies

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Rent - Park Manor

Central $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Selling Related

Expenses $6.30 $6.30 $6.30 $6.30 $6.30 $6.30 $6.30 $6.30 $6.30 $6.30 $6.30 $6.30

Travel $35.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00

Website $0.00 $0.00 $0.00 $0.00 $10.00 $0.00 $0.00 $0.00 $10.00 $0.00 $0.00 $0.00

Total Operating Expense

$41.30 $11.30 $11.30 $11.30 $21.30 $11.30 $111.30 $11.30 $21.30 $11.30 $11.30 $11.30

Net Income Before Tax

$92.50 $215.00 $337.50 $460.00 $582.50 $695.00 $717.50 $840.00 $952.50 $1,075.00 $1,197.50 $1320.00

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BaboBox

$-

$200.00

$400.00

$600.00

$800.00

$1,000.00

$1,200.00

$1,400.00

Jan-Wk 1

Jan-Wk 2

Feb-Wk 1

Feb-Wk 2

Feb-Wk 3

Feb-Wk 4

Mar-Wk 1

Mar-Wk 2

Mar-Wk 3

Mar-Wk 4

Apr-Wk 1

Apr-Wk 2

Cumulative Net Income (or Loss)

Figure 3: BaboBox Cumulative Net Income (Loss)

As indicated by the chart above, BaboBox expects to go from a negative net loss

to a profit between February week 1 and February week 2. This should definitely be

bolstered by Valentine’s Day BaboBox sales. Overall, we anticipate a profit of

approximately $1,320.00.

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BaboBox

Table 4: Breakeven in Units

Start-Up Costs $1,303.04

Contribution Margin $0.20

Breakeven in Units 6,790

Breakeven in Boxes 515

BaboBox anticipates a breakeven point of 515 boxes, or approximately 6,790

individual items (in our products), in order to breakeven with no net income or net loss.

Therefore, our start-up costs are $1,303.04

Since we anticipate a high amount of our sales to be done online, PayPal will pay

us for the credit sales and monies will be collected in our FME business account. Any

onsite sales will be done (paid) by cash, collected weekly, and deposited in the FME

bank.

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BaboBox

Risk Just like any other business, BaboBox too faces a lot of potential risk. One of the risks

that the company might face is the possibility of one of the suppliers failing to deliver on time.

This may cause for a delay in start-up. Because the company has so many different suppliers, it

will be difficult to have them all deliver, or have the team-members go pick up the units on the

same day. This may cause for delay in sales as well as start up. It may also cause the company

to cancel one of the boxes for a short amount of time. To minimize these risks the company

chose some suppliers that are available for the team members to pick up the units instead of

having them delivered.

The company also may have too many excess units at the end of the business because

the business uses a diverse amount of items in its product. Moreover, the company must buy in

bulk and cannot buy a few items in order to have sufficient inventory. After a lot of research, the

team decided to minimize the initial inventory and decided to opt for smaller inventory

purchases throughout the course of the business. The team also found out suppliers who did

not require bulk orders. However the company realizes that it is tough to completely mitigate this

risk. Therefore, if there is excess inventory after the end of the business venture, it will all be

donated to charity.

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BaboBox

Entrepreneurial Thought & Action

Our business team understands that the purpose of BaboBox is to maximize the

team’s understanding of the dynamics of business operations. Therefore, the team has

unanimously decided to focus its attention on the learning experience rather than the

maximization of profit. To enhance the team’s educational experience with the course,

the team will anticipate changes in the business process and adapt accordingly. By

understanding concepts with greater depth, the team lessens the need to memorize

processes so it may run as seamlessly as possible. A healthy balance of prediction logic

and managerial logic will help identify which team members and which methods are

most effective for achieving results. Results may arise as financial success and working

cohesively as a team to build strong relationships and trust and respect among

members.

The team understands the inevitable experience of failure along the journey of

running the business and aims to maximize learning essential lessons from failure, in

order to prepare the team to deal with real-world business problems in the

future. Failure will provide stimulus for introspection and will motivate the team to work

towards success in future endeavors. Failure will highlight the team’s shortcomings and

suggest potential methods for improvement to create a more effective mindset for the

students.

The team is excited about learning the essentials of working in teams and

strongly believes in the power of collaboration. This experience will help improve the

team’s ability to communicate in a business context. Although each member of the team

has specific responsibilities, the whole team supports one another through its

endeavors. By working closely together, members’ individual passions may be

enlightened and spark new paths along their educational journeys.

During weekly meetings, the team plans to discuss and reflect on its

experiences. Through these discussions, the team hopes to maximize the learning

process this FME experience has to offer. Processes that work extremely well will

continue to be used, while processes that were not as effective will be altered to support

a dynamic business structure.

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BaboBox

Appendix

Leadership Structure:

Co-CEO

Ken Rotunno

VP of Finance

Rishin Shah

Financial Manager

Brandon Schwartz

VP of Operations

Alyssa Reisner

Supply Manager

Julia Strickler

Distribution Manager

Sam Bohmiller

Co-CEO

Naman Rungta

VP of Marketing

Manuela Iragorri

Online Marketing

Sarita Sasson

Onsite Marketing

Xavier Trahan

VP of Sale

Allie Duncan

Online Sales

Brenda Ongko

VP of Human Resources

John Russolillo

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Job Descriptions:

CO-CHIEF EXECUTIVE OFFICER: They will work together to plan meetings, supervise inter-business operations, lead

communication with the entire team, and solve problems using entrepreneurial thought and

action, and lead a cohesive team.

Ken will supervise vice presidents of operations and finance, while Naman will supervise vice

presidents of marketing, sales, and human resources.

VICE PRESIDENT OF FINANCE: He will oversee the budget, manage accounts and sheets, make decisions based off of results,

and communicate with other teams especially relating vice presidents such as operations and

sales.

FINANCIAL MANAGER: He works as a team with the vice president of finance. He will specialize in inputting information

into the financial sheets and managing receipts and cash.

VICE PRESIDENT OF OPERATIONS: She will oversee production and distribution of BaboBox this includes reordering supplies and

managing inventory. Also, she will manage the corporate social responsibility of BaboBox.

SUPPLY MANAGER: She will specialize in managing inventory and figuring out which items need to be reordered.

She is also in charge of setting up the manufacturing of BaboBoxes.

DISTRIBUTION MANAGER: He will specialize in the final product getting to the customer. This includes managing orders

and delegating shifts for delivery.

VICE PRESIDENT OF MARKETING: She will be in charge of the advertisement, promotion, and branding of BaboBox.

ONSITE MARKETING MANAGER: He will specialize in the marketing of BaboBox through posters, word of mouth, booths, or any

other creative way on campus.

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BaboBox

ONLINE MARKETING MANAGER: She will specialize in the marketing of BaboBox through social media, our website, or any other

creative way online.

VICE PRESIDENT OF SALES: She will oversee the creating and running of website and booths used to sell BaboBoxes. She

will delegate selling shifts and encourage personal selling.

MANAGER OF ONLINE SALES: She will specialize in running the website for sales. They will work with VP of Sales and the

Online Marketing Manager to do this. She will also help the CEOs with communication within

the team.

VICE PRESIDENT OF HUMAN RESOURCES: He will help solve issues within the team, help with team bonding (especially with food), and

manage peer evaluations.