Dragon’s Den success of Levi Root’s Reggae Reggae Sauce

SCENARIO:

You have developed a hair care product, which you believe could revolutionise the hair care market.

Following on from the Dragon’s Den success of Levi Root’s Reggae Reggae Sauce – (search the internet if you are unfamiliar with this story), you have decided to make a pitch to a small group of potential investors.

You know that any potential investor will expect you to have a good knowledge of how much your product will cost to produce and also of the expected level of sales and profit your product is predicted to make.

REQUIRED:

1. List the assumptions you have used to produce your key financial data.

2. Prepare a marginal costing statement* for your product on a ‘per unit’ and 12 months sales/production basis.

3. Produce a break-even analysis (table and graph) for your product based on 12 months activity
4. Produce the following financial documents for the first 12 months of trading:
a. Cash Budget* (month by month)
b. Forecast Income Statement (for the year)
c. Forecast Balance Sheet (for the year-end)

5. Write a 1,200 word Business Case to your potential investors, focusing on presenting and interpreting the costing and financial data from tasks 2-4 above.