BUS477

Our team met one of our advisor John Derrick for revising our business plan. He gave us some valuable comments

1) If product life cycle is last for 5 years or even less, there should be R&D expenditure incurred since Year 2 of operation, so that there will be new product launch in year 4 or year 5. Even the costs maybe minimal, we should reflect R&D research cost.

2) I have arisen this issue at our meeting. John felt it makes no sense that all of us don't get wages for 2 years. As an investor, he doesn't want to invest in a business which the owners don't put 100% effort into the business. In the real world, running a business is not an easy task. We won't get anything if we don't work hard on building the business. He suggest we should allocate market wages or e.g. 40k each person for all of us even at phase one. My opinion is 2 years with no management is too long. Realistically, we only need $$ for living. If the business can't even support our life or cannot provide more than market salary, why don't we just get a high paid job without dealing with all the hassle from the business.

3)He thinks we cannot separate ourselves from the business. Owners and business are separate entity. If owner have equipment, company should buy from the owner. If we work in the garage, company should pay rent to that owner.

4)Some of our costs are still below than reality. Legal and accounting fee should be about 10,000 as we raise fund from outsiders, we have to hire accountants to do annual auditing. In addition, he questioned about costs associate with FDA & health Canada, 4-5k a month maybe low because the official inspect our place, test our product, reject our application. These all can incurred cost and we didn't reflect that in our business plan

5)Even our current sale projection, 4000 & 7000 units for phase 3&4 are still too low to be profitable. Million dollar revenue is nothing.