I'd like to start by saying please GO FOLLOW LOS MEROS INGES ON INSTAGRAM. Would be highly appreciated, although this project will be probably over by the time you read this.
Regarding costs and cash flow, the main points will be covered here (as covering literally everything would take forever).
We are considering an extra operator whose mission will be mainly production-oriented (basically, making our container).
Remuneration for all 6 positions (all five of us plus the operator) represents around S/. 3 229.
Unitary cost of each product is around S/. 4.16, which is considering the material (polipropilene), the wipes (poliester), package and logo.
Indirect costs (such as electricity, water, internet and others) amount to approximately S/. 1 500. We are not considering costs for the app and website (coming soon) as this are being made by us and do not represent monetary outputs.
For our demand, we start with the basis of amount of people that are part of the socioeconomic levels A, B and C in Arequipa between 15 and 65 years of age (we wanted to do 18 onwards, but could only get the data from 15 onwards, close enough). From this, we aim to cover in the long term 5%, starting with a possible 40% of said final group. For 2020, the number is 12 297 people. Taking into consideration data from 2015, we did a monthly forecast for the next two years (2023 and 2024). We start with 718 planned sales for January 2023, incrementing in around 60-80 units per month, ending with 1986 forecasted sales by the end of 2024.
We are considering an investment of arround S/. 10 000 for the machine that the operator will use.
We are considering a S/. 50 000 loan with an annual interest rate of 15% (very optimistic imo) to be paid in 10 years.
BCRP currently gives a 5.8% annual inflation rate, so we are considering this rate as well for variable unitary costs and the sale price.
We are considering a sale price of S/. 10, which represents a contribution margin of around 56% (not too high, not too low).
Considering we get an inside annual rate of approximately 10.58%, after a 2 year period we get a Net Present Value of S/. 888. Whilst it's true that this value is too low, said value should be bigger after those 2 years.
Our Internal Rate of Return is 4.42%, lower than the 10.58% mentioned previously. This, along with the low NPV, confirms that the project is unlikely to be profitable in the first 2 years.
This can also be confirmed by our Benefit/Cost ratio, with a value of 0.089, quite below 1.
Our breakeven point occurs at 933 products. This means that, without considering stuff such as administrative expenses and the loan to be paid, we would start to make money at our fifth month, when the forecasted sale is of 938 products. There is a couple of months where we would be barely above the breakeven point, which would explain why it looks like the project won't be profitable within the first 2 years of execution.
I'd like to start by saying please GO FOLLOW LOS MEROS INGES ON INSTAGRAM. Would be highly appreciated, although this project will be probably over by the time you read this.
The app can finally display the maximum UV radiation for the current day, thanks to the openuv.io API. It only allows us to do 50 requests per day, but as we won't leave a prototyping and evaluation phase that's fine. In case we needed more than that as, for example, the app would need to go public, all we would need to do is pay some cash to the API developers.
It was a tough process of trying to make it work, starting with getting the current location coordinates, getting the coordinates from the location entered in the text box, making the process asynchronous (as apparently it's the best way to do it, but I'm not really sure: all I know is it works and for the scope of this project that's enough) and learning how to parse JSON files using the included parser in android studio (or is it included in Java? I don't really know, this is the most Java I've touched in my life).
Also, the user can now enter the "notifications" tab and press a button to notify the app that you've applied sunscreen. As soon as this happens, you will receive a notification congratulating you for worrying about yourself, and will receive a notification in 2 hours to remind you to reapply your sunscreen, something that should be easy to do if you haven't forgotten your 2-in-1 wipes.
There is also a tab where we give a brief product description.
Also, new onwards from this week, is the new UI design, using colors that can be related more to the sun, sunscreen and so on. It is a very similar color palette to the one used on our instagram page.
To try and achieve more feedback for our third and final prototype within the semester we did two activites. We did a focus group with only women (as they were the only ones available for such study), and 20 interviews both online and physically. All 23 participants are potential clients between 18 and 26 years of age.
Something that made us very happy is that a bit over 90% of all people would buy the product in its current state. We could, however, identify the following points.
What people liked:
The app.
Design of the product.
Product duality.
Wipes with sunscreen.
Clean sensation before applying sunscreen.
Innovation.
Constructive criticism:
Being able to recharge the wipes (this was said by over 70% of interviewed people).
Waste of product (some of the sunscreen will stay on the wipes).
New ideas
Wipes should be rechargeable so there should be no need to buy the product multiple times, only the wipes.
Provide better instructions for the pictures in the app.
Usual questions
Knowing exact amount of both kind of wipes (aditionally to the amount of time one "charge" can last).
Knowing if the wipes will be able to keep the needed consistency.