Profit simulation

Earnings forecast

Business plan

Let's take a look at the business plan, valuation, and profit simulation of the quantum cryptographic device manufacturing and sales business by following the steps below.

Quantum Cryptography Device Manufacturing and Sales Business Plan and Valuation, Revenue Simulation

Assumptions:

• Manufacturing cost is 10% of the selling price.

• Selling price is $20 USD.

Sales Strategy:

• Implement a paid guarantee service via subscription. The subscription fee is $3 per month.

• Subscription registration rate is 50%.

• Monthly churn rate is 10%.

Sales Plan:

• For the first three months, conduct a free campaign by distributing devices for free to promote subscription sales. Therefore, produce 500,000 devices for free distribution during these three months.

• Subscription registration rate during the campaign is 50%.

• Monthly churn rate is 10%.

• Sell 600,000 devices in the first year.

• Plan to sell 1,200,000 devices per year from the second year onwards.

Initial Development Costs:

• Initial development cost for mass production is $2M USD.

• Development period is 6 months.

• Operating cost is ¥35M per month.

• Device sales will start from the 7th month.

• Sales and marketing expenses are 30% of subscription sales revenue.

Revenue Simulation:

First Year Revenue Simulation:

1. Device Sales Revenue:

   • Selling price per device: $20

   • Number of devices sold: 600,000

   • Revenue from device sales: $12,000,000

2. Subscription Revenue:

   • Subscription fee per month: $3

   • Number of subscriptions in the first month: 50% of 500,000 (250,000)

   • Monthly churn rate: 10%

   • Average number of subscriptions per month:

     $$\text{Average subscriptions} = 250,000 \times (1 - 0.10) + 250,000 \times (1 - 0.10)^2 + \ldots + 250,000 \times (1 - 0.10)^6$$

     $$\text{Average subscriptions} = 250,000 \times \frac{1 - (1 - 0.10)^6}{0.10} = 250,000 \times \frac{1 - 0.531441}{0.10} = 250,000 \times 4.68416 = 1,171,040$$
   • Total subscription revenue for the first year:

     \text{Total subscription revenue} = 1,171,040 \times 3 \times 12 = $42,187,200
3. Total Revenue:

   • Total revenue for the first year: $12,000,000 (device sales) + $42,187,200 (subscription) = $54,187,200

Second Year Revenue Simulation:

1. Device Sales Revenue:

   • Selling price per device: $20

   • Number of devices sold: 1,200,000

   • Revenue from device sales: $24,000,000

2. Subscription Revenue:

   • Subscription fee per month: $3

   • Number of subscriptions in the first month: 50% of 1,200,000 (600,000)

   • Monthly churn rate: 10%

   • Average number of subscriptions per month:

     $$\text{Average subscriptions} = 600,000 \times (1 - 0.10) + 600,000 \times (1 - 0.10)^2 + \ldots + 600,000 \times (1 - 0.10)^6$$

     $$\text{Average subscriptions} = 600,000 \times \frac{1 - (1 - 0.10)^6}{0.10} = 600,000 \times \frac{1 - 0.531441}{0.10} = 600,000 \times 4.68416 = 2,810,896$$
   • Total subscription revenue for the second year:

     \text{Total subscription revenue} = 2,810,896 \times 3 \times 12 = $101,102,752
3. Total Revenue:

   • Total revenue for the second year: $24,000,000 (device sales) + $101,102,752 (subscription) = $125,102,752

Simple evaluation of the above:

1. Initial Development Costs:

   • Initial development cost for mass production: $2M USD

2. Operating Costs:

   • Operating cost per month: ¥35M

   • Operating cost per year: ¥35M * 12 = ¥420M

3. Sales and Marketing Expenses:

   • Sales and marketing expenses as a percentage of subscription revenue: 30%

   • Sales and marketing expenses for the first year: $42,187,200 * 0.30 = $12,656,160

   • Sales and marketing expenses for the second year: $101,102,752 * 0.30 = $30,330,825

4. Net Profit:

   • Net profit for the first year: $54,187,200 (total revenue) - $420M (operating costs) - $12,656,160 (sales and marketing expenses) = $41,111,040

   • Net profit for the second year: $125,102,752 (total revenue) - $420M (operating costs) - $30,330,825 (sales and marketing expenses) = $94,351,927

Conclusion:

The quantum cryptography device manufacturing and sales business plan outlines a robust strategy for generating revenue through both device sales and subscription services. The initial development costs and operating expenses are significant, but the projected revenue and net profit indicate a promising financial future for the business. The subscription model provides a steady stream of revenue, and the free campaign in the first three months is expected to boost subscription registrations.

*The warranty service included in the paid subscription service guarantees 100% protection of the data stored by the customer. This is nothing but proof that our technology is genuine.