Can a $20m company generate a revenue 388m revenue stream by capturing 1% of its target group? Perhaps they can over a very long time frame. But simple economies and business sense suggests not in the short term.
The problem for a $20m company with limited capital is NWC (net working capital). Devices cost money to build. You gotta build em before you can sell them. The faster you grow the greater your need for NWC and that is a huge limiting factor and a risk factor.
There is also simple business factors that come in to play. Warehousing, distribution, back office systems and so on all take time to ramp up.
I've modeled 10k unit sales in first year with 50% growth for 5 years followed by 20% growth for 5 more. Those rates are difficult to achieve, but not impossible.
The potential sales figures management are presenting reflect poorly on them. Some realistic sales forecasts backed by business economics rather than fanciful target markets shouldn't be too much to ask from management.
ALT Price at posting:
3.5¢ Sentiment: None Disclosure: Held
