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Market and Financials

To gain a understading of how realistic the acutal implementation of such a PSS is, the market potential was analysed and a financial forecast was made.

Market potential

Germany has a robust healthcare sector and is the largest pharmaceutical market in Europe and the fourth largest in the world after the US, China and Japan. In 2019, the pharmaceutical industry in Germany will generate revenues of €46.4 billion, with a compound annual growth rate of 5.1% from 2014 to 2019. With the German retail pharmacy market is expected to be worth USD 59.59 billion by 2030.

 

With a population of 83 million, Germany is the most populous country in Europe and the largest healthcare market in the region. Healthcare spending reached a record high of €390.6 billion in 2018, equivalent to per capita spending of €4712. Between 2013 and 2018, the healthcare market in Germany grew at a compound annual growth rate of nearly 4.4%.

 

The healthcare sector currently accounts for nearly 12% of Germany's GDP, and its share continues to rise as annual growth rates outpace the country's overall economic growth. Healthcare spending in Germany will exceed €400 billion in 2019 and is expected to continue rising. Germany has an ageing population, with around half of the population over the age of 45 and around 22% over the age of 65. By 2035, a third of the population is expected to be over 65. This age group accounts for around half of total healthcare expenditure in Germany. The risk of illness and the prevalence of chronic diseases also increase with age, leading to higher demand on the domestic healthcare sector.

 

In addition, the market for smart pill dispensers is expected to witness significant growth due to factors such as increased need for medication, rise in geriatric population and age-related diseases. The smart pill dispenser market was valued at USD 2.16 billion in 2021 and is forecast to reach USD 4.00 billion by 2029, representing a compound annual growth rate (CAGR) of 8% between 2022 and 2029.

 

Therefore, as a company we believe that there is a positive market potential in Germany in order to grow as a business. 

Location

Based on the population (around 17000000 people) and the population density of Germany it was decided that the best area to start in was North Rhine-Westphalia. In the beginning phase of the company, it was decided to keep our delivery service within a 75 km radius in the state in order to be able to keep up with orders so the quality of the service doesn’t drop for the customers.

Population_density_in_Germany.png

Financials

The financial overview was made to cover/forecast the first four years from the launch date.

In order to do a financial prediction the first year after launch was called the Year To Date and then using the values in that year it would be possible to give a rough estimation on the growth for the following years. 

 

Year To Date:

 

  • Revenue: 136,588.4

  • It’s expected that the company will break even in the first year, resulting in minimal profit.

  • Total users required to generated predicted revenue: 285 customers (0.036% of the target population)

 

Year 1:

 

  • Revenue: 379,688.434

  • Average Growth rate: 177 %

  • Total users required to generate predicted revenue: 792 customers (0.1% of the target population

 

Year 2:

 

  • Revenue: 759376.869

  • Average growth rate: 100 %

  • Total users required to generate predicted revenue: 1583 customers (0.2% of the target population)

 

Year 3

 

  • Revenue: 1301799.77

  • Average growth rate: 76 %

  • Total users required to generate predicted revenue: 2713 customers (0.345% of the target population)

 

It’s important to note that these calculations are based on certain assumptions and growth rates derived from research. While the projections provide an estimation of potential revenue and user growth, they may not be entirely accurate due to various factors that can influence business performance.

Valuation

Our company is seeking a 200,000 euro investment to cover the initial fixed costs (110,000 euros) associated with developing the Dispenser, App, and Website, as well as an additional 90,000 euros for variable costs and to establish a financial safety net. We have assessed the value of our company at 1 million euros, which we anticipate generating after four years, accounting for taxes (30%). Consequently, we believe that offering 20% equity in our company would be a reasonable proposal in exchange for the investment.

References

References for the above content can be found here.

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