Location, Location, Location

4th December 2015/in ch4-the-locations-butterfly /by Developer

“Location, Location, Location”

By the time we have factored in the $2Billion initial investment from large and small businesses plus overpay for companies which cannot project a 40% return by 2018, and added the initial $1Billion reinvestment the total investment will be in the region of $3.5Billion

From this, $500Million for university operations is deducted, along with roughly the same for building and equipping the university, hospital, sports village and other municipal buildings. Added to this is investment money that goes directly to industry. For example, the energy companies that invest will own the solar arrays they purchased or manufactured.

All told, a figure in the region of $2Billion will be left, if there is money over, the initial reinvestment will be less, if under the reinvestment will be more, so making an even $2Billion.

As an example, at a cost of $100Million a suitable 9 square mile mixed usage plot of land has been identified in Orlando, Florida. Half the land is preserved for nature, added to this roads, mandatory buildings, and car parks need to be accounted for, then the remaining land value is approximately $50,000 an acre, which may sound inexpensive, as in general like for like developed land in Orlando costs around $800,000 an acre.

However, budgeting estimates need to allow for infrastructure (roads, plumbing, cycle paths, bridges, CCTV cameras, etc). Infrastructure costs are in the range of $600Million for the first 4-year phase. Thus the effective land price is $650,000 an acre, leaving $1,35 Billion for building homes, malls, retail areas and attractions
Currently in Florida, the average land vale as a portion of property value is equal to 30% of the value of the home, therefore the above land + infrastructure costs vs. home construction costs seem as they should be. It is worth noting in strong economic areas such as Washington DC the land value is closer to 75% of the home.

Despite the recent failed property development in Spain and Ireland the reasons for which are unique to their own economies, property developments are still being built all over the world including the USA. If they did not make profit they would not build them, therefore it is reasonable to assume if one spends $2Billion on a property development one would logically anticipate breaking even. That will be our starting point: a new property development expected to make neither profit nor loss.

Before moving on to “Locations Butterfly”, an important factor needs to be pointed out, which effectively means the resort development is economically sound.

This point will be framed within a question so as to evoke reasoning:

Have you ever heard of a real estate or resort development, which did not rely on selling houses?

The properties are owned by the companies that invest, long term capital asset investments which are effectively a bonus to the trading rights, shared future technologies, branding and in general not wishing to fall behind.

Two-thirds of the villas are either lived in by their new owners or placed within a subsidized rental pool, and the balance sold at cost to those on “Spartan Contracts.” This does not mean people can’t buy homes, if there is a demand more will be built, and profited from, but said profits are not an integral factor to success just a bonus, thus if the resort does not sell a single home, it will still be a financial success.

Welcome to the interactive “Locations Butterfly”

Once again we see our “butterfly effect” circular events model, with 16 more boxes to be filled in. This time it’s a simpler exercise as there is no need for a spreadsheet. An explanation of each field is presented alongside the percentage figure indicating an increase in citizens’ desirability to live, work, or vacation at the resort, as before a “Higher”, “Ok “or “Lower” text field is presented, as before if in disagreement be it higher or lower it is preferred if an alternate estimate is in-putted as opposed to a tick or yes.

In general the Locations Butterfly adds up to 120%, so making a property worth over double its value due to its position. Some questions are more specific to residential tastes; some more specific to attracting local residents to shop and visit.

All combine to make the total as both are as relevant as each other.

Please consider not all location exercises may appeal to all people, and appreciate the resort will be carefully designed so entertainment areas are far away from retreat areas.

Alternate Energies

4th December 2015/in ch3-the-theory-of-just-a-little-bit-more-than-we-know-now /by Developer

Alternate Energies

“The Theory of, a lot more than we know now”

As presented earlier: “While fossil fuel dependence is rarely mentioned as an economic threat by the CBO and leading US economists, it is for all intents and purposes an equal or greater threat than medical liabilities. Initially as global usage increases so will its price, as the stocks start to deplete, its price will rise again, and when it’s gone it’s gone. Talk of nuclear fusion is a gamble, possibly even a dangerous gamble; the process of sustained large investment in solar and other alternate energy sources needs to start immediately.”

On the 19th May 2012 President Obama sited high energy prices as a major problem in current economics, in theory a sustained large investment in solar and other alternate energy will lower current energy prices, as the supply and demand – “its going to run out someday”- factor would be reduced.

Besides the clear and present economic threat, fossil fuel usage is a grave ecological threat. Any initiative to solve one problem solves the other, and as such, this solution is presented as “a lot more than we know now”. The solution, as with most solutions within “American Butterfly” is simply a matter of finance; with enough finance most goals can be reached.

Fortunately it appears investment in alternate energy is one of the most sensible long term investments any company could make. Currently Donald Trump and Apple are investing in Solar Arrays, suggested to become profitable within 9 years. Presumably that means if one invests $1 million, in 9 years one will have made $1 million from selling the power, which equates to an 8% annual interest rate. After which one could have paid for the facility and enjoy a revenue in the region of $110,000 a year, which considering the only cost is maintenance would generate profit of around $100,000 a year.

On the 17th of May 2012, Spain auctioned bonds for just over $3.2 billion at an interest rate of 4.8%. With the Euro Zone on the brink of collapse and Spain the second most publicized troubled economy after Greece, which is seriously considering defaulting on all outstanding loans; it’s far from a safe investment.

Why anyone would invest in a risky venture for 4.8% when one can invest in Solar Arrays and receive 8% or more is beyond me, especially as the US is currently offering tax exemptions.

Best estimates put the USA as using 2.4Trillion in Energy a year, split roughly into 4 sectors, with a further 7.6% exported

Industrial usage at 28.2%

Transportation at 26.4%

Residential at 20.7%

Commercial at 17%

Last year US power consumption fell, due to both increased efficiency and the slowing of the economy. As the “American Butterfly” solution is aimed at bolstering the US economy, one needs to allow for an increase in usage, as such an uninflated (at today’s prices) figure has been estimated at $4 trillion by 2040.

As illustrated earlier, the university research department will be applying a strong and sustained effort in alternate energies, in particular increasing the energy output of each solar panel. On average, every two years the number of chips that can fit in a microprocessor doubles. Given sustained research it is presumed within 12 years, the mass of minds will at the least have doubled energy efficiency.

If $4Trillion is needed to power the US by 2040 and it currently takes nine years for a solar array to break even, $36Trillion is needed. However this can be divided in half if the expected doubling of energy output goes into effect.

Thus $18 trillion divided by 8,192 resorts leaves just under $2 billion per resort; this figure is split over 16 years, making $137 million per year. Furthermore, this figure is split in two, half being a BABY POP commitment, the second half covered by POP1. (BABY POP1 always starts after 4 years, POP1 is only enacted after a company is generating over $1 billion a year.)

So a $68.5 million Baby POP annual investment per resort added to a later equal “POP1” investment will provide all the USA’s power eventually, provided efficiency can be doubled. In total, generating a $4 trillion income to the network, most likely the single greatest industry income, although due to the “more money in people’s pockets” economic stimulus initiative, the price will probably be reduced.

(Retrospective Note: Renewable energy spending per network has now increased to over $200 million per network per year, just in case the energy efficiency is not doubled)

Electric Cars

Without the popularization of electronic cars, the 26.4% transpiration petroleum usage will still be in effect. Three initiatives are currently being considered.

Subsidized cars: Within the BABY POP financial structure $20 million per network is destined for the purchase of electronic cars. If in the first phase 16 manufacturers are chosen, each of whom can mass produce only one car, production costs become streamlined.The initial 2018 guaranteed order would be $320 million per manufacturer. For the sake of easy mathematics a target sales price of $10,000 per car would require manufacturers to make the cars for $6,000
At $10,000 per car each resort will receive 2000 cars a year. Initially a car is given to each Spartan as a part of their salary package. After this, the remaining cars will be sold at a 50% discount to all employees of partner businesses, thus employees pay $5,000 for their cars, 80% of the cost of manufacturing.

After 4 years, the car can be sold back to the manufacturer for 50% of purchase price being $2,500, after which the manufacturers can schedule reconditioning and reselling. Netweok employees effectively pay only $52 a month.
Glamorization. There is no logical reason why manufacturers can’t make electronic cars look like their concept cars, or their fueled counterparts. The new Volvo C30 looks just like any other car in its class. Whenever possible each resort shall have its own racetrack, where inter resort competitions are held.
The biggest problem with electronic cars is the battery: in their weight, their charge and their lifespan. The Volvo travels for up to 93 Miles (150KM’s) at speeds of up to 80 Miles (130KM’s) an hour with a Torque of 220NM. However “National Harbor” based in Pala Alto (Silicon Valley) has recently created a vastly improved version that will be able to drive a car for 300 (482km’s) Miles on a single charge, a charge that costs only $10.

America Butterfly Question, AB6: Given each resort can afford the annual $137 Million, (now over $200 million) has the case been made that once all have completed their 16 year programs, the combined 8192 resorts can provide most of the USA’s energy needs?

Definitely ________ Probably ________ Unlikely ________?

“Location, Location, Location”

Location, location, location, the real estate agents’ mantra: Identical homes can increase or decrease in value due to location, which is the number one rule in real estate, and it’s often the most overlooked rule. The Epitome of Location, Location, Location: You can buy the right home in the wrong location and improve it, but you cannot move it.

About.com

What realtors say about residential real estate also applies to many small businesses: The three most important considerations are location, location, location. Location is especially important for businesses in the retail and hospitality trades because they rely a great deal on visibility and exposure to their target markets.

Entrepreneur.com

“The value of a property, will rise and fall, due to its Location”

Super University Resort Hospitals “SURH’s”

4th December 2015/in ch3-the-theory-of-just-a-little-bit-more-than-we-know-now /by Developer

Super University Resort Hospitals “SURH’s”

“The Theory of more than we know now”

The first direct investment phase anticipates 5 resorts per state, then after a couple of years is followed by a second phase, creating catchment areas slightly larger than the Bahamas. As later presented in the BABY POP analyses by 2040 each resort will create a league of 16, thus creating a critical mass of 8,192 resorts and indeed hospitals, and it is this critical mass that enables the “American Butterfly” solution to absorb the US Medicare and Medicaid costs.

The “American Butterfly” medical solution is part of a global initiative, first on the addenda is pharmaceuticals and medicines. In the previous section we saw the research and development departments focusing on pharmaceutical and medicines research, these are destined to be patent free for all “SURH’s”, global Medicaid and Medicare equivalent programs, and all third world countries.

From the onset it is desired for current pharmaceutical companies to relax their patents for all above mentioned areas. In exchange they will have the rights to sell all new discoveries and advances to those that can afford it, plus they are offered of “easy industry” investments that on paper will in the long term generate more profit that they currently make. In general it is expected that as soon as one sees merit, the rest will follow; the wagons are currently circling around “Johnson & Johnson” who will lose all but two of their major income generating pharmaceutical patents by 2014.

With pharmaceuticals well considered one needs to concentrate on facilities, operations, medical technologies and staff. Facilities are constructed within the first investment phase and added to as the years go on, electricity is free and medical technologies will in time be created within the supplier butterfly structure; as such the main expense is staff.

Currently Medicare caters to around 40 Million retirees; this figure will double to 80 Million within 20 years, Medicaid largely deals with the unemployed and their children; this figure is not expected to rise, indeed due to “Spartan Contracts” it is expected to be reduced by half, as such in total 100Million citizens need to be assisted.
In 2010, Medicare spending was $453 billion & Medicaid $290 billion, as such (453 x 2 + 290 x 2 =) $1,050 trillion would be their 2030 annual liability. According to the USA debt clock, 25% of Medicare liabilities are for pharmaceuticals, thus after production costs $200 billion can be scratched off, further many or most of the hospitals and doctors that treat Medicare Patients do so for profit, so working from a non-profit perspective a figure between $700 and $800 billion seems reasonable.

If we set a base annual figure of $100 million per resort, we achieve $819 million, on paper an adequate amount, should the US government see merit in offering payroll & income tax exemptions for employees working within the non-profit wings of the hospitals, more than enough.

Here we see a breakdown of staffing levels per “SURH” adequate for 16 bed nights per patient and a high staff to patent ratio, which thus far seems an improvement on the best current care.

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Over time it is desired for most if not all hospital staff to have been trained via the “Spartan Contracts” method, as such besides doctoring, all will be trained to the level of skill one would be required to have as an employee in a 5-star luxury hotel. As with S-World, S-Web and the “per human experience” search engines there is little point copying an existing system if one does not desire to improve it.

Destined to be positioned well within the resort, if possible near a lake the hospital experience is well considered, as this generates two income streams, the first being the sale of villas and apartments attached to the “SURH”. Second is income from private health care, with the Medicare problem not destined to be an issue for ten years or more. In the critical formative years the SURH’s will for the best part act as luxurious private hospitals, generating a profit.

Finally, a word on the price tag of $100 million: we are yet to fully examine the “POP” (Pressure of Profit) literature and spreadsheets. We do, however, over time the profits pour into the next sibling, as such their will come a time when all are generating over $1 billion each year, of which currently (depending on the state) around $350 million would be paid in corporate tax.

In pure capitalistic business terms, if one considers the SURHs simply as the carrot offered in exchange for corporate tax exemptions, then in the long term, it’s an exceptional investment, effectively saving each resort $250 Million each year.

America Butterfly Question, AB5: Given each resort can afford the $100 Million, has the case been made that the combined 8192 resorts can cover the annual US Medicare & Medicaid bills?

Definitely ________ Probably ________ Unlikely ________

The Universities & “Spartan Contracts”

4th December 2015/in ch3-the-theory-of-just-a-little-bit-more-than-we-know-now /by Developer

The Universities & “Spartan Contracts”

“The Theory of, just a little bit more than we know now”

The desirability of resort towns is a curial factor; from the outset it is important for those that invest to see an immediate benefit. For instance, if “The Window Factory” invests $2.5 million knowing that before any profiteering they will be receiving a capital asset worth $5 million, not only will they see great value in investing, banks will see the opportunity to finance them as a safe investment as their loan is hedged by a capital asset.

“American Butterfly” is of course quite a story and will be a popular initiative, indeed very popular, however one can’t rely on a good story and branding alone. As such, by any and all means necessary the popularity and desirability of each resort needs to increase.

Soon we come to another interactive butterfly, listing 16 reasons why the resort towns will increase in desirability, first however, a few key factors found within the “Resorts Butterfly” will be detailed: The Operation Center/University, the hospitals created, & the Alternate Energy initiatives.

Before an analysis of the breakdown of the operation center departments is presented, the concept of “Spartan Contracts” is explained.

“Spartan Contracts”

The concept of “Spartan Contract’s” was first considered within the original “Spartan Theory”, it detailed the concept that football players improve with experience, and potential can be realized at any age.

The desire of “Spartan Contract’s” is to employ largely non-graduate workers, identified via the “S-World I see you” and “S-World UCS” aptitude and character traits programs. Contracts are 16 years long and hedged to property offering a salary just over $30,000 plus profit share. At first this salary may not seem like much, however as their property valued is effectively worth double its base cost, a $12,000 a year bond/mortgage is equivalent to paying $24,000 in the local area, add a free car and medical insurance and effectively the salary in real terms is worth $47,000 although it is taxed only on $33,000, thus $50,000. If a “Spartan” boy should meet a “Spartan” girl and start a family, their effective household income would be near double that of the average American family. Add the opportunity to double one’s salary via profit share and suddenly Spartan Contracts look most attractive.

The concept of “Spartan Contracts” is a mixture of work, education, and sport; we have all heard the phrase “the best way to learn is to teach” please consider: Who is more likely to think of a new idea to improve the construction process, the logistics officer crunching the numbers in an office, or a man or woman in the field? Maybe it’s an even playing field, however put them in a classroom and perform a brainstorming session and great innovation can be found.

The “Spartan Contracts” concept is in itself as much an economic improvement as it is social, saving the federal government much revenue in both Welfare and Medicaid. Reaching farther in all industries in the long term, particularly with doctoring, it is essential to reduce excessively high basic salaries.

Universities/Operation Centers: Initially paid for via 25% of investment capital, then after 4 years paid for via a $125 million a year levy on combined Network profits. A breakdown of “suggested” spending and departments sees the following

$37.5 million: S-World Businessbook (Network support and software development)
$31.2 million: Sports, Media, Film & Advertising
$18.7 million: Construction (In house building and property development company)
$12.5 million: Research & Development (To be increased via Special Projects funding)
$12.5 million: Nursing, Service & Doctoring (Training Academy only)
$12.5 million: University & Operations Management.

Detail are offered and a staff budget for all departments is detailed, the S-World/Businessbook breakdown is presented as an example, please remember due to Economic Stimulus, many will have their salaries matched with a similar amount of Network Credits.

(Retrospective Note: When looking at the following breakdowns of university and operation centre departments, please note the actual staff numbers and salaries are simply their as a guide, these will change to a degree. The point of the exercise, besides seeing the creation of many jobs, is to help in understanding just how much back up and assistance network companies will enjoy)

University & Operation Centre Departments

The largest department is S-World/Businessbook, suggested staff salaries, positions and numbers are below. In this case the 256 “Spartan Contracts” which are mainly in client liaison roles, with each employee becoming the direct liaison for 16 of the 4096 company sectors found in each individual network.

In all cases there are always more senior staff than Spartans, as such each Spartan is mentored by at least one senior staff member.

S-World/Buinessbook

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Sports, Media, Film & Advertising

The second largest department desired to create film clips, superior photography, and 3D rendering for the various on line portals, alongside TV series and in some cases films adding a glamour contingent to each resort.

One film specific resort “New Hollywood” olywoodHwill be created and additionally funded by a $2Million levee on each Sports Media division. Further to this, indeed much further to this when resort networks reach POP1 (generate over $1Billion a year) $100 Million a year is invested into Film & Media, effectively generating over $50 Billion a year in the US alone come 2018. There are strategic reasons for this colossal investment detailed later.

Sport and other digressions are very important in life, “healthy body healthy mind,” not to mention the saving of medical bills created from a healthy nation. All Spartans will play competitive sport. Sports leagues created, between resorts; indeed initially the number of resorts was specific to the creation of a knockout soccer competition.
In this department the Spartans will be full time athletes, models, actors, or musicians all of whom will learn and assist with all other department operations.

Like the Film department Sports also receives $100 Million a year from POP1 networks, mainly awarded as prize money in network credits, stimulating the economy of the network. This exercise becomes a profit centre and come 2036 should see half of all Americans offered places in local sports leagues that offer an average of $2,000 in prize money for participants, inspiring a nation into fitness in mind, body and soul.

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Construction

The construction department is a profitable department; it is in essence both the developer and building company attached to the resort, making a flat 20% fee in the region of $500Million, as much as all university costs combined.

Additional and sustainable profits will come from private building projects in the local area, government infrastructure projects, alongside network initiated private developments often initiated by a variety of staff in a specific area’s desire to have local housing for them to live in taking advantage of the off plan nature of any such developments lowering costs substantially.

In the same vein as above within the Middle 8, the concept of Super String Networks and Quantum Networks are detailed, which in essence see’s the network invest substantially into the local communities towns and villages. This process will not start in any feverish way until a network resort is firmly established; however once it starts the construction department will be working flat out, generating more independent income and creating a greater demand for materials and supplies.

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Research & Development

The research and development departments will initially concentrate on pharmaceuticals, solar energy, building economic and logistics, improved agriculture, electronic cars, and the “Theoretical Sciences”. As the network and number of resorts grow, new subjects will be championed.

The generous salary awarded to the Leading Scientist and Academic is indicative of building the team around the man.

As with the Sports Media division a $2Million is levied to each research and development division destined for a dedicated “City of Science”.

Further to funding comes the general idea that science budgets are seen in a similar way Western Governments treat defense budgets, in other words, if the scientists want more, if justified they will get more.

On top of fixed and discretionary budgets come “Special Projects” funded by POP1 investment and in general staff who may need to pay part of their profit share to such projects as part of the S-World UCS system called EEE points. A typical example being a staff member, who wishes to have many children, needs to pay for the ecological and recourse footprint, so a fixed figure is diverted from their profit share to a suitable Special Project, in this case one of:

“Rain Africa” which see’s the Northern and Eastern deserts turned back to their pre Roman state of fertility.

“Under World” which see’s the creation of underground woodland cities, or

“Mission Gliese” Which sees’s man, woman, beast and many a plant heading to the star’s and in so doing safeguarding earth’s complexity.

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Nursing, Service & Doctoring

The Nursing / Service / Doctoring department is a dedicated teaching department, its initial aim to train the Nurses to staff the SURHs (Super University Resort Hospitals)

University & Operations Management

Desired to be on par with Fortune 500 companies the CEO is awarded $2Million basic salary with profit share options increasing to $8Million.

The Dean’s salary at just under $1Million is twice that of the Dean of Harvard, sending a strong message for all Universities to be academically likened to Ivy League schools, colleges and universities.

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Summing Up

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Here are some employment statistics for the operation center and University employees paid for from stage 1 funding. The exact make-up of how the University will function as a teaching institution for all ages will be worked out at a later juncture; all staff have the opportunity to double their salaries in profit sharing once a resort has reached its profit target of $1 Billion. (Expected between 2 and 3 years).

Actual numbers will increase with stage 2 funding and the increase due to POP1 Sports Media & Research funding, alongside corporate paid employees and S-World UCS professionals.

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America Butterfly Question, AB5: Discounting Class structures, assuming all professors and academics assist, has the case been made if student numbers are small the equivalent of an Ivy League education could be expected?

Definitely ________ Probably ________ Unlikely ________

A Brief introduction to POP

4th December 2015/in ch2-the-suppliers-butterfly /by Developer

A (very) Brief Introduction to POP

The “POP” (Pressure of profit) process describes the network growth structure, the result of attempting to create mathematics that is not susceptible to rounding errors. It is exstreemly powerful, and presented in great detail within American Butterfly part 3. We start with BABY POP, the investment process which creates the 15 baby resorts from which “The Window Factory” and the other suppliers receive their orders. Without the guaranteed orders, “The Window Factory” could not create the necessary profits to promote growth.

These 15 resorts cannot all benefit from the construction suppliers tender process. The second and third resorts will pick up contracts after which the other resorts will manage the building contract, but not benefit from the suppliers model within construction. There are however many manufacturing models in different industries that will follow the same process benefiting baby resorts. Most profits made from e-commerce, are largely exclusive to the parent resort. This action is deliberate as the first resort needs to be economically unbreakable, thereby becoming “the anchor” for all other resorts in its league.

The “POP” process maybe best described as a continuous cash injection, companies are required by 2018 to make at least 40% profit in relationship to their initial investment. In the case of the window factory their initial investment was $2.5 million and their 2018 profit is forecast at $2.44 million i.e. 98%. In general if a company’s forecast is lower than 40%, their investment will need to be increased, while their property returns remain the same.

As such the minimum first phase resorts will make in 2018 will be $800 million as that is 40% of the (base) investment price. However due to over-performance expected from the technology companies, building suppliers, and retail suppliers to the technology company’s e-commerce endeavors, a figure in the region of $2 billion is forecast for each of 512 first (2014) and second (2016) mother resorts.

The graphic middle right shows the timeline for the creation of the first 8 resort networks created by Baby POP, after which new networks are created each year until a league of 16 is completed. Underneath we see a sample of the Baby POP spreadsheet, which is shown in full over 8 pages within American Butterfly part 3. Please note the pink squares displaying the annual $350 million investment from the parent resort (Resort Company 1= RC1) into its baby company, thus bolstering the baby’s (RC2’s) profits.

The profit target for (RC2) is lower at $700 million; in 2021 RC2 is expected to meet its profit target, once met, as before a new resort is funded (RC3), at which point the $375 million from RC1 goes into RC3 – this time however RC3 also has $300 million from RC2 generating a total of $675 million a year. As this process continues, the more baby resorts in the league, the higher the “POP” (Pressure of Profit) and the greater the cash injection, by 2036 the 16^th resort network receives $2.7 billion from Baby POP.

From the 4^th resort onward the profit target reduces to 25%, in addition over 10% will be generated via the operations center where-by the profit goes straight to Baby POP, so the actual profit target in comparison to investment is but 15%, as such Baby POP acts as a fail safe, an “at the worst we will achieve this”.

“This” however is significant, as this fail safe has enough financial power to cover all US Medical liabilities and generate half the USA’s energy needs via alternate green energy sources as by 2038.

Lastly, it is important to understand the companies that fund the cash injection, own the developments that are built, alongside new income generating business, as such; all initial companies within a mother network have a presence in all 16 resorts in the league.

POP-Spreadsheet-4--The-Theory-of-Every-Business--ch2-The-Suppliers-Butterfly

“The Theory of Everything”

The “Theory of Everything” (TOE) is terms of physics is the search for unity within the mathematics of Einstein’s Theory of Relativity and the other pillar of modern physics Quantum Mechanics

A number of candidate theories of everything have been proposed by theoretical physicists during the twentieth century, but none have been confirmed experimentally.

“The most popular Theory of Everything is
String Theory.”

“A TOE Philosophy”

An evolution of: “The Theory of Everything” (TOE)

“The Theory of, what we know now”
“The Theory of, just a little more than we know now”
“The Theory of, more than we now know”
“The Theory of, a lot more than we now know”
“The Theory of, most things”
“The Theory of, just about everything”
“The Theory of Everything”

The Suppliers and Manufacturing Butterfly

4th December 2015/in ch2-the-suppliers-butterfly /by Developer

The Suppliers and Manufacturing Butterfly

To our right, we see the second circular events butterfly including 16 factors. This example is presented to demonstrate how much profit the first wave of building supply companies can look forward to.

To assist the understanding of the process this presentation is interactive, as you can see, under the 16 headings on our butterfly there are check boxes. Over the following page is a spreadsheet that suggests an increase or decrease in profitability assigned to each box, alongside a brief explanation. Please read the explanation and its predicated increase or decrease and write your opinion in the each box.

This serves three purposes:

First: Answers will assist the process, and may lead to an increase or decrease in the forecast or result in a more detailed explanation presented.

Second: Correct answers become a validation exercise.

Third: The exercise is designed to engage the mind, and make the reader appreciate the mathematics, it’s one thing to read a profit forecast summary suggesting a 5174% return on investment, it’s another to have looked at and agreed with its every detail.

As a general rule, with all questions, due to a large degree of leeway, most, if not all estimates have been set lower that most would forecast. For instance in the authors personal experience, the loss of all financial staff and accounting costs, alongside the correct financial data presented and advice from a dedicated operation centre would have lead to a 50% rise in profitability, however for cautions sake only a 5% rise in profitability is recorded. When answering questions, please do not follow the authors caution, please give a genuine estimate, not guarded or over exaggerated, writing in higher or lower percentage rises where applicable.

Before getting into specifics, the resort expansion program needs to be highlighted:

In the last section we heard that $2 billion plus, is directly invested into each resort, where after the first $1 billion in profit from all networked companies is reinvested, in theory creating capital assets worth twice the investment price. The time it takes for the initial $1 billion in profit to be made and reinvested is estimated at just over two years.

After which by the end of the fourth year another $1 billion in profit is projected to be generated, this $ 1 billion is matched or increased by a new set of mainly small businesses, thus enough capital is available to start another resort and operation center, within a 6000 square mile radius of the initial resort.

After which, via the “Baby POP” cash injection process, this procedure repeats over 22 years until 16 resorts and operation centers are created within the 6000 square miles, approximately one every 28 miles.

All told, including home building, shops, offices, malls, marina’s, attractions, hospitals, university campuses, municipal buildings, a sports village and infrastructure over the first four years 2014 to 2018 upwards of $2.5 billion is spent. For this excursive we will assume half goes to the contractors and laborers and the balance on supplies, bricks, mortar, roofing, bathrooms, tiles, windows and the like.

For this example I have created a fictitious window manufacturing company entitled “The Window Factory” specializing in residential aluminum windows. To supply all the homes in a resort “The Window Factory” receives an annual order worth $2.5 million.

Like many or even most US small businesses in the construction industry, we shall suggest the currently this company is simply treading water, making enough to cover costs only. To start proceedings “The Window Factory” will take out a $2.5 million loan, supplied by a network bank, paying interest only, as such “The Window Factory” starts its network life making a 6% annual loss.

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Above we find the suppliers and manufacturing butterfly spreadsheet, the blue squares indicate a profitable event, the orange representing an event that increases costs, pink squares indicating money in, and grey indicating expenses.

Column 2, row (n) “Total Sales” indicates The Window Factory is receiving $2.5Million a year. In row (r) “Total Costs,” including the interest on the investment loan, are at $2.65Million: As such row (w) “Total Profits” is equal to -$150,000, beneath this, row (x) indicates the company’s profit vs. revenue ratio is at minus 6%.

SB is short for “Suppliers Butterfly Question”

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SB1. Colum 3 – Financial Software: The first blue box in row (g) indicates a decrease in costs, as all financial tasks from bookkeeping to auditing, are handled by the staff at the operation center.

The second blue boxes (k & l) are as one, the lower (l) indicating a 5% rise in financial efficiency. The software is directly linked to the bank removing most human interaction. Instead of one check and balance system, the software has four running concurrently, due to the financial systems, cash handling aside, human error and fraud become all but impossible.

Due to the increase in financial efficiency, is the 5% rise in revenue recorded in row (l) justified?
Please indicate your answer in the fields below, if higher or lower write in the percentage
Higher ________ OK ________ Lower ________?

SB2. Colum 4 – Business Advise: Over the first 4 years a team of a hundred or so senior analysts, logistics experts, engineers, software developers, network officers and industry specific business persons will spend six months working on the task of making all the window companies on the network more efficient, from cost savings, to sales techniques, to sourcing cheaper suppliers.

Over time, with hundreds of window companies on the network, each company’s triumphs and failures are recorded and analyzed, the information used to assist others.

At The Window Factory’s home resort & operation center, dedicated analysts gather all the data from the think tank, tweak the software and share the knowledge and findings. As a result, a 16% reduction in miscellaneous expenses is forecast (from energy to staples), a 10% increase in sales is predicted and material costs are expected to be reduced from 50% of total sales to 40%.
Higher ________ OK ________ Lower ________?

SB3. Colum 5 – Marketing Media & PR: Initially the dedicated Media & Marketing division working from the operations center make the S-World & S-Web applications, including photographing, filming & 3D rendering of the products, alongside the S-World presence, S-Web creates a state of the art website for The Window Factory, that alongside their own windows and accessories, offers many different types of windows from the other companies on the network, alongside many other building services, patio’s, bathrooms, kitchens, etc., which when sold generate extra revenue.

One also needs to factor in, the general good will of the people in the catchment area knowing that a purchase from “The Window Factory” is securing their pensions, healthcare and indeed helping to save the planet.
All factors combined increase sales by 15%, Higher ________ OK ________ Lower ________?

SB4. Colum 6 – Resort Order 1: The main advantage for The Window Factory and all other manufacturing companies is guaranteed orders from the networks to which it is affiliated.

SB4 is not a question field, as it is a definite action within the business plan. The first order from a resort network is placed; an increase in materials, sales tax, salaries and miscellaneous spending increases costs to $4Million, while sales increase to 5.8Million, after the staff profit share bonus, “The Window Factory” is now making over $1.5Million in profit.

SB5 a. Colum 7 – Product Discount: With profit up from zero to $1.5Million plus, a profit vs. revenue ratio of 27%, The Window Factory can afford to reduce the cost of its products by 20% as is desired by the resort network. However the resort does not reduce its $2.5Million order rather orders more, this effects the price of materials which rises from 40% to 50%. Overall profit is halved. (This is not a question field)

SB5 b. Colum 8 – Product Discount: However as the suppliers to “The Window Factory” are applying the same system their costs have also been reduced, but as more raw materials are used, not to the same factor as such the price of materials lowers from 50% to 45%. (This is not a question field)

SB6. Colum 9 – Local Orders: Due to the 20% discount in price it is forecast that local orders increase by 25%.