Economic Stimulus & Investment
Resort Network Licenses (RNL’s)
(Retrospective Note: With the creation of the RES⇔ equation and further development of Economic Stimulus, some of the following has now been super-ceded, it is, however interesting to see the initial development of “Economic Stimulus.”)
In general, with the exception of companies that offer significant PR, ecological, or philanthropic value, companies that wish to invest in the first phase, resort networks are required to present a business plan that suggests their 2018 profits will equal over 40% of the cost of their investment. If we go back to “The Window Factory” we see a $2,500,000 investment returning $2,450,000 a 98% profit.
Of course the “The Window Factory” has its growth artificially stimulated by the guaranteed orders from the various sibling resorts. Within the “Economic Stimulus” in a similar fashion, stimulated growth becomes available for other retail and manufacturing industries.
To understand this process we need to look at the dividends and staff bonus structure, and appreciate that in 2018 there will be over half a million companies operating within the network, making and selling goods from bananas to super yachts, structuring dividends and bonuses around network credits, as opposed to hard cash.
Below we see a graphic that demonstrates how the initial $1Billion in profit within a year is spent.
Give Half Back (GHB) is the money that pays for the university, operations centre, solar arrays, medical liabilities, subsidized electronic cars, super computers and contingency items. POP Cash Injection is the collective company’s investment into the next sibling resort. Dividends are network credits given to network companies and bonuses are network credits given to university and operation center staff.
However the “GHB” cost returns a profit of $150 Million which is used to increase the POP Cash injection, alongside which, profit share for all network companies staff is paid in network credits, bolstering staff bonuses by about $100 Million. As both dividends and bonuses are paid in network credits, both are economic stimulus and equal $425 Million. So the actual model looks like this.
So for each $1,000,000 in profit a network company generates, they receive $261,000 in network credits, and see $525,000 invested into the construction of the next resort, which, due to the “locations butterfly” has the potential to return a $1,800,000 capital asset. In addition, the company has the right to set up a business in the next resort, so creating an additional income stream.
Each succeeding year, $425 Million is spent on a continuous stimulation in the resort network, in so doing protecting the system that generates the profit in the first place, continually stimulating the economy, in a similar manner to rain falling, drying, and evaporating up into the skies, only to form clouds and rain again. One is not sure exactly where the rain will fall, but as night follows day, it will.
It is this network economic stimulus that gives retail stores and their suppliers an edge over companies outside the network. Unlike the window factories “suppliers’ butterfly” it is not a guaranteed order system as those who receive network credits can spend them where they choose, albeit many contingencies to encourage an even spread will be in place.
If we consider within a resort there may be 250 retail and entertainment venues, who, on average, initially invest $1,000,000, if half of the available network credits were spent within these stores, each store will see an additional $850,000 in revenue. If a store works on a 50% mark-up after sales tax, their turnover will be increased by $255,000. As this extra revenue is paid on top of existing revenue and operational costs, the majority will be pure profit; so on average 65% of each retail company’s 40% RCL profit target is generated by the economic stimulus initiative. Furthermore, 70% of the economic stimulus money goes to the retail company’s suppliers, as such the network credits system continually breathes a breath of life throughout the resort networks economies.
On average standard businesses make between 7.5% and 15% profit after tax, the spreadsheet below presents high, medium and low resort network advantages. There are many variations to this model, for instance, a retail business may currently be making 20% annual loss whilst paying 40% of its turnover in rent, removing the cost of rent dictates 20% profit, to which additional benefits are added.
- Current Profits: A company’s general profitability, before network benefits.
- Accounting & Regulations: Saving costs on financial staff, accountants and auditors. Elimination of human error and fraud. Improved financial reporting. A decrease in regulatory costs.
- Advertising & Media: Increased effectiveness due to the operations centre’s media and advertising departments
- No Rent: Illustrates the saving of rent as retail, entertainment and office based operations receive retail or office space in exchange for their initial investment.
- Controlled Competitiveness: From Thai Restaurants to Electronic Goods Stores, with the exception of Apparel, (clothing) in general a maximum of two competing retail outfits will be chosen per retail space.
- Economic Stimulus: Dividends and profit share being returned as network credits.
- Facebook: The combined sales orders from Facebook e-commerce, concierge and stores.
- S-World: The combined sales orders from S-World e-commerce, concierge and stores.
All in all, it would seem difficult for any company to generate a profit margin of less than 40% of its initial investment value. However, if after crunching the numbers a lower forecast is predicted, the practice known as RCL Overpay is enacted.
RCL Overpay: is for companies unable to present a business plan that will generate a 40% return on their initial investment by 2018.
For example in a retail store, if the cost of purchasing a shop in a mall and out-fitting is $1,000,000, but 2018 returns are only estimated at $300,000, this suggests a 30% RCL profit return. To compensate, their companies RCL value will be lowered to $750,000, in as much as that figure generates a 40% return.
Our retail company will have paid $1,000,000 and received $750,000 of cost price retail property with an assumed value of $1,500,000, possibly rising to $2,550,000 on return of US economic growth. As a safeguard to overestimates, should a company underperform without due reason, their RCL value will be adjusted down. However should this happen, assuming the company offers an adequate service or produces adequate goods, there are various measures that can be taken to bolster the company’s future sales, such as increased attention from the operation centre, an increase in Economic Stimulus, increases in orders from other Network companies, increasing their higher EEE score, and so on, and so on.
Energy RCL’s: Initially, energy would seem the most expensive type of RCL, however in the long term alongside Facebook Gifts, and S-World, it will be one of the most profitable.
Currently energy sees an 11% return from solar arrays, an investing company would need to pay 3.7 times the price of a standard RCL. However, the model for companies who wish to invest is not to buy solar arrays, rather to develop the solar array “Suppliers Butterfly” in the same fashion as “The Window Factory” (the initial investor taking exclusive tenders for all sibling resorts). With over $1 Billion in orders from each of the 15 sibling resorts, the profits will be substantial; in addition they receive a management fee from the power generated.
To sum up, in 2018 each of the first phase Mother Networks are desired to generate a 40% ($800 Million) annual return from its initial $2Billion flat rate RCL investment. We have seen the construction supplier’s model forecasting a 98% return, a 40% to 150% forecast for other suppliers and a 40% to 160% forecast for retail and entertainment.
Please note, these figures do not include orders for products from the various e-commerce platforms, which are expected to deliver substantial orders. The next chapter illustrates Facebook generating a 2018 ROI of 3500%.
Added to this, within the follow up American Butterfly Books the stage is continually being prepared for figures showing significant profits made from the combined technology, media and device manufacturers.
America Butterfly Question, AB8: Has the case been made that technically the minimum any resort network can collectively make in 2018 is a 40% profit margin. Higher ________ OK ________ Lower ________?