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Kismit Inc

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Kismet Inc
Key Notes: * Kismet was a distributor of tools and hobby products (such as: hunting knives, compasses and sleeping bags). * Stuart Trier – President * Aaron Anticic – Treasure * Mitcha Chiba – Director of Operations * Kismet focused on selling lower-priced tools to individuals and contractors throughout South-western Ontario. * Main source of revenue came from “mobile tool shows” * Kismet rented a venue within a city or small town, sending out flyers and local newspapers to sell products at 40% - 70% off opened 2-4 days in length. * Home Depot (Sales of $54B in 2001; with 27% of those sales from hardware and seasonal product lines) and Canadian Tire dominated the industry * Kismet partners were planning for next year’s operations and rapid expansion. * Chiba’s 1st annual salary: $38,000 + 10% bonus (EBIT) + company car $3000 * Administrative assistant annual salary: $26,000 * Trier and Anticic combined salary of $6000 per month + dividends equal to 20% * Kismet expected accounts receivable to increase from 0 – 10 days of sales hence wanting to increase of inventory from 29 – 40 days to mitigate frequency of stock outs. * This plus full time management of Trier and Chiba were expected to create $2M and $4M in sales for upcoming full year of operations. * New software system $20,000 – point of sale (POS) system * Inventory control system $10,000 * Office investments $5,000 * Storage cost - $3,500 per month * Fixtures $5,000 * London warehouse utilities $2,400 per year * Insurance bill increase by $2,000 annually * Both Trier and Anticic were worried for the difficulty for new companies, with young entrepreneurs to obtain financing from financial institution. * They were uncertain what information should be stressed in their meeting with the bank’s account management * Fact:

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