Peter:'So, I recommend that now is the time for our company to expand with this new venture in to the US market.'
Ray:'Peter, going back to what you just said about subsidizing the venture for the first 3 years, could you clarify what you mean?'
Peter:'Well, with all the additional costs of starting a new operation there and being new to the market, if we don't make a loss on each product we sell, then nobody will buy them.'
Ray:'So, correct me if I'm wrong, but do you mean we will make a large loss for the first 3 years?'
Peter:'It's not exactly what I meant. It won't be a large loss, we've calculated it at about $150,000 over the 3 years. By the fourth year, we'll be making a profit as we sell more units. Does that make everything clear?'
Ray:'More or less.'
Hans:'Peter, I'm sorry, could you go over that again?'
Peter:'No problem Hans, we've calculated that the loss at about $150,000 over the 3 years. By the fourth year, we'll be making a profit as we sell more units.'
Jennifer:'Sorry, I must have misunderstood what you said, do you mean that there isn't a market for our products in the US at the moment? And that we are going to be losing money until we can create a market there?'
Peter:'No, I meant that the market is there. We just need to do what we did in Turkey and we'll be certain of making a profit by the fourth year.'
Jennifer:'I don't like the sound of this. What exactly do you mean by what we did in Turkey?'
Peter:'By using the same business strategy we used when we entered the Turkish market. We made a small loss at the beginning on each product sold due to the set up costs, like marketing, advertising, building etc... In a nutshell, It'll take 3 years to build up a market for our products and then we make money.'