Business Plan Competition 07_rough.docDocument Transcript
Senior Design Business Plan Competition
(Senior Design Group or Business Name)
The real value of creating a business plan is not in having the finished product in hand; rather, the
value lies in the process of researching and thinking about your business in a systematic way. The
act of planning helps you to think things through thoroughly, study and research if you are not sure
of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous,
mistakes later. Work through the sections in any order that you like, except for the Executive
Summary, which should be done last.
This business plan is a generic model suitable for all types of businesses. However, you should
modify it to suit your particular circumstances. Before you begin, review the section titled Refining
the Plan, found at the end. It suggests emphasizing certain areas depending upon your type of
business (manufacturing, retail, service, etc.). It also has tips for fine-tuning your plan to make an
effective presentation to investors or bankers. If this is why you’re creating your plan, pay particular
attention to your writing style. You will be judged by the quality and appearance of your work as
well as by your ideas.
Draft Version 1.2 (Adapted from planning tools found at www.score.org)
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I. Table of Contents
I.Table of Contents............................................................................................................2
III.General Company Description..................................................................................4
IV.Products and Services.................................................................................................5
VI.Startup Expenses and Capitalization......................................................................12
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II. Executive Summary
Write this section last.
We suggest that you make it two pages or fewer.
Include everything that you would cover in a five-minute interview.
Explain the fundamentals of the proposed business: What will your product be? Who will your
customers be? Who are the owners? What do you think the future holds for your business and
Make it enthusiastic, professional, complete, and concise.
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III. General Company Description
What business will you be in? What will you do?
• Describe a current problem not being adequately addressed in a product / service market relating
to you design project.
• What are the current options / alternative remedies available to deal with this problem?
• What is your value proposition to deal with this issue? (i.e. your solution)
• What makes this solution better than what is currently available?
• If not already stated, profile your targeted customer and how this can be profitable.
The FIT System will encourage healthy lifestyles by monitoring performance and reducing
obesity. According to the Centers for Disease Control and Prevention, data from the National
Center for Health Statistics shows that 30 percent of U.S. adults (over 60 million people) are
obese and 16 percent of U.S. children and teens (over 9 million young people) are overweight.
Being overweight increases the risk of diseases and health conditions such as hypertension,
dyslipidemia, Type II Diabetes, coronary heart disease, stroke, gallbladder disease, osteoarthritis,
sleep apnea and respiratory problems, and some cancers.2 Additionally, the increasing number of
overweight and obese individuals has adverse economic effects on individual, state and national
levels. A study indicated that 9.1 percent of the total U.S. medical expenditures in 1998,
reaching as high as $78.5 billion were due to weight problems. Approximately half of the costs
were paid by Medicaid and Medicare.3 By providing an output of calorie expenditure, the FIT
System will aid users who wish to lose weight, thereby simultaneously increasing the health of
users and potentially lowering medical costs.
If the FIT System is implemented at an early age, young people will become aware of the direct
correlations between energy expenditure, heart rate, and exercise, which will lead to healthy
lifestyle choices. This increased insight could ultimately reduce childhood, teenage and adult
overweight and obesity problems. Current statistics show that 33 percent of all high school
students are not engaging in recommended amounts of physical activity. 4 By implementing the
FIT System, people of all ages will enjoy the benefits of a healthy active lifestyle.
Many companies have a brief mission statement, usually in 30 words or fewer, explaining their reason for
being and their guiding principles. If you want to draft a mission statement, this is a good place to put it
in the plan.
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IV. Products and Services
A radio-frequency-identification (RFID) -based system, the Fitness Identification Tracking (FIT)
System, will be developed and tested in order to provide performance trending and an increased
awareness of the physiological effects of running. It will be implemented in indoor running
tracks to count/record athlete laps, lap times, energy expenditures and heart rates.
In order to monitor the physiological constituents of a track runner, the FIT System will be
composed of four unique elements: a large display, a heart rate monitoring / recording system, an
RFID system, and computer software. Lap times will be monitored by the RFID reader, which
controls the antennas to detect the tags. When the reader detects a tag crossing the antenna it
sends the tag ID to the computer through a serial cable. Once the laptop has this information it
will calculate the lap number and time. The laptop will then send the lap number and time to the
large display. RFID technology will create an accurate means of monitoring the exact speed of
the runner based on the known distance of the track and the accurate account of the moment the
runner crosses a fixed RFID antenna, which is the competitive feature of our product. The heart
rate data will be simultaneously visible on a watch the user can wear and recorded using a
Datalogger. The Datalogger is extremely light weight and small and can be attached directly to
the chest strap, placed in the runner’s pocket or attached to his/her waist. At the end of the
workout, the heart rate data will be transmitted via a USB cable from the Datalogger to the
computer software. Once all of the data has been imported into the software, the user can view
past and present physiological workout data. Please refer to FIGURES 1 and 2 for diagrams of
the components and connections involved in the FIT System.
FIGURE 1: Block diagram for the FIT System
Draft Version 1.2 (Adapted from planning tools found at www.score.org)
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FIGURE 2: FIT System Components and Connection: (a) the RFID Tag, (b) the RFID Antenna, (c) the Power supply for the RFID
Reader, (d) the RFID Reader, (e) the Laptop equipped with the FIT System Software, (f) the Datalogger, and (g) the Polar b1 heart
Heart Rate Monitor
The FIT System will track heart rate using the Polar b1 heart rate monitor. The Polar heart rate
monitor consists of a chest transmitter and a watch receiver. In addition to this monitor, the FIT
System will use the Oregon Scientific Universal Wireless Heart Rate Data Logger to record the
heart rate data as it is being transmitted throughout the workout. This recorded data will be
downloaded to the FIT System Software via a USB cable connection. The program will then
save this information into the runner’s file for later calculations.
RFID tags are purchased pre-encoded with their own identification numbers. Therefore, each
time the runner crosses the antenna the specific tag identification will be recorded. Passive tags
will be implemented since they are cost effective, light weight and can easily be read by the
readers. Passive tags have a limited specific range dependent on the fixed location of the
antenna and power of the reader. The passive tags will be attached to the shoe, by the shoe lace.
Each tag is encased in plastic to reduce sweat damage and allow easy sanitation. The antenna
will be attached to the railing along the inside of the track to prevent any tripping hazards of
having it on the floor.
FIT System Workout Program Flow
The computer software database is the final component of the FIT System. In the interest of user
confidentiality, each FIT System user is required to create a unique, confidential username and
password. Each user must log into the FIT System workout program with his/her unique user
name and password prior to the workout in order to enter the ID number of the RFID tag and
indicate whether the heart rate monitor will be used. The username is used on the large display
in order to show lap times so the name must be confidential. Coaches and/or personal trainers
may have access to specific athletes’ data only upon the strict legal agreement of the athletes
Prior to a user’s first workout, he/she must create a username and password then enter his/her
height and weight for energy expenditure calculations. A user is only prompted to enter his/her
height and weight during the initial set-up of his/her account, but the height and weight of a user
can be changed at any time simply by logging in to the FIT System. The data obtained from the
heart rate monitor and RFID tag will be stored in the database during the workout and will be
associated with the unique username. After a workout is complete, the user may log into the FIT
System’s workout program and generate a workout summary report in Microsoft Excel. The FIT
System’s workout program performs calculations such as: target heart rate, average heart rate per
lap, number of laps, average time per lap, average speed per lap, energy expenditure and total
distance run. The data will be displayed in tabular format, with heart rate, and time per lap also
displayed in graphical form.
Draft Version 1.2 (Adapted from planning tools found at www.score.org)
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V. Marketing Plan
With any type of product entering the market there are risks. The main risks to the market of
health and fitness are contingent upon the strength of the economy. If the economy drops,
consumers will not have enough money to spend on health facility memberships that will have
this equipment. There are approximately 27,813 health club facilities in the United States
according to the U.S. Census Bureau in addition to over 250 NCAA division 1 universities that
have competitive track and cross country teams that would potentially use this product. The
estimated size of the fitness market in the U.S. is between $10 billion to $15 billion annually.
This means the total size of the FIT System market is between $10 billion to $15 billion
Many potential barriers exist for a new product entering into a large target market. The current
barriers the FIT System may face include possible patent infringements, pricing, and promotional
barriers. A thorough patent search was performed and did not reveal any infringements. Initially,
product pricing will be a large barrier, because the initial costs of implementing the FIT System
are higher than current technologies on the market. The FIT System will be marketed as a top of
the line product with multiple tiers of performance that will correspond to differing price levels.
The main promotional barrier that the FIT System will face will be proving to the market that the
FIT System is more accurate and advanced than any other current competing technologies on the
market. These barriers will eventually be overcome as the FIT System progresses further
through the introduction stage of the product life cycle.
The current product line of the FIT system will include a heart rate monitor, RFID component,
FIT system software, and RFID antenna. In the future, the product line could expand to include a
laptop computer with preloaded software and all the components being more compact. The
lifecycle of this product is completing the development stage and entering into the introduction
phase which means the product is a new idea and needs to be accepted by fitness facilities and
the users as a useful product. The pricing will be a low penetration because we will need to be
able to break even and recover development costs. Distribution will be selective until consumer
demand grows outside our local area.
Competition / Features and Benefits
Add survey data and QFD
Our current competitors are companies who manufacture pedometers and/or heart rate monitors.
In the future, other companies may begin to produce more accurate, and correspondingly, more
expensive pedometer / heart rate monitoring products. The main benefit of the FIT System is that
it provides the most accurate indoor means of tracking the distance that a user travels on an
indoor running track. The FIT System offers a new take on fitness monitoring that may quickly
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outshine the current competition. The technology currently available tends to be on a single user
basis and is generally self-contained in a watch. Companies such as Polar, Suunto, and Nike all
currently have watches on the market that allow the user to track his/her progress via heart rate,
calorie counters, and lap times. The downfall of these current technologies is that they are
relatively expensive and many are not able to be connected to computers, severely limiting their
ability to process and store data. One of the foremost advantages of the FIT System is that there
is almost no limit to the amount of data that can be stored for each runner. Also, our system will
be able to support several runners at one time and will be capable of having room for hundreds of
runners’ information on one computer.
Other advantages to the system include private access to physiological data upon completion of
the workout, or anytime thereafter with the use of a private identification user name and
password. The FIT System continuously transfers the lap count, time and distance information
throughout the workout using Radio Frequency Identification (RFID) Technology. The heart
rate data is continuously sent simultaneously to a watch display and a DataLogger. This system
displays and records the heart rate data throughout the workout. The heart rate data is recorded
in the Datalogger, which must be plugged into the FIT System Database computer to
permanently save the heart rate information. If the information is not downloaded immediately,
the data will not be deleted until the DataLogger has been filled (up to 12 months of data). The
lap time information (and therefore the energy expenditure information is automatically saved
within the system during the workout. The FIT System contrasts sharply with the software
included with some of Suunto’s watches which requires users to connect the watch to a computer
after each workout to prevent information from being over-written during the next use. Other
patents that are currently on the market use pedometers to track distance. The accuracy of
distance recorded by pedometers can be negatively affected by the user’s stride which can vary.
The FIT System uses RFID technology to obtain an accurate measure of distance and time. Also,
other patents use GPS in the watches to record distance accurately but users are required to buy
the entire system and connect it to the computer in order to transfer the information. The GPS
systems are as expensive as 350 dollars per watch, and most do not work indoors. Finally, there
are other patents for wireless heart rate monitors built into treadmills, but they do not store the
Consumer / Entrance Barriers
Promotion will be aimed at local health facilities and universities with competitive track and
cross country teams who will have the product available for their members to use.
We will maintain control of our market by acquiring the necessary patents to prevent copy cats.
We can determine it to be successful when it is working to specifications and is seen by society
as a motivator to increase their physical activities. This will be done when at least 50% of our
target market purchases our FIT system to satisfy the demand of fitness enthusiasts and have it
available for their customers to use. Another factor that makes our product successful is when
non-fitness related facilities begin to purchase and use or product. Some facilities include
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hospitals, universities, schools and physical therapists. These factors are credible to our goal
because if 50% of our target market purchases the product, we can assume that their customers
are demanding the product from the health facilities. When other facilities are purchasing the
product and using it, we are able to assume they are seeing other benefits for it that we can begin
to target that market. These goals that define success for our project are met by surveying our
customer database by demographics of facilities and measuring the customer’s satisfaction with
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VI. Startup Expenses and Capitalization
You will have many startup expenses before you even begin operating your business. It’s important to
estimate these expenses accurately and then to plan where you will get sufficient capital. This is a
research project, and the more thorough your research efforts, the less chance that you will leave out
important expenses or underestimate them.
Even with the best of research, however, opening a new business has a way of costing more than you
anticipate. There are two ways to make allowances for surprise expenses. The first is to add a little
“padding” to each item in the budget. The problem with that approach, however, is that it destroys the
accuracy of your carefully wrought plan. The second approach is to add a separate line item, called
contingencies, to account for the unforeseeable. This is the approach we recommend.
Talk to others who have started similar businesses to get a good idea of how much to allow for
contingencies. If you cannot get good information, we recommend a rule of thumb that contingencies
should equal at least 20 percent of the total of all other start-up expenses.
Explain your research and how you arrived at your forecasts of expenses. Give sources, amounts, and
terms of proposed loans. Also explain in detail how much will be contributed by each investor and what
percent ownership each will have.
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Include details and studies used in your business plan; for example:
• Industry studies
• Blueprints and plans
• Detailed lists of equipment owned or to be purchased
• Any other materials needed to support the assumptions in this plan
• Market research studies
• List of assets available as collateral for a loan