Symptum business plan comp #2

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Symptum business plan comp #2

  1. 1. Overview <ul><li>Drive System </li></ul><ul><li>Prototype </li></ul><ul><li>Market </li></ul><ul><li>Environmental Analysis </li></ul><ul><li>Operations </li></ul><ul><li>Financing </li></ul><ul><li>Exit Strategy </li></ul>
  2. 2. Team <ul><li>President: Mitchell A. Angus: Avid sponsored competitive gravity mountain biker </li></ul><ul><ul><li>Competing since ‘96: Professional Status 2001-2005 & 2008-2009 </li></ul></ul><ul><li>CTO: Vladimir V. Borisov: Bioengineering major with a background in mechanical engineering. </li></ul><ul><ul><li>Summer internship under supervision of Dr. Davis </li></ul></ul><ul><ul><li>Previous Small Business Owner </li></ul></ul><ul><li>CMO: Michael J. Allan: General Studies major with Entrepreneurship minor. </li></ul><ul><ul><li>Marketing team member for “ Under the Big Tent Event” at WSU </li></ul></ul><ul><ul><li>6 years customer service and management experience </li></ul></ul>
  3. 3. Symptum Cycles Michael Allan, Mitchell Angus & Vladimir Borisov
  4. 4. The Problem <ul><li>Current limitations </li></ul><ul><ul><li>Conventional bicycles have pre-selected gear ratios </li></ul></ul><ul><ul><ul><li>The rider is prevented from performing at optimal efficiency </li></ul></ul></ul><ul><ul><li>Conventional derailleur’s are prone to the elements </li></ul></ul><ul><ul><ul><li>Chain jumping or missing </li></ul></ul></ul><ul><ul><ul><li>Damage and wear caused by dirt and debris </li></ul></ul></ul><ul><ul><ul><li>Costly and time consuming repairs </li></ul></ul></ul>
  5. 5. Symptum’s Solution <ul><li>A frictional v-belt drive system with a variable diameter sheave for gear ratio control. </li></ul><ul><li>Rational </li></ul><ul><ul><li>Low production costs </li></ul></ul><ul><ul><li>Commonly used design </li></ul></ul><ul><ul><li>Mechanical simplicity </li></ul></ul><ul><ul><li>Modifying previous </li></ul></ul><ul><ul><li>success </li></ul></ul>
  6. 6. Mission Statement <ul><li>Symptum will set the bar for standardizing specialty mountain bikes. </li></ul><ul><li>Reinvent how bicycle gear systems are perceived and how they are designed by the industry. </li></ul><ul><li>Set out to introduce a simple solution to the current standard of bikes. </li></ul><ul><li>Change the performance and attitudes of all riders </li></ul>
  7. 7. Concept <ul><li>Continuously Variable Transmission or CVT: </li></ul><ul><ul><li>No gears necessary </li></ul></ul><ul><ul><li>Ability to offer an infinite amount of ratios </li></ul></ul><ul><ul><li>Creates a more balanced bike </li></ul></ul><ul><li>Advantages over conventional transmissions </li></ul><ul><ul><li>Engine performs at a maximum efficiency </li></ul></ul><ul><ul><ul><li>Potential to create a biomechanically favorable bicycle </li></ul></ul></ul><ul><ul><li>Potential to optimize muscle efficiency </li></ul></ul><ul><ul><ul><li>Smooth shifting </li></ul></ul></ul>
  8. 8. Conventional Gear System <ul><li>Requires constant maintenance. </li></ul><ul><li>Exposed to the elements. </li></ul><ul><ul><li>Over time major wear will occur. </li></ul></ul><ul><ul><li>Possibility of potentially damaging beyond repair. </li></ul></ul><ul><ul><li>Gear selection is severely reduced. </li></ul></ul>
  9. 9. Symptum Internal Drive System <ul><li>Requires little to no maintenance. </li></ul><ul><li>Not exposed to the elements. </li></ul><ul><li>Will be similar in weight. </li></ul><ul><li>Shifts more reliably all of the time. </li></ul>
  10. 10. Unique opportunity <ul><li>Opportunity </li></ul><ul><ul><li>Rider is given the unique ability to control input to output “gear” ratio over a continuously variable range </li></ul></ul><ul><ul><li>The proposed alternative CVT transmission will allow us to capture a fraction of a multi-billion dollar bicycle market in the U.S. alone </li></ul></ul>
  11. 11. Market <ul><li>6 Billion Dollar Industry in the US. </li></ul><ul><li>Bike Industry is growing at a rate of 6.4%. </li></ul><ul><li>Portland regularly ranks at the top of Bicycling Magazine’s list of the best cycling cities. </li></ul><ul><li>Portland’s bicycle-related industry was worth $60 million in 2007. </li></ul><ul><li>Nation’s highest % of workers who commute by bike, about 3.5%. </li></ul><ul><li>The market is still expanding and will continue to thrive with popularity in the sport exploding </li></ul>
  12. 12. Target Market <ul><li>Male and Female </li></ul><ul><ul><li>Age: 6-60 </li></ul></ul><ul><ul><li>Self-motivated </li></ul></ul><ul><ul><li>Discretionary income </li></ul></ul><ul><li>2 Segments </li></ul><ul><ul><li>Recreational </li></ul></ul><ul><ul><li>Performance </li></ul></ul><ul><li>Aggressive, active and entertaining lifestyle while seeking high quality of perfection and reliability </li></ul>
  13. 13. Competition <ul><li>The bicycle industry is divided into 4 different distribution channels. </li></ul><ul><ul><li>I. Specialty 49% II. Full Line 8% </li></ul></ul><ul><ul><li>III. Other 6% IV. Mass Merchants 37% </li></ul></ul><ul><li>Value </li></ul><ul><ul><li>Having a standardized internal drive system will set us apart from the competition. </li></ul></ul>
  14. 14. Marketing & Sales <ul><ul><li>“ Making performance and perfection a standard” </li></ul></ul><ul><ul><li>“ A sign or indication” </li></ul></ul><ul><ul><li>An abnormality to the industry </li></ul></ul><ul><ul><li>Market to segments independently </li></ul></ul><ul><ul><li>Recreation/Performance </li></ul></ul><ul><ul><li>“ Total Customization” </li></ul></ul><ul><ul><li>Website </li></ul></ul><ul><ul><li>Company vehicle to attend all events </li></ul></ul><ul><ul><li>Promotion through; key chains, bottle openers, energy drinks, stickers, and decals </li></ul></ul><ul><ul><li>Sponsor cycling events in partnership with other outlets </li></ul></ul><ul><ul><li>Extend reach by sponsoring conventions and concerts </li></ul></ul><ul><ul><li>Studies underway to define target market </li></ul></ul><ul><ul><li>Danielle H. </li></ul></ul><ul><ul><li>Mitch A. </li></ul></ul>
  15. 15. Income <ul><li>Revenue: </li></ul><ul><ul><li>Online </li></ul></ul><ul><ul><li>Bicycle Retailer </li></ul></ul><ul><ul><ul><li>Purchase bikes at a discount or wholesale </li></ul></ul></ul><ul><li>The revenue comes directly from the profits made from selling complete bicycles online or to distributors for a wholesale pricing. </li></ul>
  16. 16. Operations <ul><li>Frame & drive system manufacturer </li></ul><ul><li>Local bike shops will be utilized to sell our products </li></ul><ul><ul><li>Symptum has no physical retail stores. </li></ul></ul><ul><li>Bikes designed at Symptum Cycles </li></ul><ul><ul><li>Sent to manufacturing plant for assembly </li></ul></ul><ul><ul><li>Sent back to Symptum Cycles once completed </li></ul></ul><ul><li>Parts to be assembled onto frames will be sent to Symptum </li></ul><ul><li>Distributor purchases a bike </li></ul><ul><ul><li>Symptum will send them the frame and parts to be assembled on the bike </li></ul></ul><ul><ul><li>Sell the bike to the end user </li></ul></ul>
  17. 17. Benchmarks and Goals <ul><li>Year 1 </li></ul><ul><ul><li>First 3 months </li></ul></ul><ul><ul><ul><li>Design gearbox and frames </li></ul></ul></ul><ul><ul><ul><li>Acquire patents & trademarks </li></ul></ul></ul><ul><ul><li>Second 3 months </li></ul></ul><ul><ul><ul><li>Market testing </li></ul></ul></ul><ul><ul><li>Second 6 months </li></ul></ul><ul><ul><ul><li>begin acquiring distributors </li></ul></ul></ul><ul><li>Year 2 </li></ul><ul><ul><li>Official introduction in to market </li></ul></ul><ul><ul><li>5,000 bikes sold, $2,000,000 sales </li></ul></ul><ul><li>Year 5 </li></ul><ul><ul><li>$8,000,000 in sales </li></ul></ul><ul><ul><li>International Sales & 1% of market </li></ul></ul><ul><ul><li>Buy out investors </li></ul></ul>
  18. 18. Risks & Rewards <ul><li>Valuation: Year five is $8,572,100.17 </li></ul><ul><ul><li>Beta: 2.1 </li></ul></ul><ul><ul><li>Market risk premium: 11.60% </li></ul></ul><ul><ul><li>Long-term growth rate: 7% </li></ul></ul><ul><li>Terminal value: $12,319,705.11 </li></ul><ul><li>NPV: $8,572,100.17 </li></ul>
  19. 19. Projections Net Profit Margin: 21% Year 1 Year 2 Year 3 Year 4 Year 5 Net Income $(328,451) $1,449,910 $1,899,508 $2,484,760 $3,013,466 Revenue $1,169,028 $7,367,104 $9,778,122 $12,711,558 $15,253,870 Cash $760,186 $1,312,734 $2,988,514 $5,013,003 $7,648,812
  20. 20. Breakeven
  21. 21. Financing <ul><li>Required Capital </li></ul><ul><li>Year 1 </li></ul><ul><ul><li>October: $100,000 </li></ul></ul><ul><ul><li>Founders, Friends, Family </li></ul></ul><ul><ul><li>Infusions </li></ul></ul><ul><ul><ul><li>December-March: $500,000 </li></ul></ul></ul><ul><ul><ul><li>Total: $2.1 million </li></ul></ul></ul><ul><li>Willing to give up 39% of equity </li></ul>
  22. 22. Exit Strategy <ul><li>Buy out investor at 6 times their original investment </li></ul><ul><ul><li>Sell designs to other manufacturers </li></ul></ul><ul><ul><ul><li>Payout for investors </li></ul></ul></ul><ul><li>Investor: $ year 6 </li></ul><ul><ul><li>Reevaluate </li></ul></ul><ul><ul><ul><li>Continue operation </li></ul></ul></ul>
  23. 23. Conclusion <ul><li>Conclusion </li></ul>Danielle H.
  24. 24. <ul><li>Dan Castles , CEO of Telestream </li></ul><ul><li>Kirk and Miles, Dana Engineering Machine Shop </li></ul><ul><li>Dr. Howard Davis , Instructor </li></ul><ul><li>Victor Sandrin, Owner of Ride This Bike Shop </li></ul><ul><li>Brian Myrick, EVS Marketing Manager </li></ul><ul><li>Simon Lawton, Owner of Downhill Northwest Bicycle Shop and Training Camp </li></ul><ul><li>Gary Fisher , President of Fisher Bicycle Fisher Bikes </li></ul><ul><li>John Pope, Tesoro Chief Chemical Engineer </li></ul><ul><li>Rob Aguero, Pivot Cycles International Sales Manager </li></ul><ul><li>Michael Hersey, Marin Bikes Director of Operations </li></ul><ul><li>Steve Edmiston , Invicta Law Group Attorney at Law </li></ul><ul><li>Daniel Lulich , Niitek CTO/Serial Entrepreneur </li></ul><ul><li>Denise Caruso , Director of Recruiting at Seven Cycles </li></ul><ul><li>Mike Danielson , Angel Investor. Funded shirts, CD’s and business cards. </li></ul>Consultants

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