A Digital Safari GreenBizz Company Business Plan Competition 2012 Mt. Diablo High School - Concord, California 94520Chief Executive Officer Chief Financial Officer Chief Technical Officer Marketing Director Nina Tran Bany Noguera Eddie Duenas Rjay Molo
Executive Summary M-Power Inc. specializes in promoting independence and safety in those struggling with muscle or mobility issues through it’s new technology, the M-Power Muscle Enhancement Wear. M-Power Wear is a light weight slip on stocking that is worn on the arm or leg to provide additional strength when resistance is detected to aid those suffering with muscle weakness, injury, or difficulty getting around. The M-Power Muscle Enhancement Wear aids in the rehabilitation process for common workplace or Marketing and Advertising sports injuries and helps in the prevention of common accidents such as falls. It removes the depen- To bring the M-Power Wear to the market, we will launch our marketing campaign in year two. We will dence on others, provides strength to perform daily activities, and promotes self sufficiency in the broadcast commercials on news channels and basic cable channels during the day. We will post print lives of others who’s independence has been impacted by their muscle or mobility issue. advertisement in local hospitals, clinics, physical therapy offices and rehabilitation centers. We willl hire sales representatives to hold presentations within hospitals and attend medical conventions to educate and inform professionals on our new and emerging technology that can help serve patients. Financial Projections The M-Power Muscle Enhancement Wear is available in arms or a set of legs. The arm costs a wholesale price of $450, with a retail of $900. The set of legs costs a wholesale price of $950, and a retail price of $1900. In it’s first year, we will undergo product development and manufacturing to prepare for the second year out in the market where we expect sales of 12,500 arms and 11,250 legs after launching our marketing campaign. In it’s third year out in the market, we will increase advertising and continue to sell with sales of 25,000 arms and 22,500 legs. In year 4, we will continue to expand and increase advertising to reach a sales estimate of 50,000 arms to be sold and 45,000 legs. And lastly, in year 5, we will expect the largest amount of arms and legs sold due to advertising and publicity. We expect a sales of 100,000 arms and 90,000 legs. The total net income of the M-Power Muscle Enhancement Wear in it’sThe Market and Opportunity first 5 years will be $71,775,000.Throughout the years, statistics have shown that as age increases, muscle and mobility issues becomemore common and the ability to be independent becomes difficult. There have been an increased num- Funds Requestedber of patients in nursing homes and hospitals for physical rehabilitation and therapy for those suffering In series A, we received $5,000,000 in investment money to pay for building the facility, resources, andwith these issues. However, with the growing senior population, the demand for a product to satisfy this all costs of production. For series B, we are asking investors for $2,000,00 to pay for the expenses ofneed increases. M-Power Inc. promotes safety and independence as it works to help prevent future inju- launching our marketing campaign and costs of production to go beyond the second year. With thisries, aid in the rehabilitation process, and restore self sufficiency to leave the nursing home. investment, M-Power Inc. will be able to continue business and expand to grow in sales for further years.Competition CompanyWith many products out in the market to help in promoting independence, M-Power Inc. competes with M-Power Inc. was founded by four individuals with an aim to help promote safety and independence inwalker and power scooter manufacturers such as Hugo Walkers, Afhkim Scooters, and Pride Mobility. the lives of those whose daily living has been impacted due to muscle or mobility issues. Nina Tran, theWalkers and power scooters provide mobility for those struggling to get around, but the M-Power Muscle Chief Executive Officer of M-Power Inc. manages the overall success of the business. Eddie Duenas,Enhancement Wear provides strength and mobility with no restrictions to ensure comfort and freedom for the Chief Technical Officer of M-Power Inc. communicates operation, mechanics, and disposal of thethe user. M-Power. Bany Noguera, the Chief Financial Officer communicates costs of production and projections regarding market share, revenue, and profit. Rjay Molo, the Marketing Director communicates distribu- tion, communication, and strategies for advertisement to target customers.
Company History Company Profile M-Power Inc. was founded by four individuals with an aim to help promote safety and independence in the lives of those whose daily living has been impacted due to muscle weakness, injury, or mobility is- sues. Nina’s grandmother suffered severe muscle weakness as her bones became fragile and her body M-Power Inc. is committed to promoting independence and began to slow down. She became more prone to falls and minor injuries that began to become more severe as time passed. Eventually, Nina’s grandmother needed to be taken care of as she lacked the enhanced qualities of life for all who struggle with issues ability and strength to stand on her own. She rejected the idea of walkers and power scooters because associated with strength and mobility by providing easy to it would bring too much attention upon herself and the application is complicated and bulky. She did not want to be sent to a care home because of the financial costs and the fear of being away from her use, safe, and reliable technology. family. As Nina told her fellow classmates of her situation at home, they were able to relate as they also had family members who began to become more fragile and weak. With this, the four came together to form M-Power Inc., with a goal of finding a solution to improve the lives of those struggling with muscle orExecutives mobility issues. Nina Tran, the Chief Executive Officer of M-Power has always been one to accept the role as leader. With 3 years experience Bany Noguera, the Chief Financial Officer of M-Power, in the Digital Safari Academy, she learned the skills neces- demonstrates strong qualities in leadership through her sary to communicate effectively as well as organize and direct organization and communication skills. With 3 years experi- a group. Since her first enrollment in the DSA, Nina emerged ence in the Digital Safari Academy, Bany has learned to as a natural leader when she led her group in the Legacy of communicate and work well with others. With experience Imperialism project to create an efficient and long lasting water in financial handling, Bany has been working as a chief supply in Niger. She also has experience in working with a financial organizer at the music school in her church. She nonprofit organization called D.R.E.E.M reality, where her team manages the money, charges tuition, buys the necessary created informational brochures on sustainability as well as materials for class, organizes recitals, and works as a tutor designing the company’s logo. She organized weekly business to help others. Bany also enrolled in a summer long intern- meetings with her clients through online communication as well ship where she worked as a marketing assistant at the Wil- as in person. Nina also spent a summer interning at John Muir Health in Walnut Creek in which she cre- lows Theatre Company. With the primary responsibilities of ated multiple educational projects and business ads, attended business meetings, and learned skills in understanding and communicating the costs associated with production, as well as projections regard- time management, proper behavior at the workplace, and the resources and information needed to oper- ing market share, revenue, and profit; Bany’s prior experience in financials and her ability to communi- ate a successful business. With her primary responsibilities of managing M-Power as a whole, her focus, cate well with others makes her well qualified for this position to ultimately contribute to the success of ambition, and leadership will play a key role in the success of the business. M-Power Inc. Rjay Molo, the Marketing Director of M-Power, has al- Edward Duenas, the Chief Technical Officer of M-Power ways been one to express his creativity through visual and has shown true potential in his ability to be a leader as well auditory media. With 3 years of experience in the Digital as a team player. Edward has been enrolled in the Digital Sa- Safari Academy, he learned skills necessary for his current fari Academy for 3 years and learned skills necessary for his position. Rjay learned skills in public speaking and com- position. With his primary responsibilities in understanding munication as well as media skills in Photoshop, Indesign, and communicating the mechanics, production, and opera- Final Cut, and Garage Band. He demonstrated his skills tion of the Mpower Wear, Edward’s strong leadership and and talents through his “Speaking of I.Dentity” video in ability to work and communicate well with others makes him which he composed an original song, created a video, and well suited for the position. With prior experience construct- performed live in front of an audience. Rjay also applied his ing solutions to worldwide problems, Edward, alongside with media skills in a summer long internship at Under the Sun his group, was funded in the Legacy of Imperialism competi- Studios where he created voice training videos and taught tion in which they constructed educational academies for students in music classes. With the primary responsibilities of communicating to target customers, dis- children and adults in Togo. In his leisure time, Edward participates in extracurricular activities. He is a tribution of the M-power into the market, and strategies for advertisement, Rjay’s creativity will be a key baseball pitcher and was the quarterback of the football team for 3 years. With his drive, motivation, and factor in M-Power’s success and expansion throughout the years. experience, Edward plays a major role in the creation and future success of the M-power.
Product Data Sheet M-Power Features: Exterior M-Power Muscle Enhancement Wear • Nylon stockingFor those suffering with muscle and mobility issues, It removes the dependence on others and • Cotton fabricM-Power Inc. has invented the solution. We have reduces the high costs of nursing homes. It aidscreated the M-Power Muscle Enhancement Wear, in the rehabilitation process for common work- Interioran easy to use, slip on stocking that is worn on the place or sports injuries and helps in preventing • Artifical Muscle made arm or legs. It contains patented technology to pro- common accidents in those suffering with weak of siliconvide additional strength when resistance is detected muscles and are more prone to falls to decrease • Resistance Sensorsto assist the muscles in daily activities. death rates and hospital visits. • Copper Wiring • Flexible rechargable The M-Power Wear consists of 3 layers. The first battery to power layer is made of nylon with embedded copper M-Power Wear Benefits: electrical currentwires, artifical muscles made of silicon, resistance • Programmed sensors, a flexible rechargable battery and a pro- • Restores independence Computer Chipgrammed computer chip. The second layer is the • Copper-Aluminum copper-aluminum shape memory alloy that allows • Safe to use Shape Memory Alloyflexibility and the ability for the arm or leg to conform • Lightweightto the position necessary for movement or direction. • Assists in everyday activitiesThe third layer is the cotton fabric that is attached tothe shape memory alloy in colors black or white. • Prevents muscle collapse and fatigue • Easy to wear, can slip on or offThe stocking functions through the flexible rechar- • Provides additional strengthgable battery pack and the programmed computer • Aids in rehabilitation processchip. When sensors detect resistance within thearm or leg, the chip signals electric current from • Maintains range of motionthe battery pack to pass through the copper wires. • Can easily be concealedThis stimulates contraction in the artifical muscle to • Relieves strain on musclesprovide strength.The purpose of the M-Power Muscle EnhancementWear is to restore independence for those individu-als suffering from muscle or mobility issues. It easilyassists in performing daily activites and restores selfsufficieny to live independently and free of restric-tions as it maintains range of motion for comfort andflexibility.
Opportunity AssessmentIn “What Happens to Aging Muscles?”, Brent dence, through our newly invented technology;Agin, MD and Sharon Perkins describe the trends the M-Power Muscle Enhancement Wear.in age for muscles to deteriorate, resulting in a In “A weak balance: the contribution of musclelack of strength. The trends showed that muscle weakness to postural instability and falls,” Writer,weakness increased as the population ages. Corrinne GC Horlings, describes the trend ofStatistics show, that on average individuals around muscle weakness and its leading role in causingthe age of 50-70 lose 30% of their strength, and increased risks of falls and imbalance for seniors. billions of dollars for the U.S health care system, nearly $19-28.2 billion in 2000 as stated by, “Injury Pre-1% of muscle strength for each day spent in bed. In recent studies of strength training, weakness vention & Control: Home and Recreational Safety”. With the incresing senior population, both the numberIn relation to this trend, recent studies by Admin- was the consistent risk factor for falls in seniors. of falls and the costs to treat fall injuries are likely to increase. In “Psychosocial consequences of falling:istration of Aging have shown that the number of According to Centers for Disease Control and Pre- the perspective of older victims to falls and injuries” describe their feelings of powerlessness as they feltsenior citizens in the U.S is rapidly increasing as vention, statistics have shown that throughout the a lack of control and emotion. One man describes falls as something unpredictable and regardless ofthey currently represent 12.4% of our population years, the intensity of the problem has increased. his behavior, they can still occur. “I will walk slowly. However, falls are out of my control. In some circum-but are expected to grow to 19% in the future. One out of three adults age 65 or older fall each stances, no matter how careful I am, falls still cannot be prevented. ¼ Falls are not preventable. (ClientWith the increase in age comes higher rates of year with death rates rising as sharply as 19,700 O)” Muscle weakness accounts for increasing rates of falls and instability as well as financial costs andmuscle weakness and high demand for a product older adults in 2008. 2.2 million were treated in physical, emotional, and physiological factors. As seniors become more prone to falling as their musclesthat would help provide aid or assistance. This emergency departments for nonfatal fall inju- weaken, the time spent recuperating further weakens their muscles to account for more falls in the fu-is a good business opportunity for M-Power Inc. ries. These falls have resulted in hip/leg/forearm ture. This cycle can be prevented as the M-Power Muscle Enhancement Wear will provide the necessaryas we provide assistance for those suffering with fractures, brain damage, lack of mobility, and loss strength to prevent the muscles from collapsing.muscle or mobility issues by promoting indepen- of physical fitness. Falls have also accounted for
According to a 2005 study, the number of seniors residing in nursing homes increased to 17% with 1.3million living in the care homes. The other 83% live with their family for support and assistance in living.Although nursing homes provide health and safety for seniors, accidents and injuries within the nursinghomes is still very common, About 1,800 people living in nursing homes die each year from falls and2-6% suffer severe fractures. Due to the common accidents and injuries to seniors, they often seek as-sistance in daily living as they lose mobility and independence to live on their own due to their fragility.Data indicates that 91% of all residents within nursing homes seek assistance in daily living activities.Charts show that 94.7% of seniors need help bathing, 87.5% need help dressing, and 47.1% need help The rate of residents within nursing homes has Therefore, the M-Power Muscle Enhancementeating their food. These statistics demonstrate the severity of the problem as death rates have risen for increased throughout the years as seniors seek Wear is needed. Statistics demonstrate the det-older adults with nearly 19,700 dead due to unintentional falls. Falls have resulted in mental and physical help in daily activities. This supports our prod- rimental effects of weak muscles. Not only doesdisabilities that can affect the mobility and independence of elders to live on their own such as fractures, uct as a need as weak muscles are the leading the M-power Wear provide additional strength,fear of falling, dizziness and loss of confidence. cause of falls and imbalance; our product works but it enhances independence in individuals that to relieve the issue. The M-Power Muscle En- have difficulties performing everyday activities. hancement Wear will help those suffering with As the population will contrinue to age, muscle muscle or mobility issues maintain their indepen- and mobility issues will increase along with a high dence longer by assisting them when in need. It demand of assistance. With its many features and is essential as it provides the necessary strength benefits, the M-Power Muscle Enhancement Wear for assistance and maintains the range of motion is the perfect candidate for providing a happier, to allow the patient freedom from restriction. longer, and more independent life without the reli- ance on others to do so.
Pride M-Power Inc. Hugo Mobility AfikimCompetitive Analysis Promotes Independence Enhances strength Assists in mobility Maintains range of motion Prevents muscle collapse/ fatigue Easy to use/wearM-Power Inc. aims to promote independence in the lives of those struggling with muscle or mobility is- The benefits of M-Power in comparison to leading competition.sues through our newly invented technology, the M-Power Muscle Enhancement Wear. Hugo Walkers, Pride Mobility Scooters, and Afikim Scooters are competitors to M-Power Inc. as they allOther companies specialize in the production of services to benefit patients suffering from injured or aim to restore and enhance the independence of those with muscle or mobility issues that prevent themweak muscles. Hugo, a manufacturer of mobility products has provided innovative technologies that from performing simple day to day tasks. They all fulfill the same goals for independence and addressenhance independence for individuals. With an aim to provide “freedom, mobility, and confidence to stay the need of safety for the weak or disabled, but with different products. Although these companies allactive and go anywhere, anytime”, Hugo specializes in manufacturing and distributing walkers that pro- aim to provide easy to use products that assist in everyday activities and independence, M-Power Inc.vide stability to the user allowing them to move around a little easier. Their products are well known and can be distinugished through its use of patented technology and structure to provide additional strengthare sold in multiple stores such as Sears and Walgreens. as well as stability and mobility for individuals. The M-Power Muscle Enhancement Wear is more conve- nient as it is lighter, less noticable, and can be taken on and off when necessary.Another company that is competition is Pride Mobility. Pride mobility is a company that sells electricscooters. Pride Mobility aims to provide patients with “a life with no boundaries” through their easy to op- Therefore, consumers will buy M-Power Muscle Enhancement Wear over Hugo, Pride Mobility, and Afi-erate power scooters. The patient is provided with easy transportation from place to place. The scooters kim. It enhances independence by providing muscle strength in the legs for mobility, as well as the armscome in multiple colors, styles, and comfort levels; however they all work to enhance the independence for strength. Patients can easily wear the stocking and acquire the additional strength they need to per-of the patients. form daily activities and remove their dependence on others. With the M-Power Wear, users can do what they desire without the hassle of lugging around a big bulky walker or scooter, as our product is lightAfikim is similar to Pride Mobility. It manufactures advanced, electrically powered mobility scooters. weight, thin, and allows uses to maintain the range of motion. Users would be able to go places withoutAfikim’s electric vehicles aim to provide mobility for those who are unable to normally get around due to limitations and without bringing attention to themselves, something walkers and scooters cannot do.muscle weaknesses within the legs. Afikim’s scooters can range from outdoor and indoor mobility scoot-ers that are designed for user comfort, easy operation, sturdy construction, and reliability in all drivingconditions to promote independence for the patient.
Graph A : Muscle Weakness in Age 15.0% % of Muscle Weakness 11.3% According to Graph A, muscle weakness increas-Customer Profile es as age increases. In ages 18-24, the rate of those with muscle weakness was 0%, but as the 7.5% 3.8%The M-Power Muscle Enhancement Wear provides strength and promotes independence for those who population began to age, it increased to 11% forhave difficulties performing daily activities. M-Power Inc. mainly targets customers with muscle or mobil- ages 45-49. 0%ity issues. Our target customers are the upper middle class suffering from muscle or mobility issues that 18-24 25-29 30-34 35-39 40-44 45-49impact their independence and ability to perform daily activities that seek a product such as the M-Pow- Mobility issues also increase with age.er Enhancement Wear that will provide for their needs. Age The percentage of muscle weakness within age groups. As the population ages, mobility decreased, as suggested by the bar graph in Graph B. In people Graph B : Mobility Rates in Age ages 16-19, their ability to move around easily and 30.0% freely was 27%, but decreased to a drastic 1% as they reached the age of 65. % of Mobility Rates 22.5% The increased rates of muscle weakness and 15.0% mobility issues create social problems within the 7.5% society as it increases the amount of potential falls and death, as well as people losing the ability 0% to provide for themselves. M-Power Inc. targets 16-19 20-24 25-34 35-44 45-54 55-64 65+ customers that suffer from these issues and want Age to restore their independence. The percentage of people mobile within age groups. Lastly, M-power Inc. targets the upper middle Graph C : Population Growth in CA class because the M-Power Muscle Enhancement 40.0 Population of Seniors in CA (mil) Wear would be as costly as other alternatives such as walkers and power scooters but contain 30.0 many more benefits that exceed their competition. The M-power Wear would be successful in many 20.0 states within the U.S, however the state with a pro- 10.0 gressing increased rate of growth for seniors is the coastal region of California. According to Graph 0 C, there is a higher population of seniors located 1900 1991 1992 1993 1994 Year there due to the baby boom generation from past years as well as the influx to California for jobs to The population of seniors within California per year. contribute to the growth of our senior generation.
Marketing PlanProduct PlacementWith the goal of restoring independence in all, M-Power After manufacturing, the M-Power Muscle En-Inc. introduces M-Power Muscle Enhancement Wear. hancement Wear will be distributed to local re-The M-Power Muscle Enhancement Wear is a light tailers for customer accessibility. The M-Powerweight, slip on stocking that is placed on the arm or leg Muscle Enhancement Wear will be availableto provide additional strength when resistance is detect- for direct purchase over the counter at special-ed. It provides mobility, strength, and independence all ized medical supply and equipment stores likein one. It is lightweight, safe to use, and easy to operate AlegroMedical, Concord Medical Market, Abil-to ensure safety and self suffiency. ity Medical Supply, Mission Medical Supply, and NorthWest Medical Supplies.PriceDue to the high expenses and large amount of resources Promotionneeded to produce our technology, The M-Power Mus- M-Power Inc. mainly targets customers withcle Enhancement Wear for the arm costs $450 wholesale muscle or mobility issues that impact their in-and $900 retail. The Wear for the leg is $950 wholesale dependence and ability to perform daily ac-and $1900 retail for a set of legs. When purchasing the tivites. Our marketing message will focus on informational advertising to educate viewers on the M-Power Wear and the benefits that come alongM-Power Muscle Enhancement Wear, it comes with a promoting independence, safety, and a better with an independent lifestyle. These commercials will be broadcasted on news channels such as Kronthree year warranty. M-Power Inc. will replace any defec- lifestyle. M-Power Inc. intends to use market- 4 or KTVU 2 as a majority of the population are exposed to news coverage daily. We will also broadcasttive products with a new, fully functional M-Power Wear ing strategies in broadcasting informational commercials on basic cable channels such as Fox, ABC and Lifetime as they are popular and viewersfor the arms or legs within the 3 year time period of pur- advertisements, posting print ads, holding are more likely to be of older age. We will broadcast commercials during the daytime as a majority of ourchase. presentations in local facilities and attending customers spend their days at home due to muscle or mobility issues. medical conventions. We will be broadcasting Another marketing strategy M-Power Inc. intends to use is print advertisements. We will post print adver- tisements with information about the M-Power Muscle Enhancement Wear in local hospitals, clinics, physi- cal rehabilitation centers, and physical therapy offices as many of our target customers may be seeking assitance in one of these facilities. M-Power Inc. will also be sending sales representatives to healthcare conventions such as the Medical Equipment and Supply Association to publicize and be the voice of M-Power Inc. We will also be hiring sales representatives to schedule presentations in hospitals or centers to educate and attract medical professions to recommend the M-Power Wear for their patients as prevention from future muscle or mobil- ity issues.
Transportation In transportating the M-Power Muscle Enhancement Wear from manufac-Life Cycle Analysis Acquiring turing to its sales location, it requires the use of trains and trucks. The M- Power Muscle Enhancement Wear for arms and legs will be transportedAcquiring Transportation to local sales locations in medical supply and equipment stores. SinceIn the process of creating the M-power Muscle Enhancement Wear, the M-Power Wear is lighter than walkers and power scooters, the envi-the materials needed are silicon, cotton fabric, a rechargeable bat- ronmental impact of transporting them is not as severe. M-Power Inc. istery, nylon, copper, a programmed computer chip and a copper-alu- able to transport more of our products per train or truck and cause lessminum-nickel shape memory alloy (SMA). In comparison to competi- C02 to be emitted compared to the competition.tion, the M-Power Wear uses more nonrenewable resources.We willget the computer chip from laboratory profressors who we will hire to Usagecreate the technology. We will also need miners, drillers, melters,and The M-Power Muscle Enhancement Wear promotes independence andharvesters to obtain the other resources. This will create negative aids in decreasing social problems. Although there are environmentalenvironmental impacts. Mining for copper leads to air pollution, de- impacts in the production and distribution of the M-Power, the social ben-forestation, and potential wildlife habitat loss. Drilling for oil disturbs efits outweigh the costs toward the environment. The M-Power Wear pro-the environment, emits CO2 into the atmosphere, and could lead to motes safety, well being, independence and the best quality of life. Thosepotential destruction of wildlife if there is an oil spill. Melting metals struggling with muscle or mobility issues will no longer have to reside inproduces toxins that are harmful and polluting to the atmosphere. nursing homes and pay the high costs, so it saves money. Patients will noAnd lastly, harvesting cotton impacts the environment as many toxins longer need to use walkers or power scooters to get around, they will noware used in the soil and a large amount of water is needed for it to be able to move freely with no restrictions or attention being brought upongrow. The labor needed to make the M-power Wear does create more themselves. It allows people suffering from muscles or mobility issues tojobs, however the working conditions are harmful to human health provide for themselves and perform activities they couldn’t do before. due to the potential exposure to toxins. M-Power Wear aids in rehabilitation processes to allow workers to stay on Disposal the job and continue to make money. It allows sports players to continueManufacturing Manufacturing performance even after injury. M-Power Wear prevents muscle collapseAfter obtaining the necessary resources to create the M-Power Wear, and potential falls to ensure the safety and well being of others to liveit will be manufactured in our facility located in California. We will be longer and more secure. The M-Power Wear creates minimal pollution inmanufacturing our product in California because resources and pro- usage because it only uses a small rechargable flexible battery that canduction costs are accessable and affordable and there is a high popu- be resused many times.lation of seniors who would likely purchase the product. We will hirelocal california workers who seek employment to create the M-Power Disposing Wear. This creates more job opportunities for the unemployed. Manu- After use, the Wear will be recycled or sent to landfills. When the stockingfacturing does create higher amounts of pollution compared to current is disposed of, the cotton, nickel, aluminum, copper, and battery can beproducts as it emits more CO2 into the atmosphere. The M-Power emits recycled and reused for other purposes.The silicon and nylon are dis-energy in the production of manufacturing and uses energy from its posed of in landfills. However this does not create severe environmentalsmall rechargeable flexible battery that would power the device and be problems as they contain minimal harmful toxins.recycled properly after use.
Net IncomeFinancial Projections $80,000,000 $70,000,000Pricing and Sales Models Costs of Goods $60,000,000The M-Power Muscle Enhancement Wear comes in an For the purposes of this project it is assumed $50,000,000arm or a set of legs. The arm costs $450 wholesale and that the costs of goods for our company’s Prices$900 retail. The set of legs costs a $950 wholesale and product compromises 45% of our gross rev- $40,000,000$1900 retail. We will sell the product to retailers who will enue and is composed of the following items: $30,000,000distribute it to consumers. The wholesale and retail pric- manufacturing, labor, and materials such as $20,000,000es of the M-Power Wear is determined in relation to the silicon, copper, cotton, a flexible battery, pro- $10,000,000costs of obtaining the resources and the labor needed for grammed computer chip, copper-aluminum $-production. The prices are also determined in consider- shape memory alloy and resistance sensors. 1 2 3 4 5ation to our target customers, who we believe are most As we increase procduction levels, these Yearscommonly placed in the “middle class” of the economy, costs will increase. The fixed cost in the The total earnings of M-Power Inc. in 5 years after subtracting expenses from gross revenue.so the M-Power Wear is affordable and set at a reason- production of the M-Power Wear accountsable price. In comparison to competition, the M-Power for 30%. This pays for essential employees,Wear is more complex and unique, so the price is equal buildings and equipment. Sales and Revenue Projectionsto or greater than current competitors as it provides a In it’s first year, the M-Power Muscle Enhance- We determined our growth estimates by consumergreater amount of substantial benefits for the consumers. ment Wear will have an initial estimate of sales population. According to current statistics, as an indi- and revenue of 0, because we will be primar- vidual ages, muscle and mobility issues increase. The Gross Revenue ily focused on developing our business and babies in the baby boom generation have aged, and $140,000,000 manufacturing products to be sold in the mar- therefore we have a higher population of seniors and $120,000,000 ket. For the second year, we have set an esti- those more likely to suffer with these issues that seek a mated sale and revenue goal of 12,500 arms product that provides independence and freedom. We $100,000,000 and 11,250 sets of legs to be sold. In it’s third also estimated these goals by looking at the amount of $80,000,000 year, we estimate a sales and revenue goal marketing we will do for our product. In it’s first year, we Price of 25,000 arms, and 22,500 legs to be sold. pay marketing expenses for the creation of a business $60,000,000 In it’s fourth year, we estimate sales of 50,000 plan and designers which accounts for no sales. As we $40,000,000 arms and 45,000 legs, and in it’s 5th year, we begin a marketing campaign in year 2 with TV commeri- $20,000,000 estimate 100,000 arms and 90,000 legs to be cals and print ads, we estimate sales to increase and sold. With these sales and revenue goals for by year 3 we will hire sales representatives to speak at $- the Muscle Enhancement Wear’s first 5 years, conventions and local facilities to create more publicity 1 2 3 4 5 we project $71,775,000 in net income. to increase sales dramatically by year 5. Years The total earnings of M-Power Inc. in 5 years.
Financial ModelAdvertising and Marketing Expenses Year 1 Year 2 Year 3 Year 4 Year 5The costs of marketing needed to advertise the M-Power Muscle Enhancement Wear accounts for 20% Sales Product/Revenue Source 1 M-Power Armsof our gross revenue. In year one of marketing, we will pay expenses for the creation of our business Projected Units Sold 0 12,500 25,000 50,000 100,000 Sales Growth 100% 100% 100%plan and hiring graphic designers. In year 2, we will effectively begin our marketing campaign with a few 2 M-Power LegsTV commericals and print ads. We will pay expenses for distribution costs and advertising. In it’s third Projected Units Sold 0 11,250 22,500 45,000 90,000 Sales Growth 100% 100% 100%year, we will pay expenses in hiring sales representatives and protoypes of the M-Power to be displayedin medical conventions or presentations in medical facilities. In years 4 and 5, we will continue to expand Incomeand increase our advertising and marketing to match the amount of sales to ensure a steady flow of Gross Revenues 1 M-Power Arms $- $5,625,000 $11,250,000 $22,500,000 $45,000,000profit. 2 M-Power Legs $- $10,687,500 $21,375,000 $42,750,000 $85,500,000 Total Gross Revenue $- $16,312,500 $32,625,000 $65,250,000 $130,500,000 Return on Investments Cost of Goods 1 M-Power Arms $- $2,531,250 $5,062,500 $10,125,000 $20,250,000 Shares to Seed Investors 2 M-Power Legs Shares to Founders $- $4,809,375 $9,618,750 $19,237,500 $38,475,000 10.00% 15.00% Total Cost of Goods $- $7,340,625 $14,681,250 $29,362,500 $58,725,000 Gross Profit $- $8,971,875 $17,943,750 $35,887,500 $71,775,000 Gross Margin 0% 55.0% 55.0% 55.0% 55.0% Financing Founders $1,000,000 Friends & Family $250,000 Series A Round $5,000,000 Series B Round $2,000,000 Shares to Series B Investors Net Income $6,250,000 $10,971,875 $17,943,750 $35,887,500 $71,775,000 25.00% Expenses Product Development $4,000,000 Shares to Series A Investors Marketing $100,000 $3,400,000 $6,000,000 $12,000,000 $20,000,000 50.00% Company Formation $250,000 Operations (Fixed Cost) $1,000,000 $7,413,750 $9,935,775 $19,773,716 $39,545,474 Total Expenses $5,350,000 $10,813,750 $15,935,775 $31,773,716 $59,545,474 Percentage of shares owned by each group. Profit Net Profit (EBITDA) $(5,350,000) $(1,841,875) $2,007,975 $4,113,785 $12,229,526 Net Operating Margin -11.3% 6.2% 6.3% 9.4%Sources and Uses of Funds Cash FlowIn series A funding, M-Power Inc. recieved $5,000,000 to cover start up costs and develop our technol- Beginning Balance 0 $900,000 $1,058,125 $3,066,100 $7,179,885 Ending Balance $900,000 $1,058,125 $3,066,100 $7,179,885 $19,409,410ogy. With this fund, we were able to purchase the resources and facility in which we are manufacturingthe M-Power Muscle Enhancement Wear. We also paid for marketing expenses to develop a businessplan and graphic designers. To continue business beyond the second year, we will ask for a series B Company Valuationfunding of $2,000,000. This will pay for expenses in launching our marketing campaign and distribution Our company will be worth $45,860,721. Series A investors will make four times their investment ofto retailers to begin sales of the M-Power Muscle Enhancement Wear. With this investment, M-Power Inc. $5,000,000. Series B will make approximately eight times their investment of $2,000,000. Series A inves-will be able to make a profit that exceeds that of the investment money given. Series B funding will be tors will make $22,930,361 and series B investors will make $11,465,180.primarily used on manufacturing and advertising. We will spend about 20% on advertising and 45% onmanufacturing to attract customers and expand production. Series A will own 50% of our company andseries B funders will own 25%.