Master Minds' Kinetic Smartphone Case Extends Battery Life

Running head: MASTER MINDS
1
6
MASTER MINDS
Master Minds Innovations, LLC.
Business Plan
Chris Forrest, Jessica Harke, Ken Ostarello, Latasha Johnson,
Lita Weikert
October 19, 2016
Benedictine University
MBA-559 D1A6 Entrepreneurship
TABLE OF CONTENTS
I. EXECUTIVE SUMMARY 4
Description of the Business Concept and the Business
4
Opportunity and Strategy 4
Target Market and Projections 4
Competitive Advantages 5

The Team 5
The Offering 6
II. THE INDUSTRY AND THE COMPANY AND ITS
PRODUCT 6
The Industry 6
The Company and the Concept 7
The Product 7
Entry and Growth Strategy 8
III. MARKET RESEARCH AND ANALYSIS
8
Customers 8
Market Size and Trends 9
Competition and Competitive Edges 9
Estimated Market Share and Sales 9
Ongoing Market Evaluation 10
IV. THE ECONOMICS OF THE BUSINESS
10
Gross and Operating Margins 10
Profit Potential and Durability 11
Sales Budget 11
Fixed, Variable, and Semi-Variable Costs
11
Months to Breakeven 11
Months to Reach Positive Cash Flow
12
V. MARKETING PLAN 12
Overall Marketing Strategy 12
Pricing 12
Sales Tactics 12
Service and Warranty Policies 12
Advertising and Promotion 13
Distribution 13

VI. DESIGN AND DEVELOPMENT PLANS
13
Development Status and Tasks 13
Difficulties and Risks 14
Product Improvement and New Products
14
Costs 14
Proprietary Issues 15
VII. MANUFACTURING AND OPERATIONS PLAN
15
Operating Cycle 15
Geographical Location 16
Facilities and Improvements 16
Strategy and Plans 16
VIII. MANAGEMENT TEAM
17
Organization 17
Key Management Personnel 18
Organizational Chart 19
IX. OVERALL SCHEDULE
19
X. CRITICAL RISKS, PROBLEMS, AND ASSUMPTIONS
20
XI. REFERENCES 23
XII. BIBLIOGRAPHY
26
XIII. APPENDICES 29
A1 – Operating Cycle
29
A2 – Budgeted Income Statement

29
A3 – Sales Budget 2017
30
A4 – Variable and Fixed Selling and Administrative Costs
Budget 2017 30
A5 – Breakeven
31
B1 – Overall Schedule
32
B2 – Cash Conversion Cycle
33
Executive Summary
Master Minds Innovations, LLC, (MMI) will redefine the
mobile accessories industry by manufacturing a case that
incorporates kinetic technology. As smartphones have evolved
containing endless functions, consumers have experienced
battery unreliability (Chris P., 2016).
Description of the Business Concepts and the Business
MMI, incorporated in 2016, in the state of Illinois with five
partners who visualized a solution for extended smartphone
battery life, yielding a higher level of performance for
smartphones. This vision has matured into a reality through the
strategically developed business plan we have set forth to bring
our product to market.
Opportunity and Strategy
Our kinetic energy-powered case will be offered for many
of the larger manufactured smartphones. As an example,
Apple’s latest model of the iPhone 7 Plus will be thinner and
more streamlined. There is speculation regarding how this
model would hold a larger battery to sustain longevity and
functionality; our invention supplements that concern (Bell,
2016). Utilizing secondary kinetic technology, the phone will be
stored within a protective case, which as the user provides

motion, recharges the battery, thus experiencing longer battery
life.
Target Market and Projections
Within the telecommunications industry, specifically the high
growth mobile communications sector, MMI will initially focus
the target market on iPhone users; 82 percent of which is
projected to make up the mobile market by 2018, and soon after
move to other market movers such as Samsung (Reisinger,
2015; Samsung, 2016). To ensure our firm is competitively
positioned, we will target consumers that heavily rely on their
phones for both internet access and telecommunication.
According to information gathered by Pew Research Center,
Americans are heavily dependent on their cell phones for
staying connected to the preverbal grid (Smith, 2015). An
estimated 7 percent to 10 percent of Americans only have access
to the internet via their smartphones (Smith, 2015). As of 201,5
there were 184.2 million US smartphone users, and that number
is estimated to increase to 220 million by 2018 (Smith, 2015).
With the estimated increase in smartphone users, we initially
project to produce 10,000 units to be sold within our first year.
Competitive Advantage
Stand-alone solutions for the power-hungry devices of our time
have been weak and our product can absorb much of the market
share with our convenient and non-cumbersome technology.
Our product utilizes kinetic technology and will increase our
competitive advantage due to differentiation, ease of use, and
convenience factor (i.e. not having to carry around a charger or
external battery pack). Our device is embedded discretely
within the smartphone case and becomes effective with normal
body motion. No accessory adaptor is needed.
The Team
Our five-member team has diverse backgrounds and experiences
which include venture capitalism, private equity and private
placements, business administration, managerial finance, public
and private accounting, and most importantly classical
mechanics engineering. Our varied learning and management

styles offer us a unique business purview as it relates to our
company's vision and strategy. Christofer Forrest is acting
CFO, Lita Weikert is CEO and president, Jessica Harke is
director of sales and marketing, Latasha Johnson is HR director,
and Ken Ostarello is chief engineer.
Offering
Owners are contributing $50k each for startup costs. Additional
capital needed for operations equals $166,100 (phase 1 funding,
Q1). With collateral backing (real property) and good credit,
we expect to be approved for the SBA7(A) term loan at 6.25
percent, estimated. This loan, plus the owner’s contributions
will cover start-up and operational costs for the first year of
operations; manufacturing is being funded separately. If this
fails, we will pursue conventional lending with similar terms.
Using R&D industry benchmarks, specifically cost of sales and
gross profit percentage, we estimate our manufacturing cost to
be $36.30 per unit (retails for $100), gross profit of 63.70
percent, $363,000 total (10,000 units for first year sales,
beginning 2017 Q3, based on $1,000,000 revenue outlook)
(Butler Consultants, n.d.). We will pursue accredited investors
through online and local private placement firms that syndicate
investment packages to networks of accredited investors (i.e.
high net worth individuals; angels), and will render the services
of RegulationDResources, located in Lakewood, CO, to
facilitate it. Therefore, in our business plan and prospectus, the
offering will be $363,000 in funding for a 36 percent equity
stake in the company. These figures indicate a ROE for the
investor of 22 percent, and ROC (i.e. ratio takes into account
debt) of 15 percent in the first year.
The Industry and the Company’s Product
The industry. Due to steep market segmentation, we are able to
complete an analysis on cellular phone power banks, price range
and distribution channels. People around the world have gained
access to mobile devices. The accessories market has responded
with new and innovative ways to support customers with

varying needs. There are nearly 100 unique eco-friendly devices
that charge mobile devices. Each has both advantages and
disadvantages of using the product. “The rapid proliferation of
mobile phones has created a burgeoning market demand for
mobile phone accessories globally, leading to an exponential
market growth” (Market Research Report, 2016).
Company and concept. MMI has a transparent system to
measure environmental performance which includes extraction,
manufacturing, maintenance and disposal. As responsible
members of the global economy, we are setting the high bar by
seeking out electronic component industry standards from
around the world. Our goal is to purchase materials from
companies that have a market declaring that a product is in
conformity with all applicable essential requirements set out in
EU legislation and are RoHS-compliant (Hope Industrial
Systems, Inc., n.d.). Manufacturers with fully developed
systems for monitoring environmental impacts such as reducing
energy consumption and waste production, will be our first
points of contact. This will allow us to gather specific
environmental performance data on the vendors we use
throughout the supply chain.
Product. The kinetic energy-powered protective case will easily
adapt to many of the larger manufactured smartphones. Many
firms have tried to develop stand-alone solutions for the power-
hungry devices of our time; we believe our product can absorb
much of the market share with our convenient and non-
cumbersome technology. Our product of kinetic technology
will increase our competitive advantage due to the adaptability
and low-cost alternative to other battery charging devices. All
new cell phones are accompanied by a device that facilitate
recharging. Our device will be an added accessory and is not
necessarily needed by all customers. To ensure our firm is
competitively positioned, we will focus on people that heavily
rely on their phones for both internet access and
telecommunication.
Entry and growth strategy. To gain competitive advantage in

the mobile accessories market, key providers largely rely on
strong distribution channels such as multi-brand distributors and
retailers of mobile accessories in order to better cater to
consumers (Market Research Report 2016). MMI, will initially
focus the target market on iPhone users, 82 percent of which is
projected to make up the mobile market by 2018, and soon after
move to other market movers such as Samsung (Reisinger,
2015; Samsung, 2016). Globally, the mobile phone accessories
market is projected to account for US$121,726.4M by the end of
2025. APEJ, North America, and Western Europe are
collectively expected to account for 79.6 percent market share
by 2025 (Market Research Report, 2016). This is great news for
our company since “an annual growth rate of 30 to 50 percent
creates niches for new entrants…if a $100 million market grows
at 50 percent per year it has the potential to become a $1 billion
industry” (Spinelli, 2012, p. 142). An estimated 7 percent to 10
percent of Americans only have access to the internet via their
smartphone (Smith, 2015). Market trends point to our cell
phone case being placed in a mid-level price range.
Market Research and Analysis
Customers. The technology being proposed will be marketed to
the users of cellular telephones who often times find themselves
running low on battery power in their devices. Our product
could be sold directly to customers, contained within a standard
protective case with the added benefit of supplemental charging
from kinetic energy. Sales could be made through e-commerce
sites like Amazon as well as traditional brick-and-mortar store
shelves.
Market size and trends. Today there are about 2 billion
smartphone users worldwide, and is expected to increase to over
6 billion by 2020 (Kissonergis, 2015). About 80 percent of this
growth will occur in the emerging markets in Asia Pacific, the
Middle East, and Africa (Lunden, 2015). This global growth
will only further increase people’s reliance on their smartphone
for communication, business, and entertainment.
Competition and competitive edges. While there are no known

competitors producing a kinetic energy charging case, there is
no shortage of substitute products, including external battery
packs and cases that have additional battery power built in
(Ampy, n.d.). A device that provides longer battery life by
using kinetic energy to charge provides the distinct value over
any substitute product in that it provides longer battery life at
no cost to the user and it happens automatically as the user
moves throughout the day.
Estimated market share and sales. One of the most important
specifications to consumers is the battery life, and our product
enhances battery capacity (Wagner, 2013). Consumers are
willing to pay a premium for it; we have only indirect
competition. Salability is viable in the mobile accessories
sector.
We have a strategic value-based technology that will be offered
as an option to the mobile accessories sector. Due to the
proprietary technology we are developing, and a high
importance to acquirers, we expect a high value-added for
domestic and international consumers from strategic
importance; 3.0 times sales in 2018 conservatively.
Domestic demographics allocate more discretionary income to
products of convenience; this includes outdoor enthusiasts, and
business professionals in a myriad of industries. Note
referenced percentage of population totally reliant on
smartphones. Worldwide cell phone subscribers equal 7 billion
as of 2014 (96.9 per 100 people), 2 billion of which use
smartphones, but only 40.7 per 100 people have internet (The
World Bank, n.d.).
There are roughly 3 billion smartphone subscribers globally, 6.1
projected by 2020 (Lunden, 2015). Average growth rate of
approximately 17 percent per year until 2020. Sales in dollars
will increase to $1,170,000 in 2018, $1,368,900 in 2019, and
$1,601,613 in 2020 respectively. Unit sales increase from
10,000 to 11,700 in 2018, 13,689 in 2019, and 16,016.13 in
2020 respectively.
Ongoing market evaluation. Utilizing The Federal Reserve,

World Bank, European Central Bank, as well as macroeconomic
figures in emerging markets, we will be able to predict
economic shifts and how they correlate to our growth strategy,
pricing, and production facility expansion activities.
The Economics of the Business
Gross and operating margins. The magnitude of gross margins is
in line with industry benchmarks. Using the above stated
selling price and cost of goods sold, our projected gross margin
is 64 percent, gross income is $637,000 for 2017. Operating
income is projected at $220,900 for 2017; operating margin of
22%. Please see Appendix A2
As stated above, we will heavily market our product within the
mobile accessories market, a sub-sector of the
telecommunications industry. Contribution analysis, specifically
concerning contribution margin is speculative. As stated
earlier, industry benchmarks put cost of sales around 36
percent, further in-depth look at manufacturing costs for our
product will be published in 2017 financials once all known
fixed, direct and variable cost that contribute to the projected
cost of sales.
Profit potential and durability. Our product has attractive
margins and profit expectations. Due to mobile accessory sales
coinciding with cellular devices point-of-sale, or shortly
thereafter, we expect our profit to remain stable and durable.
As mobile phone technology increases (i.e. new phone models),
so, too, will the design of our product. Upgrading
manufacturing operations will affect cash flow to some degree,
but the intensity and magnitude of sales within the industry will
absorb much of those profit constricting activities, as sales for
the new designs will be occurring shortly after. Our supply-
chain, Japanese outsourced lean manufacturing, and our
utilization of Amazon’s fulfillment and distribution channel,
their value chain, as discussed in other sections, will aid in
profit durability, all of which contributes to an optimistic lead
time for our product.
Predicting market trends and researching new product arrivals

will enable us to focus on upcoming offering potentials. Our
chief engineer, in collaboration with all department heads will
assess this environment for competitive intelligence.
Developing a technology patent will add to the durability to our
profit stream, by creating a heavy barrier to enter the mobile
accessories sector for other firms or products.
Sales budget. Please see Appendix A3
Variable and fixed cost selling and administrative cost. Please
see Appendix A4.
Industry benchmarks put total expenses at 52.05 percent
(Butler, n.d.). Our projected total expenses of 42 percent leave
room for unknown quantities in variable cost comparatively.
Breakeven. As stated earlier, a precise contribution is difficult
to project. Notwithstanding manufacturing cost, estimated at
$363,000 for 2017, we were able to pin down breakeven in
dollars at $762,717.39 which we expect to occur in Q1 of 2019
(fixed cost $701,700, variable expense 8 percent of sales,
contribution margin ration 92 percent). However, financing
obligations accounted for, we will narrow the breakeven further
in 2018. Please see Appendix A5.
Positive cash flow. As sales ramp up, positive cash flow is
anticipated in Q3 of 2017. This is based on the estimation of
2,500 units being sold, and will bring an anticipated $25,000 in
profit during this quarter of sales. See Appendix A5.
Marketing Plan
Overall marketing strategy. MMI will be gearing our marketing
efforts towards constant smartphone users, with marketing
focused on word of mouth conversations with the target group
and social media outlets for a minimal cost. Our product will be
introduced in the Chicagoland area before it is released to the
rest of the country.
Pricing. The cost of our product to manufacture is $36.30 and
charging $100 per unit (comparable to competitor - Ampy). Our
gross margin is 70 percent which leaves a margin to account for
costs, warranty and free shipping. Smartphone users regularly

spend $20-$60 for cell phone cases (Otterbox, 2016).
Sales tactics. Methods for sales will include word of mouth and
social media. After 1,000 units sold, there will be a release of
the product nationally. The release of the product
internationally will be started when 10,000 units are sold. The
marketing cost initially will include $300 for supplying the
product to customers for trial as well as a small budget of $2400
for social media advertisements.
Service and warranty policies. The company will offer a 30-day
guarantee on the case with 100 percent refund and free return
shipping and handling back to the manufacturer. The company
will offer a 90-day guarantee on the actual kinetic mechanism
with 100 percent refund and free return shipping and handling
back to the manufacturer.
Advertising and promotion. Advertising and promotion will
announce the all-inclusive case with enclosed kinetic
mechanism. Our competitors advertise and promote having to
wear their charger and the necessity of using adaptors in order
to charge the smartphone. This truly allows our product to be
on the cutting edge especially for those who rely heavily on
their smartphones or do not have access to electricity for
charging. Areas to advertise our product include social media
and word of mouth through target groups.
Promotion can occur by participating in technological product
shows and all types of business conferences. Advertising
agencies will be utilized to assist with the distribution of this
information. The exhibit display will serve as a direct,
powerful reflection of the quality and reputation of our
company. It will provide a strong first impression and
communicate our services. The average costs of a display are
approximately $30,000 but can be reused for many trade shows
and other conferences or seminars (Trade Show Display
Product: How Much Will You Need to Spend? n.d.). At these
trade shows, raffling of ten devices as “giveaways” will occur.
This is a sure way to get the word out about how great our
product performs.

Distribution. Due to the time constraint on developing a
prototype through testing and then full production, distribution
generally takes six months (Dupree, n.d.). The product release
date is scheduled for July 2017. Each unit will be packaged and
shipped in its own box from distribution centers in United
States. The cost per unit for packaging is $2.25 (Greasley,
2013). Due to variability of shipping costs, the company will
purchase a selling contract with Amazon.com which costs
$39.99 per month with additional selling fees to include the use
of the Amazon fulfillment center. No pre-approval from
Amazon is required due to selling this in the “Electronics
(Accessories)” area (Amazon Services, n.d.).
Design and Development Plan
Development status and tasks. Currently, our product is in the
design phase and needs to be tested by users in order to
determine any adjustments that need to be made prior to our
regional launch in July 2017. Our company has experience
which will help us engineer a product that will be appealing in
functionality and looks. We are testing the product on family,
friends and colleagues with an expected review of the product
to be completed by March 2017. After this initial test group, we
will offer to another test group of consumers and have a final
product review in May 2017 before the product release in July.
Difficulties and risks. Although no major design problems are
anticipated due to past experiences, the goal for the product is
to develop a sleek case that consumers will not be weighed
down by the kinetic charger that is inside of the case. The cost
of design and development related to the release of the product
will have a buffer time of two months after our final product
review with early consumers.
Product improvement and new products. As discussed, our
case’s sleek design with the multifunctional charging ability
will initially be designed for iPhone users with room for
expansion to other major phones such as Samsung or other
Android devices. With each release of new generation phones
from each company, we will develop new cases that will fit

these phones and as our technology increases, have sleeker
cases for consumers. MMI will only be developing this product
for consumers until we have a stronger hold on the marketplace.
Once we have recognition, we will research other products,
provide enhanced designed options and have a recycling
program for cases that are outdated or damaged.
Costs. Initially, each team member will provide $50,000 toward
start-up costs. A budget was created. There was consideration
in expenses such as consulting fees, production fees, and normal
operational expenses. It is important to include expenses for
consultation because they can provide experience, efficiency,
perspective, reduce management burden and provide leverage in
negotiations. They also provide advice for obtaining equity,
raising capital, overall business development and developing
the exit strategy (Consulting Fee Rates, n.d.).
A 12-month cash flow analysis was created (appendixA5) in
order to manage cash flow during the first 12 months. It is
important to provide a structure to explain changes in cash,
provide understanding of the overall operating, investing and
financial activities and show the company's solvency and
liquidity (Lee, 2011). Having a sound cash flow analysis also
allows the company to establish a contingency plan for those
unforeseen incidents that may occur. The company has decided
to add a 15 percent contingency to the budget to cover any
unforeseen expenses (Strider, n.d.).
Proprietary issues. The kinetic mechanism technology
prototype will be developed. Once this occurs, a patent will be
pursued in order to provide protection and exclusive rights to
this technology. Proprietary agreements will be developed
outlining the proprietary ownership of the kinetic mechanism
and case. This will outline the prototype information as well as
business practices, pricing, customer lists and technical
information that is forbidden to share. All team members,
employees as well as business associates who have obtained
access to this information will be required to sign an agreement
with the company. This agreement will include actions taken

for breach of the agreement including legal action. There will
be a determination period for termination of this agreement, if
the technical and engineering information is sold or released for
public use (What is a Proprietary Agreement? n.d.).
Manufacturing and Operations Plan
Operating cycle. The device will be produced in an
assembly line that will combine robotic assembly along with
skilled and unskilled labor. This will include the assembly of
the parts that make up the kinetic energy harvester (skilled
labor) and then fitting this portion into a variety of cases
(unskilled labor), shaped to fit the device they are going to
charge. High demand for seasonal and other anticipated
production loads will be dealt with by pre-planning overtime for
skilled labor and a combination of hiring temporary unskilled
laborers on a part time basis.
Geographical location. The device is similar to the kinetic
charging device used inside of Seiko watches, which are
produced in Japan. For this reason, the skilled portion of the
assembly will take place there. Since the harvesting portion of
the product is small and lightweight, it will be shipped to the
USA where final assembly will take place by unskilled labor.
Since using Amazon to fulfill our orders, final product assembly
will take place in Ruskin, Florida, which is home to a one
million square foot Amazon fulfillment center.
Facilities and improvements. For the specialty assembly in
Japan, proprietary machines and tools will need to be
purchased. For the location in Florida, no special tools are
needed. For both locations, due to the compact nature of the
device, relatively small warehouses, less than 5000 square feet,
can be used. In Japan, the parts needed for assembly are readily
available locally, so there is not a need to stock large quantities
of them. Once final assembly occurs in Florida, the product
will be delivered to the local Amazon warehouse for
distribution to their fulfillment network. As demand for our
product increases, the Japan location can be expanded with
additional floor space, machines, and employees to meet the

demand. For final assembly within the US, expansion will
occur at the Ruskin location. Utilizing the Japanese strength in
machining, and aligning geographical logistics with Amazon,
we hope to create economies of scale within our supply chain.
Strategy and plans. All necessary parts will be purchased and
then assembled by us. In Japan, the components will be
purchased from local machine shops and then assembled by our
specialists. We will work with the local machinists to ensure
that the components are high quality and within the tolerances
that are required. For the US location, the cases will be
subcontracted out from existing manufacturers, with the device
being secured to the inside of the case. This will allow us to
offer the customers a wide variety of case styles and colors with
little to no development costs.
Production plan is straightforward. We produce 2500 units for
sale each quarter, starting in 2017Q2 for sale in Q3. Starting in
2018Q2 production will be ramped up to 2925 units, but this
figure is an estimate and can be adjusted accordingly.
Through a vigorous quality control program, we will ensure the
integrity of our products is upheld and uncompromised by
verifying correct specifications are met, raw materials sourced
match stress tests, and personnel oversight to reveal training
deficiencies or equipment efficiency improvements where
needed. We will employ classic theory of total quality control
(i.e. planning, training, inspecting, improvement) (Thompson,
n.d).
Management Team
Organization. The five-member team has diverse backgrounds
and experiences. For example, professional experience includes
venture capitalism, private equity and private placements,
business administration, managerial finance, public and private
accounting, and most importantly classical mechanics
engineering. Our varied learning and management styles offer
us a unique business purview as it relates to our company's
vision and strategy. Chris Forrest is acting CFO, Lita Weikert
is CEO and president, Jessica Pavlinec is director of sales and

marketing, Latasha Johnson is HR director, and Ken Ostarello is
chief engineer.
MMI’s Human Resource department has well-defined policies
and procedures to ensure all staff are appropriately qualified
and trained for their roles both prior to joining MMI and during
their employment. To ensure we attract and retain the best talent
possible, applicants are screened for specific educational and
professional experiences. All executive team biographies can
be found on the corporate website.
Key Management Personnel.The Chief Financial officer is
responsible for fiscal management of the organization and the
Chief Executive Officer manages the day-to-day operations. The
Director of Sales and Marketing is responsible for analyzing
market segmentation, creating sales strategies to be
implemented by the sales team. The Chief Engineer will
oversee the design, assembly and production of the device. He
will also, be responsible for launching new products in the
future. The Human Resource Director is responsible for
recruitment/talent acquisition, seamless new hire onboarding
and investing in the professional development of all employees.
To ensure future viability, the founders will not draw a salary
from the business until a profit is realized.
The Board of Directors is fully engaged and committed to
governance responsibilities. The board operates within outlined
bylaws that are written for the purpose of internal management
of the Board and company activities. The Board is comprised of
five appointed voting members who each serve a four-year term.
The Board approves/advises on major changes to the company
structure, the hiring of the internal audit firm, performs reviews
of financial reports, investments and deposits. The Board will
work closely with the executive team to align the company’s
mission and strategic initiatives with available resources.

Organizational Chart
Overall Schedule
See Appendices B1, and B2.
The management team will remain static during the R&D stage.
We will begin hiring employees in Q3 of the 3rd year of
operations as the firm anticipates breaking even in Q1 of 2019.
Most of the production and operations will be outsourced to the
manufacturer in both Japan and Florida and will not require us
to hire staffing. Executive salaries will total $250, 000 for the
first year. Salaries will increase vis-a-vie bonuses and
shareholder equity as the company becomes more profitable.
$11,300 of the initial seed monies will be used to purchase
equipment, office furnishings and fixtures during the launch
phase. The equipment cost will include securing the proprietary
machines and tools needed to outfit the Japan factory. After the
breakeven point, forecasted to occur in year 3, we will begin to
hire part-time labors and full time office staffing to keep up
with demand.
However, the schedule will have to be altered if sales are not
realized as forecasted. Economic slowing events like decreasing
competitor prices and low employment could negatively
affectsales in the summer months, especially since these are
historically slow retail sales quarters, “In July 2016, most retail
segments, including sporting goods, general merchandise and
building materials, saw reduced spending, while online and
other non-store sales saw an increase of 1.3 percent seasonally
adjusted over the previous month and 10.1 percent unadjusted
year-over-year” (Reynolds, 2016). That being said, should the
number of units sold dip below 2,925 between 2018 and 2019
we would fall below our sales floor and thus prevent us from
meeting the breakeven point. As a direct result of this, hiring
new staff members would be delayed. Management of the firm
will not be affected in other ways as our internal cash controls
provide for a 15 percent contingency via a mix of short-term
financing options and capital.

Critical Risks, Problems and Assumptions
Risks we are taking with the launch of this product are
minimal, but still could play a factor as we move forward with
product launch. There are a lot of moving parts that need to be
in check when creating a business. These involve things from
product scheduling and development, product releasing,
receiving the product, shipping the product and keeping a good
cash flow on the budget during the whole period of time.
For our product, we would be risking a short amount of time in-
between the final product review and the launch of the product.
This could delay the initial release of the product, which could
upset consumers and in turn give us a bad reputation and create
bad word of mouth. Another risk we could run into is have a
delay in receiving our product from our warehouse in Japan
because it is overseas. This risk, in particular, also increases the
amount of money we need for producing and shipping our
product. Keeping these costs down will preserve our funds
before or after we have sales. These two factors will be
especially important when it comes to product launching. Once
we receive regular shipments from the warehouse in Japan,
there will be little to no risk with receiving portions from our
product there.
Due to our detailed budget, outlined in appendix A4, we
are the only product of our exact kind, we have minimal risk of
having our competitors cut their prices. Currently, the cell
phone market is on an upswing. According to Gartner, total
sales of smartphones grew 4.3 percent from 2015 to 2016
(Gartner, 2016). As it pertains to a cell phone case, 25 percent
of smartphone users do not use them (NPD, 2013). This will
allow for us to target 75 percent of cell phone users to change
their case to something that has a multifunctional purpose.
If we do not achieve the sale projections we set, especially
as phones turn to new styles and sizes, we run the risk of having
a product that may be outdated, unusable and leave us with an
excess of inventory. In these situations, we could start offering
price decreases and other deals to consumers who are still using

the older versions of the phone.
As our product is released into our regional start area, it is
important for us to be very vigilant of the amount of product we
are ordering, producing and the amount of money we have on
hand at all times. If we become lax on monitoring operations
and cash flow, we may need to borrow money from a bank or
investor. The most important thing we will need to keep in
check is the number of funds available prior to and after
obtaining orders. If we are able to stay stable in cash flow, then
we will be able to have one less risk factor when it comes to
having a successful business.
As a company, MMI will have a successful business. If
there are scenarios we need to push back a product launch date
or shipping date, we will provide a service recovery to preserve
our integrity and enhance the customer experience. This could
range from free product shipping to a discount or refund of their
money.
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Appendices
Appendix A
1. Operating Cycle
2. Budgeted Income Statement
BUDGETED INCOME STATEMENT
Revenue
1,000,000
Cost of revenue
363,000
Gross Income
637,000
Selling, general and administrative
416,100
Operating income
220,900
Income taxes
77,315
Net income
$ 143,585

3. Sales Budget 2017
Sales Budget 2017
Quarters
Quarters
Quarters
Quarters
1
2
3
4
Year
Units sold
2500
2500
2500
2500
10,000
Cost per unit $36
363,000
Sales price $100
1,000,000
Total Sales

1,000,000
Net Sales
$637,000
4. Variable and fixed selling and administrative costs budget
2017
VARIABLE SELLING AND ADMINISTRATIVE EXPENSES
Quarters
Quarters
Quarters
Quarters
1
2
3
4
2017
Sales Tax (Illinois sales tax 6.25%
15,625
15,625
15,625
15,625
62,500
Utilities
900
900
900
900
3,600

Office expenses
1000
100
100
100
1,300
Furniture and Fixtures
10000
10,000
Interest expense
$0
Total Variable selling and Administrative Expenses
$77,400
FIXED SELLING AND ADMINISTRATIVE EXPENSES
0
Executive Salaries
62500
62500
62500
62500
250,000

Amortization of patent (Attorney filing & Patent search)
925
925
925
925
3,700
Depreciation of Office Equipment (Section 179)
5000
5,000
Rent
3000
3000
3000
3000
12,000
Website
600
600
600
600
2,400
Marketing (5% if total sales, benchmark)
50000
50,000
Insurance
100
100
100
100
400

Accounting (in house)
N/A
N/A
N/A
N/A
0
License and fees (Business State License, EIN etc...)
200
200
Dues and subscriptions (Reg D resources.com)
5000
5,000
R&D (Prototype etc...)
10000
10,000
Total Fixed Selling and Administrative Expenses
$338,700
Total Selling and Administrative Expenses
$416,100

5. Breakeven
Breakeven analysis
fixed cost
$701,700
variable expense
8%
contribution margin ratio
92%
contribution margin
break-even point
$762,717.39
Appendix B
1. Overall Schedule
Master Minds Innovations, LLC Business Plan
Management Team: Lita Weikert, Christofer Forrest, Jessica
Harke, Ken Ostarello, Latasha Bouldin

Begin Date: 01/01/2017
Due to limited battery life on cell phones, our company created
a prototype cell phone case that has a built in kinetic energy
mechanism that produces energy to support battery life in cell
phones.
Core Objective: Develop a plan for developing, producing,
implementing, marketing and distributing the MMI 100 cell
phone case.
2017
Progress Target
Status
Impact
Action Steps
Owner
J
F
M
r
M
J
J
A
S
O

N
D
Pre-planning meeting - establishing team
Weikert
x
Finished
Incorporation of venture
Weikert
Forrest
x
Finished

High
Set Up Financing Software and Accounts
Forrest
x
Finished
High
Create Operations Budget
Forrest
Weikert
x
Finished
High
Completion of design and development
Ostarello

Weikert
x
On Target
Completion of prototype
Ostarello
x
On Target
Hiring management and production personnel
Bouldin

x
Not Started
Signing distributors and dealers
Weikert
Forrest
x
Not Started
Developing Marketing Materials and Plan (Including Market
Research Survey)
Harke
x

On Target
High
Promotion and Advertising
Harke
x
Obtaining sales representatives
Bouldin
x

Obtaining product displays at trade shows
Harke
x
Ordering materials in production quantities
Ostarello
Forrest
x

Starting production of operations
Ostarello
x
x
Receipt of first orders
All
x
Delivery of Sales
Bouldin Harke

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