Coralink Sustainable Business Plan


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Coralink Sustainable Business Plan

  1. 1. 0 Connie Cacace, Marlin Martes, Carolina Martinez, John McConnell, Adam Mielnik, Keith Reid, and Sam Wicks December 17, 2013
  2. 2. 1 Table of Contents 1. Executive Summary Pages 2 2. Business Description 2.1. Problem/Opportunity Pages 3 – 4 2.2. CoralinkPages 4 – 6 2.3. Industry and Market Analysis 3. Competitive Analysis 4. Marketing Strategy 5. Operational Issues Pages 6 Pages 7 – 9 Pages 9 – 12 Pages 13 – 16 6. Human Resource Requirement 6.1. Management Team Pages 16 – 18 6.2. Personnel Requirements Pages 18 – 20 7. Financial Projections (First Three Years) 7.1. Start-up Costs 7.2. Break Even Analysis 7.3. Profit/Loss Projections 7.4. Cash Flow Statement Page 21 Pages 22 Pages 22 – 24 Page 25 – 27 8. Sustainability Statement Page 27 – 28 9. Exit Strategy Page 28 – 29 10. Sources Page 29
  3. 3. 2 1. Executive Summary: Business Description: Problem – Coralink was founded in response to a major problem and growing global concern – the degradation of Coral Reef ecosystems around the world. In the Fall of 2013, founder and visionary, Sam Wicks approached six classmates with his dream; supplement coral reef with a Man Made material. These new habitats could be used to house a great number of species of sea life in areas most distressed by declining Reef health. Since his proposal, Coralink has been working tirelessly to spread the word and their idea to solve global Coral Reef decline. Product/Service – Coralink is a self-proclaimed for-profit social venture that makes Coral Reef out of a non-corrosive metal called Monel. The firm, acting as a general contractor, oversees the marketing of these manmade structures, as well as their sale – sourcing of Monel – construction of the Coral Habitat units – and installation of the finished product. Once installed, the product will provide new substrates for coral to grow on, a new environment for marine organisms to return to, and a tool that can increase fishery yields, recreational diving activity, and the prevention of trawling. Why Coralink is unique – Coralinkpartners with federal and local governments, non-profit as well as for-profit organizations, and individuals to raise funds for the Man Made Coral Reef.Coralink‟s target customers are the Tourism Business Community, the Hospitality Industry, Fisherman Industry, and Individuals (particularly tourists visiting) located incoastal communities. Although Coralink is a for-profit company – it seeks to supply Reef Structures globally for an affordable price. The Company‟s goal is not just to make money, but to create sustainable social, environmental, and economic value for every community in which it operates. Economic Sustainability– Coralink is committed to offering its services globally. One might think that this idea has an expiration date. However, given the global declining of coral reef health, the need and desire to recreate these habitats will not go away. This will ensure a steady market for many generations to come. Additionally, since Coralink is committed to being involved in every aspect of the product cycle, they will work with local community members providing jobs for marketing, sales, construction, delivery, installation, and maintenance tasks. Social Sustainability – Fisherman and communities depend on the food that comes from these Coral Reef habitats. Many people will lose jobs and see their food resources constrained due to the decline in coral populations. Providing a solution to the problem is going to benefit them economically and socially. CoralinkArtificial Reef will ensure food supply, economic stability for the communities which depend on Reef for food, and protection against storm surges for communities located closest to the shore. Environmental Sustainability– Coralink is ensuring natural habitats for many ocean species as well as protecting the shore front from storm wreckage.Monel, the metal used in constructing Coralink Artificial Reef, will not break down nor degrade. So it will literally be in place forever - without polluting the environment it is tasked with protecting and enhancing.
  4. 4. 3 2. Business Description: 2.1. Problem/Opportunity: Coral Reef Decline:Coral Reef decline is rapid and concerning. Estimates vary on the exact number (as do definitions of what to consider threatened), but the scientific and environmental management community is in agreement that a majority of Reefs can be classified as “threatened”. As of this writing, 25% of Coral Reefs are damaged beyond repair and 2/3rds are under serious threat[i]. The most recent global report suggests 75% of global reefs are threatened either locally or globally [ii]. Threats to Reef Health Include (but not limited to) – 1) Climate Change – Coral require specific conditions to survive and grow at optimal levels.Water temperature should remain near 21°; changes of a few degrees can have catastrophic affects. Indeed, what research shows is that as water temperatures increase (due in large part to increases in anthropogenic carbon emissions) coral is forced to „spit-out‟ much needed algae, resulting in a lack of nutrient production, energy availability, and a lowered fitness. Climate change has led to a number of documented Coral bleaching events, which can lead to the death of entire Reef systems. 2) Ocean Acidification – related to climate change, acidification also results due to an increase in atmospheric carbon dioxide, concentrations which continue to increase. The carbon dioxide is naturally exchanged with the ocean, leading to a) lower pH levels and increased acidification and b) a shallower calcium carbonate composition depth. Both of these affects lead to the inability of Coral to grow and produce durable skeletons, ultimately resulting in decreased fitness, less dense Reefs, a lower competitive advantage, and a decline in available habitat for a number of Reefassociated species. 3) Harmful Practices – Coral Reefs are routinely exploited through illegal activity. Practices,such as cyanide fishing for aquarium fish, are poisoning Coral by dynamite fishing. This literally blows the Reef apart. Un-educated tourists, unknowingly, stand on or kick fragile Coral as they swim (breaking off large chunks of Reef). Loss of Coral Reefs: Declining Coral Reefs have many negative consequences both socially and environmentally (See Following): Environmental Issues Include (but not limited to) – Loss of entire ecosystems and loss of global biodiversity. Although Reefs cover less than 1% of the ocean floor, they are home to 25% of all marine organisms. Therefore, Coral Reef degradation will result in extreme habitat destruction. Social Issues Include (but not limited to) – Loss of “storm buffers”. Coastal Reefs are able to absorb up to 90% of wave energy [iii]. An increase in coastal erosion and destruction to other
  5. 5. 4 coastal ecosystems, such as grass beds and mangroves, are massive risks.Coral Reefs attract visitors to developing nations who want to snorkel, fish, and scuba dive. Some estimates say the total value of Coral related tourism and recreation is over $9 billion dollars [iv].Fishing that takes place on Coral Reefs will come to a halt if the Reefs no longer exist. Overfishing can result in a loss of over US$1 billion[v] and decreasedfood supplies for coastal people. This would be catastrophic since over 30 million people depend on Coral for income and food[vi]. Opportunity: Coralink will focus on Artificial Reefs made primarily for ocean use. Manmade structures, designed to fill the role that destroyed Reefs used to play, can provide shelter and protection for a number of economically and ecologically important fish species. These structures will be primarily designed by Coralink. Artificial Reefs have the capability to attract a variety of marine life. Coralink estimates that it will take no longer than three years for plant life and fish communities to inhabit the Artificial Coral. 2.2. Coralink: Core Product and Services: Product –Coralink will produce a high quality Artificial Coral Reef of one standard make and model. Service - 1) Coralink will ship the product after manufacturing is complete: 2) and work with local partners to install the finished Man Made Coral Reef. Detailed Description of Product - There is no „one-size-fits-all‟ model when it comes to the success of Man Made Coral Reef. Uncontrollable elements such as storms and climate can dramatically affect whether or not an Artificial Reef will succeed. Ultimately, the success of the industry relies in the long term viability of the structures it produces. While it is possible to design something that will theoretically attract a number of marine species, variables such as currents – water nutrition – and ocean acidity determine whether or not marine life will come to the Reef. The most common materials used in Reef construction include concrete, rocks, offshore platforms, tires, plastics, sunken vessels, trees, steel, and rope/netting. Coralinkwill provide its services using Monel, a man-made alloy resistant to corrosion and acidification. Monel is a material often used in ship construction. Though Monel can be expensive and is difficult to work with, its longevity will be useful in harsh oceanic conditions. Research has shown Reef productivity is dependent upon large surface area and a wide range of textures and shapes. In order to have success and attract the greatest amount of marine organisms, Artificial Reefs should mimic natural structures. By modeling its product after naturally occurring reefs, Coralink will be able to provide shelter – refuge – and stability similar to that found in nature, thereby attracting more marine organisms.
  6. 6. 5 Design – Coralink‟s initial design will be standard and undifferentiated (Exceptions: a] Produced with Monel - which no one is using for their structures on a large scale basis, and b] Size and Weight may vary depending on water depth). Therefore, during the initial months of startup, Coralink will not charge for design (initial design is a sunk cost for the first Artificial Reef). Detailed Description of Service - Coralink, along with production of Artificial Reef, will offer full scale contracting services. Meaning: 1) Coralink will produce the Reef in its own warehouse; 2) Ship (by land or sea) the finished product; and 3) Install the Artificial Reef. 2) Shipping - Coralink will initially contract with rail, trucking companies, and oceanic shipping companies to help deliver the product. In the long run, Coralink‟s desire is to own its own transportation vehicles and staff drivers, captains, etc… Coralink will collect a small fee for managing and contracting the transportation. Shipping jobs will be bid on and handled 100% by Coralink. The customer will not have to handle this part. 3) Installation - Coralink will oversee transportation from factory to on site delivery. Once the Artificial Reef is dropped into place, Coralink staff Underwater Welders and Project Manager will ensure its correct placement. If there are alterations that need to be made on site, Coralink Underwater Welders will perform it in place. Mission Statement: To provide the communities that rely on Coral Aqua-habitats with safe environmentally sustainable Man Made Coral Reef that will ensure the livelihood for which they so heavily depend. We strive to be the leader in Artificial Coral Reef production in all Coral Reef markets globally. We want to provide our employees with a happy and healthy environment that inspires them to make employment with Coralinktheir career choice. Coralink is an Equal Opportunity Employer; all persons shall have the opportunity to be considered for employment without regard to their race, color, religion, national origin, ancestry, citizenship status, age, disability, sex, sexual orientation, veteran status or any other characteristic protected by applicable federal, state or local laws. Vision Statement: Coralink seeks to serve Coral Reef Communities by offering quality environmentally sustainable Man Made Coral Reef. We design, produce, deliver, and install our Artificial Coral that will preserve and enhance tourist, fisherman, and overall local community way of life. Tagline: Changing Lives while Improving the Environment! Core Competency: By performing the four key functions required in replacing Natural Coral Reef, Designing - Producing - Shipping - and Installation, Coralink offers what no other firm can:We take care of the entire process from top to bottom simultaneously offering a superior construction material that will last forever, while acting as Manufacturer and Project Manager.
  7. 7. 6 Competitive Advantage: Coralink has a unique team of organizationally gifted leaders. Through careful planning and precision execution, Coralink can move quicker than competitors to solve Coral Reef dilemmas correctly. Further, by using superior materials, we offer what our competitors cannot: Artificial Reef that last many lifetimes without polluting the ocean. Entity/Offering/and Ten Year Plan: Coralink will first file as an LLC in the State of Florida with the plan of expanding globally to every major Coral Reef region. The long term Goal for Coralink is to either list on the public stock exchange in ten years or less, or sell right out to a private equity firm. Coralink‟s corporate office will be located on the Florida Coast (Gulf of Mexico). 2.3. Industry and Market Analysis: Industry Breakdown:As an industry, artificial Coral Reefs can be broken into two sections: 1) Artificial Reefs for aquarium use, and 2) Artificial Reefs for ocean use. The creation of Reefs is pursued by private companies, NGOs, and government industries alike. Since Reefs grow throughout the tropics, the industry is truly global, which means that there is no cap on how large it can become. The current industry has roots in a number of coastal states (mostly in the southeast U.S.), as well as Australia, the United Kingdom, and countries around the Red Sea. Unlike any time in human history, Coral Reefs are declining at a startling rate, threatening both social and environmental success. This has placed Artificial Reef construction into a new position; no longer is the process just to increase economic yields, but to make sure they do not disappear entirely. As Reefs face new challenges and their degradation continues, more opportunity will arise for Artificial Reef construction. Market: The Barrier Reef is the largest of the Corals which extends for over 1,500 miles off the coast of Australia. There are also large amounts of coral in the Middle East and the Caribbean. The oil rich Saudi Arabia is likely to be a future target market because of its desire to increase tourism and its reputation for extravagant spending. Other regions such as Australia or Mexico might purchase the product based on a desire to promote environmental sustainability or pressure from the neighboring United States (in the case of Mexico). Regardless, there is a large market out there for this product. Considering that the global economy is expanding as it moves out of recession, governments will be in a good position to make such investments. Coralink’s Initial Market: Florida/Gulf of Mexico USA (See Previous).
  8. 8. 7 3. Competitive Analysis: Major Competitors: Currently there are several competitors in the Artificial Coral Reef industry. Unfortunately there is no clear data showing the market share owned by these organizations, but it is clear that these organizations work together with multiple partners such as: local governments, NGOs, corporations, and individuals to build - restore - and maintain Coral Reefs. For-Profit Competitors x 1: Walter Marine Reefmaker (WMR) is the largest private reef builder in the United States. Their reefs are known for having a natural substrate, complexity, durability, size, and wave attenuation. With their reef system they have constructed a habitat for water species, increased wave attenuation, improved fishery management, and formed barriers to protect endangered habitats. WMR has recently added a GPS system to monitor the position of their Reefs underwater to arrange the grouping in any desired design and help locate their reefs in the event their customers cannot locate them on their own. WMR has also created four patents to protect their reef designs from competitors[xii]. Not-for-Profit Competitors x 2: (1) Coral Reef Conservation Program (CRCP) supports effective management and sound science to preserve, sustain, and restore valuable coral reef ecosystems for future generations. The National Oceanic and Atmospheric Administration (NOAA) Coral Reef Conservation Program (CRCP) is a partnership between the NOAA Line Offices that work on coral reef issues. The CRCP brings together expertise from across NOAA for a multidisciplinary approach to manage and understand coral reef ecosystems. Specifically, CRCP works with NOAA's Coral Reef Information System (CoRIS), a web-based information portal that provides access to coral reef mapping, monitoring, assessment, research, modeling, outreach, and education in the United States. The U.S. government is a main sponsor of CRCP [xv]. (2) The Global Coral Reef Alliance (GCRA) works alongside volunteer scientists - divers environmentalists - as well as other individuals and organizations committed to coral reef preservation. Their primary focus is on coral reef restoration. However, they are focused on marine problems caused by global climate change as well as environmental stress and pollution. GCRA uses solar panels to grow large limestone structures in the sea, which facilitate the growth of corals and provide habitat for fish and other coral reef species. This method has been proven to be sustainable, environmentally safe, and economically and biologically feasible [xiii]. Non-government Organization (NGO) Competitors x 2: (1) The Coral Reef Alliance (CORAL) is an international organization that works together with marine protected area managers, marine tourism operators, and local residents to protect the planet‟s coral reefs. Their main goal is to reduce local reef threats to make the ecosystem more resistant to large-scale
  9. 9. 8 global threats. To support local projects CORAL provides their partners with micro-grants to support their efforts in preserving and protecting the coral reefs [xiv]. (2) The Reef Ball Foundation is an international environmental NGO and a 501(c) 3 not-forprofit that works toward rehabilitating the marine reefs and to protect the natural reef systems using artificial reef technologies. Reef Balls are artificial reef modules placed in the ocean to form reef habitat. Their projects consist of designing artificial reefs, coral propagation as well as planting systems, estuary restoration, red mangrove plantings, oyster reef restoration, and erosion control [xvi]. Barriers to Entry: The greatest barrier to entry is the cost to create and install the Artificial Coral Reefs. Several organizations start-up as not-for-profit or NGOs due to the larger financial support imparted by government agencies, non-government agencies, and private firms to maintain their business operations. There is also an extensive amount of research and development involved. These organizations are not only restoring the habitat, they are also attempting to resolve the root of this ecological problem. The environmental sustainability of Coral Reefs relies on the minimal impact of climate changes, fishing, and land based pollution. To address these issues the world‟s population needs to further reduce greenhouse gases (primarily carbon dioxide). Additionally, any plan to bring back the Coral will heavily depend on reducing the negative fishing impact, managing waste, and improving the watershed for water quality. To surpass these barriers, strong relationships must be built with partners in order to communicate the importance of saving natural habitats. Competitor Threats: The biggest threat Coralink will face from its competitors will be establishing a reputation within the Coral Reef conservation community since organizations like WMR, CORAL, CRCP, GCRA, and Reef Ball have been in existence for over a decade and have established themselves amongst global partners. Also, a large portion of their funding comes from government assistance. Other Barriers: Private Artificial Reef building is only legal in the state of Alabama and the Florida Panhandle. This forces companies to install their Artificial Coral Reefs in the Gulf of Mexico and off the coast of Florida. Competitors Response: InitiallyNGO‟s and non-profit companiesmay be skeptical of Coralink‟s mission. Over time, Coralink‟s actions should prove that they intend on following through with the company mission statement. Once this becomes apparent, Coralink expects to gain lasting relationships with these organizations.
  10. 10. 9 For-profit companies will likely attempt to respond to Coralink‟s entry into the market: A) by attempting to discredit the new startup; or B) by experimenting with similar building materials that can be used in place of concrete and limestone. Coralink‟s response: Coralink encourages partnerships with all current NGO‟s and not-for-profit companies. Additionally, Coralink encourages other companies to seek advanced materials that will improve the environment as well as preserve it for many generations to come. Analysis:Coralink has several obstacles to overcome in order to succeed in the artificial coral reef market. To its advantage, there are not a lot of for-profit organizations in this market. With Coralink Artificial Reefs, consumers will be introduced to a new product in terms of the superior material Monel. Most competitors use concrete to build their artificial Coral Reefs. However, tests have proved that water species are not as accepting to this material. With the Monel based Coral Reef model, Coralink will bring a new and improved product to consumers and most importantly to the ocean. 4. Marketing Strategy: Customers: The market for artificial coral reefs is Global. The ecological importance of the reefs is undeniable, as is the impact that their decline has had. The geographic areas that have cultures most impacted by their local coral reefs are in the Caribbean, Southeast Asia, East Africa, and the Middle East. That being said, CoraLink, sees Florida Gulf of Mexico as its first and most promising market for launch. The CoraLink customer, in the broadest terms, will be someone who has a vested interest in the health of their local beaches and marine-life. In the Florida location, CoraLink will appeal to four types of customers including: 1) Tourist Industries; 2) Hospitality Industry; 3) Fisherman Industry; 4) and individual tourists. 1) Tourist Industries – Including (but not limited to) dive shops, fishing trips, and other companies with a vested interest in the area in which they live and do business. 2) Coastal Hospitality Businesses – such as resorts, hotels, and coastal developments. Both Tourist and Hospitality Industries depend heavily on tourism (both eco-tourists and traditional). Snorkelers may not chose a location if the Coral Reef declines too much, therefore these companies will have great interest in preserving and/or creating new Reef. Lower tourism affects both Hospitality and Tourist based businesses.
  11. 11. 10 3) Local Fisherman – Fisherman depend heavily on the ocean to sustain their economic wellbeing. With declining Coral Reef, fishermen's livelihoods are threatened with declining fish populations. Part of this reason is due to overfishing. The other side of the story is declining Coral Reef habitats. 4) Tourists and Individuals – tourists and individuals who are visiting Coral Reef based communities often are attracted to the Coral and/or what the Coral provides (in the way of vibrant fish and/or beautiful views). These potential customers vary greatly in buying power and interest, and thus Coralink will adjust the firm marketing mix accordingly for each category. Why Will They Buy: 1) Tourismbased companies - Tourist based firms will purchase Coralink Artificial Reefs for a variety of reasons. Primarily, the Reefs will provide companies the opportunity to advertise on the reefs and then use their reef contribution as a highlight for a sustainability PR campaign. Companies who have a large consumer base in coastal visitors, will see the most return on their exposure. Reef purchases can be equated to ocean sponsorship – the companies would be investing in the continued coastal health of a community and can market this contribution accordingly. Coastal businesses such as scuba diving companies have an even more direct concern for preserving the underwater ecosystems and would benefit from purchasing private Reefs to attract certain types of marine wildlife. 2) Coastal Hospitality Businesses: Local resorts and hotels have a direct interest in sustained tourist revenue and physical protection of Reef communities during coastal storms. These businesses will also see increased revenue from the ability to market their personalized Reefs and support of the local marine community. These businesses can purchase entire personalized Reef units or contribute to larger Reef installations. Coralink will offer engraved advertising on the Reef Structure with which local Hospitality and other Tourist based firms can take advantage. This should increase revenues as well as preserve community and environment. 3) Fishermen: Fishermen have long been suffering from decreased fishing season yields. Artificial Reefs have been proven to increase fish populations where installed, and thus directly correlate with fishermen income. Red snapper fish populations in particular have proven to increase dramatically after installation of Artificial Reef units. For this reason, fishermen would be eager to purchase Artificial Reef units to attract fish and increase income while also preserving the environment (net positive social impact). 4) Tourists and Individuals: Individuals who have interest in the local marine community, both tourist and local residents, will be able to purchase “a piece of the ocean” and sponsor a Reef installation. In exchange for their support they will be allowed to have a short message engraved
  12. 12. 11 on the Reef, which will serve as a lasting memento of their contribution. These customers will fund the Reef installations as a way to contribute to the coastal sustainability efforts and receive the unique opportunity to have their gift memorialized. This method appeals to the customer‟s social conscience and sense of nostalgia. As seen above, all four target customers have economic, environmental, and socially sustainable motivations. This completes a trifecta of needs: 1) The need to make money now and in the long run (sustainable profits); 2) The need to preserve and/or create a healthy sustainable environment in a way that will not compromise future generations; 3) and the need to ensure the social wellbeing of one's community far into the future. Future Target Customers: Local Governments - Local governments have a vested interest in all areas of coastal health. Reefs provide increased protection during coastal storms, increased tourist revenue, and increased revenue for tradespeople such as fishermen. In areas such as public beaches, local governments could install Reef structures to provide protection from large wave surges, increase marine life, and create increased tourist opportunities for divers and sightseers. Coralink will not immediately target the government. However, once the business model is proven - Coralink will attempt to convince local governments of the economic, environmental, and social needs for Artificial Coral Reef. Coralink, being the only Monel based Coral Reef manufacturer, will hope to attain government contracts first in the U.S. and then in countries globally. Marketing Mix: Due to the nature of the Monel material, there will not be a lot of flexibility in design initially. In the future, Coralink will add customization to the mix. Taking this into consideration: Coralink will offer one standard Coral Reef (varying only in weight and depending on water depth). The unique product design and sales method of the Cora Link Reef creates a fairly individualized pricing scheme. Individuals and Tourist - They will be able to contribute to public Reef installment for as little as $35. There will be a range of packages from $35 - $350 for the individual tourist, each package targeted at a different kind of the customer. The $35 package includes an authentication certificate, Reef map, and the addition of the buyer‟s initials on the Reef. The $350 “honeymoon package” lets couples have their initials and anniversary date engraved in a heart on the Reef, and includes a couple‟s cruise to the Reef location. These funds will be put towards discounting the cost for local companies to install Reefs. These packages will be placed in local tourist shops and advertised through magazines and catalogues making them largely available to visitors. Tourist Based Business and Hospitality Industry - This model is different since they will be purchasing the entire Reef for personal economic gain. Depending on Reef size and location the price will be $50,000 dollars on up (per unit). The Reefs are intended to maintain and/or
  13. 13. 12 increase tourism in conjunction with the above pricing/marketing proposal (Tourists and other Individuals). For Fishermen - This model is different since they could be purchasing the entire Reef for personal economic gain. Depending on Reef size and location the price will be $50,000 dollars on up (per unit). The Reefs are intended to increase fish populations in certain locations to increase fishermen‟s yields while maintaining marine biodiversity; thus justifying the price. These sales will be advertised directly to local fishermen. Stipulations: Ownership – Although Coralink will not prohibit individual companies or groups from purchasing Coralink Man Made Reef, it is the firms desire that all four customer segments will combine to buy clusters of three (3). Buying in clusters of three increases their effectiveness as well as circumvents any claim to ownership. Coralink believes Coral Reef benefits should be shared with everyone. The firm will work with local governments to ensure that no one group has complete ownership of a particular Ocean area and/or Reef. Custom Reefs – Once Coralink has proved financial viability, the firm will offer Custom Reefs to Larger Businesses. Big businesses can create custom Reefs that lend themselves to unique marketing schemes, or for several smaller businesses to join together and create beautiful underwater landscapes ideal for unique scuba diving experiences. These large sales will be presented directly to local businesses. Shared Costs – Businesses are encouraged to partner together to make the purchase more affordable. Buying in bulk as well as ensuring no direct ownership assignment. Delivery and Installation: Delivery charge and Installation costs are variable and highly dependent on Coralink‟s shipping partners. Coralink will attempt to keep total Delivery and Installation costs at $2,000 dollars. If a customer wants to handle Shipping and Installation, Coralink will facilitate the customer‟s preference.
  14. 14. 13 5. Operational Issues: Sourcing, Production, and Supply Chain: Sourcing Materials – Coralink will produce Artificial Reefs out of Monel Alloy, a nickel based alloy that is resistant to corrosion, acids and fire (including Salt water erosion). In order to do this Coralink will source Monel from American Special Metals (based close Coralink‟scorporate office in Florida), a global supplier of refractory alloys. American Special Metals is located in Florida and does business globally. All materials will be stored at the corporate headquarters in a connected manufacturing/storage facility. Manufacturing – Coralink will require tools for welding – cutting – and shaping. Additionally, a team of Welders will be staffedto mold and weldMonel into the desired shapes used for Artificial Reefs. Welders will be certified for under water welding as well as on land. All manufacturing will be performed at the corporate headquarters in a connected manufacturing facility. Transportation and Installation – The firm will require trucks to transport the finished Reefs to the loading docks, where they will be boarded onto ships and set in place. In the startup phase, this will be coordinated through partnerships by contracting out flatbed trucks and ships with cranes attached for installation. However, whether contracting out shipping/delivery or in housing this part of the job, Coralink will always have at least one Project Manager on sight as well as at least one Underwater welder to ensure precise placement. Having Coralink Underwater Welders will help in the unlikely event that a deliverable Artificial Reef is damaged during shipping and/or installation. Design Specifications (individual unit): Four Sided Pyramid = 7‟ x 10‟ base, tapering up to a 1‟ x 1‟ ½‟‟ top. The height = 9‟ and Weight = approximately 3 tones. Design –Coralink will design its Artificial Coral Reef made out of Monel. The design, initially, will be standard (only differing in size and weight). Size and weight will depend on water depth. Generally, Coralink‟s Artificial Reef will be built in the shape of a four sided pyramid. Base Dimensions = Measuring 7 Feet by 10 Feet, from the base, the four walls will taper up to a flat top piece. Top Dimensions = 1 foot by 1 ½ feet. Height = 9 feet high. Weight = 3 tons (6,000 pounds). The weight must be substantial enough to resist a storm surge, as well as break up the surge.
  15. 15. 14 Location:Coralink will incorporate as an Limited Liability Company ( LLC) and locate in Florida on the eastern coast (Gulf of Mexico). The company will require a warehouse with adequate space to contain the proper machinery needed to weld the artificial reefs, in house, and have them easily transported onto ships that will take them to their location of need. The space will be configured as a metal works factory with a loading garage, as well as front office space. The hope is to eventually open a second location on the coast of Florida, as 75% of the coral reefs in the Caribbean are in danger including all those in Florida, Jamaica, and Haiti. Other Resources and Logistics: Coralink will require trucks/drivers, underwater welders (as well as the machinery needed to weld Monel), marine biologists, and also front office employees
  16. 16. 15 to deal with day-to-day business operations. Coralink will contract with shipping companies that will be able to transport the artificial reefs to their designated locations. In the startup phase, Coralink will only bring on two Underwater Welders (full time). All other jobs will be performed by the seven founders until the company turns a profit (projected to be at the end of year two). As stated previously, shipping/installation trucks and ships will be contracted out to local partners in Florida. Rent/Lease: Coralink will lease office, warehouse, and manufacturing facilities during early stages. Quality Control: In order to assure product quality, materials used in building Coralink Reefs will only be sourced from reputable suppliers. Additionally, Coralink will have a Production Manager in the manufacturing facility at all phases of production to ensure quality. Environmental Provisions and Prevention: Coralink will strive to build its Artificial Reef in an environmentally friendly fashion. Plans include building a self-contained electrical micro-grid out of photovoltaic in order to supply the company its energy needs. New Product Development: Coralink will continuously source less expensive and more environmentally friendly construction materials. One such material that Coralink will experiment with is Roman Concrete. This substance lasts many lifetimes and costs less than Monel to produce (without the environmental hazard traditional concrete entails). However, there is no current infrastructure for such a product. Coralink will look into manufacturers for Roman Concrete in other areas of the world. Payment Options (How will we accept payment?): Coralink will accept all major credit cards as well as cash purchases, and corporate accounts. Fifty percent of the total sale will be due upfront for material and labor costs ($50,000 * .5 = $25,000). $50,000 dollars is customer(s) price for an individual unit. The remaining purchase price will be due upon installation. Cycle Time:Coralink estimates total cycle time to equal two weeks or less. Cycle time will be defined: Customer order to complete installation. Pay Structure of Employees: Initially, other than founders (who will take no pay in the start-up phase), the only Coralink employees will be two Under Water Welders. Each will be paid a salary of $75,000 dollars per year (total salary cost in start-up years = $150,000). Once the company is profitable, the founders will accept salaries in proportion to net income. Each founder has an equal share in the company and will command an equal salary proportionate to ownership.
  17. 17. 16 Training Description (Welders must be certified): All Underwater Welders must be certified in diving and welding. As Coralink becomes more and more profitable, it will hire more employees. Employees will be required to have undergraduate degrees or higher (position dependent – see below Human Resources). Type of Building – Zoning and Size of Space: Coralink will require a commercial building. The building will be 2,500 square feet. 2,000 of that will be dedicated manufacturing and warehousing Monel. 500 will be needed for office space Office Hours of Operation: Hours of operation will be Monday – Friday 7am - 5pm 6. Human Resource Requirement: 6.1. Management Team: Team Summary –Coralink senior management team is made up of seven founders: Sam Wicks is the CEO; ConnieCacaceis the Marketing Directors; Marlin Martesis the Human Resource Director and Design Consultant; Carolina Martinez is the Company Market Research Director; John McConnell is the Company Project Manager and Oversight Director; Adam Mielnik is the CEO; and Keith Reith is the Production Manager. Sam Wicks - CompanyCEO: At 21 years old, Mr. Wicks has spent a lot of time around Coral Reefs. He has performed research on Coral Reef health and ecological function in Honduras, as well as monitored fish and invertebrate biomass on reefs throughout the Caribbean. Mr. Wicks studies environmental science at Fordham University and provides his team with experience in research, data-collecting, and organization. At Coralink, Mr.Wicks‟s insight in marine ecosystems allows the company to constantly remain educated about the problems that affect marine life in different environments. In turn,Coralink is always in search of simple changes that will provide easy solutions to problems associated with the introduction of Artificial Reefs. Connie Cacace - Company Marketing Director: Connie Cacace is 20 years old. She studies marketing, communications, and sustainable business at Fordham University. Ms. Cacace has worked with Target and Limited Brands to develop comprehensive marketing objectives, as well as the subsequent integrated communications plans. Ms. Cacace's experience has helped her develop the skills necessary to conceptualize a successful campaign that is both effective and within budget. She is inspired by non-traditional marketing techniques, particularly those that work towards a triple bottom line. Her passion lies in sustainable business. Working with Coralink will be an exciting next step as she develops and executes a marketing campaign to raise awareness of the environmental concerns at hand, as well as promote the unique opportunity to purchase a part of the ocean.
  18. 18. 17 Marlin Martes–Human Resources Director and Design Consultant: Marlin Martes is 21 years old and currently seeking a bachelor‟s degree in Environmental Policy with a concentration in Environmental Design at Fordham University. Ms.Martes is interested in helping the environment through rigorous policy initiatives and design approaches that will help preserve habitats all throughout the United States. She has worked with the New York City Department of Environmental Protection as an ambassador surveying water quality within the five boroughs of the city. Ms. Martes has also worked with WXTV Univision conducting viewer demographic research and competitor website design analysis. Through coursework and work experience, Ms. Martes has attained skills in site analysis, data analysis, and landscape architectural design. At Coralink, Ms. Martes is in charge of constantly updating the company website with current interface designs that will attract clientele, as well as to ensure ease of use. Additionally, she is in charge of all Human Resource oversight. Carolina Martinez - Company Market Research Director: She is a 22 year old accounting major with a concentration in finance at Fordham University. Her career began at Ernst & Young as a client server doing audit work. Through her work experience she has gained skills in research analysis, data management, statistics, and proficiency in excel and PowerPoint. Research skills allow Ms. Martinez to determine and forecast market trends in the Coral Reef industry. At Coralink, Ms. Martinez is responsible for seeking opportunities to gain key stakeholder insights. This information is then used to help the marketing and operations team provide better quality products and provide a better service to the end users. The competitive analysis developed allows the Coralinkteam to find new ways to revamp corporate value. John McConnell - Company Project Manager and Oversight Director: He is a 31 year old Marine Corp Infantry Squad Leader who has lead Marines in some of the most complicated and extreme conditions (both in Iraq and Afghanistan). His background and skill set is in strategic planning, project management, operations, and logistics. Mr. McConnell‟s comparative advantage is organizational leadership compounded with a tireless work ethic. Though, Mr. McConnell has an extensive background in Marine training, his interests to improve the environment and his tactfulness in dealing with extreme circumstances,reflects a unique opportunity for Coralink. At Coralink, Mr.McConnell serves as the intermediary between the management team and the research and development team. Through constant communication between the two areas of the company Mr. McConnell ensures that the Coralink team remains on task at all times for each project. Adam Mielnik - Company Chief Financial Officer (CFO): He is a former investment banker with several years of experience in the financial services industry. His background is in equity market analysis and risk/portfolio management. He has extensive experience analyzing financial statements and coming up with accurate financial projections. Adam has also worked with the
  19. 19. 18 non-profit, Concourse Group, where he helped struggling credit unions manage their participation loans. His financial experience, paired with his desire to do good in the world, make him a great fit for Coralink. At Coralink, Adam provides financial insight for the company and is instrumental in sourcing funding as well as developing partnerships with stakeholders. Keith Reith: Company Production Manager: He is a Business Administration Graduated from Fordham University. A previously self-employed entrepreneur, he has a profound knowledge of the start-up culture. At Coralink, Mr. Reith will be in charge of production in the Florida Manufacturing facility. His main job is to ensure timely construction of each Artificial Reef, as well as ensure its quality. Mr. Reith will work directly with Engineers and the company Project Manager – Oversight Director to accomplish these goals. 6.2. Personnel Requirements: Personnel:In the short-run, or start-up phase, Coralink‟s founders (there duties outlined above) will perform all necessary functions with a few exceptions: 1) Two Under Water Welders will be hired for full time employment immediately; and 2) All Engineering, Marine Biologists, Scientists, Environmental Specialists, and/or Architects will be hired on contract on an as needed basis (outlined costs in Financial Section of Business Plan). In the long-run, Coralink will need the following personnel in order to successfully run the sustainable business venture of Artificial Reef fabrication: Financial and Clerical: 1) Bookkeeper – filing, payroll, etc… 2) Administrative Assistant – Secretary that will manage incoming calls, filing, client meetings, and schedules for employees & volunteers. Research & Development:1) Environmental Manager – Responsible for the overall strategic direction and management of the environmental engineering services including: developing and penetrating market segments through service offerings, client management and business development, profit/loss management, personnel resource management, and technical management oversight. This position will oversee an advanced environmental engineering department and will need to be able to manage/direct/consult/mentor a strong environmental engineering and consulting staff. Additionally, this person needs to be knowledgeable in the area of waste management and Environmental Impact assessment + mitigation. Finally, the individualmust constantlyup-date information concerning federal and state legislation regarding environmental issues – especially marine ecosystems. 2) An Environmental Chemist – Environmental chemists conduct thorough and extensive research on the impact of human activity in relation to the air, soil and water. Their duties include gathering and testing soil samples, designing and revamping production systems that are more environmentally friendly, and developing strategies for efficient waste disposal. By investigating the source/transport/and consequences of chemicals released into the natural
  20. 20. 19 environment, environmental chemists help create programs and equipment that conserve – repair – and protect the environment from further damage. Consulting and guidance from individuals in this area is needed to understand the impacts and relationships of materials dispersed in the marine ecosystems where the Artificial Coral Reefs will be placed. 3) Marine Biologists (Preferably 2) – To study the origins, behavior, diseases, genetics, and life processes of animals and wildlife of the marine environment. These individuals may specialize in wildlife research and management, including the collection and analysis of biological data to determine the environmental effects of present and potential use of land and water areas. The expertise of these individuals will help address the needs of marine ecosystems. 4) Mechanical Engineer – Designs mechanical and electromechanical products and systems by developing and testing specifications and methods. This individual also develops mechanical products by studying customer requirements as well as researching and testing manufacturing and assembly methods and materials. Additionally, this individual will design and modify equipment for fabricating, building, assembling, and installing components. The Mechanical Engineer will ensure system and product quality by designing testing methods; testing finishedproduct and system capabilities; confirming fabrication, assembly; and installation processes. Duties include (but not limited to)– preparing product reports by collecting, analyzing, and summarizing information and trends. Coralink needs this individual to help build the product and ensure quality and durability. Design: 1) Architectural Designer – Design the structure and make sure it fits in aesthetically with the environment in which it will be placed. 2) Interface Designer (Website) – Necessary for advertising and website creation. Underwater Welders (In start-up, Coralink will hire only two Underwater Welders): Underwater Welders are required to demonstrate a combination of welding skills on dry land and commercial diving qualifications. Underwater Welders (or Offshore Welders) are expected to have the ability to manage heavy equipment while performing in hazardous work environments. Underwater Welders are required to work with different procedures and types of equipment. Welder-Divers are required to perform various duties that include fitting and rigging, inspection and non-destructive testing, drafting, underwater photography and underwater cutting. Some Underwater Divers are expected to render assistance to Project Managers in the field of project planning. Welders are expected to have exceptional communication skills apart from interpersonal skills that will help them work well with the remainder of the team. These individuals are an integral component to CoraLink as they will be in charge of welding in Coralinks manufacturing warehouse as well as under water (when needed). Additionally, at least one Welder (Lead Welder) will be responsible for reviewing the proper installation of the Artificial Reefs.
  21. 21. 20 Production Manager: A Production Manager is involved with the planning, coordination and control of manufacturing processes. They ensure that goods and services are produced efficiently and that the correct amount is produced at the right cost and level of quality. The tasks of a Production Manager typically includes overseeing the production process, drawing up a production schedule, ensuring that the production is cost effective, and making sure that products are produced on time and are of good quality. Photographer:1) Underwater photography - To help implement an effective public relations and exhaustive marketing campaign. Volunteers/Community Outreach: 1) Coralink will need the help of locals in order to keep track of the marine life within the area. These individuals will help the firm understand the needs of the community and can give insight as to whether the Artificial Reefs are working, or if they observe any changes in the area in terms of water quality. 2) This can include surveying particular areas to aid in research for the Chemists and Biologists. Outside Consulting: In the event Coralink needs to gain knowledge and connections to individuals in the Scuba Diving industry. Additionally, there may be a need to gain connections to waste disposal plants or landfills in which to dispose of existing waste. Staff Education: Most staff must attain Undergraduate Degree or comparable work experience (Preferably Bachelor‟s Degree – Maters Degree encouraged). 7. Financial Projections (First Three Years): 7.1. Start-up costs:The following are Coralink‟sprojected startup costs. This includes the costs for the first six months of operation. Coralink will try to raise $410,100 dollars for Startup costs. This includes a buffer of $50,000 dollars to cover the cost of Monel in event material cost
  22. 22. 21 increase over the course of the first year. The buffer has been incorporated into the category labeled “materials and manufacturing”. Each of the seven founding members has agreed to put forth $50,000 in startup capital (50,000 * 7 = $350,000). The firm will attempt to raise the remaining $60,100, through a crowd-funding site such as Kickstarter, by using some of the marketing funds towards this goal. In the future, Coralink may seek additional funding by attempting to bring on a partner (i.e. venture capitalists, angel investor, and/or strategic partner) once a steady revenue stream is established. Note: Founders will not take money out in the startup phase. The only salaries that will be paid initially will go to two Under Water Welders at $75,000 dollars per welder (Total = $150,000). Website & IT Support 11500 Warehouse Lease 5000 Truck Rental/Partnership 5000 Ship Rental/Partnership 10000 Salaries 150000 Equipment 15000 Materials & Manufacturing 282000 Legal & Licensing 600 PR/Marketing 6000 Total 485100 7.2. Break Even Analysis: Coralink is not expecting to break even the first year, but does anticipatemaking a significant profit the second year as production costs decrease, revenue per unit increases, and unit sales increase. It is worth noting; the number of units required in order to break even decreases by 45% year over year.
  23. 23. 22 Break-even Analysis 1st Yr 2nd Yr 1.67 0.92 100000 59583 Average Per-Unit Revenue 60000 65000 Average Per-Unit Variable Cost 49500 42000 Estimated Monthly Fixed Cost 18250 12116.67 Monthly Units Breakeven Monthly Revenue Break-even Assumptions: 7.3. Profit/Loss Projections: Sales Revenue: Revenue comes from two sources: sales and crowd-funding. Coralink will charge $50,000 dollars for each artificial structure because Monel is an expensive material. It costs Coralink $47,000dollars to source and manufacture each structure which makes sets the firms margins at $3,000 dollars per structure in the first year. However, Coralinkexpects manufacturing and sourcing costs to go down over time as production increases. Coralinkattributes these cost reductions to economies of scale. It is the firms intend to market and sell these structures in groups of three because this will have a larger benefit to the marine ecosystem. Thus, each grouping of artificial reef structures totals in at $150,000 dollars. Coralink will allow for a syndicated payment structure which encourages the structures to be financed by multiple parties. Five beach resorts can pitch together $30,000 dollars each to fund the project that they might otherwise not be willing or able to fund individually. All parties involved will benefit from the collective benefits which include: a) Good press relations and b) Increased tourism in the short term. In the long term, customers can expect to see improved marine life and coral health. This shouldhave a positive result on tourism in the long term. It is expected, that fishermen and fishing companies will desire to get involved in funding the structures since the long term benefits will also include better fishing conditions. Coralink anticipates working with local governments to ensure the prevention of overfishing in areas surrounding the Artificial Reef.
  24. 24. 23 Crowd-funding Revenue: The second portion of revenue comes from crowd-funding from individuals and companies. Individuals can contribute $35 – $350 dollars in order to “own a piece of Coral”.Coralinkwill have different packages available for international tourists, newlywed couples, and families. The Company will target those who are already willing to donate to ecological initiatives “adopt a tree” initiative. Coralink will offer a more tangible product by inscribing the person‟s initials in the long lasting Monel structure, or attaching a plaque in the case of some of the more expensive packages, which they can then see for themselves if they visit the area. Anticipate revenue from crowd-funding is expected to amount to or even exceed $80,000. The amount generated from crowd-funding is expected to increase with unit sales. Additionally, Coralink will target major corporations to acquire additional funding. By inscribing a company‟s logo into the artificial coral structure, the company is making a powerful statement that will significantly improve press relations. Anticipated revenue from these corporations is expected to reach $40,000 dollars or more (in the first year – expected to increase in years to come). This is expected to increase Coralink‟s visibility among customers of the mentioned corporate sponsors. Delivery and Installation: Delivery charge and Installation costs are variable and highly dependent on Coralink‟s shipping partners. Coralink will attempt to keep total Delivery and Installation costs at $2,000 dollars. If a customer wants to handle Shipping and Installation, Coralink will facilitate the customer‟s preference. This cost has been incorporated into the category labeled “boat rental/partnership.” Profit/Loss Projections
  25. 25. 24 Revenue Artificial Reefs Sold (Monel) Total Yr 1 Total Yr 2 Total Yr 3 12 18 30 Revenue from Sale ($50k each) 600000 900000 1500000 Revenue from Crowd Funding 80000 180000 400000 Revenue from Company Sponsors 40000 90000 200000 Total Revenue 720000 1170000 2100000 Cost of Artificial Reef- Materials & Manufacturing (yr1-3: $47k, $40k, & $38k respectively) 564000 720000 1140000 Truck Rental/Partnership 10000 12000 14000 Boat Rental/Partnership 20000 24000 28000 Warehouse Lease 10000 10000 10000 Capital Equipment & Maintenance 15000 1500 1500 Website and IT Support 13000 3000 3000 PR/Marketing 20000 20000 20000 Legal & Licensing 1000 600 600 Engineer (Short Term Contract) 10000 3000 3000 Staff Salary Wages (excluding founders) 150000 180000 210000 Total Expenses 813000 974100 1430100 NET INCOME -93000 195900 669900 Expenses 7.4. Cash flow statement: Pro Forma Cash Flow
  26. 26. 25 Year 1 Year 2 Year 3 Cash Received 410100 Cash Revenue from Crowd-funding 80000 180000 400000 Cash Revenue from Company Sponsors 40000 90000 200000 Cash Sales 600000 900000 1500000 720000 1170000 2100000 1130100 1170000 2100000 Year 1 Year 2 Year 3 Cash from Receivables Subtotal Cash from Operations Additional Cash Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures
  27. 27. 26 Expenditures from Operations 798000 972600 1428600 Cash Spending 798000 972600 1428600 798000 972600 1428600 1500 1500 Bill Payments Subtotal Spent on Operations Additional Cash Spent Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets 15000 Dividends Subtotal Cash Spent 813000 974100 1430100 Net Cash Flow 317100 195900 669900 Cumulative Cash Balance 317100 513000 1182900 Note:Coralink‟s founding members will receive pay from the cumulative cash flow. Some cash may be left over as needed depending on the best interests of the company. The cash balance can also be used to forgo the need for outside capital from venture capitalists in order to accelerate expansionary plans. It can also be used to offset unforeseen costs.
  28. 28. 27 8. Sustainability Statement: Planet: Coralink has an opportunity to make a real difference in the oceans and in many marine environments. Coral and the Reefs that they create are in a crisis, under assault from a number of different factors including climate change, ocean acidification, and harmful practices. The loss of Coral and the habitats that they create will set off a chain-reaction that leads to decline throughout the entire Reef Ecosystem. Croalink‟s Artificial Reef structure will abate that problem. By mimicking Coral Reef environments, Coralink‟s product will provide shelter, refuge, and habitat for a large number of marine species. It will be a nesting ground for adults and a safe haven for otherwise vulnerable juveniles. 25 – 33% of all marine species can be found on Coral Reefs, species that, without our structures will experience the disappearance of their habitat. Additionally, through the use of Monel, Coralink‟sproduct will be long-lasting. Unlike competitors who are using steel and concrete materials that will quickly break down and decompose, Monel based structures are built to last and will not further pollute the oceans. This is not something competitors can offer confidently. It is Coralink‟s intend to provide marine habitat and the Monel based Reef supports that. People: Coral Reefs are relied upon by an incredibly large number of people; fish make up roughly 20% of consumed animal protein for 2.5 billion people (up to 50% for coastal and island populations). 97% of all fishermen can be found in developing nations. The Artificial Reefs that Coralink provides will help these people maintain their way of living. A world without fish is not an option. Through the creation of artificial structures, Coralink hopes to rejuvenate fish stocks and allow fishing to continue. Through education programs, the firm hopes to teach millions the importance of sustainable practices[xvii]. Globally, the value of Coral is estimated to be upwards of $375 billion U.S. each year (not including aesthetic value). This is money that is generated from sectors such as fishing (both commercially and recreationally), hospitality, and tourism. Divers travel the world to experience new sites and colors. Tourists are eager to snorkel on beaches full of fish. Coralink‟s Artificial Reefs will help ensure the viability of those industries. Without a Coral Reef to visit, ecotourism is expected to decline severely – affecting local dive shops, restaurants, hotels, etc. Developing nations are dependent on this huge sector for the bulk of their national economy. Coralink will help maintain that sector. Finally, Reefs protect shorelines and coastal areas. Studies show that before waves and storms make landfall, Reefs are able to absorb a majority of the energy and power that they create. This
  29. 29. 28 also reduces erosion to beaches and other environments behind the Reefs, such as mangroves and lagoons. Coralink‟s Reef Structures, in conjunction with any remaining Reef Habitat, will maintain that protection. Storms are not only expected to increase in frequency, but in ferocity as well. Shoreline protection, of which Reefs provide a multi-million dollar service, is needed now more than ever[xviii]. Profit: As a for-profit company, Coralink is interested in making money. The Monel Artificial Reef product is top-of-the-line and provides a number of advantages that competitors cannot match. As a result, the product is produced for more money and sells at a premium, yet the finished product is of higher quality and lasts indefinitely. Due to higher initial start-up costs, Coralink will operate at a loss. However, as the company brand gains popularity, it will gain a reputation as dependable, reliable, and creators of both a structurally and environmentally superior product. It is Coralink‟s overall goal to create partnerships and relationships that will cut down on costs throughout the value chain. The savings will be passed on toCoralinks customers. However, the company vows never to sacrifice quality for inferior materials or service. Long-term: Moving forward with its relationships, Coralink seeks to source Monel for less than initial startup cost of materials. Once the firm sees an increase in profits, the plan will be to buy company owned trucks as well as build an independent distribution network (independently owned and run - includes owning trucks and boats for delivery and installation). While the initial cost may be high, it will pay for itself soon enough. Coralink projects it will turn a profit in the second year and that profits will grow even further in the third. Coralink has a truly global marketplace. Coral Reefs can be found throughout the tropics and as a result, the firm seeks to sell Artificial Reef to customers around the world. 9. Exit Strategy: Exit:Coralink intends to remain private for the foreseeable future. The long term Goal for Coralink is to either list on the public stock exchange in ten years or less, or sell right out to a private equity firm. Going Public - Coralink would like to operate in multiple locations around the world. Going public may be a way to finance the expansion. Additionally, it is anticipated that the firm may have to give up equity in order to gather the funding needed to expand globally. Other Long Term Goals: The long term goal is to market to Australia because the Barrier Reef is the largest strip of coral reef in the world. Saudi Arabia is another future target because of the amount of wealth in the area as well as the increased desire of the nation to attract tourism.
  30. 30. 29 10. Sources: [i] [ii] [iii] [iv] [v] [vi] [vii],, and [viii] [ix] [x] [xi] [xii] [xiii] [xiv] [xv] [xvi] [xvii]. [xviii]