Symptum business plan comp #1


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Symptum business plan comp #1

  1. 2. Overview <ul><li>Drive System </li></ul><ul><li>Prototype </li></ul><ul><li>Market </li></ul><ul><li>Environmental Analysis </li></ul><ul><li>Operations </li></ul><ul><li>Financing </li></ul><ul><li>Exit Strategy </li></ul>
  2. 3. Brief <ul><li>Continuously Variable Transmission or CVT: </li></ul><ul><ul><li>Is a transmission in which the ratio of the rotational speeds of two shafts, as the input shaft and output shaft, can be varied continuously within a given range, providing an infinite number of possible ratios. </li></ul></ul><ul><li>Advantages over conventional transmissions </li></ul><ul><ul><li>Engine performs at a maximum efficiency </li></ul></ul><ul><ul><ul><li>Potential to create a biomechanically favorable bicycle </li></ul></ul></ul><ul><ul><li>Smooth shifting </li></ul></ul>
  3. 4. The Problem <ul><li>Current limitations </li></ul><ul><ul><li>Conventional bicycles have pre-selected gear ratios </li></ul></ul><ul><ul><ul><li>The rider is prevented from performing at optimal efficiency </li></ul></ul></ul><ul><ul><li>Conventional derailers are prone to the elements </li></ul></ul><ul><ul><ul><li>Chain slipping </li></ul></ul></ul><ul><ul><ul><li>Damage and wear caused by dirt and debris </li></ul></ul></ul><ul><ul><ul><li>Costly and time consuming repairs </li></ul></ul></ul>
  4. 5. Symptum’s Solution <ul><li>A frictional v-belt drive system with a variable diameter sheave for gear ratio control. </li></ul><ul><li>Rational </li></ul><ul><ul><li>Low production costs </li></ul></ul><ul><ul><li>Commonly used design </li></ul></ul><ul><ul><li>Mechanical simplicity </li></ul></ul><ul><ul><li>Modifying previous </li></ul></ul><ul><ul><li>success </li></ul></ul>
  5. 6. The Next Step <ul><li>Prototype Testing </li></ul><ul><ul><li>Slip conditions </li></ul></ul><ul><ul><li>Force profile </li></ul></ul><ul><ul><li>Range selection for gear ratios </li></ul></ul><ul><ul><ul><li>Compile cycling data </li></ul></ul></ul><ul><li>Shifter design </li></ul><ul><ul><li>Actuator selection </li></ul></ul><ul><li>Frame compatibility </li></ul><ul><ul><li>Geometrical design </li></ul></ul><ul><ul><li>Structural integrity </li></ul></ul>Pedal attachment Variable Sheave sheave Output sprocket Gear (a) shifter bar motion Gearbox first prototype design Testing set up Friction rollers Force sensor
  6. 7. Unique opportunity <ul><li>Opportunity </li></ul><ul><ul><li>Rider is given the unique ability to control input to output “gear” ratio over a continuously variable range </li></ul></ul><ul><ul><li>Potential to optimize muscle efficiency </li></ul></ul><ul><ul><li>The proposed alternative CVT transmission will allow us to capture a fraction of a multi billion dollar bicycle market in the US alone </li></ul></ul>
  7. 8. Risk Assessment <ul><li>Design might not meet expectations </li></ul><ul><ul><li>Final prototype will be tested by competitive bikers and bicycle enthusiasts </li></ul></ul><ul><ul><ul><li>Initial scores will be a comparison to their bicycle of choice </li></ul></ul></ul><ul><li>Market Acceptance of the internal gearbox </li></ul><ul><ul><li>Bike shows, shopping mall, and public event displays </li></ul></ul><ul><ul><ul><li>Attempt to gather consumer response through surveys </li></ul></ul></ul><ul><ul><ul><ul><li>Provide market acceptability and consumer reaction </li></ul></ul></ul></ul>
  8. 9. Team <ul><li>President Mitch Angus: Avid sponsored competitive gravity mountain biker </li></ul><ul><ul><li>Competing since ‘96: Professional Status 2001-2005 & 2008 </li></ul></ul><ul><ul><li>The National Off-Road Bike Association, Oregon Bike Racing Association, Canadian Cup, Washington, Idaho, Montana Mountain Bike Series </li></ul></ul><ul><li>CTO: Vladimir Borisov: Bioengineering major with a background in mechanical engineering. </li></ul><ul><ul><li>Summer internship under supervision of Dr. Davis </li></ul></ul><ul><ul><li>Previous Small Business Owner </li></ul></ul><ul><li>CMO: Michael J. Allan: General Studies major with Entrepreneurship minor. </li></ul><ul><ul><li>Marketing team member for “ Under the Big Tent Event” at WSU </li></ul></ul><ul><ul><li>6 years customer service and management experience </li></ul></ul>
  9. 10. Market <ul><li>Portland regularly ranks at the top of Bicycling Magazine’s list of the best cycling cities. </li></ul><ul><li>Portland’s bicycle-related industry was worth $60 million in 2007. </li></ul><ul><li>Nation’s highest % of workers who commute by bike, about 3.5%. </li></ul><ul><li>The market is increasing yet stable and will continue to thrive with popularity in the sport starting to increase. </li></ul><ul><li>6 Billion Dollar Industry in the US. </li></ul><ul><li>Bike Industry is growing at a rate of 6.4%. </li></ul><ul><li>Headquarters will be located in Portland, Oregon. </li></ul>
  10. 11. Target Market <ul><li>Male and Female </li></ul><ul><li>Age: 10-55 </li></ul><ul><li>Self-motivated </li></ul><ul><li>2 Segments </li></ul><ul><ul><li>Recreational </li></ul></ul><ul><ul><li>Performance </li></ul></ul><ul><li>Aggressive, active and entertaining lifestyle while seeking high quality of perfection and reliability </li></ul><ul><li>Discretionary income </li></ul>
  11. 12. Segments <ul><li>Recreational </li></ul><ul><ul><li>Quality of product </li></ul></ul><ul><ul><li>Superior customer service </li></ul></ul><ul><li>Performance </li></ul><ul><ul><li>Recognize a need for change </li></ul></ul><ul><ul><li>Highlight technology </li></ul></ul><ul><ul><ul><li>CVT </li></ul></ul></ul>
  12. 13. Marketing & Sales <ul><li>“ Making performance and perfection a standard” </li></ul><ul><li>“ A sign or indication” </li></ul><ul><li>An abnormality to the industry </li></ul><ul><li>Market to segments independently </li></ul><ul><li>Recreation/Performance </li></ul><ul><li>“ Total Customization” </li></ul><ul><li>Website </li></ul><ul><li>Studies underway to define target market </li></ul><ul><li>Multiple design schemes in testing phase </li></ul><ul><li>Company vehicle to attend all events </li></ul><ul><li>Promotion through; key chains, bottle openers, energy drinks, stickers, and decals </li></ul><ul><li>Sponsor cycling events in partnership with other outlets </li></ul><ul><ul><li>Extend reach by sponsoring conventions and concerts </li></ul></ul>
  13. 14. Competition <ul><li>The bicycle industry is divided into 4 different distribution channels. </li></ul><ul><ul><li>I. Specialty 49% II. Full Line 8% </li></ul></ul><ul><ul><li>III. Other 6% IV. Mass Merchants 37% </li></ul></ul><ul><li>Value </li></ul><ul><ul><li>Having a standardized internal drive system will set us apart from the competition. </li></ul></ul>
  14. 15. Income <ul><li>Revenue: </li></ul><ul><ul><li>Online </li></ul></ul><ul><ul><li>Bicycle Retailer </li></ul></ul><ul><ul><ul><li>Purchase bikes at a discount or wholesale </li></ul></ul></ul><ul><li>The revenue comes directly from the profits made from selling complete bicycles online or to distributors for a wholesale pricing. </li></ul>
  15. 16. Operations <ul><li>Local bike shops will be utilized to sell our products. Symptum has no physical retail stores. </li></ul><ul><li>Bikes designed at Symptum Cycles, sent to manufacturing plant for assembly, sent back to Symptum Cycles once completed </li></ul><ul><li>Parts to be assembled onto frames will be sent to Symptum </li></ul><ul><li>Once a distributor purchases a bike Symptum will send them the frame and parts to be assemble on the bike and then sell the bike to the end user </li></ul>
  16. 17. Life Cycle
  17. 18. Benchmarks and Goals <ul><li>Year 1 </li></ul><ul><ul><li>First 3 months </li></ul></ul><ul><ul><ul><li>Design gearbox and frames </li></ul></ul></ul><ul><ul><ul><li>Acquire patents & trademarks </li></ul></ul></ul><ul><ul><li>Second 3 months </li></ul></ul><ul><ul><ul><li>Market testing </li></ul></ul></ul><ul><ul><li>Second 6 months </li></ul></ul><ul><ul><ul><li>begin acquiring distributors </li></ul></ul></ul><ul><li>Year 2 </li></ul><ul><ul><li>Official introduction in to market </li></ul></ul><ul><ul><li>3,500 bikes sold, $2,000,000 sales </li></ul></ul><ul><li>Year 5 </li></ul><ul><ul><li>$15,000,000 in sales .25% of U.S. market </li></ul></ul><ul><ul><li>International Sales & 1% of market </li></ul></ul><ul><ul><li>Buy out investors </li></ul></ul>
  18. 19. Projected Prototype Funding <ul><li>TASK 1 (in progress) </li></ul><ul><li>Facilities $500 </li></ul><ul><li>Salaries $7000 </li></ul><ul><li>Consulting $250 </li></ul><ul><li>Direct Costs </li></ul><ul><li>Parts $250 </li></ul><ul><li>Labor $500 </li></ul><ul><li>TOTAL $8,500 </li></ul><ul><li>TASK 2 </li></ul><ul><li>Facilities $500 </li></ul><ul><li>Salaries $6000 </li></ul><ul><li>Consulting $500 </li></ul><ul><li>Direct Costs </li></ul><ul><li>Parts $2000 </li></ul><ul><li>Labor $2000 </li></ul><ul><li>TOTAL $11,000 </li></ul>
  19. 20. Projected Prototype Funding Cont. <ul><li>TASK 3 </li></ul><ul><li>Facilities $500 </li></ul><ul><li>Salaries $6500 </li></ul><ul><li>Consulting $1000 </li></ul><ul><li>Direct Costs </li></ul><ul><li>Parts $4000 </li></ul><ul><li>Labor $6000 </li></ul><ul><li>TOTAL $18,000 </li></ul><ul><li>TASK 4 </li></ul><ul><li>Facilities $1000 </li></ul><ul><li>Salaries $7000 </li></ul><ul><li>Consulting $1000 </li></ul><ul><li>Direct Costs </li></ul><ul><li>Parts $1000 </li></ul><ul><li>Labor $1000 </li></ul><ul><li>Testing $3000 </li></ul><ul><li>TOTAL $14,000 </li></ul>
  20. 21. Financing <ul><li>Required Capital </li></ul><ul><li>Year 1 </li></ul><ul><ul><li>October- $60,000 </li></ul></ul><ul><ul><li>Founders, Friends, Family </li></ul></ul><ul><ul><li>Infusions </li></ul></ul><ul><ul><ul><li>December-March </li></ul></ul></ul><ul><ul><ul><li>Total $2,000,000 </li></ul></ul></ul><ul><li>Willing to give up 32% of equity </li></ul>
  21. 22. Projections Net Profit Margin: 29% Year 1 Year 2 Year 3 Year 4 Year 5 Net Income $2,031,211 $4,994,859 $3,285,043 $4,555,713 $5,494,140 Revenue $8,663,802 $17,327,604 $17,327,604 $22,525,885 $27,031,062 Cash $2,195,005 $6,571,327 $6,830,685 $10,569,961 $15,368,478
  22. 23. Breakeven
  23. 24. Exit Strategy <ul><li>Buy out investor at 6 times their original investment </li></ul><ul><ul><li>Investor: $ year 7 </li></ul></ul><ul><li>Year 10 or $50 million: </li></ul><ul><ul><li>Reevaluate </li></ul></ul><ul><ul><ul><li>Single founder sell </li></ul></ul></ul><ul><ul><ul><ul><li>Shares will be purchased from remaining founders </li></ul></ul></ul></ul><ul><ul><ul><li>Continue operation </li></ul></ul></ul><ul><ul><ul><li>Acquisition </li></ul></ul></ul><ul><ul><ul><li>All founders step down </li></ul></ul></ul><ul><ul><ul><ul><li>Retain shares; board members </li></ul></ul></ul></ul>
  24. 25. Questions
  25. 26. Consultants <ul><li>Dana Engineering Machine Shop </li></ul><ul><ul><li>Kirk and Miles </li></ul></ul><ul><ul><li>Instructor </li></ul></ul><ul><ul><li>Dr. Howard Davis   </li></ul></ul><ul><li>Ride This Bike Shop </li></ul><ul><ul><li>Owner </li></ul></ul><ul><ul><li>Victor Sandrin </li></ul></ul><ul><li>EVS </li></ul><ul><ul><li>Marketing Manager </li></ul></ul><ul><ul><li>Brian Myrick </li></ul></ul><ul><li>Downhill Northwest Bicycle Shop and Training Camp </li></ul><ul><ul><li>Owner </li></ul></ul><ul><ul><li>Simon Lawton </li></ul></ul><ul><li>Tesoro </li></ul><ul><ul><li>Chief Chemical Engineer </li></ul></ul><ul><ul><li>John Pope </li></ul></ul><ul><li>Pivot Cycles </li></ul><ul><ul><li>International Sales Manager </li></ul></ul><ul><ul><li>Rob Aguero </li></ul></ul><ul><li>Marin Bikes </li></ul><ul><ul><li>Director of Operations </li></ul></ul><ul><ul><li>Michael Hersey </li></ul></ul><ul><li>Invicta Law Group </li></ul><ul><ul><li>Attorney at Law </li></ul></ul><ul><ul><li>Steve Edmiston </li></ul></ul><ul><li>  AterWaynne </li></ul><ul><ul><li>Partner </li></ul></ul><ul><ul><li>Ernest Bootsma   </li></ul></ul><ul><li>Waddell & Reed </li></ul><ul><ul><li>Financial Advisor </li></ul></ul><ul><ul><li>Johnathan Petrich </li></ul></ul><ul><li>Serial Entrepreneur/Venture Capitalist/Niitek </li></ul><ul><ul><li>Chief Technical Officer </li></ul></ul><ul><ul><li>Daniel Lulich   </li></ul></ul><ul><li>Klarquist Sparkman </li></ul><ul><ul><li>Partner, Patent Agent </li></ul></ul><ul><ul><li>Susan Alpert Siegel, Ph.D. </li></ul></ul><ul><li>Seven Cycles </li></ul><ul><ul><li>Director of Recruiting </li></ul></ul><ul><ul><li>Denise Caruso </li></ul></ul><ul><li>Fisher Bikes </li></ul><ul><ul><li>President Fisher Bicycle </li></ul></ul><ul><ul><li>Gary Fisher </li></ul></ul>