Tyler Hutchens Dave Ryan Gary Tobin Carrie Xing - PowerPoint PPT Presentation

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Business Plan Presentation. Tyler Hutchens Dave Ryan Gary Tobin Carrie Xing. Agenda. The Problem Giraffe Rack Solution Marketing Strategy Operations Strategy Financial Plan Questions. Bicycle Rack Market trends. SUV Sales are increasing as a percentage of total vehicle sales.

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Business Plan Presentation

Tyler Hutchens

Dave Ryan

Gary Tobin

Carrie Xing


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Agenda

  • The Problem

  • Giraffe Rack Solution

  • Marketing Strategy

  • Operations Strategy

  • Financial Plan

  • Questions


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Bicycle Rack Market trends

  • SUV Sales are increasing as a percentage of total vehicle sales.

  • Sales of racks to SUV owners are increasing by 15% annually.


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People Want Roof Racks

  • “Most people would rather use a roof rack, but can’t because of the vehicle size”

    Bobby Noyes, founder, Rocky Mounts, Inc.


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Roof Racks can be tough to use

  • “I get hurt far more often loading and unloading my bike than riding it.”

    Pam Simich, Director, VeloNews Magazine.

  • “I’ve seen people use ladders…”

    Margaret Principe, Counselor, Englewood High School.

  • “I constantly struggle to get my bike on and off of my car.”

    Christy McDevitt, Physician, KaiserPermanente.


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Our Solution

Get the rack to the bike,

not the bike to the rack!


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Giraffe Rack

Rack Design


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Innovative Design

  • Yakima and Thule complementary

  • No need to design to vehicle types

  • Easy to use


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Marketing Strategy


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Market Size

  • 2005 SUV rack market = $215M

  • Total Market Potential = $630M


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Focused Strategy

  • Roof rack accessory

  • Compatible product

  • SUVs


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Customer

  • Survey Findings

    • Bike enthusiasts

    • SUV owners

    • Women

    • Vertically Challenged

    • Already own/shopping for roof rack


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Pricing Strategy

  • MSRP = $150.00

  • Retail discount = 45%

  • 65% surveyed will pay $150


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Retailer

  • Specialty Stores

  • Good discount for merchant – 45%

  • Can sell to existing rack customers

  • Additional installation revenue opportunity


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Rollout Year One - Colorado

  • Great Market!

    • Most SUVs per capita

    • High concentration of bicyclists

    • Wealthiest counties in Rockies

  • Sales, Sales, Sales


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Ongoing Rollout

  • Year Two

    • Colorado mountain towns

    • California, Portland, Seattle

  • National Rollout in Year Three

  • 180 stores by Year Five


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Brand Image

  • Targeted Advertising

    • Print ads, point-of-purchase displays

  • Guerilla Marketing

    • Demo units

    • Events


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Giraffe Rack Advertising


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Brand Image

  • Targeted Advertising

    • Print ads, point-of-purchase displays

  • Guerilla Marketing

    • Demo units

    • Events


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Talented Management

  • Dave Ryan – President

    • 10 years experience in early-stage companies

    • Experienced Sales and Marketing Management

  • Tyler Hutchens – Vice President

    • 7 years experience in Marketing, Promotion, Operations, Finance

    • Experience with early-stage companies


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Operations Strategy


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Operations Plan

  • Major Features:

    • Complements Sales and Marketing

    • Low fixed costs

    • Outsource


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Scope of Operation

  • Outsource design

  • Contract out to manufacturers for tooling and production

  • Minimal assembly and packaging


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Key Success Factors

  • Strong supplier relationships

  • Strong retailer relationships

  • Management involvement


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Development Timeline

  • Concept R&D (30 days)

  • Product Development (55 days)

  • Product Release to Manufacturing (50 days)

  • Manufacturing Ramp-up (85 days)

    Total Duration 220 Days

    (Dec ’01 – Oct ’02)


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Financial Plan


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Giraffe Rack Gross Margin

  • Selling price of $82.50

  • Cost of goods sold $41.80

  • Our Gross Margin is 49.3%

    • Outdoor Products average = 38.8%

    • Higher for Marketing Costs


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Giraffe Rack Revenue

  • 30 retail outlets in Year 1

  • Average 100 units per location

  • Year 1 Revenues = $247,500

  • Year 1 Operating Expenses = $182,675

  • Year 1 Earnings = ($180,776)


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Revenue Growth


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Giraffe Rack Cash Flow


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Giraffe Rack Cash Flow

  • Highly seasonal sales

    • 75% coming between April and September

  • Cash need early, excess later


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Giraffe Rack Funding

  • Owners will contribute $60,000

  • Raising $200,000 in debt

    • Repaid $500,000 at the end of Year 5

    • Offers a 20.1% compounded return

      • Interest expensed and accrued each year


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Giraffe Rack Cash Flow (b)


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Giraffe Rack Growth


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Giraffe Rack Exit

  • Acquisition by a larger company

  • Licensing agreement with a larger marketing/manufacturing organization

    • Manufacturing and distribution turned over

    • Marketing and royalties negotiated


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Wrap Up

  • Market need

  • Strategy

  • Investment


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Questions?


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Cost of Goods Sold


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Giraffe Rack Growth


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Giraffe Rack Growth


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Giraffe Rack Cash Flow


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Giraffe Rack Cash Flow (b)


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Giraffe Rack Repayment


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