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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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slide1

Business Plan Presentation

Tyler Hutchens

Dave Ryan

Gary Tobin

Carrie Xing

agenda
Agenda
  • The Problem
  • Giraffe Rack Solution
  • Marketing Strategy
  • Operations Strategy
  • Financial Plan
  • Questions
bicycle rack market trends
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.
people want roof racks
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.

roof racks can be tough to use
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.

our solution
Our Solution

Get the rack to the bike,

not the bike to the rack!

giraffe rack
Giraffe Rack

Rack Design

giraffe rack8
Giraffe Rack

Rack Design

giraffe rack9
Giraffe Rack

Rack Design

giraffe rack10
Giraffe Rack

Rack Design

giraffe rack11
Giraffe Rack

Rack Design

giraffe rack12
Giraffe Rack

Rack Design

giraffe rack13
Giraffe Rack

Rack Design

giraffe rack14
Giraffe Rack

Rack Design

giraffe rack15
Giraffe Rack

Rack Design

giraffe rack16
Giraffe Rack

Rack Design

giraffe rack17
Giraffe Rack

Rack Design

giraffe rack18
Giraffe Rack

Rack Design

giraffe rack19
Giraffe Rack

Rack Design

giraffe rack20
Giraffe Rack

Rack Design

giraffe rack21
Giraffe Rack

Rack Design

giraffe rack22
Giraffe Rack

Rack Design

giraffe rack23
Giraffe Rack

Rack Design

giraffe rack24
Giraffe Rack

Rack Design

giraffe rack25
Giraffe Rack

Rack Design

giraffe rack26
Giraffe Rack

Rack Design

innovative design
Innovative Design
  • Yakima and Thule complementary
  • No need to design to vehicle types
  • Easy to use
market size
Market Size
  • 2005 SUV rack market = $215M
  • Total Market Potential = $630M
focused strategy
Focused Strategy
  • Roof rack accessory
  • Compatible product
  • SUVs
customer
Customer
  • Survey Findings
    • Bike enthusiasts
    • SUV owners
    • Women
    • Vertically Challenged
    • Already own/shopping for roof rack
pricing strategy
Pricing Strategy
  • MSRP = $150.00
  • Retail discount = 45%
  • 65% surveyed will pay $150
retailer
Retailer
  • Specialty Stores
  • Good discount for merchant – 45%
  • Can sell to existing rack customers
  • Additional installation revenue opportunity
rollout year one colorado
Rollout Year One - Colorado
  • Great Market!
    • Most SUVs per capita
    • High concentration of bicyclists
    • Wealthiest counties in Rockies
  • Sales, Sales, Sales
ongoing rollout
Ongoing Rollout
  • Year Two
    • Colorado mountain towns
    • California, Portland, Seattle
  • National Rollout in Year Three
  • 180 stores by Year Five
brand image
Brand Image
  • Targeted Advertising
    • Print ads, point-of-purchase displays
  • Guerilla Marketing
    • Demo units
    • Events
brand image38
Brand Image
  • Targeted Advertising
    • Print ads, point-of-purchase displays
  • Guerilla Marketing
    • Demo units
    • Events
talented management
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
operations plan
Operations Plan
  • Major Features:
    • Complements Sales and Marketing
    • Low fixed costs
    • Outsource
scope of operation
Scope of Operation
  • Outsource design
  • Contract out to manufacturers for tooling and production
  • Minimal assembly and packaging
key success factors
Key Success Factors
  • Strong supplier relationships
  • Strong retailer relationships
  • Management involvement
development timeline
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)

giraffe rack gross margin
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
giraffe rack revenue
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)
giraffe rack cash flow50
Giraffe Rack Cash Flow
  • Highly seasonal sales
    • 75% coming between April and September
  • Cash need early, excess later
giraffe rack funding
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
giraffe rack exit
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
wrap up
Wrap Up
  • Market need
  • Strategy
  • Investment
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