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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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Tyler Hutchens Dave Ryan Gary Tobin Carrie Xing

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Tyler hutchens dave ryan gary tobin carrie xing

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 rack1

Giraffe Rack

Rack Design


Giraffe rack2

Giraffe Rack

Rack Design


Giraffe rack3

Giraffe Rack

Rack Design


Giraffe rack4

Giraffe Rack

Rack Design


Giraffe rack5

Giraffe Rack

Rack Design


Giraffe rack6

Giraffe Rack

Rack Design


Giraffe rack7

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


Innovative design

Innovative Design

  • Yakima and Thule complementary

  • No need to design to vehicle types

  • Easy to use


Marketing strategy

Marketing Strategy


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


Giraffe rack advertising

Giraffe Rack Advertising


Brand image1

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 strategy

Operations Strategy


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)


Financial plan

Financial Plan


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)


Revenue growth

Revenue Growth


Giraffe rack cash flow

Giraffe Rack Cash Flow


Giraffe rack cash flow1

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 cash flow b

Giraffe Rack Cash Flow (b)


Giraffe rack growth

Giraffe Rack Growth


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


Questions

Questions?


Cost of goods sold

Cost of Goods Sold


Giraffe rack growth1

Giraffe Rack Growth


Giraffe rack growth2

Giraffe Rack Growth


Giraffe rack cash flow2

Giraffe Rack Cash Flow


Giraffe rack cash flow b1

Giraffe Rack Cash Flow (b)


Giraffe rack repayment

Giraffe Rack Repayment


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