Business plan - Ease-Stress Express
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You may have thought STRESS was a Good Investment Opportunity… NOW PRESENTING Dear Investors, DE-STRESS AS AN INVESTMENT OPPORTUNITY OF A LIFETIME
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Stress has become a major problem today. It leads to low productivity, as well as mental and physical issues. Companies are losing $300 billion in profits each year because of low productivity related to stress. Doctors are experiencing an increase in the number of patients suffering from being overly stressed. People are trying a variety of products to de-stress, buy these products have various side-effects, or their costs may become prohibitively high. It has become a necessity to produce a product that will be able to eliminate stress in a positive manner and that can be used for a lifetime of stress management. The answer to this problem is Ease-Stress Express’ De-Stressing Solutions. It is not just a product, but an experience. It consists of a massage chair inside an acoustically optimized cubicle with an LCD monitor and surround-sound. The massage chair will gently relax muscles while soothing sights and sounds relax the mind. Users will immediately feel refreshed, relaxed, and de-stressed. The product can be customized to meet the specific needs of the user. It allows an individual to choose a variety of sights and sounds that make each feel relaxed. These include nature sounds, nature sights, music, motivational lectures, or religious material and chants. The product will initially be marketed in the Atlanta, Georgia and Charlotte, North Carolina areas. These locations have been chosen because of their strong industrial and business concentrations. Innovative marketing strategies will be adopted to make stressed out nurses, teaches, emergency workers, etc as advocates of our product and thereby unleash positive word-of-mouth and build credibility. Displays for customers to experience the product will be positioned at airports, trade show, schools, doctor offices, and sports events. The product will, in large part, market itself. Once customers experience the product and feel the benefit, they will want one immediately. A social networking website will add to the sharing experience of each user. The office and warehouse will be located in Smyrna, Georgia. The company will start with approx 20 employees including 4 management, 6 sales, and 10 operations. Each director has expert knowledge of business areas, so outside professional assistance will be kept to a minimum, in the first year. Materials for production will be purchased locally. Assembly is fairly simple, so there will be little lead-times between purchase orders and delivery. The result is a product that will be unique and in a niche by itself. We anticipate high demand, and as we show in our financial section, the paybacks are within a couple of years with high returns for investors. All in all, we offer investors an opportunity of a lifetime.
Transcript of Business plan - Ease-Stress Express
You may have thought
STRESS was a Good Investment Opportunity…
NOW PRESENTING
Dear Investors,
DE-STRESS
AS AN INVESTMENT OPPORTUNITY
OF A LIFETIME
Relaxed Nurses = Happier Patients
Relaxed Teachers = Happier Parents
Relaxed Employees = More Productivity
Relaxed Travelers = Growth in Business
RELAXATION = PROFIT
De-Stressing Solutions:
Not just a Product …
But an Experience.
Rejuvenate …
at your leisure!
De-Stress …
when you desire!
ESE DE-STRESSING SOLUTIONS
Customer Segments:
www.your-de-stress-zone.com
HOME MUSIC VIDEOS CHANTS SAVED PROFILES FRIENDS REFER BUY MORE
TRANCE WATER GANDHI
Enjoying a massage & a motivational lecture by Gandhi.
Feeling better already.
WHAT FRIENDS FIND RELAXING
MUSIC
SIMILAR INTERESTS
WHAT FRIENDS RECOMMEND
Viral Marketing:
GOSPEL GANDHI PARTNERS
Traditional Marketing … with a twist
Assembly Facility & Warehouse
1 mile from I-285 and 2 miles from I-75.
Value-for-money lease:
• Sub-let facility.
• First 6 months free.
• Term through Dec 31, 2015.
Nominal supply-chain costs:
• Wood products neighborhood.
• Brookstone warehouse & other elec.
appliance retailers/distributors in the
same complex.
• Railroad facility available for later-
day expansion. Off
ice
space
Supply Chain
Metal Framing Dietrich Ultrasteel Framing
Acoustic Insulation Dynamat
Recycled Plywood Phase 1: HomeDepot
Phase 2: BRAZIL
LCD Panel Phase 1: BrandsMart
Phase 2: TAIWAN Surround Sound Brands Mart
Massage Chair Brookstone / OSIM uAstro
Fabric / Carpet Phase 1: Charlotte Fabrics
Phase 2: TURKEY
• Initial supply-chain cost savings due to proximity to local vendors.
• Direct sourcing model for chairs from OSIM to give additional cost savings.
• Phase 2 cost savings due to economies-of-scale sourcing from low-cost vendors.
IDEAL
COST, SIDE EFFECTS
DE-S
TR
ESSIN
G B
EN
EFIT
S
Low High
Low
H
igh
Drugs,
Liquor
Medication Church,
Religion
Pets
Recreation,
Sports
Food
Yoga,
Meditation
Sample size = 284
Location = Online through surveymonkey.com
and zoomerang.com
Competition:
ESE-
De-Stressing Solutions
ZERO COST
TO EMPLOYEES
BUT
MAXIMUM
BENEFITS
Financials:
CAGR
Sales: 45.2%
Gross Profit: 47.7%
Net Profit: 71.8%
Financials:
Cash inflows purely driven from product sales (No M&A’s).
Efficient use of cash may involve repaying debt, and
growing quicker into international markets.
Financials:
Key Ratios
Year 1 (2011-2012)
Working
Capital Current Ratio
Debt to
Equity
Return on
Investment
Return on
Sales
Return on
Assets
1st Quarter $655,568 10.48 0.88 -38% -24% -20%
2nd Quarter $710,765 8.61 0.78 18% 6% 10%
3rd Quarter $845,543 6.86 0.65 30% 11% 18%
4th Quarter $1,256,218 18.11 0.31 47% 22% 36%
Year 2 (2012-2013) $2,912,521 37.64 0.09 92% 19% 84%
Year 3 (2013-2014) $6,213,536 73.17 0.03 75% 22% 73%
Year 4 (2014-2015) $11,359,856 122.84 0.01 62% 24% 62%
Year 5 (2015-2016) $17,658,150 N.A. 0.00 48% 22% 48%
Using Gordon Model to calculate value of business at end of year 5:
Terminal Value = (Cash Flow of the Terminal Year) * (1 + g)
(ks - g)
g = annual constant growth rate of cash flow = 3%
ks = rate of return required by angel investors / VC’s = 40%
Cash Flow Terminal Year = Year 5 cash flow
= Year 5 net after tax income plus year 5 depreciation)
= 6,533,135+130,159
= $ 6,663,294.
Therefore, company value = $ 6,663,294 * (1+3%)
(40%-3%)
= 18,549,169/-
= ~ $ 18.5 mn.
This is approx 3x of Net profit and 2x of Available Cash balance for Year 5,
which is also as per Market multiples method.
Valuation / Exit Strategy:
Growth Strategy:
De-Stressing is a long-term, sustainable business venture.
Vertical Integration possibilities.
M&A or backward integration with material suppliers will allow
more margin capture within company.
Sourcing efficiencies will increase.
Initial emphasis on Product sales. Long-term opportunities in:
Partner promotions
Content Sales
Individual User Licensing
Planned geographic growth initially. Long-term opportunities in:
Blitz expansion in international markets through contract
manufacturing & franchisee sales.
Business Plan Presentation
Ease-Stress Express
Laurie Chester
Alessandro Lima
Pulkit Bhatnagar
This presentation is prepared towards partial fulfilment of the course: GM600 – Business Planning Seminar being instructed by Prof. Tom Wichser for the November
2010 session at the Alpharetta campus of Keller Graduate School, DeVry University. The logo for Keller is reproduced here as a student and not an endorsement by
the School. The views expressed in this presentation are solely of the authors and without any intention of infringement, monetary profit or harm. Images and
information have been sourced through Google and due credit has been made at appropriate locations. Any inadvertent omissions can be included if pointed out.
Copyright © 2010 Pulkit Bhatnagar et al. as authors for this report & presentation.
Prof. Tom Wichser GM 600
Dec 18, 2010
• Company Logo - http://artandbusinessconsulting.com/services_we_offer.htm
• Massage Chair - http://image.made-in-china.com/2f0j00HevTGCRaRPkE/Deluxe-Massage-Chair-DF-1688F5-A-.jpg
• LCD panel - http://www.bhphotovideo.com/c/product/716857-REG/NEC_P551_AVT_S521_AVT_LCD_Display.html
• Office table - http://t3.gstatic.com/images?q=tbn:2IEDxehzPOMO1M
• Business Traveler - http://static-p4.fotolia.com/jpg/00/08/05/43/400_F_8054368_Zm9xzZaLx5jNe8g7cx25JqcrvhdLcQT1.jpg
• Trade show - http://www.tucsonexpocenter.com/images/trade_show-3.jpg&t=1 • Tired nurses: http://news.rutgers.edu/focus/issue.2007-11-27.8621072070/nurses_-_tired.jpg • Happy Nurse: http://www.plu.edu/~beckersl/img/nurse.jpg • Tired teacher: http://www.crossdaily.com/pictures/105/T/Tired_Sunday_School_teacher_105050473.jpg • Happy teacher: http://www.wcasd.net/literacy/Teacher%20reading.gif • Angry business traveler - http://www.featurepics.com/FI/Thumb300/20100219/Airport-Delay-Cartoon-1464671.jpg • Business traveler - http://s3.amazonaws.com/pixmac-preview/000045626437.jpg • Tired employee - http://www.lrionline.com/wp-content/uploads/Stressed+out_1727_18802195_0_0_9206_300.jpg • Happy employee - http://t1.gstatic.com/images?q=tbn:Ua3lBZnkSSplZM:http://images.clipartof.com/small/31322-Clipart-Illustration-Of-A-Happy-Red-Haired-Computer-Geek-Man-In-A-Blue-Suit-Working-On-A-Computer.jpg&t=1 • • Nurse: http://comps.fotosearch.com/comp/UNN/UNN590/medical-clothing-chart_~u14431432.jpg • Firefighter: http://www.clipartreview.com/_images_300/A_firefighter_running_with_a_fire_hose_100326-154761-914009.jpg • Cops: http://t0.gstatic.com/images?q=tbn:KMZkyDChZKYZCM:http://images.clipartof.com/small/31326-Clipart-Illustration-Of-A-Male-Caucasian-Police-Officer-Standing-Proudly-With-His-Black-Female-Partner.jpg&t=1 • Teacher: http://www.cartoonclipartworld.com/school/images/77002_500.jpg • Employee: http://drbenito.co.uk/wp-content/uploads/2010/03/0511-0703-0118-4212_businesswoman_multitasking_clipart_image.jpg • Plane: http://www.airventures.net/Portals/2/plane%20clipart.jpg • Waiting room: http://www.fotosearch.com/bthumb/IMZ/IMZ007/rhu0021.jpg • • Mobile billboards - http://www.guerrillabillboards.com/mobile-billboard-images/madeyoulook-mobile-outdoor-advertising-truck.jpg • Airport lounge - http://www.holidayextras.co.uk/images/hximages/airport-lounges/stansted-lounge-3.jpg • Trade show massage - http://www.mymassageguy.com/Images/chair.gif • Facility photo+layout - http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=16845962&SRID=1306301738&StepID=101
References and Credits
Appendix 1: Target Markets
2011:
Charlotte, NC
Atlanta, GA
2012 and 2013:
GA, NC, TN, SC, AL , FL
2014 and 2015:
East US + TX, CA, NV
2011:
Atlanta
Charlotte
2012 & 2013:
GA, NC, TN
SC, AL, FL
2014 & 2015:
East US +
TX, CA, NV
Phase 1:
• Atlanta: 5.4 mn
• Charlotte: 1.7 mn
• Atlanta: Fortune 500 cos.
Transportation hub.
• Charlotte: 2nd largest banking.
Phases 2 & 3:
• South East: Proximity to Operations.
Selective targeting.
• East US + TX, CA, NV:
High conc. of companies
Fun & relaxation places.
Appendix 2: Operations Birds-eye view.
Ease-Stress Express
Customer Mgmt (Sales, Accounting)
Customer
Procurement
Plant (Atlanta)
RM Planning
Production
Quality &
Testing
Delivery
Sales
Inward PO
Credit Check
Clearance
Purchase Order
Customer
Delivery
Locations
Confirmation
POD
Invoic
ing
Dem
and F
ore
cast
Aft
er-
Sale
s Support
Appendix 3: Organization Chart
Chief Executive Officer (Professional Manager)
Marketing
Account Managers
Corp Comm
Operations
Production
Quality
Supply Chain
Finance & Admin
Accounting
Controller
Financing
Technology
Online Presence
Software & Content
ERP / SCM / CRM
Strategy
Forecasting
New Business Development
YEAR 1 = 0+4+9
YEAR 2 = 1+5+16
YEAR 3 = 1+5+25
Sample size = 284
Location = Online,
through surveymonkey.com and zoomerang.com
Appendix 4: Survey Results
S. No. Technique 1 2 3 4 5 6 7 8 9 10 Associated Risks
1 Medication X Side Effects, Addiction, Money, Health
2 Recreation / Sports X Injuries, Cost, Convenience
3 Alcohol / Drugs X Consequences, Addiction, Social Status, Health
4 Pets X Commitment, Convenience, Lifestyle Change, Immediate Results?
5 Yoga / Meditation X Cost, Convenience
6 Church / Religion X Choice, Convenience, Immediate Results?
7 Food X Health, Weight, Cost, Overall Effectiveness?
8 Others
9 ESE Solution X
S. No. Technique 1 2 3 4 5 6 7 8 9 10 Associated Risks
1 Medication X Side Effects, Addiction, Money, Health
2 Recreation / Sports X Injuries, Cost, Convenience
3 Alcohol / Drugs X Consequences, Addiction, Social Status, Health
4 Pets X Commitment, Convenience, Lifestyle Change, Immediate Results?
5 Yoga / Meditation X Cost, Convenience
6 Church / Religion X Choice, Convenience, Immediate Results?
7 Food X Health, Weight, Cost, Overall Effectiveness?
8 Others
9 ESE Solution X
