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Soap Manufacturer Business Plan Sample

This sample business plan will provide you with the ideal guidelines for starting your soap manufacturing business.

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This sample business plan will provide you with the ideal guidelines for starting your soap manufacturing business. Use this example to compile your own.

1. Executive Summary

SAFEassure, LLC has designed a new product that provides managers with a quick, easy, and affordable method to effectively monitor employee hand washing. Proper hand washing is the most effective preventative measure available to combat communicable diseases.

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Improper hand washing contributes to more than 130,000 deaths in the U.S. each year through the transfer of communicable diseases in restaurants, day cares and hospitals (more than AIDS and breast cancer combined). Studies have shown that proper hand washing procedures in these environments could cut down the spread of disease by up to 75%.

The greatest contributing factor to this problem stems from the inability of supervisors to monitor and control employee hand washing. Existing products offer no effective or affordable solutions for enforcing and ensuring hand washing compliance. Treatment of preventable diseases costs Americans over $95 Billion in direct costs each year.

SAFEassure, LLC is the first producer that answers this problem and provides indisputable proof every time a person washes his or her hands. After washing occurs, the unique dye in our soap remains on the hands and fades to the skin’s natural color in under six minutes.

Related: The Benefits Of Manufacturing Locally

This would allow supervisors to conclusively verify at a glance whether hand washing has taken place. No other product on the market offers such a high level of assurance of sanitation compliance.  The product is safe and meets all current FDA regulatory requirements for soap.

The Market

Although restaurants and hospitals have tremendous market need for a product such as ours, day cares represent the best opportunity for our initial target market.

Day cares are an ideal market because they have a vested interest in reducing disease transfer amongst children, and have adamant support from their clients [parents] to create as clean an environment as possible. As stated by Family Practice News,

“Most day care centres are sophisticated little germ factories, exchanging bacteria and viruses with the shake of a hand or the sharing of a toy. And many of those nasty bugs travel home where they can infect the rest of the family.”

The Company

SAFEassure, LLC boasts a strong founding team and experienced board of advisors. Our primary advisor, Jack Soap, brings twenty years of industry experience and networked relationships to accelerate market penetration of the product line.

SAFEassure, LLC will outsource the production of its soaps to an existing soap manufacturer. The executive team will first target the Portland Metro area and eventually the greater Northwest using direct sales and existing distributor channels to penetrate the market.

Initial capital will be used to test, patent, approve, produce, and market SAFEassure, as well as provide working capital for the first year. SAFEassure, LLC will follow three concise strategies to achieve our desired growth:

  • Exploit first-mover advantage in a highly fragmented market with a unique and differentiated product.
  • Develop a strong branding campaign to build awareness, positive perception and sales of our products within our target markets.
  • Continue to develop new products to satisfy an ever growing set of markets.

Related: Business Plan Examples to Get You Going

Mission

Our mission is to create value for customers and shareholders by continually improving health and reducing preventable illnesses through the use of our soap.

Keys to Success

  • A first-mover branding campaign to build awareness of SAFEassure’s products as the standard for ensuring hand washing compliance.
  • Patent protection to defend our time-sensitive dye and product concept from competitors.
  • Complementary relationships with organisations interested in increasing hand washing compliance.

Objectives

  • Develop a complete prototype which meets regulatory standards by February of Year 1.
  • Become the specialty soap of choice for day cares across the Northwest by December Year 2.
  • Achieve sales of $5 million by the end of Year 6.

2. Company Summary

soap-manufacturing-company-summary

SAFEassure, LLC was founded in Portland, Oregon, and created as a Limited Liability Corporation. SAFEassure, LLC develops and markets soaps utilising time-sensitive dyes promoting sanitary and safe environments to businesses and parents interested in maximising cleanliness. The company will initially be based out of a residential apartment in Portland.

Company Ownership

The executive team will retain at least 70% of the equity in the company. Every $2,500 dollars of investment in the company will secure up to 1% equity in the company. Assuming 30% of the company is owned by investors, Devon Nevius will retain 40% ownership, with Kevin Meinert retaining 30%.

Start-up Summary

Total funding required to get the business started is estimated at $250,000, of which the executive management team – Devon Nevius and Kevin Meinert – will invest $100,000 and $75,000, respectively.

An additional $75,000 investment necessary to develop a product and effectively bring SAFEassure’s products to an initially limited geographic region is sought from other investor(s).

Related: Why You Shouldn’t Quit Your Job To Start A Business

The key elements in the start-up plan for the company are:

  • Development of a working prototype.
  • Funding of working capital requirements and promotional materials for the principal operating activities of the company.
  • Gaining patent approval.
  • Establish a strong brand image early to position ourselves in the market.

The founders have already developed a rough prototype of the product. Our start-up period includes 5 months of work by an independently-contracted chemist at a local lab who will perfect this design into a finished prototype, with the correct balance of soap and dyes in four colours.

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The final two months of this start-up period include safety tests per government regulations to assure high quality.

Company Locations and Facilities

The management team of SAFEassure, LLC will initially use a residential apartment in Portland to run operations. In Year 2, we will move to a rented office. Distribution will remain outsourced.


3. Products

soap-products

SAFEassure’s product line provides a unique control level to managers, supervisors and parents alike. We have two basic product lines: CHILDassure, intended for day care facilities, and an antimicrobial-based product for hospitals (HEALTHassure) and restaurants (FOODassure) – the antibacterial products are not yet in development.

The various product lines, competitors and future product possibilities for SAFEassure, LLC will be outlined in the following section.

Product Description

SAFEassure, LLC will produce a line of institutional liquid soaps with a time-sensitive dye blended into the mixture.

The dye reacts with the hands during the lathering process, staining the hands a distinct colour, then fading in under six minutes. The product will sell for approximately $90/case. (4 gallons/case). The packaging will be compatible with existing soap dispensers mounted in washing stations and be available in a variety of sizes.

Initially, SAFEassure, LLC will produce products with child care acquirers in mind, utilising the brightest colours possible. This product line, called CHILDassure, will consist of four colours: red, blue, pink and green.

Competitive Comparison

SAFEassure’s products offer a high value alternative to other hand washing compliance products.

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They provide an unprecedented level of control, allowing these managers to monitor and follow hand washing frequency and habits of both child-care workers and children. Ultimately this can lower costs for all users, either in a workplace or private environment by reducing the risk of disease outbreaks and/or health code violations.

As the first fading dye hand soap in the market, SAFEassure, LLC will build brand identity, establishing the company as the standard for improving hand washing compliance.

As SAFEassure’s products become more familiar in a workplace environment, the product will begin to produce a pressure on employees, whereby they feel compelled to wash their hands out of a consciousness about the perception of all employees, not just managers. This “peer pressure” effect will further fuel the use of our products and the recognition of the benefits they deliver.

Sales Literature

In order to sell our product while creating familiarity and a positive brand image, it will be necessary to develop brochures and literature to emphasise the safety and beneficial attributes of fading dye soap, many of which may not be readily apparent to an interested party. These will be delivered both in person during a sales presentation and by direct mail.

Sourcing

The key to our success is the time-sensitive dye. Once the proper ratio of dye to base soap is isolated, the fragmented nature of the soap industry provides many options for outsourcing production.

Similar to any commodity, economies of scale require the soap to be produced, packaged and distributed in large batches. Initially, the soap base will be purchased in quantities of at least 38,000 gallons for approximately $50,000. Once the relationship with the manufacturer is established, our subsequent purchases will be approximately for $20,000.

These inventory amounts should be sufficient to for SAFEassure, LLC to meet the customer demand. Utilizing his production and distribution knowledge, Rick Brown will use existing established relationships in the industry to help us mix, package and distribute the product line.

Technology

The technology of our fading dyes will be pivotal in the success of our company.  The interactions between fading dyes and antibacterial or anti-microbial bases suitable for use in restaurants or hospitals are more complicated than the interactions with the glycerin or lotion soaps utilised in the CHILDassure line.

As soon as cash flow permits, projected to be in 2008, SAFEassure, LLC will employ a professional chemist with experience developing dye products to further the research into technological innovations that may produce antibacterial and anti-microbial versions of the soap to address additional markets.
Future Products

Additional soap products, manufactured to comply with regulatory minimums for strength and effectiveness in their respective target markets will be developed to address restaurants and hospitals. These soaps will be trade marked under the names FOODassure and HEALTHassure, respectively.

Perhaps the most promising future market opportunity for fading dye soap is the retail market. This product line will include soaps using the same or similar dye colours as the day care to encourage children to wash their hands more often at home.

This will be a top priority when the company develops the financial resources enough to mount a national advertising campaign and distribution system.

Related: Free SWOT Analysis Template

A complete line of fading dye products could potentially be developed, including floor, counter and body cleaning products that use fading dyes to indicate places on a surface that may not have been cleaned.


4. Market Analysis Summary

soap-market-analysis-summary

There is tremendous potential for a product that provides supervisors and parents with the control to monitor and encourage hand washing.

Considering the large scope of our potential markets, we feel it is imperative to focus our limited resources on a particular geographic region where we can establish demand for our product.

After successful market penetration, we will begin implementation into the restaurant and hospital markets.

Market Segmentation

SAFEassure’s first product line addresses the day care market. CHILDassure will first be introduced in the Portland, OR area, before sequential expansion to additional day care markets. There are currently 516 day care facilities in the Portland Metro area.

Related: How To Create A Marketing Strategy

After successful implementation in Portland, we will begin expansion into the greater Northwest. There are 3,414 day care facilities in the greater Northwest.

Successful penetration into the day care market will be followed by implementation into the restaurant and hospital markets.

There are currently 19,362 restaurants in the Northwest, followed by health care services, which includes 23,108 organisations in the Northwest.

Industry Analysis

The Industrial and Institutional soap industry, of which we are a part, is quite fragmented, but contains several well known main competitors: Gojo, Kimberley Clark, Dial, Provon, and SoftSoap, as well as generic brands that provide to distributors like Massco and Sysco.

Related: Industry Analysis Worksheet

The industry is stable and growing; between 1998 and 2003 it grew by an average of 4% annually. Within the I&I sector there is fierce competition for market share among the existing popular soap offerings, leading to lean profits on soap sales.

Distribution Patterns

Distribution in the soap industry is provided by regional providers.

These distribution companies usually serve a large portion of the market based on the respective size of the market, delivering to the organisations monthly or bi-monthly depending on demand and usage patterns.

Food services typically receive deliveries of cleaning products once a month. Hospitals typically have a distribution system that operates on monthly deliveries of large quantities. Restaurants typically have a weekly delivery schedule.

Competition and Buying Patterns

Commercial customers select soap based on the necessary minimum safety regulations for the intended user; restaurant and hospital regulations require anti-bacterial/microbial.

Customers will typically select a product based on price, distributor availability, and convenience.

Distributors will deliver a complete order of cleaning and maintenance products to customers. Major competitors sell to a variety of customers, including distributors like Sysco, who receive generic soap from bulk producers, then repackage and deliver it along with other products it sells, utilising the same distribution systems.

Main Competitors

Traditional soap producers

Soap is a common and familiar the commodity of necessity to every company. Traditional soaps employ pleasant scents and dyes to encourage hand washing compliance. However there is no way to verify if hand washing has occurred and traditional soaps do little beyond the pleasant scents to encourage hand washing.

Related: Competitor Analysis Example

The largest current soap producer, Dial Corp, consistently achieves strong sales, and has enjoyed strong market share in the commercial markets. Producing a wide variety of soap products, Dial has maintained 18% in market share over the last decade. The other largest commercial soap providers include Kimberly Clark, Gojo, SoftSoap, Provon and NXT.

Alternative hand washing compliance systems

HyGenius, a product produced by Compliance Control Inc., is a complete hand washing compliance system that is installed (and leased) in businesses like restaurants, hotels, hospitals and receive. The system includes a small control box that controls water temperature, pressure and run time.

By systematically controlling these factors, employees can be both trained and monitored in their hand washing frequency and technique.

Periodic reports stored on the computer and linked to the Internet can be produced to indicate the number of times per month employees have been washing their hands, and the estimated savings that the system has created through efficient water use.

This system has limited value to business managers because they are expensive to install and lease, and do not necessarily increase employee compliance. They provide managers the ability to track usage, but do not help control day-to-day hand washing compliance individually or immediately.

Disposable Gloves

Hypo-allergenic gloves are the solution provided by some organisations to combat the threat of hand washing non-compliance.

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To limit the risk of hand contamination, many restaurants and all hospitals require the use of gloves. Although gloves eliminate the risk of direct hand contamination they are not without downfalls:

  • Gloves can carry bacteria in-between fingers, and on the glove surface, causing similar cross contamination to that of bare hands.
  • Disposable gloves can cost a location upwards of $5,000 each year.
  • Gloves can provide a false sense of security, causing employees to substitute gloves in place of proper hand washing.
  • Gloves rip and tear.

Industry Participants

The soap industry is highly fragmented. There are more than forty different Institutional soap products that compete in the market.

Target Market Segment Strategy

soap-target-market-segment-strategy

  • Our initial day care market will consist of medium to large day care organisations, consisting of twenty or more children. Organisations such as Kindercare and La Petite Academy represent very attractive opportunities for our products.
  • Organisations of this type are attractive because they are well managed, successful, health conscious and nationwide. Within these organisations we will target decision level managers with the power to implement use of our product in those locations.

Market Needs

According to a study published in the medical journal, Infectious Diseases in Children, researchers in hand washing recovered fecal coliforms from the hands of one out of every five staff members, citing that more than 33% of day care facilities “had poor hand washing techniques and no policy for hand washing before eating or after playing outside.

In spite of all the studies about the benefits of hand washing, improper or infrequent hand washing continues to be a major factor in the spread of disease in day-cares.

Hand washing in child care facilities is an ideal initial target market for several additional reasons:

  • Child care facilities have rampant illness and germ problems that can be directly reduced through frequent child and worker hand washing.
  • Child care facilities have strict, government mandated rules that require frequent hand washing.
  • Parents are particularly interested in reducing child illness, making them one of our strongest advocates for the use of CHILDassure in environments they cannot directly monitor.

In a study cited by Family Practice News in 1996, “Scientists had kids wash their hands when they arrived at school, before lunch then again after lunch time, recess and one more time before heading home every single day.”

As a result of these ‘scheduled’ wash times, researchers found that “a month later, these kids had 24 percent fewer days off from colds, sniffles and flus and a whopping 51 percent fewer sick days because of gastrointestinal complaints like stomach cramps or diarrhea.”

With nearly 12 million children in child care facilities across the nation there is a clear need for CHILDassure, our first product, that can both encourage and help monitor child and employee hand washing to ensure a safe, clean environment for children.

Additional future target markets also have significant need for fading dye products:

  1. Hospitals:  “In health care, nurses and doctors wash only 30% of the required time between patient contacts and procedures. Each year, an alarming 2,400,000+ nosocomial infections occur in the U.S. alone. They are estimated to directly cause 30,000 deaths and contribute to another 70,000 deaths each year. Nosocomial infections cost over $2,300 per incident and $4.5 billion annually in extended care and treatment.”
  2. Restaurants:  “Food borne illness kills over 10,000 people each year. Over 70% of all outbreaks originate in food service operations and, as many as 40% are the result of poor food service and cross-contamination. Each year over 80 million estimated cases of food poisoning occur in the United States alone. The U.S. spends between $7.6 and $23 billion annually on health care and lost productivity resulting from food borne illness. The average incident costs the food service company over $75,000 and results in significant future sales losses.”

Market Trends

There has been a recent effort by the Food and Drug Association, the Centre for Disease Control, the National Restaurant Organisation, and others to promote education to increase hand washing compliance in target markets.

The focus of these programs is to educate and encourage preventative control measures for children and workers to help reduce diseases and lawsuits. This has led to greater awareness in our target markets about maximizing cleanliness and minimizing preventable illness.

There is an additional trend in both our target markets and industry towards organic based soaps. Organic products have become increasingly associated with safety and health in a variety of different markets. Our completely organic soap is complementary to this growing market trend.

Market Growth

The demand for child day care services will continue to grow.

As the labor force participation of women between the ages of 16 and 44 remains high, parents of preschool and school-age children are expected to seek more day care arrangements.

As parents continue to work during weekends, evenings, and late nights, the demand will grow significantly for child day care programs that can provide care during nontraditional hours. School-age children, who generally require child day care only before and after school, increasingly are being cared for in child care centres.

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Manufacturing

Furniture Manufacturer Sample Business Plan

In order to start up your furniture manufacturing business you are going to require a business plan similar to this.

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Furniture Manufacturer Business Plan

Executive Summary

Trestle Creek Cabinets will be formed as a cabinet company specializing in custom cabinets for the high-end residential, resort, and commercial market. Its founders have extensive experience in the construction and cabinet industry. Trestle Creek Cabinets will operate under the umbrella of Trestle Creek, Inc., a construction company sharing staff, office space, and administration costs. However, for the purpose of business planning, we are treating Trestle Creek Cabinets as a separate company.

Over some years of being involved with the construction of luxury homes, the company owners have seen a need for a cabinet line with a broad selection of design choices, high-end finishes, along with top of the line organization, customer service, and quality. Trestle Creek Cabinets will meet those customers needs. Building a strong market position in the high-end residential, resort, and commercial development segments, the company projects revenues to grow substantially between FY1 and FY3. By maintaining an average gross margin of over 25%, the company estimates handsome net profits by FY3.

The company owners have provided the capital to cover the start-up expenses. The company currently seeks a 3-year commercial loan to cover the operating expenses.

1.1 Objectives

The company objectives are:

  • To be a top cabinet supplier to luxury homes in the regional market.
  • Revenues to more than double Year1 levels by the end of Year2.
  • Aim to have 70% of sales in high-end residential customer segment.
  • 20% of sales in mid-range residential customer segment.
  • 10% of sales in commercial development segment.
  • To have a showroom within 3 months in a prominent retail space.

1.2 Mission

To deliver a high-quality product, on time and within budget while also providing a fast, error free ordering system.

Company Summary

Trestle Creek Cabinets is a new company that will provide expertise and quality in the cabinet supplier market while meeting the demanding organizational, scheduling, and quality needs of architects, owners, and construction professionals.

2.1 Start-up Summary

Total start-up expenses, including tools, software, stationery, and related expensesare shown below. Two co-owners, Martin Kribs and Brent Palmer, will provide the bulk of the start-up financing. At the same time, the company plans to receive a 3-year commercial loan facility, which will help meet the cash flow requirements.

Products

Our product is essentially made with two main components.

  • The boxes and shelves will be ordered from two different suppliers (Cab Parts, Scheers), and will be delivered in kitset form. They can be finished with custom veneers.
  • The doors, panels, and drawer fronts will come from four different suppliers: Bergmeyer Manufacturing, Homestead Woods, Decore, and Southwest Door Company. We will have 4-6 custom designs, with unlimited different custom finishes, available from Bergmeyer Manufacturing. The other suppliers will provide their stock products.

Market Analysis Summary

Trestle Creek Cabinets will be focusing on architects, owners, and contractors in the regional area who are involved in high-end residential, resort, and commercial development segments.

In 2000, a total of 219 new residential homes worth $168 million were constructed in the Teton County, WY. If we take an average of $40,000 per kitchen, (probably conservative), and multiply that by the 219 homes, that gives us a total of $8,760,000 in kitchens installed for the year. We plan to acquire 4-5% of the market share of this residential segment in our first year. We do not think this is unreachable, especially in a still growing market.

Teton County, Idaho has great potential as three new resort developments, Teton Springs Golf & Fishing Club, Grand Targhee Resort Expansion, and Teton Country Club, come on line.

The following table outlines to total market potential of the three major customer segments in the Teton County.

4.1 Target Market Segment Strategy

Trestle Creek Cabinets will be focusing on contacting contractors and architects that deal with the luxury home market. Making ourselves known to these entities will generate some strong leads, along with getting personal recommendations to the home owners.

There are plans to upgrade office space to a showroom in a high visibility location. This will give us exposure to new home builders that are looking for our product.

4.2 Industry Analysis

There are two main types of cabinet suppliers in the industry.

Resellers of complete cabinet sets using stock items where the cabinets turn up completely built. Usually have no shop facilities but do have show rooms.
Custom shops with full, in-house fabrication facilities. They are usually very product orientated and under-perform with customer support.

Trestle Creek Cabinets can provide high volume work, superior project management, and excellent quality while maintaining a low overhead.

4.2.1 Competition and Buying Patterns

The high-end cabinet market understands the concept of service and support, and is more likely to pay for it when the offering is clearly stated.

There are many competitors in the local market. Although each of them deliver a quality product, we feel they fail to deliver a full turnkey package. There are four factors that govern the cost of all kitchen projects: Scope, Product, Design, and Services. Most people mistakenly think that the size of the project and the choice of brand name products will make for the best results. But it is the design and a company’s services that will have the greatest impact on the quality and value of the customers investment.

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Manufacturing

Salsa Manufacturer Sample Business Plan

Your manufacturing business will need a proper business plan at the start and using this sample will provide you with excellent guidelines.

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Salsa Manufacturer Business Plan

Executive Summary

Salvador’s is a manufacturer of authentic Hispanic foods including salsa and chips. Their products are positioned at the high end of the market in terms of both quality and price. Salvador’s has been in business now for three years and has grown in popularity. What was once a business targeting solely the Hispanic community has grown into a business that has far broader appeal.

Salvador’s has several objectives that they will achieve within the next three years. The first is an increase in sales reaching two million dollars by Year 5. Salvador’s also would like gross margins to be above 55%. Salvador’s also hopes to have 40 different outlets that will distribute their product. Lastly, they aim to become known as the premier authentic Hispanic food producer in the area with an ever-expanding geographic distribution area.

Currently, Salvador’s has two main line of products. Their flagship product is their salsa, renowned for its freshness, uniqueness, and quality ingredients. Originally introduced in one temperature, hot, the market demand has asked for milder temperatures and Salvador’s has responded with both a medium and mild version. To compliment their salsa, Salvador’s offers fresh chips in both yellow and blue corn.

Salvador’s has targeted three main customer groups to sell their products to. The first group is grocery stores. The grocery stores will be then sell directly to the end consumer. This segment is growing at 75% and there currently are 53 potential customers. The second group is wholesale distributors. This segment has a 100% growth rate with 5 potential distributors. The last customer segment is restaurants which have a 45% growth rate. There are 18 potential restaurant customers. As mentioned before, Salvador’s originally targeted the Hispanic community. The market has indicated that their products have broader appeal and Salvador’s has recognized this and acted accordingly. The Hispanic community was initially targeted because of its exciting growth rate. The community has been growing at 22% a year, almost double the average of the overall US population.

While there are many competitors at the mid price point, both regional and national, there are few direct competitors at Salvador’s high price point. This is quite advantageous for Salvador’s, providing them with additional breathing room to establish themselves as the premier brand of authentic Hispanic food.

Salvador’s strong management team of Ricardo and Pat Torres will ensure sustainable growth for Salvador’s. Pat is the President and has 12 years of food industry experience. The previous five years was as manager of a four store Tex-Mex restaurant chain. This provided Pat with incredible insight and industry knowledge that reinforced the idea to start a business from scratch. Ricardo brings Salvador’s over six years of financial control experience that was gained as a CPA with Arthur Andersen. Salvador’s management team, due to its seasoned strength will help Salvador’s achieve the dream of being the premier Hispanic food manufacturer.

Salvador’s has begun to reach profitability and forecasts a modest net profit in three years. The commensurate modest profit margin will be achieved from sales. The financials within the plan further reinforce the exciting nature of this business.

1.1 Objectives

  • Increase sales significantly over the next three years.
  • Improve gross margin % over the current product line and maintain that level.
  • Add products and services to meet market demand, again at high gross margin.
  • Improve inventory turnover, reduce the cost of goods sold while maintaining the high quality of the products.
  • To provide jobs to the Hispanic community that are rewarding and fulfilling.

1.2 Mission

Salvador’s was built on offering the highest quality and value in its authentic hot salsa, filled with the history of the Hispanic community. Time honored family recipes have been passed down through the generations, rich with ethnic heritage. Knowledgeable consumers were looking for authentic products, filled with the best ingredients. The consumer was crying out for a change! They wanted real down home Hispanic salsa.

Salvador’s answered this call, first with its hot salsa, then adding mild and extra hot salsa, followed by yellow and blue corn chips. Constantly striving to supply what the consumer is asking for, we continually review what is available in the marketplace, and what isn’t. Improving on what is available and providing new products and services to the areas of need will assure our success in a market driven by consumer demand.

1.3 Keys to Success

  • Delivering high quality products that set themselves apart from the others in taste and value.
  • Providing service, support, and a better than average margin to our dealers.
  • Increase gross margin %.
  • Bring new products into the mix to increase sales volume.

Company Summary

Salvador’s is in its third year of operation, increasing sales five-fold in its second year, and is on track to repeat this in its third year. It has a good reputation, excellent people, an increasing position in the local market, and opportunities to reach out into other states. Starting with a few outlets for our products, we now have over 40, with two large grocery chains in the approval process of carrying our full line of products, and a large distributor intending to sell over $100,000 worth of our products annually.

2.1 Company History

Salvador’s has been hindered only by the lack of working capital it had in its initial stages of setup and operation. Sales are growing steadily, with the cost of goods sold consistently decreasing. But to make significant headway in this area, additional capital is needed to purchase ingredients and processing in larger volumes, thereby reducing the costs of goods sold by 32% overall.

2.2 Company Ownership

Salvador’s is a privately-held C Corporation owned in total by its co-founders, Ricardo and Pat Torres.

2.3 Company Locations and Facilities

Currently we have one location in suburban Perrysburg. It includes the production area, offices, and warehouse area. We are currently looking into plans to increase the size of the warehouse by adding a location, and providing a store front to enhance the current business sales practices, while providing a high quality, ethnic outlet for Hispanic foods.

Products

Salvador’s sells its authentic Hispanic salsa and chips to an ever-growing clientele. Originally geared toward the local Hispanic community, the market has expanded to include a much larger geographical area, in addition to a very broad consumer response.

We are selling quality and product-uniqueness in a market segment filled with competition. Our approach is to take our product image up-market because or our rich heritage and uncompromising view of product quality. This focus has enabled us to view the voids in the market, and add product to our line that will fill it. We have researched and reviewed other ethnic food item organizations, tracking their successes and positioning ourselves similarly.

Salvador’s is building a reputation for high quality and strong value in a product filled with authentic Hispanic flavor. We service our dealers just as if they were a part of the family – and that is our unique approach to marketing our products. You are not just a dealer; not just a consumer; you are special to us – you are family. We go to great lengths to provide our dealers with high quality products, and the ability to make a good margin on them. In addition, we make ourselves available for on-site demonstrations of the product at no charge to them. We hope to continue offering this service, but at a minimal cost to lower our expenses in the future.

3.1 Product Description

We currently offer two basic product lines:

  • Our original product, Salsa, was available only in a hot flavor. Because of consumer demand, we have added extra hot and mild flavors.
  • Chips, both yellow corn and blue corn.

3.2 Competitive Comparison

To differentiate ourselves from all of the others, we stress quality and authenticity of the ingredients, and the heritage of the family recipe.

We sell more than a jar with salsa in it. We sell high quality ingredients, carefully put together in a masterful blend that can’t be matched in taste or true Hispanic authenticity.

These are simple products that must be presented in a way that encourages the consumer to just give us a chance. Once they try our product, we will have a long-term relationship with them.

As in similar food items, we can charge a premium for what we supply. The market has shown it will buy our product over more readily known names because of the richness and authentic taste of our salsa.

3.3 Sales Literature

We are currently working on a new line of brochures and sales materials to assist our marketing, and that of our dealers. Our newly designed labels show the direction we are taking in this area, and we have enclosed a copy as an appendix/attachment.

3.4 Sourcing

Our costs are a part of the margin squeeze. As our orders go up, we need to increase our production in a way that also increases our margin. We have found a local supplier that can reduce our costs by handling much larger batches of salsa than we are currently able, yet maintain our high quality. This will reduce our costs over 32% per jar in the production of our salsa.

We need to continue to find additional opportunities that will afford us lower costs of production while maintaining the quality that has put us on the map. Our outsourcing for the corn chips has shown we can contract for a high quality product that we will be able to put our name on, and meet our goals for gross-profit margin.

3.5 Future Products

We are currently researching the addition of an authentic Hispanic Sauce, as well as other Hispanic food items to offer our current clients, and to build increased interest in Salvador’s, Inc.

We are now looking into additional products, sauce, and other Hispanic food items, as well as other ways of marketing the overall line.

We are also looking into creation of a small store front, and eventually a lunch counter or small restaurant setting.

Market Analysis Summary

We have been selling at the rate of $2,500 per month to local restaurants, small grocery stores and distributors of Hispanic foodstuffs. Salvador’s is currently awaiting approval for a large grocery chain to carry our products, and has received a commitment from a large distributor to sell from $100,000 to $150,000 of product per year. There are several other large grocery chains that have been approached and are in various stages of interest in carrying the Salvador’s line of product.

4.1 Market Segmentation

The Hispanic food industry is in a boom period. While there are many items from various vendors available, Salvador’s has approached the market as a Specialty Retailer: a provider of authentic high quality Hispanic salsa and chips.

We have made significant inroads with several area restaurants and a small grocer’s, each providing us with a market presence. We are now looking at developing our own store front as an adjunct to our current marketing. There is is a need for a specialty retailer catering specifically to the Hispanic client and to the individuals that appreciate authentic Hispanic cuisine.

In addition to the above, we are also looking at packaging our products for other groups to use for fundraising events, gift baskets for corporate promotions, and the possibility of a house restaurant to further advertise and promote the products.

4.2 Target Market Segment Strategy

We are initially focusing on the Hispanic community. They will be able to appreciate more readily the authenticity of the product. The market will observe the products they choose, and they will indirectly become promoters of our products.

4.2.1 Market Growth

The market analysis shows us a broad range of prospective clients, covering more than one ethnic group or body. The largest of these groups of customers is that of the mainstream American, which is projected to grow at 12% per year. The fasting growing segment is Hispanic, which is projected to grow at 22% per year.

4.3 Industry Analysis

The Hispanic food industry is relatively new, and its popularity is ever on the increase. The authentic taste is not common in this industry, which gives Salvador’s a leg up on the competition.

In an industry currently in a steady upward growth curve, Salvador’s is poised to capitalize on the consumer’s desire for authentic, high quality, Hispanic cuisine.

While a troubling economy can affect many areas, food items are generally not as affected, with specialty items seeming to always find favor in the market place.

4.3.1 Competition and Buying Patterns

There are many suppliers of salsa and similar products currently available on the shelves at your local grocer. However, there is still a lot of room for new products and new companies.

By positioning ourselves at the higher end of the market, we expose ourselves to consumers trying to get out of the rut, who continue to use a product that they have long forgotten why they buy. By not trying to compete head on, we are selling our product consistently and increasingly. With entrance into some of the larger grocery chains we will broaden our audience considerably.

4.3.2 Main Competitors

Although Salvador’s is staking out the high end of this market, we can not fail to be compared with some of the current leaders in this arena. Chi – Chi’s, El Paso, and Hunt’s are just a few of the participants in this segment. Most have been on the shelf for so long they are taken for granted by the consumer. Our fresh approach to authentic taste and texture makes us different.

4.3.3 Industry Participants

While there are currently several vendors in this market selling competitive products, the commonality of those products provides an opening in the marketplace for the vibrant packaging and positioning of Salvador’s salsa and chips. We stand out on the shelf, we stand out in the restaurant, and we will stand out in the mind of the consumer.

4.3.4 Distribution Patterns

While current brand names carry more weight in the marketplace, because of our unique marketing approach using local restaurants, and displaying and demonstrating our wares in local grocery stores, we are able to build consumer awareness at a margin of the cost of television and radio advertising.

In going to food fairs, neighborhood festivals and the like, we build consumer awareness and generate demand at the same time. While at these events we are also able to directly research the market and hear first-hand what the consumer is seeking.

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Tracking Device Maker Sample Business Plan

If your business will be offering tracking devices to your customers then starting off with a business plan such as this is ideal.

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Tracking Device Maker Business Plan

Executive Summary

RQM Technologies (RQM) is an exciting start-up company in the newly emerging field of Personal Tracking Devices; respected industry analysts such as Ovum and ABI Research predict this will become a $22 billion market within the next five years.

Products and Services

RQM will develop and distribute miniaturized Personal Locator Devices (or Personal Tracking Devices). Initially, the manufacturing of our devices will be subcontracted, while we develop the supporting software and systems internally, although we plan to manufacture our products in-house in future years. Unlike our competitors, we have military-inspired proprietary technology (patents applied for) which allows many of our systems to work with or without the presence of cellular towers, enabling their use anywhere in the world, including cities, deserts, oceans, lakes, mountains, or anywhere else adventurous travelers find themselves. Our products are also distinct in that they are small and fully programmable. Our systems can be customized by the end user for his or her unique, individual applications – for example, maritime applications which include a water-activated signal (as when a crewman falls overboard) are different from those required in business applications.

Market
Our primary target markets include, but are not limited to, the family consumer, channel sales to original equipment manufacturers (OEMs), businesses tracking shipments or vehicles, the military, and the political arena. Because of our unique proprietary programming capabilities for each individual unit, we have already received indications of interest from several of these target markets, including one branch of the U.S. Military.

We predict our systems will also appeal strongly to families concerned about the safety of their loved ones. Sadly, child abduction is on the rise globally.  More than 2,100 children are reported missing each day in the U.S. alone (FBI National Crime Information Center). At the other end of the age spectrum, there are 4.5 million Alzheimer patients in the U.S., 60% of whom (2.7 million adults) wander away from their homes at some point, unaware of their surroundings. We believe our devices will greatly reduce these figures in both cases, while potentially saving lives.

The combined number of “potential” customers for our products is well over 500,000,000; we will focus on a more realistic and attainable three-year sales goal of roughly 99,000 users worldwide, which will generate many millions of dollars in sales revenues.

Management
The founders of RQM Technologies, Steven M. Bloome and Andrew F. Siska, have been associates for over 20 years; they create the perfect synergy to ensure the success of our company. Steven M. Bloome is a Sales and Marketing Management veteran with more than 25 years of successfully penetrating previously unseen markets niches, partnering with other companies in win-win scenarios, and creating national presence for companies. He is also, accomplished in launching new products. Andrew F. Siska is a Chief Electronic Engineer with 20 years experience, and is considered an expert in his field, having previously designed devices for military applications, medical imaging systems, computers and more.

By focusing on our strengths, our key customers, and our customers’ needs, RQM Technologies will increase sales to several millions of dollars within two years, while also improving the gross margin on sales, cash management and working capital.

1.1 Mission

RQM Technologies’ mission is to become the leading vendor of Personal Locator Devices worldwide. Through a combination of evolving technologies, miniaturization, affordability for the end-user, programming capabilities and ease of use, RQM Technologies will be known as the premier developer/supplier of potentially life-saving Personal Locator Devices.

1.2 Keys to Success

The keys to success in this business are:

  • Product quality and efficacy in real-life situations.
  • Utilizing next-generation technology in order to improve upon current systems, while differentiating ourselves from our competition.
  • Marketing: either dealing with channel issues and/or barriers to entry, or solving problems with major advertising and promotion budgets in order to penetrate our target markets.
  • Management: products delivered on time, costs controlled, marketing budgets managed. There is a temptation to increase growth at the expense of profits; we will keep a close eye on this temptation in order to live up to our plan.
  • Sustaining controlled growth in order to manage start-up costs more efficiently.

To maintain these key factors, RQM Technologies’ needs include start-up funding, partnering with value-added investor/partners, aggressive marketing, quality sales professionals, accomplished C-Level management, product branding, increasing reach into target markets, affiliating with the right channel partners, competitive intelligence and appropriate use of evolving technologies.

1.3 Objectives

RQM Technologies has identified three types of objectives that will serve as challenging but attainable goals for the organization. They are:

Business Objectives

  • To become the premier vendor in the new and evolving Personal Locator Device industry.
  • To reach profitability within one year of the company’s launch.
  • To develop additional profit centers such as programming, training, seminars, ancillary equipment, etc. within the first two years.

Financial Objectives

  • Increase product sales to several million dollars annually by the end of the second year.
  • Bring gross margin up and maintain that high level by the third year.
  • Improve inventory turnover on an ongoing basis, until “just-in-time” inventory is standard by the third year.

Marketing Objectives

  • Focus on target marketing to increase market penetration and domination.
  • Expand target markets with controlled growth.
  • Establish brand awareness for the RQM Technologies’ name and products.
  • Position ourselves as the leading Personal Locator Device company in the world.

Company Summary

RQM Technologies is a privately owned start-up company, located in Bolingbrook, IL, a western suburb of Chicago.

RQM Technologies was formed as a company committed to developing next-generation remote Personal Locator Devices in order to immediately locate and aid in the timely rescue of:

  • missing children
  • the active elderly (including Alzheimer’s patients)
  • soldiers in the field and at sea, mariners lost at sea
  • and even pets

while also serving the business arena, as a way to better manage the logistics of:

  • outside personnel
  • fleet vehicles
  • valuable parcels
  • and deliveries

The company’s management philosophy is based on responsibility and mutual respect, while encouraging ownership of responsibilities to help foster personal and professional growth. RQM Technologies focuses on productivity for growth and profitability, and respect for its customers and employees to increase repeat and referral business while minimizing employee turnover. Additionally, the company encourages employees to have fun by allowing creative independence and providing professional challenges that are realistic, attainable and rewarding.

2.1 Start-up Summary

Our plan begins with a two month start-up period during which we will focus primarily on setting up our offices and developing our system designs, but also including significant initial marketing work. Our start-up expenses for these first months will be used for further product development, legal costs, payroll, marketing and typical expenses associated with opening our first office. The founders will provide the first round financing to launch the company, initiate a small production run of our Personal Locator Device(s), and initiate further product development, while marketing and pre-selling our devices.

In addition, we will need another investor/partner to provide funds to cover the cash necessary to see us through our first year in business, as we begin to make and sell our products. We plan to fund future growth from sales revenues.

Initially, we will be leasing a relatively small office space for administrative functions and an electronics bench lab in order to keep our first year expenses to a minimum, as we continue product development while marketing and pre-selling our Personal Locator Device(s) prior to production.  We will consider a larger office space only when we have outgrown our current facility, dependent on sales, budgets and personnel needs.

We have identified the following equipment needed for opening our first office:

  • Engineering lab equipment.
  • Software and hardware development tools.
  • Office furniture for three (sales and administrative) workstations.
  • Dell Computer Systems – three desktop computers, two laptop computers, laser printer, color printer, digital camera, scanner, GPS cell phones and a broadband internet connection.
  • Telephone system, and two GPS cell phones.
  • Copier and fax machine.
  • Additional costs for assorted professional service providers’ fees including business, development, legal and accounting providers.
  • Professional website development and maintenance.
  • Two leased company vehicles and associated costs.

2.2 Company Ownership

RQM Technologies is owned and operated by its founders, Steven M. Bloome and Andrew F. Siska.  We are currently in search of an investor/partner(s) who will bring more to RQM Technologies than just financing. The ideal Investor/Partner(s) we are seeking should bring expertise in the areas of legal, financial, and international regulatory issues, as a portion of our target market(s) will be international in scope in the near future. The Investor/Partner(s) will receive an equity position in the company and sit on the Board of Directors.

Products and Services

Products
RQM Technologies develops, markets and sells miniaturized, low-cost, electronic, remote Personal Locator Devices using unassisted GPS/GSM technology, which is not reliant on cellular towers to relay data. The remote Personal Locator Device system includes a small programmable external device (approximately 2″ x 2″ x 3/8″) fitted with GPS/GPM transceivers, which can be activated from a remote location anywhere in the world to instantaneously pinpoint the wearer’s location, speed and direction of travel, accurate to within 3 meters in real-time. This will prove an invaluable tool in helping families and law enforcement agencies locate missing persons within seconds, with the distinct potential of saving lives by finding missing persons much faster than any other current technology available to an end-user.

Our remote Personal Locator Device(s) immediately locate and help rescue lost or missing children, teens, the active elderly (including Alzheimer’s patients) pets, military personnel in the field or at sea, with a simple cellular phone call or computer key stroke. These same Locator Devices can be used in the business arena in order to better manage the logistics of outside personnel, sales people, deliveries, fleet operations, valuable packages or equipment in transit, helping to increase their business efficiency and thus improve profits.

Phase 1 Personal Tracking Device (PTD) will be cellular-tower-reliant, in order to offer the lowest price point product to the end-user. These will work well in areas where cellular towers are present, such as most cities across the continental U.S., still accurate in real-time to within about 9 feet.

Phase 2 PTD will utilize military technology not reliant on cellular towers, but rather linking directly to the GPS satellite network in orbit. These will be effective anywhere in the world, for applications where cellular towers are not present, such as mountains, lakes and oceans, deserts, and small or remote cities where cellular towers are not present. Although slightly more expensive to the end-user, we feel this product will address the problems associated in areas without cellular coverage, not currently available outside the military. The Phase 2 PTD is a unit designed for the military, sportsman, hikers, campers, boaters, and other adventurers.

Both units are being developed simultaneously, and will be available for pre-sale orders in the Fall of 2004.

Services
As RQM Technologies grows, we will be defining and developing additional profit centers for our company and investors by offering value-added services such as training classes, seminars, on-site programming, private labeling for our channel market resellers, and other ancillary revenue streams based on individual client needs.

Market Analysis Summary

The Personal Locator Device (or Personal Locator Service) industry is fairly new in the consumer market, but as most analysts agree, this is the beginning of a brand new industry with the potential for explosive growth due to the rapidly decreasing technology costs, which will allow consumers to afford and utilize a technology which was originally developed by, and for, the military in the 1970’s.

Ovum Research states that “Location Services” revenues will grow to $18 billion by 2006.  ABI, a NY based technology research firm states that the global personal GPS market will be propelled to more than $22 billion by 2008. While there is a market potential for more than a billion users worldwide, we are estimating a more realistic long-term market for Personal GPS/GSM technology, initially marketed within the United States.

Our Market Analysis focuses on five key potential customer groups:

  • Family Consumers
  • Original Equipment Manufacturers (OEMs)
  • Businesses
  • The Military
  • Political and other Government Consumers

4.1 Market Segmentation

Our market segmentation focuses on five key areas of potential customers. Our targeted market segments have so far failed to meet their own needs for low-cost, programmable tracking devices by developing such systems internally. While it is difficult to make an exact classification of the market needs for such a new electronics product, our research suggests the following (full market analysis details can be found below in the Detailed Market Breakdown topic):

  1. Family Consumers: With over 875,000 children reported missing in the United States in just the last year, this low-cost device will help families concerned about the whereabouts of their children, teens, elderly parents (including Alzheimer’s patients), and pets, by enabling them to keep tabs on their loved ones’ locations at any given time. One of the many programming capabilities of this device will allow the family to set distance parameter guidelines, such that once the wearer of the device (for example, a young child) travels beyond a set distance from the “base” unit, the remote unit is automatically activated to alert the “home base” unit (a cell phone, pda or computer) of the child’s location, direction and speed of travel. This will be a great asset in assisting law enforcement agencies in recovering missing persons within minutes. Statistics from the FBI indicate that missing children who are murdered are usually killed within three hours of abduction. The RQM Technologies Personal Tracking Device (PTD) will save lives, by immediately alerting the “base” unit, aiding in timely tracking and rescue by law enforcement agencies. Another programming capability is the ability to download all medical information, contact information, emergency numbers, etc., in the event an individual is found incapacitated, allowing emergency teams to treat a patient effectively, while alerting the guardian of her child’s, parent’s, or pet’s whereabouts.
  2. Channel Sales to Original Equipment Manufacturers (OEMs): As the heavily saturated markets of cellular phone carriers and computer manufacturers grow more competitive each year, both segments are continuously looking to add new technologies and systems to draw consumers to their specific and sometimes proprietary products and services. The RQM Technologies remote devices are designed to be used with a “home base” unit, (a PDA, most cell phones or computer), and we see great potential to partner with cellular providers, cell phone manufacturers, computer manufacturers and resellers. This natural synergy between our product’s capabilities and this market segment’s needs should prove to have a large and positive impact on the awareness of the RQM Technologies name and products, as well as increasing revenues through positioning our products with the leaders of this market segment. It is our understanding that cellular phone providers will be incorporating the technologies used in our “home base” units into their cell phones within the next three years. This will prove invaluable for RQM Technologies, as we position ourselves as the leader in this remote technology, which will work with almost every new cell phone manufactured by 2006 – 2007.
  3. Businesses: Our product enables a business location to keep real-time tracking of company vehicles, valuable packages, outside employees, deliveries, etc. We believe our device will be viewed by businesses as an economical way to increase productivity, giving them real-time data on the locations of their field employees and vehicles at all times, and helping to better manage fleet and deliveries logistics. One of our key strengths in this market segment is the low one-time cost, rather than a recurring fee for usage, adding to the business’s ROI for our products.
  4. The Military:  According to recent Department of Defense press releases, the military appears to be searching for a device such as ours. The United States Coast Guard, for instance, is called upon for Search and Rescue missions more than 40,000 per year, on average. The problem with the currently used “beacon system”: Since 121.5 MHz beacons transmit anonymously, the only way to ascertain the location is to dispatch expensive resources to investigate. Current beacon systems can take up to an hour to translate information, while only providing vague location data, forcing time intensive and expensive Search and Rescue (SAR) missions. In the field, the RQM Technologies’ remote unit will save lives, finding those missing in action, and locating sailors lost at sea. Their use will also taxpayer dollars, making Search and Rescue missions shorter and less expensive. A consultant to the U.S. Navy has indicated solid interest in two of our devices for use in the military.
  5. The Political Market: According to statistics from specialized insurers like Hiscox (UK), political kidnappings are prevalent in restive countries such as Colombia, Mexico, and the Philippines; they are also on the rise in smaller countries such as Turkey and Trinidad. The governments of these countries are spending millions of dollars in ransom each year in order to minimize publicity and embarrassment. By fitting political figures, captains of industry and high profile businessmen with our device, we believe this trend will decrease in the countries which use our product, proving its efficacy in the field and sparking interest from other countries.

Our research shows that all current competitors with similar products require the user to log on to the competitors website (or phone into call-centers) to actually locate the missing person, while incurring monthly fees ranging from $20.00 – $40.00 per month. In essence, their systems dictate that the users must be located at their internet-accessible computer in order to use the competitors’ systems. Imagine that you are a mother, visiting a park with your child. Suddenly, you turn around and cannot see him – he has disappeared! With our competitors’ systems, you would have to run home to log on to your computer, losing valuable time and probably increasing the distance between yourself and your child. With our system, however, you simply turn on your PDA or cell phone while still at the park, and view your child’s location, direction and speed of travel while you are still in close proximity. The RQM Technologies systems will allow a user to locate the missing person(s) from potentially any cell phone, wireless Palm Pilot, or PDA, freeing them from the need to be in front of a fixed computer, while increasing real-time efficiencies. This important difference of a few minutes will literally translate into saving lives.

In addition, we project the following secondary long-term markets:

  1. Maritime Market: Personal Flotation Device (PFDs) and Life Boat companies are typically manufacturers of textiles, and do not generally have the expertise to develop high-end global positioning satellite electronic tracking systems. We are planning on lobbying the Senate, through our consultant to the U.S. Navy (and Coast Guard), to enact laws mandating that these life-saving devices be fitted in all Personal Flotation Devices. This would save lives, and save taxpayers hundreds of millions of dollars in costs associated with traditional U.S. Coast Guard Search and Recovery methods. The Coast Guard admits that radio beacons are outdated technology, and they are currently implementing a program called Rescue 21, searching for better ways to locate missing persons at sea in a more timely and efficient manner.
  2. Pet Supply Chain Stores:  RQM Technologies Personal Locator Device is small enough to fit onto a pet collar. We are planning to partner with large pet-supply chains such as PetCo, PetSmart, etc., as well as pet collar manufacturers, to make this technology more accessible to consumers worried about their pets wandering off.

4.1.1 Detailed Market Breakdown

Family Consumer Segment
We predict our systems will appeal strongly to families concerned about the safety of their loved ones. According to the FBI’s National Crime Information Center (NCIC), 85% to 90% of the 876,213 persons reported missing to America’s law enforcement agencies in 2000 were juveniles (persons under 18 years of age). That indicates that 2,100 times per day, parents or primary care givers felt the disappearance was serious enough to call law enforcement. In addition, 152, 265 of the persons reported missing in 2000 were categorized as either endangered or involuntary. The number of missing persons reported to law enforcement has increased from 154,341 in 1982 to 876,213 in 2000. These figures represent an increase of 468%, and the numbers sadly continue to rise. According to the Missing Children Society of Canada (MCSC), in 2002 there were 66,532 children reported missing in Canada alone. And even more frightening, the National Center for Missing and Exploited Children (NCMEC) reports that 74% of abducted children who are murdered are dead within three hours of the abduction.

These figures indicate the strong market need for a method of quickly and reliably locating missing children. This so-far untapped market is quite large, even just within the U.S. According to the 2002 U.S. Census Bureau reports, there are 60,492, 447 are under 14 years of age in the U.S., including:

  • 33,050,162 children in elementary school (grades 1-8)
  • 4,005,938 children in kindergarten
  • 4,613,179 children in nursery/preschool

But the family market also has to worry about its elderly loved ones. According to the same census report, there are 40,144,000 adults over 62 years of age in the U.S., 4.5 million of whom have Alzheimer’s disease. With a median income in the U.S. of $51,742 per family, our family consumer market in the U.S. has the potential for selling our affordable devices for over 60,492,447 children under the age of 14, in addition to over 4,500,000 active senior citizens afflicted with Alzheimer’, based on the above figures, for a combined target market of over 64,992,447 consumers.

Business Segment
It is more difficult to determine exact numbers for the business segment, as specific data is not as readily available. However, as of 2001 (latest census data available) there were 12,753,076 businesses operating in the U.S. which fit our target market, meaning they have a strong or immediate need for our products; this number excludes others, such as retail sales, wholesale traders, information management, education, public administration, or other services not defined.

Business breakdown by employment in specific industries:

  • 2,405,825 Americans work in agriculture, forestry, fishing, hunting and mining.
  • 9,161,256 work in construction.
  • 17,067,103 work in manufacturing.
  • 6,884,607 work in transportation, warehousing and utilities.
  • 12,486,846 work in professional, scientific, management, administrative and waste management services.

The price points for similar Personal Locator Device systems using GPS/GSM technologies in the business segment are currently in the $200 – $2000 range, and in most cases, do not offer the remote abilities or programming capabilities for specific businesses needs in managing logistics and tracking. We believe our low prices, combined with these features and the autonomous internal tracking ability (not reliant on a vendor’s website with monthly fees) will be very attractive to the business segment.

Military and Government
On an average day, the United States Coast Guard assists 192 people in distress, and conducts 109 search and rescue cases. In 2000, the Coast Guard responded to 40,264 calls for assistance – from a broad spectrum of the public ranging from recreational boaters in distress to the captains of freighters sinking in gale-force winds. During that same year – on a share of its operating expenses, totaling $342 million – the service saved more than 3,400 lives and saved over $80 million in property. Our system will shorten the duration of current Search and Rescue missions, which in turn will allow rescuers to locate victims at sea faster. This will not only save more lives, but will cut costs for the United States Department of Defense.

This same system used at sea would immediately alert the deck’s computers if a serviceman at sea fell overboard, once the remote unit is programmed to be water activated. We have a preliminary interest from the U.S. Navy, thanks in part to our ability to program individual remote units with medical histories and other pertinent information for each serviceman’s remote unit. By using our system, coupled with encrypted signals for the military, our programmable PTDs also work in deserts, jungles, mountains, etc., showing longitude, latitude, altitude, speed and direction of travel, representing “eyes in the skies” for the military to know exactly where their field personnel are located at any given moment.

We have also developed a lower-cost unit for the U.S. Navy which relies on “line of sight” technology, which is affordable enough to equip every seaman in the U.S. Naval fleet. We have already received an indication of interest from the U.S. Navy, through our consultant, due to the extremely low cost and efficacy of the product.

4.2 Target Market Segment Strategy

Our choice of target markets is strategic, and reflects our strengths and weaknesses.

  1. The Family Consumer Market is key for RQM Technologies for several reasons. First, as a system that works anywhere in the world, (versus all of our competitors’ cellular tower reliant systems), our potential market is 8 billion people worldwide. Capturing a market share of only 1/10 of 1% of this potential, we would realize the sale of 8 million units. As we enter this market segment, we will be aggressively seeking partner companies such as cellular phone providers and computer OEMs (included in channel sales to further penetrate the consumer market) and associations such as The National Center for Missing and Exploited Children, The National Alzheimer’s Association, Amber Alert Network, etc. An alliance with any of these type of organizations will add significant credibility, branding and positioning, thus generating sales for RQM Technologies.
  2. The Channel Sales to OEMs segment will be strong for several reasons. By positioning our product for cellular providers, cell phone manufacturers, and computer manufacturers as an ancillary item to help them market their own products, we will effectively increase our sales force substantially, without the expenses of payroll, benefits, etc., because their sales force(s) will sell our products for their respective companies. This would also positively impact branding, making our name more commonplace in all the markets discussed herein. By securing alliances in this market, we also position ourselves as the leader in this new technology and its associated applications. This will foster confidence in the RQM Technologies’ product, increase sales dramatically and help our company break into the global market.

We will also be seeking entry into the automotive market to compete with LoJack. Our system is more effective than the current LoJack system, and with a lower price point, we feel we will be able to partner with the automotive manufacturers. The RQM system will allow them to offer a more efficient product to their customers, while increasing their profit margins for this type of technology.

The Business Market is more difficult to estimate. RQM Technologies’ products will benefit any business that depends on knowledge of the whereabouts of their products, services, vehicles, valuable parcels or outside personnel are on a real-time basis. The keys to success in this segment are threefold:

  • An affordable, one-time cost per unit for the business, instead of our competitors’ higher-priced units with recurring monthly charges.
  • The ease and ability to self-manage this program internally without the necessity to use call centers or websites for a monthly fee.
  • The programming capabilities of our units, which allows businesses to easily customize each individual unit based on their unique needs for each individual application.

The Military Market: We have a strong contact with a consultant to the U.S. Navy, who feels, based on recent DOD press releases, coupled with previous projects on which he has successfully consulted, that we are developing a product the military would greatly desire because of its purpose, abilities and low price point. One of the benefits to the programming capabilities of our PTD is the ability to program each soldier’s medical information and history into their remote units, so that any medic attending to them in the field would immediately have this valuable information. The U.S. Navy will be very interested in two of our locator systems.

The Political Market may be more difficult to penetrate because of the complexity of foreign governments, and international laws, and wide variations in cultural approaches to safety and government oversight of individuals. However, we feel we will still be able to enter into agreements with several smaller countries that are in the throws of political turmoil. We project that the benefits our products provide will quickly foster confidence in their potential, and will not be seen as a “Big Brother” device. Once our products have proven their efficacy by saving individuals from kidnappings, especially high profile officials, we believe markets in other countries will quickly open up to RQM Technologies.

4.3 Service Business Analysis

We are part of the life-saving electronic devices industry, specifically Personal Locator Device(s), an industry projected to grow to over $22 billion dollars within the next five years. Market leaders in this small but growing personal locator industry are iTrack, Wherify and uLocate, and LoJack for the automotive industry. RQM Technologies’ Personal Locator Devices (PLDs) are smaller and more easily concealed, less expensive, uniquely programmable for individual needs, and more user-friendly than our competitors’ products.

RQM Technologies will continue to conduct industry analysis to stay current on the nature and dynamics of this new and evolving technology (and emerging target markets) which, while in its infancy, is poised to experience explosive growth. This focus will help management develop insight and devise sustainable business and marketing strategies to assure future success and avoid making decisions based on blind assumptions, while continuing to develop next generation technologies to remain the leader in this industry.

4.3.1 Competition and Buying Patterns

In the Personal Locator Industry, consumers are searching for the most effective product at the lowest possible price; different market segments will put different emphases on ease of use versus reliability or cost, depending on their needs and budgets. Although we will emphasize some aspects of our products differently for the distinct market segments described above, our products beat the competition on all grounds.

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