Professional Athletic Equipment, Inc. will manufacture and market a protective device for young athletes. The trade name "Body Armor" will serve as brand name and identity name for the product. The product is intended to help prevent injury from blunt trauma to the chest, side, and abdomen. The device may also help prevent sudden death from commotio cordis (heart stoppage due to external trauma). This injury occurs primarily in baseball but can also occur in soccer and other sports. A United States patent on the device is in the application process and is pending.
This business plan is part of our regular business planning process. We revise this plan semi-annually.
In the next full year we intend to produce and market initial product. No sales have occurred to date.
We are projecting sales of 750 units per month on average in year one of marketing. This will place sales volume at £242,550 for the year. Management predicts sales exceeding £4 million and profitability in year three. Year three profits are expected to be £593,570 before taxes.
Our keys to success and critical factors for the next year are, in order of importance:
- Initial product production on first three sizes.
- Test marketing and basic research to determine product acceptance.
- Test marketing of multi-channel distribution.
- Test marketing of media, PR, pricing, and product endorsement plans.
- Goal of recouping production start-up costs and first year depreciation on initial three molds in year one.
And after that:
- Limiting loss in year two to less than £200K.
- Reaching limited retail distribution in year three (2nd sales year).
- Attaining profitable operations in year three.
1.1 Objectives
Professional Athletic Equipment, Inc. has set a modest goal for year one sales. These targeted minimums when achieved will bring us close to over-all break-even for year one and will provide a platform for limited business expansion in year two.
The sales targets by size are:
- Small--4500 units
- Medium--2250 units
- Large--2250 units
Attaining these targets will result in year one sales volume of £242,550 and will confirm a successful test.
Costs will be controlled to maintain projected margins at these modest sales levels. If sales exceed these goals additional production and stepped-up marketing activity can be implemented quickly, although additional capital will be required on short notice in order to fully implement growth. On the safe side, some sales may be missed in order to gear up for year two.
1.2 Mission
Professional Athletic Equipment, Inc. is a manufacturing and marketing company dedicated to protecting young athletes from tragic injury and death. We intend to make quality, tested products and to make sufficient profit to generate a fair return for our investors. Our initial product, the "Body Armor", will be sold via targeted direct marketing to consumers, who are the parents of youth baseball participants. The "Body Armor" is intended both to help prevent injury and to improve athletic performance via its confidence enhancing attributes among youthful sports participants. The "Body Armor" seeks to foster the enjoyment of sports by young people. We intend to grow the business and to establish our brand as a product leader and innovator in its specialty niche. We intend to finance continued growth both internally and externally and to develop and acquire new and additional products once our marketing platform is established. We will conduct our business in accordance with Christian values and strive to maintain a friendly, fair and creative work environment which respects ideas, hard work, and the dignity and worth of the individual.
1.3 Keys to Success
The keys to success for Professional Athletic Equipment, Inc. are:
- Product Quality. New molds must be made and new production commenced. Suppliers of all components must be found and initial orders placed. Timely delivery and assembly must be maintained with re-work and waste held to a minimum.
- Marketing. Once quality product is available, the success of Professional Athletic Equipment, Inc. rests wholly in the marketing venue. The "Body Armor" is a new product and consumers must be educated as to its availability and purpose. Most critical to success is the control of media costs to generate sales.
- Management. While there is a temptation to grow a business exponentially, it is critical that Professional Athletic Equipment, Inc. management concentrate first on proving product salability within certain price points, margin requirements, distribution channels, and establish consumer acceptance. Once these answers are found, then controlled expansion (which requires increased production and investment in inventory) can be executed with confidence.
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