Giraffe Racks

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Business Plan Presentation
Tyler Hutchens Dave Ryan Gary Tobin Carrie Xing
2
Agenda

• The Problem
• Giraffe Rack Solution
• Marketing Strategy
• Operations Strategy
• Financial Plan
• Questions

3
Bicycle Rack Market trends

• SUV Sales are increasing as a percentage of
  total vehicle sales.
• Sales of racks to SUV owners are increasing by
  15 annually.

4
People Want Roof Racks

• Most people would rather use a roof rack, but
  cant because of the vehicle size
• Bobby Noyes, founder, Rocky Mounts, Inc.

5
Roof Racks can be tough to use

• I get hurt far more often loading and unloading
  my bike than riding it.
• Pam Simich, Director, VeloNews Magazine.
• Ive seen people use ladders
• Margaret Principe, Counselor, Englewood High
  School.
• I constantly struggle to get my bike on and off
  of my car.
• Christy McDevitt, Physician, Kaiser Permanente.

6
Our Solution
Get the rack to the bike, not the bike to the
rack!
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Giraffe Rack
Rack Design
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Innovative Design

• Yakima and Thule complementary
• No need to design to vehicle types
• Easy to use

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Marketing Strategy
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Market Size

• 2005 SUV rack market 215M
• Total Market Potential 630M

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Focused Strategy

• Roof rack accessory
• Compatible product
• SUVs

31
Customer

• Survey Findings
• Bike enthusiasts
• SUV owners
• Women
• Vertically Challenged
• Already own/shopping for roof rack

32
Pricing Strategy

• MSRP 150.00
• Retail discount 45
• 65 surveyed will pay 150

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Retailer

• Specialty Stores
• Good discount for merchant 45
• Can sell to existing rack customers
• Additional installation revenue opportunity

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Rollout Year One - Colorado

• Great Market!
• Most SUVs per capita
• High concentration of bicyclists
• Wealthiest counties in Rockies
• Sales, Sales, Sales

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Ongoing Rollout

• Year Two
• Colorado mountain towns
• California, Portland, Seattle
• National Rollout in Year Three
• 180 stores by Year Five

36
Brand Image

• Targeted Advertising
• Print ads, point-of-purchase displays
• Guerilla Marketing
• Demo units
• Events

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Giraffe Rack Advertising
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Brand Image

• Targeted Advertising
• Print ads, point-of-purchase displays
• Guerilla Marketing
• Demo units
• Events

39
Talented Management

• Dave Ryan President
• 10 years experience in early-stage companies
• Experienced Sales and Marketing Management
• Tyler Hutchens Vice President
• 7 years experience in Marketing, Promotion,
  Operations, Finance
• Experience with early-stage companies

40
Operations Strategy
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Operations Plan

• Major Features
• Complements Sales and Marketing
• Low fixed costs
• Outsource

42
Scope of Operation

• Outsource design
• Contract out to manufacturers for tooling and
  production
• Minimal assembly and packaging

43
Key Success Factors

• Strong supplier relationships
• Strong retailer relationships
• Management involvement

44
Development Timeline

• Concept RD (30 days)
• Product Development (55 days)
• Product Release to Manufacturing (50 days)
• Manufacturing Ramp-up (85 days)
• Total Duration 220 Days
• (Dec 01 Oct 02)

45
Financial Plan
46
Giraffe Rack Gross Margin

• Selling price of 82.50
• Cost of goods sold 41.80
• Our Gross Margin is 49.3
• Outdoor Products average 38.8
• Higher for Marketing Costs

47
Giraffe Rack Revenue

• 30 retail outlets in Year 1
• Average 100 units per location
• Year 1 Revenues 247,500
• Year 1 Operating Expenses 182,675
• Year 1 Earnings (180,776)

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Revenue Growth
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Giraffe Rack Cash Flow
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Giraffe Rack Cash Flow

• Highly seasonal sales
• 75 coming between April and September
• Cash need early, excess later

51
Giraffe Rack Funding

• Owners will contribute 60,000
• Raising 200,000 in debt
• Repaid 500,000 at the end of Year 5
• Offers a 20.1 compounded return
• Interest expensed and accrued each year

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Giraffe Rack Cash Flow (b)
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Giraffe Rack Growth
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Giraffe Rack Exit

• Acquisition by a larger company
• Licensing agreement with a larger
  marketing/manufacturing organization
• Manufacturing and distribution turned over
• Marketing and royalties negotiated

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Wrap Up

• Market need
• Strategy
• Investment

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Questions?
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Cost of Goods Sold
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Giraffe Rack Growth
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Giraffe Rack Growth
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Giraffe Rack Cash Flow
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Giraffe Rack Cash Flow (b)
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Giraffe Rack Repayment