How to become an unstoppable launch machine - breakfast briefing October 2014...
KnightStandBusinessPlan
1. The Knight Stand
Dominic Brown, Therese Miller, David Schott, Alex Wittenbaum
Business 109 Section A
Dr. Kershaw
Fall 2015
Business Plan Competition Champions Fall 2015
2. 1
TABLE OF CONTENTS:
I. Executive Summary - 2
A. Mission Statement - 2
B. Objectives for sales, profits and return on investment - 2
C. Keys to Success - what are the main factors that will determine success?
II. Company Summary - 2
A. Brief Description of business - 2
B. Company Ownership - 3
C. Start-Up summary - how much will it cost to start up this business? - 3
III. Opportunity Analysis - 4
A. Industry analysis - 4
B. Competitor analysis - 4
C. Market/customer analysis - 5
IV. Management/Organization Plan - 5
A. Form of Ownership - 5
B. Personnel Plan - 6
C. Organization Chart - 6
V. Production/Operations Plan - 7
A. Location & Facilities Plan - 7
B. Sourcing - 7
C. Day and Hours of Operations - 8
D. Quality Control - 8
VI. Marketing Plan - 9
A. Description of Target Market - 9
B. Product Strategy - 9
C. Price Strategy - 10
D. Distribution Strategy - 10
E. Promotion Strategy - 10
F. Sales Forecast - 11
VII. Financial Plan - 11
A. Important Assumptions - 11
B. Start-up costs and sources of start-up capital - 12
C. Pro forma Income Statement and Balance Sheet - 12
D. Projected Cash Flow (including debt repayment) - 13
E. Key Ratios - 13
VIII. Conclusion - 14
IX. Appendices - Tables - 16
Executive Summary
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A. Our mission is to provide Marian students and fans alike with an easier, more affordable
way to easily reach personal items from their bed while still supporting their favorite
university.
B. Our objective for sales is to sell all 400 Knight Stands before May 8, 2016. This gives a
good few months to continue to sell and promote our product across campus. After we
have sold all 400 Knight Stands, taken care of all our expenses, and paid back our loan,
we will have a total profit of $2,604 which will be split up evenly between the four group
members.
C. The Knight stand is not only part of a growing industry, but it is also unique and
innovative in its field. There are no products exactly like the Knight Stand on the market.
Our team is intelligent and dedicated, and our market research yields positive results. We
have already started marketing the Knight Stand around campus and taking pre-orders, of
which we already have 110. Overall, the Knight Stand is a convenient, affordable, and
portable product that promises to be successful among the Marian University community.
Company Summary
A. The product we are selling is called The Knight Stand. It is a foldable, portable shelf that
attaches right to the side of one’s bed. The Knight Stand also folds into a tablet holder. It
comes in white with the Marian University logo on it. For years, college students in dorm
rooms have struggled to find a good place to put their phones at night, especially if their
beds are too high off the ground for a typical end table or nightstand to be useful. With
the Knight Stand, this will no longer be an issue. The Knight Stand slips right under the
user’s mattress. It provides a surface for things such as one’s phone, alarm clock, or
glasses to lay at night so that you can keep it close to you when you need it. It is useful
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for beds that are too high off the ground for a traditional nightstand as well as beds in
tight spaces because it attaches to the mattress and takes up less room than a nightstand
would. In this modern day, young people do not want to be separated from their phones.
They use their phones as alarm clocks, they read the news on their phones, they text their
friends about anything and everything, and they even want their phones near them at
night because many people feel naked without their phone. This is an advantage to us
because the Knight Stand provides a surface right by one’s bed, allowing easy access to
one’s phone at night, as well as having slits specifically designed to hold a phone charger
cable. The Knight Stand helps give young people that sense of security they get when
they have their phones near them at night.
B. There are four members on the Knight Stand team. At the end of the spring semester
2016, the profits will be divided up evenly between the four team members. We are all
equal owners of the business because we have all contributed equally to the foundation
and operations necessary to succeed and win the business plan competition. We will all
work the same hours as well, which is another reason why the company will be owned
equally between us four.
C. For our initial 200-unit purchase, we will need a loan of $1,600. Most of this will go
toward inventory, but a smaller part of it will also go toward equipment, advertising, and
our market research expense. We will use the $1600 that we have earned from the judges
to purchase 200 Knight Stands. We will pay $6.50 for each shelf that we order from our
supplier (Urban Shelf out of Pennsylvania), and $.50 for each Marian University Knights
decal that we order through the bookstore. (SUBJECT TO CHANGE). Other expenses
that will factor in with our start up cost of $1600 are:
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○ Advertising expense of $50
i. This includes the purchasing of posters, flyers, ink, sidewalk chalk, etc
○ Interest expense of $40
i. 6% interest on our loan paid off after five months
○ Credit card fee expense of $140
i. Assuming that 90% of our purchases are made with credit cards at a 2.75
rate of return to the credit card company.
○ Market research expense of $26
i. The cost of a membership to Surveymonkey.com to manage and view
survey/ market research results.
Opportunity Analysis
A. Our industry is the dorm room supplies and furniture industry. The industry is growing
rapidly, as college students spent approximately $900 on supplies and decorations for
their dorm rooms in 2012 and back-to-college spending is going up, as seen by Table A
in the appendix. Millennials, the generation that includes college-age people, are
currently the number 1 buyer of furniture. This means that our business has quite a bit of
room to thrive in this industry.
B. There are two main competitors for the Knight Stand. One of them is another similar
shelf that also attaches to the side of one’s bed. It is made of bamboo, does not fold, only
serves one purpose, and does not fit any size bed. Also, it costs upwards of $25 while we
are selling the Knight Stand at only $15. Our other competitor is a traditional nightstand,
which is a large piece of furniture that takes up a lot of space in a small dorm room and
would not be useful for people whose beds are high off the ground. Traditional
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nightstands also usually cost more than $30, so the Knight Stand is still more affordable.
See Table B in the appendix for more information regarding our main competitors.
C. There are about 1,400 beds on the campus of Marian University. This number is
significant for us because many of those beds are lofted, so a regular end table or
nightstand will not work if the user of the bed wants to have their phone close to them
while in bed. 95.6% of the people we surveyed (about 300 people total were surveyed)
sleep near their phone at night. This is a promising number for us because, if one does not
have an end table or desk on which to put their phone, they will have to put it somewhere
where they cannot reach it. The survey shows, however, that people like to sleep by their
phones and therefore would like some sort of surface on which to put their phones within
arm’s reach of their beds. In that same survey, 60% said they were interested in buying
our product. If that number is true for all Marian University students, we will be well
over our sales goal of 400 units.
Management/Organization Plan
A. Our form of ownership is a partnership. We are considering ourselves a partnership
because all four of us will have an equal share in our business. We will all put in the same
amount of time that is required to make our business thrive. We will all work the same
number of hours, attend all meetings/classes, discuss problems and any issues that arise
during our time running the business, and make any executive decisions as a team. We
feel that because we have four equal partners at the head of this business, we will succeed
and thrive extremely well over the spring semester of 2016 at Marian University.
B. Every member of the team will be a salesperson. Therese will be the head of sales,
meaning that she will be working with our sales pitches, sales schedules, inventory
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checks, pre-orders, and she will also be working the booths a little more frequently than
the rest of the team. Alex will be the head of communications, so he will be in charge of
emailing and contacting our suppliers and anyone who the business must deal with in
order to successfully market and sell the Knight Stand. He will also be the head of
accounting and a social media associate. Dominic will be the head of marketing, so he
will be in charge of managing our social media accounts on Facebook, Twitter, and
Instagram. He will also promote our product by creating flyers, posters, and sidewalk
chalk designs to spread the word about the Knight Stand. He will also contact different
people on campus in order to gain the right to advertise our product in certain areas and
events across campus. He will also make sure that our commercial has the right to be
aired on public campus televisions and on the Marian University YouTube account.
David will be the head of finances, meaning that he will handle the cash box and manage
our bank account. He will make sure that all of our money is in the right place and that
we are organized and smart with our money.
C. Organization Chart: (We are all equal owners of the company)
Therese Miller Alex Wittenbaum David Schott Dominic Brown
Head of Sales Head of Accounting Head of Finances Head of Marketing
Salesperson Head of
Communications
Salesperson Salesperson
Social Media
Associate
Salesperson Social Media
Associate
Social Media
Associate
Accounting Associate Social Media
Associate
Accounting Associate Accounting Associate
Production/Operations Plan
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A. We will be setting up booths that include a table, a cash box, a credit card reader, and
some of our inventory. The booths will be set up in Alumni Hall and the Evans Center.
We have also gotten permission from the Athletic Director, Steve Downing, to set up at
men’s and women’s basketball games in the Physical Education Center. We will also sell
at the Evans Center. We have gotten permission from Clint Whitson, the head of student
affairs at the Medical Center to set up and advertise our product there. We feel this is
necessary because all of the medical students are granted with an iPad as soon as they are
accepted into the school, and our Knight Stand works very well as an iPad holder. We
also plan to set up at SOAR (Student Orientation And Registration). We feel that the
product is great for all incoming Freshmen, and this is the perfect place to approach and
market our product to them. We will also set up at Knight Quest, a required event for all
students the day before the semester begins.
B. The business model for the Knight Stand is fairly simple, for we will be selling directly to
individuals and groups on campus. We will be focusing mainly on demonstrating what
the Knight Stand is and how it is useful not only for students, but for everyone. In order
to do that we will form a sales pitch that we will give at our booths for people inquiring
about our product. The sales pitch will include a demonstration of the product and an
explanation of the multiple ways it can be useful. The Head of Sales (Therese) is
currently working on forming a sales pitch to teach the rest of the salespeople.
C. As for the days and hours of operations, we will be setting up our booths on Mondays,
Wednesdays, and Fridays in Alumni Hall and the Evans Center from 11am - 2pm. We
will mix up the locations based on the amount of traffic that day. For example, if there is
an event at Alumni Hall during the day that we know will attract a huge crowd, we will
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set up in Alumni. Also, if one of the locations is being used, we will attempt to set up in
the other location. This (11-2) is the time of day where the most traffic seems to be going
on in both of those buildings based off our market research. We will also be setting up a
booth in the PE Center before Men’s and Women’s basketball games. Please reference
the appendix (tables C and D) for the men’s and women’s basketball team schedules.
These games attract a large crowds so we see this as a great opportunity to get our
product noticed and to get more sales. We have permission to sell at all of the basketball
games, so we will sell at all of the games that we are available and present to sell at.
D. Due to the fact that Alex has had his Urban Shelf for 3 years and it is still working
perfectly, and based on the durability of the prototypes we have been sent through Urban
Shelf, we guarantee that you will receive the best quality product at such an affordable
price. If there happens to be a manufacturing mistake, you can bring your product back to
us and we will either reimburse you your money or give you a new Knight Stand free of
charge. Therese is in charge of inventory, so she will make sure that all inventory is
accounted for (we will split it up between us four in our dorm rooms). We will do this to
prevent theft or loss of our product.
Marketing Plan
A. Our primary target market is students who live on campus. This is because many of the
beds in their dorm rooms are lofted, so students often do not have a desk or other surface
on which to put their phone if they want it to be within arm’s reach. Even for those
students whose beds are not lofted, they still do not have much room in their dorm rooms
for a big end table or nightstand. Our secondary target markets are Marian faculty, staff,
alumni, and fans. This is mainly because of the Marian logo. Those who are proudly
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affiliated with Marian love to show school spirit, so having the Marian logo on our
product is a significant selling point for Marian fans. The Knight Stand is great for really
anyone with a bed, and we are looking to appeal to people with a bed, that are affiliated
with Marian University!
B. Many students like to sleep near their phone at night. For young people, their phones are
sort of a “security blanket”: like Linus from the classic comic strip series Peanuts, they do
not want to be without their blankets, or in this case their phones. 96% of people sleep
near their phone at night. This is a problem for students who cannot use end tables, either
because their beds are too high off the ground, they do not have room for end tables in
their small rooms, or they just do not have an end table to use. The Knight Stand solves
this problem because it provides a convenient, accessible surface right next to one’s bed
and it does not take up much room. It provides easy access to one’s phone or whatever
else they might need while they lie in bed. The Knight Stand also folds up well, which is
useful for traveling from school to home or staying at a hotel for a sports match far away.
Another function of the Knight Stand that is useful for medical students and anyone else
who has a tablet is the fact that it folds into an upright, sturdy tablet holder. That can be
useful not only for classwork on the tablet, but also watching videos online or doing
video chat with friends, both of which are popular activities for young people.
C. When choosing a price, there are a lot of factors that go into making sure the one you
choose is the best one. We had to think about the low disposable income of our target
market, a price that was attractive but still gave us a good profit percentage, and we had
to see what our target market would be willing to spend. We played around with some
numbers using Excel and ended up settling on three prices. We went with a bulk order
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price of $10 and the bulk order had to be 10 or more Knight Stands. We went with a pre-
order price of $12 and once we stopped taking pre-orders the price went up to $15.
Therefore, we have a good mix of prices and are willing to work with different groups
and meet the customer demands. All three of these prices ensure that we are making a
profit off of each sale, and help us thrive.
D. With the pre-sales already set in place, we will order the first 200 Knight Stands and
distribute them to the people who have pre-ordered since a majority of them are either on
this campus or in our families. We will set up a booth at basketball games, Alumni Hall,
and the Evans Center and will have inventory on us ready to distribute it to customers
right after they purchase. The inventory will be split up between the four group members
in our dorm rooms. Therese will be in charge of where it all goes and what to do with it.
E. We have already hung up flyers across campus with information about the Knight Stand
and we also have made a commercial that we plan to post on social media and show via
television screens across campus. . We will also try to get our commercial sent out in a
mass email to the entire school. Our Head of Marketing, Dominic Brown, will be in
charge of coming up with any other promotions for the Knight Stand, such as
promotional giveaways or product placement. We plan to use sidewalk chalk to advertise
our product. This is a great option because everyone who walks over it sees it, and is
(hopefully) immediately drawn into our idea. We will be extremely active on social
media, posting promotions and letting people know when and where we are setting up to
sell our product.
F. Assuming that everyone who pre-orders a Knight Stand does in fact end up purchasing
one, we will have $1,260 in sales from our pre-orders. After that, we will have 90 knight
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stands left to sell from our initial shipment and then 200 more after our second shipment.
This means we will have to sell about 15 Knight Stands a week in order to have no
leftover inventory by the end of the semester. This would be projected sales of about
$225 per week, and about $900 per month not including our pre-order sales. As we stated
earlier, our product will sell for a post-preorder price of $15. This means that we will be
selling our product at the booths for $15 via cash or credit/debit card.
Financial Plan
A. We are assuming that all of our 110 pre-orders will actually be filled and everyone who
ordered a Knight Stand will actually pay for one. We are also assuming that we can get
our Knight Stands from the manufacturer for $6.25 apiece plus the $0.75 decal price, so
each Knight Stand will cost $7. From a non-financial standpoint, we are assuming that
our largest amount of people traffic will occur at the times we are planning to sell our
product. We can also assume that our product is in fact in demand, and we can back this
assumption due to our market research. Our most important assumption, however, is that
we can sell all of our inventory without having to mark down the price except for pre-
sales and bulk orders.
B. Our start up costs include advertising, cost of inventory, equipment expense, market
research expense, and a few others (Please refer to table E in the appendix for more
information on our original expenses.) We have received a $1,600 loan in order to
purchase the first 200 Knight Stands and to cover all of our start-up expenses.
C. See TABLE E and TABLE F in the appendix for the pro-forma Income Statement and
Balance Sheet!
D. See TABLE G in the appendix for our projected Cash Flow Statement
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E. Key ratios:
a. Debt to equity ratio
i. Total liabilities/shareholders equity
1. $1626/$2591 = 62.7%
b. Current ratio
i. Current assets/current liabilities
1. $4217/$1626 = 2.59%
c. Return on Equity
i. Net income/shareholders equity
1. $2555/2591 = 98.1%
d. Net profit margin
i. Net profit/net sales
1. $2555/$5610 = 45.5%
Conclusion
The Knight Stand is an innovative, convenient, affordable, and portable product that is
useful not only for college students, but for anyone who has a bed. It is a profitable business
because the value of our product will attract customers, especially students, and we are part of a
rapidly growing industry. We are also more affordable and useful than our competitors. Our team
is an intelligent, tight-knit, dedicated, and hardworking group that is excited to start up this
business.
Almost everyone feels a need to have something close to their bed at night. Whether it be
their phone, their alarm clock, their glasses, their inhaler, a midnight snack, or even a box of
tissues, most people have things they would like to put on a surface next to their bed. In tight
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dorm rooms where there is already a lot of furniture crammed into a small space, college
students often do not have room to put end tables or nightstands by their beds. Where, then, will
they put those things they need near them while they sleep? There is an easy solution to these
students’ problems: The Knight Stand.
Where else will you be able to find a portable bedside shelf with the Marian logo on it
sold right here on the campus of Marian University? The answer is nowhere.
Not only is the Knight Stand a unique and convenient product, but it will also be
profitable for us to sell it. It is part of a growing industry in a time when our nationwide and
statewide economies are both growing, and we have the advantage of being more convenient and
more affordable than our competitors. Our competitive advantages as well as our relatively low
costs will allow us to make a considerable profit even if we sell the product for only $12, our
projected low price. Overall, we are excited to release our new product and share the experience
of the utility, convenience, and affordability of the Knight Stand.
