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Tyler Hutchens Dave Ryan Gary Tobin Carrie Xing

Business Plan Presentation. Tyler Hutchens Dave Ryan Gary Tobin Carrie Xing. Agenda. The Problem Giraffe Rack Solution Marketing Strategy Operations Strategy Financial Plan Questions. Bicycle Rack Market trends. SUV Sales are increasing as a percentage of total vehicle sales.

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Tyler Hutchens Dave Ryan Gary Tobin Carrie Xing

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  1. 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 can’t 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. • “I’ve 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, KaiserPermanente.

  6. Our Solution Get the rack to the bike, not the bike to the rack!

  7. Giraffe Rack Rack Design

  8. Giraffe Rack Rack Design

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  10. Giraffe Rack Rack Design

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  26. Giraffe Rack Rack Design

  27. Innovative Design • Yakima and Thule complementary • No need to design to vehicle types • Easy to use

  28. Marketing Strategy

  29. Market Size • 2005 SUV rack market = $215M • Total Market Potential = $630M

  30. 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

  33. Retailer • Specialty Stores • Good discount for merchant – 45% • Can sell to existing rack customers • Additional installation revenue opportunity

  34. Rollout Year One - Colorado • Great Market! • Most SUVs per capita • High concentration of bicyclists • Wealthiest counties in Rockies • Sales, Sales, Sales

  35. 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

  37. Giraffe Rack Advertising

  38. 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

  41. 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 R&D (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)

  48. Revenue Growth

  49. Giraffe Rack Cash Flow

  50. Giraffe Rack Cash Flow • Highly seasonal sales • 75% coming between April and September • Cash need early, excess later

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