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. • Sales of racks to SUV owners are increasing by 15% annually.

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.

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.

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

Giraffe Rack Rack Design

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

Marketing Strategy

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

Focused Strategy • Roof rack accessory • Compatible product • SUVs

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

Pricing Strategy • MSRP = $150.00 • Retail discount = 45% • 65% surveyed will pay $150

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

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

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

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

Giraffe Rack Advertising

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

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

Operations Strategy

Operations Plan • Major Features: • Complements Sales and Marketing • Low fixed costs • Outsource

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

Key Success Factors • Strong supplier relationships • Strong retailer relationships • Management involvement

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)

Financial Plan

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

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)

Revenue Growth

Giraffe Rack Cash Flow

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

Tyler Hutchens Dave Ryan Gary Tobin Carrie Xing