Business Plan

FAN-TASTIC ENTERPRISES BUSINESS PLAN
Prepared By: Mark Roche 109479961 06/12/2011
Strictly Private & Confidential FAN-Tastic Enterprises 2011
Contents
1. 2. Executive Summary ............................................................................................... 1 Company Description ............................................................................................ 2 Shareholders ............................................................................................................... 2 Management Structure and Areas of Responsibility: ................................................ 2 Advisors ..................................................................................................................... 2 Products and services ................................................................................................. 3 Long Term Aim of the Business ................................................................................ 3 Objectives .................................................................................................................. 4 Swot Analysis ............................................................................................................ 4 3. Market Analysis ..................................................................................................... 5 Target Market............................................................................................................. 5 Characteristics of potential customers ....................................................................... 5 Total Market Size ....................................................................................................... 6 Market Trends ............................................................................................................ 7 Profile of Competitors................................................................................................ 8 Summary of Projected Market Share over the first five year period ......................... 9 Advantages and Disadvantages of Competitors' Offers............................................. 9 Competitive Advantage ........................................................................................... 10 Unique Selling Point (USP) ..................................................................................... 10 4. Marketing/Sales Strategy ..................................................................................... 11 Marketing Strategy.................................................................................................. 11 Sales Strategy ........................................................................................................... 11 Pricing ...................................................................................................................... 12 Marketing and Communications Strategy ............................................................... 12 5. Research and Development.................................................................................. 14 Technology Roadmap .............................................................................................. 14 Research and Development...................................................................................... 14 Technical Partners .................................................................................................... 15 IP, Patents, Copyrights, Brands ............................................................................... 15 Key Performance Indicators .................................................................................... 15 6. Staffing and Operations ....................................................................................... 17 Management (including Board) Organisation Chart ................................................ 17 Staffing ..................................................................................................................... 17 Training Plans .......................................................................................................... 17 Operations ................................................................................................................ 18 7. Financial Projections ............................................................................................ 20 I Key Assumptions .............................................................................................. 20 II Profit & Loss Accounts ..................................................................................... 23 III Balance Sheets............................................................................................... 24 IV Cashflow........................................................................................................ 25 8. Sales Pipeline ....................................................................................................... 26 9. Funding Requirements ......................................................................................... 27 Investment by Shareholders ..................................................................................... 27 Bank Lending ........................................................................................................... 27 10. Appendices ........................................................................................................ 28 Detailed Financial Assumptions .............................................................................. 28
This document is the proprietary property of FAN-Tastic Enterprises. Copying or otherwise distributing the information contained herein is a breach of confidentiality agreement.
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List of Tables
List of Tables
Table 1: Important Company Details ................................................... 1 Table 2: Shareholder Information .......................................................... 2 Table 3: Objectives of the Company ................................................... 4 Table 4: Target Market Percentages .................................................... 6 Table 5: Size of Irish Market .................................................................... 6 Table 6: Size of Indian Market ................................................................ 7 Table 7: Irish Fan Distributers Details ...................................................... 8 Table 8: CityCool Details ........................................................................ 8 Table 9: USHA Details.............................................................................. 8 Table 10: ORIENT Details ......................................................................... 8 Table 11: Predicted Market Share 2012-2016 (local) .......................... 9 Table 12: Predicted Market Share 2012-2016 (India) .......................... 9 Table 11: Advantages & Disadvantages: Competitor's Offers .......... 9 Table 12: Competitor's Pricing Scheme.............................................. 12 Table 13: KPI's Year 1 ............................................................................ 15 Table 14: KPI's Year 2 ............................................................................ 15 Table 15: KPI's Year 3 ............................................................................ 16 Table 16: KPI's Year 4 ............................................................................ 16 Table 17: KPI's Year 5 ............................................................................ 16 Table 18: Staffing of the Company ..................................................... 17 Table 19: Cost of Production of the Product ..................................... 19 Table 20: Sales Details .......................................................................... 20 Table 21: Profit Details .......................................................................... 20 Table 22: Wages ................................................................................... 20 Table 23: Purchase of Fixed Assets...................................................... 21 Table 24: Depreciation of Fixed Assets ............................................... 21 Table 25: Exports ................................................................................... 21 Table 26: Purchases & Stocks .............................................................. 21 Table27: Purchases& Creditors ............................................................ 22 Table28: Sales & Debtors.....................................................................22 Table 29: Profit & Loss Accounts .......................................................... 23 Table 30: Balance Sheets ..................................................................... 24 Table 31: Cashflow Statements ........................................................... 25 Table 32: Sales Pipeline ........................................................................ 26 Table 33: Annual Wage of Each Employee ....................................... 28 Table 34: Tabulation of Total Wages .................................................. 28
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List of Figures
Figure 1: Swot Analysis............................................................................ 4 Figure 2: Target Markets ......................................................................... 5 Figure 3:Diagram of Management of Company.............................. 17 Figure 4: Solar Panel used in "Solar Fan" ............................................. 19
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Confidentiality Agreement
The undersigned reader acknowledges that the information provided in this business plan is confidential; therefore, the reader agrees not to disclose it without the express written permission of Mark Roche. It is acknowledged by the reader that information to be furnished in this business plan is in all respects confidential in nature, other than information that is in the public domain through other means, and that any disclosure or use of this confidential information by the reader may cause serious harm or damage to FAN-Tastic Enterprises. Upon request, this document is to be immediately returned to Mark Roche.
___________________________ Signature ___________________________ Name (printed) ___________________________ Date This is a business plan. It does not imply offering of securities.
1.
Executive Summary
The purpose of this business plan is to give a detailed outline of the planned first five years of operation of the company "FAN-Tastic Enterprises". The product is a fan dubbed the "Solar Fan" that has the ability to run completely off of solar energy, with no need for extraneous energy sources. Hence the fan is both cost effective as it uses less electricity, and environmentally friendly as the product itself has no carbon footprint. These are the 2 main selling points of the product. The only main disadvantage of the product over previous models is that the initial price will be slightly higher than its predecessors, although this is countered by being cost effective in the long run. The product itself will be available worldwide via the company website, however the company will have headquarters in both Dublin and Mumbai. The company intends to start initially in Dublin and expand to Mumbai in the third year of operation of the business. The main target markets for the product are the Business Sector and the Domestic Sector. The company itself will be made up of the CEO (Mark Roche), the Production Manager (John Kehoe), the Marketing Manager (Mary O' Sullivan), and the Public Relations Manager (Gerry Murphy), the Financial Manager (Stephan Smith) and the workforce of general employees that work under this list of managers. Business Milestones: 2012- Business starts. Headquarters in Dublin. Trading starts worldwide via the company website. However, the main market targeted at this point is the Irish market as this is where the company is based at this time. Irish market will be targeted by launching the product in well known stores such as Tesco, Heatons and Woodies DIY. 2014- The company expands to Mumbai, India. Trading continues in Ireland, and worldwide via the company website, however, at this time is it estimated that from the year 2012, the main source of income will be from the Indian market. For this plan to come to fruition, new premises and equipment will be needed in India. 2015- This year marks the start of the company's R&D scheme. 40,000 euro will be put towards developing both the "Solar Fan" and also developing potential future product lines. In 2016, the second year of the Research and Development program, a further 80,000 euro is invested by the company into this area. The following is a table of important details of the business for the first 5 years of operation:
TABLE 1: IMPORTANT COMPANY DETAILS
Year 1 Sales Expenses Net Profit Investment Employment 1443750 704125 17750 500000 20
Year 2 1650000 732875 92125 20
Year 3 3506250 1612300 140825 48
Year 4 4950000 2361750 113250
Year 5 7700000 3519500 330500
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2.
Company Description
Shareholders
TABLE 2: SHAREHOLDER INFORMATION
Shareholder name Mark Roche John Kehoe Mary O' Sullivan External Investment Number Of Shares 250000 50000 50000 150000 Percentage Shareholding 50% 10% 10% 30% Cash Investment (euro) 250000 50000 50000 150000
Management Structure and Areas of Responsibility:

As Mark Roche is the CEO he holds the majority of the shares in the company. Hence, all key management decisions are his responsibility. In the event that the shareholders disagree over a decision within the company, his is the decision that counts as he holds the most shares. Both the company and product were his idea, and hence he has most influence in the company's direction. John Kehoe is the company's Production Manager. It is his responsibility to oversee the assembly of all products to the required standard. His duty is to solve any problems with the design, effectiveness, costing and overall quality of the product. As well as this all new designs and prototype models of the "Solar Fan" are his responsibility. Mary O' Sullivan is the company's Marketing Manager. Her main job is to develop the strategies used by the company to make the consumer aware of the product. Her duty is to determine what is most appealing to the potential customer and to develop the product around this idea. Analysis of the company's competition in the market is also one of her main priorities. Gerry Murphy and Stephan Smith respectively are the company's Public Relations Manager and Financial Manager.
Advisors
Financial Advisor: Crowleys DFK Chartered Accountants Fifth Floor 5 Lapp's Quay Cork City Co. Cork 021 4272900 Legal Advisor: Fitzgerald Solicitors 6 Lapps Quay Cork City Co. Cork 021 4279800
Products and services

The product idea is called "The Solar Fan". It is a desktop fan that is powered by two batteries which are contained in a battery holder within the fan. These batteries are normal rechargeable Lithium Ion batteries. They provide approximately 3.6V each and during use, the voltage powering the fan can be switched from 3.6V to 7.2V, resulting in an increase in fan speed. What is different about this fan is that these batteries will be connected to a solar panel which can absorb energy from sunlight and thus recharge the batteries. Hence, no electricity will be used by the fan as, when the battery is depleted, the solar panel will recharge the batteries completely. If the fan is being used in an office, or domestically for instance, the solar panel can be left beside a window continually and the batteries of the fan would rarely run low unless the fan itself was being used continually. The solar panel itself is not on the surface of the fan. Instead it is a separate body, connected to the battery holder of the fan by two wires (one wire connecting to the positive terminal of the battery and the other connecting to the negative). These wires are contained in a larger insulated lead, much like that used in a common kettle or toaster which will run from the bottom of the fan unit, to the back of the solar panel. The panel itself will be at 45o to the horizontal plane so that it absorbs the maximum amount of sunlight possible when placed on a window-sill. There are many advantages of this new design of fan over the normal model, such as the fact that the fan doesnt use electricity and is able to operate fully on solar power, making it 1) cheaper in the medium to long term future and 2) a lot more energy efficient. For those people who are "green enthusiasts" and already have solar panels in their houses or elsewhere, the main fan unit is also capable of connecting to any solar panel that the user of the product might already possess. The major selling point behind this new design is that the battery of the fan will charge more on sunnier days which is balanced by the fact that the user will need the fan more on such days as it will be warmer. Naturally, this fan will be more effective in climates that experience a larger amount of daily sunshine. It is planned for these areas of the world to provide a large market for the product. No future developments are clear as of yet for this product. However, if the product gains a foothold in the market, then it is possible that this product could be the first in a line of fans like this, which operate in an energy efficient manner. If enough income was generated from the sale of this initial model then it is likely that the company would look into solving some of the disadvantages of this new product over the common desktop fan.
Long Term Aim of the Business

Once the company has gained a foothold in the Irish market, the major long-term aim of the company is to target the market in India as currently it is the country with the second largest population in the world (1.15 billion people). Also, an in-depth market analysis was carried out for the country of India, and it seems that the fan industry is one of the biggest out of all domestic appliances in this country. The Company hopes to expand to the Indian market in its third year. Market Research indicates that enough revenue is likely to be gained from operating in the Irish market for two years so that expansion will be possible in the company's third year. As well as this it is likely that the company will make further modifications to the product that has
been designed during its 4th and 5th years, and also that the company will extend its product line to a wider variety of fans, which operate using a similar principal to the current product.
Objectives
TABLE 3: OBJECTIVES OF THE COMPANY
Year 1 2 3 4 5 Sales 1443750 1650000 3506250 4950000 7700000 Employment 20 20 48 73 108
Swot Analysis
FIGURE 1: SWOT ANALYSIS
3.
Market Analysis
Target Market
FIGURE 2: TARGET MARKETS
Characteristics of potential customers

From research carried out, it seems that the company will be able to secure its biggest potential market within the Domestic Sector. What this effectively includes is the culmination of any possible income that the company receives from households. From the market research carried out, it seems that one of the biggest complaints from customers in this sector is that the lifespan of a desktop fan in the average household is a lot shorter than that required by the customer. Hence, because of this, these potential customers will view this new high-quality product as a chance to eliminate their needed to buy fan after fan because of the lower-quality level that the majority of existing products in the market are at. The company intends to tackle this issue while at the same time appealing to households who care about their minimizing their carbon footprint as well as saving energy/money. It is clear that an economic recession has hit Ireland. Because of this one might expect that households are less likely to spend a greater amount on a
desktop fan unit, however after analyzing the domestic market, it seems that above all else, in Ireland people have now become more focused on long-term money/energy saving. This indicates that the result of a higher lump cost initially, will inevitably be negligible once advertising campaigns for the product make our potential domestic market aware of the savings that can be made by purchasing this unit. The second largest target market is the business sector. This sector covers a lot of bases, ranging from offices, companies and manufacturing plants, and it is clearly more diverse than the Domestic Sector. At the time this market research was carried out, it seemed that there was more demand from the domestic sector; however, in years to come, it is possible that this product could draw more attention from the business sector. This is because the product, as it is, is effectively an energy/money saving device. It is a well-known that the sole aim of the majority of companies is to make a profit. Hence, when the company improves the product in coming years through research and development, it is highly likely that sales would increase in the business sector. As well as this, it is expected that larger scale models of the fan will be designed and manufactured once the initial product gets off the ground, and these new products would undoubtedly be viewed as more viable within the business sector. Many people will appreciate that a high initial cost for a unit is worth a much larger saving in the long term future, and in the business sector this is definitely the case as profit is a constant concern. The Other sector is all possible sales coming from anywhere other than the business or domestic sector. This includes places such as hospitals, universities and any other potential consumers. A major part of this sector is selling to customers over the internet, via the company website among other well known sales- websites. Each of these areas has a unique interest in the product and hence a unique reason for buying it, and there are no potential customers in this sector that are interested enough in the product so that it would be worth investigating their motives in detail. At the time of compilation of this report the target market of the company was:
TABLE 4: TARGET MARKET PERCENTAGES

Sector Domestic Business Other Percentage of Target Market 60% 30% 10%
Total Market Size

The population of Ireland is approximately 4,500,000 people and research shows that the amount of potential customers for this product are as shown in Table 5:
TABLE 5: SIZE OF IRISH MARKET

Irish Domestic Sector: Business Sector: Other: (Potential Customers) 450,000 225,000 75,000
TABLE 6: SIZE OF INDIAN MARKET

Indian Domestic Sector: Business Sector: Other: (Potential Customers) 30,000,000 15,000,000 5,000,000
Market Trends
Irish Market There have been no recent changes in the Irish market over the past fifty years. The fan industry has remained roughly constant, and demand for the product is unlikely to change in Ireland any time soon. The Irish fan industry is a relatively small market compared to that of India, hence it is seen as a more stable alternative and a better option for company start-up. The owner of the company is originally from Ireland and this is linked to the reason for the company's headquarters being based in the company. The Irish market for fans is lucrative enough that from operating in this country for two years, it is expected that enough revenue will be gained for further expansion to be possible. During both of the first two years operating in Ireland, sales are expected to peak in the Summer time, as demand is highest at this time. Indian Market -Fluctuations in the Market: The market in India is quite unorganized, comprised mostly of many small companies fighting for dominance. Despite this fact there are also large companies such as ORIENT and USHA that possess a large market share. Fluctuations in the market happen quite frequently particularly amongst the smaller companies. As shown above, the Irish market is a lot more predictable, and the unpredictability of the Indian market is one of the main reasons why the company plans to wait until expansion of operations into this country occurs. Despite the enormous size of the market, changes occur quite regularly in this industry in India. This is due to the vast competition from numerous companies, and the similarity in the product designs of these companies. -Future Predictions: Clearly, with the market being multiple times greater than that of Ireland, this automatically implies greater competition. However, despite companies such as ORIENT and USHA controlling relatively large portions of the market already, no major international companies have obtained a monopoly on the market (an analysis of these competitor companies is dealt with in the following section). In the future it is likely that the competition in this market will not suffer major change. When FAN-Tastic Enterprises expands to India, this market is likely to remain much the same as it has been over the last 50 years, but due to the innovative design of this company's product, FAN-Tastic Enterprises is more likely than any of its competitor to gain an advantage in this market. Other Factors: It is likely that once the company has gained a firm foothold within the Indian market, that expansion into the area of second-hand fans could be possible. In
India, this market is even more broad than that of new models. However, no major detail of this will be covered in this business plan as it is unlikely expansion into this area will occur with the first five years of operation of the company.
Profile of Competitors
Irish Market There are no major competitors in the Irish market who specialize specifically in desktop fans. However there are numerous Irish companies that manufacture domestic fans as part of a lengthy product line: Irish Fan Distributors Well established company: now in the industry 20 years. Design a wide range of heating, ventilation and air conditioning units.
TABLE 7: IRISH FAN DISTRIBUTERS DETAILS Employees 200 Profitability Market Share Product Range 45% 25% Diverse
CityCool Designs Portable Air Conditioning Units Offer Emergency Service Calls, same-day delivery and installation of air conditioning systems. Claim to sell Irelands largest range of Climate Control products.
TABLE 8: CITYCOOL DETAILS Employees 100 Profitability Market Share 70% 10% Product Range Specific
Indian Market USHA Design many different types of fans as well as sewing machines, pumps and motors. Well known company, that has diversified into many other types of fan (exhaust, ceiling, pedestal and wall fans).
TABLE 9: USHA DETAILS Employees 1200 Profitability Market Share Product Range 60% 10% Diverse
ORIENT Specialize in fans and lighting. Most detailed selection of fans.
TABLE 10: ORIENT DETAILS Employees 800 Profitability Market Share Product Range 50% 10% Specific
Summary of Projected Market Share over the first five year period
For the purposes of this business plan, it will be assumed that the total amount of potential customers in the market is not a variable figure. The following two tables are constructed under the assumption that competitors maintain a constant share of the market during the first 5 year of operation of the company:
TABLE 11: PREDICTED MARKET SHARE 2012-2016 (LOCAL)

Company (Predicted Percentage Market Share) Irish Fan Distributers (2012-2016) (25%) CityCool (2012-2016) (10%) FAN-Tastic Enterprises 2012 (1.75%) FAN-Tastic Enterprises 2013 (3.75%) FAN-Tastic Enterprises 2014 (6%) FAN-Tastic Enterprises 2015 (8%) FAN-Tastic Enterprises 2016 (10%) Domestic 112500 45000 7875 16875 27000 36000 45000 Business 56250 22500 3937.5 8437.5 13500 18000 22500 Other 18750 7500 1312.5 2812.5 4500 6000 7500 Total 187500 75000 13125 28125 45000 60000 75000
TABLE 12: PREDICTED MARKET SHARE 2012-2016 (INDIA)
Company (Predicted Percentage Market Share) Usha (2012-2016) (10%) Orient (2012-2016) (10%) FAN-Tastic Enterprises 2012 (0%) FAN-Tastic Enterprises 2013 (0%) FAN-Tastic Enterprises 2014 (0.03%) FAN-Tastic Enterprises 2015 (0.09%) FAN-Tastic Enterprises 2016 (0.2%)
Domestic 3000000 3000000 0 0 9000 27000 60000
Business 1500000 1500000 0 0 4500 13500 30000
Other 500000 500000 0 0 1500 4500 10000
Total 5000000 5000000 0 0 15000 45000 100000
Advantages and Disadvantages of Competitors' Offers

TABLE 11: ADVANTAGES & DISADVANTAGES: COMPETITOR'S OFFERS Advantages Well Known Companies All Profitable Companies Hold Sizeable Amount of Market Share Disadvantages Have not covered Energy Efficiency Lack of Originality/Innovation No Niche in the Market No One Company has a Monopoly
Competitive Advantage
The fan that the company has designed is completely unique. Nothing like this exists, and none of the major competitors in either the Irish or Indian market have branched into the area of energy efficient fans. Hence, our company has a niche in this market. There are a few main reasons why a potential customer would chose this product over any of the existing designs: Despite the fact that the fan itself will be slightly more expensive than most of the models designed by our competitors, the fan will effectively pay for itself over time, as it does not require any electricity to operate. Hence, this product will be more appealing to those who are interested in saving money. Any person who is worried about their carbon footprint, or is generally just concerned about the environment/global warming would purchase this product over any of the existing models. This is because, the fact that the fan needs no electricity to operate means that no fossil fuels were burned in order for it to carry out its purpose. This product would appeal very much to those people who are tired of having to recharge batteries/buy new batteries for household equipment such as this as the rechargeable batteries are contained inside the fan and never have to be taken out of the apparatus- instead the solar panel just needs to be placed by the window. If the user doesn't wish to use the particular panel with which the main body of the fan is sold, the fan is capable of connecting to the majority of solar panels in existence with relative ease. Hence, it is possible to increase the rate at which the fan batteries charge etc.
Unique Selling Point (USP)

The Unique Selling Point of The Solar Fan is that it is the only product within the field of desktop fans that provides the function that the customer wants (production of a cool stream of air), with benefits to the user in terms of long-term monetary and energy savings. While the product is being marketed, it will be presented to the customer in a light which makes the product appear attractive in terms of being "green technology"- as it has zero carbon footprint associated with it- and as well as that it will be illustrated as the smart choice economically. This mix of economizing and energy-efficiency focused viewpoints is the Unique Selling Point that FAN-Tastic Enterprises have in mind for marketing The Solar Fan.
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4.
Marketing/Sales Strategy
Marketing Strategy
Once the product is launched in Ireland, the company will immediately begin selling the Solar Fan in-store and from the company website. The company will target the entire market, and the expected sales follow the percentage sectorial division of the target market i.e. 60% of sales in the domestic sector, 30% associated with the business sector and 10% others, and this follows the figures that were given already in the "Summary of Predicted Market Share over the first five year period" section of the business plan. These are the methods that we intend on using to reach the full target market: The product will be advertised in-store and in-store demonstrations will also be held to get the attention of potential customers. Obtain an interview on national radio, explaining our innovation and the benefits of the product to potential customers. Offer free 1 week trials of the product to potential customers, where the product is being sold. Gain the approval of well known energy companies such as "Airtricity", "Eirdata" and "Mainstream Renewable Power", and cite them on advertisements as well as on the packaging of the product. Advertise the product on the internet and social networking sites such as www.facebook.com,www.twitter.com and www.plus.google.com, as well as setting up a company website. Submit this new webpage to as many website directories as possible. Create fliers and hand them out on the street, as well as areas with high traffic density. Create a radio advertisement highlighting the benefits if the product and get it played on local radio. When the initial stages of marketing are covered and the company has gained a reputation in Ireland and India, it is likely that the company will use public television to advertise the product. Create an account on www.youtube.com and upload a video of the product in action. The Marketing Manager- Mary O' Sullivan- will be in charge of this aspect of the business. The actual marketing will be done be done by a company in which she worked for 10 years, and hence in which she has numerous reliable contacts. The company is called Acorn Marketing and it is based in Ireland, having already worked with the likes of Perlico and Dell. When the company expands to India, further marketing will need to take place, and by this time, the company will have enough employees to cover the issue of marketing without having to hire an external marketing agency.
Sales Strategy
The product will be sold and promoted in well known outlets. The advantage of selling at pre-established outlets is that at the initial stages setting up the company, we will not be known to regular consumers. Hence, they will come into contact with our product without ever having the intention of doing so.
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The product can also be purchased via the company website, and the company's account on www.e-bay.com and www.amazon.co.uk. All products ordered via the internet will be delivered to the customer in two days. This is advantageous for the customer because www.e-bay.com is a commonly used and well-known website to most people in the world, and hence adds to the ease of purchasing from our country. The product will be appear in catalogues of similar items as well as catalogues of other businesses that do not have a specified market (e.g. Argos). A major advantage of this sales strategy is that our product will be compared to older unimaginative models while the consumer is browsing through a catalogue, and will see the obvious benefits of buying a fan that does not rely on electricity to operate. Once the company expands to India, exactly the same sales strategy that was taken up in Ireland will be used to get the product to the customer.
Pricing
Competitors' Prices
TABLE 12: COMPETITOR'S PRICING SCHEME Company Desktop Fan Price () Usha Orient 22.70 - 31.45 42.99 - 55.50 Pedestal Fan Price () 31.05 - 39.81 42.70 - 56.40 Wall Fan Price () 26.28 - 35.04 30.70 - 47.50 Ceiling Fan Price () 20.70 - 71.67 23.89 - 40.47
It seems that unlike Orient, Usha designs a unique range of high-end ceiling fans. They are completely unchallenged by rival companies in this area of high-end fans, hence, this is another possible area that our company could expand into after the initial start-up stage of the business. Level of Competition in the market In Ireland and India, 35% & 20% of the target market is already dominated by large competitors companies. Hence, there is a sizeable portion of both the market in Ireland and India that is not already dominated by a major competitor already. Quality-Price Relationship Both Usha and Orient manufacture high quality fans, and this is the sole reason for the massive fluctuation in their pricing. Irish companies such as Irish Fan Distributors and CityCool do not specialize particularly in desktop/wall/ceiling fans and hence their pricing scheme is somewhat irrelevant, as it seems that if our company was to begin trading in Ireland it would grow at a rapid rate. This is the reason why expansion to India will be possible in its third year of operation.
Marketing and Communications Strategy

Advertising Methods of advertising were highlighted previously in the "Marketing Strategy" section. Briefly, advertising strategies include: Social Networking/Internet (Company Website) Word of Mouth Advertising in-store as well as in-store demonstrations of the "Solar Fan" Hand out Fliers
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These are the plans for marketing the product while the company is in its initial stages of development. When the company becomes more successful areas such as: Radio advertisements Television Advertisements
will be explored. The majority of this marketing will be done by Acorn Marketing. Public Relations Gerry Murphy is the Public Relations Manager for our company. It is his duty to maintain the public image of the company at a respectable level. People working under him deal with any complaints from the customer, and attempt to avoid any legal issues that may arise due to public relations. Of course, the amount of people working in this sector of the company will change from the time of this business plan to anytime in the foreseeable future. Generally, the more successful the company becomes, the more people will be employed in this area of the company. The shareholder decided that it would be wasteful to hire an external Public Relations Advisor, as this is unnecessary as Gerry Murphy has 10 years experience working in Public Relations with companies such as Apple and Samsung.
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5.
Research and Development
Technology Roadmap
Team/Department Structure Any other developments to the current product will be carried out by a team of engineers working under John Kehoe, our Production Manager. Any modification to the current product will be done with the same spirit of innovation that was behind the "Solar Fan", as this is what is required to keep the company going in the right direction. Methodology The team of engineers working in the development section of the company are experts in a design methodology called "TRIZ" - Russian for the "Theory of Inventive Problem Solving". "TRIZ" was the method behind the design of the original "Solar Fan", and its effectiveness is proven as it has already been used in well known companies such as Ford, LG, Procter and Gamble and Johnson & Johnson. Innovation is at the heart of the "TRIZ" methodology. Milestones to be Achieved Start trading the original design of the "Solar Fan" Start Trading "Solar Fans" of different sizes and power. Make some small modifications to the current model- e.g. optional electricity inlet. Launch multiple ranges of "Solar Fans". i.e. wall fans, ceiling fans and pedestal fans that operate under the same principal as the original model. Design high-end solar fans that operate under the same principal, but with more of an emphasis on the quality of the product.
Research and Development

One obvious modification that could be made to the "Solar Fan" is to design a model of the fan without the solar panel, but still having the ability to connect a solar panel to the fan. This would be useful for those people who already have a solar panels in their possession. Therefore it saves them purchasing an extra solar panel that they don't need. More advanced modifications have been proposed such as integrating the fan with a temperature sensor and digital display, so as to display the temperature of the room at any time. As well this, a control system will be integrated into the body of the fan, so that the fan blades will immediately begin to rotate once the temperature in the room exceeds a certain temperature chosen by the operator. A complete range of "Solar Fans" will be developed, having different size fan blades, solar panels, and overall power capability. In the distant future it is possible that the company will expand from making just desktop fans working via solar power to designing various models of "Solar Fans", such as ceiling, wall , pedestal and exhaust fans that operate based on the same energy saving principal behind the current "Solar Fan". A model of the "Solar Fan" will be designed with an optional UBS slot/ plug, so that the fan can be charged via laptop, or operated of electricity if the user wishes. After the initial start-up stage of the business, it is possible that FAN-Tastic Enterprises could mimic Usha and begin to design a range of high-end fans. There
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would be a higher pricing on these models as "Quality of the Product" would be the major selling price. Hence, a larger profit could be made on this line of products as to a customer, higher price often implies higher quality. In terms of furthering the performance of the company, the company will possibly expand into the area of second-hand fan systems (buying, selling and stripping 2nd hand systems for parts), once the company expands operations to India.
Technical Partners
www.affordable-solar.com will provide our company with solar panels used in the construction of the "Solar Fan" at a discount price. www.electricalretailers.ie will provide the company with high quality electronics needed to build the fans. www.leslie-reynolds.ie are an Irish stainless steel retailer and will provide the components needed to construct the body of the "Solar Fan"
IP, Patents, Copyrights, Brands

Both the "Solar Fan" and the technology around which it is based has already been patented. Since our competitors are not aware of this product yet, there is no way that they can legally mimic our design any time in the distant future. The patent obtained is an International Patent, and hence this holds for not only Irish companies, but all worldwide companies.
Key Performance Indicators

TABLE 13: KPI'S YEAR 1
Year 1 Key Performance Indicator Market Share On-Time Deliveries New Customers Acquired Bad Debts between Company & Customer Revenue Growth Gross Margin Frequency Annual Weekly Annual Annual Annual Annual Target 1.75% Irish Market 99+% 13125 0 1443750 50%
Year 2 Key Performance Indicator Market Share On-Time Deliveries New Customers Acquired Bad Debts between Company & Customer Revenue Growth Gross Margin Frequency Annual Weekly Annual Annual Annual Annual Target 3.75% Irish Market 99+% 15000 0 1650000 50%
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Year 3 Key Performance Indicator Market Share On-Time Deliveries New Customers Acquired Bad Debts between Company & Customer Revenue Growth Gross Margin Frequency Annual Weekly Annual Annual Annual Annual Target 6% Irish Market, 0.03% Indian Market 99+% 31875 0 3506250 50%


16
6.
Staffing and Operations
Management (including Board) Organisation Chart
FIGURE 3:DIAGRAM OF MANAGEMENT OF COMPANY
Staffing
TABLE 18: STAFFING OF THE COMPANY
Staffing over first 5 years Year CEO Management Finance Production Design Marketing Sales Public Relations Human Resources Total 3 3 1 1 20 3 3 1 1 20 8 6 4 4 48 1 4 1 6 1 1 4 1 6 2 1 4 3 18 3 1 4 5 26 5 10 8 6 8 73 4 1 4 5 45 5 20 10 10 8 108 5
ANNUAL WAGE
30000 25000 20000 20000 20000 20000 20000 20000 20000
Training Plans
Management Management must attend a bi-annual conference in their areas of expertise as well as three training sessions every year that are based on the principal of developing and maintaining management skills. Staff New staff have to attend two months of training before they start working with the company. This training will introduce them to company protocol as well as training them in the specific area in which they will work. Regular staff in the company have to attend three training and evaluation sessions held by the company with the purpose of perfecting the staff's skills in the area which they are working.
17
General The company holds parties at Christmas and Halloween for all of its employees ( staff and management). This boosts the morale amongst the employees of the company, by developing relationships between staff and management, and should make operation as a team within the company easier. Expenses related to the activities listed above will be entered in the company accounts under the title "Misc.".
Operations
Premesis During the first year of operation, the company will purchase a Headquarters in Dublin, Ireland. The product will be manufactured at this premises. As well as that, all of the other operations of the business will take place here- Public Relations, Design, Financial Management etc. When the company expands to India in its third year of operation, a similar premises will be needed, and as of yet it is undecided where this branch will be. However, this premises will most likely be in Mumbai as this is the most populated part of the country, and hence there will be more sales opportunities. Equipment No equipment will be needed for the production of the "Solar Fan". All of the parts required will be constructed manually by the production staff or bought at discount price from a manufacturer. A machine will be required however for the packaging of the "Solar Fan". Production Facilities For the first three years of operation, the fans will be produced in the company's headquarters in Dublin and Mumbai. However, in the sixth year of business due to growth of sales and production in the company, it will be necessary to purchase a separate production plant. This will allow for more employment in company headquarters in areas not related to production as well as increased jobs in the production sector of the company. It is not yet decided where this new production plant will be situated, although Dublin and Mumbai seem like good options to be closer to the target market. Consequently, this would decrease the cost of shipping of the product. So with the acquisition of this new production facility, the production section of the company will be kept separate from the all other sections of the company which will be working out of both company headquarters. Costs Involved/ Suppliers The costs involved in setting up this business are: Purchase of Premises Purchase of Packaging Equipment Employee's Wages Advertising and Marketing Campaigns Purchase of Components used to Produce the fan itself Shipping Packaging expenses A 10W solar panel can be purchased for only 38.60 euro from www.affordablesolar.com. If the panels used in the construction of the "Solar Fan" are ordered in bulk
18
a discount will be obtained. One possible option is that this website is used to obtain the solar panels needed to construct the fan.
FIGURE 4: SOLAR PANEL USED IN "SOLAR FAN"

However, there is another seemingly cheaper option. It is possible that the solar panels used in the "Solar Fan" could be built by the employees of our company. This would save money as the website mentioned above are clearly making some profit on the sale of their panels. The only downside of manufacturing the solar panels ourselves would be that it require a more skilled workforce. Consequently, the company's expenses would increase in the form of increased wages being paid to this advanced workforce. Therefore, both methods seem equivalent at this stage. Hence, seeing as the business is only in its preliminary stages, the solar panels will be obtained from www.affordablesolar.com, as the workforce behind the construction of the fan are not yet as skilled as they will be. It is possible that the company could change to the second method (manufacturing the solar panels) after a few years of operation.
TABLE 19: COST OF PRODUCTION OF THE PRODUCT

Construction of the Solar Fan Parts Body of Fan Electronics Solar Panel Total Production Cost of Fan Price () 6.4 10 38.6 55
The suppliers used for the electronics and physical components used in the construction of the "Solar Fan" are www.electricalretailers.ie and www.lesliereynolds.ie.
19
7.
I
Financial Projections
Key Assumptions
Income Sources Sales Production details for one Solar Fan:
TABLE 20: SALES DETAILS

Cost of production () +50% profit () Total Price () 55 55 110
The main source of income of this company is sales. The sales expected for the first 5 years of operation are:
TABLE 21: PROFIT DETAILS

Year Units to be Sold Total Cost of Production +Total Profit Total Price 1 13125 721875 721875 1443750 2 15000 825000 825000 1650000 3 31875 1753125 1753125 3506250 4 45000 2475000 2475000 4950000 5 70000 3850000 3850000 7700000
Sources of Expense Employees Wages Expenses due to wages for the first 5 years are:
TABLE 22: WAGES Year

Total ()
1 430000
2 430000
990000 1490000 2190000
These total wages are consistent with a summation of the annual wages in Table 18 weighted for the number of people in each position. The annual wages for each position do not change over the five year period. This is because there is no pay rise planned within this period. This is because during the first five years of operation, the company will be focused solely on gaining a foothold in the market. Research and Development Costs R&D expenses occur in the fourth and fifth years of operation of the company and are 40000 and 80000 respectively during these years.
Investment in Equipment and Materials Expenses due to purchase of Fixed Asset and the depreciation incurred on these assets are:
20
TABLE 23: PURCHASE OF FIXED ASSETS

Year Purchase of Premises () Purchase of Equipment () 1 300000 100000 3 300000 100000
TABLE 24: DEPRECIATION OF FIXED ASSETS

It is assumed that depreciation on both Premises and Equipment both occur at a constant rate of 10% of cost per annum: Depreciation on Fixed Assets Year Premesis () Equipment () 1 30000 10000 2 30000 10000 3 60000 20000 4 60000 20000 5 60000 20000
Exports Assuming that exports account for 40% of the Other section of sales, and that the expenses related to exporting one of these products is 5 the expenses arising due to exports in the first 5 years are:
TABLE 25: EXPORTS

Year Products Sold (Other Section) Products exported (40% "Other" Sales) Expense per Exports Expenses due Exports () Purchases & Stock 1 1312.5 525 5 2625 2 2812.5 1125 5 5625 3 6000 2400 5 12000 4 10500 4200 5 21000 5 17500 7000 5 35000
TABLE 26: PURCHASES & STOCKS

Year Purchases () Units Constructed from Purchases Opening Stock () Opening Stock (units) Closing Stock () Closing Stock (units) 1 770000 14000 48125 875 2 880000 16000 48125 875 103125 1875 3 1760000 32000 103125 1875 110000 2000 4 2365000 43000 110000 2000 0 0 5 3960000 72000 0 0 110000 2000
Purchases & Creditors An agreement has been arranged with our suppliers that they will offer us a maximum of 20% of our purchases on credit each year, however as the company progresses, it will be sought to have less of a need for buying on credit:
21
TABLE27: PURCHASES& CREDITORS

Year 1 Creditors as % of Sales Creditors Figure () Purchases Figure () 20% 154000 770000 Year 2 10% 88000 880000 Year 3 20% 352000 1760000 Year 4 10% 236500 2365000 Year 5 5% 198000 3960000
Sales & Debtors The company will adopt a policy to only offer a maximum of 20% of total sales each year as credit. As the company progresses, it will try and minimize its total debtors figure:
Table28: Sales & Debtors

Year 1 Debtors as % of Sales Debtors Figure () Sales Figure () 18.2% 262625 1443750 Year 2 15.333% 253000 1650000 Year 3 6.82% 239075 3506250 Year 4 5.74% 284150 4950000 Year 5 2.57% 198000 7700000
(For the purposes of the preparation of the accounts below(in particular the cash flow statement), it is assumed that Debtors have a maximum pay-up period of 1 year, and hence it is assumed that: Cash Sales = Total Sales - Debtors
22
II
Profit & Loss Accounts
TABLE 29: PROFIT & LOSS ACCOUNTS

Profit & Loss Account Sales Cost of Sales Opening Stock +Purchases -Closing Stock Cost of Sales Gross Profit Less Expenses R&D Advertising Wages Dividends Electricity Exports Tax (12.5%) Depreciation Misc. Total Expenses Net Profit 20000 430000 10000 1000 2625 180500 40000 20000 704125 17750 20000 430000 10000 1000 5625 206250 40000 20000 732875 92125 40000 990000 10000 2000 12000 438300 80000 40000 1612300 140825 40000 60000 1490000 10000 2000 21000 618750 80000 40000 2361750 113250 80000 120000 2190000 10000 2000 35000 962500 80000 40000 3519500 330500 770000 770000 48125 721875 721875 48125 880000 928125 103125 825000 825000 103125 1760000 1863125 110000 1753125 1753125 110000 2365000 2475000 0 2475000 2475000 0 3960000 3960000 110000 3850000 3850000 Year1 () Year1 () 1443750 Year2 () Year2 () 1650000 Year3 () Year3 () 3506250 Year4 () Year4 () 4950000 Year5 () Year5 () 7700000
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III
Balance Sheets
TABLE 30: BALANCE SHEETS

Balance Sheet Fixed Assets Premises Equipment Current Assets Debtors Closing Stock Cash in Hand 262625 48125 2000 312750 672750 Current Liabilities Creditors Bank Overdraft Total Net Assets Financed By: Shares Sold Profit and Loss Balance Total Net Assets 500000 17750 517750 500000 92125 592125 500000 140825 640825 500000 113250 613250 500000 330500 830500 154000 1000 155000 517750 88000 1000 89000 592125 352000 250 352250 640825 236500 400 236900 613250 198000 500 198500 830500 253000 103125 5000 361125 681125 239075 110000 4000 353075 993075 284150 0 6000 290150 850150 436000 110000 3000 549000 1029000 270000 90000 360000 240000 80000 320000 480000 160000 640000 420000 140000 560000 360000 120000 480000 Year1 () Year1 () Year2 () Year2 () Year3 () Year3 () Year4 () Year4 () Year5 () Year5 ()
24
IV
Cashflow
TABLE 31: CASHFLOW STATEMENTS

Cash Flow Statement Opening Cash Cash Sales Cost of Sales (Cash Related) Gross Profit Opening Cash+ Gross Profit Overheads: R&D Wages Advertising Dividends Electricity Exports Misc. Total Overheads: EBITDA Finance: Tax EBITDA-Finance Costs 180500 -50875 206250 64375 438300 501250 618750 356850 962500 529350 430000 20000 10000 1000 2625 20000 483625 129625 430000 20000 10000 1000 5625 20000 486625 270625 990000 40000 10000 2000 12000 40000 1094000 939550 40000 1490000 60000 10000 2000 21000 40000 1663000 975600 80000 2190000 120000 10000 2000 35000 40000 2477000 1491850 Year1 () 0 1181125 567875 613250 613250 Year2 () 49125 1397000 688875 708125 757250 Year3 () 64375 3267175 1298000 1969175 2033550 Year4 () 101250 4665850 2128500 2537350 2638600 Year5 () 356850 7264000 3652000 3612000 3968850
Capital Income: Shares Sold Capital Expenditure: Premesis Equipment

Closing Cash 300000 100000 300000 100000 500000
49125
64375
101250
356850
529350
25
8.
Sales Pipeline
TABLE 32: SALES PIPELINE

Sales Already Agreed/ Proposed Name of Customer Tesco Ireland Heatons Home Depot Woodies DIY Size of Deal 5000 5000 5000 5000 Time of Expected Sale Year 1 Year 1 Year 1 Year 2 Probability % of Getting Sale 80% 70% 100% 100%
26
9.
Funding Requirements
Investment by Shareholders
400,000 euro has already been invested in the company. This investment is solely by the shareholders (The CEO and 2 of the 3 Managers). It is possible that further funding could be gained in this manor in the first 5 years of the company, however this business plan does not rely on this happening. The money gained in this way will go solely to purchasing the materials needed to manufacture the "Solar Fan". An estimated 100,000 euro is need from external investors to get the company up and running. This is one of the reasons behind the construction of this business plan. In return for this lump sum, the investor will receive a 30% share in the company.
Bank Lending
This business plan does not take into account bank lending to the company. This method of funding for the company may be needed in the future, but this business plan does not take it into account. Despite this, if bank loan(s) are obtained they would most likely be needed to facilitate the acquisition of the Manufacturing Plant talked about earlier, which is intended to be purchased in the company's sixth year.
27
10.
Appendices
Detailed Financial Assumptions

Sources of Expense Employees Wages The total number of people employed by the company is shown in a table in the "Staffing" section of the Business Plan. If the wages of a single Employee per year in each sector is:
TABLE 33: ANNUAL WAGE OF EACH EMPLOYEE Employee

CEO Management Finance Production Design Marketing Sales Public Relations Human Resources
Annual Wage
30000 25000 20000 20000 20000 20000 20000 20000 20000
Therefore, by making reference to the list of employees in the "Staffing" section in the Business Plan, it can be calculated that the total wages per annum paid by the company to its employees is:
TABLE 34: TABULATION OF TOTAL WAGES

Staffing over first 5 years Year CEO Management Finance Production Design Marketing Sales Public Relations Human Resources Total Employees Total Wages 3 3 1 1 20 3 3 1 1 20 8 6 4 4 48 1 1 4 1 6 2 1 4 1 6 3 1 4 3 18 4 1 4 5 26 5 10 8 6 8 73 5 1 4 5 45 5 20 10 10 8 108
ANNUAL WAGE
30000 25000 20000 20000 20000 20000 20000 20000 20000
430000
430000
990000
1490000 2190000
28
29

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FAN-TASTIC ENTERPRISES BUSINESS PLAN

Prepared By: Mark Roche 109479961 06/12/2011

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Strictly Private & Confidential FAN-Tastic Enterprises 2011

TABLE 1: IMPORTANT COMPANY DETAILS

Year 2 1650000 732875 92125 20

Year 3 3506250 1612300 140825 48

Year 4 4950000 2361750 113250

Year 5 7700000 3519500 330500

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Management Structure and Areas of Responsibility:

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Products and services

Long Term Aim of the Business

Strictly Private & Confidential FAN-Tastic Enterprises 2011

FIGURE 1: SWOT ANALYSIS

Strictly Private & Confidential FAN-Tastic Enterprises 2011

FIGURE 2: TARGET MARKETS

Characteristics of potential customers

Strictly Private & Confidential FAN-Tastic Enterprises 2011

TABLE 4: TARGET MARKET PERCENTAGES

Total Market Size

TABLE 5: SIZE OF IRISH MARKET

Strictly Private & Confidential FAN-Tastic Enterprises 2011

TABLE 6: SIZE OF INDIAN MARKET

Strictly Private & Confidential FAN-Tastic Enterprises 2011

ORIENT Specialize in fans and lighting. Most detailed selection of fans.

Strictly Private & Confidential FAN-Tastic Enterprises 2011

TABLE 11: PREDICTED MARKET SHARE 2012-2016 (LOCAL)

TABLE 12: PREDICTED MARKET SHARE 2012-2016 (INDIA)

Domestic 3000000 3000000 0 0 9000 27000 60000

Business 1500000 1500000 0 0 4500 13500 30000

Other 500000 500000 0 0 1500 4500 10000

Total 5000000 5000000 0 0 15000 45000 100000

Advantages and Disadvantages of Competitors' Offers

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Unique Selling Point (USP)

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Marketing and Communications Strategy

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Research and Development

Research and Development

Strictly Private & Confidential FAN-Tastic Enterprises 2011

IP, Patents, Copyrights, Brands

Key Performance Indicators

TABLE 14: KPI'S YEAR 2

Strictly Private & Confidential FAN-Tastic Enterprises 2011

TABLE 15: KPI'S YEAR 3

TABLE 16: KPI'S YEAR 4

TABLE 17: KPI'S YEAR 5

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Staffing and Operations

Management (including Board) Organisation Chart

FIGURE 3:DIAGRAM OF MANAGEMENT OF COMPANY

Strictly Private & Confidential FAN-Tastic Enterprises 2011

Strictly Private & Confidential FAN-Tastic Enterprises 2011

FIGURE 4: SOLAR PANEL USED IN "SOLAR FAN"

TABLE 19: COST OF PRODUCTION OF THE PRODUCT

Strictly Private & Confidential FAN-Tastic Enterprises 2011