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Outdoor Gear Business Plan
Executive Summary
Simplistic Labyrinth Design Studio is a designer/prototyper for a wide range of outdoor gear. Simplistic Labyrinth will create a prototype from customer specifications or from Simplistic’s imagination. Once the protype is made, the customer can then license the product and sell it as their own. This service is useful for companies that do not have an in-house design studio as well as those that do, but for whatever reason cannot produce some “one-off” models.
In addition to designs that are requested by manufacturers, Simplistic Labyrinth has several products that they have already designed and will try to find the right company to market and manufacture the product. Simplistic Labyrinth Design Studio will leverage their competitive advantages of imagination and expertise to gain market share. Profits will be variable over time, a function of the revenue cycle for this type of business.
1.1 Objectives
The objectives for the first three years of operation include:
- To create a service-based company whose primary goal is to exceed customers’ expectations.
- The utilization of Simplistic Labyrinth by at least four multi-million dollar companies.
- To increase the number of clients by 20% per year.
- To develop a sustainable home-based design studio that licenses designs to the top manufacturers in their respective fields.
1.2 Mission
Simplistic Labyrinth Design Studio’s mission is to provide cutting edge designs to be licensed by manufacturers. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.
Company Summary
Simplistic Labyrinth Design Studio is a company that designs products, primarily outdoor gear, that is then licensed. Some of the products are designed and then a licensee is searched for to purchase the design. Other times a manufacturer will come to Simplistic and ask them to develop a product for them.
Simplistic Labyrinth Design Studio was founded by Ikan Fabreekate and is based out of Ikan’s studio in his home in Portland, Oregon. Simplistic Labyrinth Design Studio’s revenue is from license fees and one-off prototypes. Simplistic Labyrinth Design Studio will reach profitability by month four and will have yearly revenues of $6,000 for year two.
2.1 Company Ownership
Simplistic Labyrinth Design Studio is a sole proprietorship owned by Ikan Fabreekate.
2.2 Start-up Summary
Simplistic Labyrinth Design Studio will incur the following start-up expenses:
- Computer system with CD-RW, printer, Microsoft Office, QuickBooks Pro, CAD/CAM software, and a DSL connection.
- A commercial walking foot sewing machine.
- A serger.
- A heat press for applying 2-ply hot tape, 3-ply hot tape, polyurethane hot tape, and nitrile hot tape.
- Hot knife.
- Bar tacker.
- Assorted threads, needles, scissors, and fabric cutters.
- Extra phone line.
- Web page development.
Please note that the following items which are considered assets to be used for more than a year will labeled long-term assets and will be depreciated using G.A.A.P. approved straight-line depreciation method.
Services
Simplistic Labyrinth Design Studio is a full-service design studio for outdoor gear. Simplistic Labyrinth creates designs as per specifications given to them by a manufacturer as well as has designs that were created independently of a request.
Some of Simplistic Labyrinth’s designs in the past have included an simple velcro watch band that is far more secure than traditional bands yet low profile, and an insulated wine/beer bag that maintains the internal temperature made out of 1000 denier Cordura fabric for durability, simple shoe bags for securing and separating footwear within suitcases for travel, a water hydration pack for ultramarathon running, a bag for bicycling that mounts on top of a rear rack and is completely waterproof, a strap system for securing trekking poles together, bicycling messenger bags, and a slim line padded laptop computer case/envelope. The design of the product is only limited by the clients willingness to pay.
Simplistic Labyrinth derives their revenue from license fees and prototyping fees. The license fees will be the cost charged to the company to use the product for production. This differs from a royalty because a license fee will be a one time fee for a set number of items in production. A royalty is typically a per item fee. The prototyping fees are the fees charged for the production of a prototype, or working model if you will.
Some of the items designed and produced by Simplistic Labyrinth will be patented, but only if 1) the design is novel enough to receive intellectual property protection, and 2) if the design is unique enough so that the patent is not easily avoided by changing a relatively insignificant part of the design.
Market Analysis Summary
Simplistic Labyrinth Design Studio has two targeted customers, manufacturers who are interested in Simplistic developing a prototype from their specifications or for Simplistic to develop the design. Simplistic will also target entrepreneurs who either have a general idea of some product that they think would sell well and they will have Simplistic design it.
These groups will be targeted primarily through activities within the outdoor industry like trade shows and advertisements in industry journals. Additionally, Simplistic will also specifically target entrepreneurs who are interested in taking a design to market by finding someone to manufacture it for them.
4.1 Market Segmentation
Simplistic Labyrinth’s customers can be divided into two different groups:
- Manufacturers who are looking to sell a specific design and either do not have a design facility in-house, or are in need of the design quicker than their in-house staff can offer.
- Entrepreneurs who will license the design and then shop it around to different manufacturers.
The majority of the business will be with the first group. It is not unusual for a manufacturer to look outside of their company to have a prototype made. There are many companies that are considered manufacturers yet they do not even make any of their products, they farm that work out to subcontractors. Manufacturers will also farm out the design and prototyping work as a cost saving measure against large overhead charges.
Some of the market does consist of entrepreneurs who will license a design and then shop it around to different manufacturers, often overseas to have the product mass produced. Sometimes they will be responsible for the distribution and marketing of the product, sometimes they will sell the license to their customer.
4.2 Target Market Segment Strategy
Simplistic Labyrinth will target their different market segments with a three-pronged approach:
- Outdoor industry trade shows. These shows typically occur two times a year in different locations. These trade shows are quite extensive, they have retailers, manufacturers, designers, wholesalers as well as the media. The who’s who can always be found at these trade shows. Attendance/display booths are by far the best way to network and gain business in this industry.
- Advertisements in industry journals. This is another targeted method of reaching the desired audience. In this case, only industry personnel have access to subscriptions so the audience is very targeted.
- Web page. A Web page will be used to advertise the company. Previous designs, as well as service offerings, will be listed on the page. The Web page allows companies that are geographically far away to be able to see past designs and learn more about Simplistic Labyrinth.
Advertisements in entrepreneur magazines. These advertisements will be used to reach the market segments of entrepreneurs who are not necessarily in the outdoor industry but have an idea and would like it prototyped, or have money to buy a design created by Simplistic Labyrinth and will then take care of the manufacturing and marketing.