Professional Athletic Equipment, Inc., is going to market a protective tool for young athletes. The brand name and identity for the product will be Body Armor. The product is designed to protect the abdomen, chest, and side from injury caused by blunt trauma. The device may also help prevent sudden death from commotio cordis (heart stoppage due to external trauma). This injury can occur in many sports, including baseball. The United States has filed a patent application for the device.
This business plan forms part of our regular business planning. We revise this plan semi-annually.
We plan to market our initial product in the next year. No sales have occurred to date.
On average, sales will be 750 units per month in the first year of marketing. This will result in a total sales volume of $242,550. Management projects that the company will achieve sales of more than $4 million and profitability by year three. Year three profits are expected to be $593,570 before taxes.
Our keys to success and critical factors for the next year are, in order of importance:
- Production of the first three sizes.
- Test marketing and basic research to determine product acceptance.
- Test marketing of multi-channel distribution.
- Marketing media, pricing, marketing PR and product endorsements.
- The goal of recouping production costs and first-year depreciation on the initial three molds within year one.
- Limiting loss to $200K or less in the second and third years.
- Reaching limited retail distribution in the third year (2nd sales year).
- In year three, you will be able to achieve profitable operations
Professional Athletic Equipment, Inc. sets a modest goal of achieving its year-one sales. If we achieve these targets, our goal for year one sales will be just shy of breaking-even. It will also provide us with a platform to grow in year 2.
Here are the sales targets for each size
- Small’#8211;4500 units
- Medium–2250 units
- Large� units
These targets will lead to year one sales volume at $242,550. This will be a confirmation of a successful test.
Costs will be controlled to maintain projected margins at these modest sales levels. In the event that sales surpass these goals, additional production can be done and more marketing activity can be initiated quickly. However additional capital will be required in a short time to implement growth. To be safe, sales might be lost in order to prepare for year 2.
Professional Athletic Equipment, Inc., an American manufacturing and marketing company, is dedicated to protecting young athletes against tragic injury and death. We intend to make quality, tested products and to make sufficient profit to generate a fair return for our investors. The ‘#8220â€™Body Armor, our first product, will be sold through targeted direct marketing to parents of young baseball players. The “Body Armor” is intended both to help prevent injury and to improve athletic performance via its confidence enhancing attributes among youthful sports participants. The “Body Armor” seeks to foster the enjoyment of sports by young people. We aim to grow the company and establish our brand as a market leader and innovator within its niche. Once we have established our marketing platform, we intend to finance further growth internally and externally. Additionally, we will be developing and acquiring new products. We will live by Christian values.
1.3 Keys to Success
Professional Athletic Equipment, Inc. is a company that understands the importance of success.
- High Quality Products. New molds are required and production must start. The initial order must be placed with the suppliers of all components. It is important to ensure prompt delivery and assembly, and keep re-work to a minimum.
- Marketing. Professional Athletic Equipment, Inc.’s success is largely dependent on its marketing strategy. The “Body Armor” is a new product and consumers must be educated as to its availability and purpose. Controlling media costs to drive sales is key to your success.
Although it’s tempting to expand a business exponentially, Professional Athletic Equipment, Inc. must first prove product salability within certain price points, margins requirements, distribution channels, as well as establish consumer acceptance. After these answers have been found, controlled expansion (which involves increased production and investments in inventory) can then be achieved with confidence.
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