05 Mar Surveyor Instrument Business Plan

Introduction

Bottlieb Innovations, Inc. is a start up company that produces a product that will change the landscape of land assessment. Bottlieb’s Digital Geographer product is a simple device which, through patented technology, computes the area of a walked perimeter.

As the start-up enters its first production year, this plan will serve as a guide for management. This plan uses the most conservative projections and numbers possible.

The Company

Bottlieb Innovations, Inc., can be found in Escondido, CA. The facility covers approximately 1,500 feet and is located close to freeways. It includes office, workshop, and assembly spaces as well as plenty of parking.

George S. Bottlieb (president and CEO) is responsible product design, sales, marketing, and overall business management. Jay Rosenburg Jr. is the vice president and shares responsibility for business management. He focuses on marketing, finance, and operations. As the company is small, both the president of the company and the vice-president will initially focus on tasks such product assembly, packing, order processing, shipping, and delivery. As the company grows, additional management personnel will be hired. In order to cut down on overhead, temporary employees will be employed by production personnel.

The company will implement a bonus program that is linked to outstanding company performance. The bonus plan, coupled with the opportunity to work for a company that has such tremendous growth potential, should help attract and retain key personnel.

The Product

The company has already developed and is in the process of manufacturing the Digital Geographer. This device will quickly calculate the area of a walk perimeter. The Digital Geographer’s manufacturing process will be straightforward due to the small number of components.

Bottlieb’s Digital Geographer has a unique functionality that is unmatched by distance wheels from other manufacturers. The Digital Geographer turns complex area measurements into an easy task. What used to require several measurements, a large degree of estimation, and a lot of geometric calculations, now only requires the abilities to walk and push a button. Contractors know how important accurate measurement of area is. Contractors will be able to avoid the costly mistakes of underestimating jobs in a highly competitive market.

Bottlieb Innovations, Inc. produces its own products, using local suppliers of materials and other services. Bottlieb Innovations, Inc. owns molds that can be used to make plastic components like the wheel or encoder box.

Already, plans for a follow-up product, the DG-3000 are in place. For determining directional changes, the DG-3000 will be equipped with two wheels and a differential-based navigation system. This is in addition to an electronic compass. Bottlieb Innovations has plans to develop future products, including software interfaces and future iterations for the DG-3000 that may use a Global Positioning Satellite system (GPS).

The Market

Analyses have shown that measuring wheels generate an average of $100M in global sales each year, with an average price of $50 (U.S. Dollars). Worldwide, approximately two million distance measuring wheels are sold each year. Bottlieb Innovations estimates that one-third of this market’s demand comes from customers needing to calculate distance and area. If this estimation is accurate, there is potential for 600,000+ units annually in area measurement.

Bottlieb Innovations will be able to capture 1% of this market segment and sell 6,000 units annually. The market’s potential is strong as long as customers are willing to change their buying habits and recognize the digital geographer’s superiority.

There are three basic market segments in the current distance-wheel market:

1. Construction, including engineering and small scale surveying.
2. Agricultural, with large-scale surveys.
3. Niche.

Bottlieb Innovations targets current buyers between 10&#8243 and 18&#8243

Distance wheels in the construction, appraisal, small-scale surveying and other industries. The Digital Geographer is specifically targeted at buyers who use their distance wheel to measure area. The majority of Bottlieb’s initial sales will be directly to customers in California’s fast-growing construction industry, but the company plans to swiftly expand its domestic and worldwide sales.

Bottlieb&#8217s product is revolutionary in technology and there are no direct competition for the Digital Geographer. Bottlieb does expect to sell Digital Geographer products to a significant part of the distance wheel market. Bottlieb’s competition in the distance wheel market are Rollertape and Measure Man, TruMeasure and Rollersure.

Tool distributors are the preferred channel for distance wheel vendors. Distributors of agricultural supplies sell some larger wheels. Distributors take care of the product placement and customer service issues. Large retail stores that sell home improvements products (e.g. Home Depot) also sell distance wheels. Home Depot

Because of the number of companies in the industry, it is difficult to predict the future growth of the measuring wheel industry. Bottlieb Innovations doesn’t expect a significant increase in unit sales in the measuring-wheel industry in the next few years, despite the fact that there has been strong growth in construction worldwide. However, it does anticipate market share growth from existing market players over the next few decades. Bottlieb’s growth is not as dependent upon the entire market size growing as it is upon generating interest, awareness, and excitement for the Digital Geographer product.

Bottlieb believes that direct marketing and product image will help Bottlieb Innovations increase the demand for their products in the region, state and nation. This should happen within five years. Bottlieb Innovations’ initial domestic success and positive Web-based sales will decide if they can focus on global expansion during this time.

Financial ProjectionsBottlieb Innovations’#8217’s sales forecast assumes constant, un-seasonal growth with an average revenue of $425/unit. Since volume requirements will drive production, and our suppliers have substantial discounts associated with larger volumes, it is possible that we will lower the price of the Digital Geographer if the sales volume increases substantially. However, we will not allow the price decrease to cut into our profit margin.

Although it is hard to predict how many customers will pay $600 for a digital geographer, we anticipate that the number of units per month will increase to 100 within the first year. The Escondido plant can produce up 500 units per day if the demand for the product is higher than expected. The company plans to realize a very high level of profits on its sales by Year 2.

1.1 Objectives

Bottlieb’s management seeks to make the business profitable within one year of the start of production, scheduled to begin early in the third quarter of Year 1. It is possible to quickly increase the production capacity as required. If demand is high enough, the facility can produce up to 500 units per day.

The challenge facing management is to generate enough product interest in local and region-based distance-wheel markets for 100 units per months by the end year1. This will ensure profitability and enable further expansion into national or global markets.

1.2 Mission

Bottlieb Innovations strives “through relentless innovation and creativity, to extend the overwhelming power of technology to practical, accurate, time-saving devices that enable increases in customer productivity.” The company’s mission statement reflects the blend of creativity and pragmatism that Bottlieb’s management believes is necessary to successfully invent, market, produce, and sell breakthrough products.

Bottlieb Innovations’s first and only product is Digital Geographer. However, its founder and management constantly evaluate the marketability of new product ideas.

The Digital Geographer product’s anticipated revenue will be used to improve future iterations and to finance future innovative products in other fields.

1.3 Keys for Success

• Since Bottlieb’s Digital Geographer product is so revolutionary, it essentially creates a new, segmented market. Bottlieb’s management targeted distance-wheel buyers and must convince them of the Digital Geographer’s added value.
• You must ensure exceptional product quality, as your company’s reputation will first be built by users and word-of-mouth advertising.
• To ensure financial stability, accurate production planning, cost control, and budgeting are essential.
• The temptation to concentrate only on growth, while neglecting profitability, must be avoided.