Hand Cloud pillow

Hand Cloud Pillow 3450 Fairway Dr.

Trussville, Alabama 35173

Business Proposal for Ryan Dickey

SECTION ONE: THE EXECUTIVE SUMMARY 1 1.1 Overview of Idea 1 1.2 Mission and Objective 1 1.3 Keys to Success 1-2 SECTION TWO: PRODUCTS AND KEY PROBLEM TO SOLVE 2 2.1 Product Overview 2-3 2.2 Product Aspects 3 2.3 Key Opportunity 3 SECTION THREE: MARKET ANALYSIS 3 3.1 Market Overview 3-4 3.2 Target Market 4-5 3.3 Main Competitors 5 3.4 Distribution Strategy 5-6 3.5 Market Entry 6 3.6 Pricing Strategy 6-7 3.7 Scalability 7 SECTION FOUR: COMPETITIVE ADVANTAGE AND DEFENSIBILITY 7 4.1 Strengths and Weaknesses 7-8 4.2 Opportunities and Threats 8 4.3 Competitive Advantage 8-9 SECTION FIVE: MANAGEMENT SUMMARY 9 5.1 Organizational Structure 9 5.2 Current Management Team 9

5.3 Personnel Plan 10 SECTION SIX: FINANCIAL INFORMATION 10 6.1 Current Sources of Funding 10 6.2 Funding Needs 10 6.3 Breakeven Analysis 11 6.4 Proposed Milestones 11-12 SECTION SEVEN: SUMMARY 12 SUPPORTING DOCUMENTS 13-14

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I. Executive Summary

1.1 Overview of Idea

Hand Cloud Pillow is a for-profit retail business motivated to make travel and everyday naps

comfortable and convenient. The slogan of the Hand Cloud Pillow is, “Naps on the Go”, which

emphasizes the specification of being a travel oriented pillow. It was inspired through an

experience on a plane where there were many people attempting to fall asleep with their hand

on their face. This birthed the Hand Cloud Pillow by assessing that the consumer generally puts

their hand on their face to attempt at being more comfortable. Therefore, the Hand Cloud

Pillow maximizes comfort by capitalizing on the everyday functions of the consumer. Everyone

has the need of being more comfortable and Hand Cloud Pillow’s mission is to meet that need.

Hand Cloud Pillow has created a simple design that is slightly bigger than the size of the average

hand. It has a pocket on the side so that the customer can slip the pillow on their hand. Also, it

has a zipper so that the pillow that is inside can be taken out and the outer cover can be

washed.

1.2 Mission and Objective

The mission of the Hand Cloud Pillow is to allow the customer a simpler and more comfortable

experience when travelling. The objective is to build a culture of comfort and a community of

Hand Cloud users. The goal of the business is to penetrate an older market with a new product.

Then, to maintain that penetration through product development with new innovative travel

products off of the original Hand Cloud Pillow. The overall mission of Hand Cloud Pillow is to

infiltrate and be sustainable throughout the marketplace. Also, to build a positive brand equity

and be known as the dominating product line in the market of travel products.

1.3 Keys to Success

The keys to success for the Hand Cloud Pillow are sevenfold. These keys consist of: believability,

creating a positive brand equity, customer service, reliability, competence, transparency, and

adaptation. These seven keys are seven characteristics that the company holds as foundational.

The first key to success for Hand Cloud Pillow is product believability. Hand Cloud Pillow is a

new innovative product off of a product that people use every day, the pillow. Therefore, the

greatest challenge is to find the niche within the market that allows the customer to believe in

the product. This key will be met through marketing and advertising; as well as word of mouth

from existing customers.

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Then, once the product infiltrates the market place, the next step is to build a positive brand

equity through the quality of the product provided. Creating a positive brand equity hinges on

the perceived value of the product to the consumer. Therefore, Hand Cloud Pillow will

demonstrate its ability to infiltrate the marketplace and create a positive and sustainable brand

equity through the quality of the product.

The next key to success is to provide the best possible customer service. Customer service is

first and foremost the most important aspect of Hand Cloud Pillow. If the customer is not happy

than the company is not happy. Therefore, it will demonstrate its customer service through

delivering superior products, respecting the customer’s wishes, understanding the customer’s

wants, and responding to the customer in a proper manner.

Showing the customer that Hand Cloud Pillow will provide the best customer service, then

establishes the next key to success, reliability. Through Hand Cloud Pillows superior service and

quality the customer can also expect reliability. Therefore, we pledge to do what we say when

we say we will do it. Thus, there are no empty promises at Hand Cloud Pillow.

Following reliability, is demonstrating to the consumer of the competence of Hand Cloud Pillow

within the marketplace. Hand Cloud pillow understands the need for superior products and

consistently delivering those results. Consequently, Hand Cloud Pillow is intentional in

maintaining consistency within every aspect of the company’s core values.

The next major key to Hand Cloud Pillow’s success is transparency between the customer and

the company. The reason that transparency is a key to success is so that the customer has a

voice within the company. So that the customer can help the company with the quality of the

product; which then allows us to produce the best possible product to deliver to the customer.

Hand Cloud Pillow views the customer to company relationship to be a two way street. Thus,

allowing the company to be transparent at all times.

The last key to success is constantly adapting to the changes in the marketplace while also

staying consistent in its company values. Hand Cloud Pillow understands the inconsistency

within the marketplace and strives to adapt its approach to the marketplace with those

constant inconsistencies. On the contrary, Hand Cloud Pillow will not change its core values due

to changes in the marketplace.

II. Products and Key Problem to Solve

2.1 Product Overview

The Hand Cloud Pillow is a small, round shaped pillow for your hand, roughly a few inches

longer and wider than your hand. This product creates better support for your head and neck.

The side pocket on each pillow allows for your hand to easily slip into the pillow and be the

main source of support. Each Hand Cloud Pillow is filled with polyester stuffing for ultimate

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comfort. If you think about it, how often do you place your hand under your chin to rest your

head? Everywhere you look, someone will be resting their head on their hand. For example,

when traveling on airplanes, people will place their elbow on the arm rest and rest their head

on their hand. This same issue arises when sitting in a chair, leaning on a desk, traveling in a car,

etc. However, this causes discomfort. The Hand Cloud pillow will solve this problem by allowing

you to be in the same natural body position, but with more comfort for your head and hand.

2.2 Product Aspects

The Hand Cloud Pillow has a few aspects but being a simple product it is not extensive. A

sewing machine is used to stitch together the fabric used to create the Hand Cloud Pillow. Also,

using the sewing machine, a zipper is placed at the bottom of the pillow in order to make the

pillows washable. By simply unzipping the bottom of the pillow, you can remove the inner

pouch and wash the outer cover. Also, the product has the ability to be monogrammed and

personalized.

2.3 Key Opportunity

Traveling has become a trend in our society today. With social media taking increased

popularity, users are able to follow travel bloggers all around the world. People are traveling

now more than ever. It is the perfect opportunity for travelers to use a personal Hand Cloud

Pillow that creates comfort without the inconvenience of carrying around a full sized pillow.

III. Market Analysis

3.1 Market Overview

According to market research the size of the market industry is nearly 8 million people per day

on average. In 2013 the total number of travelling passengers surpassed 3 billion people. That

was merely three years ago and the numbers in 2014 were 3.3 billion passengers for the year.

(International Air Transport Association) Therefore, the market shows a steady increase in the

number of people travelling yearly. That brings more people into the market for a Hand Cloud

Pillow than ever before.

On a national level, according to the Bureau of Transportation Statistics there were 663 million

enplaned passengers in 2014, and 696 enplaned passengers in 2015. That is a 5% growth

change in the number of passengers flying per year.

This graph reveals the size of the market for the Hand Cloud Pillow. The data is representative

of domestic travel as well as passengers flying out of America and going internationally. (This

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data was taken from The Bureau of Transportation Statistics.)

The information on this graph also shows the economical fluctuations of people travelling

which directly affects the market of the Hand Cloud Pillow. According to this data, in the years

of the recession in the United States, the number of people flying went down and this has a

direct relationship with the size of the market for the Hand Cloud Pillow; because the more

people travelling, the more potential customers.

3.2 Target Market

The target market for the Hand Cloud Pillow consists of people of all ages that have the ability

to travel. As shown in the market overview, the market of people travelling per year is

consistently increasing. The largest target markets are in correlation with positioning the

product in the right sector of the market. The Hand Cloud Pillow is not a necessity product as

much as it is a luxury product, but it is cheap enough for anyone to buy.

The main geographical factors that affect the success of the Hand Cloud Pillow are whether or

not it is located in a densely travel populated area, such as Atlanta. Therefore, the product

needs to enter cities like Los Angeles, New York, Atlanta, and Dallas. These are heavy travel

areas according to market research. Thus, that is an attractive market to place the Hand Cloud

Pillow.

The beginning of the business originally sold on a college campus. It has proven to be successful

on a small scale and especially to travelling athletes.

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Also, other points of interest are in the digital marketing space. Through outlets such as social

media and website traffic. This allows for us to target online travel bloggers. Travel blogging has

become a new trend throughout the digital marketing space, and social media has given us the

ability to target these travel bloggers personally. We do this through direct messaging and

giving free product if they will post it to their site.

Therefore, the target market for the Hand Cloud Pillow is broad but encompasses everything

from personal selling on campus to digitally selling to people around the world.

3.3 Main Competitors

The main competitor of the Hand Cloud Pillow is the Neck Pillow. The famous Neck Pillow has

been the ultimate travel pillow for years. The neck pillow allows your body to rest comfortably

in a natural position. It is hands free and requires no extra movement for your head, arms, or

neck. However, many people don’t find resting or sleeping upright comfortable. This is a

weakness of the Neck Pillow that the Hand Cloud Pillow solves.

Another competing company is the OstrichPillow. This company also produces travel sized

pillows. A strength of this company is their diversity. They create pillows that solve solutions to

multiple problems. They produce a mini pillow which is placed on your arm and you bend over

to rest. Their second pillow is a light and light reversible pillow that wraps around the head,

freeing the arms and hands. Lastly is the original OstrichPillow that is the largest pillow placed

on your head that covers your entire head and neck. One weakness of the OstrichPillow is the

inability to use a washer machine to clean it. All their products must be spot cleaned, and once

wet the OstrichPillow has to sit out to dry. This inefficiency causes the customer to wait for the

pillow to dry leaving it unable to use. On the contrary, to counteract these inefficiencies the

Hand Cloud Pillow has produced a much more convenient sized pillow; along with the

innovation of a zipper, which allows for the outer cover to be washed in a washing machine,

rather than spot cleaned. Also, the Hand Cloud Pillow has the ability to be personalized by

monogramming it. These other products do not have this feature.

3.4 Distribution Strategy

When selling the Hand Cloud Pillow there has been three main distribution channels: selling on

orders, selling in person, and online orders.

The main distribution channel is through personal selling or shipping the product to the

customer. The production facility is in Birmingham, Alabama currently and the product is being

sold in Birmingham as well. This allows for an efficient way to process orders for customers and

get the product to them in a timely manner. Through this channel of distribution the customer

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places an order and it is sent to the distributor who then produces the product and brings it to

the customer either by shipping or in person.

The second distribution channel is through mass production of the product and selling to

present customers. This has shown to be efficient due to type of product that the Hand Cloud

is. This allows for the customer to have the pillow in hand at the place of purchase, rather than

purchasing the pillow and having to wait during the order process.

Lastly, the third main distribution channel is online ordering. Through this the customer simply

orders the pillow from the online Etsy account or the online website. Then the order is

processed and shipped from Birmingham, Alabama to the billing address.

3.5 Market Entry

The steps needed to open the business are as follows:

Step 1: Have the available capital to start and run the business. Initially we received a loan of

$100 that covered the cost of the initial production of the product. The sewing machine was

already purchased but has proven to be a pivotal investment.

Step 2: Once the product is produced, we must market the product to potential buyers. This will

range from word of mouth marketing to digital marketing.

Step 3: Create promotional campaigns to get the word out about the product.

Step 4: We are a retail business but do not have a necessity to have a retail store. Therefore,

going to events and setting up as a vendor is a positive way to enter the market.

Step 5: Approach the digital marketing space and create social media and hosting website to

attract potential customers.

Step 6: Improve staffing to not take on so much responsibility of the business and outsource

the production of the good.

Step 7: Approach large vendors such as SkyMall and try to partner with their company.

3.6 Pricing Strategy

We have chosen a pricing strategy that allows for a 100% profit margin but is still lower than

the competitor’s price. But through marketing ploys and the quality of the product itself, the

Hand Cloud Pillow will be seen as a superior product to its competitors.

Competitors:

OstrichPillow – Mini Pillow $30, Original Pillow $99.

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Neck Pillow prices range from $12.99-$19.99

Hand Cloud Pillow ranges from $15.00-$18.00

3.7 Scalability

This product does have the potential to grow beyond just a local business. For example, airlines

could pick up on the Hand Cloud Pillow and use them to hand out to passengers in exchange for

their current mini pillows. Globally known direct marketers such as SkyMall could be potential

partners of the Hand Cloud Pillow making pillows available through catalogue and website.

Also, the market has an endless amount of potential customers. Nearly everyone in the world

travels and therefore, the market is continually growing. (Refer to 3.1)

IV. Competitive Advantage and Defensibility

4.1 Strengths and Weaknesses

The greatest strengths of Hand Cloud Pillow is the previous experience in growing a new

business franchise. This experience was gained when working for a company called Paul Davis

Emergency Services; they are a startup franchise in Birmingham and within the first year made

over $100,000 revenue. Therefore, this experience brings the understanding of how to enter an

existing market and become successful. Also, there are additional strengths such as:

educational experience and gaining the knowledge of entrepreneurial theory; as well as, having

the privilege and professional support of being in Samford Universities Business Incubator. On

the contrary, the biggest weakness is that in the market we are entering, the managers have

little experience.

Strength Maximizing Strategy Experience in growing a new business and having it become successful.

Analyze this previous experience to gain insight into how to replicate the same results in this business.

Educated in startup entrepreneurial companies.

Continue to increase intellectual intelligence in the field of entrepreneurship by finishing out undergraduate degree. As well as interacting with successful entrepreneurs.

Have the professional support of the business incubator at Samford University.

Continue to network with members of the incubator and gain more knowledge on how to become a successful startup.

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Weakness Minimizing Strategy Little experience in the travel product market. Gaining insights through continued marketing

research and test markets.

Resources available to satisfy expected demand.

Outsourcing the production of the pillows to increase production capabilities.

4.2 Opportunities and Threats

The greatest opportunity that Hand Cloud Pillow has is an increasing market. Statistics have

shown that the amount of people flying and travelling per year has increased consistently. Also,

travel has become a new trend in modern culture. Travel websites and blogs have infiltrated

the digital space and that poses a great opportunity for the Hand Cloud Pillow. The biggest

threat facing Hand Cloud Pillow is that there are so many different types of travel pillows that it

will be hard to drastically affect the market in a short period of time.

Opportunity Maximizing Strategy There has been a consistent growth in the number of travelers every year.

Capitalize on this by riding the market wave and pushing the product in the market that the right time.

Travel has become a new trend in modern culture.

Capitalize on this buy interacting with travel bloggers and catering the product to the style of the travelers.

Threat Minimizing Strategy This is a large market with several different companies trying to enter.

Research how to affectively attract customers in unique ways that are different from competitors.

4.3 Competitive Advantage

The Hand Cloud Pillow will separate itself from competitors in three different ways: quality,

pricing and personal vending.

The main competitors within the travel pillow industry have created products that are

unnatural to the way people actually sleep. For example, when using the OstrichPillow one

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must place the pillow over there entire head and lay face first on the desk in front of them. This

is completely unnatural to the normal way of sleeping. That is why we have constructed our

pillow to meet the consumer’s need. People, when resting, will always place their hand on their

face to try and get comfortable in an upright position. That is why we have produced a pillow

that meets the need of the customer in a natural way. Secondly, dealing with quality, no other

pillow has the feature of having a zipper to remove the inner cover. This feature allows for

better hygiene by allowing the customer to take out the inner pillow and wash the cover. While

the competitors have to spot clean and wait on it to dry before they can use it again.

The next way that the Hand Cloud Pillow has a competitive advantage is through pricing

strategy. The pricing strategy is simple, turn a 100% profit while also having a lower price than

the competitor. Through the simplicity of the product it is less expensive than the competitor

but that does not become a detriment to the quality. The quality is better and the price is lower

and that is what separates the Hand Cloud Pillow from its competitors.

The last way that the Hand Cloud Pillow separates itself from the competition is through

personal vending. The reason we participate in personal vending is to allow the customer to

understand that we care about their well-being, while also providing them with a quality

product that meets their need.

V. Management Summary

5.1 Organizational Structure

Currently Hand Cloud Pillow is a sole proprietorship. In the future the desire is to become a

corporation and become publically traded.

5.2 Current Management Team

Hand Cloud Pillow currently has a staff of three managers: Ryan Dickey, Olivia Cole, and Karen

Dickey. They are in charge of marketing, operations, accounting, and media. Olivia Cole is in

charge of marketing and has the responsibility to advertise and promote the product. The

operations manager, Karen Dickey, is responsible for the production of the goods and

distribution of those goods. The accounting manager, Ryan Dickey, is responsible for balancing

all accounts. Lastly, Ryan Dickey is the overseer of all company activity and works within each

different category of marketing, operations, and accounting.

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5.3 Personnel Plan

From forecasting the growth of the business it will take over a year to fully infiltrate the market.

Therefore, there will be no full time employees until a full year has passed. From then the

company is in need of production employees. The business plan for hiring is trying to keep the

employment under 15 to avoid compliance costs.

VI. Financial Information

6.1 Current Sources of Funding

The initial source of funding was given from Samford University for $100. This money has not

yet been touched. Currently all the businesses funding has come from personal investment.

The cash flow is positive, therefore any money that is in profits is reinvested in the business.

We had an initial startup cost of $13.71 due to the assets already on hand. Therefore, the only

initial startup cost was the materials because the sewing machine which is our only technology

needed was already provided. There was an additional expense put into the formation of a

website. That expense cost $83.40.

The total number of current sales made is 49. This has produced total revenue of $719.00 and a

total expense of $336.41. This gives the total profit of the company to be $382.59 within the

first three months of operation.

6.2 Funding Needs

The current need of funding is estimated to be $10,000 to pay for more sewing machines and

materials cost. As well as marketing expenses.

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6.3 Breakeven Analysis

Breakeven Analysis

Cost Description Fixed Costs Variable Costs

Variable Costs

Cost of Goods Sold per pillow $ 5.79

Fixed Costs

Supplies $ 13.71

Miscellaneous Expenses $ 84.30

Salaries $ -

Total Fixed Cost $ 98.01

Total Variable Cost $ 5.79

Breakeven Sales Level $ 103.80

6.4 Cash Flow Statement

Statement of Cash Flows

Year 2016

January 29-31 February March April 1-12 Total

Cash Receipts:

Retail Receipts $ 101.00 $ 276.00 $ 261.00 $ 81.00 $ 719.00

Interest Income $ - $ - $ - $ -

Total Cash Receipts $ 101.00 $ 276.00 $ 261.00 $ 81.00 $ 719.00

Cash Disbursments:

Costs of Goods Sold $ 36.91 $ 106.78 $ 100.82 $ 31.12

$ 275.63

Digital Marketing $ - $ - $ - $ 83.40

$ 83.40

Credit Charge $ 1.10 $ 3.10 $ 3.05 $ 0.80 $ 8.05

Total Cash Disbursments $ 38.01 $ 109.88 $ 103.87 $ 115.32

$ 367.08

Net Cash Flow $ 62.99 $ 166.12 $ 157.13 $ (34.32) $ 351.92

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6.5 Proposed Milestones

The first major milestone was to reach $100 in profit by the end of the first month of sales. That

was exceeded by $142.31 as we pulled in a profit of $242.31 in the first month of sales.

The next key milestone was to reach $500 revenue by the beginning of the third month of sales.

That was exceeded by $138.00 as we pulled in revenue of $638.00 before the beginning of the

third month of sales.

The milestone that we hope to reach by the end of the first year of sales is to reach a total

revenue of $65,000. That is based off of the total revenue we made in the first three months

and multiplying that number by 10. This accounts for factoring in investors’ money to produce

more of the goods to scale and reach customers outside of Samford.

Then within 3 years we hope to reach over $300,000 in revenue.

These milestones seem large but we believe that the company has a limitless chance to grow. It

is a matter of creating a brand that is recognizable in the market.

VII. Summary

In summary, the market has revealed that there is a place for the Hand Cloud Pillow, due to the

ever-increasing need for comfort on long travel trips. Hence, Hand Cloud Pillow has created an

objective to infiltrate this already existing market with a new innovative product. This company

desires to expand beyond the borders of a single pillow and delve into new product

development. With the consistency within the market for stylish products, Hand Cloud Pillow

does not only make comfortable products but also stylish products. Hand Cloud Pillow delivers

several different patterns and colors giving it a sense of style and not just comfort. Also, Hand

Cloud pillow is conscious of the need convenience and creating a health conscious product.

That is why Hand Cloud Pillow has implemented a zipper so that it can be washed. Therefore,

this exemplifies that the market shows that there is a need and a place for this product.

Lastly, Hand Cloud Pillows mission statement is to enable every person with a comfortable and

convenient travel experience. Thus, Hand Cloud pillow holds on to the values of trust, reliability,

and service.

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Supporting Documents

3450 Fairway Drive Trussville, AL 35173

(205) 862-9722 rdickey@samford.edu

Ryan Dickey Education

Samford University, Fall 2014 to Present Major: Entrepreneurship GPA: 3.61 Shelton State Community College, Spring 2013 Birmingham Southern College, Fall 2012

Career Experience Vector Marketing | Sales Representative (Summer 2015)

As a mid-level sales representative for this established brand, I gained experience in creative sales tactics using both warm and cold leads, communications to seasoned business executives and account management.

“Reign” On Campus Ministry | Leadership Team/Worship Director (Fall 2014-Present) “Reign” leadership has provided me with a platform for event planning and coordination. Duties include weekly worship planning, public speaking and team management. Paul Davis Emergency Services | Team Manager (Spring 2014-Fall2014) Duties included delegation of objectives to fellow employees. Hands-on set up of equipment and restoration to homes with water, fire, and/or mold damage. As well as having communications with business executives on objectives and work progress. First Baptist Church Trussville | Middle/High School Event Coordinator (Summer 2013) Duties included leading weekly Bible studies, public speaking, contacting companies for event coordination, and weekly meetings with fellow interns. Oxmoor Valley Golf Course | Outside Services Personnel (Fall 2013) Duties included person-to-person interaction with customers on a daily basis, being the first and last representative that patrons encounter, and service to the patrons golfing equipment.

“The Room” Campus Ministry | Co-Founder (Fall 2012-Fall 2013) “The Room” provided me with personal relationships and teaching opportunities, as well as event coordination on a weekly basis. All In Sports | Co-Founder (Fall 2012-Summer 2013) Basketball camps designed to teach elementary, middle and high school students the fundamentals of basketball while sharing the Gospel. Duties included marketing camp events to local churches and schools, event coordination, and public speaking.

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Trussville Park and Recreation | Referee (2010-Present) Duties include refereeing basketball games from the ages of eight years old to eighteen.

Campus Involvement and Awards

Samford University Mens Basketball Team (Fall 2014-Fall 2015) Deans List, Samford University (Fall 2014-Fall 2015) Team IMPACT Member (Fall 2014-Fall 2015) The Firehouse Homeless Shelter, Downtown Birmingham (Spring 2014) Deans List, Shelton State Community College (Spring 2013) First Baptist Trussville Pre-Teen Camp, Volunteer (Summer 2013)

References Jeff Gilmer, Co-Owner of Paul Davis Emergency Services, Birmingham Franchise Jeff.gilmer@pauldavis.com (205)-212-8807 Steve Dickey, Co-Owner of Paul Davis Emergency Services, Birmingham Franchise Steve.dickey@pauldavis.com (205)-587-2461 Jeff Gardner, High School Minister at First Baptist Trussville jeffg@fbctrussville.org (205)-807-8645 Brian Stephenson, Vector Marketing Birmingham Plant Owner bstephenson21@yahoo.com (662)-590-6691 Ryan Leirer, Vector Marketing Birmingham Plant Manager Ryan.leirer@yahoo.com (205)-807-7198