ENT 422: Fall 2010 Generating and Screening Entrepreneurial Ideas

ENT 422: Fall 2010Generating and Screening Entrepreneurial Ideas

Kristin BoydAjai Hari

Seth HaubenKush Patel

ENT 422 – Idea Thickening 2

• Team and Creed• Semi-Final Ideas• Vendi Cab• Investigational Highlights• Everywhere Heels• Investigational Highlights• Ideas Pros/Cons• Next Steps

Agenda

3

ENT 422 – Idea Thickening

Team Creed

“We see tremendous opportunity in converting the way things are

currently done in everyday life and making convenient improvements

that help us generate significant business revenues.”

Ideas based on every day problems

Scalable

Low tech

Rapid real growth potential and quick profitability

Objectives

4


Vendi Cab

Everywhere Heels

Ladies shoes that take the pain out of high-heels

Collapsible heels

Eliminates the need for carrying extra shoes

Mini vending machine (5 items) in taxis in major

metropolitan area

Predictable needs of taxi riders

Integrated with current point of sale system

6


Vendi Cab

Product Sketch

Unit would fit in top left corner

To purchase item, select Vendi Cab button on

screen

Product cost is added to the total fare

Advertisement space also available for sale

Products offered

Item of Substance – Cliff Bar

Gum – Stride Gum

Condoms – Trojan

Energy Drink – 5 hr. Energy

Medicine – Advil packs

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Investigational Highlights – Resource Needs

Vendi Cab Supply Chain

Raw Materials for manufacturing vending machines

Manufacturing Unit

Vendi Cab HQInventory Transport

NYC Cab Company

NYC Cab

End Customer

Machine Installation

8


Investigational Highlights – Market Economics

13,087 medallions

241 million passengers ride taxis every year

Average -1.4 passenger per trip.

18,415 fares per year per taxi; 51 passengers per day per car

Free vending machines and installation

5% of the passengers make a purchase using Vendi Cab

5% of sales revenue to cab company

Average profit margin of 26% from year 4 onwards

Business Structure Assumptions

9


$3166/mo., 2500 sq. ft. office space in Jersey City, NJ

Reception: 200 sq. ft.Office Area: 400 sq. ft.R&D Lab: 700 sq. ft.General Storage: 1200 sq. ft.

Production Cost23.7%

Market Research

0.8%

Installation Cost7.9%

PP&E2.3%Sales & Salaries

31.7%

Cab Company Commision

5.0%

Profit28.6%


Facilities

Equipment

Staffing

Inventory transport: Year 1: $20,000Year 3: $20,000Year 4: $40,000

Sales/Business Development (Self)Operation Management (Self)Research and Development (3)Manufacturer (Outsourced)Machine Installation/Refill Crew (1)

Cost Structure

10


$(0.13)

$(0.12) $(0.15)$0.19

$0.60

$1.45

$(0.13)

$(0.25)$(0.40)

$(0.21)

$0.39

$1.84

-$1.00

-$0.50

$0.00

$0.50

$1.00

$1.50

$2.00

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Net Profit Cummulative Profit

Investigational Highlights – Idea Financials

Net/Cummulative Profit

Note: All $ in millions

Break Even

11



Percent of Taxi Riders who

Purchase Item

Number of items sold daily in taxi

Profit per Cab Daily

NPV

3% 1.51 $ 2.09 ($1,230,995)

4% 2.02 $ 2.78 ($121,025)

Break/Even 4.109% 2.07 $ 2.85 0

5% 2.52 $ 3.48 $988,945

6% 3.03 $ 4.18 $2,098,915

7% 3.53 $ 4.87 $3,208,885

8% 4.04 $ 5.57 $4,318,855

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Everywhere HeelsProduct Sketch

Click-Out Secure Expansion System™

Flexi-Lock Arch™

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Everywhere Heels Supply Chain

Raw Materials made into Everywhere Heels by Manufacturer

Manufacturer to Drop Ship to Retailers

Retailer Sells to Consumers

Everywhere Heels makes sales contracts with Retailers

15


Investigational Highlights – Market Economics

U.S. - 32% of the world footwear industry

Women’s footwear - 10% of the world market

Heels - 2.5% of world footwear market

Estimated shoes sold/per year - 621 million

U.S footwear revenue - $62.11 billion

Women’s footwear sold/year - 207 million

High heels sold/year in the US - $51.75 million

Potential share of Everywhere heels (0.3%) is approx. 155,250 pairs


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Development0.1%

Materials10.0%

Manufacturing & Distribution

6.0%Labor0.8%

PP&E0.2%

Sales & Marketing

0.5%Retail Markup30.0%

Contingency4.7%

Profit47.7%


Facilities

Equipment

Staffing

$2,000/mo., 2,500 sq. ft. office space in Rochester

Reception: 500 sq. ft.Office Area: 1200 sq. ft.Design Lab: 800 sq. ft.

Year 1: $10,000Computers: $4,000Design & Test Lab: $2,500Technology for collapsible heels: $3,500

Sales/Business Development (Self)Operation Management (Self)Designers/Lab technicians (3)Administrative Assistant (1)Fashion expert/consultant (Fixed Budget Contract)Manufacturer (Outsourced)Drop Shipment (Outsourced)

Cost Structure

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$(0.35) $(0.24) $(1.03)$0.94

$1.88

$7.41

$(0.35) $(0.59)$(1.62)

$(0.68)

$1.20

$8.61

-$4.00

-$2.00

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Net Profit Cummulative Profit

Investigational Highlights – Idea Financials

Net/Cummulative Profit

Note: All $ in millions

Break Even

18


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Idea Pros/Cons

Product: Unique and conciseProtectable

Market: Large market shareClear value and growth potentialShort sales cycle

Team: Blend perfectly with team creedFull team assembled internallyMembers already committed

Business: Large marginsLow initial investment

Product: New product risk

Market: New market risk

Business: Concept to Market’ lead time

20


Next Steps

Licensing/Patents

Product Development

Product Testing & Validation

Technology Investigation

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Questions?

ENT 422: Fall 2010 Generating and Screening Entrepreneurial Ideas

Documents

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