SplashToys - Business Plan

SplashToys - Business Plan

The Business plan for SplashToys Authors: Group 1 Members 6 November 2017

SplashToys - Business Plan

Key information

Name: SplashToys

Location: Enschede, Netherlands

Industry: Smart Devices & Materials, Swimming Toys

Market focus: B2B (Business to Business)

Stage: Discovery (ideation, research)

Date founded: September 04, 2017

Website:

One liner:

Don't be a fool, use SplashToys in your pool!

This Business Plan is generated with Golden Egg Check software. It remains the property of SplashToys and has to be returned upon first request. It contains confidential information that may not be disclosed to any party outside the reader. The Business Plan serves internal planning purposes and has also been prepared for information purposes to assist interested external parties to make their own evaluation of the business / investment opportunity. In all cases, interested parties should, among other things, conduct their own investigation and analysis of the opportunity and the information set out in this Business Plan. The founders of SplashToys use this plan as their guidance for sales, marketing, operational and financing priorities. All information is provided to the best knowledge of the founders and their advisors. Along the way, talking to (prospective) customers, several statements, estimates and projections may change. Although very cautious in the compilation of this report, SplashToys, its advisors and Golden Egg Check cannot be held liable for the correctness and completeness of the information and figures provided, nor for the use of this information.

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SplashToys - Business Plan

Table of contents Management summary

4 Introduction 4 Team & organization 4 Business model 4 Product 4 Market 4 Financials 4

Team & organization 5 Team members 5 Coaches, experts 5 Experience 6 Organization 7

Business model 9 9 Golden Circle 9

Value proposition canvas 10 Business model canvas 11 SWOT 12

Product 13 3 Characteristics 13

IP Strategy 14 Risks 14

Market 15 Characteristics 15 Customers 16 Competitors 17 Value chain 19

Financial 22 Revenue streams 22 Cost structure 22 Customer growth 23 Profit & Less 24 Liquidity 25 Investments 26 Implied valuation 26

List of figures 27

Reference List 27

Disclaimer 2 9

Appendix 30 9

SplashToys - Business Plan

Management summary

Introduction This is the business plan for SplashToys and more specifically for our product the Dive ‘n Play. This report is written during the minor ‘Innovation and Entrepreneurship’ of the University of Twente. The Golden Egg Check structure8 is used for this Business Plan. It remains the property of SplashToys and has to be returned upon first request. It contains confidential information that may not be disclosed to any party outside the reader.

Team & organization Our team consists of four students, their studies and role in the company is in short as following: Kjell van den Boogert - Mechanical Engineering Student (chairman) - VP of Production Jeroen Bos - Technical Computer Science Student - VP of Finance Boy Kolman - Industrial Design Student - VP of Marketing Bernard Prakken - Electrical Engineering Student (secretary) - Public relations manager Business model Our business model is focused around SplashToys’ first product the Dive ‘n Play. We believe that the development of youngsters can be entertaining and goes beyond the scope of normal tutoring and the Dive ‘n Play is an example for this.

Product The Dive ‘n Play is a game played inside the swimming pool with a pirate theme. The game can be played in teams or individual ly. The Dive ‘n Play itself will be placed just outside the pool and with a cannon kids can shoot balls in the pool. When played in team mode the balls launched will be two different colors. Each team should return their color balls to the treasury as fast as possible in order to win. This way kids will have a fun ball game inside the pool, which will improve their swimming skills! Market SplashToys targets a niche market for the Dive ‘n Play, which is beneficial, as SplashToys will be able to have a large market share in the niche market. SplashToys will use a direct sales model, selling their products directly to hotels, hotel chains, public swimming pools and recreational parks. The first year, it will focus on the Netherlands only, because we will still be busy with product development and the time between first contact and closing the deal can be quite large. So, for starters we will begin contacting the potential customers that are close to our location. After one or two years the product will stay the same and the target market will grow to a large part of Germany and Belgium.

Financials The result of the customer analysis is that there are about 5400 potential customers that we can reach out to in the first five years. Out of these potential customers there will be 560 closed deals with an annual total sale of 250 in the last year. Before we will reach this amount of yearly sales and be profitable we need financing to cover the money gap the time creates. Part o f this will be done with a loan of €150.000, with 20% interest rate, and the rest will be done using an investment of €375.000 which will be rewarded with 18,4% ownership. After the last round of funding the venture will be worth €2 million.

SplashToys - Business Plan

Team & organization

Team members

Coaches, experts

H.C. van Beusichem

-

Kjell van den Boogert

My passion for engineering arose from my passion for cycling. As a teenager, I was racing mountainbikes on the highest international level, and to have an advantage over the rest I developed systems to tune my bike. Only one world tour team preceded me in translating systems from motorsport to cycling and pushing the bikes to the next level, which delivered my current position within Specialized bicycles. That is where my competitive spirit and passion for engineering comes from, and I am keen to use this expertise for SplashToys!

Suspension guru at Specialized bicycles (Innovating bicycles company and current leader in high-end bicycles)

Jeroen Bos With knowledge and experience in studying and working on the edge of digital innovation, he is always looking for new opportunities. As an experienced computer scientist, he developed the ability to look past the technological details of new discoveries and developments and learned how to apply these in real worlds applications.

Software developer at: Better.be, Stratech

Boy Kolman

I am an "Industrial Design Engineering" student at the University of Twente. I have always been enthusiastic about design in general. That is why I wanted to become skilled and employed in this branch. I worked with and for companies from all over the world (RevLeap,YouCanFree.Us, FireBlockPlans, Fashionaparty, Timport, Domino’s Pizza and more). I will use this expertise and experience in my job as VP of marketing for SplashToys!

Owner/Designer at Boy Kolman

Bernard Prakken

Ever since I was a little child I was fascinated by electric toys. During my teenage years I started experimenting with programmable open source chips and tried several different projects. This eventually grew onto me, thus I started studying Electrical Engineering. Besides my study, I am a scout cub leader. This has given me several useful communication and leadership skills.

Student

SplashToys - Business Plan

Experience The management team combines founders vision with market expertise. Kjell van den Boogert – President/VP of Production Kjell has already had some production experience because of his employment history with Specialized (Specialized is a constantly innovating bicycle specialist). He did build a data acquisition system, which measures the behavior of the suspension of a bicycle (Lead User Innovation). The university study “Mechanical Engineering” is the fundament of his knowledge about engineering and producing products. Jeroen Bos – President/VP of Finance Jeroen has already had some experience with Finance because he had a subject called “Management & Organization”, where he learned how to build income statements, balance sheets etc. He has an employment history in “Computer Science” which could come in handy with respect to building databases. Jeroen has over 6 years employment history in the IT industry as a freelancer building and hosting web related products. So, web development and hosting are not a problem for him. Boy Kolman – President/VP of Marketing Boy has already had some experience with Marketing. He has a strong eye for design and content quality and his writing and verbal communication skills are well developed. Boy also has experience with building a small business (owner of a freelance company in Graphic Design). He has over seven years of advertising, design and presentation experience. An expert in design in general. His study “Industrial Design” gave him the knowledge of products and services. Bernard Prakken – President/Public Relations Manager Bernard is highly skilled in approaching customers and partners. He has over two years employment history with customer driven jobs. With his background in “Electrical Engineering”, Bernard made a baby monitor, a solar panel, transmitter and amplifier, chat protocol and wireless signal processing. An expert in Electrical Engineering. It applies for everyone of our team that this is their first entrepreneurial endeavor. So, we do not have that much of experience in that part. But we have members with experience in starting freelance companies, having established and grown business from scratch through technical and marketing experience. We form a motivated group of engineers with background in technology and business. We did a lot of group work and group projects, both multidisciplinary as non-multidisciplinary. Working in teams is not a problem for us! Some projects of our team members: https://portfolio.id.utwente.nl/student/boykolman/ https://www.kjellvandenboogert.nl http://debeugelaar.nl/, http://www.voetreflexpetra.nl/, http://vakantie4all.nl/

Figure 1: Team & organization - Experience

SplashToys - Business Plan

Organization The management team for SplashToys is a diverse group with strong skills in technology, marketing, finance and operations. Our primary criteria when filling these executive positions was interest in the position and skills learned in past achievements in projects. Kjell van den Boogert, a 22-year-old co-owner/president, who owns 20,4% of SplashToys, who started as a Mechanical Engineering Student. He will have a leadership role in the Production department. Kjell will be responsible for collaborating with business leaders on product strategy and roadmap, facilitating collaborative feedback from the user community, leading the design and development of intuitive, hands-on assistance with R&D activities and the delivery of regularly scheduled product releases. Kjell will stay in contact with our production partners, where modules of the products will be produced. Jeroen Bos, a 20-year-old co-owner/president, who owns 20,4% of SplashToys, who started as a Technical Computer Science Student. He will now have a leadership role in the Finance department. Jeroen will be responsible for continuously create and refine the structure of finance department. Build hiring, and compensation plans to drive the continued growth of the team. Identifying, attracting, hiring and developing new talent. Boy Kolman, a 21-year-old co-owner/president, who owns 20,4% of SplashToys, who started as an Industrial Design Student. He will have a leadership role in the Marketing department. Boy will be responsible for creating annual and quarterly marketing plans to achieve business targets. Making continued improvements (both speed and quality) to the process of creating and publishing content. Understanding and managing key drivers of profitability, while maintaining long term growth. And he also will be responsible for the Graphic Design of the company. Bernard Prakken, a 21-year-old co-owner/president, who owns 20,4% of SplashToys, who started as Electrical Engineering Student. He will be the Public Relations Manager and Sales manager of SplashToys. Bernard will create and deliver external communication strategies to build national visibility for SplashToys (in the future global visibility). In this role Bernard will develop and support external communications that increase awareness, adoption and loyalty for customers and facilitate recruiting for employees. He need to stay current on analyst publications, sharing key insights internally and externally as appropriate. A management team with experience and expertise is needed to score higher on venture opportunities. Experience and expertise is needed for providing coverage of all functional areas; marketing, operations and finance1. SplashToys management has the potential to become successful. Currently, this venture consists only of the four founding members. SplashToys is in the development stage, so it is important for us to have a board of advisers. Because, our team does not have all the experience with starting small businesses. It is wise to search for experienced advisers. We might need to bring in an additional member with more experience to be the sales manager. The job responsibilities of the additional member would be: determining annual unit and gross-profit plans by implementing marketing strategies; analyzing trends and results. Implementing national sales programs by developing field sales action plans. And maintaining sales volume, product mix, and selling price by keeping current with supply and demand, changing trends, economic indicators, and competitors. Additionally, we require experience in working as a sales manager in an entrepreneurial endeavor. Although, all of our members come from technical backgrounds, we are also students with a business background. We can also rely on a broad network, as the most enterprising university in Europe, the University of Twente has a name in facilitating starting companies. We as SplashToys could use a company like Novel-T, to give us advice on the subject Business Development, Financial Support and Juridical Support. Next to the general structure of SplashToys, we will start as a VOF. The drawback of this in comparison with a BV is that we will be personally responsible for the risk and debts of SplashToys. However, financially there are some regulations which make a VOF more interesting than a BV for a startup company. The expectations are to become a BV within a couple years, since than the employees of SplashToys, including CEO’s etcetera, are not personally liable anymore and the financial advantage will shift to a BV instead of a VOF.

SplashToys - Business Plan

Figure 2: Team & organization – Organization Chart

SplashToys - Business Plan

Business Model

Golden Circle Why? We believe that the development of youngsters can be entertaining and goes beyond the scope of normal tutoring.

How? By creating an environment in which kids need to be active and communicate with each other, although they think they are just playing a game.

What? The Dive 'n Play, a new ball game!

Value proposition canvas

PRODUCTS & SERVICES GAIN CREATORS GAINS CUSTOMER JOBS

PAIN RELIEVERS PAINS

Dive ‘n Play - A playful pirate-like set-up which serves as entertainment object at the poolside. The product is a self-entertaining object that is located next to the pool. The product consists out of a cannon, which can be loaded with balls. In addition, a treasury stands next to the cannon. Here, the balls can be returned. Maintenance service - This includes the repairing of the Dive ‘n Play when the product has taken damage as well as the refilling of the ball reservoir when balls are missing or when the extras have been used up.

Dive ‘n Play draws more attention to the poolside for its users and creates a better environment in which children need to communicate and be actively encountered with each other. For our customers it adds a new product to swimming pool toys in a new price range, which means that an extra dimension can be added to their pool with less expenses.

A game can be played, which causes the children to entertain themselves and have more fun during their visit to a pool. In some cases, this means that less poolside animation workers have to be hired to entertain the youngsters, which reduces cost. The overall amount of effort for a business to put in their recreational poolside will be reduced.

The way that the Dive ‘n Play reduces the negative emotions like boredom and lack of enthusiasm is by giving the youngsters a better experience with public pools and hotel pools. The Dive ‘n Play gives a game element to the poolside.

Kids get bored fast when they are not stimulated. The offered value of our customer is negatively impacted. This can lead to a fewer amount of entrance ticket sales, which lead to a fewer income for the pools.

Hotels – To function as a perfect host is their main goal, a poolside and toys at the poolside are tools to achieve this goal. It can benefit the guest’s experience at their poolside which results in a good review. Public swimming pools – Give entertaining to youngsters so that they will return to the pool more than once. Making their subscriptions more attractive and produce more revenue.

SplashToys - Business Plan

Business model canvas

SplashToys - Business Plan

- No brand equity / recognition (beginning) - No potential customers in our current network - Need for outsourcing service in foreign countries - Small amount of money capital - Not (yet) in the position of bulk production

- Opportunity to reach a new target audience - (New) demands in the target audience - Cooperation with other companies possible - Focused on delivering quality - Easy to assemble - Not in need of a big office to work in - Relatively cheap when compared to competitors like a water slide

- Good accessibility (location wise) - Increasing interest in health / nutrition - Technologically advanced organizational competences - Opportunity to explore not only the Dutch market

but also other markets

- Substitutes - Facilities are saving money - Changing customer tastes - Probability that our suppliers will recreate the

product and become our competitor

SWOT

Helpful

(for the objective)

STRENGTHS WEAKNESSES

Harmful

(for the objective)

Internal (within

organization)

OPPORTUNITIES THREATS

External (outside

organization)

SplashToys - Business Plan

Product

Characteristics The new Dive ‘n Play is a game for kids, which can be played in a swimming pool. Kids nowadays have more digital toys to entertain them. The problem of these toys is the lack of physical exercise needed. Research has shown that children with overweight is a problem that keeps on growing2. We entertain the children while they do their physical exercise3 and improve their social skills. The Dive ‘n Play will be a combination of a cannon and a treasury which will be placed next to a pool. Kids can launch balls into the pool by using a cannon (using a spring to launch the balls). When played in team mode the kids in the swimming pool need to get the balls back to the treasury as quickly as possible in order to win the game and win the treasure. In team mode there will be two teams, each of which has their own shooter and their own team in the water. Every team has their own color of balls and need to return their color quicker than the other team. This can be done to throw the ball in the red or blue side of the treasury. When enough balls are returned a flag will pop up in the treasury to show who has won. Although it can be played with two players, the Dive ‘n Play is an example of the more the merrier. When the game is played by just two players, there are two options. Either, the players have to launch their balls and after all balls are launched the game of returning will begin. Or one can shoot, and the other can return, which takes away the competitive aspect of the game. The Dive ‘n Play will have to be produced out of sturdy and waterproof materials. The product will get wet, might be placed outside (withstand temperature differences) and has to withstand the weight of children as they will climb on it. This is not the purpose of course, but we have to take this into account to make sure that no children will be harmed by our product while using our product. The outer parts of the “pirate-like” appearance will be constructed from plastic parts. The plastic parts are formed with the use of vacuum forming and rotational molding4. This will be an easy and cheap way of producing, and it seems the best option for the number of units we are planning to produce. This would supposably be done in China, however several companies that would suit for outsourcing and manufacture the products for us are contacted, which is also clarified in the tab “potential customer” of the “calculations” spreadsheet, but there is no definite partner yet. These molds are expensive, but the details of the cost of these and the production cost of our product can also be found in the tab “cost price breakdown” of the “calculations” spreadsheet. Our product will be a plug and play system. When the parts of the product are made by our suppliers, these parts will be transported to our customer to assemble. Since swimming pools or water paradise often have their own style it is possible to adjust the look of the Dive ‘n Play, however a custom fee will be charged for this.

Figure 3: Product - Characteristics

SplashToys - Business Plan

IP strategy The idea of our game and its rules are not subject to copyright protection, but the product itself is. However, patenting has some requirements that SplashToys cannot cater to. In order to patent a product, it has three requirements26: novelty, inventive step and the industrial application. The novelty of a product means that it is currently not part of the state of the art. In the swimming pool market, there is currently no comparable product to the Dive ‘n Play. This shows that it is indeed novel. However, the Dive ‘n Play does not contain the “inventive step”. This step says that the product must not be obvious to a person skilled in the art. The Dive ‘n Play uses simple mechanics to launch the balls into the pool and does not contain any new inventions. Therefore, the Dive ‘n Play cannot be patented. The Dive ‘n Play is an easy to copy product, nevertheless, the Dive ‘n Play is launched in a niche market. If the product was launched in a very large market, it will be more sensitive for copying than in a nice market. However, patenting is difficult and might be very costly, especially since a patent requires the publication of the technology, which means that possible competitors can copy the work and when they do we will have large legal costs to prevent them from using it. On the upside, the brand name and logo can be trademarked to prevent others from imitating our brand. We are not the first to have an idea for a water-based game, but it will have a versatile design that allows for different types of games to be played. We will try to develop our product quickly and build brand recognition with customers before the competition enters the market. By protecting and building our brand, we can further delay competitors from entering the market since they will still have to face the same challenges as we faced earlier than them, such as the NEN 101024. Furthermore, we will try to develop our product quickly and build brand recognition with customers before the competition enters the market, which will be beneficial for us in a later stadium.

Risks During the production phase, there are only a few factors that can create a risk for the finishing of the product, because we are not working with unexplored technologies. We can make a fairly accurate approximation of the risks that our company will encounter during the production phase. The most risks that we have, are able to occur while using the Dive ‘n Play. Possible risks that can occur during usage are that kids may be able to harm themselves by falling of the product itself. However, the Dive ‘n Play is stated next to the pool and has no significant height that children will damage themselves falling off. Another risk during use of the product is that kids could get their hand or finger stuck in some of the moving parts of the Dive ‘n Play. For example, the shooting mechanism of the Dive ‘n Play. To lower this risk the shooting mechanism is fully housed inside the cannon. Moving parts at the outside will be covered by rubber sealings. Safety precautions will be an important subject when finalizing the product. Another risk is that a launched ball could shoot against someone, which is why the balls will be made from a soft light material to make sure it won’t hurt when someone gets hit. During the R&D phase it is also important to choose the right materials, for example for the balls. In the wet environment mold can become a problem, although this risk is already lowered due to the relatively high chlorine concentration of swimming pool water.

Figure 4: Product - IP strategy

Figure 5: Product - Risks

SplashToys - Business Plan

When designing the Dive ‘n Play, several aspects have to be taken into consideration. But most of these aspects are design choices. Which only apply on the appearance of the Dive ‘n Play. Since our product is only placed at the poolside, and the law prohibits the use of electronics from within 2,5 meters (8 feet, 2.425 inch) of the water (NEN 101024), the Dive ‘n Play is fully mechanical. Therefore, the metal that is used in the launching mechanism has to be chosen carefully. To make sure the metal will not rust, stainless steel is used in the Dive ‘n Play. The effect on our company is that we need to offer a warranty of at least three years, so that the customer does not end up with rust in its pool. The copying of the design can be done by external companies, but the history showed that some Chinese manufacturers started to copy as well. We plan to split the production of the components to different manufacturers, so these manufacturers only know part of the production process and after that we will ship the components and assemble them in the Netherlands. There is still the possibility that the manufactures will cooperate and start assembling copies themselves, but the risk is highly reduced. In general, the risk can be reduced by having strong contract preventing the manufacturers from copying our products. However, this will also increase legal fees. Another risk is that one or more of our suppliers will not deliver the desired quality or will not deliver in time. To ensure the quality of the product the R&D is done in-house. There is still a risk that problems occur in the producing process, as well as a risk that the targeted quality will not be achieved. Since, R&D is done in-house, and different suppliers are used, our dependency of the suppliers is considered low. Which is why we would be able to switch to another supplier. However, problems like these would cost a lot of time, and can be reduced by making a well-considered choice. SplashToys will invest time to make this risk as low as possible and choose the right supplier, however a small dependency on the suppliers is inevitable. Market

Characteristics The businesses that we target know that they have to deliver high value to their customers and they are willing to pay a premium to deliver that. Which ensures that we do have a high pricing potential, as our product will greatly increase the entertainment value they create and thus will increase the return rate of their customers. In part of our target market it is very common that the customers operate in chains, so if we can convince a chain to take our product it will result in multiple products sold. We sent out a survey to 142 hotel chains, public pools and campsites, of which 18% responded. In this survey, several aspects of the Dive ‘n Play were questioned. First of all, the companies were asked whether they see the added value of our product in their pool. 48% of the companies did already see the added value of the Dive ‘n Play. More than half of the companies that filled in the form said they were not sure whether the product would be used by their guests, but then 73% of the companies does think that this type product will be valuable to the overall use of the pool. However, 37% of the respondents indicated that they do not see the added value of our product compared to other products for the poolside. This tells us that not all potential customers of the Dive ‘n Play will also be sales. The average price that our target businesses are willing to pay is around €2.200, -. This shows us that we are able to ask for a reasonable price such that our business is viable. In the questionnaire we also asked whether the respondents would also place the product in more than one of their branches. In total, 41% of these respondents answered that they are willing to do so after first testing it with one of their branches or after getting to know our company a bit better. Fortunately, the majority (41%) of the companies mentioned that they were satisfied with the design and do not want to make any changes to the product. From this survey, it is clear to us that we have a feasible product that will sell. The negative feedback that was given in the questionnaire is mostly because they did not have a clear vision on what the product is. This shows us that the amount of potential sales is very reasonable and can give us a good estimation of the expected revenue. We did get a mail from Optisport that they are very interested in the product and that they are willing to cooperate, to test our product. Since we are, in the beginning, only targeting businesses that have public pools, we will not be targeting a mass market, but a niche market. Because we target businesses, that care more about value than about speed of delivery, and not regular consumers we will not need a short delivery time. Consumers will be more likely to take rapid decisions, whereas a company has to go through a more complex process before deciding to buy the product. Since this also is takes more time, the speed of delivery becomes less important. In order to reach the customer, we will establish a sales force and use established networks. Since this is not a fast-growing market we will have to take things into our own hands and expand our target market either geographically by starting to sell outside of the Netherlands or product wise by altering the product to target other/larger markets.

The link to the survey can be found here: https://nl.surveymonkey.com/r/Q87TZVW

Figure 6: Market – Characteristics + survey

SplashToys - Business Plan

Customers The results of the market research can be found in the tab “potential customer” of the “calculations” spreadsheet. During some market analysis it was found that out of the three categories of potential customers (hotels, campsites and public pools) the campsites is probably the most promising one. As they are the category with the most public pools that are specifically for entertainment, in contradiction to some hotel pools, and more quite often do not already have entertainment systems because they are expensive. In the public pools category, we have the most potential with new swimming pools as they are still in the process of selecting entertainment equipment, but there are still possibilities to sell to ones that have already opened. When looking at the hotels category there is a clear line between the more luxurious hotels and the more price fighter hotels. In the top 5 there9 are three chains that are more premium priced10,13,14 as they have a relatively high market share when compared to their number of hotels. On average these three chains have 12% of their hotels equipped with a swimming pool. While the more price fighter chains11,12 have about 32% of their hotels equipped with swimming pools. The guests of the lower priced hotels are more likely to be regular families who appreciate the entertainment value of the hotel more than the guests of the premium hotels. For some hotel chains franchising is regular, so instantly signing a contract for large orders is less likely with these chains, however when one of the hotels signs, the other ones are still more likely to follow. However, another result was that in the Netherlands there are about 1150 potential customers15,16. This will be enough to create some initial growth, but as soon as we start to grow we will have at least the two following options. Either we expand our market to also sell outside the Netherlands to countries like Germany or Belgium, or we generalize our product to address more/different markets, for example make it also suitable on dry land, that way we can sell it to for example: play halls or IKEA Småland. After doing financial research it was conducted that our current target market was too small. This is why SplashToys expanded their targeted audience to Belgium and Germany. Some clear statistics could be found regarding the total amount of hotels and campsites via Statista17,18,19,20, a website providing statistics following from researches. However, data about the amount of pools in these hotels and campsites as well as the amount of public pool was not available. We do, however, know quite amount of pools across the Netherlands and how many are public, in hotels or on campsites. As the Dutch culture and the Belgian/German culture are quite alike we used the ratios we could calculate for the Netherlands to get a good estimation for the amount of pools in Germany and Belgium. The result of this is that by expanding to Germany and Belgium we can reach about 5400 extra potential customers in the first five years. There are more potential customers in Belgium and Germany however we expect that before the end of the fifth year we can reach 90% of these in Belgium and 75% of these in Germany. We found a large study research paper that is focussed21 on pools in Germany. This research will help us in evaluating potential customer, with market analysis and estimate customer growth in Germany. Upon starting this venture, we will buy the research, this cost is represented in the financial analysis under general expenses in the first year. The calculated number of potential customers is for the first five years. There is no centralized place where information about the amount of pools in hotels can be found. So, we deducted the amount by calculating the ratio of pools in the hotels of the top 5 hotel chains. The result was that about 19% of the hotels had pools so we projected this on the total amount of hotels in the Netherlands. For the foreign analysis we found that it would be best to determine the industry size and use our data on the Netherlands to find out how many pools there would be.

Figure 7: Market - Customers

SplashToys - Business Plan

Competitors An analysis of the market has been done to get a look at what and how our competitors are working now. We are using the economic model of the five forces by Michael Porter25. The five forces are Threat of Substitutes, Threat of new entrants, Rivalry among existing firms, Bargaining power of suppliers and Bargaining power of buyers. Our product will be sold directly to hotel chains and commercial swimming pools, our closest competitors are sellers and manufacturers of likely the same items. There are a lot of firms who sell toys for in the swimming pool, with the same goal as ours, to entertain children while swimming. But we see, that the children who go to the swimming pools are not enough entertained anymore. Which gives us a higher chance of successfully invading the market. We also have a goal to educate the children while they are entertained. This could help us build a good brand name in our market. Because a lot of guests of our customers (people who go to the swimming pools of our customers) like to see that their children learn and be entertained at the same time. Five forces Threat of Substitutes There are a lot of (indirect)competitors with their substitutes in the swimming pool, it is impossible to take them all in account. A lot of the substitutes of our competitors are low end products, cheap and are not that entertainable and educative anymore. Some products like water slides are also substitutes but these are very expensive to build for our customers. Next to that, water slides that entertain children are even more expensive than the regular ones that most of our potential customers have. After some research, we figured out that a standard pool slide will cost around €42.000, - (inclusive: design, engineering, project management, transport and assimilation by specialists). We will sell our product in a lower price range, which definitely could replace the standard slide. Threat of new entrants The barriers of entry are relatively high due to the difficulty of being successful in building a product which the target group likes and to meet the requirements in a market where a lot of standards and regulations are connected. Also, because of the supply-side economies of scale. These economies arise when we produce at larger volumes, we will then have lower costs per unit because we can spread fixed costs over more units, use more efficient technology, or command better terms from suppliers. So, the threat of new entrants is low. There will be no problem on the profit potential of our industry due to threat of new entrants. Rivalry among existing firms There is a lot of rivalry going on, to gain a higher number of customers. Rivals are highly committed to the business and have aspirations for leadership. A lot of firms wants to grow and become the largest there is. But there are not a lot of strong price reductions to vanish other competitors. Bargaining power of suppliers Powerful suppliers capture more of the value for themselves by charging higher prices. But in our case the power of suppliers is not that high, there are a lot of potential suppliers we could go to. For example, to build our product. So, the suppliers are not able to squeeze profitability out of our industry. The suppliers are however a risk for us (read: Product – Risks). Bargaining power of buyers Our product is not standardized or undifferentiated. So, buyers will not believe they can find an equivalent product, they would maybe tend to play our vendor against another. But we have enough reason to believe that they would not succeed (because the uniqueness of our product).

SplashToys - Business Plan

Competitor examples of high and low-end substitutes There is almost no competitor that is in our price range. Competitors make or cheaper products, or more expensive products. Both will be elaborated in two examples. Poolmaster is taken as competitor that is selling products with the same goal as ours in a lower price range. Our other competitors, Proslide, are in a higher price range. Poolmaster (http://www.poolmaster.com) is a manufacturer of pool toys for the same target audience as us, however they also sell to the consumer directly, instead of the swimming pools we are targeting. The current products they have readily available are floating baskets, diving disks and floatable accessories. The strength of this company is that they have a wide range of products, which gives them a wide range of customers. The pricing of their products is also lower than the price of the Dive ‘n Play, since their products are not as complicated. This may be a reason to discuss that Poolmaster is not a direct competitor, however as said before, there are no products on the market like ours. Which leaves the consumers to choose between the Dive ‘n Play and products offered by Poolmaster (or other manufacturers). Their products are the same as on the market decades ago. This also is one of their weaknesses. Since lots of products become smart products and have more interaction with its user, Poolmaster is not developing their products. Their strategy seems to be keeping the cost low and sell the similar products for a long time. Proslide (http://www.proslide.com) manufactures slides. Proslide on the other hand, is targeting the same customers as SplashToys. The customer of Proslide are mainly swimming pools, but also hotel chains, which makes them a competitor of SplashToys. A hotel can, for example, choose between a slide or a Dive 'n Play. Proslide manufactures every slide according to the wishes of the client, which makes the product more expensive and the client less likely to sign a deal with a hotel chain. Besides, the slides are not educational, since the children only spend a short time swimming. Another disadvantage is that their product needs a lot of space which makes it impossible for places with limited space. However, their product already has proven to be a great success and they are one of the leaders in building water slides. The approach of Proslide is similar to SplashToys. They are not selling directly to the consumer. They target the swimming pools itself, which gives them a different strategy than Poolmaster, who is also selling to the consumer directly. Poolmaster is also advertising with posters, flyers etcetera to the consumer, however for Proslide and SplashToys this has no advantages.

Figure 8: Market – Competitors + Five Forces

SplashToys - Business Plan

Value chain5,6 - Inbound Logistics: Since the production will be outsourced, the logistics and purchasing of the base materials will be done by our supplier. The suppliers will turn the base materials into the ordered parts. There will be two or three suppliers, and these will deliver their part of the total product directly to the customer. Since there are several suppliers the parts will arrive at different points in time at the customer’s facility. The biggest challenge for SplashToys is to make sure the different parts arrive within a week of each other at the client’s facility. The parts need some simple assembling, which can be done by our customers. The shipments will be outsourced as well. - Operations The production itself will be done by our suppliers, although the R&D will be done by SplashToys. This is still a closed innovation principle, since the R&D will stay in-house26. There is, however, a collaboration between SplashToys and the suppliers and it is important that our suppliers communicate their fabrication limits, otherwise our ideas and concepts cannot become reality. Finalizing the production process is a process that requires input from both parties. The biggest challenge is the management of the different suppliers. Since they will ship it to the customers, the quality of the product will be harder to check than when it would come to us first. To ensure the quality of the products we deliver, we will set up a contract with the supplier. This contract will state that if there is clear evidence by the customer that the product is not deliver as expected, the manufacturer has to deliver a new product. This will put the right amount of pressure on our manufacturer, such that our quality is secured. To really make sure that the production goes well in the beginning, we want to send the first few product (±5) that we sell to ourselves first. This is done to check the quality. The same procedure will be done once we create a new product or make any changes to the production process. - Outbound Logistics As discussed above, the product will be shipped from each manufacturer to the customer. SplashToys acts as the thriving organization, creating the idea into a product and managing the production and logistics. It will be hard to make sure that the manufacturers will finish and ship parts around the same time to a customer, this will be done by a contract with the manufacturer as well. We will function as the contact person between the different manufacturers and communicate a reasonable date of shipment. The risk that a part of the product is late or damaged is bigger than when it is assembled at one facility first, however the advantages outweigh the disadvantages. For example, the current method is cheaper and better protection for intellectual property. - Marketing & Sales In the startup phase of SplashToys, a lot of feedback from potential customers is needed. This will be gained by non-binding feedback relationships; however, our first clients will be part of this group. Since it will be easier to discuss this on-site, this group will be mainly in the Netherlands. They will have influence on the final product. This relationship is beneficial for both parties. They will have a product that suits more with their wishes, and we will have feedback that gives us more knowledge about our customers and their cravings. This only is applicable to the early-adopters. The majority will not have this advantage and will have a less intensive relationship. The sales will be done by direct sales. In the beginning, we will be actively approaching potential clients. The focus will be on chains of hotels, swimming pools and holiday parks in Belgium and Germany. With approaching those chains there will be a large target audience in relatively short time. Advertisement through television or radio are targeting a large audience group, our target audience will be a small piece of this. Therefore, it will not be as successful as wished, the cost are relatively high and we will reach people who are not interesting. Since we are working with a business to business approach, this should also be our advertising approach. This a different approach since, consumers will be more likely to take rapid decisions, whereas a company has to go through a more complex process before deciding to buy the product. Social media and websites are off course platforms with a large reach. Our website will be part of building brand equity. It is an easy medium to express our vision and as a young company with graphic design experience in-house it is a relatively easy way to build recognition. Before purchasing a product, people and companies will do some research. Therefore, a decent website, Instagram and Facebook account will encourage people to see a reliable business. Facebook can also be used for targeted advertisements. This is an option that is being considered, but it is a costly way of advertising and more research is needed. Another way to gain visibility in the beginning phase will be to be present a several market fairs and events. There are three annual market fairs in Utrecht concerning swimming pools, with approximately 900 visitors27. This way we will be able to approach or exact target audience, however due to travelling issues, these fairs can only be attended in parts of Belgium and Germany, and therefore will not reach all potential customers. However, it is a good way to gain visibility, since our first focus will be in the Netherlands, Germany, Belgium and France.

SplashToys - Business Plan

- Service Since the customers can install the Dive ‘n Play themselves, there is no need for an installation service. However, there wil l be some instruction included with the product, as well as a couple tutorials on our website. It will need some maintenance as well, which is a service we will provide, as well as a service in case of malfunction. In short, we will be delivering a technical onsite support service. However, there is going to be a difference in the service delivered in the Netherlands and Belgium/Germany. Our own service is limited to the Netherlands. The service for other countries will be outsourced. In the first years, partners should be found for this task. In the first three years after purchasing the service will be delivered for free, as part of the warranty. After these three years the repairs are charged. The price of the service will be calculated for each repairment individually. 10% of the products will be in need of a reparation/maintenance check-up. This will cost us €150, - per reparation/maintenance check-up. Support Activities - Procurement Resources: The investments needed are stated in the financial part of this business plan. It is focused to keep them as low as possible. People: As discussed in the organizational part of this business plan, almost all functions needed for the company are fulfilled. Except for the sales director. It will be necessary to attract a fifth person to the company. Depending on the rate of growth a mechanic for installing the product will be necessary as well. Network: The current network for R&D, graphic design, entrepreneurial experience etcetera is relatively large because of the members’ background at the University of Twente. However, there is one specific field of expertise that currently lacks. There is not a potential manufacturer of our products in our current network. This causes the need to search for a reliable manufacturer, or search for a contact who can act as a broker. The network for outsourcing the repair service needs to be extended. Equipment: There is not a lot of equipment needed since the production will be outsourced. We will be working in a small office rented in the gallery. No storage spaces are needed to store the products or packages. The products will be send directly to the customers. - Technology Development To keep the product cost low the manufacturing will be done in China. Different parts will be produced by different suppliers.

The R&D will be done in-house, as said earlier. This way our firm will be less depended on the manufacturers and it will be easier to switch to another producer if necessary. Besides, the knowledge for maintenance is easy to access and feedback can be addressed quicker as well. The knowledge for the current needed technology is already in house, so currently there is no need of outsourcing R&D.

In the beginning the product needs to be developed, but once the product is ready for production the focus will be on exploitation for this product. Once the product has established visibility and the venture is passed its survival stage the focus might shift from exploitation to an ambidexterity approach where exploitation and exploration are combined, to bring a wider product line to the market. The best ambidexterity method will be domain separation. This way only the R&D team can focus on working on a new product, once they come to a certain stage, more domains will focus on exploration, until the new product is on the market as well26.

SplashToys - Business Plan

- Human Resource Management Our human resource idea is: to give people the opportunity to grow, use their strong points, feel responsible and valued for what they do in order to create an entertaining toy which benefits the communicative development of children.

The hiring will be done on basis of the qualities, experience and more important the personality of the character to fit in our team, since SplashToys will be a small team collaborating. It will be important that we can rely on someone and exactly know what can be expected from this person.

The training will be done as a gradual process, however there probably is not much training necessary, since the company is still in their development stage. In a later stadium, more people needs to be hired and the amount of training necessary and given will gradually increase.

The team we have now is a very motivated group. We take our business serious and want to work hard for it. The way we keep everyone motivated in the team is by keeping a close connection between every coworker. This is done by doing company retreats or nights out with all coworkers. By having a positive work ambiance on the work floor, we encourage each other in the work we deliver. - Firm Infrastructure This is thoroughly discussed in the organization and team section.

Figure 9: Market - Value

chain

SplashToys - Business Plan

Figure 10: Revenue streams + Cost structure

Financial

Revenue streams + Cost structure

Explanation Because having the comments in the spreadsheet would result in very small fonts when converted to pdf, we moved the comments out of the spreadsheet.

SplashToys - Business Plan

Figure 11: Financial – Customer growth

Customer growth

Comments To estimate the amount of sales, we took the number of potential customers for the first 5 years and used a conversion rate scheme to estimate the amount of sales. These conversion rates7 are based on the document “Bottom up sales forecasting for pre-revenue startups”. Now we did not use the exact listed conversion rates as the document is more focused on software selling. Because existing pools are less likely to be a customer than new/being build pools, we have a lower than standard leads to prospects rate. We do not have any direct competitors, so customers are not likely to go to the competition, so we have a larger qualified to developed rate. The pools have no large management teams so invested time is valuable, therefore the developed to committed rate is higher. The expected time from first contact to committing is about 8 months so in the first year we will be making very little sales. Next to that, we expect to have reached out to all our potential customers in the Netherlands in the first 5 years, so we expect the customer growth there to peak in year 3, as a result the yearly sales will take an s-shape. While the selling to the foreign countries is not limited like this so those yearly sales are expected to take a j-shape.

SplashToys - Business Plan

Profit & Loss

Figure 12: Financial – Profit & Loss

Comments The calculation is all based on a few inputs, those inputs come from other pages of the document, like potential customers, but a lot of them are on the right side. The first important part to note is that around year 3 we will hire someone who will especially bring us a lot of extra sales skills. The salary we based for ourselves is 20 euros per hour, but that includes things like taxes, pensions and other costs that have to be covered. The first year we will spend a lot of our time on the development, while in the years after that our focus will lay on the sales department. Some of the products might need maintenance, since the customers can be quite far away from us we will use freelance people to do the job locally that we will select beforehand.

SplashToys - Business Plan

Liquidity

Figure 13: Financial – COGS + revenues

SplashToys - Business Plan

Figure 14: Financial – Investments + Implied valuation

Investments + Implied valuation

Comments To calculate the present value, we used a 50% discount rate, which is common for start-ups as the risk is quite high. Because one of our group members has a relative that is working in the financing of start-ups business, we think we can get a loan. So, part of our financing needed will be by loan. The total amount of investment needed is based on the liquidity. We need to fill a hole of about €525.000 and we are convinced that we can get about €150.000 of that in loans. Because we are a start-up and thus a risky investment and the interest rates for such ventures lie between 6% and 25%, we think we are able to get a loan to a 20% interest rate. So, we will only need €375.000 from another investor. The investor will get about 18% ownership for this.

Excel documents – Calculations Publication https://drive.google.com/open?id=1uFJAw6ZtVaV2MKB0xjot4z3FCUjsGGs6f6ZOMMmSvc8

SplashToys - Business Plan

List of figures Figure 1: Team & organization - Experience

6 Figure 2: Team & organization – Organization Chart 8 Figure 3: Product - Characteristics 13 Figure 4: Product - IP strategy 14 Figure 5: Product - Risks 14 Figure 6: Market – Characteristics + survey 15 Figure 7: Market - Customers 16 Figure 8: Market – Competitors + Five Forces 18 Figure 9: Market - Value chain 21 Figure 10: Financial - Revenue streams + Cost structure 22 Figure 11: Financial – Customer growth 23 Figure 12: Financial – Profit & Loss 24 Figure 13: Financial – COGS + revenues 25 Figure 14: Financial – Investments + Implied valuation 26

Reference List

1] Book: Leach & Melicher, Entrepreneurial Finance. 5th edition, 2015. South-Western Cenage Learning. 9781285425757. Chapter 2, Page 49, row 19-22 2] T. Lobstein, L. Baur, R. Ua (2004). Obesity in children and young people: a crisis in public health. DOI: 10.1111/j.1467-789X.2004.00133.x 3] Janssen, I.ab, LeBlanc, A.G.a. (2010). Systematic review of the health benefits of physical activity and fitness in school-aged children and youth. In International Journal of Behavioral Nutrition and Physical Activity. Article number 40

4] Pitt. A. (2016, July 25). Injection moulding and vacuum forming are two of the most popular approaches used to process plastics. This article provides an overview of each method and reviews the advantages a disadvantages of each. Retrieved from http://pnplastics.co.uk/injection-moulding-vs-vacuum-forming/ 5] Porter's value chain. (z.j.). Visited on 17 oktober 17, from https://www.mindtools.com/pages/article/newSTR_66.htm 6] Value chain analyse (porter). (2013, 8 december). Visited on 15 oktober 17, from https://www.toolshero.nl/probleem-oplossen/value-chain-porter/ 7] Bottum-up sales forecasting for Pre-revenue Start-ups. (2011, may). Visited on 18 oktober 17, from https://www.marsdd.com/wp-content/uploads/2011/05/Bottom-up-sales-forecasting-for-pre-revenue-startups- WorkbookGuide.pdf

8] An online toolset to build and challenge your business proposition. Visited on 4 september 17, from goldeneggcheck.com

9] Hotel chains in Netherlands. Retrieved October 14, 2017, from http://www.hotelchains.com/en/netherlands/

10] NH Hotel Group. Retrieved October 15, 2017, from https://www.nh-hotels.nl/hotels/nederland

11] Valk, V.D. Retrieved October 15, 2017, from http://www.hotelchains.com/en/netherlands/

12] Fletcher hotels. Retrieved October 15, 2017, from https://www.fletcher.nl/nl/

13] Bastion Hotels. Retrieved October 15, 2017, from https://www.bastionhotels.com/nl-nl/hotels

14] Hampshire hotels. Retrieved October 15, 2017, from https://www.hampshire-hotels.com/hotels

15] ANWB Camping. Retrieved October 15, 2017, from https://www.anwbcamping.nl/

16] Zwembad, binnen en buiten. Retrieved October 15, 2017, from https://www.dagjeweg.nl/zwembaden

SplashToys - Business Plan

17] Accomodation industry in Germany. Retrieved October 21, 2017, from https://www.statista.com/topics/3374/accommodation-industry-in-germany/

18] Hotels in Germany by stars 2017. Retrieved October 21, 2017, from https://www.statista.com/statistics/558046/hotels-by-stars-germany/

19] Accomodation capacity germany. Retrieved October 21, 2017, from https://www.statista.com/statistics/564651/accommodation-capacity-germany/

20] Travel accommodation numbers in belgium 2016. Retrieved October 21, 2017, from https://www.statista.com/statistics/413386/number-of-short-stay-accommodation-establishments-in-belgium/

21] 2016 Germany: Pools, Pool chemicals, & Pool Supplies & Accessories- Products Forecast report. Retrieved October 30, 2017, from https://www.marketresearch.com/PerryHope-Partners-v4032/Germany-Pools-Pool-Chemicals-Supplies-9752082/

22] Matrijs kosten (Mould costs). Retrieved October 19, 2017, from https://thermovormen.com/matrijs-kosten/

23] Rotational moulding of plastic powders. Retrieved October 19, 2017, from http://www.dtic.mil/dtic/tr/fulltext/u2/a013178.pdf

24] NEN 1010. Retrieved October 23, 2017, from https://www.nen.nl/NEN-Shop/Themas-Elektrotechniek/Vakgebieden/Elektrotechniek/Themas-Elektrotechniek/NEN-1010-NPR-5310.htm

25] The five competitive forces that shape strategy. (2008, January). Visited on 1 November 17, from: https://s3.amazonaws.com/academia.edu.documents/32580687/HBR_on_Strategy.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1509895090&Signature=sDyI7roktVV2DCev5R2lgkXZzSo%3D&response-content-disposition=inline%3B%20filename%3DHBR_on_Strategy.pdf#page=25

26] Book: Trott – Innovation Management and NPD. Pearson Prentice Hall, 5th edition, 2012. 9780273736561

27] ZwembadBranch (Swimming pool branche). Retrieved October 15, 2017, from https://www.zwembadbranche.nl/dag/

SplashToys - Business Plan

APPENDIX (Excel Spreadsheets)

Calculations Potential Customers

6-11-2017

** Approximation CommentsPotential customer analysis for the NetherlandsHotels Netherlands Market Share With poolTotaal 1894 100,0% 453 Because there is very little information about the amount of pools that all of the hotels have we made an educated guess.NH Hotels 36 5,3% 7 We do know the percentage of hotels from the top 5 market share chains that have pools, so we project that on the total amount of pools.Van der valk 73 4,3% 23Fletcher 81 3,4% 26Bastion 33 3,1% 2Hampshire 36 2,9% 4Total Top 5 259 19,00% 62

Campsite NetherlandsTotal 1342Outdoor pool 186Indoor pool 64Outdoor + indoor 78Total campings with pool(s) 328Total pools at campings 406

Public pools 293

Potential customer analyis for Europe except the NetherlandsGermany Belgium With pool (%) Total Expected We will also potentially address countries outside of the listed ones. However for the sake of the market research we will base our calculations on these two countries.

Campsites 2919 346 24,44% 611 Because in reality we might also adress other countries it will be done in stead of contacting the listed countries. This will cancel each other out. Because of that this analysis is still relevant.Hotels 12865 1522 23,94% 2638Public pools 2081 246 100,00% 1782 We could not find the amount of public pools that exist in these countries, so we projected the amount o pools in the netherlands on the industry size in the respective countries.Expected 0,75 0,9 - - After the first 5 year we expect to have tried to sell to all potential customers in the netherlands, for the neighbouring countries another percentage is expected

Results Potential customersPotential sales Some customers might buy multiple unitsNetherlands 1074 1152Foreign 5031 5396

Calculations Customer Growth

6-11-2017

Stage Opportunities (NL) Opportunities (EU-NL) Conversion rate CommentsLeads 1152 5396 70% We expect fewer than normal leads as existing pools are less likely to have interest when compared to new/to be build pools.Prospects 807 3777 50%Qualified 404 1889 35% We have quite a unique product at this price range, so we don't have a lot of competitors. Result is that customers are not likely to divert to a competitor.Developed 141 661 70% At this point we have had serious talks an both sides have invested in this. Both parties don't have large management teams, so invested time is extra valuable.Commited 99 463 -

Sales Objective Activity Duration (weeks)Lead to prospect Sending enquetes and calling for interest. 1,5 As just calling probably won't work, as we will probably get a more suitable moment to call back, we won't be able to finish this process within just a few days.Prospect to qualified Presentations and showing prototypes. Possibly discussing positioning. 18 Relatively small companies, so no inner company communication delays. And it also won't be an expance that could bankrupt them.Qualified to developed Selecting the best position and making an invoice regarding total cost (and custom costs) 6 Same as above, small companies. Any issues that can arrise will rise quickly so can also be dealt quickly.Developed to comitted Making sure every party is commited and sending invoice 4 Small management team, so when invoice is requested, it is almost sure that most agree with the purchase on customer side.Lead to comitted 29,5 Result is that it will take about 7 months to from lead to comitted, so we will only be making our first sales in month 8.

If you consider that delivery will take about 1 month and payment takes about 1 month. We will only receive the first revenues in month 10.

Year Netherlands Foreign Total Growth Netherlands TotalForeign Total Total2018 6 0 6 - 6 0 62019 9 28 37 616,67% 15 28 432020 20 79 99 267,57% 35 107 1422021 32 139 171 172,73% 67 246 3132022 33 218 251 146,78% 100 464 564

Year S-curve J-curve Because we are stationed in the netherlands and we will be able to contact all of the potential customers within 5 years.1 0,06 0,00 We expect that the sales in the netherlands will have the form of an s-curve. When we reach the potential amount the yearly sales there will start to plumet.2 0,09 0,06 For the foreign countries this is not the case because (as can be seen in the potential customers) we will not 3 0,20 0,17 have been able to reach all the potential customers in the next 5 years. So the sales will still be growing

Bron: https://www.marsdd.com/wp-content/uploads/2011/05/Bottom-up-sales-forecasting-for-pre-revenue-startups-WorkbookGuide.pdf 4 0,32 0,35 0,33 0,47

Totaal 1,000 1,000

Calculations Income Forecast

6-11-2017

Year 0 1 2 3 4 5 CommentsProducts Sold 0 6 37 99 171 251 Price of product € 2.500Sales revenues € 0 € 15.000 € 92.500 € 247.500 € 427.500 € 627.500 Variable COGS € 240Maintenance revenue € 0 € 0 € 0 € 0 € 750 € 5.375Revenues € 0 € 15.000 € 92.500 € 247.500 € 428.250 € 632.875 Depreciation MoldCOGS € 0 € 1.440 € 8.880 € 23.760 € 41.040 € 60.240 Buying price € 16.500Maintenance Cost € 0 € 0 € 645 € 2.130 € 5.145 € 11.685 Economic Lifetime 10Gross profit € 0 € 13.560 € 82.975 € 221.610 € 382.065 € 560.950 Rest Value € 0

Annual depreciation € 1.650General expenses € 0 € 4.000 € 1.000 € 1.000 € 1.000 € 1.000Room Rent 0 € 1.800 € 1.800 € 1.800 € 1.800 € 1.800 Year 1-2 Year 3-5Administrative expenses€ 0 € 46.080 € 57.600 € 72.000 € 72.000 € 72.000 Employees 4 5 We will start this start up with the original 4 people, but we plan to hire someone with more experience in sales in year 3 Sales expenses € 0 € 69.120 € 138.240 € 172.800 € 172.800 € 172.800 Work hours per week 60 60 With the entrepeneurial mindset we all have no issue with working 60 hour workweeks R&D expenses € 0 € 115.200 € 34.560 € 43.200 € 43.200 € 43.200 Work weeks per year 48 48Depreciation and ammortization€ 0 € 1.650 € 1.650 € 1.650 € 1.650 € 1.650 Salary € 20,00 € 20,00 We will pay ourselves 20 euro per hour bruto. So personally we will have to deduct taxes and pensions. Loan expenses € 0 € 0 € 20.000 € 30.000 € 30.000 € 30.000 COST PER YEAR € 230.400 € 288.000Total Expenses € 0 € 237.850 € 254.850 € 322.450 € 322.450 € 322.450Total Costs € 0 € 239.290 € 264.375 € 348.340 € 368.635 € 394.375 Time spent on: year 1 year 2-5 The first year will have a much higher focus on Research&Development as we have not finetuned the production process yet.

Administration 0,2 0,25EBIT € 0 -€ 224.290 -€ 171.875 -€ 100.840 € 59.615 € 238.500 Sales 0,3 0,6EBIT Total € 0 -€ 224.290 -€ 396.165 -€ 497.005 -€ 437.390 -€ 198.890 R&D 0,5 0,15

Investments € 0 € 250.000 € 65.000 € 35.000 € 25.000 € 0 Maintenance Costs € 150 We will hire freelance people to do small maintenance, these freelancers will live close to the customers and need about 2 hours per checkup. Loans € 0 € 0 € 100.000 € 50.000 € 0 € 0 Maintenance Price € 250 The first 3 years of maintenance will fall under warranty, if the customers want a checkup or repair outside the warranty than we will charge them for that. Total Loan € 0 € 0 € 100.000 € 150.000 € 150.000 € 150.000Liquidity € 0 € 25.710 € 18.835 € 2.995 € 87.610 € 326.110 Yearly Interest loan rate 0,2

Calculations Cost & Revenues

6-11-2017

Sum of 5 years Revenue (Avg) Revenue (1st Y) Revenue (3th Y) Revenue (5th Y)Sales revenues € 1.410.000 99,57% 100,00% 100,00% 99,15%Maintenance revenue € 6.125 0,43% 0,00% 0,00% 0,85%Revenues € 1.416.125

Sum of 5 years Cost (Avg Cost (1st Y) Cost (3th Y) Cost (5th Y)COGS € 135.360 9,05% 0,60% 6,82% 15,27%Maintenance Cost € 19.605 1,31% 0,00% 0,61% 2,96%General expenses € 8.000 0,53% 1,67% 0,29% 0,25%Administrative expenses € 319.680 21,37% 19,26% 20,67% 18,26%Sales expenses € 725.760 48,51% 28,89% 49,61% 43,82%R&D expenses € 279.360 18,67% 48,14% 12,40% 10,95%Depreciation and ammortization € 8.250 0,55% 0,69% 0,47% 0,42%Total Costs € 1.496.015

Calculations Liquidity

6-11-2017

Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24Liquidity € 150.000 € 130.179€ 110.358 € 90.538€ 70.717 € 50.896€ 111.254 € 31.075€ 91.433 € 71.373€ 51.312 € 33.751€ 15.950 € 123.149€ 107.848 € 92.308€ 76.767 € 63.726€ 50.685 € 102.644€ 89.603 € 76.323€ 63.042 € 52.261Revenue streams € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 2.500 € 2.500€ 2.500 € 5.000€ 5.000 € 5.000€ 7.500 € 7.500€ 7.500 € 7.500€ 7.500 € 7.500€ 10.000 € 10.000Raise fund/loan € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 100.000€ 0 € 0 € 0 € 0€ 125.000 € 0 € 0 € 0 € 0 € 0 € 65.000 € 0 € 0 € 0 € 0 € 0Costs € 19.821 € 19.821€ 19.821 € 19.821€ 19.821 € 19.821€ 19.821 € 19.821€ 20.061 € 20.061€ 20.061 € 20.301€ 20.301 € 20.301€ 20.541 € 20.541€ 20.541 € 20.541€ 20.541 € 20.541€ 20.781 € 20.781€ 20.781 € 20.781

Combined 1-2 3-4 5-6 7-8 9-10 11-12 13-14 15-16 17-18 19-20 21-22 23-24Capital beginning € 150.000 € 110.358 € 70.717 € 31.075 € 111.254 € 71.133 € 35.771 € 127.669 € 96.588 € 70.506 € 109.424 € 82.863Revenue streams € 0 € 0 € 0 € 0 € 0 € 5.000 € 7.500 € 10.000 € 15.000 € 15.000 € 15.000 € 20.000Raise fund/loan € 0 € 0 € 0 € 100.000 € 0 € 0 € 125.000 € 0 € 0 € 65.000 € 0 € 0Costs € 39.642 € 39.642 € 39.642 € 19.821 € 40.122 € 40.362 € 40.602 € 41.082 € 41.082 € 41.082 € 41.562 € 41.562

Sales Period - - - - - - - - 1 2 3 4 1 2 3 4 5 6 7 8 9 10 11 12Sales per month 0 0 0 0 0 0 0 0 1 1 1 2 2 2 3 3 3 3 3 3 4 4 4 4COGS € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 240 € 240 € 240 € 480 € 480 € 480 € 720 € 720 € 720 € 720 € 720 € 720 € 960 € 960 € 960 € 960Revenues € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 2.500 € 2.500€ 2.500 € 5.000€ 5.000 € 5.000€ 7.500 € 7.500€ 7.500 € 7.500€ 7.500 € 7.500€ 10.000 € 10.000€ 10.000 € 10.000

Calculations Investment

6-11-2017

Year 1 2 3 4 5 CommentsAnnual cash flow -€ 224.290 -€ 171.875 -€ 100.840 € 59.615 € 238.500 Because we are evaluating a start up we use a discount rate of 50%, which is common for start ups. Next to that we hold on to a 40% return rate. Terminal value € 7.415.182Total flow to discount -€ 224.290 -€ 171.875 -€ 100.840 € 7.474.797 We expect the venture to be worth about € 2.000.000 after 4 years. Meaning that the € 375.000 will be worth 18,42% . With this we calculate the amount of ownership Present value € 1.661.103,20 every funding round will buy the investor. The calculation of % of ownership will be made such that the projected value is € 2.000.000

Discount rate 50,00%Customer growth rate 46,78% Rounds Funds Ownership (%) Estimated valueLoans € 150.000 Round 1 € 250.000 12,50% € 2.000.000Pre money valuation € 1.661.103,20 Round 2 € 65.000 3,25% € 2.000.000Investor Investment € 375.000 Round 3 € 35.000 1,75% € 2.000.000Post money valuation € 2.036.103,20 Round 4 € 25.000 1,25% € 2.000.000% Ownership to investor 18,42% Final € 375.000 18,42% € 2.000.000% Left per person 20,40%

Calculations Cost Price breakdown

6-11-2017

Part Material ³⁾ Production method ²⁾ Mold price (EUR) ⁴⁾ Estimated mold lifetime Estimated price (EUR) ⁶⁾ ²²⁾ ²³⁾Treasury (1) Plastic Vacuum forming ⁵⁾ 3500 +/- 8000 units 35Treasury top (2) Plastic Vacuum forming ⁵⁾ 4000 +/- 8000 units 35Flags (2 units needed) Plastic N/A N/A N/A 8Foot piece canon (2 units needed) (3) Plastic Vacuum forming ⁵⁾ 5000 +/- 8000 units 35Cannon outside (5) Plastic Rotational moulding ⁵⁾ 2000 +/- 3000 units ¹⁾ 20Cannon inside (6) Plastic Rotational moulding ⁵⁾ 2000 +/- 3000 units ¹⁾ 20Shooting mechanism Stainless steel Metal working N/A N/A 25Flag mechanism Stainless steel Metal working N/A N/A 30Safety rubber shooting mechanism Rubber N/A N/A N/A 2Painting of components N/A N/A N/A N/A 25

Rounded total price (EUR) 240Total mold costs (EUR) 16500

A simplified pictures shows the components, linked to the table above. (This isn't the actual product, the purpose of this picture is to be supportive for a clear understanding of each part):

Extra clarification1) The lifetime of a mold used in rotational moulding will be shorter due to higher thermal shocks during the mould process. This causes crystallisation in the metal, which is an undesirable process. 2) Off course there are other ways to produce the parts (like injection moulding etc.). However, the methods stated in this column are considered to be the cheapest solution. The numbers of needed products is considered to be no mass production, which is why injection moulding would become to expensive due to high mold costs. 3) Terms like plastic and metal are really general. The exact chosen material is not defined yet, since this asks for an extensive research, which is part of the R&D and not of the business plan. The price is an estimation and there are bigger uncertainties than the fluctuations in cost price of the exact materials.

Calculations Cost Price breakdown

6-11-2017

4) For an estimation of the mold prices the following source has been used: https://thermovormen.com/matrijs-kosten/5) Compared with injection molding, vacuum molding is far easier and cheaper at a low production rate4. When using injection molding, a metal cast hast to be made. These metal casts are very expensive and take long to make. The cast that is used in vacuum molding can be made out of concrete, foam or other porous materials.6) The prices can fluctuate a little depending on the chosen material. For now we made the assumption to use polypropylene. This plastic is very durable and yet still gives in a bit when a force is put upon it. Another good property of polypropylene is that it is stable against acids and bases. It is also repellent against the growth of bacteria. This means that it is perfectly suitable for in and around the swimming pool. However, the real material choice goes beyond the scope of this project and will be part of the R&D phase of the Dive 'n Play.6) These prices are estimations, howevever the fundamentals of these estimation are source 22, 23 and the information received by Plastica forming.

Approached manufactureres Website Answer CN-Thermoforming http://vacuum.cn-thermoforming.com/products/ N/A

China plastic http://www.chinaplastic.orgWill need a 900Dollar advance payment, for which they will do a part of the R&D, however we haven't got a estimation of the mould costs and production cost

Maxtech http://www.maxtech-china.com N/AVKF Kunstoftechniek (NL) https://www.vkf-kunststoftechniek.nl ProcessingPGM (NL) https://meijdenberg.nl/ N/ABatelaan (NL) https://www.batelaan.nl N/APlastica forming (NL) http://plastica-thermoforming.eu/contact/ Responded, their pricing is used as a source for the numbers above. (For mould costs and production costs)Mulan MFG http://www.mulan-mfg.com/ N/A

Calculations Bronnen

6-11-2017

Bronnenhttp://www.hotelchains.com/en/netherlands/https://www.nh-hotels.nl/hotels/nederlandhttps://www.valk.com/hotelshttps://www.fletcher.nl/nl/https://www.bastionhotels.com/nl-nl/hotelshttps://www.hampshire-hotels.com/hotelshttps://www.anwbcamping.nl/https://www.dagjeweg.nl/zwembadenhttps://www.statista.com/topics/3374/accommodation-industry-in-germany/https://www.statista.com/statistics/558046/hotels-by-stars-germany/https://www.statista.com/statistics/564651/accommodation-capacity-germany/https://www.statista.com/statistics/413386/number-of-short-stay-accommodation-establishments-in-belgium/https://www.marketresearch.com/PerryHope-Partners-v4032/Germany-Pools-Pool-Chemicals-Supplies-9752082/https://www.marsdd.com/wp-content/uploads/2011/05/Bottom-up-sales-forecasting-for-pre-revenue-startups-WorkbookGuide.pdf