Loop ‘N Scoop

Business Plan

Brittany Carr, Madeline Danesi, Audrey Myre, Nick Reinhard, Will Silkman

Leeds School of Business

University of Colorado at Boulder

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Table of Contents EXECUTIVE SUMMARY 2 COMPANY OVERVIEW 2 BUSINESS MODEL 3 PRODUCT PLAN 4 VALUE PROPOSITION 4 PROPRIETARY RIGHTS 4 STAGE OF DEVELOPMENT 5 MARKET ANALYSIS 5 INDUSTRY ANALYSIS 6 OPPORTUNITY 7 COMPETITION/COMPETITIVE ADVANTAGE 7 MARKETING PLAN 7 CUSTOMER RESEARCH 7 TARGET CUSTOMER STRATEGY 7 BUYING DECISIONS 8 CUSTOMER BEHAVIOR 8 CHANNEL STRATEGY 9 POSITIONING 9 BRANDING STRATEGY 9 PRICING STRATEGY 9 DIGITAL STRATEGY 10 COMMUNICATION STRATEGY 10 SALES STRATEGY 10 REVENUE MODEL 11 OPERATIONS PLAN 11 OPERATIONS STRATEGY 11 SCOPE OF OPERATIONS 11 RESEARCH, DEVELOPMENT, AND ENGINEERING 11 KEY MILESTONES 12 MANAGEMENT PLAN 12 RISKS 15 FINANCIAL PLAN 16 KEY DRIVERS 16 FINANCIAL PROJECTIONS 16 FUNDING PLAN 16 FUNDING STRATEGIES 16 APPENDICES 17

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Executive Summary

Loop ‘N Scoop is an innovative new pet product designed to revolutionize the typical dog walking experience. Loop ‘N Scoop is the first company to bring together the capabilities of a retractable leash and the convenience of dog-waste scoop, giving every single dog-owner the ability to easily and sanitarily clean up after their pet. Its numerous features make it an exceptional product for every dog owner. Each Loop ‘N Scoop includes a removable scoop with bag holder, storage for additional bags, and a detachable leash loop for holding your dog when scooping. Purchasing all these products separately would cost upwards of $60 and Loop ‘N Scoop is available for about half that price. There is no other product on the market that matches Loop ‘N Scoops multi-functionality and hands free cleanup capability. Before Loop ‘N Scoop, you had to either use a scooping product that gets dirty after every use or use your hand inside an old grocery bag; but, now there is finally a product that seamlessly blends cleanliness and ease of use with a staple product of every dog owner, the retractable leash. Concerned about style and size? Loop ‘N Scoop’s streamlined design makes it as convenient as any other retractable leash, and with multiple sizes and colorful designs, there is undoubtedly one as unique as you and your pet. Whether you own one dog as a companion, breed dogs for a living, or fall somewhere in between, Loop ‘N Scoop will serve you well every single day. The product will be available online through our website and at Amazon.com, initially. We will also seek out contracts with other established retailers, both pet oriented like Petco and Petsmart, and at big box retailers like Target and Walmart. But the selling does not stop there. Dog breeders, humane societies, dog parks, and dog shows, all offer significant potential markets for Loop ‘N Scoop. With your management team of 6 founders, you will get dedicated and passionate dog lovers with business savvy and a drive for success. We are conservatively setting sales targets at 15,000 leashes in year one with a predominant line of sale through established retailers and online sources like Amazon. Assuming a 50% growth rate from there, we will be cash flow positive early in Year 3, but much more likely late in Year 2. With only $300,000, we can grow Loop ‘N Scoop into the leading brand of leash and clean up product for your pet, and from there the options are limitless, with diversification opportunities into countless other pet supply products. Loop ‘N Scoop has the potential to change how the world interacts with their pets, now we just need you!

Company Overview

Loop 'N Scoop was founded in early 2015 by six University of Colorado students with the intent to help "clean up" every walk you and your "Best Friend" have. Loop 'N Scoop's main purpose is to "unleash" every dog owner that walks their pet from today's inconvenient and inefficient alternative of picking up after their dog. With a hands free bagging system, the product keeps your hands as far away from your dogs "not so sweet treats" as possible. Imagine the ease and comfort of a retractable leash meets the efficiency and cleanliness of a scooper combining to make every moment with your dog more enjoyable. The ownership structure of

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the company will be divided equally between the 6 founders; each founder will own 18+% of the company. At this time there is no plan to create additional stock options and, for the foreseeable future, the management team will own the entirety of the company to retain decision-making abilities. If the company expands significantly, then after 3-5 years, we will revisit the potential of stock options for other employees. Loop ‘N Scoop’s vision is to make your walk with your best friend more enjoyable through a compact, light, and user-friendly product. The current problem we are facing is the pain point of a dog owner having to clean up after their dog using their hands. Loop ‘N Scoop believes this new, innovative product has great potential to be highly successful, and thus reinventing the marketing for dog leashes and pooper scoopers. We look forward to being sold not only through our own website, but being distributed in retail stores such as: Petco, Target, Petsmart, and Walmart.

Our mission statement is to ensure the highest quality of customer service, as well as great a reliable, durable, user-friendly product.

Business model The value of our business is in the product that we provide not through a service or

physical operation, therefore most of our business is tied up in the creation and distribution of the Loop ‘N Scoop product. At this moment our product is standardized through 3 different sizes, with minor cosmetic changes. We are launching with associative line of Loop ‘N Scoop bags and have no immediate plan to diversify further. If this initial venture is successful, we will consider expanding our product line. We are outsourcing manufacturing of our product and we are selling it directly and through intermediaries. About 80% of our transactions will be business to business, while 20% will be business to consumer. At first, our customers will be mostly local, but in the future we will expand nationally. We will generate revenue by selling directly on our website and also selling through intermediaries through both cash and credit. We won’t be cash flow positive and generating profit until year 3 so it is difficult for us to predict what our margins will be at this time and depends on the development of our distribution. In general because we are a product-focused business, we expect decently high margins. We are not very capital intensive because we do not need a lot of capital or hard assets to operate effectively. Most of our costs are tied up in manufacturing and personnel costs, with some in sales in marketing, as opposed to a storefront.

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Product Plan

Value Proposition Many dog owners dislike cleaning up after their pets, intruding on an otherwise lovely

walk. Often times, people don’t even pick up after their dogs because they do not have a product that makes it convenient. We seek to create a product that makes cleaning up easy, efficient, and sanitary. The benefits of Loop N Scoop come from the 2 in 1 technology that makes picking up convenient and clean.

Proprietary Rights As of now we have no proprietary rights to the product but we are hopeful to obtain both a design and utility patent. We have the resources and network within members of our group to start the manufacturing process and get a reasonable estimate, however we would need to work with outside resources to pursue our patents (Patent Attorneys, etc.).

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Stage of Development We currently have a conceptual design, which we are refining through CAD programming. We also currently have a working prototype, which allows us to visually demonstrate the unique value of the product. We still need to speak to a manufacture to get estimates on the cost of production, but we only expect a marginal increase in costs from leashes already in existence. We are also exploring the idea of creating a specific bag to sell with the product that will be tailor made for the scoop. We want the product to be usable with a wide variety of bag types but we believe we could create additional products, like special bags, that will help make our entire brand more successful overall.

Market Analysis

For Loop N’ Scoop, the overall market is growing yearly. According to Google, approximately 70-80 million Americans own dogs. Future growth trends show that this markets demographics are contributing to the rise and desire to own pets. A statistic states, “new dog and cat ownership continues to expand at nearly 4% per year, even in the face of the recent recession” (report). Demographically, the baby boomer population is aging and as more of their children are going off to college, they are looking to find companionship in a pet. Also, single member household numbers are rising in the U.S. because people are getting married later in their life and divorcing more, meaning they are more likely to own a pet before getting married or after getting a divorce to fill a part of their life. Because of the rise in pet wanting to own pets, attitudes are shifting and people are becoming more sentiment towards pets. Some people, and families, may even go as far and consider their pets as a family member. Technological advances are not just restricted to humans, but are making its ways to the pet industry. People are looking for more savvy and updated pet supplies. This strong and growing market shows that this product could show a positive trend within the pet industry.

Our customers, first and foremost, will be dog owners. We imagine almost all dog owners have a leash and/or will be purchasing a leash in the near future, and all owners should have a way of picking up after their dog. We feel that regardless of already owning these two separate products, dog owners will purchase a Loop N’ Scoop because it will not only making walking their pet easier, but more enjoyable. More specifically, we want to cater to owners who are positively impacted by the two-in-one feature of our pooper-scooper leash, in terms of efficiency and/or cleanliness. We think we can get a consumer to buy our product instead of a leash and a pooper scooper, or that if they are buying just one of those two they will still consider our product heavily for the added utility. Additionally, our product makes it so that your hand never has to come close to the bag or touching anything foul, so the added component of perceived cleanliness is a huge draw.

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A major pain point in walking or even having dogs is the inevitable experience of picking up their poop, especially on a walk. No one wants to carry the long dustpan like and rakes on a walk or run with their dog, nor does anyone, we’re assuming, enjoys sticking their hand in a plastic bag, bending over, and picking up their dog’s poop. The feeling alone is enough to make you gag. This product will solve this problem. The combination of these two products, the simplicity, and cleanliness allow for a new segment of people to be reached. Those that don’t like to carry a lot on their walks, pick up their dog’s poop, and those people that are just interested in new gadgets will find this product to serve them well. The learning curve for this new product will be an easy one for new customers because they will already have a good understanding for the use of dog leashes and pooper scoopers, the only new thing they will need to learn is how to use them combined. The benefits of this product are self-explanatory in that a customer looking at the product will clearly see that they won’t physically have to touch their dog’s poop. Based on the market trends, we assume that customer’s will be more than willing to buy this new, innovative product for their pets.

Industry Analysis

There are currently companies out there, such as Bags on Board, within this market that offer a similar service. Numerous products out there that are trying to solve the pain point of picking up your dog’s poop, but what we have yet to see on the market is one that is compact, simple, and doesn’t require you to stick your hand in the bag. Right now, the current products out there have low competing prices, ranging from $15-$50s, and are sold on websites providing customer service. A major issue right now is customer familiarity with a product. In most cases, the competitor’s product is too complicated for the customer, thus making them stick to the basic products. Thus, one of Loop N’ Scoop’s main goals is to ensure that of customer’s have multiple ways of gaining knowledge on the product, but at the same time keeping the product as simple as possible. We currently have not found any competitors out there that own the market. Barriers to entry start with competitors. They instantly have an advantage with economies of scale; meaning they could easily increase production to drive price down in order to squash new startups. They could also just add the feature that gives us the competitive advantage. Ways we could prevent this begin with obtaining patents on the dog leash/pooper scooper since there is currently not a product that is exactly like ours.

Since our product is new and has no historical sales it is imperative to gain as much negotiating power with our supply chain through sound market research along with proof of concept (focus groups, surveys) in order to show market demand. Manufacturing companies and distribution centers are important pieces to our supply chain that need to be managed and can be a serious barrier to entry. Another barrier to entry is how much capital we need in order to begin production, also known as our capital requirement. An immediate expense is purchasing molds for the pieces of our dog leash/pooper scooper, such as the nylon or leather material for the leash and the plastic for the pooper-scooper. This can range anywhere between $10,000 and $60,000, assuming our molds need to be designed, fitted and tested for quality control. Another barrier to

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entry is the cost of customer acquisition. Depending on how well established our competitor’s brands are, our customer acquisition cost could be rather large, especially if our target market psychographics prove brand loyal tendencies. The only government regulations we might have will have to abide by specific FDA rules that require specific plastic quality that ensures that the materials do not have any toxins in it.

Opportunity Our product is a solution to a major pain point to dog owners. Today the traditional way to walk a dog is by using a leash and bringing “doggie bags” to clean up any messes you “best friend” might have left behind. While cleaning up the mess, most people tend to place the bag over the pile and pick it up with their hand. This creates multiple problems such as your hand smelling, you did not actually clean up the whole mess, and you have to hold the bag for the rest of the walk. We have created a solution to these problems. The 2 in 1 scooper / leash allows for the dog owner to never touch the mess, hold the bag after picking up the mess, and also enables the dog owner to pick up all of the mess.

Competition/Competitive Advantage We have 3 main competitors, pooper-scoopers, retractable leashes, and Bags on Board. These existing products are already available at large corporations such as Amazon, Walmart, Petco, Petsmart, Target, etc., in which are ultimate goal is to eventually enter this market. However, we are the only product providing the convenience of a 2 in 1 capability. The pros and cons of each of our competitors as well as our own product are shown in Appendix VIII.

Marketing Plan

Customer Research Customers generally share the pain point of picking up their dog’s waste with their hands,

however, they are not aware of a viable solution. According to the data we collected from our surveys, potential customers would perceive this product as desirable because Loop N’ Scoop is a two-in-one pooper scooper and leash which makes dog walking more convenient as easy. Once we can educate people on our product, customers will be more willing to change and the level of satisfaction will be high because their dog walking experience will become easier. We are also going to make the design as easy and user friendly as possible in order to maintain a small learning curve for its users. Some reasons why they would not buy this product could be because the product is too bulky, heavy, or because they already own a leash and do not perceive the pain point as high enough to change the leash they already own.

Target Customer Strategy It is estimated that approximately 70-80 million Americans own dogs. Based on this,

historic growth rates of pet care are increasing exponentially (Franchise Help, Pet Care Industry Analysis 2015). One statistic claims that even during the recession, revenue was still expanding and the compound annual growth rate of 6.7% from 1994 through 2010, including 4.8% in

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2010 (Franchise Help, Pet Care Industry Analysis 2015). It is claimed, “new dog and cat ownership continues to expand nearly 4% per year, even in the face of recent recession”. A factor that contributes to this rise is the changing demographics within this industry. The baby boomer population is aging and as more of their children are going off to college, there are looking to find companionship in a pet. Also, single-member household’s numbers are rising in the US as well. With all of this in mind, attitudes in general towards pet owning are becoming more sentimental. It is shown that people will go as far even consider their pets as a family member. Another aspect to consider are people’s willingness to buy luxurious pet products such as clothing, memory foam beds, strollers/car seat etc., because they begin to treat their pet as their own children.

Buying Decisions The dog owner will be our target consumer and there will be many aspects that influence

their decision to buy our product over already existing products. After doing external surveys we found that we are selling to people that are going to the store and online looking for a leash or scooper. We will need to focus on our innovative additional attributes (Price, quality, durability, and our 2 in 1 technology). A major focus of ours would be to make a good quality, durable, and lightweight product. Our product is a combination of two already existing and successful products so instead of making two purchases of $25 - $50 dollars ($50 - $100 dollars total), consumers could be making one purchase for $40 dollars. The customer will be able to purchase the product either online at previously established retailers like Amazon.com or in physical retail stores such as Petco. The customers could only pay online via debit or credit cards but in the physical stores they product could be purchased via cash or check as well. Loop N’ Scoop is a one-time purchase due to its durability and quality. However the bagging technology allows for repeat business by the purchase of additional bags that specifically fit into our bagging technology, though any bag could be used with product. This purchase for new bags would be roughly every month or more depending on the amount of dogs you own.

Customer behavior Typically the target customer will look for information and advice online or ask a

salesperson at a pet store or ask friends for recommendations. Based on our research it seems as if people are fairly satisfied with retractable leashes and pooper-scoopers individually because that is all that is available in the market. The largest complaints stem from malfunctions of their current products. However, they are not aware of the benefits and convenience our product will bring to them because there is currently no product like ours on the market. The convenient and easy to use 2 in 1 leash and pooper scooper will persuade the target customer to change to this new product so they can avoid picking up after their dog with their hands. The Loop N’ Scoop will fully address this pain point so we believe the benefits of the Loop N’ Scoop will be sufficient enough to overcome brand loyalty and a small upcharge.

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Channel Strategy To reach our target customers, we will start with a relatively basic distribution and sales

structure. First, we will create a website and advertise our product there, allowing for a direct purchase, online, through our site, which can be found in Appendix XI. From there we will seek to utilize already established retailers like amazon.com and as well as physical stores like Petco, Petsmart, Target, and WalMart for distribution. It would also be worth exploring partnerships with smaller, specialty pet stores and groomers to carry a set amount of our product. Larger organizations that would potentially buy our product would be dog breeders and dog shelters/humane societies.

Positioning Loop ‘N Scoop provides an all in one dog leash-pooper scooper product with multiple

features for pet owners who walk their pet and need an easier, cleaner, and more satisfying way to pick up after their pet. Loop ‘N Scoop is not the only product out there aiming to make walking your pet more enjoyable. Bags on Board is one of Loop ‘N Scoop’s competitors, but Loop ‘N Scoop differs in that in addition to bags, a pooper scooper is attached to the dog leash, ensuring an easier, cleaner, and more enjoyable pick up.

Branding Strategy The customer will be able to feel the connection between themselves and their dogs when

looking at our product, website, and logo. They will sense that we are supplying a product that will make the least fun interaction between the pet and their owner easier and less negative. Ultimately we want our customers to put the gross traditional method of picking up after their pet behind them and really enjoy their time while walking their “best friend”. Due to our high quality and efficient 2 in 1 technology we will make this goal a reality.

Pricing Strategy The average Pricing for the products/services Loop ‘N Scoop will be offering are $25-

$50 for a retractable dog leash, $15-$25 for a pooper-scooper and $2-$4 for a roll of bags (15-20 bags). Within the next five years, the price for one Loop ‘N Scoop will more than likely decrease, but not significantly, due to multiple factors. Because the pet industry is exponentially increasing due to more people buying pets, Loop ‘N Scoop will always fulfill not only one, but possibly three of a pet owner’s need. Demand will eventually increase over time for Loop ‘N Scoop, and eventually expand from local stores and online sales to Targets, Petcos, and Petsmarts nationwide. With demand increasing, the unit price to produce the product should fall, giving Loop ‘N Scoop the opportunity to either decrease the selling price to gain a larger target market, or increase Loop ‘N Scoop’s profit margin. The channel pricing for Loop ‘N Scoop is as follows: the consumer will pay the retailer $39.99 per product; the retailer will pay the Loop ‘N Scoop around $24.99 per product. Loop ‘N Scoop will also be available directly from us for the same MSRP of 39.99. Bag refills will follow the same pricing strategy except at prices $5 MSRP and $3.50 in bulk transactions to retailers. At this point we are estimating about 80% of sales will be through intermediary channels, with 20% coming through our website or at one of our

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marketing events. Most of Loop ‘N Scoops competitors are priced anywhere between $15-$50. What makes our pricing strategy slightly different is that there is not a product that is exactly the same as ours on the market. After surveying about 10 people, doing online research for pricing our product, and comparing our prices to our competitors, we found that customers will more than likely be willing to pay $39.99 for a Loop ‘N Scoop.

Digital Strategy The use of the internet including a website and social media is a large part of our

branding, digital, and sales strategy. Our first step after product development and proof of concept are completed is the implementation of a website. Loop N’ Scoop’s website will be an easy to use site providing information such as product description, pricing, customer and technical support, testimonials, and information about the company and our reason for starting the company. The site will also allow for transactions to be conducted through safe and secure technology. Lastly, the site will be a place for us to enhance branding by showing the customer through visual aids (Videos, pictures, testimonials) that our product will truly enhance the experience of every walk. Lastly, with social media being such a large market now, we will implement a strong social network marketing campaign. The campaign will consist of both making accounts on all major social network sites and advertising heavily on these sites. We will also hold guerilla-marketing techniques such as setting up competitions between organizations to see who can like and share our social media pages the most.

Communication Strategy Loop ‘N Scoop will meet the target market first through the Loop ‘N Scoop website,

which is anticipated to be the primary purchasing place for customers in the first year. Through the Internet, we can have a Facebook page that customers can go on, ask questions, write reviews, and post photos/videos of them using our products. Along with this, the company, Loop ‘N Scoop can keep their customers up to date on upcoming exhibitions/trade shows, dog shows, and company events that Loop ‘N Scoop will be present for.

Sales Strategy To start, our sales strategy will focus on our website. The implementation of a website

that is easy to use will allow us to focus on branding, positioning, and getting our “name” out there. We will do this through personal selling, gorilla marketing, student interns, and social media. Once we get to a point where we have some brand recognition we will focus on getting out product into major distributors that already exist in the market. At this stage we will not just be an online product that people need to base off pictures and testimonials but rather the consumer will be able to physically hold and feel the unique blend of durability and design. This plan is fairly inexpensive because personal selling, website design and launch, social media, and student interns/ambassadors do not cost much.

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Revenue Model We are anticipating on generating revenue exclusively through the sales of Loop ‘N Scoop and the associated line of disposable bags. The revenue model and the sales targets that drive the model can be found in Appendix V.

Operations Plan

Operations Strategy We plan on having a balance in our operations by maintaining client facing functions

under our control to ensure a positive customer service experience but outsourcing manufacturing and other minor details to keep the price of our products affordable. Since our 2 in 1 leash and scoop will be less expensive than buying both a leash and pooper scooper individually we will have a competitive advantage in the marketplace due to the relatively affordable cost of around $30-$40. In regards to manufacturing, it is extremely important to us to use high quality materials. It must be a sleek design that is not bulky or easily breakable. We will also seek to win market share because of our emphasis on customer service - we will be sure to be timely when receiving orders and shipping them out and we believe it is important to be flexible with returns as well. We strive to make sure the customer is taken care of in every experience with Loop ‘N Scoop.

Scope of Operations For our product Loop N’ Scoop, some of the operations will be handled in-house, while

others will be outsourced. We are planning on handling anything related to our customers and the design of the product in-house. This includes customer service, order-fulfillment, purchasing, and shipping. We would also like to handle marketing, advertising, and financials in house. Our strategy with dealing with all customer-related operations in-house is that we want to be able to control the relationship we have with our customers. Since customer satisfaction and providing an excellent customer experience is vital to the success of our business, we want to be able to control orders and limit problems such as Loop N’ Scoop being delivered to the wrong address, wrong orders, damaged products being delivered, returns, etc. Other operations will be outsourced, specifically manufacturing the product. Once we have established the company and our sales, we want to hire sales representatives for designated regions and retailers, a marketing team, a bookkeeping operation, and customer service staff, but the initial startup phase will rely on a few individuals to handle all tasks. Regarding our website, we will design it internally but plan to outsource the actual development of the website. Finally, we will have an office or facility where the product will be shipped once they are produced, and that way we can have control over shipping to retailers and specific consumers.

Research, Development, and Engineering Our current status of development is a CAD design. This prototype gives a rough outline

of the first shape and basic design prior to forming the groups. We are looking to further this so that we can show the final features that will provide our target market with the necessary benefits. While doing a patent search through the United States Patent and Trademark Office, we found a patent for a simple pooper-scooper. After doing more research, however, we found patents for a pet leash with an integral waste bag dispenser, a pooper-scooper system, and pet

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sanitation article attachable to a leash assembly. We concluded from the research that no patent currently exists for the product and service we are trying to provide. We believe that Loop ‘N Scoop’s technology is patentable because there is no product like it on the market. We know that throughout this process this prototype will be changing and improving based on the feedback that our customers give us. For us, to create a product that will provide our customers with the most benefits, we will need to conduct various tests. For one, it will be key to have focus groups that consists of various demographics, in terms of both humans and dogs. For this product, Loop ‘N Scoop is meeting an unmet, if not known, need within our target market, but market tests will be key to ensure that our product fulfills this need.

Key Milestones

In order to make our company successful there are many milestones that must be met. Our first step is product development; our prototype will be the base of our marketing and website design. We will use our first round of market testing to help innovate the product. Thus, the development of a prototype will be the start of our schedule looking forward (Day 1). Next, our focus will be to create and establish our website. This will have to be done prior to our product being launched and thus the completion of our website will coincide with the start of our sales. A simple, easy to use, consumer friendly design is important because our website will be our main source of sales as we enter the market. After our website is established, our team will need to shift our efforts to simultaneously focus on marketing strategies and agreements with distributors and suppliers. The launch of a social media campaign will be our starting marketing strategy. While launching a Facebook, Instagram, and Twitter page we will need to come up with gorilla marketing ideas and also complete our second round of market testing allowing for us to gain testimonials. Using these testimonials we can share them through our digital marketing campaign and start getting our name out more. By week eight we should have our second round or market testing down and have a digital marketing campaign launched. While focusing on marketing, we will also have to focus on the future of our product. This means that a part of our team will need to work on making the key connections needed to get our product on the shelves of major distributors in our market (Petco). By week 10 we need to have a deal with one or more distributors. It is important to meet this deadline so we can enter the major market as there is a marketing “buzz” surrounding the product. Along the way we will also be focusing on showing our product at exhibitions and conferences. This is just another way to help establish our product in the market. We will aim to attend at least two of these before week 10. As the company grows and there is more demand for our product we will need to make certain key hires to continue our success. We will not know what these hires will be until the time comes. For example, we might need to hire a chief marketing officer to establish an advertising campaign while we move our old CMO to Chief Operating officer to ensure that the operation he helped put into place are continuing to make the company successful. Once again this is just an example, but key hires will be needed in the future as the company grows sales and the product grows in popularity.

Management Plan

The ownership structure of the company will be divided equally between the 5 founders;

each founder will own 20% of the company. At this time there is no plan to create additional

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stock options and, for the foreseeable future, the management team will own the entirety of the company to retain decision-making abilities. If the company expands significantly, then after 3-5 years, we will revisit the potential of stock options for other employees. Executive Board Chief Executive Officer Nick Reinhard, a soon to be graduate of the University of Colorado. Has extensive background in leadership and operations management. He has served as an executive officer of two separate organizations prior to his time with Loop ‘N Scoop. His ability to network and innovate combined with his proven history of successful projects, events, and fundraising campaigns proves that he meets the qualifications to be our CEO. His duties and responsibilities as Chief Executive Officer are as followed: ● Set the direction of the company’s future by forming key partnerships; accumulate new

investors, and making key hires. ● Focus on building a fun and motivating culture within the company. ● Focus on capital allocation to ensure projects are funded, which support the company

strategy. Chief Financial Officer Will Silkman is a graduate of the University of Colorado with a degree in International Affairs and a minor in Business Analytics. He has extensive leadership experience through several organizations on campus during his time in school. Specifically, he is the senior student member and the Vice Chairman on the Student Government Finance Board, which has fiscal oversight of over $25 million in student fee money. He also interned at the investment management firm, Janus Capital Group, as well as spending time as a bookkeeping student assistant at the University Memorial Center. His significant experience in financial reporting as well as his management experience makes him a viable choice for the CFO position. In that position he will be responsible for: ● Process contracts, payables, and receivables ● Accounting and Bookkeeping management (internally or manage external vendors) ● Payroll ● Cash Flow Management ● Monitoring the budget for Sales, Marketing, and Product Development ● Decision Analysis for new products and company ventures ● Managing the debt and equity positions of Loop ‘N Scoop ● Long-term strategic positioning

Chief Operating Officer Madeline Danesi is a soon to be graduate of the University of Colorado at Boulder with a degree in Integrative Physiology and a minor in Business. She has an extensive background in retail, customer service, and in various leadership roles. A great example of this would be her role as Chief Administrative Officer for Kappa Alpha Theta. Through this position, she was in charge of various subcommittees, responsible for keeping Nationals informed about the executive

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offices weekly minutes, and ensures that all daily operations of the chapter were running smoothly. Because of her past experience with doing administrative work, she is the best person to be Loop N’ Scoop’s CAO. Her duties and responsibilities include: ● Responsible for administrative management both private and public ● Manage daily operations ● Report regularly to the CEO

Director of Sales Brittany Carr is a soon to be graduate from the University of Colorado at Boulder with a degree in Psychology and a minor in Business. She has a background in sales, customer service, and marketing. Brittany is an active member of the Chi Omega Zeta Chapter, as well as Order of Omega and other leadership roles on and off campus. She also the social media and marketing coordinator at her current job, Alex and Ani. Because of her extensive background in sales and customer service, as well as her strong interpersonal skills, Brittany is a great fit for Director of Sales at Loop N’ Scoop. Her responsibilities include the following: ● Planning and implementing sales ● Developing strategic sales plans ● Develop and manage sales/operating budgets ● Monitor competitor products and sales activities ● Meets with key clients, assisting sales representatives, and maintaining relationships with

customers and closing deals Director of Marketing Audrey Myre is a soon to be graduate from the University of Colorado at Boulder. She is graduating with a Bachelor in Psychology, minor in Business with an emphasis on innovation, and a certificate in Digital Media. Her ability to create public relations campaigns, create websites and design images and videos in Adobe creative suite makes her a strategic and innovative director of marketing. Audrey’s passion for advertising and marketing, as well as her organization and digital media skills make her especially adequate for this position. Director of Marketing duties and responsibilities include: ● Looking at existing and new markets ● Developing strategic marketing plans (digital) ● Develop and manage marketing budgets ● Plans advertising and promotion activities (especially digital in beginning stages of our

company) ● Packaging and positioning of product

Director of Research and Development Ryan Gandy’s past experience and knowledge in engineering digitally and physically have proven to be a great advantage for Loop N’ Scoop. He first provided Loop N’ Scoop with a great CAD design of the prototype followed by an actual physical prototype. He has also served on a research and development team for another company and believe that he has the experience to fulfill the position of Director of Research and Development. His duties will include:

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● Complete product research (research on production specifics, production costs, and production timeline)

● Develop the product based on the ideas and feedback from the research ● Ensure existing products are up to date ● Continue to innovate

Risks

There are a few major risks that our venture faces. First, the Loop ‘N Scoop is a one-time buy so we must address the problem of a long sales cycle. In the future, we plan to sell compostable bags that can be used with the Loop ‘N Scoop so that we have a product that is a recurring purchase in order to maintain revenue. Another risk is changing the buying habits of our customers so they select our 2 in 1 leash versus our competitor, the standard leash. We must rely heavily on our marketing to express the pain point, promote our product, and decrease the products learning curve. A third risk is whether or not the product will be functional. Because we only have a basic prototype we are unsure of the capability of the technology. To mitigate this risk, we will put a lot of time and resources into the research and development into our product. We will also hold many focus groups to ensure customer satisfaction while using the product. With this in mind, our last major risk is time and cost to develop. Since our product does not already exist in the market and is highly based on design, we need to make certain we find the most suitable engineer and manufacturer for our product. We have known this risk from the beginning, so we have allocated extra resources and created our budget in a way that addresses this risk.

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Financial Plan

Key Drivers One key driver that will ensure the financial success of our business is revenue. Revenue

is the income generated from the sales of our product, Loop N’ Scoop. Revenue is an integral part of our business because that’s where we will be getting our income and pay for our operating expenses. Although our business could potentially run on debt, eventually we would have to pay that debt and we cannot pay that unless we are generating some revenue. Secondly, we can use revenue to track the growth of our sales over a period of time and determine whether our sales are increasing or decreasing. If our revenue is increasing it will, that means we are capturing more market share, which proves the concept of our product. Thirdly, revenue is important to investors because it shows proof of concept, meaning it will show investors that it a product worth investing in.

Another key driver is customer acquisition. The customer acquisition costs is determined by taking the number of new customers per year, which we assume will be around 50% a year or 7,500 in year one, and dividing that by the total sales and marketing expenses per year, which will be $124,500. Thus, the customer acquisition costs will be around 6.02%.

Financial Projections Several financial statements, including the income statement, revenue model, cash flow statement, and breakeven analysis as well as the financial assumptions can be found in the appendix.

Funding Plan

Funding Strategies We are going to utilize a combination of equity funding and debt financing. We plan on

using friends and family as a source of equity funding because we do not necessarily need a lot of capital initially. Also friends and family funding is suitable for smaller companies that need minimal amounts of cash and are in the very early stages, which we currently are in. We would still want to pay our friends and family back but it would be a less structured pay back schedule and we could be more flexible. We are going to use angel investors as well. This will allow us to fulfill more of our cash needs and good growth potential in the early stages of our company. Since angel investors typically require an exit strategy, if our projections hold, we can begin to buy down their investment starting in year 3. We also plan to use sources of debt financing. As a startup company we won’t have a large financial track record or a lot of physical assets to use as collateral. Because of this, during the first year we will look to our family and friends in particularly for money. As said before, there will be a different repayment plan. After two years, we hope to get loans from a bank from having a strong financial track record, great credit, and through acquiring physical assets to use as collateral.

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Appendix I: Three-Year Income Statement

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Appendix II: Three-Year Balance Sheet

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Appendix III: Three-Year Cash Flow Statements

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Appendix IV: Break-Even Analysis

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Appendix V: Revenue Model

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Appendix VI: Assumptions When constructing the financial model there were a few assumptions taken: ● There are approximately 80 million dog owners in the United States meaning about ¼ of

the population owns one. If we assume that ratio for the Colorado region of about 3,000,000 million people (both assumptions would be on the conservative side) that leaves a potential market of 750,000 dog owners. If we shoot to put leashes in 1/50 of those after year one, we will need to sell 15,000 leashes. Considering our product line also relies heavily on established retailers and online ordering, that seems to be a very achievable and scalable goal.

● We are predicting that 1/10 purchasers of loop ‘N Scoop will also purchase our branded bag refill. This number could be significantly higher as well, but do not expect it to be lower.

● We are outsourcing production to cut down on rental space and production costs, but that make a high variable cost of production. Based on research through Alibaba, there are several leash choices available for under $5 per unit but we would like to ensure quality so are looking to spend a little more per leash, up to $7.50. Bags will cost about a dollar per roll. As we establish ourselves we will eventually save money through economies of scale and building rapport with suppliers.

● Considering the large inventory we will be ordering on a consistent basis, we expect that shipping costs will fall around $0.10 per unit of each bag and leash, consistent with other imports.

● We left some general funds available (4%) in additional Costs of Revenue to cover unforeseen shipping issues, potential tariffs, etc. Can adjust to decrease if not needed in Year 1 or 2 and apply those funds to other sources.

● We will be using a warehouse to double as inventory storage and an office to base out of in order to save money on rent.

● Have allocated $25,000 for legal in Year 1 and decreased that to $20,000 and then $15,000 over 2 and 3. Those funds will be used for looking into patents specifically, as well as general legal advice and incorporation documents.

● Have allocated 26,000 for start-up office costs in year one to cover computers, internet, software, etc. Will replace, get more computers in Year 3 again, with $6,000 annual in general P&E costs.

● We will start with 6 FTE (founders) and will make hires as needed after that. Considering we will not be CF positive until Year 3, we will likely have to make due with our 6 founders until then. In reality will likely not need all 6 in Year 1 but will cover interdisciplinary need, and do pre work to increase sales in Year 2 and 3

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Appendix VII: Customer Survey

Methodology

To get a better understanding of Loop ‘N Scoop’s potential customers, we created a survey asking various questions about the customer and their relationship with their pet. The survey link was shared on various Facebook pages, sent directly to people in emails, as well as through text messages. After conducting this survey, Loop ‘N Scoop received 23 different responses. The results of the various questions strongly indicate that people are sentimental towards their pets, treat their pet as a family member, purchase nonessential accessories on a monthly bases, clean up after their dog while on a walk daily, and that people saw the combination of a pooper scooper and leash to be the most beneficial tool while walking their pet. The graphs below show the results for each questions specifically.

Results Q1. Do you currently own, plan to own, Q2. How many years have you been a pet owner? or have owned a pet?

Q3. Please mark the items below that pertain Q4. How often do you do the following? to you and your pet. Have you ever….

Q5. Please rank the following features that you would find beneficial when walking your pet.

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Appendix VIII: Competition Matrix

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Appendix IX: Letter of Intent

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Appendix X: Resumes

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Appendix XI: Website

http://loopnscoop.weebly.com/

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Appendix XII: Sources

United States Patent and Trademark Office http://www.uspto.gov/web/patents/classification/uspcindex/indextouspc.htm Pooper Scooper System Patent http://www.google.com/patents/US6062618 Pet leash with integral waste bag dispenser http://www.google.com/patents/US5441017 Pet sanitation article attachable to a leash assembly http://www.google.com/patents/US5363809

Franchise Help, Pet Care Industry Analysis 2015 https://www.franchisehelp.com/industry-reports/pet-care-industry-report/