The Market
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Ford Motor Company's two-passenger Th!nk NEV. |
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Small neighborhood electric vehicles (NEV's) have been gaining popularity throughout the United States, and in other parts of the world. NEV's, also known as Low Speed Vehicles (LSV's) can legally be driven on any street with a posted speed limit no greater than 35 mph. This means that most urban environments, and many small, rural communities would be appropriate locales for the SunVee.
Because the SunVee is completely pollution free, it will appeal to the wide range of people who are concerned about our environment; many of them have been waiting for a practical solar car for many years. As gasoline and energy costs escalate in the future, the SunVee will become even more attractive, because solar energy is free. Batteries will need replacement perhaps every five years, but that is a comparatively small expense. In addition, thanks to recent legislation, NEV owners are now eligible for a federal tax credit.
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Solar electric panel. |
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Ease of charging will also attract customers. Unlike all other NEV's available, the SunVee does not need to be plugged in to be charged. The solar-electric panels and the charge controller take care of the batteries in the best possible manner, keeping them charged and ready to go, but not overcharging them. The owner can simply park the SunVee in the sun and the vehicle will take care of itself; there is no need to ponder whether it is necessary to plug it in or not. Of course if it is a cloudy day and the owner wants to charge the vehicle, it can be plugged into ordinary house current to do so.
Styling
The shape of an NEV is free to take many forms, since it is not constrained by the conventional Internal Combustion Engine's requirements for space, air, water, oil, etc. The electric motor itself is very small. The battery compartment is best kept low in the vehicle for optimal center of gravity, so it can be under the rear storage bay. The shape of the SunVee will be somewhat constrained by the need to incorporate the photovoltaic panels into the body. Amorphous cell panels allow simple curved solar panels to be part of the vehicle. SunVee could be daringly bold or perhaps retro in styling. Eventually there could be several different models to choose from.
Business Concept
The company manufacturing the SunVee will be part of the Neighborhood Electric Vehicle Industry. The target market for the SunVee is all people living in urban or semi-rural environments where neighborhood use of vehicles on streets posted at no greater than 35 MPH is possible. The SunVee differs from its competitors in that is completely charged by just parking it in the sun. Important characteristics of the SunVee include: no fuel costs, no pollution, no use of fossil fuel, quiet operation, and it is fun to drive! The company making the SunVee will become a significant player in the movement toward safe, sustainable, pollution-free transportation.
Current Situation
At this point, a business concept has been refined and an extensive plan for taking this concept to market has been developed. Initial equity investors or partners are now being sought.
Key Success Factors
There are several key factors that are particularly important for success.
1. Initial testing and proof of concept has been accomplished.
2. There is an obvious need for non-polluting vehicles, both from consumer demand and governmental mandate.
3. Uniqueness of styling and function will set the SunVee aside from the competition.
4. The marketing strategy for extremely low overhead will be a decided advantage.
Financial Needs
At this time $110,000 in equity investment is being sought. It will be used for the intital phase of establishing a corporation responsible for manufacturing and marketing the SunVee and creating a replicable prototype SunVee. It is projected that this phase I of development will take about 12 months to accomplish. The money will primarily be used to pay for personnel and material to accomplish the creation of this prototype, as well as to establish the corporation. We would anticipate going public within perhaps five years, allowing investors to recoup their investment plus a negotiated return on that investment.
Vision Statement
The vision for SunVee is to provide a significant number of neighborhood solar cars for people in North America so that they might enjoy driving a classy, utilitarian car that is completely non-polluting and does not depend on fossil fuels. Distinctive characteristics of the company will be that much of it is internet based, without the overhead of sales rooms, massive corporate headquarters, and an extensive sales staff. The SunVee will differ from its competitors in that the vehicle will be charged with solar electric panels incorporated into the body of the car. The SunVee will fulfill the strong desire among many people to drive a totally eco-friendly car. Our company will be recognized as a leader in the field of Neighborhood Electric Vehicles, with the distinction of of being the first, and possibly the only, one that runs completely on the energy from the sun.
Milestones and Phases of Equity Investment
Important milestones for launching this business are:
1. Presentation to investors for Phase I begins with the creation and promotion of this website. (Current)
2. Financing for Phase I completed Dec. 2002.
3. SunVee prototype completed Dec. 2003
4. Financing for Phase II completed by March, 2004
5. Management and manufacturing teams in place June, 2004
6. Manufacturing plant established and begins production August, 2004
7. Financing for Phase III completed by Feb. 2005
7. Regional sales representatives in place by Feb. 2005
8. Major marketing efforts are initiated March, 2005
9. First SunVee ships April, 2005
Overall Strategy
Our strategy is to adopt innovative and leading-edge techniques in all aspects of running our business. Being a younger, smaller company than our competitors, we will have a natural advantage of being able to innovate. We have much less invested than our competitors in the past way of doing business, so we have little to lose and much to gain by doing business differently. We want to particularly be recognized as using innovative ideas to directly benefit our customers, such as new policies on pricing, service and marketing. But we also want to try innovative techniques for running our business better internally.
Marketing Strategies
Our basic marketing strategy is to excite customers about driving a SunVee through conventional advertising and through the example of those who have already purchased one. Our marketing efforts will emphasize the fact that the SunVee is complely free of fuel costs and pollution. The message that we want to send to customers is that not only is the SunVee fun to drive but it is also good for the environment and their pocketbook. We will primarily direct our marketing toward urban drivers and small, rural community drivers. We will equally rely upon our advertising and commissioned sales by existing owners to drive sales ahead. Key differences between our marketing program and those of our principal competitors is that the standard automotive show room with its often overly persuasive sales force will be replaced by enthusiastic owners who love their cars and a highly informative and effective internet-based sales program.
We will closely integrate all of our marketing and sales efforts to project a consistent image of our company. The image we will present of the SunVee is one of great fun to drive, ease of refueling (park it in the sun), extreme economy (no fuel cost), and evironmental responsibility (no pollution nor use of fossil fuel). We will emphasize these factors in our sales advertising by showing people driving with pleasure, while bypassing gas stations, ATM's, and smog test stations.
Sales Tactics
Our primary sales method will be a combinaiton of an informative website with an easily navigated process for commiting to purchase a SunVee, and enthusiastic and motivated prior customers willing to demonstrate their SunVee to prospective customers for substantial commissions on eventual sales. A particularly important aspect of our sales process is assuring customer satisfaction, so that they want to promote the SunVee. We address this by making a superior product that will basically sell itself. Our sales tactics differ from our principle competitors in that we don't rely on expensive showrooms, paid sales staff and wholesale/retail pricing structures.
Advertising
The message or theme that our advertising will deliver is that the SunVee is fun, cost effective, easy to use, and evironmentally responsible. The primary advertising vehicles that we will use are the internet and television. Secondary advertising vehicles that we will use are national magazines and newspapers.
Promotions/Incentives
We will promote our business through our website, www.sunvee.com. On this site we will offer product information, service information, basic information about our business, suggestions on how to use our product effectively, a wide range of information of interest to potential customers including information on how to order a SunVee and lots of pictures of all aspects of the SunVee. Also there could be a list of commissioned agents in all localities who have expressed an interest in being listed at the website. We will promote our website on all of our literature, by listing our web address in our advertising, in major search engines on the web, by getting free links with related websites and by advertising on the web.
We will encourage anyone who purchases a SunVee to become a commissioned agent, thereby generating an ever-expanding sales force who are enthusiastic about demonstrating the SunVee, and gaining significant sales commissions.
Publicity
The main purpose of our publicity is to increase the general awareness of the SunVee. Our publicity is also intended to emphasize our competitive advantages. The primary publicity vehicles that we will target are the web and national television. Secondary publicity vehicles that we will target are national magazines and newspapers. We will pitch the media by mailing and e-mailing press packets, arranging interviews, etc.
We plan on holding a press conference to announce the introduction of the SunVee. We will announce this press conference widely, and give special invitations to members of the media. We expect that the SunVee will become significant news and will generate much free publicity.
Trade Shows, Etc.
We will occasionally feature the SunVee at appropriate trade shows, consumer shows and conventions. Our objective in attending these shows will be to portray our firm as a major player in the Neighborhood Electric Vehicle Industry, provide demonstrations and keep up industry contacts.
Human Resources Plan
We recognize that human resources are an extremely important asset. Hence we will screen new applicants very carefully including in-person interviews and reference checks. We will review each employee's performance regularly, and when possible promote from within. Our salaries and benefit packages will be competitive with those offered by other firms in our area.
Our human resources strategy will be to treat all employees with respect, to create a positive and productive environment, to be fair and consistent, and to involve employees in decision-making as much as possible.
New staff will be added as needed to accomplish the goals of each phase of development. Our recruitment strategies for identifying candidates and hiring individuals to fill these positions will be based on a combination of referrals, classified advertising in local newspapers or other web-based methods.
Product Delivery
We will control costs by getting competitive bids on major purchases, arranging for long-term delivery contracts and watching overhead costs closely.We will insure that our quality is high by having specific standards that must be adhered to, selecting high quality vendors, having a rigorous hiring process, communicating to all employees that quality is our first priority, and conducting customer surveys.
We believe that maintaining excellent relationships with our suppliers is an important part of successfully delivering our product. We will pay our suppliers within terms; we will treat their sales people and customer service people with respect; we will maintain a relationship with key executives at our core suppliers; and we will let our suppliers know that we appreciate their work. Because of these steps, our suppliers will be willing to really go to bat for us when we need their extra help.
Financial Projections
The following projections are based on these assumptions: Sales commissions will amount to 10% of gross sales (5% for agents and 5% for delivery people), the actual cost of sales (including freight) will amount to 25% of gross sales, the payroll tax rate is 13% and there will be no sales on credit (except credit cards).
Phase I (2003) would involve consultants or contracted work only, no employees.
Phase II (2004) would invlove hiring a Manager ($40/hr.), Secretary ($20/hr.), Accountant ($25/hr.), Inventory person ($20/hr.), Shop Foreman ($25/hr.), 5 Mechanics ($20/hr.) and 5 Assembly persons ($15/hr.).
Phase III (2005) would add to the personnel a Webmaster/clerk ($25/hr.), a Technical Support person ($25/hr.), a Publicist ($25/hr.) and would increase the Assembly Team to 20 people for the last half year.
(2006) would increase the Assembly Team in increments to 30 people.
(2007) would see a doubling of the Assembly Team to 60 people, with the addition of an Assistant Manager ($30/hr.) and general raises for all of the key employees.
It is assumed that 10 people can assemble one SunVee each day and that each SunVee will have a retail price of $10,000.
Pofit and Loss Projections:
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2003 Total |
2004 Total |
2005 Total |
2006 Total |
2007 Total |
| Sales |
0 |
0 |
2,800,000 |
6,600,000 |
14,400,000 |
| Cost of Sales |
0 |
0 |
700,000 |
1,650,000 |
3,600,000 |
| Gross Profit |
0 |
0 |
2,100,000 |
4,950,000 |
10,800,000 |
| Commissions |
0 |
0 |
280,000 |
660,000 |
1,440,000 |
| Literature & mailings |
0 |
0 |
5,000 |
5,000 |
5,000 |
| Advertising and publicity |
0 |
0 |
500,000 |
800,000 |
1,000,000 |
| Other marketing |
0 |
0 |
25,000 |
50,000 |
100,000 |
| Payroll |
0 |
285,600 |
1,536,000 |
2,611,200 |
4,915,200 |
| Payroll taxes, benefits |
0 |
37,128 |
199,680 |
339,456 |
638,976 |
| Facilities and equipment |
4,800 |
100,000 |
50,000 |
60,000 |
200,000 |
| Maintenance & repairs |
0 |
3,000 |
3,000 |
5,000 |
20,000 |
| Utilities, phone, postage |
1,200 |
3,600 |
5,000 |
5,000 |
8,000 |
| Insurance |
720 |
1,500 |
3,000 |
4,000 |
6,000 |
| Supplies |
30,000 |
500,000 |
10,000 |
10,000 |
15,000 |
| Travel & entertainment |
1,200 |
14,000 |
20,000 |
20,000 |
25,000 |
| Legal |
6,000 |
6,000 |
10,000 |
10,000 |
12,000 |
| Consulting services |
60,000 |
10,000 |
10,000 |
10,000 |
10,000 |
| Misc. taxes & fees |
300 |
1,000 |
3,000 |
3,000 |
4,000 |
| Depreciation |
0 |
8,000 |
9,000 |
9,000 |
15,000 |
| Other G&A expenses |
5,400 |
10,000 |
12,000 |
15,000 |
20,000 |
| Total operating costs |
109,620 |
979,828 |
2,680,680 |
4616,656 |
8,434,176 |
| Operating profit |
-109,620 |
-979,828 |
-580,680 |
333,344 |
2,365,824 |
| Operating profit margin |
0% |
0% |
-20.7% |
5.1% |
16.4% |
| Net profit |
-109,620 |
-979,828 |
-580,680 |
333,344 |
2,365,824 |
| Net profit margin |
0% |
0% |
-20.7% |
5.1% |
16.4% |
Cash Flow Projection:
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2003 |
2004 |
2005 |
2006 |
2007 |
| Starting cash |
110,000 |
380 |
28,552 |
256,872 |
599,216 |
| Cash sales |
0 |
0 |
2,800,000 |
6,600,000 |
14,400,000 |
| Equity capital proceeds |
110,000 |
1,000,000 |
800,000 |
0 |
0 |
| Total resources |
110,000 |
1,000,000 |
3,600,000 |
6,600,000 |
14,400,000 |
| Cost of sales |
0 |
0 |
700,000 |
1,650,000 |
3,600,000 |
| Payroll & related |
0 |
322,728 |
1,735,680 |
2,950,656 |
5,544,176 |
| Non-payroll expenses |
109,620 |
649,100 |
936,000 |
1,657,000 |
2,865,000 |
| Total uses |
109,620 |
971,828 |
3,371,680 |
6,257,656 |
12,019,176 |
| Net change in cash |
-109,620 |
28,172 |
228,320 |
342,344 |
2,380,824 |
| Ending cash position |
380 |
28,552 |
256,872 |
599,216 |
2,980,040 |
Balance Sheet Projection:
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2003 |
2004 |
2005 |
2006 |
2007 |
| Current Assets |
380 |
28,552 |
256,872 |
599,216 |
2,980,040 |
| Accumulated depreciation |
0 |
8,000 |
17,000 |
26,000 |
41,000 |
| Net Depreciable Asssets |
0 |
-8,000 |
-17,000 |
-26,000 |
-41,000 |
| Total Assets |
380 |
20,552 |
239,872 |
573,216 |
2,939,040 |
| Long-term debt |
0 |
0 |
0 |
0 |
0 |
| Stock & Paid-in Capital |
110,000 |
1,110,000 |
1,910,000 |
1,910,000 |
1,910,000 |
| Retained earnings |
-109,620 |
-1,089,448 |
-1,670,128 |
-1,336,784 |
1,029,040 |
| Total Equity |
380 |
20,552 |
239,872 |
573,216 |
2,939,040 |
| Total Liabilities & Equity |
380 |
20,552 |
239,872 |
573,216 |
2,939,040 |
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