Transcript Business Plan: 3D Additive Manufacturing Technologies, Co. * 3

BUSINESS PLAN:
3D ADDITIVE MANUFACTURING
TECHNOLOGIES, CO. – 3-DAMTM
Starting A New Venture – MGMT 6630
Joe Ott
7-18-2012
BUSINESS CONCEPT
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1. INTRODUCTION
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2. THE COMPANY
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2.1. LEGAL STRUCTURE AND OWNERSHIP
3. PRODUCTS / SERVICES
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1.2. BUSINESS IDEA
1.3. BUSINESS MODEL
1.4. BUSINESS GOALS
1.5. KEYS TO SUCCESS
3.1. PRODUCT AND SERVICE SUMMARY
3.2. CUSTOMER
3.3. TECHNOLOGY
3.4. REGULATORY ISSUES
4. THE MARKET
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4.1. MARKET ANALYSIS
4.2. TARGET MARKET SEGMENT
4.3. GROWTH POTENTIAL
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5. THE INDUSTRY
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6. SALES
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5.1. COMPETITION
6.1. SALES STRATEGY.
6.2. PRICE STRATEGY
6.3. PROMOTION STRATEGY
6.4. SALES FORECAST
7. THE MARKETING PLAN
8. MANAGEMENT AND EMPLOYEES
9. ACTIVITY PLAN
10. FINANCE AND ECONOMY FIGURES
BACK UP SLIDES
1. INTRODUCTION - “With 3-DAMTM comes manufacturing freedom!!”
• 1.2. BUSINESS IDEA
• The business idea behind 3-DAMTM is to cross additive
manufacturing technology with the “KinkosTM” concept.
• Customers contact store by appearance, email, web submission
• Business would staff trained engineers and technicians to assist
customers in selecting the correct technology to manufacture their
hardware.
• 1.3. BUSINESS MODEL
• Sole Proprietorship during the initial start-up phase
• Would initially target a small volume of jobs, applying a medium
margin.
• Diversification Growth Strategy - 3-DAMTM would practice Forward
Integration by getting in front of the customer
1. INTRODUCTION - “With 3-DAMTM comes manufacturing freedom!!”
• From ASTM Designation: F2792 – 10 - Standard Terminology for Additive Manufacturing
Technologies2
• Why pursue additive manufacturing? There are many benefits in using additive manufacturing to
make hardware over conventional manufacturing5:
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Design flexibility
No tooling constraints
Allows complex models
No hard tooling required
No material lead time
Automated process
Reduced development expenses
Faster concept design to functional component
Reduced manufacturing costs
Near wrought material properties
Reduced product life cycle cost
Reduced manufacturing time: hours/days/weeks vs. months
Minimal secondary machining - near-net shape part
Additive manufacturing is an emerging industry.
• Some of the difficulties with additive manufacturing are:
• New technology – not everyone is familiar, technology evolving
• High barriers to entry – initial high start-up costs for equipment
• Material properties are still being defined
• Technical and process models are limited
Picture courtesy of Rapid Quality Manufacturing5
1. INTRODUCTION - “With 3-DAMTM comes manufacturing freedom!!”
• 1.4. BUSINESS GOALS
• 2 years of operation:
• Increase market share – establish 4 stores in largest US manufacturing locations (Houston, TX; Milwaukee,
WI; Seattle, WA; San Antonio, TX)4
• Increase market penetration over time –grow each store’s revenue at least 12.5% yearly
• Establish new pricing incentives and promotions
• Build long lasting quality partnerships
• Advertising
• Join Committee F42 on Additive Manufacturing Technologies1
• 6 years of operation:
• Increase market share – establish a store in 10 major US cities. Have plan developed to have 50 stores in
major US cities by 10 years of operations.
• Increase market penetration over time – continue to grow revenue at least 12.5% yearly, per store.
• 1.5. KEYS TO SUCCESS
• Flexibility – providing solutions for variety of customer and their unique requirements.
• Adaptability – have technology and capability for variety of needs.
• Sustained Growth – have capacity where and when a customer needs it.
• Technical “Know-how” – have understanding of how to use additive manufacturing technology to
provide best results.
• Speed – providing solutions faster and more efficient than anyone else.
• Funding – have cash and capital to sustain growth and profit.
2. THE COMPANY - “With 3-DAMTM comes manufacturing freedom!!”
• 2.1. LEGAL STRUCTURE AND OWNERSHIP
• 3-DAMTM will be listed with the Internal Revenue Service as a sole
proprietorship
• The principle owner (and equity shareholder) will be Joe Ott.
• Minor equity shareholders (<49%) will be silent partners
Figure 1. – Basic Organizational Structure
3. PRODUCTS / SERVICES - “With 3-DAMTM comes manufacturing freedom!!”
• 3.1. PRODUCT AND SERVICE SUMMARY
• Plastic and metal parts and concepts, produced in a few hours or days, using
additive manufacturing technologies
• Evaluation and modification of designs/CAD and concepts for application to
additive mfg.
• Coordination of post processing.
• Metrology center – accurate measurement evaluation
• 3.2. CUSTOMERS
• The target customers are everyone from local hobbyist and enthusiast to large
Fortune 500 companies needing unique part developed and produced.
• The current market doesn’t have local “to-go-to” places to get all your materials
and additive manufacturing methods and post-processing under one roof.
• All competition is located in a few select areas
• 3-DAMTM would provide a place for customers to have one-stop-shopping for
their manufacturing. Customer(s) can contact the business center by phone,
web, or face-to-face. Sales engineers would be available to help customers
work through product development and iteration until the final product is ready.
Pricing would be evaluated based upon the necessary amount of engineering
and development to make hardware, material considerations, and post
processing requirements.
3. PRODUCTS / SERVICES - “With 3-DAMTM comes manufacturing freedom!!”
• 3.3. TECHNOLOGY
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Powder Bed Technologies - Powder Bed is the distribution of thin layer of powder (metal or thermoplastic) and uses an
energy source to sinter/melt the powder into solid form. Powder Bed Technologies offer high resolution, medium volume,
small to medium sized part capabilities. Two common methods are:
Selective Laser Melting – laser beam power source in an inert atmosphere (nitrogen or argon)
Electron Beam Melting – electron beam power source in a heated, vacuum environment
Deposition Technologies – Metal is introduced via powder nozzle or wire feed into an energy source directly at the build
location, which melts to metal into solid form. Deposition Technologies offer lower resolution, lower volume, larger sized
part capabilities. 3 common methods are:
Laser Powder Deposition – laser/power nozzle combination
Laser Wire Deposition – use of a continuous feed wire and laser energy source
Electron Beam Wire Deposition – use of continuous feed wire and EB energy source
Specialized Software – (CAD/CAM, 3D model analysis, project/customer management) will be required to seamlessly
integrate customer models between additive mfg. platforms and required post processing technologies.
• 3.4. REGULATORY ISSUES
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"Green Technology"
PPE
Inert Gases
Intellectual Property7
Product Liability7
Pictures courtesy of EOS (http://www.eos.info/en/home.html), Arcam (http://www.arcam.com/),
and Optomec (http://www.optomec.com/)
4. THE MARKET- “With 3-DAMTM comes manufacturing freedom!!”
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4.1. MARKET ANALYSIS
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Wohlers Associates Inc. - Additive manufacturing had a total of market size of $1.7 billion worldwide in 2011.
Emerging Industry - Additive manufacturing can be considered an emerging industry in the US12
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Small Businesses •
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2+ years old (generally wouldn't be start-ups in their first year)
Income - Have manufacturing costs >$1000 per part.
Need - need fast parts made, short runs
Education - need to understand hardware end requirements.
Work - manufacturing, research, engineering, automotive, etc.
Geographical location - in key starting cities, some internet sales.
Potential Customer
Year 1
Year 2
Year 3
CAGR
Sm. Business
100
513
677
61,30%
Lg. Business
10
52
68
61,48%
Hobbyists
310
1 590
2 098
61,29%
Total
420
2 155
2 843
61,30%
Large Business 2+ years old
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Income - Have manufacturing costs >$1000 per part.
Need - need fast parts made, short runs, development iterations
Education - need to understand hardware end requirements.
Work - manufacturing, research, engineering, automotive, etc.
Geographical location - in key starting cities, some internet sales.
Hobbyists •
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CAGR- Compound Annual Growth Rate
4.2. TARGET MARKET SEGMENT
Age - 16 years or older
Income - able to afford part costs between $100 and $2000.
Need - generally have a concept they want to make or need a replacement part for one that broke
Gender - male and female
Education - majority expected to have some college and / or trade school
Work - professionals and trades
Geographical location – key US manufacturing centers / cities, some internet sales.
4.3. GROWTH POTENTIAL
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Additive Manufacturing, aka 3D Printing, will reach $3.1 billion worldwide by 2016 and $5.2 billion by 20208.
If 3-DAMTM can capture even 1% of this market that would be $31 million dollars in revenue. 5% growth in revenue the next year would
result in $32,550,000 of revenue, per store.
5. THE INDUSTRY - “With 3-DAMTM comes manufacturing freedom!!”
• 5.1. COMPETITION - Other companies trying to adopt the “Kinkos” model are:
• Mydea Technologies – digital model shop and an additive manufacturing and rapid prototyping
provider. http://www.mydeatechnologies.com/
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Owners: Michael Siemer
Annual Sales: $520K
Competitor’s distribution channel: Internet
Competitor’s marketing strategy: Internet Sales
Products and Services: Product Development & 3-D CAD Modeling, Rapid Prototyping/Additive Fabrication, Subtractive Rapid
Prototyping, Rapid Tooling & Manufacturing
Competitors price strategy: mid to high cost.
• Shapeways – 3D Printing company for designers and Do-It-Yourselfers. Helps people make and sell
their items. http://www.shapeways.com/
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Owners: Peter Weijmarshausen
Annual Sales: $1.90M
Competitor’s distribution channel: Internet
Competitor’s marketing strategy: Internet Sales, Arts and Crafts forums, Web sales of clients’ products, Do-It-Yourself market.
Competitors price strategy: Low to mid cost.
Products and Services: Tutorials, Shapeways Lab, Software, Metals and plastic fabrication, Online Sales.
• The following companies are a selection that specialize in additive technology and would be
competition for their prospective sub-fields:
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Morris Technologies - http://www.morristech.com/ – Selective Laser Sintering (SLS) metals
C&A Tool - http://www.catool.com/ – SLS metals and machine shop
Paramount Industries – http://www.paramountind.com/ - Stereolithography (SLA) and SLS of plastics
Materialise - http://manufacturing.materialise.com/ - a Belgian firm that uses additive manufacturing to make a range of products,
including medical devices.
6. SALES - “With 3-DAMTM comes manufacturing freedom!!”
• 6.1. SALES STRATEGY
• It is envisioned that customers would contact a local 3DAMTM business center to initiate a job.
• 6.2. PRICE STRATEGY
• Pricing would factor in the costs of overhead, materials, and
per hour cost for machines and personnel.
• A profit mark-up of 30% will be added to each job.
• 6.3. PROMOTION STRATEGY
• Sales will be generated through advertisement and
campaigns. The campaign will utilize TV, trade journals, and
the internet (web pages, FaceBook, etc.).
• 6.4. SALES FORECAST
• Based 3 major products/services: Sales Engineering,
Fabricated Metals, and Fabricated Plastics.
• Projected the amount of sales revenue generated by the
average increase in customers each month times the
expected revenue each customer would generate. YR 2
accounts for 4 stores in key cities. YR 3 accounts for 5
stores in key cities. Expect average growth of 12.5% per
year for each store.
• Cost of sales is the overhead for the sales engineers and
technicians plus an estimated monthly operating cost for the
metal machines of $4000 and plastic machines of $3000.
• These numbers are based upon a best scenario.
Sales
Year 1
Year 2
Year 3
Sales
Engineering
98 000
503 000
664 000
Powder Metal
144 000
740 000
975 000
Powder Plastic
104 000
533 000
704 000
Total sales
346 000
1 776 000
2 343 000
240 000
525 000
620 625
Powder Metal
24 000
70 000
82 750
Powder Plastic
24 000
52 500
62 062
288 000
647 500
765 437
Direct costs,
sales
Sales
Engineering
Total, direct
costs, sales
Sales monthly
7. THE MARKETING PLAN - “With 3-DAMTM comes manufacturing freedom!!”
• As part of a Diversification Growth Strategy 3-DAMTM
would practice Forward Integration.
• As the customer is the focal point for the business model, 3-DAMTM offices
will be targeted close to the customers.
• Customers will be contacted through advertisement and
campaigns.
• The campaign will utilize TV, trade journals, and the internet (web pages,
FaceBook, etc.).
• Highlights of ads will target design freedom, no or low tooling, and speed.
• Additionally, small to large manufacturing companies will be approached.
• A marketing group will be selected to assist in the
marketing campaign on a yearly contract.
• A $100k budget will be set for marketing. The marketing campaign will
start in June 2013 and continue through December 2013.
8. MANAGEMENT AND EMPLOYEES - “With 3-DAMTM comes manufacturing
freedom!!”
• CEO / CTO - complete oversight and responsibility for the company as well as
technical authority.
• CFO - direct oversight of the following reporting line: Accounting, Patient Accounts,
Communications, Purchasing, Printing & Duplicating, Information Management,
Management Information Systems.
• Accounting and Human Resources - Accounting and Human Resources will be
outsourced to a 3rd party company and overseen by the CFO.
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The company will be responsible for all day to day accounting and human resources activities, including
accounts receivable and payable, health and dental care, 401k management, and taxes, etc. The company
should have experience with accounting and HR in all US states. It would be preferred if the company has
experience with start-up companies.
• Technology Team – Materials Engineer, Technology Researcher, Training/Quality
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Responsibility for moderately complex engineering projects,
• Serves as consultants, providing technical information and engineering recommendations that assist various
projects and processes and materials.
• Coaches and trains less experienced engineers and technicians.
• Branch Manager(s) – oversee branch offices and perform sales
• Employees
Sales engineers – customer interface, engineers marry up technology to customer needs. There will be 2-3 per
store.
• CAD and Build technicians – modify designs to make technology friendly, operate and run machines. There will
be 1 per machine and two CAD operators per store.
• Post processing technicians - provide any necessary post processing and coordination. There will be one per
store.
• Shipping/Receiving – ship and receive hardware, supplies, etc. There will be one per store.
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9. ACTIVITY PLAN - “With 3-DAMTM comes manufacturing freedom!!”
• This section describes some activities that will be needed to implement the
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whole or parts of the business plan.
Order and Install Machines – machines and installation at $1,000,000 apiece. 1 plastics, 2 metals, 1 metrology and inspection, 1 oven and autoclave
= $5,000,000
Store – 15,000 sq. ft. * $3.523 per foot per year = $52,800. Plus $1,000,000
for upgrades and office requirements. Equals $1,052,800.00
Hire Accounting / HR - $100,000
Supplies - $100,000
Advertising Campaign - $100,000
Activity
Start date
Stop date
Order and Install
Machines
03/01/2013
06/01/2013
Store
03/01/2013
Hire Accounting /
HR
Responsible
Department
5 000 000
CTO
Technology Team
06/01/2013
1 052 800
CTO
CEO
01/02/2013
05/31/2013
100 000
CFO
CEO
Supplies
03/01/2013
06/01/2013
100 000
CEO
CEO
Advertising Co.
04/01/2013
06/01/2013
100 000
CEO
Branch Managers
Total
Budget
6 352 800
10. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes
manufacturing freedom!!”
The following are “Seed Capital funding expenses” that will be incurred
prior to the business starting:
Start-up Costs
Research
Technology
100 000
Research
Store
Location
200 000
Permits and
Fees
100 000
Marketing
Study
100 000
Total Start-up
Costs
500 000
Start-up
funding
Bank Loans
3 000 000
Bank Loans
2 000 000
Other
Investors
2 000 000
Grants
2 000 000
Government
Loans
1 000 000
Total Start-up
funding
Total Equity
10 000 000
9 500 000
The following describes all the “Start-up through Second Stage” funding
(existing and needed) for the project:
Bank Loans – $3,000,000 – Secured against the procured equipment.
Equipment, Real-estate, and Long-term loans.
Angel Investors – $2,000,000
Other Investors – $2,000,000 – Informal Risk Capital, Venture Capital
Grants – $2,000,000 – SBIR - Phase I and Phase II, Fed, State, Local.
Government Loans - $1,000,000 – SBA (504, SBA), etc.
Total: $10,000,000
Third stage (growth) funding would be necessary for expansion beyond
the first store and would be necessary at last quarter 2013.
10. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes
manufacturing freedom!!”
Net profit monthly
PROFIT & LOSS TABLE
Year 1
Year 2
Year 3
Sales
346 000
1 776 000
2 343 000
Sale costs
288 000
647 500
765 437
--------------BTO profit
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58 000
1 128 500
1 577 563
17 %
64 %
67 %
Salaries
830 004
1 040 000
2 190 000
Additional Salaries
costs
273 901
343 200
722 700
0
6 352 800
0
1 210 560
6 052 800
12 105 600
Accounting / HR /
Advertising Services
99 996
200 000
200 000
Supplies (office and
operating)
99 996
400 000
500 000
Utilities, Web, IT,
Phone
20 000
96 000
120 000
Insurance
999 996
4 000 000
5 000 000
Maintenance Plan
100 000
400 000
500 000
Research
Technology
100 000
0
0
Research Store
Location
200 000
0
0
Permits and Fees
100 000
0
0
Marketing Study
100 000
0
0
BTO profit %
Expenses
Marketing and
activity costs
Depreciation
--------------Sum direct costs
Financial costs
Profits before tax
Profit before tax %
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4 134 453
18 884 800
21 338 300
-0
-0
-0
-4 076 453
-17 756 300
-19 760 737
-1 178 %
-1 000 %
-843 %
Net profit yearly
10. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes
manufacturing freedom!!”
Balance Sheet
Year 1
Year 2
Year 3
1 297 208
-9 265 893
-22 254 593
346 000
1 776 000
2 343 000
1 643 208
-7 489 893
-19 911 593
Current assets
Liquid assets
Sales
Total current
assets
Fixed assets
YR1
Current Ratio = 0.16
*indicates low liquidity
YR2
-1.08
YR3
-1.33
Fixtures and
fittings & fixed
assets
6 052 800
29 264 000
54 528 000
Debt Ratio =
6.43
-0.92
-0.75
*indicates business while taking on more debt
is working out of debt
Acc depreciation
fixtures &
fittings/fixed assets
1 210 560
7 263 360
19 368 960
Debt to Equity = 1.32
*High capital industry/business
Total fixtures and
fittings/fixed assets
4 842 240
22 000 640
35 159 040
Total assets
6 485 448
14 510 747
15 247 447
Liabilities
Share capital & risk
capital
10 000 000
10 000 000
10 000 000
Accounts payable
288 000
647 500
765 437
Accrued taxes
273 901
343 200
722 700
Long-term
liabilities
0
0
0
Balanced
profit/loss
0
-4 076 453
3 520 047
Total liabilities &
equity capital
10 561 901
6 914 247
15 008 184
Profit for the year
-4 076 453
7 596 500
239 263
Net Profit Margin = -11.78
4.28
*indicates high initial risk but business
becoming more stabile.
0.10
ROI =
-0.63
0.52
0.02
*indicates high initial risk but business
becoming more stabile.
10. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes
manufacturing freedom!!”
CASH FLOW ANALYSIS
Liquid assets, incoming
Year 1
Year 2
Year 3
10 000 000
6 644 130
-6 790 066
346 000
1 776 000
2 343 000
Liquid assets obtained from
activities
Sales
Other earnings
0
0
0
346 000
1 776 000
2 343 000
612 082
2 859 146
2 479 729
Increase in accounts payable
0
0
0
Increase in short-term liabilities
0
0
0
Increase in long-term liabilities
0
0
0
Sale of current assets
0
0
0
Sale of fixed assets
0
0
0
Total earnings from activities
Other liquid assets obtained
VAT and tax refunds
New capital increase
0
0
0
958 082
4 635 146
4 822 729
Cash expenditure
2 937 992
13 136 300
9 275 437
Total expenditure from activities
2 937 992
13 136 300
9 275 437
323 160
721 842
1 253 200
Reduction in short-term
liabilities
0
0
0
Reduction in long-term liabilities
0
0
0
Total liquid assets obtained
Liquid assets spent
Other liquid assets spent
VAT and tax payments
Purchase of current assets
0
0
0
Purchase of fixed assets
1 052 800
4 211 200
5 264 000
Total liquid assets spent
4 313 952
18 069 342
15 792 637
-3 355 870
-13 434 196
-10 969 908
6 644 130
-6 790 066
-17 759 975
Net cash flow
Liquid assets, outgoing
Back Up Slides
REFERENCES:
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"Designation: F2792 − 12a - Standard Terminology for Additive Manufacturing Technologies." ASTM F2792 - 12a. ASTM,
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June 2011. Web. 17 July 2012. <http://techliberation.com/2011/06/10/3d-printing-the-future-is-here/>.
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<http://www.whitehouse.gov/sites/default/files/microsites/20091216-maunfacturing-framework.pdf>.
USA. National Science and Technology Council. Executive Office of the President. A NATIONAL STRATEGIC PLAN FOR
ADVANCED MANUFACTURING. Http://www.whitehouse.gov/, Feb. 2012. Web. June 2012.
<http://www.whitehouse.gov/sites/default/files/microsites/ostp/iam_advancedmanufacturing_strategicplan_2012.pdf>.
Wohlers, Terry. "Worldwide Trends in Additive Manufacturing." RapidTech 2009: US-TURKEY Workshop on Rapid
Technologies. Wohlers Associates, Inc, 2009. Web. June 2012. <http://iweb.tntech.edu/rrpl/rapidtech2009/wohlers.pdf>.
One Store (Houston, TX) Ratios
Current Ratio =
*indicates low liquidity
YR1
0.16
YR2
-0.10
Debt Ratio =
1.62
3.34
*indicates store is working out of debt
YR3
-1.5
0.76
Debt to Equity =
1.32
*High capital industry/business
Net Profit Margin =
-11.78 -11.74 -10.42
*indicates high initial risk but business working toward stabilizing.
ROI =
-0.63
-2.34
1.78
*indicates high initial risk but business becoming more stabile.