ENGR 425: Laundrasist

Due on Monday, December. 16, 2013

Macy

Joe Marcus (jam5806@psu.edu) 732-766-5501, Dylan Ventura (dmv5091@psu.edu) 724-433-9273, Justin Fincher (jrf5334@psu.edu) 717-418-0986, Kevin Cook (ksc5214@psu.edu) 610-213-558

CONTENTS

ENGR 425 (Macy): Laundrasist

Contents
Executive Summary Business Concept Business Model Product/Service Description Industry Analysis Market/Customer Analysis Founding Team Sales Strategy Financial Plan Feasibility Decision 3 5 5 6 7 10 15 16 18 20

Business Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Business Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Bibliography Appendix 21 22

Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

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ENGR 425 (Macy): Laundrasist

Executive Summary
Being held down by an annoying laundry machine buzzer that you can never hear or always returning with your clothes being wrinkled or smelling of mildew? These can be considered problems of the past with this new product called Laundrasist. Laundrasist is an innovative new product that will alleviate many of the problems centered around doing laundry. There are currently 102 million washing machine units in use throughout the United States. 80 % of which are used in personal households. 45% of all personal households consist of more than one oor giving us a total potential market of 44.88 million customers. By notifying the person doing the laundry through a belt clip receiver, one will know immediately when the laundry is nished from anywhere in or around the home. This will nullify anyone forgetting laundry in the washer or dryer for a long time and will also allow someone to do almost anything in or around the house without worrying about the laundry. This product is unique to the customer, and is something that every person who is in charge of the laundry will want and need. The Laundrasist oers the customer the luxury of setting their laundry then forgetting about it. Through engineering a vibration sensor the Laundrasist senses the machine vibrating and noties the receiver upon completion of vibration. The Laundrasist is relatively low cost to the consumer, compared to the competitors that oer expensive replacement machines. The Laundrasist also is able to be attached to any previously owned machined without any hiccups and is easily adaptable. The start-up cost will be $250,000 at rst. $50,000 of which will come out of pocket and the additional $200,000 we predict will come from an angel investor who believes in the product as strongly as we do. We will use our start-up money directly to fund the market research, gain FCC clearance to transmit a signal, and product development of the Laundrasist. The out of pocket money will come from our team through various loans and gifts by friends and family who believe in the product. Through the rst ve years we expect to have steady demand growth for our product as more people become aware of its many advantages over competing products and services. We plan to also have a steady pricing strategy, which starts and ends with the price of our product at $35 per unit. We consider this to be a very low cost compared to having to purchase a new smart integrated laundry unit. Our team consist of Joe Marcus, the founder and CEO. Dylan Ventura, our supply chain and distributions manager. Kevin Cook, the companys marketing director. And Justin Fincher, our operations manager. However, we lack an engineer able to design and build the device so its

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ENGR 425 (Macy): Laundrasist production will have to be outsourced causing a higher production cost. What we oer compared to the competition is a device that does not require the use of a smart phone, WiFi, or having to submit any personal information online allowing for peace of mind knowing that the laundry is in safe hands.

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ENGR 425 (Macy): Laundrasist

Business Concept
Laundrasist is a portable self alert system marketed towards busier than average individuals living in multi-level households. The product alerts the user when a wash cycle has nished, thus eliminating the hassle of checking on their laundry allowing for more ecient use of their time.

Business Model
The market that would value this product the most we believe, would be the middle-age housewives that tend to live busier lives than the normal parents. Parents in todays world are bombarded with many tasks throughout the course of the day, so eciency is key. Our product will help the mothers and fathers in many households, to become more ecient, relieving the worry and stress associated with doing the familys laundry. Before this product, you had to be within earshot of the washer and/or dryer and to be ready at a whim to get your garments. By reminding the user with a ring and a vibration, Laundrasist helps ease the mind of the individual, while keeping everything in the household moving. This product will mainly be marketed to moms of the house or to busy, single parents. These individuals show benet from a product that would help them get more accomplished throughout the day. These people have tremendously busy schedules and a countless number of things to remember, therefore can use extra help however they can get it. Their schedules usually include very little disposable time. A product that eliminates waste could become an integral part of their lives. There would also be a noticeable prot margin for our suppliers. First, the market research company that we will hire to do research on our available market will tell us if this product would be wanted by the public. The company would gain a prot for doing this research, and therefore would have value in working with our product and us. Next, the suppliers that we would use would be in charge of supplying our company with the parts of our actual product. Our main parts for this product include a plastic mold for the device, a base station, vibration sensors, transmitter, small speaker, and a belt clip attachment. Many dierent companies would supply these parts. These companies would generate prot by creating dierent molds and providing these parts in bulk, at a wholesale cost. From our manufacturing sites, the product would be moved to our distributors/ customers, where they would move the product to our nal consumer. We plan on distributing Laundrasist to Page 5 of 23

ENGR 425 (Macy): Laundrasist many dierent chain stores to help to better segment our market. These chains are therefore able push our product to the appropriate market. We plan on selling our product, to many dierent drug stores and grocery stores throughout the country. With these stores sharing the same market as our product, our company and these dierent retail stores would have a mutually benecial relationship. These retail stores would attract our target market, thus increasing potential sales. In turn, our product would then attract more customers to the store who have seen the nd it at ads. We plan for this product to be a solution to the ongoing laundry problems we face today, as well as a cheaper and simpler alternative to current electronic reminders.

Product/Service Description
The idea for Laundrasist was sparked by our group leader, Joe Marcus, and his idea to make the lives of his grandparents easier. Because his grandparents live in a home where the laundry room is in the basement, they were constantly having to travel downstairs to check on the laundry status. Joe thought that if there was some way of letting them know when the wash was done, it could make many peoples lives a lot more easy and convenient. Laundrasist is unlike any other laundry alert system available in the fact that it is a tangible, battery operated device. This product has a base station that attaches, by magnet, to the side of any washing or drying machine, and a detachable receiver equipped with an audible and visual alert system. Through the reverse engineering of vibration sensors, the base station senses when the machine has stopped running, and sends a signal to the portable receiver. The Laundrasist device uses a transmitter similar to that of a walkie-talkie, meaning that the receiver can be alerted within a range of approximately one mile from the base station. By having the ability to take the Laundrasist receiver with you to, there is no need to worry about checking on, or forgetting your laundry. The receiver will sound with a friendly chime and vibration pattern with ashing LED lights as soon as the laundry cycle has ended. The audible and visual alert can be stopped by simply pressing a button in response. Due to the use of a transmitter, Laundrasist needs FCC clearance and verication to legally comply with government regulations, which is not hard to obtain. Unlike our current potential competitors, Laundrasist does not require the use of computers or cell phones to check the laundry status, nor does it require the user to be within earshot of the machine. This means that the customer does not have to remember to check anything, such as email

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ENGR 425 (Macy): Laundrasist or cell phone applications, and they can also go about completing other tasks, knowing they will receive a friendly reminder when the laundry is ready. With the idea of marketing to busier than average parents, it is key to minimize the number of steps needed to complete the seemingly endless process of doing laundry. The main dierentiation, and selling point, of our product is the fact that it does not require any further use of technology, and can actually be carried around, or placed in a nearby room to hear the alert. As for our products weaknesses, there were few we could identify. The main liability, or weakness regarding our product is that customers may consider it an item that could easily be lost or misplaced. However, if the receiver is not able to be easily located, it will alert at the end of the next laundry cycle, thus giving away its location and solving the problem. Another thought provoking question is Is this a need, or a want? As previously discussed, the ecient use of time management is becoming a greater need in households everywhere. Meaning that people will pay to make their lives easier, more ecient, and more comfortable.

Industry Analysis
Having clean clothes is like food and shelter, and is considered a necessity of life and laundry machines provide a basic health service for millions of Americans (Wallace). The household laundry machine and dryer industry is one in its mature stage of development, but has many opportunities for improvements and developments that the consumer is interested in. The household laundry industry is mostly made up by three companies, Whirlpool Corporation, General Electric, and Maytag International, Inc. (Industry Reports). These three companies have a majority of the market share, and have bought out or ran smaller companies out of business do to economies of scale, and the ability to have a lower price than most of its competitors. In 2008 laundry equipment was the second-largest home appliance market, following refrigeration, with $4.1 billion in shipped products. (Business Information). Nearly 80 percent of all household laundry equipment is purchased by individuals for home use, and could be enhanced by the Laundrasist. The products that the household washer and dryer companies oer to the consumers are electric washing machines, electric dryers, and gas dryers. Washers are of two types: top-load and frontload. Most of all of the dryers today are front loaded which allow for more space for clothing, and is about the same price to manufacture. These companies work around the world and distribute to many countries that have the infrastructure and that are capable of supporting electric products. The industry mostly segments this market into one category, the homemaker. This person is usually,

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ENGR 425 (Macy): Laundrasist the mother of the house, but doesnt have to be. This is the person who tends to the needs of the house such as cleaning, washing and folding clothes, outdoor jobs, making the meals for the family, and tending to the children of the house. It is easy to say that this person doesnt have the time to think about when their laundry is nished with everything else going on. Also in many households it is the homemaker who completes the laundry for the rest of the family, which at times can be an exorbitant amount of laundry that must be completed in a timely manner. These homemakers would not only benet but would absolutely need this product in their life. There are many patterns in this industry that call a need for an alert system to notify a person away from the machine, when their laundry is completed. Our product, The Laundrasist could become an integral part of this industry, and could also enhance the washing machine and dryer market. People today are becoming more aware that time is nite and that it is important to be as ecient as possible when completing task. This has never become more apparent than in the household, and how homemakers are becoming increasingly busy with the amount of task that they must complete in a day. It is an unreasonable assumption to think that a person should be within earshot to hear if their laundry is completed or not, when there are jobs around the house, in and out, to be completed during the same time period. This product would not only add to eciency, but would also decrease the need for ironing in the household. The ironing process is one that could be eliminated by the Laundrasist, because the homemaker could retrieve the laundry as soon as it is done drying and would cause less time for wrinkles to occur in the clothes. Laundry equipment was increasingly moved out of basements and closer to living areas in the 1980s (Wallace). This was in part due to the easy accessibility to the machine, and the fact that the homemakers did not want to travel up and down steps to do their laundry. Due to this change, a new problem was created, which could be considered more of a distraction than walking up and down steps, and this problem was noise. Noisy machines can bother everyone in a household, and if the family is large enough it seems that the washing machine and dryer are always running. This product could allow for more families to put their machines back into the basement and away from the main living quarters of the family. Positive demographic trends and healthy housing starts helped boost household laundry equipment sales more than 50 percent between 1980 and 1990, and other than the recession in 2008 has been steadily increasing in direct relation to the amount of households in America (Industry Reports).This in turn means that as the amount of household increase in America so will the need for more laundry machines, and in turn the need for more Laundrasist modules. Page 8 of 23

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Figure 1: As seen in this graphical display, there has been a rise in the amount of stay at home parents, by male and female both, each with many tasks that must be completed in a timely manner.

Porters ve forces model uses industrial organization economics that derive ve forces that determine competitive intensity and attractiveness of the market (Harvard Business). The rst of the ve forces is the threat of new entrants, and we plan to lower the risk of this much as possible through brand equity and our logo as well as our use of cheaper plastics as molding. This will prevent or at least deter other companies from moving in and taking our business right after we enter the market. The second of the ve forces is the threat of a substitute product. This threat can be reduced as much as possible by our product meeting the requirements that our consumer feel that need to be met. If we can have a product work every time and be reliable, there would be more of a chance that they wouldnt want to change to a competitive product. The next of the ve forces is the bargaining power of the consumer. At this point there are not many substitutes available to the consumer doesnt have as much bargaining power, which in turn helps our company to reduce the amount that the consumer can leverage our product. We also believe that our consumer will not only want this product, but will need this product, and therefore their price sensitivity would be lower and they would be willing to pay more for this product. The fourth force in this model is the bargaining power of the supplier. The supplier would already have many of these

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ENGR 425 (Macy): Laundrasist products available to them because a plastic molding company already has other customers and have previously existing supply chains that Laundrasist could benet from. There are also many plastic molding companies with competitive prices that allow for our company to search and nd the cheapest supplier, and will prevent a supplier from charging exorbitant prices. The nal force in this model is the intensity of competitive rivalry. This is one area where it would be dicult to enter in such a mature market, but with new technology and the changing wants of the consumer we believe this market is just reading for a big boom that could mean a resurgence of the market.

Figure 2: New home sales in the U.S., which is directly related to the amount of washing machines and dryers purchased.

This leads to the overall attractiveness of this industry. Even though it is in its mature stage of development, new technology can cause an increase in the wants of the consumer. This market has also always had a steady incline as with the amount of households in America, and both are directly correlated with each other, and with every laundry machine could come the Laundrasist.

Market/Customer Analysis
Our Target Customers are tenants or individuals in multi-level homes, or other dwellings. Our company solves the problem of having to continuously monitor your laundry cycles for completion. Our customers proles include those compulsive individuals looking for items to stay on top of their day-to-day errands. The need for eciency and proper time management in their busy day-to-day lives motivates their buying decisions. A Laundrasist system will not only potentially help to bring Page 10 of 23

ENGR 425 (Macy): Laundrasist peace between individuals in an split-level residence but it would also help to reduce stress in a busy household. Besides being small, compact, and portable, our product doubles as its own notication service, alerting you when a laundry cycle has been completed. Some other strengths of our product include having an audible alert tone and colorful LEDs. Aside from the possibility of being misplaced or stolen the strengths of our product seem to far outweigh its weaknesses. Our product provides real-time notication without the need to purchase new, expensive, washers and dryers with builtin, notication features via email or smartphones that seem to be very unstable. Our product is dierentiated from our competitors as being a cheaper alternative with less of a learning curve. Our product is plug and play and this is what makes us dierent from our competitors. As an aftermarket add on our product is very versatile. Unlike our competitors Laundrasist can be used on multi platform basis, instead of being part of a xed machine or system. Laundrasist considers the top four companies in the washer and dryer industry: General Electric Company, Whirlpool Corporation, AB Electrolux and LG Electronics; as well as service companies like full-service Laundromats and dry cleaners to play part in the list of Laundrasists competition. Whirlpool Corporation is the worlds largest manufacturer and marketer of major home appliances with about $18.1 billion in net sales, holding the majority stake in the market with 40.9%. Coming in second is Sweden based AB Electrolux. AB Electrolux holds 23.8% of the market and is one of worlds largest suppliers of major household appliances, selling more than 40 million products to customers in 150 dierent countries. Coming in third is one of the largest and most diversied industrial corporations in the world, The General Electric Company which holds 19.7% of the market share. Last, but not least, is the holder of 7.4% of the market share, South-Korea based LG Electronics. In 2004, the company began focusing on providing home appliances in the United States, and by 2008, LG was ranked highest in customer satisfaction in washing machines in the J.D. Power and Associates 2008 Laundry Appliances Study. Laundrasist will try and attract business away from aftermarket retailers of washer and dryer supplies along with dry-cleaners. From the year 2000 to 2013, there has been a decline in the use of dry-cleaners.(see Fig. 1a) Revenue from the dry-cleaning industry has dropped by $6,027.7 Million. Laundrasists goal is to hopefully capture a piece of that pie. As well as Dry-Cleaners, The Laundromats industry is in the decline stage of its industry life cycle. Indicators of this stage are: decreasing protability, fewer companies and establishments, declining employment and decreasing industry value added. Industry value added, which measures the industrys contribution to GDP, is projected to decline at an average annual Page 11 of 23

ENGR 425 (Macy): Laundrasist rate of 2.5% over the 10 years to 2018. (See Fig. 1b)

Along with companies in the aftermarket laundry business, other companies that will try to jump in and steal our market segment will be those like Samsung, with their WF457 washer and dryer. Samsungs WF457 is controlled by an 8 inch touchscreen and is compatible over WiFi via an app available for most smartphones and tablets. Our target market is very large. Spanning over 115 Million multi-level households. Our market is to be shared with the Laundromat and dry cleaning businesses. Below you will see the market segmentation for both businesses along with accompanying statistics. Customers purchases are motivated by many dierent factors. The rst step, and most important factor playing into consumers purchasing decisions, starts with need recognition. Once a Page 12 of 23

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consumer realizes they have a need the next thing that they conduct is an information search. The consumer conducts both and internal and external information search, analyzing dierent sources taking into account all the dierent benets, risks or consequences associated with making the purchase. The next step where our product basically stands alone is in the alternative evaluation step. Since our product is in a league of its own, it makes it easier for the consumer to make a purchase because there are virtually no comparable products. After all these decisions have been made the customer will decide whether or not he/she will buy the product. The fact that Demand for washers and dryers is directly tied to the number of new households formed each year is a huge positive for Laundrasist.

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ENGR 425 (Macy): Laundrasist Although the washer and dryer industry has high barriers to entry we believe that the aftermarket industry for washers and dryers has much lower barriers. With Laundromats and Dry Cleaners on the decline (See Fig 2a.) Laundrasist will penetrate the market by lling a direct void in the industry. People are always looking for new ways to be more ecient and get the most out of their 24hours in the day and our product is able to help them do, just that.

Some additional information we would like to know about our customers and our market would be things like market tends and consumer spending patterns. Along with that information we believe our business would benet from knowing what our customers already know and expect about our product as well as their post-purchase thoughts.

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Founding Team
The founding team of our company, Laundrasist, consists of four current Penn State students. Each member of the team researched dierent business aspects and options to choose what to implement into the company. Although work is evenly distributed, and ideas often coincide, the project manager, Joe Marcus, holds authority on nal decisions after the team has given input and brainstormed together. Every team member has business knowledge and background; brief experience and expertise can be seen as follows: Joe Marcus - Senior, Energy Engineering. Previous experience as an Aquatics Supervisor at the South Brunswick Family YMCA where he was directly responsible for record high enrollment in aquatics classes. Also, he is currently the president of the Engineering Leadership Society at Penn State University where he runs logistics for the organization and oversees all spending to balance budgets. Kevin Cook - Junior, Marketing. Previous experience as a marketing and risk management intern with the Consolidated Rail Corporation. Kevin has also worked as an operations and distributions supervisor with DMI Sports while also heading a marketing eort throughout Pennsylvania, New Jersey, Delaware, and Maryland. Justin Fincher - Junior, Management. Previous experience as an operations intern with PNC. Worked with Dawood associates as an oce intern, and is procient in communicative and comprehension skills. Dylan Ventura - Junior, Supply Chain Management. Previous experience in product dispatch and transportation, as well as eective communication of delivery times. Dylan has worked as a shop manager at a roong company, making products and managing inventory while being responsible for sales and customer service. (Resume in appendix) Together our team brings a wide range of business knowledge to the table. We have expertise in almost all areas necessary to run a business. Justins management skills are very useful for day-to-day operations and managing, while Dylans understanding of the supply chain provides insight into the strategic and tactical planning it takes to operate a business. With a background in marketing, Kevin knows how to reach the target market, and draw attention to our product, resulting in sales. Not only does each member possess their own unique attributes and experiences Page 15 of 23

ENGR 425 (Macy): Laundrasist to bring to the business, but we all share the common goal, to produce a reliable product that will help to make the lives of our customers more easy. Laundrasist is run as a partnership between the four founding members, however Joe Marcus will hold a 30% stake in the company with the remaining 70% divided evenly among the other three. We have chosen to divide the company this way because Joe will have a greater investment of time, money, and responsibility. Our overall strategy is to gain a large enough number of customers to catch the attention of competitors and potential buyers. Since we have deemed the company not feasible, an exit strategy is not necessary. However, in a scenario where the idea would be feasible, we believe that selling the company for a prot, after approximately ve years, would be the ideal exit strategy.

Sales Strategy
The Laundrasists value to the consumer is apparent on many dierent levels. One of the main focuses of the product is to address the need to be ecient in the home. The hassle of ironing clothes and the inconvenience of having to stay near the laundry machine can all be alleviated by this innovative product. The Laundrasist also lets the user move the machine out of living quarters and away from areas where noise may be a problem. Eciency is one of the most important concepts in the household today and has led to many innovations such as the Tide Pods, and the extended spin cycle so clothes will not have to be ironed afterwards. This product addresses the needs of the homemaker of the household. The homemaker of the household is dened as the person who manages the household and all the activities that occur within a family. These homemakers are mostly women, who are parents and are approximately between the ages of 25 to 40. The location of our market is within the United States in single family or multi-family houses. This product is in line with accessories that improve the eciency of washing clothes such as dryer sheets, soap, detergent, fabric softener, and attachable scent products within the dryer, and would tend to fall into line with how they would target their customers. Most of these products tend to be bought at grocery stores, or convenience stores such as Wal-Mart, CVS, Walgreens, and Rite-Aid around the United States. (Proctor & Gamble) It is important to have an appropriate outreach to you customers, so that one can truly meet their needs. (Johnson & Johnson) We will be collecting the dierent parts from our dierent suppliers of plastic molds, small

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Table 1: Fixed and Variable Expenses Variable Expenses Fixed Expenses Cost of materials Rent/ insurance on manufacturing site Shipping cost Rent/ insurance on warehouse Hourly wages of part time employees Insurance on Inventory Packaging supplies Payments of loans Transportation cost Salaries of management

receiver, and speaker, and wiring, and then manufacturing the products at one central manufacturing site. After the product is manufactured we would deliver it, by truck, to our distributors who would then further distribute the product to our consumers. We would also have a very small oce attached to the warehouse were management and a sales team would work on maintaining good relations with suppliers and our distributors, as well as making any other sales that we could incur. The sales strategy must also take in to account the variable and xed expenses. These are important because as the demand for our product rises the variable expenses will get larger, either directly or indirectly, and the xed expenses will most likely remain constant. Our product will be seen through many dierent commercial and television ads. During a period that happens once every year we will play our alternate commercial that would display a promotional ad that discounts the product with a coupon that could be found in the various stores section of the Sunday newspaper. The coupon will let the customer get 5 dollars o the purchase of the item. This price cut will be incurred by our company and our suppliers would not share a cost of this discount. The second promotion that will oer will be a 5 dollar mail in rebate that is printed on a piece of paper inside the packaging of the product. This cost will also be directly incurred by our company and not the distributor of the product. The commercial would be played mostly during the day-time to reach our target market. Marketing during the day time would also save us from having to pay for a prime-time slot on television. During these commercials there will be an available at message that will not only tell our customer where to go to get the product, but will also bring more customers to these stores and would be mutually benecial for both parties. We hope through our market analysis that our product will we wanted by the customer enough that we then could receive a discount on the price of putting our product on the shelves. Our pricing structure will be a low entry price system and will remain constant throughout the time our product is found on the shelves. The price that our product will remain at is $35. This will

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ENGR 425 (Macy): Laundrasist attract the shopper who is price sensitive, yet still wants to be ecient in the home. Compared to most of the companies in our industry we feel that it is an innovative product that doesnt have the typical price range or benchmarks that most products in this industry consist of. Our rst benchmark that we have set is to be able to reach the distributors that we feel meet the target market and who can sell our product, and have the distributors want our product. A second benchmark would be to have over $850,000.00 in revenue by the end of year two and have revenues over $2 million by the end of the 3rd year

Financial Plan
Laundrasist will be sold to customers at a price of $35.00 per unit. We expect to sell 10,000 units in our rst year of sales. From then on we expect our sales in increase exponentially by 1.05 per year totaling 72,782 units in the 5th year of sales. We project it will cost us $20.00 per unit in the rst year to produce through a subcontractor. We expect the price to drop down to $18.00 per unit by year 5 as we will have substantially larger orders for them which in turn will increase their revenue and keep our business by lowering our cost of production. Table 2: Five Year Projected Income Statements Year 1 2 3 4 5 Expected Revenue $350,000 $554,713 $899,639 $1,494,748 $2,547,376 Variable Costs $214,000 $339,167 $524,361 $849,871 $1,411,974 Fixed Costs $26,000 $90,500 $111,250 $141,375 $185,563 EBIT $(169,167) $(387,623) $(483,572) $(527,854) $(365,172) Prot and Loss $(169,167) $(447,623) $(531,572) $(572,854) $(379,172)

We estimate that we will need $250,000 to start our business. $50,000 of which will come out of pocket and the additional $200,000 we predict will come from an angel investor who believes in the product as strongly as we do. The reason why we need so much money to start-up our business is because we will need to get FCC clearance along with production, marketing, and distribution costs to make our product known and easily accessible for the customer. As seen in the graph above, this business is not projected to break even within the rst ve years of operation. This does not prove to be attractive numbers to proceed with the company and produce the product. To make the numbers more attractive well have to sell a much higher volume of product and have them produced at a much lower cost increase prot margin. Other Page 18 of 23

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Table 3: First Year Cash Flow By Month

Figure 3: Break Even Revenue vs. Actual Revenue

information that would be helpful in doing the nancial projections would be estimates on the cost and timeline to acquire FCC clearance for the product. Also we were unable to nd a price estimate for independent market research to prove that there is indeed a market for this product which would be vital in securing an angel investor.

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Feasibility Decision
This business venture turns out to not be feasible. Some changes that need to be made in order to make the business feasible are:

Cheaper production costs. Higher sales volume. Technology development to create the product. Patents and a strong lawyer team to prevent being bullied out of the market by major appliance companies. Also we would need to wait for the economy to nish its recovery so the market has more disposable income to spend on luxury products such as ours. We would need a strong marketing campaign to push the product and make customers want this product more than they want other frivolous potential purchases.

Business Strengths
Some of the strengths of our business include our passion in the product. We believe this product will improve the lives of the customers by helping them manage their daily household tasks. Another strength of the business is the imagination and innovation of the founding team. We were able to see a aw in an existing market and think around these aws to design a product that functions more eciently for the customer.

Business Weaknesses
A major weakness of our business is that none of the founding members have any experience with mechanical or electrical engineering to personally make the prototype. This means we will have to contract with a prototyping engineering company which will likely prove to be costly. Also this would make acquiring a patent dicult as to we were not the ones to actually build the product. Another weakness is lack of start-up capitol. As college students our personal funds are not as large as we need them to be in order to get the business o the ground. We lack experience in

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ENGR 425 (Macy): Laundrasist a business start up making it easy to be taken advantage of by production and/or distribution companies. Finally we lack the market research to prove this will be a successful product when it hits the market.

Bibliography
Industry Reports. Market Research Reports. N.p., n.d. Web. 29 Nov. 2013. Wallace, Brian. 2013 Industry Survey. Coin Laundry Association. N.p., n.d. Web. 29 Nov. 2013. Your 1 Source for Business Information. Business Information, News, and Reports. Gale Group Inc., n.d. Web. 26 Nov. 2013. Harvard Business Review Magazine, Articles, Blogs, Case Studies, Books - Harvard Business Review. Harvard Business Review Magazine, Articles, Blogs, Case Studies, Books - Harvard Business Review. N.p., n.d. Web. 29 Nov. 2013. Procter Gamble. PG.com Company: Leadership Qualities, Common Purpose, Best Brands. PG, 1 Apr. 2001. Web. 01 Dec. 2013. Johnson Johnson Family of Companies. Rep. Johnson Johnson, 1 Jan. 2013. Web. 1 Dec. 2013. BestOfMediaTeam. The Best of CES: Samsung WF457 Washer and Dryer. Toms Guide. Computing.net, 11 Jan. 2012. Web. 12 Dec. 2013. Kelly, Doug. IBISWorld Industry Report 33522 Major Household Appliance Manufacturing in the US. ISBIS World. ISBIS World, July 2013. Web. 12 Dec. 2013. Moldvay, Caitlin. IBISWorld Industry Report 81231 Laundromats in the US. ISBIS World. ISBIS World, Apr. 2013. Web. 12 Dec. 2013. SAMSUNG Smart Washer/Dryer - Android Apps on Google Play. SAMSUNG Smart Washer/Dryer - Android Apps on Google Play. Google, 4 Nov. 2013. Web. 12 Dec. 2013. Smith, Gavin. Washer Dryer Manufacturing in the US Industry Market Research Report Now Available from IBISWorld. PRWeb. IBIS World, 20 June 2013. Web. 12 Dec. 2013. Washer Dryer Manufacturing in the US: Market Research Report. Washer Dryer Manufacturing in the US Market Research. ISBIS World, June 2013. Web. 12 Dec. 2013. Page 21 of 23

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Appendix
Financials

Figure 4: Unit Sales by Year

Figure 5: Business Costs by Year

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Financials

ENGR 425 (Macy): Laundrasist

Figure 6: Net Earnings by Year

Figure 7: Percent of Revenue Spent by Year

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