Section 6

Team 6

Fall 2021

Business Plan

Business Name: Bluewater Electric LLC.

Business Idea: Flood Detection Technology

Team Members:

Josh Bowers _Josh Bowers_____________________ bowersjd@dukes.jmu.edu

Josh Clawson _Josh Clawson ____________________ clawsojt@dukes.jmu.edu

Kieran McCreight _Kieran McCreight_________________ mccreiks@dukes.jmu.edu

Liza Fox _Liza Fox_________________________ fox2la@dukes.jmu.edu

Quioneé French _Quioneé French___________________ frenchqk@dukes.jmu.edu

Rachel Schweitzer _Rachel Schweitzer_________________ schwe3rc@dukes.jmu.edu

Tyler Woody _Tyler Woody______________________ woodytr@dukes.jmu.edu

 Executive Summary
Bluewater Electric LLC.
Team 6, Section 6
Address: 5801-5821 N Andrews Way, Fort Lauderdale, FL
33309 Phone: (754) 734-2255
E-mail: bluewaterelectric@gmail.com
Business Description: The Flood Detection
Management: Hardware is a floor mounted device that, in the
Titles: event of a flood, whether from internal water
Chief Executive Officer, Director of Shipping sources or external (weather), will cut off the
and Warehouses, Director of Production, electricity in the room.
Office Manager, Senior Sales Representative Product: Our product has a water sensor that
detects water. The device sends an electrical
Industry: Switchgear and Switchboard current to the breaker and overloads the circuit,
consequently turning off the electricity in the room.
Apparatus Our first-year projected sales bring in $178,000,
increasing by $189,000 in the second year, and
Number of Employees: skyrocketing in years 3, 4, and 5 to 2 million, 4
Years 1-2: 11 total employees million, and 8.8 million dollars respectively.
Years 3: 15 total employees Competitive Advantage: The technology used for
Years 4: 16 total employees the device is mostly sold at a commercial level for
Year 5: 19 total employees higher prices with a focus on warehouse protection,
not homeowners. The autonomy of the device in
Amount of Financing Sought: turning off the electricity also differentiates our
$2,500,000 technology, making it a push marketed product.
Additionally, our patent on the printed circuit board
Founder’s Equity - $350,000 (14%) designed to automatically turn off electricity
Equity - $1,150,000 (46%) creates an industry barrier to entry.
Debt - $1,000,000 (40%) Markets: Our target markets for the first 2 years
are focused on business to consumers, consisting of
Investment Sources: homeowners ages 25-54. In the third year we will
Founder’s Equity - $350,000 expand our target market to businesses (retail stores
Equity - $1,150,000 and restaurants). Our first market is Young
Debt - $1,000,000 Digerati, consisting of 1.8 million households with
a growth rate of 4% over 5 years. Networked
Use of Funds: Product Development, Neighbors consists of 1.2 million households with a
Marketing, Lease of Warehouse, Salaries, growth rate of 2%, and our metropolitan
retail/restaurant segment consists of 2 million
Product/service selling price: $59.99 businesses with a 2% growth rate. In the first year,
our variable cost of one unit is $16.38 and we are
outsourcing plugs, circuit boards, and water
sensors.

Distribution Channels: Our Flood Detection Devices will primarily be sold through a website, and in the third year we will
have a retail channel through Amazon. When we expand to business-to-business markets, we will add a salesperson to deal
directly with companies but still sell through our website and Amazon.
Competition: Although there are flood alarm devices available in the market, our flood detection device serves as a
superior safety device for residences. Our product incorporates an electricity shut-off feature which is new technology to the
market and gives our product a competitive advantage.

Financial Projections (Unaudited):

2022 2023 2024 2025 2026

Revenue: $178,170 $367,139 $2,201,242 $4,070,043 $8,868,313

EBIT: ($546,003) ($408,589) $790,305 $2,099,989 $5,665,422

1
 Narrative

Elevator Pitch: According to the Federal Emergency Management Agency “floods are the

most common natural disaster in the United States” (FEMA, 2021), and one of the largest

causes of death and injury during a flood comes from electrocution. At Bluewater Electric,

our mission is to reduce the risk of electrocution during a flood with an affordable, easy to

use product. Competitive products are mostly flood alert systems, which use different

means of informing the user of a flood. Our product is unique as it takes the burden away

from the user by automatically turning off electricity. This technology reduces the risk of

electrocution and eliminates the possibility of human error.

Product Description: Flood Detection Blackout provides customers the feeling of security

for themselves and their families by shutting off electric currents in the event of excess

water in the home. When water comes in contact with the floor mounted electronic sensor,

our product will then overload the breaker and autonomously cut the power in that room.

This prevents the hazard of electrified water in residences or businesses, which could

prevent death and injury. The small size of the product is sleek and nonintrusive as it is 4 by

4 by 2 inches, the weight is 2 pounds, and it is powered by plugging it into a wall outlet.

Competitive Advantage: Our product provides a unique take on flood detection sensors by

focusing on a different aspect of consumer safety. Flood Detection Blackout, without need of

human interaction, shuts off the power in a flooded room. Competitors’ products merely

alert users of the problem, but do not take critical action to prevent injuries. With the

increasing problem of climate change flooding is becoming a more prevalent issue,

expanding the demand for our product worldwide. On average, Our flood detection

technology is difficult to replicate as it is a foreign concept to the market, and we plan to

patent the circuit board technology designed to shut off electricity to a room.

Value Proposition: The established need for personal and property safety in the event of a

flood ensures a significant consumer base and profits. Our product will reduce the cost of

2
homeowners insurance by preventing one of the largest threats to personal safety, being

injury from hazardous weather conditions brought inside the home. For businesses, it will

reduce liability insurance by implementing greater safety measures for patrons, contributing

to long-term marginal increases in profit. According to extensive research, we plan to have

a return on equity in year 5 of 177.83% with disbursements of $3,000,000 making

Bluewater Electric a profitable long-term for business investors. Concerning business

flexibility, our manufacturing facility is equipped for unexpected fluctuations in demand.

Business Strategy: The Bluewater Electric business strategy is based on technological

differentiation from other flood detection products. Our focus is on creating a user friendly

product that offers unique electricity cutting technology for homeowners.

Business Location: Bluewater Electric will be based in Ft. Lauderdale, Florida. We will be

based in this location because we are close to major flooding areas in the U.S (U.S Natural

Disasters). with plenty of manufacturing infrastructure in Florida to ship to these areas in

the Gulf of Mexico and along the east coast. The area is also very attractive to workers, with

many great tourism spots and large cities nearby. Florida also has no state income taxes

which we hope will also attract quality workers to our company.

Outsourced Functions: Bluewater Electric is outsourcing the basic manufacturing of the

circuit board, sensor, and plugs. This allows our company to save valuable time and money

in parts we do not specialize in. Thus, will save over $100,000 in specialized labor, faster

lead times, raw materials, and additional equipment. We have also outsourced our shipping

to UPS to provide the most efficient shipping possible to our U.S. customers.

Financial Performance: Bluewater Electric compensates for sunk costs and beginning

financials in the first two years. Then, in the third year we begin to exhibit positive profit

margins. By year five, Bluewater holds return on equity of 177.83%, net profit margin of

36.36% and an inventory turnover that is 286.96% higher than industry average

(BizMiner). Overall, Bluewater Electric is a financially stable and profitable entity, able to

generate a $3.13 million net income in year five alone.

3
 Exhibit 1: Organizational Chart

Organizational Chart Notes: There are no changes to staffing in year one or year two as critical employees are already
secured, and our manufacturing capacity (187,200 units/year) far exceeds our production requirements (6,120 in year two)

Timeline Team 6 Section 6

Dec 3 | Finalize business plan for Flood Detection Technology
Dec 3 | Secure key leadership (President, top manager, accountant, HR, etc.) for our company
Dec 17 | Apply for federal ID number (EIN)
Dec 22 | Apply for Federal business license and any other state/local certifications we may need
Dec 28 | Secure an office and manufacturing facility
Jan 3 (Day 0) | Open bank account, deposit funding, start books
Jan 4 | Begin hiring management
Jan 7 | Purchase major machinery or equipment
Jan 10 | Make facility improvements (office, service space, factory, warehouse, etc.)
Jan 13 | Build production line
March 7 | Bring Supervisors/Management on board
March 11 | Develop marketing/sales plan
June 15 | Begin marketing promotion
June 17 | Hire employees
June 20 | Provide employee orientation
June 21 | Train employees
July 6 | Kick off shipping, handling, and monitoring installation. (Practice runs, soft opening, public relations, key customer
events, etc.)
July 25| Fill orders and take survey

Secure People and Training: Bluewater Electric will hire skilled and unskilled workers and put them through a training and
onboarding process for manufacturing. We plan to hire young college graduates for our sales positions and our website and
technology management positions. For web design, our interview process will include necessary portfolios and we will ask for a
sample web design for our company. Upper management and field experts will design training programs they see fit and adjust
them accordingly to personality and operations. In seeking management, we will look for experienced workers who do not need
extensive training, have held similar previous positions, and manage people well. We will have high employee retention due to
growth opportunities within the firm and a solid structure of benefits.

Critical Employees: We have 3 critical employees for our operation to be efficient: Director of Shipping and Warehouses,
Director of Production, and Office Manager. The Director of Shipping and Warehouses oversees our inventories, shipping
facility, and ensuring the safety of the storage space. Our Director of Production ensures we meet quota for a day’s work and is
the direct supervisor/servant leader of our storage pickers and our manufacturing employees. The Office Manager keeps track of
the books and handles human resource issues while being the supervisor for the Website Admin and our Customer Support
Representatives.

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Exhibit 2: Employee Pay and Benefits

5
 Exhibit 3: Target Market Selection
Segment Growth
Segment Name Description
Size Projection
Mid to high wealth neighborhoods at high flood risk or at
High Tide Flood risk in suburban areas. People who own
homes and mostly have children so they have reason to
1-2% growth protect them from accidental electrocution during floods.
Networked 1.2
rate over the They are spread out all over the US. Their spending
Neighbors million
next 5 years habits are trendy. and they are in the age range of 35-54
(Claritas). They are mostly educated and very successful
and their purchases reflect it. They frequent Facebook,
Instagram, Twitter, and Fantasy sports websites and apps.
These are businesses mostly in metropolitan areas with
interest in providing a good or a service while keeping
processing costs low for maximum profits. They make
strategic decisions that will benefit their business in the
long run as well as serve their customers' needs. Relating
Metropolitan 2% Growth
to purchasing habits, it is typical to purchase in bulk or to
Retail/Restaurant 2 million over the next
purchase specialty items more specific to customers'
Businesses 5 years
wants. There is substantial interest in the safety of served
customers and inventory. There are also requirements for
business safety regulations. Businesses use websites to
communicate with consumers, as well as in-person
contact as in trade shows.
Mostly metropolitan areas where there are less places for
the water to travel (therefore more flooding occurs and is
more likely to cause damage). They are homeowners
mostly with children and their ages range from around 25
to the upper 30s (Claritas). They are spread across the US
4% growth
1.8 in all of the major cities, with large grouping mainly in
Young Digerati over the next
million southern California and the Northeast region of America.
5 years
Their spending habits include typically higher branded
restaurants and merchandise. They are educated people
making purchases using recommendation websites. They
often use Facebook, Instagram, YouTube, Twitter, and
Yelp as their main media sources..
6
Priority level
Justification for Targeting
for targeting
Networked Neighbors is a substantial target market as they have money to
spend and a lot to protect. They want to protect their children and themselves
from electrocution, as well as their belongings from the harm of flood
damage. Flood Detection Blackout also has the potential to save consumers
considerable money on insurance expenses. This segment strategically fits
our current marketing strategy, and serves as a favorable jumpstart for
2
manufacturing in the second year. This market is also a good size and has a
decent growth rate. Our advertising expenses will increase, but this segment
will be within our marketing range. We target this segment in year 2 because
we will still be establishing our product with households and refining the
production process before we graduate to massive economies of scale in
adding businesses.
While this segment does not fit our previous trend of business to consumers,
this segment will be equally as marketable due to business interest in
increasing the safety of consumers and decreasing the liability expense on
the business industry. The Flood Detection Blackout will save businesses
money marginally, eliminating the cost spent on this product through the
savings on insurance expenses. This is a market that will continue to grow
3
and will remain a positive investment. The cost to reach this market will be
high, but once we penetrate their market, we will become a trend among
business owners. This segment also potentially has the most to lose as the
safety of consumers is vital to business success. They have capital for
funding and this gadget could potentially save them money on lost inventory
and equipment damage.
This is Bluewater Electric's priority target market as they have a high
volume of households as well as the fastest growth rate compared to similar
segments. This segment will also age out to our second segment, making this
product a staple in their everyday lives. Thus, consumers in this market will
become recurring customers and long term relationships will form. The
Young Digerati segment also frequents social media trends and sites,
1 therefore the cost of marketing and advertising will not be monumental in
our first year. This segment comprises homeowners looking to protect their
home and family (Claritas). They also tend to use recommendations from
outside sources, and thus with increased community emphasis on safety
suggestions, they will be looking for safety emphasis in their homes. Being
younger, this segment is also technologically savvy and will be interested in
technology to provide service and safety in the home.
 Exhibit 4: Market Quantification

Total Market Annual

Annual Unit W/Sale Annual $
Year Potential (No. of Market Share** purchase
Sales Price† Revenue
Customers)* amount***

2022 1,800,000.00 0.33% 0.50 2,970 59.99 178,170.30

2023 3,060,000.00 0.40% 0.50 6,120 59.99 367,138.80
2024 5,061,200.00 1.50% 0.50 37,959 57.99 2,201,242.41
2025 5,101,200.00 2.80% 0.50 71,417 56.99 4,070,043.43
2026 5,102,024.00 6.10% 0.50 155,612 56.99 8,868,312.61
Assumptions used to calculate total market potential: We calculated market potential throughout 3 target markets and their
projected growth. In the first year, we are targeting our "Young Digerati '' segment which are homeowners from ages 25-35 with
children living in mostly metropolitan areas with a growth rate of .02%. In our second year, we added another consumer market called
the "Networked Neighbors". This segment is currently made up of 1.2 million households from the ages of 35-54 residing in mostly
suburban areas. Lastly, in year 3, we added in our metropolitain restaurant and retail segment which adds another 2 million to our
market potential with a growth rate of .02%.

Assumptions used to identify the market share: To calculate our market share, we surveyed potential customers across the US to
measure their interest in purchasing Flood Detection Blackout. We found there is demand for the product in the marketplace. Our
survey resulted in a market share of .0033 percent regarding consumers who would absolutely purchase our product. We then took a
percent of those who said they would most likely try our product increasing our market share to .061. We included these customers
because with the right marketing tactics and word of mouth, consumers are likely to buy our product based on their target market
characteristics. This is due to the fact that they rely heavily on recommendations such as yelp and review sections. This factor would
turn a percentage of our “most likely to buy” to “absolutely will buy”.
Assumptions used to identify the annual purchase amount: Because our product is an in-home fixture, customers do not need to
buy this item very frequently. As a safety device, our product is meant to ease consumers' minds relating to electric issues regarding
flooding, hence the point in buying our product. Customers would only have to purchase a couple new devices (to account for
mounting the flood detection device in multiple rooms) every 5 years. Therefore our annual purchase amount is calculated as follows:

Break Even Analysis:

Average Total Fixed Unit Variable

Year BEP in Units
Price Costs Cost

2022 $59.99 $738,772.00 $16.38 16940

2023 $59.99 $770,549.00 $14.38 16894
2024 $57.99 $993,628.00 $13.02 22095
2025 $56.99 $1,239,323.00 $11.17 27048
2026 $56.99 $1,598,719.00 $10.53 34411

Break Even Analysis Justification:

In the first two years of production, we are solely marketing to consumers, later adding businesses to our marketing plan in the
third year (specifically retail and restaurants). This explains the increase in sales and the drastic changes in costs as well as the
jump in our breakeven number in year three. Due to using a skimming price strategy, the price of our product will begin to
decrease in year three as other technology may enter the market.

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 Exhibit 5: Positioning and Competitive Analysis

After conducting research, each competing product type has moderate-to-high Ease of Use and Safety. However,
none of them are rated 7/7 in each category, providing a hole in the market for our product. In addition, none of
these competitors have the ability to prevent electrocution in a flooded room, furthering the gap in the marketplace.
We will be competitive in reliability, safety, and ease of use (quadrant 1). We also differentiate ourselves by offering
the electricity shut-off that no product on the market currently features. This technology uses a safety feature that is
present on all breaker boxes wherein if the box receives amperage that exceeds 25 amps, it automatically cuts
electricity to the room from which it received the electricity. Our business purchases a patent in 2022 as a means to
protect our innovative technology and maintain this competitive advantage.

Due to the wide variety of different flood detection products, we classified them into three different categories for
our perceptual maps: Flood alarms, flood alert apps and automatic water shutoffs. We believed that these are the
three most prominent types of flood products. The attributes we chose to survey consumers on included reliability,
ease of use, and perceived safety the product provides. Although other attributes apply, like price, a home safety
product like ours considers these three attributes the most relative. Electrocution during floods is a serious risk, and
consumers will be more concerned with how reliable, simple, and effective the product is.

As can be seen in the maps, consumers rate flood alarms, flood alert apps, and automatic water shutoffs high in all
three attributes. While this does pose a threat to our production, the new technology that we are introducing into the
market sets us apart from the other three product categories, providing a competitive advantage. However, other
product categories are already established in the market, causing a weakness for our business. Our opportunity lies
in the new electricity technology that our product offers, as well as the application it has to both residential houses
and business buildings. Additionally, due to different rooms being on different circuits, many consumers will buy
multiple of our devices in order to provide protection in different rooms of their house/building.

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 Exhibit 6: Marketing Mix

Product/Service Branding: Bluewater Electric plans to create our branding value through packaging, product name, and a prestige
impression, along with our logo and slogan. The strategy of our marketing is to create a sense of reliability and high quality at a lower
price than our competitors. We will create a prestige impression through our packaging and product name, called "Flood Detection:
Blackout Edition. This is accompanied by sleek black and gold package design to display a sign of wealth and luxury. Our logo entails a
gold and black lightbulb with a lightning bolt striking through it. Lightning is often seen as a sign of power and an electrical weapon of
the skies. The bolt of lightning inside of the lightbulb represents how we have managed to capture this weapon of the skies and utilize it
in our products. This lightbulb is accompanied by our company name, and a futuristic font and outline, to embody the fact that our
company is striding into future years and constructing the future of innovation in the flood detection industry. Our slogan is "Electrical
Protection For The People '', which is meant to show that we stand with
the customer, and are a reliable source of flood detection technology for
all customers alike. The intention is to build a relationship with
customers where the product can be recognized as dependable and
exceptional for its price point.

Pricing: Our price point was estimated between a cross of surveying potential customers on what price point they would be willing to pay
for the product with our own estimation of what we believe consumers would be willing to pay. Bluewater electric will use a skimming
strategy, where we lead with a higher price point with less direct competition in the market. As more direct competitors enter the
product's market and the variable costs become increasingly cheaper, we are slightly lowering the price. We also want to keep our price
low in the belief that many of our customers may want to purchase multiple of our products, and a lower price will allow them to do so.
Our branding and product reliability will also more than justify our retail price.

Distribution/Location Strategy: The location of Bluewater Electric will be based in the heart of Ft. Lauderdale, Florida. Bluewater will be
based in Ft. Lauderdale because the city is close to some of the higher flooding locations in the United States. Being located on the coast
of Florida will allow us to ship to close areas within heavy flooding such as locations near the Gulf of Mexico and all along heavy
flooding areas on the East Coast. Florida is also a heavy populated state with lots of manufacturing and shipping infrastructure to help
our starting small business. Ft. Lauderdale is also a very attractive location for employees to work in. Florida is a heavy populated state
with great tourism and vacation spots and many big cities nearby to visit. Florida also has no state income tax which we believe will be
an attractive feature to employees. There are even plenty of great colleges in Florida where we can hire talented employees at a cheaper
starting price. Our distribution strategy is largely based upon the fact we will be primarily selling our product online. In the beginning
years of our company we will sell exclusively on our website and through Amazon. This will allow us to focus most of our marketing
through online channels which is the future of marketing. Our product will be distributed through partnerships with UPS and Amazon,
who have great infrastructure to ship our product fast and efficiently at reasonable prices for the company. We are also researching using
contractors as a way to further integrate our product into the market and spread it to newer customers.

Promotional Strategy: Campaign #1 is our biggest campaign every year in business. In our first year in business we have attributed 50%
of our advertising to the social media platforms of Instagram and Facebook. The company will do this to reach our primary target market
of ages 25-35 years old. This is because in the year of 2021 Facebook has reported 86% of people ages 18-29 and 77% of people ages
30-49 uses Facebook, while Instagram has reported 67% of people ages 18-29 and 47% of people 30-49 use Instagram (Khoros, The
2021 Social Media Demographics Guide, 2021). In our first year, all of our campaign #2 money will go towards Search Engine
Optimization on Google and Amazon, because this will lead more consumers to our website and Amazon page, which are our primary
sales locations. Our third campaign the first year will go towards marketing at professional electronics events, because this will help
electronics customers see us as a more reputable brand and help to get our name out in the industry. Our Campaign #1 every year will go
towards social media marketing because we believe it is the cheapest and most efficient way to reach our young to middle-aged target
market. Furthermore, we will create a short YouTube video marketing campaign to reach our audience because 71% of people aged
26-35 use YouTube per their own numbers. Other marketing campaigns we have lined-up include marketing through websites online that
sell electronics and appliances, and an informational campaign to show the dangers of electrical appliances in flooded homes.

Compensation Method: $50,000 Salary

+ 5% Commission (Up to $5,000)
Number of Sales People Per Year:
2/2/3/4/4

Our sales management plan is impacted

heavily by the idea that we will be
selling our product only online, which
allows for the company to not have too many salespeople on payroll. Our Senior Sales Representative will be brought in on a higher
salary because of his prior experience and reliable sales record in the field and will also take on some aspects of marketing. We will also
begin with a Business-to-Consumer sales representative who will travel from home-to-home to prospective customers to pitch our
product and try to bring in newer customers. This position will also be trained in how the product works and can even assist in proper
set-up of the device if necessary. We will go on to add one more Business-to-Consumer sales representative in our first five years
because most of our target market consists of households. In the third year of the company, we will add a Business-to-Business sales
representative to sell our product to local businesses, which make up over a third of the target market the company is reaching

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 Exhibit 7: Process Map

For each major quality step:

Quality Step What is measured? How often? How will you ensure quality?

Q1 Proportion of materials/parts Every 5% of By only allowing quality parts/materials to be used, and by

that do not meet shape, size, yearly output discussing possible changes/improvements with suppliers
or durability when proportion of defects is higher than allowed.

Q2 N/A Training/testing By training injection molding employees to be more skilled at

every 2 years using the molding machine, thenn leading to less defects in
the shape & size of polypropylene shells.

Q3 Proportion of Finished Every 5% of By Inspecting large groups of finished goods to find an

products that are not close
enough to desired shape,
durability, size, or reliability
For each critical resource:
Critical Resource Brief Description
yearly output average proportion of defects in total inventory. When defects
are found, they are removed. If the proportion of defects
breaks the limit, the process will be evaluated & improved.
Unit Cost (in appropriate unit) How many?

CR1 Polypropylene Injection Molding Machine $29,995 One (1)

CR2 Product Assembly Robotics $23,000 One (1)

CR3 Product Packing Robotics $23,000 One (1)

Briefly describe your main facility - provide information about layout and dimensions.
The facility is 25,000 square feet, with 17,000 square feet reserved for inventory holding, 2,500 for inventory receiving, 2,300
for product assembly, and 3,200 for break rooms, offices, and meeting areas.

10
 Operations Exhibit 8: Quality Assurance
Indicate the Why is this dimension important, given your industry Identify the Quality
Dimensions of & target market? Step(s) on the Process
Quality on which Flowchart / Service
you will focus. Blueprint to which this
corresponds.

Reliability As the flood detection hardware is a product designed for Q1

safety, it is imperative that the device does not require
repairs often. This will be done by examining the sourced
materials for quality.

Durability Given our industry it is important that the hardware CR2

functions properly over a long period of time without need
for repair or replacement. This will be done by assembling
the parts into the finished product accurately.

Performance Given the industry and target market, it is important the Q3

product performs how it is advertised. This will be done
by testing the finished product for functionality.

Use the space below to describe any additional Proactive Quality Assurance Plans that are not connected to a
specific activity on your Process Flowchart / Service Blueprint.
To supplement the quality assurance plans that are linked to specific activities on the Process Flowchart, there will be a
director of production who will oversee all production efforts and play a major role in the examination of production
machinery and materials in an effort to prevent defects.
Describe any reactive quality assurance plans. Include a recovery plan should a customer receive poor quality
goods and/or services.
Should a customer receive poor quality hardware, the faulty hardware will be returned and replaced for free. Both
shipping the faulty hardware from the customer and shipping the replacement hardware to the customer would be
covered by the product provider. The customer will also be given the option to fill out a survey clarifying the issue with
the hardware.

If you will utilize a quality/process improvement methodology, indicate which:

☐ NA ☐ TQM ☒ Six Sigma ☐ ISO ☐ Benchmarking
☐ Other (specify what):
Note: You will not use all of them; only those with highest relevance.
Provide a specific explanation of how your chosen quality methodology relates to your business and how it will
be applied:
Six sigma fits this business plan in that as a safety product, one of the most important objectives is to limit defects and
anything that may lower the reliability of the product in order to keep customers safe. It is important to also implement
the DMAIC problem solving process, which serves as a structured improvement strategy. The five steps of DMAIC
(define, measure, analyze, improve, and control) can improve the effectiveness of any process. This will be
implemented first with the define and measure steps of DMAIC, wherein our amount of defects will be identified as the
area for improvement and baseline measurements will be taken. Depending on sources of defects, modifications will be
made to machinery, materials, or processes. The last step of DMAIC, control, is accompanied by the proactive quality
assurance plan noted above as a means to limit defects and sustain improvements.

11
 Exhibit 9: Inventory, Suppliers, and Distribution

Operations Exhibit 9A: Inventory, Suppliers and Distribution

RAW MATERIAL INVENTORY & SUPPLIER SELECTION If yourorganization does not have raw material inventory, please check this box: ☐NA
Item(s) Supplier Name & Reason for selecting this supplier Supplier Frequency of System of Mode(s) of
Location lead time replenishment Management Transportation
Simple Water Detection Adafruit Adafruit manufactures American-made water 10 days Every 2 Months Highway
Sensor New York City, New sensors at a very cheap price. They Will allow us Fixed Order
York, United States to get the water sensors quickly for cheap. Interval
Aeroplane Grade Aluminum Shanghai Hengtie Steel By sourcing aluminum through China, we are 10 days Every 2 Months Highway, Air
Alloy Sheet plate Trading Co., Ltd. able to save a lot of cost and get large quantities Fixed Order
Shanghai, China at once through Alibaba. Interval
VDE7854 0.5mm Double Guangzhou Hengxing Guangzhou Hengxing Conduction Technology 10 days Every 2 Months Highway, Air
Insulation High Temperature Conduction offers cheap and quality wire at a very low cost Fixed Order
Wire Technology Co., Ltd. through Alibaba. They have shown reliability to Interval
Guangzhou, China 4000 companies over 30 years.
NEMA 5-15P ASSEMBLED Quail Electronics, Inc We chose Quail because they offer same-day 7 days Monthly Fixed Order Rail
PLUG Livermore, CA quick shipping and provide quality plugs for Interval
cheap, and have been in business for 30 years.
Circuit Board Turnkey PCB Turnkey offers high quality, pre-programmed 20 days Every 3 Months Fixed Order Highway
Assembly Services circuit boards at an affordable price, which Interval
San Francisco, CA allows us to outsource the programming.
Packaging Packola Packola provides cardboard boxes for cheap, in 15-20 days Every 3 Months Fixed Order Highway
Van Nuys, CA bulk, with a wide range of customization. Interval

Polypropylene Xiamen Keyuan Plastic We chose Xiamen Keyan Plastic Co, because 7 Days Monthly Fixed Order Air, Highway
Co., Ltd. they offer cheap, high-quality polypropylene in Interval
Fujian, China large amounts through Alibaba.
FINISHED GOODS INVENTORY If your organization doesnot have finished goods inventory, please check this box: ☐NA
Finished goods produced Frequency of shipping Average level of Finished goods inventory on site Amount of safety stock on site
At the end of Year 1 15 per day Weekly 37.5 15 per week
At the end of Year 2 30 per day Weekly 75 25 Per week
At the end of Year 3 170 per day Bi-Weekly 212.5 37.66 bi-weekly
At the end of Year 4 315 per day Bi-Weekly 393.75 58.76 bi-weekly
At the end of Year 5 650 per day Daily 325 14.8 daily

What is the lifespan of your finished goods inventory? ☐NA Our finished Goods Inventory does not expire
How will you manage the perishability of Finished Goods Inventory? ☐NA Our finished goods inventory is not perishable

DISTRIBUTION If your organization does not requiredistribution, please check this box: ☐NA
Name of transportation Reason(s) for selecting this provider/carrier Frequency of Pick Up / Drop off
provider/carrier
UPS Have a Large distribution infrastructure, offer FOB freight shipping which is ideal for selling on our website. Weekly in years 1 and 2, followed by biweekly in 3 and 4,
then daily in year 5
Amazon FBA Selling on their site is a good way to gain exposure, Amazon fulfills shipping requirements for a small fee. Weekly in years 1 and 2, followed by biweekly in 3 and 4,
then daily in year 5

12
 Exhibit 10: Capacity and Resources
Demand Capacity Utilization Hours of Operation Bottleneck name and description How will you manage /adjust the bottleneck to
(per hour) (per hour) (%) ensure you can appropriately serve or supply
your customers?
At the end 45 3.38% 245 days from 8a.m-5p.m Polypropylene shell manufacturing makes the The bottleneck doesn’t influence the company’s
of Year 1 which is to 1,960 hours a year plastic mold , and it makes 45 per hour ability to satisfy demand because it is larger
1.52
At the end 45 6.94% 245 days from 8a.m-5p.m Polypropylene shell manufacturing makes the The bottleneck doesn’t influence the company’s
of Year 2 3.12 which is to 1,960 hours a year plastic mold , and it makes 45 per hour ability to satisfy demand because it is larger
At the end 45 43.05% 245 days from 8a.m-5p.m Polypropylene shell manufacturing makes the The bottleneck doesn’t influence the company’s
of Year 3 19.37 which is to 1,960 hours a year plastic mold , and it makes 45 per hour ability to satisfy demand because it is larger
At the end 45 80.98% 245 days from 8a.m-5p.m Polypropylene shell manufacturing makes the The bottleneck doesn’t influence the company’s
of Year 4 36.44 which is to 1,960 hours a year plastic mold , and it makes 45 per hour ability to satisfy demand because it is larger
At the end 90 88.21% 245 days from 8a.m-5p.m Polypropylene shell manufacturing makes the The bottleneck doesn’t influence the company’s
of Year 5 which is to 1,960 hours a year plastic mold , and it makes 45 per hour but ability to satisfy demand because it is larger
79.39 we have 2 so it is 90 per hour
calculations for end of Year 1
Hours of operation/month Demand/month Demand/hour Capacity/month Capacity/hour Utilization
 (245*8)/12  2,970/12 2,970/1,960  (45*8)/12  45/8 (1.52/45) *100
- 245 is how many days the workforce is -2,970 is the demand for the -2,970 is the demand -45 is the amount that can be -45 is the maximum that can -1.52 is our demand per hour 
working  year for the year produced based on the bottleneck be produced based on the -45 is the maximum inventory that
-8 is the how many hours out the day that -12 is the number of months in -1,960 is the number of per hour bottleneck  can be made in an hour
the workforce is working  the year hours that the -8 is the number of hours of work in -8 is how long the workforce -100 is to convert it into a
-12 is the number of months in a year workforce is working a day is working in a day percentage
in a year -12 is the number of months in a
year

Additional resources (beyond your bottleneck) must be allocated appropriately to support operations. Identify which resources have a significant impact on capacity at start up and describe why these
are appropriate amounts of resources at start up.
 There are two main resources that can have an impact on our capacity. One impact being the machinery being used. The machinery being down, or something being broken with the machine that must get fixed
before anything can move forward. Another resource involves the workforce. Anything can happen and one person calling out can impact the system. These are appropriate amounts of resources for a startup because
given the ratio between the demand per hour and the capacity per hour there is quite a bit of leeway that can be used that has no harm to the company.
Describe adjustments you will make as resource requirements vary with time. Be specific regarding which key resources (beyond your bottleneck) will be adjusted, when and how. If you will make
multiple adjustments, explain each.
In year 3 the manufacturing personnel increases to 4. In year 4 the manufacturing personnel increases to 5. In year 4 the manufacturing personnel increases to 6. The manufacturing personnel increases each year
except year 1 and 3 to keep up with the change in demand that happens for those years. Also, in year 5 there is another Polypropylene machine and a machine that assembles the product is added to the manufacturing
process.
How will you manage seasonality? If your organization does not have seasonal demand, please check this box: ☐NA

13
 Exhibit 11: Income Statement

14
 Exhibit 12: Balance Sheet

15
Exhibit 13: Cash Flow Statement

16
Exhibit 14: Financial Statement Notes
Balance Sheet Notes

Type of Organization: L.L.C. (Limited Liability Corporation)

Founder’s Capitalization:
● On January 3rd, 2022, our 7 founders contributed $50,000 each, totaling $350,000 in founder’s capital, and $1,500,000 total in
stockholder’s equity when combined with the additional $1,150,000 issued in common stock.
Debt Financing:
● We assumed based on the risk of investment due to our technology-push operations strategy and on interest rates similar to other businesses
in our field that our interest would be 4% over the prime rate (BizMiner).
● Therefore, we borrowed $1,000,000 at an interest rate of 7% over 10 years. We paid only interest payments for the first 3 years then paid
the principle of the loan back in the beginning of year 4.
Property and Equipment:
● We will rent a 25,000 square foot warehouse/office building in Florida for our operation. Our rent expense based on other properties similar
in the area will begin at $155,000 in year one and will increase by 2.4% each year to account for inflation. We acquire more office
equipment within year 5.
● In year one, we will buy a polypropylene injection molding machine for $29,995, a product assembly robot for $23,000, and a product
packing robot for $23,000, which totals about $73,000 in equipment. We purchased a polypropylene machine for $25,000 in year 5 which
increases our depreciation expense in year 5, as well as assembly robots.
Labor Costs:
● For the labor portion of COGS, we assume it is calculated on a per unit basis. Therefore, we multiplied the cost of labor per unit by the
number of workers. Then we multiplied the product by the number of units produced in that year.
● Out of 245 work days per year, we plan to incorporate 8 federal holidays with the remaining assuming they take paid vacation. Therefore,
we pay the majority of labor costs in each year, but some is accrued for the next year.

Income Statement Notes

Sales Revenue:
● We calculated sales revenue by gathering a market share estimation through primary research and multiplying that by the number of
households/business in our target market segment to find the forecasted demand for our product. Then we multiplied that by our selling
price for each year to give us estimated sales revenue.
Variable Costs:

Variable Costs 2022 2023 2024 2025 2026

Copper Wire $0.05 $0.05 $0.04 $0.04 $0.04
Polypropylene $0.12 $0.12 $0.09 $0.08 $0.07
Water Sensor $1.56 $1.56 $1.56 $1.56 $1.56
Plugs $0.92 $0.92 $0.92 $0.92 $0.92
Aluminum $1.43 $1.43 $0.41 $0.04 $0.02
Circuit Board $5.00 $5.00 $4.80 $4.50 $4.00

Outbound transportation $0.00 $0.00 $0.00 $0.00 $0.00

Labor cost (wages) $6.00 $4.00 $4.00 $3.00 $3.00

Packaging $1.30 $1.30 $1.20 $1.03 $0.92

Total Variable Cost $16.38 $14.38 $13.02 $11.17 $10.53

Selling and General Expenses:

● Insurance expenses begin at a relatively low cost because of production volume. As our production increases so does our liability, and thus
our costs rise incrementally.
● For depreciation, we are using the double declining method. All of our office and manufacturing equipment are depreciated over 10 years.
As for our intellectual property (patent) we are using the straight-line method over the 17 years.
● Because our beginning target markets use social media and recommendations, our advertising is partially word of mouth and done through
our consumers. However, advertising and promotion expenses increase substantially in the third year as we add businesses to our target
market.
● Our business license in Florida amounts to $125 in the first year with payments of $25 in the years following. The Federal tax is 6% of
revenues. Florida does not have a state income tax and for an L.L.C, income taxes are paid directly by owners based on their percent share
of the company.
Cash Flow Statement Notes
● We based our beginning cash balances off of our cash and cash equivalents from the balance sheet.
● Depreciation in our cash flow statement includes both accumulated depreciation from our equipment and amortization costs.
● Disbursements of $3,000,000 will be distributed in year 5 such that each stockholder will receive $2 per share.

17
 Exhibit 15: Financial Ratios

18
 Exhibit 16: Financial Analysis
Liquidity

Bluewater Electric’s current and quick ratios are far higher than industry average due to Bluewater’s consistently low current

liabilities. These ratios are downward trending due to an increase in accounts payable and accrued benefits caused by an increase

in staffing as the company scales up in later years. The operating cycle is 40.8% of the industry average as Bluewater assumes a

rapid receivables turnover rate.

Financial leverage

Bluewater has volatile leverage ratios that are caused by negative net income decreasing retained earnings in the first two years of

the company’s life, as well as the company initially holding a high amount of long-term debt. Once business to business retail

begins and restaurant marketing in year three, increased profits fully pay off the loan principal in year four. Once the principal is

paid off, there is no more debt financed. Past this point, the times interest earned is N/A, and debt/equity is less than 7% of

industry average due Bluewater’s only used liabilities account being current liabilities.

Asset management

Inventory turnover rate averages at 305.96% of the industry average; a striking difference caused by an effective value added

process and accurate target market segments. Bluewater Electric’s receivable’s turnover is 124.1, which is 2.25 times the industry

average. This is due to its assumption that 55.4% of sales will be done in credit, and that only 1.39% of these sales will remain in

accounts receivable by the year’s end. Fixed asset turnover exhibits rapid growth past year two, as while net sales increases there

is a decrease in net fixed assets due to machinery depreciation and acceptable process utilization without new machinery

purchases until year five.

Profitability

Gross profit margin hovers on average 231.66% higher than industry average due to a skimming price strategy. Operating profit

margin and return on assets are negative for the first two years due to a negative EBIT and net income, respectively. However,

these ratios skyrocket in year three and then continue to grow with a sales increase due to business to business marketing and a

consistently high profit margin.

DuPont Analysis

Equity multiplier is volatile until Bluewater pays off its long-term liabilities principal in year four. Net profit margin and Return

on Equity both follow a trend of heavily negative early year value in comparison to the industry average, but quickly increase

through later years. This is because the company cannot afford its selling and administrative expenses with revenue alone until

year three. Return on Equity’s Year two value is caused by the ratio of year two’s negative income to its negative equity resulting

in a positive 4470%. The negative total equity is caused by year one and two’s net income loss, which is corrected in years 3-5.

Valuation

The valuation multiple is calculated on a Price Earnings ratio found by averaging other company’s Price Earning ratio in

Bluewater’s industry. Overall, Bluewater starts off far below industry average valuation, but eventually surpasses it in year four.

19
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22
 Meet the Team - Section 6, Team 6

My name is Josh Bowers. I am from Oak Hill, Virginia. I am a junior at James Madison University majoring in CIS in the
College of Business, and minoring in Film Studies.

My name is Kieran McCreight and I am from Manassas, VA. I am a Junior Marketing major and plan to minor in
Computer Information Systems. Outside of class I enjoy watching sports and going to the Recreation Center.

My name is Rachel Schweitzer, and I am from Charlottesville, Virginia. I am a junior majoring in marketing and double
minoring in Spanish and honors disciplinary studies. I am also an intern for Marketing Mojo.

My name is Tyler Woody and I am from Ashburn, Virginia. I graduated from Briar Woods High School in 2019. I am a
junior Economics major, minoring in Political Science.

My name is Liza Fox and I am from Martinsville, Virginia. I am double majoring in Business Management and
Hospitality Management. Outside of class, I love to cook and exercise.

My name is Josh Clawson, a CIS major from Fairfax, Virginia. Outside of class I study cloud computing and boulder in
the UREC adventure center

My name is Quionee French. I am from Fredericksburg,Virginia. I am a junior CIS major.

23