Section 8101

Team 4
Summer 2021

Business Plan

Fore Industries Inc.

Golf Gust is a high quality plastic bottle with a nozzle like cap that when squeezed emits an

eco-friendly, corn-based, green cloud that allows golfers to visualize the direction of the

wind and its speed. Our product is easy to use compared to the more traditional methods of

throwing grass into the air without having to be reliant on technology. The recreational

golfers using our product will be able to quickly and efficiently measure wind direction and

speed in a reliable manner thus improving their game.

Team members: Email address:

Claire Boynton…………………………………………………………………………….boyntoci@dukes.jmu.edu

Peter Corelli………………………………………………………………………………..corellpx@dukes.jmu.edu

Alex Horgan………………………………………………………………………………..horganag@dukes.jmu.edu

Stefan Petrovic………………………………………………………..………………...petrovsx@dukes.jmu.edu

Jessica Shuler…………………………………………………………..………………..shulerjl@dukes.jmu.edu

Kendall Williams………………………………………………………………………...willi7kl@dukes.jmu.edu
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Executive Summary
Fore Industries Inc.
Peter Corelli
1106 W Pine St, Orlando, FL, 32805
Phone: (914) 414-8011
E-mail: pv.corelli@fore.industries.com

Management: Business Description: Our business is

Titles: General Manager and Production
Manager
Industry: Sporting and Athletic Goods
Manufacturing - 339920
Number of Employees: 16 as of
12/31/2023
Amount of Financing Sought: Seeking
$400,000 from Angel Investors
Investment Sources:
$200,000 in convertible debt and
$200,000 in equity financing.
Use of Funds: R&D and dividend
payments to shareholders
Product/service selling price:
$7.50
focused on promoting, producing, and
selling a simple golf accessory that can
help even the average golfer improve his
or her game.
Products/Services:
Cost- $1.04
Price- $7.50
Sales Volume- $1,709,600 as of 12/31/23
Competitive Advantage: We are the
first business to develop a corn-based
powder marketed to the golf industry.
Markets: Our target market consists of
recreational golfers with a segmentation
regarding demographics, such as being
male, with a market size of 24.8 million
golfers.

Distribution Channels: As a business to business company we are putting our efforts

towards a wholesale approach and selling to large golf-related companies such as Dick’s
Sporting Goods and the PGA Tour Superstore. We are also focused on contacting smaller-
scale golf pro shops located at golf courses and getting our product on their shelves.

Competition: Our main competitors are two products that are more so targeted towards
helping individuals that hunt determine which direction the wind is moving. These
competitors are considered indirect since they have a different target market but a product
that performs a similar task. We are looking more towards the market that consists of
averagely skilled and recreational golfers who are interested in improving their game.

Financial Projections (Unaudited):

2022 2023 2024 2025 2026

Revenue: $976 $2,442 $4,884 $7,492 $10,100

(dollars in thousands)
EBIT: ($732) $482 $1,880 $2,774 $3,454
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Elevator Pitch

The Golf Gust is a unique and simple way to detect the speed and direction of wind while

playing golf. Wind is an important factor in a golfer’s game that can be the difference

between a winning shot and a ball stuck in the sand. We have created a product that will

allow recreational golfers of all ages to judge the direction and relative speed of the wind

while out on the course. Utilizing a pocket sized plastic bottle, golfers will be able to give the

Golf Gust a small squeeze which emits a cloud of green powder that will indicate wind

direction and speed. With this small and easily held bottle golfers of all ages will have an

edge in an eco friendly and non-toxic manner. Let the weather work for you, instead of

against you.

Product Description

The Golf Gust aids recreational golfers in judging wind direction and speed as a means of

improving their game. By utilizing high quality plastic with a nozzle-like cap and an eco-

friendly powder, we have created a bottle that when squeezed emits a green cloud, allowing

golfers to visualize the direction and speed of wind on the course. Our bottle easily fits in

the palm of your hand and allows for ease of use compared to the more traditional methods

of throwing grass into the air without having to be reliant on technology. Our product costs

$7.50.

Competitive Advantage

While there are similar powder-based wind detectors on the market, they are primarily

aimed towards bow hunters. The Golf Gust is going to be a differentiation focused product

by providing a unique way of detecting wind to the niche market of golf. We are specifically

targeting the recreational golf industry for the more casual player who is looking to improve

their game. The other examples of wind detectors contain, and have a history of containing

talcum powder, a toxic and cancerous compound. To combat these concerns we have

decided to make a corn based powder that is eco-friendly and non-toxic; this is an exclusive

benefit of our product compared to its competitors. It will be safe for the humans using it,
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Summer 2021
the grass on the courses, as well as any wildlife that may come across it. Furthermore, the

digital counterparts often only indicated the speed, or when it did offer both wind direction

and speed readings the price of the product increased significantly. Our product puts the

focus on a safe-for-all-ages, easy-to-use item that can easily fit in your pocket.

Value Proposition

With the golf industry continuously growing, both in the United States and abroad, our

company has an ever-increasing opportunity for growth within this world-wide sport. Having

the ability to measure wind in a timely manner is an integral aspect of any golfer's game,

and can have a sizable impact on how the sport is played. The recreational golfers using our

product will be able to quickly and efficiently measure wind direction and speed in a reliable

manner in order to improve their game. We are offering a safe and unique product to

consumers who are looking for both an efficient and effective way to measure wind.

Business Strategy

By creating a product that is safe for all ages and used in a sport that is played by people

from all backgrounds, we have the capability of having a very large target market. We will

be a United States based product that focuses on quality for the users. While startup costs

may be high due to the initial investment in machines and purchasing a building, once we

get going, the manufacturing costs will be relatively low since we will be able to

manufacture everything ourselves. We plan on outsourcing the raw material that will then

be molded and refined into the bottles and powder. We also plan on dyeing the corn-based

powder green to blend better into the golf courses. We chose a corn based substance for

the powder to ensure that it will be safe for both human use and the golf courses. Similar

products on the market use powders containing talcum which can be very harmful and

cause cancer. By building our company in an eco-friendly manner we are able to create a

product that consumers do not need to worry about having a larger impact on the

environment and will allow them to focus on their sport. We plan on doing only Business to

Business (B2B) sales, which include large sporting goods stores, golf-specific retail stores,
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and golf pro shops. This sales method was chosen in order to better capture the convenient

product market and enable consumers to spot the product without having to go looking for

it.

Business Location

Fore Industries Inc. will be based out of Orlando, Florida for a variety of reasons. Orlando

has a very strong economy for businesses and manufacturing. Florida also does not have

income taxes on Limited Liability Companies which will help us to cut down on some costs.

Florida is also home to one of the largest golf markets in the United States, and will allow

for relatively easy expansion up the east coast to New York, another one of the major golf

markets in the United States. Orlando is also surrounded by a number of shipping ports

which will make future expansion to international markets more of a possibility.

Describe Any Outsourced Functions

Our company will be reliant on the outsourcing of the raw materials that we will then utilize

to manufacture our product. We will be dependent on the corn-starch material which is our

powder, as well as the plastic to mold into our bottles. All of the materials that we are

outsourcing are located in the central Florida area which will result in quick lead times. It

also supports local businesses which will aid in continued growth for the Florida economy.

Financial Performance

The six founders of Fore Industries each contributed $150,000 each as well as obtaining

$200,000 in convertible debt and $200,000 as equity. When looking at our company’s

timeline we were able to successfully earn a profit and ramp up production through

increasing employees and equipment - as of inception we had a loss in net income, but in

the years following we managed to break even and drastically increase profits with a net

income of $2,529,909 by the end of year 2026! With leftover cash we were able to put

funds towards R&D, payments to shareholders, and even increase employees’ salaries by

3% starting in the year 2024 through 2026.

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Exhibit 1: Organizational Chart

Regarding the number of employees our company consists of throughout the five years is as

follows. For the first year, in a hierarchical order, our company will consist of one General

Manager, Production Manager, Market Research Analyst, Sales Representative, Finance and

Accounting clerk, and a total of seven employees working in the warehouse. In year 2 we

will be adding one additional warehouse machinist. For year 3 we will be adding 1 Sales

Representative and one extra machinist and shipping/receiving worker. For year 4 we are

adding another Sales Representative, and a total of 5 warehouse workers, two of which will

be for shipping/receiving and the other three for machine operating. Lastly, for year 5 we

are adding one more Sales Representative and finally one additional shipping/receiving

worker for a total of 23 employees.

Exhibit 2 Pays and benefits

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Knowledge, Skills, and Abilities

General Manager Effective communication skills, An appropriate degree in

problem solving skills, delegation
skills, motivational and ethical.
Market Research Analyst Client-focused, analytical skills,
communication skills, open-
minded, and aware of current
trends.
Accountant Organizational skills, oral skills,
mathematical skills,
trustworthiness.
Customer Service Representative Effective communication skills,
friendly, patient, and problem-
solving.
Machinist Operational, technical, and
mechanical skills, endurance and
strength.
management, work-experience,
adequate training, and a mentor
within the company to learn from.
An appropriate degree in
marketing, a certain level of
experience, and a marketing
team along with all necessary
resources.
A math test and financial
accounting screening test,
appropriate accounting degree as
well as CPA license.
A thorough understanding of how
the company works and common
issues, appropriate degree, and
experience in the position.
An appropriate education and
experience working with
particular machines.

Motivating Employees
Motivating your employees and providing them with a healthy work environment promotes good results
through allowing them to get better work done. Our managers will be largely responsible for having a
presence among all employees acting as a leader. As far as motivating our employees and keeping them
interested in working for us includes commission, good factory conditions, and a snack bar. For the first
two years employee’s salaries will remain the same, but for years three, four and five salaries will
increase by 4% each year. As far as days off go for employees they are provided with 18 days of
vacation, 7 days of sick leave, 1 hour lunch breaks daily, and all Holidays including New Year’s Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, Martin Luther King
Day, Veterans’ Day, Easter, New Year’s Eve, and Good Friday.
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Exhibit 3: Market Segmentation Analysis/Target Market Selection

The pie chart on the left depicts what percent of

golf players come from each age group. Golf is
such a diverse sport that anyone can play. We
have a very large target age range of 24-75
years old. This wide range will allow us to
target multiple age demographics leading to
increased sales. We are specifically looking at
recreational golf for our market. After further
evaluation into which gender is more likely to play golf we see 75.5% of players reporting
male and only 24.5% of players reporting female. As a result we have decided to pick a
male target market (SBRnet, 2021).

T he bar graph to the left depicts the percentage

of golf players who are found in various income
brackets. Based on golf participation by income,
the majority of golf players are affluent with an
average income of at least $75K. Due to this
our target market will be centered around the
middle class and above (SBRnet, 2021).

After an interview with a member of our target market, a 55-year old middle class male, we
were able to get insight into the buying habits of himself and his peers. In general, the
preferred locations for purchasing golf gear include big-box sporting goods stores, golf
specific retail locations, and local pro shops. Because of the wide dispersion of buying habits
among the recreational golf community we will focus our sales efforts within all three
markets.
Our interviewee is a prime example of our target market. Chris Corelli on average plays golf
in 4 hour sessions, twice a week. He reports spending on average between $0.5K - 1K
annually on golf equipment and accessories in order to improve his game. Mr. Corelli, when
asked, was intrigued by the Golf Gust and reported that he would be interested in buying it
if it were on the market.

We have chosen to not partake in online sales, making us strictly a business to business
company. By producing a low cost shopping product that will be found in golf and sports
retail locations we plan on the Golf Gust being an impulse buy. We expect consumers to
compare the Golf Gust versus its competitors based on price and quality, but not a lot of
forethought will go into the purchasing of the golf gust when compared to golf clubs or other
more specialty products.
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Exhibit 4: Market Quantification

To determine what amount of the market we can
forecast for sales we began by looking at what
percent of the United States population plays golf
as well as how much money is spent annually on
golf accessories. With roughly 24.8 million golfers
in the United states (SBRnet, 2021) and an
average of $504 million dollars (National Golf
Foundation, 2020) in golf accessory sales each
year we were able to compare that to our sales
forecast to determine what percent of the market
we aim towards for our market share. By dividing
estimated sales for the first five years of operation by the total amount spent on golf
accessories in the United States we have determined that our market share is as follows:

Year Potential Customers Market Share Unit Sales Per Customer Sales Revenue

2022 47K 0.19% 2.76 $977K

2023 119K 0.48% 2.74 $2,442K

2024 241K 0.97% 2.71 $4,885K

2025 370K 1.49% 2.70 $7,492K

2026 496K 2% 2.72 $10,100K

By determining what percent of the golf industry our target market is we were able to find
our potential customers for each corresponding year. We then utilized the amount of
potential customers to determine how many units each customer would need to buy in order
to reach our estimated sales revenue. We feel this is a realistic number to achieve based on
how many puffs each unit contains versus how often our interviewee reported playing golf.

Year Price per Unit Fixed Cost Unit Variable Cost Break-Even in Units

2022 $7.50 $1,573K $1.04 244K

2023 $7.50 $1,620K $1.04 238K

2024 $7.50 $2,325K $1.04 326K

2025 $7.50 $3,676K $1.04 509K

2026 $7.50 $5,242K $1.04 725K

We found the unit sales needed to break-even by dividing fixed costs by the price per unit
minus variable cost per unit for each corresponding year.
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Exhibit 5: Positioning/Competitive Analysis

Our product, the Golf Gust, is priced moderately in comparison to competitors. The other
powder-based wind detection products, such as Hunter’s specialty Windicator and Dead
Down Wind Detector, are priced very cheaply and are low-tech, but are very harmful (Dead
Down Wind, 2021) & (Hunter Specialties, 2021). Both of these products contain Talcum
powder, which is very toxic and cancerous. The Golf Gust is corn-based and non-toxic for
both humans and the golf courses it will be exposed to. The digital anemometer is priced
slightly above ours but while the competitor detects wind speed, the powder in our product
allows for indication of both speed and direction. The Garmin golf watch is very expensive
and above the budget of many recreational golfers. It is also highly reliant on technology,
and if that were to fail the product would be rendered unusable in that moment. The Golf
Gust is independent of technology, and safe from harmful compounds, which will allow
consumers to confidently use the product and trust that it will be ready when needed.

Strengths: Weaknesses:
● Differentiation from the other powder ● Difficult to patent
based products ● High price relative to the other powder-based
● convenient size and shape for people's wind detectors
pockets ● Troubles with sales during a recession
● Single use

Opportunity: Threats:
● Make powder refills ● Risk of new entrants due to the simplicity of
● Biodegradable bottle our technology

● International expansion (Japan)

● Golf courses banning powder-based wind
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detectors

Exhibit 6: Marketing Mix

The Golf Gust will be designed to be easily recognizable.
Often associated with freshness, growth, and the
environment. We have included the color green into our
logo to indicate that our product is eco-friendly and
environmentally conscious. We plan on selling our product
in big-box sporting goods stores such as Dicks Sporting
Goods, large specialty golf stores such as Golf Galaxy, and
golf course pro shops.

We have decided to price our product at $7.50 wholesale and $9.99 retail, which is higher
than the other powder-based wind detectors on the market due to the high quality plastic
and our eco-friendly corn based powder. To decide on a price we utilized a cost-based
pricing basis by determining our price based on the cost of our product. We have a market
share pricing objective by setting our prices considerably lower than our digital counterparts
in order to gain consumers and grow our market share. Our nail-down strategy is
psychological and premium pricing because our product is priced higher than the other
powder based wind detectors on the market therefore indicating a higher quality product to
consumers.

We have chosen to distribute our products via big-box retail stores, specialty golf retail
stores, PGA pro shops, as well as on golf courses. We made these decisions based on data
from our interview that indicated these locations are where he and his friends are likely to
purchase golf accessories from.

2022 2023 2024 2025 2026

Total
Advertising $44K $154K $374K $946K $2,222K
Budget

Our product is a shopping product that is meant to be easily purchased with very little
forethought. We have chosen an advertising budget by using a percentage of sales, and
increasing that percentage slightly each year as our company grows the first few years. We
plan on focusing our main advertising efforts on in store promotions of posters and visually
appealing displays. We also plan on providing golf courses with samples that consumers can
test out while on a golf course with real wind conditions. We will also put ads on Facebook
and in magazines, but a smaller amount of our advertising budget will go to these ads. Our
packaging will include a pegable hole to allow for wall hanging in stores. Our product will
also be small enough to be able to be placed by a cash register for last minute impulse
purchases.
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Exhibit 7: Process Map

Quality Step What is measured? How often? How will you ensure quality?
Q1 Blending When produced Test a batch of powder to see if they are mixed
well
Q2 Bottle/nozzle After molding/drying Test if bottle/nozzle came out to expected
functionality standard
Q3 Quantity of powder After filing but before cap is Examine if sufficient amount of powder has been
screwed on loaded into bottle
Q4 Fit and finish Just before packaging Test a batch of the finished product to see if
everything fits and looks good.

Critical Brief Description Unit Cost (in appropriate unit) How

Resource many?
CR1 The SZ-1300A machine molds bottles and nozzles then dries them. $10,000 1
CR2 The blend of cornstarch and food coloring are thoroughly blended $2,000 1
into a solid powder in the Lianhe V type machine
CR3 Skilled machinists are needed to monitor and operate the plastic $34,000 2
injection machine.
CR4 The Auger Filler machine fills cornstarch and food coloring into each $5,750 1
bottle.
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Our facility is a total of 9,600 square feet and it is located in central Orlando near the airport and railroad. Approximately 1,500 square
feet of this facility consists of air conditioned offices and a room that is fit for higher up employees to do paperwork. The rest of the
warehouse is spacious and open - perfect for equipment, machinery, and warehouse workers to focus on production.
Exhibit 8: Quality Assurance

Indicate Why is this dimension important, given your Identify the Quality
the industry & target market? Step(s) on the
Dimensions Process Flowchart /
of Quality Service Blueprint to
on which which this
you will corresponds.
focus.
Conformanc It is important that when our target market of mainly Q1
e recreational golfers use our product that the powder
comes out in a uniform and green color as promised
through our product description.
Performance This dimension of quality is vital because we need our Q2
product to perform well on the golf course to ensure
customers come back and make consecutive purchases.
Conformanc The amount of powder loaded into our product needs to Q3
e meet a certain quantity standard each and every time so
that golfers’ are able to use the product for the promised
duration.
Aesthetics When customers hold our product we want them to gain Q4
an appreciation for the cost and care that went into
producing the product.

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.
Some measures we can take to avoid issues with quality are taking proactive measures by
inspecting our inputs and raw materials prior to the production process and inspecting our final
product after it is produced. This will ensure that our plastic bottle and nozzle conform to our
standard as well as making sure each bottle is filled with enough powder. This will include testing
such as quick touch and physical examination to see if our final product meets management’s
expectations.
Describe any reactive quality assurance plans. Include a recovery plan should a
customer receive poor quality goods and/or services.
If a customer has any issues with the product they are able to reach our customer service team
over email or phone. This can help resolve issues with customers that come across issues with our
product, and since we are focused on quality they will be offered a refund and a new product.

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:

Given the fact that our company produces a product that is made of plastic we think it is necessary
to include the ISO 14000 series in our company. This will help our company keep tabs on how we
are managing our plastic products and reducing any amount of environmental damage. We will
apply this throughout our manufacturing process by limiting the amount of waste and any waste
that we do incur will be recycled.
The second quality/process improvement method we are including in our business process is the
Six Sigma methodology, which is the constant effort to improve processes within our business.
These efforts are likely to lead to discovering and eliminating defects in our product as well as
improving the overall quality through reducing variation in production. This approach can be
applied by focusing on internal processes, eliminating defects, and understanding our production
processes. The six sigma methodology will help us take our current business process and improve
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it as we move forward.
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Operations Exhibit 9A: Inventory, Suppliers and Distribution
RAW MATERIAL INVENTORY & SUPPLIER SELECTION If your organization 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 (City, State, lead time replenishment Management Transportation
Country) (in days) (in days)
HDPE Commercial Plastics Florida buys and sells recycled plastic 30 Every 5 days Fixed Quantity ☐ Highway ☐ Rail
Recycling, Inc (cprinc, which helps us achieve our ISO ☐ Waterway ☐ Air
2021) 14000 and Six Sigma goals.
Cornstarch Medina Baking & Powder Supplies cornstarch at cheap 5 Every 5 days Fixed Quantity ☐ Highway ☐ Rail
Products (medinabaking, wholesale prices which is an ☐ Waterway ☐ Air
2021) advantage and based in Florida
Food Color Camila’s Cake Supply This supplier is ideal since they too 5 Every 30 days Fixed Quantity ☐ Highway ☐ Rail
(camilascake,2021) are located in Florida and are able to ☐ Waterway ☐ Air
supply us with the proper amounts of
food coloring.
Packaging SupplyOne Strong reputation nationally for high 60 Every 5 days Fixed Quantity. ☐ Highway ☐ Rail
(supplyone,2021) quality products and has a big ☐ Waterway ☐ Air
presence in Florida.

FINISHED GOODS INVENTORY If your organization does not have finished goods inventory, please check this box: ☐NA
Finished goods Frequency of Average level of Amount of safety stock on site
produced shipping finished Finished goods
(per hour) goods inventory on site
At the end of Year 1 62.62 10 (2 weeks) 2,964.8 460
At the end of Year 2 156.56 10 (2 weeks) 7,411.4 1149
At the end of Year 3 313.11 10 (2 weeks) 13,853.4 1329
At the end of Year 4 480.28 10 (2 weeks) 20,814.2 1603
At the end of Year 5 647.44 10 (2 weeks) 27,824.6 1927

What is the lifespan of your finished goods inventory? ☐NA

How will you manage the perishability of Finished Goods Inventory? ☐NA

DISTRIBUTION
Name of transportation
provider/carrier
Florida Freight Lines
(floridafreightlines, 2021)
If your organization does not require distribution, please check this box: ☐NA
Reason(s) for selecting this provider/carrier Frequency of Pick Up / Drop
off
After calculating the amount of product we are shipping at each time we have determined Every 10 days
that this company can withstand our product load and their services meet our needs. They
also have a great deal of experience in the trucking business. Cost was also taken into
account when choosing this supplier since they are based out of Florida, which helps us
reduce cost and support another local business.
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Exhibit 10: Capacity
Demand Capacity Utilizati Hours of Bottleneck name and How will you manage /adjust the bottleneck to
(per (per on Operatio description ensure you can appropriately serve or supply
hour) hour) (%) n your customers?
At the end of 62.62 214 29.3 8-12, 1-5 1 plastic injection molding. The first year we have one injection molding machine
Year 1 Molds plastic into bottle and that is our bottleneck and that produces an output
nozzle that satisfies customer demand.
At the end of 156.56 214 73.16 8-12, 1-5 1 plastic injection molding. The bottleneck stays the same while our demand
Year 2 Molds plastic into bottle and increases to a suitable utilization.
nozzle
At the end of 313.11 428 73.16 8-12, 1-5 2 plastic injection molding Demand has increased beyond our bottleneck which
Year 3 machines that produce bottles forces us to buy one additional machine that will
and nozzles separately. make the bottle and nozzle separately.
At the end of 480.28 642 74.81 8-12, 1-5 3 plastic injection molding To satisfy demand we buy one additional machine to
Year 4 machines that produce bottles reduce the bottlenecks and be able to meet our
and nozzles separately. increased demand.
At the end of 647.44 856 75.64 8-12, 1-5 4 plastic injection molding We add an additional machine to a total of four to
Year 5 machines that produce bottles satisfy demand and keep a steady utilization.
and nozzles separately.

Show your calculations for the following parameters at the end of Year 1.
Hours of operation/month Demand/month Demand/hour Capacity/month Capacity/hour Utilization
173.33 10,854 62.62/hr 37,664 214 29.3

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.

Our machinists are the main additional resource that have a big impact on capacity at startup. We are going to allocate two machinists to the plastic injection
molding to make sure that operation of the machine goes smoothly since operating this machine will be the most complicated and crucial one in our factory.

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.

Once we reach year three we will increase our number of machinist employees by one and allocate two machinists on each plastic injection molding machine
to satisfy demand. Year four we will increase the number of machinists by three since we will now have 3 plastic injection molding machines in operation and
we will have 2 machinists on each machine. Year 5 we add one more machine and the most experienced machinist will be working alone on one machine
while the other three machines will have two machinists each to make sure our most important equipment operates to our quality standards. So, every
station has at least one machinist and there are also warehouse workers who are responsible for packaging which occurs at a rate of 300 per hour. This
process is manual labor and is a two man job as one worker is responsible for packaging the bottles and the other is responsible for loading the packaged
goods onto pallets.
How will you manage seasonality? If your organization does not have seasonal demand, please check this box: ☐NA
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Exhibit 11: Income Statement
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Exhibit 12: Balance Sheet
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Exhibit 13: Cash flow
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Exhibit 14: Financial Notes

Notes 1: Accounting method

Our company uses MACRS financial lives and rates for our fixed assets and depreciation

Note 2: Assumptions
The following assumptions were used in developing the pro forma statements:
● Sales revenue: # of units sold * sales price
● COGS: # of units sold * variables cost
● 6% of sales revenue will be allocated to commission and divided evenly between the
sales team members.
● Commission Expenses are assumed to be 5% of sales revenue.
● Rent Expense is assumed at $11 per square foot(9,600), totalling $105,600.
● Research and Development is assumed at 3.5% of revenues all five years.
● Assumed the indirect method for cashflow.
● MACRS depreciation was used and assumed to have a useful life of 5 years.
● Tax rate for Florida is 5.5% and the Federal tax rate for C corporations is 21%
● Accrued salaries and wages, Accrued payroll taxes and benefits, and Accounts
Payable are each assumed to be paid off at 25% each year.

Note 3: Investment capital

The initial start-up costs for our company are funded with a $900,000 investment from our
six owners personal funds. A $200,000 investment is in equity for 20% of the company.
Another start-up cost was the use of a $200,000 convertible note at 6 percent with an
interest of 6%,conversion cap at $8,000,000 and a maturity of 7 years.

Note 4: Capital investment

Our initial capital investment is $128,042 in equipment and machines. Additional purchases
of one machine each occur at year three, four and five for a cost of $30,000.

Note 5: Risks
These are the multiple risks that are associated with this company. Risks include:
● Risk related to the economy. Currently the economy is in recovery from the impact
of COVID-19. There is a risk that mutations of the virus will cause countries to close
down again and the recovery is only in its initial stages with uncertainty of the
future.
● Risk related to input and product quality. As a company we are determined and
driven to provide a high-quality and reliable product. While we are taking steps to
reduce flaws in inputs and products we realize that there is a risk that our proactive
measures will not always result in customer satisfaction 100% of the time.
● Risk related to product price, cost to produce, and unit sales. Based on research
done in the marketing department, forecasts were created which estimated the
price, cost of goods sold, and unit sales.
● Risk related to repeat customers. There is uncertainty regarding if customers will
come back and make repeat purchases at least two or three times after initially
buying our product.
 Section 8101
Team 4
Summer 2021
Exhibit 15: Financial Ratios
 Section 8101
Team 4
Summer 2021
Exhibit 16: Financial analysis

● Fixed Asset Turnover ratio is very similar to the industry average proving that we are

appropriately and efficiently allocating our assets towards generating profits.

● Our Receivable turnover ratio is below the industry average, however, this is a result

of having a small start-up company which has a small percentage of its debt found in

Accounts Receivable.

● In our first year we had several expenses to pay off being a start-up company,

therefore resulting in a net loss for the first year, but a net profit in all the years to

come.

● Fore Industries Inc.'s valuation in year 1 was $1,709,599.50 and ultimately

increased up to $17,675,050.75 by year 5.

● Our gross profit margin is steady and above our industry average which allows us to

cover equipment and interest costs in full and on time.

● Our debt to equity ratio starts off closer to the industry average, but decreases as it

approaches year 5 which indicates that our company has a favorable financial

leverage.

● The net profit margin starts off negative due to start up costs, but closer to year 5 it

improves drastically which indicates that we are able to efficiently convert sales into

profit.

● The current ratio and quick ratio for our business is significantly higher than the

industry average because we have an excess amount of cash but we are planning to

expand internationally and purchase a building after year 5.

● Time interest earned is reaching the industry average by year 5 which shows that

we are able to pay off our creditors quickly.

 Section 8101
Team 4
Summer 2021
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 Section 8101
Team 4
Summer 2021

Meet the Team

My name is Claire Boynton. I’m from Virginia Beach, Virginia. I’m

a junior studying Management with a concentration in
Entrepreneurship. I’m involved in a sorority and Intervarsity here
at JMU. I enjoy spending time with friends and family as well as
traveling in my free time.
 Section 8101
Team 4
Summer 2021
My name is Peter Corelli. I am from White Plains, New York. I am
a senior majoring in management with a concentration in
Entrepreneurship. I am a student representative for the Honor
Council and I partake in intramural street hockey. In my free time
I enjoy spending time outdoors both fishing and hiking.

My name is Alex Horgan. I’m from Centreville, Virginia and I am a

senior Marketing major. I am part of the James Madison University
club lacrosse team. In my free time I enjoy spending time with my
friends and watching sports.

My name is Stefan Petrovic. I’m from Gothenburg, Sweden. I am a

senior majoring in Computer Information Systems. I am also a
student athlete and part of the men’s tennis team at JMU. In my
free time I like to spend time with my friends and watch sports.

My name is Jessica Shuler and I am from Boulder, Colorado. I am

currently a junior Marketing major, with a double minor in Human
Resource Development and Environmental Studies at James
Madison University. I am a member of Epsilon Sigma Alpha, a
coed service fraternity, and am passionate about traveling and
competitive archery.
My name is Kendall Williams, and I am from Aldie, Virginia. I am a
junior Marketing major at James Madison University. I have
previous experience owning and operating a small business. In my
free time, I enjoy spending time outdoors and traveling as well as
volunteering to teach young children about farming.