Group 3: DynoGear Dynamometer

DynoGear Business Plan

DynoGear Business Plan

Group 3: DynoGear Dynamometer

Jaime AlcalaNeil De VeraJonathan FurduiMicah McCantsGurkamal Singh

Business Consultant:Amanda Suryakusuma

Table of ContentsI. The Executive Summary3i. Overview3ii. Problem, Solution, Opportunities, Advantages3iii. Business Model3II. Company Mission, Vision, and Values4i. Mission Statement4ii. Company Vision4iii. Corporate Values4III. Define Your Market5i. Business Industry and Outlook5ii. Critical Needs of the Market5iii. Target Market and Target Clients5iv. Market Share6IV. Description of Products and Services7i. Product7ii. Product Financials8iii. Competition8V. Organization and Management9i. Proprietorship9ii. Business Management9iii. Upper Management9iv. Lower Management10v. Flow of Operations10IV. Marketing and Sales Strategy11i. Review of the Marketing Environment11ii. 4P’s and 4C’s and SWOT Analysis11iii. Product Life Cycle12iv. Sales Strategy13VII. Financial Management14i. Start Up Costs14ii. Projected Balance Sheet15iii. Projected Income Statement16iv. Projected Cash Flows17

I. The Executive Summaryi. Overview

DynoGear intends on producing a dynamometer that is proficient in measuring the torque, efficiency of the motor, rotor velocity and power output from a range of electrical motors. This dynamometer should be compatible with three-phase AC motors, single-phase AC motors, and DC powered machines, in addition to various sizes of motors. The design will mimic a pulley assembly, including a belt, disk, and springs. The target market includes other education institutes that conduct research, and potentially small companies that are interested in a low-cost, portable, and customizable dynamometer.

ii. Problem, Solution, Opportunities, Advantages

Problem:

· The University of California Riverside currently does not possess a machine such dynamometer for students conducting research in the field of engineering specifically to measure torque, engine efficiency, angular velocity, and power of motors.

Solution:

· DynoGear will design and construct a dynamometer for the students, faculty, or staff members of UCR and other prospective learning institutions or research facilities.

Opportunities:

· This will allow DynoGear with the opportunity to not only provide a dynamometer for UCR, but will also for other institutions that are interested in a dynamometer but are constrained by a budget.

· Completion of this design will allow for a unique measuring system and hands-on analysis technique for users.

Advantages:

· This dynamometer will be low-cost, portable, and customizable in the way that it will be able to accommodate motors of all sizes.

· The simple design will result in low maintenance and low costing repairs.

· Device will measure the power of a motor so that the user can match the correct system, thus increasing efficiency

iii. Business Model

DynoGear will begin with providing a dynamometer for the research laboratory of UCR. From then, DynoGear will provide dynamometer for other university laboratory and research facilities. Subsequently, when DynoGear grows enough to sustain a mass production or manufacturing system, they will offer their dynamometer to maintenance companies who require a simple, affordable and portable device to correctly determine a motor’s torque, efficiency, rotor velocity and power output.

II. Company Mission, Vision, and Valuesi. Mission Statement

DynoGear’s mission is to provide our customers with affordable instruments to advance research.

ii. Company Vision

DynoGear plans to start out providing low-cost dynamometers to learning institutions and research facilities, then expanding to supply to companies that involve maintenance or work with motors. We hope to penetrate the online market and offer our products through various online retailers such as eBay, Amazon, and McMaster-Carr. In 10 years, our goal is to have multiple warehouse locations, a perfected mass manufacturing system and plant in which our dynamometers are readily available. We aim to also develop other products that can be utilized in research. To achieve this growth, we will need to establish and maintain a strong relationship with our suppliers, develop an efficient production system, and continually improve our product to retain a competitive advantage over similar products in the market.

iii. Corporate Values

We value the safety of our customers.

Nothing is more important to us than our customers’ safety. We aim to provide devices that do not risk the safety of the users in any way, and ensure that all products meet all the safety requirements of university laboratories or research facilities.

We aim to further the progression of education.

We value and uphold the importance of education. We hope that our products will be used as instruments in the search for knowledge, and encourage the interests of our team as well as our customers.

We believe in operating ethically, with integrity and respect.

At DynoGear, we believe in conducting not only ourselves but also our entire business with the highest standards of honesty, integrity and respect.

We strive for continuous improvement.

As an organization founded on the principle of learning, we are always looking for ways in which to improve and advance our products and our company as a whole to better serve our customers.

III. Define Your Marketi. Business Industry and Outlook

DynoGear will enter the Machinery Manufacturing industry, where companies in this industry manufacture various types of machinery used in manufacturing, specifically, motor manufacturing. DynoGear would then focus its efforts in supplying to the education and academia industry. This industry mainly comprises of establishments that provide instruction and training in a variety of subjects. Such establishments include schools, colleges, universities, and research facilities. Revenue for establishments in this industry is predominantly generated from tuition and program fees.

Demand for the Machinery Manufacturing Industry

ii. Critical Needs of the Market

In supplying to the education industry, DynoGear will be providing to customers who have the need for an affordable, portable dynamometer to accurately measure the torque, efficiency of a motor, rotor velocity and power output from a range of electrical motors. Customers with this need include education establishments such as universities and research facilities. Essentially, the need that will be fulfilled with this product covers the need to accurately determine the torque, efficiency, and power output.

iii. Target Market and Target Clients

The target market for DynoGear and more specifically, the Dynamometer is the educational services industry. Educational establishments such as universities are the main targets, with a target market of ages 18-30, which represent the target age group that will be using our products in educational establishments or research facilities. This age group mainly consists of university and college students. The target market of ages 40-60 represents the target age group that will be actually purchasing our products, which include university and college professors.

DynoGear hopes to be able to reach a market outside of the educational services industry, including small consulting, construction, and research companies and facilities. Anyone with the need to be able to choose the correct motor and provide maximum efficiency and optimization in design is a potential customer.

iv. Market Share

The projected scope of DynoGear’s market share is not very large, due to DynoGear’s high competition. We will have to compete with other companies producing dynamometers, in which there are various types of dynamometers containing different materials. Varying dynamometers include the Autodyn Chassis Dynamometer, the Eddy Current Dynamometer, and the 15000 Series Dynocom Dynomometer, among many others. In the span of 5 years, we plan to obtain a goal of 1% of the market.

IV. Description of Products and Servicesi. Product

DynoGear’s aim is to create a portable dynamometer designed to be operable by individuals of educational institutions, mainly university students and faculty. This dynamometer will be able to measure the torque, efficiency, rotor velocity, and power outage from a range of electrical motors. The design will include a pulley, belt, disk, and springs. There will also be a safety cage installed around the dynamometer for safety precautions and will also protect the user from injury. The motor shaft will be connected to a large disk, which will come into contact with a belt to create friction. The ends of the belt will then be attached to springs that are set to a certain magnitude or power. Torque will then be developed by the motor, which will be used as a tangential force to be measured.

In terms of building the dynamometer, the members of DynoGear will collectively work together to assemble the model. They will begin by taking a plate of aluminum and drilling 16 holes, adding treads. Next, they will weld another piece of aluminum to the rod shaft, in which thin strips of aluminum will be welded to the square of aluminum on the top. Lastly, the cage, which is donated by the Engineering Department of the University of California Riverside, will be applied around the dynamometer to ensure the safety of the user.

ii. Product Financials

Materials

Part Number

Qty.

Unit Cost

Noncontact Tachometer

1905T22

1

$157.37

Spring Tensioners- Weston 50lb. Spring and Hook Scale

(11’ x 1” in diameter)

-

2

$45.98

($22.99 each)

Base – 6061 Multipurpose Aluminum

2 Ft. Length (1/2’ Thick x 12” Width)

8975K135

1

$75.94

Rod – 6061 Multipurpose Aluminum

2 Ft. Length (18’’, 1’’ Diameter)

8974K13

1

$14.77

Rod Top – 6061 Multipurpose Aluminum, Rectangular Bar

½ Ft. Length (6’’ x 1’’ x ¼’’)

8975K596

1

$1.91

Rod Top 2 – Anodized 6061 Multipurpose Aluminum, Rectangular Bar

1 Ft. Length (1/4” Thick x ¼” Wide)

6023K35

1

$3.83

Ultra-Grip Shaft Collar for 1” Diameter

(OD: 2-1/4”, Wd: 1-1/2”)

9665T2

1

$86.66

Flat Belt Pulley Cast Iron

-

1

$35.00

6061 Multipurpose Aluminum Rod 2” Diameter

(1/2 Ft. Length)

8974K71

1

$16.36

¼”- 20 Conformable Soft-Tip Set Screws

Conformable Soft Nylon-Tip Set Screw, 18-8 Stainless Steel, ¼” -20 Thread, ½” Long

90291A537

1

$7.20

Short Rods- Unpolished 6061 Multipurpose Aluminum

(6” Diameter 3”Lg)

1610T56

1

$48.25

Cage

-

1

$0 (Donated; would normally cost $60)

Total Cost

$493.27

iii. Competition

In the education services industry, DynoGear’s dynamometer will have very high competition. There are many existing dynamometer products that exist in the industry, each with both similar and different features and functions. The biggest advantage and differentiator of the DynoGear Dynamometer is that it is cost-efficient, portable, and customizable in the way that it will be able to accommodate motors of all sizes. It is designed as a small-scale, accessible version of the standard dynamometer. Also, due to its simple yet effective design, it will allow for repairs and maintenance costs to remain low. Not only is it low-cost and low-maintenance, it will also be easy to use and easy to assemble. This product will be more accessible to universities and research facilities, especially those who may have budget. Our position in the market is as a provider of low-cost research equipment for primarily university students and faculty.

V. Organization and Managementi. Proprietorship

The founders of DynoGear: Jaime Alcala, Neil De Vera, Jonathan Furdui, Micah McCants, Gurkamal Singh, and Amanda Suryakusuma will share equal and sole ownership and proprietorship. They will share equal rights of the DynoGear Dynamometer design, and any other future DynoGear production designs.

ii. Business Management

DynoGear’s business management will be as following: there will be a single President/CEO, and a Executive Vice President of five departments: Finance, Marketing, Research and Development, Internal/Human Resources, and Manufacturing/Operations. All executives and levels of management will be outsourced and hired by the DynoGear founders.

iii. Upper Management

DynoGear’s Upper Management consists of only one vital role, the President/CEO. The President/CEO will be responsible for clearly communicating a strategic vision for the corporation in addition to holding high performance standards and showing confidence in the corporation’s ability to meet these standards. Although the President/CEO will have ultimate jurisdiction on all business matters, including company direction and company policies, the President/CEO will be required to regularly report company activities to the original founders to ensure that there is alignment in company vision.

iv. Lower Management

The Lower Management involves the head of DynoGear’s five departments. The Executive Vice President of Finance will manage all of the issues related to financials, including making certain that the President/CEO obtains all the company financial reports for the bimonthly meetings with the founders. The Executive Vice President of Marketing will overlook the marketing department and make certain that the company is implementing all the correct marketing tactics. The Executive Vice President of Research and Development will head the department in improving and modifying their products to provide the best quality for DynoGear customers. The Executive Vice President of Internal/Human Resources will be in charge of the corporation’s internal affairs, including all employees and matters in relation to DynoGear’s human resources. Finally, the Executive Vice President of Manufacturing/Operations will overlook all manufacturing processes and will work towards improving efficiency and cutting labor costs.

v. Flow of Operations

The general flow of operations within DynoGear will originate with the President/CEO, in which this person will have final say of company policies and direction. The President/CEO will hold bimonthly meetings with the original founders, in which they will discuss strategies, current reports, pressing issues, and other important matters in relations to DynoGear. The President/CEO will also manage the Executive Vice Presidents of the five departments, who will in turn each lead and oversee each of their corresponding department.

IV. Marketing and Sales Strategyi. Review of the Marketing Environment

DynoGear will be competing in the education and academia services industry. The market and customers this organization will be catering to are educational institutes and research facilities, such as universities and university research laboratories.

ii. 4P’s and 4C’s and SWOT Analysis

Product...Customer Solution

DynoGear will provide a dynamometer to measure the torque, efficiency, and rotor velocity and power output of a range of electrical motors. Features that distinguish this product from competitors include portability, low-cost, and ease of use. It will be called the DynoGear Dynamometer.

Price...Customer Cost

The dynamometer will be set at a low price, as DynoGear aims to be the customer’s affordable provider of equipment. It will be priced at $800, while the cost to produce each dynamometer will be estimated at $600. By keeping prices low, this will attract educational institutes who may have a budget.

Place (Distribution)...Customer Convenience

Distribution will introduce its products to local educational institutes and research facilities, then will expand into online retailers such as Amazon, eBay, and McMaster-Carr, including its own DynoGear company website.

Promotion...Customer’s Mind

Promotion will include print advertisements through various popular engineering magazines, attending engineering conventions and holding displays, online advertisements of banner ads, and word-of-mouth advertisement.

Positioning

DynoGear will position its brand as education’s preferred provider of affordable research equipment.

SWOT Analysis

Strengths

· Small-scale

· Affordable

· Universal (compatible with different motors)

· Portable

· User-friendly

Weaknesses

· Limit of how much horsepower it can test

· 2 kilowatts limit

· Belt in design is prone to wear, meaning it will need maintenance

· Dynamometer is potentially loud, which can be offsetting to users

Opportunities

· Allows for testing in research facilities

· Allows for DynoGear to be a provider in education institutes

Threats

· Threat of dividing up motors into smaller pieces may render the dynamometer useless

· Many large companies that use dynamometers already have one in its facilities

iii. Product Life Cycle

Introduction

DynoGear will introduce its DynoGear Dynamometer to select educational institutes and research facilities. They will only feature the one-dynamometer design, and will be low penetration priced.

Growth

Products will be made to order, and will be more accessible through different modes such as online retailers. Product quality will be consistent, and pricing will remain low as more customers are gained. Promotion and advertising is aimed at a broader audience and more effort will go into advertisement.

Maturity

DynoGear will have its products readily available for its consumers, through all modes of distribution. Pricing will continue to remain the same, and distribution becomes more intensive as incentives may be offered to encourage preference.

Decline

DynoGear will maintain its product as readily available, and will look into adding new features or updating the parts for higher efficiency.

iv. Sales Strategy

DynoGear will begin by offering their dynamometer to local educational institutes, starting with University of California Riverside. They will then go to other universities, and approach research facilities. Advertising will include attending engineering conventions and advertising in engineering magazines as well as sending out newsletters to potential consumers. Popular engineering magazines include: Engineering and Technology Magazine, ASME’s Mechanical Engineering Magazine, and even university magazines such as Cornell’s Engineering Magazine. The Marketing Department will also invest in advertisements such as banner ads on websites and on various websites selling other engineering modes of measurement. DynoGear will create its own website in which consumers will be able to purchase the dynamometers, and will also create links in which their products will be sold through other online retailers such as Amazon, eBay, and McMaster-Carr.

VII. Financial Managementi. Start Up Costs

Projected start up costs for DynoGear for a year of operations will be estimated at around $26,800. Legal fees will cost around $1,000. Insurance will cost $250 per month, which will total $3,000 at the end of December 2014. Rent for an office space for DynoGear will cost $500 a month, totaling $6,000 for one year. The costs to create a website and set up a point of sale system within the website will be estimated at around $1,000. The materials needed to create a dynamometer will cost precisely $600 per dynamometer. Assuming DynoGear sells 20 dynamometers by the end of the year, costs of materials will total $12,000. Advertising and marketing will cost $3,000, including all the materials such as brochures, flyers, business cards, etc. The delivery/distribution and transportation costs for obtaining materials, delivering the dynamometers, and other transportation costs will total $800.

Start-Up Expenses

Legal

$1,000

Insurance

$250/month= $3,000

Rent

$500/month= $6,000

Website

$1,000

Materials

$600/dynamometer= $12,000

Advertising and Marketing

$3,000

Delivery/Distribution and Transportation

$800

Total Costs

$26,800

ii. Projected Balance Sheet

DynoGear

Balance Sheet

(December 2014)

Assets

Current assets:

 

Cash

$1,000

Inventories

$0

Accounts receivable

$16,000

Other

$0

Total current assets

$17,000

Fixed assets:

 

Property and equipment

$2,000

Equity and other investments

$500

Less accumulated depreciation

($1,000)

Total fixed assets

$1,500

Other assets:

 

Long-Term assets

$1,500

Total other assets

$1,500

Total assets

$20,000

 

 

Liabilities and owner's equity

Current liabilities:

 

Accounts payable

$10,000

Accrued wages

$0

Income taxes payable

$2,500

Other

$500

Total current liabilities

$13,000

Long-term liabilities:

 

Mortgage payable

$5,000

Total long-term liabilities

$5,000

Owner's equity:

 

Investment capital

$500

Accumulated retained earnings

$1,500

Total owner's equity

$2,000

Total liabilities and owner's equity

$20,000

iii. Projected Income Statement

Income Statement

DynoGear

Revenue

Gross Sales

16000

Less: Sales Returns and Allowances

0

Net Sales

16000

Cost of Goods Sold

Beginning Inventory

0

Add:

Purchases

11000

Taxes

750

Shipping Costs

1000

Other

500

Inventory Available

13250

Less: Ending Inventory

1000

Cost of Goods Sold

12250

Gross Profit (Loss)

3750

Expenses

Advertising

3000

Depreciation

100

Insurance

3000

Interest

100

Legal and Professional Fees

1000

Licenses and Fees

500

Website

1000

Office Expense

500

Rent

6000

Repairs and Maintenance

50

Transportation

300

Total Expenses

15550

Net Operating Income

(11800)

Other Income

Gain (Loss) on Sale of Assets

200

Interest Income

100

Total Other Income

300

Net Income (Loss)

(11500)

iv. Projected Cash Flows

Statement of Cash Flows

Dec-14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash received from customers

 

$16,000

 

Cash paid for merchandise

 

 

11,000

 

Cash paid for shipping and handling fees

1,000

 

Cash paid for taxes

 

 

500

 

Other

 

 

 

0

 

 

 

 

 

 

 

Net cash provided (used) by operating activities

 

$28,500

 

 

 

 

 

 

 

 

 

 

 

 

Cash received from sale of capital assets (plant and equipment, etc.)

$10,000

 

Cash received from collection of notes receivable

(8,000)

 

Cash paid for purchase of capital assets

 

500

 

Other

 

 

 

0

 

 

 

 

 

 

 

Net cash provided (used) by investing activities

 

$2,500

 

 

 

 

 

 

 

 

 

 

 

 

Cash received from issuing stock

 

$15,000

 

Cash received from long-term borrowings

 

10,000

 

Cash paid to repurchase stock

 

(250)

 

Cash paid to retire long-term debt

 

(5,000)

 

Cash paid for dividends

 

 

(10,000)

 

Other

 

 

 

0

 

 

 

 

 

 

 

Net cash provided (used) in financing activities

 

$9,750

Increase (decrease) in cash during the period

 

$40,750

Cash balance at the beginning of the period

 

5,000

Cash balance at the end of the period

 

 

$45,750

President/CEO

Exec. VP of Finance

Exec. VP of Marketing

Exec. VP of R&D

Exec. VP of Internal/HR

Exec. VP of Manufacturing/Operations

Group 3: DynoGear Dynamometer

DynoGear- Amanda Suryakusuma

Group 3: DynoGear Dynamometer

17