Download presentation
Presentation is loading. Please wait.
Published byMeaghan Bark Modified over 10 years ago
1
Business Plan: 3D Additive Manufacturing Technologies, Co. – 3-DAMTM
Starting A New Venture – MGMT 6630 Joe Ott
2
BUSINESS CONCEPT 1. INTRODUCTION 2. THE COMPANY 3. PRODUCTS / SERVICES
1.2. BUSINESS IDEA 1.3. BUSINESS MODEL 1.4. BUSINESS GOALS 1.5. KEYS TO SUCCESS 2. THE COMPANY 2.1. LEGAL STRUCTURE AND OWNERSHIP 3. PRODUCTS / SERVICES 3.1. PRODUCT AND SERVICE SUMMARY 3.2. CUSTOMER 3.3. TECHNOLOGY 3.4. REGULATORY ISSUES 4. THE MARKET 4.1. MARKET ANALYSIS 4.2. TARGET MARKET SEGMENT 4.3. GROWTH POTENTIAL 5. THE INDUSTRY 5.1. COMPETITION 6. SALES 6.1. SALES STRATEGY. 6.2. PRICE STRATEGY 6.3. PROMOTION STRATEGY 6.4. SALES FORECAST 7. THE MARKETING PLAN 8. MANAGEMENT AND EMPLOYEES 9. ACTIVITY PLAN 10. FINANCE AND ECONOMY FIGURES BACK UP SLIDES
3
1. INTRODUCTION - “With 3-DAMTM comes manufacturing freedom!!”
1.2. BUSINESS IDEA The business idea behind 3-DAMTM is to cross additive manufacturing technology with the “KinkosTM” concept. Customers contact store by appearance, , web submission Business would staff trained engineers and technicians to assist customers in selecting the correct technology to manufacture their hardware. 1.3. BUSINESS MODEL Sole Proprietorship during the initial start-up phase Would initially target a small volume of jobs, applying a medium margin. Diversification Growth Strategy - 3-DAMTM would practice Forward Integration by getting in front of the customer This business plan will outline the scope and make-up of the 3-DAMTM company, the market, competition, and financial outlook of the proposed company. The business name of the company to be formed will be “3D Additive Manufacturing Technologies, Co.” otherwise known as 3-DAMTM. This name comes from a combination of the two common names for the technology the company is based upon, “3D Printing” and “Additive Manufacturing”. 3-DAMTM will utilize the technologies of additive manufacturing and offer a “KinkosTM” style of service and manufacturing to customers. From ASTM Designation: F2792 – 10 - Standard Terminology for Additive Manufacturing Technologies2, additive manufacturing (AM), n—process of joining materials to make objects from 3D model data, usually layer upon layer, as opposed to subtractive manufacturing methodologies, such as casting, forging, and machining. Synonyms: additive fabrication, additive processes, additive techniques, additive layer manufacturing, layer manufacturing, and freeform fabrication. It can encompass metals, polymers, and electronics and apply to a range of structural and functional materials as well as components for an array of defense and energy applications.
4
1. INTRODUCTION - “With 3-DAMTM comes manufacturing freedom!!”
From ASTM Designation: F2792 – 10 - Standard Terminology for Additive Manufacturing Technologies2 Why pursue additive manufacturing? There are many benefits in using additive manufacturing to make hardware over conventional manufacturing5: Design flexibility No tooling constraints Allows complex models No hard tooling required No material lead time Automated process Reduced development expenses Faster concept design to functional component Reduced manufacturing costs Near wrought material properties Reduced product life cycle cost Reduced manufacturing time: hours/days/weeks vs. months Minimal secondary machining - near-net shape part Additive manufacturing is an emerging industry. Some of the difficulties with additive manufacturing are: New technology – not everyone is familiar, technology evolving High barriers to entry – initial high start-up costs for equipment Material properties are still being defined Technical and process models are limited Picture courtesy of Rapid Quality Manufacturing5
5
1. INTRODUCTION - “With 3-DAMTM comes manufacturing freedom!!”
1.4. BUSINESS GOALS 2 years of operation: Increase market share – establish 4 stores in largest US manufacturing locations (Houston, TX; Milwaukee, WI; Seattle, WA; San Antonio, TX)4 Increase market penetration over time –grow each store’s revenue at least 12.5% yearly Establish new pricing incentives and promotions Build long lasting quality partnerships Advertising Join Committee F42 on Additive Manufacturing Technologies1 6 years of operation: Increase market share – establish a store in 10 major US cities. Have plan developed to have 50 stores in major US cities by 10 years of operations. Increase market penetration over time – continue to grow revenue at least 12.5% yearly, per store. 1.5. KEYS TO SUCCESS Flexibility – providing solutions for variety of customer and their unique requirements. Adaptability – have technology and capability for variety of needs. Sustained Growth – have capacity where and when a customer needs it. Technical “Know-how” – have understanding of how to use additive manufacturing technology to provide best results. Speed – providing solutions faster and more efficient than anyone else. Funding – have cash and capital to sustain growth and profit. This business plan will outline the scope and make-up of the 3-DAMTM company, the market, competition, and financial outlook of the proposed company. The business name of the company to be formed will be “3D Additive Manufacturing Technologies, Co.” otherwise known as 3-DAMTM. This name comes from a combination of the two common names for the technology the company is based upon, “3D Printing” and “Additive Manufacturing”. The initial location of the first office should be located in Houston, TX. According to (Kotkin, Dec 2011) Forbes Magazine4, this is currently the largest center of manufacturing in the US. Flexibility – providing solutions for variety of customer and their unique requirements. This will be achieved by understanding each market’s unique needs (part sizes, quality level, common materials, etc.) Adaptability – have technology and capability for variety of needs. This will be achieved by procuring additive manufacturing machines that initially will be able to serve the needs of the majority of markets. Sustained Growth – have capacity where and when a customer needs it. By targeting major manufacturing cities and business and residential centers, 3-DAMTM will be at the fingertips of industry. By taking internet and phone orders can provide service worldwide. Technical “Know-how” – have understanding of how to use additive manufacturing technology to provide best results. Will train and educate sales engineers and operators in various additive manufacturing technologies. Will provide continuing education as technologies change and mature. Speed – providing solutions faster and more efficient than anyone else. This will be achieved by streamlining the store’s infrastructure using lean concepts and software integration. A lean value chain will ensure post processing turn time is minimized. Funding – have cash and capital to sustain growth and profit. Aggressively campaign for funding via government and private investment.
6
2. THE COMPANY - “With 3-DAMTM comes manufacturing freedom!!”
2.1. LEGAL STRUCTURE AND OWNERSHIP 3-DAMTM will be listed with the Internal Revenue Service as a sole proprietorship The principle owner (and equity shareholder) will be Joe Ott. Minor equity shareholders (<49%) will be silent partners Figure 1. – Basic Organizational Structure
7
3. PRODUCTS / SERVICES - “With 3-DAMTM comes manufacturing freedom!!”
3.1. PRODUCT AND SERVICE SUMMARY Plastic and metal parts and concepts, produced in a few hours or days, using additive manufacturing technologies Evaluation and modification of designs/CAD and concepts for application to additive mfg. Coordination of post processing. Metrology center – accurate measurement evaluation 3.2. CUSTOMERS The target customers are everyone from local hobbyist and enthusiast to large Fortune 500 companies needing unique part developed and produced. The current market doesn’t have local “to-go-to” places to get all your materials and additive manufacturing methods and post-processing under one roof. All competition is located in a few select areas 3-DAMTM would provide a place for customers to have one-stop-shopping for their manufacturing. Customer(s) can contact the business center by phone, web, or face-to-face. Sales engineers would be available to help customers work through product development and iteration until the final product is ready. Pricing would be evaluated based upon the necessary amount of engineering and development to make hardware, material considerations, and post processing requirements. Plastic and metal parts and concepts, produced in a few hours or days, using additive manufacturing technologies. Individual parts or part pieces will generally be as up to as large as the build chamber of each machine allows and as small as the accuracy of the technology allows. The initial materials that will be available for customers’ parts will be limited to those qualified by the vendor the anticipated plastic and metal machines allow. Through technology development 3-DAMTM will look to grow this list. Evaluation and modification of designs/CAD and concepts for application to additive mfg. Coordination of post processing. Initially post processing will be outsourced. As 3-DAMTM grows it is anticipated that machining/post processing resources will be added to the product and services summary for each store. Metrology center – accurate measurement evaluation through surface and dimensional scanning using laser and light machines.
8
3. PRODUCTS / SERVICES - “With 3-DAMTM comes manufacturing freedom!!”
3.3. TECHNOLOGY Powder Bed Technologies - Powder Bed is the distribution of thin layer of powder (metal or thermoplastic) and uses an energy source to sinter/melt the powder into solid form. Powder Bed Technologies offer high resolution, medium volume, small to medium sized part capabilities. Two common methods are: Selective Laser Melting – laser beam power source in an inert atmosphere (nitrogen or argon) Electron Beam Melting – electron beam power source in a heated, vacuum environment Deposition Technologies – Metal is introduced via powder nozzle or wire feed into an energy source directly at the build location, which melts to metal into solid form. Deposition Technologies offer lower resolution, lower volume, larger sized part capabilities. 3 common methods are: Laser Powder Deposition – laser/power nozzle combination Laser Wire Deposition – use of a continuous feed wire and laser energy source Electron Beam Wire Deposition – use of continuous feed wire and EB energy source Specialized Software – (CAD/CAM, 3D model analysis, project/customer management) will be required to seamlessly integrate customer models between additive mfg. platforms and required post processing technologies. 3.4. REGULATORY ISSUES "Green Technology" PPE Inert Gases Intellectual Property7 Product Liability7 The following technology is necessary for 3-DAMTM in order to create an output. These will be key technologies that will enable 3-DAMTM to be competitive and maximize turn-time while keeping quality. These technologies are generally very expensive capital investments. Additionally, these machines take up floor space and must have special environmental controls / PPE. It will require significant investments to procure initial machines and supplies and floor space. Additive Technologies are generally considered "Green Technology". But due to the fine particle size of powders used in manufacture special PPE and air filters will be required. Inert gases, such as argon, will be used in the manufacture of 3D parts. This may require a permit. Other regulatory considerations will be protection of Intellectual Property of customers. As this technology can easily be used to copy designs, infringement must be evaluated and considered7. Also, product liability should be accounted for and proper insurance ($1Million minimum) carried in the case of a bad part causing damage to persons or property7 or litigation. Pictures courtesy of EOS ( Arcam ( and Optomec (
9
4. THE MARKET- “With 3-DAMTM comes manufacturing freedom!!”
4.1. MARKET ANALYSIS Wohlers Associates Inc. - Additive manufacturing had a total of market size of $1.7 billion worldwide in 2011. Emerging Industry - Additive manufacturing can be considered an emerging industry in the US12 4.2. TARGET MARKET SEGMENT Small Businesses - 2+ years old (generally wouldn't be start-ups in their first year) Income - Have manufacturing costs >$1000 per part. Need - need fast parts made, short runs Education - need to understand hardware end requirements. Work - manufacturing, research, engineering, automotive, etc. Geographical location - in key starting cities, some internet sales. Large Business - 2+ years old Need - need fast parts made, short runs, development iterations Hobbyists - Age - 16 years or older Income - able to afford part costs between $100 and $2000. Need - generally have a concept they want to make or need a replacement part for one that broke Gender - male and female Education - majority expected to have some college and / or trade school Work - professionals and trades Geographical location – key US manufacturing centers / cities, some internet sales. 4.3. GROWTH POTENTIAL Additive Manufacturing, aka 3D Printing, will reach $3.1 billion worldwide by 2016 and $5.2 billion by If 3-DAMTM can capture even 1% of this market that would be $31 million dollars in revenue. 5% growth in revenue the next year would result in $32,550,000 of revenue, per store. CAGR- Compound Annual Growth Rate Potential Customer Year 1 Year 2 Year 3 CAGR Sm. Business 100 513 677 61,30% Lg. Business 10 52 68 61,48% Hobbyists 310 1 590 2 098 61,29% Total 420 2 155 2 843 12.5% = $387,500,000
10
5. THE INDUSTRY - “With 3-DAMTM comes manufacturing freedom!!”
5.1. COMPETITION - Other companies trying to adopt the “Kinkos” model are: Mydea Technologies – digital model shop and an additive manufacturing and rapid prototyping provider. Owners: Michael Siemer Annual Sales: $520K Competitor’s distribution channel: Internet Competitor’s marketing strategy: Internet Sales Products and Services: Product Development & 3-D CAD Modeling, Rapid Prototyping/Additive Fabrication, Subtractive Rapid Prototyping, Rapid Tooling & Manufacturing Competitors price strategy: mid to high cost. Shapeways – 3D Printing company for designers and Do-It-Yourselfers. Helps people make and sell their items. Owners: Peter Weijmarshausen Annual Sales: $1.90M Competitor’s marketing strategy: Internet Sales, Arts and Crafts forums, Web sales of clients’ products, Do-It-Yourself market. Competitors price strategy: Low to mid cost. Products and Services: Tutorials, Shapeways Lab, Software, Metals and plastic fabrication, Online Sales. The following companies are a selection that specialize in additive technology and would be competition for their prospective sub-fields: Morris Technologies - – Selective Laser Sintering (SLS) metals C&A Tool - – SLS metals and machine shop Paramount Industries – - Stereolithography (SLA) and SLS of plastics Materialise a Belgian firm that uses additive manufacturing to make a range of products, including medical devices.
11
6. SALES - “With 3-DAMTM comes manufacturing freedom!!”
6.1. SALES STRATEGY It is envisioned that customers would contact a local 3-DAMTM business center to initiate a job. 6.2. PRICE STRATEGY Pricing would factor in the costs of overhead, materials, and per hour cost for machines and personnel. A profit mark-up of 30% will be added to each job. 6.3. PROMOTION STRATEGY Sales will be generated through advertisement and campaigns. The campaign will utilize TV, trade journals, and the internet (web pages, FaceBook, etc.). 6.4. SALES FORECAST Based 3 major products/services: Sales Engineering, Fabricated Metals, and Fabricated Plastics. Projected the amount of sales revenue generated by the average increase in customers each month times the expected revenue each customer would generate. YR 2 accounts for 4 stores in key cities. YR 3 accounts for 5 stores in key cities. Expect average growth of 12.5% per year for each store. Cost of sales is the overhead for the sales engineers and technicians plus an estimated monthly operating cost for the metal machines of $4000 and plastic machines of $3000. These numbers are based upon a best scenario. Sales Year 1 Year 2 Year 3 Sales Engineering 98 000 Powder Metal Powder Plastic Total sales Direct costs, sales 24 000 70 000 82 750 52 500 62 062 Total, direct costs, sales Sales monthly
12
7. THE MARKETING PLAN - “With 3-DAMTM comes manufacturing freedom!!”
As part of a Diversification Growth Strategy 3-DAMTM would practice Forward Integration. As the customer is the focal point for the business model, 3-DAMTM offices will be targeted close to the customers. Customers will be contacted through advertisement and campaigns. The campaign will utilize TV, trade journals, and the internet (web pages, FaceBook, etc.). Highlights of ads will target design freedom, no or low tooling, and speed. Additionally, small to large manufacturing companies will be approached. A marketing group will be selected to assist in the marketing campaign on a yearly contract. A $100k budget will be set for marketing. The marketing campaign will start in June 2013 and continue through December 2013.
13
8. MANAGEMENT AND EMPLOYEES - “With 3-DAMTM comes manufacturing freedom!!”
CEO / CTO - complete oversight and responsibility for the company as well as technical authority. CFO - direct oversight of the following reporting line: Accounting, Patient Accounts, Communications, Purchasing, Printing & Duplicating, Information Management, Management Information Systems. Accounting and Human Resources - Accounting and Human Resources will be outsourced to a 3rd party company and overseen by the CFO. The company will be responsible for all day to day accounting and human resources activities, including accounts receivable and payable, health and dental care, 401k management, and taxes, etc. The company should have experience with accounting and HR in all US states. It would be preferred if the company has experience with start-up companies. Technology Team – Materials Engineer, Technology Researcher, Training/Quality Responsibility for moderately complex engineering projects, Serves as consultants, providing technical information and engineering recommendations that assist various projects and processes and materials. Coaches and trains less experienced engineers and technicians. Branch Manager(s) – oversee branch offices and perform sales Employees Sales engineers – customer interface, engineers marry up technology to customer needs. There will be 2-3 per store. CAD and Build technicians – modify designs to make technology friendly, operate and run machines. There will be 1 per machine and two CAD operators per store. Post processing technicians - provide any necessary post processing and coordination. There will be one per store. Shipping/Receiving – ship and receive hardware, supplies, etc. There will be one per store.
14
9. ACTIVITY PLAN - “With 3-DAMTM comes manufacturing freedom!!”
This section describes some activities that will be needed to implement the whole or parts of the business plan. Order and Install Machines – machines and installation at $1,000,000 a-piece. 1 plastics, 2 metals, 1 metrology and inspection, 1 oven and autoclave = $5,000,000 Store – 15,000 sq. ft. * $3.523 per foot per year = $52,800. Plus $1,000,000 for upgrades and office requirements. Equals $1,052,800.00 Hire Accounting / HR - $100,000 Supplies - $100,000 Advertising Campaign - $100,000 Activity Start date Stop date Budget Responsible Department Order and Install Machines 03/01/2013 06/01/2013 CTO Technology Team Store CEO Hire Accounting / HR 01/02/2013 05/31/2013 CFO Supplies Advertising Co. 04/01/2013 Branch Managers Total
15
10. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes manufacturing freedom!!”
The following are “Seed Capital funding expenses” that will be incurred prior to the business starting: The following describes all the “Start-up through Second Stage” funding (existing and needed) for the project: Bank Loans – $3,000,000 – Secured against the procured equipment. Equipment, Real-estate, and Long-term loans. Angel Investors – $2,000,000 Other Investors – $2,000,000 – Informal Risk Capital, Venture Capital Grants – $2,000,000 – SBIR - Phase I and Phase II, Fed, State, Local. Government Loans - $1,000,000 – SBA (504, SBA), etc. Total: $10,000,000 Third stage (growth) funding would be necessary for expansion beyond the first store and would be necessary at last quarter 2013. Start-up Costs Research Technology Research Store Location Permits and Fees Marketing Study Total Start-up Costs Start-up funding Bank Loans Other Investors Grants Government Loans Total Start-up funding Total Equity The following are “Seed Capital funding expenses” that will be incurred prior to the business starting: Research Technology – $100,000 – this is to research the best metal, plastics, and metrology machines necessary to support the business concept. Research Store Location – $200,000 – This is to find and fund the initial store location plus other 3 locations for next 3 stores. Permits and Fees – $100,000 – This will fund necessary permits and fees for establishing the store in first store location. Marketing Study - $100,000 – This will fund a marketing study for the Houston, TX area specifically and US in general to help target large businesses, small business, and hobbyists. The following describes all the “Start-up through Second Stage” funding (existing and needed) for the project: Bank Loans – $3,000,000 – Secured against the procured equipment. Equipment, Real-estate, and Long-term loans. Angel Investors – $2,000,000 Other Investors – $2,000,000 – Informal Risk Capital, Venture Capital Grants – $2,000,000 – SBIR - Phase I and Phase II, Fed, State, Local. Government Loans - $1,000,000 – SBA (504, SBA), etc. Total: $10,000,000
16
10. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes manufacturing freedom!!”
Net profit monthly PROFIT & LOSS TABLE Year 1 Year 2 Year 3 Sales Sale costs BTO profit 58 000 BTO profit % 17 % 64 % 67 % Expenses Salaries Additional Salaries costs Marketing and activity costs Depreciation Accounting / HR / Advertising Services 99 996 Supplies (office and operating) Utilities, Web, IT, Phone 20 000 96 000 Insurance Maintenance Plan Research Technology Research Store Location Permits and Fees Marketing Study Sum direct costs Financial costs -0 Profits before tax Profit before tax % % % -843 % Net profit yearly
17
10. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes manufacturing freedom!!”
Balance Sheet Year 1 Year 2 Year 3 Current assets Liquid assets Sales Total current assets Fixed assets Fixtures and fittings & fixed assets Acc depreciation fixtures & fittings/fixed assets Total fixtures and fittings/fixed assets Total assets Liabilities Share capital & risk capital Accounts payable Accrued taxes Long-term liabilities Balanced profit/loss Total liabilities & equity capital Profit for the year YR YR YR3 Current Ratio = *indicates low liquidity Debt Ratio = *indicates business while taking on more debt is working out of debt Debt to Equity = 1.32 *High capital industry/business Net Profit Margin = *indicates high initial risk but business becoming more stabile. ROI = Generally these ratios are stating that the business will be very risky at the onset due to the high amount of debt the company will have. This debt will continue to grow as the company expands but the expansion and income will stabilize the company as it grows out of debt in its first decade. These ratios can be compared (Appendix 3) against just the initial store. We see the same risk but slower recovery, though more stability.
18
10. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes manufacturing freedom!!”
CASH FLOW ANALYSIS Year 1 Year 2 Year 3 Liquid assets, incoming Liquid assets obtained from activities Sales Other earnings Total earnings from activities Other liquid assets obtained VAT and tax refunds Increase in accounts payable Increase in short-term liabilities Increase in long-term liabilities Sale of current assets Sale of fixed assets New capital increase Total liquid assets obtained Liquid assets spent Cash expenditure Total expenditure from activities Other liquid assets spent VAT and tax payments Reduction in short-term liabilities Reduction in long-term liabilities Purchase of current assets Purchase of fixed assets Total liquid assets spent Net cash flow Liquid assets, outgoing
19
Back Up Slides
20
REFERENCES: "ASTM International Technical Committee F42." ASTM International Technical Committee F42. N.p., n.d. Web. 17 July < "Designation: F2792 − 12a - Standard Terminology for Additive Manufacturing Technologies." ASTM F a. ASTM, 17 July Web < "Industrial Space Cost Comparison." Greater Houstono Partnership. Cushman & Wakefield, Third Quarter 2011, Web. June < Kotkin, Joel. "Heavy Metal Is Back: The Best Cities For Manufacturing." Forbes. Forbes Magazine, 15 Dec Web. 17 July < Liechty, Eli. "Commercial Benefits of Metals Additive Manufacturing for Aerospace Production." Midwest SAMPE. Mar Lecture. "Manufacturing.GOV." National Network for Manufacturing Innovation (NNMI). N.p., n.d. Web. 17 July < Marcus, Adam. "3D Printing: The Future Is Here." 3D Printing: The Future Is Here. The Technology Liberation Front, 10 June Web. 17 July < McCue, TJ. "3D Printing Industry Will Reach $3.1 Billion Worldwide by 2016." Forbes. Forbes Magazine, 27 Mar Web. 17 July < McCue, TJ. "Additive Manufacturing Will Change in the Next 5-10 Years." Forbes. Forbes Magazine, 02 May Web. 17 July < Smartplan Generator Ver USA. EXECUTIVE OFFICE OF THE PRESIDENT. EXECUTIVE OFFICE OF THE PRESIDENT. A FRAMEWORK FOR REVITALIZING AMERICAN MANUFACTURING. Dec Web. June < USA. National Science and Technology Council. Executive Office of the President. A NATIONAL STRATEGIC PLAN FOR ADVANCED MANUFACTURING. Feb Web. June < Wohlers, Terry. "Worldwide Trends in Additive Manufacturing." RapidTech 2009: US-TURKEY Workshop on Rapid Technologies. Wohlers Associates, Inc, Web. June <
21
One Store (Houston, TX) Ratios
YR1 YR2 YR3 Current Ratio = *indicates low liquidity Debt Ratio = *indicates store is working out of debt Debt to Equity = *High capital industry/business Net Profit Margin = *indicates high initial risk but business working toward stabilizing. ROI = *indicates high initial risk but business becoming more stabile.
Similar presentations
© 2024 SlidePlayer.com Inc.
All rights reserved.