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3 Mar.
2023

Surveyor Instrument Business Plan


Surveyor Instrument Business Plan


Introduction

Bottlieb Innovations, Inc., an innovative start-up, produces a product that will transform the land assessment industry. Bottlieb’s Digital Geographer product is a simple device which, through patented technology, computes the area of a walked perimeter.

This plan serves as a guideline to help management when the company enters its first fiscal year. This plan uses the most conservative projections and numbers possible.

The Company

Bottlieb Innovations, Inc., is located in Escondido, CA. The facility covers approximately 1,500 feet and is located close to freeways. It includes office, workshop, and assembly spaces as well as plenty of parking.

President and CEO George S. Bottlieb is responsible for product development, sales, and overall management of the business. Jay Rosenburg Jr. shares responsibility for business administration, with a particular emphasis on finance, marketing and operations. Since the company is very small, both the president and VP will initially have to focus on tasks such as product assembly, packaging, order processing, and shipping. Other management personnel will be added as the company grows. Temporary employment agencies will initially contract production staff to reduce overhead and provide benefits.

The company will offer a competitive bonus plan to reward outstanding company performance. With such incredible growth potential, the bonus plan should attract and retain top talent.

The Product

The company has created and is planning to manufacture a simple device, called the Digital Geographer. It will calculate the area from a walked perimeter in a fraction the time required by current area measuring techniques that rely on distance measurement wheel technology. It is expected that the manufacturing process of the Digital Geographer will be very simple due to its few components.

No fair comparisons can be made between the functionality of Bottlieb’s Digital Geographer and the distance wheels offered by a range of other manufacturers. The Digital Geographer simplifies complicated area measurements. It used to require multiple measurements, extensive estimations and complicated geometric calculations. The Digital Geographer now requires you to be able to simply walk and push a button. Contractors understand the importance and value of accurate area measurement. Contractors will be able to avoid the costly mistakes of underestimating jobs in a highly competitive market.

Bottlieb Innovations, Inc. assembles its own products, using local vendors for materials and services. The company has molds to produce plastic components such the wheel, encoder box, and other parts.

Plans for a follow on product, the DG-3000, are already underway. The DG-3000 uses two wheels, a differential-based system instead of an electronic compass for determining directional change. Bottlieb Innovations plans future products with software interfaces. Future iterations of DG-3000 may also use a Global Positioning Satellite, (GPS), system.

Market

Analyses of the measuring wheel market have revealed that there is an annual global revenue of approximately $100M. The average price of the wheels is around $50 (U.S. dollars). The worldwide sales of distance wheels total approximately two million annually. Bottlieb Innovations conservatively estimates that within this market, one-third of the demand is generated due to customer need to calculate area and distance versus distance measurement only. If this estimate is correct, there may be demand for 600,000.+ units per annum in the area measurement segment.

Bottlieb Innovations could capture 1% in this segment. This would mean that the company can sell 6,000 units each year. As long the market values the Digital Geographer as a superior product and customer buying habits are changed, then the market potential is high.

There are three basic market segments in the current distance-wheel market:

  1. Construction: Appraising, engineering, small-scale surveying.
  2. Agricultural, which includes large-scale surveying.
  3. Niche.

Bottlieb Innovations is targeting current buyers aged 10𔈁 to 18&#82433.

Distance wheels are used in construction, surveying, and small-scale appraising industries. The Digital Geographer is specifically targeted at buyers who use their distance wheel to measure area. Bottlieb’s initial sales will go to California’s fast-growing construction sector. However, Bottlieb plans on rapidly expanding its domestic and global sales.

Bottlieb’s product is a technological leap, so there are no direct competitors to the Digital Geographer product. Bottlieb does expect to sell Digital Geographer products to a significant part of the distance wheel market. Bottlieb can be seen as a competitor in the current distance wheel market.

Distance wheel competitors typically sell through distributors of tool. A few of the larger wheels can also be sold through agricultural supply dealers. Distributors can handle product placement issues and the problems that arise when dealing with customers. Distributors also sell distance wheels at large home improvement stores (e.g. Home Depot

The large number of private-owned companies involved in the industry makes it difficult to forecast the current industry growth. Bottlieb Innovations doesn’t expect a significant increase in unit sales in the measuring-wheel industry in the next few years, despite the fact that there has been strong growth in construction worldwide. However, it does anticipate market share growth from existing market players over the next few decades. Bottlieb’s growth is not as dependent upon the entire market size growing as it is upon generating interest, awareness, and excitement for the Digital Geographer product.

Bottlieb expects direct marketing and product reputation, as well as sales through major distributors and home improvement stores, to briskly expand market demand throughout the state, region, and nation within the next five years. Bottlieb Innovations will focus its efforts on global expansion after achieving initial success in domestic markets and securing favorable Web-based orders.

Financial ProjectionsBottlieb Innovations’ sales forecast assumes constant, non-seasonal growth and an average revenue of $425 per unit. The Digital Geographer’s price will be driven by volume and the significant discounts our suppliers receive for higher volumes. If sales volume rises, it is possible to lower the price. However, we won’t allow the price to drop in order to cut into our profit margin.

It is difficult to know how many of our customers will pay in the neighborhood of $600 for a Digital Geographer, but we expect to ramp up to 100 units per month within the first year. The Escondido facility can produce up to 500 units per monthly if there is more demand than anticipated. The company plans to realize a very high level of profits on its sales by Year 2.

1.1 Objectives

Bottlieb&#8217’s management wants to make the business profit within one-year of its start of production. This is expected to happen in the first quarter of Year 1. As production capacity increases, it can be quickly increased. If there is enough demand, it could be increased to 500 units per month at the existing facility.

Management’s challenge is to generate enough demand for the product on local and regional distance-wheel market to achieve sales of 100 units per monthly by the end of Year1. This will ensure that profitability is achieved and will allow expansion into global and national markets.

1.2 Mission

Bottlieb Innovations seeks to « through relentless innovating and creativity, extend the overwhelming power and technology to practical time-saving, accurate, and time-saving tools that enable increases customer productivity. » Bottlieb’s mission statement reflects this blend of creativity that Bottlieb’s management believes is necessary for creating, marketing, producing, and selling breakthrough products.

Although the Digital Geographer is Bottlieb Innovations’ first and only product, the founder and management are constantly evaluating the market feasibility of a wide range of breakthrough product ideas.

The anticipated revenues generated by the Digital Geographer product will be used to improve future iterations of the product, as well as to fund research and development of future innovative products, possibly in unrelated fields.

1.3 Keys to Success

  • Bottlieb&#8217’s Digital Geographer products are so unique that they create a new market. Bottlieb’s management targeted distance-wheel buyers and must convince them of the Digital Geographer’s added value.
  • The company’s reputation is built on the quality of its products.
  • It is essential to have accurate production planning and cost control.
  • The temptation to concentrate only on growth, while neglecting profitability, must be avoided.