Business Plan of FridgieBuilt
ENGR 310 – Professor Hanan AlTabbakh
Jasem Alasfoor 38285
Hassan Ghadanfer 28868
Ahmad Al-Jadi 31003
Talal AlLanqawi 42581
Fahad AlSweleh 31085
Contents
Executive Summary:...................................................................................................................................... 3
BMC:.......................................................................................................................................................... 3
Key partners: ......................................................................................................................................... 3
Key activities: ........................................................................................................................................ 3
Value Propositions: ............................................................................................................................... 4
Customer Relationship:......................................................................................................................... 4
Customer segments: ............................................................................................................................. 4
Key resources: ....................................................................................................................................... 4
Channels:............................................................................................................................................... 5
Cost structure:....................................................................................................................................... 5
Revenue Streams: ................................................................................................................................. 5
Business Description: .................................................................................................................................... 5
Industry Analysis: .......................................................................................................................................... 6
Mission statement: ....................................................................................................................................... 7
Management plan: ........................................................................................................................................ 7
- Product and services: .................................................................................................................................. 8
Mission Statement: ................................................................................................................................... 9
Trackable Goals: ........................................................................................................................................ 9
Situation Analysis: ................................................................................................................................... 10
Target Market: ........................................................................................................................................ 10
SWOT Analysis: ....................................................................................................................................... 10
Weaknesses: ........................................................................................................................................... 11
Opportunities: ......................................................................................................................................... 11
Threats: ................................................................................................................................................... 11
Promotion/Distribution Strategy: ........................................................................................................... 11
Balance sheet: ............................................................................................................................................. 12
Resources and assets: ............................................................................................................................. 12
Income statement and Traction: ............................................................................................................ 14
Cash flows: .............................................................................................................................................. 14
The risks and problems ............................................................................................................................... 15
Executive Summary:
In this business plan, we cover everything related to the startup of our company that is
FridgieBuilt. It includes the business description that it what we do and how did we come up
with this idea. We also state the mission statement and management plan to get an overview of
how the work will be divided among us and to show how capable are team is.
We also cover in depth what our product is and what can we offer, taking into consideration
our main competitors, their and our strengths and weaknesses. This is all supported by all the
financials and numbers to back the project. What really will define our success is our marketing
strategy, that will rely heavily on social media and online advertising, without abandoning the
traditional methods of marketing, to achieve our main goal which is attracting and reaching as
many customers as we can. So, by year two we should have a solid target market base. By then,
we me expand our business to reach wider target audience which are government agencies and
hospitality services: like hotels and restaurants. The next step would be expanding globally
through online global retails such as: Amazon, eBay.
BMC:
Key partners:
1. Plastic suppliers
2. LG compressor
3. Stores and distributors
4. Advertising agencies
5. Outsourcing suppliers
Key activities:
1. R&D
2. Prototyping
3. Networking
4. Funding
5. Marketing and advertising
6. Delivery
7. Quality check
8. Customer care
9. Recruiting and training
10. Manufacturing and assembly
Value Propositions:
1. Cheaper
2. Lightweight
3. IOT connectivity
4. Assembled in KW
Customer Relationship:
1. 24/7 contact support
2. Website
3. Social media
4. Service and sales team
Customer segments:
1. Overlanders and campers
2. Teens and adults
3. Males predominantly
4. Middle/lower class
5. Personal use
Key resources:
1. Parts
2. Tech team
3. Delivery services
4. Labour
5. Storage
6. Development team
7. Workshop
8. Drivers
9. Equipment
10. Store
Channels:
1. Social media
2. Website
3. Advertisements
4. Local and foreign suppliers
5. Affiliates
Cost structure:
1. Fixed: labour-equipment-maintenance-rent-website
2. Variable: parts-marketing cost-website maintenance
Revenue Streams:
1. Sales per unit
2. Delivery fees
3. Services and maintenance
4. Accessories
Business Description:
FridgieBuilt is a startup manufacturing company planned to expand to produce at a global
level, that produces portable mini powered coolers built for campers and overlanders. Most mini
fridges in the market are expensive and heavy due to the building materials manufacturer’s use
for extreme terrains and harsh weather in hostile climates and nature. However, here in Kuwait
the terrain is mostly flat so there is no need for the extra protection for the fridge. Our goal is to
provide the market a fridge which is lighter and less expensive. This equates to a better
alternative than the products in the market. We can achieve this because, focusing on the design
structure of the fridge and making it lightweight with 80% of the body made from plastics. This
will result in less metal compounds and synthetic material usage which brings down the price of
the fridge unit. You can look at it as killing two birds with one stone. A great opportunity to
maximize on as there are no rivals competing on this edge.
We chose to go with this venture as we witnessed the rise of people going outdoors recent
years and several shops and businesses opening up in the local area providing outdoor and
camping equipment and gear. People used to take ice coolers with them in their adventures but
nowadays due to technological advancements, there are powered coolers, provided a 12volt
source from your car, you have a fridge everywhere you go. These fridges are showing up a lot
in local stores, and it is a good opportunity to penetrate the market and provide local
outdoorsman with a better alternative. Other than that, due to current situations with the
pandemic, we feel there is a good opportunity in supplying frontline workers with these types of
fridges to help them with their work and accommodate them in this hot weather.
In addition, a study shows that market for mini fridges has been rising for the past years,
“The scope of the global Portable Mini Fridge Market was appreciated at US$ 918.6 million in
2018. The range is projected to touch US$ 1.3 billion by 2025, growing at a CAGR of 5.2% for
the completion of the prediction period.” So, there is a good opportunity to capitalize on.
Industry Analysis:
Competition
Price
(47l-50l)
Repair
and Maintenance
ORP
390kd
Location
and POS
-
Availability
Shuwaikh
Shipment
industrial
UrOffroad
350kd
-
Alrai
Shipment
ARB
325kd
-
Alrai
Shipment
Camouflage
250kd
Only
Shuwaikh
Shipment
Online
On-site
replacement
FridgieBuilt
280kd
Industrial
20kd
order and Pop-up
exbitions
production
Mission statement:
Our company’s target is to provide the most up to date fridges to the customers, with an
affordable price tag. Utilizing the latest techs in the market and efficient components, we will
deliver products that satisfy the customer’s needs and pocket.
Management plan:
Figure 1. (The management format of our business.)
The figure attached shows our business’s management format. The head and CEO of our
business is Jassem. He has many experiences related to management and engineering. He gained
those experiences during his time at the AUK and the team of founders decided that he is the
man up for the job. He makes sure all departments in our business are functioning properly and
with harmony. All departments in our business report to him and he has absolute authority over
them. One of his main tasks is making sure our company stands for our mission statement.
Talal is head of advertising sector, he reports to the CEO the work of the department.
Talal gained his experiences also from the AUK and the team saw that he excels in
understanding marketing concepts and in understanding social media and it’s influences even
though he is an engineering student. He supervises the marketing team and works with them to
make sure our business is know nationwide.
The finance and relations head is Fahad and he reports to the CEO. Due to Fahad having
a hobby of dealing with numbers and him having a great interest in financial concepts the team
decided he that he would be a great head of finance even though he is also an engineering
student. He listens to the financial consultants and works with the lawyers to ensure that our
business is accomplishing our financial plans and that it is taking the legal road.
Ahmed is head of production sector. He gained many experiences related to research and
understanding during his engineering career at the AUK. He also reports to the CEO and he
works with the Research and Dev. Team, the technical consultants and the assembly team in
order to produce for our customers the products with high quality, with decent price tags and
with the latest techs installed.
Lastly, Hasan is our head of labor and services sector. He also reports to Jassem and he
supervises the delivery sector and customer care team to make sure that our customers are
satisfied. He gained a lot of knowledge during his career at the AUK. The team saw that he is a
calm and a wise person Thus we decided that he fits in this position, where he also helps in
putting the code of ethics of our company and he establishes protocols related to our workers and
related to settling disputes between them.
- Product and services:
As of now, we plan to create one type of fridge of size 50 Liters, which is the sweet spot
of being large enough without compromising the portability aspect, that can translate into fitting
72 cans of drink. This means that the fridge suits the needs of a family of 4 members going outdoors
comfortably for the whole weekend. In addition, the fridge we have a flexible temperature control
and it can be tweaked to the user's preference using a smartphone's companion application.
Although our fridge doesn't come with a dual-compartment, It can act as freezer or cooler
depending on the temperature it is set on. Also, the fridge can be powered by 12-volt power supply
which makes it compatible with cigarette lighter socket in the user's car. There are three main
advantages that will distinguish our product from our competitors’. Firstly, the price of our product
will be lower. This can be archived by building fridge with most of the components made from
plastic while maintaining a reasonable amount of durability. Another leverage we have against our
competitors is that all our fridge’s components will be assembled and manufactured in Kuwait
which in turn will saves us from the shipment cost. Finally, we will offer services that our
competitors do not. we will offer repair and maintenanceService for small fee. Also, our costumers
will be able to rent our fridge for a fee of 20 Kd per day.
-Marketing
plan:
Mission Statement:
The mission of Fridgiebuilt is to build a solid value-based customer relationship by providing the
highest quality of customer service and ensuring that our products meet their needs with lowest
possible prices.
Trackable Goals:
1. How do we do in terms of number of sales by first year (the details in the financial
analysis)?
2. How much successful is our product and if it did meet their needs based on the feedback
of the customers in social media?
3. How much traffic does our website get on monthly bases?
4. How many visitors did we manage to attract to our booth during expeditions?
5. How many followers did we gain in social media each month? and the number meet our
expectations?
6. How satisfied our customers with our customer services?
Situation Analysis:
First year: We will self-market our products on social media platforms mainly on Twitter and
Instagram, which are basically free of charge, due to the limited number of staff and employees.
This will help us identify
Second/Third year: We will reach the break-even point sales and start to generate profit from the
sales. Also, we will be able to partner-up with social media influencers to help us promote our
product to their audience. By then, we will have a solid customer base.
Fourth to seventh year: We will expand our business by starting to target new customers and
these targets are: government agencies and hospitality services. Also, we start creating new line
of products that suit the needs of our new target base.
Eightieth year and on: We will expand our business even further by selling our products through
online retailers like: Amazon, eBay and Ali-Baba to reach audiences beyond our country. By
then, will have built our brand that is recognizable globally.
Target Market:
Currently our main target market are the over landers and campers. The age of our target market
is from 10 and above as our product is simple to operate, but not suitable for individuals below
the age 10 because product is electric. After expansion, the target market will include
government agencies and hospitalities services.
SWOT Analysis:
Strengths:
1. All founding members have experience in computer and electrical engineering.
2. Some of the founding members have a network of entrepreneurs.
3. Sufficient knowledge of how to use Technology to market our product.
4. Some of the founding members have strong background in financial analysis.
Weaknesses:
1. Lack of human resources.
2. Some of the founding members are inexperienced entrepreneurs.
3. Limited funds to start-up the business.
4. Limited line of start-up products.
5. We need to build a brand for our company.
Opportunities:
1. With recent growing number of people who goes camping and outdoors during weekends
(Before pandemic), these people will most likely find our product appealing.
2. According to millioninsights.com “The scope of the global Portable Mini Fridge
Market was appreciated at US$ 918.6 million in 2018. The range is projected to touch
US$ 1.3 billion by 2025, growing at a CAGR of 5.2% for the completion of the
prediction period.”
3. There are campers and over landers that are recently gaining a lot of traction and views
by reviewing and using camping products and we could work with these influencers to
get our product out in the marketplace.
Threats:
1. Sudden decrease of demand.
2. Rise of new competitors that have similar line of products (copycats).
3. Increase of raw material cost.
4. Product does not meet the quality assurance standards.
Promotion/Distribution Strategy:
At first, we will promote our product using social media platforms to display and describe the
features of our product. After that, we will demo our product at booths during expeditions and
live events. Then, we will partner-up with local retailers like Xcite and Best to sell our
product.The product can be picked-up by the customers or delivered their houses through these
retailers. At the same, the product will be available to rent for 20 KD per day. After expanding,
we will create our own website to self-promote our products online and if the customer wanted to
buy our product, he will be directed to major online retailers that will ship our product globally.
Balance sheet:
Resources and assets:
Physical resources and their expenses = 323,300 $
The physical resources are enough to manufacture and assemble 5000 refrigerators
resource
Expense per
Number of units
Total expenses
unit
Aluminum parts
15$
5000
75,000$
Plastic parts
3$
5000
15,000$
Compressors
40$
5000
200,000$
Delivery trucks
10,000
2
20,000$
website
300$
1
300$
Assembly equipment
-
-
8000$
gas refrigerant
50$ per LBS
100 LBS
5000$
Financial resources = 4,000,000 $
The financial resources are contributed equally among the five business owners and their
annual liabilities (20% each)
Personal savings = 1000.000 $
25% of business capital
Business term loan = 3,000,000$
75% of business capital
Human resources and their annual liability = 315,000 $ annually
resource
Human capital
Annual liability
Business owners and engineering team
5 persons
0$
lawyers
1 person
60,000$
Financial consultant
1 person
70,000$
Technical consultant
1 person
70,000$
Delivery men
2 persons
20,000*2=40,000$
Research and Development team
3 persons
30,000*3= 90,000$
Technical and assembly team
3 persons
25,000*3=75,000$
Marketing and advertising team
3 persons
20,000*3=60,000$
Customer care
3 persons
20,000*3=60,000
Other Costs = 63,000 $ more or less annually
Item
Type
Cost
Store rent
fixed
60,000 $ Annually
Equipment maintenance
fixed
2,000 $ Annually
Trucks maintenance
fixed
500$ Annually
Electricity
fixed
1,000 $ Annually
Website development
variable
unknow
Marketing and advertising
Variable
unkown
Other liabilities = 260,000 $ more or less annually
Item
cost
Loan annual fees
260,000 Annually
taxes
unknows
Income statement and Traction:
The revenue will stem mainly from the sales of refrigerators unit at 900$ per unit
Refrigerators maintenance, renting and accessories sale can contribute to revenue too
We will assume the sales of 1000 units in year one and two ,1500 units in year three and
four and 2000 units in year five and six. Increased sales in the following years is the
result of increased popularity due to good advertisement, customer care and highly
efficient products that easily satisfy the customers.
Total revenue
Total cost
Net profit
End of year 2
1,080,000 $
1,599,300 $
-519,300$
End of year 4
2,700,000 $
2,641,000 $
59,000 $
End of year 6
4,860,000 $
3,917,000 $
943,000 $
Business Breakeven at the end of year four.
Cash flows:
Affordability: The available capital is 4,000,000 which is enough to sustain the business
for 6 years without reinvesting a part of the net profit. Business liquidity is high.
Creditors: A bank will provide a loan of 3,000,000 $ that require an annual fee of
260,000$ for 15 years. As the bank finances 75% of the business capital, the business is
highly leveraged.
Financial growth: Net profit increases exponentially year by year. The business is highly
profitable. Although in the first two years the total costs is greater than the revenue, the
business will breakeven at the end of year four , and the profit will increase dramatically
following that year.
The risks and problems
1. Competitors risk
The first risk that we need to consider is the competitor’s risk. There are many
competitors that sell good quality products but for high price. these competitors are well
known in the market such as ARB and Uroffroad which sell their product for a high
price. The solution to this risk is show a good quality locally built product for a low price
that will break their high price and show good advertisements that will show the features
of our product using the social media platforms and the influencers.
2. Financial loss risk
The second risk is the financial loss of the business. This means that the business
losing money and not gaining anything from the profits that were gained from selling the
products. This problem solution is to increase the price of the product and the
maintenance cost to overcome this financial loss. Another solution is to make special
offers for our product that will make us overcome the loss. If there is no financial loss,
then we will continue with the sales as normal.
3. Internal fraud risk
The third risk that need to be careful about is the internal fraud among the
employees. This risk needs to be assisted carefully because we need to think who is the
one committing the fraud act in terms of if it is a financial fraud or any other type of
fraud. If we find this employee, we will fire this employee on the spot. In addition, we
will try to minimize the fraud act as low as possible.
4. Product not meeting demands
The fourth risk is the risk that the product is not meeting the demands of the
costumer. This risk can be maintained by reviewing the product as a whole and then
checking the demand that was listed by the costumer and try to adjust the product to
them. we will try to achieve every demand for every costumer that we have been
interacting with as a business. We want to make every costumer happy and all the owners
happy with the product that come out of the business.
5. Advertisement risk
The fifth risk is the advertisement risk. This means that there is financial support
for the advertisements. The advertisements are important part of any business which
allow the business to grow and to gain a lot attract more customers. The solution is to cut
a budget for the advertisements.
6. Risk of the business failing
The next risk is the risk of the business failing. If the business fails in terms of
financial, then the only option is to sell the business to a capable owner that will make the
business goes smother and with no interruptions. If the business fails in any other
department other than the financial department, then we will try to assist the situation and
find a solution for the problem.
7. Taking unskilled labor
Taking unskilled labor will result in weak product in terms of efficiency. This risk
will come inevitably. These unskilled labors will try improving and we will try to
develop these labors to make the product as efficient as possible. The owners will be on
watch for these unskilled labors and train them to meet the costumer’s demands.
8. The rise of labor cost for the specialized workers
The rise of labor cost for the specialized workers that the government put on the
business along with the taxes is a big risk that we will need to calculate with the financial
department to meet the demands of the government. There are limited numbers of
specialized workers in our field of work, so we need to take care of them and try to meet
their demands in terms of cost.