SPLASH
A DBA of Splashco, LLC
“Shower Product Liquid Actuating System Hardware Company”
Business Plan with
EXECUTIVE SUMMARY
Contact Information:
David A Green, Founder
1 - 760 - 298 - 2946
excaliburpd@verizon.net
COPY A
This document contains confidential information. It is disclosed to you for informational
purposes only. Its contents shall remain the property of Splashco LLC and shall be returned to
SPLASH when requested.
This is a business plan; and is not an offer to sell securities.
1
Non-Disclosure and Confidentiality Agreement
The undersigned ("Recipient") hereby agrees that all financial and other information
("Information") that it has and will receive concerning SPLASH is confidential and will not be
disclosed to any individual or entity without prior written consent.
The Information shall remain the property of SPLASH and shall be returned to SPLASH
promptly at its request together with all copies made thereof.
Recipient acknowledges that no remedy of law may be adequate to compensate SPLASH for a
violation of this Agreement and Recipient hereby agrees that in addition to any legal or other
rights that may be available in the event of a breach hereunder, SPLASH may seek equitable
relief to enforce this Agreement in any Court of competent jurisdiction.
_______________
Date
________________________________
Signature
This is a business plan; and is not an offer to sell securities.
2
Executive Summary
SPLASHCO, LLC, DBA SPLASH, a California LLC in-formation, is American
owned and operated to design, develop, manufacture, and sell the first SPLASH
products, ‘SaferShower’ and ‘ShowerSoaper’. SPLASH, upon funding, will move
forward with the manufacture of a new product designed in response to showering
safety concerns for people with limited mobility and range of motion. SPLASH
has designed a shower fitting that attaches to the existing shower pipe, and to
which any showerhead can be attached. The fitting is equipped with a flow control
valve and a refillable reservoir. ShowerSoaper is designed to disburse a fluid
shower product (i.e. soap) through the showerhead. The company is seeking
investors to fund start-up, engineering, manufacture, marketing, sales, and
distribution.
1.1 Market Opportunity
SPLASH will first release the ShowerSoaper, branded as ‘SaferShower’, as an
innovative safety device targeted for clients with limited mobility/range of motion.
Secondarily, ShowerSoaper will be introduced as a convenience product for nondisabled persons. A Manufacturers’ Representative has expressed the desire to sell
ShowerSoaper to its existing customer base of leading retailers, such as Target,
Lowe's, and Home Depot.
Our research has shown us that there are over 33,000 emergency room visits per
year in the United States, due to accidents associated with showering. Not only
would a decrease in accidents be a benefit, but also our product would be a benefit
to those who have difficulty or are unable to shower using a washcloth and bar of
soap. These include anyone with a condition that affects 'range of motion':
·
·
·
·
·
Arthritics
Amputees
Broken Bones - Hand, Arm, Collar
Wounded Military Personnel
Non-Ambulatory Patients
·
·
·
·
Stroke
Joint and Back Surgery Patients
Diseases Affecting the Muscles
Disabilities
1.2 Product Description
SPLASH has designed a shower accessory that enables the user to introduce and
control the flow of a liquid soap into the water stream of the showerhead. The
fitting is designed with a removable, refillable reservoir, which is used to hold soap
or any other liquid.
3
Persons with physical limitations no longer have to worry about the risks of having
to pick up a dropped bar of soap or how to a manage using a bar of soap.
ShowerSoaper is very easily installed and operational in less than five minutes.
1.3 Current Business Status
SPLASH is a DBA for Splashco, LLC, a startup California LLC, registered in
2012. The founders are David Green, President, and John Harrison, Treasurer and
Secretary.
David Green conceived the idea for ShowerSoaper. He has worked many years in
the aerospace industry and in the logistics business of transportation of
maintenance. He has owned and operated his own logistics company for many
years.
John Harrison, a 40-year manufacturing veteran with extensive startup business
experience, co-invented ShowerSoaper. He has owned and successfully operated
various businesses.
SPLASH is finalizing the product design, manufacture, sales, distribution, and a
comprehensive operating team.
1.4 Market Potential
Management has estimated the Total Available Market (TAM) for SaferShower
and ShowerSoaper.
1.4.1 SaferShower - The Rehabilitation and Physical Therapy Industry
Market Segments: Limited - mobility, range of motion, balance, and the elderly
The founders envision three channels of distribution for SaferShower:
· Direct Sales: A therapist stocks SaferShower and sells it retail.
· Wholesale Sales: A therapist prescribes SaferShower, which the patient
purchases at a local drug or medical supply store.
· Internet Sales: Therapist refers patient to the SaferShower web site.
1.4.2 ShowerSoaper - Consumer Sales
The founders envision three channels of distribution for ShowerSoaper:
· Infomercial
· Wholesale Sales to retailers
· Internet Sales to end users
4
Retailers that may carry the ShowerSoaper:
Lowe's
K Mart
Costco
Sam’s Club
1700 locations
1300 locations
400 locations
600 locations
Home Depot
True Value
Ace Hardware
Target Stores
2000 locations
1000 locations
2000 locations
1750 locations
These eight retailers represent the potential of 10,750 retail locations.
1.5 The Capital Request
SPLASH is seeking a $500,000 investor. The investor will be given the option of
becoming a 10% Equity Owner, receiving a note at 12.5% interest, or receiving a
perpetual revenue participation note, terms to be negotiated.
1.6 Use of Funds
Operations
Engineering
Tooling
Infomercial
Infomercial Air Time
Web Page
Miscellaneous
$ 40,000
$ 25,000
$150,000
$150,000
$150,000
$ 35,000
$100,000
Total
$500,000
1.7 Exit Strategy and Return on Investment (ROI)
The ownership of SPLASH anticipates, and is planning, a lucrative buyout of
SPLASH at five years, when the value is projected to be nineteen million dollars.
A 10% equity investor will receive a 380% return on their $500,000 investment.
5
SPLASH – Cover Page
1
Nondisclosure & Confidentiality Agreement
2
1.0
Executive Summary
3
1.1
1.2
1.3
1.4
1.4.1
1.4.2
1.5
1.6
1.7
Market Opportunity
Product Description
Current Business Status
Market Potential
SaferShower
ShowerSoaper
The Capital Request
Use of Funds
Exit Strategy and Return on Investment (ROI)
3
3
4
4
4
4
5
5
5
Table of Contents
6
2.0
The Company
8
2.1
2.2
2.3
2.4
Company Description
Vision Statement
Mission Statement
Ownership
8
8
8
8
3.0
Product
8
4.0 Marketing Plan
9
4. 1
4. 2
4. 3
4. 4
4.4.1
4.4.2
4.4.3
4. 5
4. 6
4. 7
4. 8
4. 9
4.10
4.11
9
10
10
11
11
12
12
12
12
12
12
13
13
13
Industry Description
The Need
Target Market
Market Size
SaferShower
ShowerSoaper
Five Year Sales Projection
Competitive Advantage
Branding
Pricing
Distribution Plan
Promotional Plan
Customer Service
Warranty Policy
6
5.0
Operating Plan
13
5.1
5.2
5.3
Location
Suppliers and Vendors
Personnel Plan
14
14
14
6.0 Management, Organization, and Ownership 14
6.1
6.2
6.3
6.4
Management / Principals
Organizational Structure
Professional Consultants
Ownership and Boards
14
15
15
15
7.0 Goals, Keys to Success, and Plans
16
7.1 Goals
7.2 Keys to Success
7.3 Future Products
16
16
17
8.0 Startup Expenses and Capitalization
17
9.0 Financial Plan
17
10.0 Exit Plan & ROI
17
7
2.0 The Company
2.1 Company Description
Splashco, LLC, DBA SPLASH, is a California LLC, registered in 2012.
2.2 Vision Statement
SPLASH envisions a world where those with physical limitations are able to
provide for their own showering without assistance.
2.3 Mission Statement
The mission of SPLASH is to serve those in rehabilitation, or with limited range of
motion, by providing an inexpensive and simple device to facilitate showering.
2.4 Ownership
The inventors are David Green and John Harrison. The founding members are
David Green, John Harrison, Elliza Crockerham, and Cheryl Sisson, who have
started operations by implementing virtual office technology.
3.0 Product
Founder, David Green, was faced with limited mobility due to Arthritis in his back.
He soon discovered that the normal things in life, that he had taken for granted,
were not easy to do anymore. Simple things like tying his shoes and bending over
were no longer simple. One day while showering, he dropped the soap, and at that
point he asked himself what he could do to make this chore easier. The thought hit
him, if he could make the soap come through the showerhead, that would solve the
problem. That was the moment when the ShowerSoaper was conceived.
The company’s first product, SaferShower, will target the physical therapy /
rehabilitation industry. The same product, marketed as ShowerSoaper, will target
the consumer market. Both are a shower accessory that enables the user to
introduce and control the flow of a liquid soap, shampoo, conditioner, or other
appropriate product, into the water stream of the showerhead. The fitting is
designed with a removable - refillable reservoir, which holds any liquid that the
user wishes to introduce into the shower stream.
The consumer will be able to order additional reservoirs and soaps, gels,
moisturizers, and shampoos and conditioners, through the SPLASH web site.
8
The product is designed; and arrangements are being made for the digital design,
prototype, and fabrication of SaferShower. A Patent application is being drawn up
to protect and secure the intellectual property rights.
4.0 Marketing Plan
The product will be released in planned and programmed phases to optimize the
amortization of manufacturing set up costs. This will be followed by mass
distribution through major outlets.
Phase One: SaferShower is sold in the physical therapy / rehabilitation industry for
$40.00 retail. SaferShower and ShowerSoaper websites will be developed.
The founders envision three channels of distribution:
· Direct Sales: A therapist stocks SaferShower for $30, and sells for $40 retail.
· Wholesale Sales: A therapist prescribes SaferShower, which the patient
purchases at a local drug or medical supply store.
· Internet Sales: Therapist refers patient to the SaferShower web site.
Phase Two: The creation of a series of ShowerSoaper commercials to be aired on
home shopping cable TV, and targeted to women and senior viewers. These
commercials will direct buyers to an 800 number or website for ordering. The
ShowerSoaper website and commercials will offer the complete line of products
and accessories. ShowerSoaper will retail for $20.
Phase Three: Introduce ShowerSoaper in retail sales.
Phase Four: Place press releases and feature articles into selected periodicals and
trade magazines. These ads will direct consumers to the SaferShower or
ShowerSoaper 800 numbers, websites, and retailers.
SPLASH will form promotional strategic alliances with liquid product producers
and a showerhead manufacturer, as these phases are being implemented.
4.1 Industry Description
SPLASH is a member of the plumbing accessories industry, physical
therapist/rehabilitation industry, and the personal care products industry.
9
4.2 The Need
Research shows an increased need for a product that will assist those with limited
mobility and range of motion. This population has greatly increased in the past
several years. Most alarming, is the number of military personnel that were
wounded in war since 2003. There have been over 250,000 VA disability claims.
Many people have difficulty, or are unable to shower using a washcloth and bar of
soap. These include anyone with a condition that affects 'range of motion' and
those with limited mobility:
· Arthritics
· Amputees
· Broken Bones - hand, arm, collar
· Wounded Military Personnel
Special Needs
· Stroke
· Hip, Back, Joint surgery
· Diseases affecting the muscles
· Neuromuscular Disabilities
SaferShower will be marketed to the physical therapy/rehabilitation industry. On
an average, three hundred seventy persons of all ages sustain injuries from bathtub
or showers daily in the United States. The dangerous aspect of bathing is evident
from the injury data reported by the Consumer Product Safety Commission:
117,230 bathtub/shower injuries in 1989, 136,616 in 1990, and 139,434 in 1991.
The National Institute on Disability and Rehabilitation Research indicated that in
1987, 2.5 million elderly had difficulties with bathing.
4.3 Target Market
The target market has grown as the Baby Boomers reach retirement age.
According to the U.S. Census Bureau, the number of seniors increased 15.1% from
2000 to 2010, to 40.3 million, or 13 %, of the U.S. population. Seniors account for
79% of bathroom injuries. Over a third of seniors required hospital admission
following a bathroom incident. This demonstrates that prevention of these types of
injuries will both save lives and improve the quality of life.
A recent study, conducted by the Center for Injury Research and the Research
Institute at Nationwide Children’s Hospital, reported that more than 43,000
children, 18 years and younger, are treated in hospital emergency departments
annually for injuries occurring in a bathtub or shower.
According to the National Safety Council, one person dies every day from using
bathtubs or showers in the United States. Slip and fall accidents are the #2 cause
10
of accidental deaths, after automobile accidents. These facts, uncovered in our
research, indicate the need for SaferShower.
For the instant gratification generation, ShowerSoaper will provide complete
control of the flow ratio of soap to water while showering.
4.4 Market Size
The SaferShower market consists of the disabled and people concerned about
shower safety. The ShowerSoaper market is those desiring ShowerSoaper’s
convenience.
4.4.1 SaferShower
Disabled:
Arthritis
Stroke
Amputation
Back & Spine Surgery
Hip & Knee Replacement
Hip & Knee Surgery
Broken humerus - Upper Arm
Wrist fractures
Clavicle & Shoulder fractures
Neuromuscular Diseases
*21,000,000
466,667
25,000
600,000
400,000
1,030,000
370,000
397,000
250,000
*1,500,000
www.cdc.gov/arthritis
www.ninds.nih.gov
Nat. Ctr. for Health Statistics
www.neurohealthchiro.com
http://orthoinfo.aaos.org
U.C. Davis study
www.nysopep.org
www.orthosupersite.com
www.lifebridgehealth.org
*Currently, 22,500,000 Americans experience functional limitations due to these
two diseases. Each year, the SaferShower potential market expands by 3,538,667,
due to these eight conditions.
According to the U. S. Census Bureau, there are 34,200,000 Disabled Persons with
functional limitations living in the United States.
People concerned about shower safety:
There are approximately 40 million elderly in the United States, and that
population is increasing 15%, (6,000,000) per year. Many elderly are concerned
that they may be injured in a shower accident. This is reasonable, considering that
the elderly account for 79% of all bathing related accidents.
Each year, over 3,500,000 Americans experience functionally limiting disabilities.
The disabled and the elderly constitute SaferShower’s Total Available Market
(TAM).
11
4.4.2 ShowerSoaper
The population of the United States, over 312 million people, is the target market
for ShowerSoaper.
4.4.3 Five Year Sales Projection
First five-year sales are projected to increase 5% annually, and market penetration
is set at 20% the first year and increase 20% yearly until 100% in the fifth year.
First five-year sales are projected to be 1,454,649 units.
Projected Sales Mkt. Reach Net Sales
Y1
424,950
20 %
84,990
Y2
446,198
40 %
178,479
Y3
468,507
60 %
281,104
Y4
491,933
80 %
393,546
Y5
516,529
100 %
516,529
Y1-5 2,348,118
1,454,649
4.5 Competitive Advantage
The founders are unable to identify any similar or comparable products.
4.6 Branding
The Company’s name has evolved specifically to make it more brandable.
SPLASH is a name that connotes light hearted fun, takes us back to a time when
we were children, and for which we have fond memories. For the target market,
these are attractive attributes.
4.7 Pricing
“SaferShower” will retail for $40.00. “ShowerSoaper” will retail for $20.00.
4.8 Distribution Plan
Retail sales, generated from the infomercials and the websites, will be handled
directly by our distribution facility. Internet and phone orders will be received at a
data center and forwarded to the distribution center for fulfillment.
12
Wholesale orders will be shipped directly to the retailers’ distribution centers from
the Port of Entry by the manufacturer.
4.9 Promotional Plan
There are many possible promotional tools:
·
·
·
.
·
·
·
·
·
A joint promotion with a showerhead manufacturer
A joint promotion with a liquid soap manufacturer
Press Releases
TV and Radio Commercials
Magazines
Newspapers
Coupon Books
Home Shows
Advertising Agencies
4.10 Customer Service
The inventors will actively encourage consumers to share ideas for continuing
improvement of the product.
All packages will list the company’s toll-free phone number and website. All
customer concerns or suggestions will be reviewed. Customer service will respond
professionally to all inquiries, with the express desire to always satisfy the
consumer. Customer service will submit monthly reports of issues to the
marketing department.
4.11 Warranty Policy
All SaferShower and ShowerSoaper units will be warranted free of failures of
materials and manufacturing defects for one year from date of purchase.
5.0 Operating Plan
SPLASH, LLC operations are home-based in Hesperia, CA, and managed by the
founder, John Harrison. Prototype development will commence upon funding; and
full-scale manufacturing will follow. Manufacturing and distribution relationships
are being established.
SPLASH will engage the services of a manufacturer with whom we have done
business for decades.
13
We will manufacture and ship to forecasts that have been developed in conjunction
with our major channels of distribution.
The manufacturing company will design and build the mold. When the mold is
completed, a small shipment of units will be sent to Hesperia for final acceptance
and release of the initial production order.
A fulfillment company will to process all telephone and Internet sales. Shipping
and handling will be $7.50. Terms for these sales will be cash in advance. The
company will negotiate with USPO, UPS, or Fed Ex for delivery of orders.
5.1 Location: The Company will be a home-based business.
5.2 Suppliers and Vendors
We are selecting vendors and suppliers.
The first vendor is the plastic injection molding company.
A manufacturers’ representative firm will handle sales. There will be a negotiated
commission on sales.
The fulfillment service provider, web designer, master, and host, merchant account
provider, and the telephone/cell phone provider will be established later.
We will use a bookkeeping company, overseen by the accountant, for accounting
and payroll.
5.3 Personnel Plan
Staffing for the operation includes the inventors, who will handle some parts of
marketing and distribution during the early phase of the company. An
Administrator will manage the office and be paid hourly.
6.0 Management, Organization, and Ownership
6.1 Management / Principals
The Inventors are Mr. David Green and Mr. John Harrison. Additionally, the
founders include Cheryl Sisson and Elliza Crockerham.
Mr. Green has worked many years in the aerospace industry and a great number of
years in the logistics business of transportation of merchandise. He has owned and
operated his own logistics company for many years, and served on the Board of
Directors for several charitable organizations. He has worked as Operational
14
Manager and Administrative Manager for the same company during the past ten
years.
Mr. John Harrison, with a 40-year history in business, is key to the start up success
of SPLASH, LLC. He has owned and operated several manufacturing plants that
utilized custom injection molding. Mr. Harrison has spent numerous years creating
contacts in the manufacturing and shipping industry, including shipping products
overseas and products all over the United States. He has mentored many people to
establish and grow their companies.
The manufacturer will contribute production, packaging, and routing services for
the products.
Another key contributor will be the manufacturers’ representative firm. It will
handle all sales contacts with the retailers.
The COO will coordinate all communications with the manufacturers’
representative and the manufacturer.
6.2 Organizational Structure
·
·
·
·
·
Mr. Harrison and Mr. Green will divide the management responsibilities.
Mr. Harrison will manage operational functions, both domestic and
international.
Mr. Harrison will manage marketing and sales.
Mr. Green will manage administration.
Staff will be added as required.
6.3 Professional Services
The company will engage an accounting firm to administer payroll, general ledger,
accounts payable and receivable, taxes, and reporting for governmental
compliance.
An intellectual property attorney, who has served Mr. Harrison on two previous
patents, will serve the company’s intellectual property requirements.
6.4 Ownership and Boards
Upon registration of the LLC, David Green, John Harrison, Cheryl Sisson, and
Elliza Crockerham will be the founding members. Mr. Green will be president and
Mr. Harrison will be the secretary-treasurer of the company. Splashco will be
managed by the members.
15
7.0 Goals, Keys to Success, and Plans
7.1 Goals
Listed below are the company’s goals:
Pay off loans
Reduce emergency room visits caused from falls in the shower
Product recognized, endorsed, and used by the medical industry
Establish the ShowerSoaper’s brand in the plumbing industry
Establish the SaferShower’s brand in the rehabilitation industry
Have the product available in several national retail outlets
Have the product available internationally
Create a 30-second commercial and 20 min. infomercial
Sell 1,500,000 units, over the first five years
Establish joint marketing venture with a showerhead manufacturer
Establish joint marketing venture with a personal care products company
Establish a private label line of products
Instructional videos for installation, use, and refilling, on the websites
7.2 Keys to Success
Raise adequate capital
Raise more than adequate capital
Minimize expenses
Cut expenses more
Selection of strategic partners:
Investor
Engineering
Manufacturing
Mfg. Rep
TV time broker
Fulfillment Company
Accountants
Lawyers
16
7.3 Future Products
In addition to a strategic alliance with a showerhead manufacturer and consumable
products company, a potential future product is a stainless steel Metal Injection
Molded (MIM) ShowerSoaper.
8.0 Startup Expenses and Capitalization
David Green has funded the development of the invention and company.
The founders will offer potential investors three options:
1. A debt investment secured by a 12.5% simple interest note, and the projected
yield at three years is ~ $791,667, a 158.3% ROI.
2. An equity investment, secured by 10% of the LLC’s equity, is projected to yield
at five years, a return equivalent to 35% compounded interest.
3. A Revenue Participation Note (RPN) yielding 150% return of principal, and a
1% share of gross revenue from the sale of products and the LLC for the life of
the company. Projected yield at five years, after sale of the company, is
$1,035,257, a 264.1% ROI. A sample RPN is appended in the index.
9.0 Financial Plan
Projections are in the attached spreadsheet and are in seven sections:
Section One
Section Two
Section Three
Section Four
Section Five
Section Six
Section Seven
Unit Sold: Infomercial, Internet, Medical, and Retailers
Income from Sales
Cost of Sales
Expenses
P&L
Cash Flow
Investor’s ROI
10.0 Exit Plan and ROI
The ownership anticipates, and is planning, a lucrative buyout of SPLASH at five
years, when the value is projected to be nineteen million dollars.
A 10% equity investor will receive a 380% return on their investment, in addition
to pass through profits and losses.
17