DynoGear Business Plan
Group 3: DynoGear Dynamometer
Jaime Alcala
Neil De Vera
Jonathan Furdui
Micah McCants
Gurkamal Singh
Business Consultant:
Amanda Suryakusuma
Group 3: DynoGear Dynamometer
DynoGear- Amanda Suryakusuma
DynoGear Business Plan
Table of Contents
I. The Executive Summary ............................................................................................................................ 3
i. Overview.................................................................................................................................................................................................................. 3
ii. Problem, Solution, Opportunities, Advantages ...................................................................................................................................... 3
iii. Business Model................................................................................................................................................................................................... 3
II. Company Mission, Vision, and Values ...................................................................................................... 4
i. Mission Statement ............................................................................................................................................................................................... 4
ii. Company Vision................................................................................................................................................................................................... 4
iii. Corporate Values ............................................................................................................................................................................................... 4
III. Define Your Market ................................................................................................................................ 5
i. Business Industry and Outlook ...................................................................................................................................................................... 5
ii. Critical Needs of the Market ........................................................................................................................................................................... 5
iii. Target Market and Target Clients............................................................................................................................................................... 5
iv. Market Share ....................................................................................................................................................................................................... 6
IV. Description of Products and Services ...................................................................................................... 7
i. Product ..................................................................................................................................................................................................................... 7
ii. Product Financials .............................................................................................................................................................................................. 8
iii. Competition ......................................................................................................................................................................................................... 8
V. Organization and Management ............................................................................................................... 9
i. Proprietorship ....................................................................................................................................................................................................... 9
ii. Business Management ...................................................................................................................................................................................... 9
iii. Upper Management .......................................................................................................................................................................................... 9
iv. Lower Management ........................................................................................................................................................................................10
v. Flow of Operations ...........................................................................................................................................................................................10
IV. Marketing and Sales Strategy ............................................................................................................... 11
i. Review of the Marketing Environment .....................................................................................................................................................11
ii. 4P’s and 4C’s and SWOT Analysis ..............................................................................................................................................................11
iii. Product Life Cycle ...........................................................................................................................................................................................12
iv. Sales Strategy ....................................................................................................................................................................................................13
VII. Financial Management ........................................................................................................................ 14
i. Start Up Costs ......................................................................................................................................................................................................14
ii. Projected Balance Sheet.................................................................................................................................................................................15
iii. Projected Income Statement ......................................................................................................................................................................16
iv. Projected Cash Flows .....................................................................................................................................................................................17
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DynoGear Business Plan
I. The Executive Summary
i. 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.
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DynoGear Business Plan
II. Company Mission, Vision, and Values
i. 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.
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DynoGear Business Plan
III. Define Your Market
i. 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
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DynoGear Business Plan
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.
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DynoGear Business Plan
IV. Description of Products and Services
i. 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.
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DynoGear Business Plan
ii. Product Financials
Materials
Part Number
Qty.
Unit Cost
Noncontact Tachometer
Spring Tensioners- Weston 50lb. Spring and Hook Scale
(11’ x 1” in diameter)
Base – 6061 Multipurpose Aluminum
2 Ft. Length (1/2’ Thick x 12” Width)
Rod – 6061 Multipurpose Aluminum
2 Ft. Length (18’’, 1’’ Diameter)
Rod Top – 6061 Multipurpose Aluminum, Rectangular Bar
½ Ft. Length (6’’ x 1’’ x ¼’’)
Rod Top 2 – Anodized 6061 Multipurpose Aluminum,
Rectangular Bar
1 Ft. Length (1/4” Thick x ¼” Wide)
Ultra-Grip Shaft Collar for 1” Diameter
(OD: 2-1/4”, Wd: 1-1/2”)
Flat Belt Pulley Cast Iron
6061 Multipurpose Aluminum Rod 2” Diameter
(1/2 Ft. Length)
¼”- 20 Conformable Soft-Tip Set Screws
Conformable Soft Nylon-Tip Set Screw, 18-8 Stainless
Steel, ¼” -20 Thread, ½” Long
Short Rods- Unpolished 6061 Multipurpose Aluminum
(6” Diameter 3”Lg)
Cage
1905T22
-
1
2
8975K135
1
$157.37
$45.98
($22.99 each)
$75.94
8974K13
1
$14.77
8975K596
1
$1.91
6023K35
1
$3.83
9665T2
1
$86.66
8974K71
1
1
$35.00
$16.36
90291A537
1
$7.20
1610T56
1
$48.25
-
1
$0 (Donated; would
normally cost $60)
$493.27
Total Cost
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.
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DynoGear Business Plan
V. Organization and Management
i. 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.
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
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
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DynoGear Business Plan
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.
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DynoGear Business Plan
IV. Marketing and Sales Strategy
i. 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.
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DynoGear Business Plan
SWOT Analysis
Strengths





Small-scale
Affordable
Universal (compatible with different
motors)
Portable
User-friendly
Opportunities


Allows for testing in research facilities
Allows for DynoGear to be a provider in
education institutes
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
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.
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DynoGear Business Plan
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.
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DynoGear Business Plan
VII. Financial Management
i. 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
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DynoGear Business Plan
ii. Projected Balance Sheet
DynoGear
Balance Sheet
(December 2014)
Assets
Current assets:
Cash
Inventories
Accounts receivable
Other
Total current assets
$1,000
$0
$16,000
$0
$17,000
Fixed assets:
Property and equipment
Equity and other investments
Less accumulated depreciation
Total fixed assets
$2,000
$500
($1,000)
$1,500
Other assets:
Long-Term assets
Total other assets
Total assets
$1,500
$1,500
$20,000
Liabilities and owner's equity
Current liabilities:
Accounts payable
Accrued wages
Income taxes payable
Other
Total current liabilities
$10,000
$0
$2,500
$500
$13,000
Long-term liabilities:
Mortgage payable
Total long-term liabilities
$5,000
$5,000
Owner's equity:
Investment capital
Accumulated retained earnings
Total owner's equity
$500
$1,500
$2,000
Total liabilities and owner's equity
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$20,000
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DynoGear Business Plan
iii. Projected Income Statement
Income Statement
DynoGear
Revenue
Gross Sales
Less: Sales Returns and Allowances
Net Sales
16000
0
16000
Cost of Goods Sold
Beginning Inventory
Add:
Inventory Available
Less: Ending Inventory
Cost of Goods Sold
Purchases
Taxes
Shipping Costs
Other
0
11000
750
1000
500
13250
1000
12250
Gross Profit (Loss)
3750
Expenses
Advertising
Depreciation
Insurance
Interest
Legal and Professional Fees
Licenses and Fees
Website
Office Expense
Rent
Repairs and Maintenance
Transportation
Total Expenses
3000
100
3000
100
1000
500
1000
500
6000
50
300
15550
Net Operating Income
(11800)
Other Income
Gain (Loss) on Sale of Assets
Interest Income
Total Other Income
Net Income (Loss)
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200
100
300
(11500)
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DynoGear Business Plan
iv. Projected Cash Flows
Statement of Cash Flows
Dec-14
Cash received from customers
Cash paid for merchandise
Cash paid for shipping and handling fees
Cash paid for taxes
Other
$16,000
11,000
1,000
500
0
Net cash provided (used) by operating activities
Cash received from sale of capital assets (plant
and equipment, etc.)
Cash received from collection of notes receivable
Cash paid for purchase of capital assets
Other
$28,500
$10,000
(8,000)
500
0
Net cash provided (used) by investing activities
Cash received from issuing stock
Cash received from long-term borrowings
Cash paid to repurchase stock
Cash paid to retire long-term debt
Cash paid for dividends
Other
$2,500
$15,000
10,000
(250)
(5,000)
(10,000)
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
Cash balance at the end of the period
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5,000
$45,750
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