Ryan Casey, Kevin Chen, Brian Dorne,

Doug Effler, Mike Ghezavati , Margie Mazurek

Spirit DoorsBusiness Plan Proposal | Summer 2010

2

The Problem

Identified Need

Rising energy costs are pushing storm door sales

The desire for a stylish and sophisticated form of collegiate expression exists

Consumers lack elegant collegiate merchandise to express their loyalty to their team

Sophisticated fans need products other than bumper stickers, plastic toys, and foam fingers to express their fanaticism

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Solution: Company Mission & Vision

Mission

“Spirit Doors are a new generation of high-performance storm doors featuring highest quality materials and unique colored-glass sports designs to allow loyal sports fans to showcase their team spirit to friends and neighbors.”

Vision

“Within the next five years, Spirit Doors will capture 5% of the storm door market and will become a reputable brand among avid sports fans, known for high quality and innovative products.”

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Door Sample

5

Door Sample

6

Door Sample

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Industry Analysis

Window and Door Industry

Window and door market slowly declining since 2006

But, new residential construction and home remodeling is expected to increase in 2010

The US window and door industry remains fragmented and is dominated by small to mid-sized companies

– Few accounting for more than 1% to 2% of overall sales

Sports Fan Market

Sport fans represent a strong market potential

The retail market for collegiate licensed products was $4.3 billion in 2009

In 2009, over 48.3 million fans attended NCAA games

Southeastern Conference had an average home attendance of 76,288 fans

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Sales Projections & Market Share

Estimations

5.2 million doors sold in 2011

$700 million in revenue in 2011

Our Share is 3,200 to 5,800

$1.04 million to $1.9 million Gross Revenue

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Market Segmentation

Potential market

Homeowners with college degrees who have an affinity with college sports

Live around major universities

Have a need to show off their team spirit– As Flashy as You Want It

– As Personalized as You Want It

Alumni associations and booster clubs

Season ticket holders

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Target Market

Primary Customer Segment

25-54 year old male homeowner

Annual income $50,000+

Strong passion for sports

Customer Needs

Strong need to express their passion for sports

Need to belong to a group of like-minded sport fans

Want to balance family obligations with their enjoyment of sports

Secondary Customer Segment

Alumni centers and booster clubs looking to show off their team spirit to the public

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Customer Response

Survey

Conducted a survey to determine product need and interest

Received 21 responses from target customers

Key Findings

63% of those surveyed found product attractive

54% indicated would purchase product if within price range

Several expressed interest in product line extensions to NBA and NFL teams

Competitors

Pella

Been around for 90 years and have annual sales of >$1 billion

Won J.D. Power Associates award three years in a row for “Highest in Customer Satisfaction Among Window and Door Manufacturers”

Partnered with Lowe’s

Emco

Been around for 80 years with annual sales $50-$100 million

Partnered with Home Depot

Larson

Established in 1952 with annual sales of $20-$50 million

Partnered with Lowe’s

Competitor Analysis

Strengths All three have been well established for decades and know the industry very

well

Have all partnered up with the two biggest distributors in the home improvement market: Home Depot and Lowe’s Home Improvement Warehouses

Well established distribution locations and infrastructures across the country

Currently offer designs on their glass storm doors (but not college logos) and therefore have the technology to expand into this market should they choose to

Weaknesses (Our Strengths!) Do not offer storm doors with college logos

No exclusive marketing deals with NCAA schools

They are all large “corporate” entities and cannot offer the personal customer service that Spirit Doors will offer

Competitive Matrix

Possible Market Entry Failures

Reasons:

Spirit Doors is entering a well established industry/market

Numerous competitors giving customers many alternatives should they not want college logos on their doors

Customer always has the alternative of not buying a storm door since the product is not a necessity

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Market Entry

Strategy = Offensive

First Mover/Proactive approach

Keep Competition from entering market

Target 8 major football schools including OU and UT

Attain Exclusivity rights with University and CLC

Pre Sell to National Home Improvement Stores

Revenue Model

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Spirit Doors, Inc

Product Retailer Product Consumer

Competitive Positioning

Customization

Pers

on

al E

xp

ressio

n

Spirit Doors

Pella, Larson,

Emco

Pricing and Sales Channels

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Pricing

$499 signify superior luxury product with significant offering

$499+ for web orders with customization

Sales Channels

Website

Catalogue/ Direct Marketing

Internal Sales Team

Store Fronts

Advertising and Promotions

Trade Shows

Direct Marketing

Radio

Print and Online

Partnerships

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MediumEstimated Cost

(FY2012)

Online Marketing

Company Website $2,000

Banner Ads $7,000

Pay-Per-Click $15,000

National Marketing

Booths at conventions and tradeshows $10,000

Local Marketing

Radio $6,600

Direct Mail $15,000

Print Ads $10,000

Other

Marketing Collateral (print, promotional items) $10,000

Total $75,600

Resources and Operations Issues

21 1312 Crosby Rd, Carrollton, TX

Up to 60,000 sq ft production facility

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Resources and Operations Issues

1/3/201123

Financial Projections

“Spirit Doors” Assumptions

Description Estimate

Stores Will Stock/Sell our Product 24

Average Doors Sold per Store per Month 18

Average Sale will Produce $300 in Revenue $325

Sales Team of 3 full time Salespersons 3

Each Salesperson will Service 8 Stores 8

Variable cost per door $190

Conservative 5% Growth in 2012 (increases from Sales Efficencies from CRM and Sales Team Head Count Increases)

1.05

Conservative 8% Growth in 2013 (increases from Sales Efficencies from CRM and Sales Team Head Count Increases)

1.08

Cost ($190) / Price ($325) 0.585

Cost ($180) / Price ($325) learning curve effect 0.55

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Financial Projections

Income Statement Summary

Column1 2011 2012 2013

Revenue $1,044,576 $1,769,040 $1,910,565

COGS 611,077 972,972 1,050,810

Gross Profit 433,499 796,068 859,753

Oper Exp 294,996 220,112 230,618

Net Income 40,894 374,371 408,938

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Financial Projections

Break Even Analysis – per Month

Monthly Door Sales 0 20 40 60 80 100 120 140 160 180 200 220 240 260

Variable Cost/Door 190 190 190 190 190 190 190 190 190 190 190 190 190 190

Variable Cost/Month 0 3,800 7,600 11,400 15,200 19,000 22,800 26,600 30,400 34,200 38,000 41,800 45,600 49,400

Fixed Cost/Month 27,938 27,938 27,938 27,938 27,938 27,938 27,938 27,938 27,938 27,938 27,938 27,938 27,938 27,938

Total Cost/Month 27,938 31,738 35,538 39,338 43,138 46,938 50,738 54,538 58,338 62,138 65,938 69,738 73,538 77,338

Revenue per Door 325 325 325 325 325 325 325 325 325 325 325 325 325 325

Total Revenue 0 6,500 13,000 19,500 26,000 32,500 39,000 45,500 52,000 58,500 65,000 71,500 78,000 84,500

Break-even Point 206.946

$0

$20,000

$40,000

$60,000

$80,000

$100,000

0 100 200 300Doors Sold per Month

Break-even Analysis - Per Month - Spirit Doors

Fixed CostTotal CostTotal Revenue

Project Timeline

ID Task Name Start Finish Duration

Q4 10 Q1 11 Q2 11

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

1 60d11/23/20109/1/2010Receive funding commitment for $500,000

2 45d12/2/201010/1/2010Apply for CLC standard license

3 60d1/6/201110/15/2010Begin negotiations with 8 target schools for 7 yr exclusive deal

4 21d1/31/20111/3/2011Receive license from CLC and conclude agreements w/ schools

5 43d3/31/20112/1/2011Ordering tools, plant equipment and capital

6 23d3/31/20113/1/2011Begin search for sales personnel

7 43d5/31/20114/1/2011Contract and negotiate with distribution channels

8 8d4/12/20114/1/2011Sign lease for facility

9 20d5/4/20114/7/2011Install production lines

10 8d4/29/20114/20/2011Create website

11 14d5/19/20115/2/2011Hire and train production crew

12 14d5/19/20115/2/2011Hire and train sales personnel

13 22d5/31/20115/2/2011Install sales/administrative systems

14 11d6/15/20116/1/2011Hire office and engineering personnel

15 12d6/30/20116/15/2011Begin production of doors

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22d6/30/20116/1/2011Launch marketing campaign

21d7/29/20117/1/2011Begin distribution of product through channels

Thank You!