This business plan provides a blueprint for the launch and growth of Breeze Technology Inc. (Breeze). It will also serve to demonstrate the operational and financial viability of Breeze.
Breeze is in the business of commercializing technology for the sports, leisure and recreation markets. Our launch product is a footwear ventilation technology which is applicable to all closed shoes and boots. Breeze will first enter the athletic/casual/outdoor shoe and boot markets, where the technology can be applied immediately. The technology will later be diffused throughout the entire range of footwear products as ongoing R&D and marketing analyses identify further avenues for profitable application of the technology.
The technology consists of an active displacement system which induces a positive flow of fresh air into the shoe while forcibly exhausting the warm and moisture-laden air which has collected inside the shoe. The air is replaced entirely once per stride with fresh air from outside the shoe. The resultant cooling and dehumidifying effect on the feet is substantial. Product testing indicates a reduction in the temperature inside the shoe of 7.3°F and a reduction in the "heat index" within the shoe by 46°F. This has obvious benefits in reducing odor, athlete's foot and other fungal infections. Less obviously, the technology militates against foot fatigue, blistering and discomfort related to the buildup of heat and moisture within the shoe.
The benefits of Breeze technology include significant cushioning advantages over the existing airbag and gel technologies, allowing the user greater comfort and protection from shock-related injuries. Breeze technology can be used in conjunction with existing cushioning systems to improve the functioning of those systems, and potentially can be custom-adjusted by the user to suit different activities and/or users of different weights.
Potential manufacturing cost advantages are also provided by Breeze technology since it renders obsolete the need for ventilation holes and/or porous fabrics (including leather). This in turn permits the use of less expensive manufacturing materials which are both waterproof and stretch resistant, eliminating the need for reinforcing overlays and multiple stitching processes.
Two additional advantages are offered by the use of nonporous and non-stretching materials. First, if water does enter the shoe from around the ankle, the Breeze technology would actively evacuate the water and ultimately dry the foot. Second, non-stretching fabrics in the shoe's upper will significantly extend the useful life of athletic shoes and other footwear (and the period of peak performance), and thus justify a premium price.
The market for athletic/casual footwear is colossal. In the US alone, annual retail sales in 1993 were $11.6 billion. Breeze research demonstrates that this market demands comfort, performance, style and value in their footwear. Breeze technology better satisfies these demands.
To serve this market Breeze considered two strategic options: manufacturing and licensing. Manufacturing and marketing the footwear under our own banner involves considerable business risk and funding costs, which may be minimized by licensing. Breeze decided to seek to license the technology to a major athletic footwear manufacturer in a mutually-beneficial strategic alliance. Royalty income from this alliance will provide the necessary funding for ongoing R&D expenditures and patent protection for other technologies which the company intends to commercialize in the sports, leisure, and recreation markets. By year three, revenue flows are expected from licensing and/or manufacturing of subsequent technologies.
Strategy to achieve licensing of the technology is based on personal selling to senior executives of target footwear manufacturer(s) using prototypical models, video, and technical support. Breeze is currently negotiating with a major footwear manufacturing company and expects to soon announce its first licensing agreement for the Breeze technology.
Expected royalties total $3.56 million for calendar 1994, with $30.4 million in royalties expected over the first five years. This income will be applied liberally to R&D, a patent protection fund, and the commercialization of other technologies, as well as to the accumulation of a strategic fund to defend against theft of our intellectual property. It is anticipated that about $4.9 million of royalty income will be paid out as dividends to shareholders over the five years. Cash balances remain positive throughout, and grow to $10.7 million over the five years.
The Breeze management team consists of Bob Brough, Peter Homan, and Tim Zwemer. They bring together complementary skills and a wealth of experience in the management of new and growing businesses. The venture team has successfully funded the development and the protection of the intellectual property. Breeze is not seeking further investor participation nor any debt funding. They expect to fund the continued growth of the company with royalty income from the initial strategic alliance and subsequent commercialization of other technologies.
|Breeze Technology, Inc.|
|Table of Contents||Appendices|
0. Executive Summary|
1. The Company
2. Market Analysis
3. Strategic Options
4. Marketing Strategy
5. Research & Development
6. Organizational Structure
7. Risk Reduction Strategies
8. Exit & Harvest Strategies
I. Focus Group Analysis|
II. Competitor Content Analysis
III. Product Test Results
IV. Inventor's Test Results
V. Resumes of Directors
VI. US Market Data
VII. Technical Drawings