Saniclean, Inc. Business Plan Outline

SaniClean, Inc. Business Plan Outline

I. Mission Statement- SaniClean Inc.'s mission is to profitably supply environmentally friendly water filtration systems. The launch product is an innovative self-cleaning swimming pool filter and our lead international market is the US, following the successful testing and launch of the product in Australia. The immediate goals are to secure a licensing agreement with a major American pool industry manufacturer, gain funding for initial working capital, and continue R&D activities to apply the technology to other industries and guarantee the long term success of the company.

II. Management Team- SaniClean believes that the most important element supporting the feasibility of its proposed program is the strength and the proven ability of its management team.

A. The Team

1. Andrew Matthews. As Chief Executive Officer, Andrew's responsibilities include overall strategy, marketing and the development of strong relationships with key stakeholders. Andrew will relocate to the US in July 2006. He has prior new venture start up experience in international markets. As National Marketing manager (Retail Business) with Shell Australia, he was an integral part of a team that launched 60 Circle K convenience stores nationally. He has worked as a business development manager in Papua New Guinea dealing with US mining companies. More recently Andrew started Cambodia's only national brewery and established the largest food and liquor wholesaler in that country. Andrew has worked as a Government advisor to assist entrepreneurs start and grow their business.

2. Kim Green is the V.P. Finance and is initially responsible for overseeing R&D in Australia. Kim will relocate to the US in January 2007. Currently Kim is consulting to the State Department of Public Works and Housing as a financial analyst within the Financial Policy and Management Division. Kim has had extensive experience in international markets including the Middle East, India, Singapore, P.N.G., China, Taiwan and Australia. His roles as project manager in the oil exploration industry provided extensive experience in financial planning. Due to the technical nature of this work, Kim is well qualified to oversee R&D operations having been responsible for up to 30 technicians, geophysicists and other technical staff.

3. Prue Kupsco is the V.P. Legal Liaison. Prue's responsibilities are to coordinate dealings with the external patent attorney and general legal counsel. Prue has an impressive combination of academic qualifications and business experience. She has a law degree, Masters of Accounting and Master of Business Administration and is currently completing a program that will allow her to be admitted to the Bar. This is supplemented by experience in her family's construction company. Kel Constructions is a developer of hotels and resorts in the North of Australia and has swimming pool construction experience. Prue has been responsible for the development and oversight of the legal and accounting departments in this company during her time at university and has an ongoing role.

B. Future Team Members

C. Board of Directors

E. Supporting Professional Services

F. Company Structure and Ownership

III. Market Research and Analysis-

A. Market Description- The US domestic pool market can be divided into three major product segments: 1) above-ground pools; 2) in-ground pools; and 3) spas/hot tubs. Although the commercial pool market is significant, it will not be considered in this plan as the product requires modification to best satisfy that market's demand. These modifications will be made as part of ongoing R&D, and it is expected that a suitable product will be ready for this market during the third or fourth year of operation. The revenue from commercial pools, or from any other market application of the technology, will not be considered in this plan, but will instead be treated as part of the 'blue sky' potential. Thus, this plan limits its focus to domestic pools and spas of 35,000 gallons and less.

Pool filter purchasers can be divided into two separate categories. The 'first-time' pool purchaser is typically guided by the pool builder or pool designer, as they usually have minimal experience with pool filters. The replacement' filter purchaser is more informed in their filter purchase decision, though typically requires updated information from pool service providers or retailers on technology and product developments.

B. Trends- In 2005 there were 9.7 million domestic pools and spas in the US. New pool and spa construction in 2005 totaled 883,000 units, a 9% increase. Filter sales are seasonal with the majority of sales occurring between April and September. New pool and spa purchases are sensitive to macroeconomic cycles, but since these cycles are difficult to predict, this plan conservatively assumes that pool and spa construction will increase at the trend growth rate of 5%. Replacement of existing filters occurs on average every 7.5 years for pools and every 10 years for spas. This accounted for a further 1,066,000 unit sales in 2005. Thus total pool and spa filter sales were 1.899 million units in 2006 (which represents $450 million at wholesale) and are forecast to grow to 3.115 million units in 2010. (Table to be provided indicating sales projections.

C. Trend Analysis-

D. Competition- All five of the major manufacturers produce each of the three types of pool filter. No manufacturer dominates a particular filter market and each has a national distribution system. 90% of filter products are manufactured in the US with the "Made in USA" label being highly valued by consumers.

E. Competitive Advantages- Water clarity and price are the major criteria in the pool filter purchase decision. The diagram below demonstrates the potential positioning of SaniClean in these two dimensions relative to the other filter types. (There is a range of water quality and price for sand and cartridge filters). As can be seen, SaniClean can be positioned above the existing value frontier which win facilitate its market penetration.

When a new product enters a market with such a pronounced value advantage, competitor retaliation should be expected. In this case however, competitor retaliation is constrained as SaniClean has a substantial manufacturing cost advantage and its quality advantage is legally protected. Other sustainable competitive advantages include SaniClean's