Granite Industries, Inc.

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Chemical Laboratory Business Plan

Strategy and Implementation Summary

We address the market through three business segments: speciality products, textile chemicals, and consumer products. We are a highly technical niche player who has developed strong alliances with distributors who have powerful channel relationships but lack manufacturing or product development capabilities.

Our marketing strategy assumes that we will serve these distributors in three ways:

  • Toll Manufacturers, where our customer provides the raw materials and the formulation and we mix to his/her specifications.
  • Custom Manufacturers, where our customer may provide materials but we provide the formulation and the processes.
  • Trade Supplier, where we develop and sell our own lines of products based on industry and customer needs.

5.1 Competitive Edge

Our competitive edge is in the formulations and manufacturing processes we have developed for the production of the seven products in which we specialize. As detailed above, we are in an excellent position to capture a significant part of the $300 million Creatine Monohydrate market. We simply need to establish a marketing program and begin to promote our capability.

5.2 Sales Strategy

Our sales strategy is outlined below in three phases.

  • Phase One is to accommodate our existing customers and to make sure that current orders and subsequent orders are maintained.
  • Phase Two will commence when our facilities are expanded. We will then be able to accept new clients and contact companies who have shown interest in our products and be able to accommodate their orders.We plan to hire a high-quality sales person to assist in defining our marketing program.

Both phase one and two will primarily be toll and custom manufacturing.

  • Phase Three will begin with the hiring of two additional sales representatives who will develop our end-user program wherein we will begin to sell our own product lines.

5.2.1 Sales Forecast

Our sales forecast assumes no significant change in costs or prices, which is a reasonable assumption for the past two years.

Our sales increased from 1997 to 1999. We anticipate a slight drop in 2000 due to financial constraints. All of these sales were without the benefit of a marketing program. We feel that with a good marketing program and adequate manufacturing facilities we can achieve substantially increased sales goals in 2001 and 2002. While this seems ambitious, we rely on our distributors' projections and based on that, we know we will be able to literally sell to the production capacity of our manufacturing facilities.

Sales Forecast
FY 2001 FY 2002 FY 2003
Row 1 $2,217,375 $2,653,800 $3,450,000
Other $0 $0 $0
Total Sales $2,217,375 $2,653,800 $3,450,000
Direct Cost of Sales FY 2001 FY 2002 FY 2003
Row 1 $975,445 $928,830 $1,207,500
Other $0 $0 $0
Subtotal Direct Cost of Sales $975,445 $928,830 $1,207,500

5.3 Milestones

The following table shows specific milestones, with responsibilities assigned, dates, and budgets. We are focusing, in this plan, on a few key milestones that can be accomplished. In addition, shortly following funding we will hire a vice president of marketing and two office personnel. Plant personnel will be added as equipment and facilities are operational.

Milestone Start Date End Date Budget Manager Department
Business Plan 10/16/2000 12/1/2000 $2,000 Pres Total
Presentation to Funding Source 12/5/2000 2/15/2001 $0 Team Total
Stage One New Funding 2/15/2001 2/30/2001 $523,500 Team Total
Location move and up-fit 3/15/2001 3/30/2001 $15,000 VP Manufacturing
Equipment Acquisition 4/10/2001 4/20/2000 $350,000 VP Manufacturing
Raw Materials 4/20/2001 4/30/2001 $90,000 VP Manufacturing
Marketing and Promotion 4/20/2001 12/1/2001 $400,000 Pres Marketing
Totals $1,380,500