Tricky Widgets Manufacturing

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Heavy Equipment Maker Business Plan

Strategy and Implementation Summary

TWM will succeed by manufacturing high quality, durable heavy equipment machinery with a significant number of product features and options which are extremely precise in control of movement. It will focus on a very narrow segment of the market and attempt to achieve the best reputation in that segment.

5.1 Competitive Edge

TWM's competitive edge is its level of quality, product features and options, and the company's relationships with several major commercial construction companies nationwide.

5.2 Sales Strategy

As the table shows, TWM plans to deliver sales of approximately $54 million in the current year, $62 million in the second year, and $75 million in the third year following this plan.

5.2.1 Sales Forecast

The company will begin by utilizing its extensive contacts with several major construction companies to leverage contracts through direct sales methods and onsite demonstrations. A number of these companies have expressed an interest in purchasing the proposed products of TWM. The company's extensive advertising campaign will be used to create product awareness through  the use of trade journals, direct mail advertising, and other means. At some future date, the company will seek to entice major equipment distributors to carry TWM's products once the company has established a firm reputation. The establishment of a post sales servicing and parts division will provide additional sales and opportunities for marketing new products.

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Widget Basic 295 310 341
Widget Deluxe 335 352 387
Widget Premium 362 380 418
Other 0 0 0
Total Unit Sales 992 1,042 1,146
Unit Prices Year 1 Year 2 Year 3
Widget Basic $35,000.00 $38,500.00 $42,350.00
Widget Deluxe $50,000.00 $55,000.00 $60,500.00
Widget Premium $75,000.00 $82,500.00 $90,750.00
Other $0.00 $0.00 $0.00
Sales
Widget Basic $10,327,309 $11,928,042 $14,432,931
Widget Deluxe $16,765,112 $19,363,705 $23,430,082
Widget Premium $27,159,482 $31,369,201 $37,956,734
Other $0 $0 $0
Total Sales $54,251,903 $62,660,948 $75,819,747
Direct Unit Costs Year 1 Year 2 Year 3
Widget Basic $28,000.00 $30,240.00 $32,659.20
Widget Deluxe $40,000.00 $43,200.00 $46,656.00
Widget Premium $60,000.00 $64,800.00 $69,984.00
Other $0.00 $0.00 $0.00
Direct Cost of Sales
Widget Basic $8,261,847 $9,368,935 $11,130,295
Widget Deluxe $13,412,090 $15,209,310 $18,068,660
Widget Premium $21,727,585 $24,639,082 $29,271,229
Other $0 $0 $0
Subtotal Direct Cost of Sales $43,401,522 $49,217,326 $58,470,184