Tall Drink of Water

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Pet Supplies Business Plan

Strategy and Implementation Summary

Tall Drink of Water's strategy is to provide high-quality, functional and beautiful products that are environmentally and socially responsible. We want our products to be the standard by which similar products will be measured.

Strategic Assumptions:

  • Our individual customers think of their pets as family and care about the health and well-being of their family pets.
  • Many of our end-users have high quality and style expectations.
  • Products adopted by the commercial market, design and pet care professionals and government agencies, will lead to brand establishment, acceptance and recognition
  • Individual consumers will more readily use products used by government facilities and pet care professionals.

Profits will be used for new product development and incremental improvements for existing products, and to expand our marketing and sales efforts to foreign markets.

5.1 Competitive Edge

Our patented designs and technology will be our competitive edge. There are many elevated pet feeders in the market, but ours will be the first* to market with an integrated, elevated fountain and contemporary designs. With patent protection of the elevated feeder with an integrated fountain, we can potentially capture a large share of the market for that class of products. As patent holders of the technology, we could also license it to other manufacturers to increase revenue and have the branding benefit of being "the original" elevated feeder and integrated fountain product.

Another competitive advantage is that our products provide an off-the-shelf solution for owners of large breed dogs like Mastiffs, Newfoundlands and Great Danes that are, on average, about five inches taller than the existing large model elevated feeders on the market. Our products also address the needs of pet owners who live in small, urban apartments and appreciate contemporary design.

* Based on preliminary patent searches on the US Patent and Trademark Office web site.

5.2 Marketing Strategy

In the first year of operation, our marketing strategy will be focused on design professionals, pet care professionals and government agencies. Marketing efforts will include trade show participation, design contest entries, and advertising in industry and lifestyle magazines.

In subsequent years, we will expand our marketing efforts to include individual consumers who may be reached through advertising in lifestyle magazines and on cable television, sponsoring dog shows and competitions, and participation in regional pet events.

5.3 Sales Strategy

The company intends to focus its initial sales efforts on commercial clients, design professionals, pet care professionals and government agencies, to establish product reliability and brand recognition for the company without incurring exorbitant advertising costs. This strategy will generate fewer sales, but sales of higher priced items. The owner will identify and work with these prospects directly. Because of the potential complexity of these orders, delivery times will vary, but the consumer will be provided with an estimated delivery time and regular progress updates by e-mail or fax.

Sales to individual consumers will be completed through the company's website, by phone or fax, through catalogues and third party websites. The owner will work with manufacturers to determine the appropriate delivery schedule for these items, but anticipates being able to offer consumers 5 – 10 business day delivery terms. FedEx will be the preferred shipping vendor.

The company does not have immediate plans to offer products for sale in retail stores, but this decision will be re-evaluated based on consumer feedback and demand.

Order processing, manufacturing, delivery and shipping will be managed using electronic data interchange (EDI) methods to minimize order processing times, facilitate order tracking and optimize customer and vendor information management.

Products will be manufactured by an independent plastics moulder with whom we have contracted. After the prototypes, they will manufacture the standard feeders in batches of 2,000, and coordinate with us to ship directly to consumers to reduce delivery time. Custom orders will require more lead- and manufacturing time, and will be coordinated with their custom-solutions department.

To ensure that we are meeting (and hopefully exceeding) customers' expectations, consumers will be asked to complete a satisfaction survey regarding the level of service received from the beginning of the sales process to delivery and installation (where applicable), including follow-up and future service needs.

5.3.1 Sales Forecast

The sales forecast table shows a worst case scenario of forecasted sales for the first three years of operation. During the first year, our focus will be on sales to commercial consumers, design and pet care professionals and government agencies to establish product reliability and brand credibility. Sales may fluctuate seasonally for design and pet care professionals, and based on budgetary cycles for government agencies.

In the second and third years, we will expand our sales strategy to include individual consumers. The basic, off-the-shelf models, developed for high- and moderate-income consumers will be sold on the company's website, by phone and fax, through catalogs and third party websites. Individual consumer sales may also fluctuate seasonally, but we are estimating flat monthly sales for all market segments with annual sales growth of 10% for 2006 and 2007 based on an average of the low and high end industry expert sales forecasts.

This time table is flexible and can be accelerated based on demand.

Based on current economic indicators, we set the direct cost of sales to increase at a rate of 5% for the first three years of operation. This too is flexible and can be adjusted based on changes in the economy. Cost of sales below includes manufacturing and delivery costs.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Basic small feeder $0 $5,000 $5,750
Basic medium feeder $0 $10,000 $11,500
Basic large feeder $0 $20,000 $23,000
Basic extra large feeder $0 $30,000 $34,500
Custom low-end feeder $40,800 $44,880 $49,368
Custom medium feeder $45,000 $49,500 $54,450
Custom high-end feeder $58,000 $63,800 $70,180
Total Sales $143,800 $223,180 $248,748
Direct Cost of Sales Year 1 Year 2 Year 3
Basic small feeder $0 $2,050 $2,358
Basic medium feeder $0 $4,100 $4,715
Basic large feeder $0 $8,200 $9,430
Basic extra large feeder $0 $12,300 $14,145
Custom low-end feeder $17,000 $17,325 $18,191
Custom medium feeder $11,400 $11,970 $12,569
Custom high-end feeder $11,200 $11,200 $11,200
Subtotal Direct Cost of Sales $39,600 $67,145 $72,607

5.4 Milestones

The accompanying table lists milestones for our start up goals and budgets for each. Tonya McClendon will be the manager in charge of each milestone, consultants will be used for many functions. The milestone schedule shows our emphasis on planning for design, development and market introduction.

Additional milestone tables will be created for future marketing and sales planning.

Milestones
Milestone Start Date End Date Budget Manager Department
Utility patent drawings 10/1/2004 11/1/2004 $2,500 TLM Consultant
Design patent drawings 10/1/2004 11/1/2004 $2,500 TLM Consultant
Business licenses 11/1/2004 12/15/2004 $250 TLM Admin
Prototype development 11/15/2004 12/15/2004 $6,300 TLM Consultant
Incorporation 10/1/2004 1/1/2005 $250 TLM Admin
Branding 1/15/2005 2/15/2005 $4,000 TLM Consultant
Website design 2/20/2005 4/15/2005 $1,000 TLM Consultant
Print advertising campaign development 3/15/2005 4/15/2005 $1,000 TLM Consultant
Trade show entry applications 10/1/2004 5/15/2005 $750 TLM Marketing
Design competition application 10/1/2004 5/15/2005 $750 TLM Marketing
Totals $19,300