Social Venture Business Plan (DRAFT)

"Hey guys, this is the first comprehensive draft of our business plan. Im sure it needs a lot of editing. But that is why im sending it to you. Any major change should be accompanied by some sort of explanation so we can come to the same understanding. I will need it back by Tuesday. So i can reedit them and send it to our advisors and mentors for further feedback.

Peter i still need the numbers on amputees you promised to send to me.

Let me know if you have any questions"

Kay


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2ft Prosthetics
Business Plan


12/27/2009
Social Venture Competition
Kay Boakye-Yiadom


Executive Summary (must concisely describe the content of the venture plan.)
2ft Prosthetics is an engineering company engaged in the design and manufacture, of quality and affordable prosthetic legs for developing nations. Our team of passionate engineers is interested in the training of locals to replicate production as a means of encouraging self reliance through job creation. Our vision for the world is twofold; Firstly, to supply quality and affordable prosthetic legs to all those in need of it. Secondly, to partner with reputable humanitarian organizations like Deseret International (A worldwide leader in the establishment of micro franchise model clinics) in the establishment of model clinics where locals can be given the technical expertise needed in the design, fitting and production of their own prosthetic legs.
The need for affordable prosthetic legs is great. Disease, trauma accidents, birth defects, car wrecks, and warfare are the primary causes of the loss of a limb. When a person becomes an amputee, they are faced with staggering emotional and financial lifestyle changes. Fortunately, high-tech prosthetic devices that restore a person's basic skills and independence are available. The problem is that many amputees lack the financial resources to obtain adequate prosthetic care. Inadequate support for victim assistance in both developed and underdeveloped countries can often be traced to discrimination against the disabled. Throughout history and in most cultures, attitudes toward people with disabilities have been exceedingly negative. The disabled are often viewed as objects of charity or pity; The result is an increase in the number of beggars on the streets, an increase in the number of people to add to the already packed list of people on government welfare and an increase in the number of children who have to drop out of school because a father or mother can no more support their education.
The solution to this problem is encapsulated in the vision of 2ft Prosthetics. We are confident that our efforts in developing affordable and easily replicable prosthetic legs will give the many amputees out there a chance to live their lives again, to take pride in enjoying the fruits of their own labor and to stand with hope.
Service
Our service to the world is twofold. These include:
• Providing quality and affordable prosthetic limbs to all those in need
• Establishing micro franchise model clinics for the training of amputees to design, make and fit prosthetic limbs
Market/Customers
The developing world suffers a shortage of strong social and medium scale enterprises (SMEs). The effect is low economic growth rates, high unemployment, social unrest, and all the other elements that cause poverty. Many NGOs are actively engaged in the fight against these elements that perpetuate poverty. The services offered by 2ft Prosthetics are directly in line with the missions and aims of many of these organizations. In employing our services we offer firstly, the supply of quality prosthetics at a cost far cheaper than the usual $1000 or more which might be paid for a single prosthetic limb. There will be two kinds of prosthetic limbs. An economically efficient one made out of basic materials known as the Ecoleg and a high earned one made out of relatively sophisticated materials known as the Proleg. Secondly, we will provide strong technical training and support needed in the creation of a micro franchise model for a local prosthetic clinic. The clinics will be our main center of production for distribution. These clinics will promote sustainable economic growth through job creation. The clinics will also take away from the streets, amputees who now earn a living begging and soliciting
Business Concept and Model
The prosthetic leg which our team of BYU engineering students have designed, is a one piece design made of polyvinyl chloride (PVC). The foot component can have a two or three piece design depending on the needs of the amputee.
2ft Prosthetics seeks to collaborate with other local and international organizations such as Deseret International, Globus Relief, LDS Humanitarian Organization and the World Health Organization (WHO) in bringing relief and hope to the many million amputees who cannot afford a prosthetic limb. Our goal is to be the main supplier of these institutions with low cost prosthetics for distribution to areas where they have identified to be in greater need. These well funded Non- Governmental Organizations (NGOs), with already established local infrastructure will fund the cost of supply. We will also collaborate with these organizations in establishing a simple clinic for local prosthetic production in communities where they have identified the idea to be feasible. The total cost of materials for the current design is under $30. To manufacture the prosthetic leg, only a hack saw, an oven or fire and a drill is needed. The simple design is easily customized and replicable. All materials are locally available. The trained amputees will produce these legs for sale in their own communities and countries.
Competitive Advantage/Differentiation
2ft Prosthetics supports the economic thought that families, communities and countries must earn their way out of poverty. Donations can only go so far. If sustainable development is what we want it can only be achieved through a profitable private or social enterprise with viable value propositions in indigenous countries. This is the type of vision 2ft Prosthetics carries. We are not solely interested in profit making, we are determined to providing opportunities for as many amputees as there are out there, to live their lives again, to take pride in enjoying the fruits of their own labor and to stand with hope
In many countries the most basic machinery required for prosthetic manufacturing is expensive, costing tens of thousands of dollars. Prosthetic and orthotic materials and components vary enormously in price and availability, but even limbs produced with the most basic components cost hundreds of dollars. Moreover, training and technical expertise can be quite hard to obtain. This can create a problem of sustainability.
The problem of sustainability for prosthetic programs is evident in developing countries all over the world. It is not unusual to see large programs either sitting idle or with minimal staff. In Central America, since well-funded prosthetic workshops are usually dependent on grant cycles, they inevitably cease if the grant is not renewed. When this happens, the result is the absence of any programs. One organization used a high-tech CADCAM system in Central America. Frequent power shortages, excessive heat, the inability to have parts on hand and lack of access to local repair people to fix the machine all ensured that the project was usually closed. This resulted in poor people with disabilities traveling long distances only to be turned away because of a variety of technical problem. The situation is no different in Africa and other areas.
The mission of 2ft Prosthetics is unique in offering solutions to many of these chanllenges.
Social Impact Analysis (A detailed assessment of the venture's social impact.) This analysis is independent of any financial returns on investment. (Please check out the socialventure.byu.edu web site under “Resources” for helps.)
There are nearly 500 million disabled persons in the world, 80 percent of them living in developing countries (World Bank Disability and Developmental Conference). Often considered a burden on communities, disabled persons have always occupied the bottom rung of the social and economic ladder. They are regularly shunned, isolated and stigmatized by their societies. In developed industrial nations, unemployment rates for people with disabilities are more than 10 times that of people without disabilities.
At the heart of the vision of 2ft prosthetics is a firm desire to erase this stigma. Through our carefully planned out program, our unique services end up benefiting all. It is readily apparent that an artificial leg or arm is much more of a means than an end. Most individuals state that obtaining a prosthetic limb is important, but that having work is equally (if not more) important. People want a leg so that they can work, attend school, go to church, take care of their children and do the things they used to prior to the amputation.

Stake Holders
Who do we have an effect on? Who has an effect on us
Intended/Unintended changes in their lives
What think will change for them
The amputees
• Gains and maintains employment

• Reduced social isolation

• Improved physical health
Family members of Amputees
• Family Savings on health care spending
• In the case of amputees who are bread winners, children do not have to risk dropping out of school

Local community
• Improved perception of local area as soliciting amputees leave the streets

National government
• Savings on health care spending in building and equipping Prosthetic Centers (Estimated 1million dollars per nation)

• Savings in the training of technicians
(Estimated $15,000 per person)

• Increased income taxes where employment is increased




Financial Information
Projections are based on the fact that a model clinic produces at least 50 prosthetic limbs per month at the price of $40 per limb. That will amount to about $24,000 per year per clinic in income. If there are about 5 of these clinics on one continent alone, we are looking at about 120,000 in revenue
If a humanitarian organization places an order of about 1000 prosthetic limbs for distribution per year. Then there is about another $40,000 in income.
This is something I just put together. I admit it will have to go through a lot of editing. Feel free to make any suggestions with explanations.

Year 1
Year 2
Year 3
Year 4
Year 5
Revenues
$150,000
$155,500
$160,000
$165,500
$170,000
Cost of Sales
50,000
51,000
52,000
53,000
54,000
Gross Profit
$100,000
$104,500
$108,000
$ 112,500
$116,000






Accounting
300
310
320
330
340
Advertising & Promotion
300
250
220
200
200






Compensation & Benefits
7,200
7,500
7,700
7,900
8,000












Lease - Facilities
1,200
1,200
1,200
1,200
1,200






Licenses & Fees
15
17
19
20
22
Maintenance
100
110
115
120
125
Miscellaneous
100
150
200
250
300
Office supplies
150
150
150
150
150
Security
50
50
50
50
50






Utilities
400
400
400
400
400
Website
500
500
500
500
500
Total Operating Exp.
10,315
10,637
10,874
11,120
11,287
EBIDTA
89,685
93,863
97,126
101,380
104,713
Depreciation
100
100
100
100
100
Operating Profit
$ 89,585
$ 93,763
$ 97,026
$ 101,280
$ 104,613






Earnings Before Taxes
$ 89,585
$ 93,763
$ 97,026
$ 101,280
$ 104,613
Income Taxes
100
105
110
115
120
Net Income
$89,485
$93,658
$96,916
$101,165
$104,493


Company Background
Since the beginning of our prosthetic leg project in October 2008, we have made great
progress and seen satisfying results. We have also seen our plans morph in order to best
achieve our goal of providing an inexpensive below-the-knee prosthesis to developing countries.
Our first big public demonstration of our project was at the 2009 Economic Self-Reliance Conference held at BYU in October2009. We set up a poster display that described our inexpensive leg design and social venture. We received great feedback from many social entrepreneurs. Two gentlemen, one from India and one from Kenya, emphasized the need for this in their home countries.
Due to the uniqueness of our product, we have been invited to present our research at the annual UCUR conference this February. We received this honor as a result of the research we have performed this past year with the assistance of four $1,500 BYU ORCA
grants. The conference is being held at Southern Utah University on February 26th, 2010. This past November, we experienced some success in the BYU Idea Pitch Competition. Out of 144 teams that applied to the competition, we were one of 30 teams to make it to the semi-finals.


Company Goals

Long Term
• Have a representation through our clinic program on every continent
• Develop a high end prosthetic limb made out of Carbon Fiber


Short Term
• Develop a loyal and regular customer base through our durable and trusted brand of prosthetic leg
• Establish our first micro franchise model clinic by the end of the Summer of 2010
Management Team

Kay Boakye-Yiadom
Kay Boakye-Yiadom is second year chemical engineering major and a minor in economics. He hails from Accra Ghana where 2ft Prosthetics hopes to pilot its micro franchising model. In his freshman year, he represented International Students on the prestigious Students Advisory Council (BYUSAC). He currently serves as the College of Engineering and Technology representative on the Students Advisory Council (BYUSAC) and team leader of the on campus internship team of Benetech.
David Williams
David Williams is in his fourth year of studying mechanical engineering at BYU.  He is very passionate about the biomedical engineering field, and served as the Biomedical Engineering Club president during 2008-2009.  He has interned with Edwards Life sciences, the world leader in artificial heart valves, the past two summers.  David is currently serving as the president elect in the Fulton College of Engineering and Technology Student Council.  He loves being active outdoors, and is looking forward to the approaching ski season.  David is also working on a business management minor.
Peter Jepson
I am a senior in the Electrical Engineering program from San Jose, California. This is my third year as a member of the BYU Biomedical Engineering Club and I have been involved in service and family-oriented organizations such as Access (a mentoring program), Teaching at Orem and Provo Schools (TOPS), and Stand for the Family. I have also worked on many extracurricular technical projects. Under Professor Bangerter, I am researching current Diffusion Magnetic Resonance Imaging techniques. I also contributed to the BYU Mars Rover prototype that won 2nd place in an international design competition earlier this year by implementing the video capture, processing, and transmission subsystem. I have worked for two summers as an intern with Lockheed Martin Space Systems Company (LMSSC). Working with engineers from other disciplines at LMSSC, I contributed in creating savings of over $250,000 per SBIRS spacecraft by improving manufacturing processes and redesign of circuit board components. I intend to continue studying at BYU as an Electrical Engineering graduate student doing research in Magnetic Resonance Imaging after graduating in April 2011
Business Advisors

Roland A. Radack
Roland A. Radack currently serves as Vice President Administration of Deseret Management Corporation, a position he has held since joining the company in September, 1996. In connection with his current position, he also oversees the company's charitable giving foundation, The Church of Jesus Christ of Latter-day Saints Foundation. Prior to his current assignment, he served as vice president and treasurer of Bonneville International Corporation, a national commercial broadcast and media communications company based in Salt Lake City, Utah, where he worked for almost fifteen years.
Mr. Radack joined Bonneville International Corporation as assistant controller/tax manager in November 1981 and was appointed vice president and treasurer in October 1988. Prior to joining Bonneville, Mr. Radack was an audit senior with the international accounting and professional services firm of Deloitte & Touche in Salt Lake City, Utah where he performed and supervised numerous audits for clients arranging from large multi-national organizations to small start-up companies in various industries.
Roland Radack serves as audit committee chair and member of the compensation committee of the Great Salt Lake Council of the Boy Scouts of America. He also assists other community service organizations such as the United Way of Salt Lake and The Boys and Girls Club and is a member of the Rotary Club. He is a member of both the American Institute of Certified Public Accountants and the Utah Association of Certified Public Accountants.
Born and raised in Salt Lake City, Utah, Mr. Radack received his Bachelor of Arts degree in Accounting from the University of Utah, speaks German and Portuguese and enjoys gardening, photography, hiking, camping and being with his family.
Gary Brinton
Gary Brinton is a management advisor to the 2ft Prosthetic group. He is the President and CEO of Seven Peaks Company
Dee Williams, CFO of Deseret Book Company

Doug Jackson, the President of Deseret International,



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