Child Thermo Seat Safety Device
Page 1 of 13
1.
Executive Summary Imagine that a parent picks their child up from daycare on a hot day and places their child in a child seat in their car. On the way home, the parent remembers that he or she needs to pick up a few items from the store. Unaware of the danger involved in their decision, the parent decides to leave the child in the vehicle. While the parent is away, the child begins to experience hyperthermia, in which the child's body is unable to cool off; consequently, the child dies. The parent quickly remembers that the child is still in the vehicle, but it is already too late. Many people think that they will never be in this situation; however, it is evident that these fatalities involving children occur far too often. As shown in Figure 1, the second leading cause of non-traffic vehicle fatalities of children under age fifteen is due to a child being left in a hot vehicle, which accounts for twenty-four percent.
Figure 1: Pie Chart of Child Fatalities from 2000-2004 TCSSD LLC offers a solution to this problem that is the Thermo Child Seat Safety Device (TCSSD). TCSSD is made up of two temperature sensors, an audio integrated circuit (IC), a microcontroller, a cellular module, and a dual tone multiple frequency (DTMF) decoder. Currently, TCSSD LLC has no competition and, with roughly 4.1 million children born a year, has a very large target market. TCSSD LLC captures this market by offering a product that is highly reliable, great customer relations, and effective management. In order to produce a highly reliable device, each TCSSD is tested thoroughly until it is proven to be 110% efficient. TCSSD LLC gains the trust and respect of child seat manufacturers and individual parents by having a knowledgeable, willing, and caring customer service. Finally, the management of TCSSD LLC consists of the inventers of TCSSD. Therefore, the management is very motivated and knows how to produce effective TCSSD's. TCSSD LLC's main goals are to significantly decrease the number of children that die each year from being left in a hot vehicle by a factor of five and to offer parents and guardians a peace of mind knowing that their child is protected if accidentally left in a hot vehicle. To do this, TCSSD LLC offers TCSSD to child seat manufacturers because the device can reach more of the target market this way. Individual parents and guardians, that already own child seats or would rather buy TCSSD separately, will also be able to purchase the safety device. The successful implementation of TCSSD means that parents will have a dependable prevention method that can save their child from dying if entrapped in a hot vehicle.
ECE 4542: Senior Design II
April 14, 2006
Thermo Child Seat Safety Device
Page 2 of 13
1.0.
Objectives To produce a product that will set the standards for children safety devices To initially capture close to 100% of the market To provide a quality product and excellent customer service To offer a product at a competitive price To become profitable within 3 years Mission
1.1.
TCSSD LLC's number one priority is that of saving lives. Our mission is to offer a quality product that can be used by manufacturers and consumers of child seats as a dependable safety prevention device. In doing so, our company hopes to aid in the reduction of deaths and the preservation of life due to the continuous problem of children dying each year from being left in hot vehicles. Our goal is to become the market leader in providing an efficient and reliable device that insures the safety, from this danger, of children within vehicles; therefore enabling this company to reach its utmost priority of saving lives. 1.2. Keys to Success
In order for TCSSD LLC to succeed as a business, the following objectives will have to be accomplished:
Product Reliability. The TCSSD has to be safe and reliable to provide safety to children. For this to happen, the device will have to perform in extreme temperature ranges. The device will have top-notch components that can operate safely in these extreme temperature ranges and perform their duties correctly each time. Customer Relations. TCSSD LLC will have to provide quality and efficient service to all of its customers. By fixing any problems that may arise after product release will ensure a sound customer base. Listening to customer's suggestions and criticism of our product will help in evolving upgrades and future versions of our safety device. Manufacturer Relations. TCSSD LLC will develop relationships with the four largest child seat manufacturers such as Graco Children Products, Fisher-Price, Evenflo Company, Inc., and Cosco, Inc. These established relationships will allow TCSSD LLC to grow and be recognized as the market leaders in providing an efficient and reliable device that insures the safety of children. Effective Management. Five engineers will comprise the management team. Each of the engineers will be directors of separate departments of the company. The department will consist of new product development, product manufacturing and customer service, accounting, logistics, and software design. These managers will be responsible for effectively and efficiently supervising and directing duties of the employees of the company.
1.3.
Target Market
TCSSD LLC's target market is parents and guardians who have children or are expecting to have children. All parents and guardians are responsible for keeping their children in a child seat while traveling in a vehicle to protect their child. However, when the vehicle is stopped and vacated, the existing child seat cannot protect a child from hyperthermia. TCSSD is a very reliable device that is used in conjunction with the existing child seat to protect the child while the vehicle is vacant. TCSSD is marketed to any parent or guardian who wants their child protected from being left alone in a hot vehicle.
ECE 4542: Senior Design II
April 14, 2006
Thermo Child Seat Safety Device
Page 3 of 13
1.4.
Competitive Advantages
There are similar devices that alert that there is a child inside a vehicle; however, the TCSSD will directly notify the parent or guardian through a cell phone call that their child is in danger. Since there is no other device that communicates directly to the parent or guardian, TCSSD will be the only product on the market to provide this type of personal interaction. 1.5. Basic Strategies
There are several basic strategies that will be employed to insure the success of our company. The first is to insure that our infrastructure is as solid as possible. This will be accomplished by hiring good employees and managers, working with reliable suppliers, and using high quality parts. A large part of this stipulation will include insuring the best available cellular signal at all times. This will be accomplished through our choice of cellular network carriers. The second will be to stand behind our product by offering guarantees of quality, warrantees, etc. We will also employ a customer service department that will be available 24 hours a day to answer customer's questions. Our product will be marketed to car seat manufacturers as well as the general public. One option we will have will be to sell exclusively to car seat manufacturers, in which case we will let them handle the marketing, etc. This option would be favorable, and the car seat and module would be sold together, eliminating the possible misplacement of the pressure sensors by individuals. The last but not least will be our attention to bringing the customer the lowest possible price. This will be accomplished through our streamlining of the manufacturing process, guaranteeing that it is as efficient as possible. We will also bring the price down by selecting the highest quality and yet lowest cost parts that are available to us. Advertising is a large part of the budget of most companies, however ours will be significantly smaller than most. This can be accomplished through concentrating on landing larger contracts with car-seat manufacturers, automobile makers, etc. Our main goal will be to strive to please the customer's by listening to their needs and changing as needed. This will insure the success of our company and build a good reputation for TCSSD LLC's future. 2.0. Company Summary
The inspiration behind providing an efficient and reliable device that will insure the safety of children was founded by Christopher Colston, Matt Robison, Toby Mask, Justin Vanderford, and Chamel Young in August 2005. TCSSD LLC is a limited liability company whose mission is to offer a quality product that will be used as a dependable prevention device. 2.1. Company Location and Facilities
TCSSD LLC's main production facility will be located in Starkville, MS. This location will keep start-up costs low due to the low cost of land around Starkville and will be within close proximity to Mississippi State University. Being close to Mississippi State University means that many resources and a steady stream of qualified workers will be available. TCCSD LLC will operate from within a single 20,000 square foot building. This will allow room for offices, supply rooms, and assembly line for assembling the product. There will also be room for shipping/ receiving, conference rooms, etc. 2.2. Company Strategy
ECE 4542: Senior Design II
April 14, 2006
Thermo Child Seat Safety Device
Page 4 of 13
TCCSD LLC strategy is to provide reliable products that will become a global standard for all manufactured child seats. We plan to reach and maintain this status by continuing to produce dependable products at an affordable price. This will be achieved by TCSSD LLC's continuous search for quality parts, excellent customer service team, experienced engineering and management staff, and with the aid of our partners in the cellular technology and service industry. TCCSD LLC plans to be forerunner in this area of service by continuing to establish various patents for our new methodology of communicating existing problems to the consumer in the area of child and car safety. This should be a fairly simple task due to the current technology that is already present within our company and lack of specific competition in this market. Along with a strong engineering foundation and improved customer relations, TCCSD LLC expects a constant growth in size and market value. 2.3. Start-up Costs
The majority of the startup cost of the business will be shared between the five members of our company, and the rest of the costs will be funded by borrowing money from a lender. These costs include legal advice, office equipment and supplies, website, insurance, manufacturing equipment, and component inventory. Start-up costs are shown in the following tables: Startup Expenses Legal Stationary Brochures Consultants Insurance Building Rent Initial Inventory Expensed Equipment Other Total Startup Expenses
1,000.00 400.00 2,000.00 5,000.00 350.00 740.00 85,000.00 3,000.00 1,000.00 98,500.00
Startup Assets needed Cash Balance on Starting date 25,000.00 Startup Inventory 0.00 Other Current Assets 7,000.00 Total Current Assets 32,000.00 Total Startup Requirements 130,500.00 Investment Chris Colston Toby Mask Matt Robinson Justin Vanderford Chamel Young Total Investment Current Liabilities Current Borrowing
15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 75,000.00
55,500.00
ECE 4542: Senior Design II
April 14, 2006
Thermo Child Seat Safety Device
Page 5 of 13
Other Current Liabilities Total Current Liabilities Long-term Liabilities Total Liabilities Loss at Start-up Total Capital Total Capital and Liabilities Checkline 2.4. Product Description
0.00 55,500.00 0.00 55,500.00 98,500.00 -23,500.00 32,000.00 0.00
A child dying from being left alone in a hot vehicle is a problem that technology can solve. TCSSD LLC's goal is to create an affordable and very reliable device, TCSSD, which will put an end to such unnecessary child deaths. TCSSD is used in conjunction with a child seat and has two main parts, the pressure switch and main box. The pressure switch detects any pressure greater than five pounds and is simply placed between the cushioning and molding of the child seat. The main box, which contains temperature sensors and a cellular module, can be placed in any convenient place (the car seat, on top of the child seat, etc.). When used correctly, TCSSD will keep a child safe if forgotten in a hot vehicle. 2.5. Competitive Analysis
There are currently no competing products to contend with in this area. However, future competitors will emerge and we will have to stay competitive. We will achieve this by keeping our manufacturing costs as low as possible and running an efficient company led by competent individuals. There is a huge market for our product that includes every parent who owns a child seat, and we plan to hold a large percentage of this market. 2.6. Future Technologies and Products
TCSSD LLC is committed to improving the reliability, functionality, and features of the TCSSD by researching and optimizing its different hardware components. TCSSD LLC may also be able to apply its knowledge of cellular communication into other areas. For example, TCSSD LLC could create a car alarm that calls the owner if the car is tampered with or a house alarm that calls the resident if the house is broken into. 3.0. Market Analysis Summary
TCSSD LLC will be marketed to parents who have children, expecting parents, and guardians. No device is currently offered to this demographic that will protect their children if forgotten in a hot vehicle. Therefore, TCSSD LLC will have no competition from other companies and have an open market. It is TCSSD LLC's belief that the majorities of parents are safety-oriented and want their children to be safe at all times. Therefore, TCSSD will be a desired device that will ensure the safety of children. 3.1. Market Segmentation
Parents that have children and expecting parents make up the majority of the market for TCSSD LLC. Guardians, such as babysitters and grandparents, make up the rest of the market for TCSSD LLC. Figure 2 shows market segmentation for TCSSD LLC.
ECE 4542: Senior Design II
April 14, 2006
Thermo Child Seat Safety Device
Page 6 of 13
10%
Parents
30% Parents 60%
Expecting Guardians
Figure 2: TCSSD LLC's Market Segmentation 3.2. Industry Analysis
With more than a dozen child seat manufactures today, the child restraint market is fairly consistent in today's economy. In the United States children under the age of four are required by law to be place in car safety seats, and in some states they are required up to the age of 8 years old to be confined to a car seat. With child seat manufacturers and parents being the target market of TCSSD, we should be able to capture a large portion of the market. There is some concern of lost of market due to the small decline in birth rate but this should not greatly affect the sale and continuous sale of TCSSD considering the overall expected growth in population. 3.3. Competitive Comparison
There are not any products currently on the market that are similar in operation to the functionality and service provided by TCSSD. Thus, TCSSD has a competitive edge over others, by being forerunners in the market of providing warning systems using cellular technology. Currently TCSSD specializing in providing a safety prevention device to be used with child seats, which can be used with most child seat manufactured today. This device is used to help prevent against hyperthermia deaths of children left in vehicle by placing a call notifying the parent of this danger. As mentioned earlier, this service is currently offered only by TCSSD therefore making us market leaders in the area. 3.4. Sales Forecast
TCSSD LLC will grow over time and the customer base will gradually increase as the word of our product spreads. This first year gain is shown in Figure 4. In the upcoming years, the company will gain more customers and the third year profits will be $2.4million. These yearly profit forecasts are shown in Figure 5. Our gains in profit are due to the spread of how great our product is by word of mouth and by learning what marketing techniques will best work in implementing these techniques. In addition, Figure 6 depicts
ECE 4542: Senior Design II
April 14, 2006
Thermo Child Seat Safety Device
Page 7 of 13
the detailed profit analysis for the first year for TCSSD LLC starting with January 2006.
Number of Units Cost of Goods Month Sold Total Sales Sold Profit January 5 $1,800 $600 $1,200 February 15 $5,400 $1,800 $3,600 March 65 $23,400 $7,800 $15,600 April 115 $41,400 $13,800 $27,600 May 160 $57,600 $19,200 $38,400 June 200 $72,000 $24,000 $48,000 July 230 $82,800 $27,600 $55,200 August 270 $97,200 $32,400 $64,800 September 300 $108,000 $36,000 $72,000 October 350 $126,000 $42,000 $84,000 November 425 $153,000 $51,000 $102,000 December 400 $144,000 $48,000 $96,000 Total 2535 $912,600 $304,200 $608,400
Year 2006 2007 2008
Number of Units Sold 2535 6500 10000
Profit $608,400 $1,560,000 $2,400,000
Figure 3: Detailed Sales Forecast for TCSSD LLC
2006 Sales
450 400 350 300 250 200 150 100 50 0 January
Sales
April
July Month
October
Figure 4: TCSSD LLC's Projected Sells for 2006
ECE 4542: Senior Design II
April 14, 2006
Thermo Child Seat Safety Device
Page 8 of 13
Profit Forcast
$2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2006 2007 Year 2008 Yearly Profit
Figure 5: Profit Forecast for TCSSD LLC
2006 Profit Analysis
$160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Total Sales Cost of Goods Profit
November
January
June
Month
Figure 6: TCSSD LLC's 2006 Profit Analysis 4.0. Management Summary
Management and organization play important roles in TCSSD LLC. In order for TCSSD LLC to be successful and provide efficient and reliable devices, each founding member must perform well and understand the goals of TCSSD LLC. The following sections will illustrate TCSSD LLC's management structure.
ECE 4542: Senior Design II
September
December
February
October
March
April
August
May
July
April 14, 2006
Thermo Child Seat Safety Device
Page 9 of 13
4.1.
Organizational Structure
The organizational structure of TCSSD LLC is distributed amongst each founding member. Each member will serve as manager for the following divisions: Engineering and Research, Sales and Marketing, Accounting and Financing, Human Resources, and Manufacturing. Each member goal is to provide quality service to ensure that each division operates correctly. The following organization chart, Figure 7, shows the structure of TCSSD LLC:
TCSSD LLC
Engineering & Research
Sales & Marketing
Accounting & Financing
Human Resources
Manufacturing
Figure 7: TCSSD LLC's Organizational Structure 4.2. Management Team
Christopher Colston, Chief Executive Officer, is a graduate of Mississippi State University with a degree in Computer Engineering and a minor in Mathematics. Chris is responsible for overseeing all of TCSSD LLC's functions and performs at its highest standard. In addition, Chris will manage the Human Resources department, in which he will be responsible for the hiring of all personnel and ensure that each employee is aware of all benefits and that TCSSD LLC provides a great working environment. Justin Vanderford, Director of Engineering & Research, is a graduate of Mississippi State University with a degree in Electrical Engineering. Justin is responsible for overseeing all design and development of all products. Matt Robison, Director of Sales & Marketing, is a graduate of Mississippi State University with a degree in Electrical Engineering. Matt is responsible for overseeing market analysis of target market and researching advertisement techniques for all products. Chamel Young, Director of Accounting & Financing, is a graduate of Mississippi State University with a degree in Computer Engineering and a minor in Mathematics. Chamel is responsible for overseeing the financial and purchasing department of TCSSD LLC. Her duties include keeping track of payroll,
ECE 4542: Senior Design II
April 14, 2006
Thermo Child Seat Safety Device
Page 10 of 13
purchases, and other financial concerns. Toby Mask, Director of Manufacturing, is a graduate of Mississippi State University with a degree in Electrical Engineering. Toby is responsible for overseeing fabrication and assembly of boards and components and make sure the manufacturing is performed in the most efficient manor. 4.3. Personnel Plan
Our initial company will consist of no more than 10 people. This will include the original five-team members/founders as well as up to five additional employees who will be involved in marketing, bookkeeping, shipping, and legal. The assemble and testing of the product will be handled by the original five team members/founders and after a successful company launch, these five member/founders will focus more on managing the company and hire other workers to work on the assembly and testing. Table 1 lists a tentative salary and expense budget for the first four years of the company's growth. A goal of the company will be to spend a larger percentage of the total annual income on marketing at the start of its growth. After this, word of mouth will be the main marketing tool. Many of these aspects will reach a plateau after a certain amount of growth and stop growing, reducing the bottom line. Position Founders / Engineers Employees Production Testing Marketing Accounting Total People Total Payroll 2006 $350,000 $100,000 $100,000 $5,000 $200,000 $20,000 10 $775,000 2007 $450,000 $150,000 $200,000 $10,000 $300,000 $30,000 15 $1,140,000 2008 $500,000 $200,000 $300,000 $20,000 $400,000 $30,000 20 $1,450,000 2009 $500,000 $250,000 $400,000 $30,000 $500,000 $40,000 25 $1,720,000
Table 1: Budget for first 4 years
5.0.
Strategy and Implementation
TCSSD LLC will offer parents and guardians a safety device that will keep their child safe if forgotten in a hot vehicle. At this time, there is no device on the market that offers this capability, so TCSSD LLC has a Reach large target market with no competition. The plan to capture this market is to offer a highly reliable device Target Market will be offered to child seat manufacturers and that any parent can trust at a reasonable price. This device individual parents and guardians. Figure 8 shows the strategy pyramid of TCSSD LLC.
Great Customer Relations
Effective Management
Reliable Device
ECE 4542: Senior Design II Child Seat
Manufactures
Individual Parent and Guardians
April 14, 2006
Thermo Child Seat Safety Device
Page 11 of 13
Figure 8: Strategy Pyramid 5.1. Market Strategy
Initially, TCSSD LLC will market to manufacturers of child seats. TCSSD LLC will work with these manu...