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26 Pages

MF-WirelessHeartbeatDetector-Web

Course: ECP 6701, Spring 2011
School: University of Florida
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Word Count: 957

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Coursehero >> Florida >> University of Florida >> ECP 6701

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MarketFeasibilityStudy MarketFeasibilityStudy VitalSign: WirelessHeartbeatandRespirationDetector PresentationOutline PresentationOutline TechnologyDescription PotentialMarkets TargetMarket FinancialAnalysis Conclusions TechnologyDescription TechnologyDescription DevelopedbyDr.JenshanLinandhis colleaguesattheUniversityofFlorida VitalSignutilizesamodifiedDopplerradarto wirelesslymonitorheartandrespirationrates TechnologyDescription TechnologyDescription Thesmallportabledeviceemployslow powerradiowavestodeterminevitalsigns withoutattachingsensorstothebody Thesystemmonitorschestmotionto determineheartandbreathingrates Provenaccuratewithin3meterrange PatentPending TechnologyDescription TechnologyDescription Nextgenerationworkingprototypethesize ofascientificcalculatorhasbeen developed Goalistointegratethetechnologyintoa singlechip PotentialMarkets PotentialMarkets Technologyapplicableinvariousmarkets Conductedmarketresearchinthe followingthreepotentialmarkets: Healthcare NationalDefense Cardiovascularexerciseequipment PotentialMarketsHealthcare PotentialMarketsHealthcare By2011,thefirstofthe76millionbaby boomergenerationwillturn65yearsold Increasingdemandonthehealthcare system Opportunitiesforcosteffectivehealthcare solutionsallowingdoctorstofunctionmore efficiently PotentialMarketsHealthcare PotentialMarketsHealthcare Telemedicineuseofelectronicinformationand communicationtechnologiestoprovidehealth serviceswhenparticipantsaregeographically separated Remotepatientmonitoringisakeycomponent oftelemedicine Allowshealthcareprovidersaccesstoimportant informationregardingapatientsmedicalstatus betweendoctorvisits PotentialMarketsHealthcare PotentialMarketsHealthcare VitalSignprovidesadditionalconvenience Easilymonitorpatientswithsevereburns orcontagiousdiseases Providesmethodtomonitorbabieswithout thepotentialdangerofwires PotentialMarketsHealthcare PotentialMarketsHealthcare BarrierstoEntry Onlymeasurestwoimportantvitalsigns FDApremarketrequirementsfor groundbreaking(ClassIII)medical technologiescovereveryaspectofproduct development FDAvalidationprocesswilltakeupto5years andcostatleast$15million PotentialMarketsNationalDefense PotentialMarketsNationalDefense DepartmentofDefense(DOD)budgetfor2006isover$500 billion VitalSignmayfillthemilitarysneedtoprovidetroops, conductingurbanwarfareoperationswithpersonneldetection devices Allowsdetectionthroughbarrierssuchaswoodandconcrete whenlookingforenemycombatants PotentialMarketsNationalDefense PotentialMarketsNationalDefense Additionalmilitarydetectionapplications include: Militarysearchandrescueonthebattlefieldor duringanaturaldisaster Detectionafterbiologicalexposure PotentialMarketsNationalDefense PotentialMarketsNationalDefense BarrierstoEntry Notablechallengesdealingwithgovernment acquisitionsbureaucracy Competitionfromlargedefensecontractors developingtechnologythatcanprovidemore datatothesoldierthanVitalSign PotentialMarketsCardiovascular PotentialMarketsCardiovascular ExerciseEquipment Cardiovasculardisease (CVD)isthenumberone killerofmenandwomen intheUnitedStates Increasedawarenessof theimportanceofproper dietandexercise Hascreatedexceptional growthintheexercise andfitnessindustry PotentialMarketsCardiovascular PotentialMarketsCardiovascular ExerciseEquipment PotentialMarketsCardiovascular PotentialMarketsCardiovascular ExerciseEquipment Approximately4.4milliontreadmillswere soldin2003totaling$2.7billion Ellipticalcrosstrainersexperiencedgrowth of41%in2003. Increasingpopularityofheartrate monitoringduringcardiovascularexercise toatargetheartratezoneallowingfor maximumexerciseefficiency PotentialMarketsCardiovascular PotentialMarketsCardiovascular ExerciseEquipment CompetitiveAnalysis Twoprimaryproductscurrentlymeasureheart ratewhileexercising HandgripSensors TelemetricChestStrap VitalSignhassignificantadvantagesoverthe twocurrentlyavailabletechnologies TargetMarketCardiovascular TargetMarketCardiovascular ExerciseEquipment Lowbarrierstoentry Abilitytoprovidearevenuestreamquickly Technologycanbeintegratedintothenext generationofcardiovascularexercise equipment,providingconvenient monitoringofheartandrespirationrates FinancialAnalysisStartupand FinancialAnalysisStartupand OperationCosts Investmentof$2millionoverthenext2 yearsisestimatedforresearchand developmentwithzeroestimatedrevenue R&Disreducedto$250,000inyear3and beyond Marketingisbudgetedat$1millioninthe firstyearofsales,whichisthenreducedto $250,000inthefollowingyears FinancialAnalysisRevenueForecast FinancialAnalysisRevenueForecast Conservativeforecastistosell200,000units duringyearthreeatapriceof$8each Forecastsalestoincreaseby100%eachyear forthenextthreeyearswhilethepricewillbe reducedby10%eachyear Equatestosalesbeginninginyearthreeat 200,000unitsandincreasingto1.6millionunits byendofyearsix Revenueisprojectedtoincreasefrom$1.6 millionto$9.2millionduringthesameperiod. FinancialAnalysisPriceand FinancialAnalysisPriceand IncomeElasticity Themarketforallcardiovasculardisease(CVD) monitoringequipmentisgenerallypriceelastic SinceVitalSignisacomplementaryproductitis moreelastictothepriceofthecomplementary product Largeincreasesinthepriceofcardiovascular exerciseequipmentwillseverelyimpactthe salesofourproduct Demandisincomeelastic FinancialAnalysis FinancialAnalysis BreakEvenAnalysis OperationalCostsduringthefirstyearof commercialavailability(2008)areestimatedat $670,000 The6year(20062012)totalcostofproduct development,operationalexpenseswillbe approximately$12.7millionwithrevenuetotaling $19.7million Resultinginsixyearnetprofitofapproximately $5.3million BreakEvenAnalysis BreakEvenAnalysis $12,000,000 Total Costs Total Revenue $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Year 1 Total Costs Total Revenue Annual Profit Total Profit Year 2 Year 3 Year 4 Year 5 Year 6 Year 1 $973,000 $0 Year 2 $1,083,000 $0 Year 3 $1,150,000 $1,600,000 Year 4 $1,770,000 $2,880,000 Year 5 $2,870,000 $5,440,000 Year 6 $4,935,000 $9,792,000 ($973,000) ($973,000) ($1,083,000) ($2,056,000) $450,000 ($1,606,000) $1,110,000 ($496,000) $2,570,000 $2,074,000 $4,857,000 $6,931,000 ProFormaFinancialData ProFormaFinancialData Profit & Loss Projections Total Sales Less: Cost of Sales Gross Profit Year1 Year2 Year3 $ -$ - $ 1,600,000 $ 20,000 $ 35,000 $ 480,000 $ (20,000) $ (35,000) $ 1,120,000 Year4 $ 2,880,000 $ 960,000 $ 1,920,000 Year5 $ 5,440,000 $ 1,920,000 $ 3,520,000 Year6 $ 9,792,000 $ 3,840,000 $ 5,952,000 Operating Expenses Business development payroll Research payroll Rent Utilities Legal Expenses Licenses & fees Advertising/Promotion Travel Payroll taxes Lease expenses Other Misc expenses Total operating costs $ $ 750,000 $ 12,000 $ 3,000 $ 15,000 $ 10,000 $ $ 5,000 $ 150,000 $ 5,000 $ 3,000 $ 953,000 $ 50,000 $ 750,000 $ 12,000 $ 3,000 $ 15,000 $ 15,000 $ 10,000 $ 25,000 $ 160,000 $ 5,000 $ 3,000 $ 1,048,000 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 400,000 250,000 25,000 5,000 15,000 15,000 40,000 55,000 130,000 10,000 5,000 950,000 $ 500,000 $ 250,000 $ 25,000 $ 5,000 $ 15,000 $ 15,000 $ 50,000 $ 65,000 $ 150,000 $ 10,000 $ 10,000 $ 1,095,000 Total costs $ 973,000 $ 1,083,000 $ 1,150,000 $ 1,770,000 $ 2,870,000 $ 4,935,000 Profit before Interest and taxes Interest expense Taxes Incurred $ (973,000) $ (1,083,000) $ $ -$ -$ $ -$ -$ 450,000 - $ 1,110,000 $ $ 78,750 $ 2,570,000 $ $ 246,750 $ 4,857,000 $ $ 1,214,250 Net Profit(loss) $ (973,000) $ (1,083,000) $ 450,000 $ 1,031,250 $ 2,323,250 $ 3,642,750 200,000 250,000 25,000 5,000 15,000 15,000 20,000 35,000 90,000 10,000 5,000 670,000 300,000 250,000 25,000 5,000 15,000 15,000 30,000 45,000 110,000 10,000 5,000 810,000 Conclusions Conclusions NumerousPossibilitiesforVitalSign FitnessEquipmentIndustryismostviable Technologyneedsonlyminorchanges. Industryisgrowing Nothingexiststhatcancompare. Technologyisdefinitelyfeasible Questions Questions

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