1

The Gyroscope for Business

Providing a stable framework of business support to accelerate the rate at which

business ideas spin into successful reality.

2

Problem

of businesses fail in the first five years

Pro

fit

Los

s

Years

U.S Dept of Commerce

3

Reasons

Poor planning Insufficient resources Inadequate management Ineffective business processes Marketing failure Inability to respond to change

Compilation: SBA, Wharton, D&B, & others

4

Beacons of Success

In the midst of these disappointing statistics are found three beacons of success which demonstrate dramatically better success rates Franchising Business Incubators Venture Capitalists

5

Success

Success Rate

95% of franchises succeedU.S. Dept of Commerce

87% of companies in business incubators graduate successfully within three years

Impact of Incubator Investments Study, 1997

Pro

fit

Los

s

Years

6

What’s The Difference?

-100

-75

-50

-25

0

25

50

75

100

-100

-75

-50

-25

0

25

50

75

100

CommittedThird Party

7

Committed Assistance

In all three of these arenas of business success, assistance is provided to help management develop effective ancillary business functions so that management’s primary focus can be maintained on the key IDEA, or Core Competency of the company.

8

New business expectations

Every new business leader expects that his focus in the new business will be on his IDEA, his Core Competency

9

Typical Reality

The reality is that ancillary issues in a company steal leadership attention and the IDEA, or Core Competency, does not receive effective focus.

Success suffers!

10

Solution

Mission Statement: Accelerate business growth by providing client companies with expertise and strategic integrated support systems which enable profitable focus on core competencies.

Focus: Serving clients of investment groups to accelerate investor profits, lower risks, and provide effective progress reporting.

Syn gy

11

Return to effective focus

Synogy’s provision of integrated support systems enables business leaders to return their focus to the Core Competencies

Success Accelerates!

12

Synogy Partner Benefits

Synogy Partners - client companies under contract with Synogy, receive many benefits Focus on development of core competency Strengthen leadership Expand network of strategic relationships Accelerate growth Increase efficiency of operations & processes Build staff capabilities Affordable access to high-end solutions

13

Synogy’s Investor Benefits Investor’s whose companies are served by

Synogy receive a number of benefits. Closer communication & reporting on status of

client company (on-line report website) More rapid information on company problems or

opportunities Accelerated growth of investment value Higher profits Lower risks Minimized headaches

14

Method Overview

Three-way Contract Relationship Synogy Group - Proven Network of Expertise Multiple Incubator-type Services Synogy Centers around the World

Investor

SynogySynogy Partner

15

Contract Relationships

Investor

SynogySynogy Partner

Investor contracts with Synogy to assist Client

Investor invests in Client requires Client to contract with Synogy

Client contracts with Synogy to provide assistance - becomes Synogy Partner

Synogy serves Synogy Partner

Synogy reports to Investor

ClickClickClickClickClick for Next

16

Relationship Dynamics Contract between Synogy & Investor to

provide business development services to Investor’s client company

Client contracts with Synogy to provide services - becomes Synogy Partner

Synogy reports progress to Investor Synogy provides multiple incubator-type

services to Synogy Partner

17

Conceptual Plan

18

Synogy Services Synogy provides four types of services.

1. Synogy Group - strategic network of proven business leadership and technical expertise (Synogists)

2. Development of Systems & Processes - analysis, development, and documentation of effective business processes

3. Professional Development - training and mentoring to enhance leadership & staff skills

4. Leveraged Relationships - high-value services and products at group rates

19

1. Synogy Group Synogy Group - a network of proven business

experts, provides help with multiple needs in the Synogy Partner Board of Directors & Advisory Board -

high-profile, recognizable names Regular monthly strategic planning Regular monthly technical development

consulting from industry experts Development of strategic relationships

20

1. Synogy Group continued

Prescreening of all experts & consultants Experience, Expertise, Reputation, Background Check

Screened for mentoring and business builder attitudes Network developed containing high levels of

experience and success Network database established for matching skills

profiles to specific company needs Strategic use of network to expand relationships and

exposure of client companies

21

2. Develop Systems & Processes Develop effective processes for multiple

functional areas of operations. Human Resources, Payroll, Benefits Insurance Standard Operations Manuals Corporate Image & Marketing Design Training: Leadership, General Management, &

Project Management Import / Export & Government Regulations

22

2. Develop Systems & Processes cont.

Additional processes Personnel recruitment New hire setup Templates & documentation for standard

business processes Computer network communications Expense report management Project management

23

2. Develop Systems & Processes cont.

Future Development of Implementable Best Practice Processes (IBPPs) Standardized package – customizable Developed with industry recognized experts Defined acquisition and implementation

processes Online documentation of all processes Staff training & online training Continuing support and upgrade

24

3. Professional Development Leadership training programs and

leadership mentoring Technical skills training programs Team building programs Training & reference lending library Professional development newsletters

25

4. Leveraged Relationships Free or discounted service packages or

products from a variety of suppliers Leveraged acquisition of high-end services

through strategic relationships Group purchasing discounts

• Insurance & Benefits

• Business & Office Supplies

• Computers & Equipment

26

Synogy Centers Synogy Centers will be built around the world to serve

companies wanting a physical business incubator environment.1

Traditional incubator services Reasonable cost facilities Shared resources - networks, copying, library Regular training classes Development support teams Strategic inter-company networking Leveraged administrative support

1 Many clients will not be in an Synogy Center

27

Business & Financial Analysis

Syn gy

28

Market Analysis

Initial Focus will be on pension funds and related investment groups Some currently invest in over 25 businesses each

year - existing and start-up Some invest over $1 billion per year

Hundreds of passive investment groups exist which are potential future clients

29

Competition No known competition focusing on serving

the Passive Investor niche market Ancillary competition from major business

consulting firms - will form strategic relationships with some

Other business incubators exist Most are government entities Most are local Many focus on dot.com & high-tech

30

Projected Client Growth

418

41

73

114

0

20

40

60

80

100

120

140

Yr 1 2 3 4 5

Total number of client companies being served

31

Projected Growth

First 6 months focused on developing “Best Practice” processes and package of services

4 Client Companies by end of year 1 Maintaining very controlled growth

18 Client Companies by end of year 2 Houston Synogy Center opened - 6th Qtr

41 Client Companies by end of year 3 2 new Synogy Centers opened

32

Projected Synogy Centers

01

3

6

10

0

2

4

6

8

10

12

Yr 1 2 3 4 5

Total number of Synogy Centers

33

Financial Projections

Profitability in third year - $3 million Net cash flow profit exceeds $10 million /

year by fifth year Asset value from Synogy Partners and

property exceeds $205 million by fifth year Net Present Value = $124 million

34

Revenue, Gross Margin, & Profit

($10,000,000)

$10,000,000

$30,000,000

$50,000,000

$70,000,000

Year 1 Year 2 Year 3 Year 4 Year 5

Total Revenues

Gross Margin

Net Income

35

Cumulative Asset Value

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

Year 1 Year 2 Year 3 Year 4 Year 5

36

Financial Requirements

$8.5 Million Phase 1 - year 1 Start-Up Development of Services & Standard Processes Development of Synogy Group

$3.5 Million Phase 2 - year 2 Expand services & Development of IBPPs

$50+ Million Phase 3 (mortgage funding) Development of Synogy Centers around world

37

Risk Analysis Under estimation of expenses for developing

value added services - would require additional allocation of funds

Difficulty in developing resource network and finding business leaders willing to mentor other business leaders

Passive investment companies not willing to invest additional funds in assisting their clients

38

Contact Information

Synogy founder & Chairman: Hank Tate interim address:

12954 Westleigh Houston, TX 77077 281-870-9194 fax: 281-870-9669 hank.tate@synogy.com

39

Structure & Operations

Syn gy

40

Organization ChartHank Tate

Chairman & CEO

Gill HollowayPresident

MARKETING

Marketing

Lead Generation

Lead Conversion

VP Marketing

CLIENT FULFILLMENT

Aline TatomManager, IBPPDevelopment

ManagerTraining

ManagerPartner Services

ManagerInvestor Services

ManagerDue Diligence

ManagerResources

VP ClientServices

VP SynogyGroup

Ray SheenVP Knowledge

INTERNAL OPERATIONS

ManagerNetworks

Chris TuckerManagerSoftware

ManagerUser Support

ManagerFinance

Manager People

ManagerLegal

ManagerAdministrative

ManagerCommunications

VP Technology VP Operations

FIELD OPERATIONS

Manager, BranchOperations

Management

Manager, BranchSystems/

Support/Liaison

VP SynogyCenters

41

Board of Directors

High-Profile Business Leaders with experience in developing emerging businesses Active involvement in refining Synogy’s services

and processes Active development of Resource Group Network

Minimum 4 meetings / year Stock & Compensation for Services

42

Board of Advisors

Proven experience in a wide variety of business skills

Contractual relationship for availability and confidentiality

Emphasis on High-Profile Individuals Stock & Compensation for Services Annual Meeting

43

Synogy Group Division

Build & Support Synogy Group Network Business Leaders & Professional Experts

• Demonstrated Ability, Background Checks

• Emphasis on High-Profile Individuals Professional Services Companies

• Demonstrated Ability, Background Checks Approval Process & Contractual Relationship Database searchable by skills

44

Client Services Division

Identify and Establish Client Services Determine resource needs of client companies Locate needed resources in Resource Group Implement IBPPs

Manage Client Relationships & Billings Database of Clients and skills

45

Administration Division

Manage Synogy Internal Operations Customer Communications Internal Communications Develop Synogy Business Processes

Synogy Staff Management Benefits & Development

Develop Administrative “best practices” that can be shared with Client Companies

46

Technology Division

Develop & Manage Synogy’s use of technology Communications Computers Internet Database Development for Divisions

Provide “best practices” technology resource to Client Companies

47

Financial Division

Manage Synogy’s Financial Affairs Manage Client Billing Develop financial “best practices” that can be

shared with Client Companies

48

Knowledge Division

Direct Development of Implementable Best Practice Processes (IBPPs)

Develop & Present Training Programs Leadership Development Professional skills development “Best Practices” training

Newsletter Production Synogy Website Content Management

49

Synogy Centers Division

Research on Incubator Centers around the world - Identify Best Practices

Develop Houston Incubator Center Develop Management of Houston Synogy Center Develop Synogy Center Processes & Practices

Develop additional Synogy Centers around the world