Business Plan

*Please note that this business plan is only a model and it is not required to join the

international development program. It was put together as a tool to help you develop a

business strategy.

Summary

This document is a business plan model made available to our future business associates who

wish to find some information and have some analytic tools at their disposition. This model

will be very useful in formulating a plan of action and prioritizing your business activities. This

business plan can be used by entrepreneurs who wish to develop a new market in the central

vacuum industry or simply boost their distribution network with the Cyclo Vac brand. You will

be able to get a better understanding of the environment in which your business will evolve,

to recognize opportunities and adapt to risks, therefore putting in place a successful

distribution business.

Three steps to start up a business – Central Vacuums

1. Find the “WOW” Factor and Assess Your Strengths

As you may already know, not everyone is cut out to open a business although many

would like to. If you want to start a business, start by asking yourself a few simple

questions:

a) Am I willing to work more hours than normal to start?

b) Do I have the will power and “sales tiger” in me to sell the products?

c) Do I accept rejection well?

d) Can I find the right people around me to help me get started (sales; technical;

installers; financial; etc.)?

e) Am I self-disciplined to work hard and never stop at the first “no”?

f) Can I afford to start a business?

g) Is there room for another player in this market? Am I the first? How can I do it

different from others to be successful?

2. What Type of Business Should I Get Into?

OK so you answered all of the questions above and are convinced you have what it takes

and what the market needs, now let’s choose the right business.

The central vacuum industry is a rapidly expanding sector of the economy that allows for

many types of business plans that can be adapted to each market but there are some

common denominators that make it interesting.

a) It is estimated that more than 30 million portable vacuums were sold in the United

States alone in 2013.

b) This product is considered a niche sector but allows your business to grow in many

ways since it involves several steps to get to the final installation process where

there is potential to make money. (Initial selling stage; installation stage; after

sales -bags; brushes; filters; maintenance).

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c) The portable vacuums being sold in Europe must now abide by strict rules on their

Watts consumption thus making it more difficult to match the power of a central

vacuum system. This is opening doors for us…

d) Although the central vacuum was invented over 60 years ago, it is still a relatively

new product in many countries

So the bottom line is: This industry is going to grow more and more and you need to ask

yourself, do I want to be a leader in introducing it or simply follow others. You need to

now concentrate on the type of business…will you import and warehouse the products

and have others do the dealer/store part of the business? Will you do B2B and B2C or just

one of them? Where are your strengths vs weaknesses? Who will do the installations

(electricians; plumbers; your own staff)?

3. A Business Plan is a “Must”

There are several steps in getting a small business up and running in the proper way and

it is “always” a good idea to put your best ideas on paper and follow a guided plan…. a

flexible one, but a written one! Before you even open your business, you need to

thoroughly think through what the business will be. Why it will be unique. How you will

get customers. How you will handle the competition, and so on. That is your business plan.

Not only will you use it to make sure you are on the right track, but investors will want to

see it to determine whether your new business is a worthwhile investment.

As such, a big part of that plan will be your financial analysis: How much money will you

need, how will you spend it, how much profit can you reasonably expect to make? Your

financials will tell you. Finding the sale price is an important part of your plan so you will

need to benchmark the competition or ask for a Dealer price list with suggested retail

prices if the manufacturer has one and adapt it to your costs; overhead and market

purchase price capacity. (The price consumers are willing to pay)

Business Sector

The central vacuum industry is mostly in the residential sector (household appliances

consumers). The majority of Cyclo Vac’s consumers are homeowners. The main focus of the

enterprise is the business to business approach (B2B) by which we sell to distributors and

retailers who in turn sell to the consumers (B2C).

External factors

In order to evaluate the potential of your products in your market and territory it is

recommended to gather as much information as possible to get a good understanding of the

environment in which your business will evolve. A good evaluation of the market will allow

you to better focus your activities, evaluate with certitude certain risks, and allow you to

establish a pricing strategy pertinent to your territory.

Market Research

As mentioned, market research is recommended as the ideal tool to better locate your

business in its environment and to better elaborate on your business strategies. Such

information can be collected by internet sources such as your country’s statistical department.

Also, there are companies who compile extensive databases with lots of pertinent information

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and these databases are available to you with some fees. It is also possible to use the direct

approach and collect information by distributing surveys to your target clientele.

1. Secondary Data

In gathering your secondary data we recommend that you use the PESTEC method. This

method allows you to figure out which elements from your environment could influence

your business activities and goals, by analyzing the following fields:

a) Political factors:

Are there norms in place specifically for the central vacuum industry? What are

the laws that regulate the business sector (real estate, residential or commercial,

tourism, etc.) in my country? What are the measures of protection for the

marketing aspects such as representation or displays? Are there federations or

organizations that control the business sector of the central vacuum? Is my

country politically stable (war, conflicts, corruption etc.)? Are there any

restrictions on the international commerce of central vacuums?

b) Economic factors:

Is my country’s economic situation trustworthy and suitable for development?

What are the economic factors that will directly influence my business (inflation,

unemployment rate, debt ratio, level of consumption, R&D, etc)? Is there any

information available on the evolution of your particular business sector? Are

there factors in the world’s economy that could influence your strategies and

operations?

c) Social factors:

What are the social factors that could influence your business (culture, language,

aging population, birth rate, etc.)? Where is the majority of the clientele located?

Is there a strong urbanization tendency? Are there existing tendencies in my

industry that could help inspire my business?

d) Technological factors:

Does your country offer good technological development while maximizing

communication? What are the new technological advances in your sector of

activity? What are the technological norms of production in this particular sector

(CE, CSA, UL, etc.)?

e) Environmental factors:

Are there any climate factors in your country that could influence your activities?

What is the geography of your country and could it influence the shipping and

receiving aspect? What is the ecological impact of your commercial activities on

the region and how can you minimize the risks? Are there any environmental

norms in your country?

f) Competitive factors:

Is there an existing market for central vacuums in your country? If so, what is the

level of competition? Who are your main competitors and what are their market

shares? Are there any international companies who operate in this market and

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what are their distribution network and communication tools? Can you use them

for inspiration?

2. Primary Data

Primary data is non-itemized information and must be collected directly with your clients

in your market. To do so, you may hand out surveys or gain access to existing databases

of businesses in the same sector (may incur costs). The main goal is to gain a clear picture

of your potential clients and to evaluate their interest in your products.

While coming up with questions for the survey, it is important to be as specific as possible

in order to eliminate any ambiguity and to facilitate answering your questions. It is also

important to interpret your data on a global basis in order to gain knowledge on general

tendencies.

You may find a basic survey model in appendix.

Internal Factors

You are now at the point where you need to elaborate on your strategies, your communication

plan, your structure, both organizational and operational, and also your financial plan. You

will have to define your internal operations and your clientele in order to adapt your

marketing strategy accordingly. The following sections will give you recommendations that

may serve as reference points while drafting your business plan. The best way to succeed is

to work in a professional manner with an open mind and a positive attitude. And, most

importantly, find your motivation!

Setting Your Goals

It is very important for a business person and his/her enterprise to know the guidelines that

will guide the company’s activities towards success. That is why it is recommended to set the

specific goals that you would like to achieve in order to profit and prosper.

The SMART method is a technique used for precise goal setting. It sets a time frame and allows

to analyze progress in both quantitative and qualitative ways.

The method consists of setting goals in the 5 following ways:

a) Specific: Clear and concise actions must be established in order to achieve each goal

b) Measurable: The goal must be measurable and quantifiable. Real time progress must

be calculated in numbers which in turn can be analyzed to efficiently determine the

progress. This will also help in adapting to various situations and setting new goals.

c) Accessible: The entrepreneur’s motivation will be the decisive factor in the goal

reaching process. The goal should be accessible or readjusted with changing

circumstances.

d) Realistic: The goal must be directly related to the entrepreneur’s activities. It must be

realistic and attainable and it must reflect what you would like to achieve in the

context of the business. The main objective should not be over-evaluated or under-

evaluated.

e) Time-related: All goals should be made with a time frame in mind. This will help adapt

our daily routine to meet our goal. You should set short term goals (0-1 year) medium

term goals (1-3 years) and long term goals (4+ years).

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A weekly follow-up is recommended. Taking time to evaluate the evolution of your

commercial activities in respect to your goals is very important in order to keep control. It will

allow you to adjust your actions at any moment.

In order to evaluate the achievement of the objectives, take the time required to also evaluate

prior learning and retrospect on what has been achieved and what has not.

Here is an example of objective that meets the SMART criteria: Sell 300 units within the first

year.

Communication/Marketing Plan

Your first customers are a key part of your future. They not only bring in your initial cash flow

but also confirm that your business plan and idea are needed in the market. Their feedback

in the initial sales will also help you fine tune your offer to differentiate you from the

competitors.

Here are a few examples of important marketing activities that we recommend to have on

your timeline and in your goals.

a) Identifying and getting to know the targeted consumers (their needs, profile buying

capacity etc.)

b) Taking classes and on-going training on your products and preparing the sales team

c) Putting up a show-room

d) Putting together the advertising package (brochures, flyers, posters etc.) while staying

within the brand’s graphic norms

e) Setting up a web site

f) Preparing the Grand Opening and first special offer

g) Prospecting

h) Participating in industry related shows and fairs.

i) Following up on the communication objectives.

After you have pin-pointed your consumer’s profile, it is time to utilize the right type of

advertising in order to reach them. In your market study, try to think about which form of

advertising will be the most suitable to reach your clientele (internet, radio, newspapers,

brochures, social media, etc.). This will allow you to make the right decision when it comes to

communication channel. It is important to take into consideration the cost of an advertising

campaign as the cost can accumulate quickly. Therefore, some advertising media may be more

effective or more affordable. Don’t forget to keep in mind that your client profile can change

from region to region and that your message should be simple and to the point.

Ask yourself the following questions:

a) What is your target market?

b) Which type of consumer are you trying to reach?

While analyzing the competition you will have looked at the type of marketing methods that

they utilize. You can always use them to get inspiration as they can provide a first guideline to

follow.

It is a good idea to use a calendar to indicate all your marketing strategies as this will be a

visual aid and help you achieve your marketing goals.

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One of the most important aspect of marketing is direct sales. It is of the utmost importance

that you build a sales team with attributed territories and norms to follow.

Here are some examples of affordable and efficient ways to communicate with your

prospects:

1. Putting up a sign outside of your client’s home while installing the central vacuum

system. This will raise the neighborhood’s curiosity as they pass by.

2. You can use the same strategy if you get distribution rights for a large real estate

project as you can leave your sign up for the duration of the project.

3. Another effective and inexpensive method is the personalized approach (sales, follow-

ups, emails, phone calls, thank you cards, promotional items, etc.).

It is important to set and respect a serious and strict budget for these activities.

Who Are You?

In order to sell your project you must first be completely sold on the idea. Therefore, it is a

good idea to include in your business plan a description of your training, your experience, your

motivation and all other positive elements that you will bring to the project. Include a C.V. and

a letter of motivation and do the same for all of the members of the enterprise.

Your Team

One of the key elements of a project’s success is first and foremost the human factor. The

company you keep will greatly influence your enterprise and its success in reaching the goals

you have set forth. It is therefore important to surround yourself with positive people who

will assist you in the different aspects of the company (sales, finance, operations,

administration, etc.).

Take the time to think of all the personnel you will need to recruit. Use your contacts and, if

needed, do some hiring, but always keep in mind what type of people will help you succeed.

Legal Form

All businesses must be registered under the appropriate legal form in order to operate as a

commercial enterprise. First of all it is recommended to choose a name for your company that

is not already used by someone else.

It is your duty to educate yourself on all the different types of enterprises that are available in

your country. It is also important to know and follow all the rules and laws that will govern

your business sector and to keep up with all the necessary permits and licenses.

Types of business structures (Canada):

a) Individual Companies

b) General Partnerships

c) Business Corporations

d) Incorporated Businesses

e) Cooperatives

Some documents must be properly filled out and different fees are associated with each

different type of business structure. Therefore, it is up to the entrepreneur to get the

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pertinent information from the appropriate governing body before choosing a type of

business structure.

Distribution Network and Logistics Operations

It is important to reflect on logistics and to establish the norms of your supply chain and

delivery for your company:

What will be the minimum inventory?

Type of shipping: own fleet or a private delivery company (UPS FEDEX DHL)

Who will be your supplier and where will your shipments come from? (Canada, France, USA:

depending on desired quantities and location)

Financial Plan

When working on a business plan, a budget must be put in place in order to correctly manage

your investments. You must also find out the source of your investments. Will you be the sole

investor? Will you borrow from lending institutions or perhaps other investors?

A professional and detailed financial plan will allow you to approach investors with

confidence.

Think of all the fees and costs that go into starting and maintaining a business. Each activity

will incur various costs, both fixed and variable. You need to determine these costs in detail.

A rough financial plan is available in appendix.

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Appendix 1: Survey Model

This market survey is provided in order to help determine your target clientele’s interest for

our product and therefore the product’s potential on the market. It is important that you

adapt the questions to your culture and to the information you wish to collect.

Socio-Demographic Profile

1. What sex are you?

a. Male

b. Female

2. In wat age group are you?

a. 18-25 years old

b. 26-34 years old

c. 35-49 years old

d. 50-60 years old

e. 60+ years old

3. In what category is your family income?

a. $20,000 or less

b. $20,000 to $40,000

c. $40,000 to $60,000

d. $60,000 to $80,000

e. $80,000 to $100,000

f. $100,000 or more

Central Vacuum Survey

1. How do you clean your home?

a. Cleaning service

b. Broom

c. Central vacuum

d. Portable vacuum

e. Other: ________________

2. How often do you clean your home?

a. Twice a week

b. Once a week

c. Once every two weeks

d. Once a month

e. Other: ________________

3. How much time do you usually spend cleaning your house?

a. Less than 30 minutes

b. 30 to 60 minutes

c. 1 to 2 hours

d. 2 to 3 hours

e. More than 3 hours

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4. Are you satisfied of your home’s cleanliness with your current cleaning system?

a. Yes

b. No

5. What do you most appreciate of your current cleaning system?

_____________________________________________________________________

_____________________________________________________________________

6. What do you least appreciate of your current cleaning system?

_____________________________________________________________________

_____________________________________________________________________

7. Approximately how much money do you spend per month in cleaning?

_________ $/month

8. Do you know about central vacuum systems?

a. Yes

b. No

9. Do you own a central vacuum?

a. Yes

b. No (Skip to question 19)

10. Are you satisfied of the efficiency of your central vacuum?

Poorly satisfied 1 2 3 4 5 Very satisfied

11. Are you satisfied with the ease of use of your central vacuum?

Poorly satisfied 1 2 3 4 5 Very satisfied

12. What do you like most about your central vacuum?

_____________________________________________________________________

_____________________________________________________________________

13. What do you like least about your central vacuum?

_____________________________________________________________________

_____________________________________________________________________

14. What brand is your central vacuum?

____________________________________

15. How did you buy your central vacuum?

_____________________________________________________________________

16. How much did you spend for your central vacuum?

a. $200 - $400

b. $400 - $600

c. $600 - $800

d. $800 - $1200

e. Over $1200

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17. Does this amount include the installation?

a. Yes

b. No

18. How long have you had your central vacuum system?

_____________________________________

19. What do you know about a central vacuum system where the vacuum hose is

connected by a piping system inside the walls to a vacuum unit somewhere outside

the living area (basement, under the stairs, in a wardrobe, etc.)?

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

20. Do you know at least one brand in the central vacuum sector?

a. Yes: ______________________

b. No

21. Would you be interested in having a central vacuum system?

a. Yes

b. No

22. What price would you be willing to pay for a new central vacuum?

a. $200 - $400

b. $400 - $600

c. $600 - $800

d. $800 - $1200

e. Over $1200

23. Do you know the brand Cyclo Vac

a. Yes

b. No

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Appendix 2: Financial Plan Model

This is only an example of what can be found in a financial plan. We encourage you to put as

much detail in your financial plan as possible.

Entrance Fee (one time) € 25 000

Distribution and Marketing Rights (Country)

Starting Samples

Cyclo Vac Website (domain + hosting)

Exhibition Booth

Training and Support

Launch

Other Investments

Stock (First Container) € 75 000

Interior Rearrangement € 3 000

Marketing € 10 000

Other € 1 500

Total Starting Investment € 114 500

Revenu

Product Group

Vacuum units € 250 000

Attachments € 100 000

Parts & Fittings € 40 000

Bags & Fitlers € 20 000

Installation/Service € 50 000

Total Revenu € 460 000

Expenditures

Supplier (marchandise) € 150 000

Freight Fees (5%) € 20 000

Business Place

Rent (warehouse & office) € 24 000

Taxes & Permits € 1 500

Electricity & Other € 3 500

Insurance & Alarm € 1 800

Computing € 5 000

Telecoms € 2 500

Maintenance, office supply € 3 000

Employees Sales reps salary € 35 000

Representation costs € 2 500

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Vehicle Registration / Permit € 15 000

Gas € 5 000

Marketing Distribution network development € 2 500

Advertising & Marketing € 10 000

Exhibitions & Fairs € 7 500

Interest, bank fees € 2 000

Others € 3 000

Total expenditures € 293 800

Gross profit (gross loss) € 166 200