Develop two (2) Work Plans? In a tables format
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NCTBusinessPlan.pdf
Business Plan 2016
Owners Mick & Sheryl Dundee
6 Gumnut Road, DANDENONG, VIC, 3025
(03) 9600 7000 [email protected]
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by National Camper Trailers in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of National Camper Trailers. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader may cause serious harm or damage to National Camper Trailers. Upon request, this document is to be immediately returned to National Camper Trailers. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date
This is a business plan. It does not imply an offering of securities.
Table of Contents
Page 1
Contents 1.0 Objectives ................................................................................................................................. 2
1.1 Mission .................................................................................................................................. 2 1.2 Keys to Success..................................................................................................................... 2
2.0 Company Summary .................................................................................................................. 2 2.1 Company Ownership ............................................................................................................ 3 2.2 Company History .................................................................................................................. 3
2.3 Performance over the past 10 years ...................................................................................... 4 3.0 Company Structure ................................................................................................................... 6
3.1 Factory and Manufacturing ................................................................................................... 6
3.2 Assembly and Fitout ............................................................................................................. 6 3.3 Finance and administration. .................................................................................................. 6 3.3 Human Resources and WHS ................................................................................................. 7
3.4 Sales and Marketing .............................................................................................................. 7 4.0 SWOR Analysis ........................................................................................................................ 8
4.1 Strengths ............................................................................................................................... 8
4.2 Weaknesses ........................................................................................................................... 8 4.3 Opportunities......................................................................................................................... 8 4.4 Risks ...................................................................................................................................... 8
5.0 Market Analysis & Sales .......................................................................................................... 9 5.1 Marketing Strategy.............................................................................................................. 10
5.2 Sales Forecast...................................................................................................................... 10
6.0 Financial Plan.......................................................................................................................... 11
6.1 Projected Profit and Loss .................................................................................................... 12 6.2 Business Ratios ................................................................................................................... 13
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1.0 Objectives
The objectives over the next three years for National Camper Trailers are the following:
Reverse the current trend of revenue declining and costs of both production and operations increasing
Evaluate restructure options to cut costs Prepare the company for its next business stage, either listing, selling or JV Develop and implement a digital marketing campaign and Website presence Reduce staff turnover and improve company culture (need measures & surveys)
1.1 Mission
The mission of National Camper Trailers is to be seen in the market as the off road camper trailers experts. National Camper Trailers are unique in designed and assembling to the customer’s specifications.
1.2 Keys to Success
In the off road camper industry, a company builds its client base one client at a time and mostly through reputation, referrals and word of mouth marketing. To achieve this National Camper Trailers needs to;
Build to high-quality standards, best fittings and quality accessories with flexible configurations
Listen and engage with its customers, giving expert advice in configurations, fitout and accessories
Broaden the usage base to include caravan parks and other holiday spots, not necessarily
off road.
Knowledgeable sales staff to assist each client. Develop a lifetime engagement model that constantly shares photos, adventure stories,
talks about new and exciting places to visit, partner with 4 star caravan parks, using a range of social media tools to stay in touch for a lifetime.
2.0 Company Summary
National Camper Trailers is a family owned and financed company, with its main factory in Dandenong, the company has been very profitable since it started and has little debt. The factory and showroom sits on 4 1/2 acres of land with 4 buildings;
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Main Showroom and administrative office building, approximately 5000 sq. ft. in size.
The second building is approximately 2500 sq. ft. and is used for finishing, accessories and servicing camper trailer
Building 3 is approximately 4800 sq. ft. and is used in manufacturing, welding and heavy section assembly
The fourth building is approximately 8000 sq. ft. and is used as trailer storage, fit-out, awnings, attach tents, toilets, showers, etc.
All of the free standing buildings are owned 100% by NCT and could be sold off or leased to a third party if the business required. NCT shares showroom floorspace with Regal Vans on the Queensland Sunshine Cost an established manufacturer and supplier of caravans, NCT has a senior and junior salesman in the showroom. To further support sales and marketing initiatives, NCT also has a car transporter that takes display camper trailers to caravan and camping expos across Australia, this involves 3 staff they attend on average 4 shows a month.
2.1 Company Ownership
National Camper Trailers Pty Ltd, ABN 90 989 989 989 has been operating since 1981. Head office is; 6 Gumnut Road DANDENONG, VIC, 3025 (03) 9600 7000 [email protected] Privately owned by Mick and Sheryl Dundee.
2.2 Company History
National Camper Trailers was established in June 1981, owner Mick Dundee was building box trailers suitable for being towed on off road tracks in his garage for some extra cash. Several customers had requested a range of modifications including independent strut suspension, fold out sides that could hold a gas stove, cradles for small fridges, gas bottles, extendable tables, fold out beds, canvas roofs and awnings. As four wheel drive vehicles became more affordable the opportunity to venture off the beaten track and go bush, was driving the need for purpose built off road equipped camper trailers, caravans were not designed for this activity. Mick’s part time hobby, quickly became a full time business, his wife Sherryl provided the administration and phone support. Mick and Sheryl also became regular participants with the off- road Camper Trailer enthusiasts, showcasing new gadgets, off-roading accessories and features, this underpinned their marketing and growing profile as experts in off-road camper trailers.
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Within a year Mick had leased a factory and had 6 tradesmen working for him. The business was growing fast delivering custom built trailers, rebuilding the suspension, using lightweight alloys and materials, slide out stainless steel sinks and awnings and fittings. Almost every job was designed in consultation with the buyer building to the buyer’s specifications.
2.3 Performance over the past 10 years
The past performance table shows that the company needs to correct its declining profitability, almost all measures are tracking in a unsatisfactory direction Total Sales, have consistently stayed at around $5M over the past 10 years, but sales to June 2015 have dropped a further 9% on the previous year from $4.8M to $4.4M. Gross Margin as a % of Sales 5 years ago was consistently at around 40% this has been going up over the last few years to now be 50%, operating costs were never regarded as an issue as NCT kept making profits well in excess of $1m for many years. Increased competition, lack of a digital marketing presence and genuine prospects with a corresponding drop in sales has seriously eroded recent profitability. The Earnings before Interest Tax and Dividends (EBITDA) has dropped from 30% plus to 13% of the total sales, this needs serious attention and immediate action on both sales volumes and cost to manufacture and deliver.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
National Camper Trailers - 10 Year Sales & Financials
Sales Gross Margin Gross Margin % of Sales
Operating Expenses Operating expenses % of sales EBITDA
EBITDA % of sales
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NATIONAL CAMPER TRAILERS - BALANCE SHEET
Balance Sheet 30-Jun-14 30-Jun-15
Current Assets
Cash $850,015 $650,578
Accounts Receivable $802,846 $1,185,725
Provision for Doubtful Debts -$40,140 $762,706 -$39,620 $1,146,105
Spare parts $119,800 $98,002
Campers WIP $659,234 $990,528
Other Debtors $85,000 $78,520
Total Current Assets $2,476,755 $2,963,733
Non-Current Assets
Expo Truck & Vehicles $200,000 $200,000
Less: Accumulated depreciation -$33,333 $166,667 -$58,333 $141,667
Manufacturing Equipment $850,000 $850,000
Less: Accumulated depreciation -$170,000 $680,000 -$255,000 $595,000
Land & Buildings at cost $2,900,000 $2,900,000
Less: Accumulated depreciation -$812,000 $2,088,000 -$928,000 $1,972,000
Total Non-Current Assets $2,934,667 $2,708,667
Total Assets $5,411,422 $5,672,400
Current Liabilities
Accounts payable $285,000 $243,800
Accrued wages $95,000 $13,500
Accrued compensation $70,000 $70,000
Income taxes payable $123,216 $73,000
Payroll taxes payable $21,000 $21,000
Total Current Liabilities $594,216 $421,300
Long-Term Liabilities
Long-term loan payable $1,200,000 $1,200,000
Total Liabilities $1,794,216 $1,621,300
Stockholders' Equity
Share Capital $750,000 $750,000
Accumulated retained earnings $2,226,535 $2,867,206
Current net profit (loss) $640,671 $433,894
Less: Dividend $0 $0
Total Capital $3,617,206 $4,051,100
Total Liabilities & Equity $5,411,422 $5,672,400
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Mick - CEO
Consultant/ Operations Manager
Bill
Factory & Maunfacturing (15)
Michael
Assembly & fitout, (20)
Sheryl
Finance & Admin (4)
Heather
HR & WHS (3)
Kennedy
Sales & Marketing
Expo Team (5) Digital Marketing
TBA National outlets (4)
3.0 Company Structure
3.1 Factory and Manufacturing Complete all the major engineering works, on the trailers, weld, chassis, suspension, laser align towing points and balance the trailer to center of gravity with the tow point. Bill has 15 tradesmen, all have been with the company many years, with their own factory and set-up they operate almost autonomously to the rest of NCT.
3.2 Assembly and Fitout Fitout campers to the customer’s specifications. When assembled to the customer’s specifications with top of the range fittings, the campers’ retail for $22,500 through to $45,000. Michael has a team of 20 and insists on a strong customer service focus, the campers are not cheap and the customer must feel they are getting a quality product and top delivery service. Michael has significant staff turnover issues.
3.3 Finance and administration. Sheryl now requires support with the accounting and cashflow, for years it was easy and very profitable, with little need for budget monitoring or using cashflow reports to ensure sufficient working capital, in the last 12 months that has all changed. Suppliers have withheld delivery due to late or slow payments, the family has had to dig into their retirement funds to pay the bills.
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3.3 Human Resources and WHS A recent addition to the structure, Sheryl was responsible for the payroll and WHS had never been an issue. The new HR Manager Heather started at NCT in early 2015, she needs to develop and implement HR policies, procedures and HR accountable activities that align to the company’s objectives. NCT needs resource planning, position descriptions at all levels, implement performance measures, processes to recognise good behavior and manage unacceptable behavior, annual reviews of staff, training in compliance with employment legislation and develop HR policies in line with legislative requirements including a safe and respectful workplace. This has been identified as a key project for the year and as such the HR strategic plan and specific operational (tactical) plans are to be reported on monthly at the senior management meetings, alignment with the companies stated objectives is expected.
3.4 Sales and Marketing Traditionally sales were driven off market reputation and word of mouth, Dale and Sheryl have done little off road camping in the last few years, in the past this was a great source of new business and customers. A recent review of the NCT website by a digital marketing consultant indicated that the website was not interactive and he doubted that it was generating any new business. NCT also relies on the ‘Expo truck’ to generate new business, this is a camper transporter that travels around the country attending Camping Expo’s showing the latest off road camping features, with more than one a week throughout Australia the Expo Truck is busy, it has a team of 3 including salespeople and presenters.
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4.0 SWOR Analysis
4.1 Strengths
Reputation as a builder of top quality Camper Trailers, with accessories to match Total engagement with the customer in trailer configuration Recognised at trade shows and Expos as a leader in the Camper trailer industry Strong balance sheet, little debt Knowledgeable and creative staff assisting clients in bringing their unique ideas to a reality.
4.2 Weaknesses
Traditional word of mouth advertising appears to be on the decline, failing to build on past reputation, strengthening their position in the market as knowledgeable experts growing new customers
No active digital marketing strategy Top quality fittings are becoming the norm, and are prolific on competitors website Staff turnover in the assembly/fitout team is unacceptable and needs to be reduced Plenty of customer activity at Expos, but conversions and successful follow up is declining Prospecting database is out of date and not used effectively HR policies, procedures, roles & responsibilities, accountability, performance evaluation
process; all need a serious overhaul including compulsory training for all staff
4.3 Opportunities
Outsource trailer manufacturing, potentially from overseas suppliers Leverage name and reputation, sell the expert personal consultation approach end to end,
what you need, where you can visit, which clubs and travel groups you should join. Speed up delivery, all custom built and assembled camper trailers take approximately 10
weeks, this annoys customers Consider the use of new CAD design tools, to specify fittings and fitout, this could be turned
into an order to be fulfilled overseas and delivered with a few weeks, straight off the ship Growing market with a significant percentage of our target market still not knowing we exist. End to end service, trailer servicing, long term storage, trade second hand NCT camper
trailers with a buyback program
4.4 Risks
Large corporate business chains BCF, Bunnings, Jayco, level the playing field with quality fittings and accessories, sourced in bulk locally and from overseas
Continued decline in sales, plus the continued increase in costs will force the company to consider its future
The capacity of customers to spend on top of the range camper trailers continues to be eroded, retirement savings and disposable income is in decline in Australia.
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5.0 Market Analysis & Sales
Current industry figures indicate there are over 100 caravan manufacturers, 160 camper trailer manufacturers and 15 motorhome/campervan manufacturers within Australia. Over 85% of these are manufactured in the Greater Melbourne area, hence Victoria is regarded as the recreational vehicle (RV) capital of Australia.
The RV Manufacturing industry is extremely labour intensive, due predominately to its low production volumes, in comparison to other industries such as motor vehicles. Many products are custom engineered to suit the requirements of the consumer. Consequently, it is not uncommon for 20 weeks to pass between order placement and final delivery.
Industry growth has remained steady, despite its target market of Australians aged 50 and older growing as a proportion of the total population. A key driver for the industry is the amount of retirement savings that people have available to spend on a recreational vehicle. The superannuation balances of many Australians close to retirement were decimated following the global financial crisis, making recreational vehicles less affordable.
The Camper Trailer market has changed radically in the last few years, not only in the range of camping vehicle options but in how the market becomes informed as to what is new and available. Recreational vehicles, camper vans, caravans, have all developed off road capabilities. Customers get information form Expos and trade shows but still source critical information via Google Search. Even the grey nomads are using Google search as the bible on information. The RV market is no longer seen as roughing it you can have comfort and all the amenities from home, ranging from showers and toilets to TV’s and internet. National Camper Trailers is finding it more challenging every day to operate in the off road camper market. Industry Products Caravan Campervan/Motorhome Camper trailer 4WD Recreational vehicle
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5.1 Marketing Strategy National Camper Trailers has a modest program of marketing its services that includes Expo displays, magazine advertising, Website with some online marketing. Significant investment in this area has been allocated to improve NCT’s marketing presence, this must produce an ongoing and identifiable sales pipeline, and the marketing investment needs to be measurable, demonstrating the cost and benefit An initial budget of $40,000 a month has been allocated, just how this money is to be spent is not yet clear, the following is a list of the senior management’s desired outcomes;
Be prominent in Google Search, being on the first page
Start an AdWords program that generates sales
Analysis of the benefit of the ‘Expo Truck’ attending Expos, it was a great generator of new sales, now the crowds still, but the conversions are not coming
Employ or contract a digital marketing expert, many competing skills required, SEO, AdWords, Website improvement, Social Media, email campaigns
Build an industry profile, via 4WD Adventure TV, sponsor travel tours, best scenery photo competitions, adventure stories on NCT Facebook,
Review and confirm or adjust sales forecast for the next 2 years
Implement a prospect database
Commence a research program, that identity’s preferred markets and emerging opportunities
5.2 Sales Forecast NCT continues to generate sales predominately on reputation and word of mouth, the Expo Truck sales are falling.
2010 2011 2012 2013 2014 2015
$4,909,894 $5,186,690 $5,363,486 $5,040,282 $4,817,078 $4,425,610
$2,160,353 $2,282,144 $2,520,838 $2,469,738 $2,553,051 $2,242,121
44.0% 44.0% 47.0% 49.0% 53.0% 50.7%
$823,869 $904,140 $1,009,046 $1,362,487 $1,637,807 $1,590,148
16.8% 17.4% 18.8% 27.0% 34.0% 35.9%
$1,336,484 $1,378,004 $1,511,793 $1,107,251 $915,245 $651,973
27.2% 26.6% 28.2% 22.0% 19.0% 14.7%
$20,458 $23,052 $25,540 $25,848 $26,762 $29,504
240 225 210 195 180 150
For the most part, sales for a custom RV and trailer company are steady year round and reflect little seasonality.
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6.0 Financial Plan National Camper Trailers needs to restore its profitability of past years, EBITDA was often in excess of $1.5M for a small family company this is a great result. The past few years have seen profitability declining rapidly, sales revenue has dropped by 18% over the last 3 years, whilst cost of production have decreased in a similar manner, operating expenses have not been reducing at the same rate. Operating costs are likely to increase as increased investment is required in the entire HR process, plus the need to build a digital marketing presence with search, interactive and fast Website and social media presence. The number of trailers produced each year has declined by over 10% a year for the last 4 years, this has been offset to a degree by the increased price per trailer in line with market prices, however there appears to have been no efficiency’s gained in the reduced number of trailers being built. It is time to develop some strong cost benefit analysis and break even ratios, coupled with research to ascertain what direction is best going forward, bulk produce or continue with specialised custom built. Short term objectives;
Evaluate the benefit of the Expo truck.
Consider Importing trailers and replace the factory part of the business, need a robust business case to evaluate all the impacts and opportunities.
Longer term objectives;
Return the company to past profitability
Prepare the financials to present for IPO
Raise capital to expand the business, throughout Australia
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6.1 Projected Profit and Loss The following table shows that NCT intends to correct its downward trend in profitability. The factory and assembly area have the same staff numbers, yet the number trailers competed has been steadily reducing this need to be analysed and addressed. The net profit or EBITDA as a percentage of sales has decreased from 22% in 2013 to 15% in 2015, overall profitability has reduced from $1.1M to $0.650M in 2015 with a small budgeted improvement forecast for 2016.
2013 2014 2015 2016 Sales $5,040,282 $4,817,078 $4,425,610 $4,720,000
Gross Margin $2,469,738 $2,553,051 $2,242,121 $2,311,000
Gross Margin % of Sales 49.0% 53.0% 50.7% 49.0%
Operating Expenses $1,362,487 $1,637,807 $1,590,148 $1,553,800
Operating expenses % of sales 27.0% 34.0% 35.9% 35.9%
EBITDA $1,107,251 $915,245 $651,973 $757,200
EBITDA % of sales 22.0% 19.0% 14.7% 13.4%
Camper Trailers (RRP ave) $25,848 $26,762 $29,504 $29,504
Camper Trailers (No) 195 180 150 160
Staff at end of Year 37 43 47 47
Expenses
Advertising $30,000 $221,710 $180,000 $220,000
Travel & Accommodation $115,185 $122,540 $125,600 $95,000
Office Staff $531,259 $542,100 $560,100 $558,000
Communications $52,400 $54,400 $56,000 $46,000
Vehicle expenses $44,500 $44,000 $46,000 $41,000
Depreciation $210,010 $224,200 $234,333 $235,000
Insurance $78,495 $85,157 $78,415 $46,000
Operating supplies $3,200 $13,200 $3,200 $1,800
Rent $271,420 $285,000 $275,000 $275,000
Office costs $8,500 $10,500 $10,500 $12,000
Computer Expenses $17,518 $35,000 $21,000 $24,000
Operating Expenses $1,362,487 $1,637,807 $1,590,148 $1,553,800
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6.2 Business Ratios
The company's projected business ratios are provided in the table below. The final column, is based on the budget.
2013 2014 2015 2016
Sales Growth -6.03% -4.43% -8.13% 6.65%
Percent of Total Assets
Total Current Assets 44.00% 46.00% 52.00% 54.00%
Long-term Assets 56.00% 54.00% 48.00% 46.00%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 11.00% 12.00% 7.40% 9.50%
Long-term Liabilities 23.00% 22.00% 21.10% 20.00%
Total Liabilities 34.00% 34.00% 28.50% 29.50%
Net Worth 66.00% 66.00% 71.50% 70.50%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 49.00% 53.00% 50.66% 48.96%
Selling & Administrative Expenses 27.03% 34.00% 35.93% 35.93%
Profit Before Interest and Taxes 21.97% 19.00% 14.73% 13.41%
