Go-Cart Designer and Supplier
Go-Cart Designer and Supplier
342 Third St.
Ottawa, Ontario K1A0B1
This company produces a go-cart that is equipped with a unique and patented braking system.
Traditional go-carts are universally recognized to have multiple safety hazards, most notably caused by faulty braking systems. Speedy Go-Carts, with their unique and patented braking system, are the solution!
Sales of brand name go-carts have declined from about 5 million per year from ten years ago to about 4 million at present.
We feel the decline of the go-cart is due to its inherent safety hazards. If good, safe go-carts were available, the sport could be renewed and rejuvenated and the market could be dominated by the newer, safer go-cart.
Traditionally, most designers only utilized four wheels for their go-carts; this design inevitably leads to wheel skidding and flat spots, quickly destroying the wheels utilized for braking. Alternatives to this traditional design include hydraulic go-cart systems, but these are impossible to market because of their high cost.
Our unique go-cart model fulfills the crucial criteria of smooth and effective go-carts that are both simple and inexpensive to manufacture (only about $32-63 per go-cart). In spite of this, it has been difficult to introduce our go-cart prototype to manufacturers. We feel this is due to a number of different factors:
- The information gets lost in the bureaucracies of those companies without reaching the decision-makers.
- Most manufacturers have already been burned by trying to introduce poorly designed go-cart systems.
- They are constantly being inundated by go-cart inventions that do not meet their criteria. This has resulted in a great skepticism regarding go-cart inventions.
- Staff members that receive the information have no real incentive to put the ideas to the test.
- The manufacturers have long-term production plans that they are very unwilling to interrupt.
Ben Clamtom, the buyer of go-carts for a major retailer (300 stores in Canada), tested the prototype and again confirmed the effectiveness of our go-cart system.
Ted Dansom, Vice President of OTHHO Sports in New York, has tested twenty-five different go-cart systems stated that the Speedy Go-Cart, "definitely works." In fact, his company made an offer for the exclusive rights to the invention that was proportionate to their small market share—about 100,000 per year. Unfortunately, this was too low for us to accept.
It is assumed that the reader of the following is aware of the obvious market need for go-carts equipped with a smooth and effective braking system, one that is far superior to the ineffective and hazardous rubber stoppers presently in use by all go-cart manufacturers.
It is also assumed that the reader is familiar with the invention titled "Four Wheel Mechanical Go-Carts System" and agrees that this is the best possible solution to the problem, and that therefore basic viability of this business opportunity is self evident.
The question that remains to be answered prior to receiving detailed quotes and information from manufacturers is, "What is the profit potential for this business opportunity?" This business plan seeks to answer this question.
Presently, there are approximately 20 go-cart manufacturers. The most well known brand names are sold primarily in large chain sporting good stores, while the other, smaller manufacturers are focused more on the local and specialized go-cart market.
Currently there are approximately 4 million brand name go-carts sold annually. This is a decline compared to the sales of 5 million brand name go-carts sold annually only 10-15 years ago. It is estimated that off-brand manufacturers sell an average 50,000 go-carts per year. Assuming this average holds, the off-brand go-cart market is currently at approximately one million go-carts annually.
The popularity of go-carts has declined somewhat since its peak and research shows that brand names have lost a lot of their market share to the specialized go-cart market. The two distinct markets are now somewhat overlapping as inexpensive go-carts manufactured by brand name manufacturers are appearing in some specialized stores. Brand name manufacturers are facing stiff competition and low profit margins in this new market.
The bottom line:no manufacturer has a distinct advantage in the market.
The estimated worldwide customer base for go-carts is approximately one million people.
When anticipating what the market response will be when Speedy Go-Carts are introduced into both sporting goods and specialized stores, it seems both logical and reasonable to expect that the market response will be very positive—simply because it fills a very real market need. This is evidenced by the fact that so many inventors have spent millions of dollars on hundreds of patents in a quest to solve the braking problem for go-carts.
Faced with competition from such a superior go-cart, it is reasonable to assume that all manufacturers will lose a substantial portion of their market share. The resulting loss of market share will likely push some manufacturers into the red.
The totally unexploited, multi-million worldwide market of people that don't like to use go-carts because of safety concerns will immediately be accessible. Safe go-carts can also be extended from flat to steeper ground. This is expected to become popular also with experienced go-cart racers and will consequently open an additional unexploited market niche.
The bottom line: speedy go-carts have outstanding market potential.
In spite of all the hundreds of patents issued so far for go-cart systems, not a single market success has been achieved. Research of previous patents provides an obvious reason. Of all the patented go-cart designs, none offers a safe and effective braking system.
The bottom line: there is no competition. speedy go carts are equipped with a safe and effective braking system that is otherwise not available in the market.
MARKETING & SALES
The Speedy Go-Cart Company will assume a position as global wholesaler of the new and unique go-cart. Creative marketing strategies will be associated with the new product launch, taking full advantage of the media attention received from well-planned publicity stunts on global sports TV channels, thereby significantly reducing marketing costs.
A targeted marketing campaign involving Internet marketing and all other media will coincide to maximize this exposure. By maintaining the momentum and marketing advantage gained, imitators trying to compete will be severely disadvantaged.
The bottom line: free publicity will create the launching momentum required.
Patent rights are necessary in order to raise operating capital and to maximize the value of the company. However, patents only provide offensive rights, so the best way to discourage imitators and patent infringement is to rapidly dominate the market at a price that will not be profitable for others desiring to compete. Highly favorable international search and preliminary examination reports have been received from the European Patent Office.
The bottom line: the most important key U.S. market will be covered by broad, unavoidable patent protection.
All amounts are in Canadian dollars.
|Per soap box|
|Marketing, admin, operating and distribution costs||$50|
|Estimated sales||1 million carts|
|Estimated gross profit||$4m|
|Estimated net profit||$2m|
|Estimated sales||2.5 million carts|
|Estimated gross profit||$22m|
|Estimated net profit||$15m|
|Estimate sales||5 million carts|
|Estimated gross profit||$44m|
|Estimated net profit||$28m|
$1,500,000 Canadian is required in the initial startup phase.
|Tooling for test samples||$ 200,000|
|Manufacture test samples||$ 100,000|
|Manufacture 2nd test samples||$ 40,000|
|Test 2nd test samples||$ 70,000|
|Overhead/operating costs||$ 350,000|
Production Phase Funding
Institutional funding and/or private investor capital will be sought as bridge funding that will be required to sustain the company operations through to profitability.