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Environmental Audio Systems
Adam Blazier
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Environmental Audio Systems
“Creating a comfortable environment for all is creating harmony in the Environment...”
-Adam Blazier, founder of Environmental Audio Systems, LLC
Ball State University
Spring 2016
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Table of Contents
Executive Summary ....................................................................................................................................... 6
The Opportunity ........................................................................................................................................ 6
The Business .............................................................................................................................................. 7
Capital Needs ............................................................................................................................................ 7
Business Description ..................................................................................................................................... 8
General Description .................................................................................................................................. 8
Attributes .................................................................................................................................................. 9
Key Success Factors ................................................................................................................................. 10
Future Scalability ..................................................................................................................................... 10
Industry Analysis ......................................................................................................................................... 12
Current State of the Industry .................................................................................................................. 12
Trends ..................................................................................................................................................... 13
Market Analysis ........................................................................................................................................... 16
Target Market ......................................................................................................................................... 16
Secondary Market ................................................................................................................................... 17
Competitor Analysis ................................................................................................................................ 18
Indirect Competition ............................................................................................................................... 20
Branding .................................................................................................................................................. 22
Philanthropy ............................................................................................................................................ 23
Market Size ............................................................................................................................................. 24
Approachable Market Forecast .............................................................................................................. 26
Pricing Strategy ....................................................................................................................................... 29
Sales Forecast: ........................................................................................................................................ 30
Market Share .......................................................................................................................................... 32
Marketing Plan ........................................................................................................................................ 32
Location ....................................................................................................................................................... 44
Management ............................................................................................................................................... 48
President ................................................................................................................................................. 48
Installation Technicians/Store Associate ................................................................................................ 48
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Marketing Representative ...................................................................................................................... 49
Employee Benefits .................................................................................................................................. 49
Employee Motivation Plan ...................................................................................................................... 50
Operations .................................................................................................................................................. 51
Hours of Operation ................................................................................................................................. 51
Inventory and Restocking ....................................................................................................................... 51
Design and Research ............................................................................................................................... 52
Installation .............................................................................................................................................. 52
Logistics ................................................................................................................................................... 52
Sales ........................................................................................................................................................ 53
Exit Strategy ................................................................................................................................................ 54
Milestone Schedule ..................................................................................................................................... 55
Critical Risks ................................................................................................................................................ 56
Supplier Relationships ............................................................................................................................. 56
Customer Service .................................................................................................................................... 56
Life of Vehicles ........................................................................................................................................ 56
Servicing .................................................................................................................................................. 57
Patenting ................................................................................................................................................. 57
Vehicle Manufacturing ............................................................................................................................ 57
Design/Prototypes ...................................................................................................................................... 58
Schematics .............................................................................................................................................. 59
Financials ..................................................................................................................................................... 63
Key Financial Assumptions ...................................................................................................................... 63
Key Balance Sheet Assumptions ............................................................................................................. 67
Financial Statements ................................................................................................................................... 69
Income Statements ................................................................................................................................. 70
Balance Sheets ........................................................................................................................................ 73
Statement of Cash Flows ........................................................................................................................ 76
Appendix ..................................................................................................................................................... 79
Break Even Analysis ................................................................................................................................ 79
Market Surveys ....................................................................................................................................... 80
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Table of Figures and Charts
Executive Summary ....................................................................................................................................... 6
Capital Needs ............................................................................................................................................ 7
Chart1 .................................................................................................................................................... 7
Market Analysis ........................................................................................................................................... 16
Market Size ............................................................................................................................................. 24
Chart 2 ................................................................................................................................................. 24
Chart 3 ................................................................................................................................................. 25
Chart 4 ................................................................................................................................................. 25
Approachable Market Forecast .............................................................................................................. 26
Chart 5: Percentage of Market Interested in EVAS ............................................................................. 26
Chart 6: Percentage of Market Likely to Purchase ............................................................................. 27
Figure 1: Funnel of Industry to Approachable Market ....................................................................... 28
Sales Forecast: ........................................................................................................................................ 30
Chart 7 ................................................................................................................................................. 32
Marketing Plan .................................................................................................................................... 32
Figure 2 ............................................................................................................................................... 43
Location ....................................................................................................................................................... 44
Figure 3 ............................................................................................................................................... 44
Figure 4 ............................................................................................................................................... 46
Design/Prototypes ...................................................................................................................................... 58
Figure 4 ............................................................................................................................................... 58
Schematics .............................................................................................................................................. 59
Figure 5: .............................................................................................................................................. 59
Figure 6: .............................................................................................................................................. 60
Figure 7: .............................................................................................................................................. 61
Figure 8: .............................................................................................................................................. 61
Figure 9: .............................................................................................................................................. 62
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Executive Summary
The Opportunity
Imagine a family of four traveling together on a long road trip. While the family can all agree on
a particular genre of music, one problem exists that occasionally causes confrontation. Most
will agree that comfort is a big factor in one’s ability to enjoy riding in a vehicle, especially
during long road trips. However, people’s levels of comfort are affected by different
preferences. For those in society who have certain disabilities such as Autism, comfort may be
even more difficult to achieve during long road trips. The father in the family of four mentioned
above is an Iraq War veteran named Ryan Smith. Ryan is among the 24.4 million Americans who
struggle with a disability known as Post-Traumatic Stress Disorder (PTSD).1 As a result of the
gruesome experiences that Ryan encountered while on his tour in Iraq, he needs to listen to
loud music while driving or riding in a vehicle to prevent the flashbacks of a terrible tragedy that
occurred when his convoy triggered an Improvised Explosive Device, causing several injuries
and one casualty of a soldier sitting in the seat across from where Ryan was sitting.2 Ryan’s
concerned family is not comfortable with his habit, and only agrees to cope with it because
they know that this is the only method that he has to remain collected while riding in a vehicle.
Similar families faced with Autism, Cerebral Palsy, PTSD and Hardness of Hearing are struggling
every day to find mutual comfort related to the audio volume levels in vehicles.
Environmental Audio Systems (EVAS) is an assistive technology vehicle audio system
installation service that will be located in vast-growing Hamilton County in Indiana with the
mission to provide relaxation to families or those individuals who have differing volume
preferences or who have disabilities that cause them to have discomfort in vehicles.
Complications such as the disabilities listed above can cause auditory sensory difficulties in the
brain that can increase or decrease stimuli to sound. Opportunity lies in the ability to help these
families overcome their differing audio preferences.
Currently, the aftermarket vehicle audio industry is declining, at an interpolated rate of 440
million per year.3 While this is alarming to many, the owner of EVAS sees this decreasing
industry as an opportunity to revive a once-booming industry by providing a unique design of
stereo system that is currently only available in high-end luxury vehicles to help individuals with
disabilities at a lower price point. By designing unique aftermarket, high-quality stereo systems
that give each person in a vehicle the ability to adjust the audio volume for his/her seat, EVAS
provide comfort to families with disabled who struggle to cope with differing audio volumes.
1 PTSD Statistics. (n.d.). Retrieved November 19, 2015, from http://www.ptsdunited.org/ptsd-statistics-2/ 2 True anecdote experienced by owner’s loved one in 2010. Actual name was not used at request.
3 Explained in further detail in Industry Analysis
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The Business
Environmental Audio Systems is a service that works with each customer’s individual needs to
create the exact system that solves his or her issues. EVAS’ target market is the concerned
family member who wants to give his/her family or loved one the ability to have an
individualized comfort setting. The Company creates unique audio systems for this target
market by essentially creating audio “environments” for each seat of the vehicle that allow
each passenger to adjust his or her audio volume.
EVAS will acquire revenue from the installation of its audio systems into customers’ vehicles.
The Company will acquire inventory from audio component manufacturer, JBL, and will use
these components in the creation of its unique audio systems.
Capital Needs
Environmental Audio Systems’ total start-up costs will be roughly $60,000. The Company is
seeking a loan for $80,000. This loan will be used to purchase inventories needed to begin the
first month of operations as well as salary expenses for all employees of the venture. This loan
amount will keep the company above a negative cash flow balance and provide cushion during
the first few months of operations before insurance payments are received from accounts
receivable. Please visit the Financials section for further detail on this matter. A capital injection
of $10,000 will also be supplied by the President of the Company. The first three years’ revenue
and net incomes are listed in the table below. EVAS is expected to grow at a bench-marked
level of 30% in the second year and then 25% in the third year. Refer to the Financials section
of this business plan for a more detailed explanation of the financial projections.
Chart1
Year 1 Year 2 Year 3
Revenue 655,000 851,500 1,064,375
Net Income 208,987 408,715 575,381
Revenue Projections
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Business Description
General Description
Environmental Audio Systems (EVAS) is a retail service that works with customers to provide
custom-tailored audio systems in two-door or four-door vehicles for families who are affected
by disabilities that cause auditory perception difficulties. The four main disabilities that EVAS
targets are Cerebral Palsy, Autism, Post-Traumatic Stress Disorder and Hardness of Hearing,
conditions which can cause difficulties in auditory processing or discomfort with high audio
volumes. The focus of EVAS is to create individualized audio systems that give each passenger
in a vehicle the ability to set the volume of the audio to a desired level without harming sound
quality or social interaction between passengers thus giving more comfort to those who are
affected differently by sound than what may be considered “normal.”
The stereos that EVAS tailors are a part of a group of technology known as Assistive
Technology. According to the United Cerebral Palsy, “Assistive Technology is any item, piece of
equipment, or product that is used to increase, maintain, or improve the functional capabilities
of individuals with disabilities.”4
EVAS’ target market is families affected by who live within a 30 minute drive time of EVAS’
location and have loved ones who struggle with one of the disabilities described above.
“Professional Prides,” a term coined by the Esri Business Analyst, is the group of people who
make up the majority of the 30 minute drive time target market. The secondary market is
mostly made up of the “Traditional Living,” another group of people named by the Esri Business
Analyst for their family-driven demeanors and their will to hold true to their younger values.
This group of people makes up the majority of the population within a 60 minute drive-time of
EVAS’ location. The firm is a service that works with each customer to custom fit his or her
vehicle to create separate audio “environments” for each seat of the vehicle. The goal of EVAS
is provide more comfort and enjoyment in vehicles for those who normally struggle to obtain
relaxation during car rides.
EVAS uses a top-down marketing approach combined with a bottom-up marketing approach to
ultimately “pull” the amount of customers that the business can capacitate. EVAS’ market share
for the first year of operations is 5% or 3,500 families in the market of 66,000 families with
disabilities. EVAS can capacitate roughly 300 of these customers in the first year of operations.
Through involvement in the community, endorsement and partnership, EVAS will be able to
4 Assistive Technology Information. (n.d.). Retrieved February 03, 2016, from http://ucp.org/resources/assistive-
technology/
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promote its products to the target customer. Please visit the Market Analysis section for more
detail on how EVAS captures its target customer.
Attributes
Environmental Audio has many attributes that set it apart from other audio customization
businesses. EVAS’ target market is one made up of persons who have difficulties hearing or
have other complications that may cause one to become uncomfortable while riding in a
vehicle with loud or quiet audio. EVAS strives to create audio systems in vehicles that provide
high-quality sound and comfort to individuals with PTSD, Down syndrome, and the hard of
hearing without distracting others or abolishing the sense of social interaction in a vehicle.
Businesses in the audio customization industry currently focus on flashy, overly-loud and bass-
boosting sound systems that are created more for show than audio quality and practicality.
Also, competitors in EVAS’ local market focus more on other vehicle accessories giving them a
disadvantage to provide customers with more expertise and customer service related to their
audio systems. By dividing their attention to other forms of vehicle accessories, competitors in
EVAS’ market also divide the time that could be given to deliver better quality sound systems
and customer service for those sound systems. EVAS is also the first business in the local market
to target persons with disabilities. EVAS is set apart from its competitors through its unique
designs and individualization of the audio system. For a further look into how these audio
systems give each passenger his or her own audio “environment,” please refer to the
Prototypes and Schematics sections of the business plan. EVAS is a customization service that
provides practicality, comfort and sound quality through the utilization of these “audio
environments.”
Practicality- EVAS will install systems that are more practical than the average customized
sound system. EVAS’ systems will not take up large amounts of space and will “fit in” with the
factory look and feel of the vehicle. EVAS will not need to use speaker cabinets or other devices
to fit subwoofers which take up large amounts of space.
While the audio systems in these
pictures do attract a certain market,
this is not the market that EVAS will be
targeting. These systems are not ideal
for families with disabled individuals.
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Comfort- EVAS will create systems that allow individuals to adjust volume levels to their desired
level. This will provide passengers with hearing perception disabilities with more comfort
during car rides.
Purpose- Just as the individual in the Executive Summary needs a different volume than his
family, there are many others in the marketplace who also have differing audio preferences.
EVAS is a service that has a bigger purpose than other vehicle audio services. EVAS serves to
provide a way for individuals who have unfortunate difficulties to find relaxation while riding in
vehicles.
Key Success Factors
Community – The Company will be greatly involved in the local community and surrounding
areas. The business will create relationships with community leaders and leading businesses to
establish the support of the local area.
Partnerships – EVAS’ involvement in the community will provide the Company with key
partnerships that will give EVAS support, endorsement and rapport needed to be successful in a
competitive environment. EVAS will utilize its partners to promote its products, gain
endorsements and to achieve trust in the market.
Customization - EVAS gives customers the ability to customize their audio systems to how they
want it. Customers can create a system that focuses on comfort and practicality or a more cost
effective, conventional audio system.
Newness - EVAS sheds a new light on the art of the audio system by giving each person his or
her own “environment” to provide more comfort and higher quality of sound to the passenger.
No other assistive technology provides this ability to the disabled.
Design - The design of the audio systems installed by EVAS will be designed to help those with
needs, a task that no other audio service does in EVAS’ market. EVAS’ technicians will work with
those who have disabilities in order to design the best possible system for each family’s needs.
Future Scalability
Environmental Audio Systems has a great potential in its ability to help those in need with
diverse products that can be used for applications outside of the automobile. The owner of
EVAS has visions of later implementing the use of audio “environments” for applications such as
home theater, where individuals can adjust the sound for his or her seat much like for the
vehicle application. EVAS will also expand into entertainment centers for vehicles that pair the
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use of the audio environments with television monitors and factory-installed video
entertainment centers. For the purpose of start-up, EVAS will primarily focus on its
Environmental Audio sound system for vehicles. Milestones for these goals will be discussed in
the Milestones section further in the business plan.
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Industry Analysis
Current State of the Industry
Past:
The car stereo became the centerpiece of the automobile in the early 1930s, when Paul and
Joseph Galvin and William Lear developed the motorized Victrola, or “Motorola.” By the 1970s,
aftermarket custom stereo components started to become commonplace as new companies
such as Kenwood and Alpine began developing higher quality equipment. The first car stereos
started as large single-speaker, vacuum-tubed systems, whereas today cars have up to dozens
of speakers and are compact, solid-state devices.5 Early stereos could only play audio through
amplitude modulation (AM) radio. Later years brought the innovation of the frequency
modulation (FM) radio as well as the onset of 8-track, cassette and CD players.
Assistive Technology has been dated for use as early as 950 B.C. when artificial limbs were
crafted out of materials such as wood and leather. Assistive Technology developed into
products such as glasses, wheelchairs and computer devices.6
Current:
After the recent recession in 2009, the aftermarket car audio industry has struggled to regain its
footing. Car manufacturers such as GM and Ford have started to put highly-interactive and high
quality stereo systems in vehicles that have made buying aftermarket systems for consumers
almost unproductive. This has caused a great decrease in profit for the industry. In 2011, the
aftermarket stereo industry brought in $6.1 billion in sales.7 Today, aftermarket audio systems
can be purchased at large corporate retailers such as Best Buy or Walmart. Consumers can also
have systems installed or purchased at small “mom and pop” retailers. The biggest competitor
to retailers and services is the internet. With websites such as Amazon.com or eBay, retailers
have difficulties in competing with the prices of these large conglomerates.8
5 “The History of the Car Stereo.” Jamie Lendino. PC Magazine
http://www.pcmag.com/article2/0,2817,2399878,00.asp. February 10, 2012. Accessed October 2, 2015. 6 Assistive Technology from Ancient to Modern Times. (n.d.). Retrieved February 07, 2016, from
http://bluebirdcare.ie/assistive-technology-ancient-modern-times/ 7 Ceoutlook.com. (2012, May 30). Retrieved October 4, 2015.
8 Interview with Greg Murphy, owner of Xtreme Vehicle Design in Noblesville, IN.
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The Assistive Technology industry is a thriving industry in the U.S. In 2011, the industry
generated revenues of $41.1 billion. Today Assistive Technology ranges from intricate computer
software used for eye-control computers to simple wheelchairs and hearing devices. 9
Future:
The industry is expected to decrease in total sales, and by 2018, the industry will only produce
$3.2 billion in revenue. 10 With this decrease in revenues, many small audio retailers are going
to have to diversify or they will fail. Large retailers are expected to stock less aftermarket audio
equipment and small retailers will have to find other products to diversify, such as window
tinting, truck bed liners or other vehicle customization. 11 Vehicle manufacturers are expected
to consume most of the profit of the car stereo industry and could eventually mark the end for
the aftermarket industry.12
The Assistive Technology industry is expected to grow over the next years. In 2016, the
expected revenue for the industry is $55 billion, a 6% increase from the revenue in 2011.13
Trends
The aftermarket car stereo industry has seen some trends in the past decades that have
dramatically changed the success of aftermarket manufacturers. Here are some current trends
that are affecting the industry.
Automotive Manufacturers are installing high-quality, full entertainment centers.
Most of today’s vehicles are eliminating the need for consumers to purchase new stereo
systems for their vehicles. Companies such as Bose, Infinity and JBL are partnering with
automotive manufacturers to give cars a high quality sound system from the factory. 14
9 Assistive Technology from Ancient to Modern Times. (n.d.). Retrieved February 07, 2016.
10 Ceoutlook.com. (2012, May 30). Retrieved October 4, 2015.
11 Interview with Greg Murphy, owner of Xtreme Vehicle Design in Noblesville, IN.
12 Vehicle makers are killing off aftermarket car radios, IMS research suggests. (2012, May 28). Retrieved October
4, 2015. 13
Assistive Technology from Ancient to Modern Times. (n.d.). Retrieved February 07, 2016. 14
5 Things That Killed Aftermarket Car Audio | Web2Carz. (2014, November 29). Retrieved October 4, 2015.
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Satellite Radio
Sirius XM radio is the largest company in radio broadcasting by revenue and has 28.4 million
subscribers. Satellite radio uses orbiting satellites to distribute commercial-free music, sports,
news and entertainment. Sirius has become standard in many vehicles with subscription fees.15
Pods, Handheld Devices and Smartphones
Vehicles are being manufactured with smartphone, and portable music device compatibility
through Bluetooth. Many cars come standard with these options, which are driving sales away
from aftermarket stereos that consumers would buy to acquire these commodities.
Pandora, Spotify and Music Applications
Car manufacturers and aftermarket manufacturers alike are integrating computer applications
such as Pandora, an internet-based
Back-up Cameras
Premium vehicle trims are being installed with back-up cameras to aid drivers when reversing.
Currently, there are no aftermarket stereo head units with back-up camera capabilities, but
back-up camera systems can be purchased separately.
Navigation
Vehicles are being implemented with Navigation GPS systems in the premium model trims.
Consumers are also using navigation applications on smartphones and tablets to guide them
when driving. Aftermarket dash units with GPS integration are also available with a general
range of $150 to $3000 for the consumer.
Stereo Placement
Older cars, from the early 2000s and before, were produced with a dedicated placement into
the dashboard that made it easier for consumers to change the radio’s head unit. Today’s
vehicle interior is becoming much sleeker with curves and jagged lines that fit the contours of
the passengers. These new design techniques are making it harder for consumers to change the
stereo head units in their vehicles without professional help.16
15
SiriusXM. (n.d.). Retrieved October 4, 2015. 16
Vehicle makers are killing off aftermarket car radios, IMS research suggests. (2012, May 28). Retrieved October 4, 2015.
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Integration of Other Systems into Infotainment Centers
Infotainment centers in vehicles are becoming crossroads for multiple systems. Climate
controls, audio controls, warning chimes and hazard lights are all being integrated into the main
dash head units of vehicles.17
17
5 Things That Killed Aftermarket Car Audio | Web2Carz. (2014, November 29). Retrieved October 4, 2015.
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Market Analysis
Target Market
Environmental Audio Systems will market to families who are directly impacted by mental,
neurological or physical disabilities that may cause family members to struggle in finding
comfort while driving or riding in vehicles. Autism, Cerebral Palsy, Down-syndrome, PTSD and
hardness of hearing are examples of disabilities that can cause people to have discomfort while
traveling. Currently, these people will use other means to cope with the anxiety and discomfort
that vehicles cause them, such as listening to loud music that may be distracting to others in
the vehicle, listening to headphones, or watching movies/videos to keep the vehicle from
overstimulating certain emotions. These current methods can create distraction for others or
prevent social interaction between family members in the vehicle. For some, music can be
overstimulating and may actually cause discomfort rather than help those individuals. EVAS’
goal is to market to this group of people who have differing audio preferences than what is
considered the “norm.” Everyone has differing music volume preferences, however, these
disabilities create neurological or physical difficulties that can cause audio to have adverse
effects and can heighten or decrease stimulus to sound. People in this market will range from
parents who have children with disabilities, to senior citizens who have spouses with one of the
disabilities described. The age range will be from approximately 24 to 70. This consumer will
typically be family members who will be purchasing from EVAS because they are concerned
with their children’s or loved ones’ well-being. More often than not, this customer will be
purchasing a system for the good of his or her family rather than the needs of his or herself.
This target market will consist of the concerned mother/father or spouse who wants to provide
more comfort to their loved ones’ daily life activities such as driving or riding in a vehicle. EVAS
will be targeted the direct market within a 30-minute drive time of its location as its target
market. The greatest number of people found in this target market is known as “Professional
Pride” a termed coined by the Esri Business Analyst. The “Professional Pride” is a group of
people whose median age is around 40, and live in newer suburban neighborhoods. The
Professional Pride is a well-educated, professional who lives the typical American lifestyle of
having a day-to-day full-time job while raising a family. This market has an average household
income of $127,000. The Professional Pride are highly experienced in sciences, technology and
business. 80% of Professional Pride members are married and over half of these married
couples have children. This group is very involved in making sure that their children have all of
their needs. These individuals are very goal-orientated and have routine lifestyles. Professional
Pride make up 7.8% of households within a 30 minute drive of EVAS’ location; the largest
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segment in the radius.18 23,868 households are home to Professional Pride members within this
30-minute drive radius.19 EVAS’ target market within this 30-minute drive time is home to
197,197 families, with a median age of 37. 26.5% of this market has a four-year college degree,
with 68.5% currently holding “white-collared” jobs. The Median income in 2015 for the target
market is roughly $55,000 annually.20
Secondary Market
EVAS’ secondary market is the group of people who also fit in the criteria set for the Primary
Market; those families who have loved ones who have disabilities that cause sensory
difficulties. The secondary market, however, will consist of those who live outside of the 30-
minute drive time window. The secondary market consists of those who live within a 60-minute
drive time of EVAS’ location. The segment of people that makes up the majority of this
secondary market is known by the Esri Business Analyst as the “Traditional Living.” This group
of individuals is a little younger than the Professional Pride and does not value advancement in
their careers as much. The Traditional Living segment highly values family life. This group of
people has a median age of 34 and a median household income of $37,000. This market
segment is full of new householders who are newly-wed and are encompassing the new
lifestyle of living on their own or having children while still maintaining their younger lifestyles.
As a more cost-conscious buyer, this market will often void brand name items to save money.
Households in this segment tend to have one to two vehicles.21 The Traditional Living segment
makes up the majority of individuals in the 60-minute drive time region, as 7.6% of the
population in this radius. 63,900 households can be found within a 60-minute drive time of
Environmental Audio Systems’ location. 22 Within a 60-minute drive of EVAS, 353,277 additional
families reside with a median age of the population at 37 years old. 19.7% of the population in
this market has a bachelor’s degree, with 61.1% holding a “white-collared” job. The median
income for the secondary market is roughly $50,000.23
18 Tapestry Area Segmentation Profile. (n.d.). Retrieved January 31, 2016. From Esri Business Analyst. 19 Tapestry Area Segmentation Profile. (n.d.). Retrieved January 31, 2016. From Esri Business Analyst. 20 Market Profile. (n.d.). Retrieved February 18, 2016. From Esri Business Analyst. 21 Traditional Living. (n.d.). Retrieved January 31, 2016. 22 Tapestry Area Segmentation Profile. (n.d.). Retrieved January 31, 2016. 23
Market Profile. (n.d.). Retrieved February 18, 2016. From Esri Business Analyst.
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Competitor Analysis
EVAS’ direct competition will consist of other smaller, vehicle audio customization installation
services that are within the same geographical area as Environmental Audio Systems. These
competitors are businesses that will function much like EVAS, in that they install and customize
vehicle audio for their customers. The three biggest competitors in and near Noblesville, IN are
discussed below. The differentiator that EVAS uses to set itself apart from its competitors is its
method for designing stereo systems that help individuals with disabilities. The marketing plan
will be a crucial operation for EVAS to effectively reach its target market in this aspect.
Auto Outfitters (AO)
AO is a business owned by Vance Maxwell. Vance currently has three locations, Noblesville,
Lebanon and Anderson, IN. Auto Outfitters is a complete one-stop-shop for customers who are
looking to upgrade components on their vehicles. Auto Outfitters sells just about anything
vehicle-related, from remote starters, audio components to interior lighting. AO focuses more
on other accessories besides audio equipment. Customers will pay AO anywhere from $100 for
the most basic audio installations, to $5000 for complex installations. Only 10% of Vance’s sales
come from electronics.24 AO does not focus all or most of its energy into the aftermarket audio
market, which leaves room for a business such as EVAS. Although the aftermarket industry is
waning as discussed in the Industry Analysis portion of this business plan, EVAS’ differentiation
of design and customer service will allow it to sustain in a waning market.
Because of this decreasing market, AO and other businesses are pulling their investment out of
the aftermarket audio industry and are putting it into more diverse areas of the vehicle
accessory industry. This will allow EVAS to take control of the aftermarket audio installation
market and establish itself with its unique stereo designs marketed towards those with
disabilities.
24
Interview with Vance Maxwell, Owner of Auto Outfitters on October 14, 2015.
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Xtreme Vehicle Design (XVD)
Xtreme Vehicle Design is a direct competitor of Auto Outfitters, located on Herriman Blvd in
Noblesville, IN. XVD is also retailer that sells a diverse inventory or vehicle customization
products such as remote starters, window tinting and audio components. A large portion of
Xtreme Vehicle Designs’ sales derive from installation of these products into customers’
vehicles. According to the owner, Greg Murphy, only about 5% of the business’ sales are from
audio sales,25 a figure that other competitors such as AO exhibit. Customers will pay XVD
anywhere from $200 for basic audio installations to $3000+ for complex installations. XVD does
not focus solely on audio because it does not have a differentiator in its aftermarket audio
designs that sets it apart from other competitors. Therefore, the business cannot remain
sustainable if it does not diversify into other vehicle accessories. Nonetheless, by diversifying
into other products, XVD is providing itself a security blanket for when certain products
fluctuate in the marketplace, however, XVD will not be able to provide the specialization and
customer service for its audio installations as EVAS will be for its customers. Because EVAS will
specialize solely on audio, it can assure its customers that the Company can give each customer
the exact solution and have the expertise and knowledge to provide the best customer service
for vehicle audio.
Perk’s Audio
Perk’s Audio is another small installation business located in Noblesville, IN. Perk’s Audio was
once a business that focused solely on vehicle audio, but has recently merged with another
company in Indianapolis that sells other vehicle products much like those that are sold at Auto
Outfitters and Xtreme Vehicle Designs. Perk’s Audio fell under hard times because it could not
differentiate itself enough from the competition to sustain on just audio installations alone, and
the owner, Terrance Perky decided to merge to keep the business afloat. Terrance claims that
customers will pay from $200 for basic audio installations, to $5000 for larger, complex
installations. Much like the other competitors, Perk’s Audio cannot give its customers the
25
Interview with Greg Murphy, Owner of Xtreme Vehicle Designs on September 30, 2015.
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customer service that they may need for its audio systems, and Perk’s does not market towards
a unique target market as EVAS does.
Original Equipment Manufacturers (OEM)
Higher-end vehicles such as Audi, BMW and Mercedes-Benz are being equipped by companies
such as Harmon Kardon with sound systems that do that which EVAS’ systems are designed to
do; give each person individualized volume levels. However, the down-side to these systems is
that most people do not have the means to acquire vehicles at the price point that these
systems are installed in, and systems such as these have yet to be installed in lower-priced
vehicles.
Indirect Competition
EVAS’ indirect competition is a mix of businesses that range from large retail corporations, to
services that may serve as substitutes for those who may find their benefits as greater than
what EVAS can provide.
Amazon and Other Online Vendors
Amazon, eBay and other online vendors provide a quick and easy way for consumers to find the
products that they need for usually the lowest prices available. The downfall for consumers
choosing this method of purchasing is that they have to install the products themselves.
Installing speakers into the arrangements that EVAS can create for its customers would be
extremely difficult and time consuming for the average consumer to install themselves.
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Best Buy and Other Electronic Stores
Best Buy and RadioShack also sell aftermarket car stereo products and will also install them into
customers’ vehicles at competitive prices. These businesses do not market to individuals with
disabilities.
Disability Services
Services such as ABA, occupational therapy and social therapies could substitute for certain
individuals. EVAS is aware that its audio system design will not work for every person, and will
do its best to work with each customer to ensure that its services provide the necessary
benefits. For some, other services such as counseling or therapy may be the best fit for certain
individuals to find coping mechanisms while riding or driving in vehicles, which could ultimately
take sales away from EVAS. EVAS will work with each individual to ensure that it can provide
benefits for each customer before using time and resources on individuals. EVAS will also
partner with these services to receive endorsements and referrals for customers who could
benefit from EVAS’ services.
Headphone Manufacturers
Headphones have been a way for people to shut themselves out of the outside world for
decades. For some, headphones provide a method of listening to their own preferred music at
their own desired volumes. While headphones take away from the social aspect of being in a
vehicle with others, some may see headphones as a sufficient fix to their differing audio
preferences.
Pharmaceutical Companies
Just as some individuals with disabilities may find counseling or therapy as a more beneficial fix
to their discomfort of vehicles, some may find that medication may be the best way for them to
cope with anxiety or irritability associated with vehicles. Medication can provide treatments for
individuals with PTSD, or those with anxiety. Some may find that medication is the best solution
for the problem.
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Branding
Environmental Audio Systems’ brand will be a pivotal factor in its success as an assistive
technology company. With aftermarket audio a decreasing industry, diverse competitors and an
abundance of alternatives make success in the aftermarket installation industry impossible
without formation of a brand that customers will recognize. According to Terrance Perky,
owner of Perk’s Audio, “Businesses that solely focus on audio need to have something that
makes them stand out from the other retailers that customers will travel from different regions
to buy from.”26 The brand is how the company transmits the message to the customer that the
service provides different and better benefits. EVAS will use different tactics to get this message
across to its target market. Through use of philanthropy, themed logos, goodwill, partnerships,
public image and customer relation, EVAS will market itself as a company that is in the best
interest of the customer and is the only aftermarket stereo service that tailors the needs of
those with disabilities. The Company will be immensely involved in the surrounding community
to gain the trust and support of the market. The logo is currently shown in the images below; a
3-D image with different colored fonts. Looking closely, one will notice the design of the logo.
The logo was designed to show the four letters of Environmental Audio System’s acronym,
EVAS. The four letters are each a different color; “E”- yellow, “V”- blue, “A”- red, and “S”-
orange. The letters were also designed to look like people. “E” in the logo was created to look
like a person holding the “V” and the “A.” The “V” and “A” were attached to form the image of
a person doing a cart wheel. The blue “V” symbolizes blue jeans of this person. The goal of this
logo is to promote the happiness and fulfillment that EVAS can create in the lives of the
disabled. Through the use of community outreach and relationship, EVAS plans to create this
fulfillment in these individuals’ lives. EVAS chose to create its logo in 3-D to indicate the
complication of the disabilities that it is proposing to treat, and to show that there is more to
the needs of these individuals that what can be described on “paper,” or in 2-D. Each individual
has different needs and the idea behind the 3rd dimension design is to show the public that
EVAS will strive to create a tangible treatment for each situation. The logo is colored yellow,
blue, red and orange because these colors create certain feelings and portray different values.
Yellow – instills optimism, confidence and self-esteem.
Blue – evokes calmness or serenity in peoples’ emotions.
Red – portrays strength, courage and energy.
Orange – displays warmth, comfort, and security.
EVAS wants to use these feelings to connect customers to the service.27
26
Interview with Terrance Perky, owner of Perk’s Audio on October 8, 2015. 27
http://www.colour-affects.co.uk/psychological-properties-of-colours. Accessed on February 29, 2016.
Page | 23
Philanthropy
EVAS will stay involved within the local community to promote Autism, Down syndrome,
Cerebral Palsy and Post-Traumatic Stress Disorder awareness. Fundraisers will be held as well in
which proceeds will go to charities that help and research about these disabilities such as
Autism Speaks, The PTSD Foundation of America, and United Cerebral Palsy. The Company will
also work with its target market to better understand the intricacies of its disabilities to provide
systems that result in better treatment. The Company will try to partner with some of these
organizations to provide funding and awareness to those with disabilities. EVAS will host
outings, fundraisers and will partner with other disability services to create awareness in the
community. Please see the Marketing Plan for more detail on how philanthropy is used to
Page | 24
market and promote the business.
Market Size
24.4 million Americans today live with Post-Traumatic Stress Disorder, which accounts for 8% of
the total population of the U.S.28 3.5 million Americans live with Autism, which accounts for 1%
of the American population.29. It is estimated that 500,000 people in the United States show
symptoms of cerebral palsy, which equals .002% of the U.S. population.30 10 million Americans
struggle with Hardness of Hearing.31 This accounts for 3% of the total U.S. population who have
hardness of hearing. Keeping these statistics in mind, take a look at the markets within EVAS’
region. EVAS will market to the areas within a 30 minute and 60 minute drive time of its
location upon start-up, keeping a closer relation to the immediate community. For example,
EVAS will hone in on the immediate community within a 30 minute drive as its first target. The
number of families for these two regions is 197,197 and an additional 353,277, respectively. As
discussed in the Target Market and Secondary Market sections, EVAS’ primary and secondary
markets are the populations within a 30-minute drive time radius and within a 60-minute drive
time of EVAS’ locations.
Chart 2
28
PTSD Statistics. (n.d.). Retrieved November 19, 2015, from http://www.ptsdunited.org/ptsd-statistics-2/ 29 Interview with M.D. Mark Ambre. Interviewed October 12, 2015. 30 A closer look at Cerebral Palsy. (n.d.). Retrieved November 8, 2015. 31 Jnl. of Deaf Studies and Deaf Education. (n.d.). Retrieved November 8, 2015.
Cerebral Palsy Autism PTSD Hard of Hearing
# in U.S. 0.5 3.5 24.4 10
Percentage of Population 0.002% 1% 8% 3%
Percentages of Population with Disabilities (in millions)
Page | 25
The table below discusses the total market size and projected “approachable” market that
EVAS will be able to capture. Keep in mind that EVAS’ target market is the family who is
affected by one of the disabilities discussed above.
Chart 3
Values from Esri Business Analyst
The table below shows the amount of expenditures that each segment in EVAS’ market spent
last year on audio/video installations. The total expenditures for the 60 – minute region are
$5.4 million. The assumption that audio accounts for 80% of these expenditures will be
accounted to subtract the video sales from the final market size.
Chart 4
Values from Esri Business Analyst.
EVAS’ total market size within its 60-minute drive time includes 550,000 families who expend
$4.3 million on automotive audio installations. The Company will be targeting the 66,000
families who are affected by one of the disabilities described.
Drive TimeNumber of
Families
Households affected
by Cerebral Palsy
Households affected
by Autism
Households affected by
Hardness of Hearing
Households
affected by PTSD
Total Households With
Disabilities in Each Segment
30 (Target Market) 197,197 4 1,972 5,916 15,776 23,668
60 (Secondary Market) 353,277 7 3,533 10,598 28,262 42,400
Total 550,474 11 5,505 16,514 44,038 66,068
Number of Families with Disabilities Within 60 Minute Drive-Time
Area
Total
Expenditures
Estimated Audio
Expenditures
30 minutes $ 1.6 1.3$
60 minutes $ 3.8 3.0$
Total $ 5.4 4.3$
Audio/Video Installation Expenditures (Millions)
Page | 26
Approachable Market Forecast
EVAS has conducted 120 market surveys to use in projecting the outreach that the Company
can provide to those who could benefit from its services.
Questions in the survey will help EVAS discern who is interested in the services that the
Company provides, and will break this number down into conversion of sales based on the
approachable market.
In the previous section, the total number of families inside EVAS’ target and secondary markets
of 30 and 60 minute drive times was determined using the Esri Business Analyst. In the market
surveys, 36 respondents, or 30% said that they have a family member who struggles with one
of the targeted disabilities. Those 36 who have a family member with one of the described
disabilities were asked, “Do you agree that the ability to adjust the volume of the audio in a
vehicle for each individual person would help persons with disabilities to enjoy riding in
vehicles? (Disabilities such as Post Traumatic Stress Disorder, hardness of hearing, or Down
syndrome),” 8% of the 36 answered that they strongly agree. The participants who answered
that they “strongly agree” represent the percentage of the population who are interested in the
services that EVAS has to offer because the question identifies those who are invested in the
idea that the service could provide help to their family member who struggle with a disability.
Chart 5: Percentage of Market Interested in EVAS Table Options
# Answer Response %
1 Strongly Disagree
2 6%
2 Disagree
2 6%
3 Neither Agree nor Disagree
12 33%
4 Agree
17 47%
5 Strongly Agree
3 8%
This 8% equals the amount of families who are interested in EVAS’ services. Break down the
66,068 families with disabilities, and the 8% equates to 5,285 families who are interested and
able to purchase. To further break this number down, the survey asked the 8% the following
question: “How likely would you be to purchase a vehicle audio system if it was designed to
help those with disabilities enjoy riding in your vehicle?” 67% of these survey takers answered
that they were very likely to purchase a stereo system that was designed to help those with
disabilities when riding in a vehicle. The following table shows the results from this question.
Page | 27
Chart 6: Percentage of Market Likely to Purchase Table Options
# Answer Response %
1 Very Unlikely
0 0%
2 Unlikely
0 0%
3 Somewhat Unlikely
1 33%
4 Undecided
0 0%
5 Somewhat Likely
0 0%
6 Likely
0 0%
7 Very Likely
2 67%
This 67% is an astounding number, as it shows that those who have experience dealing with
their loved ones’ disabilities are willing to purchase a system that helps with their needs.
67% of the 5,285 families who were interested in the service equates to 3,541 families who are
willing to purchase the audio system in the first year of operations. These 3,541 families
portrays EVAS’ “approachable market.”
In this analysis of the market, the Company uses a “funnel” to show the approach that the firm
plans to use in order to reach its target customer. This projection will create a more accurate
evaluation of revenues as it uses primary market data found through surveying. The following
diagram shows the logic behind this scenario.
Page | 28
Figure 1: Funnel of Industry to Approachable Market
The whole area inside the “funnel” portrays all of those who are potential customers to the
aftermarket audio industry. As the market funnels downward, the target market becomes
narrower and the number of potential customers within this market decreases.
Total number of potential customers in industry (population in U.S.): ~ 318 mil
Potential Customers in Indiana (pop. in Indiana): ~ 6.6 mil
Families within EVAS’ 60-min drive time target market: ~550,000
families
Families within EVAS’ target market who have one of
the disabilities: PTSD, Autism, Cerebral Palsy, or hard
of hearing ~66,000 families
Interested and able to purchase: 8% of
66,000 families = 5,285 families
Approachable market: 67% of
5,285 families = 3,541 families
Page | 29
The diagram shows the method that the marketing plan will use to attract its target customers.
The market segment that the Company is attracting is the group of those who have one of the
disabilities described. To reach this market segment, the Company must work its way down the
“funnel” to achieve this goal. The diagram displays the breakdown of each segment moving
towards the end goal, which is converting families with autism, cerebral palsy, PTSD or hard of
hearing into sales from those interested and able to purchase from EVAS.
Pricing Strategy
The goal of EVAS is to ensure that all individuals, whose lives can benefit from the Company’s services, have means of affording them. EVAS is a for-profit business, however, the Company will price its installations at reasonable prices in order to benefit more people who may not be able to afford high marked-up prices. In order to provide customers with the best financing possible, EVAS will partner with groups such as the Veteran Affairs, United Cerebral Palsy, Autism Speaks, and Easter Seals Crossroads to provide funding and/or low-interest loans for customers. These organizations can provide funding to individuals who are in need. For example, the United Cerebral Palsy has created a fund known as the UCP Bellows Fund which is a National program that provides funds to individuals with disabilities for AT equipment.32 EVAS will also work with Medicaid users who are of lower income. By partnering with these groups, EVAS will be able to attract customers of all income levels. EVAS will price its stereo systems competitively to the market leaders in the area. The direct competitors in the market will charge as much as $5,000 for a complete audio system installation.33 EVAS will use factors such as materials used and labor to determine the price for each audio system installed into a customer’s vehicle. Pricing will be based on factors such as number of speakers used and hours needed for install, and will be given in two different “tiers.” The Premier tier will give customers 16 - 6.5” speakers, 8 tweeters and four 10” subwoofers in the vehicle and will be of upmost quality. The standard tier will give customers 8 - 6.5” speakers and 8 tweeters in the vehicle. Quotes will be available to customers before installation to give customers an estimate of the total price that they will have to pay. 30-50% markup is typical in aftermarket retail. 34 EVAS will charge its customers a 40% markup on the products used in its installations as a standard average of the “typical” markup. This markup in products will be added to the cost of labor to obtain the amount charged to the customer.
32 ATIA Funding Resources Guide. (n.d.). Retrieved February 08, 2016, from
http://www.atia.org/i4a/pages/index.cfm?pageid=4219 33
Interview with local market competitors. September – October 2015. 34
Email from Greg Murphy, owner of Xtreme Vehicle Designs. March 1, 2016.
Page | 30
After calculating markup and labor costs, the two pricing options will be available for customers: Premier and Standard Tiers. Because EVAS’ systems are of a specialty type, the Company can charge more than the competitors in the market. Premier: $7,000 Standard: $6,000 Please visit the Design/Prototype section for a detailed breakdown of the materials that are used for each option.
Sales Forecast:
As projected in the Market Share section, the approachable market in the first year can be
assumed to be 3,541 families. As explained in the Operations section further in the business
plan, the capacity of the business will not be able to support anywhere close to 3,500 families in
a given year. With the current business model, EVAS will only be able to capacitate 6 installs per
week at FULL capacity. (At 6 installs per week, the Company will be completing approximately
312 installs in the first year).
EVAS will project capacity at 30% in the first year, and work towards a goal of half capacity by
year three. This means that the Company will have to implement a bottom up approach to the
top down approach mentioned before in order to create a “pull” of customers that meets the
capacity of the firm. At 30% capacity, 2 installs will be sold per week, converting 104 families to
sales in the first year.
The diagram on the next page portrays this logic.
Page | 31
From these 104 sales, a multiplier is used to determine the revenue in the first year. The
multiplier used in this case is a combined makeup of the revenues generated from each tier of
audio system.
The multiplier was calculated by assuming 30% premier tier and 70% standard tier. 73 standard
and 31 premier will be sold in the first year.
Multiplier: (70% * 6000) + (30% * 7000) = 6,300
Revenue: $6,300
Conversion to sales in target markets:
104 installations Multiplier
First year’s revenue: 104 families x $6,300
$655,200
EVAS
Capacity of 2 installs/week
104 installs in first year
EVAS applies a bottom up approach to
pull in the number of customers that
the Company can capacitate.
Page | 32
Based on an interview with owner of Xtreme Vehicle Design, Greg Murphy, Environmental
Audio Systems is expecting to have a 15% growth every fiscal year in future years of its
operations.35 Xtreme Vehicle Designs has had 15% growth every year from the end of the 2009
recession to present, in which its growth has since leveled off. EVAS will use Xtreme Vehicle
Design as a bench-mark for its first three years’ growth model. In its second year of operations,
EVAS will have established its brand and will expect to grow 30% from year one to year two,
twice the growth of Xtreme Vehicle Design in normal operations. In year three, EVAS will have
its brand established, and will expect to grow at 25%. The following figure is EVAS’ growth
projection.
Chart 7
Market Share
Based on year one’s revenue, EVAS is expecting to acquire 15% of the total $4.3 million market
in the first year of operations.
Marketing Plan
EVAS’ marketing plan will be a vital part to the growth and sustainability of the business. The
company’s unique target markets make it a necessity to know exactly when and where its
customers will find attraction to the company. To ensure that the target customer is adequately
marketed to, EVAS will implement several actions into its marketing plan that will be directed
towards the ideal customer. It is crucial that the business has support from the community,
community leaders as well as leading businesses in the area. Relationships with other
businesses and the surrounding area are important to the success of the business because it
provides “social proof” adding to a very important reputation that such a service should be
backed with.
35
Interview with Greg Murphy, owner of Xtreme Vehicle Designs. Interviewed September 30, 2015.
Year 1 Year 2 Year 3
655,000$ 851,500$ 1,064,375$
Revenue Projections
Page | 33
Promotion
The Company will promote its services in several ways. EVAS will join and partner with other
organizations to acquire attention in the Assistive Technology market, as well as gain traffic to
the business through gaining influence and rapport in the market.
Grand Opening/ Ribbon Cutting Ceremony
On the day of grand opening, the business will host an event for the community to partake in.
Community leaders such as the mayor of Noblesville will be invited to speak on behalf of EVAS
to promote its goodwill towards the community. Visitors will be allowed to tour the facility and
food will be provided by EVAS’ partners. EVAS will promote the contributions of the partners.
Commencement will include a ribbon cutting ceremony to signify the opening of the business,
as well as other sources of outreach to the community.
The ribbon cutting ceremony will be hosted on April 12, 2018. At this event, EVAS will provide
free promotional gifts such as pens, mugs and water bottles. The prices for these promotional
items are as follows:
Pens: $1.78/pen for 250 units
Mugs: $12.84/mug for 50 units
Water bottles: Pacific 26-oz aluminum sports bottle – $4.96/ bottle. 36
36
Prices from vistaprint.com. March 16, 2016.
Page | 34
The Company will purchase 250 pens, 50 mugs and 100 water bottles for the ribbon ceremony.
This will cost the Company $1,583 to promote the Company through promotional gifts. $2,000
will be allotted for the grand opening ceremony.
Partnerships
The Company will create quality and valuable relationships with other businesses in the
community. These partnerships will create referrals, positive publicity and support for EVAS in
the community. Quality relationships are vital to the success of the business. If the purpose of
the Company is not seen and supported by the community, the ability for the business to
sustain or grow will not be prevalent.
EVAS will partner the following businesses and medical establishments in the market to gain
support and endorsements:
Behavior Analysis Center for Autism (BACA) – 11902 Lakeside Dr. Fishers, IN 46038
Bierman Autism Center – 16414 Southpark Dr. Westfield, IN 46074
United Cerebral Palsy Association of Greater Indiana – 8020 Zionsville Rd. Indianapolis, IN 46268
Pilipis Behavioral Group – 152 S 9th St. Noblesville, IN 46060
Aspire Indiana – 9615 East 148th St, Suite 1, Noblesville, IN 46060
Easter Seals Crossroads – 4740 Kingsway Dr, Indianapolis, IN 46205
Indiana Hearing Aid – 160 N Tenth St. Noblesville, IN 46060
Whisper Hearing Centers – 18051 River Ave. Suite 104, Noblesville, IN 46062
EVAS will partner with these medical centers and businesses to gain endorsements and placement of
the business’ promotional marketing to reach out to where the target customers spend their time.
To acquire these partners, the business must present benefit to these establishments.
Partnerships are “mutual agreements that benefit both parties. Partners can also be called
‘connectors’ as they directly deal with the target customers who EVAS wants to offer its
systems to.“37 EVAS will engage these businesses through different forms of involvement.
Connection to partners will involve the following actions:
“Lunch and Learns” – EVAS will invite its partners to its operational meetings as well as offer to
provide lunch to its partners during their meetings. By providing these partners with lunch, the 37
Meeting with Ted Baker, owner of Innovation Connector in Muncie, IN on March 25, 2016.
Page | 35
Business will have the opportunity to network with these partners, share the business’
offerings, create relationships and learn how the community and market can be benefitted
through the offerings of both EVAS and the partnerships. EVAS will invite these partners to tour
its facility and teach about the benefits that EVAS has to offer.
Partner Event Volunteering/ Contribution – Environmental Audio Systems will volunteer at its
partners’ events and community involvements. The company will also come alongside these
businesses to help pitch-in to their community engagements and help fund their causes.
Medical centers and establishments (such as the partners that EVAS plans to acquire) are
constantly hosting events to involve the market and community.38 EVAS will contribute to these
events in any necessary manner to help promote its benefits to the public and to acquire
healthy relationships with its partners.
Demonstration in Partner Vehicles – The majority of EVAS’ partners will likely have vehicles in
which they transport their own clients from place to place. EVAS will offer to install its systems
into its partners’ vehicles for free of charge, or at discounted prices. This will provide offering to
the partners and will provide a method of promotion for EVAS’ systems.
Customer Stories/Portrayal of Goodwill
As much as audio installation is important to the business, EVAS is not simply an aftermarket
audio system installation service. What fashions EVAS, are the stories of those who the business
have helped or could help. The business will share the stories of its customers and show the
community how the service has bettered the lives of each individual. These stories will be the
“bread and butter” of the business as they will be the compulsion to individuals choosing EVAS
as a treatment for their needs. By visualizing and seeing the change that EVAS can have on the
lives of others, individuals will be more willing to trust investing into the products that EVAS
offers. This is a marketing tactic that businesses such as the Hillcroft Services in Muncie, IN use
to show how their services are bettering the community. Hillcroft Services creates flyers, and
handouts that contain pictures and stories of patients that they have helped. In the Hillcroft
Overview Handout, the service displays several stories of individuals that have benefitted from
using the resources at Hillcroft.
EVAS will also market events and gatherings that the company holds for the community and will
advertise the impact that these events have on its participants for future events. This will be
done in the same manner that the Hillcroft Services in Muncie, IN markets its events. The
38
Meeting with Ted Baker, owner of Innovation Connector in Muncie, IN on March 25, 2016.
Page | 36
Hillcroft Services advertises its events by posting “fun” pictures of previous events on flyers and
brochures that show the market how the events impacted the community.39
Each quarter, EVAS will order 100 trifold brochures in which will include the stories of
individuals that gained improved lives because of EVAS’ services. These brochures will be
ordered from vistaprint.com at $44.99/ 100 units. EVAS will order 300 units every yearly
quarter to promote the goodwill of the business.
Product Brochures
To show potential customers the vision of EVAS’ audio systems, the Company will utilize
brochures to promote the benefits and features of the systems. These brochures will be
available at EVAS’ facility as well as at its partners’ facilities. EVAS’ partners will hand these
brochures to customers that could benefit from EVAS’ services. EVAS will update its brochures
every six months and will purchase 300 brochures each month from vistaprint.com. At $44.99/
100 units, EVAS will incur a marketing expense of roughly $150 per month for product
brochures.
Community Events (Goals for future operations)
EVAS will host events for the community to get involved with. These events will include 5k runs,
golf outings, and fundraisers to raise awareness about the disabilities that the target market
struggles with. The community event schedule for the first year of operations is as follows:
(Dates and times are tentative)
White River Greenway Autism Awareness 5k Run/Walk: Noblesville, IN April, 2018
The first community event will be held in Noblesville, IN on the White River Greenway,
otherwise known as the “Potter’s Bridge Trail” by the local market. This 5k will start on the
White River Greenway walking trail off of Hague Road in Noblesville and end at Potter’s Bridge.
The route is pictured below. The event will be slightly longer than the typical 5k which is 3.1
miles. The objective of this event is to raise awareness about EVAS’ services and how Autism
affects the lives of many individuals. There will be no registration fees for participants, as the
goal is to raise awareness, not revenues for the Company. The cost of this event will be
minimum to the Company, as volunteers will be attracted to help run the event. The majority of
39
Interview and tour of Hillcroft Services with Brenda Williamson, Director of Marketing, on February 23, 2016.
Page | 37
the expenses for this event will be for the advertisements displaying partner names. Product
brochures will be given as handouts to interested participants at the event’s check-in table.
Three water stations will be available at mile markers one, two and the finish line. EVAS will get
its partners involved to help supply items such as water cups, pre and post-run snacks and
ribbons for top placement runners.
This event will provide volunteers the opportunity to help bring the community even closer.
Community partners in the local newspaper, radio and media will be invited to broadcast the
event as well as create community recognition.
United Cerebral Palsy Fundraiser: Noblesville, IN June, 2018
EVAS’ partnership with United Cerebral Palsy will allow the Company to host fundraisers to
create awareness about the disability as well as market EVAS’ services to the community. The
fundraiser will give EVAS the chance to gain interest in the community and gain rapport. The
fundraiser will last the entire month of June. EVAS will get the help of its community partners
such as restaurants to get customers to donate to the United Cerebral Palsy. When customers
at these places of establishment donate to the fundraiser, they will get to sign their names on a
banner that gives the customer recognition for donating. All donations will be given to the
United Cerebral Palsy to further the organization’s understanding and treatments for Cerebral
Page | 38
Palsy. EVAS’ cost for the fundraiser will be derived from the printing of the banners signed by
the donors. Customers will have the choice of donating $1, $5 or $10 to the United Cerebral
Palsy.
EVAS Stony Creek Golf Course Golf Outing: July, 2018
The company will host an annual golf outing that will create more awareness about the
business’ services and the disabilities that the business serves to treat. This golf outing will cost
contestants $400 per team, and will be played as a “best ball” tournament. The purpose of the
event is to create fellowship in the community as well as promote awareness. The event will
also act as a promotion for EVAS’ services. Partners will provide contributions to the event and
EVAS will provide its own contributions such as snacks, drinks, family photo-taking and other
activities. Prizes will be awarded for different categories such as lowest score, highest strokes
(will not be mentioned until end of round), most mulligans and other family-orientated awards
that engage the contestants but not create a highly competitive tournament. The cost to EVAS
will be the acquisition of the green’s fees for a 7 hour period on a Saturday morning for the
number of teams, as well as the expenses for food and beverages. EVAS’ goal for the event is to
acquire ten teams and generate $4,000 from the event.
The Assistive Technology Industry Association (ATIA)
The Assistive Technology Industry Association is a non-for profit membership organization of
manufacturers, sellers and providers of technology-based assistive devices and/or services that
EVAS will use to gain knowledge, and influence in the assistive technology industry.40
Membership for small businesses (revenues less than $500,000/year) is $650/year. The value in
ATIA’s membership is access to networking opportunities, educational conferences, and
recognition in the AT community. Conferences allow members to gain interest from industry
members and customers who may be looking for AT provisions.
Rehabilitation Engineering and Assistive Technology Society of North America (RESNA)
RESNA offers services to find certified assistive technology professionals that are RESNA
certified (the professionals have passed a test to prove that they have experience to provide
quality service). EVAS will gain certification through RESNA and will establish itself as a
40 What is Assistive Technology? How Is It Funded? (n.d.). Retrieved February 03, 2016, from
http://www.atia.org/i4a/pages/index.cfm?pageid=3859#What_is_ATIA
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professional Assistive Technology business. EVAS can use this status as a way to gain attention
from medical centers for which to create partnerships with. These partnerships will benefit
medical centers by giving the centers another pathway to helping its patients. These
partnerships will benefit EVAS by obtaining referrals from the medical centers that will bring in
more customers to the Company.
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Arc of Indiana
Arc of Indiana is an organization dedicated to empowering the people of Indiana who are
affected by disabilities and to provide independence for these individuals and their families.
The Arc also provides education about intellectual and developmental disabilities to create
prevention again the development of disabilities in future newborns. The Arc of Indiana host
conventions, events and other community engagement that exactly fit the type of outreach and
community involvement that is congruent with EVAS’ mission and vision. EVAS will join the Arc
with a Bronze professional membership which will provide the Company with the following
benefits:
Receive current information relevant to The Arc’s constituents and members including printed and online
newsletters and publications.
Invitations to special member events and trainings at reduced rates where applicable
Complimentary At-Large Individual Memberships in The Arc of Indiana and The Arc of the United States
Identification in The Arc’s newsletter and on our website
Certificate of Membership41
This membership will cost the Company $2,500 and the proceeds are directed towards the cause that the Arc is
dedicated to serve. This membership will provide the Company invaluable opportunities to be engaged in the
community and promote its services to the wellbeing of the community.
Approval of Insurance Payment from Customers
By partnering with the local market leaders in medical and behavioral analysis, EVAS can
receive endorsement from doctors who can aid in the process of receiving funding from
insurance companies to help customers purchase EVAS’ products. According to healthcare.gov,
“Services and devices to help you recover if you are injured, or have a disability or chronic
condition” can be covered in the “health insurance marketplace.” EVAS’ relationships and
community involvement will help the Company gain rapport and key trust in the community
who can have an influence on the services that insurance companies cover.
In-Store Mock-Ups of Final Products
EVAS will have mock-up prototypes on the showroom floor that allows customers to experience
the different audio “environment” designs and arrangements. These mock-ups will allow
41 Who We Are. (n.d.). Retrieved March 26, 2016, from http://www.arcind.org/about-the-arc/who-we-are/
Page | 42
customers to add/subtract speakers and move them around to different positions in the
prototype. The mock-ups will allow families to try out the stereo system before purchasing it to
find the speaker arrangement that best fits the needs for loved ones.
Advertising
Word of Mouth
Word of Mouth is a very powerful tool in advertising. EVAS will use incentives to encourage
customers to spread the news about the Company to other potential customers. These
incentives will include friend-referrals that give discounts to customers who attract their friends
or family members to purchase from the Company. Referral incentives will change periodically,
however, at the opening of normal operations, EVAS will provide a $500 incentive to both
parties involved in the referral. EVAS will also keep good customer service and publicity to
ensure that the Company has a good view in the public eye.
Email List
EVAS will acquire a list of prospective customers and repeat customers who fit within the
definition of the target market. This email list will be acquired at events held by EVAS, on the
website as well as on social media. Customers will be inclined to join this email list because in
doing so, EVAS will offer the customer something of value in return for “opting-into” the email
list. The Company will create content that the target customer will crave, such as tutorial videos
for helping their loved ones cope with their disabilities, and by doing this, the Company can find
the ideal target customer that will be more likely to purchase from EVAS. Opting into the email
will not cost the customer and will give the customer access to news about the Business. EVAS
will use this list to promote the launching of new products and/or events that the Company will
hold. This will allow the Company to market directly to the customers who chose to receive the
content rather than blindly marketing to individuals who the Business “hopes” wants to receive
the content. A “squeeze page” will be used to attract customers to opt in their emails on the
Company’s website.42 An example of a “squeeze page” is shown on the next page.
42 Walker, J. (2014). Launch: An Internet millionaire's secret formula to sell almost anything online, build a business
you love, and live the life of your dreams. New York, NY: Morgan James Publishing. Retrieved March 3, 2016.
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Figure 2
Social Media and Website
EVAS will acquire a domain name and will be active on all of the major forms of social media:
Twitter, Facebook, and Instagram. The Company will also provide incentives to current
customers by giving them discounts or giveaways for posting the hashtag #HarmonyForAll.
(tentative). This hashtag will attract different walks of life to the common theme that EVAS is
striving to accomplish; creating harmony for the disabled while traveling. EVAS will keep close
tabs on its customers’ activities on the Company’s social media and will respond to feedback
and review given by people in the community. Social media is advantageous because of its low
cost to use for promotional purposes. Unless promotional services on social media are utilized,
the only cost to run the sites will be the labor cost needed for an employee to manage the sites.
Local Newspapers and Radio Ads
EVAS will market to the direct community and target markets through the use of local media.
According to McCrocklin Ford, Newspapers, and local radio ads can be the most important
forms of advertisement for the business.43 EVAS will utilize these methods to gain credibility in
the community. However, because of the connection to the target customer through the
Company’s partners, the business will not invest much into this form of advertisement.
Nonetheless, despite McCrocklin’s dependence on local advertising, some would argue that this
form of promotion is not as beneficial as others may agree.
43
Emails from Judy Wiley at McCrocklin Ford. February 2016.
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Location
16625 Mercantile Blvd. Noblesville, IN: Figure 8
EVAS will be located on Mercantile Blvd in Noblesville, IN just off of highway 37, a major two-
lane highway that runs through Fishers and Noblesville. As the name of the street, Mercantile
Blvd, suggests this area is highly populated by traffic flow and is a great place for businesses to
thrive. Below, is a photo of the geographical area surrounding the location. 44
As the photo portrays, 34,000 cars travel on
highway 37 every day. The exact location of
EVAS’ brick and mortar building is displayed
by the blue pin. One can see how the
location will be a prime area to attract
attention from consumers who travel on 37.
Figure 3
EVAS’ floorplan will be simple but effective. Upon entering, consumers will be greeted by an
associate at the entrance of the building who will assist with customers’ needs. A waiting area
will be available at the front of the building, giving visitors a place to relax while waiting on
assistance. This area will be equipped with comfortable couches and lighting to provoke
comfort and relaxation for customers.
44
Figure obtained on Esri Business Analyst. Accessed November 27, 2015.
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The main attraction inside EVAS’ store will be two prototypes of EVAS’ “premier” and
“standard” installation tiers. These prototypes will allow sales associates to work with
customers to find the exact placement of speakers and will allow consumers to move speakers
into different positions so that they can find the solution that they are looking for. Shelves will
be positioned on the sides of the building for product placement of vehicle accessories and
components used in the sound systems.
The photos on the next page depict the floor plan of EVAS’ Mercantile Blvd location. (Design is
tentative).
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Figure 4
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The photo below shows the target and secondary markets in orange and green, respectively.
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Management
President
Environmental Audio Systems’ founder and President is Adam Blazier. Adam is an
Entrepreneurial Management major and a minor in Economics at Ball State University who will
graduate with a Bachelor’s of Science in May of 2016. Adam has always had an interest in music
and audio technology and this interest began when he started playing guitar at the young age
of 10. Since, Adam has had multiple experiences with live sound, as well as recording and audio
technologies used in music studios. During his freshman year at Ball State, Adam was a part of
the Music Media Production major at BSU where he built his network in the audio technology
realm and gained more experience with the industry. Adam decided to change his career path
after his freshman year at Ball State University to better suite his ambitions. Adam’s passion for
audio technology and music has been implemented into his founding of Environmental Audio
Systems.
Adam’s duties will involve a variety of tasks to ensure that EVAS runs in conjunction with the
vision that he has for the business. These tasks will include:
Networking
Bookkeeping
Maintaining supplier relations
Hiring/firing
Overseeing daily operations
Maintaining good customer service practices
Keeping up-to-date on new technologies and products
Installation Technicians/Store Associate
EVAS will have one installation technician/store associate on staff at any given time (growth of
firm will allow hiring of additional employees). This employee will carry all of the basic and
necessary functions of the business. This employee will manage all basic tasks such as helping
customers, answering the phone, acquiring sales and customer service. This technician will be
detrimental to the operations of the business. The employee under this job title will undergo
specific training to gain knowledge about how EVAS’ audio systems will work. The technician
will need to have many years of experience in audio technology and installations. It will be
preferred for applicants to have degrees related to electronics, audio or sound engineering.
According to competitors in the market, installation technicians will earn $12-15 per hour.
Because the associate at EVAS will be carrying out the fundamental operations of the business,
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this employee will need to be compensated at a competitive wage for the amount of work that
he or she will be doing. The technician/store associate will receive a wage of $24 per hour and
will work 5, 8-hour days per week.45 This will equate to approximately $50,000 compensation
that this employee will earn, creating more of a monetary incentive for this employee to
contribute his or her passion and outstanding work ethic to EVAS. The duties of this employee
will include:
Install audio systems
Install audio components
Provide customer service to existing customers
Report to President
Work with customers to find best solutions
Carry out functions of the business
Answer phones and emails
Help set up community events
Run social media pages and website
Marketing Representative
Marketing and relationships are the heart and soul of EVAS’ success. To help create
relationships, and to speak on behalf of the Company to partners and the community, the
Company will hire a Marketing Representative. The marketing representative will be the direct
connection between partners, the market and EVAS, earning a starting salary of $40,000 per
year. The following responsibilities will be required of the Marketing Representative:
Connect with new and current partners alike
Manage social media
Create events for EVAS to host and manage contribution to partners’ events
Connect with market and make decisions based on feedback/ reaction
Speak on behalf of EVAS at partner meetings
Employee Benefits
EVAS will offer Vision and Dental insurance to its full-time employees who qualify in addition to the
standard required benefits such as FMLA, leave for voting/military services/jury duty, and contribution
45
Email from Greg Murphy at Xtreme Vehicle Designs. Information acquire March 15, 2016.
Page | 50
to FICA, unemployment taxes and disability programs.46 EVAS will also provide paid vacations, holidays
and sick leave for its full-time employees.
Employee Motivation/Retention Plan
The importance for EVAS to have a low employee turnover rate is critical. The Company wants
to build strong, lasting relationships with its employees and to keep them motivated for the
goals of the Company. In order to ensure that employees are motivated, EVAS will pay the in-
store associate at competitive wages to its competitors. However, the company will find more
intrinsic values to offer the employees other than money. The business will also hire applicants
who have a like-minded approach towards the community and helping those individuals with
disabilities. Employees will be given the opportunity to also be involved within the community
and the business will hire applicants who enjoy reaching out and creating relationships. The
work environment will be made enjoyable for this type of employee as in-store associates will
be gaining hands-on experience, in a setting that focuses on the well-being of others.
Communication will be kept at a high level to keep the firm on the same page and to avoid any
confusion that may cause disgruntlement.47
46 The Basics of Employee Benefits. (2005). Retrieved March 29, 2016, from
http://www.entrepreneur.com/article/80158 47 (n.d.). Retrieved February 29, 2016, from http://www.forbes.com/sites/ilyapozin/2013/12/04/why-your-
employees-are-leaving-you-and-how-to-stop-them/#6f7747b65240
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Operations
Hours of Operation
EVAS will host operations during normal business hours. The schedule below displays the hours
for each day.
Sunday: closed
Monday: 12pm – 8pm
Tuesday: 12pm – 8pm
Wednesday: 12pm – 8pm
Thursday: 12pm – 8pm
Friday: 12pm – 8pm
Saturday: 9am – 5pm
EVAS will base its schedule around the typical work day that the local market has. Most people
in the local market get off of work in what is known as “rush hour”, usually between 4-5pm. By
keeping the store open until 8pm, EVAS will give the target market the ability to come into the
store after work.
Inventory and Restocking
EVAS will use reorder points and an inventory management system to determine when to
reorder new inventory. All employees will keep track of all inventories in the system to make
sure that enough is supplied to meet the demand. Purchasing will stay current on all of the new
equipment available in the industry from EVAS’ supplier to ensure that EVAS inventories all of
the most up-to-date components. Purchasing will also need to determine how much inventory
needs to be ordered in order to avoid surplus or shortage of inventory.
EVAS will create a relationship with automotive audio manufacturer, JBL. JBL is a supplier and
manufacturer of quality, reasonably-priced audio equipment and components.
Acoustical foam will be used in to prevent unwanted noise from traveling within the vehicle.
Auralex is a manufacturer of industrial-grade acoustical foam for music studios and other
applications.
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Design and Research
Installation Technicians will be required to research and track different designs for different
automobiles and keep records of how different configurations work in different automobiles.
Over time, the technicians and EVAS should have a database of different audio system
configurations that work the best for each vehicle type or model. This will speed up future
installations into automobile model that have been in the shop before, and will give technicians
templates to start with when working with the customer to provide the best solution.
Technicians will be trained and should have prior experience in sound engineering and
acoustics to determine the best configurations to install at each tier. The price for each tier will
be based on time needed to install and cost of inventory and will be determined by the
technicians.
Installation
Installation of EVAS’ audio systems will vary depending on each individual scenario. However,
the amount of time that each installation will take can be averaged and projected based on
industry norms. The premier tier will take approximately 4 hours to install while the standard
tier will take approximately 3 hours to install. Given that EVAS’ store associate will work 40
hours in a week, this employee could essentially install roughly 13 standard tier installs or 10
premier tier installs based on an hour break every day in a five day work week. 70% of sales are
projected to be of the standard tier while 30% are projected to be of the premier. An aggregate
number of hours can be estimated based on the following formula:
Standard + premier install times: .3(4 hours) + .7(3 hours) = 3.3 hours aggregate.
In an employee’s 40 hour work week, total capacity for the current employee model equates to
12 installations weekly for one store associate. Other factors may prohibit this employee from
working at full capacity each week because the employee will be carrying out other operations
of the business. All other processes included, it would be sensible to predict that one employee
can install 6 audio systems per week.
Logistics
The consumer will walk into the store, and will be greeted by a sales associate. The consumer
will express their needs to the sales associate who will then decide the next step for
determining the best solution. Once the type of solution has been determined, the sales
associate will bring in an installation technician. The installation technician will work with the
sales associate and customer to determine how the customer wants to configure his or her
Page | 53
audio system. This step will utilize the prototypes that are located on the showroom floor. The
customer will be able to move speakers around to find the best placement of speakers in his or
her vehicle. After this “template” configuration is determined, the customer will have the
choice to set up the template in his or her own vehicle before installation and make any final
changes to the configuration. Finally, the customer’s vehicle will be taken into the installation
area, where the technicians will install the audio system.
Audio systems will take varying times to install, but times are expected to vary from an hour to
8 hours at most.
Sales
The sales team will be the initial connection between the customer and EVAS. When a
customer contacts EVAS, sales team members will work to make sure that the customer is
confident that the service is the best choice for his or her needs. Customers will choose a
budget for their project and sales team members will work within the confines of that budget
to create the audio system for the customer. EVAS has tiers that affect the price of each audio
configuration. Factors that affect each tier are the quality of audio equipment chosen by the
customer, time needed to install the audio system, number of seats in the vehicle and other
factors such as sales or promotions taking place at time of purchase. EVAS will break tiers into
different categories in which affect the quality of the configuration being installed in a vehicle.
The sales associate will follow a step-by-step process in which takes a customer through the
selection of type of vehicle, number of seats, number of speakers in each audio “environment,”
and brand of equipment. Based on these steps, the customer will have a quote and an
estimated time for installation.
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Exit Strategy
The owner has no intentions to exit the market and will continue to grow the vision and reach
of the company unless market conditions suggest that the business is no longer viable or
sustainable.
In the event that the market conditions become unlivable, the owner will start by liquidating
assets at resale values and downsizing. Downsizing will include laying off employees, and
cutting hours of operations. The exit of the market will eventually led to liquidation of all assets
at resale value and voiding leasing agreement at place of establishment.
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Milestone Schedule
May 2016 – Graduate from Entrepreneurial Management Program with
Bachelors of Science
May – June 2016 – Obtain capital, leasing space, website development and
establish Environmental Audio Systems, LLC
July – September 2016 – Start hiring processes and begin filling leasing
space with furniture and equipment
October – December 2016 – Start training for employees, launch website,
and begin marketing for pre-operations
January – February 2017 – Finalize training for employees, order first
month’s inventory
March 2017 – Open doors for operations, and host grand opening ceremony
January 2017 – Start normal operations
January 2020 – Design/prototyping and feasibility analysis for home theater
market
January 2021 – Given feasibility, enter home theater installation market
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Critical Risks
Supplier Relationships
It is highly important in the aftermarket audio industry for distributors to have solid
relationships with their suppliers. The suppliers can make or break a retail company. 48 EVAS
will acquire relationships with its vendors that will give the Company the best prices in order to
compete with other retailers’ prices. It is also important for a retailer to build relationships with
vendors who police their online sales as customers will often buy from Amazon or eBay,
because some vendors do not maintain limits on prices that their products can be sold at. 49
Customer Service
High quality relationships with customers are perhaps the most important factors to success in
the aftermarket audio industry. It is key that EVAS build its relations with its customers and that
it displays these good relationships to its potential customers. EVAS is more than a typical
installation company in that its mission is to create better environments for those who have
disabilities that make it difficult for individuals to remain comfortable in vehicles. In order to
gain the trust of its customers, EVAS will need to ensure that it builds rapport with its
community. The importance of providing high quality and effective audio installations is also
very critical to success in this industry.
Life of Vehicles
Vehicles do not last forever. The average life expectancy of today’s vehicles is 8 years or
150,000 miles.50 To combat this critical risk, the Company will encourage customers to wait
until they have purchased a newer vehicle to consult EVAS or will encourage customers to
install the system into the customers’ newest vehicle. The Company will give discounts to
repeat customers who have purchased from EVAS and then choose the Company to install a
system in another vehicle. EVAS will work towards developing its systems to be more “mobile”
so that they can be transferred from vehicle to vehicle in the scenario that customers purchase
a new vehicle after installing EVAS’ system.
48
Interview with Greg Murphy, Owner of Xtreme Vehicle Design, on September 30, 2015. 49
Interview with Vance Maxwell, Owner of Auto Outfitters, on October 14, 2015. 50 What's the life expectancy of my car? (2006). Retrieved March 25, 2016, from
http://www.nbcnews.com/id/12040753/ns/business-consumer_news/t/whats-life-expectancy-my-car/#.VvX1efkrKUk
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Servicing
Audio components are electro-mechanical devices and are prone to wear and tear. EVAS will
provide 3 year warranties on its installations that allow customers to have their systems
serviced free of charge.
Patenting
The system that EVAS designs are not patentable.51 EVAS will keep tabs on the best technology
in the industry and constantly change its designs and inputs to stay ahead of the competition.
The Company’s approach to it market and community engagement will also be a differentiating
factor that keeps the Company ahead of the game.
Vehicle Manufacturing
Luxury features in vehicles will always live as a “trickled-down” technology. Features that are
only available in high-end luxury vehicles will always find their way into the midst of more
modest, lower-end vehicles. Manufacturers strive to find ways of making these features more
affordable and cheaper to produce. Because a system such as EVAS’ “environmental audio” is
already being sold in luxury vehicles such as BMW, it is only a matter of time before these
systems are available to vehicles at lower price points. It is critical that EVAS establishes its
brand as a community leader and outreach to those in need. The relationships that EVAS
creates in the market will be the factor that prevents the vehicle manufacturers from taking
control of the market.
51
Meeting with Charles P. Schmal, patent attorney at Woodard, Emhardt, Moriarty, McNett and Henry LLP in Fall of 2014.
Page | 58
Design/Prototypes
Every design that EVAS creates will be different for each customer. Every person will have
different needs and the Company will do its best to meet those needs for every customer.
While every person will have different desires, however, the basic design of EVAS’ audio
systems will derive from the same template.
As with all vehicle audio, the sound must come from a source. The source of vehicle audio is
held within the Head Unit. The head unit is where the driver controls the volume, equalization
(in higher-end models), source of audio (FM, AM, CD, USB), radio station programming, clock,
balance and fade. The head unit is the “brain” of vehicle audio. EVAS will not modify the head
unit of its customers’ vehicles unless requested to do so by the customer. Newer vehicles are
designed with head units that integrate other features of the vehicle such as the heating and air
conditioning systems. Newer vehicles are becoming more and more complex and stereo head
units are at the center of these transformations.
Factory head units installed into today’s vehicles are designed to only work with the audio
systems installed in those vehicles. EVAS will use a Line Output Converter, such as the product
shown below, to convert vehicle head unit output into a usable signal for aftermarket
components.
Figure 4: This Scosche Line Output Converter can be purchased for roughly $20 on Crutchfield.com
From the head unit, the signal will be split using Y-cable splitters. Each signal has a right and a
left channel, thus creating stereo sound in the automobile. Both the right and left channels will
need to be split four ways in order to give each seat its own “environment.” When splitting an
audio signal, the voltage of the signal is also split, causing less amplification to the sound
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volume.52 The eight separate left and right channels will need to be amplified. Because each
person will be receiving his or her own separate audio signal, the power sent to each
“environment” will not need to be that of which an audio system in a whole-vehicle setup
would be. EVAS will use smaller, compact, lower-wattage amplifiers to feed each audio
environment. The Company will place these amplifiers to the customer’s desired location, but
for the purpose of visual aid, this business plan will indicate that the amplifiers are being placed
into the trunk of the vehicle. The amplifier is where the audio signal’s power is determined.
Adding more voltage to the signal will increase the amplitude, thus increasing the volume.
Potentiometers will be used (voltage divider with an adjustable knob) to allow each passenger
to adjust the audio volume. A potentiometer adjusts the gain of the amplification circuit for
each seat, thus modifying the amplitude of the output signal.53 EVAS will use
Acoustic padding manufactured by Auralex will be used to capture any unwanted sound
traveling inside the cabin of the vehicle. Auralex’s Sheetblok is a perfect tool for this
application. This product is roughly an inch think and has adhesive for which to be applied to
surfaces. EVAS will apply Sheetlblok under the headliner of vehicles and other various places
inside the cabin of the vehicle to prevent audio output from one environment inhibiting the
experience for a passenger in another. The diagram below shows the design for the
Environmental Audio System.
Schematics
Figure 5:
52 How To Hook Up Y Splitters For Car Audio / Better Explained. (n.d.). Retrieved February 28, 2016, from https://www.youtube.com/watch?v=boO3oJS6qkE 53
Vance Blazier, former electrician and electronics engineer.
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Please visit the Financials Cost of Goods Sold section in Key Financial Assumptions to see the
cost of each component being used in the fabrication of EVAS’ audio systems. The following is a
list of parts being used in the systems.
The same speakers and tweeters from JBL will be used for both tiers of stereo systems. 10 inch
subwoofers will be used for the premier tier and placed underneath the seats, while in the
standard tier, no subwoofers will be used. The figure below shows the breakdown of the
components needed for the two tiers of audio systems. As stated in the Cost of Goods Sold
section in the Key Financial Assumptions section, the equipment in each design can change
based on the customer’s wants. However, this table shows a breakdown of the template used
for each tier.
Figure 6:
Audio Equipment
Tier:
Premier Quantity
JBL GX-A604 Amplifier 4
Auralex Sheetblok (per sq. ft.) Acoustic foam 6
Scosche SLC4 Line Output Converter Line output converter 1
JBL GT7-6 (pair) Speakers 16
JBL GTO19T (pair) Tweeters 8
JBL S2-1024 Subwoofers 4
Stinger PRO Series 14 Guage Wire (per ft.) Wiring 20
EFX Remote Level Control Potentiometer 3
Standard
JBL GX-A604 Amplifier 4
Auralex Sheetblok (per sq. ft.) Acoustic foam 6
Scosche SLC4 Line Output Converter Line output converter 1
JBL GT7-6 (pair) Speakers 8
JBL GTO19T (pair) Tweeters 8
Stinger PRO Series 14 Guage Wire (per ft.) Wiring 20
EFX Remote Level Control Potentiometer 3
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Figure 7:
Figure 8:
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Figure 9:
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Financials
Key Financial Assumptions
Revenues
Revenues will be generated through sales of EVAS’ stereo systems and through admissions to
events held by EVAS, such as golf outings. EVAS will have two tiers of stereo systems which will
each generate a different value of sales. The two tiers are “premier” and “standard.” The type
of equipment, number of speakers, configuration and labor cost will all factor into the final
revenue for each customer. Starting revenues for the premier and standard tiers are as follows:
$7,000 and $6,000 respectively. Please refer to the Installations monthly breakdown in the
business plan to observe average revenues.
Cost of Goods Sold
The cost of goods sold will be determined by the equipment requested from the customer, the
number of speakers needed to create the desired audio system and the time needed to install
the system. The table, Figure 12, shows the typical costs of goods needed for each tier of
system. These costs can change based on any modifications the customer wants to make to the
design, but this table shows the template for each tier and the equipment costs for each
component. Chart 8:
Cost of Goods Sold
Audio Equipment
Tier:
Premier Price per Unit Quantity Total Cost
JBL GX-A604 Amplifier 107.14$ 4 428.54$
Auralex Sheetblok (per sq. ft.) Acoustic foam 2.38 6 14.25
Scosche SLC4 Line Output Converter Line output converter 14.28 1 14.28
JBL GT7-6 (pair) Speakers 28.57 16 457.09
JBL GTO19T (pair) Tweeters 31.43 8 251.40
JBL S2-1024 Subwoofers 71.42 4 285.69
Stinger PRO Series 14 Guage Wire (per ft.) Wiring 0.65 20 13.00
EFX Remote Level Control Potentiometer 10.71$ 3 32.12$
Total 1,496.36$
Standard
JBL GX-A604 Amplifier 107.14$ 4 428.54$
Auralex Sheetblok (per sq. ft.) Acoustic foam 2.38 6 14.25
Scosche SLC4 Line Output Converter Line output converter 14.28 1 14.28
JBL GT7-6 (pair) Speakers 28.57 8 228.54
JBL GTO19T (pair) Tweeters 31.43 8 251.40
0.00
Stinger PRO Series 14 Guage Wire (per ft.) Wiring 0.65 20 13.00
EFX Remote Level Control Potentiometer 10.71$ 3 32.12$
Total 982.14$
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Accounting Expenses
EVAS will hire an outside accounting firm to fulfill its accounting operations and auditing.
Approximate quotes from Sponsel CPA Group, LLC indicated that the firm will usually charge
between $7,000 and $10,000 per year to fulfill a small business’ accounting operations.54
Depreciation
EVAS will have assets that will depreciate over time. The brick-and-mortar building that EVAS
will house its operations will be rented and therefore, no depreciation can be expensed.
Depreciation will be done using the straight-line method. All equipment such as office
equipment, installation equipment and computers will be depreciated using the straight-line
method. EVAS also will have interactive displays that will depreciate.
Insurance Expense
All of EVAS’ assets will be covered by Nationwide commercial insurance coverages. In order to
obtain a projection of the expenses, Adam will interview a Nationwide representative in order
to receive an accurate quote.
Internet and Phone Expenses
Internet and Phone will be acquired through Comcast and will cost the company $89.90 per
month. At suggestion of Ted Baker, owner of Innovation Connector in Muncie, IN, $250 should
be allotted for phone and internet expense to acquire the highest quality service. High quality
internet and phone are salient to the business.
Marketing Expenses
Marketing will play a huge role in EVAS’ operations. In order to reach the public and get
consumers to experience EVAS’ sound systems, marketing will need a budget of $500 per
month. This $500 will be used to fund marketing events such as golf outings, community
outreach and community events. Please see the Marketing Plan in the Marketing section for
details on how the marketing plan will be executed.
54
Quote from Chris Sargent, associate at Sponsel CPA, LLC on March 14, 2016.
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Every yearly quarter, 300 promotional brochures will be purchased, costing roughly $150 from
vistaprint.com. Please visit the Marketing Plan for more information on the benefits of these
brochures.
EVAS will also incur additional costs from product brochure printing at the same rate as the
promotional brochures. Product brochures will be purchased every month, creating additional
expenditures of $150 to the marketing expense account. In the first sixth months of operations
and during the startup period, $4,000 will be allotted to spend on marketing expenses. These
expenses will be used to acquire strategic partners and to promote the business. This expense
will decrease gradually throughout the remaining of year one and into year two, where the
expenses will level off to $650 per month.
Miscellaneous Expenses
Certain expenses will be classified as miscellaneous expenses. These expenses will include
assorted expenses such as travel, emergencies or broken assets. EVAS will allot $300 per month
for miscellaneous expenses.
Office Supplies Expenses
EVAS will incur expenses each month to pay for its supplies needed in the administration office.
These supplies will include items such as paper, ink, pens, etc. EVAS will allow a budget of $250
per month set aside for these supplies.
Personnel Expense
Personnel Expenses are based on the number of days, hours, and wages expected of
employees. These variables have been obtained through industry norms, and research. The
president of the company will also receive a wage of $50,000 per year. A Marketing
Representative will also be hired at a salary of $40,000 per year. Dental and Vision benefits will
be provided for this full-time Marketing Representative. It will be assumed that these benefits
will cost the Company $10,000 per yer.
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Personnel Taxes
Salary taxes expenses will vary month-to-month based on hours worked by employees. Each
salary tax expense will be calculated as a rate of the total salary expense as follows: state
unemployment tax of 5.4%, federal unemployment tax of 0.7%, Social Security tax of 6.2% and
a Medicare tax of 1.45%. Only the first $7,000 each year will be eligible for state and federal
unemployment taxes.
Quality Control Expenses
Any expenses that the company incurs as a result of replacing, refurbishing, or shipping
defective parts will be recorded as Quality Control. EVAS will allot $500 to this expense account.
Rent Expenses
The company will rent a facility at 16625 Mercantile Blvd in Noblesville, IN with an area of
space measuring 2000 sq. ft. This rent expense will be around $2,500 per month based on a
yearly rent rate projection of $15 per sq. ft. The facility will house all inventory and operations
of the business. This rate was estimated based on research of rental rates in the market.
Utilities Expenses
Heating/cooling, water, and electricity will be projected at approximately $500 per month.
Website Maintenance
EVAS’ website will be $10 per year for the domain name as well as $29 per month to maintain
the functions of the website. EVAS will outsource for website maintenance to Weebly.com.
Interest Expense
Interest will be paid monthly for loans needed for start-up. A loan will be acquired through J.P.
Morgan Chase. The loan will amount to $80,000 and will have an annual interest rate of 3%.
This interest expense will amount to roughly $200 for the first month and will decrease each
addition month because the principal of the loan will be paid off monthly.
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State Income Taxes
Total Income EBT will be taxed at a 5% tax rate.
Federal Income Taxes
Total Income after State Income Taxes will be taxed at a rate of 25%.
Key Balance Sheet Assumptions
Current Assets
Accounts Receivable
With recent changes in health care reform, such as Obama Care, it is now mandatory for U.S.
citizens to acquire some form of health care coverage. EVAS’ revenues will be acquired as up-
front cash and carry transactions or will be funded through health insurance companies.
Because of many factors related to the number of insured persons with health care, and the
ability for EVAS to get approval from health insurance companies, an assumption that 75% of all
purchases will be funded through health insurance. When dealing with insurance companies,
cash is not available at the moment of transaction. It can take up to 6-8 weeks for the funds to
be made available to a medical center in the form of Cash.55 For the purpose of repayment of
A/R, EVAS will assume that these payments will be made every two months.
Inventory
EVAS will keep $15,000 of inventory on hand at all times to ensure that the Company has
enough supply to meet all demand.
Office Equipment
The company will obtain office equipment such as desks, computers, printers, and filing
cabinets to help organize the operations of the business. $10,000 will be set aside for office
equipment purchases during the start-up period.
55
Phone Interview with Melissa Blazier, LPN on March 23, 2016.
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Installation Equipment The company will invest its cash into assets such as handheld tools, software and special
computing devices to aid in the installation of audio systems. $10,000 will be set aside for
purchasing of installation equipment and tools during the start-up period.
Accounts Payable
EVAS will occasionally need to purchase equipment or inventory on credit. The amount of credit
sales performed during the months will be researched through industry information to
determine industry norms on discount periods, and payment terms.
Start-up loan, J.P. Morgan Chase
The company will obtain a start-up loan through J.P. Morgan Chase financial services. The loan
will amount to $80,000 and will have an annual interest rate of 3%.
Capital Injection
The owner will invest an initial capital injection into the company of $10,000. These funds will
be used during start-up to acquire assets
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Financial Statements
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Income Statements
Startup Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total
Revenue
Installations 50,000$ 57,000$ 63,000$ 82,000$ 82,000$ 63,000$ 38,000$ 32,000$ 32,000$ 37,000$ 63,000$ 56,000$ 655,000$
Total Revenue -$ 50,000$ 57,000$ 63,000$ 82,000$ 82,000$ 63,000$ 38,000$ 32,000$ 32,000$ 37,000$ 63,000$ 56,000$ 655,000$
-$
Cost of Revenue -$
Materials Expenses 8,886$ 10,382$ 11,364$ 14,825$ 14,825$ 11,364$ 6,921$ 5,939$ 5,939$ 6,407$ 11,364$ 9,868$ 118,083$
Gross Profit -$ 41,114$ 46,618$ 51,636$ 67,175$ 67,175$ 51,636$ 31,079$ 26,061$ 26,061$ 30,593$ 51,636$ 46,132$ 536,917$
Operating Expenses
Accounting Expenses 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 8,125$
Amortization Expense 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 16,000$
Depreciation 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 6,667$
Insurance Expense 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 6,500$
Internet and Phone Expenses 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 3,250$
LLC Formation 70$ 70$
Marketing Expenses 4,000$ 4,000$ 4,000$ 4,000$ 4,000$ 4,000$ 4,000$ 2,500$ 2,500$ 2,500$ 2,500$ 2,000$ 2,000$ 42,000$
Miscellaneous 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 3,900$
Office Supplies 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 3,250$
Quality Control Expenses 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 6,500$
Rent Expenses 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 32,500$
Personnel Taxes 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 19,055$
Personnel Expense 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 154,918$
Security System 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 481$
Utilities Expenses 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 6,500$
Website Maintenance 40$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 398$
Total Operating Expenses 22,955$ 24,763$ 24,763$ 24,763$ 24,763$ 24,763$ 24,763$ 23,263$ 23,263$ 23,263$ 23,263$ 22,763$ 22,763$ 310,114$
Operating Income EBIT (22,955)$ 16,351$ 21,855$ 26,873$ 42,412$ 42,412$ 26,873$ 7,815$ 2,798$ 2,798$ 7,330$ 28,873$ 23,369$ 226,803$
Interest Expense 200$ 197$ 193$ 190$ 187$ 183$ 180$ 177$ 173$ 170$ 167$ 163$ 160$ 2,340$
Operating Income EBT (23,155)$ 16,154$ 21,661$ 26,683$ 42,225$ 42,229$ 26,693$ 7,639$ 2,624$ 2,628$ 7,163$ 28,709$ 23,209$ 224,463$
State Income Taxes -$ 808$ 1,083$ 1,334$ 2,111$ 2,111$ 1,335$ 382$ 131$ 131$ 358$ 1,435$ 1,160$ 12,381$
Income Federal Taxes -$ 202$ 271$ 334$ 528$ 528$ 334$ 95$ 33$ 33$ 90$ 359$ 290$ 3,095$
Net Income (23,155)$ 15,145$ 20,308$ 25,015$ 39,586$ 39,589$ 25,024$ 7,161$ 2,460$ 2,463$ 6,715$ 26,915$ 21,758$ 208,987$
Environmental Audio SystemsIncome Statement (2017)
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Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total
Revenue
Installations 65,000$ 74,100$ 81,900$ 106,600$ 106,600$ 81,900$ 49,400$ 41,600$ 41,600$ 48,100$ 81,900$ 72,800$ 851,500$
Total Revenue 65,000$ 74,100$ 81,900$ 106,600$ 106,600$ 81,900$ 49,400$ 41,600$ 41,600$ 48,100$ 81,900$ 72,800$ 851,500$
-$
Cost of Revenue -$
Materials Expenses 11,551$ 13,496$ 14,773$ 19,272$ 19,272$ 14,773$ 8,998$ 7,721$ 7,721$ 8,329$ 14,773$ 12,828$ 153,508$
Gross Profit 53,449$ 60,604$ 67,127$ 87,328$ 87,328$ 67,127$ 40,402$ 33,879$ 33,879$ 39,771$ 67,127$ 59,972$ 697,992$
Operating Expenses
Accounting Expenses 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 7,500$
Amortization Expense 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 16,000$
Depreciation 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 6,667$
Insurance Expense 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 6,000$
Internet and Phone Expenses 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 3,000$
LLC Formation
Marketing Expenses 1,500$ 1,500$ 1,000$ 1,000$ 1,000$ 1,000$ 650$ 650$ 800$ 650$ 650$ 800$ 11,200$
Miscellaneous 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 3,600$
Office Supplies 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 3,000$
Quality Control Expenses 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 6,000$
Rent Expenses 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 30,000$
Personnel Taxes 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 17,589$
Personnel Expense 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 143,002$
Security System 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 444$
Utilities Expenses 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 6,000$
Website Maintenance 40$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 368$
Total Operating Expenses 22,273$ 22,263$ 21,763$ 21,763$ 21,763$ 21,763$ 21,413$ 21,413$ 21,563$ 21,413$ 21,413$ 21,563$ 260,370$
Operating Income EBIT 31,175$ 38,340$ 45,363$ 65,565$ 65,565$ 45,363$ 18,989$ 12,466$ 12,316$ 18,358$ 45,713$ 38,409$ 437,622$
Interest Expense 157$ 153$ 150$ 147$ 143$ 140$ 137$ 133$ 130$ 127$ 123$ 120$ 1,660$
Operating Income EBT 31,019$ 38,187$ 45,213$ 65,418$ 65,421$ 45,223$ 18,852$ 12,332$ 12,186$ 18,231$ 45,590$ 38,289$ 435,962$
State Income Taxes 1,551$ 1,909$ 2,261$ 3,271$ 3,271$ 2,261$ 943$ 617$ 609$ 912$ 2,280$ 1,914$ 21,798$
Income Federal Taxes 388$ 477$ 565$ 818$ 818$ 565$ 236$ 154$ 152$ 228$ 570$ 479$ 5,450$
Net Income 29,080$ 35,800$ 42,388$ 61,329$ 61,332$ 42,397$ 17,674$ 11,562$ 11,424$ 17,091$ 42,741$ 35,896$ 408,715$
Environmental Audio SystemsIncome Statement (2017)
Environmental Audio SystemsIncome Statement (2018)
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Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total
Revenue
Installations 81,250$ 92,625$ 102,375$ 133,250$ 133,250$ 102,375$ 61,750$ 52,000$ 52,000$ 60,125$ 102,375$ 91,000$ 1,064,375$
Total Revenue 81,250$ 92,625$ 102,375$ 133,250$ 133,250$ 102,375$ 61,750$ 52,000$ 52,000$ 60,125$ 102,375$ 91,000$ 1,064,375$
-$
Cost of Revenue -$
Materials Expenses 14,439$ 16,871$ 18,467$ 24,090$ 24,090$ 18,467$ 11,247$ 9,651$ 9,651$ 10,411$ 18,467$ 16,035$ 191,885$
Gross Profit 66,811$ 75,754$ 83,908$ 109,160$ 109,160$ 83,908$ 50,503$ 42,349$ 42,349$ 49,714$ 83,908$ 74,965$ 872,490$
Operating Expenses
Accounting Expenses 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 625$ 7,500$
Amortization Expense 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 1,333$ 16,000$
Depreciation 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 556$ 6,667$
Insurance Expense 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 6,000$
Internet and Phone Expenses 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 3,000$
LLC Formation
Marketing Expenses 650$ 650$ 800$ 650$ 650$ 800$ 650$ 650$ 800$ 650$ 650$ 800$ 8,400$
Miscellaneous 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 300$ 3,600$
Office Supplies 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 3,000$
Quality Control Expenses 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 6,000$
Rent Expenses 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 30,000$
Personnel Taxes 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 1,466$ 17,589$
Personnel Expense 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 11,917$ 143,002$
Security System 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 37$ 444$
Utilities Expenses 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 500$ 6,000$
Website Maintenance 40$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 30$ 368$
Total Operating Expenses 21,423$ 21,413$ 21,563$ 21,413$ 21,413$ 21,563$ 21,413$ 21,413$ 21,563$ 21,413$ 21,413$ 21,563$ 257,570$
Operating Income EBIT 45,388$ 54,341$ 62,345$ 87,747$ 87,747$ 62,345$ 29,090$ 20,936$ 20,786$ 28,300$ 62,495$ 53,402$ 614,920$
Interest Expense 117$ 113$ 110$ 107$ 103$ 100$ 97$ 93$ 90$ 87$ 83$ 80$ 1,180$
Operating Income EBT 45,271$ 54,228$ 62,235$ 87,640$ 87,643$ 62,245$ 28,993$ 20,842$ 20,696$ 28,214$ 62,412$ 53,322$ 613,740$
State Income Taxes 2,264$ 2,711$ 3,112$ 4,382$ 4,382$ 3,112$ 1,450$ 1,042$ 1,035$ 1,411$ 3,121$ 2,666$ 30,687$
Income Federal Taxes 566$ 678$ 778$ 1,095$ 1,096$ 778$ 362$ 261$ 259$ 353$ 780$ 667$ 7,672$
Net Income 42,441$ 50,839$ 58,345$ 82,162$ 82,166$ 58,355$ 27,181$ 19,540$ 19,402$ 26,450$ 58,511$ 49,989$ 575,381$
Environmental Audio SystemsIncome Statement (2017)
Environmental Audio SystemsIncome Statement (2019)
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Balance Sheets
Startup Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets
Current Assets
Cash 31,845 10,046 25,659 3,980 72,621 51,266 152,596 131,813 186,579 165,598 193,119 173,339 228,653
Accounts Receivable 37,500 42,750 90,000 61,500 123,000 47,250 75,750 24,000 48,000 27,750 75,000 42,000
Inventory 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000
Total Current Assets 46,845 62,546 83,409 108,980 149,121 189,266 214,846 222,563 225,579 228,598 235,869 263,339 285,653
Fixed Assets
Office equipment 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Installation Equipment 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Less: Accumulated Depreciation (556) (1,111) (1,667) (2,222) (2,778) (3,333) (3,889) (4,444) (5,000) (5,556) (6,111) (6,667)
Total Fixed Assets 20,000 19,444 18,889 18,333 17,778 17,222 16,667 16,111 15,556 15,000 14,444 13,889 13,333
Total Assets 66,845 81,990 102,298 127,313 166,899 206,489 231,513 238,674 241,135 243,598 250,313 277,228 298,987
Liabilities
Current Liabilities
Accounts Payable
Total Current Liabilities - - - - - - - - - - - - -
Long-term liabilities
Start-up loan, J.P. Morgan Chase 80,000 78,667 77,333 76,000 74,667 73,333 72,000 70,667 69,333 68,000 66,667 65,333 64,000
Amortization - 1,333.33 2,666.67 4,000.00 5,333.33 6,666.67 8,000.00 9,333.33 10,666.67 12,000.00 13,333.33 14,666.67 16,000.00
Total Long-term Liabilities 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000
Total Liabilities 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000
Owner's Equity
Capital Injection 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Retained Earnings (23,155) (8,010) 12,298 37,313 76,899 116,489 141,513 148,674 151,135 153,598 160,313 187,228 208,987
Total Owner's Equity (13,155) 1,990 22,298 47,313 86,899 126,489 151,513 158,674 161,135 163,598 170,313 197,228 218,987
Total Liabilities and Owner's Equity 66,845 81,990 102,298 127,313 166,899 206,489 231,513 238,674 241,135 243,598 250,313 277,228 298,987
Environmental Audio SystemsBalance Sheet (2017)
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Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets
Current Assets
Cash 209,539 294,645 276,163 399,473 381,411 504,313 485,493 534,660 515,440 564,287 546,158 644,034
Accounts Receivable 90,750 42,000 103,425 42,000 121,950 42,000 79,050 42,000 73,200 42,000 103,425 42,000
Inventory 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000
Total Current Assets 315,289 351,645 394,588 456,473 518,361 561,313 579,543 591,660 603,640 621,287 664,583 701,034
Fixed Assets
Office equipment 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Installation Equipment 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Less: Accumulated Depreciation (7,222) (7,778) (8,333) (8,889) (9,444) (10,000) (10,556) (11,111) (11,667) (12,222) (12,778) (13,333)
Total Fixed Assets 12,778 12,222 11,667 11,111 10,556 10,000 9,444 8,889 8,333 7,778 7,222 6,667
Total Assets 328,067 363,867 406,254 467,584 528,916 571,313 588,987 600,549 611,973 629,065 671,805 707,701
Liabilities
Current Liabilities
Accounts Payable
Total Current Liabilities - - - - - - - - - - - -
Long-term liabilities
Start-up loan, J.P. Morgan Chase 62,667 61,333 60,000 58,667 57,333 56,000 54,667 53,333 52,000 50,667 49,333 48,000
Amortization 17,333.33 18,666.67 20,000.00 21,333.33 22,666.67 24,000.00 25,333.33 26,666.67 28,000.00 29,333.33 30,666.67 32,000.00
Total Long-term Liabilities 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000
Total Liabilities 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000
Owner's Equity
Capital Injection 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Retained Earnings 238,067 273,867 316,254 377,584 438,916 481,313 498,987 510,549 521,973 539,065 581,805 617,701
Total Owner's Equity 248,067 283,867 326,254 387,584 448,916 491,313 508,987 520,549 531,973 549,065 591,805 627,701
Total Liabilities and Owner's Equity 328,067 363,867 406,254 467,584 528,916 571,313 588,987 600,549 611,973 629,065 671,805 707,701
Environmental Audio SystemsBalance Sheet (2018)
Environmental Audio SystemsBalance Sheet (2017)
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Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets
Current Assets
Cash 626,094 738,426 720,545 880,045 862,828 1,021,676 1,003,100 1,069,508 1,050,465 1,116,471 1,098,757 1,226,083
Accounts Receivable 102,938 42,000 118,781 42,000 141,938 42,000 88,313 42,000 81,000 42,000 118,781 42,000
Inventory 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000
Total Current Assets 744,031 795,426 854,327 937,045 1,019,766 1,078,676 1,106,413 1,126,508 1,146,465 1,173,471 1,232,538 1,283,083
Fixed Assets
Office equipment 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Installation Equipment 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Less: Accumulated Depreciation (13,889) (14,444) (15,000) (15,556) (16,111) (16,667) (17,222) (17,778) (18,333) (18,889) (19,444) (20,000)
Total Fixed Assets 6,111 5,556 5,000 4,444 3,889 3,333 2,778 2,222 1,667 1,111 556 -
Total Assets 750,143 800,981 859,327 941,489 1,023,655 1,082,009 1,109,190 1,128,730 1,148,132 1,174,582 1,233,093 1,283,083
Liabilities
Current Liabilities
Accounts Payable
Total Current Liabilities - - - - - - - - - - - -
Long-term liabilities
Start-up loan, J.P. Morgan Chase 46,667 45,333 44,000 42,667 41,333 40,000 38,667 37,333 36,000 34,667 33,333 32,000
Amortization 33,333.33 34,666.67 36,000.00 37,333.33 38,666.67 40,000.00 41,333.33 42,666.67 44,000.00 45,333.33 46,666.67 48,000.00
Total Long-term Liabilities 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000
Total Liabilities 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000
Owner's Equity
Capital Injection 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Retained Earnings 660,143 710,981 769,327 851,489 933,655 992,009 1,019,190 1,038,730 1,058,132 1,084,582 1,143,093 1,193,083
Total Owner's Equity 670,143 720,981 779,327 861,489 943,655 1,002,009 1,029,190 1,048,730 1,068,132 1,094,582 1,153,093 1,203,083
Total Liabilities and Owner's Equity 750,143 800,981 859,327 941,489 1,023,655 1,082,009 1,109,190 1,128,730 1,148,132 1,174,582 1,233,093 1,283,083
Environmental Audio SystemsBalance Sheet (2019)
Environmental Audio SystemsBalance Sheet (2017)
P a g e | 76
Statement of Cash Flows
Startup Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Beginning Cash Balance -$ 31,845$ 10,046$ 25,659$ 3,980$ 72,621$ 51,266$ 152,596$ 131,813$ 186,579$ 165,598$ 193,119$ 173,339$
Start-up loan, J.P. Morgan Chase 80,000
Capital Injection 10,000
Revenues - 50,000 57,000 63,000 82,000 82,000 63,000 38,000 32,000 32,000 37,000 63,000 56,000
(37,500) (5,250) (47,250) 28,500 (61,500) 75,750 (28,500) 51,750 (24,000) 20,250 (47,250) 33,000
90,000 12,500 51,750 15,750 110,500 20,500 138,750 9,500 83,750 8,000 57,250 15,750 89,000
Purchase of equipment (20,000)
Purchase of Inventory (15,000)
(8,886) (10,382) (11,364) (14,825) (14,825) (11,364) (6,921) (5,939) (5,939) (6,407) (11,364) (9,868)
(625) (625) (625) (625) (625) (625) (625) (625) (625) (625) (625) (625) (625)
Amortization Expense (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333)
(500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500)
Interest Expense (200) (197) (193) (190) (187) (183) (180) (177) (173) (170) (167) (163) (160)
(250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250)
(70) - - - - - - - - - - - -
(4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (2,500) (2,500) (2,500) (2,500) (2,000) (2,000)
(300) (300) (300) (300) (300) (300) (300) (300) (300) (300) (300) (300) (300)
(250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250)
- - - - - - - - - - - - -
(500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500)
(2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500)
(1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466)
(11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917)
(37) (37) (37) (37) (37) (37) (37) (37) (37) (37) (37) (37) (37)
- - - - - - - - - - - - -
- - - - - - - - - - - - -
(500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500)
(40) (30) (30) (30) (30) (30) (30) (30) (30) (30) (30) (30) (30)
- (808) (1,083) (1,334) (2,111) (2,111) (1,335) (382) (131) (131) (358) (1,435) (1,160)
- (202) (271) (334) (528) (528) (334) (95) (33) (33) (90) (359) (290)
(58,155) (34,300) (36,137) (37,429) (41,858) (41,855) (37,420) (30,283) (28,984) (28,981) (29,729) (35,529) (33,686)
Net Cash provided by Operating Activities 31,845 (21,800) 15,613 (21,679) 68,642 (21,355) 101,330 (20,783) 54,766 (20,981) 27,521 (19,779) 55,314
31,845$ 10,046$ 25,659$ 3,980$ 72,621$ 51,266$ 152,596$ 131,813$ 186,579$ 165,598$ 193,119$ 173,339$ 228,653$
Accounting Expenses
Insurance Expense
Internet and Phone Expenses
Activity from Operations:
Cash Inflows:
Cost of Goods Sold
Cash Out Flows:
Training Expenses
LLC Formation
Marketing Expenses
Miscellaneous
Office Supplies
Property Maintenance
Quality Control Expenses
Rent Expenses
Salary Taxes
Salary Expense
Security System
Shipping and Receiving
Ending Cash
Utilities Expenses
Website Maintenance
State Income Taxes
Income Federal Taxes
Statement of Cash FlowsEnvironmental Audio Systems
For the Year Ended December 31, 2017
Increase (Decrease) in Cash and Cash Equivalents
Total Cash In flows
Less: Change in Accounts Receivable
P a g e | 77
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Beginning Cash Balance 228,653$ 209,539$ 294,645$ 276,163$ 399,473$ 381,411$ 504,313$ 485,493$ 534,660$ 515,440$ 564,287$ 546,158$
Start-up loan, J.P. Morgan Chase
Capital Injection
Revenues 65,000 74,100 81,900 106,600 106,600 81,900 49,400 41,600 41,600 48,100 81,900 72,800
(48,750) 48,750 (61,425) 61,425 (79,950) 79,950 (37,050) 37,050 (31,200) 31,200 (61,425) 61,425
16,250 122,850 20,475 168,025 26,650 161,850 12,350 78,650 10,400 79,300 20,475 134,225
Purchase of equipment
Purchase of Inventory
(11,551) (13,496) (14,773) (19,272) (19,272) (14,773) (8,998) (7,721) (7,721) (8,329) (14,773) (12,828)
(625) (625) (625) (625) (625) (625) (625) (625) (625) (625) (625) (625)
Amortization Expense (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333)
(500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500)
Interest Expense (157) (153) (150) (147) (143) (140) (137) (133) (130) (127) (123) (120)
(250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250)
- - - - - - - - - - - -
(1,500) (1,500) (1,000) (1,000) (1,000) (1,000) (650) (650) (800) (650) (650) (800)
(300) (300) (300) (300) (300) (300) (300) (300) (300) (300) (300) (300)
(250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250)
- - - - - - - - - - - -
(500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500)
(2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500)
(1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466)
(11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917)
(37) (37) (37) (37) (37) (37) (37) (37) (37) (37) (37) (37)
- - - - - - - - - - - -
- - - - - - - - - - - -
(500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500)
(40) (30) (30) (30) (30) (30) (30) (30) (30) (30) (30) (30)
(1,551) (1,909) (2,261) (3,271) (3,271) (2,261) (943) (617) (609) (912) (2,280) (1,914)
(388) (477) (565) (818) (818) (565) (236) (154) (152) (228) (570) (479)
(35,364) (37,744) (38,957) (44,715) (44,712) (38,947) (31,170) (29,483) (29,620) (30,453) (38,604) (36,349)
Net Cash provided by Operating Activities (19,114) 85,106 (18,482) 123,310 (18,062) 122,903 (18,820) 49,167 (19,220) 48,847 (18,129) 97,876
209,539$ 294,645$ 276,163$ 399,473$ 381,411$ 504,313$ 485,493$ 534,660$ 515,440$ 564,287$ 546,158$ 644,034$
Accounting Expenses
Insurance Expense
Internet and Phone Expenses
Activity from Operations:
Cash Inflows:
Cost of Goods Sold
Cash Out Flows:
Training Expenses
LLC Formation
Marketing Expenses
Miscellaneous
Office Supplies
Property Maintenance
Quality Control Expenses
Rent Expenses
Salary Taxes
Salary Expense
Security System
Shipping and Receiving
Ending Cash
Utilities Expenses
Website Maintenance
State Income Taxes
Income Federal Taxes
Statement of Cash FlowsEnvironmental Audio Systems
For the Year Ended December 31, 2017
Increase (Decrease) in Cash and Cash Equivalents
Total Cash In flows
Less: Change in Accounts Receivable
Statement of Cash FlowsEnvironmental Audio Systems
For the Year Ended December 31, 2018
Increase (Decrease) in Cash and Cash Equivalents
P a g e | 78
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Beginning Cash Balance 644,034$ 626,094$ 738,426$ 720,545$ 880,045$ 862,828$ 1,021,676$ 1,003,100$ 1,069,508$ 1,050,465$ 1,116,471$ 1,098,757$
Start-up loan, J.P. Morgan Chase
Capital Injection
Revenues 81,250 92,625 102,375 133,250 133,250 102,375 61,750 52,000 52,000 60,125 102,375 91,000
(60,938) 60,938 (76,781) 76,781 (99,938) 99,938 (46,313) 46,313 (39,000) 39,000 (76,781) 76,781
20,313 153,563 25,594 210,031 33,313 202,313 15,438 98,313 13,000 99,125 25,594 167,781
Purchase of equipment
Purchase of Inventory
(14,439) (16,871) (18,467) (24,090) (24,090) (18,467) (11,247) (9,651) (9,651) (10,411) (18,467) (16,035)
(625) (625) (625) (625) (625) (625) (625) (625) (625) (625) (625) (625)
Amortization Expense (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333) (1,333)
(500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500)
Interest Expense (117) (113) (110) (107) (103) (100) (97) (93) (90) (87) (83) (80)
(250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250)
- - - - - - - - - - - -
(650) (650) (800) (650) (650) (800) (650) (650) (800) (650) (650) (800)
(300) (300) (300) (300) (300) (300) (300) (300) (300) (300) (300) (300)
(250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250) (250)
- - - - - - - - - - - -
(500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500)
(2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500)
(1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466) (1,466)
(11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917) (11,917)
(37) (37) (37) (37) (37) (37) (37) (37) (37) (37) (37) (37)
- - - - - - - - - - - -
- - - - - - - - - - - -
(500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500) (500)
(40) (30) (30) (30) (30) (30) (30) (30) (30) (30) (30) (30)
(2,264) (2,711) (3,112) (4,382) (4,382) (3,112) (1,450) (1,042) (1,035) (1,411) (3,121) (2,666)
(566) (678) (778) (1,095) (1,096) (778) (362) (261) (259) (353) (780) (667)
(38,253) (41,231) (43,474) (50,532) (50,529) (43,465) (34,014) (31,905) (32,042) (33,119) (43,308) (40,455)
Net Cash provided by Operating Activities (17,941) 112,332 (17,880) 159,499 (17,216) 158,848 (18,576) 66,408 (19,042) 66,006 (17,715) 127,326
626,094$ 738,426$ 720,545$ 880,045$ 862,828$ 1,021,676$ 1,003,100$ 1,069,508$ 1,050,465$ 1,116,471$ 1,098,757$ 1,226,083$
Accounting Expenses
Insurance Expense
Internet and Phone Expenses
Activity from Operations:
Cash Inflows:
Cost of Goods Sold
Cash Out Flows:
Training Expenses
LLC Formation
Marketing Expenses
Miscellaneous
Office Supplies
Property Maintenance
Quality Control Expenses
Rent Expenses
Salary Taxes
Salary Expense
Security System
Shipping and Receiving
Ending Cash
Utilities Expenses
Website Maintenance
State Income Taxes
Income Federal Taxes
Statement of Cash FlowsEnvironmental Audio Systems
For the Year Ended December 31, 2017
Increase (Decrease) in Cash and Cash Equivalents
Total Cash In flows
Less: Change in Accounts Receivable
For the Year Ended December 31, 2019
Increase (Decrease) in Cash and Cash Equivalents
Statement of Cash FlowsEnvironmental Audio Systems
P a g e | 79
Appendix
Break Even Analysis
Monthly:
BEQ= Fixed Expenses/ (Selling price – Variable Costs)
= 14,157/ (6,300 – 1,239.25)
= 14,157/ 5,060.75
= 2.79 ~ 3 per month
Yearly:
BEQ= 170,496 / (5,060.75)
= 33.69 ~ 34 per year; EVAS will break even in month 4 of year 1.
$-
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
$300,000.00
$350,000.00
10 20 30 40 50
Am
ou
nt
in D
olla
rs
Quantity of Audio Systems
Break Even Analysis
Fixed Costs
Total Costs
Sales/Units Sold
P a g e | 80
Market Surveys
Initial Report Last Modified: 10/22/2015
1. Please specify your gender. # Answer
Response % 1 Male
103 86% 2 Female
17 14%
Total 120 100%
Statistic Value Min Value 1 Max Value 2 Mean 1.14 Variance 0.12 Standard Deviation 0.35 Total Responses 120
2. Please specify your age. # Answer
Response % 1 18-25
19 16% 2 26-35
19 16% 3 36-45
29 24% 4 46-55
37 31% 5 56-65
11 9% 6 66-75
5 4% 7 76 and older
0 0%
Total 120 100%
Statistic Value Min Value 1 Max Value 6 Mean 3.14 Variance 1.84 Standard Deviation 1.36 Total Responses 120
P a g e | 81
3. Please specify your household annual income. # Answer
Response % 1 $0-20,000
11 9%
2 $20,001-40,000
19 16%
3 $40,001-60,000
15 13%
4 $60,001-80,000
23 20%
5 $80,001-100,000
13 11%
6 $100,001-120,000
18 15%
7 $120,001-140,000
6 5%
8 $140,001 or more
12 10%
Total 117 100%
Statistic Value Min Value 1 Max Value 8 Mean 4.25 Variance 4.43 Standard Deviation 2.10 Total Responses 117
4. What type of vehicle do you drive on a daily basis? # Answer
Response % 1 Sedan
33 28% 2 Coupe
13 11%
3 Roadster (2 seat convertible)
0 0%
4 Four-seat Convertible
1 1%
5 SUV
26 22% 6 Mini-van
7 6% 7 Four-door truck
24 20% 8 Two-door truck
16 13%
Total 120 100%
P a g e | 82
Statistic Value Min Value 1 Max Value 8 Mean 4.43 Variance 7.17 Standard Deviation 2.68 Total Responses 120
5. How many times a week do you drive with family or friends in your
vehicle? # Answer
Response % 1 0
11 9% 2 1-3
65 54% 3 4-6
21 18% 4 6+
23 19%
Total 120 100%
Statistic Value Min Value 1 Max Value 4 Mean 2.47 Variance 0.82 Standard Deviation 0.91 Total Responses 120
6. Do your friends or family get frustrated by your music listening
habits while riding in your vehicle with you? # Answer
Response % 1 Never
44 37% 2 Rarely
48 40% 3 Sometimes
20 17%
4 Most of the Time
8 7%
5 Always
0 0%
Total 120 100%
P a g e | 83
Statistic Value Min Value 1 Max Value 4 Mean 1.93 Variance 0.80 Standard Deviation 0.90 Total Responses 120
7. How many people do you know who have a mental or neurological
condition that make them uncomfortable while riding in vehicles?
(These conditions may include but are not limited to Post Traumatic
Stress Disorder, down syndrome or anxiety). # Answer
Response % 1 0
84 70% 2 1-3
35 29% 3 4-6
0 0% 4 7+
1 1%
Total 120 100%
Statistic Value Min Value 1 Max Value 4 Mean 1.32 Variance 0.27 Standard Deviation 0.52 Total Responses 120
8. How many people do you know who are comforted by listening to
music in a vehicle? # Answer
Response % 1 0
28 24% 2 1-3
51 43% 3 4-6
16 13% 4 7+
24 20%
Total 119 100%
P a g e | 84
Statistic Value Min Value 1 Max Value 4 Mean 2.30 Variance 1.09 Standard Deviation 1.05 Total Responses 119
9. Would you agree with the following statement: "Today's car
stereos are not designed to satisfy each individual passenger rather
they are designed to focus on the car as a whole?" # Answer
Response %
1 Strongly Disagree
2 2%
2 Disagree
9 8%
3 Neither Agree nor Disagree
30 25%
4 Agree
61 51% 5 Strongly Agree
18 15%
Total 120 100%
Statistic Value Min Value 1 Max Value 5 Mean 3.70 Variance 0.77 Standard Deviation 0.88 Total Responses 120
10. Do you get uncomfortable by your family or friends music
listening habits while they are riding in your vehicle? # Answer
Response % 1 Never
40 33% 2 Rarely
39 33% 3 Sometimes
34 28%
4 Most of the Time
6 5%
5 Always
1 1%
Total 120 100%
P a g e | 85
Statistic Value Min Value 1 Max Value 5 Mean 2.08 Variance 0.89 Standard Deviation 0.95 Total Responses 120
11. Do you agree with the following statement: "Certain disabilities
may create struggle for people to remain psychologically or
neurologically comfortable while riding in vehicles?" # Answer
Response %
1 Strongly Disagree
1 1%
2 Disagree
2 2%
3 Neither Agree nor Disagree
35 29%
4 Agree
67 56% 5 Strongly Agree
14 12%
Total 119 100%
Statistic Value Min Value 1 Max Value 5 Mean 3.76 Variance 0.50 Standard Deviation 0.71 Total Responses 119
12. Do you believe there is a need for an audio system that
individualizes the music volume for each person in the vehicle? # Answer
Response %
1 Strongly Disagree
4 3%
2 Disagree
26 22%
3 Neither Agree nor Disagree
40 33%
4 Agree
42 35% 5 Strongly Agree
8 7%
Total 120 100%
P a g e | 86
Statistic Value Min Value 1 Max Value 5 Mean 3.20 Variance 0.93 Standard Deviation 0.97 Total Responses 120
13. How likely are you to purchase an aftermarket stereo system for
your vehicle? # Answer
Response % 1 Very Unlikely
38 32% 2 Unlikely
29 24%
3 Somewhat Unlikely
10 8%
4 Undecided
14 12%
5 Somewhat Likely
20 17%
6 Likely
3 3% 7 Very Likely
6 5%
Total 120 100%
Statistic Value Min Value 1 Max Value 7 Mean 2.85 Variance 3.32 Standard Deviation 1.82 Total Responses 120
P a g e | 87
14. How much would you pay for a service business to install a whole
aftermarket stereo system in your vehicle? # Answer
Response %
1 Would not purchase
72 60%
2 $0-500
41 34% 3 $501-1000
4 3% 4 $1001-1500
1 1% 5 $1501-2000
1 1% 6 $2001-2500
0 0% 7 $2501-3000
0 0% 8 $3001 or more
1 1%
Total 120 100%
Statistic Value Min Value 1 Max Value 8 Mean 1.53 Variance 0.82 Standard Deviation 0.91 Total Responses 120
15. How likely would you be to purchase an audio system for your
vehicle that individualizes the audio volume for each person in the
vehicle? # Answer
Response % 1 Very Unlikely
49 41% 2 Unlikely
22 18%
3 Somewhat Unlikely
12 10%
4 Undecided
21 18%
5 Somewhat Likely
11 9%
6 Likely
3 3% 7 Very Likely
2 2%
Total 120 100%
P a g e | 88
Statistic Value Min Value 1 Max Value 7 Mean 2.50 Variance 2.62 Standard Deviation 1.62 Total Responses 120
16. Do you agree that the ability to adjust the volume of the audio in
a vehicle for each individual person would help persons with
disabilities to enjoy riding in vehicles? (Disabilities such as Post
Traumatic Stress Disorder, hardness of hearing, or down syndrome). # Answer
Response %
1 Strongly Disagree
4 3%
2 Disagree
10 8%
3 Neither Agree nor Disagree
42 35%
4 Agree
58 48% 5 Strongly Agree
6 5%
Total 120 100%
Statistic Value Min Value 1 Max Value 5 Mean 3.43 Variance 0.72 Standard Deviation 0.85 Total Responses 120
P a g e | 89
17. Please indicate your occupation: # Answer
Response %
1 Management, professional, and related
25 22%
2 Service
16 14% 3 Sales and office
9 8%
4 Farming, fishing, and forestry
3 3%
5 Construction, extraction, and maintenance
7 6%
6
Production, transportation, and material moving
5 4%
7 Government
9 8% 8 Retired
11 9% 9 Unemployed
6 5% 10 Other
25 22%
Total 116 100%
Statistic Value Min Value 1 Max Value 10 Mean 5.31 Variance 12.46 Standard Deviation 3.53 Total Responses 116
P a g e | 90
18. How likely would you be to purchase a vehicle audio system if it
was designed to help those with disabilities enjoy riding in your
vehicle? # Answer
Response % 1 Very Unlikely
34 29% 2 Unlikely
23 19%
3 Somewhat Unlikely
14 12%
4 Undecided
26 22%
5 Somewhat Likely
15 13%
6 Likely
5 4% 7 Very Likely
2 2%
Total 119 100%
Statistic Value Min Value 1 Max Value 7 Mean 2.90 Variance 2.72 Standard Deviation 1.65 Total Responses 119
P a g e | 91
Sales Model For Year 1:
Installations
Startup Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Tier:
Premier Total Spread
Revenue per system 7,000.00$ 7,000.00$ 7,000.00$ 7,000.00$ 7,000.00$ 7,000.00$ 7,000.00$ 7,000.00$ 7,000.00$ 7,000.00$ 7,000.00$ 7,000.00$
Systems installed 2 3 3 4 4 3 2 2 2 1 3 2 31 30%
COGS 1,496.36$ 1,496.36$ 1,496.36$ 1,496.36$ 1,496.36$ 1,496.36$ 1,496.36$ 1,496.36$ 1,496.36$ 1,496.36$ 1,496.36$ 1,496.36$
Standard
Revenue per system 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$
Systems installed 6 6 7 9 9 7 4 3 3 5 7 7 73 70%
COGS 982.14$ 982.14$ 982.14$ 982.14$ 982.14$ 982.14$ 982.14$ 982.14$ 982.14$ 982.14$ 982.14$ 982.14$
Total Revenue 50,000.00$ 57,000.00$ 63,000.00$ 82,000.00$ 82,000.00$ 63,000.00$ 38,000.00$ 32,000.00$ 32,000.00$ 37,000.00$ 63,000.00$ 56,000.00$
Total COGS 8,885.54$ 10,381.91$ 11,364.04$ 14,824.68$ 14,824.68$ 11,364.04$ 6,921.27$ 5,939.14$ 5,939.14$ 6,407.04$ 11,364.04$ 9,867.68$
Gross Profit 41,114.46$ 46,618.09$ 51,635.96$ 67,175.32$ 67,175.32$ 51,635.96$ 31,078.73$ 26,060.86$ 26,060.86$ 30,592.96$ 51,635.96$ 46,132.32$
Total Product Sales/Installation Revenue 50,000.00$ 57,000.00$ 63,000.00$ 82,000.00$ 82,000.00$ 63,000.00$ 38,000.00$ 32,000.00$ 32,000.00$ 37,000.00$ 63,000.00$ 56,000.00$ 655,000.00$
Total Employee Commission
Total Product Sales/Installation COGS 8,885.54$ 10,381.91$ 11,364.04$ 14,824.68$ 14,824.68$ 11,364.04$ 6,921.27$ 5,939.14$ 5,939.14$ 6,407.04$ 11,364.04$ 9,867.68$
Total Product Sales/Installation Profit 41,114.46$ 46,618.09$ 51,635.96$ 67,175.32$ 67,175.32$ 51,635.96$ 31,078.73$ 26,060.86$ 26,060.86$ 30,592.96$ 51,635.96$ 46,132.32$
COGS/Revenue 18% 18% 18% 18% 18% 18% 18% 19% 19% 17% 18% 18%
P a g e | 92
Adam Blazier
David Norris
MGT 341
Ph.D Goldsby
15-Oct-14
Customer Map
How might the customer
reduce noise pollution?
How might the customer
adapt their audio
environment to take into
account family needs?
How might the customer have
a user friendly stereo?
How might the customer
individualize their stereo?
How might the customer
cancel extraneous sound?
How might the customer have
automatic fearutes to protect
outside sound environment?
How might the customer
upgrade their audio
equipment?
How might the customer
enjoy their own audio
environment?
How might the customer
enjoy a high quality sound
experience in their car?
How might the customer have
good quality equipment?
How might the customer
enjoy music at their own
volume levels?
How might the customer have
available technologies
adapted to their car stereo?
How might the customer
absorb sound with dampening
material?
How might the customer
personalize the stereo
through custom DIY
installation?
How might the customer have
controller in back seat?
How might the customer have
a child lock feature?
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