PEEPING TOMS -- BUSINESS PLAN ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

PEEPING TOMS -- BUSINESS PLAN

BUSINESS PLAN

PREPARED BY:
Brian Ray Brian Cusick Matt Rowan CJ Lewis

PEEPING TOMS -- BUSINESS PLAN

TABLE OF CONTENTS
Section I. Section II. EXECUTIVE SUMMARY MISSION, GOALS, AND OBJECTIVES
Description of Business Mission Statement Goals And Objectives

Section III. Section IV.

BUSINESS/INDUSTRY PROFILE
Current Size/Growth Potential Industry Trends/Opportunities

ORGANIZATIONAL MATTERS
Risk Management Outside Services/Advisors Personnel Management Business Structure

Section V.

THE MARKETING PLAN A. Products/Services

1. Products/Services Description 2. Life Cycles/Seasonality 3. Product/Services Growth Description 1. Customer Analysis 2. Competitive Analysis
a. Current Trade Area b. Market Size & Trends c. Market Potential

B. Market Analysis

C. Marketing Strategies

1. Location/Distribution 2. Price/Quality Relationship 3. Promotional Strategies

a. Packaging b. Public Relations c. Advertising

Section VI.
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THE FINANCIAL PLAN

Financial Assumptions Additional Financial Statements:

Appendix

PEEPING TOMS -- BUSINESS PLAN

I. EXECUTIVE SUMMARY!
Peeping Toms provides a simple solution to give you more privacy and make your home a safer place. PeepHoles have been around a long time, but there are still a lot of people who do not have one installed. In our research we found that 78% of the individuals we surveyed do not have a peephole in their door. Almost all of these people said that they would like one; most say that they just have not gotten around to installing one. And of those who do have a peephole, every single one said that they use their peephole frequently. People want to know who is behind their door before they open it. Here are just two comments we received from survey participants:
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It is nice to see who is at the door before opening it. We have windows but usually it is very hard to see who is there, especially if they are standing close to the door. -Survey Participant I hate opening the door for salesman!
-Survey Participant

PeepHoles are not a new product; our goal is simply to be the most convenient peephole installation service available. We bring our product directly to consumers through door-to-door sales and local marketing. We can install our product on the spot and to the clients specifications. Our installers are well trained and professional and we guarantee all of the work we provide. In this business plan you will see how we plan to reach our clients and meet their needs in ways that our competitors do not.

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II. MISSION, GOALS, AND OBJECTIVES

Description of the Business Our business is a primarily a door to door sales model. We will be selling peepholes to individuals in residential arias (primarily Utah County then expanding when sales justify the growth) and installing them at the point of sale. Initially we will be selling a basic selection of peepholes that get drilled into the door and allow the homeowner to see who is on the other side. We also want to make our company name (Peeping Toms) a common name/brand that people will know and recognize. Our target market will be homeowners and home/apartment renters of all ages, anyone that wants a custom installed peephole. Our product will be installed at the exact height and spot of the customers choosing. Peeping Toms is at the beginning stage, but we intend to recruit and hire college students to sale and install our product during the summer months. We will continue to expand until we are located all over the United States. Mission Statement Our mission is to build a valued, trusted, and hard working company that people will know they can trust and refer to friends. We will treat all people with dignity and respect, while working as hard as we can to build a company and brand. Our purpose is to help families feel a little safer in their homes. We will be the most convenient option for anyone looking for a peephole. Goals & Objectives
1. 2. 3. 4. 5.

Get the business up and started Hire at least 15 individuals to our sales team Sell enough product to turn a profit the first summer Add a minimum of 3 offices each year after the first Brand our company name (Peeping Toms)

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III. BUSINESS/INDUSTRY PROFILE

Current Size/Growth Potential - County population in 2012: 540,504 (97% urban, 3% rural); it was 368,536 in 2000 - County owner-occupied with a mortgage or a loan houses and condos in 2010: 76,601 - County owner-occupied free and clear houses and condos in 2010: 19,452 - County owner-occupied houses and condos in 2000: 66,800 - Renter-occupied apartments: 44,549 (it was 33,137 in 2000) - % of renters here: 33% - State: 30% Source: http://www.city-data.com/county/Utah_County-UT.html#ixzz2muHbnY5O The data above makes evident that the number of residents in Utah County continues to grow at a rapid pace. 10,000 new apartment complexes where built between 2000 and 2010, that is 1000 a year on average. Such rapid growth suggests continued opportunity for growth in industries related to the housing market, including peepholes and home automation, which itself is a multi-billion dollar industry. Peepholes are our ticket into the industry of home automation and a cost effected method of creating brand recognition previous to healthy investments into automation technology. Industry Trends/Opportunities While much of the industry is trending towards home automation, there is still a huge market for the traditional and cost effective peephole. Many people think the inventor of a peephole was William Didds lll but it was really George Winningham and he invented the peephole in 1932. Since then it has been installed into millions of doors, both for residents and businesses. The majority of families living in homes (especially condos and townhomes) that do not already have peepholes cannot afford expensive home automation systems and are not in the market for them. Although it is important to mention that augmenting these modern digital automation systems into the Peeping Toms marketing plan is going to be essential for substantial growth later on, it is not cost effective to start with initially. It will be Vital for the Peeping Toms brand to grow and become known as the leading peephole installers in the industry. Currently a large franchised company focusing on such practice as installing peepholes does not exist. The majority of installers are independent contractors going door to door on their own accord and for the sake of their own

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companies. The Peeping Toms uniformity among reps will give customers a since of trust and comfort in buying and create very positive sense of name recognition. The reputation created by the effectiveness of the employment screening process will be essential in ensuring that the Peeping Toms brand and name recognition is positive with the public. The housing market has been recovering from the crash in 2008, housing has been up 1520% in Utah County and developers have begun again the condo and townhome construction projects throughout Pleasant Grove, American Fork, and other Utah County cities. Opportunities are endless in the industry of privacy and security for home and business residents. Both on the small scale, starting initially with peepholes, and also on a large scale, moving into home automation later on. The profit margin per peephole is significant enough ($25-$50 etch.) That to gain traction in this industry is both reasonable and realistic.

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IV. ORGANIZATIONAL MATTERS

Business Structure Our business will be registered as a limited liability corporation. There are 4 owners; Matt Rowan, Brian Ray, Brian Cusick, and CJ Lewis, all with equal share in the company profits and liabilities. Any person additional employee will be a 10-99 employee paid as a contractor based on commissions. Our goal is to keep our structure as simple as possible. This will be true until sales justify hiring in house employees legal or accounting services for example. Management Our team is uniquely qualified to enter this market because each founder has a set of relevant and complementary skills that will help us to move this business forward. Brian Ray is an expert in direct sales and has a lot of experience selling products door-to-door. We will lean on this knowledge as we build out our sales team. Brian Cusick will provide his tools and skills to help our team learn to install our peephole products. His knowledge of financial planning and money management will also be invaluable for this organization. Matt Rowan is an expert in website optimization and online marketing. He will help us reach our local markets through online marketing and social media. CJ Lewis is a designer and web marketer. His skills will help us produce quality content that will allow us to brand our company and reach our target market. He will support Matt in online marketing efforts.

Resumes can be found in the appendix of this document.

Personnel We will need a team of energetic and enthusiastic sales people to help us sell and install our product in a door-to-door fashion. In order to reach these people (our potential team members) we will sponsor events and parties that attract our target employees. Our noceiling commission structure should prove very compelling (and lucrative). We will use

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college campuses and college events to reach our potential team members. We will also offer bonuses and incentives to current team members for helping us to find good talented people to join the team. Outside Services/Advisors Although our team is well equipped to handle most aspects of business management and day to day processes, there will likely (and hopefully) come a time when we need to reach out to outside service providers for help. We expect that we will hire a CPA and potentially an attorney or legal council to help us manage finances and more complex agreements and documentation. If demand for these services is great (within our organization) we may bring on full time accounting or legal team members, but our plan is to hire third parties for most situations. Risk Management There is a possibility that our installers will make a mistake and damage a door during the installation process. We intend to have an agreement in place with each costumer that guarantees our work up to a certain value (i.e. $1000). We will make sure that we have enough cash on hand to cover any situations that may occur. This will require us to keep a detailed log of every issues that arise so that we can foresee and plan for potential problems in the future.

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V. THE MARKETING PLAN

A. Products/Services
1. Products/Services Description We will offer only one primary service - the custom installation of a peephole. We will also limit our selection of peepholes to just a few (10 or less) basic styles. We will sell the peephole along with the installation. Purchasing a peephole from Home Depot or another hardware store will cost an individual around $5 to $15. They will have to install the hardware themselves. We are not going to attempt to compete on a price comparison test. Our goal is to be the most convenient option. We come to you and provide the service on the spot. Our trained installers are quick and professional and our work is guaranteed. Our installers can even be scheduled (using our website or Facebook page). So Peeping Toms can provide services at the clients convenience. We want to reach individuals who do not have the skills, tools, or time to install their own peephole. We also want to be more convenient even for those who do have the skills, tolls and time. Our trained and practiced installers and our reasonable pricing will accomplish these goals. Our product/service will sell for $40 to $75 per installation (including parts and labor). Variation in pricing will very depending on complexity of the project (type of door, type of peephole etc). 2. Features/Benefits Our products will be basic (initially) just a few peephole styles and colors. What makes us unique is our ability to provide the product on the spot or on demand. Our door-todoor installers can provide the service on point of sale. Or, a time can be scheduled for your installation using our Facebook page or website. 3. Life Cycles/Seasonality We do have a seasonal product. Most of our sales will be made in the summer months when the weather is good. Our sales people will be contacting customers directly through door-

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to-door sales so cold weather will not be optimal. We account for this seasonality by targeting college age students who are looking for summer time work. We also account for this by paying individuals as 10-99 employees who have the understanding that their work is seasonal. This will allow us to be heavily staffed in the summer months but lean in the winter. 4. Product/Services Growth Description We plan to keep our product basic for as long as possible. However we would like to reach into more advanced peephole solutions eventually. Once our model is proven and sales are predictable we would like to introduce more advanced electronic audio and video recording peepholes. These products would require more skilled installers but they will also be a higher ticket item and could potentially bring higher revenue.

B. Market Analysis
1. Customer Analysis Our funnel will target homeowners, home renters, apartment owners, and apartment renters who do not currently have a peephole installed. More specifically, we are targeting the decision makers of each household. Our marketing will focus primarily on the Utah county aria initially but we will quickly branch out to other arias based on our sales team and capabilities. Residential arias will be our primary focus; however, we will also be targeting a more specific group of individuals who own multiple apartments or apartment complexes, as well as organizations responsible for many apartments or homes. The plan is to start small by targeting individual residents and then move to these larger opportunities after our process is refined and the business model is more proven. Approaching owners of many apartments or homes will allow us to capture more business quickly, and without the need for costly,and time consuming door-to-door sales. Secondary Markets For residential customers our secondary market will target homeowners who currently do have a peephole. For these individuals we will be offering to provide additional peepholes for interior and exterior doors. For example; we will offer peepholes for backdoors or garage doors that provide added security and indoor peepholes for parents to check on young children.

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Additional Details About Our Target Market From the surveys and interviews that we performed we found that many people who desire peepholes want them for security reasons. They want the ability to see who is at the door without having to open the door and reveal themselves (or their home) to the visitor. It is clear that our target market values security. We also had a number of comments that suggest that our target market also values privacy. Several individuals mentioned that they have windows, or other ways to view who is at their door, but they would prefer not to be seen by the visitor until they first see who is at their door. 2. Competitive Analysis We conducted a survey to find out if we have any direct competitors. None of our survey respondents have every been approached by someone selling peephole installation. This market appears to be relatively un-tapped. Our competition is the handyman or do it yourself type who would prefer to purchase and install their own peephole. Our goal is to be competitive in our pricing and so convenient as to make this option impractical even for the average handyman. Because there is nothing to prohibit new entrants into our space we know that marketing and brand awareness will be key. We want people to recognize the name Peeping Toms and to trust us. We believe that beating our competitors will primarily be accomplished by getting their first. 3. Market Potential A. Current Trade Area - we will focus first on Utah Count B. Market Size & Trends - based on our research we estimate that around 70% of residents will be in need of at least one peephole. (see Industry information above and survey results in appendix for more details) C. Market Potential - we estimate that each sales rep will install 1 to 2 peepholes per hour. In a single summer (90 days) this is 720 hours X $50/per sale average X 1.5 (average per hour sale) = 54,000. If the company takes $10/per sale this is 10,800 per employee. The seller will keep the rest of the profits less the cost of products. Our goal is to have 15 installers our first summer and grow from there.

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C. Marketing Strategies
1. Location/Distribution We will focus first on Utah County and expend to surrounding areas. This will be ideal because of our familiarity with the aria and also because we will have access to UVU, BYU and several other universities for new employees. 2. Price/Quality Relationship Our installation price will be higher than the cost of buying and installing a peephole on your own. However, our price comes with the piece of mind that comes from knowing that your project is being completed by a trained professional. It also comes with a guarantee that any damages will be covered by Peeping Toms. If an individual installs their own peephole and makes a mistake the project could become very costly for them. We also offer convenience - we are there and ready to install on the spot. 3. Promotional Strategies a. Packaging - We will leave our card with phone number, website and name of installer to give the customer access to us in the future. If our services are appreciated the customer can also share these card details with friends and family and further advertise our services. b. Public Relations - We want to be heavily involved on college campuses and sponsor events to get our name out - both to the public and also to potential employees. c. Advertising - We will advertise our services in several ways. Our primary and initial means for getting sales will be door-to-door sales. However we believe that we can make this job much easier for our reps by providing advertising first. Here are some of the things we will do to market our business: 1. We will build a website which we will optimize and market for local search terms. When users in Utah County (or any aria that we are servicing) searches the web for Peephole or how to install a peephole or something similar, we will optimize our website to show up for these searches. 2. We will use Google Adwords to target searchers within our target demographics.

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3. We will create a Facebook page to show potential customers where we are (which neighborhoods we are knocking) and offer promotional deals to users who see our FB page and accept our services. We will also use Facebook to hold contests and grow our audience. 4. Printed Materials - we will print business cards for each of our installers to hand out. We will also create flyers that can be used to canvas a neighborhood prior to our door-todoor visits.

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VI. THE FINANCIAL PLAN

Financial Assumptions The Cost of each unit is very low, only $5 per unit. Since the fulfillment of such product also must be coupled with the service of installation, the profitability aspect of the product/service grows substantially. Fulfilling such a sale for $50 avg. per unit/install is not unrealistic and would actually be quite a competitive rate. A conservative projection is given in the projected income statements but expecting a high percentage of products/installs to be sold at above average prices is likely, resulting from proper branding and recognition of trust. 1. Projected Income Statement: (refer to appendix) 2. Projected Balance Sheet: (refer to appendix) 3. Projected Cash Flow Statement: (refer to appendix) Additional Financial Statements Although costs are low, some capitalization needs still exists. In order to market and brand the Peeping Toms correctly it will be vital to ensure that the representatives, who interact with consumers are screened and their appearance consistent. Customers must feel comfortable to let reps install peepholes in their homes. In order to create such trust in our consumer background checks will be given and uniforms purchased with individual nametags included. Total start up capitol product/peepholes and other cost, such as those mentioned above is 25K. This will provide necessary funding to buy a bulk amount of peepholes, uniforms for representative, pay for background checks and licensing of reps, while at the same time leave the business with enough working capitol to get through the critical start up phase.

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Appendix
Financial Documents, Managing Partner Resumes & Survey Data Follows

PEEPING TOMS -- BUSINESS PLAN

Q. Do You Have A Peephole?

We found that the majority of our surveyed people do not have a peephole on their door. This suggests that there is a demand for our product/service. Especially when considering the responses to our other questions.

Q. (If Yes) Do you use it? How Often?

Without exception everyone who had a peephole said that they used their peephole. Many of them made comments suggesting that they use their peephole frequently. Example Responses:

yes, whenever someone comes to the door. Every time someone comes to the door.

Q. If you do have a peephole - what benefits, if any, do you think a peephole provides?
Of the people surveyed it seemed like most of the individuals who had peepholes used them frequently. This suggests that the product we are offering is worth having, and supports the value of our services. Example Responses:

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love not having to open the door Protection and discretion I know who is at the door before i answer it. Safety

Q. If you do not have a peephole - Do you think you would use one?
Example Responses:

It is nice to see who is at the door before opening it. We have windows but usually it is very hard to see who is there, especially if they are standing close to the door Yes absolutely yes we wish that we had one

Q. How much would you be willing to spend to have a new peephole drilled (if you already have a peephole please provide how much the service would be worth to you assuming that you did not)
Average Amount From Responses = $32.56 This was good news for us because it leaves lots of room for us to price the product and still make a profit.

Q. Has anyone ever come to your door and asked to put in a peephole?
100% of respondents said NO

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This was good news for us because it means that our target market is not saturated with any similar offerings.

Q. Would you trust someone coming door-to-door doing them?

Most of the respondents to our survey said that they would trust someone who came doorto-door selling the installation service as long as that individual had the right tools and credentials and seemed to be knowledgeable. Example Responses:

Most Likely I think I would YES

PEEPING TOMS -- BUSINESS PLAN Survey Results Follow:

PEEPING TOMS -- BUSINESS PLAN