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Due to capital constraints and a lack of international expertise, Helios has created Helios International
Ltd. as the exclusive representative in the European market. Carlos Weeber and Danny Scott have
extensive experience working in the industry and specifically related to the bicycle industry in
Europe. Danny S has competed in the Tour de France and has many connections to the market. Carlos
W. has been with Helios since the inception and is ready to take his experience to the European
market. To capitalize the Company, the Principals intend to contribute a total of $125,000 dollars of
equity, Helios (the Parent) will also contribute $125,000. To fund Helios International Ltd., an additional
loan of $500,000 will be required to reach the $750,000 goal. It is expected that the loan will be repaid
in four years with an interest rate of 8.0%. For this loan, the lender will have a 50% ownership in the
Company until the loan is repaid. In addition, Helios (Parent) will place company as collateral. The
proceeds of this capital will be utilized for Helios International, Ltd. organization and start-up costs as
well as for ongoing working capital requirements.
The Company will be established in Amsterdam Netherlands with a warehouse, offices, and distribution
facility from where sales will be realized through Internet sales and wholesale distribution to bike shops
in the Netherlands region. Manufacturing of the product is sourced from Shenzhen Fumax Technology
Co. Ltd. Shenzhen Fumax is the current supplier of the Smartbike handlebars to Helios today. Quality
is strictly controlled and has provided reliable delivery to date of the product. Investment will be made
in additional tooling capacity to sufficiently provide the projected volume.
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The strategy is to establish distribution first in the Netherlands marketplace through an existing
infrastructure of 2,655 bike shops, while using Internet website to generate sales in the greater European
Economic Community. The plan is to expand into brick and mortar bike shops in Germany, Belgium,
and Denmark within the five-year business plan. These 4 countries in total represent the highest
concentration of bicycles in the EU and the affluence to afford the premium Smartbike handlebars.
a. Market Opportunity
In the Netherlands market there are approximately 16.6 million bike riders in the country. There are
more bikes than people in the country and is one of the most common forms of transportation. On any
given day there are over 4 million of these bikes on the road. Bicycles are used for commuting to work,
school, shopping and entertainment. Less than 10% of bikes are used for recreational purposes. In fact,
the Netherlands offers the cyclist a 19 a kilometer tax deduction. With that many cyclists there are over
300 cycling fatalities a year. In addition, 450,000 bikes were reported stolen in 2012. The Helios
Smartbike handlebars are a perfect fit for the market. The handlebars provide the biker with a sleek
solution to enhance safety, security for the bike, and a navigational tool integrated into one package.
Currently the market offers individual products that must be attached to the bicycle and will perform
similar functions. This option is a risk for the biker because they must then detach the devices or risk
having them stolen as well. The patented Smartbike handlebar is the only product to combine all three
features in one integrated handlebar. The Helios Smartbike handlebar is priced at a premium in the
market at 300 or $325.81, this price includes the mandatory 20% Value Added Tax (VAT). Considering
the average cost for bicycle is $1,200, the handlebar is appropriately priced.
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b. Projected Income and Expenses
To evaluate the merits of Helios International, Ltd. business plan, detailed financial projections were
evaluated to assess the
profitability of the
enterprise. This analysis
included the preparation of
a detailed balance sheet,
income statement, and
cash flow statement. This
analysis also demonstrated
loan repayment over a
four-year period. While the Company is a Start-Up, the business risk of the undertaking is manageable
as: 1) The Helios Smartbike handlebar is a proven product in the North American market, 2) The
manufacturing will be performed by a well-respected company with a proven track record, and 3) The
initial target market has been thoroughly analyzed in terms of market size, regulatory environment,
economic potential, and political stability.
Gross profit is conservatively calculated to result in a 77% return. The five-year plan results in
$5,700,000 projected income by the fifth year. Sales are projected to grow from 8,900 units the first year
to 36,700 units by the fifth year.
Helios is planning to introduce the integrated Smartbike handlebars into the European Union.
Specifically, Helios has decided to locate sales, marketing, warehousing, and distribution team in
Amsterdam, Netherlands. The strong economic stability in the European Union is hosted together by
the 28 member states that have adopted the framework of a single market with free movement of goods,
services and capital. Internationally, the EU aims to bolster Europe's trade position and its political and
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economic weight. The currency of EU is the euro () which has a current exchange rate of $1.09 dollars
per euro ( ) and circulates among 19 of the member states, under the auspices of the European
Economic and Monetary Union (EMU). The US is the largest trading partner with the EU at 15.3%
with 517,162 million euro () the second largest trading partner with the EU is China at 13.8% and
466,826 million euro (). The EU was also the biggest exporter, accounting for 15.4% of all exports
compared with 13.4% for China and the 10.5% for the United States. The EU aims is to promote
efficient, safe, secure and environmentally friendly transport networks. With just 7% of the worlds
population, the EU's trade with the rest of the world accounts for around 20% of global exports and
imports. EU economic policy seeks to sustain growth by investing in transport, energy and research
while minimizing the impact of further economic development on the environment. Around two-thirds
of EU countries total trade is done with other EU countries. With the EU at a GDP of $18.27 trillion,
23.6% of the global GDP and at a 1.4% growth per yearly quarter this is a prime time to enter into this
growing market. The EU has a $48,670 GDP per capita. EU major industries include electronics,
automotive, fashion and shoe, telecommunications, metal processing and energy. The Netherlands has
no required minimum investment to start a business for foreigners. Currently around 6,300 foreign
companies have established their operations, including; Cisco Systems, Microsoft and Nike. The
Netherlands is one of the largest recipients of FDI (Foreign Direct Investment) in the world. Foreign
companies made inward direct investments worth 589 billion US dollars. Foreign investors provide
Netherlands, which is the trading country, has a very stable Constitutional Monarchy. The Netherlands
is also a parliamentary democracy. The Dutch monarch has no real political power and serves only as
representative head of state, and a symbolic person uniting the divided parliamentary politics. The
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parliament is comprised of two chambers, the Lower House, and the Senate. Together these two
chambers constitute the Estates-General. This means that the Dutch political system gives a lot of
coalition of different political parties, and the party with the most
seats won typically produces the Prime Minister. The King gives
the leader of the party, holding the most seats in the government,
Map of the Netherlands recognized worldwide as for its transparency, fairness and
effectiveness. The World Bank stated that the Dutch government is one of the most effective in the
world. The legal system is fair and transparent and well equipped to deal with business, trade, taxation,
and patent issues. The Netherlands is a part of the European Union which provides economic stability,
meaning if a decline in economic stature is detected, other members will take action to ensure the
stability of the economy and government which adds to the statement that the Netherlands is well
Helios Intl, Ltd. is a limited liability company which allows the company to only be liable for what
Helios and equity shareholders have invested and is a distinction from a privately held company and the
publicly traded company. In order to incorporate the business by legal standards Helios Intl, Ltd. must
file the legal form: Besloten Vennootschap (BV). Helios Intl, Ltd. must follow this website
www.belastingdienst.nl to start the legal process in becoming a registered tax paying company, which
includes every step from tax arrangements to benefits. The legal system is fair and transparent and well
equipped to deal with business, trade, taxation and patent issues. The Dutch tax system has a number of
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features that may be very beneficial in international tax planning. The relevant factors include a
corporate income tax rate of 20% on the first 200,000 euros, and 25% for taxable profits exceeding
200,000 euros, which is well below the EU national average. Companies can benefit from an effective
tax rate of only 5% for R&D income from self-developed patented intangible assets and also from self-
developed unpatented intangible assets which qualify for the so-called WBSO. The Dutch ruling
practice, which provides clarity and certainty on tax assessments in advance, can be obtained on future
transactions, investments or corporate structures. There is also a broad tax treaty network. The
Netherlands has signed treaties with more than 80 countries that ensure the avoidance of double
taxation on income and capital. This reduces withholding taxes on dividends, interests and royalties (for
interest and royalties, in some cases, taxes are reduced to 0 %). Dutch tax law also provides the
participation exemption, which states that all benefits related to a qualifying shareholding, including
cash dividends, dividends-in-kind, bonus shares, hidden profit distributions and capital gains, are
exempt from Dutch corporate income tax. In addition, a law was passed in 2006 that every member on
the EU must tax 6% for all e-bikes and bicycles imported into an EU member country, this number is
added to the Cost of Goods Sold. VAT is an additional tax paid to the government based 20% of the
final sold product, since Helios Intl, Ltd. is only selling directly to the customer through online sales,
Helios Intl, Ltd. only has to pay the VAT tax on the final product sold going through online sales.
Labor Laws within the EU and Netherlands have been with high demand, in 2007 an EU law was
passed that the employee must be granted 20 days of paid vacation and 33% of benefits added to their
yearly salary.
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B. Trade area and cultural analysis
1. Trade Area Analysis
Europe is often described as being a peninsula meaning it is a piece of land surrounded by water on
cultural force throughout history. This continent can be divided into four major regions running north to
south. These consist of Western Uplands, North European Plain, Central Uplands, and the Alpine
Mountains. These diverse regions cause a very wide variety of physical landscape as well. In the
Western Uplands, glaciers and large sheets of ice have created a very rough landscape consisting of
marshlands, lakes, and fjords making travel by car a challenge. The majority of the North European
plain lays below 152 meters (500 feet) in elevation making it home to many navigable rivers. This
geographic region is also home to the most densely populated regions in Europe. The Central Uplands
are lower in altitude and less rugged than the Alpine region and are heavily wooded. In this area, the
population density is among the lowest except in few river valleys such as the Rhine, Elbe, and
Danube. The fourth and final region is the Alpine Mountains which consists of very high elevations,
rugged plateaus and steeply sloping land. Europe is considered the most culturally diverse continent in
the western world. Due to the large scale diversity it is home to many religions, and languages. Among
the different variety of religions Christianity is by far the largest majority of religious persons in the
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continent. This has a direct influence on the language spoken which is English. 51% of all European
adults can speak and understand English. The next widely spoken language is German which consists
of approximately 18%. Due to Europe being surrounded by water on three sides it is exposed to a vast
amount of trade influencing customs and traditions. Among these customs is transportation. Riding
bikes is a major part of the culture of living in Europe. Bikes have been the main form of transportation
since they were created. In the mid 1900s as cars started to become a more plausible method of
transportation, bikes began to become in danger of being hit by automotive vehicles. Several children
deaths occurred, which frustrated and caused many parents to become concerned with their loved ones
safety. Bike lanes called fietspaden, were created in several countries but in the Netherlands they
were taken more seriously and laws were passed prohibiting anything besides two wheels to be within
the combines of the two lanes. The laws in this country are very different from America. In the
Netherlands if a cyclist is hit for any apparent reason then the driver of the vehicle is at fault. These
laws and regulations make cycling in the Netherlands one of the safest places to ride and also deter
many people from driving cars in the fear that they will hit one of the hundred thousands of cyclist in
the city. This is the reason why the bike per capita is so high within this country. With so many bikes
prevalent around in the city it is easy for one of them to be picked up and stolen, which acts as an
advantage to the proposed product. Now the customer can easily monitor where their bike is at all
times, and if it is stolen they can easily track its location through cell service. Some other advantages
that arise from this situation is that with the Helios handlebars turn signals can help the operators of
motor vehicles to better predict the next move of the cyclist. Disadvantages of the product are very
minimal, however they do exist. Among these are the frustration of recharging the product. In the
Netherlands the majority of people leave their bikes outdoors overnight. With this being said, the
handlebars must be opened up and the battery will be taken out and up to its charging station when low.
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A problem that can arise from this is that while the battery is disconnected from the handlebars, the
tracking system will not function, however technology will be developed to solve this problem with
early revenue.
Smartbike handlebars, however efforts to get a more Bike station in the city of Amsterdam
diverse crowd will be implemented. Seeing as this age group responds better to products that are
interconnected to their cellular devices and turning something ordinary to extraordinary, the main
features of the product that will be heavily marketed is the technological innovations rather than the
safety features. The average income per capita per year within the Netherlands is approximately
27,888 or $30,434.17. This average income is higher than the United States. In Amsterdam an
estimated 63% use their bikes on a daily basis that is not including those who use bikes on a weekly
basis. Due to this high percentage of individuals who rely on their bikes as a main form of
transportation they are more willing to spend money to updated and repair their bikes. In America the
main form of transportation is via car, where the average income is $50,500 and the average price per
car is $33,560. With that being said, Americans spend over half of their income on transportation,
similarly in Amsterdam, citizens are more willing to spend a larger portion of their income on other
forms of transportation, which in this case are bikes. The Helios handlebars priced at 300 or $325.81
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will be a relatively small portion of the citizen's income. Helios Ltd is aware that a large portion of
sales will be coming from adults such as parents. Due to this aspect, on the website, Helios is going to
2. Manufacturing
The manufacturing for the Helios Smartbike handlebars will take place in Shenzhen Fumax
Technology Co. Ltd., Shenzhen, China. Shenzhen Fumax is the current contract supplier and
assembler of the Helios handlebars to the North American market. Investment will be made to add
capacity and tooling requirements that will meet the volume demands of Helios International, Ltd. This
city is considered the wealthiest city within China. It is known as the shopping mall of the country
because of its vast range of items are manufactured and sold to the public. Tourism is a large portion of
income for this city. Estimated at over 67 million total visitors and 6.89 million overnight visitors,
tourism brings many companies and technological innovations to gain exposure. Due to the vast market
ranging from manufacturing to distribution and even tourism the economy is more stable than the
3. Distribution
After the manufacturing of the Helios bar is completed in Shenzhen, the product will be transported via
ocean freight to the large city of Amsterdam. This is largest city in Holland with a population of
779,808 recorded in the 2011 census. Along with being the largest city, it also is the capital of the
Dutch nation. Due to the stability of the European Union, both storage and distribution will be done
through countries that are a part of the EU. Helios is planning to rent a warehouse, instead of
purchasing one, in order to allow for expansion if needed. Helios will hire the company of Komerk,
which provides a 700m2 warehouse facility for 130,000 per year with a five-year contract. This
company is going to provide warehouse services including loading and unloading shipments onto
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freighters, taking care of any and all paperwork to be able to ship the goods as well as send updates on
the whereabouts of the goods. Helios will pay the company an additional 70,000 a year for their
services. Komerk is a well-established company receiving phenomenal ratings over its 20 years of
doing business.
III. PROBLEM
1. Safety The greatest challenge of riding a bike is sharing the road with other vehicles. Being
seen by drivers and other bike riders is a top safety concern. Among these concerns is the need
to signal a turn. It can be difficult or even dangerous to remove a hand from the handlebars in
2. Security In Amsterdam, parking for bikes cost a fee, so a large percent of citizens do not park
their bikes in the safety of a bike rack with locks. As a result bikes are easily accessible on the
side of the road. Bike theft is a big problem and with such a large bike population, it makes
recovery of a stolen bike very difficult. In 2013 approximately 450,000 bikes were stolen and
almost 50% of those stolen were taken from right outside of the residents home.
3. Navigation - Riding a bike requires full attention to the road and all potential hazards. With
hundreds of intersecting streets and canals, Amsterdam can be very difficult to navigate.
Looking at a map or your GPS while riding is not a safe option. The Helios Smartbike
kilometer of land. A large majority of the population is either Catholic (31%) or Protestant (21%) and
unaffiliated (40%). The literacy rate for ages 15 and older is 99%. The Netherlands was chosen as a
launch point for Helios in the EU due to the high concentration of people using bicycles for
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transportation and the affluence of the average citizen to afford the device. This form of transportation
is very valuable and even offers benefits for users. Bike riders can receive 19 cents per kilometer as a
tax-free perk, meaning that the amount of money spent on taxes will decrease the larger distance
traveled by bicycle. The specific target market will be bikers between the ages of 15 to 50, which
makes up approximately 80% of the entire biking population. At any given time 25% of the population
of bikes are being ridden, meaning one and every four people is on their bicycle at any given time.
Cyclist account for 40% of all of traffic related incidents, just last year there were over 300 reported
deaths by bike related accidents. Biking is such a large part of life within the Netherlands that the
government has spent $436,000,000 in improving bicycle infrastructure. In this country theft is a large
problem, last year alone 450,000 bikes were stolen. Studies show that one and every three bikes is
Wearing helmets is very rare, and is typically only seen on either on a child or a teen who has not yet
succumbed to peer pressure. This helps to explain the high number of fatalities seen every year as well
as a need for a new safety aspect built into the bicycles. The average speed of a cyclist is between 15
and 18 kilometers per hour, making that average trip just 15 short minutes, making traveling by bicycle
5% to 10% quicker than driving a car. The reason for the Helioss target market being so vast, is due to
the wide range of cycling by such diverse age groups. Citizens use bikes for everyday activities such as
going to work, school, seeing family and friends, going to bars, cinemas and theaters. These activities
are not restricted to a certain age group and appeal from teens to fifty-year-old men and women.
strength, and sleekness in a way that compliments your style and keeps you safe at the same time.
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VI. SOLUTION
1. Safety Helios provides many features that are very important in creating a safe environment to
ride. The cautionary blinkers on either side of the handlebar help to alert cars, and other bikers
cyclist to see when others are speeding up and or slowing down to prevent bike crashes. In
addition, there is a powerful 500 lumens headlight to illuminate the path at night.
2. Security In order to prevent theft, Helios offers a very special feature which sends a message
to your smartphone via notification alerting if the bike is in motion once the lock setting is
turned on. If the bike does happen to be taken and the owner of the bike cannot get to the bike
before the thief flees, a GPS system can be used to track the bike through SMS. This same
feature will help you to locate your bike if youve forgotten where it is parked.
3. Navigation Aide - With Helios handlebars getting lost will never be a problem again. The
Smartbike handlebar product offers a solution, with turn by turn navigation, the blinkers
automatically illuminate when approaching an upcoming turn to alert you it is time to slow and
switch lanes. It uses state of the art code through Bluetooth to route your smartphones maps to
the handlebars to accomplish this task making getting lost a thing of the past while riding
bikes.
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VII. CHANNELS
1) Social media
To attract attention from a younger crowd; Instagram, Twitter, Facebook, Youtube, and Snapchat pages
will be created. On these sites, the product will be featured demonstrating all of its amazing capabilities
in different situations that will impress the youth of Europe. Helios will show the wide range and
durability that the Helios bars can withstand and conquer with ease. To attract more traffic to the social
media and website pages, celebrities will be paid to use and advertise the Smartbike handlebar. A total
of $25,000 will be spent on website and social media development in the first year. $10,000 will be
spent on the development of a fully functional and easily navigable website. This is important because
this will be the final destination of traffic flow from the internet. The rest of the money, which is
$15,000, will be used to pay celebrities to advertise the Smartbike handlebar. The celebrities will be
chosen based off of popularity in the biking community. The marketing budget for the website and
2) Trade Shows
Since this product is for those who use bikes not only for recreation but for sport as well, a large
portion of advertisement will be attained at trade shows and bike races. At these races a booth will be
set up with the product mounted on a bike, and an expert will be demonstrating how beneficial the
Helios handlebars are for every rider. Helios Intl, Ltd will also sponsor riders and give them a free
handlebar to discuss after and before the televised races. This will capture the crowd that is very serious
about street riding as a sport, as well as the kids who aspire to become great like the professional bikers
as well. In the first year Helios has budgeted $42,000 to be spent on trade shows. The amount of
invested money in trade shows increase substantially each year ending the five year plan with
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3) Word of mouth
Word of mouth is going to be very beneficial when advertising the Smartbike Handlebars product. This
product contains many amazing features that make the experience of biking more enjoyable and far
safer. These handlebars will undoubtedly be discussed between friends and family members. Another
feature that is contained within the smartphone application is a community page which allows Helios
members to connect to one another. This will be an incentive for friends to get their peers involved in
this community as well. Due to the resolving of multiple local biking issues such as safety and security,
this product will be a solution to those issues. Although word of mouth is free, Helios wants to ensure
the satisfaction of their customers and plans to create a survey for those who have bought or heard of
the Smartbike handlebars to communicate different aspects of the company if needed to keep customers
happy, and keep Helios a topic frequently discussed in and around the community.
4) Storefronts
In Amsterdam alone there are approximately 157 bike shops and in all of the Netherlands 2,655 bike
shops exist. Helios is going to wholesale Smartbike handlebars to these stores for a much lower cost
Amsterdam Bike Shop stores and this number continues to grow over the
course of the five-year plan as more bike shops begin selling the Smartbike handlebar. This cost will
help to bring recognition to the product inside of the store as well as attract attention from pedestrians
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5) Print Ads
The largest form of marketing investment that Helios will be budgeted for is print ads. This method of
marketing covers everything from flyers, newspaper ads, banners, magazine articles and more. In
Europe reading the newspapers and magazines is still of large importance. Helios plans to take
advantage of this aspect of life for Europeans by placing advertisements within these commonly read
tabloids by spending $50,000 in the first year and increasing at a steady rate until $106,296.40 is
budgeted in the fifth year. This price also includes the creation of flyers that storefronts can pass out to
customers to drive their sales. It also includes banners that can be hung in store windows and along
Netherlands there are 2,655 bike shops. The percent of overall sales in
store fronts decreases each year for the first five years. The reason for this
smaller percentage of store front sales is because Helios plans to have the second revenue stream
becoming more profitable as it touches a larger number of people, and expands beyond just Netherlands.
The percent of sales in storefronts as well as online are shown to the right. For future growth, Helios will
partner up with major bike manufacturers such as Accell Group headquartered in Heerenveen,
Netherlands to offer the Helios handlebar as an option direct from the manufacturer. In addition,
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partnering up with city bike rentals to give their customer a more enjoyable and safer experience, could
allow Helios for another revenue stream that will become sustainable with loyal customers.
Customer lifetime value is important to Helios due to the improvement and development of new
technology within the Smartbike handlebar. Based on market research, Helios determines that a
customer will replace his bike 4 times within our target market of 15-50 year olds. At an average
Helios handlebar price of $285.00, the customer lifetime value is $1,140.00 Lifetime value is important
Everyone who purchases the Smartbike handlebars will register with Helios. Updates on software will
be provided. Helios will create a blog that drives customer loyalty, promotes the features of the
product where one can describe occurrences that have saved the consumer in forms of safety, security,
and navigation. Promotion items can be awarded to the one who writes the most articles or random
C. Revenue
Revenue 2017 2018 2019 2020 2021
Units Sold
Netherland Wholesale 5,950 8,033 10,442 13,053 15,664
Cross Border Internet Sales (less VAT) 2,943 4,414 7,063 12,007 21,012
Total Units 8,893 12,447 17,505 25,060 36,676
Unit Growth (%)
Netherland Whole Sale 35% 30% 25% 20%
Cross Border Internet Sales 50% 60% 70% 75%
Unit Sales Price ($/Unit)
Netherland Retail 154.76 162.50 170.62 179.15 188.11
Cross Border Internet Sales 271.51 285.09 299.34 314.31 330.02
Unit Sales Price Growth (%) 5% 5% 5% 5%
Total Gross Sales ($) 1,719,856.02 2,563,740.80 3,895,917.61 6,112,348.63 9,880,949.95
Service Parts Revenue ($) 149,345.91 307,648.90 467,510.11 733,481.84 1,185,713.99
Returns (Parent Co. resp) (85,992.80) (128,187.04) (194,795.88) (305,617.43) (494,047.50)
Total Revenue 1,783,209.13 2,871,389.70 4,363,427.73 6,845,830.47 11,066,663.95
Helioss revenue contains a very conservative growth throughout the first five years. The two sources
of revenue are Brick and Mortar and Online sales. While the Brick and Mortar sales grow at a slower
rate because of reaching maximum expansion, the Online Sales grow at a faster rate due to the
revenue of $1,780,000 in the first year of sales and increasing to $11,070,000 in the sales.
D. Gross Margin
The increasing gross margin demonstrates the viability of the product and that customers are willing to
pay a premium price for the Smartbike Handlebar. Looking at the Gross Margin, the value of the product
is demonstrated in the market and is our gauge in controlling costs. Providing a gain in gross margins
also shows how sustainable the company will be. With an outstanding 77% gross margin the first year to
by year 5 the company will start to generate at 85% gross margin meaning that the company will bet
more efficient with the selling price to the landed cost per unit.
Projected Gross Margin 2017 2018 2019 2020 2021
Total Revenue ($) 1,783,209.13 2,871,389.70 4,363,427.73 6,845,830.47 11,066,663.95
Cost of Goods Sold ($) 413,519.97 570,335.49 790,417.60 1,115,029.67 1,608,072.39
Gross Margin ($) 1,369,689.17 2,301,054.21 3,573,010.13 5,730,800.80 9,458,591.56
Gross Margin (%) 77% 80% 82% 84% 85%
is important because it determines if Helios is turning profit from advertising per customer. The number
can be found by dividing the total cost of advertisement for the specific year by the number of units sold
Customer Acquisition Cost
within that same year. This customer acquisition
Cost of Total Units Customer
Year Marketing Sold Acquistion Cost
is very low when compared to the lifetime value,
2017 $ 142,000.00 8,893 $ 15.97
2018 $ 171,465.00 12,447 $ 13.78
meaning that the customer is considered
2019 $ 207,043.99 17,505 $ 11.83
2020 $ 250,005.61 25,060 $ 9.98
profitable. The reasoning behind this is because it
2021 $ 301,881.71 36,676 $ 8.23
cost less money to secure a customer through advertising than the customer is worth to Helios.
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B. Distribution Cost
Distribution cost is any cost required by a wholesaler, retailer, or distributor. This covers anything from
Distribution Cost per unit sold
shipping, both inbound and Year 2017 2018 2019 2020 2021
Distribution Cost $ 45.28 $ 36.58 $ 29.78 $ 24.11 $ 19.39
outbound, to taxes and tariffs, marketing and advertising, and storage costs. This amount is important to
Helios because it determines how much money will need to be spent to get the product to the customer.
The amount spent on distribution decreases from year to year as a result of improved scale with more
units sold as well as Helios Ltd controlling the selling general and administrative expenses (SG&A).
Job Description:
1) President & Internal Sales Directs the overall strategy of the company and develops relationship
2) CFO & Internet Sales Manages the accounting, payroll, and directs the Internet sales strategies and
3) Marketing and Sales Manager Manages and promotes internal and external sales on a daily
4) Customer Service/Warranty Analyst Manages customer service and warranty calls and
returns. Inspects quality on shipments received. Assists in the order fulfillment activities when
5) Order Fulfillment Analyst (1) - Wholesale distributer managing customer service and order
6) Admin and Order Processing Analyst (1) - Handle office calls, incoming and outgoing
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X. DETAILED FINANCIALS
A. Projected Income Statement by month
Gross Margin ($) 84,264.54 87,204.25 102,157.25 105,721.07 110,468.99 115,432.78 120,622.37 127,855.28 135,533.95 145,041.92 155,230.43 166,149.14
Gross Margin (%) 76% 76% 78% 78% 78% 78% 78% 78% 78% 78% 78% 78%
SG&A Costs
Professional Salaries 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67
Employee Salaries 16,250.00 16,250.00 16,250.00 16,250.00 16,250.00 16,250.00 16,250.00 16,250.00 16,250.00 16,250.00 16,250.00 16,250.00
Benefits 15,800.00 15,800.00 15,800.00 15,800.00 15,800.00 15,800.00 15,800.00 15,800.00 15,800.00 15,800.00 15,800.00 15,800.00
Supplies 750.00 750.00 500.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00
Accounting/Tax (Contract) 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00
Legal (Contract) 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00
Warehouse 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67 16,666.67
Utilities 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00
Product Delivery 1,492.50 1,537.28 1,583.39 1,630.90 1,696.13 1,763.98 1,834.54 1,926.26 2,022.57 2,143.93 2,272.57 2,408.92
Marketing/Advertisement 11,833.33 11,833.33 11,833.33 11,833.33 11,833.33 11,833.33 11,833.33 11,833.33 11,833.33 11,833.33 11,833.33 11,833.33
R&D 4,213.23 4,360.21 5,107.86 5,286.05 5,523.45 5,771.64 6,031.12 6,392.76 6,776.70 7,252.10 7,761.52 8,307.46
General Liability Insurance 1,112.81 1,151.16 1,309.95 1,355.16 1,415.51 1,478.59 1,544.51 1,635.97 1,733.00 1,853.28 1,982.07 2,120.01
Misc. Startup Cost 41,710.00 - - - - - - - - - - -
Total SG&A Cost 133,495.20 92,015.32 92,717.87 92,738.77 93,101.76 93,480.87 93,876.83 94,421.66 94,998.94 95,715.97 96,482.83 97,303.05
SG&A/UNIT 229.77 153.29 149.50 144.73 139.28 134.05 129.04 122.84 116.97 110.48 104.39 98.68
Total Expenses (160,511.47) (119,927.16) (121,555.58) (122,533.65) (124,184.15) (125,907.06) (127,705.60) (130,163.48) (132,764.98) (136,001.69) (139,459.72) (143,154.50)
Total Expenses/Unit (276.27) (199.79) (196.00) (191.23) (185.78) (180.55) (175.54) (169.34) (163.47) (156.98) (150.89) (145.18)
Net Income ($) (49,230.66) (4,811.07) 9,439.38 12,982.30 17,367.23 21,951.91 26,745.54 33,433.61 40,535.01 49,325.95 58,747.60 68,846.09
Net Margin/Unit ($) (84.73) (8.01) 15.22 20.26 25.98 31.48 36.76 43.50 49.91 56.93 63.56 69.82
Distribution Cost/unit sold 56.75 55.13 53.15 51.25 49.39 47.60 45.88 43.75 41.73 39.50 37.41 35.44
Net Operating Profit (49,230.66) (4,811.07) 9,439.38 12,982.30 17,367.23 21,951.91 26,745.54 33,433.61 40,535.01 49,325.95 58,747.60 68,846.09
Depreciation - - - - - - - - - - - -
Interest Expense - - - - - - - - - - - -
Loan Repayment - - - - 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00
Income Tax (25%) - - 1,526.51 2,412.24 3,508.47 4,675.48 5,894.72 7,587.57 9,383.75 11,602.32 13,978.57 16,524.02
Net Profit (50,343.47) (9,295.56) 3,269.58 5,881.57 (3,390.09) 47.84 3,639.64 8,626.74 13,918.26 20,453.68 27,453.63 34,952.06
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B. Projected Cash Flow, first year
Projected Cash Flow Statement
2017 2018 2019 2020 2021
Cash Flow Statement
Net Income 51,880.55 666,918.66 1,536,026.99 3,044,739.85 5,691,845.98
Inventory (126,196.12) (4,559.40) (50,379.90) (74,281.41) (112,783.47)
Accounts Receivables (212,000.59) (27,281.88) (124,336.50) (206,866.90) (351,736.12)
Accounts Payables 48,651.52 1,982.26 4,218.79 5,044.78 6,251.59
Operating Cash Flow (237,664.64) 637,059.63 1,365,529.38 2,768,636.32 5,233,577.98
Start-Up Cost (Equipment) (41,710.00) - - - -
Debt 400,000.00 (187,500.00) (100,000.00) (100,000.00) (12,500.00)
Equity 750,000.00 - - - -
Net Cash Flow 870,625.36 449,559.63 1,265,529.38 2,668,636.32 5,221,077.98
Initial Cash Balance 883,125.36 1,332,685.00 2,598,214.37 5,266,850.69
Ending Cash Balance 883,125.36 1,332,685.00 2,598,214.37 5,266,850.69 10,487,928.67
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E. Projected Three Year Plan
Income Statement
Projected Income Statement 2017 2018 2019 2020 2021
Revenue ($)
Units Sold
Netherland Wholesale 5,950 8,033 10,442 13,053 15,664
Cross Border Internet Sales (less VAT) 2,943 4,414 7,063 12,007 21,012
Total Units 8,893 12,447 17,505 25,060 36,676
Unit Growth (%)
Netherland Whole Sale 35% 30% 25% 20%
Cross Border Internet Sales 50% 60% 70% 75%
Unit Sales Price ($/Unit)
Netherland Retail 154.76 162.50 170.62 179.15 188.11
Cross Border Internet Sales 271.51 285.09 299.34 314.31 330.02
Unit Sales Price Growth (%) 5% 5% 5% 5%
Total Gross Sales ($) 1,719,856.02 2,563,740.80 3,895,917.61 6,112,348.63 9,880,949.95
Service Parts Revenue ($) 149,345.91 307,648.90 467,510.11 733,481.84 1,185,713.99
Returns (Parent Co. resp) (85,992.80) (128,187.04) (194,795.88) (305,617.43) (494,047.50)
Total Revenue 1,783,209.13 2,871,389.70 4,363,427.73 6,845,830.47 11,066,663.95
SG&A Costs 5% 5% 5% 5%
Professional Salaries 200,000.00 210,000.00 220,500.00 231,525.00 243,101.25
Employee Salaries 195,000.00 204,750.00 214,987.50 225,736.88 237,023.72
Benefits 189,600.00 199,080.00 209,034.00 219,485.70 230,459.99
Supplies 4,250.00 3,150.00 3,307.50 3,472.88 3,646.52
Accounting/Tax (Contract) 15,000.00 15,750.00 16,537.50 17,364.38 18,232.59
Legal (Contract) 15,000.00 15,750.00 16,537.50 17,364.38 18,232.59
Warehouse 200,000.00 210,000.00 220,500.00 231,525.00 243,101.25
Utilities 54,000.00 56,700.00 59,535.00 62,511.75 65,637.34
Product Delivery 22,312.96 23,428.60 24,600.03 25,830.04 27,121.54
Marketing/Advertisement 142,000.00 171,465.00 207,043.99 250,005.61 301,881.78
R&D 72,784.10 76,423.30 80,244.47 84,256.69 88,469.53
General Liability Insurance 18,692.02 28,713.90 43,634.28 68,458.30 110,666.64
Misc. Startup Cost 41,710.00
Total SG&A Cost 1,170,349.07 1,215,210.80 1,316,461.77 1,437,536.60 1,587,574.73
SG&A/UNIT 131.60 97.63 75.20 57.36 43.29
Total Expenses (1,583,869.04) (1,785,546.29) (2,106,879.36) (2,552,566.27) (3,195,647.12)
Total Expenses/Unit (178.10) (143.45) (120.36) (101.86) (87.13)
Net Income ($) 199,340.09 1,085,843.41 2,256,548.36 4,293,264.20 7,871,016.83
Net Margin/Unit ($) 22.42 87.24 128.91 171.32 214.61
Distribution Cost/unit sold 45.28 36.58 29.78 24.11 19.39
Net Operating Profit 285,332.89 1,085,843.41 2,256,548.36 4,293,264.20 7,871,016.83
Depreciation 5,958.57 6,852.36 7,880.21 9,062.24 5,998.05
Interest Expense 37,666.67 25,000.00 17,000.00 9,000.00 1,000.00
Loan Repayment 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00
Income Tax (25%) 61,916.56 265,210.85 559,887.09 1,071,066.05 1,967,504.21
Net Profit 67,057.65 666,918.66 1,536,026.99 3,044,739.85 5,691,845.98
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F. Description of the planned growth
At first month of operation, conservatively, Helios Intl. Ltd. expects to have 26 retail shops carrying the
Revenue 2017 2018 2019 2020 2021
product which is 1% of all bike Units Sold
Netherland Wholesale 5,950 8,033 10,442 13,053 15,664
Cross Border Internet Sales (less VAT) 2,943 4,414 7,063 12,007 21,012
shops in the Netherlands. The Total Units 8,893 12,447 17,505 25,060 36,676
Unit Growth (%)
Netherland Whole Sale 35% 30% 25% 20%
Projected growth through retail is Cross Border Internet Sales 50% 60% 70% 75%
35% in the second year of operation, 30% in the third, 25% in the fourth, and 20% the fifth. The growth
will start to slow as the product reaches maximum expansion. The Online sales will reach exponential
growth because of the market potential which is all of Europe. The online growth starts with 50% the
second year, 60% the third, 70% the fourth, and 75% the fifth. By the fifth year the number of units
sold online will exceed the units sold through retail because of the vast exposure through the internet.
The plan is to expand into brick and mortar bike shops in Germany, Belgium, and Denmark by the end
of the fifth fiscal year business plan. These 4 countries in total represent the highest concentration of
bicycles in the EU and the affluence to afford the premium Smartbike handlebars.
financials since the company started its operations, to show there are sufficient funds, not only for the
$125,000 investment but the equity to support the collateral for the investment.
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The Personal Financial Statement shows the Principal Executives net worth, since they will together be
PERSONAL FINANCIAL STATEMENT
Date: 31-Dec-15 31-Dec-15 investing up to an additional $125,000 for
Person: Danny Scott Carlos Weeber
Assets Amount in Dollars Amount in Dollars
C ash - checking accounts $ 26,023.00 $ 21,438.00
equity share. Each executive will be putting
C ash - savings accounts $ 61,083.00 $ 69,394.00
C ertificates of deposit $ 58,050.00 $ 64,538.00
Securities - stocks / bonds / mutual
$62,500 to the business to start and the
$ 65,064.00 $ 72,850.00
funds
Notes & contracts receivable $ 51,038.40 $ 61,876.00
initial capital funding. The executives have
Life insurance (cash surrender value) $ 95,000.00 $ 94,000.00
To capitalize the Company, the Principals intend to contribute a total of $125,000 dollars of equity,
Helios (the Parent) will also contribute $125,000. To fund Helios International Ltd., an additional loan
of $500,000 will be required to reach the $750,000 goal. It is expected that the loan will be repaid in
four years with an interest rate of 8.0%. For this loan, the lender will have a 50% ownership in the
Company until the loan is repaid. In addition, Helios (Parent) will place the subsidiary as collateral.
3. External Sources
Helios LTD. Is requesting a one-time
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4. Short term and long-term borrowing
The $500,000 investment is a loan that is intended and projected to be payed of by the end of the fifth
fiscal year
5. Repayment plan
Repayment Plans
2017 2018 2019 2020 2021
Beginning Loan Balance ($) 412,500.00 312,500.00 212,500.00 112,500.00 12,500.00
Interest Expense (8%) 37,666.67 25,000.00 17,000.00 9,000.00 1,000.00
Loan Amortization 100,000.00 100,000.00 100,000.00 100,000.00 12,500.00
Ending Loan Balance 312,500.00 212,500.00 112,500.00 12,500.00 -
plans section. Principle and interest will begin after the 4th month of investment. In addition to the
repayment plan the investors are entitled to 50% of the profit in such time until the loan is paid in full.
In total 50% of the projected profit will be $5,500,000 this money will be paid yearly.
a startup, KPIs are critical to measure performance. Without a measurement, there is no baseline and
there is no target. Helios International will be measuring the following KPIs monthly:
1) Sales revenue - Monthly revenue will have an impact on cash flow required to run the business. Helios
Int. will measure this by keeping track of the number of units exported each month.
2) Gross Margin - Measuring gross margin is key to maintain profitability and insure the company will
be viable moving forward. This is calculated week by week and will be using the equation previously
mentioned. Although the gross margin is tracked week by week, action to correct any areas causing a
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3) Customer Experience - Important to gauge the success of a new product in a new market. This is key
for a startup and building customer acceptance in light of the fact that word of mouth is important for this
visible product. This will be measured by a quick survey that is administered from the app. Follow up
emails will be made after the handlebars are purchased encouraging the customer to input their comments
4) Customer Acquisition Cost - CAC will need to be calculated and tracked to manage Helioss
advertising and insure that Helios is receiving the biggest value for its marketing budget. Helios is
calculating the CAC through the equation explained previously, and will be tracked month by month.
5) Monthly Profit and Loss - Tracking P&L results monthly will give the business a clear view that
Helios International is on track with sales and expectations. A comparison with the projected growth and
the number of actual sales will allow Helios to make this comparison at the end of each month.
6) Overhead Costs - Tracking SG&A expenses monthly is critical to insure that variable costs that the
business controls is kept in check. Unexpected expenses can rise and eliminate the gains in profit. This
is calculated each month by the amount of money deducted from the companys cash flow.
7) Inventory Size - This metric is important to measure the quantity of product on hand. First to make
certain that there is sufficient product to meet demand, but also to insure that there is not an overstock
situation and the company is not burdened with a high carrying cost. This measurement is important that
the bike shops also report what is on hand to measure their turnover and the success of their sales. This
is calculated by an IMS which determines the number of units of each particular model sold per week.
This system will also create a seasonal prediction for the number of units, and skews sold.
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XII. COMPETITIVE ADVANTAGE
The Helios Smartbike handlebar is an integrated safety, security, and navigational device that is
packaged in a stylish fashion that has no competition. The Helios handle bar has a utility and design
patent. The functions provided by the handlebar are not found in any other product:
The handlebars have been tested in all weather conditions and have excellent reliability
ratings. Exceptional service will be provided with Youtube videos to troubleshoot any problems as well
as technicians on call that will assist in the setup and maintenance issues.
XIII. CONCLUSION
Helios International, Ltd. a jointly owned subsidiary of Helios (San Francisco) is seeking to expand
into the European Economic Community market with a launch strategy from Amsterdam,
Netherlands. All estimates in this business plan are based on the two revenue streams described;
Storefront wholesale and Internet sales. We are confident that with this strategy Helios Ltd will meet
the revenue and profit goals described. Helios Ltd will establish a foothold in Netherlands and then
expand storefront sales to other European countries. We are most excited for the additional prospect of
growth in the partnering with Accell Group. Accell is the largest bike OEM in Netherlands
manufacturing brands such as: Hercules, Staiger, Winora, Tunturi, Lapierre, Mercier, Atala, Batavus,
Loekie, Koga-Miyata, and Sparta B.V. Offering the patented Helios Smartbike Handlebars as optional
equipment from the OEM has the potential to increase the original projections by 50%. Helios Ltd is
looking for the investment of $500,000, to be paid back in a 4-year period with an 8.0% interest and in
addition the investor will receive 50% of the profits during this period of growth.
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XIV. BIBLIOGRAPHY
http://www.ridehelios.com/
http://www.belastingdienst.nl/rekenhulpen/registratie_buitenlandse_ondernemers/en/
http://www.hollandtrade.com/business-information/holland-information/foreign-investment/
http://www.numbeo.com/cost-of-
living/compare_cities.jsp?country1=Netherlands&city1=Amsterdam&country2=United+States&city2=New+York
%2C+NY
http://netherlandsbynumbers.com/2013/08/31/10-questions-about-the-dutch-and-their-bikes/
http://www.weekendnotes.com/interesting-facts-about-netherlands/
https://en.wikipedia.org/wiki/Customer_lifetime_value
http://netherlandsbynumbers.com/2013/08/31/10-questions-about-the-dutch-and-their-bikes/
http://www.chinaimportal.com/blog/customs-taxes-importing-china-ultimate-guide/
http://europa.eu/about-eu/countries/member-countries/netherlands/index_en.htm
http://www.doingbusiness.org/data/exploreeconomies/netherlands/~/media/giawb/doing%20business/docume
nts/profiles/country/NLD.pdf
http://ec.europa.eu/budget/biblio/documents/regulations/regulations_en.cfm
XV. APPENDIX
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MFG COST OF THE BAR PER UNIT
MATERIALS $ 21.96
LOADED LABOR $ 5.14
PACKAGING $ 3.37
Manufacturing FEE (40%) $ 12.19
TOTAL $ 42.66
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