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"   RJM Specialty Laminates     Business Plan         Prepared by:  Rene Buys Jameson Craig Michael Rocksborough-Smith Michael Vorhies       WOOD 465  April 8, 2005RJM Specialty Laminates  Business Plan 2005  1EXECUTIVE SUMMARY  The steady growth of the ski and snowboard industry over past years has created market conditions that are ideal for the entry of new startup manufacturing companies. The recognition of this opportunity prompted our response; the role that wood ski and snowboard cores play in the industry is forecasted to be a success within the innovation driven market environment.  RJM Specialty Laminates cores are tailor-made, using interior British Columbia grown Douglas-fir wood. Our products are able to utilize the inherent \u201Cgreen\u201D value of a renewable resource in the manufacture of ski/snowboard components.  The wood is being cleared for ecological reasons.  Thinning of the small diameter Douglas-fir is occurring to provide the habitat characteristics essential to the mule deer winter range.  Densely grown stands have implications on wood properties as well.  The harvested Douglas-fir contains a very tight grain and therefore has high strength and durability properties - perfect for wood ski and snowboard cores.  RJM Specialty Laminates cores are to be made wholly of Douglas-fir.  When our cores are introduced into what is an integral part of the ski and snowboard, a quality product is achieved by our clients.  Our cores are durable and maintain excellent characteristics over a long product life.    Our success will be based on a solid customer base of startup ski and snowboard manufacturers seeking to make a high performance and high quality product. Additionally, we will provide consumers with the \u201Cgreen\u201D choice, capturing a significant market share of the many people who base purchase decisions on environmental values.  We will foster close personal relationships with our customers and with the industry at large.  As we become more established we will look into diversifying through the utilization of multiple wood species when producing our cores.  These objectives will help to develop a strong name for RJM Specialty Laminates in the most efficient manner. Our company size, structure and technology will allow us to make rapid decisions and produce trials and results with accuracy and speed.  Concepts and ideas could become prototypes in hours.   This will prove very beneficial for the research and development side of the business as well as helping customers quickly find a perfect custom design to suit their needs.  This business plan will include a financial analysis for this venture. It will include in it a summary of capital start up costs as well as a cash flow projection for the first year of operations. Sales and operations are expected to start out slow, but quickly gain momentum as we gain new customers and confidence.  The details set out in the plan will represent our best efforts in identifying and defining the role we can play within our sector, industry and market.      RJM Specialty Laminates  Business Plan 2005  2TABLE OF CONTENTS  EXECUTIVE SUMMARY ...........................................................................................................................1 TABLE OF CONTENTS ..............................................................................................................................2 LIST OF ILLUSTRATIONS........................................................................................................................3 LIST OF TABLES...........................................................................................................................................3 LIST  OF FIGURES.........................................................................................................................................3 1.0 INTRODUCTION ...................................................................................................................................4 1.1 BUSINESS BACKGROUND.......................................................................................................................4 1.2 GENERAL COMPANY DESCRIPTION........................................................................................................4 1.2.1 Business Philosophy......................................................................................................................5 1.3 OVERVIEW OF THE SKI CORE INDUSTRY................................................................................................5 2.0 INDUSTRY ANALYSIS AND TRENDS ..............................................................................................6 2.1 HISTORY OF SKIS AND SNOWBOARDS....................................................................................................6 2.2 THE ECONOMIC SECTOR........................................................................................................................7 2.3 THE INDUSTRY ......................................................................................................................................7 3.0 MARKETS...............................................................................................................................................8 3.1 INTRODUCTION......................................................................................................................................8 3.2 MARKET SIZE AND TRENDS...................................................................................................................8 3.3 PSYCHOGRAPHICS AND DEMOGRAPHICS ...............................................................................................9 4.0 COMPETITION....................................................................................................................................10 4.1 COMPETITIVE POSITION.......................................................................................................................10 4.2 STRATEGIC OPPORTUNITIES ................................................................................................................11 4.3 FACTORS AFFECTING ABILITY TO COMPETE .......................................................................................11 4.4 MARKET SHARE DISTRIBUTION...........................................................................................................12 4.5 FUTURE COMPETITION ........................................................................................................................12 4.6 BARRIERS TO ENTRY ...........................................................................................................................12 5.0 STRATEGIC POSITION AND RISK ASSESMENT........................................................................12 5.1 STRATEGIC POSITION...........................................................................................................................12 5.2 RISK ASSESSMENT AND OPPORTUNITY BALANCE ...............................................................................13 5.2.1 SWOT Analysis............................................................................................................................13 6.0 MARKETING PLAN............................................................................................................................14 6.1 TARGET MARKETS ..............................................................................................................................14 6.2 MARKETING MIX BREAKDOWN...........................................................................................................15 6.2.1 Product........................................................................................................................................15 6.2.2 Place ...........................................................................................................................................16 6.2.3 Promotion ...................................................................................................................................16 6.2.4 Price............................................................................................................................................17 7.0 OPERATIONS.......................................................................................................................................17 7.1 FACILITY .............................................................................................................................................17 7.2 PRODUCTION .......................................................................................................................................18 7.3 INVENTORY .........................................................................................................................................19 7.4 CUSTOMER SERVICE AND ORDER FULFILLMENT..................................................................................20 8.0 MANAGEMENT AND ORGANIZATION ........................................................................................20 9.0 DEVELOPMENT..................................................................................................................................21 RJM Specialty Laminates  Business Plan 2005  310.0 FINANCIALS ......................................................................................................................................21 LITERATURE CITED ...............................................................................................................................23 APPENDICES .............................................................................................................................................24 Appendix I. WOOD 465 Term Assignment Handout............................................................................25 Appendix II. Communication of Intent from Ski and Snowboard Manufacturers ................................27 Appendix III. List of Ski and Snowboard Manufacturers and their Core Material..............................31 Appendix IV.  Wood commonly used in skis and their properties. .......................................................31 Appendix V. Financial Documents.......................................................................................................32 Appendix VI.  Assumptions made regarding the Business Plan...........................................................37      LIST OF ILLUSTRATIONS  List of Tables Table 1. Age profile of alpine skiers (Adapted from Canadian Ski Council 2004).9 Table 2. Household incomes &amp; home ownership of alpine skiers. (Adapted from Canadian Ski Council 2004)......................................................................................... 10    List  of Figures Figure 1. Traditional skiing, ca 1900\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..6 Figure 2. R&amp;D Technician (Scotty Bob 2005)..\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..13 Figure 3. Snowboard cores\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u202615 Figure 4. CNC Router (Scotty Bob 2005)................................................................... 19 Figure 5. Flat management structure of RJM Specialty Laminates ....................... 21    RJM Specialty Laminates  Business Plan 2005  41.0 INTRODUCTION  1.1 Business Background  Ken Day, the manager of the UBC Alex Fraser Research Forest, near Williams Lake, BC, is currently harvesting large amounts of small diameter, tight grain Douglas-fir (Pseudotsuga menziesii).  The majority of the logs are harvested below the utilization standards and are too small for most mills to handle (Day 2005).  These logs are being harvested to accomplish overriding social and ecological objectives.  Due to decreased fire presence, the forests have accumulated large amounts of small trees.  Competition in the dry climate has decreased the forest productivity and quality habitat area for mule deer winter range.  The decreased vigor of the forests due to competition has increased the chance for bark beetle outbreaks and increased the potential for much more severe catastrophic wildfires.  These issues are being mitigated through commercial thinning of small diameter Douglas-fir trees, providing sustained mule deer habitat and improving forest health.  A more detailed description of the context, problem, and constraints is provided in the WOOD 465 handout attached as Appendix I.  This plan has been developed to utilize the small diameter Douglas-fir to the financial benefit of both the Alex Fraser Research Forest and this start up business.  RJM Specialty Laminates, a start up company, will produce solid Douglas-fir ski and snowboard cores diversifying later into mixed wood cores and other laminated wood products.  1.2 General Company Description   RJM Specialty Laminates evolved as a product of four students from UBC\u2019s Faculty of Forestry, Michael Vorhies, Rene Buys, Jameson Craig and Michael Rocksborough-Smith.  RJM Specialty Laminates was developed to introduce Douglas-fir laminated ski and snowboard cores to the snowsport industry.  Our knowledge of wood properties and processing will allow is to provide our clients with a quality ski and/or snowboard core that meets their customized specifications.  In addition, RJM Specialty Laminates will look into diversifying our product to incorporate a mixture of wood species in forming cores to provide a greater variety of core structural characteristics.  RJM Specialty Laminates will be strategically located in the Kamloops area.  The location will take advantage of relative close proximity to the timber source (288km South).  Kamloops is situated well for market access as four major highways, numerous shipping companies, two major rail lines and an airport all service the area.    RJM Specialty Laminates  Business Plan 2005  5RJM Specialty Laminates will enter into a strategic alliance with UBC Alec Fraser Research Forest regarding the supply of timber.  RJM Specialty Laminates will develop further partnering and simple contractual relationships with ski and snowboard manufacturers.  Letters of intent from several ski/board manufacturers have been included in Appendix II.    A flat management structure has been set up by RJM Specialty Laminates.  Flat management structures are \u201Crelatively unencumbered by internal constraints and the organization has energy to deal with the world that goes right on changing\u201D (The Gleaner, March 17 2004, organizing ourselves for success).  It can therefore aid in the development of products quickly and efficiently. In addition cross- functional teams will be developed to improve work processes that cross organizational bounds and solve problems that have impact on multiple parts of the company (Human Resource Development Council 2005).  In this way the departments will work efficiently and smoothly together.  The Organization of the company will consist of an Owners Group, General Manager and five departments described further in Section 8.  1.2.1 Business Philosophy    Mission Statement \u2013 Manufacturing high quality, ecologically friendly, Douglas-fir ski and snowboard cores to a dynamic industry.  Vision Statement \u2013 We will produce superior ski and snowboard cores.  We will become a trusted and reliable staple in ski and snowboard manufacture with great potential to further develop our product.  We will deliver a product that exceeds our customers\u2019 expectations in every aspect.  Values \u2013 customer oriented, sustainable, forward looking, reliable, high quality.   1.3 Overview of the Ski Core Industry  It is difficult to identify the ski and snowboard industry as there is such variability in how companies go about the procurement of their cores.  Some companies produce their cores in- house while others rely on manufacturers to produce the core to their specifications.  There is also great variability in the materials used to generate a ski or snowboard core.  Wood and foam cores are the major materials used but some companies are using metals, fiberglass and carbon fibers in their core production.   RJM Specialty Laminates  Business Plan 2005  6 The wood ski core industry utilizes various techniques but all generally produce a vertically laminated block of which to cut out core blanks.  Multiple woods are used and selected based on their structural qualities such as their modulus of rupture (MOR), modulus of elasticity (MOE), specific gravity (SG) and shear strength.  Woods that are currently used in ski manufacturing can be found in Appendix III.  Ski and snowboard core manufacturers have found success when they have developed a reliable customer base through providing a consistent and unique product (S. Martin, Donek Snowboards (personal communication, April 5, 2005. Scotty Bob, a high end ski manufacturer, expressed that, \u201Ccompanies that use wimpy woods and synthetic foam cores can add various laminates to approach the performance of a great wood, but they can't come close to the durability\u201D (2005).  It is this attitude combined with   2.0 INDUSTRY ANALYSIS AND TRENDS  2.1 History of Skis and Snowboards   If one were to track the development of skis through time one would find a product rich with innovation and adaptation.  Skis have moved from crude pieces of equipment formed from pieces of wood to highly designed, performance based equipment utilizing the most advance technologies and materials available.  Ski shape and design is fueled by the sports participants innovation on the slopes.  One such development milestone, arguably the biggest of its kind for any sport in the past, is the snowboard.  When Sherman Poppen joined two skis together with some doweling for his daughter in 1965 he could have had no idea that his idea planted the seed for modern snowboards in the minds of industry pioneers like Jake Burton and Tom Sims (Transworld Snowboarding 1996).  Once again it was the introduction of a suitable way to fix the rider\u2019s foot on the board which set the sport rocketing on its way.    Figure 1. Traditional skiing, ca 1900 RJM Specialty Laminates  Business Plan 2005  72.2 The Economic Sector The manufacturing sector in Canada: null 4.7 million people depend on the sector for their livelihood; 2.5 million directly employed null Accounts for more than $400 billion in exports null Performs 75% of private sector R&amp;D  null Directly accounts for 21% of economic activity (Canadian Manufacturers and Exporters 2004)  2.3 The Industry    The longstanding development and streamlining of the ski industry coupled with the consolidation of the snowboard industry in the late 1990\u2019s has resulted in very tight and focused conditions, with existing relationships becoming more and more entrenched (Linton 2000).  The snowboard industry in particular remains one of the fastest growing areas in the Canadian sporting goods industry (Linton 2000).  Interestingly enough, the inherent seasonal nature of the sport does not unduly limit off-season industry performance in the retail end of ski and snowboard manufacture.  The release of new product lines and models each year provides those consumers who want to be on the cutting edge with the newest technologies, while those looking for entry-level products can still be very content with purchases of last year\u2019s overstock at sale prices.  The distribution of products to end-users is primarily through sport and outdoor retail chains as well as web-specific retailers.          Research and development (R&amp;D) plays a massive role in the industry.  Both skiing and snowboarding have well established international level competitions and gaining an edge over your competitor, for both the athletes and the manufacturers, is everything.  At his point there is little scope for influential technological advances in the field, but in a sport where milliseconds may make the difference between getting a medal and being sent home empty-handed, it is the little things that count.  Although you never see it (unless you break your ski in half), the core of the ski/snowboard is a major focus of R&amp;D.  It represents the largest component in the manufacturing process and largely defines the performance capabilities of the ski or snowboard. RJM Specialty Laminates  Business Plan 2005  83.0 MARKETS  3.1 Introduction  Skiing and snowboarding are global pursuits.  Wherever there is snow \u2013 and in some cases even where there is not \u2013 you will find people launching themselves down icy slopes.  The manufacture of skis and snowboards is not limited in the same geographic and climatic sense but is roughly located along the same lines; North America and Europe host the majority of production. 3.2 Market Size and Trends  The market for ski and snowboard manufacture is a huge one.  The market for the manufacture of high-quality wood ski/snowboard cores is, by association, equal in scale.  Both these markets are intrinsically linked to the number of people who ski/snowboard as they are the end-user.  Information on these users can be used to determine the market size.    null During the 2002/2003 season alone, a total of 4,162,000 (15.3%) Canadians aged 12 years and over participated in one or more forms of skiing1.     null There was an increase of 617,000 participants from last year (5.8%) null 2002/2003 showed the first increase in participation for several years   (Source: Canadian Ski Council \u2013 Facts &amp; Stats 2004)  A subtle indicator of the current market size is the carrying capacity of big-name brands.  The market is flush with large-scale international organizations; huge brands like K2, Rossignol, Atomic, Head, Salomon, Dynastar, Volkl and Volant are all able to claim massive influence on the ski consumer.  Snowboarding is equally flush with exclusive boarding giants like Forum, Lib Technologies, Burton, Da Kine, Volcom and many more \u2013 all performing at a very high level while selling very similar products.  The number of companies that are competitive and successful within this relatively narrow product market is a valid indicator of market size.  The market for specialty components in the manufacture of skis and snowboards has access to this broader market.   A significant trend which has and will continue to have sweeping implications for business and competition in many industries is the increasing demand for high standards of environmental and social responsibility built into the design, manufacture, and distribution of products (Ottman 1998).                                                   1 Includes snowboarding RJM Specialty Laminates  Business Plan 2005  9An increased global awareness of the social and environmental ramifications of the choices that individuals make every day \u2013 from what coffee they drink to what car they buy - has businesses striving to prove that their products are safe choices.  More than ever, the \u201Ctotal product\u201D must incorporate high standards of environmental and social responsibility within every aspect of production and distribution possible.  Industries which are related to the outdoors generally involve consumers who place a relatively high value on the environment and sustainability; therefore, \u201Cgreen\u201D business practices and products become even more important  3.3 Psychographics and Demographics   Skiing and snowboarding attracts a wide variety of personalities and attitudes to the slopes.  However, several common themes may be found deep in the psyches of cash-strapped student riders and chalet-owning millionaires alike.  Along with skis or a board, participants generally possess an adventurous spirit, a high appreciation for the outdoors, and healthy outlook.       The ski/snowboard industry boasts an immensely diverse market demographic.  In Canada especially, people of all ages, in all walks of life and of all social standings go skiing to the tune of millions of people each year (Canadian Ski Council 2004).     Table 1. Age profile of alpine skiers (Adapted from Canadian Ski Council 2004)  NOTE: Alpine skiers include snowboarders.  A diverse age class structure with a significant consumer base with almost 50% of participants under the age of 24;  A younger generation who have grown up with the environment and sustainability issues permeating society.     RJM Specialty Laminates  Business Plan 2005  10Table 2. Household incomes &amp; home ownership of alpine skiers. (Adapted from Canadian Ski Council 2004)   Note: 71.4% of participants come from household incomes greater than $50 000.  This represents a large consumer base with the financial means to pay a slight premium for the products which are more aligned with consumer values regarding the environment.      For further demographic information on the ski and snowboard industry in Canada, see the Canadian Ski Council reference.  4.0 COMPETITION 4.1 Competitive Position  There are many materials and methods used to produce ski and snowboard cores.  Manufacturers will \u201Cuse wood or synthetic cores or composites of wood and injected foams that are engineered and customized to meet the needs of various skiing styles\u201D (Jacoby 2002).  There is tremendous variability in the ski and snowboard industry regarding the type of core material used.  There are multiple smaller companies that produce the ski from core to completion.  Companies such as Scotty Bob located in Silverton, Colorado and Donek Snowboards located outside of Denver, Colorado produce custom wood core skis and snowboards respectively.  They operate on a small scale and can produce custom boards to individuals.  There are also small companies such as Prior Skis and Snowboards located in Whistler, BC.  Prior sends a Computer Assisted Drafting (CAD) file to a manufacturer in Quebec who in turn produces a core to the given specifications.  Beyond wood core skis and snowboards there are companies who develop their cores from synthetic materials.  Salomon skis utilize a core that they have developed from synthetic materials and marketed as \u201CSpaceframe\u201D construction.  Atomic skis have developed a core that incorporates magnesium channels to help dampen ski vibration (Atomic 2005). RJM Specialty Laminates  Business Plan 2005  11Currently there is a great deal of competition among ski manufacturers to provide a unique and innovative ski core that provides a superior product.  How a company gets there is quite diversified.  Companies either manufacture their cores in-house or design a core to be manufactured elsewhere; the machinery, materials and techniques utilized by different companies is an even further variation on the process (S. Martin, Donek Snowboards (personal communication, April 5, 2005). 4.2 Strategic Opportunities  This business venture aims to introduce a Douglas-fir ski and snowboard core which no other company is currently producing.  Additionally, there is currently no company in North America that is solely manufacturing ski and snowboard cores (S. Martin, Donek Snowboards (personal communication, April 5, 2005).  By utilizing current machinery and a computer numerically controlled (CNC) router we will have the ability to produce large ski core lines to companies.  In addition, our knowledgeable staff can aid ski and snowboard manufacturers in product development.  Our machinery will allow us to move from concept to reality in six hours as compared to more generic mills where it would take up to two weeks to produce a new core shape.  This enables RJM to test many different designs while presenting options to possibly industry customers.  Since we will be producing cores from rough cut lumber we will have the ability to provide customers with a product anywhere along the core production line.  The Douglas-fir will be harvested from the Alex Fraser Research Forest for ecological purposes.  This will be played up in the marketing of our product.    4.3 Factors Affecting Ability to Compete  There are multiple factors that affect RJM Specialty Laminate\u2019s ability to compete: \u2022 Customer Reliability \u2013 Ski and snowboard core manufacturers have in the past had difficulty finding reliable customers.  Some core manufacturers have gone out of business due to orders being met and customers not paying (S. Martin, Donek Snowboards (personal communication, April 5, 2005)  Careful selection of clients and detailed payment schemes will need to be developed to ensure complete payments are made. \u2022 Unit Price \u2013 Finding an appropriate price to sell the wood cores at can be an issue.  The price needs to be reflective of the material and operating cost while still remaining competitive in the market.  Ski and board core manufacturers not charging enough for their product is another reason such manufacturers struggle in the business (S. Martin, Donek Snowboards (personal communication, April 5, 2005). RJM Specialty Laminates  Business Plan 2005  12\u2022 Solely Wood Cores \u2013 RJM Specialty Laminates will only be able to produce wood ski and snowboard cores.  Innovation will have to come from product design and construction techniques and will not be able to utilize new materials. 4.4 Market Share Distribution  The market share distribution for wood ski and snowboard cores is currently unknown.  A partial list of ski and snowboard manufacturers and their principle core type is provided in Appendix III 4.5 Future Competition  As skiers and snowboarders continue to push the limits and progress their respective sports the ski industry will continue to innovate and evolve with them.  There will be a continued drive to utilize new materials and techniques that become available to manufacturers.  Manufacturers will gain a competitive edge through providing a superior \u2018total product\u2019 and RJM Specialty Laminates will be able to do this.  It is also to our advantage that we have the capability to quickly adapt to new demands in the production of wood ski and snowboard cores.  4.6 Barriers to Entry  This venture has several potential barriers to entry: \u2022 RJM Specialty Laminates has a high capital investment and relatively low unit sales price. \u2022 Willingness for companies to switch their current core material and or process. \u2022 Number of new entrants into the ski and snowboard manufacturing business requiring some level of core manufacturing.  5.0 STRATEGIC POSITION AND RISK ASSESMENT  5.1 Strategic Position  RJM Specialty Laminates will not purely pursue \u2018operational effectiveness\u2019 but will seek to develop an \u2018activity system\u2019 that creates customer value distinct from competitors (Martin, R.J. and M.E. Porter 2000).  Our activity system will incorporate a series of interrelated decisions that will develop over time and make it difficult for competitors to match our product. RJM Specialty Laminates  Business Plan 2005  13 The ability for RJM Specialty Laminates to quickly adapt to meet new design specifications provides a significant advantage for the business.  The utilization of a CNC router and other machinery in a specialty factory make it possible for us to work closely with customers in developing their product line.  Not only will we be able to produce their current line of ski and snowboard cores but we will also be able to aide them in carrying out their research and development needs.  Most companies outsource the making of the ski cores to companies that are not primarily core manufacturers and this makes it difficult for these ski and snowboard companies to test out prototypes.  It allows us to move from concept to prototype in six hours as opposed to two weeks for other manufacturers (Donek 2005).  Douglas-fir has structural qualities that will make a superior ski and snowboard core.  So far there are no skis that are utilizing a completely Douglas-fir core.  The cores we produce from this wood can also be marketed as eco-friendly.  RJM Specialty Laminates will also be looking to acquire additional wood from Alex Fraser Research forest to utilize other species unique structural qualities to be combined with the Douglas-fir to provide further product possibilities.  5.2 Risk Assessment and Opportunity Balance  It is important to be aware of the internal and external environment within which RJM functions.  Knowledge of such information can be a valuable tool in understanding our company\u2019s position in the business and allowing for appropriate strategic development.  A tool that can be used to determine our strategic position is known as a SWOT Analysis (ICMBAI 2005).  It outlines the internal strengths and weaknesses and the external opportunities and threats to our venture.  5.2.1 SWOT Analysis    Strengths -     Location with good distribution access.    -     Low stumpage fees on wood. - Guaranteed access to, and supply of, high end wood. - In-house expertise regarding ski and wood manufacturing. - Positive feedback from interested potential clients. - Ability to adapt to different customer demands. Figure 2. R&amp;D Technician (Scotty Bob 2005). RJM Specialty Laminates  Business Plan 2005  14 Weaknesses -     Large start-up cost with minimal return in first couple years. - Ability to only use wood in the manufacture of cores.  Opportunities -     Production of an ecologically friendly product. - Involvement in a market where ski and board manufacturers are looking for product advancement. - Filling a current void in specialty ski and snowboard core manufacturers.  Threats  -     Minimal new entrants into ski and snowboard manufacturing. - Willingness of current companies to switch to a new core manufacturer or to allow a core manufacturer to produce their cores. - Reliability of customers to provide complete payment. - Development of superior materials that wood can no longer compete with.   6.0 MARKETING PLAN  6.1 Target Markets  Our primary target market will be high end ski manufacturers. In particular one manufacturer has already expressed interest in using our ski and snowboard cores. This company is PRIOR snowboards and skis based out of Whistler British Columbia. They are a smaller more grassroots type company whose goal is to expand into the international markets. As well, we would push our solid Douglas-fir wood cores in the ski manufacturing industry to other upstart companies wishing to make a premium quality high strength ski. Primary focus will be on more independent companies. Our current state of production will mean that we have to focus on these smaller companies until we develop our reputation and a more sophisticated and refined production process. Additionally we will make ourselves known to skiers themselves and ski towns around North America, because this is where most of the minds that start up a ski company will be coming from. Most companies will most likely be within North America, however if interest comes from overseas then steps will be taken to make our cores available to them.   Over time as our company evolves efforts will be made to push our cores onto manufacturers that are already well developed. Our cores will be marketed as an alternative to what they already have, boasting an environmentally friendly core, as well as a superior strength and durability. We will move into a higher level of production, allowing us to produce a lot more cores, to meet this kind of target market demand. RJM Specialty Laminates  Business Plan 2005  156.2 Marketing Mix Breakdown 6.2.1 Product  The main product being produced by RJM Specialty Laminates will be solid Douglas-fir ski and snowboard cores. The cores will be made of vertically laminated strips of solid Douglas-fir. There are very few ski and snowboard manufacturer\u2019s that use a single type of material throughout the entire core of the ski. They often use a blend between two different types of woods, or even synthetics and woods. These weaker cores often require sheets of aluminum or titanium laminated on by the manufacturer to match the ideal amount of strength and durability. Our cores will not need any of these extra laminates as they will have a naturally superior flex, strength, and durability. These cores will be especially strong and durable due to the unique properties of our wood source (see appendix IV for wood characteristic comparison). The characteristics of our wood will maintain their natural flex for a much longer period of time compared to cores made with weaker wood or synthetic foam which brake down and lose elasticity more quickly. Our cores, with their high strength will also allow them to have excellent edge hold and lateral stiffness, resulting in a very high performance ski or snowboard.  RJM Specialty Laminates will have the unique ability to go from a concept to a finished prototype core in a matter of six hours using our CNC router. This will allow our product to be fully customizable to a ski manufacturer\u2019s specific need.  We will be able to provide our customers with additional support in research and development with the aid of our research and development staff member.  As time allows, our company will grow and develop into making cores with a mix different species of wood.  This will allow us to provide additional core characteristics to our customers.  RJM Specialty Laminates will also look into the production of fully manufactured skis and snowboards, Figure 3. Snowboard cores RJM Specialty Laminates  Business Plan 2005  16right from start to finished product. Our designs will be cutting edge and because of our fast turn around time from idea to prototype, we will be able to perform extensive research and development on our products before releasing them to the markets. 6.2.2 Place  RJM Specialty Laminates will have a channel of responsibility that starts right in the UBC Alex Fraser Research Forest where the Douglas-fir trees will be harvested. The channel of responsibility will continue through to our finished product being received by our customers, the ski and snowboard manufacturer\u2019s. We will outsource the logs to PAL Lumber in Williams Lake, BC. PAL Lumber will mill and kiln dry the wood, supplying RJM Specialty Lumber with rough cut, kiln dried lumber. The lumber will then be brought to our facility in Kamloops, BC, the ski and snowboard cores will be produced. The Kamloops location is perfect because of the close proximity to our wood source as well as all our transportation needs. Initially, RJM Specialty Laminates will be dealing with the relatively local ski and snowboard manufacturer, PRIOR. Shipping charges will therefore be kept to a minimum. However, we plan to move into any available markets within North America, and if demand allows it, overseas.   Inventories are kept to a minimum as we are a \u201Cmake to order\u201D business.  Ski and snowboard cores will be shipped as they are finished. The primary mode of shipping out the product will be by truck, through a courier. When our markets start to spread out throughout North America, and depending on order size, air transport will be considered. Kamloops is situated well for the subsequent distribution of our product as the Coquihalla (Hwy 5), TransCanada (Hwy 1), Yellowhead (Hwy 16), and Highway 97 converge there.  In addition over 25 trucking and transport companies that ship goods across B.C., Canada and the U.S are located in Kamloops (Venture Kamloops Business Development 2005).  Both the Canadian National Railway and Canadian Pacific Railway service Kamloops in addition to the Kamloops airport.  Venture Kamloops Business Development states, \u201CThe airport is in a prime location to handle air cargo given the surrounding infrastructure and lack of air and ground traffic congestion\u201D (2005). There will be no intermediary on our supply chain, we will ship the ski and snowboard cores directly to our customers from our facilities. 6.2.3 Promotion  RJM Specialty Laminates will use the personal selling model for promotion. We will use a direct presentation of the information pertaining to our products for our customers. Our main form of promotion will rely on relationship building with our valued customers. Lines of communication will RJM Specialty Laminates  Business Plan 2005  17be very open between our company and the ski and snowboard manufacturers that we will be dealing with.  Our company will rely a lot on \u201Cword-of-mouth\u201D advertising that our customers will pass around throughout the industry. As the company grows bigger we will start directly approaching companies, showing them our product, and building industry relationships. Trade shows will also be a major form of advertising for us. We will attend all North American Trade shows pertaining to our industry and we will have displays and knowledgeable staff on hand at these shows showcasing our superior product. We will have a company website; however, it will not be very extensive and no sales will occur over it. This is the case because we will be relying on direct customer contact, and would rather deal with our customers in person. The website will contain basic information pertaining to our product, as well as promoting it over our competitors\u2019 products. The website will also contain contact information for the company and where we are located. 6.2.4 Price  In the short term we will use a cost-based pricing system. This is because initially we will want to meet our manufacturing target rate of return.  Eventually we will move towards a value-based pricing system as our high end product will grab a premium price. People will buy our product for its high quality and high level of performance and consistency associated with our cores.  Fixed costs involved with our company are quite high because of all the specialized machinery that is needed in order to produce our high quality cores. Our initial capital investment will involve purchasing such machinery as a CNC router as well as many other wood working machines. In Appendix V there is a list of the machines initially needed to start up the company as well as the costs associated with them. Overhead costs will involve rent of the facility, as well as utilities such as power, phone, internet, and heat. Another factor to consider is the cost associated with getting rid of waste that is a result of machining our wood cores. Variable costs associated with our business are the raw materials such as logs, lumber and glue. Other fluctuations in prices would be associated with shipping. 7.0 OPERATIONS  7.1 Facility   RJM\u2019s manufacturing facility located in Kamloops will be capable of taking rough cut, kiln dried lumber and running all the necessary steps in order to produce Douglas-fir ski cores.  The facility will consist of several different wood processing machines. Our planning team has decided not to RJM Specialty Laminates  Business Plan 2005  18incorporate the milling and drying of the lumber into our facility. We will instead focus on the secondary processing aspects of making ski cores. The milling and drying of the lumber will be outsourced to the PAL lumber mill in Williams Lake. By cutting this step out, we will reduce capital expenditure, operations requirements and overall facility size.   We are aiming to start off as a smaller business that focuses on meeting customer\u2019s specs to a high standard. We feel that this will be much more easily achieved by cutting out the primary operations in our facility so that we can focus on fine tuning our products processes and in turn its quality.  Over time we will look into the prospect of opening our own primary processing mill but outsourcing these operations right now is the most appropriate for our economic outlook.  The facility will include a testing area where all products can be tested to ensure they are free of manufacturing defects. This will show the customer that they are getting a quality product that they feel comfortable using for their skis. Flex, torsion and pull strength will all be tested before the product is shipped out.   Our facility will have a good presence of technologically advanced machines. We will make use of a CNC router and several Instron testing machines. Continuous training for our employees will keep them knowledgeable about the equipment they use and the tasks they are performing. Machines will be upgraded to meet the demands of the industry and to keep us competitive. We will pride ourselves on having technologically advanced machinery that will help us produce high quality ski cores.  7.2 Production  The production at our mill will be fairly standard of most secondary processing facilities.  \u2022 Our production will run 8 hours a day, 5 days a week.  \u2022 There will be 4 equipment operators, 1 plant manager and 1 maintenance technician, 1 R&amp;D Technicians and 1 Sales and Marketing personel. \u2022 The production process will be continuous meaning each machine will start a new order as soon as the previous is completed.  \u2022 Customer\u2019s orders will be prioritized in chronological order.        However we will make exceptions for customers who are reliable and have built a good business relationship with us.   RJM Specialty Laminates  Business Plan 2005  19The production process of ski and snowboard cores is very similar to other wood manufacturing processes in the wood industry. The rough dimension lumber from the mill is ripped, planed, glued, finger-jointed, sanded and CNCed.   The following will explain the steps involved in making ski cores and the machines required.    1) The table saw will rip the rough cut, kiln dried lumber into the necessary thicknesses in order to be vertically laminated. Defects will be cut out of each piece in order to have consistent strength properties throughout the core.  2) The planer will then plane the pieces down to the proper thickness so that they can be laminated.  3) The finger jointer will finger joint the pieces together to get the appropriate length. 4) The pieces will be put into the laminator machine to be laminated into blocks. 5) The blocks are planed again to their final dimensions. 6)  The core blanks are cut out of the blocks. 7)  The core is drilled for binding mounts. 8)  The blanks are pre-sawn to get the general side-cut shape. 9)  The blocks are sanded  10) The blocks are put into the CNC machine and profiled into the desired shape. Figure 4. CNC Router (Scotty Bob 2005) 7.3 Inventory  RJM will have an area in the facility for inventory storage. Since we are receiving a kiln dried product it is important to keep it out of the elements to reduce variability in our final product. Unfortunately we are constrained by the size of our plant and therefore can only store enough inventory to meet our largest customers order\u2019s if needed. This will reduce our holding cost and avoid the need to increase our storage space.    RJM Specialty Laminates  Business Plan 2005  207.4 Customer Service and Order fulfillment  We plan on being committed to our customers and building strong business relationships to stay competitive in the market place. RJM offers custom profile ski cores to adapt to different styles and performance specifications in the industry. We will focus on quality and ensuring our customers orders are fulfilled to their satisfaction because they are the soul reason we exist.   In the past, ski core companies ran into problems where customers would place an order and not pick up or pay for the final product. We plan on imposing a 50% deposit on any order to reduce our losses if by chance a customer decides to \u201Cjump ship\u201D after they place an order.     8.0 MANAGEMENT AND ORGANIZATION  Our business will revolve around a team environment. Every employee will have the same importance as the other and will be expected to treat all employees the same. Employees are encouraged to give input and engage in open discussion when they recognize areas of opportunity.  However, the plant manager will undoubtedly have the final say. Good communication between employees will further aid the team in achieving their goals which will add to the company\u2019s success.   Our labour force will be centralized around quality productivity. The quality of our product will be our main concern. We will start by producing high quality products to gain our customers confidence, then continue by increasing our speed of production. Our goal is to stay competitive and if the balance between quality and production speed is just right then we will remain competitive. We plan on achieving this balance through communication between R&amp;D and the machine operators. The testing technicians will be able to source the problems of failure in the product (if any) and help the operators eliminate the problem.    The management style for RJM Specialty Laminates will be flat and all employees will report to the plant manager who will report to the owners group. Being a company of smaller nature, there is no need for a board of executives until the company grows in size. The flat nature of the company will promote good communication because all the information will be centralized by the plant manager and can be immediately transferred to other employees.  RJM Specialty Laminates  Business Plan 2005  21 Figure 5. Flat management structure of RJM Specialty Laminates  9.0 DEVELOPMENT  A period of growth is to follow this introductory year.  Although sales are likely to be limited at first, it is our goal to have an annual increase in sales of 10% on each of the first five years.  It is anticipated that much of this growth will come from word of mouth among consumers as our product introduces a novel take on environmentally friendly skis and snowboards.  With the same overall aim of business growth in mind, a milestone goal will be set for the start of each production year.  Starting in year two, by the start of the ski season RJM will have entered into contract with a major ski/snowboard company for the development of a custom core for at least one ski/snowboard design \u2013 if not an entire line.  The hope is that once our capacity to fulfill our production commitments is strained, we will have the potential to expand our business.  After the initial growth of our company, following the introduction of the Douglas-fir ski core into the industry, RJM Specialty Laminates plans to diversify our product.  We will be looking to acquire different types of wood from the Alex Fraser Research Forest to utilize in the production of our ski and snowboard cores.  Through the use of multiple species, combined strategically in the core, we will be able to provide our customers with more options to meet varying and developing riding styles.     10.0 FINANCIALS  A detailed financial analysis was conducted and included in Appendix V.  It includes an income statement for the first year, machine capital investments, a year end summary, a break-even analysis and a balance sheet.  Our calculations are based on a per unit sale of the ski cores of twenty dollars.  Machine costs were determined through internet supplier catalogues.  Machines RJM Specialty Laminates  Business Plan 2005  22were selected based on our capacity requirements and specialty needs.  Earnings based on monthly production after tax is $33,117.00.                               RJM Specialty Laminates  Business Plan 2005  23LITERATURE CITED  Atomic. 2005. Atomic alpine innovation. [online]. Available at http://www.atomicsnow.com/english/home2.php. [cited on 6 April 2005].   Canadian Manufacturers and Exporters.  2004.  Canada\u2019s manufacturing industry drives our economy [online].  Available from http://www.cme-mec.ca/national/template_na.asp?p=4 [cited 7 April 2005].  Canadian Ski Council.  2004.  Facts and Stats 2004 [online].  Available from http://www.canadianskicouncil.org/site/images/content/pdfs/Facts%20%20Stats%202004%20-%20all%20final.pdf [cited 7 April 2005].  Center for Wood Anatomy Research. 2005. Technology transfer fact sheet [online]. Available from http://www2.fpl.fs.fed.us/TechSheets/SoftwoodNA/htmlDocs/piceasitchen.html. [cited on 5 April 2005].  Crane, L.  1996.  The history of snowboarding: a 30 year timeline.  Transworld Snowboarding Magazine [online].  Available from http://www.transworldsnowboarding.com/snow/instruction/article/0,13009,246571,00.html [cited 7 April 2005].    Day, K. 2005. Lecture in WOOD 465. March 10. University of British Columbia, Vancouver, BC.  Donek. 2005. Donek handcrafted snowboards and skis: about us [online]. Available from http://www.donek.com/donek.htm. [cited on 7 April 2005].  Human Resource Development Council. 2005. Organizational learning strategies: cross functional teams [online]. Available from  http://www.humtech.com/opm/grtl/OLS/ols3.cfm. [cited on 6 April 2005].  Internet Center for Management and Business Administration Inc. (ICMBA). 2005. Strategic management: swot analysis [online]. Available from http://www.quickmba.com/strategy/swot/. [cited on 7 April 2005].  Jacoby, M.  2002. Olympic Science. Chemical and Engineering News. 80(5): 29-32  Linton, S.  2000.  The Canadian snowboard industry.  STAT-USA market research report [online].  Available from http://strategis.ic.gc.ca/epic/internet/inimr-ri3.nsf/en/gr-88665e.html [cited 7 April 2005].    Martin, R.L. and M.E. Porter. 2000. Canadian competitiveness: nine years after the crossroads. January.   Ottman, J.A.  1998.  Green Marketing: opportunity for innovation.  Ottman Consulting Ltd.  New York, NY. [online edition].  Available from http://www.greenmarketing.com/Green_Marketing_Book/welcome.html [cited 7 April 2005].  Venture Kamloops Business Development. 2005. Transportation and communication [online]. Available at http://www.venturekamloops.com/Pages/kamloops/transportation.htm. [cited on 6 April 2005].  RJM Specialty Laminates  Business Plan 2005  24         APPENDICES                RJM Specialty Laminates  Business Plan 2005  25Appendix I. WOOD 465 Term Assignment Handout     RJM Specialty Laminates  Business Plan 2005  26 RJM Specialty Laminates  Business Plan 2005  27Appendix II. Communication of Intent from Ski and Snowboard Manufacturers  Communication with K2 (ski and snowboard manufacturer):  Michael,  Call any time.  That would be great if this project ended up with us using that wood.  I still haven't heard on our annual Fir consumption, I'll ask again.  Later,  Ken S.  -- Ken Schiele Product Development Engineer K2 Sports 19215 Vashon Hwy SW Vashon, WA  98070 206-463-3631 x1493 --  -----Original Message----- From: Michael Vorhies [mailto:mvorhies@gmail.com]  Sent: Tuesday, March 15, 2005 7:13 PM To: Ken Schiele Subject: Re: FW: From the K2 Skis Web site  Ken,  Thank you for your response.  This is a class project but the problem is very real. The project is addressing utilization problems that the UBC Alex Fraser Research Forest is having with Douglas-fir they are harvesting for Mule Deer winter range habitat.  This problem is also much broader than just the research forest.  Many woodlot owners and Crown forest areas in BC will be looking for a way to utilize this small diameter, tight grain wood as it is harvested for wildlife and fire protection purposes.  We were told in class that the Research Forest Manager will be reviewing all the business plans and if one (or more) looks particularly promising or possible it may be funded and followed through with.  I would be very excited to see this wood used in your skis.  I noticed your phone number in your email.  May I call you to address some specific questions I have and to give you a better idea of what this project is about?  Thank you very much,  Michael Vorhies  On Tue, 15 Mar 2005 09:10:02 -0800, Ken Schiele &lt;Ken_Schiele@k2sports.com&gt; wrote:  Michael,  Yeah, these might work for skis.  We currently use quite a bit of Fir for both ski and snowboard cores (I don't recall exactly what species, nor do I know the diameter of the trees).  RJM Specialty Laminates  Business Plan 2005  28The lumber is brought into our facility, milled down to 20mm wide boards, and these are laminate together to create a block for a ski core.  So I think dimensionally, this wood would work fine - at least the trees are quite a bit bigger than our raw lumber needs.  Attached is a picture of one of our bio flex cores, that might help show what we've got here. Other cores are all fir, some are 1/2 fir (alternating laminates lengthwise with other wood, usually spruce or aspen).  I've send our purchasing department an email asking what total qty of fir we order on an annual basis.  I'll forward this info when I receive it - I imagine this would be useful for your business plan.  Does this wood really exist, or is this only a class project?  If it's a real case, we'd be interested in trying it.  Regards,  Ken S.  Ken Schiele Product Development Engineer K2 Sports 19215 Vashon Hwy SW Vashon, WA  98070 206-463-3631 x1493  -----Original Message----- From: K2 Skis Customer Service Sent: Monday, March 14, 2005 1:30 PM To: Ken Schiele; Aaron Ambuske Subject: FW: From the K2 Skis Web site  Can you guys handle this question or should I send it to somebody else...?  Thanks,  Justin York K2 Sports Customer Service and Technical Support 19215 Vashon Hwy. SW Vashon, WA 98070 (800) 426 1617 ext. 1349 justin_york@K2sports.com  -----Original Message----- From: Michael Vorhies [mailto:mvorhies@gmail.com] Sent: Monday, March 14, 2005 1:20 PM To: K2 Skis Customer Service Subject: From the K2 Skis Web site  Name: Michael Vorhies Email Address: mvorhies@gmail.com Address: 5240 SW Humphrey Blvd. City: Portland State/Province/Country: Or Zip/Postal: 97221 RJM Specialty Laminates  Business Plan 2005  29Phone: 604-228-1796 Comment/Question:  I am a University of British Columbia student in the faculty of forestry.  I have been assigned a project in my wood business class to create a business plan based on a large amount of small diameter Douglas-fir trees that are being harvested to maintain mule deer winter range habitat. The goal of the business plan is to utilize this wood. As an avid skier I am looking into the possibility of using this wood for ski cores.  The wood is tight grain and has a high MOE.  It does not have many branches.  The diameter of these trees are approx. 20cm (8in) and smaller.  I am wondering if it is even possible for this wood to be used in making ski cores?  Is there someone I can contact to discuss wood requirements for ski cores with?  Thank you very much for looking into this for me.  Communication with Prior (ski and snowboard manufacturer):  Thanks for the note Mike,  As small Douglas fir is likely similar to aspen in useable wood content it may make be suitable for us.   For wood cores we would have to provide instructions to a mill with the right type of machinery...and this to me is the challenge.  If you are able to dig up a few specialty mill names/numbers in Williams Lake and/or Prince George and let me know that would be great.  Feel free to call number below with a few additional questions at your leisure.  Dean  604-935-1923 www.priorsnowboards.com www.priorskis.com Built right...  in Whistler  -----Original Message----- From: Michael Vorhies [mailto:mvorhies@gmail.com]  Sent: Tuesday, March 15, 2005 7:38 PM To: Dean Thompson Subject: Re: wood cores  Dean,  I have been told by my professor that there is a cohort of wood available to be tested.  If you have facilities to test the cohort I would be happy to arrange a supply for you.  Otherwise, the Center for Advanced Wood Processing here at UBC can perform the tests if this business plan progresses to such a level.  The Douglas-fir for this specific business plan would be coming from the Alex Fraser Research Forest near Williams Lake, BC.  However, the utilization problems the research forest is having with the small diameter, tight grain fir is not unique.  This wood as it is being harvested throughout BC to improve wildlife habitat and reduce forest fire risk, especially in urban interface areas.  The trees diameters tend to be too small to make standard dimensional lumber and new uses for the wood need to be found to recoup the harvesting costs.  As for wood manufacturers who can process kiln dried vertically laminated wood products there are many small specialty mills around Williams Lake that could be looked into.  Additionally, as RJM Specialty Laminates  Business Plan 2005  30part of the business plan we can include the need for a mill to be set up to address this specific issue.  I would like to continue to stay in touch as I would be very excited to see this wood used in your skis and/or snowboards.  I noticed your phone number in the email.  Perhaps I can call you to have some specific questions answered and give you a better idea of this project?  Thank you very much,  Michael Vorhies  On Tue, 15 Mar 2005 07:58:41 -0800, Dean Thompson &lt;dean@priorsnowboards.com&gt; wrote: Hi Michael,  Thanks for your interest in Prior.  This sounds like a good wood source - we have used some Douglas fir in the past. Please advise if you have a cohort who can test the weight, pull strength, etc against comparative properties of aspen and maple (I believe it would be more like maple).  We are a west coast company we are very interested in using wood from the west coast if possible.  Note that our cores are produced in Quebec and their natural wood source is aspen and maple. We are interested to get our cores manufactured here if we can find a suitable wood core manufacturer.   If you have any ideas regarding wood manufacturers who can process kiln dried vertically laminated wood products please let me know.  Kind regards,  Dean 604-935-1923 www.priorsnowboards.com www.priorskis.com Built right...  in Whistler   -----Original Message----- From: Michael Vorhies [mailto:mvorhies@gmail.com] Sent: Monday, March 14, 2005 9:58 PM To: info@priorskis.com Subject: wood cores  I am a University of British Columbia student in the faculty of forestry.  I have been assigned a project in my wood business class to create a business plan based on a large amount of small diameter Douglas-fir trees that are being harvested to maintain mule deer winter range habitat.  The goal of the business plan is to utilize this wood. As an avid skier I am looking into the possibility of using this wood for ski cores.  The wood is tight grain and has a high MOE.  It does not have many branches.  The diameter of these trees are approx. 20cm (8in) and smaller.  I am wondering if it is even possible for this wood to be used in making ski cores?  I realize you use a maple/aspen mix for our cores but I was hoping there someone I can contact to discuss wood requirements for ski cores with?  Thank you very much for looking into this for me.  Thank you, Michael Vorhies  RJM Specialty Laminates  Business Plan 2005  31Appendix III. List of Ski and Snowboard Manufacturers and their Core Material   Appendix IV.  Wood commonly used in skis and their properties.   SPECIES SG MOE MOR SHEAR Pseudotsuga menziesii  Douglas fir  0.48  1.79  13.1  1.40 Picea Sitchensis Sitka Spruce  0.40  1.57  10.2  1.15 Acer Saccharum Sugar Maple  0.63  1.83  15.8  2.33 Fraxinus smericana White Ash  0.60  1.74  15.0  1.91 Populus Tremuloides Trembling Aspen  0.38   1.18  5.4  0.85  Compiled from Center for Wood Anatomy Research (2005)   COMPANY WEBSITE CORE TYPE Salomon Skis www.salomonski.com Foam Core (space-frame technology) Rossignol Skis www.rossignol.com Synthetic (fibro-metal) K2 Skis www.k2skis.com Fir/Spruce blend Atomic Skis www.atomicski.com Beta 4 profile (wood/synthetic blend) Volkl Skis www.volkl.com Wood/fiberglass Armada Skis www.armadaskis.com Wood/synthetic Dynastar Skis www.dynastar.com wood Prior Snowboards and skis www.priorsnowboards.com Maple/aspen Donek Snowboards www.donek.com Ash/poplar Scotty Bob www.scottybob.com Sugar maple RJM Specialty Laminates  Business Plan 2005  32Appendix V. Financial Documents                                              RJM Specialty Laminates  Business Plan 2005  33                               RJM Specialty Laminates  Business Plan 2005  34 End of First Year  Sales 1,999,920Loans 1,440,0000Cost of Goods Sold 0logs 58,950lumber 27,000shipping 4,020wood glue 4,800Direct LabourEquipment depreciation 96,702Wages 445,000Total Cost of Goods SoldMaterials, Labour Costs 539,770General ExpensesMarketing 60,000Insurance 22,800Maintenance 18,000Miscellaneous 6,000Office Expenses 3,000Rent 64,800Travel 12,000Utilities 8,400Loan Payments 120,000Total Expenses 1,491,242Operating Profit 508,678Earnings After Taxes 397,405Results of Operations 397,405Income Summary         RJM Specialty Laminates  Business Plan 2005  35Break Even Analysis-$500$0$500$1,000$1,500$2,000$2,5000 20000 40000 60000 80000 100000Units Produced DollarsFixed CostTotal CostTotal RevenueProfit  Break Even Point   The sales volume that RJM needs to achieve in its first year to break even (produce zero dollars in profit but recoup all associated costs), is 21 544 units, or $430 880 in sales.                                      = BREAK EVEN POINT = FIXED COST / ( UNIT PRICE \u2013 VARIABLE UNIT COST )    RJM Specialty Laminates  Business Plan 2005  36Balance Sheet                                              BALANCE SHEET     Assets   Current Assets Value Inventory $32,200.00Cash $1,400,000.00Fixed Assets   Machinery $130,595.00Office Supplies $3,000.00Shop $64,800.00    Total Fixed Assets $1,630,595.00  Liabilities and Capital           Current Liabilities  $1,400,000.00        Long-term Liabilities $130,595.00Owner's Equuity $100,000.00    Total Laibilities and Owner Equity $1,630,595.00RJM Specialty Laminates  Business Plan 2005  37Appendix VI.  Assumptions made regarding the Business Plan  Market Information \u2022 Wood core industry is closely tied to overall ski and snowboard manufacturing industry. \u2022 Ski core market characteristics and trends can be inferred from information on this ski and snowboard market as a whole. \u2022 Interests in outdoor activities relates to increased values placed on the environment.  Financial/Operational Information \u2022 PAL Lumber is able to handle the small diameter Douglas-fir and meet our specification. \u2022 Our output of 100,000 cores per year is feasible based on estimated production quotes from industry participants. \u2022 The cost of $20 is based on the best estimates to date. \u2022 Funding will be secured through business loans.  Strategy \u2022 We will be able to procure additional species of wood from Alex Fraser Research Forest for further development. \u2022 Qualities of Douglas-fir do lend themselves to making quality ski and snowboard cores, however, this plan does assume that a cohort test proves this. "@en
<https://open.library.ubc.ca/cIRcle/collections/undergraduateresearch/18861/items/1.0108128>