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Thompson Motorsports & Design is a small, Michigan-based custom motorcycles builder and motorcycle parts / Aftermarket Automotive parts brick and mortar organization. Thompson Motorsports & Design will remain small in order to offer unprecedented customer attention. Thompson Motorsports & Design will become the premier destination for South West Michigan custom motorcycles and motorcycle parts / Automotive parts.

The Market

Thompson Motorsports & Design will be participating in an exciting, growing market. The $14.6 billion U.S. market for motorcycles is set to see its 13th consecutive growth year with the support of the of a key consumer bloc. Baby boomers are heading out on the highway in droves. This Packaged Facts report covers the explosive market for motorcycles, including cruisers, sport bikes, touring and dirt bikes, which accounted for about 91% of motorcycle sales in 2004 and scooters, standard bikes and dual-purpose bikes, which accounted for the rest of the market. All segments will get a boost in the coming year, due to skyrocketing gas prices, bringing more cycle devotees into the core user group and further changing the face of the motorcycle consumer. This all new Packaged Facts report looks into distribution and retail growth areas, such as alternate forms of financing for distributors. . Additionally, TV coverage for motorsports has increased dramatically helping fuel growth.

The Organization

Thompson Motorsports & Design is founded on the idea that maintaining satisfied customers is essential to the financial health of the organization. With this in mind, Thompson Motorsports & Design will be working hard to ensure that all of their customer's expectations are exceeded in all transactions. To maintain a presence within the motorcycle and custom automotive community and close relationships to customers, Thompson Motorsports & Design will be an active member of the local scene through participation and sponsorship.

Products, Services, and Delivery

Thompson Motorsports & Design will be both a brick and mortar company serving the local community as well as an online web site. The web site will be a place to purchase goods and to promote the business. Thompson Motorsports & Design will offer engine and chassis parts for a wide variety of motorcycles and cars. Safety equipment and set up equipment will also be offered. All of the popular name brands will be offered in addition to an array of generic label parts. Thompson Motorsports & Design will offer a variety of services from tunes ups to full blown custom motorcycles and vehicles.

Financials

Thompson Motorsports & Design will be profitable from month one. Margins are forecasted to be at 50%, eventually reaching 53%. Year one sales will be $105,000 for year one with a 30% growth rate for the first five years.

Thompson Motorsports & Design is an exciting opportunity that combines a customer-centric organization with an explosive industry. Motorsports is becoming increasingly popular in the United States with more and more people becoming active participants. Even for those who are not true participants, it is now "cool" to have your motorcycle or car "tweaked out" even just for aesthetics. An investment in Thompson Motorsports & Design is a high growth, reasonable risk opportunity.

Highlights

1.1 Objectives

To make Thompson Motorsports & Design the number one destination for the purchase of custom motorcycles and recreational / automotive accessories in South West Michigan.
To achieve an initial gross profit margin of at least 50%, increasing that by at least 1% per year until reaching our final target of 53%.
To sell $105,000 in product the first year.
To maintain a solid growth rate of 30% per year for the first five years.

1.2 Mission

Thompson Motorsports & Design is dedicated to providing custom motorcycles and recreational / automotive products that combine quality performance with value pricing. We wish to establish a successful partnership with our customers, our employees, and our suppliers that respect the interests and goals of each party.

Constantly striving to supply what the consumer is asking for, we will continually review what is available in the marketplace, and what isn't. Improving on what is available and providing new products and services to the areas of need will help ensure our success in a market driven by consumer demand.

Success will ultimately be measured by our customers choosing us because of their belief in our ability to meet or exceed their expectations of price, service, and selection.

1.3 Keys to Success

To succeed in this business, we must:

Be an active member of the motorcycle and custom automotive community; i.e., attend functions at local race tracks, attend regional and national trade shows.
Deliver our products promptly.
Work with our customers on a personal level, as opposed to the "What's your customer number?" mentality of large firms.

2.0 Company Summary

Thompson Motorsports & Design is a new company, which upon commencement of operations will provide customers with custom motorcycles, affordable products and quality service.

2.1 Company Ownership

Thompson Motorsports & Design is a South West Michigan Sole Proprietor company, owned entirely by James A Thompson III.

2.2 Start-up Summary

Our start-up costs are listed on the following page. Major costs include $10,000.00 for two motorcycles that will be custom built, and $5,000 for parts for the motorcycles to be sold, $3,600 for rent for one year, $1,500.00 for a Miller Welder, and $5,000 for a company pick-up truck.

The company will start out with 2 custom motorcycles on hand. This means the majority of company assets will consist of inventory and the starting cash balance will not be significant.

You will find that we have approximately $28,100.00 additional funding needed. The purpose of this plan is to secure financing for that amount.

Later in this plan, when you view the Projected Balance Sheet, Projected Cash Flow and the Projected Profit and Loss, you will notice that we do not show any debt or interest expense. However, by examining these same charts, you will see that we project a sufficient amount of earnings to service a debt load.

Upon negotiations of debt amount and terms, modified charts will be provided upon request.

Start-up

Requirements

Start-up Expenses
Work Truck	$5,000
Rent	$3,600
Miller Welder	$1,400
Cost of 2 motorcycles	$10,000
Parts for motorcycles	$5,000
Total Start-up Expenses	$25,000

Cash Balance on Starting Date	$3,000
Total Current Assets	$21,140

Investment	$30,000
Total Investment	$30,000

Accounts Payable	$2,000

Current Liabilities	$2,000

Long-term Liabilities	$0
Total Liabilities	$2,000

Loss at Start-up	($2,000)

Total Capital	$28,000
Total Capital and Liabilities	$30,000

Start-up

2.3 Company Locations and Facilities

Thompson Motorsports & Design will be located at 70528 CR 384 South Haven, MI 49090. This location will afford convenient access for traveling motorcycle customers and race teams wishing to stop at our location.

Another advantage of this location is that we are located within 30 minutes of West of Kalamazoo, North of Benton Harbor, and South of Holland.

By being located in close proximity to Gingerman Raceway in South Haven, Thompson Motorsports & Design will enjoy a large built-in customer base. The skyrocketing popularity of Motorcycle and Automotive road racing in the last 10 years has only strengthened its role as the hub for most race teams and all the related businesses they've spawned.

Another benefit of the area is that we are located on the Lake Michigan. This is a great spot for us to show off our custom motorcycles / Autos. Also it brings in watersports to our business.

2.4 Company Facility

We have initially rented a 1,000 sq. ft. building. As needs dictate. Our office and/or warehouse facilities could be expanded into an additional 2,500 sq. ft.

This location will consist of shop space, and warehousing. All deliveries and shipments will be serviced at this location. We will also have ample parking available.

3.0 Products and Services

Thompson Motorsports & Design will sell custom motorcycles and motorcycle / Automotive products to the South West Michigan area. These products will include aftermarket parts, stunt accessories, chains & sprockets, and chrome parts.

Services that we will provide include Plastic welding, fiberglass repair, tune ups, Painting, rust repair, audio installation, custom fabrication, tire changes, aluminum polishing, product installation, powder coating, and chroming.

3.1 Product and Service Description

Thompson Motorsports & Design will assist its customers in selecting the best parts for their application at a price that meets or exceeds their expectations. In the event of a problem, we will be there to assist and counsel the customer to a speedy solution.

We will carry or have quick access to most major lines of aftermarket equipment. We will also carry generic "plain label" merchandise that we will market under our own performance name. Private labeling will allow us, in most cases, to greatly increase our profit margins since the procurement costs are much lower for these types of items.

Our experience has shown that most customers in this area preference are for low prices. We believe we can offer products that indeed are lower in price without sacrificing the performance and safety concerns that our customers will demand. Thompson Motorsports & Design will provide precisely the level of service that today's customers requires.

3.2 Competitive Comparison

Within our niche, we have two significant competitors. One only build custom choppers, and the other is just a Kawasaki dealer. Neither does both or builds custom sportbikes and custom vehicles, which should give us an edge in those respect.

More discussion is included later in this plan on competitive businesses.

3.3 Sales Literature

To drive sales initially, Thompson Motorsports & Design will utilize an existing web site (www.thompsonmotorsportsanddesign.com). This web site will have the Thompson Motorsports & Design logo, phone number, etc., on it.

After much research, we found that the product mix on this web site most closely resembles the needs of the consumer niche that we are focusing upon.

We will produce flyers in-house on an as-needed basis. These will primarily be to showcase new products and/or to advertise special sales promotions.

3.3.1 Brochure Distribution

Following are planned means of brochure distribution:

Give away in-store.
Personally hand out at area race tracks.
Distribute at local trade shows and auctions.

3.4 Fulfillment

We have an established relationship with our manufacturers and suppliers, and will be able to take advantage of all discounts and promotions in order to keep our margins at roughly 50% throughout the operation. We will also implement and employ "just-in-time" inventory strategies for hardware, supplies, and service parts orders to further strengthen our margins.

As we continue to grow the business, we will evaluate other motorcycle industry manufacturers and product lines to strengthen our offerings with a view primarily to quality and margin advantages.

3.5 Technology

All computer hardware and software systems that will be utilized by Thompson Motorsports & Design have been carefully and diligently evaluated. We will use off-the-shelf, PC-based software for accounting purposes including AR/AP, inventory, purchasing, sales, and returns. We will start out with two workstations and expand upon that as necessary.

By choosing this software, our training costs will be reduced tremendously. Much of the software used by competitors takes weeks to learn and master. Thompson Motorsports & Design use of this software will enable a basic, computer-literate employee to learn the system in one day.

This system will speed our order entry process, assist us in sales forecasting, and allow us to give a higher level of customer service.

3.6 Future Products and Services

We must remain on top of new products and trends. The most important factor in developing future products is market need. Our understanding of the needs in our market niche is one of our competitive advantages.

As stated earlier, we will have our own private label brand. Not only are profit margins better than name brands, but these accessories will help build name identity and awareness for Thompson Motorsports & Design when they are used on customer motorcycles and vehicles. As our sales volume increases, this will be an area that we can expand.

4.0 Market Analysis Summary

The prime market of Thompson Motorsports & Design is a 30-mile radius. However, the center has easy access to the Interstate highway system, that radius can be extended to 50 to 100 miles.

4.1 Market Segmentation

The motorcycle industry is in a boom period. While there are many items from various vendors available, Thompson Motorsports & Design has approached the market as a specialty retailer -- a provider of parts and services to the customer.

4.2 Target Market Segment Strategy

Our segment definition is in and of itself strategic. We are not intending to satisfy all users of motorcycle equipment, but rather only those who like sportbikes and choppers. We can save our customers time and money, not so much within our pricing structure, but by assessing their needs and directing them toward the proper product. Our customers tend to desire a high-end product, when often a low to mid-end product will do as good as or sometimes even a better job. By always dealing in an honest and ethical manner, we will build customer loyalty and word-of-mouth sales that many of our competitors are lacking.

4.2.1 Market Needs

Since our target market is the motorcyclist, the most important needs are service, price, and availability, in that order. One of the key points of our strategy is to focus on target segments that know and understand these needs and are willing for us to fulfill those needs.

4.2.2 Market Trends

Trends are in our favor. We have identified four major trends that help us:

Motorsports in particular, have experienced explosive growth since 2000. Most experts attribute this growth to greatly expanded television coverage of motorsports events. This coverage exposes many more potential participants to the sport. By focusing on affordable service and products, we feel that Thompson Motorsports & Design will be filling a niche in the market.
This area has experienced tremendous population growth in the past decade, approximately 25%. As racing and the local population grow hand-in-hand, it should make many more potential customers available to us.
Finally, there is the aging Baby Boomer generation. Many have discharged their duties to their children, who have grown and moved on, and now there is money and time again. They turn to something they always wanted to do, or return to the sport they loved, and they go riding.

4.3 Service Business Analysis

With expanded television coverage and an enormous base of motorsports activity, motorcycle racing and custom motorcycles is a thriving industry, as well as a very fast growing sport in America. Outsiders to the motorcycle industry must understand that racers and custom bike owners may be the most obsessive consumers of any industry. They avidly purchase new technology.

Racers are hard on their investment, too. New tires might be a weekly purchase, and several engine freshening expenditures might be called for in a season. A good whack at the outside wall and a racing retailer has a customer or two for forks, clip on’s, fasteners, rear sets, and more.

Racers spend what it takes to win; they are not out merely to enjoy the ride. Any person who has spent any time at all in the racing pit has heard the guy in front of him in the snack bar line describe how he postponed a key household expense--the telephone bill or a new household appliance--to purchase a new right rear tire, or other critical racing part.

To service this sport, there are thousands of small businesses across the country skilled in the ways of horsepower and hooking it to the ground. Whether they make their money from parts or services, retailing or building engines, these businesses make it an easy and convenient matter to go racing. Without these local ambassadors of speed, it is hard to imagine the existence of auto racing in a large scale.

4.3.1 Business Participants

We are part of the Performance Industry, which includes several kinds of businesses.

Speed Shops: Most of these are small, sometimes part-time ventures run from the individual's home. Sometimes they will service a local race track; however, they usually carry a very minimal amount of inventory, and are usually operated by a racer or an ex-racer depending solely upon a small circle of friends or acquaintances as customers. They normally are short on business and marketing skills.

Engine & Chassis Builders: Typically these are well-respected firms supplying engines and chassis to the racing industry. Their customer profile lies in the mid to upper end of the market. They offer superb technical support; however, it is only available to customers utilizing their engine or chassis. They stock parts to service their engine or chassis, but are usually limited in areas areas beyond that. Normally their pricing structure is slightly above average.

Mail Order: The motorcycle industry is served increasingly by large mail order firms that offer aggressive pricing on motorcycle components. They are usually impersonal, and have little or no technical support available. For the purely price-driven buyer who purchases parts and expects no support, these firms offer a good option.

Others: There are many other channels through which people buy their motorcycle parts, usually variations of the main three types above.

4.3.2 Distributing a Service

Generally, traditional distribution channels are followed. The products are bought from distributors and/or direct from the manufacturers, who have little say in how products are marketed. As in most industries, price levels decrease as volume increases.

4.3.3 Competition and Buying Patterns

We feel that motorcycle customers understand the concept of service and availability, and are much more likely to pay for it when the offering is clearly stated.

There is no doubt that we will compete much more against the large mail order outfits than against any small local suppliers. We have good indications that racers/customers would rather pay 5-15% more for a long-term relationship with a vendor providing quality service and support. To this point, the motorcycle customer thinks about price because that's what he sees emphasized by the mail order companies.

Availability is of utmost importance. The buyer tends to want immediate, local solutions to their problems and/or needs.

4.3.4 Main Competitors

Twisted Twin

The above is targeted towards the custom built chopper market although they do sell Harley parts as well. They do not do anything with sportbikes or automotive. Most of their business is threw shows and online.

Vanderzee motor mall

They are a Kawasaki dealership. They carry quads, motorcycle, and jet ski's and accessories. They also have a car lot. They don't do a lot with sport bikes and nothing to do with customizing.

5.0 Strategy and Implementation Summary

Our strategy is based on serving the niche of South West Michigan area. This area is full of small race teams and customers that can't get products or services from the major vendors. Also:

What begins as a customized version of a standard product, tailored to the needs of local motorcycle customers, can eventually become a niche product that will fill the needs of similar motocycle customers across the country.
We are planning our marketing strategy so that we can eventually reach specific kinds of motocycle customers across broad geographic lines.
We focus on satisfying the needs of local motocycle customers.
We focus on follow-on technology that we can take to the masses, as opposed to leading edge technology that aims at the motocycle customers.

5.1 Marketing Strategy

The retail marketing strategy of Thompson Motorsports & Design centers on creating a corporate identity that clearly defines our market niche in terms that benefit our customer. Other specific strategies that will be used follow:

Print Ads - Keeping the Thompson Motorsports & Design name in front of the customer while getting established will be necessary. We plan on running limited space ads in the local newspapers to keep our name and phone number in front of the consumer. We may attempt to showcase a single product in an effort to return revenue from the ad. Our past experience has been that showing measurable revenue from these types of ads is difficult. In the future we plan on utilizing banners at Gingerman Raceway.
Race Car / Road race (motorcycle) Sponsorship -Racers can be persuaded into running the Thompson Motorsports & Design logo on their race car / Bike in exchange for a token discount on purchases and/or for receiving technical support.
Decals - We will have decals manufactured with the Thompson Motorsports & Design logo. We will include the decals with all of the orders that we ship. Customers will enjoy displaying decals on their race cars, haulers, tool boxes, etc.
Apparel - We know several people in the area who produce apparel. A line of premium Thompson Motorsports & Design apparel could be designed and produced in very short runs to reduce inventory costs. These can be sold or given away with qualifying purchases to further expose the Thompson Motorsports & Design name.
Trade Shows - We will exhibit at approximately four local trade shows annually. Revenue that we produce at the shows will outweigh our expenses for attending.
Word of Mouth - By giving first-time customers great service and a fair price, the word is sure to spread. Also, the many industry and motorcycle contacts that we already have in the area will prove to be most beneficial in spreading the word.

All marketing decisions with regard to specific media choices, frequency, size, and expenditures will be conducted on an on-going basis with careful considerations of returns generated.

5.1.1 Pricing Strategy

Our customers are especially sensitive to value. We must ensure that our price and service are perceived to be a good value to the customers. However, in the nearly thirteen years of experience that we have accumulated in the motorcycle industry, one message rings true: someone can always beat you on price.

Therefore, our pricing strategy is to be competitive within the various product categories, but not to rely on the selling price to overshadow the other advantages of doing business with our company. We will sell ourselves on the basis of a diverse line of quality products that are readily available, reasonably priced, and backed up by our extraordinary customer service. The products will be checked prior to shipment and all promised shipping dates will be met.

We will strive for a gross profit margin of 50%, increasing that to 53% by year four.

5.1.2 Promotion Strategy

Our most important vehicle for sales promotion will be our news paper ads and word of mouth.

5.1.3 Distribution Strategy

Our customers will buy our products at our location. However, we anticipate a significant amount of web site order sales in order to meet or exceed our Sales Forecast. We will receive orders by mail, phone, or internet, process them immediately, and ship the goods via United Parcel Service.

In the event we are out of an item or we don't stock it, many of our vendors have offered drop shipping as a service to us. This will allow us to keep our service at a high level, yet let us keep our inventory levels in check.

5.2 Sales Strategy