Laser Fence Business Plan

Laser Fence Business Plan

Author’s Name

Institutional Affiliation

Executive Summary

There has been immense growth in the fencing industry from the traditional timber fence to the modern laser fence. There are numerous benefits derivable from the installation of a laser fence around Australia’s Broadacres farms. Such benefits include improved crop production resulting in augmented income, increased wool and other sheep products, diminished time and labor costs, and diminished human-wildlife conflict.

The main customers will be farms, commercial premises, industrial sites, and government properties with the pioneer market being Broadacres farm in Australia the pilot region being Western Australia. The main competitors of Lite Fence PLC will include: Invisible Fence PLC, Senstar, and Optex Pinnacle. The first market will be Broadacres farm in Australia the pilot region being Western Australia.

The capital set-up and flow of Lite Fence will majorly be made up of loans, savings, and shareholding.  The company’s capital structure will entail: 45% venture capital, 30% partner contributions, and 25% unsecured debt. The estimated initial cost is $292,120 broken down into numerous cost components: licenses and permits- $1,800, pick-up truck for material delivery- $15,000, computer software apps – $8,000, office space rent- $22,400, working tools and equipment- $27,300, three months’ operational costs- 120,000, sales and marketing expenditure-$6,400, research and development- $4,600, among other costs.

 

 

 

 

 

Laser Fence Business Plan

Company Summary

Lite Fence PLC is an emerging company launched in May 2018 as a partnership among three individuals with interests in the field of security systems. The three individuals are Davies Hurdley, Bruce Wilkins, and Amina Iverson. Fencing companies belong to the fence construction industry that comprises of companies that install a wide variety of fences that range from security fences to residential fences, and niche fences. The three partners who were classmates in a class on security systems, came together in a brainstorming session to underline the concerns property owners raise regarding the use of other types of fences. The location of the business will be along 785 Dandenong Valley Highway, Dandenong South, Australia.

The utmost gain derived from mixing ‘levels of defense’ is its ability in enabling individuals to sense an intrusion before its full culmination. It is completely unfair that one should have to remain in the dark while an intrusion occurs in the sanctity of their properties before their knowledge of the invasion. The initial line of defense that can be established is at the perimeter, and there is no better way to achieve a remarkable outcome than by utilizing emergent technologies to attain a security system that is almost full proof. Despite the limited knowledge on the notion of laser fencing in Australia, among the most critical steps to guarantee maximum security is the installation of a laser fence.

Detailed Product Features

Zwayen (2015) defines a laser as a recognition gadget for offering a cautionary pointer in reaction to an invasion by an intruder in a restricted property. The fence entails a laser generator for producing a laser beam. Additionally, the first mirror is set in line with the laser beam and reflects it to a second mirror which is aligned with a third mirror that eventually redirects the ray to the visual detector.

Fig. 1: Laser Fence System

The features of the fence include: unique detection algorithm, 30m radius for 190 degrees array (Vanderwerf, 2017), a function for automatic area setting, environmental disqualification circuit, horizontal and vertical mounting, Form C master alarm output, anti-rotation utility, scene selection (indoor wall/ceiling protection, outdoor, vehicle, and indoor), anti-masking function, adjustment of non-detection area, tamper output, IP connection and analog (Dry contact), built-in heater, trouble output, alarm duration function, fog cancellation algorithm (with listed Patent), anti-rotation function, and non-detection area adjustment.

The laser fences range from one beam to four beams.

Fig. 2: One beam laser fence

Fig. 3: Four beam laser fence

Laser Fence PLC will be offering the XD-B50D 4 beam laser fence with a laser wavelength of 808nm, 650nm, and 980nm (Romaniuk, 2018).  Also, the product has an alert distance of 50m, and additional features include blocking beam alarm.

Competitive Comparison

Lite Fence PLC faces intense competition from numerous other fence manufacturing companies within Australia. Invisible Fence PLC and DogWatch Inc. have developed electric dog fence solutions that are full service within all the regions in Australia (Invisible Fence, 2019). However, this company does not pose substantial competition because the technology entails a digital signal passed between a transmitter and an FM receiver collar. It is practically untenable to fix the collars on all the sheep in the Broadacres farms due to the cost component.

Furthermore, the product can only prevent the animals from going outside the farm, but not intruders or wild animals from entering the farm (Invisible Fence, 2019). Moreover, DogWatch Inc. has merely produced a product for dogs only and not animals like sheep. Lastly, Dogwatch’s products are based on electronic as opposed to laser technology.

Another competitor is Senstar is another Australian-based security installations company specializing in intrusion detection sensors combined with video management systems. The company has over 35 years’ experience in manufacturing different types of sensors that range from gate, fence, and wall-mounted sensors, to microwave, fiber-optic, barrier, buried, and electrostatic sensors, coupled with intelligent lighting solution (Senstar, 2019). Nonetheless, the company is not a direct threat as it does not manufacture and sell laser fences.

The biggest competition, however, may come from foreign companies such as Indian-based OPTEX Pinnacle India Private Limited. OPTEX offers detection systems with the capacity of guarding the range surrounding the outer boundary, proximal area to the perimeter and the building, as well as the interior space and roof (Optex Pinnacle India Limited, 2019). The company also prides itself in the range of products on offer from Photo Beam, to Fiber Sensys, Motion Detector, and Redwall. Though the company seems to be a pronounced threat to Lite Fence PLC, OPTEX is based in India and is yet to establish an Australian subsidiary hence Lite Fence has the opportunity to penetrate the market as market leaders before OPTEX makes a move.

Laser fence PLC is aware that Australia’s fencing industry faces cut-throat competition. However, the rival firms majorly deal in other forms of fences such as steel fence sheets, tubular fencing, aluminum slat screening, and colorbond fencing. These fences are not applicable for use in large tracts of land. Fortunately for Laser Fence PLC, the rival companies only offer other types of fences and not laser fences. Laser fences are not stand-alone and can only function together with extra types of fences such as barbed wire, woven wire, chain link, and agricultural fences. So rather than competing, Laser Fence PLC will collaborate with rival firms such as Auswest Fencing & Wrought Iron Inc. and Our Town Fencing Inc. to offer the best fencing outcomes.

Market Analysis Summary
Market Trends

The market trends in the security systems industry are such that no fixed profit projections exist when taking part in fence installations contracts. Slater et al. (2005) highlight that the profit that is due to Laser Fence PLC, therefore, is influenced by several variables for instance: the company’s ability to obtain quality and fairly-priced fencing materials, preciseness during installation, and the support services offered after installation. The ability to gain all the mentioned variables will increase the company’s market share and profits to a large extent.

Another apparent trend that is wide-spread among fence construction firms is the fact that a majority of them are inventing new ways of making money. In this regard, most companies are engaging in certain types of building renovations works (Mohr, Jakki, Sengupta, Sanjit and Slater, 2005). Since laser fencing is still a new concept in the fencing industry, Laser Fence PLC can generate additional income by undertaking periodical systems upgrades and support services at subsidized fees.

Remarkably, Australia’s Fence Construction Industry has been stimulated by the increased rates of human-wildlife conflict. Wild animal predators have been indiscriminately pouncing on domestic animals such as sheep that are being reared in large number across the numerous Australian Broadacres farms (Thomas, 2017). Furthermore, there have been instances of human intrusions into these farms that have gone undetected and have resulted in losses to the owners as a result of theft.

Also, since the laser technology is still a new idea in Australia’s Fence Construction Industry, there are high prospects in the Australian market. We expect the transformative Laser Fencing Technology to endear to a majority of electric fence users (Romaniuk, 2018). I, therefore, foresee the increased awareness on the benefits of laser fences triggering a switch to the new technology among farmers. Laser fencing is only not cost-effective but also more efficient compared to electric fencing.

Finally, Australia’s Fence Construction Industry will undoubtedly be influenced by external variables. Australian government policies supporting the growth of Broadacres farms such as tax breaks and reductions aimed at promoting large-scale farming and food security will bolster the laser fencing business (Thomas, 2017). Undoubtedly, for every fencing company with creative, hardworking, and proactive management and workers, they will continuously make enough revenues to cater for their operational and overhead costs, sustain their commercials comfortably, and generate sensible profits from the businesses.

Target Market

Lite Fence PLC’s market varies widely from home to facilities owned by different classes of people. The company has adopted a business concept that is directed at converting the users of other types of users in dissimilar settings to embrace the new transformative technology.

The target market of the company will entail entire Australia for starters, before spreading to other countries within the Oceania continent. To this effect, the company has already initiated plans to recruit freelance sales and marketing agents to drive the firm’s business interests in diverse parts of Australia (Slater et al., 2005). Lite Fence products have been designed for different individuals and companies as listed below:

  • Corporate firms with the intent of fencing their establishments.
  • The Australian Government through tenders.
  • Families interested in setting up home security systems.
  • Farmers interested in mounting perimeter fences around their farms.
  • Public facility managers aimed at hiring fence construction companies to safeguard their facilities.

The initial market for Lite Fence PLC will be Broadacre farm in Australia the pilot region being Western Australia. Broadacre farms are parcels of land whose size exceeds 4,000 meters squared that meet specific land-use criteria, majorly farming operations on a large-scale. The farmers cultivate crops such as oilseeds, pulses, rice, winter and summer cereals, and sugar cane. Also, the farmers rare cows for milk and beef as well as sheep for lamb and wool.

Competitive Advantage

Undoubtedly, the fence construction industry is an extremely productive industry. Clients will only hire a company based on its capacity to install fences that will successfully safeguard their property (Slater, Hult, Tomas, and Olson, 2005). Despite Laser Fence PLC being a relatively young company, the firm boasts of having close-neat links with vendors, capacity to enlarge and limit operations promptly depending on market demand and entree to position markets, and having the best qualified, creative, and experienced minds at the helm of management.

Setting aside all the above-mentioned attributes, the main competitive advantage that Laser Fence PLC enjoys is being among the pioneer laser fence manufacturing and installation companies in Australia. The company can easily use this advantage to dislodge rival fence companies in the market by just selling the advantages of laser fences compared to other types of fences to potential customers (Walker & John, 2018). So long as they convince them to try the new fencing technology, they are almost guaranteed of being the automatic suppliers of the fences.

Lastly, employee welfare will be at the top of the company’s strategic management goals. Laser Fence PLC will offer among the best salaries, allowances, and retirement benefits in the entire industry to its staff. The move is aimed at establishing a sense of loyalty among the employees to increase their willingness and zeal to build the business with the founders and deliver their set mission and vision.

Marketing Strategy

Marketing Mix (Four Ps)

Product

Talking about laser fences does not imply crisscrossing laser lines that create some form of a hurdle course rather than a security apparatus. In our context, laser fences generally denote scanners that are attached to the boundaries of a property to provide an additional surveillance element (Zwayen, 2015). The fence will make use of both precise and innovative scan detectors that sense the speed, size, and proximity of a moving object from the sensor. The next step involves the processing of the information by employing a unique algorithm, culminating in an extremely dependable detection system with marginal false alarms.

There is extensive flexibility of products being offered for laser fence in Australia in terms of their settings. Nonetheless, the property owner is still required to select ones that fit their specific requirements from the set of products (Romaniuk, 2018). After making of the decision, Lite Fence PLC Australia sends a team at minimal time and cost to undertake the installation. The company’s efficiency increases by the fact that the company has various business partnerships with Security Systems and Information Technology (IT) firms that it has trained to offer installation and support services of their products on their behalf.

Pricing

A set of the laser beam sensor intrusion detection will cost between $100 and $900 depending on whether it is one beam or four beams. For the Broadacre farm, we intend to use the three beam sensor which will cost the company $400. Finding a balance between affordable pricing and maintaining a reasonable profit margin to progress business is critical for any start-up venture (Damodaran & Toro, 2010). In this regard, the retail price of the product will be $600 per set, inclusive of installations costs. However, we can make any necessary adjustments to consider the two beam sensor if the owner decides to go for lower prices.

Placement

The company will majorly aim at conducting marketing through online distribution. Since Australia’s Broadacre farms will be our first customers, we intend to undertake an exceptionally remarkable job on the first farm that will earn us recommendations for other installations in other farms. Furthermore, we shall offer free fitting and support services for the first six months. Also, our products will have one year’s warranty.

Promotion

Laser Fence PLC will undertake thorough recruitments procedures for their sales and marketing team. Freelance brokers will also be recruited across the country (Ferrell, 2016). Moreover, the company will offer training aimed at equipping the team with the necessary skills to attain organizational goals and objectives. Better yet, the training will not be limited to our in-house sales staff, but will also be offered to our freelance brokers.

Laser Fence PLC will employ several innovative sales and marketing strategies. First, we will introduce our business to potential clients by attaching introductory notes to our brochure (Walker & John, 2018). The leaflets will be disseminated to various stakeholders in the construction and real estate’s sectors such as property developers and farmers across Australia. Secondly, Laser Fence PLC will publish advertisements in real estate websites and magazines. Also, the business will enroll in the local directories (yellow pages).

Real estate seminars, expos, and business fares will also provide a good ground for the company’s sales and marketing staff to gain valuable insights on potential markets. Furthermore, the company will capitalize on the internet frenzy to promote the company’s product offerings through its official website as well as social media platforms (Chaffey, 2011). Besides, Laser Fence PLC will develop personalized packages for different clients based on their distinct features. Lastly, the company will deliver high-quality products and services and request satisfied customers to spread the word to their mates and kin.

Sales Forecast

It is undisputed that property owners in Australia and globally deem it necessary to construct or re-construct time and again. This need is driven by factors such as the desire to keep up with emerging trends in the vicinity or town. In the context of the fencing industry, there another consideration is the advancement in technology to enhance security (Chaffey, 2011). Robbers and burglars are managing to crack and outmaneuver security systems at almost the same rate that security systems are being modified. This ingenuity necessitates property owners to constantly upgrade their security systems. Since laser technology is currently the epitome of modern security systems, this implies booming business for Laser Fence PLC.

Also, the company is strategically capable of overcoming the challenges existing in Australia’s fence construction sector. We take pride in having three brilliant and tech-savvy minds as the proprietors of the business. The company values R&D and has invested adequate resources for the same (Slater, Hult, Tomas, and Olson, 2005). Additionally, our employees are thoroughly trained to maintain service quality. Most importantly, the principal venture capitalist in the firm has been operating a thriving security systems business for the past eight years hence has immense expertise in the field. There is no better person than him to mentor the mushrooming company to prosperity.

Besides, Laser Fence PLC is the first security systems firm specializing in laser technology to venture into providing laser fencing solutions to Australia’s Broadacre Farms. This pioneering move is advantageous to our company since we have already attained a niche market with great potential (Mohr et al., 2005). The technical staff of Lacer Fence PLC can also profit from the expertise it will have obtained from on-job-learning and trial-and-error during the installations. This knowledge will give the company a competitive advantage over rival firms when they start exploiting the niche market of Broadacre Farms. The advantage gained in the market further translates to increased sales and profits resulting from enhanced competencies.

In undertaking our sales analysis, we engaged the help of market trends analysis data from credible financial sites such as Bloomberg. From the assessment of our company’s probabilities of success in the real estate and fence building industry, we fancy our chances. Our analysis derived the following quarterly sales projections.

Period Sales Cumulative Sales
Quarter 1 Year 1 60000 60000
Quarter 2 Year 1 70800 130800
Quarter 3 Year 1 92040 162840
Quarter 4 Year 1 119652 211692
Quarter 1 Year 2 153154.56 349192.3968
Quarter 2 Year 2 196037.8368 446966.2679
Quarter 3 Year 2 250928.4311 572116.8229
Quarter 4 Year 2 321188.3918 770852.1404
Quarter 1 Year 3 449663.7485 1079192.996
Quarter 2 Year 3 629529.248 1510870.195
Quarter 3 Year 3 881340.9471 2115218.273
Quarter 4 Year 3 1233877.326 1233877.326

N.B: This forecast was grounded on the industry averages with an assumption that the economic conditions will remain relatively constant and that no other security systems firms will be constructing laser fences in the Broadacres within the duration. Also, it is worth noting that a margin of error exists; hence the figures may be a little bit higher or lower.

Finance Plan

Funding

The total estimated initial capital for Laser Fence PLC is $292,120. The business will source for a $ 131,454 million financing from interested venture capitalists in exchange for 45% stake in the company. The partners will raise the remaining 30%, which is $87,636 equating to $29,212 each. The sources of the partners’ contributions will come from personal savings, fundraising from friends and family members, and obtaining personal loans (Damodaran & Toro, 2010). Since Laser Fence PLC is still a company in its inception, it lacks assets that can be used as collateral for secured loans from financial institutions. In this regard, the company will seek for the remaining 25% equivalent to $73,030 unsecured loan from a construction SACCO or bank. The two types of institutions were selected since they charge lower interest rates compared to the traditional banks by 2 to 3 percentage points. Besides, lenders only need to act as each other’s guarantors.

Expenditure

The money raised would be used in covering different costs of the company that range from initial set-up, to fixed, and operational costs (recurrent expenditure).

Cost Item Amount
Incorporating the business in the U.S. $720
Consultation fee for Business Development $2,400
Licenses and Permits $1,800
Insurance fee (staff compensation, general liability, surety bond, and property casualty) $5,800
Computer software apps (Accounting, CRM, Payroll, Microsoft Office software) $8,000
Office space rent at 785 Dandenong Valley Highway, Dandenong South, Australia for one year @$ 1.12 per square feet x 20,000 square feet $22,400
Office furniture and fittings (partitioning, furniture, filing cabinets, computers, printers, telephones, internet installation, safety equipment, and electronics) $38,500
Working tools and equipment (drills, saws, ladders, hammers, welding machine) $27,300
Purchase of pick-up track $15,000
Additional start-up expenses such as stationery and utility deposits (phone, electricity, internet, water) $3,400
Three months’ operational costs (staff salaries and allowances, utility bills) $120,000
Official company website launch $800
Sales and marketing expenditure (signage, promotions, business cards, adverts) $6,400
Initial stock (sensors, adapters, microcontrollers, and speakers) $32,600
Research and Development (R&D) $4,600
Contingency fund $2,400
Total Expenditure $292,120

Payment Options

Laser Fence PLC has formulated a flexible and accommodative payment policy to cater to all classes of customers. Nonetheless, for purposes of enhancing accountability and easing the book-keeping process, the only mode of payment that is prohibited is cash transactions (Zielinski, 2019). The available modes of payment include bank transfer, cheque, bank overdraft (credit cards), and online payment platforms (PayPal, Alipay, and Skrill Moneybookers).

The company is also swimming the wave of digital transformation and technological evolution. As such, the company will consider including cryptocurrencies such as Bitcoin, Ethereum, and Litecoin as future modes of payment (Zielinski, 2019). The company’s bank accounts and other payment details will be noticeably displayed on the official website among other promotional materials such as flyers and brochures. A disclaimer shall be issued that any cash transactions undertaken between a Laser Fence employee and the client will be at the risk of either or both the parties.

References

Chaffey, D. (2011). Internet Marketing: Strategy, Implementation, and Practice. Harlow: Prentice Hall/Financial Times. Print.

Damodaran, A., & Toro, J. (2010). The Dark Side of Valuation: Valuing old tech, new tech, and new economy companies. New Jersey: Pearson Education.

Ferrell, O.C. (2016). Marketing Strategy. Cengage Learning. Print.

Invisible Fence (2019). How it Works. Retrieved from https://austin.invisiblefence.com/how-it-works (Accessed 18 April 2019).

Mohr, Jakki, Sengupta, Sanjit and Slater, S. (2005). Marketing High Technology Products and Innovations. Englewood Cliffs, NJ: Prentice-Hall.

Optex Pinnacle India Limited (2019). Multi-layered Perimeter Protection. Retrieved from http://www.optexpinnacle.com/application/laser_fence.html (Accessed 18 April 2019).

Romaniuk, R. (2018). Laser Technology 2018: Progress and Applications of Lasers. Proceedings of SPIE 10974, (1): 1–366. https://doi.org/10.1117/12.2522499

Senstar (2019). Perimeter Intrusion Detection. Retrieved from https://senstar.com/products/#pid (Accessed 18 April 2019).

Slater, S.F., Hult, G., Tomas, M. and Olson, E.M. (2005). Key Success Factors in High-Tech Markets. Working Paper. Colorado State University.

Thomas, D. (2017, April 6). Successful large scale investment in Australian Broadacres farming. Property Central. Retrieved from https://www.graincentral.com/property/successful-large-scale-investment-in-australian-broadacre-farming/ (Accessed 18 April 2019).

Vanderwerf, D. F. (2017). The Story of Light Science: From Early Theories to Today’s Extraordinary Applications. Springer International Publishing.

Walker, O.C, and John, W.M. (2018). Marketing Strategy: A Decision-Focused Approach. Print.

Zielinski, K. (2019). 10 Payment Methods for Global E-Businesses. Across the Board. Retrieved from https://blog.paylane.com/payment-methods-for-global-business/ (Accessed 18 April 2019).

Zwayen, A. (2015). Design and Construction of a Smart Security System by Laser Fence Technique. Fondazione Giorgio Ronchi (6): 699-713.