BUSINESS PLAN:

3D ADDITIVE MANUFACTURING
TECHNOLOGIES, CO. 3-DAMTM
Starting A New Venture MGMT 6630
Joe Ott
7-18-2012
BUSINESS CONCEPT
1. INTRODUCTION
1.2. BUSINESS IDEA
1.3. BUSINESS MODEL
1.4. BUSINESS GOALS
1.5. KEYS TO SUCCESS
2. THE COMPANY
2.1. LEGAL STRUCTURE AND OWNERSHIP
3. PRODUCTS / SERVICES
3.1. PRODUCT AND SERVICE SUMMARY
3.2. CUSTOMER
3.3. TECHNOLOGY
3.4. REGULATORY ISSUES
4. THE MARKET
4.1. MARKET ANALYSIS
4.2. TARGET MARKET SEGMENT
4.3. GROWTH POTENTIAL
5. THE INDUSTRY
5.1. COMPETITION
6. SALES
6.1. SALES STRATEGY.
6.2. PRICE STRATEGY
6.3. PROMOTION STRATEGY
6.4. SALES FORECAST
7. THE MARKETING PLAN
8. MANAGEMENT AND EMPLOYEES
9. ACTIVITY PLAN
10. FINANCE AND ECONOMY FIGURES
BACK UP SLIDES
1. INTRODUCTION - With 3-DAMTM comes manufacturing freedom!!

1.2. BUSINESS IDEA

The business idea behind 3-DAMTM is to cross additive
manufacturing technology with the KinkosTM concept.
Customers contact store by appearance, email, web submission
Business would staff trained engineers and technicians to assist
customers in selecting the correct technology to manufacture their
hardware.
1.3. BUSINESS MODEL
Sole Proprietorship during the initial start-up phase
Would initially target a small volume of jobs, applying a medium
margin.
Diversification Growth Strategy - 3-DAMTM would practice Forward
Integration by getting in front of the customer
1. INTRODUCTION - With 3-DAMTM comes manufacturing freedom!!
From ASTM Designation: F2792 10 - Standard Terminology for Additive Manufacturing
Technologies2

Why pursue additive manufacturing? There are many benefits in using additive manufacturing to
make hardware over conventional manufacturing5:
Design flexibility
No tooling constraints
Allows complex models
No hard tooling required
No material lead time
Automated process
Reduced development expenses
Faster concept design to functional component
Reduced manufacturing costs
Near wrought material properties
Reduced product life cycle cost
Reduced manufacturing time: hours/days/weeks vs. months
Minimal secondary machining - near-net shape part Picture courtesy of Rapid Quality Manufacturing5

Additive manufacturing is an emerging industry.

Some of the difficulties with additive manufacturing are:

New technology not everyone is familiar, technology evolving
High barriers to entry initial high start-up costs for equipment
Material properties are still being defined
Technical and process models are limited
1. INTRODUCTION - With 3-DAMTM comes manufacturing freedom!!
1.4. BUSINESS GOALS
2 years of operation:
Increase market share establish 4 stores in largest US manufacturing locations (Houston, TX; Milwaukee,
WI; Seattle, WA; San Antonio, TX)4
Increase market penetration over time grow each stores revenue at least 12.5% yearly
Establish new pricing incentives and promotions
Build long lasting quality partnerships
Advertising
Join Committee F42 on Additive Manufacturing Technologies1
6 years of operation:
Increase market share establish a store in 10 major US cities. Have plan developed to have 50 stores in
major US cities by 10 years of operations.
Increase market penetration over time continue to grow revenue at least 12.5% yearly, per store.

1.5. KEYS TO SUCCESS

Flexibility providing solutions for variety of customer and their unique requirements.
Adaptability have technology and capability for variety of needs.
Sustained Growth have capacity where and when a customer needs it.
Technical Know-how have understanding of how to use additive manufacturing technology to
provide best results.
Speed providing solutions faster and more efficient than anyone else.
Funding have cash and capital to sustain growth and profit.
2. THE COMPANY - With 3-DAMTM comes manufacturing freedom!!
2.1. LEGAL STRUCTURE AND OWNERSHIP
3-DAMTM will be listed with the Internal Revenue Service as a sole
proprietorship
The principle owner (and equity shareholder) will be Joe Ott.
Minor equity shareholders (<49%) will be silent partners

Figure 1. Basic Organizational Structure

3. PRODUCTS / SERVICES - With 3-DAMTM comes manufacturing freedom!!
3.1. PRODUCT AND SERVICE SUMMARY
Plastic and metal parts and concepts, produced in a few hours or days, using
additive manufacturing technologies
Evaluation and modification of designs/CAD and concepts for application to
additive mfg.
Coordination of post processing.
Metrology center accurate measurement evaluation

3.2. CUSTOMERS
The target customers are everyone from local hobbyist and enthusiast to large
Fortune 500 companies needing unique part developed and produced.
The current market doesnt have local to-go-to places to get all your materials
and additive manufacturing methods and post-processing under one roof.
All competition is located in a few select areas

3-DAMTM would provide a place for customers to have one-stop-shopping for

their manufacturing. Customer(s) can contact the business center by phone,
web, or face-to-face. Sales engineers would be available to help customers
work through product development and iteration until the final product is ready.
Pricing would be evaluated based upon the necessary amount of engineering
and development to make hardware, material considerations, and post
processing requirements.
3. PRODUCTS / SERVICES - With 3-DAMTM comes manufacturing freedom!!
3.3. TECHNOLOGY
Powder Bed Technologies - Powder Bed is the distribution of thin layer of powder (metal or thermoplastic) and uses an
energy source to sinter/melt the powder into solid form. Powder Bed Technologies offer high resolution, medium volume,
small to medium sized part capabilities. Two common methods are:
Selective Laser Melting laser beam power source in an inert atmosphere (nitrogen or argon)
Electron Beam Melting electron beam power source in a heated, vacuum environment

Deposition Technologies Metal is introduced via powder nozzle or wire feed into an energy source directly at the build
location, which melts to metal into solid form. Deposition Technologies offer lower resolution, lower volume, larger sized
part capabilities. 3 common methods are:
Laser Powder Deposition laser/power nozzle combination
Laser Wire Deposition use of a continuous feed wire and laser energy source
Electron Beam Wire Deposition use of continuous feed wire and EB energy source

Specialized Software (CAD/CAM, 3D model analysis, project/customer management) will be required to seamlessly
integrate customer models between additive mfg. platforms and required post processing technologies.

3.4. REGULATORY ISSUES

"Green Technology"
PPE
Inert Gases
Intellectual Property7
Product Liability7

Pictures courtesy of EOS (http://www.eos.info/en/home.html), Arcam (http://www.arcam.com/),

and Optomec (http://www.optomec.com/)
 4. THE MARKET- With 3-DAMTM comes manufacturing freedom!!
4.1. MARKET ANALYSIS
Wohlers Associates Inc. - Additive manufacturing had a total of market size of $1.7 billion worldwide in 2011.
Emerging Industry - Additive manufacturing can be considered an emerging industry in the US12
CAGR- Compound Annual Growth Rate
4.2. TARGET MARKET SEGMENT
Small Businesses - Potential Customer Year 1 Year 2 Year 3 CAGR
2+ years old (generally wouldn't be start-ups in their first year) Sm. Business 100 513 677 61,30%
Income - Have manufacturing costs >$1000 per part.
Need - need fast parts made, short runs Lg. Business 10 52 68 61,48%
Education - need to understand hardware end requirements.
Hobbyists 310 1 590 2 098 61,29%
Work - manufacturing, research, engineering, automotive, etc.
Geographical location - in key starting cities, some internet sales. Total 420 2 155 2 843 61,30%

Large Business -
2+ years old
Income - Have manufacturing costs >$1000 per part.
Need - need fast parts made, short runs, development iterations
Education - need to understand hardware end requirements.
Work - manufacturing, research, engineering, automotive, etc.
Geographical location - in key starting cities, some internet sales.

Hobbyists -
Age - 16 years or older
Income - able to afford part costs between $100 and $2000.
Need - generally have a concept they want to make or need a replacement part for one that broke
Gender - male and female
Education - majority expected to have some college and / or trade school
Work - professionals and trades
Geographical location key US manufacturing centers / cities, some internet sales.

4.3. GROWTH POTENTIAL

Additive Manufacturing, aka 3D Printing, will reach $3.1 billion worldwide by 2016 and $5.2 billion by 20208.
If 3-DAMTM can capture even 1% of this market that would be $31 million dollars in revenue. 5% growth in revenue the next year would
result in $32,550,000 of revenue, per store.
5. THE INDUSTRY - With 3-DAMTM comes manufacturing freedom!!
5.1. COMPETITION - Other companies trying to adopt the Kinkos model are:
Mydea Technologies digital model shop and an additive manufacturing and rapid prototyping
provider. http://www.mydeatechnologies.com/
Owners: Michael Siemer
Annual Sales: $520K
Competitors distribution channel: Internet
Competitors marketing strategy: Internet Sales
Products and Services: Product Development & 3-D CAD Modeling, Rapid Prototyping/Additive Fabrication, Subtractive Rapid
Prototyping, Rapid Tooling & Manufacturing
Competitors price strategy: mid to high cost.

Shapeways 3D Printing company for designers and Do-It-Yourselfers. Helps people make and sell
their items. http://www.shapeways.com/
Owners: Peter Weijmarshausen
Annual Sales: $1.90M
Competitors distribution channel: Internet
Competitors marketing strategy: Internet Sales, Arts and Crafts forums, Web sales of clients products, Do-It-Yourself market.
Competitors price strategy: Low to mid cost.
Products and Services: Tutorials, Shapeways Lab, Software, Metals and plastic fabrication, Online Sales.

The following companies are a selection that specialize in additive technology and would be
competition for their prospective sub-fields:
Morris Technologies - http://www.morristech.com/ Selective Laser Sintering (SLS) metals
C&A Tool - http://www.catool.com/ SLS metals and machine shop
Paramount Industries http://www.paramountind.com/ - Stereolithography (SLA) and SLS of plastics
Materialise - http://manufacturing.materialise.com/ - a Belgian firm that uses additive manufacturing to make a range of products,
including medical devices.
 6. SALES - With 3-DAMTM comes manufacturing freedom!!
Sales Year 1 Year 2 Year 3
6.1. SALES STRATEGY
It is envisioned that customers would contact a local 3- Sales
98 000 503 000 664 000
Engineering
DAMTM business center to initiate a job.
Powder Metal 144 000 740 000 975 000

Powder Plastic 104 000 533 000 704 000

6.2. PRICE STRATEGY
Total sales 346 000 1 776 000 2 343 000
Pricing would factor in the costs of overhead, materials, and
per hour cost for machines and personnel.
Direct costs,
A profit mark-up of 30% will be added to each job. sales

Sales
240 000 525 000 620 625
Engineering
6.3. PROMOTION STRATEGY
Powder Metal 24 000 70 000 82 750
Sales will be generated through advertisement and
campaigns. The campaign will utilize TV, trade journals, and Powder Plastic 24 000 52 500 62 062
the internet (web pages, FaceBook, etc.). Total, direct
288 000 647 500 765 437
costs, sales

6.4. SALES FORECAST

Based 3 major products/services: Sales Engineering, Sales monthly
Fabricated Metals, and Fabricated Plastics.
Projected the amount of sales revenue generated by the
average increase in customers each month times the
expected revenue each customer would generate. YR 2
accounts for 4 stores in key cities. YR 3 accounts for 5
stores in key cities. Expect average growth of 12.5% per
year for each store.
Cost of sales is the overhead for the sales engineers and
technicians plus an estimated monthly operating cost for the
metal machines of $4000 and plastic machines of $3000.
These numbers are based upon a best scenario.
7. THE MARKETING PLAN - With 3-DAMTM comes manufacturing freedom!!
As part of a Diversification Growth Strategy 3-DAMTM
would practice Forward Integration.
As the customer is the focal point for the business model, 3-DAMTM offices
will be targeted close to the customers.
Customers will be contacted through advertisement and
campaigns.
The campaign will utilize TV, trade journals, and the internet (web pages,
FaceBook, etc.).
Highlights of ads will target design freedom, no or low tooling, and speed.
Additionally, small to large manufacturing companies will be approached.

A marketing group will be selected to assist in the

marketing campaign on a yearly contract.
A $100k budget will be set for marketing. The marketing campaign will
start in June 2013 and continue through December 2013.
8. MANAGEMENT AND EMPLOYEES - With 3-DAMTM comes manufacturing
freedom!!
CEO / CTO - complete oversight and responsibility for the company as well as
technical authority.
CFO - direct oversight of the following reporting line: Accounting, Patient Accounts,
Communications, Purchasing, Printing & Duplicating, Information Management,
Management Information Systems.
Accounting and Human Resources - Accounting and Human Resources will be
outsourced to a 3rd party company and overseen by the CFO.
The company will be responsible for all day to day accounting and human resources activities, including
accounts receivable and payable, health and dental care, 401k management, and taxes, etc. The company
should have experience with accounting and HR in all US states. It would be preferred if the company has
experience with start-up companies.
Technology Team Materials Engineer, Technology Researcher, Training/Quality
Responsibility for moderately complex engineering projects,
Serves as consultants, providing technical information and engineering recommendations that assist various
projects and processes and materials.
Coaches and trains less experienced engineers and technicians.

Branch Manager(s) oversee branch offices and perform sales

Employees
Sales engineers customer interface, engineers marry up technology to customer needs. There will be 2-3 per
store.
CAD and Build technicians modify designs to make technology friendly, operate and run machines. There will
be 1 per machine and two CAD operators per store.
Post processing technicians - provide any necessary post processing and coordination. There will be one per
store.
Shipping/Receiving ship and receive hardware, supplies, etc. There will be one per store.
9. ACTIVITY PLAN - With 3-DAMTM comes manufacturing freedom!!
This section describes some activities that will be needed to implement the
whole or parts of the business plan.
Order and Install Machines machines and installation at $1,000,000 a-
piece. 1 plastics, 2 metals, 1 metrology and inspection, 1 oven and autoclave
= $5,000,000
Store 15,000 sq. ft. * $3.523 per foot per year = $52,800. Plus $1,000,000
for upgrades and office requirements. Equals $1,052,800.00
Hire Accounting / HR - $100,000
Supplies - $100,000
Advertising Campaign - $100,000

Activity Start date Stop date Budget Responsible Department

Order and Install

03/01/2013 06/01/2013 5 000 000 CTO Technology Team
Machines

Store 03/01/2013 06/01/2013 1 052 800 CTO CEO

Hire Accounting /
01/02/2013 05/31/2013 100 000 CFO CEO
HR

Supplies 03/01/2013 06/01/2013 100 000 CEO CEO

Advertising Co. 04/01/2013 06/01/2013 100 000 CEO Branch Managers

Total 6 352 800

 10. FINANCE AND ECONOMY FIGURES - With 3-DAMTM comes
manufacturing freedom!!
The following are Seed Capital funding expenses that will be incurred
Start-up Costs
prior to the business starting:
Research
100 000
Technology

Research
Store 200 000
Location

Permits and
100 000
Fees

Marketing
100 000
Study

Total Start-up
500 000
Costs

Start-up
funding The following describes all the Start-up through Second Stage funding
Bank Loans 3 000 000 (existing and needed) for the project:
Bank Loans 2 000 000 Bank Loans $3,000,000 Secured against the procured equipment.
Equipment, Real-estate, and Long-term loans.
Other
Investors
2 000 000 Angel Investors $2,000,000
Other Investors $2,000,000 Informal Risk Capital, Venture Capital
Grants 2 000 000
Grants $2,000,000 SBIR - Phase I and Phase II, Fed, State, Local.
Government
1 000 000 Government Loans - $1,000,000 SBA (504, SBA), etc.
Loans
Total: $10,000,000
Third stage (growth) funding would be necessary for expansion beyond
Total Start-up the first store and would be necessary at last quarter 2013.
10 000 000
funding

Total Equity 9 500 000

 10. FINANCE AND ECONOMY FIGURES - With 3-DAMTM comes
manufacturing freedom!!
PROFIT & LOSS TABLE Net profit monthly
Year 1 Year 2 Year 3

Sales 346 000 1 776 000 2 343 000

Sale costs 288 000 647 500 765 437

--------------- --------------- ---------------

BTO profit 58 000 1 128 500 1 577 563

BTO profit % 17 % 64 % 67 %

Expenses

Salaries 830 004 1 040 000 2 190 000

Additional Salaries
273 901 343 200 722 700
costs

Marketing and
0 6 352 800 0
activity costs

Depreciation 1 210 560 6 052 800 12 105 600

Accounting / HR /
99 996 200 000 200 000
Advertising Services

Supplies (office and

operating)
99 996 400 000 500 000 Net profit yearly
Utilities, Web, IT,
20 000 96 000 120 000
Phone

Insurance 999 996 4 000 000 5 000 000

Maintenance Plan 100 000 400 000 500 000

Research
100 000 0 0
Technology

Research Store
200 000 0 0
Location

Permits and Fees 100 000 0 0

Marketing Study 100 000 0 0

--------------- --------------- ---------------

Sum direct costs 4 134 453 18 884 800 21 338 300

Financial costs -0 -0 -0

Profits before tax -4 076 453 -17 756 300 -19 760 737

Profit before tax % -1 178 % -1 000 % -843 %

 10. FINANCE AND ECONOMY FIGURES - With 3-DAMTM comes
manufacturing freedom!!
Balance Sheet
Year 1 Year 2 Year 3

Current assets

Liquid assets 1 297 208 -9 265 893 -22 254 593

Sales 346 000 1 776 000 2 343 000

YR1 YR2 YR3
Total current
1 643 208 -7 489 893 -19 911 593
Current Ratio = 0.16 -1.08 -1.33
assets *indicates low liquidity
Fixed assets
Debt Ratio = 6.43 -0.92 -0.75
Fixtures and *indicates business while taking on more debt
fittings & fixed 6 052 800 29 264 000 54 528 000 is working out of debt
assets

Acc depreciation Debt to Equity = 1.32

fixtures & 1 210 560 7 263 360 19 368 960 *High capital industry/business
fittings/fixed assets
Net Profit Margin = -11.78 4.28 0.10
Total fixtures and
4 842 240 22 000 640 35 159 040 *indicates high initial risk but business
fittings/fixed assets
becoming more stabile.
Total assets 6 485 448 14 510 747 15 247 447
ROI = -0.63 0.52 0.02
Liabilities
*indicates high initial risk but business
Share capital & risk becoming more stabile.
10 000 000 10 000 000 10 000 000
capital

Accounts payable 288 000 647 500 765 437

Accrued taxes 273 901 343 200 722 700

Long-term
0 0 0
liabilities

Balanced
0 -4 076 453 3 520 047
profit/loss

Total liabilities &

10 561 901 6 914 247 15 008 184
equity capital

Profit for the year -4 076 453 7 596 500 239 263
 10. FINANCE AND ECONOMY FIGURES - With 3-DAMTM comes
manufacturing freedom!!
CASH FLOW ANALYSIS
Year 1 Year 2 Year 3

Liquid assets, incoming 10 000 000 6 644 130 -6 790 066

Liquid assets obtained from

activities

Sales 346 000 1 776 000 2 343 000

Other earnings 0 0 0

Total earnings from activities 346 000 1 776 000 2 343 000

Other liquid assets obtained

VAT and tax refunds 612 082 2 859 146 2 479 729

Increase in accounts payable 0 0 0

Increase in short-term liabilities 0 0 0

Increase in long-term liabilities 0 0 0

Sale of current assets 0 0 0

Sale of fixed assets 0 0 0

New capital increase 0 0 0

Total liquid assets obtained 958 082 4 635 146 4 822 729

Liquid assets spent

Cash expenditure 2 937 992 13 136 300 9 275 437

Total expenditure from activities 2 937 992 13 136 300 9 275 437

Other liquid assets spent

VAT and tax payments 323 160 721 842 1 253 200

Reduction in short-term
0 0 0
liabilities

Reduction in long-term liabilities 0 0 0

Purchase of current assets 0 0 0

Purchase of fixed assets 1 052 800 4 211 200 5 264 000

Total liquid assets spent 4 313 952 18 069 342 15 792 637

Net cash flow -3 355 870 -13 434 196 -10 969 908

Liquid assets, outgoing 6 644 130 -6 790 066 -17 759 975
Back Up Slides
REFERENCES:
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2012. <http://www.astm.org/COMMITTEE/F42.htm>.
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17 July 2012. Web. 2012. <http://enterprise.astm.org/filtrexx40.cgi?+REDLINE_PAGES/F2792.htm>.
3. "Industrial Space Cost Comparison." Greater Houstono Partnership. Cushman & Wakefield, Third Quarter 2011, 2011.
Web. June 2012. <http://www.houston.org/pdf/research/17CW005.pdf>.
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July 2012. <http://www.forbes.com/sites/joelkotkin/2011/12/15/heavy-metal-is-back-the-best-cities-for-manufacturing/>.
5. Liechty, Eli. "Commercial Benefits of Metals Additive Manufacturing for Aerospace Production." Midwest SAMPE. Mar.
2011. Lecture. www.midwestsampe.org/content/files/events/.../Metals%20Liechty.pdf
6. "Manufacturing.GOV." National Network for Manufacturing Innovation (NNMI). N.p., n.d. Web. 17 July 2012.
<http://www.manufacturing.gov/amp/pilot-institute.html>.
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June 2011. Web. 17 July 2012. <http://techliberation.com/2011/06/10/3d-printing-the-future-is-here/>.
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by-2016/>
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years/>.
10. Smartplan Generator Ver. 1.5- http://download.cnet.com/Smartplan-Generator/3000-2076_4-10708683.html
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REVITALIZING AMERICAN MANUFACTURING. Http://www.whitehouse.gov/, Dec. 2009. Web. June 2012.
<http://www.whitehouse.gov/sites/default/files/microsites/20091216-maunfacturing-framework.pdf>.
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ADVANCED MANUFACTURING. Http://www.whitehouse.gov/, Feb. 2012. Web. June 2012.
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Technologies. Wohlers Associates, Inc, 2009. Web. June 2012. <http://iweb.tntech.edu/rrpl/rapidtech2009/wohlers.pdf>.
 One Store (Houston, TX) Ratios
YR1 YR2 YR3
Current Ratio = 0.16 -0.10 -1.5
*indicates low liquidity

Debt Ratio = 1.62 3.34 0.76

*indicates store is working out of debt

Debt to Equity = 1.32

*High capital industry/business

Net Profit Margin = -11.78 -11.74 -10.42

*indicates high initial risk but business working toward stabilizing.

ROI = -0.63 -2.34 1.78

*indicates high initial risk but business becoming more stabile.