ProPulse Business Prospectus

ProPulse
Business Prospectus
Prepared by: Gina Eom 21502455
Ash Khan
27th May 2013

ProPulse Business Prospectus
[2013]
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Confidentiality Agreement
The undersigned reader acknowledges that the information provided in this business
prospectus is confidential; therefore, the reader agrees not to disclose it without the
express written permission of Gina Eom.
It is acknowledged by the reader that information to be furnished in this business plan
is in all respects confidential in nature, other than information that is in the public
domain through other means, and that any disclosure or use of this confidential
information by the reader may cause serious harm or damage to ProPulse Ltd.
Upon request, this document is to be immediately returned to Gina Eom.
___________________
Signature
___________________
Name (printed)
________________
Date

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Table of Contents
Confidentiality Agreement ....................................................................................... 2
EXECUTIVE SUMMARY.............................................................................................. 4
The Business...............................................................................................................................................................4
The Market...................................................................................................................................................................4
The Future..................................................................................................Error! Bookmark not defined.
PROPOSED COMPANY OFFERING ............................................................................. 5
THE MANAGEMENT TEAM........................................................................................ 5
THE COMPANY AND THE CONCEPT........................................................................... 7
OUR MISSION..............................................................................................................................................................7
THE HEALTH AND FITNESS INDUSTRY.................................................................................................... 12
THE TECHNOLOGY............................................................................................................................................... 13
EXTERNAL ENVIRONMENTAL ANALYSIS................................................................................................ 15
ECONOMICS OF THE BUSINESS ............................................................................... 16
GROSS AND OPERATING MARGINS..............................................Error! Bookmark not defined.
PROFIT POTENTIAL AND DURABILITY .....................................Error! Bookmark not defined.
FIXED AND VARIABLE COSTS..........................................................Error! Bookmark not defined.
BREAK EVEN ANALYSIS......................................................................Error! Bookmark not defined.
THE MARKET................................................................. Error! Bookmark not defined.
S.W.O.T. ANALYSIS................................................................................................................................................ 19
OUR PRODUCT POSITIONING......................................................................................................................... 20
MARKET SEGMENTATION ............................................................................................................................... 21
OBJECTIVES:............................................................................................................................................................. 21
PRICING STRATEGY………………………………………………………………………………………19
PROPRIETORY ISSUES ............................................................................................. 25
REGULATORY AND LEGAL ISSUES ........................................................................... 25
OPERATIONS PLAN ................................................................................................. 27
CRITICAL RISKS & ASSUMPTIONS............................................................................ 29
RISKS............................................................................................................................................................................ 29
Assumptions............................................................................................................................................................. 30
THE FINANCES............................................................... Error! Bookmark not defined.
KEY OBJECTIVES AND FINANCIAL REVIEW............................Error! Bookmark not defined.
BALANCE SHEET FORECAST............................................................Error! Bookmark not defined.
PROFIT AND LOSS FORECAST.........................................................Error! Bookmark not defined.
EXIT STRATEGY ............................................................. Error! Bookmark not defined.

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EXECUTIVE SUMMARY
The Business
ProPulse is a privately owned company in Melbourne, Australia. Gina Eom and Ash
Khan are the founders of ProPulse are the majority owners. John Poulakakis, Olga
Chotiy are on the advisory board. Hatan Al-Shahry and Melissa Bridges are amongst
the Board of Directors and hold minority stock positions.
ProPulse produces – in the form of a long sleeve shirt, a comfortable alternative to the
various heart rate monitors and fitness trackers that currently exist. We offer highly
innovative and technology driven products that help individuals accomplish their
physical and mental health goals. No other company has produced an integrated and
new product like this, thus giving us a competitive advantage in the current market.
The Market
ProPulse intends to cater to sport, exercise and health enthusiasts of varying levels of
ability and interest ranging from novice to professional athlete. Consumers of fitness
services and products are aware that understand the positive benefits of exercise in
combination with such devices. From gen y to baby boomers ProPulse’s aim is to
provide the consumers with a tool to optimize one’s health, further their capabilities,
and improve quality of life.
The Future
ProPulse plans to grow in the industry though market development – from selling
locally to expanding into the global market and Market and cultivate ProPulse's brand
and image as the premier long-term health and fitness products provider. Product
development and product variation will be possible through continuous research and
development providing consumers with newer technologies that ………

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PROPOSED COMPANY OFFERING
We have estimated total start-up costs of $500,000. The numbers in the start-up and
the start-up funding tables are meant to reflect these estimates. The company capital
will be $300,000.
Ash Khan and Gina Eom, as co-founders, will provide the bulk of start-up financing in the
amount of $50,000 ($25,000 and 25% ownership each). Also, $50,000 of Veski
innovation fellowships would be obtained in government grants. An additional
$100,000 additional funding would be needed.
Therefore ProPulse offers a prospective investor a chance to become a co-owner
and participate in the company’s capital for the amount of $100,000, and could
be offered a 20% ownership stake in it. The funds provided by the investor will
contribute towards covering part of the start-up expenses.
For the remaining additional $200,000 financing need to cover the start-up costs,
we plan to receive a five year commercial loan at 12 % interest per annum from
the Commonwealth Bank which will meet the cash flow requirements. The
borrowed funds would be used to cover part of ProPulse’s start-up expenses.
The loan will be repaid in equal monthly installments over the five year period.
THE MANAGEMENT TEAM
Gina Eom
Gina Eom is the co-founder and CEO of ProPulse. Gina thought of the idea in 2011 as
a regular user of heart rate monitors and various fitness trackers. After spending years
of discomfort with heart rate monitor chest straps and the annoyance of various
gadgets and devices she became frustrated that there was not one product that
provided all of these tools in a simple and easy way. Thus ProPulse was born.
Gina has a Bachelors degree in Behavioural Studies and a Masters degree in
Marketing from Monash University thus can utilise these skills in the creation and
execution of the ProPulse brand. Through Gina’s outstanding networking skills
ProPulse has access to a wide range of professionals. This list includes Accountants,
Lawyers, Sports Advertisers & Marketing Directors and those working in the various
fitness industries.

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Ash Khan
Ash Khan is the co-founder and CFO of ProPulse. He has a Bachelors of Commerce
(Finance) degree from the University of Wollongong and a Double Masters degree
(Masters of Business (Marketing) and a Masters of Professional Accounting) degree
from Monash University make him the ideal candidate for handling the main financial
activities of the company. With considerable experience working for a B2B platform
for Dubai World and as a marketing assistant at Microsoft, he brings a solid
knowledge of the business environment into the company. Having also worked at
TNT Express in the past, he will be able to use his personal contacts as an advantage
when negotiating freight contracts
Hatan Al-Shahry
Hatan is the Head of Product Development at ProPulse. He possesses a Bachelors
degree in Biomedical Science from Swinburne University and is considered
somewhat of a prodigy having graduated top of his class. He is the brains behind
bringing the ProPulse concept into fruition and has a proven track record for
developing highly innovative products.
Michelle Bridges
Michelle is a prominent and successful personal trainer, author and TV personality.
Famously known as being the personal trainer on the Australian version of The
Biggest Loser, she will serve as both the Director of Marketing and act as a Brand
Ambassador of ProPulse. Her extensive knowledge of the fitness industry alongwith
her popular image and famed reputation will be a massive asset to the ProPulse team
in its attempts to reach its marketing objectives and increase brand awareness
John Poulakakis
John Poulakakis is the Chief Commercial Officer of the Melbourne Demons Football
club. Previously he has been the managing director of the Campaign palace - a highly
renowned and awarded agency and also has started his own marketing consultancy.
With John’s years of expertise in Advertising and Marketing, and his current position
within the sports and fitness industry, ProPulse will have access to a range of

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information and connections and his knowledge will be invaluable to the company’s
success.
Olga Chotiy
Olga Chotiy is a manager and accountant on the advisory board of Pro Pulse. She will
guide the company with regards to finances, budgeting, the prospective outlook and
manage the financial health of ProPulse in the most critical years. In order to aid the
full success of the brand, Olga will offer her business expertise and contacts within
the industry
THE COMPANY AND THE CONCEPT
ProPulse is a company situated in Melbourne Australia. Gina Eom and Ash Khan
formed it in January 2012. ProPulse aims to provide health and fitness products and
services that are innovative and high in quality. It will join health and fitness
industries aiming at (1) disease prevention, (2) optimized health, and (3) improving
overall quality of life, thus relevant to the majority of individuals all over the world
today.
OUR VISION
To create awareness about a healthy and active lifestyle and its benefits it brings,
especially in today’s society where the obesity epidemic is growing and concern for
health is rising.
OUR MISSION
Our business model is clear. Our value proposition is to provide customers with high
quality products that are easy to use to aid their athletic and everyday performance
and accomplish their physical and mental goals.
We are developing revolutionary products that transform the way we think about

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electronics and their interaction with the human body. Listening to your body is one
thing, understanding what it is telling you is an altogether different story.
PRODUCT CONCEPT
ProPulse produces a comfortable alternative to the current heart rate monitor and
fitness trackers that exist. The idea is to offer an inbuilt heart rate monitor in the form
of a long sleeve shirt, instead of chest strap that tend to slip, loosen and chafe during
exercise and various other tools that need to be clipped on, or held by the individual.
Designed for comfort and extended wear, the ProPulse Shirt is constructed of an
advanced wicking fabric with special sensory fibers integrated directly into the
garment. Smart clothing technology allows for the combination of machine and
garment. Skin contact with embedded sensors, allow vital signs of the human body to
be captured (Kang, 2006). The textile electrodes are knitted into and the fabric acts
as a second skin that moves and stretches with the body.
Along with the basic functionality of many other heart rate monitors and fitness
trackers, the sensors detects hydration levels of the body and also measure calories
burned during a workout and can adjusts daily caloric intake to each according to
each individuals body, providing figured for future caloric expenditure allowing
individuals to plan ahead. This gives Propulse a unique advantage over other
companies in that we can take estimation component out of our product as it is
tailored to each individual and their body.

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ProPulse shirts have an inbuilt ‘rollable display’ around the wrist area in place of a
watch. A flexible organic light emitting diode (FOLED) is incorporated with a
flexible thin film allowing it to be bent or rolled while operating (MacDonald, 2003)
This forfeits the need to wear a chunky watch, arm band or carry around a tracking
tool as one exercises or goes about their day.
The ProPulse garment is also integrated with smartphone/android application and a
program to sync with one’s computer allowing individuals to track their information
and optimize their day.
ProPulse will cater to many groups of individuals. For athletes ProPulse’s product
may mean a deeper understanding of their performance and thus of their sport,
allowing users to find and repeat their peak performances and to raise their ability to
new levels. And for everyday individuals the ProPulse offers an investment in our
product and a fitness solution to improve well-being.
We anticipate that our product alone will be profitable, however, we also perceive
substantial opportunities in expansion of our products in the future.
ENTRY GROWTH AND STRATEGY
ProPulse is in the entry stage currently and numbers are expected to grow an average
of 7.0% in the first year and with a significant increase in the year after. There is an
immediate need for technologies that enhance the exercise experience, as well as for a
leader that will educate and guide the market in a new and innovative way. ProPulse
aims to integrate technologies and functions like no other company has done.

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The fitness market is constantly growing and evolving. It represents a huge untapped
customer base and with strong current economy and with the rise of obesity and
concern for health, there is room for ProPulse within Australia and in the rest of the
world.
Growth in revenue has been driven by the mainstreaming of fitness services as health
awareness increases (IBISWorld Industry Report, 2012). ProPulse first aims to
develop a solid domestic sales base in order to provide us with the cash flow and
working capital needed to form and develop good export markets. ProPulse will use
sporting, fitness and other relevant retailers (i.e Harvery Norman, Sportsmart) as
streams to market our product to the consumers. ProPulse will also show in various
fitness expo’s and conventions and put a website in place in order to distribute the
product locally and overseas.
Various factors set ProPulse apart as a company optimally positioned to experience
significant growth in the near future. It premiered as an innovative company to bring
to market a unique blend of fitness, health, medicine and technology in its product.
The increase in obesity and a rise in number of interest in fitness and health especially
in the western world allows for market potential and growth in this sector.
Expansion of the ProPulse success is planned in various ways:
→Product Development:
Short term
 As a variation of the core product, broaden the current range into singlets and
t-shirts with the rollable display placed elsewhere on the product

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Long Term
 R&D- By using different sensing materials, various concentrations of
substances such as potassium, magnesium etc in the sweat can be detected,
broadening our products usefulness further in the medical and health industry
 Incorporation of an inbuilt blood pressure monitoring technology
→ Market Development:
Short Term
 From selling within Victoria, ProPulse product will be distributed around to
retailers around Australia
 ProPulse will also look to sell to health and fitness clubs as well as sporting
clubs, along with our retailers
Long Term
 Although selling online, once business processes are set in place ProPulse
will expand to the US, UK and China etc, for increase in market potential.
Local offices will be set up in various geographical markets with the intention
of having greater control over marketing and distribution with customers in
various countries
 Relationships and networks are to be made with the overseas market in order
to increase brand awareness, base and presence of our brand and product
 ProPulse would also aim to partner up with major fashion labels in the near
future in order to incorporate our technology into mainstream fashion and
promote the product concept of Healthy Fashion
 It would also lobby major sports governing bodies and promote to them the
usefulness of our product in helping prevent adverse heart related deaths on
the pitch (which is currently a growing concern)

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MARKET RESEARCH AND ANALYSIS
THE HEALTH AND FITNESS INDUSTRY
Facts:
 The prevalence of overweight and obesity in Australia has been steadily
increasing over the last 30 years (ABS, 2012).
 Australia is one of the most overweight developed nations, with overweight
and obesity now affecting over 60% of Australian adults and one in four
children (Stassi, 2009).
While the current status of Australians' overall health and fitness may not be great,
Australia's health, fitness and weight-loss industries booming. More Australians are
seeking the assistance of professionals and products, spending to get their health and
weight under control.
 In 2011 Australia’s fitness sector earned revenue of $1.77 billion, representing
growth of 3% per annum over the past five years, which was pretty solid
considering the economic downturn that occurred during the same period
(IBIS world report, 2012).
Australians are increasingly viewing fitness spending as a necessary expense.

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 It is expected that demand for health and weight-management services will
continue to rise - to reach $3.0 billion by 2017-18 (IBIS world report, 2012)
Not only within Australia but also in much of the developed world, the fitness/health
industry continues to benefit from growing awareness of health issues and the
importance of exercise in maintaining good health.
 The US fitness sector continues to record yearly growth of 1% and is worth
$25 billion.
 China’s fitness industry is set to witness significant growth over the coming
years. Though at present only 10% of Chinese people’s income goes to health,
it is predicted that this will jump to 30% over the next five years (Guangzhou
International Fitness Fair (2012)).
THE TECHNOLOGY
Over the past decade, Australia’s health and medical industry has grown dramatically
in size and reputation for its world leading technology, innovation, high professional
skills, advanced research, development and robust health system.
Consumers of fitness services and products are aware that fitness can provide the
necessary tools to optimize one’s health, improve quality of life and extend life span.
The fitness and health industry have been evolving, with fitness tracking tools
becoming of majour importance to allow them to keep a close record of their progress
and fitness goals. Demand for real-time data, including personal health information, is
driving the market for wearable, wireless devices that will grow from 14 million items
in 2012 to as many as 171 million in 2016 (IMS Research, 2012). In four years, the
market for wearable wireless devices is expected to achieve minimum revenues of $6
billion (IMS Research, 2012).
Furthermore, the sports and health mobile application market will grow to over $400
million in 2016 - up from just $120 million in 2010. Much of that growth will be

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spurred by the ability of mobile handsets to easily connect to wearable devices that in
turn can deliver new functionality, accuracy, and appeal to sports and fitness
application. The integration of a tracker, mobile application and the innovative
garment gives ProPulse competitive edge on a global scale within this industry.
COMPETITORS AND EXISTING MARKETS
There is a greater use-case for wearable technology in order to transmit data such as
vital signs, and track user performance. Dominant wearable products in activity
monitors exist within various categories:
Fitness : Fitbit, Adidas miCoach and Nike Fuelband
Functions: tracking daily steps and general activity, estimating caloric output.
Heart Rate: Garmin, Polar and Suunto
Functions: Heart rate monitoring, estimation of caloric output, stopwatch/timer
Medical: Abbott and Medtronic
Functions: Glucose monitor
(The medical market is an area in which ProPulse hopes to expand in the near future)
For the time being we find the threat of competitors is moderate. Although here are
main firms mentioned above that provide heart rate/fitness monitors globally this
industry is a constantly evolving and new products and services are being formed. We
are the first company to integrate and evolve this technology in the form of a single

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garment discarding much of the guesswork that other brands use and believe our
unique proposition is what truly sets us apart.
Competition among such brands to gain market share exists in the areas of new
technologies, product performance, price and service, design and strategic alliances
etc however there are untapped areas within the market making it worthwhile for
current and new innovative companies such as ProPulse to enter.
A barrier to entry in the fitness and health industry - namely regarding products if a
company wants longevity may be the capital investment required, especially as an
adequate amount of ongoing R&D is involved with product development.
The system and technology like ours does not exist yet in other brands
EXTERNAL ENVIRONMENTAL ANALYSIS
This section contains an environmental analysis. Although we recognise six
influences in the environmental factors, they are all linked to each other, so if there
are dramatic changes in government policies we would often also see changes in
social and economical factors. Recognising these trends and changes can help
ProPulse identify viable strategies that will influence performance within the
business.
Political Economic
 Government policy has potential to
influence the market, specific initiatives
could benefit the industry but there’s also
a broader push on the part of the
government to try and promote healthy
eating and exercise, possibly resulting in
more people seeking
 lack of funding, grants and initiatives may
pose a problem for ProPulse
 international legislation, government
policies, trading policies regarding China
exporting/manufacturing processes may
change
 Factors such as utilities prices, wage
rates and R&D will affect numerous
aspects of the company
 Economic trends may change and
Individuals may need to prioritise
their spending and cuts are made on
their disposable income.
 Seasonality issues - people tend to be
focused on health and exercise
coming into warmer months
 labour costs changes in China – cost
of production may increase
Social Technological

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 Lifestyle factors such as growth in
convenience foods and home
entertainment have resulted in more
sedimentary lifestyles, consumption levels
of alcohol are rising which will effect active
participation and exercise. In today’s
culture there is lots of pressure to look
better and have better bodies; this has
influenced the levels of people who want
to improve themselves
 how the public view the brand and its
image can shape how successful we are
 ‘weight loss’ products and its buying trends
can be very fad based
 There is always new technological
advances being discovered thus it is
vital that ProPulse continue their
research and development in order
to stay ontop and continue offering
consumers the most innovative and
latest findings
 Staff need to be qualified and
suitably trained to use the
equipment/technological tools
Environmental Legal
 ProPulses environmental impact that raw
materials regarding the product may be
costing
 adverse weather impacting shipping and
transport of the product and its parts
 Changes in legalities and regulations
especially when dealing with
overseas i.e. China
 health and fitness sector specific
regulatory compliance
ECONOMICS OF THE BUSINESS
Break Even Analysis
We estimate our monthly fixed costs to be $33,511. Our monthly break-even
analysis reveals that we require revenue of $57,450 a month to cover our costs,
parting with neither profit nor loss. With our products priced at $120 per unit,
this equates to a minimum sale of 479 units a month. Following are the
calculations that we conducted to arrive at this estimate and the accompanying
break even analysis chart:
Contribution Margin Ratio: ($120 - $50)/ $120 = 0.58
Monthly Breakeven Sales Volume: ($33,511)/0.58 = $57,450

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Break-even at $57,450 a month equates to $689,400 a year. This implies that, in
order to break even in year 1, ProPulse would need to achieve at least 81% of its
projected sales revenue ($854,576). At 79% of our sales forecast, we are
confident that this is very much achievable. Furthermore, 25% of our fixed costs
are discretionary, and are attributed to marketing and promotions. What this
means is that we will have the option to decrease our fixed costs by 26% each
month (on average) at our discretion. As fixed costs are the main ingredient of
the break even analysis, this gives us the ability to reduce our break-even figure
by up to 25% or $171,480. This would bring our break-even estimate to $43,160
which corresponds to the minimum sale of 360 ProPulse units.
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
0 1000 2000 3000 4000 5000 6000 7000 8000 9000
Units
Break Even Analysis
Sales Fixed Costs Total Costs BEU approx. = 5745

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$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
2014 2015
Net Profit: Yearly
Net Profit: Yearly
$460,000
$470,000
$480,000
$490,000
$500,000
$510,000
$520,000
$530,000
$540,000
$550,000
$560,000
$570,000
2014 2015
Gross Margin: Yearly
Gross Margin: Yearly

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THE MARKET
S.W.O.T. ANALYSIS
Strengths Weaknesses
- Owners commitment and dedication
towards health care and fitness
-Pro Pulses attention to marketing
- High quality garments
- technologically advanced product
- excellent innovation
- Advisory Board consisting of strong network
contacts
- integration of various trackers that does not
exist yet
- Low customer awareness
- High start up costs particularly due to the high
technological demands
- customers with brand loyalty to other existing
brands
Opportunities Threats
-continuing globalisation
- start up company, no image/brand yet. (is
this a weakness?) Thus can create…
-expanding/evolving market and expansion
abroad
- product and services expansion
- further improvement in product
innovations
-acquisitions and licensing programs
(expanding/venture into new areas = larger
audience = larger profit generation)
-competition: will face a challenging situation in
creating its brand image and attracting
customers towards their services due to
presence of already established players in the
local market
-product substitution
- external changes
-possible economic slowdown
In order to overcome any weaknesses, the heavy base of marketing knowledge and
experience in the industry from board advisors will help so that ProPulse campaigns
are a success and the consumers quickly grow to know, understand and love the
ProPulse brand.

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Even in the midst of the economic downturn, the industry has maintained steady
growth and Health and fitness products will grow remain resilient as demand from
health-conscious consumers grow. ProPulse has much room for opportunities and
growth in the future.
OUR PRODUCT POSITIONING
ProPulse has what we believe to be an unparallel product offering. Our integration
and innovation in technology in this industry are significantly better than what
competitors are producing.
 We offer highly innovative and technology driven products positioned at
middle to high price points that serve superior performance who prefer to exercise to
not only for a healthy body but also for the mental satisfaction derived from using the
product

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MARKET SEGMENTATION
 Sport and exercise enthusiasts of varying levels of ability and interest
ranging from novice to professional athlete
 Those that recognise the need to have physical activity in their lives
 Those that have incorporated some sort of exercise program in their
daily/weekly routine for the last several years
 Individuals wanting to further their health and athletic capabilities
Because there are so many different sports and levels at which to compete, there is a
broad range of markets for the company to target. At ProPulse, we will provide a
marketplace that satisfies the needs of each group.
OBJECTIVES:
1. The creation of a unique and innovative company that will differentiate
ProPulse from other brands
2. Educate the community on the importance of health and fitness and what it has
to offer
3. Generate a 2% yearly increase in sales and more than double in the following
years to come
4. Market and cultivate ProPulse's brand awareness and image as the premier
long-term health and fitness products provider.
5. Foster networks and look for future company alliances and affiliations
STRATEGIES
 Attract novice fitness enthusiasts
- Engage and provide friendly environments
- offer introductory and free fitness training sessions in order for
individuals to gain confidence in exercise and grow with the brand

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 Attract elite fitness enthusiasts / sporting individuals
These clients will provide an important function for ProPulse as the leaders or ‘early
adopters’
- Advertise the latest technologies and innovations in product
- Advertise and show we are providing a state of the art innovation that
will take their capabilities to the next level
 Building a Social environment
- ProPulse focuses on building a social presence in the community
through events and sponsorships
 Competitive Edge
- ProPulse will follow a differentiation strategy to achieve a competitive
edge in the fitness and health market. ProPulse separates itself from
other brands by providing an integration of various existing trackers as
well as an innovative new blend of technologies.
Promotions/Advertising strategy to help fulfill these objectives:
Planned
promotion
/advertising
type
Expected business
improvement
Budget/
Cost ($)
Target date
Social Media:
Facebook/
Youtube
help collect feedback,
free market research,
brand engagement and
awareness, engage
prospective buyers, far
reach across target
markets
$10,000 1st October 2012
- Ongoing
Print Media
Advertising
(Gyms, sporting
Brand and product
awareness,
advertisement of the
$200
monthly
1st June- Ongoing
every two months

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clubs),
brochures,
sending mailers
to target
market
launch of the ProPulse
product, gaining of
prospective clients
Press Release
distribution inc.
radio
advertisement
Brand and product
awareness, talk about
the core values of
ProPulse and
communicate that to
the audience
$4470 for 4
week period
1 August 2013
Word of Mouth
(Referral)
Powerful marketing
tool, create a positive
buzz about the brand in
sporting fitness industry
$0 Ongoing since
prototype
conception in
2012
Billboard Exposure along busy
traffic routes, ability to
reach a vast number of
middle income earners
(Adopt-a-light, 2012)
$20000 for a
3 month
period
September 2013
(ongoing every 3
months)
Event: fun run
around Albert
Park - product
launch
Large scale exposure of
the brand and product
to sporting, fitness, and
other individual,
promotes healthy living,
exercise and fun,
Creates excitement,
attracts attention, funds
$20000-
30000
(depending
on permit
and event
scale size)
October 2013
Free park
circuit
style/personal
training
exercises
Drive potential
consumer interest,
grow commuity
awareness
$200 ($50 a
session for
the trainers)
Once a month –
starting from June
2013
Sponsorship of
local clubs and
sporting events
Promotion of ProPulse
with affiliations with
sporting and fitness
clubs within the
community
~$10,000 ongoing from July
2013 and
intermittent extra
costs dependant
on various event
dates
Hire sales
representatives
Promotion of the brand
to retailers and more
$10,000 August 2013

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to representate
our
brand/image
touch points and brand
recognition/understand
ing
Creation of the
website
Connects ProPulse
globally, brand
awareness and product
recognition
$10,000 June 2013
PRICING STRATEGY
The pricing strategy we will be using for our product is cost plus pricing. Therefore
after careful consideration, we have decided that the price for a ProPulse shirt will be
$120 per unit. This is a 70% markup on our costs of production per unit ($50). We
believe that that this price will be highly competitive in regards to our competitors’
products and at the same time will be attractive enough for our end customers.
SALES FORECAST
Sales Forecast: Monthly
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2014
2015

[2013]
25
PROPRIETORY ISSUES
 Innovation Patent: Although the various technologies are not invented by
ProPulse, we have been granted this application to protect our garment
creation and unique method.
 Trademark: In order to distinguish ProPulse, the name, logo and certification
of garment quality we be registered giving us exclusive rights to commercial
use
 Design registration will undergo for our ProPulse Garment
 Application of Domain name to exclusive right for the website for the
duration of the license period
REGULATORY AND LEGAL ISSUES
 Fitness Australia Registration & Code of Practice
Ensures and acknowledges that ProPulse products and services meet the fitness
industry standards and best practice in the Australian health and fitness industry.
Committed to providing customer care, safety and wellbeing and quality service
$800,000
$820,000
$840,000
$860,000
$880,000
$900,000
$920,000
$940,000
$960,000
$980,000
2014 2015
Sales Forecast: Yearly
Sales Forecast: Yearly

[2013]
26
to clients and members.
 The Fair Trading Act 1999
Administered by Consumer affairs Victoria to promote and encourages fair
trading practices and a competitive and fair market
 The Australian Consumer Law
ProPulse has a duty of care to prevent harm which could reasonably be
expected to occur in the course of providing advice or instruction to clients
 Free trade agreement
When dealing with foreign countries, ProPulse must also abide by the various
bilateral Free Trade Agreement.
 Trade Marks Act 1995
Exclusive legal right to use, license and sell your intellectual asset in Australia
 Crown Land Reserves Act 1978
In order to run events such as the fun run permits had to have been issued by
the Committee of Management (Parks Victoria) and abiding by the Crown
Land Reserves Act 1978 due to the fact that Albert Park is on Crown Land.

[2013]
27
OPERATIONS PLAN
ProPulse will be outsourcing all phases of production. This strategy has eliminated
the need for extensive fixed assets while maintaining flexibility in design and
production. It allows the company to focus attention on sales, marketing, and
product development to establish initial market acceptance. The operational plan
would be conducted in three stages:
Stage 1: Manufacturing
 The production of the ProPulse shirt would be divided between its two
main components: the rollable display and the bio-monitoring shirt.
 Both components would be produced by two separate contract
manufacturers. After careful consideration and a number of meetings
with different manufacturers, we have narrowed our choices to two
specific companies whom we believe would be able to meet our
expectations. They are:
o Altadox Electronic Design & Manufacturing – Based in China with
manufacturing facilities in Shenzen, Shanghai and Dalian, they
would be responsible for manufacturing the rollable displays that
will be embedded into the ProPulse shirt. Possessing a start of the
art 30,000 sqm facility with the latest production equipment we
are very confident that they will be able to provide the required
quality, manufacturing time frame and production techniques
required to make the component.
o AiQ Smart Clothing – Based in Taipei, Taiwan, they are a market
leader when it comes to manufacturing smart clothing. They would
be responsible for manufacturing the bio-monitoring shirts which
is the most important component of our product. They would also
be responsible for the embedding of the newly manufactured
rollable displays into the ProPulse shirt. We have full confidence
in their ability to deliver as they have a proven track record and
the necessary experience required to produce our product.
 In the beginning we would be targeting a production of approximately
1000 units per month. The large capacity of the manufacturing facilities
provides us with an option to increase our production output if we choose
to do so in the future, which will be largely dependent on our future sales
revenues

[2013]
28
 Throughout the entire production process, a member of the management
team will make regularly scheduled visits to each of the contract
manufacturers to ensure that the production is going according to plan
and that the quality of the product is not compromised. They would also
advise the necessary personnel if any design changes are to be made.
 The newly assembled product will then be exported to our leased 5000
sqm warehouse located in Tullamarine, Melbourne, ready to be
distributed. The responsibilities of shipping the completed unit to the
warehouse will be handed by TNT Express.
Stage 2: Distribution
 We will lease ten trucks in order to distribute our product
 Each truck will then be loaded up with the product units and will make
periodic calls to the selected Sports & Fitness retailers.
 The number of units delivered to each retailer will be dependent on the
quota that was agreed upon during initial negotiations
Stage 3: After Sales Service and Customer Support
 We will hire the services of Outware Mobile, a smartphone developer
based in Melbourne to develop the integrated smartphone app for our
product. The app is expected to be available in all four main smartphone
platforms (Windows Phone 8, iOS, Blackberry, Android).
 We will also provide after sales support to our customers and hence set
up a customer service call centre in our offices
 We would also set up a hotline for our retail partners and manufactures in
regards to any questions or queries that they might have
 We will also set up a FAQ section in our website which will be accessible
to customers
In addition to the above we also have a company headquarters is located at
St.Kilda, Melbourne. The office would be approximately 400 square feet, with
the option of an additional 800 square feet of space, if we decide to expand in the
future. The company has a two year lease on the current premises with an
additional two year option.
We also have a 600 square feet research lab located in Point Cook, Melbourne
where we will be conducting all of our research and development activities in
regards to our product.

[2013]
29
CRITICAL RISKS & ASSUMPTIONS
Gina Eom and Ash Khan will share responsibility for the marketing activities. We
will ensure that risks are actively identified, analysed, and managed throughout the
life of the project. Risks will be identified as early as possible in the project so as to
minimize their impact. The strategy for accomplishing this are outlined in the
following sections
RISKS
Risk Likelihood Impact Strategy
Cost overrun or
Determining that the
business can no
longer support itself
Medium
Detrimental to
ProPulse if this may
happen, The
business may no
longer exist, we
may have debts to
pay off
Create a contingency fund
- source continuous
sponsorship/initiative grants, make sure
there is enough so that we may pay off
any debt as soon as possible
Problems developing
a sufficiently large
client base.
Low
not enough
business/income
coming in to support
ProPulse
ProPulse is delivering a unique
proposition unlike any other in the
market. Consistent branding and other
marketing efforts are key so that the
client base is being communicated to
effectively. Marketing efforts to make
sure our message is being sent out to
consumers
A member of the
board, employee
may act to the
detriment of the
company ProPulse
i.e trading
information
Low competing brands
may acquire our
research or other
private information
Contracts are set in place along with
along with corporate governance
guidelines that state the behaviour of
all members of the ProPulse Company.
Legalities apply to those who break the
contract
Delays - e.g
production, planned
product launch
Medium Affects sales, affect
cashflow, changes
in marketplace may
occur
Strong start up plan to override the
risks i.e construction and equipment
delivery delay penalties where
appropriate
Threat of natural Medium Inurance policies put in place to mitigate

[2013]
30
Assumptions
Assumption management procedures are to be in place and roles and responsibiilities
outlines for clarity of supporting roles and systems
Initial Project Plan;
 Organisation chart;
 Work Breakdown Structure
 Risk Log
 Supplier management-related documents
 Stakeholder analysis
 Benefits Log
Review any additional background documents which may include:
 Corporate strategic plan
 Information systems and information technology plans
 New product releases
 Compliance requirements e.g., new regulations
 Acquisition or merger plans; or
 Other significant project documentation i.e. change management plans, new
product development/release plans
disaster, death of
management etc
any uncontrollable risks i.e Property &
Casaulty insurance, liability insurance etc
The demand for
health and fitness
products declining
Low Affect sales as there
is no demand from
consumers
Although the industry shows that
demand in market is increasing, actively
promote the advantages of ProPulse,
and health, fitness and exercise in daily
life
Competitive Risks High Loss market
share/average
consumer dollar
Continuous revision of S.W.O.T to find
our advantage over competitors, R&D
effort to maintain innovation

[2013]
31
- Meetings with the project sponsors and also product steering committee in China to
discuss project assumptions that may exist.
- All facts and figures were calculated under the basic assumption of steady rates re:
Interest rate, tax, payroll etc.
FINANCIAL PLAN
Projected Profit and Loss
 Our profit projection for 2014 is $55,461, achieving a 6.49% profit margin.
 2015 will see a 11.1% increase in sales, churning a profit of $78,934
representing a 8.21% profit margin.
 Across both years we will maintain a gross margin of approximately 58%
(see table 3)
 Our R&D spending will decrease in 2015 as we will be focusing on more
incremental changes to the product rather than a radical makeover. R&D
expenses will mostly focus on improving the quality of the product, adding
new functions, fixing any bugs etc. We eventually do plan to increase our R&D
budget again in the future once we have established a firm foothold in the
market.
 We have chosen a business model that minimizes fixed costs and accepts a
higher variable costs proportion (50%) until our sales pick up momentum
and we see a sustainable sales rate. In doing this we will reduce the impact of
an unfortunate event where we experience an extended period of low sales
volumes. What we trade off however is incremental profit we would receive
as sales increase, for the fact that 50% of our costs would increase with our
sales.
 We have a sizeable marketing and promotions budget that constitutes
approximately 25% of our expenses in 2014, falling to 19% of our expenses
in 2015. It is one of our most significant expenses.
 Payroll accounts for 7.5% of our expenses in 2014 and 10.4% in 2015. This is
due to our belief that we would expand our staff in our second year of
operations.
Overall we believe that our estimates are highly promising. A return of 6.49%
($55,461), while at first may not seem significant, is a much welcomed figure for

[2013]
32
a brand new product concept in its first year. As we see from our year 2
projections, there is a significant jump and increase in our net profit which
should also indicate a similar pattern for the forthcoming years.
Table 3: Pro Forma Profit and Loss for the year ended June 30
2014 2015
Sales $854,576 $961,398
Less Cost of Goods Sold $356,073 $400,582
Gross Profit $498,503 $560,815
Gross Profit Margin 58% 58%
Expenses
Rent $65,000 $70,000
Warehousing $34,000 $57,000
R&D $120,000 $100,000
Utilities $7,720 $9,000
Payroll $30,210 $45,000
Marketing/Promotion $100,000 $80,000
Insurance $5,200 $7,360
Payroll Taxes $1,900 $3,400
Accounting & Bookkeeping $11,100 $14,150
Transport $27,000 $45,000
Total Operating Expenses $402,130 $430,910
Net Profit Before Tax $96,373 $129,905
Company tax expense $28,912 $38,972
Interest expense $12,000 $12,000
Net Profit $55,461 $78,934
Net Profit Margin 6.49% 8.21%

[2013]
33
Projected Balance Sheet
Table 3
ProPulse
Assets
Current assets: 2014 2015
Cash 300,000.00 533,000.00
Investments - -
Inventories - 140,000.00
Accounts receivable - -
Pre-paid expenses 200,000.00 -
Other - -
Total current assets 500,000.00 673,000.00
Fixed assets: 2014 2015
Property and equipment - -
Leasehold improvements - 30,000.00
Equity and other investments - -
Less accumulated depreciation - -
Total fixed assets - 30,000.00
Other assets: 2014 2015
Goodwill - -
Total other assets - -
Total assets 500,000.00 703,000.00
Liabilities and owner's equity
Current liabilities: 2014 2015
Accounts payable - 140,000.00
Accrued wages - -
Accrued compensation - -
Income taxes payable - -
Unearned revenue - -
Other - -
Total current liabilities - 140,000.00
Long-term liabilities: 2014 2015
Loan payable 200,000.00 200,000.00
Total long-term liabilities 200,000.00 200,000.00
Owner's equity: 2014 2015
Investment capital 250,000.00 250,000.00
Government grants 50,000.00 50,000.00
Accumulated retained earnings - (67,000.00)
Earnings 130,000.00
Total owner's equity 300,000.00 363,000.00
Total liabilities and owner's equity 500,000.00 703,000.00
Net Worth 300,000.00 363,000.00
Balance Sheet for the year ended 30th June

[2013]
34
EXIT STRATEGY
The owners of ProPulse are establishing this business as a cash flow company for
themselves and as a vehicle to pursue their passion for health and fitness. ProPulse
will provide adequate dividends to the owners, as well as generate enough revenue to
pay off the initial loan in the first three years.
The aim is to go public with an IPO in ten years as the intended exit strategy however
this would depend on the growth, situation will be reviewed at the end of the 5th year.
The owners may eventually exit the business through an acquisition or a sale to
others/each other if the fit an circumstance is appropriate.

[2013]
35
Reference:
ABS (2012). Australian health survey: First results, 2011–12. Canberra:
Australian Bureau of Statistic
IBIS World (2012). The real winners in Australia's battle against the bulge.
Retireved 7th
of May 2013, from
http://www.ibisworld.com.au/about/media/pressrelease/release.aspx?id=293
IMS Research. (2012). World Market for Wearable Technology – A
Quantitative Market Assessment. Retrieved 12th
of May 2013, from
http://imsresearch.com/press-
release/Wearable_Technology_Market_to_Exceed_6_Billion_by_2016
Kang, T. (2006). Textile-Embedded Sensors for wearable Physiological
Monitoring Systems. A dissertation submitted to the Graduate Facultu of North
Carolina State University.
MacDonald, W. A. (2004), Engineered films for display technologies. Journal
of Materials Chemistry. 14. Pg. 4-10.
Parks Victoria, 2013. Retrieved 20th May 2013 from
http://parkweb.vic.gov.au/explore/parks/albert-park
Legislation
 The Australian Consumer Law, 2012
 Crown Land Reserves Act 1978
 Fair Trading Act, 1999
 Trade Marks Act 1995

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