Hycon Ltd Proposed Business Plan

Executive summary

Hycon Ltd is a medical equipment and drug development company that proposes to design, patent and market medical devices and drugs associated with an endoscopic surgical niche for markets. So far, four devices have already been considered with the contribution of the prominent physicians and surgeons. Three different types of drugs have already been considered, and six patents are initially registered. The company projects a turnover of $15 million at the end of the financial year with all the patent applications having been already through a leading patent law firm.

The targeted market niches are well defined, and all are subjected to high progression trend, with the Endoscopic Variceal Ligation market projected to exceed $160 within a financial period of three years. The products and services will be marketed globally through email, television broadcasts, blog spots, Google adds, signage, fliers among other multiple marketing channels.

Company Summary

The company is currently working on its patents-applied technologies to an ultimate product and endorsement stage along with the establishment of corporate image and identity in the medical products field. This calls for a joint venture license and pursuance several important objectives such as:

1.    Establishment of an efficient medical advisory board

2.    Working on the corporate identity, products brand names and particular trademarks.

3.    Conducting trial experiments on living animals

4.    Prepare for clinical trials

5.    Building effective company staff, infrastructure, while retaining experts for trial and compliance matters.

6.    Discover and explore the available opportunities for second round financing so as to maximize the shareholders’ wealth.

7.    To ensure that the patent completion process is done within the required time frame

Start-up Summary

In the startup plan of this company, the following elements are very essential, the legal cost of filing all the patent applications, the establishment of a good corporate image, the setting, and place of doing the business, compensation to the key managers and the founders of the company and formulation of a strategic plan of raising the start-up capital.

Company locations and amenities

Hycon Ltd offices are located at 1236 Main Street, Anytown, U.S.A, the offices are temporarily leased on a month to month basis, hence this business plan call for the establishment of permanent corporate offices, R&D facilities, and other manufacturing facilities. These facilities are to be placed in Puerto Rico with 9,000 sq. ft.

Products and services descriptions

Hycon Ltd intends to market three different products.

1.    The Visi-Band. This a one-use device used in endoscopic variceal ligation processes

2.    The Visi-Gator. This is a partly disposable device used to eradicate blood clots during different endoscopic surgical procedures.

3.    The Visi-Lyser. This is a suction device used in laparoscopic procedures. The surgeon, therefore, can easily access the inside of the abdomen and pelvis through small incisions in the skin.

The technology used in these products is subject to six patents applications.

Further descriptions

Visi-Band is pre-loaded delivery equipment used to apply multiple ligating bands remotely from the distal tip of an endoscope. It can ligate greater range of tissue sizes with a single band.  This super-elastic Band innovation efficiently promotes the band material stresses such that it increases the apparent stretchability of the band.

Visi-Lyser can be used together with the Visi-Gator in laparoscopic processes and at the same time can be used alone.

These products have the following functional advantages over the currently available products like SpeedBand. They have a better visibility because of the side-mounting band dispensing device, and they offer higher protectively from dislodging of bands as they can load bands internally. Apart from the capability of carrying more bands at a time, these devices ensure a substantial reduction in manufacturing and assembly expenses. In addition, the equipment has a better field of view and increased mobility.

Technology

Argwings and Mac is a patent attorney for Hycon Ltd. Six patents which take into account both offensive and cautious postures in their claims have been authorized and filed with the registrar of companies. The primary patents application areas are described as follows

1.    The transporting tube

2.    The dispenser itself

3.    Tissue softening device

4.    The dispenser controls machine

High degree of care has been taken to guard all potential claims of discoveries and possible antagonism from other technologies. All the patents have been assessed in the medical device field by specialists to Hycon Ltd with the first three relating to the Visi-Gator with the last two relating to the Visi-Band.

Sourcing

The major raw material needed for Hycon products are as follows

1.    Precast plastic parts

2.    The tooling and molds. (capital outflow)

3.    Band polymer

4.    Electric motor

These components are easily sourced, and the multiple potential suppliers have been identified. Injection molders have been recognized to make the molded parts.

Market analysis and strategies

Marketing will be done through industry and trade and awareness campaigns directed to customer segments. Public relation, media, will assist in creating awareness of the existence of these products, their features, and particular usage. Visi-Band will cost $250 per unit. The Visi-Gator will have two prices based on the components. That is, motorized at $1000 and the suction component at $200 per unit.

Sales packages include both direct wholesale and retail sales to the foreign market distributors. The direct sales will mainly entail personal contacts, emails, and media to the key market segments. To cultivate direct sales to key target groups in the industry, a website, and electronic commerce will be used.

Financial plan

These financial projections are based on conventional sales forecasts for the whole of the first financial year. After completing the preliminary stages of this project, a subsequent venture funding is potentially available in the $5 million range. We have plans to monitor our cash flows and cash balances closely.

Essential Assumptions

The key financial presumptions for this are as follows. The current interest rate is constant at 10%. The long-term interest rate is also 10%. The corporate tax is charged at 30%. Others 0%

Break-even analysis

The break-even analysis presumes an approximate running cost of $360,000 per month. This includes full payroll, utilities, rent, sales and marketing and other miscellaneous expenses. The break-even target can endure Hycon Ltd in operation for one year and six months.

Hycon Ltd

Projected Income Statement

For The Year Ending 31/Dec/2016

                                                                                    $                                                          $

Sales                                                                                                                             22,330,000

Cost Of Sales                                                                                                                       (8,200,500)

Gross Profit                                                                                                                  14,129,500

Gross Profit%                                                                                                                63.3%
Expenses

Sales and Marketing Expenses                           1,415,500

General and Administrative Expenses 2,346,700

Other Expenses

Other Payroll                                                   400,000

Consultants Fees                                        80,000

            Total Operating Expenses                                                                                   (4,242,200)

Profit Before Interest And Tax                                                                                     9,887,300

Taxes Incurred                                                                                                        (2, 966,190)

Interest Expense                                                                                                            (250,000)

Net Profit                                                                                                                       6,671,110

Net Profit%                                                                                                                    29.9%