Table of ContentsIntroductory Components..................................................................................................................1

Executive Summary.........................................................................................................................1

Company Overview..........................................................................................................................2

Mission Statement............................................................................................................................2

Management Function........................................................................................................................2

Planning................................................................................................................................................2

Organization.......................................................................................................................................2

Directing...............................................................................................................................................5

Controlling...........................................................................................................................................5

SWOT Analysis.......................................................................................................................................6

External Environment..........................................................................................................................7

Current Economic Conditions.......................................................................................................7

Industry Analysis...............................................................................................................................9

Real....................................................................................................................................................9

Virtual..............................................................................................................................................10

Competitive Analysis.....................................................................................................................11

Marketing Plan.....................................................................................................................................11

Target Market and Market Segmentation..............................................................................11

Marketing Mix...................................................................................................................................12

Product............................................................................................................................................12

Price.................................................................................................................................................13

Placement......................................................................................................................................14

Promotion......................................................................................................................................14

Positioning.....................................................................................................................................15

Discussion of Business Risks.......................................................................................................16

Financial Planning...............................................................................................................................17

Break-Even Analysis.......................................................................................................................17

Income Statement..........................................................................................................................17

Balance Sheet..................................................................................................................................18

Cash Budget.....................................................................................................................................18

Financial Write-up...........................................................................................................................19

Appendix................................................................................................................................................19

Bank Statement...............................................................................................................................19

Contract..............................................................................................................................................19

Loan Amortization...........................................................................................................................20

Organization Chart.........................................................................................................................20

Introductory Components

Executive Summary

Velocity International was established in 2011 as an extreme sporting goods retailer.

Over the years, the company has expanded to include a wide variety of products, ranging from

both physically operated to electric. The major categories of the sporting goods include bicycles,

inline skates, snow boards, ski’s, skateboards, hover boards, electric bicycles, and electric go

karts. Additionally, we will also be selling complementary accessories and Velocity

International’s very own branded clothing line.

Velocity International will mainly be targeting teenagers and young adults. Additionally,

we will focus our marketing and promotional items on individuals who are interested in living a

health conscience lifestyle and are seeking an alternative to the conventional methods of

adhering to such needs. Therefore, Velocity International has begun to sell electric, ecofriendly

sporting goods products that satisfy both the need to take care of the environment and oneself.

We have positioned ourselves in a place of growth, where we are fully expected to

expand quickly and efficiently. We cater to almost every aspect of the sporting goods industry,

through the inclusion of new products that are more targeted for teenagers. Sports, being an

international activity, can straightforwardly be marketed in international countries, with the only

disadvantage being the different time zones. Additionally, we plan on attending at least two trade

shows this year, which is where a large amount of our sales will be derived from. VI is currently

expected to make a profit by the end of this fiscal year, by selling more than 8,500 products, our

breakeven point.

VI feels that we are in an optimal position, in terms of our finances. As of October 2015,

our company’s cash account balance is $880,619, higher than the average firms. With such a

large amount, we are in the process of paying off our total current liabilities, with the largest

debt, $281,358, being our business loan. This situation is ideal since the FED is preparing to

increase the prime interest rate, which will save VI a substantial amount of cash.

Company Overview

Velocity International, positioned at 67-01 110th St. Forest Hills, New York is an already

established firm that has been in existence for over five years. Previously, the company

‘Bikeworks’, a bicycle retailing company, was established in September of 2008. VI’s main

purpose is to sell high quality sporting goods at affordable prices. Velocity International began

its first year of operations in September 2011 with twenty-five employees, and has since grown

to 31 employees. The company filed with VE Law and became recognized as a C Corporation on

October 1, 2011.

Mission Statement

Velocity International’s mission is to be dedicated to providing our customers with the

highest quality products at an affordable price point. Our goal is to promote an active, outdoor,

healthy, and ecofriendly lifestyle through the sale of extreme sports and electric products, as well

as complementary accessories.

Management Function

Planning

Short Term Goals Strategies Deadlines

Promote our new products

Getting our staff to advocate for our company and through affiliate marketing. Emailing our existing customers about the new products

January2016

Continue to promote and improve our company’s website

We will keep up to date with oure-commerce information, as well as adding in high quality content, which includes a functioning checkout button and high resolution product images.

December 2015

Long Term Goals Strategies Deadlines

Give back to the community

Create awareness about breast cancer with our pink products and offer eco-friendly products

June 2017

Build the company’s name recognition within the nation

Promote our company through social media: Instagram, Email, Newsletters and Facebook

April 2018

Create good relations with other VE firms

Create 5 trade deals with international firms and 5 trade deals within the country

January 2017

Organization

Our company’s organizational chart is broken down into four tiers. The C.E.O., at the top

of the hierarchy, is responsible for creating, planning, implementing, and integrating the strategic

direction for the company. The Chief Executive Officer (C.E.O.) also oversees all the

departments and instill responsibly and hard work. The second tier includes the Chief Operating

Officer (C.O.O.) and the Chief Financial Officer (C.F.O.). The C.O.O. directs and manages the

Web Design, Administration, Human Resources and Public Relations departments. Meanwhile,

the C.F.O. directs and manages the Accounting, Sales & Marketing and Purchasing departments.

The third tier is made up of the Vice Presidents of the Accounting, Purchasing, Administration,

Sales & Marketing, Web Design, Public Relations and Human Resources. Lastly, the fourth tier

is made up of employees for each department. Due to the flat structure of our company’s

organizational chart, it’s more efficient for us to communicate between departments.

The Accounting department is responsible for establishing the company’s cash budget,

maintaining the accounting system, and completing financial records. Their duties range from

structuring, formatting, and reviewing the company’s monthly financial reports. Additionally, the

department prepares and updates a break-even analysis.

The Sales and Marketing department works on creating a master product list along with

evaluating the VE competition. The team creates and refines the procedures for processing and

carrying out sales of all of Velocity International’s products on the master product list at the

time. Additionally, the department produces a sales catalog, order forms, as well as an inventory

report.

The Human Resources department has a major role in the overall functionality of our

company. The employees are accountable for creating a department workflow diagram, as well

as being able to identify our current business resources, and establish the firm’s attendance

policy and the associated penalties. Furthermore, every Friday, the staff members are required to

collect all of the employee’s weekly task log and completion sheets.

The Purchasing department creates a supply requisition form and establishes supply

request procedures as well as develops and maintains purchasing records. As part of their job,

they establish a virtual market place.

The Administration department oversees coordinating a company newsletter project and

developing procedures to manage firm purchasing. In addition, they create a system for storing

and sharing files between departments as well as purchase or renew insurance policies based on

the company’s objectives.

The Web Design department is in charge of the entire design aspect of the company’s

website. Specifically, their function is to create and constantly update the layout of the site,

ensure that all parts of the website are operational, and to ensure that there are no errors

throughout the purchasing process.

The job of the Public Relations Coordinator is to prepare and supervise the production of

publicity brochures, handouts, leaflets, and photographs. The Coordinator is accountable for

advertising and managing the company’s reputation with other VE Firms as well as throughout

the school.

Directing

The employees are given tasks and deadlines, but they cannot commence their job until

they are informed about what to do and how to do the job through direction and leadership.

Therefore, the CEO holds weekly company meetings on Mondays to assign, discuss, and review

tasks and objectives. Information and completed tasks are collected at the beginning of the

meeting from the previous week and the progress is discussed with feedback from the team. The

CFO and the COO assigns tasks to the VPs of their departments. The VPs then disperse and

divide the specific tasks to the staff members who are most qualified to complete them in an

orderly and timed fashion.

Controlling

The controlling management function of the business helps insure high quality of work

output, which is an important key factor for long-term success. In order to keep track of each

employee task sheets are disturbed in the being of the week and collected at the end. Employees

are required to fill out the weekly log/task sheet for each day. Morning agendas are also

disturbed every morning, informing the employees what is required by the C-Levels. In order to

commemorate our hard working employees, two employees are selected each marking period

and receive the honorary title of “Employee of the marking period.” All of this is done to ensure

that our goals are met and that employees are motivated to stay on task.

SWOT Analysis

Strengths Weakness Our highly qualified and Multi-

Cultural employees support our operating policies to support our company’s objectives.

High education of employees Flat structure of our company’s

hierarchy allows for excellent communication.

The Returning employees use their prior experience to improve the company.

Inability of file sharing makes it difficult for work to be shared and reviewed.

High payroll expense due to 31 employees

Difficulty in collecting accounts receivables

Strategies to improve In order to improve these

weaknesses, we would have to down size our company staff.

The implementation of the buy button to eliminate and receive cash receivable.

Opportunities Threats NYC and California trade fairs The Turbulent Global Economy

allow us to bring our products to a larger market.

National and NYC implementation of bike lanes increase the demand for bikes.

Public awareness of ‘Going Green’ and ‘Pink Products’ increase recognition of the pink products offered by our firm and that majority of our products are eco-friendly.

Mass media focus on living a healthy lifestyle, which increases demand for extreme sporting goods.

Difficulty in communicating with international firms/ customers due to the different time zones

Competitors in the Virtual Enterprise market

Strategies to Improve Search for specific times, which

can accommodate other countries, as well as being specific for each country we plan on selling to.

External Environment

Current Economic Conditions

The U.S. Prime Interest rates have been

increasing at the same pace, 3.25%, for six

consecutive years. According to bankrate.com,

the prime interest rate is an important index used by banks in order to set the rates on many

consumer loan products, such as credit cards and auto loans. The following is disadvantageous to

Velocity International since an increase in the prime interest rate translates into the company’s

bank loan interest rate to rise as well.

The unemployment rate has been decreasing

over the past few years, according to the BLS

(Bureau of Labor Statistics). The U.S.

unemployment rate was essentially unchanged

at 5%, the graph on the left indicates

Unemployment rate in the US edged down to

5% in October of 2015, the lowest level since April 2008, from 5.1% in the previous month.

Ultimately, this change is positive because it signifies that there is full employment throughout

the U.S., which means that those counted in the working population are employed.

Optimistically, with an increase in the number of people employed, Velocity International’s sales

should increase simultaneously.  

T he U.S. Real G.D.P., (Gross Domestic

Product), is another crucial economic

indicator, in regards to the sporting goods industry. As you can see from the chart (left) the

current real GDP is at 16.39 trillion USD as of (2015). The real GDP is the monetary value of all

the finished goods and services produced within a country's borders in a specific time period,

most commonly divided by year. North America’s current real GDP indicates that the economy

has expanded and will continue to expand based on the upward slope of past years. Therefore,

the sporting goods market will increase in terms of production.  

Industry Analysis

Real

Over the past few years, the sporting goods sales have been constantly increasing due to a

shift towards a healthy lifestyle and an alternative to unconventional transportation. Sports

activities tend to attract preteens, teens, and young adults, making the biking industry accepted

by people of all age groups. As health awareness continues to spread throughout America, along

with its benefits, the demand for sporting equipment will increase.

According to a recent study, the market for sporting equipment in the United States had an

estimated valuation of 63 billion dollars in 2014. By the end of 2015, it is expected to increase by

approximately 1.9 billion dollars, producing an estimate of 65 billion dollars. That’s an increase

of 19.08 billion dollars since 2002. As of 2013, the total value of retail trade sales in the United

States amounts up to 4.46 trillion dollars, a rise from the 3.26 trillion reported a decade earlier.

Sporting goods stores like Dick’s Sporting Goods, Bass Pro Shop, Cabela’s, and Sports

Authority bring in majority of the sporting industry’s sales. In total these sporting goods stores’

sales exceed 43 billion dollars in 2013. In the previous year, there was a major comeback in

regards to the U.S. bicycle industry, with direct effect sales of 6.1 billion dollars, including retail

sales of bicycles, and accessories, through all channels of distribution. This compares to the 5.8

billion dollars in sales in 2013. Wal-Mart placed first in the recent ranking of the leading

sporting goods retailers, due to revenues that reached 9.3 billion dollars. Nike, also one of the

most profitable sportswear and sporting goods company in the world, made 27.8 billion dollars

in its revenue in its 2014 fiscal year. In the recent market research, 9.7 billion dollars were made

from solely online purchases, and increase from 2012’s 8.4 billion dollars.  

Virtual

Throughout Virtual Enterprise International, there are 78 sporting goods firms across the

United States, and 256 sporting goods firms globally. Given the enormous interracial mixture in

Velocity International, we promote globally as well as domestically.

There are a total of 507 firms in the United States, and 111 firms in New York State.

Each firm contains an average of 25 students/ employees. Statistics show that an average yearly

salary of a VE employee is $624,000 a year. This equates to a monthly buying power of

approximately $52,000 for employees. Therefore, one of our firm’s main objectives is to be able

to tap into a percentage of the monthly buying power for each firm that we have a trade

agreement with.

The following chart reveals the currency exchange rates for USD. This information is

important to our company not only on an international scale but also on our trade fairs. The New

York Trade Fair is where many international companies will be making purchases. In addition,

Velocity International has 31 multicultural employees that can reach out to our international

consumers.

Competitive Analysis

Velocity International is a company that provides products that other firms have not

incorporated into their inventory. Four of our indirect competitors include Adventure Outdoors

Company, Body Kinetics, Isports, and Adrenaline Inc. However, it’s worth noticing that

Adrenaline Inc. was one of our direct competitors in the previous fiscal year. All of these

companies specialize in selling sporting equipment and also provide body gears. Velocity

International differentiates itself from

its competitors by implementing a

new product line of e-bikes, hover

boards, and the firm’s own branded

clothing line.

Marketing Plan

Target Market and Market Segmentation

Velocity International’s target market is comprised of consumers who are between the

ages of fourteen and thirty-five whom are both male and female. The company has a wide

audience range, with our consumers having an age difference of twenty-one years. We

specifically aim to fit the needs of those interested in extreme sporting goods, and those looking

for a new modern take on electrical sporting technology. Our clients can be described as active,

eco-friendly, explorers and competitive. These individuals described are our primary consumers.

Other consumers that we target include other VEI firms with whom we endeavor to create

partnerships within this fiscal year. We are particularly determined to build partnerships with

international firms in the fashion industry, since we have recently expanded our product offering

through the addition of a new VI branded clothing line. There are 189 international firms in the

fashion industry. Building these partnerships by the end of the year will be essential as we hope

to increase our sales and gain experience with this newly introduced product.

Through Extensive market research conducted by our employee’s, Velocity International

found the localities of our consumers. We have established sales and made revenue in North

America, South America, Asia, Europe and Australia. We have established dominance thanks to

sports being a worldwide phenomenon; a great pastime that has translated to all people and

cultures worldwide. It should also be recognized that this expansive market is accredited to the

establishment of VEI firms all around the globe.

Marketing Mix

Product

We have products that range from skateboards to inline skates as well as products that are

similar to those of other sporting goods companies. Our company strives to differentiate itself

and modify based on our growing and shifting consumer needs. We have recently added two new

additions to our company products. These new additions include electrical sporting goods and a

Velocity International branded clothing line designed personally by a company employee. All

our products could now be divided into categories consisting of electrical sporting goods, manual

sporting goods, and clothing. Under the electrical category one would find products ranging from

hover boards to electrical bikes. Manual sporting goods include skis, snowboards, mountain

bikes etc. As for clothing we plan on having numerous shirts, crewnecks, and sweats that are

specifically geared towards extreme sports.

The sporting goods industry, like many others, is competitive. With similar products and

not much direct competition the rivalries we have are directly involved with pricing. For which

we have specific methods of action that put us a step ahead of companies selling similar

products. Unlike other companies, we have decided to modernize and use this era of technology

to our advantage by adding electrical products that are eco-friendly. Our company has expanded

its offerings and we have therefore expanded our market.

PriceVelocity International’s prices are determined by the relationship between our supply and

demand. Products with special features have a higher cost because they are manufactured with

high-end merchandise. Therefore, the firm raises the profit margin to 60% in order to make

profit. Another way prices are determined is through observing the demand for a particular

product. If a product is currently in high demand, we would take the original price and sell it on

average for 50% more than the price at which we are purchasing it from the manufacturer.

Products that don’t fall into this excessive demand will sell for 35-45% more than the wholesale

price. The third way in which the company decides pricing is based on competition. If our

competitors are selling the same products and are receiving a larger amount in sales, then we will

sell the products at a 10% discount. This method will get our target consumers to refer back to

our company for the mere fact that we would be selling the products for a cheaper, more

affordable price. A price that, of course, will continue to make the company a profit for each

product sold. In doing so we aid our company against our competition and are keeping both our

consumers satisfied. Velocity Internationals pricing objective is to maximize profit. For example

if we were to buy two hundred units at $129 per unit of skateboards, which would cost us a price

of $25,800 from the wholesaler. We could later price the product at $200 per unit, which is a

55% markup, and it would give us a $14,200 profit.

Placement

Velocity International plans on producing 46% of its sales directly from our website, a

dramatic increase from last year’s 5%. This increase

is due to the fact that Velocity International has now

created various social media pages.  As shown in

the bar graph we also plan to make 44% of our sales

at the New York City trade fair and 7% at California

trade fair. The Belgium trade fair comes last at 3%. These sales are comprised of our virtual and

real world consumers.  

Promotion

Advertising: We plan to advertise by setting up an ad with a QR code that directly connects to

Velocity International’s website. This will the increase sales and publicity of our company.

Direct Marketing:

Direct Mail: We will be sending out newspapers with real prints of our current products

and offers. This will ensure that the consumers can physically view and read what they are

buying, which will encourage them to purchase it.

E-mail: In this day and age the internet is the way to connect with each other and sending

emails is one way to achieve this. Information about products and offers at Velocity International

will be sent to consumers and other firms around the globe. Therefore, the emails will not only

be written in English, but the emails will be written in the native language of area we plan on

contacting.

Social Media:

Instagram: Social Media is certainly in right now and our company feels this is the best

way to reach a majority of our consumers. Instagram will be used to promote Velocity

International by including pictures of our new product line and current promotional offers. We

are not only able to connect with our customers, but can receive direct feedback from them

through the comments they leave and in turn help make our business better.

To purchase advertisement, we have a budget of $10,000 dedicated to developing

publicity and awareness for our company . To promote our company online, we are designating

$4,000 each month to Instagram ad space. With the research we done on cbsnews.com, we have

found that 80% of our target market (teenagers) use Instagram. This ad space with benefit our

company because Instagram has gained a vast amount of popularity within the years which is an

advantage to Velocity International as we have just created a profile. Trade fairs are where some

of our largest sales derived and we want to make sure our company is promoted efficiently by

reaching a large audience. We are allotting $2,000 for promoting at Trade fair events in San

Francisco and New York City. The remaining funds will be directed to our in-house promotional

campaigns, which are mainly the product catalog development. Our catalog will contain a brief

description of our products with prices.

Positioning

At Velocity International, our customers are very important to us. We strive to meet the

needs of our customers while remaining at an affordable price range. We position ourselves as a

company at the head of the sporting goods market providing customers with new and dynamic

products, which promotes ecofriendly and healthy lifestyles. Velocity International differentiates

itself because we have a variety of products that cater to our consumers’ lifestyles more

specifically than any of our competitors.

Discussion of Business Risks

We have identified two main risks below, that our company currently faces, and have

determined ways to alleviate them.

Risk Identified Risk Addressed

We may not be able to reach our projected sales goal because teens may not be interested in sporting products in the VE Teen Consumer Market.

To address this issue we have the Sales and Marketing department conduct extensive market research to assure that our firm is meeting the needs and wants of our customers.

There is a fluctuation in currency To address this issue our firm adjusts

exchange rates. This is an important aspect on Velocity International because we want to ensure that our products are affordable in the countries they are being sold in.

the prices of our products by factoring the currency exchange rates, so we can continue selling our products to foreign customers.

Financial Planning

In our break-even analysis, we determined our average selling price per sale to be $278.50 and

our average cost of goods sold per sale to be $187.53. We also incorporated our Average Profit

Rate at 50% and our Annual Fixed Cost to be $774,417. Therefore, Velocity International

projects its break-even point to be after we sell 8,512.88 units, reaching sales of $2,370,837.08.

Any further sales past this point will result in VI turning out a profit.

Break-Even Analysis0 500

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Break Even

RevenueVariable CostFixed CostTotal Cost

Units

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lars

Income Statement

At Velocity International our greatest source of revenue originates at the NYC Trade Fair, where

we plan to reach sales of $1,000,000. However, the NYC Trade Fair is held only once per fiscal

year. Our company sustains most of our monthly expenses with our monthly income. We have

steady website sales that are increasing on a positive slope. One of our tailing expenses is the

cost of goods. Although we have many more fixed expenses such as the rent, salaries, loan

payment Velocity International has a strong foundation and a steady income to surpass our

expenses and become profitable.

Balance Sheet

As of April 30, 2016 our total assets value at $924,687 with cash being our biggest asset

with a value of $880,619. Our long-term liabilities include paying off our current loan and our

accounts payable. Our total liabilities balance with our total assets at $924,687.

Cash Budget

Velocity International began this fiscal year with $761,862 in our bank. We projected

sales of approximately $3,417,800 and expenses of $2,972,528 thus resulting in a total profit of

$445,272. The trend in our cash budget shows that the sales are increasing exponentially as the

fiscal year progresses. Our leading expenses are the cost of goods sold which varies directly with

our sales at the rate of 50%. However, we are extremely optimistic regarding our ability to reach

our projected sales.

Financial Write-up

Appendix

Bank Statement

Contract

Loan Amortization

Organization Chart