Uri Dahan & Co.

Business Consultants, Investment & Capital Raising

The XXX Eyewear

Collection

Business Plan

(Due to confidentiality and other considerations

The website version presents the executive summary alone
Company identifying information has been removed)

‫)משיקולי חיסיון ושיקולים נוספים‬

,‫מוצגת באתר רק תמצית המנהלים של התכנית העסקית‬
(‫תוך הסתרת מידע מזהה על החברה‬

Tel. 972-77-7032332, 972-73-7292232, Fax. 972-2-6790162,

Mobile phone 972-50-5516067, 972-50-7407008
E-mail: [email protected] , website: www.uri-dahan.com
Address: Tshernikhovsky St. 48 Entrance C’, Jerusalem 92585, Israel
Uri Dahan & Co.
Business Consultants, Investment & Capital Raising

Contents

Chapter 1: Executive Summary

1. The Product and Business Idea

2. The Vision Care Industry

3. The Business Strategy

4. The Financial Plan

5. Notes

Chapter 2: The Planned Product

1. Description of the Business Idea

2. Production: Advantages versus Disadvantages

Chapter 3: Vision Care Industry Overview

1. The Vision Care Industry

2. Eyeglasses and Sunglasses Sub-industry

3. The Vision Care Industry Performance

4. Brand Name Characteristics in the Eyewear Market

Chapter 4: The Business Strategy

1. SWOT Analysis

2. Risks and Chances, Selection of the Business Strategy

Chapter 5: The Financial plan

1. The Financial Plan

2. Profitability of Investment

Appendix: The Entrepreneur’s Curriculum Vitae

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Chapter 1: Executive Summary

The purpose of this report is to integrate the business idea into the format of a
formal business plan. This will be done by analyzing the business environment in
which the business idea is to be implemented; by aiding the entrepreneur in the
formation and presentation of her business outlook; and by deriving the financial
plan and work budget needed to implement the business idea.

After its preparation, this business plan will assist in plotting optimal budget goals,
and recruiting business partners such as suppliers, distributors and investors, etc.
It is obvious that not all of those mentioned above will receive the plan in its
entirety.

Below is a summary of the report. It is recommended that the entire report be read
including the attached tables that are an inseparable part of this business plan.

1. The Product and Business Idea

The ‘XXX’ is a business idea that has been integrated by the entrepreneur over a
period of time. The entrepreneur has been active in the eye care industry for 28
years, and thus she is deeply acquainted with it. In essence, the business concept
exploits the design deadlock and the lack of innovation in design that has existed in
the industry over a long period. The entrepreneur is using the innovation of her
idea as a marketing and business lever. This topic will be discussed in greater detail
later in this report.

The collection will be composed of two different sets of frames – the ‘XXX’ Classical
Collection and the ‘YYY’ Youth Collection:

• The former will incorporate Western world fashion and ethnic jewel-craft native
Israeli ornamentation in its design. The frames’ material will be prestigious and
of high quality - titanium, gold and silver items, stainless steel as well as
acetate including combinations of the above. This Collection’s price will be set
to the elite level of eyeglasses.

• The ‘YYY’ Collection presents a totally innovative idea that copies body piercing
to glasses frames. It will also be possible to attach different items to the frame.
This idea provides an additional opportunity for personal expression.

There will be a number of proven rimshape models for men and women bearing the
design concept ‘signature’. This design ‘signature’ will be product’s key
differentiator from other elite eyewear models on the market. Eyewear modeling
will include the handmade work of jewelers and artists of ethnic design melded with
the world’s most successful eye-rim shapes. The collection will also comprise less
expensive models that will feature the brand style, but be produced on a regular
production line basis: basic models for men and women that represent the “stamp”
of both collections. The modeling of the eye shapes of these models will include the
craft of goldsmiths based on the guidelines of the most successful models
worldwide. Other models will bear the conception’s stamp, but which can be
produced on a regular production line.

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As stated above, the most important advantage is that both collections introduce
innovative ideas that have never been seen. Our estimate is that the planned
collections perfectly satisfy a latent unsatisfied market demand has not been aware
of. Thus, even small scale market entry can involve moving high volumes of
product with attractive margins.

2. The Vision Care Industry

In this paper (in the Executive Summary and in Chapter 3) information on the sun
ware industry is reviewed according to the following sources:
1. http://www.optistock.com
2. http://www.allaboutvision.com
3. Jobson Optical Group Data Base
4. U. S. Optical Indistry Handbook 1998, Jobson Publishing L.L.C., 1998

Over the past decade, the U.S. vision care industry has grown steadily. Total retail
sales rose from $16.0 billion in 1999 to $16.5 billion in 2000. Ophthalmic frames
and sun wear experienced growth in both dollar sales and units sold; premium lens
products and treatments generated nearly $8.3 billion for retailers, distributors and
manufacturers.

From the following in-depth description of the industry, it can be inferred that the
vision industry is a multi-billion dollar business with all the hallmarks of a promising
investment opportunity:
• Steady growth
• Favorable demographic trends
• Strong brand penetration
• High-margin products
• Technological advancements
• Industry consolidation
• Emerging global markets

The combined power of fashion and function is steadily driving eyeglass sales.
Frame and lens volume topped $13.3 billion in 1999, up more than 18% from
1995.

This business plan refers to the market of sunglasses as a whole, and to the market
of eyeglasses without the optical lenses. According to the entrepreneur’s
estimation optical lenses contribute 35% of the frame and lens volume mentioned
above. That is why the market share we are concerned with stands on about $8.6
billion.

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Business Consultants, Investment & Capital Raising

The growing popularity of advanced lens materials and high-fashion frames is

boosting consumer spending on eyewear. The average retail price for a pair of
eyeglasses has increased by more than 18% in the past five years to $172 and will
probably continue to rise given the emphasis on premium lenses and high-end
fashion frames.
It is important to mention, at this stage, that the industry is enormous in
proportion to the planned scope of activity. So the market is not expected to offer a
meaningful response to the enterprise. So the initial market penetration is
expected to be absorbed into the existing optical market, with an opportunity for
real market share developing as the product/concept matures the optical market
will absorb the initial market penetration without

3. The Business Strategy

Mapping the risks and chances of the total planned enterprises, defines the optimal
way of marketing into a plan of working with several distributors on a geographic
base. Initially, operating through large chains will not be permitted. After the
product’s penetration into the market, distribution through big chains will be
considered.

The distributors’ operating system will emphasize the product, the innovative idea
and the penetration of the product to the market segment, which is at a state of
relative vacuum, because of the lack of innovation, as aforementioned.

The factors that shape the choice of the marketing standard are:
• Penetration into a new market
• New and unknown product – risk involved
• Resource constraints of investment in advertising
• The entrepreneur does not operate the marketing system herself in US

4. The Financial Plan

The level of profitability versus costs is high in this industry, as can be read in the
following chapter providing an industry overview. This situation defines an
extremely high rate of return on investment. From the scope of a yearly cycle of
about $3.7 million for the first sales year, we can arrive at a gross profit of $2.7
million. Sales costs comprise 26.7% of the cycle (see summarizing table and chart
attached to the Executive Summary).

Profits after taxes (by the Israeli tax system) for the first year are expected to be
$0.5 million and will grow into $1.3 million by the fifth year. The average annual
profits after taxes stand at $0.9 million.

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The results of several feasibility checks allow us to present the project as a

profitable one. The level of enterprise profitability is high in every way of
measurement, also in comparison with the rate of return in the eyewear industry,
as shown in the chapter of Vision Care Industry Overview.

5. Notes

To prepare this report, we met the entrepreneur and were given information and
material about the planned enterprise, just as this plan expresses.

All the data used in this business plan is shown in U.S. dollars, fixed prices and
before VAT, if not indicated otherwise.

In the industry overview chapter, we tried to show up-to-date data. These were not
found for each and every need of the plan, which is why some of the information is
not completely revised. However, the data given in this business plan reflects the
industry’s activity to a satisfactory level for purposes of preparing and writing this
business plan.