Bigguhn Printers, Inc. A Different Approach

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1 Business Description Bigguhn Printers will manufacture and sell a patented and innovative printer designed to print images onto billboards. Bigguhn Printers will manufacture and sell several models of the Bigguhn Saleable Printer. The Bigguhn Printers sales team will focus on selling this product to already existing billboard companies both nationally and internationally. Bigguhn Printers plans to immediately begin to build facilities to manufacture and begin production for national sales after ten to twelve months. International sales are planned for nine to twelve months after national sales begin. Bigguhn Printers will initially sell the printer and any supporting software needed to operate the printer. The printer is an incremental type printer. It is mounted to the billboard and prints advertisements onto media that is presented on the billboard. The media is on a rolling mechanism, much like film in a camera, making it possible for many ads to be repeatedly shown, sequentially during a day, a week, or a month. The printer will receive data to be printed on the billboard using wireless technology and is powered by internal solar charged batteries. Mission Statement Bigguhn Printers strives to create reliable durable messaging products that will both revolutionize and drive the future of billboard advertising. With the Bigguhn Printers innovative real time messaging technology, products will go beyond present industry capabilities, standards and expectations. Goals and Objectives Bigguhn Printers plans to become the leading company in the changeable media billboard industry. Bigguhn Printers believes this goal will be achieved within the next five to seven years because of the high quality of the Bigguhn Saleable Printer and reasonable price. Bigguhn Printers has also set goals that will help create a plan to become the leader of this industry. The goals of Bigguhn Printers are as follows: Complete design and evaluation of product within nine months Sell 50+ scalable digital printers in the first 24 months of business. Sell printers during the first five years Develop a national network of sales associates; this will help ensure that the Bigguhn Saleable Printer gains a recognizable name in the marketplace. In three to five years the company wants to have expanded to an international level with sales and manufacturing facilities across the globe Increase marketplace for changeable media by 5% to 15% within first three years. Capture 2% of the total US market within the first seven years Gross sales of over $125 million, in the US, within the first seven years Regular annual gross sales of over $25 million after five years. Increase annual gross sales to over $50 million at the end of the first seven years Have a greater than 18% after tax net profit within the first five years Background Information The Industry People and businesses have used large and small outdoor signs to attract and direct potential attendees to events for over a hundred years. In the last century, the Billboard Advertising Industry, is primarily dedicated to commercial endeavors and has developed and evolved. There are nearly 500,000 large and small billboards within eyesight of the highways, freeways and local streets in the United States. The revenue from the uses of billboards in the US exceeds $40 billion each year. The revenue from the uses of billboards in the UK exceeds $25 billion each year. Internationally the billboard industry potentially has annual revenues exceeding $150 billion. Static and digital billboard make up 65 percent of the out of home advertising industry. The billboard industry is continuing to grow because consumers are spending much more time outside their houses. The daily commute for Americans has increased to at least one hour per day. The large growth in this industry is the perfect environment to introduce a more cost and energy efficient method, like the Bigguhn Scalable Printer. [c]2009 Dwain Gipson, Bigguhn LLC dgipson@bigguhn.com Pg. 1 of 5

2 Industry Trend Currently, in an attempt to increase the revenues at an advertising site, the trend is toward the use of electronic displays on outdoor billboards. The electronic display based billboard is much more flexible and effective. The Light Emitting Diode or "LED" based outdoor electronic displays allow images to be created and displayed using a computer. Electronically generated images are therefore quickly and inexpensively changed. Electronic display based billboards allow transient advertisements. These transient advertisements create opportunity for higher revenues than static advertisements. Business Fit In the Industry and the Future of the Marketplace The Economy The current economic trend, and for the next few years, has prescribed the need for reducing the costs in business. While the LED Electronic display billboard is a dramatic improvement, its high installation and associated operating costs demand a higher usage cost than non-electronic billboards. In todays and the near future economy, this will have a significant negative impact on the number of customers using these billboards. Companies have to reduce their advertising budget and explore "alternative" advertising mediums. The Environment Today's trend is toward "greening" up in the ways we consume energy. This trend dictates that we "conserve" energy wherever possible. The LED Electronic billboard, due to the fact that each LED is effectively a "light bulb", uses a tremendous amount of energy. The amount of energy consumed by one LED Electronic billboard is equivalent to the energy needs of 30 households. This issue is of great concern and help to feed the opposition by certain parties lobbying against the proliferation of billboards in general. Business Model The Bigguhn Printer Advantage A Bigguhn Scalable Printer billboard provides the same functionality as the "LED" Electronic billboard. A Printer based outdoor billboard costs 80% less to install and requires 95% less energy to operate than an LED electronic billboard. This gives the Printer billboard a significant marketing advantage over the LED electronic billboard in the near future economy. Structure Bigguhn Printers will be the primary manufacturer of the Bigguhn Saleable Printer; however the company will also provide Original Equipment Manufacturer (OEM) opportunities to others. Customer service is a major priority of Bigguhn Printers, which strives to satisfy customers by providing the following: Technical support to the OEMs, Installers and End Users Additional functionalities and upgrades to the Bigguhn Scalable Printer Training on how to enhance the marketability and use of Bigguhn Saleable Printer based outdoor display billboards Products/Services Growth Description Currently the Bigguhn Saleable Printer is being developed. After obtaining investment funding, a prototype of the printer will be built and tested in Reno, Nevada. The Bigguhn Saleable Printer will then be marketed mainly to large billboard companies. The printer can be attached to existing billboards therefore there is no need to build new billboards. As our competitors invent new forms of outdoor advertising, the Bigguhn Saleable Printer will be able to upgrade these older billboards. Recent announcements from major internet based data gathering and distribution entities, like Google, have stated intentions to enter the wireless arena. This means a tremendous increase in content available wirelessly. This will provide a plethora of textual data and images for use in the electronic outdoor billboard advertising business. The uses for this type of Content are virtually unlimited. The uses and installations of some form of printer based billboards will grow at a comparable rate. Installations of "LED" based electronic billboards will still be limited by their costs. The Market Analysis [c]2009 Dwain Gipson, Bigguhn LLC dgipson@bigguhn.com Pg. 2 of 5

3 Customer Analysis Currently, the customers for the Bigguhn scalable print system are owners of billboards or billboard companies that already own billboards and want to modify the billboards they currently own. The market is nationwide and the target markets are as follows: Top outdoor billboard advertising companies; these companies currently are vertically integrated meaning that they physically own and maintain the outdoor billboards. They usually own large amounts of billboards across the nation that the Bigguhn Scalable Printer could be attached to and maintain by their own staff. Private owners of outdoor billboards; usually own only one billboard and lease it out to billboard companies. They can purchase a Bigguhn Saleable Printer and contract with an ad agency for less costly services. Other: general users of outdoor advertising other than billboards. The Bigguhn Saleable Printer can be attached to buildings, street furniture and transit forms of advertising. Competitor Analysis The Bigguhn Scalable Printer will be competing with every form of advertising that currently exists in the outdoor advertising industry. LED Electronic billboards are becoming popular. The typical ad is displayed for eight seconds "a spot" out of every 60 seconds. There are 8 "spots" available. This technique allows the billboard to be concurrently shared among several advertisers to increase its revenue. The cost of advertising for a "LED" display is approximately $2,500 a month for each 8 second "spot" on a single "LED" billboard. The cost of advertising on a network of 3 to 4 "LED" billboards is $7,500 a month. This is necessary to recover the cost of the large investment and operational costs of the "LED" billboard. There is a much lower investment and operational costs with the Bigguhn Saleable Printer which can be programmed to run ads in any time increment desired; therefore the cost involved in using a Bigguhn Saleable Printer are significantly smaller. The cost of advertising for a "LED" display is approximately $2,500 to $7,500 for each advertiser per month for a "spot" compared to the $500 to $1500 it would cost to advertise "full time" with the Bigguhn Saleable Printer. Other Markets Another potential customer of Bigguhn Printers is the owners of manually changeable billboards, such as Readerboards. When the Bigguhn Saleable Printers are retrofitted onto these billboards, it offers a more cost and time efficient method of this type of outdoor advertising. Currently static billboards cannot offer as many ads in the same time increments as ones with the Bigguhn Saleable Printer. Static billboards have also proven themselves as cost inefficient, it takes a long period of time to place new ads on static boards and often boards are left blank or advertisers gain free exposure. This cannot happen on a billboard with the Bigguhn Saleable Printer. Another potential customer for Bigguhn Printers is the operators of mobile billboards that are attached to trucks and driven around a particular territory. They gain much more exposure than other billboards. They require man intensive labor everyday and the cost of gas and maintaining vehicles, which can become quite costly. The Bigguhn Saleable Printer is easy to run and requires much less labor due to the fact that it is operated by a computer; using the wireless internet. While mobile billboards gain more exposure; they can lack the variety. A mobile billboard with a Bigguhn Saleable Printer can show multiple ads for one or more companies at one or more locations. This will tend to create increased customer attraction to the Mobile Billboard industry. [c]2009 Dwain Gipson, Bigguhn LLC dgipson@bigguhn.com Pg. 3 of 5

4 Market Potential Current Trade Area Billboards are scattered across the United States. Large billboard advertising companies use most of these billboards. Therefore, Bigguhn Printers will be selling nationwide to these companies. Later, Bigguhn Printers will focus on a more global market. The function and features of the Bigguhn scalable printing system will have a significant impact upon the future needs of outdoor advertising. Market Size and Trends There are over 500,000 large and small billboards within eyesight of the highways, freeways and local streets in the United States. Within the overall mix of small billboards, large printed billboards and changeable letter reader boards, there are approximately 200,000 (40%) existing potential Bigguhn Saleable Printer sales sites. The Bigguhn Scalable Printer is unlike any other billboard media currently on the market. It will revolutionize the outdoor advertising industry that is currently growing. Americans today spend a large portion of their time commuting. Due to the fact that Americans are spending time in their car, billboards are becoming a more effective way to advertise. The Bigguhn Saleable Printer will give static billboards, which dominate the commuters sight paths, greater content variety. This will increase the efficiency of billboard advertising capability. Currently, the billboard industry is looking to increase profits by concentrating on becoming energy-efficient. The Bigguhn Saleable Printer is solar powered and uses far less energy than electronic display boards. Static billboards produce large amounts of unrecyclable waste. A Bigguhn Saleable Printer equipped billboard reuses advertisements over and over therefore producing less waste than a static billboard. Sales Volume Potential At a market-share of 25%; in the US, the sales would be 100,000 units. At a average sale price of $50K per unit; there is a $5,000M existing sales potential. Our sales team will target the top outdoor advertising companies within this market. New Market Potential The Reader Signboard and Mobile Billboard industry present another great market potential. Here is the potential of a 12% to 15% increase in the sales of the Bigguhn Scalable Printer. Additional sales of the printer and its associated components could increase potential sales revenue from $5,000M to $6,500M. Financial Plan The financing for this plan is in three stages. There is the startup, pre-production expansion and production expansion stage. Startup funding will be raised through interested individuals and Angel investment. Funding for the expansion stages will be raised through additional investment from the original investors, stock offers and/or VC investment. Contemplated total investment is $2,700,000 over the first 3 years. There will be an opportunity for Investor cash out, after 4 years, at a 440% return on Investment. Start Up: $300,000 First 12 months This is the manufacturing development stage. At this stage, we are completing the mechanical and electrical aspects of the Scalable printer. We shall produce 3-foot, 8-foot and 14-foot wide prototype print assemblies. Pre-Production: $1,200,000 13th month This stage is focused on completing full scale and fully qualified production prototypes. We will build a series of units which will be tested at customer sites. We will further develop vendors for outside services and hard tooling. We will further develop proprietary sources for media and inks. We will begin our marketing program. Sales goals for the completed product will be set. Production: $1,200,000 25th month At this stage we will have developed our manufacturing processes into a "full run" capability. We will begin to produce 300+ printers annually. Plans will be developed to begin international production and sales capability. [c]2009 Dwain Gipson, Bigguhn LLC dgipson@bigguhn.com Pg. 4 of 5

5 Accelerate to Full Production: 37th month to 84th month (4 years). At this stage we will have developed our manufacturing processes into a "full run" capability. We will begin to accelerate to produce printers annually. We will complete our plan to create international sales and manufacturing. We consider taking the company public and entering into an IPO to raise $300 million to $800 million for expansion and capture up to 15% of the world's entire marketplace for this type of display technology. The Projected Results After 5 to 7 years of operation, reaching a modest goal of 5400 (2.7% of the USA only billboard marketplace) units sold: $2.42M graduated investment in the first 3 years 30% Investor Equity $148.3M gross sales $76.65M Pretax Income $21.5M Hard Assets $50M Minimum Sustainable Annual Sales The use of Bigguhn Printer will continue to expand into markets other than billboard industry. The additional earnings, from these activities, will be significant. [c]2009 Dwain Gipson, Bigguhn LLC dgipson@bigguhn.com Pg. 5 of 5