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+====== Draft Business Plan Starting From MakeIt Labs ======
+===== Executive Summary =====
+MakeIt Labs LLC. is an open-access workshop that will serve people in the North Boston/Merrimack
+Valley area. We will provide the equipment, classes and personal help to a membership community that
+allows them to prototype and develop any idea they can imagine. We are targeting people who have an
+interest in hands-on skills in a variety of design and manufacturing areas.
+We focus on developing and fostering a creative community of hands-on individuals, and providing them
+with the tools they need to succeed. The location will have equipment for welding, metalworking,
+woodworking, plastic-working, electronics, programming and many other skill sets. There will be regular
+classes over these areas that will train people to safely work with this equipment and how it can be used
+to realize their ideas.
+Owner Joseph Schlesinger is a Systems and Electrical Engineer with a long history of invention and self-
+started entrepreneurship. He has personal skills in machining, welding, electronics design and
+programming which he has used to complete numerous cross-disciplinary projects. He has started and
+run a Convenience store, businesses in Web Design, Defense/Aerospace Communications and Online
+Alternative Currency Trading. Invention, prototyping and teaching has been a life-long passion of the
+owner, and this business will allow him to utilize his skill set and passions into a successful venture.
+There will be a heavy focus on community. It is the belief and experience of the owner that a strong,
+active community fosters excitement, passion and innovation that drives members to both stay with the
+business and come out satisfied with continual completion of projects.
+Funding will come primarily from membership fees collected by those interested, and from classes held
+on various topics. Continual investment from the owner to make up initial revenue shortfalls. The
+business will eventually seek non-profit status and then donations from area business and equipment
+comes largely from the existing stock of the owner and initial generous members.
+===== Company Summary =====
+MakeIt Labs is an Open-Access workshop opening in Lowell, MA. MakeIt Labs is founded on the idea
+that designing and building your own ideas provides a level of satisfaction unmatched by many
+consumer activities. MakeIt Labs seeks to capitalize upon this by offering its members the equipment,
+facilities and knowledge necessary to build their ideas and projects of interest.
+===== Keys to Success: =====
+==== 1.1 Competitive Advantage ====
+The lack of similar locations in an area of the country known for its creative and inventive spirit offers a
+large, pent up demand for this service. Centralized control offers key competitive advantages over other
+similar spaces.
+Almost all similar businesses in this field are structured through a communal, non-profit structure. While
+the idea is to keep the space as free and creativity-fostering as possible, this structure slows capital
+acquisition, misallocates resources, breeds political infighting and leads to long reaction times to
+problems that arise.
+Because MakeIt Labs is structured as a business, and not a communally-organized space, there will be a
+greater emphasis on increasing revenue. Where research shows that many locations with a similar
+purpose shy away from increasing revenue for ideological reasons, and to avoid the political infighting
+that comes with money, the business-organized ownership of MakeIt Labs uses this to its advantage.
+This income can be effectively re-invested into the kinds of higher-cost, high-value equipment that
+attracts users.
+Our main keys to success include:
+  * Creation and maintenance of a strong, vibrant community
+  * Utilize existing online communities for marketing
+  * Variety of high-value tools otherwise inaccessible to customers
+  * Availability of proper training
+  * Flexible access and use of facilities
+  * Providing a work area free from intellectual property demands
+==== 1.2 Mission ====
+MakeIt Labs offers a productive environment that nurtures innovation. MakeIt Labs will provide the
+equipment, space and knowledge to attract the area's leading inventors, citizen scientists and general
+innovators. We offer classes and events that entice new members, while expanding into new areas to
+keep experienced members coming back, all while fostering a community that cements members into
+long-term bonds centered on MakeIt Labs.
+==== 1.3 Objectives ====
+The objectives of MakeIt Labs are the following:
+  * Achieve self-sustaining status within the first 6 months
+  * Provide a rich community of innovation
+  * Encourage collaboration among local innovators
+===== Operational Strategy =====
+==== 2.1 Company Ownership ====
+MakeIt Labs is a privately owned limited liability corporation operated by and under the sole ownership
+of Joseph Schlesinger.
+==== 2.2 Management Team ====
+MakeIt Labs is run solely by Joseph Schlesinger, its founder. Joseph is a life-long hobbyist and maker
+who has long identified strongly with the culture to which MakeIt Labs will be targeting. The creation of
+MakeIt Labs comes after Joseph searched for a similar space in the area, asking many of the people that
+would be interested in such a space, and found no such thing. Also being a life-long entrepreneur with
+several ventures under his belt, he decided to start MakeIt Labs to satisfy both his own personal need
+for a workshop, and to provide a way to share his passion for creation. His C.V is listed in the appendix.
+==== 2.3 Services and Activities ====
+MakeIt Labs will offer services to entice both existing and potential area innovators. MakeIt Labs will
+provide design, engineering and fabrication instruction in addition to the use of its facilities.
+=== 2.3.1 Membership ===
+Membership offers people the chance to have 24/7 access to the MakeIt Labs facilities. Members will
+receive discounts on all classes, have the ability to store their projects in on-site lockers and be allowed
+to come relax with other members at MakeIt Labs. Membership allows people who do not have the
+tools, space or support to come anytime and be involved in an active community of innovators. No
+formal qualifications are necessary, beyond a mandatory liability waiver and payment of membership.
+There will be two tiers of membership: regular and student/out-of-work. The idea is that students and
+those who are currently out of work, while able to contribute a great deal of enthusiasm and time to the
+MakeIt community, aren’t able to provide the financial contributions that full members would be, and
+should be given lenience, as well as the fact that a reduced membership provides more income than no
+membership whatsoever.
+=== 2.3.2 Classes ===
+MakeIt Labs will offer classes in large number of areas. Classes will be offered to both members (at a
+discount) and non-members (to draw interested people into membership). Instructors will be chosen on
+a class-by-class basis both from the member pool and the surrounding area based on their knowledge of
+the subject matter, experience in the field and ability to effectively teach. MakeIt Labs will focus on
+teaching the needed information in a casual, hands-on environment that adheres to its culture of strict
+safety. Classes will be offered both on a regularly scheduled group basis and special individual cases.
+These classes may or may not require material use charges.
+Fees for the classes will be based on a combination space usage, instructor, and material fees. Base cost
+of a class is $20 per session per person. This serves as a base level of income for MakeIt, to recuperate
+costs for running the event in the facility. This cost will be waived for members, as an incentive for
+membership. The rest of a cost of a class goes towards covering paying an instructor and/or any
+consumables used in the process of a class. Classes will be chosen based on the expected level of
+interest.
+The courses taught can be broken down into three basic types:
+== 2.3.2.1 Design/Engineering ==
+Design and engineering courses will focus on the planning and theoretical aspect of making things.
+These courses will provide the overarching concepts that will aid the attendees in analyzing how best to
+realize their projects, while practicing these skills with free-form hands-on exercises. They may either be
+short one-session classes, or multiple-session, multi-week courses depending on the complexity of the
+material. An example of this type of class would be Introduction to Micro-controllers
+== 2.3.2.2 Safety ==
+Because of the inherently dangerous nature of some of equipment at MakeIt Labs, some will require
+mandatory safety courses before use is allowed. These courses will be short, one-session introductory
+courses that focus on proper operation, cleaning and maintenance on either individual pieces or groups
+of equipment. They will require people knowledgeable in the field. Those who take these courses should
+at their end feel confident that they can safely begin to use the equipment for their projects. An
+example of this type of class would be Basics of Arc Welding. While no safety ‘course’ will be required
+for general membership, a brief overview of the safety policy of the lab will be given upon attaining
+membership.
+== 2.3.2.3 Fabrication ==
+Fabrication courses will offer advanced hands-on techniques and skills that go beyond the minimal level
+of operation taught by safety courses. These will require a master of the field to teach. They will allow
+members to begin to fully realize the potential that the area of the course offers. These courses will
+usually run multiple sessions over the span of several weeks. Students should feel increased confidence
+at the end of the course that they can use their new skills to tackle a wider variety of projects. An
+example of this type of class would be TIG Welding for Bicycles.
+==== Market Analysis Summary ====
+MakeIt Labs provides a service that is critically lacking in an area with large, pent-up demand. An initial
+small advertising campaign attracted dozens of potential customers in days. Completing projects is a
+satisfying experience, as any do-it-yourselfer can attest. Today's typical consumer lifestyle leaves many
+without much realization of this joy. Local innovators with projects that lack the proper equipment or
+space are often forced to either make due, leading to lack-luster results, or put off projects till 'some
+day'. The most many people can do is dream. There is no doubt that innovative types would flock at the
+chance to work on interesting projects, learn valuable new skills and collaborate with like-minded
+people.
+=== 3.1 Market Segmentation ===
+MakeIt Labs has determined that a large portion of potential members will come within a one hour
+travel time, estimating that 80% will come from within a 30- minutes travel time. The majority of
+interested people are expected to be people in the engineering profession.
+We will target engineers, students, artists and people in hands-on fields within 30-minutes of travel. We
+do not expect people to travel more than an hour to work on projects or take classes. Research into
+other hackerspaces shows that these are the most prevalent audiences. Age and gender vary wildly,
+with most coming from an engineering or artistic background.
+The area is host to an enormous engineering base. Major engineering employers within a 30 minute
+radius include, but not limited to: IBM, iRobot, Sun, Cisco, Intel, Adobe, Oracle, MIT Lincoln Labs and
+MITRE. Any one of these is filled with engineers without the multi-disciplinary facilities or freedom to
+create. Lowell is also home to a major engineering college, UMass Lowell. Lowell is also the center of a
+thriving art community that would enjoy exploring and creating with the equipment and skills that
+MakeIt Labs offers.
+Querying online social networking websites for users with related interests within this travel distance
+reveals 70,000+ people in the target market.
+=== 3.2 Service Business Analysis ===
+MakeIt Labs was started because the founder attempted to find something similar and couldn't find
+anything like it. There is no business in the area that offers a wide variety of hands-on classes in a casual
+environment, or offers the space and/or equipment to work on projects, let alone on a 24/7 basis. While
+there are clubs for specific interests (Ham Radio, RC models), there is no place in the area for general
+inventors and innovators to collaborate and create together.
+=== 3.3 Competition ===
+Little competition exists for this market in the target area. Vocational schools in the area serve at the
+secondary-education level and don't offer full use of their facilities. Colleges are limited to a narrow
+band of students, and don't make their equipment or facilities available. While local technical colleges
+offer the classes for the skills some may require, they are often targeted at employment. With this, the
+focus is on teaching certification rather than necessarily then focusing on practical skills. Those purely
+interested in the creative process are often dissuaded by the high cost and certification-focus of these
+classes. Employers often discourage working on personal projects at work in order to avoid liability
+issues. Even when employers allow this kind of activity, employees will often avoid using their facilities
+to avoid potential intellectual property issues down the line.
+Within our target market area of 30-minutes of travel time, no other direct competitors exist. The
+nearest competition is located in Boston, MA, nearly an hour away. For an active hobbyist, it is expected
+that this travel time is considered too much for a membership.
+The largest threat would result from a competing hackerspace opening in the nearby area. Because of
+the potency of bandwagon effect when it comes to hackerspace communities, the strategy is to firmly
+cement a strong MakeIt Labs-centric community.
+=== 3.4 Marketing Strategy ===
+We will use established networks and organizations to spread the word, including but not limited to
+professional engineering organizations such as IEEE and ASME, hobbyist clubs such as RC and Ham radio
+clubs, online inventors, 'Maker', 'DIY' and 'hackerspace' communities, both online and offline. The use
+of the label ‘hackerspace’ however, should be handled with care. While there is a strong community
+built up around the use of the term, the prefix of ‘hacker’ can give negative connotations to those who
+aren’t aware of its meaning. Therefore, the term should be used thoughtfully and selectively when
+advertising the purpose of the space.
+== 3.4.1 Online Social Networks ==
+Marketing will focus on targeting these communities as tightly as possible. Online advertising will be a
+key component. Using online social networks, advertisements can be delivered directly to people who
+already express interest in these types of activities.
+A brief, tightly-budgeted, limited-focus 3-day ad campaign on the social networking site Facebook.com
+attracted over two dozen interested people, 2 of which signed up almost immediately. It is believed
+that with a mildly expanded budget, better chosen interests, and a longer-running campaign, as well as
+advertising on a number of other targeted platforms, the results could be drastically improved. Initial
+results show that an effective initial campaign can be run on the order of $100/month. This can be
+achieved by focusing on only the most likely potential members, those with highly-aligned interests such
+as ‘hacking’ or ‘making’. As this pool becomes saturated, and revenue increases, the advertising target
+can be widened to less-aligned targets such as ‘welding’ or ‘programming’.
+Potential customers can also be advertised to via the websites they visit. Several online websites are
+particularly popular with people with the perquisite interests, including makezine.com,
+instructables.com and hackaday.com. However, these websites target a very large market
+geographically, unsuitable to a location-driven business. Their most effective use would be to create
+projects that would get posted on these sites, getting MakeIt free advertising.
+== 3.4.2 Affiliate Program ==
+Once sufficient interest has been generated from online advertising, and a broad enough network of
+customers has been established, affiliate programs can be started to recruit members. Members will be
+encouraged to recruit their friends by means of cash handouts upon recruitment (and payment of
+membership by) people they bring in. Payment will be proportional to the level of membership
+recruited. i.e. more paid for full members than student members.
+== 3.4.3 Media Publicity ==
+The idea of garage-style innovation easily captures media attention, especially when combined with
+demonstrable projects/inventions. Members will be actively encouraged to post the progress of their
+work online via the MakeIt Labs website (http://makeitlabs.com). Particularly interesting projects,
+especially those of media interest (green energy, etc) will have MakeIt Labs help in disseminating to the
+local press, whether it be newspapers, tv news, bloggers, special interest sites, etc.
+== 3.4.4 Open Houses ==
+MakeIt Labs will hold monthly open-house sessions where potential members will be encouraged to
+visit. While potential members will be encouraged to visit anytime, providing a set date for visits
+provides a no-stress atmosphere for people that would just want to “stop by” without having to
+announce beforehand. These open houses will be of a casual nature, and not require extensive planning,
+preparation or cost. They merely serve as an opportunity for people interested to satisfy their curiosity.
+These open houses will also provide a platform for members to show off their latest projects, providing
+the deadline that some members will need to motivate themselves.
+=== 3.5 Location ===
+The location of the facility was chosen based on access to necessary services and economy.
+A loading bay door was considered essential for means of carrying in/out heavy equipment and supplies.
+A door which could have an electronic access lock attached was also considered mandatory. While the
+preferred layout would have had two separate locations, one for office/electronics/computer work and
+another for dirtier metal/carpentry/plastics work, for reasons of economy this was not possible in the
+first location. It was considered more important to have a location that could accommodate the ‘dirtier’
+activities, as this is what most people lack in their own condos, apartment, etc.
+As far as nearby services, it was essential that the location be located nearby to hardware, general and
+food stores. The current location is down the street from a Target, less than a mile from a Lowes and has
+a 24/7 Walgreens and a dozen or so restaurants in the area, many open late at night for those night-owl
+inventors. It is also a quarter mile from the Route 3 Lowell Connector, the major thoroughfare in and out
+of the city.
+The street is in the industrial heart of Lowell, and boasts a steel foundry, rapid prototyping business,
+scrap yard, sheet metal fabrication show, and several automotive and welding businesses, opening up
+potential teaching and partnership opportunities.
+=== 3.6 Competitive Edge ===
+Targeted customers currently spend their time in their making-centric hobbies and projects. What
+MakeIt Labs provides them, beyond equipment and a knowledge base, is the ability to hang out and
+interact with other people with similar interests. The key to locking in a customer base will be focusing
+on establishing a strong MakeIt Labs-centric community. Bandwagon effect applies strongly to
+hackerspaces. Interesting people producing interesting projects attracts more people of the same type.
+Being the first open-access workshop in the area provides a firm foundation that potential competition
+will find hard to overcome.
+MakeIt Labs will achieve this by focusing on providing the infrastructure for projects and collaboration.
+Research of other similar ‘hackerspaces’ reveals that projects are largely self-formed by the members.
+Therefore, MakeIt Labs will focus on providing the proper environment. Collaboration area will set up
+with a couch, whiteboards, computers, projector, snacks and drinks and high-speed wireless internet
+access. The goal will be to make MakeIt Labs centric part of the creation experience to its members. All
+of these items are already owned by the owner, and will be transferred to MakeIt as part of the setup
+process, minimizing startup cost. Additional equipment, along with replacements for broken or
+damaged equipment,
+=== 3.7 Risk Factors ===
+This business poses certain risk factors:
+  * Sole Ownership
+  * Liability and Safety Issues
+  * Membership collection hassles
+We can minimize certain risk factors by:
+  * Delegating tasks to the established community
+  * Fostering a culture of safety
+  * Authoritative control of facilities
+  * Carrying adequate insurance
+  * Minimize collection costs through automated membership system
+== 3.7.1 Sole ownership ==
+The fact that MakeIt Labs is run by a single individual is both a key strength and a weakness. The singular
+point of contact and decision making leads to quick decision uniform to the overall strategy of MakeIt
+Labs, but leaves the business vulnerable if for some reason the owner is unavailable.
+Security and financial transactions are largely automated through the use of online billing and bill
+payment tools. This is to ensure that in the event of absence of the owner for a period of time, the space
+can continue to run smoothly with minimal intervention.
+As time progresses with MakeIt Labs, responsibilities for day-to-day operation will be delegated out
+amongst the more active members of the established community, either through direct election of
+positions by the owner, or by a more democratic process if deemed appropriate. This will help to further
+the sense of community within MakeIt Labs. Sole ownership will still be retained for the sake of being
+able to have swift, final decision making should the need arise, and to address liability/business
+concerns.
+== 3.7.2 Liability and Safety Issues ==
+MakeIt Labs possesses equipment that makes safety a key concern. Among the collection of equipment
+in the facility, there will be dangerous equipment that could pose a safety risk to people without the
+knowledge of how to use them properly.
+A focus will be on embedding the need for safety in the community. There will be constant reminders in
+all events/activities that safety is a top priority at MakeIt Labs. It will be made clear to members at
+multiple levels that this equipment will be off limits to those who cannot demonstrate the required
+safety knowledge. Safety courses will be provided by knowledgeable professionals to allow members to
+access this equipment.
+As part of the MakeIt Labs security system, multiple cameras will be in place, and gone over from time
+to time. It will be known to the membership that MakeIt Labs policy that anyone caught using
+equipment in an unauthorized or unsafe manner will be ejected from the premises and not allowed to
+return. This practice will be enforced by the owner. The membership will be made aware of the
+transgression, and new codes can be changed as soon as an issue occurs so the member will not be
+permitted access. These systems are part of the initial setup cost, and require no further purchases
+beyond routine repair and replacement
+The aspect that will most influence safety at MakeIt will be establishing a culture of safety. Members will
+be reminded from the beginning that safety takes priority over everything at MakeIt. Warnings will be
+posted around dangerous equipment reminded members of their needs for proper knowledge and
+caution before and during operation.
+Beyond this, liability waivers and insurance will be a key component to protecting MakeIt Labs from
+litigation should an accident occur. All members will be required to sign a statement understanding the
+MakeIt Labs safety policy, and disavowing MakeIt Labs of any and all liability from any harm to one’s self
+or property while performing MakeIt-related actions.
+== 3.7.3 Membership Dues Collection ==
+One of the issues with running a membership-based income model is the time-consuming process of
+collecting membership fees. Once membership is initially approved, the system will be entirely
+automated. Membership fees will be collected by a 3rd party online payment collection and the results
+transmitted to the MakeIt Labs security computer system. Access to the building is controlled by an
+electronic lock, also controlled by the same computer system. When membership expires, the code used
+by the member will cease working, requiring them to pay to re-activate it.
+==== Financial Plan ====
+=== 4.1 Start-up Funding ===
+The start-up expenses for MakeIt Labs are minimal. A number of tools are already largely owned by the
+founder, and tools from interested parties have been offered for use free of cost to MakeIt Labs. Both
+initial capital expenses and monthly deficits will be covered by the founder until break-even has been
+achieved.
+=== 4.2 Important Assumptions ===
+An important aspect of the operating model is that costs are highly scaled to membership levels. The
+two largest cost factors, leasing and energy consumption, are directly proportional to membership
+levels. Long-term capital investment is almost non-dependent on the membership size targeted for the
+initial growth period. This flexibility allows the business to scale its costs dynamically as membership
+revenue fluctuates, providing a resilient business model.
+As the shop and its use is the primary interest of the owner, funds will be directed towards growth and
+expansion of the shop. After the initial break-even period, there is no foreseeable need for outside
+funding. Additionally, while it is believed that the business is ripe for franchising opportunities, this is
+not part of the initial business plan. Effort will be instead be focused on creating a successful enterprise
+and lab space for the founder. The reasoning for having it remain for profit is two-fold: control and
+options. The eventual goal of is for it to later service as an incubation chamber for later business ideas
+and projects of the founder, as well as any that may crop up as a result of the community established.
+=== 4.3 Accounting, Legal and other services ===
+To keep operating costs low, accounting will be handled largely by the owner. This is also another
+reason why an LLC was chosen. Its simplified tax structure makes it easy for the owner to do his own
+accounting, keeping the costs of outside accounting minimal.
+Little to no legal expenses are anticipated beyond the initial setup fees. Because of this, the monthly
+budget for legal and accounting fees will be carried from month-to-month creating a slush fund for
+unforeseen needs, and will accumulate for a time when it is needed.
+Given the size of the facility, the need for other 3rd party services such as janitorial are eliminated.
+=== 4.4 Breakdown of Monthly Expenses ===
+Rent – Covers the cost of leasing the facilities. Includes ‘triple net’ real estate costs such as grounds
+maintenance, essential repairs to the building, plowing, etc. Does not cover infrastructure
+improvements.
+Internet – Cover the cost of internet service. Does not cover phone or television (not needed).
+Utilities – Covers the cost of electricity (including that involved in cooling) and heating. Costs are
+projected based on talks with other tenants in nearby units.
+Equipment Purchase – Covers the cost of both purchasing new equipment and replacing or repairing
+damaged equipment and infrastructure upgrades.
+Insurance – Covers the cost of insuring the business from property lost due to theft, and liability
+coverage against members.
+Legal/Accounting/Etc – Covers the needed end-of-year accounting assistance, Also covers unforeseen
+legal needs. Monthly budget for legal and accounting fees will be carried from month-to-month creating
+a slush fund for unforeseen needs, and larger expenses like the end-of-year tax preparation.
+Maintenance – Covers miscellaneous unforeseen expenses related to keeping the place running.
+Advertising – Covers the cost of advertising the business. Funds will initially mostly be consumed by
+online advertising, but maybe later include publicity stunts, contests and travel to relevant
+events/conferences.
+==== Appendix A. – Startup Costs ====
+Provided by Owner Value Cost
+Couch 400 0
+Drill Press 200 0
+Desks 300 0
+Oscilloscope 300 0
+Function Generator 200 0
+Power supply 200 0
+Mini-Fridge 150 0
+Computers 500 0
+Monitors 500 0
+Shelving 160 0
+Workbench 100 0
+Chairs 50 0
+Small Tables 20 0
+Printer 100 0
+Total 3180 0
+Acquired for Free Value Cost
+Welder 200 0
+Drill Press 300 0
+Microwaves 200 0
+Workbenches 300 0
+Chairs 150 0
+Air Conditioner 250 0
+Stereo 50 0
+Total 1450 0
+Purchased Value Cost
+Shelving 300 300
+Paint 100 100
+Painting supplies 75 75
+Toiletries 20 20
+Cleaning supplies 30 30
+Metal lockers 20 20
+Air Conditioner Installation 250 250
+Safety/Surveillance 300 300
+Legal Setup 800 800
+Total 1895 1895
+Grand Total
+Value
+Cost
+==== Appendix B. – Cash Flow Analysis ====
+==== Appendix C. - Projected Operational Earnings ====
+==== Appendix D. – Sensitivity Analysis - Projected Worst-Case Operational Earnings ====