Radiant Heating System
 
This HVAC business plan was used to start a radiant heating business and secure financing.
Have you ever stepped on a cold tile floor at 7am? Have you ever sat in a cold car, parked in your garage? Do you neglect that favorite hobby because your workspace is cold or uncomfortable? If you have experienced any of these occurrences, you're not alone. Cold tile flooring and cold garages are things of the past, as long as your home is built with radiant heating. Radiant heating is the oldest, 'new' technology being used to heat homes, commercial buildings, and garages, and HotSpot Heating Systems is the company who is making it happen. HotSpot Heating Systems is one entity targeting homebuyers and homebuilders.
HotSpot Heating Systems, founded in 1993, specializes in radiant heating installations targeted towards homebuyers, homebuilders, and automobile enthusiasts. Founder Edgar Pekin, is one of four Radiant Panel Associate members within the metropolitan area, and has over twelve years in heating, ventilation, air conditioning, and radiant heating systems. Mr. Pekin founded HotSpot Heating Systems out of frustration in locating knowledgeable individuals for installing a radiant heating system. Upon discovering radiant heat's many benefits, he decided to venture on his own to assist others in heating their homes with this efficiently advanced method of heating.
HotSpot Heating Systems use a system of tubes, manifolds, and heaters to circulate warm water through concrete slabs or custom designed retro-fit systems. The circulating warm water heats the slab structure and radiates the heat upward from the floor. This mass heating method maintains heat in the floor and eliminates cold floors.
HotSpot Heating Systems has designed four product offerings; HotSpot Now, HotSpot System, HotSpotPanel, and My HotSpot. The HotSpot Now includes tubing and manifolds for installation at a later date. The HotSpot System includes an unassembled system of tubes, manifolds, water heater, and valves, and detailed diagrams for installation. The HotSpotPanel is a professionally designed and assembled system on a metal backing, complete with diagrams, connectors, and service tips. The My HotSpot is specifically designed for each job on an individual basis. Each product is of high quality and includes a one-year guarantee on parts and a 20-year guarantee on the floor tubing.
The radiant heating industry is growing at 25% annually with expected industry sales of $188MM for the year ending December 31, 2000.
HotSpot Heating System's projected sales are $33K, $107K, $215K, for the years ending December 31, 2000, December 31, 2001, and December 31, 2002, respectively. Although revenues will exceed $33K for the six months ending December 31, 2000, HotSpot Heating Systems expects a loss from operations of $8K. The loss is due to start-up costs and slow sales in the first six months ending December 31, 2000. HotSpot Heating Systems will advertise heavily to educate consumers on the benefits of radiant heating, which will increase sales beginning of year two.
HotSpot Heating Systems is seeking start-up funding of $60K, to cover start-up costs, early loses, and advertising. HotSpot Heating Systems is seeking a line of credit of $60,000. The money will be used to cover operational expenses, advertising, inventory, and fund working capital. Mr. Pekin is investing $15,000 in stocks and cash towards HotSpot Heating Systems' initial start-up costs including legal fees, accounting, trademarks, and intellectual property.
HotSpot Heating Systems will pay the debt through earnings and has figured monthly payments of $400 into the budget and income statement. Mr. Pekin can collateralize the financing using his personal residence and/or other personal property.
 
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