Formula SAE (F-SAE) is a student competition where students design and build a race car. Part of that competition is pitching the race car as part of a wider business to potential investors. I presented this at F-SAE Australasia 2017 for UNSW Redback Racing. Despite only having 2 weeks to prepare a presentation where other teams have an entire year, Redback Racing placed 4th in the presentation event, which is the best result Redback has had in 6 years.

1. 1
RB-17
Challenge Experience

2. 2
• Longtime watcher/hobbyist
• Older, established career
Motorsports Fanatic
Dan
• Younger
• Beyond spectatorship
Career Volunteer
Des
Meet Our Customers
Commonalities
• Serious leisurers
• High information needs
• Strong personal preferences, highly knowledgeable
[1] Customer Profiles

3. 3
Customer Expenditure
$60,000
$15,000
Initial Purchase and
Modifications
Average Annual Spend
[2] CAMS Report on Spending

4. 4
PERFORMANCE
SAFETY
DRIVABILITY
Customer Demands
AFFORDABILITY

5. 5

6. 6

7. 7

8. 8
$7,500
$25,000
$38,000
$55,000
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Shifter Kart RB-17 Formula Vee Formula Ford
Market Options
1.8
1.6
2.0
0.0 0.5 1.0 1.5 2.0 2.5
Formula Ford
Formula Vee
RB-17
Lateral Acceleration (g's)
3.9
4.5
4.1
0.0 1.0 2.0 3.0 4.0 5.0
Formula Ford
Formula Vee
RB-17
0-100 km/h (s)
Vehicles
[3] Formula Vee
[4] Formula Ford

9. 9
Aerodynamic GripPower to Weight
Performance

10. 10
• Wide power and torque bands
Power/Torque Response
• Custom racing
dampers
• Fine tuned suspension
Tunable Suspension
Drivability

11. 11
Crash Structures
Safety
• Custom built
• Extensively tested crash
structures

12. 12
ERGONOMICS DATA ACQUISITIONAERODYNAMICS
Add On Packages

13. 13
DATA ANALYSIS AND
TUNING
REGULAR RACE EVENTSONLINE SUPPORT ACCESS
Subscription Service
SIMULATOR DRIVER
TRAINING

14. 14
Leasing Program
• Vehicle assigned
• 4 drive sessions
• 3 race events
• Monthly lease from facility

15. 15
Distribution Channels
International online sales
will be offered once
Redback has built a
following
Online Sales
On the spot sales will be
offered at our roadshow
display
Event Appearances
Our manufacturing facility
and showroom will be
situated right next to the
racing action
Factory Showroom
Subscription
Service
Base Vehicle
and Addons
Leasing

16. 16
Event Appearances
Social Media – Youtube product placement
Marketing Plan
Short Term – Building Traction
Motor Enthusiast Publications
Long Term – Developing Relationships

17. 17
Order fulfillment begins
Showroom begins
Take customer orders
Jun
2018
Factory Showroom Opens
Publicity built through social media and event appearances
Jan
2018
Early Stage Marketing
Marketing Timeline
Leasing program used to test premium services
for subscription model
Jan
2019
Leasing Program
Begins

18. 18
Includes delivery and support to overseas markets
Jul
2020
Online Sales Begin
Premium subscription program rolled
out simultaneously
Jul
2019
Start Car Enthusiast Targeted Marketing

19. 19
Manufacturing/Showroom Facility
Eastern Creek
[5] Warehouse Facilities

20. 20
Core Business Outlook
• Cost per car: $25,000
• Cost to build: $13,495
• Unit Margin: 85.2%
• NPM at 7 years: 19.44%
0.00
5.00
10.00
15.00
20.00
25.00
0 1 2 3 4 5 6 7 8
Net Profit Margin

21. 21
Funding Breakdown
Debt,
$411,000
Equity,
$411,000
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Setup
Costs
Corporate Ownership: 40%

22. 22
($1,000,000)
($500,000)
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
1 2 3 4 5 6 7 8
Value
Time (Years)
NPV (cumulative)
NPV (cumulative)
What to Expect
Break-even in 3.5 years!

23. 23
The Bottom Line
• Initial Investment: $411k investment for 40% stake
• Expected ROI of $4.14 per dollar (Δ$2.82)
-3.00
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
0 1 2 3 4 5 6 7 8 9
ROI(PerDollar)
Time (Years)
Projected Return on Investment

24. 24
Summing it Up

25. 25
YOU!
THANK

26. 26
Appendix

27. 27
Floor Plan Space (sq m.)
Showroom 200
Office 300
Workshop 700
Maintenance Bay 400
Storage 400
Total 2000
Equipment
List Price Quantity
Total
Price
5 axis laser cutter $70,000 1 $70,000
MIG welder $3,500 2 $7,000
5 axis cnc $25,000 1 $25,000
3 axis router $7,500 2 $15,000
Misc. power tools $40,000 1 $40,000
Total $117,000
Manufacturing Facility

28. 28
Office
Setup,
$200k
Machinery,
$117k
Warehouse
Shelves,
$6k
Showroom
Renovation
, $100k
Forklifts,
$22k
3 months
Salary,
$190k
3 months
Rent, $87k
Marketing
Setup
Cost,
$100k
Office Setup $200,000.00
Machinery $117,000.00
Warehouse Shelves $ 6,000.00
Showroom
Renovation $100,000.00
Forklifts $ 22,000.00
3 months salary $190,000.00
3 months rent $ 87,000.00
Marketing setup cost $100,000.00
Total $822,000.00
Capital Investment Breakdown

29. 29
Equipment List
Equipment List Floor Size Cutting Area Price Quantity
5 axis laser cutter 5x2.5x1.6 3x1.5x0.06 $70,000 1 $70,000
https://www.alibaba.com/produ
ct-detail/2000-watt-fiber-laser-
cutter-
for_60682425451.html?spm=a
2700.7724838.2017115.93.243
335791TSz2R
MIG welder 2x2 $3,500 2 $7,000
https://www.alibaba.com/trade/
search?IndexArea=product_en
&CatId=&fsb=y&SearchText=ho
t+wire+cutter
Misc power tools 10x5 $40,000 1 $40,000
3 axis router 3.2*1.6*1.9 2.5*1.8*0.2 $7,500 2 $15,000
https://www.alibaba.com/produ
ct-detail/aluminum-composite-
panel-cnc-router-
3_60534116935.html?spm=a27
00.7724838.2017115.1.7c675e
e5Cixfot
5 axis cnc 3.8x2.8x3.2 0.55x0.35x0.38 $25,000 1 $25,000
https://www.alibaba.com/produ
ct-detail/economical-multi-
cutting-5-axis-
milling_60592794477.html?sp
m=a2700.7724838.2017115.76
.7c675ee5Cixfot
$157,000

30. 30Revenue
Year 2017 2018 2019 2020 2021 2022 2023 2024
Number of cars 115 135 155 175 195 215 235 255
Price $25,000 $ 25,000.00 $ 25,000.00 $ 25,000.00 $ 25,000.00 $ 25,000.00 $ 25,000.00 $ 25,000.00
Sales revenue $ 2,875,000.00 $ 3,375,000.00 $ 3,875,000.00 $ 4,375,000.00 $ 4,875,000.00 $ 5,375,000.00 $ 5,875,000.00 $ 6,375,000.00
Other Products $ 34,500.00 $ 40,500.00 $ 46,500.00 $ 52,500.00 $ 58,500.00 $ 64,500.00 $ 70,500.00 $ 76,500.00
Add-ons Revenue $ 172,500.00 $ 202,500.00 $ 232,500.00 $ 262,500.00 $ 292,500.00 $ 322,500.00 $ 352,500.00 $ 382,500.00
Servicing Revenue $ 28,750.00 $ 33,750.00 $ 38,750.00 $ 43,750.00 $ 48,750.00 $ 53,750.00 $ 58,750.00 $ 63,750.00
Total revenue $ 3,110,750.00 $ 3,651,750.00 $ 4,192,750.00 $ 4,733,750.00 $ 5,274,750.00 $ 5,815,750.00 $ 6,356,750.00 $ 6,897,750.00
Expenses
COGS $ 1,551,925.00 $ 1,821,825.00 $ 2,091,725.00 $ 2,361,625.00 $ 2,631,525.00 $ 2,901,425.00 $ 3,171,325.00 $ 3,441,225.00
Set-up Costs $ 822,000.00 $ - $ - $ - $ - $ - $ - $ -
Salaries $ 920,000.00 $ 920,000.00 $ 947,600.00 $ 976,028.00 $ 1,005,308.84 $ 1,035,468.11 $ 1,066,532.15 $ 1,098,528.11
Utilities $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Factory Lease $ 288,000.00 $ 288,000.00 $ 288,000.00 $ 288,000.00 $ 288,000.00 $ 288,000.00 $ 288,000.00 $ 288,000.00
Insurance (General Liability
and Factory) $ - $ 12,000.00 $ 12,000.00 $ 12,000.00 $ 12,000.00 $ 12,000.00 $ 12,000.00 $ 12,000.00
Shipping $ 46,000.00 $ 54,000.00 $ 62,000.00 $ 70,000.00 $ 78,000.00 $ 86,000.00 $ 94,000.00 $ 102,000.00
Depreciation $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
Loan Repayments $49,320.00 $41,556.55 $32,861.49 $23,123.02 $12,215.94 $0.00 $0.00 $0.00
Total expenses $ 3,717,245.00 $ 3,177,381.55 $ 3,474,186.49 $ 3,770,776.02 $ 4,067,049.78 $ 4,362,893.11 $ 4,671,857.15 $ 4,981,753.11
Income
Gross profit -$ 606,495.00 $ 474,368.45 $ 718,563.51 $ 962,973.98 $ 1,207,700.22 $ 1,452,856.89 $ 1,684,892.85 $ 1,915,996.89
Tax (30%) $ - $ 142,310.53 $ 215,569.05 $ 288,892.19 $ 362,310.07 $ 435,857.07 $ 505,467.86 $ 574,799.07
Net income -$ 606,495.00 $ 332,057.91 $ 502,994.46 $ 674,081.79 $ 845,390.16 $ 1,016,999.83 $ 1,179,425.00 $ 1,341,197.82
Net income less 40%
dividend -$ 363,897.00 $ 199,234.75 $ 301,796.67 $ 404,449.07 $ 507,234.09 $ 610,199.90 $ 707,655.00 $ 804,718.69
Investor dividend -$ 242,598.00 $ 132,823.17 $ 201,197.78 $ 269,632.71 $ 338,156.06 $ 406,799.93 $ 471,770.00 $ 536,479.13
Discount rate 7.70% 1 2 3 4 5 6 7
NPV (each year) -$ 363,897.00 $ 184,990.48 $ 260,185.47 $ 323,755.18 $ 377,003.71 $ 421,108.12 $ 453,447.86 $ 478,777.98
NPV (total) $ 2,135,371.81
NPV (cumulative) -$ 363,897.00 -$ 178,906.52 $ 81,278.95 $ 405,034.14 $ 782,037.85 $ 1,203,145.96 $ 1,656,593.83 $ 2,135,371.81

31. 31
Bibliography
[1] Career Volunteering In Commodity-intensive Serious Leisure: Motorsport Events And Their
Dependence On Volunteers/Amateur
[2] CAMS End of Year Report
[3] Formula Vee
[4] Formula Ford
[5] Warehouse Location