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Business Plan

Ticky Tocker

63 Ang Mo Kio Avenue 3 #01-02 Singapore 366063 Phone: Fax: 6232-3223 6256-4554

E-mail: tickytocker@tt.gov.sg

February, 2010

Table of Contents
1. Executive Summary......................................................................................4 1.1. 1.2. 2. Objectives..............................................................................................5 Mission...................................................................................................5

Company Summary......................................................................................6 2.1. 2.2. Company Ownership............................................................................6 Company Location...............................................................................6

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Products.........................................................................................................6 3.1. Product Description.............................................................................6

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Market Analysis Summary..........................................................................8 4.1. 4.2. 4.3. 4.4. Market Segmentation...........................................................................8 Target Market Segment Strategy........................................................9 Market Needs.........................................................................................9 Main Competitors..................................................................................9

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Strategy and Implementation Summary...................................................12 5.1. 5.2. 5.3. 5.4. 5.5. 5.6. Strategy Pyramid................................................................................12 Competitive Edge...............................................................................12 Marketing Strategy.............................................................................13 Promotion Strategy............................................................................13 Distribution Strategy..........................................................................13 Pricing Strategy..................................................................................14

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Management Summary..............................................................................14 6.1. Organizational Structure....................................................................14


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6.2. 7.

Management Team.............................................................................14

Financial Plan..............................................................................................15 7.1. 7.2. 7.3. 7.4. 7.5. Start-up Cost Summary......................................................................15 Break-even Analysis...........................................................................16 Income Statement...............................................................................17 Cash Flow............................................................................................19 Balance Sheet.....................................................................................20

Appendix

1.0 Executive Summary

Ticky Tocker (TT) is a Singapore limited company established in the year 2008. TTs emphasis will be on clocks and watches. Additionally, TT will produce products that are suitable for the handicapped. Ticky Tocker offers its customers a trendy, fun place to buy their time-piece. Products are of high quality and TT offers many different designs of product to suit different peoples needs. Ticky Tocker will focus on three markets: 1. Working adults 2. Students 3. The handicapped These groups are all potentially strong customer segments. The benefit of this mix of customers is that it helps maintain consistent business throughout the year. Ticky Tocker will be launching its newest product (keypad alarm clock) in late 2010. This product can be used by people in all the markets above. It is expected to bring in more revenue to the company. Ticky Tocker has assembled a strong management team. Alex Tan, President, is responsible for overall business management. He had a successful career in retail before becoming half owner of TT. Roy Yeo, designer, is responsible for product design and development, assembly, and manufacturing. As co-owners, Roy and Alex jointly develop business strategy and long-term plans. Roy is strong on product know-how and technology, and Alex is strong on management and business know-how. Most important to Ticky Tocker is the financial success which will be achieved through strict financial controls. The market and financial analyses indicate that with a start-up expenditure of $265,350, TT can generate $1,060,000 by year one, $1,205,000 by year two and produce a net profit of $556,810 by the end of year three.

1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 FY 2008 F Y2009 FY 2010 S ales Gros Marg s in Net P rofit

1.1 Objectives Ticky Tocker has established three firm objectives it wishes to achieve in the next three years: 1. Open the third retail outlet by the end of the third year. 2. Gross Margin of 45% or more. 3. Net After-tax Profit above 20% of Sales. 1.2 Mission Ticky Tocker Mission is two-fold, with each being as integral to our success as the next.

Product Mission - Provide customers with high quality clock and watch and usable by all kinds of people. Economic Mission - Operate and grow at a profitable rate through sound economic decisions.

2.0 Company Summary


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Ticky Tocker is a Limited Company specialty manufacturer of clock and watch for people who are concern of the time. Our customers are in all levels of business, ranging from students and adults to the handicapped. 2.1 Company Ownership Ticky Tocker is a Singapore Limited Company, owned entirely by Roy Yeo and Alex Tan. It was created in the year 2008. 2.2 Company Location Ticky Tockers first retail outlet is located in Bishan Junction 8. Two more retail outlets will be opened in the east and west sides of Singapore over the next two years. 3.0 Products Ticky Tocker provides its customers with high quality clocks and watches at affordable price. In addition, TT will also offer products that are suitable for the disability. We conducted a survey to determine whether there is a demand for a new product that we are developing (Keypad Alarm Clock). Details and results of the survey are placed under the appendix. 3.1 Product Description TT will launch its newest alarm clock at the end of December 2010. This product, named Keypad alarm clock (KAC), is designed in such a way that it is ideal for those with low vision or hand impaired to use. It is a clock thats sure to be seen and heard. It shows the hour and minutes on a large, black 1.5" LED display. It makes setting of alarm easy with jumbo-size buttons. The alarm is so easily set that a hand impaired individual, without holding the alarm clock, can make all the settings with a stick held in his mouth, or simply set by stepping it using his toe. The KACs Braille characters help them to set quickly and correctly. In addition, The KAC has an adjustable volume control which can be set to an extra loud beep for heavy sleepers. The KAC is light and only 0.8" thick, which makes it convenient for the user to carry when they travel. The following is the image of the KAC:

Keypad Alarm Clock (KAC)

Product Features: Loud volume (about 100 dB) Buttons are located on top of the clock easily accessible Large, easy to read time display Easy to set Rubber Keypad Extra-large buttons Built-in night light Built-in calculator Product dimensions: 7.1x8.7x0.8 inches More details of this product are placed under the appendix.

4.0 Market Analysis Summary


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Ticky Tocker will focus on three markets: 1. Working adults 2. Students 3. The handicapped 4.1 Market Segmentation Ticky Tocker will focus on three different market segments: working adults, students and the handicapped. These groups are all potentially strong customer segments. The benefit of this mix of customers is that it helps maintain consistent business throughout the year. Also, by appealing to several market segments, Ticky Tocker does not become overly dependent on any single consumer group. The working adults and students are those who need an alarm clock to wake them up in the morning. The handicapped would include those who are physically disabled in seeing, hearing or movement. Students represent an excellent customer segment for several reasons:

By attracting students, we generate excellent word-of-mouth. Students represent a large base of potential part-time employees.

Market Analysis
Student WorkingAdult Handicapped

4.2 Target Market Segment Strategy


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TT's target market is students who need fashion-look products that they can afford. We will follow closely with the current trends and design our products according to it. By setting the price of the product at a reasonable price, consumer will seek Ticky Tocker out and become a regular guest. To penetrate the target market for the handicapped, we designed half of our products in such a way that they may be able to use it. Ticky Tocker will also take the product to the customer. They can simply purchase the items they want online. 4.3 Market Needs Everyone needs a clock or a watch to keep track of the time. An alarm clock is especially important for all the people in the world. They need an alarm clock to get out of bed faster and to their jobs or classes more quickly. 4.4 Main Competitors Clock and Watch Stores: These are the industry where Ticky Tocker will experience a high level of competition. However, TT knows the quality of our products, along with the development of more products to meet the market demand, gives it a competitive edge over many of the stores. We used SWOT analysis to distinguish Ticky Tocker from its competitors: Ticky Tocker: Strengths:

Products could be used by all customers. Products are easy to operate. Able to respond very quickly as we have no red tape, no need for higher management approval etc. Able to give excellent customer care, as the current small amount of work means we have plenty of time to devote to customers. Able to change direction quickly if we find that our marketing is not working. Small overheads, so can offer good value to customers. Offer e-purchase

Weaknesses: Weak brands. Limited budget.


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Cash flow will be unreliable in the early stages. Limited varieties of products. No market presence or reputation.

Opportunities:

Could develop new products. Can surprise competitors. Professional help is available for designing new products. Competitors may be slow to adopt new technologies.

Threats:

Vulnerable to reactive attack by major competitors. Price wars with competitors. Competitors have an innovative product. Competitors have superior access to channels of distribution. Bad economy - lower income of customers

Direct competitor - Colonial Times Clock Inc.: Colonial sells all types of clocks; grandfather, wall, and mantel, to match their customers dcor and budget. They are also the largest Canadian company to sell grandfather and wall clock kits to do-it-yourselfers who take pride in assembling and finishing the case themselves. They also sell the plans so any of their clocks can be built from scratch and then completed with a beautiful movement package. Colonial offers their customers a large selection to choose from. They are also a clock repair specialists and clock parts supplier. Strengths:

Sell all types of clocks; grandfather, wall, and mantel. Sell kits to customers who want to do-it-yourself Provide clock repair Supply clock parts Offer high quality time pieces Provide online-store

Weaknesses:

Expensive Old design hard to attract young people Sell only one type of products clock.

Opportunities:
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Growth of the internet leading to an increase in the number of consumers willing to buy online.

Threats:

May lose the customers as price are not competitive

Ticky Tocker believes it has a significant competitive advantage over Colonial Times Clock Inc. because of the following:

Design: TT offers a more fashion-look clock than Colonial. Apart from adults, this will attract more teenagers to the business. Price: TT provides their customers products at a more affordable price. Colonials clocks usually cost over hundred dollars.

Indirect competitor - Handicaps Inc.: Strengths: Good advertising Good quality equipment Good customers service Unique product: Superarm lift Offer a wide variety of accessories

Weaknesses: Smaller market: products are used only by those handicapped. Prices perceived to be too high.

Opportunities:

Could extend to overseas. Support core business economies. Could seek better supplier deals. Growth of the internet leading to an increase in the number of consumers willing to buy online.

Threats:

Existing core business distribution risk. Possible negative publicity. A new competitor in the market.

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The competitive edge Ticky Tocker has on Handicaps Inc. is that TTs products are cheaper and it can be used by all kinds of people, not only the handicapped. Other competition: Ticky Tocker knows that once it has entered the market and established a presence, others will try to follow. However, TT believes that the corporate missions and even the organizational design will be imitated, but never duplicated. TT will constantly evaluate its products, locations, service, and corporate missions to ensure that it remains competitive in this industry. 5.0 Strategy and Implementation Summary Our strategy is simple; we intend to succeed by giving people a high quality product at an affordable price and an environment that attracts "trendy" people like a magnet. 5.1 Strategy Pyramid Ticky Tockers strategy is to show people that TT has an excellent product and convenient accessibility. To execute on this strategy, TT is placing its retail outlets at easily accessible locations throughout Singapore. Customers can also purchase their items they want online. TT is also pricing its product competitively. Then, through coupons and display ads at the locations, TT hopes to achieve more customers to its store. In so doing, TT has: 1. Provided a customer with a quality product at a competitive price. 2. Provided the customer with a more convenient way for obtaining their desired product. 5.2 Competitive Edge Ticky Tocker competitive edge is simple. TT provides a high quality product at a competitive price that can be used by all kinds of people, including the disabilities.

5.3 Marketing Strategy

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First and foremost, Ticky Tocker will be placing its retail outlets in locations of very high visibility and great ease of access. They will be located in the shopping mall on the east, west and center of Singapore. Ticky Tocker will be implementing an advertising promotion campaign which could involve drive-time radio and brochure. Drive-time radio will attract the attention of working adults. The brochure can be found on the appendix of this business plan. Word of mouth has always proven to be the greatest advertising program a company can instill. So, most of products are kept at low price to ensure that students can afford it. As one of our main target market are students, we will also advertise out products through magazine such as I-weekly and Teenage where most of the students will read. Ticky Tocker will hand out discount coupons to those who have purchased a certain amount of product or something similar. This encourages the person to come in for cheaper product. TT will also be distributing coupons during special occasions such as New Year and Christmas. 5.4 Promotion Strategy The long-range goal is to gain enough visibility to leverage the product line into other regions and generate inquiries from potential inventors. To do that, Ticky Tocker needs:

Spread the word. Print brochures and exchange them with other businesses, post them on public bulletin boards, or hand them out on the sidewalk downtown (perhaps in costume to attract attention). Advertising at $1,600 per month concentrating on drive time radio and magazines. Ticky Tocker will experiment with different stations and magazines, keeping careful track of results. Publicity: Attractive display

5.5 Distribution Strategy Ticky Tockers first retail outlet is located at the centre region of Singapore. For the next two years, TT will open two more outlets at the east and west sides of Singapore. This will make TT more accessible. 5.6 Pricing Strategy

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Ticky Tocker pricing will be comparable to the competition, but with the valueadded feature of higher quality products and convenience. 6.0 Management Summary We are a small company owned and operated by Roy Yeo and Alex Tan, as a Limited Company. Roy Yeo is the developer and designer of the products, and Alex Tan manages the company as president. 6.1 Organisational Structure Alex Tan, President, is responsible for overall business management. Our managers of finance, marketing, and sales report directly to Roy. Roy Yeo, designer, is responsible for product design and development, assembly, and manufacturing. Our workshop manager reports directly to Alex. As co-owners, Roy and Alex jointly develop business strategy and long-term plans. Roy is strong on product know-how and technology, and Alex is strong on management and business know-how. 6.2 Management Team Alex Tan, 35, president, had a successful career in retail before becoming half owner of Ticky Tocker. He was an area manager of Marks and Spencer and merchandising assistant for Next. He has a degree in business administration from National University of Singapore. Roy Yeo, 36, workshop manager, designed products for Amphasis Design Pte Ltd before becoming half owner of Ticky Tocker. He has a M.S. in industrial design, from the University of York. Jolene Koh, 28, is marketing manager. She is in charge of production and advertising. Jolene also managed direct sales at one of our retail outlets. Jolene has a degree in marketing from the Nanyang Technological University.

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7.0 Financial Plan 7.1 Start-up Cost Summary The table below shows the expenses that are paid to establish the business: Start-up Cost Start-up Expenses Legal Office Equipment Vehicle Finance (6 months) Administration Labor (6 months) Website Development & Hosting Identity/Logos/Stationary Other Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements $23,500 $35,000 $0 $128,500 $187,000 $265,350 $3,500 $4,950 $3,600 $52,000 $5,300 $4,000 $5,000 $78,350

7.2 Break-even Analysis


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Using the average price per unit, less the average cost per unit, divided into the fixed costs of operation, TT concludes that we will need to sell at least the number of units shown in the following table and chart to reach break-even each month. Table: Break-even Analysis Break-even Analysis Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost $12.45 $10.96 $46,022 30,915 $384,850

7.3 Projected Profit and Loss (Income Statement)

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We are profitable in the first year, with profits increasing over the next two years, as we establish a loyal customer base.

Profit and loss Statement FY2008 Sales Less: Cost of goods sold Gross Margin 1,060,000 312,000 748,000 Expenses Start-up Cost Payroll Sales Expenses Rent Marketing Depreciation Utilities Other Total Operating Expenses 265,350 295,000 10,000 28,000 4,150 3,000 6,950 2,450 572,800 320,000 15,000 33,000 4,430 3,900 7,500 2,600 386,430 340,000 17,500 35,000 4,790 4,250 8,920 2,730 413,190 FY2009 1,205,000 400,500 804,500 FY2010 1,465,000 495,000 970,000

Net Profit

175,200

418,070

556,810

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Net Profit Yearly


600,000 500,000 400,000 300,000 200,000 100,000 0 F 2008 Y F 2009 Y F 2010 Y

Gross Profit Yearly


1000000 900000 800000 700000 600000 500000 400000 300000 200000 100000 0

F 2008 Y

F 2009 Y

F 2010 Y

7.4 Projected Cash Flow


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The cash flow projection shows that provisions for ongoing expenses are adequate to meet Ticky Tocker needs as the business generates cash flow sufficient to support operations.

Pro forma Cash Flow FY2008 Cash Sales 369,147 FY2009 740,800 FY2010 1,220,500

Additional Cash Received Sales Tax, HST/GST New Current Borrowing New Other Liabilities New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received 0 0 0 100,000 0 0 0 469,147 0 0 0 135,350 0 0 0 876,150 0 0 0 190,950 0 0 0 1,411,450

Expenditures from operations Cash Spending Bill Payments Subtotal Spent on Operations 255,174 47,163 302,337 311,983 52,326 364,309 440,655 69,140 509,795

Additional Cash Spent Sales Tax, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets 0 1,200 0 0 128,500 0 1,900 0 0 168,200 0 3,000 0 0 300,750
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Dividends Subtotal Cash Spent

0 432,037

0 534,409

0 810,545

Net Cash flow Cash Balance

37,110 14,650

341,741 356,391

600,905 957,296

7.5 Balance Sheet The following is a projected Balance Sheet of Ticky Tocker. Pro Forma balance Sheet FY2008 Current Assets Cash Inventory Other Current Assets Total Current Assets 14,650 35,000 0 49,650 Long Term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets 128,500 3,000 131,500 181,150 Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities 40,620 8,150 0 48,770 103,810 4,000 0 107,810 205,500 450 0 205,950
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FY2009

FY2010

356,391 74,629 0 431,020

957,296 150,230 0 1,107,526

390,450 6,900 397,350 828,370

703,220 11,150 714,370 1,821,896

Long-term Liabilities Total Liabilities

91,500 140,270 Capital

335,676 443,486

892,100 1,098,050

Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital

15,000 5,000 20,880 40,880 181,150

15,000 36,753 333,131 384,884 828,370

15,000 76,435 632,411 723,846 1,821,896

Net Worth

40,880

384,884

723,846

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Appendix Table: Profit and Loss

Pro Forma Profit and Loss FY2008 Sales Less: Cost of goods sold Gross Margin Expenses Start-up Cost Payroll Sales Expenses Rent Marketing Depreciation Utilities Other Total Operating Expenses Net Profit 265,350 295,000 10,000 28,000 4,150 3,000 6,950 2,450 572,800 175,200 320,000 15,000 33,000 4,430 3,900 7,500 2,600 386,430 418,070 340,000 17,500 35,000 4,790 4,250 8,920 2,730 413,190 556,810 1,060,000 312,000 748,000 FY2009 1,205,000 400,500 804,500 FY2010 1,465,000 495,000 970,000

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Appendix Table: Cash Flow Pro Forma Cash Flow FY2008 Cash Sales 369,147 FY2009 740,800 FY2010 1,220,500

Additional Cash Received Sales Tax, HST/GST New Current Borrowing New Other Liabilities New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received 0 0 0 100,000 0 0 0 469,147 0 0 0 135,350 0 0 0 876,150 0 0 0 190,950 0 0 0 1,411,450

Expenditures from operations Cash Spending Bill Payments 255,174 47,163 311,983 52,326 364,309 440,655 59,140 509,795

Subtotal Spent on Operations 302,337

Additional Cash Spent Sales Tax, HST/GST Paid Out Principal Repayment of Current Borrowing 0 1,200 Appendix
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0 1,900

0 3,000

Other Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent

0 0 128,500 0 432,037

0 0 168,200 0 534,409

0 0 300,750 0 810,545

Net Cash Flow Cash Balance

37,110 14,650

341,741 356,391

600,905 957,296

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Appendix Table: Balance Sheet

Pro Forma Balance Sheet FY2008 Current Assets Inventory Other Current Assets Total Current Assets 14,650 35,000 0 49,650 FY2009 356,391 74,629 0 431,020 FY2010 957,296 150,230 0 1,107,526

Long Term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets 128,500 3,000 131,500 181,150 390,450 6,900 397,350 828,370 703,220 11,150 714,370 1,821,896

Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities 40,620 8,150 0 48,770 91,500 140,270 103,810 4,000 0 107,810 335,676 443,486 205,500 450 0 205,950 892,100 1,098,050

Appendix
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Capital Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital 15,000 5,000 20,880 40,880 181,150 15,000 36,753 333,131 384,884 828,370 15,000 76,435 632,411 723,846 1,821,896

Net Worth

40,880

384,884

723,846

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Appendix Survey:

Appendix
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Purpose of the survey Question 1: Determine which target market the person belongs to. Question 2: To estimate the population size of the handicapped. Question 3: To estimate the population size of the handicapped. Question 4: Define what the customers want in order of importance. Question 5: Define how much the customers are willing to spend. Question 6: Define what the customers want. Question 7: To elicit a customer's future intentions.

1500 people had taken the survey. Results: From the survey, we found that half of the people who had taken the survey know someone who is physically handicapped. This will create a handicapped market for our business. The maximum price they are willing to spend is $21-$30. This is not a problem for us as the price of our product is kept below $30. Most of the people prefer alarm clock which are loud and easy to use. The new product (KAC) that we are launching will meet these criteria.

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Appendix New Product:

1 7 6 2 5 4 Keypad Alarm Clock (KAC) 3

Usage: 1: 2: 3: 4: 5: 6: 7: Click this button to on/off the product. Click this button to switch to calculator function. Click again to return to clock function. Click this button to adjust the volume of the alarm clock. The minimum value is one while the maximum value is ten. Click this button to start setting the alarm. Click the second time after setting the time to activate the alarm. Click the third time to off the alarm. The clock will ring 5mins after this button is pressed. Click this button to start setting the current time. Click again to confirm the time. The light is on as long as this button is pressed. Appendix
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Product Features: Loud volume (about 100 dB) Buttons are located on top of the clock easily accessible Large, easy to read time display Easy to set Rubber Keypad Extra-large buttons Built-in night light Built-in calculator

Product dimensions:

This product is good for heavy sleepers. It has an adjustable volume control which can be set to an extra loud beep for heavy sleepers. In addition, it is designed in such a way that it is ideal for those with low vision or hand impaired to use. It shows the hour and minutes on a large, black 1.5" LED display. It makes setting of alarm easy with jumbo-size buttons. The alarm is so easily set that a hand impaired individual, without holding the alarm clock, can make all the settings with a stick held in his mouth, or simply set by stepping it using his toe. The KACs Braille characters help them to set quickly and correctly. Furthermore, KAC is light and only 0.8" thick, which makes it convenient for the user to carry when they travel. The combination of all this features will make KAC a very competitive product.

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Appendix Brochure

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