Your pet will be in safe while your are awayThis investor presentation is strictly private and confidential, and specifica...
Executive SummaryPain of the CustomerExisting SolutionsCustomer SatisfactionSolutionBusiness ModelValue ChainRevenue Strea...
Executive Summary•	 Pet owners in the UK are increasingly away from home on business and leisure trips;•	 Petaway provides...
Pain of the Customer• Pet owners in the UK are increasingly away from their homes and consequentlytheir pets due to busine...
Existing Solutions60%19%10%11%Primary Research: 102 total responses, 71% are pet owners• 60% of pet owners leave their pet...
Customer Satisfaction22% indicated that they are not satisfiedwith existing solutionsDo you experience any problems with th...
Solution• Petaway is a website that allows pet owners to find a suitable home for theirpets when they are travelling;• It c...
>50% are interested in leaving their pet with pet lover/owner via our network andtaking care of someone else’s pet while t...
VISITS VISITSCREATION OFACCOUNTCREATION OFACCOUNTLISTING OFPETSLISTING OFHOMESSEARCHSHORTLISTCOMMUNICATION/TRANSACTIONADDI...
Business ModelPetaway is a two-sided platform consisting of pet owners (those who want to leave their pets in goodhands wh...
Value ChainFeedbackInboundcontentManagementof platformsCustomerserviceMarketing•	 Customers create supply;•	 New ideas are...
Revenue StreamsADVERTISINGPREMIUMSUBSCRIPTIONDog Collar Supplier(Shenzhen XiyuanElectronic TechnologyCo., Ltd.)Pet Insuran...
Revenue Streams: Validation0204060253052Willingness to buy extra services, % of all customersGPS Collar Insurance Pick-up ...
PersonasJoanna, 36,Senior manager•	 Travels for work andleisure frequently;•	 Is a pet owner and caresabout their well bei...
Market Summary•	Market size: 13 million households have at least one pet out of a total of 27 million in the UK (PFMA, 201...
Marketing Approach10%5%7%78%Traffic Sources forYear 1SeoFacebook AdsPPCOffline Marketing and other sources•	 Digital Predom...
Cusomer Acquisition and LTV2%3%17%26%52%Marketing ExpenditureSeoFacebook AdsPPCE-mail MarketingOffline Marketing•	 Expendit...
Key ObjectivesYear 1Revenue 276,764Burn 112,504Headcount 6Members 21,105Premium Subscribers6,753Year 2Revenue 730,591Burn ...
SCALEUK expansionSTICKINESSLaunch in RichmondVIRALITYLaunch in the UKEMPATHYBeta-testing1 month 4 months 8 months2-3 years...
Milestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding Strate...
Key Metrics and “if not” scenarioAdditional Services• GPS Collar/Members: >50%• Insurance/Members: >30%• Pick-Up and Drop-...
Financials-75,000-37,500037,50075,000112,500150,000Period 0Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul AugProfit after TaxE...
Financials037,50075,000112,500150,000Period 0Sep Oct Noc Dec Jan Feb Mar Apr May June July AugTotal Net Costs Total Net Re...
Team CredentialsIgor StefanyukCEO• 2 years of experience in digitalmarketing and PR;• Led project development of CMSand IA...
Valuation and InvestmentOpportunityPetaway seeks to raise £60,000 in equity from investment partners for Jan, 2014(Core Ca...
APPENDIX 1: WEB USERINTERFACES
APPENDIX 2: FINANCIALSTATEMENT
APPENDIX 3: FINANCIALJUSTIFICATIONS
1.Prediction of Traffic for RichmondPrediction: In the launch of Richmond, there is insufficient data to calculate a bottom-...
Keyword Searches per month in the UK CompetitionPet insurance 246,000 HighDog insurance 49,500 HighCat insurance 22,200 Hi...
Total sources of traffic from the entire UK in December is:Traffic before December is calculated backwards- from the traffic ...
4.Conversion Rate: from visitors ti usersAlthough in our primary research we found that 53% of customers are willing to jo...
8.Justification of Cost of ProductionGPS CollarPartner with: Shenzhen Xiyuan Electronic TechnologyBuy: £60 per unitSell: £7...
10.Justification of Fixed CostThe web design cost, development of CMS and mobile app development are based on the team’s wo...
12.Market Growth in Year 2 and 3The year-on-year growth forYear 2 and 3 are predicted to be:Year 2: 150%Year 3: 400%This i...
APPENDIX 4: TEAM CVS
APPENDIX 5: REFERENCES
•	 Deeho (2013), Average pageViews perVisitor [online] available from <http://www.deehoseo.com/search_engine_optimization/...
New Venture Proposal: Petaway
New Venture Proposal: Petaway
New Venture Proposal: Petaway
New Venture Proposal: Petaway
New Venture Proposal: Petaway
New Venture Proposal: Petaway
New Venture Proposal: Petaway
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New Venture Proposal: Petaway

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This New Venture Proposal is created by the N7 consultant group at the Imperial College Business School. It was very well received during the business pitch. Hopefully, this will spark ideas for other entrepreneurs.
I am currently looking for job opportunities in London. If interested, please contact me at:
wai.chan12@imperial.ac.uk

Petaway is a new social network that utilises a two-sided market strategy. Petaway allows pet owners to leave their pets with other members of the network while they are away on vacation. Members will be able to search for pet-friendly homes around their neighbourhood.

The underlying aim of Petaway is to provide an alternate offering to pet sitters and pet hotels, which can sometimes be very expensive.

The business model consists of 3 main revenue streams: advertising, selling of additional services, and premium subscription, where users can subscribe to see homes that are verified by Petaway, and to book them in advance. We forecast revenues to be £277K in Year 1.

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Transcript of "New Venture Proposal: Petaway"

  1. 1. Your pet will be in safe while your are awayThis investor presentation is strictly private and confidential, and specifically prepared in context of the first capital round of PetAway
  2. 2. Executive SummaryPain of the CustomerExisting SolutionsCustomer SatisfactionSolutionBusiness ModelValue ChainRevenue StreamsPersonasMarket SummaryMarketing ApproachCustomer Acquisition and LTVAgendaKey ObjectivesGo-to Market StrategyMilestones and Funding StrategyKey Metrics and “if not” scenarioFinancialsValuation and Investment OpportunityAppendix 1: Web User InterfacesAppendix 2: Financial StatementAppendix 3: Financial JustificationsAppendix 4: Team CVsAppendix 5: References
  3. 3. Executive Summary• Pet owners in the UK are increasingly away from home on business and leisure trips;• Petaway provides an online community for pet owners and pet lovers to interact and find temporary homesfor their pets;• The current offerings in the market are not always available, expensive and do not guarantee peace of mindto customers;• Petaway has a competitive edge, as it is an economical solution that provides a reliable service;• The market size in the UK is very vast as more than 40% of households have one dog or one cat. Thisequates to a market size in excess of 13 million pets.The pet industry is forecasted to grow at a favourablerate of 12% p.a. enhancing the prospects for Petaway’s success;• The Petaway team currently consists of 6 entrepreneurs with diverse skills and work experience specializingin online marketing and web based services;• We intend to use a 3 stage process to successfully launch Petaway.The first stage would involve Beta testing.This will be followed by an initial launch in the community of Richmond prior to full UK expansion in 2014;• Petaway has 2 key sources of revenue – premium subscriptions and additional services. We forecastrevenues to be £277K inYear 1, £730K inYear 2 and £2.9 million inYear 3;• Petaway seeks to raise £60K in equity from investors in exchange for a 12% equity share in the company
  4. 4. Pain of the Customer• Pet owners in the UK are increasingly away from their homes and consequentlytheir pets due to business and leisure trips;• Pet owners currently leave their pets in the care of friends/relatives, pet-sittersor pet-boarding facilities;• Pet owners are dissatisfied with these solutions as friends/relatives are not alwaysavailable, pet-sitters and pet-boarding facilities can be very expensive if used on afrequent basis and furthermore they do not guarantee good quality care for pets;• Pet owners are looking for a reliable and economical solution that takes goodcare of the pets they love when they are awayThe  problem,  and  how  we  propose  to  solve  it
  5. 5. Existing Solutions60%19%10%11%Primary Research: 102 total responses, 71% are pet owners• 60% of pet owners leave their petwith a relative or friend;• 19% of pet owners leave their petswith pet sitters;• 10% use boarding serviceswhile they are away;• 11% use other solutions (The mostfrequent answers are “Trainer” and“Take a pet with me in a trip”)Where do you leave your pet whenyou are away?The  problem,  and  how  we  propose  to  solve  it
  6. 6. Customer Satisfaction22% indicated that they are not satisfiedwith existing solutionsDo you experience any problems with thecurrent available offerings?Relative/Friend• Not always available;• Feel like a burdenPet Sitter• Expensive;• Suitable just for short trips;• Pet sitters treat a pet badlyYes22%No78%Primary Research: 102 total responses, 71% are pet ownersPet Boarding• Expensive;• Cleanliness and safety issuesThe  problem,  and  how  we  propose  to  solve  it
  7. 7. Solution• Petaway is a website that allows pet owners to find a suitable home for theirpets when they are travelling;• It connects pet owners and pet lovers to create an online community;• Members will also have access to a range of additional service offerings;• USP: Petaway is an economical solution that connects pet lovers and pet ownersto create a user generated platform to solve the pain of pet ownersThe  problem,  and  how  we  propose  to  solve  it
  8. 8. >50% are interested in leaving their pet with pet lover/owner via our network andtaking care of someone else’s pet while they are awayYes52%No48%Would you be interested in taking care ofsomeone else’s pet while they are away?Would you be interested in leaving your pet witha pet lover/owner via our pet network?Yes53%No47%Solution: ValidationPrimary Research: 102 total responses, 71% are pet ownersThe  problem,  and  how  we  propose  to  solve  it
  9. 9. VISITS VISITSCREATION OFACCOUNTCREATION OFACCOUNTLISTING OFPETSLISTING OFHOMESSEARCHSHORTLISTCOMMUNICATION/TRANSACTIONADDITIONALSERVICE OFFERINGSGPS CollarPick-up andDrop-off ServiceInsurancePREMIUMSUBSCRIPTIONSEARCH (WITHVERIFIED HOMES)PET STAY IN HOMESREVIEWS & RATINGSREIMBURSEMENTPet owner Pet loverVerification byPetAwayGETVERIFIEDHOME STATUSBusiness Model1 23 45 6789 111012131214 1516Description is on the next slideThe  problem,  and  how  we  propose  to  solve  it
  10. 10. Business ModelPetaway is a two-sided platform consisting of pet owners (those who want to leave their pets in goodhands whilst they are away) and pet lovers (those who are willing to take care of other’s pets)1, 23, 45, 6, 7, 891011, 12, 1314, 1516Both pet owners and pet lovers can sign up to a free account to enlist their pets or homes on our databasePet owners can search our database for their ideal home of stay and vice versa for the pet loversPet-owners can communicate with pet lovers via our service to organise a period of stayAt the stage of the transaction, Petaway will offer pet owners additional services (GPS collar,Insurance, and Pick-up and Drop-off services) to ease their pets’ stayAfter the period of the pet’s stay, pet owners will be asked to review and rate the services of the petlover, which will allow Petaway to identify the 50 most popular homes to be given the status of aVerified HomeUpon account registration, pet owners will be able to subscribe to a premium account, which will give themthe ability to view and book the verified homes in advance. (In our primary research, we found out that petowners are willing to pay a premium to ensure that their pets are in good hands – homes verified byPetaway will give them that extra assurance)Due to the extra demand, Petaway will reimburse verified homes £40 each monthThe  problem,  and  how  we  propose  to  solve  it
  11. 11. Value ChainFeedbackInboundcontentManagementof platformsCustomerserviceMarketing• Customers create supply;• New ideas are based on feedback;• Review and rating system creates valuefor customers• Monitoring and managing atwo segment database;• Monitroing of technicalaspect of the platform (e.g.updates);• Verification of homes forthe premium users• SEO and PPC;• E-mail;• Facebook ads and Sponsored stories;• Offline marketing• Customers areencouraged to providefeedback throughreviews and ratings• GPS Collar;• Insurance;• Pick-up and Drop-offThe  problem,  and  how  we  propose  to  solve  it
  12. 12. Revenue StreamsADVERTISINGPREMIUMSUBSCRIPTIONDog Collar Supplier(Shenzhen XiyuanElectronic TechnologyCo., Ltd.)Pet Insurance(PetPlan Ltd.)Private Cab CompanyPartnership: PetAwayearns 20% of marginPartnership: PetAwayearns 20% of marginBulk purchase: PetAwayearns 20% of marginADDITIONALSERVICESGPS Dog Collar InsurancePick-up and Drop-offServiceDOG OWNERSThrough GoogleAdSense Sell to dog owners Offer to dog ownersHow  will  Petaway  make  money?
  13. 13. Revenue Streams: Validation0204060253052Willingness to buy extra services, % of all customersGPS Collar Insurance Pick-up and Drop-off ServicePrimary Research: 102 total responses, 71% are pet owners040,00080,000120,000160,000200,000Predicted Revenur afterYear 1PremiumSubscriptionGPS Collar InsuranceAdvertisingPick-up andDrop-offService• In our primary research, we found that customers believe that there is addedvalue in the extra services, with the GPS collar being the most popular;• Premium subscription is introduced after the first 6 months, subsequently it ispredicted to be our second biggest revenue stream afterYear 1How  will  Petaway  make  money?
  14. 14. PersonasJoanna, 36,Senior manager• Travels for work andleisure frequently;• Is a pet owner and caresabout their well being;• Has a high disposableincome;• Wants a reliable servicethat assures pets’ well being;• Internet user;• Willing to pay up to £10 permonth for Petaway• Loves animals;• Has a lot of free time;• Wiling to take care ofother’s pets;• Can provide a safeenvironment for pets;• Internet user;• Verified by PetawayNickolas, 52,RetiredShareHow  will  Petaway  make  money?According to our primary research, we identified two distinct groups of users - those that are willing to take care ofother’s pets but not willing to leave their pets with others and vice versa (refer to Appendix 3.13 for moreinformation). Hence, Petaway can offer premium subscriptions with access to verified homes for greater peace ofmind.Personas of premium subscribers and verified homeowners:
  15. 15. Market Summary• Market size: 13 million households have at least one pet out of a total of 27 million in the UK (PFMA, 2013);• Expenditure: Pet owners spend £14.9billion a year on their animals’ care – an average of £11.04 each week(The Mirror, 2011);• Growth: the UK pet industry grew by approximately 12 percent, swelling to nearly 4 billion (Pet Business World,2012);• Trips: 92.9 million holidays (Mintel, 2012) were taken by people from the UK (domestic and international) withexpected growth of 1.4%.The average nights spent whilst travelling globally is 10 nights (Travel Trends, 2010), whilethe average length of domestic trips is 2.31 nights (VisitEngland, 2010)0 2 4 6 85.588Pet population, millionDogsCatsOther animals(rabbits, hamsters,rats etc)Potential for expansionin the futureSource: PFMA, 201320122013201420152016201792 93.5 95 96.5 9897.596.595.094.794.592.9Domestic and overseas holiday, millionSource: Mintel, 2012Market  attractiveness  and  customer  acquisition
  16. 16. Marketing Approach10%5%7%78%Traffic Sources forYear 1SeoFacebook AdsPPCOffline Marketing and other sources• Digital Predominantly: Since our platform is web-based, wewill use digital marketing tools, which will enable us to targetpeople according to different demographics and psychographicscharacteristics;• Traffic is Key:The aim of our marketing activities is to increasetraffic to the website thereby increasing the number of memebers;• SEO is King: Our website will be optimized by keywords whichare related to existing solutions (‘Dog sitter’, ‘Cat boarding’ etc),additional services (‘Cat insurance’, ‘GPS Collar’ etc) and generalsearch queries (‘Dog care’ etc);• Traffic Generation: We will use PPC and Facebook Ads togenerate traffic as well. Facebook ads will be very important in theStickiness Period enabling us to target people, who live inRichmond, and will help to create an initial audience;• Retention: E-mail marketing will be used for retention andengagement purposes;• Offline: We will also use offline advertising – flyers, which will bedistributed in parks during the time dog owners are walking withtheir dogsMarket  attractiveness  and  customer  acquisition
  17. 17. Cusomer Acquisition and LTV2%3%17%26%52%Marketing ExpenditureSeoFacebook AdsPPCE-mail MarketingOffline Marketing• Expenditure and Customer base: The marketing budget,which is £46,275 forYear 1, will be mainly spend on SEO, FacebookAds and PPC. 21,105 members are predicted to be acquired by theend ofYear 1;• Customer Acquisition: Customer acquisition cost is £0.45,assuming that 1 out of 5 unique visitors will become a member,and, hence, a customer. Taking into consideration that all ouradvertising will be highly targeted, this metric is more thanrealistic;• Customer LTV: The lifetime value of the customer is £120,assuming that the average pet lives for 10 years, and taking intoaccount that a pet owner is going on vacation/trip twice a year for3 days each time;• Monetary Value: Customer LTV is in 267 times higherthat customer acquisition costMarket  attractiveness  and  customer  acquisition
  18. 18. Key ObjectivesYear 1Revenue 276,764Burn 112,504Headcount 6Members 21,105Premium Subscribers6,753Year 2Revenue 730,591Burn 346,394Headcount 9Members 82,544Premium Subscribers26,414Year 3Revenue 2,947,869Burn 739,184Headcount 24Members 330,177Premium Subscribers105,657150%400%Annual Growth RateAnnual Growth RateImplementation  strategy  and  metrics
  19. 19. SCALEUK expansionSTICKINESSLaunch in RichmondVIRALITYLaunch in the UKEMPATHYBeta-testing1 month 4 months 8 months2-3 yearsValidation 1 Validation 2 Validation 3Go-to-Market StrategyChallenge: Difficulty forusers to comprehend theidea or use the interfaceStage:Will involve a beta-testing phase comprisingof 200 individuals.The aimwill be to acquire earlyadopters and gain theirfeedback with regards tothe platform and assesstheir activity and monitorrisks and against-planscenario’s.Challenge: Creating initialaudience (Egg and chickenproblem) and retaining customersStage: Start the service in theneighbourhood of Richmond witha population of 20K people.Thisnetwork process will help toengage users on a more personallevel and because of the limitedarea, word-of-mouth will spreadmore effectively.Challenge: Increase growthrate and implement premiumsubscriptionStage: Launch the servicethroughout the UK byincreasing marketing activitiesand WoM communication. Inthe same time we will launchpremium subscription to meetneeds of customers, who wanta reliable service, thereby andincreasing revenue income.Challenge: Furtherexpansion of thebusinessStage: Expansion in-depth the UK andgenerating additionalrevenue by providingservices to newcategories ofcustomers (rats, rabbit,hamsters owners etc).Implementation  strategy  and  metrics
  20. 20. Milestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategyMilestones and Funding StrategySTAGE ACTIVITIESSTAGE ACTIVITIESSTAGE ACTIVITIESFounding thebusinessDomains registrationFounding thebusinessIA & UX prototypingFounding thebusinessCMS developmentFounding thebusinessAgreement withpartners(transportation,insurance, GPS collarproduction)Founding thebusinessBeta-testingBusinessDevelopmentLaunchBusinessDevelopmentMarketing activities &customer acquisitionBusinessDevelopmentIntroduction ofpremium subscriptionBusinessDevelopmentMobile/tablet appdevelopmentBusinessDevelopmentHiring additional staffFundingStrategyOwn investment(~ £10,000)FundingStrategy Business Angel(~ £60,000)PERIOD 0YEAR 1YEAR 1YEAR 1YEAR 1YEAR 1YEAR 1YEAR 1YEAR 1YEAR 1YEAR 1YEAR 1YEAR 1YEAR 2 YEAR 3PERIOD 0RICHMONDRICHMONDRICHMONDRICHMOND UKUKUKUKUKUKUKUK YEAR 2 YEAR 3Jun-Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul AugYEAR 2 YEAR 3
  21. 21. Key Metrics and “if not” scenarioAdditional Services• GPS Collar/Members: >50%• Insurance/Members: >30%• Pick-Up and Drop-off/Members: >25%• Profit per interaction: >£9Validation 1: Empathy => StickinessValidation 2: Stickiness =>ViralityValidation 3:Virality => ScaleFeasibility of the Solution• Interaction/members: >50%• Recommendations/interactions: 50%• Satisfied members/interactions: 85%Conversion Rate• Members/Unique visitors: >20%Advertising•Traffic: >2,500 visitors in April• Frequency of visiting website: >10times per monthGrowth• New customers: >60% p/mPremium Subscription• Premium subscribers/Members switch:>32%Improve UI and UX, build personalrelations with customers,implement encourage system forinteraction (e.g. amazon vouchers)if notPromote benefits of additionalservices to customers, improveUX, pricing and discount issuesRevision of marketing mix andsources of traffic, promotionoffers and benefits on “firstscreen” to catch a visitorIncrease traffic by communicationthrough opinion leaders, PR andviral content in SM. Increasenumber of content on the websiteand number of keywords for SEOIncrease marketing budget,implement system of inviting newcustomers by existing members(e.g. DropBox)Free trial, providing additionalbenefits for premium subscribers121234345656Implementation  strategy  and  metrics
  22. 22. Financials-75,000-37,500037,50075,000112,500150,000Period 0Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul AugProfit after TaxExpected Cash Flow (before financing)Expected Financials inYear 10375,000750,0001,125,0001,500,000Year 1 Year 2 Year 3Expected Financials inYear 1, 2 and 3• Profit after Tax inYear 1 is expected to be £112,500;• Profit after Tax in Year 2 and 3 are expected to be £346,000 and £739,000respectively, with an expected cashflow of £1,208,000 at the end of period 3Financial  statements
  23. 23. Financials037,50075,000112,500150,000Period 0Sep Oct Noc Dec Jan Feb Mar Apr May June July AugTotal Net Costs Total Net RevenueRevenue and Costs inYear 10750,0001,500,0002,250,0003,000,000Year 1 Year 2 Year 3Revenue and Costs inYear 1, 2 and 3• Total net revenue is expected to be £277,00 in Year 1, £731,000 in Year 2 and£2,948,000 inYear 3;• Expected Stabilised Gross Profit Margin is expected to be 31% inYear 3Financial  statements
  24. 24. Team CredentialsIgor StefanyukCEO• 2 years of experience in digitalmarketing and PR;• Led project development of CMSand IA for several websites;• MSc in Internationl RelationsCFOTiffany Chan•Worked at Standard CharteredPrivate Back (financial institution);• BSc in Operational Research fromLondon School of EconomicsAnushka Suri•Worked at Ormax World (marketresearch firm);• BSc in Law and Business Studiesfrom University of WarwickCMO•Worked in Sales Department ofSamsonite (global luggage manufacturer);• BSc Management Studies fromNottingham University BusinessSchoolAnant BerliaCaroline StavrouCCO•Worked in Sales Department atLoccitane (beauty products);• Co-organiser of few charity events;• BSc Business Management fromUniversity of SurreyCSOFaris Memon•Worked in Sales Department atHassan A. Muzaffar Trading;• Fluent in 5 languages;• BA Business Management, KingstonBusiness SchoolCCSO
  25. 25. Valuation and InvestmentOpportunityPetaway seeks to raise £60,000 in equity from investment partners for Jan, 2014(Core Capital funding for website development and CMS), for which a 12% equityshare is offered£60,00012%  of  total  equity  with  a  35%  annual  return  for  3  years
  26. 26. APPENDIX 1: WEB USERINTERFACES
  27. 27. APPENDIX 2: FINANCIALSTATEMENT
  28. 28. APPENDIX 3: FINANCIALJUSTIFICATIONS
  29. 29. 1.Prediction of Traffic for RichmondPrediction: In the launch of Richmond, there is insufficient data to calculate a bottom-up approach (as with the approach for the entire UK).The following Top-down approach is used for the first 4 months in the financial models:The key assumption is that 10% of the population with pets will visit the website, and 50% of the visitors will become users.Total population in Richmond 21,469Total population with pets (44%) 9,446Traffic to Petaway (10%) 944,636% to use Petaway in Jan (50% of traffic) 20%Number of population to use Petaway in Jan 189Month on month growth rate in Richmond 40%2. Prediction of Traffic for the Entire UKOur traffic in December was predicted by using marketing expenditures: SEO, PPC and Facebook Ads and 10% markup from other channelsAfter SEO, we predict that Petaway will be the last result in the TOP3 organic search results.Therefore, capturing 9.5% (Search EngineWatch, 2011) of all Search traffic.Traffic from SEO = 75,525 in December ofYear 1.
  30. 30. Keyword Searches per month in the UK CompetitionPet insurance 246,000 HighDog insurance 49,500 HighCat insurance 22,200 HighPet collar 3,600 HighDog collar 90,500 HighCat collar 18,100 HighPet sitter 33,100 HighDog sitter 22,200 HighCat sitter 8,100 HighDog walking 110,000 MediumPet sitting 40,500 MediumDog boarding 60,500 MediumCar boarding 8,100 MediumPet boarding 33,100 MediumDog care 49,500 MediumTotal 795,000Source: Google AdWordsFor  PPC  and  Facebook  Ads,  we  set  a  budget  of  £1,000  in  December  of  year  1  (budget  per  month  is  calculated  according  to  the  advertising  growth  rate).  Therefore,  the  trafJic  from  PPC  and  FB  ads  is:PPCPPCPrice per click £0.6Clicks in Dec 1,667Facebook adsFacebook adsPrice per click £0.5Clicks in Dec 2,000
  31. 31. Total sources of traffic from the entire UK in December is:Traffic before December is calculated backwards- from the traffic in December up until the traffic at the endof April (end of empathy stage in Richmond).Using this method: month on month Traffic growth is 62%Traffic sourcesTraffic sourcesSEO in Dec 75,525PPC 13,333FB ads 24,000Other sources (10%) 11.286Total 124,1443. The month on month growth for marketing activities are:Calculated backwards from the traffic in December up until the traffic in Richmond)Growth of market expenditure for PPC 14%Growth of market expenditure forFacebook ads23%Growth of market expenditure forOffline15%
  32. 32. 4.Conversion Rate: from visitors ti usersAlthough in our primary research we found that 53% of customers are willing to join our website, we believe that this number is inflateddue to the discrepancy between expressing desire to commit and actually committing.Hence, we predict the conversion rate to be 20% and the churn rate 15%.However, we will need to verify the conversion rates in our beta testing5.Conversion Rate of revenue streamsWe have based our conversion rates according to the percentage of willingness to buy discovered in our primary research.Assumption: People in the UK travel on average 2 -3 times a year (Mintel, 2013)Premium Subscription (monthly fee) 32%GPS Collar (purchase once) 52%Third Party Insurance (purchase 2 times a year) 30%Pick-up and Drop-off Service (purchase 2 times a year)25%6.Justification for display advertisingThree banner ads will be placed on every website page.The revenue formula is based on the following: size of traffic, average page views pervisit (which is 2.5 pages (Deeho, 2013)), and display ad rates (which is £1.5/per 1000 views (Google AdSense)).Display Ad Revenue = Traffic*3*2.5/1000*£1.57.Justification for affiliate marketingOne affiliate ad will be placed on every website page.The revenue formula is based on the following: the number of traffic, average page viewsper visit (which is 2.5 pages (Deeho, 2013)), average CTR for affiliate ads (which is 4% (WSM4B, 2012)), average conversion rate (which is also4% (Learn Analytics, 2013)), average sale value for pet shops (which is £27 (IndustryIQ, 2009)) and the assumption that the affiliate percentagewill be 10%.Affiliate Ad Revenue = Traffic*2.5*4%*4%*£2.7
  33. 33. 8.Justification of Cost of ProductionGPS CollarPartner with: Shenzhen Xiyuan Electronic TechnologyBuy: £60 per unitSell: £75 - most of people are willing to pay less than £100 + shipping is £5 for 50 pieces (HongKong post bulk mail)Pick-up and Drop-off servicesPartner with: Private Cab companyLabour price: £5/hoursAssumption:• People travel 2 times a year• Average journey length is 5miles• Negotiation of 80% of margins go to supplierInsurancePartner with: PetplanAssumption:• People travel 2 times a year with an average stay of around 3 days• Negotiation where 80% of margins go to the supplierPremium SubscriptionPayment of 40£ to 50 verified homes = £2000Home verification cost= £5009.Justification of Prices from Revenue StreamsAll prices are based on the willingness to pay revealed from our primary research.GPS CollarLess than £100Therefore, price at £75Pick-up and Drop-off services £3 per mileInsurance £1 pound per dayPremium Subscription Price at £5 per month
  34. 34. 10.Justification of Fixed CostThe web design cost, development of CMS and mobile app development are based on the team’s work experience.The prices in the UKmight be higher, but we will outsource production to Russia or India. We will buy several domains in different domain zones(.co.uk, .com, .org), and the annual expenditure will not exceed £40 (123-red.co.uk), pets cages will be purchased from ‘Pets at home’ orother suppliers.11.Justification of Variable CostSEOThe cost is based on the number of keywords and competition (WebpageFX)£3,000 per monthPPCPPC expenditure is based on Google Adwords rates@ £0.6 per clickEmail MarketingExpenditure on e-mail marketing is based on number of total subscription (Sign-up.to pricing)@ £19 per 2,000@ £45 per 5,000@ £85 per 10,000@ £125 per 15,000@ £185 per 25,000@ 272 per 50,000Web-hosting ServicesFor the web-hosting service we will buy the Ultimate package with 24/7 support,unlimited disk space, a number of databases and the ability to customize the mobilewebsite from GoDaddy Hosting@10 per monthRent of Office We will rent desk space in a shared office, Spitalfield, London, E1 (Gumtree)@ £75 per weekFacebook AdvertisingExpenditure on advertising is based on Facebook rates@ £0.5 per clickOffline Advertising We will print 20K flyers atVistaprint - £360 per 10,000 flyers
  35. 35. 12.Market Growth in Year 2 and 3The year-on-year growth forYear 2 and 3 are predicted to be:Year 2: 150%Year 3: 400%This is due to the surge in marketing spending, especially for the third year.Costs of PPC, Facebook Advertisements and Offline marketing have the same month on month growth as inYear 1.13.Justification for Premium Subscription• The retired are the second largest group of users who are willing to take care of others pet (after students, who do nothave a stablehome), but they do not want to leave their pets with other users on our network• Senior Managers are the largest group of users who are willing to leave their pets with other users in our network. Moreover, theyprefer to pay a premium to ensure their pets are in good hands• Hence, they can generate the supply and demand for our premium subscribers020406080Other Part time Retired Senior Manager Home Maker Student Corporate Total52.5246.157628.5733.3366.6733.3333.3338.3838.464042.865033.3333.33Users by Occupation, %Willing to leave pets to others Willing to take care of pets
  36. 36. APPENDIX 4: TEAM CVS
  37. 37. APPENDIX 5: REFERENCES
  38. 38. • Deeho (2013), Average pageViews perVisitor [online] available from <http://www.deehoseo.com/search_engine_optimization/website-average-page-views.php> [28 May2013]• Goodwin, D. (2011) Top Google Result Gets 36.4% of Clicks [online] available from <http://searchenginewatch.com/article/2049695/Top-Google-Result-Gets-36.4-of-Clicks-Study > [28May 2013]• Hanna, L. (2011) Brits spend £14.9billion a year on pets available from <http://www.mirror.co.uk/news/uk-news/brits-spend-149billion-a-year-on-pets-126226> [28 May 2013]• IndustryIQ (2009) Pets Shops Report [online] available from <http://www.immediate.com/images/Pet%20Shops.pdf> [28 May 2013]• Clarysse, B., Kiefer, S. (2011) The Smart Entrepreneur, Elliott & Thompson [Kindle edition]• Croll,A.,Yoskovitz, B. (2013) Lean Analytics: Use Data to Build a Better Startup Faster, OReillyMedia [Kindle edition]• Mintel (2012) BusinessTraveller – UK – August 2012 [online] available from <http://academic.mintel.com/display/632323/> [28 May 2013]• Mintel (2013) Holiday Review – UK – January 2013 [online] available from <http://academic.mintel.com/display/651669/> [28 May 2013]• Mintel (2013) Pet Food and Suppliers – UK – February 2013 [online] available from <http://academic.mintel.com/display/637889/?highlight=true> [28 May 2013]• Mintel (2008) Pet Food and Suppliers – UK – October 2008 [online] available from <http://academic.mintel.com/display/280625/?highlight=true> [28 May 2013]• Pet Business World (2009) Pet industry growth [online] available from < http://www.petbusinessworld.co.uk/uk-pet-industry > [28 May 2013]• PFMA (2010) Pet Population [online] available from <http://www.pfma.org.uk/pet-population/ >[28 May 2013]• VisitEngland (2010) BusinessTravelTrends [online] available from <http://www.visitengland.org/Images/UK%20Business%20Trips%202010_tcm30-26793.pdf> [28 May 2013]• WSM4B (2012) Affiliate marketing practical: CTR, EPM & EPC [online] available from <http://wsm4b.com/content/affiliate-marketing-practical-ctr-epm-epc> [28 May 2013]

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