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B Plan

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  • 1. Rohit Garg – 12PGP091 FINDER Indian Institute of Management Raipur IIM RAIPUR FINDER 1
  • 2. Agenda Idea / Concept Why Should You Invest In Our Business Plan Market / Competitors Go To Market Strategies Financial Management Milestones IIM RAIPUR FINDER 2
  • 3. Idea / Concept • Product: FINDER • Idea: to develop a gadget that will activate an alarm on voice recognition. • Concept: to develop an affordable and trendy device that could help our customers to locate the lost items. We use only one sense (our eyes) of the five senses to find the lost items, this gadget will allow us to use other senses (our ears) as well to find the lost items. IIM RAIPUR FINDER 3
  • 4. Idea / Concept If you have lost an object and this gadget is attached to the object, all you have to do it call out the name of the gadget and you will be able to find the object. Features: • The size of gadget is 2 cm x 1 cm • The gadget can be attached to anything, metallic or non-metallic. • You will be reminded by the gadget if there is any need to recharge. IIM RAIPUR FINDER 4
  • 5. Agenda Idea / Concept Why Should You Invest In Our Business Plan Market / Competitors Go To Market Strategies Financial Management Milestones IIM RAIPUR FINDER 5
  • 6. Why Should You Invest In Our Business Plan The entrepreneur • We are a group of young entrepreneurs who have excellent academic and professional background • We have a proven track record and we have leadership qualities The idea/product • Our product has a high market acceptance • Our product has global potential The market Financials IIM RAIPUR • We are creating new markets and not much competition in first year • There are established distribution channels • Positive cash flow from second year onwards • The project does not require subsequent investments • Low break-even point FINDER 6
  • 7. Why Should You Invest In Our Business Plan People • Stop searching, start living • Empowering visually challenged and ageing populations across continents • Finder will initiate consumers towards next generation connected world Technology • Finder will help us achieve technology leadership in miniature home gadgets • Accumulated domain knowledge will help us in embedding its current portfolio with “console free” controls Profit • Finder will take us into every household • Improved brand recognition and technological leadership via embedded next generation solutions will lead to sustained long term profits IIM RAIPUR FINDER 7
  • 8. Agenda Idea / Concept Why Should You Invest In Our Business Plan Market / Competitors Go To Market Strategies Financial Management Milestones IIM RAIPUR FINDER 8
  • 9. Market / Competitors Market • Our customer is each and every individual who is scared to lose something special. • In a recent customer survey we came across the idea “to develop an affordable device that could help our customers to locate the lost items”. Our survey team reported that everyone at least once a day says “I don’t know where I have kept it”. • Total estimated sales are the sum of the estimated first time sales, replacement sales and repeat sales. • We are launching our product in Delhi. The total population of Delhi is 13 Million; we are expecting families that have an income more than Rs 20,000 per month to purchase at least one unit of our product • Our product is a durable good with infrequent repeat purchase. We expect to sell more than 1 Million units in the first year. . IIM RAIPUR FINDER 9
  • 10. Market / Competitors Competitors • We understand that no business can escape from competition. However this is a new idea and our future competitors will take some time to launch their products. • We will protect our product with patents, good customer service, and excellent product quality. We will take the following steps: • We have a company for reviewing our product sign a non-disclosure agreement. • We have hired a lawyer experienced in our field to write it for us. • We are very selective about who we share your idea with. • We have secured referrals from people we trust. • We have registered our trademark. IIM RAIPUR FINDER 10
  • 11. Market / Competitors RFID GPS • RFID tags need a RFID scanners • GPS chips need a locator • RFID tags are difficult to remove • GPS chips need Antenna, Band-pass because some are very small filter, Host computer to process the information, Stable crystal oscillator • RFID tags can be read without your knowledge • Accuracy of the locator is 1m X 1m FINDER • FINDER is a available at 1/10th the price of GPS chip or RIFD tag • FINDER does not need a scanner. The scanners for RFID and GPS are very expensive • FINDER is easy to remove • FINDER can be used by people suffering from blindness IIM RAIPUR FINDER 11
  • 12. Agenda Idea / Concept Why Should You Invest In Our Business Plan Market / Competitors Go To Market Strategies Financial Management Milestones IIM RAIPUR FINDER 12
  • 13. Go To Market Strategies We carried out the concept development and testing and the following results were recorded: • Communicability and reliability: our product scored high on both communicability and reliability. The customers welcomed the new concept. • Need gap: from the customer feed-back it is clear that there is a latent demand and we are the first company to bring a product that fills the need gap. • Perceived value: our prices are welcomed by the customers and our gadget scored high on perceived value. • Purchase intention: 95% of the customers interviews answers affirmatively. Our customer relation executives have informed us that the product inquiry has already starting coming in. Our tagline1: Our tagline2: Your search ends here Now you will never say “I have lost it” Bringing you the latest search tool Keep it, Forget it IIM RAIPUR FINDER 13
  • 14. Go To Market Strategies When? Where? Whom? How? Our company has decided to be the first entry. Initial market research indicates that there is huge latent demand and being the first entry we can become market leaders. Our company has decided to target metro cities in the first few years. If the reports of subsequent market research are optimistic then our company would like to invest in distribution channel and target Pan-India. Our company has decided to target families where the income is more than Rs 20,000 per month. Our company is particularly interested in college students and young executives. The company has decided that our product will be available in all the electronic stores, retail stores and gift shops Our company will target the customers (B2C). Our gadget is a small chip that our customer can place on the object they “don’t want to lose”. Our product will be available in all the electronic stores, retail stores and gift shops IIM RAIPUR FINDER 14
  • 15. Market / Competitors Distribution • Since our product is a low-value item we will use the traditional supply chain (involving the wholesalers, distributors, and retailers). • The initial analysis carried out indicates that we should go for intensive distribution (anyone who wishes to stock our product is encouraged to do so). • Other Options: • Going directly to the customer: this option is not feasible since the product is a low-value product. • Going directly to the retailer: this option can be worked out later but at present our team cannot handle logistics at national level. • Sales agents: this option is not feasible since the product is for B2C market and not for B2B market. IIM RAIPUR FINDER 15
  • 16. Go To Market Strategies • Product Leadership: Initially we are looking for product leadership as our company has developed product offerings that we have positioned as radically new. We will continue with our R&D to upgrade our products and to make our products trendy. • Sales Leadership: We will then move to sales leadership because sooner or later, product leadership erodes. Competitors will come out with their offerings. Our management team aims at building a highly motivated sales team. Our sales team will be armed with superior product knowledge and professional sales skills, and they will stand out. • Thought leadership: We will finally move to thought leadership. Sales leadership is hard to sustain because of its inherently high-cost operating model. The third option is to clearly define the market through a superior vision that will enable our management team to identify, attract, engage, qualify and convert more of the right sort of prospects and to develop a pipeline of opportunities that are predisposed to buy. IIM RAIPUR FINDER 16
  • 17. Agenda Idea / Concept Why Should You Invest In Our Business Plan Market / Competitors Go To Market Strategies Financial Management Milestones IIM RAIPUR FINDER 17
  • 18. Financial Management We have come up with the following cost break-up: • Fixed cost = Rs 50,000,000 (The fixed cost includes the machines. The machines have a life of 10 years). • Variable cost = Rs 50 per unit (Includes Material and Labour costs) • Selling price = Rs 101 (We are following a fixed price throughout India. We believe that currently we are not in a position to go for multiple pricing, as our customers in different geographies may feel cheated.) Profit in the first year: • • • • • • • Units sold = 1,000,000 Fixed cost per year = Rs 50,000,000 / 10 = Rs 5,000,000 Variable cost = Rs 50 * 1,000,000 = Rs 50,000,000 Total cost = Rs 5,000,000 + Rs 50,000,000 = Rs 55,000,000 Total revenue = Rs 101 * 1,000,000 = Rs101,000,000 Total profit = Rs101,000,000 - Rs 55,000,000 = Rs 46,000,000 Profit% = Rs 46,000,000 / Rs 55,000,000 = 84% Break-even point analysis: • BEP = Total fixed cost / (Selling price per unit – Variable cost per unit) • BEP = Rs 5,000,000 / (Rs 101 – Rs 50) • BEP = 98,040 IIM RAIPUR FINDER 18
  • 19. Financial Management Profit and Loss Statement, Balance Sheet and Cash Flow Statement for 5 years • Our management has figured out that we need Rs 5.66 crore as initial investment. We are planning to raise Rs 2.5 crore in the form of secured loan from SBI at a rate of 10% per annum (under the State Government scheme to support SMEs). Rest of the money will be raised in the form of equity. • Sales are assumed to grow at a rate of 10% per annum • Cost of Goods Sold is assumed to grow at a rate of 10% per annum since sales are growing at 10% per annum • Monthly rent is Rs. 50,000 • Selling, General and Administrative Expenses is Rs 5,000,000 and are assumed to grow at a rate of 10% per annum • Machine is bought in 2014, the cost of the machine is Rs 5 crore, and has a life 10 years. We have followed straight line depreciation • The tax rate is 30% • Deposit for factory (as the factory has been taken on rent) is 1 year of rent • Inventory is equal to the 10% of COGS and Cash & Cash Equivalents is equal to 1% of the Revenues IIM RAIPUR FINDER 19
  • 20. Financial Management Profit and Loss Statement, Balance Sheet and Cash Flow Statement for 5 years IIM RAIPUR FINDER 20
  • 21. Financial Management Profit and Loss Statement, Balance Sheet and Cash Flow Statement for 5 years IIM RAIPUR FINDER 21
  • 22. Financial Management Profit and Loss Statement, Balance Sheet and Cash Flow Statement for 5 years IIM RAIPUR FINDER 22
  • 23. Agenda Idea / Concept Why Should You Invest In Our Business Plan Market / Competitors Go To Market Strategies Financial Management Milestones IIM RAIPUR FINDER 23
  • 24. Milestones Part A (0 – months) Description 1 Securing Patents, Getting people on Board, Hiring a lawyer for registering our company and to look into Non Disclosure Agreements and Contracts. B (1 – months) 2 Securing contracts from suppliers for chips, speakers, microphones, batteries, and testing kits. Securing contracts from distributors and retailers. Finalize logistics. 3 Get factory on lease, hire workforce, train workforce, get clearances, and get major positions filled. 3 Focus on marketing and advertising. Finalize price, packaging, and major cities to target. C (1 – months) D (2 – months) IIM RAIPUR FINDER 24
  • 25. Rohit Garg – 12PGP091 Appendix Indian Institute of Management Raipur IIM RAIPUR FINDER 25
  • 26. Logo / Trademark IIM RAIPUR FINDER 26
  • 27. Industry and Market Analysis Indian consumer electronics market is estimated at Rs 53000 Cr. It is growing at 14 % CAGR. Rural India accounts for 35 % share by revenues. It is expected that the market will grow to Rs 70,000 Cr by 2015. The major players are Sony, Samsung, and LG. Rural Urban Total 2011 14.4 26.7 41.1 2012 16.4 30.4 46.8 2013 18.7 34.7 53.4 2014 21.3 39.5 60.8 2015 24.3 45.1 69.4 Electronic consumer industry includes good from flat panel TV to refrigerators. Hence, a basket analysis was carried to estimate market size for our product Finder. It was carried out by focusing on items priced between 300 INR to 1000 INR. The sales & growth rates were obtained for individual items: USB memory drives, watches, LED Luminaire and calculators. The results of the analysis indicate that market size for our product is estimated at Rs 6560 Cr. The results are tabulated below. USB Memory CAGR IIM RAIPUR 20.4 Luminaire (LED) 51.5 Wrist Watches 24.0 FINDER Calculators Aggregation 15.0 26.9 27
  • 28. Flow Process India: Research and Development India: Equipment Design Chips, speakers, microphone, batteries, and testing kits are imported from China. • Step 1: In China we need to hire a local agent to help represent us. China: Parts Manufacturing • Step 2: We will find a manufacturer for our products in trade shows in China to do this. One of the largest shows is the Canton Fair that takes place every spring and autumn in Guangzhou. China: Front End Assembly • Step 3: Establish guanxi. In China, establishing business relationships is much more than surface-level networking. India: Back End Assembly India: Testing and Packaging India: OEM IIM RAIPUR • Step 4: We will insist on meeting and conducting our business in the direct approach. We will audit the factory and inspect the products they are making for us. • Step 5: We will insist on sea transportation for most of the orders. The logistics of shipping are complex, so we might want to use a logistics provider. FINDER 28
  • 29. HR Policies As entrepreneurs, the last thing that we want is a cumbersome HR department to slow us down. Regrettably, HR has the ability to sink a small business faster than virtually anything else for reasons like: Key points: • We will invest the money in an employee handbook • We will engage an Insurance Agent • We will have an Employee Review program. • wrongful termination • If required we will fire employees and without • violation of payday laws remorse. • harassment • We will create a system for analyzing people who • discrimination are applying for jobs in our company. IIM RAIPUR FINDER 29
  • 30. Advertisement – Story Board IIM RAIPUR FINDER 30
  • 31. Rohit Garg – 12PGP091 Thank You Indian Institute of Management Raipur IIM RAIPUR FINDER 31