Final ASSIGNMENT

Running head: INTELLIGENT HOTEL SOFTWARE INC. 1
Intelligent Hotel Software Inc.
Conghui. Li (Alice)
Mengxi. Liu (Cicy)
Xi. Luo (Catherine)
Yang. Tian (Serena)
MGMT 443
Tara Williams
April 8, 2016

INTELLIGENT HOTEL SOFTWARE INC. 2
Executive Summary
Intelligent Hotel Software Inc. is a technology company that providing fingerprint
identification system to hotels. Our products include small finger scan locks, which locate on the
wall beside each room and self check-in kiosks will be placed in front of the front desk in hotels.
These two types of machines will reduce hotel front desk costs. At the same time, it will save
customers’ check-in and check-out waiting time. It also satisfied with the special needs for
customers who like new technology, high security, and want to save time for waiting lines. Our
mission is to provide intelligent software for hotels, which is easy to use and save time. Let
customers experience how technology helps life to be easier and better. Our vision is to be the
pioneer of intelligent hotel software and attract all the hotels around the world join us.
Our target market is the Canadian market. We plan to divide into two stages in order to
cover the whole Canadian market. First stage will focus on western Canadian market. Our head
office will be built in Calgary, and we have another office in Vancouver. The second stage we
will expand to eastern Canada, and start from Toronto. Based on our previous research, there are
2000 hotels in western Canada. We will target 400 hotels, which are some middle-high level
hotels, business hotels in downtown areas, airport hotels, and tourist hotels. Our target customers
are age range is 20-45 years old, higher education level, and businessmen.
The fingerprint scan technology is not a new technology, and it has been used in many
workplaces, Chinese education system, and special working areas. However, this technology has
not been used in the hotel industry yet. We decide to bring the fingerprint technology into hotel
industry through this opportunity so that benefit more people and increase profits for hotels. We
are the first company doing this and we don’t have direct competitors right now. Definitely, our
company is profitable and realizable.
Intelligent Hotel Software Inc. will corporate with a Chinese company—ZhongKong
technology. This company manufactures the fingerprint scan machines only, including the small
fingerprint scanner and big self check-in machines. Our company is responsible for designing the
products and the system. As a Chinese firm, they provide low price but high quality products.
They have successful experiences in producing fingerprint scan machines.
The table below shows the cost saving once the hotel purchase our product. We assume
the average amount of staff in the front desk in one hotel is 3, and they work 8 hours a day, and
follow 3 working shifts. The total labor cost in one year will be $290,304. If the hotel installs 20
small machines and 1 big machine, only one person as a helping-guide. The cost in a year will be
$101,718, which saves $188,586. Bigger hotels such as airport hotels, they usually have more
than 3 front desk clerks, and they have more rooms. In the long term, they would save more
money if they install our products. The cost of machine is always cheaper than cost on human.

Traditional Hotel
cost
# of front desk
clerk/shift
working
hours/shift
# of
shifts
minimum wages/hour costs/day
3 8 3 $11.20 $806.40
$806.4*30 days*12
months=$290,304
Switch to
Intelligent Hotel
Software
# of fingerprint
machine
# of self
check-in kiosk
cost
20 1 $4,950
# of front desk
clerk/shift
working
hours/shift
# of
shifts
minimum wages/hour
1 8 3 $11.20 $268.80
$268.80*30 days*12
months=$96,768
Total cost $101,718
Save $188,586
We have $250,000 investment from shareholders, and we are looking for a $ 200,000
loan from bank. Our start-up cost is $363,685 which includes research and development,
management, product assets, production cost, and sales cost. Our sales will reach $1,202,270,
and the net profit will be $367,262 by the end of year 1. Our financial goal for year 1 is
$360,000. By the year 2, we forecast the whole Canadian market, and cover every hotel room.
We will sell 6,000 small machines and 307 big machines. This business plan analysis the hotel
industry situation, target market, opportunities, financial data, and our forecasting for future
sales. This venture proves Intelligent Hotel Software Inc. is viable, reliable and profitable.

TABLE OF CONTENTS
1. INTELLENT HOTEL SOFTWARE INC……………………………………………………...5
1.1 Business Concept..………………………………………………………………………….5
1.2 Market Opportunity and target market…………………………………………………......6
1.3 Competition.…………………………………………………………………………….....10
1.4 Competitive Matrix………………………………………………………………………..12
2. LOCATION…………………………………………………………………………………...12
3. PRICING STRATEGY………………………………………………………………………..13
3.1 Stage one…………………………………………………………………………………..13
3.2 Stage two…………………………………………………………………………………..13
3.3 Stage three…………………………………………………………………………………14
4. PROMOTIONAL STRATEGY AND BUDGET……………………………………….…….14
4.1 Social media strategy……………………………………………………………………...15
5. REGISTER AND ORGANIZATION……………………………………….………………..15
5.1 Federal incorporation……………………………………………………………………...15
5.2 Insurance package………………………………………………………………………....15
5.3 Ownership structure……………………………………………………………………….16
5.4 Share buyback……………………………………………………………………………..17
5.5 Key factors of corporate agreement……………………………………………………….17
6. MANAGEMENT TEAM……………………………………………………………………..18
6.1 Employees…………………………………………………………………………………18
6.2 Benefit package…………………………………………………………………………...18
6.3 Potential mentor…………………………………………………………………………...18
7. GANTT CHART……………………………………………………………………………...19
8. FINANCIAL PLAN…………………………………………………………………………..20
8.1 Start-up cost……………………………………………………………………………….20
8.2 forecast…………………………………………………………………………………….21
8.3 Income statement………………………………………………………………………….21
8.4 Balance sheet……………………………………………………………………………...21
8.5 Break-even point…………………………………………………………………………..22
8.6 Financial ratio….………………………………………………………………………….22
9. LOAN REQUIREMENT……………………………………………………………………...23
10. CONCLUSION………………………………………………………………………………23

Intelligent Hotel Software Inc.
Business Concept
Intelligent Hotel Software offers the fingerprint identification system for the hotel
industry. Intelligent Hotel Software will manage customers’ reservations, deposit, check-in,
check-out, security, guest information, payments, and maintenance. The fingerprint scanning
machine can provide the convenient functions for any size of hotels. This system provides both
convenience and privacy for the guests.
The key technology of the software is fingerprint identification system. We provide self-
check-in kiosk in the hall of the hotel which every customers can clearly see it. This self-check-
in kiosk can help guests who want to extend their staying days and some guests whose
smartphone without touch ID, and people who have never been to this hotel before. If customers
want to extend staying days, they can choose extend date function and then select how long they
want to extend, and finish their payment. For the customers who don’t have an iPhone 6 or 6s or
cell phones without scan fingerprint function, they can choose reservation without fingerprint
function. They will type their order number or booking number which they receive after they
book the hotels online. Then they will confirm their information, scan their fingerprint, and get
their room number at last. For the new customers who do not have reservation, they can follow
the instructions of the no reservation function. First, they will select date and then choose a
room. After this, the screen will show two options: ready to pay or book another room. When
customers choose ready to pay function, they can insert their card, confirm their information and
scan their fingerprint and get their room at last. By following the instructions, customers can
scan their fingerprint and finish payment. After customers scan their fingerprint, the hotel will
record their information. Once they have registered, the hotel will keep their all information.
Customers will not need to worry about the second time reservation because they have already
booked once. If customers have any problem or concern, they can press need help button and
hotel staff will come out to help them. The self-check-in kiosk provides language of English,
French, and Chinese to satisfy different customer needs. The feature of machine has already
showed on the first pitch on the PowerPoint (see picture in Appendix A).
Our next important equipment is the fingerprint lock which is located on the wall beside
the door of each room. The screen is touchable. If customers have already booked a room and
provided their fingerprint, they will receive a confirmation and their room number. When they
enter the hotel, they can skip front desk and go to their room directly, and then begin their self-
check-in program (see picture in Appendix A). The kiosk and lock are technology products and
they can save customers time for check-in and check-out. Also, customers get high security and

no longer worry about losing their room card. For the cost part, it can reduce front desk cost in
terms of reducing the number of front desk staff and saving the cost for making room cards.
Furthermore, if someone wants to enter the room without permission, once he tries to scan his
fingerprint, his information and even criminal record will be identified by the hotel, our
company, and police station. Also, we will provide maintenance, installation and training
services.
Our key supplier is ZhongKong technology company in Shanghai, China. We want to
partner with this company because they can offer us self-check-in kiosk machine and fingerprint
machine which includes the touch screen, fingerprint scanner, and keyboard. Also, it can
provide us fingerprint collector. ZhongKong technology is a company which manufactures core
bio identification technology. This company manufactures different kinds of identification
systems such as ID cards, fingerprint identification system, and retina identification systems. It
provides high quality products with lower price compared to some of its competitors. It can
offer a great deal on shipment as well.
Market Opportunities and Target Market
Our target area market will cover Western Canada and Eastern Canada. According to our
first stage target market, we narrow down our number of potential buyers to 405 different hotels
in Western Canada and 574 hotels in Eastern Canada. However, specifically, we will not target
all hotels because motels, slow, or small size hotels will not considered to use the software due to
the small number of guests. We will focus on middle to upper middle hotels such as Holiday
Inns and Best Western due to the fact that they are chain hotels and they provide higher standard
hotels, suits, and express for families and they are built in most of cities in Western and Eastern
Canada. Specifically, we will cover the business hotels in Downtown area such as Sandman,
Hilton, and Delta. According to the google maps, there are 32 Holiday Inns in Alberta, 20 in
British Columbia, 8 in Saskatchewan, and 4 in Manitoba. There are 61 Best Western hotels in
Alberta, 90 in British Columbia, 10 in Saskatchewan, and 6 in Manitoba. Downtown area is the
political, economic center of a city, so we choose this area. Edmonton, Victoria, Regina,
Winnipeg are the capital cities of each province. Vancouver and Calgary are the two largest
census metropolitan cities among Western Canada, so we will focus on the business hotels in
Downtown areas of these cities. According to google website,
 2 Sandman hotels, 2 Delta hotels, and 2 hotels, Hilton, downtown Edmonton.
 1 Sandman hotel, 1 Delta hotel and 1 Doubletree, Hilton, downtown Regina.
 1 Sandman hotel, 1 Delta hotel, and 3 hotels, Hilton, downtown Winnipeg.
 3 Sandman hotel, 1 Delta hotel, and 1 Hampton Inn hotel, Hilton, downtown
Vancouver.
 1 Sandman hotel, 3 Delta hotels and 2 Hampton by Hilton and 1 Hilton Garden
Inn, downtown Calgary.

Same as the types in Western Canada, Eastern Canada has total 574 hotels. In total, we
will have 979 potential buyers. The number of hotels is found on the google website and just
count one by one.
Also, we will focus on the market of main tourism cities and airport hotels because of the
large number of customers and the level of busyness. According to Statistics Canada, Alberta’s
tourism sector is including four-season resorts featuring hotels (Appendix B 1.1). According to
Alberta Tourism (2012), 33.1 million person-visits were made to Alberta, Approximately 41% of
all visits in the province included at least one overnight stop in Alberta yielding 13.5 million
overnight person-visits in 2012 (Appendix B 1.1). Alberta is the province which is the home to
the world renowned Banff National Park and Jasper National Park. According to Calgary
Herald, Officials with Parks Canada said more than 3.6 million visitors passed through the gates
of the country’s iconic park from April 2014 to March 2015, which is the park’s fiscal year
(Appendix B 1.2). The numbers are up from nearly 3.3 million visitors from April 2013 to
March 2014 (Appendix B 1.3). It is also the highest number of visitors since at least 2000.
According to Trivago, Banff National Park has 38 hotels. According to Jasper National Park
annual report, Jasper National park had 126,879 visitors in 2011 (Appendix B 1.4). According to
Trivago (Appendix B 1.4), Jasper National park has 20 hotels. Victoria has 70 hotels except the
above hotels mentioned. These three cities are tourist cities, so they will have a lot of customers
during each season.
Our Intelligent Hotel Software can save guests’ check-in and check-out time. Also, we
can provide our guests to quick-enter the room, so it will be very beneficial and helpful for
hotels. The next target market will be airport hotels because airport is one of the busiest line in
the development of city, but we just focus on international or busy airports. According to
TripAdvisor, there are top 5 hotels which are very close to Calgary International Airport and
Delta hotel which is in the terminal, so more customers will choose these. There are top 5 hotels
near Edmonton International Airport and top 5 hotels near Vancouver International Airport.
There are top 5 hotels near Winnipeg airport. We consider people who are willing to live in the
closest hotel by airport because it quick and convenience.
Compared to last year, hotel industry has developed and consumers seek to higher quality
of living. The size of the hotel industry is expanding rapidly and significantly towards the
internationalization, grade, network, business and entertainment in the direction of development.
In highly developed information today, people's daily life is closely connected to the network
information combination with the vigorous development of the tourism industry and frequent
business trip. The Intelligent Hotel Software will become popular because the fierce market

competition in hotel industry which ask the hotel to introduce more, newer and higher IT
Technology. Our Intelligent Hotel Software can provide consumers with a thoughtful,
convenient, comfortable and satisfactory service, to meet the consumers’ need personalized
service, information services. We can provide the guests a home-style way of
informationization, intelligent, and personalized service which can enhance hotel management
level, reduce the cost of hotel operations, and improve the occupancy of the hotel guests’
satisfaction.
Intelligent Hotel Software is the development of new economic era hotel industry
direction in twenty-first Century. We have high venture and opportunity for our target markets
because these hotels have larger number of guests. There is no one hotel use the fingerprint
identification system and we are the only one to provide this. Although some hotels have self-
service, our fingerprint identification system is unique.
From Google website http://www.statcan.gc.ca/pub/11-402-x/2012000/chap/tt-ut/tt-ut-
eng.htm

From Alberta hospitality report (see resource Appendix B 1.6).
Pertain to our target market trend, strong RevPAR growth is driving the development of
hotels in the province. 2011 RevPAR growth in Alberta was 5.5%, well above inflationary
levels, and 4.5 times the national average. Through September 2012, RevPAR growth in Alberta
is dominating the country at 9.4%, well beyond the national average level, so hotel industry is
very potential and our business can have a high viability. For the demographic analysis, our
target market customer will be the age from young adults to older adults such as businessmen,
families, people who like to use technical products and special status people such as politician or
celebrities. Our target customer will have middle to high income and the occupation is varied
because people will choose hotel to stay during the trip. For psychographic analysis, our target
customers have middle to higher social class and they enjoy having quick, technologic and
convenient lifestyle. Also, their personality will be optimistic, open and extroverted, so they
would like to try new stuff. They have positive attitude towards life and they want to achieve a
higher standard of life. Due to the market trend, we will be successful to attract more hotels to
join us.

Competition
Our unique idea of using fingerprint identification system in hotel to save customers’
waiting time and benefit hotel with the labor cost. Our brand new idea is one of a kind, and it
still fresh in the industry. Our service is changing from manual service to network and self-
service based on fingerprint function. After research, we don’t have any direct competitors in
Canada, even in the world in terms of there are no fingerprint identification system exists in any
hotels in Canada and there are no businesses that sell the same product to hotels like we will.
However, we do have lots of indirect competitors to face, and they offer different alternatives to
satisfying the same customer need. For instance, some company provide self-check-in/out kiosk
or self-check-in system for hotels. Some hotels live with the self-check in system but it different
kind from us or the traditional front desk hotels.
Our indirect competitors are Ariane System Company, Calypso System Company and
Slabbkiosks Company, they all have the same idea of self-service kiosks for hotels without
finger print. There are some criteria of indirect competition following:
1. Ariane is the world leader in self-check solutions for the hospitality market. Ariane has
Europe, North America, Southeastern Asia and South Africa (Appendix B 1.7).
2. Ariane’s main office located in Pantin, France, and they also have offices located in
London, United Kingdom; Ludwigsburg, Germany; Madrid, Spain; Atlanta, United
States (Appendix B 1.8).
3. Ariane’s distributors spread all over the world - Boortmeerbeek in Belgium, Ridderkerk
in the Netherlands, Bubikon in Switzerland, Via Bardelli in Italy, Wroclaw in Poland,
Singapore and Dubai (Appendix B 1.9).
4. Ariane Company develop their own hardware and software for kiosks, keycard dispensers
and online check-in.
5. Their products include everything people need from online check-in to keycard
dispensers and self-service kiosks. “Guests could check-in online prior to arrival and
receive” mobile keys” by OpenWays or pick up a keycard in the lobby kiosks. For Kiosk
check-in, their machine features is similar to our self-check-in machine, and their kiosk
check-in machine for some customers who unable to check-in prior to their arrival or
simply because one step could not be completed on-line” (Ariane). The kiosk self-check-
in machines installed at the entrance in some hotels to make sure customers take
maximum advantage of their self-service strategy (Appendix B 2.0).
6. Ariane has four kinds of devices and they are for different levels of hotels. Duo 1700
series made for lower level hotels which is a simple and low cost device. Duo 2000 series
device could help customers pick up their room key card by keying in their confirmation
number on the Duo 2000 pin pad. Duo 4000NA series also made for people self-check-in
in upper middle hotels. Duo 6000 series made for luxury and design hotels (Appendix B
2.1).
7. The price of kiosk check-in machine in general is from 1000-1500 dollars (see resource
in Appendix B 2.2).

8. “There are 310 room Holiday Inn Hotel Brussels airport hotel is now live with kiosk
check-in powered by Ariane systems and installed by their partner Van Hessen” (Ariane,
Appendix B 2.3). “Arriving customers can self-check-in directly in the kiosks by
completing the registration form, and paying by credit card and receiving their room key.
Saving time for customers and hotel staffs. More than 80 customers on average use the
kiosks per day” (Ariane).
9. Ariane offers a complete range of project management, training and accompanying
services. Also, they provides onsite and online supports (Appendix B 2.4).
10. As their partners, Ariane chooses some of the best and most trusted companies. Their
partners range from access control systems, payment systems, PMS-systems. Some
companies they work with are FCS, GUESTDRIVEN, IRIS, NOR1, HFTP, and HTNG
and so on (Appendix B 2.5).
11. Calypso system has developed self-service check-in kiosk for Centara Cosi hotels. The
guests are able to check-in even at late hours without staff helps.
12. Calypso system provide check-in kiosk offers multi-languages to guests such as Chinese,
Japanese, English, Arabic, Thai, French, German, Spanish, Korean and Italian (Appendix
B 2.6).
13. SlabbKiosks Company develop all kind of self-service kiosk for hotels, factories,
companies, and restaurant.
14. “SlabbKiosks works with various kiosk software manufactures to create customized
applications that are just right for their kiosk project” (Appendix B 2.7).
15. SlabbKiosks offers installation, maintenance and leasing service.
Another indirect competitor is Openways Company (Appendix B 2.8). Some criteria are
following:
16. The idea of Openways is using customers’ cell phones as the key to enter their room.
They create a special mobile key, guests can book the hotel via Internet and phone, and
they receive a message from the hotel. Customers can skip the front desk and go straight
to open the guestroom by using their mobile key.
17. No add-on hardware or software required, and extremely easy to use.
18. “High security encryption, and compatible with the major e-lock brands” (Openways).
19. Use the 5.8 billion cell phones in the world as the key and suit for any kind of smart
phones (Appendix B 2.9).
20. “Some major hotel chains and casinos (in North America and Europe) are currently
preparing the introduction of their first mobile key service with OpenWays” (OpenWays,
Appendix B 3.0).
Interviews (see Appendix B 3.1)

Competitive Matrix
Location
Our main office and warehouse will be built at Calgary because our first stage focus on
Western Canada. We found a place on 4032 7 ST SE at Calgary, the size around 1000 square
feet available for rent. We want to use for office and warehouse. The monthly rent is $1,800,
more detail see Appendix B 3.2. The annual rental is $21,600. Our annual budget is $450,000,
so after pay our rental, we left $428,400 to run our business. According to the pricing strategy
below, the rental is affordable. Calgary is close to Edmonton, Banff, and Medicine Hat
(Appendix B 3.3) and it has convenient traffic flow. Also, it has growing business environment
and lots of opportunities, and it has direct airlines from Beijing, China to Calgary which can save
transportation costs. The shipping fee to Canada is start from CAN$24/kg, continue to later
weight is about CAN$10 without extra fee. Also, we will build our agencies on Vancouver,
Toronto, and Montreal to deal with some business issues, and offer maintenance and installation.
According to report of hotel industry in Alberta, the total revenue for lower hotels is
$1,294,000, lower middle is $5,050,000 and upper middle is $12,113,000. And their forecast
budget on purchases, materials are $230,000 for bottom hotels, $1,191,000 for lower middle, and
$2,800,000 for upper middle (Appendix B 3.4). So our location choose some major cities and
tourist cities where available lower and upper middle hotels and more people flow around.

Pricing Strategy
Our annual budget is $450,000, but it is not the start-up cost. In order to reach the annual
revenue which is $600,000, we need to control overhead cost within $200,000. The average
price of fingerprint lock in the market is around $350 for each, and self-check-in kiosk is around
$1000 per unit. (Appendix B 3.5) Although fingerprint recognition is not a new technology, there
is hardly any hotels use fingerprint as their room card. It is a favorable situation to capture
market share. In order to capture market as soon as possible, we price our fingerprint lock at
$200 and self-check-in kiosk at $950. Even though we price our product at a lower level, it is
still have high profit margins. Therefore, we use a penetration pricing strategy.
Whereas, fund is too little for a technology product, so we need to achieve our annual
revenue gradually and we set a reasonable stage to reach our goal. Hence, we create a three-
stage plan to achieve our annual revenue.
Stage One
At our first stage which period is four months, we don't expect a higher sales. Our aim is
increasing the awareness of our product. Therefore, the first stage also called trial stage. In the
trial period, equipment are assigned to 200 hotels in Alberta. Our fixed cost is $66,667.
According to our product’s price, our break- even point is to sell 560 units of fingerprint lock and
28 units of self-check-in kiosk. Our goal is to sell 800 fingerprint locks, and 40 self-check-in
kiosks during the first four months. Our purchase volumes are low, so the cost is higher. The
total revenue of stage 1 is $247,500, and total variable cost is $186,667 that includes product's
cost and install fee. At stage 1, fingerprint lock markup is 40% of selling price, and self-check-in
machine’s markup is 55.7% of selling price.
Sales $160,000 $38,000 $198,000
Total cost
Fixed Cost $66,667
Variable cost $80,000 $16,000
$162,667
Gross margin $35,333
Stage Two
At second stage, we expand our market to Saskatchewan, and British Columbia. Hence,
we increase our sales to1500 units fingerprint lock and 75 units self-check-in kiosks. Because
our purchase amount increase by almost two times, manufacturers give us a 10% off of each unit.
Variable cost is $90/unit for fingerprint lock and $360/unit for self-check-in kiosk. Fingerprint
lock markup is $110, and the markup on self-check-in kiosk is $590.
Sales $300,000 $71,250 $371,250
Total cost
Fixed Cost $66,667

$228,667
Stage Three
At our third stage, our market cover all four provinces in Western Canada. With the
expanding of market, sales increase as well. Base on the cost of stage two, we get another 10%
off from manufacturer. During stage 3, our product revenue is $742,500. The cost of fingerprint
lock and self-check-in kiosk are $81/unit and $324/unit. The markup on fingerprint lock and
self-check-in kiosk are $119 and $626.
Sales $600,000 $142,500 $742,500
Total cost
Fixed Cost $66,667
$358,267
The following chart shows our annual product’s revenue is $1,311,750 which includes
5300 units of fingerprint lock and 325 units of self-check-in machine. Within our control, the
fixed cost is not over $200,000. Also, install fee is including in variable cost. We have other
income which service and maintenance. Because our products price is fixed; if customer’s
ordering over 20 units, we will provide free install and maintenance. Therefore, our main
income is product, so the service and maintenance fee is negligible.
Sales $1,311,750
Total cost
Fixed Cost $200,000
Variable cost $566,400
$766,400
Promotional Strategy and Budget
For promotion channel budget, we will use Facebook, Twitter, or booking hotels
websites. The minimum daily advertising spend on Facebook is a $1.00 per day. The minimum
cost per click is 1 cent. Prosser (2013) said, “A small business can set the maximum dollar
budget per day or maximum dollar budget for the lifetime of an advertising campaign. However,

you cannot have a maximum daily spend and lifetime campaign budget.” Prosser (2013) pointed
out, “US advertisers on average will have to pay $24.00 to get 100 people to click on their
advertisement or will have to pay $24.00 to get their ad shown 36,364 times (Appendix B 1.6).”
The promotion of the product has been shown on the pricing discount for stage two and stage
three.
Because we don’t have a direct competitor, we cannot provide a map of benchmarked
business currently.
Social Media Strategy
Advertising will be a good way to show our business ideas. Advertisement is the most
directive way to show a product how to work and the feeling. As the first stage strategy, we need
to build social awareness which means get more people knowing about this new technology in
hotels.
The secondary stage will use word-of-mouth strategy. We are going to invite some
famous people or celebrities to use and feel the fingerprint check-in system. After that, we
interview them and make another advertisement. Also, we will post videos on YouTube,
Facebook, Instagram, and Twitter.
The third stage will cooperate with magazines which are published in the airplanes and
business areas. We will invite magazine writers to use our products and share their experience
with readers.
Register and Organization
Federal Incorporation
We decide to incorporate our business in terms of “separate legal entity, limited liability,
lower corporate tax rates, greater access to capital, and continuous existence” (A&P intertrust
corporation, see Appendix C 1.1). If we incorporate our business provincially, for example, we
can do business in other provinces and territories when we register our corporation with Alberta,
however, we have to register our corporation with each province, which we plan to do business
in. Our business expect to expand or deal with most of hotels all over the Canada, due to this
reason, incorporating provincially is possibly not a better route in the long time in terms of how
expensive and time consuming the process in each province which we want to do business.
Therefore, “federal incorporation is generally entitled to carry on business anywhere in Canada
under its name, subject only to registering in the province where business is carried on.” If we
chose federal incorporation, “our business name will be protected throughout Canada, meaning
that we have the right to use that name in any province. Our business name will also be protected
against registration across Canada” (Corporation centre.ca, Appendix C 1.2). So for the federal
incorporation fees is $200 and we have to also register extra-provincially, we chose Alberta
because our main office located in Calgary. The extra-provincial registration fee for Alberta is
$395.
Insurance Package
Our business insurance covers the property which our company own such as our
inventory which are fingerprint locks and self-check in kiosks will ship from China and place in
warehouse in Calgary, materials, and four offices’ equipment. Also, general liability insurance
included in our business insurance package, which can protect our products and employees from
the risk of lawsuit and to against third party. We chose business property and liability insurance
packages, and our budget for insurance packages is $10000 (Appendix C 1.3).

Ownership Structure
We have four shareholders, who are Alice, Catherine, Serena and Cicy, and we share
equally in the new deal at 25% each. Each one of us will invest $62,500, and there is total
$250,000 investment from four of us. We determine the total number of common shares we hold
is 10000, so each of us will hold 2500 shares. We expect our full returns earned by an investment
over the period of ownership, which include any dividend cash flows paid during that period and
our net income for this year.
(See resumes for each member of the management team in the Appendix C 1.4).

Share Buyback
At first quarter, 10000 shares at stock at $15 per share, we will pay out $ 150,000 in cash.
Second quarter, 10000 shares at stock at $17 per share, and we will pay out $170,000 in cash.
Third quarter, 10000 shares at stock at $20 per share, and we will pay out $200,000 in cash. Last
quarter, 10000 shares at stock at $25 per share, and we will pay out $250,000 in cash.
Corporate Agreement
Some of the key factors to include in a corporate agreement are:
 Who owns (or will own) shares?
 Are there vesting provisions?
 Are shareholders allowed to pledge or hypothecate their shares?
 How are share sales handled?
 What are shareholders’ obligations and commitment?
 What happens in the event of death/incapacity?
 What are the operating guidelines or restrictions?
 Are there any financial obligations by shareholders?

“Key” Management Team
Management team profile
1. Alice Managing Director
2. Serena Financial Controller
3. Catherine Director of Administration
4. Cicy Director of Operation
Employees
At stage one, we will hire 4 assistants in our main office in Calgary, and 2 assistants in
the office in Vancouver. At second stage, we will hire 2 assistants in each office in Toronto and
Montreal. In total, we will hire 10 staffs and the hourly wages for our office assistants is $15
(Appendix C 1.5). Our total labor cost is $253440 a year (Appendix C 1.6). Our office assistants
duties are filing which include creating and maintaining an electronic filing system; handle mail,
email or outgoing messages and responsible for responding them; data entry and computer work;
and customer service.
Benefit Package
We also offer the following benefits:
 6 weeks paid vacation
 Health plans
 Medical and dental plans
 Retirement plans
Potential Mentor
Our potential mentor is Tracy-Lynn Stroud. She is a mentor for students, where she can
apply her experience and passion in entrepreneurship and community development, as well as
her education in business. She helped us a lot in our business plan and gave a lot of
suggestions. She has been work in hotel for two years and she has tried the self-check in kiosk in
one hotel long time ago. Due to this information she gave us, we can think thoroughly and
decrease the risky. She is very helpful, kind, and extroversion. She likes to try new technology
and she thinks if the hotels have our product, it will be very fancy and helpful. Due to the varied
reasons, she is a suitable mentor for us (see Tracy’s resume in Appendix C1.7)

GANTT Chart

Financial Plan
Start-Up Cost
Research &
Development
TC Comments
Market research $0
Product development $2000
BP development $2000
Management
$ Per
month
$ Per
year
Total
cost
Office supplies
1st
2nd
$6000
$4000
$10000 Follow 1st, 2nd stage
Legal & accounting $500
Licenses $615
Federal corporation
Federal fees - $200
AB - $395 Annual corporate
report - $20
Employee’s wages
1st
2nd
264 d
132 d
$190080
$63360
$253440
1st: 6 employees in W
2nd: 4 in E
Production Assets
Plant and equipment $2000
Transportation $25000 Two delivery vehicle
Overhead
Utilities $0 $0 $0
All the utilities include in the
monthly rent
Insurance package $10000
General liability Insurance,
property insurance
Leases $1800 $21600 $21600 Main warehouse with office
Rent
1st
2nd
$315
$625
$3780
$3750
$7530 1st stage: in western; 2nd: 2
agent offices in eastern
Production Costs
Improvements &
maintenance
$10000
Freight $3000
Customs duties $2000
Sales costs
Advertising $8000
Promotion $6000
Total start-up costs $363685

Forecast
In our year 1 forecasting, we set a two-stage plan. During first six month, we focus on
western of Canada. There are 405 hotels that consider as our target customers, and our goal is
that achieving 15% of market share which is 61 hotels. The rooms’ average number of each hotel
is 60. The first stage is experimental stage, so our target is 30 rooms of a hotel can install our
products. Our aim is selling 1830 units of fingerprint machine. Also, we think one self check-in
kiosk covers twenty units of fingerprint machine is the best covering scale. Therefore, during the
first six month, our sales goal is 1830 units of finger print machine and 92 units of self check-in
kiosk. During last six months of year 1, we expand our market to eastern Canada. There are 574
hotels, and 15% of them is our aim. (Appendix C 1.8)
In year 2 forecasting, base on year 1’s sales, we come up a formula which accuracy is
65%. (Appendix C 1.9)
The total capital is 450,000 dollars. We assume that 50% of sales collect on cash the
others on debt. From cash flow, we can know the first month that we loss, but following month
things goes well. (Appendix C 2.0)
From our research, industry metrics of sales is 2 million, so it is reasonable and logic that
our forecasting will be. (Appendix C 2.1)
Income Statement
For year 1 income statement, the sales include three parts which are fingerprint machines,
self check-in kiosk and service fee. The service fee is depending on the self check-in kiosk. Each
kiosk cost 500 dollars service fee. Fonder invest us 200000dollars, and interest rates is 6% in 6
years, so the interest expenses is 200000*0.06/6=20000. (Appendix C 2.2) moreover, according
to 2015 corporate income tax rates, general rates is 12%(Appendix C 2.3)
In our year 2 income statement, we increase the expense of adverting and promoting.
Compare to year1, year 2’s net income is two times of year 1. (Appendix C 2.4)
Balance Sheet
For the balance sheet part, base on the monthly cash flow, year 1 end cash balance is
$259,681 which is 225 of sales. Accounts receivable is 169,171 which is 14% of sales. We
assume that inventory is 37% of sales. Base on the assumptions of asset in year 1, we come up
year 2 asset. Owner’s equity common stock and retain earning. Common stock is our fond which
is 250,000 and investor’s 200,000. Retain earning is net profit in year 1 and 2. (Appendix C 2.5)
Fingerprint machine Self check-in machine Service
Selling price 200 950 500
Cost
Stage 1 91 360 0
Stage 2 80 324 0
Fixed expenses 353685
Assume sales in following ratio
Fingerprint machine 91%
Self check-in kiosk 4.50%
Service 4.50%

Fingerprint machine
Self
check-
in
machine
Service
Selling price 200 950 500
Cost
Stage 1 91 360 0
Stage 2 80 324 0
Fixed expenses 353685
Assume sales in following ratio
Fingerprint machine 91%
Self check-in kiosk 4.50%
Service 4.50%
Weighted average selling price: Stage 1:Weighted average variable expenses:
200*91%+950*4.5%+500*4.5% 91*91%+360*4.5%+500*0
247.25 99.01
Stage 2: Weighted average variable expenses:
80*91%+324*4.5%+500*0
87.38
Break-even point = fixed cost/variable cost
=353658/247.25-99.01
=2385 units
Break-Even Point
Because the cost in year 1 between stage 1 and stage 2 is different. According to stage 1’s
cost, the break even point is 2385 units which include 2170 units fingerprint machine, 107units
self check-in machine and 107 times of service fee, but it exceed our forecasting in stage 1 which
is 1830 units fingerprint machine. Therefore, it needs to use total fixed cost minus stage 1’s net
profit which is 353658-(1830*91+107*360+107*500)=95108
In stage 2, the fixed expense is $95105. Therefore, break-even point is 95108/247.25-
87.38=595 units. The 595 units which include 541 fingerprint machine, 27 units of self check-in
machine and 27times of service fee.
To sum up, the break even point is 2371 units of fingerprint machine, 134 units of self
check-in kiosk and 134 time of service fee.
Financial Ratio
There is no data from the given website for our financing ratio
FINANCIAL RATIO YEAR1 YEAR2
Ability to pay debt as it comes due 208% 265%
Company's profitability on its assets 31% 44%
Operating profit margin 32% 41%

Total asset turn over 97% 106%
The amount of debt the company use 34% 29%
Return on equity 45% 60%
Loan Requirement
Small business loan is more suitable. To start a business, Eligibility is based on our
personal credit history. If we do not have an established credit history for our business, we can
choose a line of credit which means we have access to funds when we need them – no matter if
it’s to help manage expenses and cash flow, pay suppliers or make large purchases and the credit
limits start at $5,000 (Appendix C 2.6). We decide to chose lines of credit in RBC in terms of
large maximum amounts available, interest rates are float and renewable periods is long
(Appendix C 2.7). The total loan we want to borrow for this year is $200,000. We typically use
our loan for daily operations such as our inventory purchases. According to the lines of credit in
RBC, our monthly payment is $16666.67 and interest cost is $16250 (Appendix C 2.8). Our
collateral for the loan is our inventory.
By the end of first year, our net income is $367,262; we plan to pay back our loan quarterly, so
$50,000 plus interest every four-month.
Conclusion
Intelligent Hotel Software Inc. is a technology company that provides fingerprint
identification system to add value on hotels. We want to provide convenience to guests and save
their time on check-in and checkout. Also, we help hotels reduce labor cost. Because there is no
such service has been using in hotel industry, we have a great opportunity to develop and be
successful in the future.
$0.00
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
$300,000.00
$350,000.00
$400,000.00
$450,000.00
$500,000.00
Inventory loan payment
year 1
year 1

Final ASSIGNMENT

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