EEE457

Business Plan
Liangliang Weng
Yi Zhang
Jusso Pasanen
Nick Seelig

EXECUTIVE SUMMARY:
Opportunity Statement
When people travel internationally they usually run into all kinds of problems. For example, they
might get ripped off by local merchant or they are not be able to enjoy the trip due to a language
barrier. The tour guide service provided by traditional travel agency is also not very efficient. One
tour guide usually oversees a large group of travelers and the itineraries are not customizable.
Sometimes travelers find it really hard to communicate with a local tour guide due to culture
differences. Yotraveler is a peer to peer platform that provides a personal tour guide service, and
helps to solve all of these possible problems. By matching up travelers and tour guides with same
cultural background, similar interests, and hobbies. Yotraveler tries to provide customers an
immersive and localized experience in foreign cities.
Today’s modern travelers are usually more self-servicing. The proliferation of internet and other
communication technology has made it a lot easier for travelers to get travel information. Those
online resources has made travelers prefer to do research and plan itineraries on their own, which
helps to avoid intermediaries, save money and create a more personalized travel experience. The
trend of such self-servicing travel has lead to the rise of p2p ecommerce platforms in travel
industry.
Yotraveler sees a prime opportunity to capitalize on this industry revolution and to attract
international travelers by transforming the way customers plan their trip Yotraveler will provide a
fully customizable, peer-to-peer travel experiences to all the consumers’, matching them up with
someone with the same culture background, giving them a personal tour guide who truly understand
their needs and wants, and provide a travel experience that fully meet their requirements
Business concept and service
People with bilingual skills can sign up to be tour guide on Yotraveler’s website. Through the
background check and the screen system, they will become Yotraveler’s tour guides to provide
searchable and customizable itineraries based on traveler’s preferences, tastes and interests. With the
sufficient knowledge about their local community, tour guide will make the most suitable

suggestions based on traveler’s preferences. For example, tips on the best restaurant, nearby activities
or attractions. The price and service time of the tour guide is predetermined. Once the trip is booked,
customers can interact with their tour guides online or through phone call. Tour guides will join the
trip throughout the duration of the service and make the travelers feel like a local.
Description of target market
Yotraveler will initially target international leisure travelers, especially in the major cities of China
and US. Since rapid growth of Chinese economy lead to Chinese customer’s increasing spending on
traveling. There is also a significant increase in the number of international travelers in China.
Those international travelers who travel between the major cities in China and US will be
Yotraveler’s first target group, as the business grow, Yotraveler will expand the range of target
customers to international travelers in other countries and other tourist cities.
Marketing
The first stage of marketing plan will focus on attracting an inventory of tour guides to sign up. The
second stage of the marketing plan will center on raising awareness of Yotraveler’s online platform
and attract more customers to the website. Since Yotraveler’s initial target customers will be
travelers in the major cities of China and US, then Yotraveler will first put most marketing efforts in
those cities.
The major channel of maketing and advertising will be Internet. Instead of adopting costly and
conventional traditional marketing tactics, Internet will be the most effective way trying to reach the
early adopters among the potential customers. Once the early adopters are engaged, then they will
spread the message about Yotraveler to the majority.
Competitive Advantage, Technology and Operations
Yotraveler will leverage the trend of p2p ecommerce platform in travel industry. Trying to build
connections between international travelers looking for personal tour guides and people with
bilingual skill interested in being a tour guide. Both tour guide and travelers will build personal
profiles when they register, Yotraveler will match them up according to their situations. The big
players in the travel industry like Priceline end Expedia usually provide limited travel reviews and

mainly focus on providing travelers with hotel, car and lodging accommodations. Yotraveler’s
business is more than simply listing the attractions or activities, travlers will be able to match up with
tour guides according to their preferences, interests and culture background.
Management Team
Yotraveler’s management team is comprised of four highly motivated college students graduate from
Whitman School of Management,with a diverse array of knowledge and experience. Three of the
team members has lived in more than two countries and possess bilingual skills, which inspire them
come up with the business concept of Yotraveler.
Nicholas Seelig holds a bachelor’s degree of Finance, his professional knowledge in the field of
Finance and his previous working experience in venture capital will serve him well as he assumes the
role of Chief Executive Officer. Liangliang Weng possesses a Bachelor’s degree of Supply Chain
Management & Entrepreneurship. She also has accumulated enough communication and managing
skills during her past working experience. This year she became the cofounder and COO of Asia &
American Group LLC. Her sufficient working experience will serve her well as she assumes the role
of Chief Marketing Officer. Juuso Pasanen possesses a Bachelor’s degree of Finance. Juuso has
accumulated certain level of management skills during his past working and leadership experience.
Juuso’s previous working experience and professional knowledge will bring a great value to the role
of Chief Financial Officer. Yi Zhang has Bachelor’s degrees of Information science and technology
and Supply Chain Management. Her professional knowledge and past working experience has
provided her with both management skills and technical skills. In the past two years, she has interned
as IT consultant and data analyst in Shanghai. Her sufficient working experience makes her a natural
choice for Chief Information Officer
Taking into consideration that the management team do not have much experience in the field of
travel industry and P2P ecommerce, it will also heavily rely on professional outside, including
Software developer Alfred Sun and Expert in Tourism Tiger Qu.
Financial Highlights

Yotraeler expects to break even in its eleventh month(Jan 2017) of operation .Year-over-year growth
is expected with annual transactions rising from 4,781in year one to 30797 by the end of year two.
Subsequently, revenues will rise from $ 229,499 in year one to $ 1,478,270 by the end of year two.
By year five, Yotraveler’s revenues are projected to be $4 million, yielding the company more than
$2 million in profits; a profit margin of nearly 50%.
Financing Needs
Yotraveler will seek an initial investment of $520,000 from a single venture capital firm in
exchange for a 10% equity stake in the business and a seat on the company’s board of directors. The
anticipated annual growth rate for the terminal value is relatively conservative at 40%. A total
infusion of $520,000 will allow for the design and development of Yotraveler’s online platform and
provide a cash reserve safety buffer.
Section I:
The Company, Concept, And Product(s) or Service(s)
A. The Company and the Concept:
YoTraveler will be formed as a C Corporation in New York City in January 2016. The corporate
headquarter will be located in Syracuse, New York to take advantage of the relatively cheap costs.
YoTraveler will commence operation in New York City and Syracuse after launching.
This idea of YoTraveler developed through our own experiences. We felt it is time consuming to
search traveling attractions and make trip plans. When we traveled with a traditional travel agency,
we felt the routing is inflexible and that the service fee is too expensive. Further, we had to travel

with a bunch of other tourists. Also, the meaning of traveling for us is not how or where we travel,
but the key is whom we travel with. We hope we can make more friends with similar hobbies, and
develop new connections in the process of traveling. Thus, we generated the idea of YoTraveler.
MissionStatement:
The mission of YoTraveler is to match travelers and guides in an efficient way, ensuring security,
and the opportunity to have a trip full of great experiences.
Main Objective:
YoTraveler aims to help tourists in the making of customized trip plans, finding of their preferable
tour guides, and in providing opportunities for local people to expand their connections whilst
earning extra money.
The core benefit of YoTraveler is the matching feature where the customer can find a guide who
speaks same language in a foreign country, and someone who knows the area very well. This is
important for YoTraveler because we have all experienced the opposite of this.
B. The Product(s) or Service(s) Mix:
1. Peer to peer tour guide service: tourist can find a local tour guide with similar hobbies, interests,
and background.
2. Customized trip plan service: every customer may choose an attraction in a city they want to visit,
and the duration of the visit on a given day.
3. Less known attraction developing service: people can upload the pictures and information of
places they liked that are not mainstream attractions.
Application
Our main users are people who want to travel internationally and people who have spare time and
interested to be guides with the benefit of making money. The reason why they will use our site is
because the traveler will want a tour guide who is familiar with their customs, values, and will use
this to make their experience better during their visit.
Features

YoTraveler has three special features that are different from our competitors. Firstly, YoTraveler has
the customized trip plan making service: tourists just need to choose the attractions, the
transportation method, the activities, and the length of their trip. YoTraveler will then generate this
unique trip plan for them, consisting of their chosen items. Compared to traditional travel agencies
and other peer-to-peer tour guide services, YoTraveler provides travelers more choices and more
flexibility in the making of their trips. Secondly, YoTraveler will match travelers and tour guides
according to their hobbies, cultural background and interests. It is more comfortable for travelers to
meet tour guides who are familiar with their cultures as well as local cultures. For example, if you
like sports or art and you have the opportunity to meet someone who likes one of those as well,
naturally your interaction will be better. Thirdly, unlike traditional travel agencies that only focus on
famous traveling attractions, YoTraveler will establish a section for local residents to upload upload
pictures and information of less known places in the city of the traveler's destination. The traveler can
then click “like” and YoTraveler will recommend the most popular places to other customers.
Possible Drawbacks
YoTraveler havs two main drawbacks. Firstly, it is hard for customers to trust the local tour guides.
Although we will create background-checking system, there are risks that some people might practice
unethical actions while using our services. Secondly, YoTraveler cannot guarantee the quality of tour
guides in the launch stage since it is hard to check if the quality of the information tour guides
provide is adequate.
Opportunities
As YoTraveler is developing, YoTraveler can provide flight booking and accommodation services,
which can help travelers to save time and energy. Also, we have the opportunity to expand into many
big cities of the world and not just New York City. Finally, we can look into the smartphone
industry, and develop an app like our competitors to keep up with the technology.
C. Entry and Growth Strategy
In the first 2 years we will start our business in New York City. Later down the road we will expand
to other cities in the United States, and ultimately to other countries. However for now we feel that
New York City is the best place to test our concept in because of the high frequency of traveling.
Customers will be able to reach us through our website. Since we will be advertising through

television ads, banners in train stations, the radio and newspaper, people will eventually know what
YoTraveler is.
In five years we see YoTraveler growing exponentially, which means each year we will be growing
at an increasing rate compared to a constant rate. In terms of countries that we have entered after first
2 years include Russia, India, Canada, Brazil and Australia. In the fourth year YoTraveler should
stabilize the company while in year 5 move to countries like Singapore, Amsterdam and Iceland
which are small countries but travel is extensive there. There will be little expansion of product mix
due to the concept of the business however, there will be more preferences and more activities per
destination due to the growth of the company.
As mentioned before we would like to focus on the growth of the company for 3 years mainly in
large countries to pool the biggest consumer base. In year 4 we will stabilize the company by not
expanding to other countries and focusing on improving the company for year 5 to come due to
expansion in this year. Beyond 5 years will be hard to forecast with little information provided. Right
now it is hard to forecast beyond 5 years.
Section 2:
Industry Analysis
A. Travel Agency Industry
YoTraveler is going to operate in the global tourism industry, and the NAICS code of that industry is
561510. According to IBISWorld this industry is growing and mainly dominated by companies that
operate online. Futhermore, this is divided into two segments; travel websites, which is where
Yotraveler is, and traditional brick and mortar travel agencies.
B. Industry Statistics
Size and Growth
In the United States, this industry`s size is $35.3 billion, with a growth rate of 2.3 % for the next five
years. According to IBISWorld the online platforms are increasingly taking over in this industry.
Life Cycle

IBISWorld shows that online segment of this industry is growing fast, but the traditional travel agents
are having difficulties in growth because of the price competition of the online platforms.
Implications for YoTraveler
Due to the fact that online travel agencies have overtaken this industry it is a perfect time for
YoTraveler to join the scene as well. We see a good opportunity in the growth of the industry, and
the fact that the top competitors are relatively new. With a right business plan emphasizing
differentiation, this gives us a chance to get in the mix and possibly capture a good market share in a
growing industry.
C. Industry Structure
The industry is very fragmented. The top four counterparts capture around 17.2% of the market
share, the biggest shares going to online travel agencies like Expedia and priceline.com. However,
according to IBISWorld most of the counterparts comprise of smaller firms that don’t generate as
much revenue as the top players.
Major Players
There are two major players in this industry. Priceline. Com LLC and Expedia Inc. capturing 5.4%
and 9.5% market share, respectively.
Priceline.com LLC:
Based in Norwalk, CT priceline allows users to buy cheaper and discounted airline tickets, hotel
rooms, and rental cars. It operates in over 60 countries, and in 2014 its revenue globally was $8.8
billion. The fact that it operates under different brands have helped them capture more market share.
Expedia Inc.:
Expedia is also an American based company. It earned about $4.8 billion in 2013, and its revenue is
expected to grow with an annual rate of 12.5%. Expedias focus lies on increasing online presence and
sales. This has worked through acquisitions across the industry.
Basis of the competition

Few of the important factors in the industry are, pricing, being specific in terms of offering correct
things to a particular niche, and keeping up with the latest technology. The technology factor
illustrates why the traditional travel agencies have been left behind.
D. Key Industry Trends
Costs
The average profit margin of the global industry last year is estimated to be 8.8, which represents a
high level of competition. (Alvarez 2015) The largest expense for travel agencies is wages, which
accounts 27.8% of total revenue on average. (Alvarez 2015). Due to automation and use of internet,
this number is estimated to decrease. Depreciation is also part of costs but only accounts for a small
portion, about 1.5%. (Alvarez 2015) Marketing expense also plays an important role, for some online
booking agencies this expense can represent up to 40% of their revenue. (Alvarez 2015) The Rent
and utilities costs are expected to decrease due to lower demand for brick-and-mortar establishments.
Prices
Due to the high competition and easiness to access travel information, price has become an important
factor to attract customers. With the rapid development of information, network and communications
technology, travel agencies are able to provide service with lower costs, which also drives down the
prices.
Internet
The widespread application of Internet makes it more convenient for customers to access travel
information. Which contributes to a large growth of online booking websites. Instead of booking
through traditional brick-and-mortar travel agencies, customer are more willing to book directly
through those websites.
Other key trends
As the global economy continues to grow, the global travel agency industry is expected to recover
from the recession in the following five years. As the global economy grow, unemployment rate
continue to decrease, customers will be able to allocate more spending on travelling and vacation.

The number of international traveler is estimated to grow from 1.2 billion to 1.4 billion by 2015
(Alvarez 2015)
E. Key Success Factor
According to IBISWorld, for a firm to be competitive and excellent in the travel agency industry, one
must -
· Become a member of a group buying, promotion, marketing strategy scheme
· Analyze seasonal demand in travel industry
· Offer goods/services/products in different territories and regions
· Take suggestions from experts of its professional fields and applying the most advanced and
useful technology and techniques
· Employ workers with working experiments and ensure the flexibility of workforce (Alvarez
2015)
Best practices
One of the major player in this industry will be Priceline inc. It’s a CT-based company that allow
customer purchase discount travel-related products using their trip filter advanced search technology
from their website. (Alvarez 2015) Its previous acquisitions, Booking.com (2004), Agoda.com
(2007) and TravelJigsaw (2010), have contributed greatly to the company’s market share growth.
(Alvarez 2015) Being able to access more booking system, Priceline took advantage of economic of
scale to offer customers with lower prices.
Implication on YoTraveler
There are several major players in this industry, for example Priceline, expedia and airbnb, but none
of them actually has taken an absolutely advantage of the market. Therefore, there is still enough
space for new company to exploit a niche market. YoTraveler try to exploit a niche market by
providing a peer to peer travel service, which means other startups can also take advantages of this
opportunity. YoTraveler would be better off by implementing a long-term developing strategy in

order to build a cornerstone in an established industry with solid companies in it. Customer
acquisition, brand awareness, and brand loyalty will be key elements for success at the beginning
period.
F. Financial Ratios
Figure f-1
Figure f-2
Figure-3
According to the figures listed above, you can say that YoTraveler is entering a steady industry with
low barriers to entry. As the number of global tourists continue to grow, the sales revenue of the
industry is also expected to grow. After a small decline in 2009, the sales revenue began to recover
and continue to grow to date. According to Figure 1, marketing and labor cost account for most of the
total cost. In order to gain customers, brand awareness, and brand loyalty for further growth,
YoTraveler will invest heavily on marketing and advertising in the beginning period.
SECTION 3:
MARKET RESEARCH AND ANALYSIS
A. Research carried out:
For primary research, three of our team members interviewed a variety of people, from different
backgrounds, and different ages. The main goal was to find people who travel couple times a year for
leisure. These long interviews were conducted either face to face or by Skype. These interviewees
were not domestic, and had a lot of experience in international travel. We interviewed people who
range from the age of 20 to 40. Furthermore, the interviews gave us a better understanding what a
customer wants specifically from a service like ours.
The feedback we received from these individuals very helpful. They liked the fact that our concept
gives room for flexibility, and that is customizable at the same time. Also, few of them mentioned
how important it was that they could directly communicate with the tour guide without any

intermediaries. Few interviewees also mentioned a concern for safety. We take this issue very
seriously, and keep improving our concept on how we can involve a system where we can ensure as
much security as possible for our customer. In addition, we had feedback about the quality of the tour
guides, and how can we prove that our tour guides are reliable and good at what they do. This is
where our rating system comes in, and customers will be able to read reviews. Finally, we got
suggestions on how to improve by adding more features. For example, adding a section where guides
and customers can add pictures and comment experiences of less known places in a city that are
worth going to.
Overall, these interviews were very important for us in the further development of our business
concept. We will keep adding more things as more research is conducted.
Secondary research:
We have used the most recent data on websites like the IBISWorld and NAICS to find information
about the travel agency industry in the U.S. The information from these websites is used throughout
our business plan.
B Definition of relevant market and customer overview
YoTraveler will target the international leisure travelers to the U.S. This takes 52% of the whole
industry as you can see in the chart below. According to IBISWorld, there has been a significant shift
towards international travel over the past decade as international travel has become cheaper and more
accessible to a broader audience.
As we saw from our long interviews, a very diverse group of people are interested in our business.
Therefore, we are targeting international travelers to the U.S. regardless of their age. These customers
will want to find a secure and reliable tour guide who has a similar background as them. This gives
them comfort and can enhance their experience by further understanding of the destination. We are
targeting small groups or individuals with medium or high income.
C. Market Size and Trends:
Market Size

Year 2016 2017 2018 2019 2020
United States 1000 2000 4000 4500 9000
China 750 1500 3000 3500 7000
Total Profit $1,471,750.00 $2,943,500.00 $5,887,000.00 $6,728,000.00 $13,456,000.00
Avg Trip Price $3,000.00 Grand Total
Avg trip Cost $2,159.00 $30,486,250.00
AvgTriProfit $841.00
Factors that will affect market growth are population, income level, social trends, environmental
trends and socioeconomic trends. YoTraveler will be more popular in the United States than other
countries due to our forecasting assuming Americans travel more and will be more inclined to use
YoTraveler since the company was founded in the United States.
D. Buyer behavior
The global tourism is recovering rapidly after a difficult period of time after recession. The US
residents’ spending on international trips is growing constantly. While in China, customers’ spending
on international trips grow rapidly during the previous years. Holidays are usually the peak tourist
time, customers can easily access travel information through internet. Websites like Priceline and
Expedia provides convenient booking service, customer can book the hotels, air tickets or even rent a
car according to their requirements.
Travelers can be generally divided into two groups, leisure traveler and business traveler. Usually the
leisure travelers are more price sensitive while business travelers care more about time and locations.
For leisure travelers, the head of the household usually make the actual purchase decisions. The
person who pays for the trip doesn’t necessarily make the decision, in most cases they will consult
with their spouse before they actually make the purchase.

E. Market Segmentation and Targeting
For traveling purpose there are mainly two types of travelers, the business traveler and leisure
travelers. For travel distance we can then divide them into two groups, the domestic traveler and
international travelers. Therefore, if we integrate those two classification then there are mainly four
segments.
Domestic leisure traveler
This customer group is usually price sensitive, they are willing to spend more time on booking
process. When deciding places they want to travel, they usually turn to their family, friends or online
review for recommendation. Since they are traveling domestically, won’t experience much difficulty
in communication. Therefore, they are more likely to make their own travel plan and then travel by
themselves.
Domestic business traveler
Compare to leisure traveler, this customer group is more concerned about time and location. They
don’t spend much time on booking process and more willing to pay a higher price for a convenient
hotel or flight time. In order to show up for their meeting on time, their hotel and air tickets options
are limited. Since they are traveling domestically for business activities, they don’t actually need any
assistance during their trips.
International business traveler
Similar to the domestic business traveler, this customer group also value the convenience of location
and time. The only difference is that they are travelling internationally, which mean they may need
some level of assistance during the trip. Usually the companies have already thought about it, so they
either send someone who are familiar with the foreign country or arrange some assistance for that
traveler.
International leisure traveler
This customer group is similar to the domestic leisure traveler, they also value their travel experience
and more concerned about the price. One major difference is that they are travelling to a foreign
country where they are not familiar with. Due to language barrier and culture differences, it is highly
possible that this customer group will need assistance during their trip.

Target segment
international domestic
leisure International leisure traveler Domestic leisure traveler
business International business traveler Domestic business traveler
YoTraveler’s target customers will be international leisure travelers, mainly from China and USA.
Tourists from China and USA are those who spend the most when traveling abroad. Residents from
both countries are spending more money on international trips, especially in China. Chinese people
spent the most when traveling abroad, spending a total of $165 billion in 2014 (Polland 2015). Over
the official week-long holiday period, China's tourism sector received 176 million people, who spent
a combined 101.4 billion RMB ($16 billion USD), up 14.9% and 23.6% respectively from the year
before according to the country's Tourism Administration. Americans spent $112 billion while
traveling abroad last year — that's 7% more than the previous year, perhaps due to a stronger dollar
(Polland 2015).
Besides the increasing purchasing power of Chinese and American tourists, the main reason that
YoTraveler target this customer group is that among the 4 groups of customers, they are the group
who are most likely need a tour guide service. When they travel to a foreign city where they are not
familiar with, also having difficulty communicating with local people, they will desperately need
help from someone who has the same culture background and speak the same language. YoTraveler
will try to satisfy this kind of customer needs, providing a tour guide with the same culture
background with our customer and also familiar with the foreign city. Trying to give travelers a trip
that is most suitable for them.
•Where are the customers located?
There are two groups of customers – travelers and tour guides. There is no limit of where traveler
located since the main target travelers are leisure international travelers who need help to overcome
the language barriers. Thus, travelers can come from all over the world. YoTraveler’s tour guides
will be located in New York City in the beginning, however, during the expansion time they will be
in different cities and countries. In the current market, travelers are dissatisfied with inflexible trip

plan options that conventional traveling agencies provide and ignorance of culture barriers.
Currently, most travel agencies or other peer-to-peer tour guide services only provide limited options
of traveling plan. Travelers have to choose one from all of the options and travel with a tour group. If
travelers need more customized trip schedule and private tour guide, they will be charged expensive
traveling service fee for customized tour service. There is no such traveling service that is affordable
for most travelers. Also, when travelers visit new countries, some travelers need to adapt to the new
environments and local cultures. Thus, travelers may need tour guides with similar cultural
background, which will make it easier to communicate and understand the local culture. In the
current market, traditional travel agencies provide local tour guides who have limited knowledge of
travelers’ cultures or local cultures.
G. Estimated Market Share and Sales:
YoTraveler aims to provide travelers with customized and free trip plans and provide tour guide with
two culture backgrounds. Customized trip plans will help travelers save time and money. Travelers
do not need to search traveling attractions by themselves or find expensive travel agencies to make a
plan for them. They just need to input the name of the cities they will visit and check the attractions
and transportation methods we provide / input by themselves if not show in the list, YoTraveler will
make precise trip plans according to their requirements. Also,
YoTraveler helps traveler have more comfortable trip by offering them tour guides with similar
cultural background to them. Tour guide with similar cultural background will better understand
travelers’ needs and wants and will make traveler feel as comfortable as being at home. These are
the fundamental value added by our services – having an easy, safe, comfortable and affordable trip.
Leisure international travelers could be the major user of our service in future years. The reason why
leisure international travelers are major purchaser is that they need tour guides to help them translate
the local language and understand the local culture. Leisure travelers will have needs to save money
and meet more people. Most business travelers are not focusing on saving money and probably they
can understand the local language, which means they have no needs to use our service. Also, people
who have multi-cultural backgrounds, such as temporary residents and immigrants, may our major

tour guide source. Some of temporary residents are unemployed due to their status, so being a tour
guide will be an opportunity to earn money for these individuals.
Section IV
THE ECONOMICS OF THE BUSINESS
A. Revenue Drivers and Profit Margins:
User service fee:
YoTravler has two revenue drivers. One is 6% user service fee collected from travelers, which
account for 50% of our total revenue. This service fee will cover the cost of credit card transaction
fee, web maintenance and advertising. The price will be fixed for the beginning five years, and may
be adjusted depending on market competition and customer feedbacks. Service fee will be refundable
if travelers cancel their booking.
Tour guide service fee:
YoTraveler will charge 6% service fee from tour guide at the time of booking. This is the other 50%
of YoTraveler’s revenue. This will also remain fixed, and is balanced with the user service fee. This
service fee will cover the operating expenses. In order to be transparent, users’ and tour guides’
payout will be revealed in billing lists.
Example:
Item: A three-day tour in New York with travelers. The estimate time in the trip is 20 hours/
customer. Tour guide service fee will be $10/hour /customer. Thus, the total tour guide expenses for
the trip will be: (2 customers) x (20 hours/customer) x ($10/hour /customer) = $400
YoTraveler’s User service fee: $400 x 6% user service fee= $24
YoTraveler’s tour guide service fee: $400 x 6% tour guide service fee = $24
YoTraveler’s total collected fee: $24 + $24 =$48

Gross Margins:
YoTraveler estimated that the average number of customer for each trip is 2, and average traveling
hours for each customer is 20 hours. Based on the calculation above, YoTraveler’s estimated total
revenue per transaction will be $48, which means YoTraveler’s selling price will be $48 per
transaction. Variable cost per transaction consisted of credit card transaction fee and IT cost. Credit
card transaction fee will be 3% of total tour guide expense, which will be $12.5 per transaction. IT
cost is $0.5 for each transaction. Therefore, YoTraveler’s gross margin will be 73.96%. A detailed
calculation for gross margin is shown in Figure below.
If we assume the annual transaction is 1000
Gross Margin
Annual transactions 10,000
Annual Revenues ($48 x 10, 000)= $480,000
Variable Costs
Credit Card Transaction Fee
IT Cost
(3% x $400 x10, 000) = 120,000
($0.5 x 10,000) = 5,000
Total Variable Cost $12, 5000
Gross Margin ($480,000 – $125, 000)= $355,000
Percent 73.96%
C. Fixed and Variable Costs:

Yotraveler’s fixed costs and variable costs are listed in Figure 1 and 2. Since Yotraveler is a website
that provide travelling service, fixed costs are mainly consisted of salaries, rent, marketing and GA
expenses. The fixed cost for first year is shown in the figure below.
Figure 1
Fixed Costs Amount/year Description
Marketing &
Advertising
$50,000 Social media marketing campaign and Google ads
marketing
Rent $37,500 1290 (sq. ft.) 3125 per month in Beijing
Salary $360,000 Technical staff for website maintenance and upgrade
Legal $10,000 Legal counsel
Insurance $600 Commercial general liability insurance
Utilities $5,000 Internet, electricity, water
Web Maintenance $8,000
Office Supply $20,000 Office supply for daily operation
Total $491,100
Figure 2
Variable costs Per transaction Description
Credit Card
Transaction
$12.00 3% transactional fee with an average transaction cost of
$400

IT Costs $0.50 Average cost per transaction will utilize cloud service from
companies like Amazon, Google ore Microsoft. Price
quotes from AWS
Total $12.50
For variable costs, there will be a 3% transactional fee required by Credit Card Company. The cloud
service provided by companies like Amazon, Google and Microsoft has turned the IT costs from
fixed costs into variable costs. Because instead of purchasing hardware and building their own
infrastructure, companies can rent cloud space and storage resources, and it can be scaled
dynamically based upon usage. This feature helps to eliminate the redundancy and complexity of
managing one’s own infrastructure, increase the cost efficiency of a business. Furthermore, system
administration and repair are also included in the cloud service.
D. Operating Leverage and its Implications:
At the beginning period, we will try to minimize fixed costs such as IT hardware and office expense
until the business become more financially stable. Large fixed costs will be reduced by utilizing
cloud-based service. Renting cloud space from companies like Amazon, Google or Microsoft allows
Yotraveler to scale computing resources dynamically according to usage. A cloud-based solution is
more flexible and cost efficient compare to the traditional solution (buy hadwares, servers and build
one’s own infrastructure), it reduces the startup cost at the beginning period, which decreases the
time to reach break-even point. Yotraveler chose to hire their own technical staff instead of
outsourcing to other company. Although the higher labor cost will increase the operating leverage,
we believe it is important to have complete control over designing and development of the website.
Yotraveler can be considered as a company with medium leverage, it’s less risky than those
companies who host all of their infrastructures. Potential investors will assess companies based on
their financial positions. However, in the first period, the fixed costs will still be much higher than
variable costs, making Yotraveler a risky venture in the short run.
Startup cost

Type Cost
Website set up $200
Space renovation $5,000
Office Equipment $20,000
Rent Deposit $3125
Total 28,325
F. Overall Economic Model:
YoTraveler’s economic model is a low risk model. The only revenue driver is customer service fee.
Unlike other high-risk peer-to-peer companies, YoTraveler does not plan to use the cash flow from
customers to invest. YoTraveler will try to keep fixed cost low in order to maximize the profit.
Revenue growth depends on customer growing rate, which is not stable due to market competition
and overall economic environment. YoTraveler’s primary variable cost is credit card transaction fee.
The variable cost is already pretty low compared to companies in other industries. Therefore, the
only method to increase net income is to reduce fixed cost. YoTraveler will use a cloud based hosting
platform to eliminate cost of server and IT hardware. Also, YoTraveler plan to rent a small office in
Beijing to cut down the rental. Overall, YoTraveler’s economic model is relatively stable and
attractive to investors because of low variable and fix cost, high growing potential, and high gross
margin rate.
G． Break-Even Chart and Calculation
The design of website and technology development of YoTraveler will take around 2 month.
YoTraveler will commence operation around May 2016. YoTraveler’s strategy is to outsource
technology development and centered on marketing to reach the break-even point in October 2017,

the twenty-second month of operation. Revenue n the break-even point is 64,869 with 1351
transactions.
Fixed costs such as salary and advertising cost will increase based on revenue growth rate. The
breakeven point is relatively difficult to attain in a short of period for a start-up company due to lack
of brand awareness. However, our revenue is expected to grow as traveling market grows. Monthly
transaction growth rate is expected to be 15% in year one. The second year quarterly growth rate is
estimated to be 40%, and the third year annual growth rate will be 120%. If the venture falls short of
sales projection, YoTraveler will reduce the rental cost by closing offices because YoTraveler is a
web based company and shutting down office in a short period will not influence the sales a lot.
H. Profit Durability
If our services are up to par as they always will be we will see a steady stream of income coming. We
will see the most revenue around holiday times and school breaks or extra long weekends. The
company may see a decline in revenue when the temperature also makes a decline, as more people
tend to travel in the summer.
Section V
Marketing Plan
A. Overall Marketing Strategy:
Like other peer-to-peer companies, the key to success for YoTraveler is to attract users.
However, it is money- consuming for a start up company to achieve brand awareness worldwide.
Also, it is almost impossible for young graduates to operate multi-national company. With
limited financial and human resources, YoTraveler will focus on New York and Beijing at
beginning and expand to other big cities as the company grows. YoTraveler’s market segments
are international leisure travelers because they are the major group who need help to overcome
the language barriers. YoTraveler’s initial tour guides will mainly come from international
students and expatriates because of their multi-culture backgrounds and legal status.

In order to attract target customers, YoTraveler will use Internet marketing and digital marketing.
There are two main reasons to use Internet and digital marketing. First reason is that YoTraveler
is an online platform, so most of our target audiences are Internet users. Focusing on Internet and
digital marketing is more efficient. Also, Internet and digital marketing is relatively cheaper than
conventional marketing tactics. Considering limited makarting budget, Internet and digital
marketing is most feasible market tactic for YoTraveler. YoTraveler plans to advertise on social
media platforms such as Facebook and Weibo. Also, YoTraveler will use search engine
optimization tactic, such as Google Adwords, to increase traffic to our site. As the company
developing, YoTraveler will increase advertsing budget and will advertise on YouTube and
Youku.com to attract more customers.
B. Pricing
YoTraveler will set the price of tour guide service to protect travelers. Currently, the average
wage of U.S. tour guide is $11.11 per hour. Since most of YoTraveler’s tour guides are part time
and not professional, YoTraveler’s tour guide service fee is set to be $10 per hour/customer.
Besides service fee, tour guides can also earn tips from travelers. In order to calculate the total
service fee needed to pay to tour guides, travelers need to input the number of days they will
travel and the number of people.
YoTraveler’s major competitor Vayable collects its 15% service fee all from tour guides. Unlike
Vayable, YoTraveler’s pricing strategy is similar to Airbnb’s: Airbnb charges charges 3% from
hosts and 6%-12% from buyers. YoTraveler will charge 5% from travelers and 5% from tour
guides, which is around 10% on every transaction on its site. Comparing to Vayable, YoTraveler
decreases the service fee from tour guides to attract more tour guides because good tour guide is
one of our core competencies. Although charging more than Vayable from travelers, YoTraveler
will attract travelers and maintain profits by providing better service such as trip making service
and tour guides with similar culture backgrounds.

C. The Selling Cycle
Customer experience is another critical issue for YoTraveler. In order to provide customer more
convenient service, YoTraveler will create a simple and straightforward instructional video.
Users can click “how to use YoTraveler” or “how to be a tour guide” to open the video. The
instructional video will show customers step by step of how to register and find matching tour
guides.
Travelers are required to provide the following information: the number of travelers, trip’s
beginning date and end date, the start point of trip, attractions that they planed to go,
recommended attractions, personal preference such as movie, music, art, sports, and food, budget
range per day, and other requests. Tour guides need to provide their bank account, languages
they can speak, preferred working period, cities they live, attractions they are familiar with,
transportations they can provide, and their personal preference. YoTraveler will make a trip plan
and match a tour guide based on the information they provide.
D. Sales Tactics
At beginning, YoTraveler will invite some international students to register as initial tour guides in
the site. International students have at least two culture backgrounds and familiar with the local
cities. Also, International students are more reliable because most international students accepted
high education and do not have financial problems. Thirdly, international students are approachable
for the founding entrepreneurs as they are all students now. In the aspect of travelers, YoTraveler will
try to invite friends and their families to try our service because hey can provide useful feedbacks and
YoTraveler can improve its service before launching. After obtaining initial customers, YoTraveler
will try to attract more customers by advertising and promotion.

E. Advertising and Sales Promotion
YoTraveler needs to reach the guides and the tourists when the service is launched. In the two month,
Yotraveler will reach a good amount of guides before they start reaching out to the customers. This is
to ensure that we find a reasonable amount of guides from different backgrounds before our
customers start using our services. YoTraveler will reach at least 10 professional tour guides. Also,
we will invite 30 international students from universities in New York and Beijing. New York
University and Beijing University are good places to start.
As soon as we have reached our goal of getting initial tour guides we will move on to reaching more
tour guides and potential customers. This will work through Internet and digital marketing. Firstly,
we will set up Yotraveler pages on social media sites such as Facebook, Instagram, Weibo, and
Wechat. This will create word of mouth advertising for us. Next, YoTraveler will initiate campaigns
and activities online, which will be promoted officially by Facebook and Weibo. Further we will get
short advertisement on YouTube, especially to those videos that interest travelers, and New York
City related videos. This will cost us approximately 30 cents per view so it will be very variable and
hard to estimate. Finally, for both tour guides and customers, YoTraveler is attempting to create
advertisement at airports such as Newark, and J.F.K that are main sources of international travel
around New York City.
F. Publicity
Yotraveler will make as much positive publicity as possible through our social media outlets on
Facebook and Instagram. On Instagram, YoTraveler will post our customers own pictures showing
their good experiences if they have used the hash tag “#IamYoTraveler”. We want to show that our
customers are very important to us, and this is a good way of showing it.
YoTraveler will create news or make the news by our unique approach of “matching” people in a
new location with the intention of the guide helping a tourist out. Hopefully people catch the fact that
we are creating easy jobs for people that are interested in helping others out.
G. Customer Service
Customers’ feedback will be an important source of advice for Yotraveler to make improvement.
Yotraveler will build an organized customer service system to make sure all the customers can get
instant assistance and communicate efficiently when they use our service.

Yotraveler’s customer services are provided through all different channels (e.g.phone call, email and
online chat) The customer service operation will be divided into two groups---technical support and
guest service. If a customer is having a technical issue, then he or she will be connected to a technical
support agent who will be available 24 hours/day, 365 days/year. The technical support agent will
help the customer go through the process of using our website with detailed explanation. If the
customer is having other issues, then he or she will be connected to a guest service consultant who is
also available 24 hours/day, 365 days/year. Guest service consultant usually will take care of issues
after the transaction has been made. For example, billing, payments, post-travel ratings, personal
complains and communication issue with tour guide.
After any interaction with technical support agent or guest service consultant, the customer will
receive a customer service satisfaction survey. To make the survey more effective, most criteria are
rated from 1-5 stars, the open answer questions will be optional. All the customer feedback will be
collected and organized because Yotraveler wants to make improvement on customer service through
active listening.
H. Warranty
To resolve the liability issue between travelers and tour guide, Yotraveler will hold the payment in
each transaction until the trip is over, travelers and tour guide rate each other. If both sides are
satisfied with each other, then Yotraveler will complete the transaction by sending the money to the
tour guide. The salary of tour guide is set based on minimum wage requirements, if the customers
want to pay more, tips will be voluntarily. If the traveler is not satisfied with the service, Yotraveler
will first try to mediate the conflict and make a settlement, usually by providing a discount. If the
customer remains unsatisfied, then they will be able to get their money back in 100%. If a user cancel
a booking, Yotraveler will issue a refund with the total amount minus the 5% service fee.
I. Distribution
Since YoTraveler provide service online, YoTraveler does not have distribution part.
SECTION VI
A. Development Status and Tasks

Yotraveler will require the development of both the website and a mobile application.
Development of these services will begin in the early period of 2016. The specific schedule
is shown in section 9. Once the first round of seed financing is finished, Yoraveler will begin
to work on the development and beta testing of the website. Full development and testing of
both platforms will take place within the third quarter of the year.
Yotraveler will build its online platform, using some of the best factors in other existing sites.
During beta testing, Yotraveler will improve the usability and favorability based on users’
feedback. In the launch period, Yotraveler will invest heavily on marketing and adverting,
trying to get cusomters engaged. Digital adverting on other social media platforms will be an
effective way of marketing, it will also compose a big part of the marketing cost,
B. Difficulties and Risks
Risks to Tour guides and Travelers
There is a potential risk when the travelers are not satisfied with the tour guide service, and it
will be hard to define whose responsibility it is. In order to resolve the liability issue between
travelers and tour guides, Yotraveler will hold the payment in each transaction until the trip is
over, travelers and tour guide rate each other. If both sides are satisfied with each other, then
Yotraveler will complete the transaction by sending the money to the tour guide. If the traveler is
not satisfied with the service, Yotraveler will first try to mediate the conflict and make a
settlement, usually by providing a discount, meanwhile the tour guide will also receive penalty,
their service fee will get deducted accordingly.
In order to protect customers’ safety, Yotraveler will run a highly intelligent screening process
trying to keep unsavory characters from serving as a tour guide. This screening process will
include background checks and verification of public profiles.
C. Product Improvement and New Product
Ongoing development will always be an important task, Yotraveler will also build an
organized customer service system to make sure all the customers can get instant
assistance and communicate efficiently. Yotraveler will also try to improve customer
experience through active hearing, making improvement based on customers feedback
collected from online survey.
D. Costs
A combined total of $240,000 in salary costs will be paid to two in-house programmers, their
main tasks are coding and developing the web and mobile platform of Yotraveler. Their

compensation can be increased accordingly to ensure the quality of their work meets the
requirements of the business
C. Product Improvement and New Product
Ongoing development will always be an important task, Yotraveler will also build an
organized customer service system to make sure all the customers can get instant
assistance and communicate efficiently. Yotraveler will also try to improve customer
experience through active hearing, making improvement based on customers feedback
collected from online survey.
D. Costs
A combined total of $240,000 in salary costs will be paid to two in-house programmers, their
main tasks are coding and developing the web and mobile platform of Yotraveler. Their
compensation can be increased accordingly to ensure the quality of their work meets the
requirements of the business.
E. Proprietary Issues
Yotraveler will seek to put in place protections for its intellectual property. Trademarks will
be used to protect words, names, and logos that distinguish Yotraveler from competitors.
Yotraveler will seek legal way to protect its intellectual property, Trademarks will be used to
protect words, names, and logos that distinguish Yotraveler from competitors.
In order to safeguard all of its intellectual property, for example, the unique back-end algorithm that
match up travelers with tour guides based on their profile and prefenreces. All the employee who has
knowledge of the algorithm will sign a confidential agreement
SECTION VII
A. Operations Model & Cycle
Yotravelers operations will mainly be focused on the acquisition of customers and tourguides, and
webite development. We do not have much more in the operations since Yotraveler is an online
platform. We need to make sure our website is coded well, and that the money transactions are
secured. We believe it is hard for us to get bottlenecks because of our online approach. However, it
may be hard to find enough tourguides in the beginning, so this may slowdown our initial process.

We have to ensure that the website has backups. This means that if it crashes or if something
unexpected happens that we have a plan to reboot and get the website running again. We are still
discussing possible ideas for this.
B. Operations Strategy
Yotraveler is a service platform, and with our approach we are trying to keep everything internal
except a few things. We will not hire any sales staff but will try and do all the sales internally to
reduce cost.
Further, our social media pages on different platform will continue to promote our services.
Yotraveler sees its online platform as a strategic asset. Our developers will build, operate and
constantly improve/update the online platform to remain competitive. The website will allow service
providers (hosts) to create and post listings of their service offerings and travelers will have the
opportunity to buy and complete transactions through a payment portal.
Yotraveler will design its web site to be easy to navigate. The design will also take into account the
ease of setting up tour guide profiles. This is important to make the experience good for all of our
users. We will also provide a 24/7-customer service through messaging board, live chat, or a toll
number if any problems occur.
Finally, Yotraveler will have all the information tracked about our customers including,
demographics, time spent on the site, clicks, age etc. This will help us in improving the site annually
so that we can keep up with the competition, and potentially get ahead.
C. Geographic Location
We are planning to put our headquarters in upstate New York due to the close proximity to New
York City, which is our first target city. This is because it is a big city with a lot of traveling
annually.
D. Facilities and Equipment
We are planning to find a leasable office space somewhere in upstate New York, where we can
manage operations, and maintain the website. Not a lot of space is required so this wont be a huge
expense.
E. Legal Considerations

Yotraveler will have buy legal rights to operate in the state of New York. We also need to consider
safety issues, when dealing with our tour guides. This wont be an issue because we will ensure that
our background checks will go through the government.
We will set up trademarks for the names, logos, and words. This is so that our competitors cant copy
our ideas. This ensures that we stay in level or a head of them.
SECTION VIII:
MANAGEMENT TEAM
A. Organization
All Yotraveler’s founders will also be serving on the business executive management team. The
Chief Marketing Officer, Chief Financial Officer and Chief Information Officer will all report
directly to the CEO. In addition, Yotraveler will hire two programmer working on the website
development who will directly report to the Chief Information Officer. A detailed organizational
chart outlining key management positions is showed in Figure 11
Figure 11
Key Management Roles
Chief Executive Officer
The CEO as the highest ranking executive, will Oversee and deliver the company's performance. The
main responsibilities of the CEO include making important corporate decisions, providing the proper
resources, managing overall operations and developing high-level strategies, The CEO will also
retain a seat on the Board of Directors, acting as a point of communication between board of
directors and the corporate operations.
Chief Marketing Officer
The Chief Marketing Officer of Yotraveler will be responsible for developing overall marketing
strategy, conducting marketing research, building company’s brand through channels like social
media or magazines. Since the traditional role of CMO is changing so Yotraveler also decide to
broaden CMO’s responsibilities. The CMO of Yotraveler will double as Chief Customer Officer,

managing Yotraveler’s customer service operation, managing the relationship between corporation
and customer and maximize customer’s satisfaction with our service.
Chief Financial Officer
The CFO’s responsibilities include developing financial and tax strategies, oversee Yotraveler’s
financial activities and keep records, reporting financial results to the board of directors, so CFO
will also retain a seat on the Board of Directors. The main duties involve developing the optimal
capital structure, managing the investments, profits and costs.
Chief Information Officer
The CIO will be responsible for the development, management and the following maintenance of
Yotraveler’s web platform and mobile application. There will be two computer programmers
working on the specific website development and report directly to CIO.
Past Management Team Interactions
All the members of Yotraveler’s management team has worked together many times and made great
progress in the past. This level of familiarly will provide the team with a certain level of trust and
tacit cooperation. The management has build up certain routines regarding team work and decision
making, helped the team avoid many pitfalls of a startup team
B. Key Management Personnel
Chief Executive Officer-- Nicholas Seelig
Nicholas Seelig holds a bachelor’s degree of Finance from Syracuse University. He has taken many
courses related to corporation management such as Corporate Finance, Management Information
Systems, Principles of Marketing, Strategic Management, Managerial Accounting and Financial
Accounting. In addition to professional knowledge, Nick also has accumulated sufficient working
experience in the relevant fields. Last summer he worked in Eagle Rock Management being part of
a 5-member team responsible for assessing, acquiring and managing multifamily properties in the
Northeast for owner operator with portfolio value in excess of $800 million.Nick’s professional
knowledge and previous working experience will serve him well as he assumes the role of Chief
Executive Officer
Chief Marketing Officer – Liangliang Weng

Liangliang Weng possesses a Bachler’s degree of Supply Chain Management & Entrepreneurship
from Whitman School of Management in Syracuse University. In additional to her professional
knowledge learned in school, she also has accumulated enough communication and managing skills
during her past working experience. This year she became the cofounder and COO of Asia &
American Group LLC, Helped clients write business proposal and also responsible for the promotion
and marketing in China. In Yotraveler she will be the Chief Marketing Officer working on promotion
and marketing towards international travelers in China and US. Liangliang’s previous working
experience will serve her well as she assumes the role of Chief Marketing Officer
Chief Financial Officer – Juuso Pasanen
Juuso Pasanen possesses a Bachler’s degree of Finance from Whitman School of Management in
Syracuse University. Besides the professional knowledge learned from Investments and financial
management class in Syracuse University, he also has accumulated certain level of management
skills during his past working and leadership experience. In 2013 he worked as a live promoter
competing against 50 other callers a day placing in top 10 every single day. As a team athlete aiming
for a career in corporate finance, he worked with a team to develop an atmosphere of professionalism
and team unity. Juuso’s previous working experience will serve him well as he assumes the role of
Chief Marketing Officer.
Chief Information Officer – Yi Zhang
.
Yi Zhang has Bachler’s degrees of Information science and technology and Supply Chain
Management from Syracuse University. Her professional knowledge and past working experience
has provided her with both management skills and technical skills. Yi got her first internship in
Shanghai, worked in venture capital called Meridian Capital as a data analysis. Last summer, Yi
worked in Columbia Shopping Center as an IT consultant for three months. Yi is also capable of
applying her knowledge for real world usage. She has did several real world projects with her
classmates and successfully helped the sponsors to save money on inventory and increased
profitability. Yi’s previous working experience will serve her well as she assumes the role of Chief
Information Officer
C. Management Compensation and Ownership

The executive team does not expect any salary or compensation until year three, when the company
reach the break-even point. Venture capital incestors will hold 10% equity as outlined below. The
four founding entrepreneurs have decided to divide up the remaining 90% equally, because everyone
basically has the same level of responsibility and roles within the organization. Every member of the
executive team will get 22.5% of the equity.
Pre offered ownership
founders Equity %
Nicholas Seelig 22.5%
Liangliang Weng 22.5%
Juuso Pasanen 22.5%
Yi Zhang 22.5%
Capital venture 10%
Total 100%
D. Other Current Investors:
Although there are no other current investors yet, YoTraveler anticipates raising $800,000 in venture
capital funding according to baseline risk assessment and by analyzing the data from competitors.
One of YoTraveler’s competitors, Vayable, raised $2 million through Y Cominator in 2012. Airbnb
raised $112 million at a valuation of $1.3 billion. Since there is more similar service in the market
than before, YoTraveler’s market share will be less than Vayable, and the fund that YoTraveler can
raise will be around $800,000.
E. Employment and Other Agreements, Stock Options and Bonus Plans:
There are no employees in YoTraveler. YoTraveler provides peer-to-peer tour guide service, in
which tour guides are also YoTraveler’s customers. There are no stock plans for the management

team and employees now. YoTraveler intends to create tour guide recognition program by rewarding
well-performed tour guides with performance bonus.
F. Board of Directors or Board and/or Board of Advisors:
YoTraveler will form a Board of Directors consisted of two inside directors and three independent
directors. The inside directors are YoTraveler’s CEO and CFO, and three external directors are
venture investor, technology talent, and entrepreneur with rich experience in tourism. YoTraveler
selects board directors based on their reputation, professional skills and industry knowledge. Those
board directors with various backgrounds will help YoTraveler in financial, technical, and
operational aspects. YoTraveler will hold board meetings once a week in the early stage. YoTraveler
will compensate inside directors and venture investors with the equity stake of 5% to 10% for they
serving on the board. Issues of these stakes will be specified in engagement agreement.
Proposed Independent Board Directors
Venture Investor: Xiaoping Xu
Xiaoping Xu is the founder of ZhenFund, which is one of the biggest venture capital institutes in
China. ZhenFund has invested in several public technology companies including Jiayuan.com
International Ltd. and JMEI. Xiaoping will bring venture capitals and valuable relationships to
YoTraveler.
Software developer: Alfred Sun
Alfred is the fonder and CEO of Weimob. Alfred achieved computer science master degree in
Beijing Institute of Technolgy. He served as technical director in a business consulting website,
Huxin.com. Alfred also was the software developer of Momo and Irearch.com. Alfred will bring
professional technology knowledge to YoTraveler.
Expert in Tourism: Tiger Qu
Tiger is the CEO of Queen Travel Representations in New York. He has a 3-year experience with
travel-related works. Tiger will bring YoTraveler with plenty of knowledge regarding tourism.
G. Other Shareholders, Rights, and Restrictions:
YoTraveler does not have any additional shareholder, right, and restrictions.
H. Supporting Professional Advisors and Services:

Legal Consultant: Douglas J. Gorman
Douglas is the cofounder of Crisafulli Gorman, PC. Douglas assists start-up companies and emerging
business with formation, choice of entity, and structuring and financing. He has rich experience in
commercial practice including drafting and negotiating commercial contracts, structuring different
types of assets. Douglas will serve as YoTraveler’s legal consultant to solve legal related issues.
Accounting Advisor: Xiaohua Li
Xiaohua is the CEO of Dalian Dianjin Accounting LLC. She has 22 working experience in
accounting and auditing. Xiaohua used to work for several transnational corporations such as
Trufocus Corporation and Faxitron Bioptics LLC. Xiaohua will serve as accounting advisor in
YoTraveler to deal with accounting-related matters.
Advertising: Areil Zhang
Areil achieved her master degree of advertising in Chinese University of Hongkong. She is currently
working for Optimum Media Direction (OMD), a global communication agency founded in New
York in 1996. Areil has 5-year working experience and has participated in the marketing and
advertising plans for Johnson & Johnson, Siemens, and FedEx. Areil will help YoTraveler make
marketing and advertising strategy.
IT Consulting: Alfred Sun (one of the independent board director)
Banking: Silicon Valley Bank (SVB)
Silicon Valley Bank is an international private bank that has helped numerous innovative companies
to move ideas forward. SVB provides a full range of financial service including investment solution,
valuation and research, and funds management.
SECTION IX:
OVERALL SCHEDULE
A detailed operational schedule is outlined in Figure 9.
All the tasks will be operated in certain order. At the beginning period, the most important task for us
wound be meeting with investors and obtaining the critical financing. With sufficient financial

resource Yotraveler will be able to start the following tasks like hiring technology staff and leasing
office space. If the initial funding can’t be obtained by the time scheduled, then all the following
tasks will be delayed. However, we’ve considered that possibility and left enough time for designing
and developing of the website, we will be able to correct that schedule slippage and catch up with the
progress.
After hiring the IT staff, developing and designing the website will be the primary focus for
Yotraveler. Once the first development and beta testing get completed, Yotraveler will work closely
with the developers, to make adjustments according to rate of flow. After launching of the website
and mobile application, Yotraveler will continue to make improvements based on customers’
feedback.
SECTION X:
CRITICAL RISKS, PROBLEMS AND ASSUMPTIONS
YoTraveler identifies six areas of risk and developed the respective mitigation strategies.
Sales growth
Yotraveler’s sales revenue is dependent upon the amount of customers and price of each transaction.
It requires a certain level of growth rate on order to cover up the start-up costs and reach the break-
even point. If Yotraveler fails to meet the sales projections, there will be a risk of not being able to
pay salaries of essential developers and also have to delay the payment to investors. If the average
transaction price is lower than predicted, then Yotraveler’s sales revenue will also get affected. In
order to avoid those kinds of risks, Yotraveler will spend most of money on marketing during the
launch period, try to attract more potential customers. On the other hands, Yotraveler will promote
more package offerings to increase the average price per transaction.
Quality of service

Yotraveler’s success is also dependent upon customer’s loyalty, therefore it is important to provide
high quality service to increase customer satisfaction and customer engagement. However, there is
still risk that customers can purchase a low quality tour guide service through Yotraveler. This can
leave a bad impression about the company and ultimately hurt company’s sales. In order to avoid
such risk, Yotravler will add more procedures when screen the tour guides, including background
checking. On the other hand, the quality of customer service e will also be important, Yotraveler’s
will closely monitor customers’ feedback, making adjustments according to those feedback,
incorporate rating system to make sure every customer’s payment is secured.
Economy
The recession during 2009 has negatively affected the travel industry. Although the US economy
has been on its way to strong recovery. The projection can still be too optimistic, there is still risk
that travel industry can be affected by another economic downturn, because during economic
recession customers usually will cut spending on traveling. Yotraveler will pay close attention to
the economic landscape especially prior to launching. The condition of economy will become less
of a concern after Yotraveler reach the break-even point and start to make profit. In the case of large-
scale economic downturn in US, Yotraveler will try to explore more foreign markets and shift its
focus to those markets.
Network Effects
The most basic assumption is that YoTraveler will attract enough bilingual tour guides. YoTraveler
will not be able to survive if this assumption cannot be come true. There are two risks associate with
this assumption. One is that people who intend to be tour guides will use other similar website as a
platform instead of using YoTraveler; the other one is that people who register to be tour guides are
not bilingual or multi-language speaker.

In order to reduce risk, YoTraveler will carry out three plans. Firstly, YoTravler will not charge any
registering fee to lower the entry barrier for tour guides. Also, at first two years, YoTraveler will
recruit professional tour guides and international students as original tour guides since those people
can fluently speak at least two languages. Finally, YoTraveler will establish background-checking
system to ensure that all new tour guides have at least two culture backgrounds.
Platform Development
Another basic assumption is that YoTraveler will be able to obtain an attractive and simple webpage
hosted on a secure back-end. This assumption is critical because it is the key factor of company's
viability. The risk associated with this assumption is that YoTraveler may not be able to constantly
retain the attraction and security. In order to minimize the risk, YoTraveler initially will offer a
premium salary some top-notch tech experts who have passion on company’s development. When
YoTraveler achieve enough customers, YoTraveler will enhance the information security system by
hiring more security experts.
Entry into Travel Market
The third assumption is that YoTraveler will successfully have a share in its target market. At the
early stage, YoTraveler will target New York City and Beijing as main market. However, these two
cities are the most competitive areas where many travel agencies and tour guide service companies
exist. If YoTraveler are not able to stand out among those competitors, YoTraveler will change the
strategy to focus on more niche market such as college visiting.
SECTION XI:
Financial Plan
Financial Highlights
Following the successful launch of Localfy’s platform, the company will focus on nurturing its
growing community of hosts and travelers, responding quickly to problems that arise and proactively
enhancing the site to meet future needs of consumers. Additionally, Localfy will safeguard all of its

intellectual property, especially trade secrets around its unique back-end algorithm that suggests
travel experiences for users based on a user’s traffic and past bookings on the site. Trade secrets will
be backed up by signed confidentiality agreements with every employee who has knowledge of the
algorithm.
Year 1
Year one is a period of time to develop YoTraveler’s platform and attract initial customers. In the
first month, YoTraveler will spend $28,325 one-time start up cost for website up, space renovation,
office equipment and rent deposit, which will pull down the first year net income. The company will
start to depreciate the office equipment we purchased including the computers and furniture.
YoTraveler will use two month to prepare for launching the company and there will be no sales in
first two month. YoTraveler will suffer a loss of $292,374 in the first year, despite the total sales of
$229,449.
Year 2
Second year sales growth rate of 200% will stimulate YoTraveler to earn net income of $581,102,
which is a good signal for break even. YoTraveler estimate the growth rate based on the fact that
companies with similar business model grew incredibly: Airbnb has grown 750% during recent four
years. With the high annual growth rate, YoTraveler will be expected to break even in October 2017.
Year 3
The sales will reach $1,007,637 with the annual growth rate of 100%. YoTraveler will increase the
salary and rental as the net income consistently grow. The company will hire two additional staff and
rent a larger office. Also, YoTraveler will increase the advertising expenses to attract more
customers.
Year 4
The revenue is expected to continually grow in year 4 with growth rate of 90%. The total net income
in year four is estimated to be $757,271.
Year 5

The growth rate will tend to be steady and the net income will exceed $2 million in year 4.
Financial Assumptions:
The first year financial figure are according to the revenues estimations and cost figures (including
variable, fix and start-up cost) in Section 4. YoTraveler estimates the sales by estimating the number
of transactions and the average revenue per transaction.
The estimated sales will be: number of transactions * average revenue per transaction.
Based on marketing research, YoTraveler expected that the initial customer is 600 with the 2
travelers on average per transaction, so the number of transaction is 300 in month three. The number
of transaction for next period will be calculated by: #of transaction * growth rate.
Also, YoTraveler estimates that the average price per transaction is $400, in which YoTraveler
charges 12% as service fee, which is $48. Therefore, the average revenue per transaction is expected
to be $48. For example, there will be 300 transactions in the third month, the sales in third month will
be: 300 transaction x $48/transaction = $14,400
Cost of good sold is 3% credit card transaction fee for each transaction $0.5 IT cost/transaction (e.g.
cost of good sold = 3% average price/ transaction x number of transactions +$0.5 x number of
transactions)
YoTraveler will hire two programmers and one data analyst initially and the estimated salary will be
$120,000 per employee. Employees’ salaries are estimated to grow with the growth rate of net
income. YoTraveler will rent an office in Beijing and the rental for 1290 sq. ft. is $37,500. The
office rental and utilities will be higher as the company expands. The detailed information about web
maintenance, marketing and advertising and insurance are all in the fixed cost figure in Section 4.
YoTraveler will make first capital expenditure on office equipment consisting of computers and
furniture, which is estimated to be $20,000. The life of the office equipment will estimated to be 5
years, so its depreciation will be $4000. YoTraveler does not have interest expense since angel
investors will invest all of the capital. Corporate tax is 15% since YoTraveler will be formed in China
as a foreign invested company. According to Chinese tax regulation, the annual c-corporation general
business tax rate will be 15%.

The only liability is bills that have not been paid. There will be no cash dividends to be paid for the
first five years. Sales are estimated to increase with the growing rate accordingly: 200% in year two,
120% in year three, 100% in year four, and 90% in year five. Investment of $ $614,301 from angel
investor will be needed in year1. Full financial statements (including income statements, balance
sheet, and statements of cash flow) will be found in Appendix.
SECTION XII:
PROPOSED COMPANY OFFERING
A. DesiredFinancing
Yotraveler has a high potential to quickly grow the value of the company, but requires significant
upfront cost. Yotraveler anticipates that it will need $520,000 to cover all the necessary startup costs,
and also a 25% cash buffer to protect against unexpected expenses or delays in income.
Yotraveler is seeking to raise $520,000 from investors .This financing is being sought as a one-time
cash infusion at the outset of the business.
B. Offering
Yotraveler, which intends to market peer-to-peer tour guide service via an online social and mobile
platform, is offering a maximum of 20% shares of equity. The investor will
C. Capitalization:
All shares issued will conditionally be given the right of first refusal before an investor may attempt
to sell shares to an outside party. All shares have equal voting privileges. Post-offering disbursements
are outlined in Figures 22 below.
Figure 22
Post-Offering Ownership

Founders Equity %
Nicholas Seelig 22%
. Liangliang Weng 20%
Juuso Pasanen 19%
Yi Zhang 19%
Angel investor 20%
total 100%
D. Use of Funds:
The initial fund collected from angel investor will be used to cover the cost of designing and
developing online and platform, pay general and administrative expenses, and for general working
capital purposes. Since our projected revenue model is already conservative, we estimate that the
money from the offering will be sufficient to fund our operations without the need for additional
capital . Yotraveler’s operations for a period of approximately 12 months . The use of the offering
proceeds are listed in figure 2.
Figure 24
Sources of Funds Offering

Offering Proceeds $520,000
Total Sources of Funds $520,000
Use of Funds
Startup costs $28,325
Marketing $50,000
Salary (technical staff for site design and
$360,000
development)
Legal $10,000
Rent $37,500
Website maintenance $8,000
Utilities $5,000
Office supply and daily operation $20,000
Insurance $600
Total Use of Funds $519,425
E. Investors’ Return (Exit Strategy):
The investor will be able to sell their part of equity no sooner than end of year 5. They can will
harvest their returns along with the founding members upon the successful merger, sale, or IPO of the
venture during year five.Since Yotraveler’s business model is a natural complement to other big
company’s service, an acquisition by other big players like Priceline or Airbnb is most probable.

Reference
http://www.payscale.com/research/US/Job=Tour_Guide/Hourly_Rate
http://amigobulls.com/articles/airbnb-potential-ipo-candidate
http://clients1.ibisworld.com/search/default.aspx?st=travel
http://venturebeat.com/2014/06/19/uber-and-airbnbs-incredible-growth-in-4-charts/
Appendix
Break-evenanalysis
Income Statement Year 1
Income Statement Year 2-5

Balance sheet
Cash flow Year 1
Cash flow Year 2
Cash flow year 3-5
Travelers are required to provide the following information:
1. the number of travelers
2. trip’s beginning date and end date,
3. the start point of trip,
4. attractions that they planed to go, recommended attractions (show as tag format, when the
cursor move to the tag, it will show the basic information of the attractions),
5. personal preference (customer need to choose at most four option that we provided such as
movie, music, art, sports, food, nature)
6. budget range per day (under $50, $50 -$100, $100 - $200, $200+)
7. other requsts

Long Interview
2. Why I chose these people:
I thought that interviewing 2 people from different age groups and traveling frequency can get an
all around perspective of how our service is. Although they are from the same state I don’t think that
will matter because they are from different economic backgrounds.
3. Their reactions to our business idea:
Interviewee 1 thought the idea needed some tweaking in the payment area. Overall he felt that
YoTraveler is very useful to someone who is not aware of the area. His favorite part about
YoTraveler was the reward program for the employee of the home country.
Interviewee 2 hated the idea because he felt that you should want to explore the area on your own.
He felt that the idea was cool but he would not use it because he would want to take matters into his
own hands.
4. Based on the interviews I think that we need to revise our payment method. Whether we want
something that will give us the most profit or what will be more convienent to our customer. From
interviewee #2 since he would like to travel alone we can implement a part-time travel guide for a
discounted rate.
Long Interview – Liangliang Weng
1. Demographics of 3 interviewee:
Interviewee1: Male data scientist in LA, 33 years old, travels around 3 times per year
Interviewee2: Johns Hopkins University graduate student majored in IT, female, 23 years old, travels
4-5 times per year Chinese
Interviewee3: Male accountant in Kunming, China, 25 years old, travels 3 -4 times per year.
Interviewee4: Male entrapeneur in NY, 52 years old and travels 5 times a year
Interviewee5:Male student in NY, 21 years old and travels twice a year
2. Why these people were chosen:

There are three reasons I chose them. Firstly, all of them like traveling and travels at least 3 time every
year, which means they are our target customers. Secondly, they are pretty young; their ages are
between 20 to 35 years old. We can assume that they are more willing to try new service. Thirdly, they
are from different places and have different jobs, so they may provide different suggestions according
to their needs and knowledge.
3. Their reactions to our business idea:
· Interviewee1 (the data scientist) likes our business model. However, he said he was lazy and he
felt there are too much troubles to make traveling plans. He recommended us to provide more
customized and humanized travel plans through data analyzing. After tourists decide the city they
want to visit, we will ask them to pick their tourist attractions, their preferred transportations, their
budget, and their preferred features such as romantic, adventure, and comfort. Finally, we will make
different travel plans and match tour guides for different tourists through data analyzing and
calculating. Overall, he thought that our business idea is very interesting and potential.
· Interviewee2 (IT graduate student) likes our overall business idea and “traveler-friendly” model.
However, she felt that we could add more features on our service. She suggested us to establish a
platform in our website for local residents to upload the pictures of local interesting places that are
not famous attraction yet. Our customers can click “like”, and we will add the most popular places of
interest into our attraction recommendation list. She said our business idea is very good overall.
· Interviewee3 (Accountant) likes our “tourist-friendly” tour guide service. However, he worried
about the security issue and felt that our security system is not thorough enough. He suggested that
we should select tour guides through county, federal, and multi-state criminal background checks.
Overall, he said he was willing to try our service if we solve the security issue.
4. Based on their reactions, we will add modify our classification system, add interests
recommendation feature in our website, and enhance our background checking system. Firstly, we
will hire some data scientists to design a serious of questions and make recommendation lists for
tourists. Tourists just need to pick their preferred one among all of the options. Secondly, in order to
develop more attractions, we will design a recommendation platform in which all of the local
residents can upload the pictures and descriptions of their favorite places of interests. Thirdly, we
will try to cooperate with government security department and develop a background checking
system that includes county, federal, and multi-state criminal background checks.

Long interview--- YI ZHANG
1. I interviewed two person who are both Chinese. One of them is a programmer who is currently
work in Japan, another one is a graduate student in Penn State University.
2. I chose these two person because they both are people who are currently live in foreign
countries, and they both had many experience in international travelling.
3. After I told them our business idea, they both showed interest in this form of travelling. They
like the idea that traveler can directly communicate with tour guide, which skip all the intermediaries
and make international travelling more affordable. They also like the feature of highly customized
tour, which give the traveler more freedom in travel planning. However, they are both concerned
about the quality of their tour guide. Since any local residents and register to be a tour guide, it would
be hard to know if their tour guide will be professional or familiar with the local attractions. Also
they want the whole process to be simple and easy, instead of bargaining with their tour guide, they
prefer a predetermined price set by the website. Overall, they like the general idea of our business
concept but still have some concern about the quality of tour guides.
4. Based on their reactions, there are several improvements we can make. In order to ensure the
quality of our service, we will develop a rating system so that tourists and tour guide can rate each
other when they finish their trip. There should be general background check for the tour guides. For
example, tour guides are required to provide more information when they register, or take some tests
to prove they have certain level of knowledge about local attractions.

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