DECA Business Plan

3. A. Company Information
TechTab is a kid-friendly tablet committed to combating illiteracy
for primary school children. The business is a general partnership
situated in Sydney often known as Australia’s new and emerging Silicon
Valley. Ultimately, TechTab’s primary goal is to stop Australia’s real and
arising threat of those in retirement being more literate than the young adults of
Australia.
B. Location/Business Opportunity
With Sydney emerging as a significant tech hub due to help primarily from
both the government (ASW) and the tech company Atlassian, Sydney is projected to
reach around 10,000 new jobs by 2036. Thus, because Sydney is emerging as a
major tech industry, TechTab can take advantage of the projected growth by placing
the headquarters right in Sydney, Australia. Furthermore, if Australia improves the
education of the youth, it will help improve the health, wellbeing and life prospects of
the children in Australia and ultimately benefit the future of the country as a whole.
Lastly, because of the emerging threat that the young generation will be less
knowledgeable than those in retirement, Australia requires a company like TechTab
because it can effectively solve the arising problem of illiteracy.
C. Mission Statement
“​TechTab will counter the ​growing epidemic​ of the ​younger generation
being more illiterate than ever before due to taking advantage of a key component of
the 21st century: ​Technology​.”
D. Product Generalization
TechTab plans to make a tablet that improves on kids literacy by making
reading games that are explicitly focused for the youth while taking advantage of a
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4. multiplayer feature for the child to help foster interpersonal connections between
multiple children. TechTab plans to introduce a game called ​Read It Out Loud​ which
uses speech to text conversion to measure the accuracy of the user saying the
words out loud and help them with their pronunciation which will further improve their
literacy skills. The multiplayer feature is a bonus to TechTab because it is useful for
those who have a competitive spirit and notes which one gets the most words
pronounced correctly. However, at the end of each game, it will give tips on how to
improve one's reading skills while noting which phrases the user had gotten wrong
when they said the text out loud. Unlike other tablets, TechTab will ​only be focused
on educational apps ​and not permit any video games that do not foster improving
the literacy rate in Australia. Ultimately, TechTab will be able to promote a learning
environment between peers as they further the essential skill of literacy which will
help them for the rest of their lives.
.
E. Business Model
Tech Tab bases its model on the ​Disruptive Innovation​ ​business model
which creates a different market, educational tech tablets, and is separated from the
more broad market of tablets in general.
F. Pricing
TechTab plans to sell the educational tablet at a rate of $52.50 by using a
similar, inexpensive module to that of the tablet Aakash Tablet which ​will cost
$30.50 to make and be sold for $52.50 when ordered in for each one. ​The tablets
will be sold at a lower price based on the bulk quantity order especially useful for
schools. TechTab understands that due to Australia being a country in development
they are not able to purchase expensive tablets resulting in TechTab being an
inexpensive and educational tablet to improve the literacy of Australia.
G. Predicted Loan
The CEO of TechTab(Zachary) plans to invest $80,000 with his own capital
and his families into TechTab. After that TechTab is requesting a $530,000 loan at
an​ 8 percent annual interest rate over five years​. The investment will be
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5. specifically aimed to pay off the expenses required to start up the company in
Sydney, Australia for operations like salaries, advertising and buying tablets.
A. Economic, Political and Legal Analysis of the Trading Country
1. Description of Australia’s Economic System
Known for its a free-market, capitalist economy with few restrictions on
imported goods, Australia is similar to that of the United States. Australia is also the
12th largest per capita at 67,458 USD with a growth of around 2.9 percent.
Additionally, Australia has not been affected by the Global Financial Crisis due to its
bank system and keeping the inflation rates low. The unemployment rate is around 5
percent, with an employment rate growth of about 2.5 percent. Australia is known as
the 6th most attractive country in the world for VC (​Global VC and PE Country
Attractiveness Index) and the 13th most innovative in 2013. Additionally, there is the
AusIndustry R&D Tax Incentive ​which helps foster innovation in Australia by
providing tax deduction if the company may have a rough year and acquires less
than AU$20M. This tax incentive will help spur more businesses and help keep them
afloat during their struggles proving how Australia provides a unique opportunity for
new companies in technology.
2. Describe the trading country’s governmental structure and stability, how the
government controls trade and private business
Based on a reports the Economic Intelligence Unit Australia ranked Australia
as one of the highest in terms of political stability. The governmental structure of
Australia is a federal parliamentary of constitutional monarchy. Australia is known as
a federation because the power is shared with the Commonwealth federal
government and the government of the six states. Australia’s government can be
separated into three categories: legislative, executive and judiciary. The legislative
government debates and votes on the new laws to be introduced in Australia. The
executive government enacts and upholds the laws established by the legislature.
Lastly, the judiciary government enforces the laws and manages both the legislative
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6. and executive government.
The government is controls trade in a free manner, for example, Australia has a free
trade agreement with the United States, and international trade places a big part of
Australian economy due to them being used to sourcing overseas. Australia
manages companies in a fair manner and ensures that trading is fair for both
businesses and consumers. Additionally, another benefit of having a business in
Australia is that they will interfere with monopolies to make sure that there is a fair
competition.
3. Provide a description of laws and agencies that affect businesses?
One of the laws that will affect businesses would be AUSFTA which
decreases tariffs and increased quotas for businesses. Australia Office of
Commercial and Business Affairs (CBA) is another example of how the Australian
government fosters the growth of international trade. The CBA will assist the
company by providing information about tariffs, assisting with foreign policy, and
granting intellectual property rights.
B. Trade area and cultural analysis
1. Geographic and demographic information, important customs and traditions, other
pertinent cultural information, competitive advantages and disadvantages of the
proposed product and/ or service
Australia is the world’s smallest continent but sixth largest country in the
world. Australia is located in the Southern Hemisphere, south of Asia and near
Indonesia. Australia is a developing nation and is known as the 12th largest
economy and sixth highest per-capita income. One important custom that Australia
has that’s unique to the country is Boxing Day Test Cricket which is relatable to
America’s Black Friday day shopping. Additionally, they have traditions that are
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7. similar to that of America, most commonly, Christmas which is celebrated during the
summer. One of the disadvantages of starting a company in Australia is how the
reporting requirements may be complex especially coming from the United States.
However, there is a massive advantage of TechTab being located in Australia due to
Sydney is a great place to start a tech company because of the gained assistance
from big Fortune 500 companies and the governmental plan that aims to make
Sydney the next Silicon Valley.
2. Analysis of the potential location—importance and requirements of each trade
document required by the U.S.A. and/or Canada and the country of choice
Australia is a market that is consistently expanding and continuing to develop
positively especially for the technological side of Australia. In fact, Australia obtained
$4.2 billion in merger and acquisitions among technology companies in only the year
2017 and the number increases in a constant manner proving how Australia is one of
the best places to start a technological company. Additionally, Australia is open to
international trading best illustrated by their Free Trade Agreement which will reduce
the barriers for US exports and ultimately is shown to be one of the best ways to
open a foreign market to the US exporters. This agreement will be beneficial for
TechTab because Australia is reducing the barrier for exports and ultimately
fostering a positive trade growth which will help the company prosper positively. For
exporting out of Australia, they will require numerous documents specifically bills of
lading, bills of exchange and insurance certificates. The bill of lading is a contract
between the freight carrier and the shipper, the bill of exchange binds one party to
pay a fixed price to the other party, and lastly, the insurance certificate is proof that
the business has insurance. For importing Australia requires the Informal Clearance
Document (ICD), an air waybill (AWB) or bill of lading (BLAD). The air waybill is a
receipt that is issued from the international airlines for goods, and the ICD is a
document for clearing goods in customs. Ultimately, even though Australia has these
different regulations in place, they are still seeking to improve a connection with the
US, shown best by their initiation of the Free Trade Agreement which will make it
easier to start TechTab and import from the US due to limited barriers in place.
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8. List the top three problems your product/service is addressing
1. There is a growing epidemic that the younger generation of Australia will be
more illiterate than the last two generations.
2. Education is not successful in Australia as proven by the educational system
not beneficial due to many students being illiterate and innumerate.
3. A downward spiral effect: The future generation is illiterate and is not able to
teach their children fundamental skills like reading or even numeracy like
mathematics. This will cause them the next generation to be illiterate continue
until something is done.
Who are the target customers? Describe the target market (age, income level,
population estimate, other specific demographic and economic information),
customer buying behavior related to the proposed product and/or service
TechTab’s target market is specifically the younger generation who TechTab
is trying to fix the national issue of illiteracy. The target market starts from around six
years old to eighteen years old.
Six years old is the average for
when kids start to read.
Additionally, TechTab's target
market goes up to eighteen years
old because the illiteracy
epidemic has negatively impacted
some high schoolers, so they
have never learned proper
reading skills which justifies TechTab’s decision to go all the way up to high school.
The population estimate of the target market is around 4.8 million because that is the
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9. number of kids 6 to 18 living in Australia. Australians specifically have high liquid
assets and are receptive to imported products which is an essential characteristic
because the high liquid asset will mean they will have some more money to spend
on a tablet. Additionally, Australians would want to buy TechTab because of the
newfound illiteracy rates that are arising and being able to stop these problems
benefits the future of Australia.
What is the single, clear, compelling message that states why your product/service is
different and worth buying?
TechTab is a clear leader in the educational industry especially in Australia
because it solves a vital epidemic they are facing in terms of education. Because the
literacy rate is doing so bad the future generation’s predicted outcomes are
inadequate. In general being literate is positive because it will allow one to read
books which have years of knowledge inside them. However, TechTab makes it fun
to read and through the enjoyment, cure Australia’s illiteracy issue. TechTab plans to
introduce a game called ​Read It Out Loud​ which uses speech to text conversion to
measure the accuracy of the user saying the words out loud, and additionally help
them with their pronunciation, which will further improve their literacy skills. The
multiplayer feature is a bonus to TechTab because it is useful for those who have a
competitive spirit and notes who gets the most words pronounced correctly.
Additionally, at the end of each game, it will give tips on how to improve one's
reading skills while noting which phrases the user had gotten wrong when they said
the text out loud. Ultimately TechTab uses a game that will lower the illiteracy rate in
an entertaining manner for the younger generation of Australia.
What are the top three features of your product/service?
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10. 1. TechTab will cure the illiteracy rate of Australia through education and
entertainment purposes.
2. TechTab will help educate the students by reading which will help them
because they are now able to self study and learn from a vast amount of
books.
3. TechTab will partner with RSF Dhaka Project in order provide education to
communities around the globe.
What are the pathways to customers?
Australians are in favor of foreign goods or services, in fact, Australians love
to buy foreign supplies online especially for products they don't have. For my
business to flourish, the company must convince the Australian consumers that
TechTab is one of the best foreign educational tablets in the world. This task can be
done explicitly through TechTab’s marketing campaign to get the information of
TechTab to the entire world. This task should not be hard to obtain because once
TechTab reminds those living in Australia about the illiteracy issue, through
appealing advertisements numerous people will want to buy TechTab for the niece,
grandson, or daughter to cure Australia’s massive problem of illiteracy. The
campaign will associate TechTab as educational, affordable, and essential to all
families of Australia, which will help the company target the 4.8 million kids of
Australia. By spreading awareness of the growing illiteracy rate, TechTab will be able
to be established as a reliable and well-known company in the Australian economy.
Additionally to increase the reputation of TechTab, it is a partner of the RSF
Dhaka Project which provides education to communities
throughout the world. In fact, TechTab donates 15 percent
of profit for each tablet sold to the RSF Dhaka Project to
prove to the world they want to help educate not only in
Australia but fix it around the globe. Additionally, this is
known as a cause marketing campaign which is proven to
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11. be not only beneficial for the charities but also for the business due to the positive
reputation it provides in the community.
What is the revenue model and what are the lifetime values?
A. Revenue Model
TechTab’s revenue stems mostly from the international market for developing
countries (as of right now Australia). After five years TechTab is projected to have a
revenue of 75,000,000 dollars per year due to the educational aspect which is
necessary to parents who want the best for the kids and also the fact that it is a
technological company which are making a lot of money as of right now. TechTab
will generate both project revenue and transactional revenue in Australia. Project
revenue will be especially useful for testing out different apps on the tablet to find out
which one will be the most fun for the target market and work on how to improve the
illiteracy rate. After TechTab can fix the illiteracy in Australia or we have no more
revenue to make from Australia, we plan to move the company’s markets to one of
the numerous developing countries with illiteracy issues.
B. Lifetime Values
Because tablets last approximately three years, the average customer would
have to buy one periodically. However, because they are not that expensive costing
around $52.50 for each tablet, it is an offset for the cost of the tablet, and ultimately
justifies the three years renewal of tablets due to the cost. Additionally, on the
marketing aspect, TechTab will keep customer acquisition costs low, by having
relatively inexpensive marketing methods. For example, TechTab will utilize trade
shows to spread the TechTab brand to the world. TechTab plans to sell to schools,
specifically language arts classes. The average per each language arts class comes
out to be $1575. Therefore due to the immense order value and low customer
acquisition costs the customer lifetime value is projected to be approximately $1450.
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12. What are the customer acquisition costs, distribution costs, human resources costs,
and other additional costs?
A. Customer Acquisition Costs
When establishing a firm, the costs initially will be expensive. To be a
significant company of education and technology, we must highlight the issue of
illiteracy going on throughout the country. TechTab’s advertising will be mentioning
the affordability of TechTab and the impending problem of the future generation
being uneducated. TechTab will be able to sell tablets at a competitive price to
schools and parents to help foster a learning environment that is beneficial for the
students and cure the illiteracy of the nation.
B. Distribution Costs
To obtain a variety of supplies essential to TechTab’s success, we plan to
transport goods between nations like the United States and Australia. These costs
will be relatively low, as trade between the US and Australia is growing due to the
Fair Trade Agreement and other policies causing the trade to be fairly inexpensive.
The expenses are included in the Detailed Financials section under “Shipping
Expense.”
C. Human Resources Costs
TechTab will hire a limited number of essential employees in Australia to save
money which can be later beneficial for the business. TechTab plans to begin with
ten employees at moderate wages. Four of the employees will work on advertising
the company by attending trade shows and help train the other developers on the
coding aspect of TechTab. The other six employees will be administrative. These
expenses are included in the Detailed Financials section under “Salaries.”
D. Additional Costs
Additional Costs are mentioned in the Detailed Financials under
“Miscellaneous” section include travel expenses, insurance expenses, and office
expenses.
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13. A. Projected Income by Month
Detailed Income Statements Operating Months 1-4:
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14. Detailed Income Statements Operating Months 5-8:
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15. Detailed Income Statements Operating Months 9-12:
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16. B. Projected First Year Cash Flow
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17. C. Projected Balance Sheet
This is the estimation for the first year balance sheet.
D. Projected Ten-Year Plan
The company is going to be in the Australian marketplace for its first ten years
of growth. The expected growth is around 45 percent each year. Based on the
market research and the advertising budget, TechTab will be able to grow its
revenues over the next year. TechTab does plan to have more employees when the
demand for the educational tablets start to increase. The software is easy to
implement and ultimately will be even more profitable when mass producing these
tablets.
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18. E. Planned Growth of Business
TechTab is starting with an initial focus on Australia; however, due to low
literacy rates in numerous developing countries, TechTab applies to many
developing nations across the world. Illiteracy rates are not only confined to Australia
as a vast amount of people are illiterate across the world, and any country with
illiteracy issue can take advantage of TechTab to help the future generation to learn
and take advantage of numerous opportunities of literacy. With an initial focus on the
Australian market, the company can learn from observed trends over the next year
and specifically tailor an approach to new markets. The expansion rate has a low risk
because TechTab plans to buy a limited amount of inventory and see how it does in
the international market then adjusting the inventory based on the supply and
demand of the product. Ultimately, this helps TechTab because expanding in new
markets won't leave us with an excess of inventory which will be expensive. Overall,
these factors result in TechTab being able to open throughout the world with a
limited risk.
F. Proposed Plan to meet Capital Needs
1. Personal and Internal Sources
I elected to contribute $35,000 of my own money into TechTab and my family
will contribute $45,000 of their own money into the company.
2. Earnings, Long-Term Borrowing, Long-Term Equity
TechTab will obtain the rest of the capital, around $450,000, from outside
investors through debt and equity of the company. TechTab will be able to generate
a positive net income from sales of educational tablets by the 6th month of operation.
The revenues gained from the 6th month will be used to pay off the loans and capital
received from the investors. After the 6th month, TechTab will be making a
consistent profit and will be able to pay back the investment in less than two years
with interest to those who invested in the company.
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19. 3. External Crisis
TechTab plans to fund the start-up costs with both equity and loans received.
As soon as TechTab becomes profitable, the loans will be paid for, and the earnings
will be used to fund the operations.
4. Repayment Plans
TechTab will pay the monthly interest from the beginning of the first month,
and after the loan will be amortized after the end of the second year.
5. Plan to Provide Return on Investment to Equity Funds
After the second year, TechTab plans to give the excess cash held to be
distributed to all of the equity holders.
Total Initial Capital: 530 (in thousands of dollars)
What are the key activities that must be measured?
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20. Key activities that must be measured is the effect that the tablet has on the
illiteracy rate of Australia. TechTab must make sure that the tablet will increase the
literacy rate and ultimately cure illiteracy in Australia, due to the skill of being literate
is essential throughout one's daily life. Also, by measuring how the tablet, more
specifically the app, has on their literacy rate, we can improve the app to help benefit
those who want to promote their literacy. Another essential metric is customer loyalty
so that in the future the customers will use TechTab again which will ultimately
increase our sales for the company. Finally, TechTab will note how effective the
advertising campaign is through viewing the number of times the ad has been seen.
Then TechTab can optimize the ad to target more people and help boost sales for
the company.
What about your product/service means that it cannot be easily copied or bought?
The primary advantage that TechTab has is the fact that illiteracy is a growing
problem in Australia and there is a limited amount of support to help cure this
problem. By offering, a solution to Australia and by helping the future generation be
more literate and learn crucial literacy skills it results in TechTab being a competitive
business in the educational field. Additionally, because Australia is a developing
country we decided to make it affordable to everyone by using a similar, inexpensive
module to that of the tablet called Aakash which will result in the tablet costing
around $30.50 per each one, and sold for $52.50 which is an affordable price
especially compared to educational tablets or even other tablets in the marketplace.
Additionally, TechTab makes the games fun to play for it to be entertaining, due to
the target market primarily consisting of kids. One of the specific ways TechTab can
make the game more interesting for the target market is by the app called Read It
Out Loud which is only downloadable on a TechTab tablet. This app has an
aesthetic interface and uses speech to text conversion to measure the accuracy of
the user saying the words out loud, and help them with their pronunciation and
further their literacy skills.
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21. Additionally, they can play with their friends, for example, TechTab has a
multiplayer feature which is useful for those who have a competitive spirit and notes
who gets the most words pronounced correctly. However, to improve literacy, it will
give tips on how to develop one's reading skills while noting which phrases the user
had gotten wrong when they said the text out loud. By making a tablet multiplayer
and fun for the target market while helping fix a global problem in Australia results in
TechTab being a competitive product in the Australian marketplace.
Specific request for financing, summary of key points supporting the financial request
TechTab will require $530,000 in start-up costs. This includes the price to pay
for all of the expenses during the initial months, significantly advertising and
providing exposure for the company. Advertising is crucial during the first few months
in order to establish the market for the product. The business is predicted to be
profitable in the sixth month of operation, and the long term loans will be repaid with
an additional 8% interest after five years of operation.
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