1. 1
Evan van Niekerk - Amy Tsai - Jespeter Liao - Allison Stanbury - David Cortes
New Venture Start-up – Set D
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Table of Contents
Overview......................................................................................................................................4
1.0 - Service Description ........................................................................................................4
1.1 - Physical Description ................................................................................................................4
Primary - Document Management..........................................................................................................4
Secondary - Paper Shredding....................................................................................................................4
Secondary - Website Services...................................................................................................................5
1.2 - Geographic Reach .....................................................................................................................5
1.3 - Geographic Location ................................................................................................................5
Source: GeoSearch 2011 - Census Divisions (CD), Statistics Canada...............................6
1.4 - Hours of Operation...................................................................................................................6
1.5 - Regulatory Compliance...........................................................................................................6
1.6 - Insurance .....................................................................................................................................7
2.0 - Market.................................................................................................................................7
2.1 - Profile of the Market................................................................................................................7
Accounting Firms...........................................................................................................................................7
Real Estate.........................................................................................................................................................8
Private Healthcare Clinics ..........................................................................................................................8
Law Firms..........................................................................................................................................................9
2.2 - Buying Criteria and Process..................................................................................................9
Criteria................................................................................................................................................................9
Process.............................................................................................................................................................10
2.3 - Market Trends............................................................................................................... 11
eFiling .................................................................................................................................................. 11
eDisocvery.......................................................................................................................................... 11
Streamlined Data............................................................................................................................. 11
3.0 - Competition.................................................................................................................... 11
3.1 Competitor Profile ................................................................................................................... 11
Canadian and Multinational Record Management Companies................................................11
Local Record Management Companies..............................................................................................12
3.2 Competitor Assessment ......................................................................................................... 13
Common Strengths.....................................................................................................................................15
Common Weaknesses................................................................................................................................15
3.3 Competitive Edge...................................................................................................................... 15
4.0 - Marketing........................................................................................................................ 16
4.1 - Promotional Tactics and Timing...................................................................................... 16
Advertising.....................................................................................................................................................16
Internet Marketing .....................................................................................................................................17
Public Relations ...........................................................................................................................................18
Direct Marketing..........................................................................................................................................18
Personal selling............................................................................................................................................19
4.2 – Pricing ....................................................................................................................................... 21
Standard Pricing.......................................................................................................................................21
Bundle Pricing..............................................................................................................................................22
5.0 - Organization .................................................................................................................. 24
3. 3
5.1 - Bio................................................................................................................................................ 24
Jespeter Liao – Chief Operating Officer (COO)................................................................................24
Amy Tsai – Chief Marketing Officer (CMO).......................................................................................24
David Cortese – Chief Financial Officer (CFO).................................................................................25
Allison Stanbury – Chief Sales Officer (CSO)....................................................................................25
Evan van Niekerk – Investor ..................................................................................................................25
5.2 - Form of Organization............................................................................................................ 25
5.3 - Ownership ................................................................................................................................ 26
5.4 - Implementation Schedule................................................................................................... 27
6.0 - Key Risks......................................................................................................................... 28
6.1 – Internal Risks.......................................................................................................................... 28
Business Acquisition – Over Estimation of Demand ....................................................................28
Cash-Flow.......................................................................................................................................................28
Loss of a Key Member ...............................................................................................................................29
Equipment Problems.................................................................................................................................29
6.2 - External Risks.......................................................................................................................... 29
Small Business Window ...........................................................................................................................29
Competition trying to strong arm us/keep us out.........................................................................29
Technology – Personal Scanning Products.......................................................................................30
7.0 - Financial Requirements and Cash Flow Projections ....................................... 31
7.1 - Start Up Costs and Funds..................................................................................................... 31
7.2 - Cash Flow Projection ............................................................................................................ 32
7.3 - Explanation of Assumptions .............................................................................................. 34
Start Up Cost Notes.....................................................................................................................................34
Cash Flow Notes ..........................................................................................................................................34
Appendix A – Marketing Material (Flyer Mockup) .................................................... 37
4. 4
Overview
PrimaData is a new technology company that will aim to increase the efficiency of its
clients, who will be small businesses in the Lower Mainland area. PrimaData’s
primary service will be the conversion of paper documents to electronic files, but
they will also be offering a variety of additional secondary services. These secondary
services will include paper shredding, website services, search engine optimization
and LinkedIn management. Ideally companies will be attracted by the primary
service and then opt to add services, further improving their efficiency and
increasing PrimaData’s revenue. All business activity will take place in the Lower
Mainland either at PrimaData’s head office or on site at the clients business
according to the specific job.
There are currently two large, multinational companies competing for the paper
conversion market, as well as several technologies that allow people to do it
themselves. PrimaData’s differentiation from these companies is that they will be
offering additional services that the others do not. These services, mentioned above,
go along with the target companies need to become more efficient and help them
save time and money by going through only one company. PrimaData is hoping to
draw in customers with service bundles and to then maintain a long-term business
relationship by slowly evolving along with their client’s needs.
1.0 - Service Description
1.1 - Physical Description
Primary - Document Management
PrimaData will assist small businesses by converting their paper documents into
electronic format. By using specialized equipment to create searchable PDF files,
companies can easily access these files without the hassle of flipping through paper
indexes. Converting paper documents to electronic files significantly reduces
document access times, and improves both access and security for key records such
as contracts, human resource files and invoices.
Once the initial service has been carried out, PrimaData will then offer additional
secondary services. The secondary services will extend and maintain customer
relationships as well as implement a continual revenue stream. The secondary
services will include the following:
Secondary - Paper Shredding
Once the documents have been converted to electronic format, the customer will
have the option to securely shred and dispose their old paper documents for an
additional charge. This will take place at the PrimaData office located in Burnaby or
at the client’s place of business, based on their preference.
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Secondary - Website Services
In addition to the document management and shredding services, PrimaData will
offer web services to their clients. The purposes of the secondary services are to
create and maintain a loyal client base, generate a continual revenue stream
amongst the clients, and differentiate PrimaData from competition with a unique
service edge. These web services will include:
Web Site Management
Website management will include helping the company with the construction and
maintenance of their business website.
Search Engine Optimization
Search engine optimization will include helping the company better utilize search
engines to increase their appearance in organic search results for potential clients.
LinkedIn Management
LinkedIn management will include helping the company build and manage their
business LinkedIn profile in order to increase their social presence within the
business industry.
1.2 - Geographic Reach
According to the Provincial government, small businesses are mainly focused in the
Mainland/Southwest region of B.C. According to Statistics Canada, this area is the
most densely populated region in British Columbia with 52.6% of B.C. population
resides in this census metropolitan area1. PrimaData will be able to travel within
Greater Vancouver to ensure a quick travel time to and from destinations. Statistics
Canada states the Mainland/Southwest has the second highest small business
growth rate (1.5%) with the highest total number of small businesses within the
region (223,100 since 2011). The agent representing PrimaData will be able to
cover multiple locations in one outing. Constant communication between the office
and on-road agent will ensure maximized operational efficiency, and therefore
starting the business with lower operational costs in the long term.
1.3 - Geographic Location
The office of PrimaData will be located in Burnaby, B.C. Burnaby is central to most
business activity that happens within our geographic reach. Secondly, rent is
generally cheaper than Vancouver downtown area. As seen in this map below, the
geographical diameter around Burnaby allows maximum reach within the Lower
Mainland. The only discrepancy between this map and our actual reach is the travel
distance in between municipalities when making service calls. The general
assumption that travelling on the highway during non-busy hours will allow
PrimaData to find business past Maple Ridge and possibly reaching to Mission in the
near future.
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Source: GeoSearch 2011 - Census Divisions (CD), Statistics Canada
1.4 - Hours of Operation
PrimaData’s hours of operation will be based solely around maximizing service
revenue. The office hours will be 8am until 5pm, Monday to Friday. These hours
will be when potential customers can call and inquire about the services offered.
The hours of sales operations will be from 9am until 5pm Monday to Friday. These
hours will be allocated to visiting clients and potential customers at their business
in order to meet with them, and discuss and assess their wants and needs. The
actual services will be offered 24 hours a day, 7 days a week. The timeline of each
job will be negotiated separately to meet the needs of the client.
1.5 - Regulatory Compliance
PrimaData will require the following regulations and documentation to carry out
business in Greater Vancouver and the Lower Mainland:
Municipal Business Licenses
For every city that PrimaData operates in they will be require to purchase and file a
separate business license. At this point PrimaData anticipates filing in:
Vancouver
North Vancouver City
North Vancouver District
Burnaby
Coquitlam
New Westminster
Port Coquitlam
Port Moody
Delta
Surrey
Langley
West Vancouver District
Richmond
Maple Ridge
Federal Incorporation
In order to operate as a corporation PrimaData will be required to file incorporation
papers. PrimaData has chosen to incorporate federally due to lower corporate tax
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rates, easier access to capital if needed, and room for future growth without re-
filing.
Non-Disclosure Agreements
PrimaData will likely be handling confidential documents and records, therefore will
require writing and signing of confidentiality agreements will all customers. This
will protect the customers from any breach of their private information and will
protect PrimaData from any employee misconduct.
1.6 - Insurance
The PrimaData Burnaby office will primarily be used as a general location for
registration and storage for office supplies and company assets. Insurances found on
the Canada Business Network for this business include:
Content Insurance: protecting key assets
Business Interruption Insurance: covering loss of earnings due to temporary
business shut down
Vehicle Insurance: when travelling to and from customers and main office
Errors and Omissions Liability: cover costs for employee malpractice and
negligence
Product Liability: covers insurance costs for service quality per job
General Health Insurance Coverage for Employees: all important agents of
the company will be filed as employees of this corporation
2.0 - Market
2.1 - Profile of the Market
The market that PrimaData will be targeting is small businesses in the Greater
Vancouver and Lower Mainland. Specifically those that have relied on, or currently
rely heavily on the use of paper documentation. There were 196,190 small
businesses operating in Metro Vancouver Area in 2011, accounting for 98.2 percent
of all businesses in the province. About 81 per cent of these small businesses were
micro-businesses with fewer than five employees. The composition of Metro
Vancouver’s businesses is dominated by service related firms, which comprises 83%
of the region’s businesses inventory. Firms in the goods-producing sector account
for the remaining 17%. Metro Vancouver is the preferred location for a cluster of
high-tech manufacturing firms, with integrated product design, sales and
management business components.
The following industries have been identified for having the highest business
potential:
Accounting Firms
Certain original hard copy paperwork filed with an accounting or auditing firm must
be kept, whether this is by law or according to company policy. Most of these firms
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currently use primitive filing systems where paper files are stored in manila folders
where easy access to information includes finding the right cabinet and folder.
Within B.C., there is an estimated amount of 2585 small accounting firms that would
require PrimaData's services.
By having a soft copy on computer will allow ease of information extraction within
short notice. A mini-database within the firm will allow accountants to quickly
process trends within certain industries if specialized in a certain field as well as
test analysis software once available within the association's resource site. Formats
will then be dealt with if incompatible but in files will first be processed as PDF files
to serve initial purposes.
Real Estate
The real estate industry has always been known for its large amount of paperwork,
which can include selling contracts, bids, and more. In addition, most real estate
firms tend to rely on hardcopy filing cabinets to manage their paper documents.
These can take up valuable office space. The retrieval of these documents by
employees can be a time consuming process, especially if a document has been
misfiled.
According to Statistics Canada, in 2011,the breakdown of employer establishments
in the Real Estate subsector included 5,501 micro businesses (1-4 employees),
which is 73.8% of the sector, and 1,498 small businesses (5-99 employees), which is
25.4% of the sector. In addition, in British Columbia, the real estate sector is the
leader in small business growth. From 2007 to 2012, there was a net addition of
3,116 small businesses in real estate, with the largest jump seen in 2012. The small
business real estate industry is a profitable market for PrimaData due to its heavy
reliance on paper documents to conduct business and the industry’s high growth.
Private Healthcare Clinics
This industry is one that PrimaData will be focusing a very large amount of its sales
efforts. According to industry standards all clinics must maintain paper
documentation records for every single patient they take. Even so, most clinics have
begun to add these records in to electronic databases for easier management and
access, making the paper files mostly just protocol. This is extremely beneficial for
PrimaData because it means that unlike other industries, which have no such
regulations, there will be a continuous flow of new paper documentation to be
converted. Ideally PrimaData will be able to gain contracts with these companies to
convert and manage new files each year. This will benefit the clinics because the
personnel currently transferring the paper files to computers are not specially
trained for this and more of their time could be put towards their actual jobs within
the clinic.
The specific types of clinics that prima data will be targeting include, but are not
limited to:
Audiology Cardiology Chiropractic
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Corporate Health
Cosmetic
Dental and Oral Health
Dermatology
Family Medicine
Fertility
Maternity
Gastroenterology
Natural Medicine
Neurology
Nursing
Occupational Therapy
Oncology
Physiotherapy
Psychology
Travel
Urology
Weight Loss
Surgery
Sports Medicine
Sleep
Sexual Health
Psychiatry
Law Firms
Law firms are required to keep an original hard copy form of most documents they
are required to deal with. Moreover, a lot of the smaller firms do not have
sophisticated filing systems to properly manage and maintain a streamlined
database to find important information quickly. There are approximately 120 law
firms in the Vancouver area that would benefit from Prima Data’s services
By scanning and creating a manageable database that can be fine tuned to a client by
client basis will extremely help law firms in reducing wasted time looking for
documents. Having this technology will also allow for law firms to be well organized
and give the ability to quick share and send information between each other and/or
the client. Lastly, PDF format which PrimaData services use is now becoming
acceptable to use in court.
2.2 - Buying Criteria and Process
Criteria
Below are the criteria that PrimaData will need to satisfy in order to meet the target
market’s purchase requirements:
Must Be Competitively and Affordably Priced
The services we offer must be competitively priced with the competition in the area.
If PrimaData were to price its services below the competition, it runs the risk of
devaluing its services and potential customers may go elsewhere. On the other hand,
if PrimaData were to price its services high above the competition, it runs the risk of
loosing potential customers due to over-pricing. By having the services priced based
on what the competition is charging, PrimaData will remain competitive in the
market and be able to win over potential customers with different services.
Must Have Convenient Hours
PrimaData must be able to carry out their services in a timely fashion that works
with the schedule of the customer without effecting their day-to-day operations.
Since PrimaData will be dealing with business-related documents and potentially
preforming the services at the customer’s office, hours of operations must be
flexible with the customers schedule. If PrimaData does not provide convenient and
flexible hours of operation to the market, then potential customers will go else
where for their wants and needs.
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Must Have Service Differentiation
PrimaData must clearly differentiate itself from the competition. By offering
different services than the competition, PrimaData is able to provide greater value
to its customers. The target market is more likely to chose PrimaData over the
competitors since PrimaData offers additional services.
Must Have Convenient Payment Options
PrimaData must offer convenient payments options and terms for their clients in
order to satisfy their payment wants and needs. The more convenient and appealing
the payments options and terms are to the target market, the more inclined they are
to chose PrimaData’s services.
Must Have Security and Privacy Options
It is vital that PrimaData offers secure services that ensure privacy of the business
documents and information they will be dealing with. Potential customers will not
want to use PrimaData’s services if they feel as if their private information will be
violated or exposed to the public. Users of the services must feel protected on how
their information is being handled.
Process
Awareness
During the first stage of the buying process, awareness of the company will be
gained through direct marketing, trade shows and sales promotion. Direct
marketing will be sent out to all potential customers letting them know about what
the company does and PrimaData’s services can provide them with value. Trade
shows will be used to network with customers and demonstrate how the technology
works and how it can be beneficial for the companies. Sales representatives will
meet with potential clients to discuss how becoming paperless can make their
companies more efficient and reduce wasted employee time that occurs with
traditional filing systems.
Investigation
The market will investigate by being driven to PrimaData’s website when
researching prices, bundles and services that are offered. Moreover, at the trade
shows customers will stop by the booth to see how the conversion process works
and what benefits it offers to their companies.
Purchase and Payment
Depending on if the customer is buying a bundle or a one-time service, this will
dictate how the purchase and payment process will work. When buying a bundle the
customer can pay on credit with 2/10, n/30 terms starting after the work is
completed to entice the customers to pay earlier for the discount. When purchasing
a one-time service, customers will pay once the work is completed with no credit
11. 11
terms offered. PrimaData will accept credit card, cheque, and cash as forms of
payment.
2.3 - Market Trends
eFiling
Nuance states that electronic filing systems are becoming more popular with the
wide spread use of PDF format. In the case of law firms, many court systems
mandate the filing of documents electronically. This has caused many law firms to
adopt either software or companies to help them with the transition into the new
filing system.
eDisocvery
As these filing systems are put into place the sheer growth in volume of digitized
files can be overwhelming. eDiscovery Trends writes that companies are now
looking for either software or other companies that will provide a solution to
making the files more accessible. Moreover, companies have been increasing
worried about lost data and a security measure that has caused them to lean to
sophisticated solution software companies.
Streamlined Data
Nuance states with the rise of cloud technology and the widespread use of
smartphones and tablet, having information on a format that is readily available has
become paramount. This has lead to more companies wanting to go paperless by
relying more on PDF files so they are able to access important information
anywhere they want.
3.0 - Competition
3.1 Competitor Profile
The competitors have been grouped into two categories due to the large number
and their similarities.
Canadian and Multinational Record Management Companies
The first category of competitors include record management companies that have a
Canadian or multinational presence. These particular companies have expanded
into several cities and have a large client base. The most dominant companies that
offer services within the Greater Vancouver and Lower Mainland area include B.C.
Records Management Services, Iron Mountain Canada, and Recall. These companies
have built a strong client base and have successfully established themselves with
credible working relationships. In addition, they are very well known by
PrimaData’s target market.
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Local Record Management Companies
The second category of competitors includes record management companies that
are strictly located in the Lower Mainland. These companies generally offer fewer
services and are much small in size, for example myScan.ca. The majority of these
companies offer similar selling features as both B.C. Records Management Services
and Iron Mountain Canada but to a lesser extent.
PrimaData also takes into consideration the competition of free apps that make it
possible to scan documents. Some of these apps include: CamScanner, Genius Scan,
and ScanToPDF.
Below is a table describing each competitors major customers, services offered,
location the services are available, and pricing.
Competitors
Name
Major
Customers/Industr
y Specialties
Services Offered Location Services
are Available
Pricing
B.C. Records
Management
Services
Legal
Accounting
Medical/dental
Financial
Small/medium
business
Document storage
Scanning and
imaging documents
Electronic media
storage
Shredding and
document
destruction
Greater Vancouver
and Lower Mainland
area:
Abbotsford
Burnaby
Chilliwack
Coquitlam
Delta
Fort Langley
Langley
Maple Ridge
Mission
New
Westminster
North Vancouver
Pitt Meadows
Port Moody
Richmond
Surrey
Vancouver
West Vancouver
White Rock
An average of 15 -
99¢ per page for
document scanning
An average of $35 per
hour for shredding
Iron Mountain
Canada
Accounting
Energy
Enterprises
Healthcare
Government
Financial services
Document
management
Health information
management
Record management
and storage
In over 35 countries
Great Vancouver and
Lower Mainland area
An average of 15 -
99¢ per page for
document scanning
An average of $35 per
hour for shredding
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Legal
Retail
Small/medium
businesses
Secure shredding
Data backup and
recovery
Technology escrow
services
myScan.ca Legal
Real estate
Mortgage firms
Medical
Environmental
Engineering
Insurance companies
Banks
Human resource
offices
School districts
Large/wide format
scanning (i.e.
blueprints,
engineering
drawings)
Document scanning
OCR services
Document
management
Data entry and form
processing
Greater Vancouver
and Lower Mainland
area:
Vancouver
Burnaby
New
Westminster
West Vancouver
North Vancouver
Richmond
Delta
Surrey
White Rock
Langley
Abbotsford
Coquitlam
Pitt Meadows
Port Coquitlam
Port Moody
Maple Ridge
An average of 15 -
99¢ per page for
document scanning
3.2 Competitor Assessment
Below is a table identifying each competitor’s key selling features, how many years
they have been in business, strengths, and weaknesses.
Competitors
Name
Years in
Business
Key Selling Points Strengths Weaknesses
B.C. Records
Management
Services
24
Provide flexible delivery
- Same day, Next day or 2
hour Rush
- 4 Hour emergency
deliveries available 24
hours/day, 365
days/year
High volume conversions
with quick turnaround time
and extreme accuracy
Long time in business
provides strong credibility
Long time in business
with established
relationships with
current customers
National coverage of
services
Affiliated with large,
well-established
associations within
document conversion
and record
management: National
Offers no services
that are different
from competitors
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Association for
Information Destruction,
Professional Records &
Information Services
Management, etc.
Continually evolve their
record management
services
Iron
Mountain
Canada
62 Provides 5+ services
Long time in business
provides strong credibility
Strong marketing including
up-to-date website and
online resources (i.e. blog,
statistics, customer
testimonials, etc.)
Successful expansion
globally
Most successful and
popular competitor with
a large market share
(94% of the Fortune 1000
rely on Iron Mountain to store
and manage their
information)
Long time in business
with established
relationships with
current customers
Expert staff with
security expertise
Won multiple awards
since 2002 (i.e.
Company of the Year
by The Boston Business
Journal, Fortune names
Iron Mountain one of the
World's Most Admired
Companies)
Employ 21,000
professionals worldwide
and maintain an
unrivalled infrastructure
that includes more than
1000 facilities, 10 data
centers and 3500
vehicles
Offers no services
that are different
from competitors
15. 15
myScan.ca 5 Free Pickup or Delivery of
documents for order of
$1000 and more
Affordable pricing
Expert staff with
expertise in dealing with
small business, from a
corporation to
government
organizations
A division of Smart
Technologies
Consultants Ltd. (larger
company, provides
credibility)
Offers no services
that are different
from competitors
Out-dated
marketing and
advertising,
including the
company website
Common Strengths
One area of common strength that all competitors’ posses are their long time in
business. In order to be successful, businesses must create working relationships
with their target market. All competitors have built strong relationships with the
target market due to the longevity of their business. It will take PrimaData quite a
long time to develop the same type of relationships the competitors hold. Both B.C.
Records Management Services and Iron Mountain Canada have successfully
expanded their businesses throughout Canada, whereas myScan.ca has focused on
building their business within the Lower Mainland and Vancouver. All three
competitors are well known throughout Vancouver and the Lower Mainland. Iron
Mountain Canada is the most successful and established of the three companies.
Common Weaknesses
The main area of weakness amongst the three companies is their ability to
differentiate themselves through additional services other than scanning and record
management. All three companies offer very similar services and do not expand
their services beyond record management.
3.3 Competitive Edge
Based on the analysis of competitors, it is clear the competitive edge offered by
PrimaData is a service edge. By offering additional services to scanning and record
management, PrimaData is able to differentiate itself from the competition and
provide customers with greater value. None of PrimaData’s competitors offer web
services in addition to scanning and record management services. PrimaData’s
service edge includes website management and design, SEO optimization, and
LinkedIn development services. These services will be offered in specific bundles
that allow customers to tailor their bundle to their exact wants and needs. This
option of being able customize a service bundle is currently not offered by
competitors, nor do the competitors offer the bundles with services that include
web services. By successfully communicating the service edge, PrimaData will
gradually build a core of loyal customers, which can be expanded over time.
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4.0 - Marketing
4.1 - Promotional Tactics and Timing
Because the target market of PrimaData is small businesses located in Greater
Vancouver Area, the marketing efforts will be aimed at organizational buyers. The
marketing objective is to increase the brand awareness enough to generate a Net
Income by 2016. Therefore, the promotional techniques are designed to assist
PrimaData to reach its marketing goal. In order to reach the goal with limited
budget, various tools within the promotional mix were chosen. The following
section outlines the rationale behind the strategic decision of the choice of
promotional tactics.
Advertising
Flyers and Brochures
PrimaData will create flyers and brochures to assist other marketing efforts. The
flyers provides the target audience a simple visual that allows the potential
customer to know the existence of PrimaData and the services it provides. The flyer
will be visually attractive with graphics and a tagline that highlights the unique
selling proposition that the competition cannot or does not offer. The brochure, on
the other hand, provides detailed information about the company and services. It
will be sent out based on request and handed out at the trade show PrimaData will
attend in October. All of PrimaData’s advertisement will have contact information
and links to direct the target audience to call or visit the website or social media
pages.
Vehicle Wraps
Because of the limited budget, PrimaData will choose car wrap over other
advertising options. The average car wrap job cost around $2.00 a square foot,
which is cheaper compared to advertising through other media such as TV, radio or
newspaper. By using vehicle wraps as a marketing tool, PrimaData’s professional
image will be reinforced, leaving a lasting impression 24 hours and 7 days. The
other reason for choosing this tool is because research shows that car wraps are
viewed on average by 60,000 people per month and about 80% of people say they
remember what they see on vehicle wrap, which provides PrimaData a great
opportunity to increase awareness and generate leads.2
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Figure 1: Cost of Advertising
Internet Marketing
Website
In order to allow the potential customers to access information about PrimaData
more easily and quickly, PrimaData will create a website (www.PrimaData.ca) and
use it as a marketing communication medium. This will allow PrimaData to develop
awareness and influence attitudes by providing in-depth information regarding
company’s products and services. PrimaData will also conduct Search Engine
Optimization which improves the visibility of a website to increase the number of
visitors from search engines. The goal of this is to attract more potential clients to
the site within the target market.
Social Media
PrimaData will be using four social media tools: Facebook, Twitter, LinkedIn and
YouTube. The use of social media will primarily target the younger demographics
such as Generation Y within PrimaData’s target market, as they are frequent
Internet user compares to older generation. The social media websites provide a
platform for PrimaData to directly interact with its potential customers. All of
PrimaData’s marketing material will have links directing the target audience to the
PrimaData’s website and social media pages. The Chief Marketing Officer PrimaData
will be responsible for maintaining and updating the social media pages with latest
news and promotions.
Interstitials
Interstitials are ads that appear on the screen while a site’s content downloads.
According to the research, 47 percent of sampled Internet users like interstitials ads
and the recall rate was high at 76 percent. 3This gives PrimaData the potential to
raise its brand awareness. With the purpose of reaching more potential customers
within the target market, PrimaData will placed its interstitials on various industry
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1.78
5.92
11.66
11.3
0 1 2 3 4 5 6 7 8 9 10 11 12
Vehicle Graphics
Billboards
Radio
Newspaper (1/4 page and B/W)
Prime Time Network TV
Cost Per Thousand (CPT) Impressions
AdvertisingMedia
Cost of Advertising
18. 18
association websites, such as Small Business B.C., B.C. Legal Management
Association and CGA B.C. The design of the ads will be simple but attractive.
Public Relations
Trade shows
Every year, PrimaData will attend to The SOHO|SME Expo which attracts thousands
of business owners, entrepreneurs and executives from small and medium size
enterprises with up to 50 employees. PrimaData will showcase its services at the
booth and engage in face-to-face communication with potential clients. Because the
event partners with various industry associations and groups, it provides PrimaData
a cost-effective way to reach and interact with a large amount of potential clients
and prospects in one place at one time. Furthermore, the Expo will help to increase
PrimaData’s brand exposure and create an opportunity for PrimaData to make
connections, build relationships and generate leads. The Sales Manager at
PrimaData will collect contact information from valuable leads that attend to the
Expo and follow up through sales calls or direct marketing.
Grand Opening
In order to raise the brand awareness, PrimaData will have a Grand Opening Party
on Mar 1. Prior to the event, the invitation will be sent to small business owners and
industry professionals that are the potential clients within the target market. On the
Grand Opening Day, the company and the management team will be introduced to
the guests. There will be a showcase of PrimaData’s product and services. Chief
Marketing Officer will do the event planning and execution, with assistance from
other executives.
Direct Marketing
The direct-response media will be directed at the target market to further generate
a response or transaction. The focus for using this type of marketing will be to get
noticed by local small business owners. Small business owners are primarily
between the ages of 35 and 54 (51%) within B.C. and are accustomed to the
traditional methods of advertisement (via direct mail).
Contents of the direct mail and/or email will be used to introduce PrimaData as a
company and what type of service the company can offer. This will be sent out by
the marketing manager within the first month of operations to generate initial sales
and business generation. If sales are not negotiated after the first points of contact,
the sales representatives will initiate lead generation for references and follow-up
later in the year. After receiving initial feedback and effectiveness towards sales
generation, changes in regards to design and content will be made accordingly.
19. 19
Figure 2 B.C. Statistics Age Distribution of Self-Employed Workers Compare to Employees, B.C. 2012
Personal selling
This method is chosen due to the newness of the industry and relatively short
window of opportunity. Sales representatives will be prospecting local businesses
within Greater Vancouver, via both cold calls and, preferably, referrals. The sales
manager will specialize in targeting the four main industries during PrimaData's
introductory stage. They will be following up from call reference from our direct
email and effectively sell personally towards individual clients. A behavioral
evaluation will be implemented until a couple months into the operations until
professional demeanor is achieved to sales manager's satisfaction since this
business is heavily focused on customer satisfaction. A sales quota will be assigned
once a realistic goal can be set per industry. The sales manager will be maintaining
customer relationship management to build long-term profitable relationships with
customers. An assistant sales manager will be promoted if quantity of long-term
customers is starting to strain the quality of service, according to company's service
protocol.
20. 20
Notes:
Colours are for visual differentiation only.
Lighter shade indicates preparation stage.
Marketing Tactics Budget
Advertising
Flyers QTY: 10,000 (8.5"x11", double-sided) $443.30 Design & Print
Brochures QTY: 4,000 (5.5"x 8.5", 8 pages) $897.00 Desgin & Print Send as direct mail or on request
Car Wrap Design $350 Fabrication and Installation $2,700 Design & Install
Internet Marketing
Website Reserve domain $12.95/year Prep Constant update information
Social Media Basic acoount free Prep Constant update information
Interstitial ads $0.0025 Per interstitial ad x 100,000= $250 Design
Direct Markeitng
Direct Mail Postage fee $0.353 x 5000= $1765 Design & Print
Personal Selling
Personal Selling Prep & Training
Sales Management Use Microsoft Excel
Public Relations
Trade Shows SOHO SME Expo Exibition Fee $6,696 Prep
Grand Opening Event budget for 50 participants $4,000 Prep
Nov Dec
Promotional Timeline for PrimaData 2014
May Jun Jul Aug Sep OctJan Feb Mar Apr
21. 21
4.2 – Pricing
In the increasingly competitive data scanning industry, PrimaData will benchmark
its competitors and use an At-market pricing strategy. It will adopt flexible pricing
policy that involves customize price quotes that tailored to individual buyers’ needs
under different buying situation. The bundle pricing will also be offered to the
customers due to the fact that most customers value the package more than the
individual items.
Standard Pricing
Price per Image for scanning service
The price is the same for single-sided and double-sided pages. Each scanned side
counts as one image. The default resolution is 300dpi. Because some documents will
need to be prepared for scanning, such as remove staples, re-staple, remove binding,
redo binding after scanning, remove stickers and post-it notes etc. the document
preparation service will be charged on top of scanning. The volume discount at
various rate will be offered to customers who order more than 10,000 scans.
Document Size
300
dpi
400
dpi
600
dpi
Document
Preparation
Black and White Letter / Legal / A4 (up to 8½ " x
14")
12¢ 17¢ 20¢
$30 per hour
Black and White Ledger / A3 (up to 11" x 17") 20¢ 25¢ 30¢
Grey Scale Letter / Legal / A4 (up to 8½ " x 14") 15¢ 25¢ 30¢
Grey Scale Ledger/ A3 (up to 11" x 17") 25¢ 35¢ 40¢
Colour Letter / Legal / A4 (up to 8½ " x 14") 35¢ 55¢ 70¢
Colour Ledger/ A3 (up to 11" x 17") 50¢ 75¢ 90¢
The rates are reduced with larger volumes:
Volume Discount
Up to 10,000 pages 0
10,001 to 50,000 3%
50,001 to 75,000 7%
75,001 to 100,000 10%
Over 100,000 12%
22. 22
Price per 100 pages for shredding service
The price for shredding service is charged by every 100 pages. The document
preparation fee will be included if the documents need to be prepared to shred.
Volume Price Document Preparation
Up to 100,000 pages (per 100 pages) $15 $30 per hour
Over 100,000 pages (per 100 pages) $12
On-Site Scanning/Shredding
For some documents that contain sensitive information (customer transaction
records, financial information, legal document, etc.), PrimaData provide On-Site
scanning/shredding services within the Great Vancouver area. The service team will
bring all of the required equipment required to scan and manage the documents.
The total charge will be $30/hour+ the cost of scanning/shredding.
Off-Site Scanning/Shredding
Once client require for an off-site scanning/shredding service, PrimaData, or a
courier company, will pick up documents from customers and scan/shred them in
PrimaData’s office. The pickup/deliver is available in Great Vancouver areas and the
delivery fee will be charged depends on the amount of the documents.
Pickup or Delivery, Each Trip (one way) Price
Up to 5 standard or comparable paper boxes, up to legal size each
(10"x12"x15")
$30 per trip
Over 5 standard or comparable paper boxes, up to legal size each
(10"x12"x15")
$10 per box per
trip
Bundle Pricing
In order to cater to different customers’ needs, PrimaData will also offer bundles at
different prices. Low represents the lowest possible price with the minimum
quantity ordered within each level. High represents the highest possible price with
the maximum within each level. Median represents the middle price in the bundle.
23. 23
Basic Bundle Price Rates
Bronze:
Paper Conversion 5000 – 10000 pages, normal page rates
less 5%
Shredding 2000-10000 pages, 15 dollars per 100 pages less
5%
Low: $855
High: $2,565
Median: $1,710
Silver:
Paper Conversion 10,001 – 25,000 pages, normal page rates
less 7.5%
Shredding 10,001- 25,000 pages, 15 dollars per 100 pages
less 7.5%
Low: 2,498
High: $6,244
Median: $4,370
Gold:
Paper Conversion 25,001 – 50,000 pages, normal page rates
less 10%
Shredding 25,001 – 50,000 pages, 15 dollars per 100 pages
less 10%
Low: $6,075
High: $12,150
Median: $9,113
Platinum:
Paper conversion 50,001 – 75,000 pages, normal page rates
less 12%
Shredding 50,001 – 75,000 pages, 15 dollars per 100 pages
less 12%
Low: $11,880
High: $17,820
Median: $14,800
Diamond:
Paper conversion over 75,001 pages, normal page rates less
15%
Shredding over 75,001 pages, 15 dollars per 100 pages less
15%
Low: $17,212
Deluxe Bundles Price Rates
Deluxe Option One:
Basic Level (BL) + Website Creation / Re-design
BL + $5000
Deluxe Option Two:
BL + Search Engine Optimization (SEO)
BL+ $798 per
project
Or
BL + $175 per
month
Deluxe Option Three:
BL + Website Creation / Re-Design + SEO
BL +$ 5798 per
project
Or
BL + $5000 + $2004
per month
Premium Bundles Price Rate
24. 24
Premium Option One:
BL + Social Media Integration and Management
BL + $750 down
payment + $350
Monthly payment
Premium Option Two:
Basic + Deluxe + Social Media Integration and Management
BL + Deluxe Option
+ $750 Down
Payment + $350
monthly payment
5.0 - Organization
5.1 - Bio
Jespeter Liao – Chief Operating Officer (COO)
Jespeter Liao has been attending different advocate tech
groups within Vancouver for the past five years since she
finished BCIT for Computer Information Systems.
Jespeter is highly trained in preforming services that
include maximizing information systems to hardware
venture within the Greater Vancouver area for the past
five years.
Amy Tsai – Chief Marketing Officer (CMO)
Amy Tsai is a BCIT graduate of the Marketing
Management program. She was formally invited to work
at a marketing agency. From this work experience, her
skills in campaign creation and setting marketing
strategy was able to flourish. She has an exceptional
network within the Vancouver Board of Trades and Small
Business B.C. She also found creating events a passion for
creating a business herself.
25. 25
David Cortese – Chief Financial Officer (CFO)
David Cortese has been a certified accountant with a CPA
for the past five years. He has worked with many local
companies as their go-to accountant for his impeccable
knowledge of favorable business laws and expertise in
strict cost management for new tech companies prior to
obtaining his CPA.
Allison Stanbury – Chief Sales Officer (CSO)
Allison has worked on various marketing projects and
possesses remarkable marketing skills. She has worked
in sales and the hospitality industry for over 4 years and
has received numerous awards based on her sales
performance. Allison recently worked with a
Vancouver-based mobile app startup company that
aired on CBC’s Dragons’ Den, where she helped the
small business with online and traditional marketing.
Allison also posses very strong communication,
negotiation and management skills
Evan van Niekerk – Investor
Evan, a former BCIT BBA graduate, has spent the past 10
years building his company First Steps Marketing Inc.
FSM was a company, which focused on helping start-up
companies identify connect and communicate with their
specific markets. In September of 2013 FSM was sold to
BDC Venture Capitalist with Evan not remaining on as the
CEO. Since the sale, Evan has continued to help grow
small businesses but now from an investment side rather
than marketing.
5.2 - Form of Organization
PrimaData will be a provincially incorporated company from day one. This decision
is based on the fact that business operations will include the potential handling of
confidential information and documents. By setting up as a corporation the
shareholders will have a legal barrier in the case that there is any form of
26. 26
confidentiality or legal issues. The five shareholders above will be PrimaData’s only
initial employees and each will contribute equal time and effort to the company.
5.3 - Ownership
Share Holder Title Investment Shares/Percentage
David C Chief Technology Officer $10,000 1500/15%
Amy T Chief Operations Officer $10,000 1500/15%
Jespeter L Chief Finance Officer $10,000 1500/15%
Allison S Chief Sales Officer $10,000 1500/15%
Evan V Investor $100,000 4000/40%
27. 27
5.4 - Implementation Schedule
2014 Description
Jan Design Flyers and Brochures
Contact vehicle wrap company to design the car wrap for
PrimaData
Reserve the domain www.PrimaData.ca
Start to build and design the website
Design interstitial ads
Open new accounts on social media websites including
Facebook, Twitter, YouTube and LinkedIn
Start planning for grand opening event: reserve a venue, find
catering company, invite guests, create agenda
Feb Print Flyers and Brochures
Install the car wrap
Test and launch the website
Confirm interstitial ads design
Website and social media sites maintenance
Mar Send direct (e)mail
Personal selling and sales management
Website and social media sites maintenance
Apr Send direct (e)mails
Personal selling and sales management
Website and social media sites maintenance
May Send direct (e)mails
Personal selling and sales management
Website and social media sites maintenance
Jun Send direct (e)mails
Personal selling and sales management
Website and social media sites maintenance
Jul Send direct (e)mails
Personal selling and sales management
Website and social media sites maintenance
Aug Start planning for SOHO|SME Expo
Send direct (e)mails
Personal selling and sales management
Website and social media sites maintenance
Purchase second shredder
Purchase third scanner
Sep Print the promotion items for SOHO|SME Expo
Send direct (e)mails
Personal selling and sales management
Website and social media sites maintenance
Purchase second paper bailer
28. 28
6.0 - Key Risks
6.1 – Internal Risks
Business Acquisition – Over Estimation of Demand
Acquiring business is going to be a challenge due to the face that the majority of
PrimaData’s services rely on hooking the customers within the initial offering of
document conversion. If this service does generate as much business as projected
the additional services may remain lightly used which will have sales remain low.
Response:
PrimaData’s response to this will be to ensure that all additional services are being
executed at the highest possible level. This will ideally increase business for the
clients and create a situation where PrimaData becomes known and sought after for
more than their primary services. On top of this, PrimaData will be putting
considerable time and effort in to personal selling and customer relationship
management.
Cash-Flow
Much of PrimaData’s business growth will depend on how successful their services
are in increasing the client’s efficiency and business volume. Because these results
could take a significant amount of time to evaluate, initial sales, and therefore cash
flow, could be slow growing. The risk of this is running out of working capital, which
would result in an inability to continue business.
Response:
The response to this is to first ensure that there is enough working capital budgeted
for the start up in order to stay afloat until profitability is achieved. Secondly,
PrimaData will have an external investor who will be ready to supply additional
funds over the next two years as long as operations are heading in the right
direction. Thirdly, PrimaData will focus very hard on communicating the success of
their services to the rest of the market via social media, advertising, and word of
mouth. Lastly, PrimaData will use a sales allowance to promote early payments.
Oct Attend SOHO|SME Expo
Send direct (e)mails
Personal selling and sales management
Website and social media sites maintenance
Nov Send direct (e)mails
Personal selling and sales management
Website and social media sites maintenance
Dec Send direct (e)mails
Personal selling and sales management
Website and social media sites maintenance
29. 29
Loss of a Key Member
As PrimaData is a new venture, there is always the risk of someone leaving the
company. This would most likely be a result of a difference between how they
thought things would be and what they actually are.
Response:
PrimaData’s response to this will be that each of the operating partners will have
the option to buy an equal amount of the leaving partners shares. If any partner(s)
chooses to not purchase their portion of the shares they will be distributed equally
among those who do. After this round of repurchase, any remaining shares will be
offered to the outside investor. If after this there are still shares not purchased, the
partners will then work together to decide whom the remaining shares will be sold
to and brought on as the new partner.
Equipment Problems
Because PrimaData’s main line of business relies on a piece of specialized
equipment any failure or malfunction will result in a failure to deliver the promised
service. This will result in a negative reputation and lower chance of repeat business
and business generation due to negative word of mouth.
Response:
PrimaData will purchase two of the scanners being used. One will be used as the
primary piece of equipment and the other will remain on standby in case the
primary piece breaks down or if there is increased document conversion volume.
When business reaches the point where the second machine is being used on a
regular basis, a third scanner will be purchased as standby equipment.
6.2 - External Risks
Small Business Window
Because the current trend has moved to most filing, records and documentation
being created and stored electronically, the market for businesses needing
document conversion will be shrinking constantly. This will result in an eventual
and gradual decrease in business over the next several years to the point where
document conversation will not be viable as a primary offering.
Response:
PrimaData has and will continue to position themselves to grow and evolve over
time. A large part of the documentation conversion is obtaining customers who they
can then target for their other services. The long-term goal of PrimaData is to focus
more and more their web and social management services so that they are not
affected by the environmental change described above.
Competition trying to strong arm us/keep us out
Both of the companies, Iron Mountain Canada and B.C. Record Services, have been
identified as PrimaData’s direct competitors. Both companies are large in size and
30. 30
have successfully gained at large client base. Because of this, there is a risk that
these competitors will use their size as leverage to make PrimaData’s entrance to
the market more difficult.
Response:
PrimaData has recognized this risk and has created a portfolio of services that is
differentiated from those of the competition. This will ideally prevent excessive
customer and business loss because the target market is not identical and
PrimaData will be able to draw in customers whose needs cannot be met by the
competition.
Technology – Personal Scanning Products
One of the largest risks to PrimaData will be from technology. There are already
products on the market that help people convert their paper documents into
electronic files. These along with any new products that will be entering the market
will have a high likelihood of taking and increasing portion of the market.
Response:
PrimaData will be offering services above and beyond just document conversion,
which will ideally draw customers away from these products. Also, by offering
flexible schedule and affordable prices PrimaData will show that their services are
more affordable and affective than renting/buying the products then using company
time to use them.
31. 31
7.0 - Financial Requirements and Cash Flow Projections
7.1 - Start Up Costs and Funds
Prima Data
Required Expeniture Cost
Work Van
Van $5,000.00
Car wrap $3,500.00
Liciensing
Business Liciense $350.00
Incorporation Fees $200.00
WorkSafe $1,010.00
Insurance
General Liability $3,500.00
Vehicle $1,267.00
Portable Scannerx 2 $895.89
Uniforms $100.00
Office Sign $2,000.00
Office Lease Down Payment $6,811.38
Marketing $1,342.00
Paper Baler $3,500.00
Shredder $2,200.00
Office Equipment $5,000.00
Certificates, Filing, and Other Documents
Replacement Registration Documents $33.60
Certificate of Good Standing $44.80
Annual Report Filing $84.00
Society Search $22.40
Working Capital requirement $99,255.00
Total Start up Cost $136,116.06
34. 34
7.3 - Explanation of Assumptions
Start Up Cost Notes
Note 1: Work van based on 2013 GMC Savana Cargo 5 year financing with 4%
interest rate. PrimaData will put a $5000 down payment on the $26,710 van.
Note 2: Office Lease: Based on a Davies Hall listing 3-year lease for the office and
warehouse. (2519 sq. ft, $9/ft + $4.52/ft. for operation costs). For start up
PrimaData will use a 20% down payment.
Note 3: Paper Baler based on the cost of a small paper baler made by BOBO Machine
co Ltd out of China.
Note 4: Portable Scanner based on the cost of two “Neat Desk” scanners just in case
one breaks down.
Note 5: All regulatory costs based off Small Business BC’s website.
Note 6: Working Capital Requirement determined to be $67,870. Due to being a
new company PrimaData will be taking out an additional 50% on top.
Note 7: Uniforms was based on having to purchase 4 custom made shirts for the
time being. $20 a shirt was allotted to cover the cost.
Note 8: Office Equipment includes computers and office supplies. Computers will be
ordered by part and put together by David Cortese to save costs.
Note 9: Although we have a website, PrimaData will be uses its own website
designer to create it.
Cash Flow Notes
Note 10: Salaries based on everyone except for Evan getting paid $1000 per month.
Also salaries don’t start until company officially opens for business.
Note 11: Office Lease: Based on a Davies Hall listing 3-year lease for the office and
warehouse. (2519 Total square feet, Cost $9 a sq. foot plus $4.52 a square foot for
operation costs).
35. 35
Note 12: Work Van: Based on a 2014 GMC Savana Cargo 5 year finance plan with a
4% interest rate, minus the down payment of $5000.
Note 13: Another shredder, scanner, paper baler and pallet jack will be purchased
to keep up with increased demand and will be utilized more heavily for the
following year.
Note 14: Credit card transaction fees are assumed to be 2.5%.
Note 15: Pallets are purchased based on the approximate level of shredding for the
following month.
Note 16: Repair and Maintenance allowances increases as new equipment is added
in.
Note 17: Assume 80% of files converted will be black and white normal size (12
cents option), 15% color (35 cents option) and 5% the rest.
Note 18: Assume no bundles will be sold in the first few months while PrimaData
builds reputation.
Note 19: Assume the tradeshow brings in more clients and more bundles are sold
during this month. PrimaData has forecasted for seasonal changes with the high
seasons being around the trade show (Aug-Oct) and around the grand opening /
anniversary (Mar-May) where we increase the amount spent on marketing.
Note 20: Majority of the sales to begin with will be one-time services with
PrimaData’s main revenue streams, paper conversion and shredding. These clients
will most likely pay by credit card or cheque right after work is completed. Bundles
will be on terms of n/30 due to larger payment size and to be in accordance to their
buying criteria with such amounts.
Note 21: Brochures and flyers will be designed and printed in the first two months
of each year and will be distributed throughout the year. The distribution will
follow the same pattern as the direct mail in which it is sent out (higher quantity
during busy seasons). Brochures and flyers were done this way to maximize on the
order quantity discount.
Note 22: Sales are scaled based on start up period, marketing, trade shows and
building.
Note 23: Basic bundle is determined by have a realistic as possible mix of low, high,
and average costs of each level. For example, for the beginning start up period it is
assumed that bundles will be sold at the lowest end of paper conversion and
shredding. As the company continues on deluxe and premium bundles will be sold
with varying subscription and project based revenues added into the mix.
36. 36
Note 24: 10 bundles are sold in the first year. Without the bundle option a
maximum of 14,500/mo papers are converted, with only 30% of these added to
shredding revenue to provide a realistic first year. Second year a maximum
40,000/mo papers converted, with 30% of these will be shredded without bundle
option. 19 bundles will be sold, 3 SEO subscriptions, 2 LinkedIn management
subscriptions and 5 project based SEO and LinkedIn being purchased by clients.
Note 25: When purchasing a bundle, any unused paper conversion or shredding will
be given as credit to the client. This allows us to get the revenue from the bundle up
front and only have to “pay back” the customer when they need the service again.
This will help with keeping cash flow consistent and reducing bad debt expense.
Note 26: Tax is estimated at 20% of revenues.
Note 27: Vehicle insurance is based on personal experience with company
insurance and is estimated at $1267 yearly rate. PrimaData will pay yearly to save
money on the cost.
Month Milestone
January 2014 Acquire equipment, van & office
March 2014 Grand Opening
August 2014 Attend first trade show
February 2015 First month of positive cash flow
37. 37
Appendix
Appendix A – Marketing Material (Flyer Mockup)
Appendix A- Flyer mock u
PrimaData will assist your small
businesses by converting their paper
documents into electronic format.
You can securely shred and dispose
your old paper documents.
Website management will include
helping the company with the
construction and maintenance of
your business website.
LinkedIn management will increase
your company’s social presence
within the business professional
world.
Converting paper documents to
electronic files significantly reduces
document access times, and
improves both access and security for
key records such as contracts, human
resource files and invoices.
PrimaData assists your small business
by converting your paper documents
into electronic format. By using
specialized equipment to create
searchable PDF files, you can easily
access these files without the hassle
of flipping through paper indexes.
Once the documents have been
converted to electronic format, you
will have the option to securely shred
and dispose their old paper
documents for an additional charge
as well as web services to maximize
your newly optimized system.
PrimaData
