This document provides a business plan for MDLX, a company that aims to create an online marketplace for students, faculty, and staff at Knox College to buy and sell used goods. The plan outlines the opportunity in reusing goods on college campuses more efficiently. MDLX will launch initially at Knox College and plans to later expand to other Midwest schools. The plan details the company's products and services, market analysis, financial projections, marketing strategy, and management team. The goal is to launch an initial beta version of the online platform in Fall 2015 to promote reuse and reduce waste at Knox College.

1. Start-Up Term 2015
Final Business Plan
Joe Miao
Jinglun Ding
Laura Lueninghoener
Anda Xu

2. Table of Contents
Executive Summary…………………………………………………………………….. 2
The Industry, the Company, Products/Service……………………………………….. 2
Market Research and Analysis……………...…………………………………………. 4
The Economies of the Business……….………………………………………………..6
Marketing Plan……...……………………………………………………………………. 6
Design and Development Plans………..………………………………………………. 8
Manufacturing and Operations Plan…………….……………………………………... 8
Management Team……………………………………………………………………….9
Sustainability and Impact……...………………………………………………………... 10
Overall Schedule……………………….………………………………………………... 11
The Financial Plan...……………………………………………………………………...11
Proposed Company Offering….………………………………………………………... 12
Appendixes...……………………………………………………………………………...12
Joe Miao, Resume
Jinglun Ding, Resume
Laura Lueninghoener, Resume
Anda Xu, Resume
Financial Breakdown
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3. i. Executive Summary
The mission of MDLX is is to promote the concept and ethics of a sustainable, local economy
around college campuses and universities. This is done through a web interface designed to
connect college students with unwanted quality items to students, faculty, staff, and
administration on the same campus. Working complementary with other departments and
offices to create an efficient system, it will decrease overall waste and reduce institution
spending. This system will empower college students to lie a sustainable life and promote this
lifestyle to create an all encompassing sustainable community.
We are taking advantage of opportunities, created by an increasing need to improve efficiency
in reusing and recycling on college campus, by creating a local share economy. The central
component of the program is a well-designed merchandise website offering the services of local
trading and sharing. We also see an opportunity to facilitate a longer product life cycle. Many
items on college campuses are bought brand-new from stores and online websites, such as
Amazon. These items are used for a few years and then either dumped in the trash or given to a
local charity. While the later option is responsible decision, these items can be used by other
students on campus. This would allow less items to go through the system, students to make a
bit of cash, and items of good quality find a new home. There is not a need to bring so many
new items each year on campus, when the same amount of things will be donated or thrown
away by the end of the year.
ii. The Industry, the Company, the Services
A. The Industry
The current Industry for Internet resale is booming. There are currently around 151 million
undergraduate students globally and 21.8 million undergraduates in the United States alone.
This is a tremendous increase for the US because there were 15.3 million undergraduates in
2000. Not only are the number of students attending college increasing, but so is the amount
of money that academic institutions are putting into sustainable initiatives. ​Knox College has
been increasing the amount of money put into sustainable initiatives each year. ​Doing so not
only cuts down on waste removal services and saves money, but also raises the degree of
STAR, or sustainability score, a school receives. This can lead to free promotion in highly
acclaimed magazines, lower overall expenditures, and increase reputability. USAToday
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4. claims that 69% of students say that a college’s commitment to environmental issues affects
whether to apply or not.
The Industry is also growing outside the academic sphere. Ebay, Amazon, and Craigslist
now have to share the space with other startups and companies trying to find a niche
market. Services such as Freecycle.org, Freecycle@Work, Mecari, Poshmark, Vinted, and
Felicks are gaining traction in the space. Each company has seen, on average, growth of
17% ​since its founding and some are now signing contracts with other companies and
academic institutions for the sole right to facilitate a buying and selling community.
B. The Company and the Concept
The goal of MDLX is to create a user-friendly, intutative, local, online retail platform where
anyone with a Knox.edu email address can create an account. We are not limiting the
service to only students, but expanding it to include faculty, staff, and administration. This
allows the needs of the entire Knox community to be met. Survey data shows that faculty,
staff, and administration provide a large portion of the supply and students provide most of
the demand for this particular niche industry. MDLX’s platform will create a safe, trustworthy,
tight-knit community where users feel comfortable buying and selling second-hand goods.
C. The Service
Our company works within the service-based industry. While there are products for sale on
our site, we are a third-party that facilitates trade. Once users have an account and are
signed in, there are several features that are accessible. The left side has several different
item categories; click on any of the categories to browse items. Inside each section is an
advanced search bar; type in keywords, arrange items from lowest to highest, arrange items
from highest to lowest, filter by condition, or filter by price to find better items. On the top
righthand part of the navigation bar click, “Sell&Share”. This will redirect users to a webpage
to post items. Once an item has been bought, an email will be sent out to both buyer and
seller, a “sold out” watermark will appear over the item picture, and the site will automatically
take the posting down.
D. Entry and Growth Strategy
During the first few years we plan to add: an Internet Stripe feature, commission feature, and
physical shop feature. Until we can get the Internet Stripe feature included, we do not have a
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5. way of charging or receiving a 5% commission on all transactions. Feasibly, it would take
our team a year to implement the Stripe feature and find a physical location for item
distribution. Our current focus is to bring out a Beta or Gamma version of this product before
charging fees. We want to make sure that we can offer our users a top-of-the-line, reputable
service that stands out among the ever-increasing competitors. After Knox College, we
would like to expand to other colleges in the Midwest and ACM Conferences. Some of these
schools include: Grinnell, St. Olaf, Carleton, Colorado, and Ripon. These schools are the
early adopters in sustainability initiatives for the conferences and will set the bar for other
colleges to follow.
III. Market Research and Analysis
A. Customers
Our customers include everyone with a Knox.edu address, which extends to students,
faculty, staff, and administration. This market segment is exclusive to that particular
institution-issued email address. Through our own surveys and focus groups, we have found
that the demand for this service will mainly be pulled by current students and young
professionals, mainly in the areas of Athletics and Admissions. This demographic is starting
a new chapter in life and are trying to situate themselves appropriately. The supply side of
our business will also come from this same demographic, but also the faculty, staff, and
administration. As we have discovered, these people have gained a substantial amount of
physical capital and are looking to downsize on material goods.
Our focus group feedback has affirmed the likeability of our service. Customers are
extremely receptive until we reach an older demographic, mainly 65+, that is hesitant.
Students and young Knox professionals are extremely excited for this service because
MDLX will facilitate trade during an important life period. Many of these people are furnishing
a dorm room or apartment for the first time and need things, but do not want to pay full price.
Every MDLX focus group participant is an early adopter and was extremely interested in
getting registered and starting to post products.
B. Competition and Competitive Edges
The major strength of our competitors is being a household name. For us, it will be difficult to
compete with entities like Amazon, Ebay, and Craigslist. Realistically, we are not challenging
these companies head on, but instead trying to take control of an overlooked niche market.
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6. The advantage MDLX has over these companies is accessibility. If users do not have an
internet device, the school has devices available and users do not have to travel to use the
service. A weakness our business has are the ever-changing supply and demand of
products and our face-to-face meeting strategy. Millennials are moving towards an Internet
medium instead of meeting face-to-face.
Our competition has some problems. While Felicks has an impressive 14,000 people
registered at 12 different schools, these numbers indicate larger problems. The founder,
Ilham Kabir, attends Indiana University which has around 36,800 undergraduates. If the
number of people registered was evenly distributed among the twelve schools, this would
mean that IU has 1,167 students registered with Felicks, which is between 3-4% of the total
student population. It may be that there are more undergraduates registered than 4% at IU,
but the Felicks is having trouble with penetration. Also, the non-IPO platform looks and runs
like it was created by an introductory CS student. The site is not intuitive and take
painstaking time to figure out.​ Our platform is clean, simple and has been formed through
survey feedback, focus groups, and open house demos.
C. Estimated Market Share and Sales
The estimated sales until the end of June 2015 will be $1,892.64. Our estimated sales at
Knox for the following academic year is between $8,000 ~ $10,000.
D. Ongoing Market Evaluation
We will continue to evaluate our target market and tailor our services to fit the current
market. Users can continually give us feedback about our services and we will collect
analytics on the site. Things such as number of visits, number of transactions, and the
number of active users will help us determine consumer needs and product improvement.
MDLX would like to add the payment system before entering into other ACM and Midwest
Conference Schools. The feedback given at Knox and the slow integration into the other
schools will guarantee successful market penetration and a reduction of errors when adding
a new institution. Using a bottom-top approach and testing our service on a smaller scale
will ensure that the site does not crash and can handle a substantial increase of users and
transactions.
IV. The Economics of Business
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7. A. Profit Potential and Durability
Since MDLX is non-profit organization, we are not focusing on generating a major profit.
Instead, our goal is to keep a positive cash flow at the end of every reporting period and use
the profit to grow our organization.
B. Fixed, Variable, and Semivariable Costs
Fixed costs include: domain purchase fee, web server monthly fee, office supplies,
advertising and marketing expenses, incorporation fee, and general liability insurance fee.
Variable cost is the online payment service, Stripe, which we will implement on our website.
It charges a flat rate (2.9% +30​ ¢​) on each transaction.
C. Months to Breakeven and Reach Positive Cash Flow
We will need four months to breakeven and have positive cash flow in October 2015. This is
only true if we receive an $800 grant from Knox Sustainability Fund. If not, we will need ten
months to breakeven in April 2016 when Stripe is implemented to start collecting sales
commission and finder’s fees.
V. Marketing Plan
A. Overall Marketing Strategy
MDLX aims to release our product in the fall of this year. We will introduce it to first years
during orientation and start pulse advertising at the beginning of the school year. We will
start the site with inventory from the ShareShop and encourage people to sign up at
Pumphandle, Carnival of Clubs, and other beginning of the year events. Advertising will be
heavy during August and September when we release the initial product. Marketing will then
level out during the months of October to March. When April hits, advertising will again be
heavy until the beginning of June. ​Our supply and demand will fluctuate during the academic
year. The beginning of each term will see a rise in demand and the end of the term will see a
rise in supply. August and September will have the highest demand and May and June will
be the highest supply period. Buying and selling happens throughout the year, as shown in
the current selling outlets for campus. With a more accessible online platform, transactions
should start to even out the during the year.
B. Pricing and Sales Tactics
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8. Once Stripe is implemented, we are planning on taking a 5% commission on all sales. Our
competitors are taking higher cuts, some as much as 20% to turn profits. College and
university campus users are not as receptive to a higher commission rate because the items
being sold on MDLX, as opposed other commercial platforms, are mostly likely not as
valuable monetarily. A higher commission will discourage sales. Later on, we would like to
add a “Services” section where users can post services he or she needs or can offer. This
feature was the most highly requested feature from our focus groups. Our team has decided
to charge a $5 Finder’s Fee to post these services. The overall goal is to create a strong
core of dedicated users through a heavily penetrated market. On social media and resale
platform sites, it is all about the number of users a site has registered. Soon, this market will
be turning away from numbers to actual value.
C. Advertising and Promotion
Our survey results show that potential users look at Facebook, posters/flyers, Faculty-Staff
mailing list, Union Board events, and friends/co-workers the most to find out about events.
Exploiting these avenues, our plan is to have special events advertised on Facebook and
posters to spread the word about the business. Emails to the Faculty-Staff Mailing list will
get the ball rolling on that particular market segment. To generate word of mouth, we plan
on using groups such as KARES, Buy/Sell/Trade Facebook Page, and the Sustainability
office to be our ambassadors. These people will be our early adopters.
D. Distribution
After a user buys an item on the MDLX site, a buyer’s contact information will become
available. The buyer and seller are then responsible for following the Meeting Guidelines
MDLX emails to both users. Both parties will meet on campus, during the daytime, at a
suggested public location, and at a convenient time. This allows MDLX to not incur
distribution expenses for the first couple of years. Once Stripe is implemented, we plan on
moving to a warehouse to conduct transactions. Distribution costs will rise because we will
have have to pay rent, utilities, insurance, and worker wages.
VI. Design and Development Plans
A. Development Status and Tasks
At the moment our team has email notifications, post history, order history, posting, buying,
seller acceptance, registering, logging in, and currently posted items on the front page
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9. completed. These are all fully functioning and have been tested for bugs. We have left to
implement: negotiating, online payment plug-in, commission, and finder’s fee charge, and
services left. These should take another two months to code, test, focus group, and
implement. Simultaneously on the business side, we will be working to find a physical space
and hire employees to work the warehouse.
B. Product Improvement: Difficulties and Risks
The potential problems and risks include: finalizing Stripe, adding a Services section, setting
up a commission fee, and finishing legal paperwork. We already have a bank account, but
need to sign paperwork to work with third-party vendors. The services page will be the most
difficult because there are more problems that can go awry. Logistically, we have to create a
demand and supply platform for the page and then write an extensive Term and Services
addition. Legally, we are liable for a services recommendation than selling an item on the
MDLX site. Purchasing additional insurance for the Services section will be necessary for
this next step.
VII. Manufacturing and Operations Plan
A. Geographical Location and Operating Cycle
Our business will begin at Knox College before expanding. We would like to see a physical
distribution center in the middle of campu, preferably in Seymour, GDH, or the Aux Gym.
Realistically, we would co-exist with the ShareShop. However, many students, faculty, staff,
and administration do not know the location of the ShareShop. They also tend to dislike the
“creepiness” of the basement space. Keeping the location central to campus and open
concept will ensure a feeling of warmth and trustworthiness. The other problem with
co-existing with the ShareShop is access. Froggi, the Knox Sustainability Coordinator, is
looking to hire one full-time student to work the ShareShop for the 2015-2016 academic
year. However, she had a trouble finding volunteers willing to sit in the space and finding
consistent operation hours. Many people this year have not known when the ShareShop
was open; especially since hours change each term.
B. ​Facilities and Improvements
The type of space we are looking for is a place big enough to hold large, in-transit items, but
small enough to be located in the middle of campus. It must be clean, well-lit, and manage
day-to-day transactions. Ideally, we would be able to purchase and maintain our own
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10. servers into the same space. We would like to hire a manager to oversee the day-to-day
expenses and problems.
VIII. Management Team
A. Organization
For our company, Anda Xu will be the head of the Software Development, Jinglun Ding will
be charge of the Design Department, Laura Lueninghoener will be the Chief Marketing
Officer, and Joe Miao will be the Chief Financial Officer. All of us will sit on the Board of
Directors and have a 25% stake in the company. Corporations, organizations, and the
Government can invest in the company for Goodwill purposes.
B. Key Management Personnel
Jinglun Ding ​is a Sophomore at Knox College. He has a major in Computer Science is
working on being a double major in a self-designed Art Design major. His strengths lie in
dynamic website development, advanced image processing, coding, composition, and
website interface design. Duties for the term included: website visual design, front end
functionality, photography, typography, and logo and PR development.
Laura Lueninghoener ​is a Junior at Knox College. She has a self-design major in Media
Studies and a minor in Business and Management with a focus in Marketing. Her strengths
lie in marketing, research, networking, social media management, writing, design and
composition, and oral defense skills. Duties for the term included: writing legal paperwork,
blogging, maintaining social media sites, researching, running focus groups, and completing
write-ups.
Joe Miao​ is a Senior at Knox College. He has a major in Computer Science and a minor in
Economics. His strengths lie in marketing, analysis, financials, management, website
development, and visual design. Duties for the term included: website visual design, front
end functionality, team schedule management, Pivotal Tracker management, financials, and
all odd jobs.
Anda Xu ​is a Senior at Knox College. He has a major in Computer Science and a minor in
Mathematics. His strengths lie in website development, functionality, software development,
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11. coding, and integration. Duties for the term included: back end coding, front and back end
integration, website functionality, and back end research.
C. Supporting Professional Advisors and Services
Our company will be using F&M Banking for all of our banking needs. The flexible business
plans allows us to change and adjust with our growth. Our lawyer that we would use is
Daniel Alcorn from Alcron-Karlin, LLC.​ The insurance company that we would use is Invision
Insurance in downtown Galesburg with basic liability policy.
IX. Sustainability and Impact
During one academic year at Knox College, students generate almost 400 tons of landfill
waste. Of those 400 tons, at least 50 tons of this can be reused. This number increases with
summer move-out in June. During move-out each year, the school generates about eighteen
tons of landfill waste. The new sustainability initiative last move out (2014) was able to
collect nine tons, out of the eighteen tons, and reuse it. Out of the nine tons, half of that was
recycled and half of this was used. In simpler terms, fifty percent of landfill waste at Knox
can have an extended life. This initiative was so successful that Knox College had a surplus
in the Share Shop and was able to give back to the Galesburg community through donation
to Safe Harbor, FISH Food Pantry, and the local shelters.
However, this system is simply not enough. Students have tried additionally tried to find a
better solution. Below is a screenshot, obtained from Froggi, that gives an example of a
need to facilitate a better system on campus. MDLX can offer this service.
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12. X. Overall Schedule
Time Milestone Explanation
Aug. 2015 First Release Users can post and buy items, finalize a deal on MDLX’s
website, and meetup to complete transaction using cash.
Oct. 2015 Second Release
- Complete
Services
Function)
All focus groups asked for a service function. This time
would allow us to code the function and follow up with legal
paperwork and liabilities. We also will implement a Wishlist
feature so users can post requests for things they want.
Nov. 2015 Incorporate &
Insurance
We will incorporate MDLX as a non-profit organization and
purchase general liability insurance to protect our
business.
Apr. 2016 Third Release -
Online Payment
Plugin
This would allow us to start charging a commission and
gaining money on each transaction. It also makes it easier
for users to buy products because many people at Knox do
not carry cash on their person.
Mar. 2016 Space on
Campus
There is currently a bloodbath for spaces on campus. This
time would allow us to work with the school to find a space
in the middle of campus and come to a favorable
agreement on a rent contract.
XI. The Financial Plan
MDLX is a non-for-profit organization. Investors will need to look at our balance sheet and
Cumulative Cash Flow at the end of each reporting period. Our major revenue will come
from grants and donations from other organizations or individuals. Initially, we are planning
to apply for $800 through the Knox Sustainability Fund based on our operating expenses.
However, we are also researching nationwide sustainability funds. To cover expenses, we
charge users a sales commission and finder’s fee on using our site. Our expenses include:
advertising and marketing, research and development, general administrative, and other
expenses. As a non-profit organization, we need concentrate on advertising, marketing, and
develop new services. Our advertising and marketing expenses include: business cards
cost, fundraising events, and other advertising costs. Research and development expenses
include: website domain purchase fee, web server fee, and Stripe service fee. For an online
payment vendor, we chose Stripe because it has a simple pricing structure and charges a
relatively lower rate on transactions. All the net profit will roll into next reporting period’s
budget to cover expenses.
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13. XII. Proposed Company Offering
A. Desired Financing
Based upon our Financial Plan, we will need $688.55 for our business to continue to operate
until the end of March 2016. If we do not receive the grant from Knox, we will need $122.55
to finance our business to operate till the end of September 2015.
In the “MDLX_Startup Budget” excel sheet in the Appendix, risks in broken down into further
details. It shows cumulative cash flow if we achieve 10% of projected revenue, 20% of
projected revenue… 90% of projected revenue in each of the following 13 months. If a
cumulative cash flow for a month is below zero, it means we are going to need that amount
of funding to operate till the end of that month.
B. ​Use of Funds
Receiving our full financing will allow us to maintain current services, develop new features,
and achieve market penetration at Knox. The capital will be used to cover our daily
operational costs, such as a monthly web server fee and marketing expenses. It will also
allow us to implement Stripe, which will make transactions easier for users. If we do not
receive enough from the Knox Sustainability Fund, the majority of fund from our investors
will be used to cover our incorporation fee and general liability insurance.
XIII. Appendixes
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