a simple business plan for a new venture

The company offers clients a game application for smartphones that they can download. Regardless of the operating system, the solution works with all cellphones and has no ongoing monthly or yearly subscription fees. However, users of this gaming game must pay a $5 purchasing price at first. Extra than an annual update price of $0.5, there are no other subscriptions required after installation. This gaming program has a collection of games in a single package, which is very distinct from those of its competitors. The product will include a large selection of kid-friendly games. Some of the games in the application are educational and will enhance sharpening of the brains. For example, some of the games will require quick mathematical calculations demanding the brain to process within microseconds. Also, some games will help young people gain English vocabularies by engaging the names of the surrounding environment.

As a startup company, the company will engage a minimal workforce expecting the numbers to increase with the growth of the company. The business will adapt a functional organizational structure that comprises of different operational units with each function handling its activities. The business will have four initial and major departments that include marketing, finance, support and advertising departments. The finance department handles all the matters related to financial resources while advertising departments create product awareness. The support department will handle complaints and technical queries while the marketing team will deal with sales. A Chief Executive Officer (CEO) will head all departments. The business will uphold ethical policies and act responsibly.

Product Summary

The product is a phone application that will reach out to different target markets. The application contains a bundle of games, unlike the common applications that entail a single component. The application is compatible with almost all smartphones, as long as they have the capabilities of internet access, installation, and running applications. The application will run on low storage space with a quick access with a single click. The product has several security measures to protect the privacy of users. Consumers will pay via a personal portal created online on the company’s website. The users will fill credit or debit card details in their portals, and the business will provide data security by encrypting the data. During payments, the bank will credit the company’s account with the $5 with no charges as per the agreement between the company and the respective accepted banks. The payment feature in the application will enable users to check their payment details and pending balances, including the annual updates costing $0.5. The company will avail its product in its website and other leading stores such as Google Play for Android operating systems. The product will comprise of different educational gaming applications suitable for children and the youth.

Start-Up Cost and Capitalization

A start-up business may obtain funds from friends and relatives, borrowing from financial institutions and equity financing (Tulchin, 2013). However, the source of capital for the company follows a two-step strategic financial sourcing plan. The company expects, to begin with, a capital of $20000 with a bank loan of an equal amount. The banks charge an interest loan of 10% annually, where the interests form part of the company’s expenses. The bank loan will act as the first plan while the alternative plan involves equity financing. Since investors prefer a business that increase their wealth, the business will settle on issuing shares to the public for subscription. An investor in the alternative plan will receive a share of dividends after making profits. The business intends, to begin with, an initial stock price of $20 to issue 1000 shares. If this plan applies, the CEO and heads of the four departments are expected to purchase a minimum of one hundred shares.

Financial Plan

With an amount of $12000, the business intends to spend some amounts on acquiring strong internet security controls and patenting the innovation with the authorities. The current costs of patenting an innovation are $200 while a strong security system will cost $500. The table below shows the anticipated annual expenses and assets for acquisition.

Asset

Cost

Patent Rights

$200

Security Systems

$500

Expense

Annual Amount

Marketing

$8000

Annual Loan Interest

$2000

Support

$4000

Advertising

$3000

Research and development

$1000

Salaries and Wages

$1000

Total Expenses

$19000

The first step the business will take is buying the security system to safeguard the privacy of users. As a new product, the marketing department will take the largest share of expenditure with minor sub-categories. Social media marketing cost $4000; search engine optimization cost $1000, referral websites and bonuses cost $2500 and miscellaneous expenses of $500. As an incentive of encouraging innovation and new technological advancements, the business plans of spending $2000 on Research and Development (R&D). The financial plan runs

for the whole year with expenses and revenues gathered across the quarters. The finance department will prepare financial statements for every quarter. If the business raises money via equity financing, it will require an information system database for shareholders costing $100. In the first quarter of operations, the company will cover its expenses using initial start-up capital. The subsequent quarters will use the revenue collected from sales to cover the expenses. The company targets 1,000,000 users in the first year with projected sales across the four quarters shown below.

Quarter

Sales (Unit Price)

Sales revenue

1

150000 ($5)

$750000

2

200000 ($5)

$1000000

3

300000 ($5)

$1500000

4

350000 ($5)

$1750000

Total Annual Sales

$5000000

As shown in the projected sales above, even a slight variance from the projected sales will cover the expenses and make huge profits for the business. Additionally, more sales through the quarters infer the growth of the company. The business will use the abnormal profits to acquire its application store and an office. The profits will also see the acquisition of more assets such as mainframe computers for the support department and a strong firewall for the company. With the annual revenues, the updates fees will raise a total of $500000 as from the projected by sales. The business will pay its employees salary with financial resources from the sales of the respective quarters.

Marketing Plan

From the projections of the sales, the marketing expenses have a larger share as compared to the rest. A marketing strategy boosts sales revenue by trying to reach more consumers of the products. Over two billion people across the globe use smartphones and the demand for gaming application by the youth is overwhelming. The target market for the product is young people of the age between 16 to 48 years. Usually, a mobile phone has several uses such as messaging and making calls. However, the target market spends some significant time in games and social media platforms. The critical factor for the product’s market entry is the affordability and the compatibility of the app with simple and cheap smartphones. The product does not require internet services to operate, the resulting impact of playing the games offline will lure many consumers and even those that cannot afford the internet. The marketing plan comprises of pricing, promotion, conversion, referral and retention strategies.

Pricing Strategy: For the pricing strategy, it is ethical to bring fair competition in the market. Fair competition implies that the prices are not too low to woo more users and the prices are not too high beyond the limit of competition. A price rate of $5 for the app is quite fair, and positioning in the gaming sector creates an added advantage since most users of smartphones are young. Ansoff’s model emphasizes that the technological industry is volatile, requiring a business to choose the most appropriate pricing technique to increase sales (Lynn, 2011).

Promotion Strategies: The promotion strategy is very simple and obvious, through social media platforms. Most users of the platforms such as Twitter, Facebook and WhatsApp will create time for idling via games. As part of the optimization marketing strategy, Google will rank the product highly on the internet platform. Any promotional strategy increases the product awareness and market share by enticing new customers.

Retention and Referral Strategies: The retention marketing strategy will ensure that customers do not desire similar apps from competitors. As a result, the company will add features to the app on an annual basis requiring a minimal fee of $0.5. New features will ensure that the app is captivating to new and existing users. The referral strategy will facilitate marketing of the product. This strategy will reward users who use the most referral links to entice new consumers. The referral fee is $2 for each new user of the app.

Organization and Staffing

The business has four departments requiring the heads or managers with a minimum of three employees. After the first quarter, the company will create a human resource department with the need of a greater taskforce. Meanwhile, the CEO and the managers of respective departments will create the necessary job roles, requirements and descriptions. The CEO and managers will develop interview guidelines, establish the training and development programs, create the work schedules and assess the regular performance of the newly recruited employees. Note that the company will apply fair employment by giving a chance to the candidates that match the required skills, abilities and knowledge. For fair recruitment, the company will list the available job requirements and descriptions; the company will advertise the positions in social media platforms and other media channels such as newspapers and radio stations. The business will provide a job seeker’s portal on the website where candidates will register and follow up the recruitment process. After creating an online portal, the candidates will upload their resumes for review. Through the portal, the job seekers will see the application status and make any inquiries. The CEO and managers will contact the qualified candidates for an interview via the respective email addresses. The business will implement a corruption free policy where any person will have the right to report cases of bribery during the recruitment process.

Corporate Social Responsibility(CSR)

Organizations have several responsibilities for its stakeholders. These stakeholders include suppliers, customers, employees, the society and the government (D’Amato, Henderson & Florence, 2009). The company will engage in CSR activities across the globe. The business will support the Red Cross and other humanitarian organizations with surplus financial resources to support in activities of helping the societies. As a successful entrepreneurial business, the company will support upcoming entrepreneurs achieve their dreams via financial support and any piece of information that will help grow the beginners. For the government, the business will pay its tax obligations and meet the regulatory requirements of operating business. For the employees, the business will ensure fair remuneration and provide opportunities for growth and development. Finally, the users of the mobile app will receive a quality product at the fairest price.

Summary

Through innovations and entrepreneurship, individuals generate wealth without relying on employment. The gaming application by the business is a stepping stone to greater success and an innovative idea to benefit the society. For just $5, the app is a great sharpener of children brains and a source of leisure for the youth. Through research and development, the company will improve the product to add greater comfort and user experience. The application is available for smartphone users across the globe, and the best way of marketing this product is through the use of social media marketing. Most users of social media platforms such as Facebook are the same users of the app. Successful companies have to act responsibly; the business will, therefore, make policies subject to ethical considerations. This app will automatically gain worldwide recognition via its activities of social responsibilities and the quality of the product.

References

D’Amato, A., Henderson, S., & Florence, S. (2009). Corporate social responsibility and sustainable business. A Guide to Leadership tasks and functions, 102.

Lynn, M. (2011). Segmenting and Targeting Your Market: Strategies and Limitations (Ph.D.). Cornell University

Tulchin, D., & Lin, S. Y. H. (2012). Capital Sources for Social Enterprise.