Graded Homework

Assignment: Business Plan
? The professor will choose the group members. Students will choose which idea to pursue from
the discussion board assignment.
? Each group will have a CEO whom will be responsible for dividing the work amongst group
members and ensuring that the assignment is compiled correctly and turned in on time. If the
team has any issues with members not performing, it is up to the CEO to report these issues to
the professor.
? The CEO role will be automatically assigned to the idea originator. If the idea originator does not
want to be the CEO, then they get to decide who will be.
? There will be a strong emphasis on the collection of research data.
? When choosing your company name, make sure you perform a ?trademark search? first. Do not
choose a name that is already taken. You can perform a trademark search by visiting the
USPTO.GOV? site, clicking on "TESS Search Trademarks" then "Basic Word Mark Search (New
User)". If the trademark search does not return any "Live" matches or has "Dead" ones you can
use it.
? Write the business plan as if an actual investor/bank were reading it. This is a formal document,
ensure your tone is professional.
? There is no need to "teach" the reader the terms/concepts/definitions you have learned
throughout the class. Assume the person reading the document is knowledgeable about the
terms.
? Avoid the use of "I", "we" or "our". Refer to the business as the company name you selected or
"The Company".
? Don’t write as if the company is already established. This is your ?PROPOSAL? to start the
company.
? You will be expected to choose an available web domain (don’t worry you don’t actually have to
buy it) make sure to do a domain search first to ensure you aren’t choosing a URL that is already
taken. For instructions on how to do this, check out Extra Credit Assignment #1.
? Make use of font tools (bold, italics, colors) to highlight important words in your business plan.
? The use of bullet points, graphs, charts and graphics to break up the monotony of the plan is
encouraged.
? There will be Adobe Connect meeting rooms for all the groups in this class to meet and work on
group assignments. These can be found by going to “Course Tools”, then clicking on “Adobe
Connect” and then scrolling down to “Adobe Connect Group Meeting Rooms”. From there, select
the link for your group number.
? Maximum of 4,000 words (which should be about 6 pages, single spaced). The cover page, table
of contents, addendum/appendix and works cited pages do not count towards these length
requirements. Include page numbers on every page. ?
? ? The business plan must include the following segments:
Cover Page? – Company name, location, and team members. Engaging graphics/images
are encouraged.
Company Overview? – Covers what the company will do, what makes it unique, and what
the value proposition is. Mention how the company would legally be established (C-Corp,
S-Corp, LLC, etc.). Include the mission statement and the purpose of the business and
any keys to success. ? Team Background? – A few sentences for each team member covering their background,
chosen major and any special traits/skills that will help take the company to the next
level.
? Distinctive Competence? – Describe the product or service in detail. If applicable,
mention any potential Intellectual Property (IP). Make sure to mention any future products
or services.
? Market Analysis? – Include the addressable market and the clear market need. ?I would
like all groups to use the library (online or in person) to get the ?IBIS Market Data? (or
equivalent resource) for their chosen industry. Make sure to credit this as a source of
information when stating your market size. Contact the ?FIU Library? if you need help
accessing these resources.? Also mention the Aha! Moment that drove the business idea.
Identify if the market is growing or shrinking. Mention any barriers to entry for the
industry. Note this is the most important part of the plan.
? Competitive Analysis? – Who the major competitors are (there are ?ALWAYS
competitors) and what makes your company/product/service better.
? Business Model? – How the business makes money.
? Marketing Strategy? – Who the targeted customers are. What marketing strategies will
be used to grow the business. Mention how the product or service will be priced. Mention
any potential strategic alliances.
? Financial Projections? – Simple table showing a basic 5 year (1 column per year)
financial projection including the following information: unit sales OR # of users, gross
sales revenue, gross expenses, gross margin $, gross margin %, net profit $ and net
profit %.
? Funding? – If applicable, mention the type of funding (debt or equity), the amount of
funding needed and where it would come from. Raising no capital or bootstrapping is OK
as well – just mention how it will be done.
? Risk Factors? – Clearly identify the risk factors relating to the business. Leverage
concepts from the Lean Startup book to identify methods of reducing the major risk
factors.
? Appendix? – Include any relevant graphs, figures or pictures.
? Works Cited -? Make sure to include this as a final page in your business plan. Ensure
this is in proper MLA format. Use MLA-standard in-text citations in your plan when using
information from other sources. Shop, Pay & Go
I. Introduction
All companies strive to maximize profits. Such performance is typically defined by
tangible measurements such as total sales or earnings per share. We are introducing our new application named Shop, Pay & Go that will help both customers and businesses. The goal of this
app is to mainly help the consumers’ shopping experience to be pleasant and quick while cutting
costs and increasing profit for the business. For consumers, we want them to stop abandoning
their shopping carts when they see the long lines and use the app to pay for their items. On the
business owners side, we will help cut costs by reducing the amount employees required to
process the customer’s payments as well as reducing expenses related to training and
development of employees. By having less expenses for employees and having less cart
abandonment and put-backs, it will help to improve your profits. With our new app, Shop, Pay &
Go, we hope to revolutionize the way companies do business with their customers.
II. Background Information
a. Customer Service Issues
In the retail environment, checkout time has a huge impact on customer perception of
service. Regardless of how convenient the store location is or how reasonable the prices are, long
checkout lines can make customers leave a store and never come back. Retailers cannot ignore
this issue, because finding new loyal customers is a difficult and expensive task. Indeed, it can
take up to 18 months before new customers become profitable.
Long checkout lines negatively affect sales in the following ways:
? Cart Abandonment and Put-backs occur when customers leave their carts because
checkout lines are too long for them. Many customers may abandon their carts or put
their goods back on the shelves, and leave without purchasing anything, in order to avoid
the line. The store earns no revenue and customers leave dissatisfied.
? Drive-bys occur when customers do not even attempt to enter a store because the lines
are too long or perceived to be too long. Researchers at Duke University and Columbia
Business School have discovered that shoppers pay much more attention to the length of
a line, rather than to how fast that line is moving. Most customers do not take into
consideration the fact that people in a longer line, served by three cashiers, will spend
less time waiting than people in a shorter line served by only one cashier (Ideas for
Leaders 2013).
? Perception of value can suffer because of long checkout lines. Waiting at the checkout to
pay is the last thing a customer does before leaving. If a negative impression is created at
this phase of their experience, the customers’ perception of value, including customer
service, will decrease. Consequently, the customers’ share of expenditure at a particular
store will also decrease. Researchers have also discovered that price sensitive consumers
have higher tolerance for waiting in line than shoppers who buy products that are more
expensive (Ideas for Leaders 2013). Therefore, if a store sells both expensive and
inexpensive goods, customers willing to pay premium price for goods will be the first
disappointed by a long wait. ? Negative word-of-mouth affect sales. Long checkout time is perceived as a negative
experience associated with stress, boredom and a wasting of time feeling. However,
many customers share their negative experiences with families and friends. Therefore,
long checkout lines can give a negative image of a store, leading to poor sales
performance.
Several studies have proven that long checkout lines problem is very significant:
? A third of customers report they have abandoned a checkout line when forced to wait for
more than 5 minutes.
? Nearly half of all customers will actively avoid a retailer in the future if the wait in the
line was longer than 5 minutes.
? 48% of those surveyed avoid a retail store because of someone else’s negative
experience.
? Most customers become frustrated after 2.5 minutes of no apparent progress in a line
(Nomi.com 2016).
b. Operating Costs and Profit Margins
High operating costs is another serious issue affecting retailers’ profit in a negative way.
Your store may be conveniently located, you may offer great products at reasonable prices, you
may hire the most qualified employees but operating costs can make or break retail operation. In
the retail industry, these costs are known as selling, general and administrative costs (SG&A), a
balance sheet item, deducted from your gross profit (revenue — cost of goods sold) to arrive at
net income.
Typically, a retail store producing about $500,000 in sales yields a net profit of only 2 to
3 percent, often as a result of extremely high operating costs which are usually between 40 and
50% of sales revenue. Wal-mart, for example, the world’s largest retailer, only experienced a 3%
profit margin a year ago. In other words, it takes Walmart approximately 30 days in a 31-day
month to cover its operating costs. These costs could be broken down into a few more specific
expenses that may help management to figure out how to cut them.
In any retail operation the largest overhead cost is labor cost which is typically 15% of all
costs. Retail employees include cashiers, salespersons, sales managers, customer service
representatives and many others. As of 2015, they earned average median hourly wage of
$16.64, but depending on occupation earnings vary greatly. Rent equals approximately 10% of
all operating costs. Advertising and promotion come in at about 3% and administration costs
(payroll services for example) follow at 2.5%. Supplies, such as bags, boxes, tape, office supplies
typically run at 2.5% with accounting and technology generally falling in the 3-4% range. These
costs include checkout lane setup and maintenance costs. Retailers usually pay up to $125,000
for a 4-lane setup (or about $30,000 a piece) and most checkout equipment includes 2
touch-screen monitors, a barcode scanner, electronic scale, payment module and ATM PIN pad. It is also important to increase revenue while cutting operating costs. The studies have
shown that a single shopper, for instance, usually visits 4 stores a month – a drug store (CVS,
Walgreens, etc.), a couple of grocery stores (Publix, Whole Foods, etc.) and a convenience store
and buys the same items. If retailers can improve customers’ perceived value, making them
spend 30-40% more every time they shop at a particular store, sales revenue can raise by
one-third.
Incremental improvements in checkout efficiency can pay impressive dividends. For
instance, by reducing cart abandonment by only 1%, a retail store with daily sales of $200,000
can increase it yearly revenue by $730,000.
Technology helps retailers to optimize various aspects of operations, including supply
chains, POS systems, location selection, call centers, etc. However, when it comes to customer
experience in retail locations, no technology has been adequately applied. We would like to
introduce a new technology, called Shop Pay and Go. It is focused on understanding in-store
customers’ behavior and is aimed to enhance shopping experience while increasing sales revenue
and cutting operating costs.
III. Shop, Pay & Go
a. Mission Statement To continually develop innovative technologies while striving to lead the way as an
eco-friendly organization. We are bringing resolutions to an overwhelming world. Shop, Pay and
Go is committed to provide the quickest, easiest and best personal experience as you make your
purchases.
b. Description of Shop, Pay & Go
Shop, Pay & Go will be an application downloadable on any smartphone with iOS or
Android Operating System that have an incorporated camera. Customers will be able to scan the
items quickly and place them in a bag. When all items are scanned, customers can see the list of
items. If the list does not match, they can cancel or rescan an item. If they approve the list, they
will be forwarded to the paypal application, on which they can pay with their credit cards. After
the payment is completed, they will automatically receive a receipt by email.
Shop, Pay & Go will be linked to the retailers’ operating system to register all purchases.
This will enable the company to register those revenues for accounting purposes. Moreover, an
interface with the company’s stock management softwares will make it possible to register all
stock exits from our application. c. Benefits of Shop, Pay & Go
Shop, Pay & Go is an application designed to reduce the time customers spend waiting at
the cash registers, while enabling retailers to reduce their costs. Therefore, Shop, Pay & Go will help businesses improve their customer service. Indeed, customers will be more satisfied as they
will no longer have to wait in long lines. This will also help reduce the number of unsatisfied
customers, who spread negative comments about the company. Consequently, more customers
will be willing to visit the stores that will use our application. Meanwhile, customers who come
to the store will be more likely to complete the purchases rather than driving by or abandoning
their carts. The smaller checkout lines will also help attract customers who are willing to pay a
premium price, especially since this class of customers is more sensitive to time. This will
increase the company’s revenues.
Shop, Pay & Go will also enable businesses to reduce their operating costs in several
ways. Indeed, our application will help reduce labor costs by reorganizing the purchase process.
Moreover, the connection between our application and the warehousing softwares will help
minimize storage costs. Finally, our system will enable stores to reduce the space they currently
use for checking lines and cashiers. This means that stores may be able to avoid expensive
extensions by adding racks in areas currently used for checking lines. d. Security Analysis
While creating our product, we have identified two main types of risks: payment fraud
and shoplifting. Shop, Pay & Go takes an active role to making sure that customer feel safe
when paying. For this reason, all payments through the Shop, Pay & Go application will be
secured by Paypal. This agreement is intended to protect customers from credit card and identity
theft.
We have also devised various procedures to limit both shoplifting and human errors. In
order to prevent shoppers from leaving the store without paying, a few employees will check all
customers’ bags, while surveying the payment area. Stores can install portals that will sound if
customers leave with unpaid expensive goods. Our application will directly send the payment
information to the portals. Those checks will also prevent people from paying only for some of
the goods they purchase.
IV. Consumer Profile
a. Busy workers
b. Families
c. Tech Savvy Individuals
We all know the feeling of getting caught up in the fast paced busy lifestyle, always on
the go until something unexpectedly slows you down. You know the feeling, telling
yourself “ I’m just quickly going to stop in the store, I’ll be in and out” and then you see
the long line and ask yourself how in such a fast-paced busy town and we all been stuck
just waiting here for something as simple as scanning a barcode. That is why although
we believe that one day this app is something that can be a weekly app for all demographics, we have a very specific target market. We will first test in high contracted
cities, where people are always on the move and every minute counts. Therefore, the
demographic we are targeting are people 18-60 years of age, that live in cities that are
very busy and in a hustle, we are targeting busy workers, families and tech savvy
individuals. This is an app that is created to save people as much time as possible. Shop
pay and go works very close along the lines of PayPal. People that are currently using
PayPal is a group that we hope to target right away because they are already very
comfortable using an app to make purchases. PayPal currently has over 119 million
active accounts giving people growing convenience and saving time. After all for busy
individuals time is money and it is our mission to make the lives of those individuals that
much more convenient. V. Conclusions In a world of growing population and revolutionary technology, convenience stores are facing a
dilemma involving having too many customers, and not being capable of rapidly attend them to
minimize their waiting time in lines to pay. Shop, Pay, and Go is designed to minimize the
average waiting time for customers at the retailers and grocery stores. Our ultimate goal is to
improve the level of customers satisfaction as well as to increase revenues for the stores that are
going to use the app.
Studies have shown the negatives effects of having long checking lines, especially at
supermarkets, so we will strive to develop and update our technology thru Shop, Pay, and Go in
order to expedite the lines, minimize losses, increase efficiency, and maximize customer
satisfaction. Works Cited
“Why Customers Leave and How to Keep Them”. ?Nomi.com?, 2016. Web. 31 March 2016.
Executive Summary
This report provides a description of a new product which could give a significant boost to the
retail stores. Our intention is to create an app that in a simple way give the customers the
possibility to grab a product, scan it with his/her own smartphone using the camera, and pay
for it with his/her credit card information. This way the customer have the option to do a very
fast and simple self-checkout through this app. Our objective is to give the retail stores a