Summary of the Business Idea: Kool Designs

KOOL DESIGNS GRAPHIC DESIGN BUSINESS
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Summary of the Business Idea
About the Business and the Industry
We are three young graphic designers with an idea of a creative agency business called "Kool Designs." Our services include logos, advertisement materials, brochures, posters, web design, art direction, illustration and photography, business cards, pamphlets, and others. We offer "All-in-One Concept," services that customers use to present their businesses well. We perform well to satisfy customers; expectations for good graphical work until we get a satisfied customer base. Our prices are fair, i.e., at least 10-20% lower than existing creative agencies working in the industry. Besides, we offer freelancing services at Upwork and Fiverr. Our line of business is a graphic design agency that is flexible, fast, and cheap.
Target Customers and Customer Profile
The businesses will contract with us and ask for our services regularly. It will provide around 30% of the revenue to the company. The visiting customers can contact us and ask for the relevant services. The segment will give approximately 20% of the revenue to the business. We will remain active for at least 18 hours on different freelancing platforms. The segment is worth 50% of our business revenue. Here, our emphasis will be on international and national clients. We work for at least 100 hours per month in freelancing companies to find our new customers, i.e., small shops, private people, or small companies. We have in-depth knowledge of technical and vocational skills to attract the audience. The most considerable resources for our business are our time and passion, good knowledge, and flexibility.
Size of the Market
Kool Designs will operate both online and in the office. The market size is $41.8 billion in 2021, which is expected to increase by 3.7% in the next three years. In 2017-2022, the growth rate was only 0.6%, which rose to 3.7% due to the COVID-19 impact where most of the businesses have shifted their focus online. The graphic designers market will be $12.7 billion in 2021, according to IBIS World (2021).
Figure 1: Market Growth and Size
(Source: IBIS, 2021)
The graphic designers market was shrunk by 10.6% in 2020; however, the market hopes to recover as soon as possible. It is expected that 11,000 new jobs will be added every year till 2028, and the industry is in the growth phase for the next ten years. The categories of the services are book designing, website, logos, illustration, video editing, and other factors. Video editing and online advertisement are expected to increase by 24% by 2028 (Eksposure, 2020).
Number and Location of Competition
In 2020, there are over 400,528 businesses of graphic designing, and design-led companies have stimulated creativity which has increased the creativity by 1.5 times. Design-driven companies have outperformed by 228%, whereas 67% of small businesses pay $500 for a logo (Eksposure, 2021). The competitors are from every region (online and in-office). The other competitors are freelancing platforms. At least 70% of the competitors of Kool Designs will be from online channels like freelancing platforms, website services, and social media channels.
Customers' Preferences
Modern-day businesses are based on dynamic content with different visitors' inputs depending on the options during navigation. Kool Design's website content will be dynamic based on users' input. The service's name and description will be stored in our database. This information is fetched when a user views a webpage. The content is generated by the CMS, which changes across products. The product price will be increased and decreased as per users' demand. Our customers can select various options from our checklist and plan their budgets accordingly. The dynamic website requires detailed programming and database design. It contains the information that changes depending on factors, i.e., time zone, area, language. Any change in the data within the database changes the website.
Potential Risks
Negative reviews on freelancing would negatively impact the business. Besides, data loss chances due to hardware or system failure are high, resulting in the loss of potential business values. No entry barriers increase new entrants every day; that is why the business has to deal with already established competitors. Diversification in skills and offerings will lead to an increased customer base to overcome such risks. Work from home mantra can save operational costs. Adaptation of better technologies will improve the quality of work further.
Key Success Factors
* The marketing will be done through business cards, social media marketing, and networking. Our customers will leave reviews on our profile and website, which will attract more customers. Besides, we will be displaying our work on our portfolio which customers can see before ordering.
* Customer loyalty can be increased by improving the services and offering regular discounts to frequently visiting customers.
* The business's legal status is the partnership where we will be sharing expenses and profit on an equal basis.
* Kool Designs will provide follow-up after services to our clients for up to five days to ask for us for unlimited revisions.
Fixed and Variable Costs
The incurred cost is based on the fixed and variable costs to run the graphic designing business. The fixed costs will not change throughout the year, whereas the variable costs change depending on the activities levels (Drury, 2013). Total fixed costs for the project will be $50,800. The furniture and fixtures costs, computer peripherals, and internet connection deposit will be the highest cost, whereas license and insurance will be of low cost. The variable costs will have rent and salaries as the most increased cost and office supplies, refreshments, and travel expenses as the lowest cost. The volatility of the variable costs is high than the fixed costs. The initial equipment required for the project are systems, hard disks, motherboards, highly established internet, and telephone connections. Two permanent graphic designers and two part-time designers will be recruited to manage the business operations and customers' orders.
Table 1: Fixed and Variable Cost
Fixed Costs

$

Variable Costs

$

Security Deposit

$ 12,000.00

Rent

$ 30,000.00

Furnitures and Fixtures

$ 12,000.00

Marketing and Advertisement

$ 1,000.00

Computer Peripherals

$ 25,000.00

Salaries

$ 15,000.00

License

$ 2,500.00

Courier and Postage

$ 200.00

Working Capital

$ 3,000.00

Office Supplies

$ 300.00

Fire Insurance

$ 1,000.00

Refereshments

$ 500.00

Theft Insurance

$ 1,000.00

Traveling Expenses

$ 300.00

Reserves

$ 4,000.00

Refereshments

$ 1,200.00...