Business Plan - Entrepreneurship in the Global Age

Business Plan: Entrepreneurial Opportunity
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Business Plan: Entrepreneurial Opportunity
Executive Summary
This plan presents Smith Inc., a start-up firm aiming to develop smartphones for developing and developed nations around the world. The company will be based in the US, but it will have partners in Asia who will manufacture and supply smartphone generic parts. The product that Smith Inc. plans to introduce in the market is a semi-customizable smartphone which will be sold at $300 per unit. This is a fraction of the price other industry players are offering. The features of the business proposition that is expected to appeal to customers are the low pricing and the ability to customize the phone, both of which are not present in the industry.
The company will invest significantly in marketing, particularly in online platforms in order to reach its target customers. The firm will hire a marketing manager to oversee its promotional activities. The aim of marketing strategy will be to create and spread awareness of the brand in the market. The operations of Smith Inc. will be overseen by Mr. and Mrs. Smith as well as three employees that will be hired. The three employees that will be hired will be in charge of marketing, operations, and research and development (R&D). As for the finances, the owners will contribute $300,000 from their savings while $600,000 will be solicited from angel investors and venture financing for a percentage of equity in the firm. It is expected that the business will sell 40,000 units in the first year of operations, 60,000 in the second, and 80,000 in the third. These sales will enable the business to pick up and achieve growth. The income will also help the company in expanding operations.
Company Description
Smith Inc will be a startup company dealing with the manufacture and sales of semi-customizable smartphones to customers in developed and developing countries around the world. The smartphone will be easily customizable by the buyer. The generic parts of the phone will be easily assembled and customized to fit demands of the customer. The company will thus operate in the smartphone industry, and it expects competition from major industry players like Samsung Electronics and Apple Inc. However, price and the ability to customize the smartphones will distinguish Smith Inc. from the competition. Smith will set up a manufacturing plant in an Asian country, Indonesia. According to Lomas (2017), the labor costs in China have risen, and companies are considering other low-cost manufacturing countries like Indonesia, Thailand, Vietnam, and Malaysia. Indonesia will be manufacturing hub as it starts the smartphones manufacturing and selling. As a start-up based in the US, managing operations in Asia will be challenging. The business will depend on partners in Asia to help in the manufacturing of the Smith phone generic parts.
The development of semi customizable phones is selected because it is not currently on the market and it is an opportunity worth exploring. The products of major industry players like Samsung and Apple does not allow easy customization by the customer. Smith phone intends to provide the customer with the ability to easily customize their smartphones to fit their desires. Therefore, the reason for selection of this product is to offer a new experience to customers, something that traditional manufacturers do not do with their annual upgrades. Price will also be a distinguishing feature between Smith phones and competitors. The phones will be sold at a fraction of the price of competitors. This way, Smith Inc, will not only be offering the ability to customize, but also affordability.
Smith Inc. will be sold in developed as well developing countries. As such, the product will be sold in the global market. With the world being globalized now than ever before, selling products in the international market has become less cumbersome. Smith Inc will take advantage of the internet that has characterized business operations in this age and sell the phones through an online platform. As a firm dealing with electronic products, it expects to face intellectual property rights issues. A semi customizable smartphone is not currently in the market and Smith Inc will seek to patent the product to avoid IP infringement. The company will use the legal expertise of Ms. Susan Block to protect the product. In the part of the company, it will ensure uniqueness of the products to avoid lawsuits from other existing smartphone manufacturers. Smith Inc. will this adhere to all IP laws to avoiding falling victims of lawsuits and having the company closed down altogether.
The legal form that Smith Inc. will take is a C corporation. This is selected for the purpose of growth. As a C corporation, Smith Inc. will be able to growth and secure financing easily through the sale of stocks. The competitive advantage of Smith Inc lies in the features of the smartphones and price. The ability to customize the phone is expected to appeal to customers to a great extent. In addition, the product will be sold at a fraction of the price of major smartphone manufacturers. The company expects that these features will fuel the sales of the company.
Marketing Plan
Without a market, a business cannot operate. The smartphone market has been growing ever since it started back in 2008. According to Kharpal (2017), mobile devices characterize people’s business, and entertainment lives significantly. Of all the smart connected consumer products, tablets and smartphones account for about 60% (Kharpal, 2017). In addition, according to Statista (2017), there has been a significant growth in the number of smartphones users. As shown in the graph below, smartphone users’ number has increased from 1.57 billion in 2014 to 2.32 billion in 2017.The figure is expected to reach 2.87 billion users by 2020 (Statista, 2017). Such projection shows that the market for smartphones devices is growing and Smith Inc intends to take advantage of that and enter the market.
Value is important for customers, and it determines whether they will purchase a product or not. As such customer select products that give them benefits at a price they perceive to offer value for their money. Smith Inc understands this, and it is the reason it intends to offer significant benefits to customers at an affordable price. Therefore, the target market for the company is made up of customers who want value for their money. The ability to customize the smartphones is expected to offer value to these customers. This is in addition to the primary smartphone features. Given that they can receive this at a lower price compared to what other industry players are offering, it is expected that they will prefer Smith Phone. The company also understands that other factors such as culture and social groups can affect the behavior of the target market.
The competition for Smith phone will come primarily from the two Smartphone giants, Samsung Electronics and Apple Inc. The products of other small industry players will also offer competition but not as much as two biggest ones. The success of Smith will depend on how it will compete in the market. These competitors have huge experience and financial resources which they can use to suppress competition. However, as mentioned earlier, Smith Inc brings a product in the market that is not currently in existence. The products offer more benefits than the traditional industry players. These benefits that come in the form of product features and price is set to distinguish Smith Inc from the competition. Therefore, the competitive advantage that Smith Inc will capitalize on include ability to customize and low pricing.
Marketing will play a significant role in the success of operations of Smith Inc. As a start-up company, it has to create awareness not only about its product but also its brand. The first objective of the marketing strategy, therefore, is to create brand recognition. With the advancement of the internet, newer channels of advertising have emerged. The brand recognition will thus be created and spread mainly through the internet. In this regards, social media channels such as Twitter, Facebook, Instagram, and Youtube will be used to market the firm and its product. The second objective of the marketing strategy is to increase market reach. The marketing efforts of the firm will focus on reaching new customers in developed and developing nations around the world. According to Garrity (2017), there has been an increased connectivity of people to the internet, and it is expected that about 1.1 billion more will get connected in the next five years. The increased internet connectivity means that the marketing efforts of the firm can easily reach its customers. Therefore, the internet will primarily be helpful in helping Smith Inc. reach its customers.
Organization Plan
The two owners of the firm, Randy and Jennifer Smith will form the management of the firm as it starts operations. While Mr. Smith will head finance and marketing, Mrs. Smith will be overseeing the operations, R&D, and the administrative tasks of the business. The two will be assisted by three other employees who will help them in running the operations of the firm.
With 22 years experience in the finance sector, Mr. Smith is better placed to help the firm, secure funds and see where best to invest. Since it is a startup, Mr. Smith will have to fulfill other roles such as managing sales and overseeing the marketing operations. On the other hand, Mrs. Smith has managed to run three startup companies, and the company will depend on her expertise to a great extent. Running the R&D, administrative tasks, and operations at the same time can be overwhelming. As such, employees hired will help her in running these functions. Below is the organization chart for Smith Inc.
Smith Inc.Head of R&D, Administration and OperationsJennifer Smith Head of Finance and MarketingRandy SmithEmployee 2Employee 3Employee 1
It is important that communication flow within the organization is specified. As seen above, the management of the organization will be overseen by Mr. and Mrs. Smith. The other three employees will be reporting to the two who will be working closely together to guarantee the success of the organization. The firm will encourage open communication, where employees are allowed to offer their insights about the market and business operations. Primarily, the firm will use downward communication where the Mr. and Mrs. Smith share the goals of the business, job instructions, feedback, and communication of organizational vision and mission t...