COMP1635: Group Business Plan

Executive Summary

In the following business plan, we outline our business plan for Lyme charge - considering the idea behind the conceptual design of the products and services that will be provided.

We will be looking further into the environmental and ethical issues that occur, when producing the product and how we will differ from competitors who provides a similar service. We will explore the target market, to see the potential size of the market and the interest of our service. When coming up with a plan of expanding the business, we will be looking at current businesses which offer a similar service and reflect on it - to see how we can integrate a service which will have a USP compared to competitors.

The plan will also include a pro forma balance sheet and income sheet. This shows the possible revenue that will be made during a three-year running of our business. We will try to best predict as accurate as we can with figures, using McDonald's as a company that we will be selling to. This will give us insight into how many customers we will be selling the products to and how many Lyme chargers we will be installing.

Product Description

The product that our company will produce is a special mat coined Lyme Charge. This mat will enable portable devices such as phones and laptops to wirelessly charge - consumers can also purchase a Lyme Extension which will enable devices to wirelessly charge to those which do not provide native support for wireless charging. Consumers are recommended to download a free application called Lyme on their Android or iOS devices which will provide a way for consumers to earn points by tapping their devices at participating locations such as restaurants which can then be redeemed for discounts of their choosing; for example, spend 100 points to get a free cheeseburger at McDonald's.

This idea shows huge potential as wireless charging is in its early stages and it will be advantageous to use this opportunity now to invest in wireless charging as it will be vastly profitable since it will be the next trend in the market while wired charging will soon become redundant. This is also explained in the target market analysis that “According to IHS, 80% of consumers want wireless charging in public places” (Mearian, 2015). This shows the excitement and demand for this product which will solve the problem that consumers often run low on battery when travelling around. In addition to this, the benefit to the consumer is that they no longer need to carry extra items such as a portable charger or USB plug adaptors with them since this new service is simple, efficient and effective. Furthermore, as mentioned before, consumers can also get discounts the more they use this service - provided that they are using the application. This means that the consumer is more likely to use this product.

The mobile application allows consumers to easily find the nearest location that uses Lyme charge. Customers (restaurant, university etc.) can pay to advertise on our mobile application which puts their company in the featured list so consumers can easily find where they are. We will also make it so that the consumer gets more points if the customer pays for a subscription fee (VIP status). This adds value to the customer who purchase our services as consumers’ are more likely to go to a restaurant that has Lyme charge then those that do not. In addition to this, consumers are even more likely to go to a restaurant that has a VIP status which provides more points to the consumers. This will make the customer buy the product as it will be a long-term investment to overall increase market share as more customers are attracted to their company. Points are rewarded if you spend more than 5 minutes at any Lyme charging station in the same building.

Environmental Analysis

Wireless charging units are currently being sold by IKEA. Although the unit itself is designed in an aesthetically desirable way, the product requires a specific case for your device in order to make it compatible with the piece of furniture. This is a drawback of IKEA’s product as customers may not want to have a bulky case on their device to simply allow it to charge. Our product will have the capability of wireless charging without the need for any predefined cases – we provide a simple solution, Lyme extension, to those devices that do not natively support wireless charging. This unique factor to our product differentiates us from the market which will give us a better platform to stand out to our clients.

IKEA’s product also appears very domestic, whereas our product will be targeted towards commercial businesses. The businesses will want to buy our product in bulk as it will create a more convenient and futuristic setting in their establishment due to their customers being able to charge their phone conveniently without the need for wires or bulky accessories which can be inconvenient when out in public.

One of our products main strengths is its USP. We will have a versatile product which is adaptive to all smart phones. This is something that our competitors have not yet accomplished and it makes their products restricted. Our clients will recognise how our unique and far simpler product is more convenient for the public's use due to them being able to charge any mobile device they may have rather than being restricted to either a Samsung or an Apple device.

In terms of timing, we are a lot further behind than our competitors. Other competitors have already developed their technology and are now pitching to clients and gaining them. We will be relying heavily on how unique our product is and hoping that the clients can recognise all the potential and benefits our wireless charging unit has.

The inductive charging market really only gained significance in Europe in the last 10 years, since it has been introduced there has been rapid growth predictions for the market industry. With wireless charging being a relatively new concept to society, it gives our company a lot of opportunities to be able to penetrate into the market and gain a significant market share.

One of our competitors have some figures which show the positive effects having wireless charging units in business can have. They state that 79% of people would be more inclined to visit a place which has wireless charging units (Powermat, 2015). These statistics suggest that our product will be very desirable for businesses and that there is a market and a huge opportunity to sell these unique products.

Although the inductive charging industry has developed rapidly. One of the leading phone manufacturers, Apple, still have not incorporated the invention into their products. At the moment they simply rely on third party products which often involve a wireless charging case. These products can negatively affect the device or appear bulky and unattractive (Global Insights Inc., 2016). Apple’s lack of inductive charging resources could create problems in our wireless charging tables as we will have to create a product which can charge an Apple iPhone just as easy as it would be able to charge a Samsung phone.

The rapid movement of the wireless charging industry means that our competitors are already using this wireless charging concept at a small scale. If we do not manage to penetrate the market quickly it will become saturated with more competitors making it harder for our company to gain a presence in the market. Starbucks have partnered up with a company called Powermat. Although their concept is the same as ours, it is only available in the United States and few cities in Europe. This means that United Kingdom is still waiting for a service like ours to be produced. However, due to Powermat partnering up with Starbucks, it gives them a lot of credibility making them more likely to acquire more fast food restaurants than our company.

Technology is a forever changing industry and although wireless charging is a fairly new concept, there are always companies developing new innovative inventions and if there is an invention in relation to wireless charging it could make our product irrelevant providing that the new invention is a better and more convenient idea for the consumers.

Target Market Analysis

The potential size of the market is not as big as it will be for the customers that the company will be selling to. The target market is high street chain and franchise restaurants, universities and coffee shops. During the research of the restaurant industry, it was found that “the eating out market is forecast to grow by 18% by 2021, reaching £43.3 billion” (Mintel, 2015 a). This shows that the market is scalable as there will be a higher demand of people wanting to eat out at restaurants.

Although the consumers using Lyme charge in restaurants are not the target market for the company, they will be the end users of the product. This will increase our customers’ sales as there will be more consumers in restaurants and therefore more people to use Lyme charge. Furthermore, “A higher share of consumers (75%) have had a meal in a restaurant than have ordered a takeaway/home delivery” (Mintel, 2016 b). This shows that people are more interested in sitting down at a restaurant than eating at home. Because of this, it gives the opportunity to sell the Lyme charge to restaurants.

The team have done some primary research in restaurants, universities, coffee shops and pubs to see what our target market were already doing in the UK. After doing this research, it was found that McDonald's were the only customer of our target market to use a product like Lyme charge. Other companies that are considered as part of the target market only had charging facilities using a mains socket. The company also looked to see if consumers liked the product that McDonald’s are using. McDonald’s are using Aircharge in their restaurants. “According to IHS, 80% of consumers want wireless charging in public places” (Mearian, 2015). This shows that customers want the opportunity to charge their devices in public places.

The team then designed an online questionnaire to see how many people would like more charging facilities in public place and what they like to do when they are in places like restaurants, universities and coffee shops. The results of the questionnaire show that 89% of people want extra charging facilities when they are out in public. It was also found that when people are in these types of public places, they like to stay connected with their friends and family. The questionnaire also proves that when people are using public places, they like to receive discounts. From these findings, the team decided that a mobile application should be created alongside Lyme charge - the consumer would then have to download the application to start earning points to claim discounts. This is explained further in the product description.

A typical buyer of Lyme charge would be owners or directors of companies or franchises. There are some social factors to consider with the typical buyer. The buyer will want the product to start a trend within the social community. If enough people are talking online about the product; then more people are likely to want to use the product. This can create free social advertising helping to bring customers to McDonald's. In addition to this, our typical buyer has ethic factors to consider – they would preferably want a product that is power efficient as they would want to help the environment without spending too much resources powering these devices. Our product meets these targets which means they are more likely to invest in our product.

Marketing Plan

There are limited products out there that are commercially available which offer similar aspects of wireless charging. To make our wireless charging differentiate from the rest – our firm has decided to create a mobile application which links in with the use of Lyme charge (the mobile application is explained in more detail in the product description), this is our unique selling point that no other competitors have.

The most important value that our customers need is more attraction which means more sales. Our service provides an excellent solution to solve their needs as a survey explained in the target market analysis - consumers want wireless charging in public places such as restaurants. The more satisfied the consumers are with our customers; the more likely they are to purchase from them again. This means that investing in our Lyme charge would be better than investing in other wireless stations. In the environmental analysis, it is explained that our USP is having a versatile product which is adaptive to all smart phones – this is another reason for customers to invest in our product. Once a customer purchases our product, the distinguishing feature that our service provides is that their locations that support Lyme charge will be searchable on the mobile application for free. They can further extend this service by paying for advertising to put their locations in the featured list. This makes it so that consumers who use the application can easily identify where the featured locations are - making more attraction to our customers.

Our finance department has done research on other product prices similar to our service on several shopping sites to determine the best competitive price which has been explained in the financial projections. On our crowd funding page; we will provide a free portable Lyme charge and extension to all backers who have donated £30 or more - many more rewards will also be listed on the page as well.

We will initially start off with few promotions to make customers and consumers alike using our service and then we will gradually create more promotions as our company expands and also based on customer feedback. Promotions such as a discounted installation by buying our bundles or by customers purchasing a subscription fee to get VIP status so consumers can earn more points if they charge their devices at their location. Also, there will also be a 10% discount to customers who has paid for a subscription fee (VIP status) on Lyme charge (Lyme extension not included).

Our product aims to charge mobile devices, so I assume that all customers and consumers who use this service have access to online capabilities. With this in mind; our company will make purchases though an online channel so customers can pay for our products on our website. Our Lyme charge will be distributed by an internal delivery department which are also the ones that do installations. Our Lyme extensions are distributed by a trusted external delivery company to deliver to consumers all over UK which will later be globally expanded.

Financial Projections

When coming up with the financial projections of the company, a few assumptions will be made, which will affect the accuracy of these projections over a long-term projection. I would take an example value of the number of customers that a restaurant chain will get within one day. This will then be used to predict how many of those customers will have a phone which supports wireless charging and how many customers would purchase a portable extension that can be used to convert their phones, to be able to have compatibility with wireless charging.

The business will be funded by a bank loan of £50,000 and a crowd funding of £50,000 as a kick starter. Within the first year, we expect to sell 1400 Lyme charges and 9500 Lyme extensions which is calculated in the income sheet to sum £240,600 with ad revenue and a gross profit of £0. This means that we made break-even in the first year - the profits made was reinvested into the company for hardware and software needed to upkeep the business. The sales were calculated using information on the average number of customers that McDonalds get in one store every day (McDonalds, 2013) and how many stores they have in the UK (McDonalds, 2011). I then multiplied this by 15 franchises - this is the number of stores we will be distributing the product and service to. The sales and profit for other years are shown in the income statement (Figure 2).

Our service will cost £15 for Lyme charge and £5 for Lyme extension, installation will cost £7 per mat. Customers can also buy a bundle of 5 mats with discounted installation for £90. This compares with competitors such as Anker as their prices for a wireless charger are between £13-£20. We will also include discounts which are outlined in the marketing plan - this will sum to £2,000 for the first year which is added in the operating expenses of the income sheet (Figure 2).

There will be fixed costs for maintaining the server for the website and mobile application. Costs of repaying the loan (Figure 1) and interest (Figure 2) will also incur.

Figure 1 - Pro-Forma Balance Sheet for a 3-year period

Figure 2 - Pro-Forma Income Sheet for a 3-year period

Review

Overall, my performance in the team has been excellent. The tasks that I needed to complete were done to high standard and on time. In addition to this, I used skills such as critical reading and thinking to aid my colleagues with their work - whether it is feedback of what can be improved or ideas that could be included to overall bring the plan together. Furthermore, my enthusiasm for the topic enabled me to better understand what I wanted the business plan to be.

Since the team decided to use my idea for the group business plan, I had more knowledge of what the idea for the product will be. Looking back at the initial planning phase, I could have explained my idea clearer to the team in an effective way as when I was reading their tasks; team members had slightly different ideas to what the product was so I had to spend some extra time editing certain pieces so the plan would have better structure and the different sections were linked which flowed better.

Reflection

The team worked well together to create an excellent business plan. We were able to easily contact all team members which made communication within the team outstanding. This made the quality and impact of the work improve as we were away over the Christmas holidays so having an easy method of contact enabled me to help my colleagues more efficiently. Also, there were no conflicts within the team, everyone participated and contributed to the best of their abilities which had a positive impact of the work produced.

To enhance the performance of the team, I believe we should have produced a better, complete plan using the business model canvas. This method of planning would enable the team to successfully understand the conceptual idea of the product so there would be less time spent editing pieces of work to match the business plan as mentioned in the review. Furthermore, I feel like there should have been a schedule where certain tasks should be completed as some of the tasks like the marketing plan require information from other sections of the plan so it would have been more helpful to link tasks then rather than doing it at the end. This would have an impact on our work as it would be completed sooner while still maintaining the high-quality work.