Introduction of F-Smart Key Idea

F-Smart Key will be a startup business targeting both local and international markets. The business will be dealing with a product line of key holders. F-Smart Key will be a limited company. The smart key holder is a compact and essential tool resembling the size of a Swiss army knife that will reduce the amount of space that keys occupy in an individual’s pocket. Instead of too much rattling and jingling in one’s pocket, the key holder will keep the keys composed and aligned. This, as a result, permits one to flip the key that is required for a particular door. Moreover, the tool has been designed in a way that it has other purposes, like bearing an opener that contains a loop on the other end for attaching thicker keys. Besides, the f-smart key also has an in-built tracker tile that can help one find his or her lost keys. Note that the tile contains a battery life of about five months. Thus, the device will automatically send a notification to an individual’s phone within a particular radius.

Unique Selling Point

There shall be two main categories of customer’s for the smart key. These are domestic, as well as institutional customers. Both of them shall use the device for their safety purpose. Through competition with other similar business, the company intends to attain a market share of 40 per cent. A much broader appeal exists during high school and university admissions when most students require the smart keys for security purposes as mentioned earlier. These are the occasions when great sales will be realized (Grönroos, 2012). Besides, new and existing organizations have shown a great interest in the product.

Marketing Mix

Products/ Services

After an intense investigation around the area, the company realized that the targeted customers would need an efficient smart key holder that will enable them to effectively organize their keys while in their pockets and also to minimize chances of keys getting lost. Hence, the company will majorly focus on the smart key holder, rather than dealing with a wide range of products. The device is fast selling given that it permits placing five keys on top of each stud. Moreover, the smart keys have varieties of spacers for holding keys of different sizes (Goi, 2009).

Place

The company will ensure that the products are sold both online and offline. As such, it will reach a broad range of potential customers. These include both the local and international buyers. Moreover, the organization will use online distributors to facilitate faster strategic placement of the smart key (Brownlie & Saren, 2014). Most of the organizations in the industry have been reluctant to integrate online sales; hence, F-Smart Key intends to be unique.

Pricing Strategy

It shall be wise for the company not to set high or low prices for its clients. F-Smart Key Solutions will be keen to ensure that fellow retailers and wholesalers do not complain about offering prices much lower than the industry, given that the firm will be sourcing from the cheapest supplier. Therefore, the introductory prices will be slightly lower than the coverage market rate to popularize the business. This is one of the features of being customer oriented. Considering that the market is comprised of price-sensitive clients, charging them a slightly lower price below that of competitors will lead to increased market share for the company.

Promotion

To create substantial market coverage awareness, F-Smart Key Solutions will initiate various promotional strategies. Such include online and offline advertisements, through social media, television, and newspapers, as well as direct marketing mailshots. The best time for the promotional activities will be during school and university admissions and the launch of new organizations, both at international and local levels. Various components of the smart key, like having a tile tracker built on it, should be made known to potential customers during a promotion.

Market Segmentation, Targeting, and Positioning

Segmentation

Through segmentation, the organization will be able to identify various market niches and conduct research on the specific needs of customers. The firm will have to serve customers from each segment differently, depending on their needs, financial status, as well as tastes and preferences. F-Smart Key Solution will carry out different segmentation strategies to fully satisfy its customers. One of the approaches is demographic segmentation. Further classifications will be based on values, beliefs, lifestyle, and behaviour (Chaston, 2014).

Targeting

The company will need to evaluate the potentiality of each of the market segments. Factors to be considered will be such as the size of the market, or the level of income (Chaston, 2014). Moreover, anticipated profits must be more than the cost of production, as well as the expenses involved in reaching out to each segment.

Positioning

F-Smart Key Solutions will need the incorporation of positioning maps to come up with the market overview (Chaston, 2014). The company can design big, small key holders, as well as those with and without tile trackers. Each design will have a unique price tag. This will enable the organization to reach all the potential clients, irrespective of their levels of income and tastes, among other factors.

SWOT Analysis

Strength

F-Smart Key Solution has the advantage of offering a unique product, which is much differentiated from other competitors. Besides, the smart key has many features that come with various benefits like trackers that will help in the location of the key in case it gets lost (Hill & Westbrook, 2014).

Weakness

The organization has a weakness of budgetary limitation and how to attract skilled personnel. This is because it is a new venture.

Opportunity

The organization will be opportunistic to introduce an online selling platform that most similar organizations have been reluctant to launch. Besides, the organization has a chance of increasing its sales during high school and college admission.

Threat

The major threat is that there are already other players in the industry. This poses stiff competition in the market. However, through in-depth strategic planning, the organization is anticipating to control a significant market share.

Competitor Analysis

The company’s competitors are the existing businesses which comprise wholesalers, retailers, wayside shops, and supermarkets. Among them are those that have already been established in the industry, as well as those willing to join. The organization will overcome and outweigh its competitors through the use of Bowman’s strategic clock (Farquhar & Meidan, 2010). F-Smart Key Solution shall gain insight into how its smart keys should be positioned to give it the most competitive advantage in the market. Moreover, the organization will have a variety of alternatives, which will be based on two dimensions. These are the perceived value of the keys and the price (Burd & Cherington, 2010). To have a competitive positioning that outplays the competitors, the organization will need the differentiated strategy, which will offer the customers the highest level of perceived added value (Farquhar & Meidan, 2010).

Finance

Efficient financial analysis will enable the proprietor to know the effects of every transaction that will be taking place in the business. It will show the levels of profit, which is a determinant of a firm’s growth and survival in the competitive industry. The pre-operational cost will be calculated to show the initial costs that will be incurred before starting the business. A proforma income statement will be derived to be used as a budgeting tool. A proforma balance sheet will also be prepared to indicate how capital will be distributed among various assets. Additionally, a cash flow statement will be prepared.

Startup Cost

The planned business will be started with little capital from members’ contributions, as well as a loan from the bank. For the business to become popular in the market the firm. One of the strategies is the advertisement. This can be achieved through various radio stations, TV, newspapers, in addition to posters. This is to ensure that information reaches as many potential customers as possible. Sweet talking is another strategy. Marketing team shall be required to use a polite and convincing language when handling customers to make them buy the products/ services offered by the company. Another strategy is through sales promotion. This method provides users with experience of the products, thus, luring them to buy the products. Still, the firm shall be providing after-sales services. This is a unique strategy that will make the firm stand out among its competitors. Another way involves hanging banners on the premises where the business operates. This is aimed at catching the attention of potential customers.

Recruitment will be either internal or external, depending on the skills required. If a vacant position requires skills that are already within the organization, then there shall be no need for external recruitment. Training will not be necessary as the business will employ already qualified human resources to cut down operating expenses. However, in the event that there is a need for employee development, then this will be achieved through seminars and attending workshops.

Financial Forecast and Break-Even Analysis

FACILITIES	QUANTITY	UNIT PRICE (	TOTAL COST ( )
Land	1 acre	250,000	250,000
Premises		280,000	280,000
Website cost			63,000
Books of accounts			450
Pick-up	2	200,000	400,000
Counter/shelves			7,000
Personnel			4,000
Other expenses			4,000
Promotional costs			8,000
Adding machine	3	1,000	3,000
Labour			1,900
		TOTAL	1,021,350

 

The sources of money needed to purchase these facilities will be as follows.

Own advances:                        £850000

Bank loan:                               £1280000

Total:                                       £2,130,000

Comprehensive Financial Plan and Break-Even Analysis

Pre-Operational Costs

It refers to the money spent before the business becomes operational. These costs shall be split into particular units as shown in the table.

Items	Costs in pounds
Licenses	40000
Adding and weighing machine	10000
Fittings	30400
Electricity installation and reinforcement	21700
Others cost	3000
Shelves	14000
Shopping	2000
Books of account	11000
Pick-up	400000
Receipt books	300
Rubber stamps	2000

 

Projected Cash flow

 

S	Jan.	Feb.	March	April	May	June	July	Aug.	Sep.	Oct.	Nov.	Dec.
Loan	150000	–	–	–	10000	20000	–	–	–	16000	0	–
Credit sales	50000	25000	30000	420000	–	–	35000	26000	18000	22000	0	–
Other sales	65000	140000	30000	150000	42000	23000	19000	1000	–	20000	18000	14700
Cash sales	90600	10000	30000	200000	200000	20700	320000	200000	190000	925000	29000	12000
Total receipt	3555600	265000	360000	25700	252000	250000	374000	236000	208000	1505000	308010	267000
Cash outflow
Creditors	–	20000	33000	–	–	15000	–	–	30000	–	40000	–
Purchases	80000	85000	90000	85000	70000	65000	60000	45000	35000	50000	90000	85000
Maintenance	–	2000	3000	4000	–	–	–	6000	–	–	5000	–
Electricity	2500	3000	6000	4500	5500	3980	4560	2143	3546	4896	3120	5000
Water bills	40000	2890	3000	5423	4200	4000	3902	4300	4500	3900	3990	3400
Repair	8000	–	–	1400	399	2000	4000	5000	2800	200	2020	–
Transport	8000	4500	5000	3000	3800	4800	4000	6000	7000	5500	6000	5500
Loan paid	8800	8800	8800	8800	8800	8800	8800	8800
Total outflow	117600	146000	258098	127123	105200	112980	85962	85313
Surplus	238000	119000	101902	129877	146800	137020	29000	151687

Estimation of Working Capital

Item	Cost
Cash at bank	680000000
Cash at hand	20000000
Stock	2060000000
Work in progress	80000000
Total	2840000

 

 

	Jan.	Feb.	March	April	May	June	July	Aug.	Sep.	Oct.	Nov.	Dec.
Sales	100000	12000	130000	14000	150000	160000	17000	180000	190000	100000	200000	210000
Opening stock	100000	140000	160000	180000	200000	210000	220000	230000	250000	260000	270000	290000
Purchases	800000	85000	90000	85000	70000	65000	60000	50000	45000	35000	40000	90000
Goods available for sale	180000	225000	250000	265000	270000	27500	280000	280000	295000	310000	380880	380000
Closing stock	140000	160000	180000	200000	210000	220000	23000	250000	260000	270000	290000	31000
Cost of sales	40000	65001	70000	65000	60000	55000	30000	35000	20000	70000	75000	180000
Gross profit	60000	55000	60000	75000	900000	105000	120000	150000	150000	75000	75000	180000
Expenses	45000	35750	35400	35250	35180	35650	35000	35485	35150	34250	35000	35150
Net profit	14050	19250	24000	39750	54820	69350	84150	114515	119850	40150	145000	831285

 Proposed Income Statement (year 3)

 

	Jan.	Feb.	March	April	May	June	July	Aug.	Sep.	Oct.	Nov.	Dec.
Sales	1500000	155000	160000	170000	1750000	180000	188000	192000	197000	194000	195000	200000
Opening stock	1200000	1600000	180000	200000	220000	240000	260000	280000	30000	320000	380000	420000
Purchases	600000	550000	620000	640000	680000	700000	750000	80000	82000	85000	900000	900000
Goods available for sale	180000	215000	242000	264000	288000	310000	335000	36000	382000	405000	470000	510000
Closing stock	1600000	1800000	200000	220000	240000	2600000	280000	300000	320000	380000	420000	460000
Cost of sales	20000	350000	42000	44000	48000	48000	50000	60000	62000	25000	50000	50000
Gross profit	13000	12000	118000	126000	127000	13000	13000	128000	130000	169000	145000	150000
Expenses	44450	34650	34220	34930	3590	35600	35100	33180	34150	34830	34950	35650
Net profit	8550	85350	83780	91070	91100	94400	94900	94220	95850	134170	11080	114350

Proposed Proforma Income Statement

 

 

 

Desired Financing Amount 

 

Pre-operational cost:               £652100

Working capital:                     £2840000

Fixed assets:                            £212400

Total:                                       £820800

 

Proposed Capitalization

Capital:                                    £300000

Bank overdraft:                       £955060

Creditors:                                £955060

TOTAL:                                  £2210120

 

Conclusion

In conclusion, the smart key idea is no doubt a venture that will have lifeblood in the future. Through financial, breakeven, and SWOT analyses, the business idea should be integrated to enable the organization to serve the vast majority of customers at both local and international levels. Moreover, offering differentiated smart keys with various features will no doubt make the organization to thrive in the competitive market and to command a significant market share.

 

 

References

Brownlie, D., & Saren, M. (2014). The four Ps of the marketing concept: prescriptive, polemical, permanent and problematical. European Journal of Marketing, 26(4), 34-47.

Burd, H. A., & Cherington, P. T. (2010). Cooperative Retailing as a Competitor in the Consumer Market. Journal of Marketing, 3(2), 215. doi:10.2307/1246439

Chaston, I. (2014). Market positioning. Small Business Marketing, 82-100. doi:10.1007/978-1-137-32601-0_5

Clark, L. (2016). Marketing Courses and Marketing Research. Journal of Marketing, 12(4), 488. doi:10.2307/1246631

Farquhar, J. D., & Meidan, A. (2010). Communicating in the marketing of financial services. Marketing Financial Services, 319-350. doi:10.1007/978-1-349-92401-1_12

Goi, C. L. (2009). A review of the marketing mix: 4Ps or More?. International Journal of Marketing Studies, 1(1), 2.

Grönroos, C. (2012). Marketing redefined. Management Decision, 28(8).

Hill, T., & Westbrook, R. (2014). SWOT analysis: it’s time for a product recall. Long Range Planning, 30(1), 46-52.