Introduction of F-Smart Key Idea

The business will be a startup business targeting both local and international markets. The business will be dealing with the key holders’ product line. It will be a limited company type of business. The address of the business will be 150-404500-Canary Wharf, United Kingdom. The smart key holder is a compact and essential key holder resembling the size of a Swiss army knife that will reduce the amount of space the keys takes 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, permitting one to flip the key that is required for a particular door. Moreover, the key holder 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. In addition, the f-smart key also has an in-built tracker tile that can help one find his or her keys since the tile contains a battery life of about five months and will automatically send a notification to an individual’s phone when the f smart key is far away.

Unique selling point

. There will be two main categories of customer’s for the smart key, i.e. domestic customer and institutional customers who will use the smart keys for their safety purpose. Through competition with other similar business, the company intends to attain a market share of 40%. A much broader appeal exists during high school and university admissions when most students require the smart keys for various security purposes. Besides new and existing organization have shown a great intention on the smart key. These are the occasions when great sales will be realized (Grönroos, 2012).

Marketing Mix

Products/Services

After an intense investigation around the area, the company realized that the targeted group would need an efficient smart key holder that will enable them to organize their keys effectively to avoid instances of key getting lost. Hence the organization will majorly venture on the smart key holder. The product is fast selling since it permits placing five keys on top of each stud. Moreover, the smart keys have unique spacers that allow one to compensate for various key sizes (Goi, 2009).

Place

The company will ensure that the products are sold both online and offline where both the local and international buyers can access and order the smart keys. 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 same business have been reluctant to integrate online sale hence the F-smart key wishes to be indifferent

Pricing Strategy

The company will be very wise not to sell at very low prices or high prices when pricing the products. F-smart key solutions will be keen to ensure that fellow retailers and wholesalers do not complain about offering prices much lower than the wholesalers and the retailers because the business will be buying from the cheapest source. So the introductory prices will be slightly lower than the coverage market price to popularize the business thus customers oriented. The prices of the smart key are sensitive hence charging a slightly lower price below the competitors for a start will lead to increased market share for the company.

Promotion

To create a large market coverage awareness, F-smart key solutions will initiate various promotional strategies like both online and offline advertisement, television and newspapers and direct marketing mailshots. The best time for the promotional activities will be during school and university admissions and during the launch of new organizations and companies both international and local wise. Various components of the smart key should be made aware during promotion like having a tile tracker built on it.

Market Segmentation, Targeting, and Positioning

Segmentation

Through segmentation, the organization will be able to identify various market niches that will specify the specific needs of customers and also will help the organization in locating new customers. The f-smart key solution will carry out various segmentation strategies to reach out on a wide range of customers. They include; demographic segmentation, psychographic, values, beliefs, lifestyle, and behavior (Chaston, 2014).

Targeting

The company will need to evaluate the potentiality of each of the market segments through criteria size of the smart keys that requires the market to be large enough to accommodate segmentation (Chaston, 2014).Moreover; anticipated profits must be more than cost and marking each of the marketing segments to be accessible.

Positioning

F-smart key solutions company will need the incorporation of positioning maps to illustrate the market overview (Chaston, 2014). The company can design big and efficient key holders, small key holders and less expensive, smart key having tile and tracker and so on. This will enable the organization to reach every target markets pocket. For instance, the smart key having the tile trackers which connects to one’s phone blur tooth to ensure that, the last location is identified.

SWOT Analysis

Strength

The f-smart key organization has a strength of offering a unique product in the market with is much differentiated from other competitors. Besides, the smart key has many features that come with various benefits like trackers and tiles that will help in the location of the key is lost (Hill & Westbrook, 2014).

Weakness

The organization faces a weakness of budgetary limitation and how to attract skilled personnel since the organization will be a new venture

Opportunity

The organization will be opportunistic to introduce an online selling platform that most similar organizations have been reluctant to introduce. Besides, the organization will offer more improved quality and efficient smart key with various features.

Threat

The threat will exist since similar businesses are already in existence. 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 both wholesalers and retailers who have already established a market and also those willing to enter the United Kingdom market. These are wholesalers, retailers and wayside shops and supermarkets. The organization will overcome and outweigh its competitors through the use of Bowman’s strategic clock (Farquhar & Meidan, 2010).  The organization will 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 on positioning its smart keys which will be based on two dimensions; that will be 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

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 increments in profit responsible for the growth and survival of the business. 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 calculated to be used as a budgeting tool. A proforma balance sheet will also be prepared to indicate how liabilities and network of the business are distributed, and the cash flow will be prepared.

Startup Cost

The planned business will be started with little capital from the company’s member’s advances and a borrowed loan from the bank.  For the business to be known,  various costs will be channel to cover the different methods that will be used to make potential customers aware of the organization  through, advertising through various radio stations, televisions, newspaper and posters thus each group of people will get accessed to the advertisements, i.e. the service provided, Sweet talking-using a polite language when handling customers in order to make them buy the products/ services provided by  the company. Promotions, e.g. sales promotion. Thus making customers aware of the service provided. Providing after sales services, gift/free samples. Banner. Hanging a banner on the premises where the business will be situated and many more. Recruitment will be either internal or external depending on the skills required. If the required person is trained, then there is no need for external recruitment. Training will not be necessary as the business will employ already trained manpower to cut operating expenses but if needs arise the company will do it through seminars and attending of shows

Financial Forecast and Break-Even Analysis

FACILITIES	QUALITY	UNIT PRICE	TOTAL COST ($)
Land	1acre	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 costs			4,000
Promotional cost			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

Own advances                                      850000

Short term loan                                      1,280,000

Total                                                        2,130,000

Comprehensive Financial Plan and Break-Even Analysis

Pre-Operational Costs

It refers to the money spent before the operating of the business. It refers to all costs to be incurred before the business starts operating

ITEMS	COST
Licenses	40,000
Adding &weighing Machine	10,000
fittings	30,400
Electricity installation &reinforcement	21,700
Others cost	3,000
Shelves	14,000
Shopping	2,000
Books of account	11,000
Pick up	400,000
Receipt	300
Rubber stamps	2,000

 

 

S	Jan	Feb	Mar	April	May	Jun	Jul	Aug	Sept	Oct	Nov	Dec
Loan	150000	–	–	–	10000	20000	–	–	–	16000	0	–
Credit sale	50000	25000	30000	420000	–	–	35000	26000	18000	22000	0	–
Other sales	65000	140000	30000	150000	42000	23000	19000	1000	–	20000	18000	14700
Cash sale	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
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 bill	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

Projected Cash flow

 

Estimation of Working Capital

ITEM	COST
Cash at bank	680000000
Cash at hand	20000000
Stock	2060000000
Work in progress	80000000
Total	2840000

 

 

	Jan	Feb	Mar	April	May	Jun	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 on 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 sale	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	Mar	Apri	May	Jun	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 on 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 sale	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 (year 3-5)

 

DESIRED FINANCING

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 analysis the business idea should be integrated to enable the organization to serve the vast majority of customers both local and international. 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.