PriceCheck.com
12/5 - 2013
Never pay too much!
Company Background
Business Description: Our business PriceCheck is an internet based website that provides the service of comparing prices. We have a partnership. One unit is a single product from a company displayed on our website.
Business Model: Our target group is people who wants to save money and save time when trying to find the right price for your product. We will only be on the internet and maybe expand and make an app.
Advertising will be a big expense in the beginning, because we need to get the word of our website out so people know about us. We will mainly advertise on the internet because that is where we will be our self.
Mission Statement: Our mission is to provide customers a website to find the best prices by using the most efficient and convenient options.
Market Opportunity
Opportunity: Expanding to make an app as well as our website.
Increasing our number of categories. Eventually be public traded. We can also make deals
Target Market: Our target market is people from the age between 18 and 60. Our target group is people who want to save money and do so in a time saving and efficient way, the will mainly be living in bigger cities or close to cities.
Industry Overview: We want to be the preferred website when comparing prices. We can also make deals so you get 50 percent of specific services and products.
Market Research: We made a survey online on SurveyMonkey.com where 31 people answered, that’s where we have our primarily research and knowledge.
Contact Information
Nina Scheele Sandberg
805 878 7915
Nina.scheele.sandberg@ hotmail.com
PriceCheck
River Oak Plaza
Buellton, California
93427
Year Founded
2013
_____________
Investment Opportunity
$50,000
Annual Operating Costs*
$28,704
Annual Sales*
$98,000
Annual Profit*
$3,651.6
Return on Sales*
3.73%
Return on Investment*
7.3%
Breakeven Units/Month*
4,192 units/month
*Projected
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PriceCheck.com
12/5 - 2013
Leadership
Qualifications: We are all students in a business college and are learning how to run and start a business and how the business world is. Also Joanna has been on an internship in an IT-company who specializes in software.
Never pay too much!
1. OPPORTUNITY RECOGNITION & BUSINESS STRUCTURE
1.1 Business Opportunity
Our business opportunities are: Increase our target group by increasing our number of categories.
Make business agreements with different companies about cheaper products.
To do an App for smart phones and iPhones.
We can eventually be public traded, which will include a board of directors, of whom will conduct an interest plan of the company.
The problem we want to solve is to be able to search for a specific product and get the cheapest price, so that you do not need to check all of the possibilities as a single individual. It finds you the cheapest place to buy the product wished easy and quick.
Our business solves this problem by gathering all prices of products on one web-site, to prevent the long time spent by costumers searching for the product(s) individually.
1.2 Type of Business
Our business is a service, because we are making a comparison web-site that we use in Denmark and has created a big capital income. We expect there is a lower overhead
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PriceCheck.com
12/5 - 2013 and manufacturing costs, which will make it easier to start up the company with a loan from a money institute.
1.3 Type of Business Ownership
We have a partnership, we chose partnership because we think that we all have different qualifications that can help the company start up and grow with rapid expansions which will create a high income for the company and its investors.
We chose this type of business ownership because it will create an easy way to set up the business, and it will get easier access to a start capital financed by a money institute because we have more people that can vouch for the money.
1.4 Mission Statement
Our mission is to provide customers a website to find the best prices by using the most efficient and convenient options.
1.5 Social Responsibility
We rank products that is produced environmental friendly higher than normal products
In the “popularity” section. And we will make an advertisement on the front page of the web-site to create customer awareness. And we will donate a little amount to charity for every user made on our website.
We give 10 cents per customer that signs up at the website, and/or creates an account which at the same time gives us the right to send out offers with deals etc. to the consumer.
1.6 Qualifications
We are currently studying on Niels Brock international business college. We have experience of using social networks and have knowledge about different kind of websites.
Joanna has had an internship in a ITCompany which specialized in making software’s.
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PriceCheck.com
12/5 - 2013
We would need to hire an IT expert to create our web-site and know our software.
One of us needs to learn how to recreate or edit the web-site, by taking courses in a month or a couple of weeks.
2. MARKET RESEARCH
2.1 Market Research
Our business is a web based industry. We provide a service on our website by comparing prices.
It’s a relatively large industry and it’s only getting bigger. But our website stands out from our competing websites because none of them provide the exact same service.
Our target market is big, because we target more after personality than after demographics, psychographics and so on, of course we still focus on those things but mainly people who like to save money and are willing to do a effort to do so.
We found out that only a few people know a “price checking service” even though there are a lot of different companies. We also found out that 85% would use a service to check the price of a product before purchase. When we combine the two facts shows that there is a business opportunity, because the consumer would use the service and the fact that there are n’t a lot of people who know about the market, which shows us that it is a very new market. We also found out that 30% of people would use our service on a daily base. 50% said also that they would like to be a “member” of a “price checking service” this is a business opportunity which can be very useful in the way that it will allow us to send out mail commercials, to the customer without breaking the national spam regulation of the United States of America.
2.2 Target Market
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PriceCheck.com
12/5 - 2013
Demographics:
We target people of 18 of ages and up. We target people who want to save money, no matter their income or education level.
Geographics:
Our customers is located in bigger cities.
Our costumers live all over the states but our target group will in the beginning be here in the valley and in Santa Barbara. Our business is located in Buellton, in the
Santa Ynez Valley.
Psychographics:
It’s people who want to save money on products, by checking prices in different stores or on different web-sites. And people who is aware of how much money they want to/ is going to use on the specific product.
We have a very big target group with a lot of different buying patterns which means that we can not specify a certain buying pattern. But it’s for people that buy both high
Priced/quality products and low price/quality products.
2.3 Competitors
Shopzilla.com, they do a price checking services where you enter the thing you want to check the price on, and it will find the price.
Pricegrabber.com, they do price comparison, where you can search for a product and it will search for the best price for the product.
And Shopper.com, which compare prices on electronic products.
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PriceCheck.com
12/5 - 2013
Companies which indirectly fulfill the same want or need as our business:
Ebay.com, a company where you can buy and sell products, from both companies and private sellers (persons), they find the lowest price and you can buy the product directly from the web-site.
Amazon.com, a company where you can buy and sell products, from both companies and private sellers (persons), they find the lowest price and you can buy the product directly from the web-site.
2.4 Competitive Advantage
Factor 1:
Design
Factor 2:
Categories
Factor 3:
Target area
Your Business
We offer a great and consumer friendly design.
We have narrowed our categories in the beginning
We target exclusively Santa
Barbara county
Pricegrabber.com Amazon.com
Have a good layout, but it’s not that convenient and a bit
They have a lot of pictures and advertisement on difficult to figure out. the start page, which seams overwhelming
They have a big variety, but it’s hard to figure out.
They target all around the U.S, which have a big target group
They have few categories that covers a lot.
They target all around the world, which gives them a big market share.
Our three competitive advantages: Easy access to find products and prices.
Only in a area nearby the customer.
Easy way to get to the web-site that sells the item.
2.5 Business Growth
Deals, would be a great opportunity for our company to grow, because it is easy to
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PriceCheck.com
12/5 - 2013 apply, and
It’s very easy to market because people already is on the website, and we can send out emails to existing members, so we get a bigger target.
We would start finding prices in all of California and at some point all the east coast and
U.S, which will mean that we are going to expand our business and our target market.
2.6 Challenges
There’s a lot of competitors, and if the market is too small. Also if bigger companies do
Not want to negotiate agreements with us, this would mean that we will have to go to
Smaller businesses’ which will make us les appealing and in the end make us les profit.
We will have to advertise a lot to get known in the start, as well as getting good deals from e.g. Best Buy, which can link to our website, so we have a easier way to get new customers and get our name spread out.
3. FINANCIAL INFORMATION & OPERATIONS
3.1 Definition of One Unit
One unit is a single product from a company displayed on our website.
3.2 Delivery of Service
Description of Process Steps
1. Knowing our website
2. Get the need to use our service
3. Going to our actual website
4. Search for a product
5. Finding the right price and the right seller
6. Being linked to the seller
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PriceCheck.com
12/5 - 2013
3.3 Variable Expenses
Material Description
Materials
Bulk Price
Total Material Costs per Unit
Labor
Bulk
Quantity
Quantity per Unit
Cost per
Unit
Total Labor Costs per
Unit
$2.5
$
0
0
$0
Cost of Labor per Hour
$10
Material Costs
$0
3.4 Economics of One Unit
Time (in hrs) to make one unit
0.25 hours
EOU
Labor Costs
$2.5
TOTAL EOU
$2.5
Selling Price per Unit $3.50
Variable Expenses per Unit
Costs of Goods Sold
Materials
Labor
Total Cost of Goods Sold
$0
2.5
$2.5
Other Variable Expenses
Commission
Packaging
Other
Total Other Variable Expenses
Total Variable Expenses
$0
0
$ 0
$0
Contribution Margin per Unit $1
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PriceCheck.com
12/5 - 2013
3.5 Fixed Expenses for One Month
Expense Type Monthly
Cost
Explanation
Insurance $250
Salary $1,800
We will have business insurance.
We will have an IT expert employed.
A
B
C
D
Advertising
Interest
Depreciation
Utilities
Rent
$1,000
$167
$125
$200
$400
We will advertise on TV, YouTube, and social medias.
With a $50,000 loan with 4% interest and payoff agreement.
We have 5 computers that we will buy at $800 and selling it at $200.
For the phone and internet bill
We will have a small office in Buellton.
Other Fixed
Expenses
Total Fixed
Expenses
$250
$4,192
We will rent a server (web space) from another company most likely Amazon.
3.6 Income Statement for First Year of Operations
REVENUE selling price × units sold $98,000
Gross Sales selling price × units sold $98,000
Sales Returns selling price x units returned 0
Net Sales B – C $98,000
VARIABLE EXPENSES
Costs of Goods Sold
E
F
G
Materials
Labor
Total Cost of Goods Sold
I
Other Variable Expenses
H Commission
Packaging
cost of materials × units sold
cost of labor × units sold
E + F
cost of commission × units sold
cost of packaging × units sold
$0
65,000
$0
0
$65,000
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PriceCheck.com
12/5 - 2013
J
K
Other cost of other costs × units sold
Total Other Variable Expenses H + I + J
L Total Variable Expenses
M CONTRIBUTION MARGIN
G + L
D – L
FIXED OPERATING EXPENSES
N
O
Insurance
Salaries
P
Q
Advertising
Interest
R
S
T
U
V
Depreciation
Utilities
Rent
Other fixed expenses
Total Expenses
cost of insurance × 12 months
cost of salaries × 12 months
cost of advertising × 12 months
cost of interest × 12 months
cost of depreciation × 12 months
cost of utilities × 12 months
cost of rent × 12 months
cost of other × 12 months
N + O + P + Q + R + S + T + U
0
2,004
1,500
2,400
4,800
3,000
$3,000
0
12,000
W PRE-TAX PROFIT
X Taxes (15%)
Y
M – V
W × 0.15
NET PROFIT W – X
3.7 Start-up Investment
Item
Insurance
Rent
Web space
Advertisement
Phone, Internet & computer
Why Needed
To protect being sued
So we have an office to work from
We need a server
People need to know about us
We are providing a service over the net so we need to be on it our self
Vendor
GEICO
Buellton
Amazon
TV channels and
YouTube
Verizon
$0
Cost
$250
$400
$250
$500
$4200
$65,000
$33,000
$28,704
$4,296
644,4
$3,651.6
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PriceCheck.com
12/5 - 2013
Emergency Fund (1/2 of startup expenditures)
Total Start-up Expenditures $5600
$2800
Reserve for Fixed Expenses (covers 3 months of fixed expenses) 21,716
Total Start-up Investment $50,000
How much of this start-up investment can you afford to pay yourself? $10,000
How much of the start-up investment will you need to finance? (Total Start-up
Investment- What you can afford to pay) $40,000
3.8 Financial Ratios
Return on Sales (ROS):
Annual Net Profit $3,651.6
$98,000 =
3,73%
≈
$0.0373
Total Annual Sales
Return on Investment (ROI):
Annual Net Profit $3,651.6
Total Startup
Investment
Breakeven Units (Monthly) :
Fixed Monthly
Expenses
$50,000
=
7.3%
≈
$0.073
$4,192
=
4,192
≈
4,192 units
Contribution Margin
4. MARKETING & SALES
$1
4.1 Marketing Plan
Our target customers are people who like to save money and find good deals easy. We will target our customers through advertisement and word of mouth.
Our features and benefits are that we are comparing the prices on a big variety of products and giving you an easy overview of the product you are searching for. It will find the cheapest prices on the products you want easy.
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PriceCheck.com
12/5 - 2013
Our product is a website and we will focus entirely on using and being on the Internet.
We only charge money if you want to have a user, who we will give personal deals and personalize so you can easier find the cheapest products that is in your interest.
4.2 Promotion
We will have advertisement on the internet and on facebook to appeal the bigger crowd and the younger people. We will also depend some on word of mouth. And we will also donate money to charity and in the local community to get our name spread.
We won’t really have any merchandising because we are providing a service over the internet. We might have some pencils and cups or small things like that, but nothing big. And also we will have stickers on our cars.
We will go out to the local community here in the valley to start with, and donate money for social events and get our name spread out and hopefully it will go through word of mouth from then, and we will also do a lot of advertisement.
To boost the sales of our service, we will try to promote our service through giving users free coupons, free gifts and discounts. We might also do competitions once in a while. To get our customers more interested and engaged in our business.
4.3 Sales Methods
We are trying to make our website design as clean and user-friendly as possible.
We will lure people to our website by giving them what they want by making an overview of different product and prices.
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PriceCheck.com
12/5 - 2013
4.4 Sales Estimates
We can maximum produce 3.528 units a month, but to make this happen we need to
Work 7 hours a day everyday in a month.
We need to produce 1,677 units each month
Our website is more likely to be used in the holiday season, where people are eager to find a good deal on presents.
Month
January
February
March
April
May
June
July
August
September
October
November
December
Annual Total
$8,166
$8,166
$8,166
$8,166
$8,166
$8,166
$8,166
$8,166
$8,166
$8,166
$8,166
$8,166
$97,992
Revenue
$8,166
$16,333
$24,498
$32,664
$40,830
$48,996
$57,162
$65,328
$73,494
$81,660
$89,826
$97,992
$97,992
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