Business Plan
Company XXX XXX XXX XXX
Table of Contents
Particulars
Page
1. Executive Summary
3
2. The Market
5
3. The Business Model
17
4. Marketing Plan
36
5. The Management
40
6. Sources and Uses of Funds
42
7. Financial Plan
44
2
â–¸ Executive Summary
3
Executive Summary Company is a startup company based in Fujairah that aims to launch a logistics aggregation app. The app will consolidate the demand and supply side of the delivery logistics market. The app will be launched on Android and iOS, and include a reporting mechanism and dashboard on the PC and Mac. The Delivery Services industry operators provide air, surface, and express courier delivery services of parcels, documents, and packages to residential and business customers. The industry has experienced moderate growth over the past five years. A large portion of the industry's growth has come from greater business activity and demand for time-sensitive goods in UAE. The logistics market is expected to grow to $27 billion (Dh99 billion) in 2016 due to a surge in import and export trade volumes as well as the upward trend of local manufacturing, according to a perspective by Frost & Sullivan. The idea is the brain child of the Founder, who is the 100% owner and CEO of the company. The company is looking to raise $100,000 in the first funding round.
$748,316 Net Present Value
126%
Internal Rate of Return
38%
Revenue CAGR
The key financial performance data is given below:
86%
Profits CAGR
Financial Charts 2,000,000 1,500,000
56%
1,000,000
Cash CAGR
500,000 0 Year 1 Revenue
Year 2 Net Profit
Year 3 Cash Balance
Year 4
Year 5 Expon. (Revenue)
4
â–¸ The Market
5
The Market The Courier, Express, and Parcel market is estimated to grow at a CAGR of 6% between 2016 and 2020 The global courier, express, and parcel (CEP) market is estimated to grow steadily at a CAGR of around 6% between 2016 and 2020. The growth of the CEP market is directly proportional to the growth of the e-commerce industry. Vendors in the market are providing express and same-day delivery services by improving their logistics efficiency. They are focusing on offering several valueadded services such as the assortment and grading of products, packaging, management information system (MIS) services in the logistics supply chain, mobile tracking applications, online tracking of parcels, SMS and e-mail alerts, and hub-to-spoke collection centers. Vendors in the market are also deploying global positioning system (GPS)-enabled transportation trucks for tracking, radio-frequency identification (RFID) for inventory tracking, bar coding, and management information system (MIS)-related services. The growing focus on timely transportation and delivery and efficient inventory management will augment the growth prospects for the CEP market over the forecast period. Reports say that market will witness the dominance of integrated service providers in the coming years. At present, the market comprises vendors who either provide asset-type or non-asset-type services. However, there remain growing incidences of integration among these service providers. Integrators provide every form of logistics services and have the potential to achieve economies of scale and enhanced efficiency because of reduced expenses as they handle the entire logistics processes. These vendors possess a strong IT infrastructure to support their operations and are equipped with systems that can electronically monitor all processes. Nippon and Yamato Express are some of the most popular integrated service providers in the market. The market is highly fragmented and is localized with several vendors catering to each logistics sub-segment. Though composed of both big and small players, the market is primarily dominated by small and medium enterprises who edge over their peers in terms of price, delivery speed, reliability, and supply chain capacity. The growing requirement for CEP services across the world has led to the entry of many new players in the market. Several companies are entering into mergers to increase their reach, leading to a consolidation in the market.
Source: www.technavio.com
6
The Market The UAE Delivery Services Market The Delivery Services industry operators provide air, surface, and express courier delivery services of parcels, documents, and packages to residential and business customers. The industry has experienced moderate growth over the past five years. A large portion of the industry's growth has come from greater business activity and demand for time-sensitive goods in the UAE. The growing number of individuals with internet access has also aided revenue. With more consumers using e-commerce websites, a greater number of goods requires courier and delivery services. At the same time, however, internet use has diminished the need for shipment of some goods including documents that can be scanned and sent electronically.
In contrast, local messengers provide delivery services within a single urban area and are excluded from courier networks. Together, these segments cater to a wide variety of consumers, with demand for each segment differing based on the services offered.
Specifically, downstream demand for courier services stems from manufacturers and retailers across the county, while demand for local delivery services is derived from households and other local markets. Although the markets for each segment differ, demand for each segment tends to fluctuate in line with consumer spending, corporate profit, and the number of businesses, all of which have increased over the five years to 2016.
The couriers and local services industry comprises two segments: larger couriers and smaller local delivery companies. Couriers are establishments that primarily engage in delivery services between urban centers using a network of air and surface transportation systems.
Source: www.technavio.com
7
The Market Market Requirements and Operating Efficiencies On demand consumer logistics spaces are burgeoning, with several upcoming startups utilizing innovative technologies and approaches with the potential to revolutionize logistics solutions. In fact, this space has emerged as one of the VC favourite avenues. Rapid delivery has proven itself a business necessity when considering domestic pick ups and deliveries and transport of essential materials. Demand arises when an individual needs household items or other necessities moved, or businesses and SMEs move inventories to and from their warehouses, or there is a logistic requirement for an eCommerce company; logistics providers that can provide a solution by connecting users to trusted drivers as well as vehicles, can tap into the market potential.
Companies in the industry continually look to increase operating efficiencies by integrating new technologies. Industry operators use efficient communications equipment, newer, and more advanced vehicles, and computer-assisted work scheduling to become more efficient. The industry's customer base is also changing—largely the result of newly created middleclass consumers or expanding manufacturing hubs. Regions with sophisticated supply chains and relatively well-developed transportation infrastructure will benefit from the large consumer base that has moved its purchasing online.
Companies that provide B2B and B2C logistics solutions are a modern necessity. Such companies aggregate vehicles like LCVs, vans, mini trucks, etc.; they also help corporations, SMEs, and customers by fulfilling their logistics needs on an on-demand (SMEs/B2C) or a contractual basis. They also work with the vendors to help them optimize their inventory utilization. Additionally, they help customers book vehicles through the platform. Such aggregators collect, transport, and deliver goods, and consist of fleet owners, single truck owners, brokers, and contractors. Source: www.technavio.com
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The Market Market Segmentation Based on Customers Business Services Banking, government, and legal professionals in the business services market segment are the largest users of couriers and delivery services. This segment typically uses the industry's services for time-sensitive packages from a range of industries that include manufacturing (especially electronics), horticulture, and medical. The requirements of business-to-business shipping best suits parcel carriers. The retail and wholesale business segment, which is the second-largest user of courier and delivery services, is also included in this segment. It includes businesses in the fashion, electronics, consumer goods, and antiques industries. For example, fashion houses use couriers to transport garments between shops. The increasing use of e-commerce has led to steady growth in this market segment over the past five years. Overall, this segment has slightly grown as a portion of overall industry revenue in the past few years. The industrial transportation is another market segment that can be tapped into.
Household Households make up the second biggest segment of industry revenue. This segment includes self-employed or work-fromhome individuals who use courier services to deliver documents and parcels. The increasing number of individuals who use the internet as a trading platform will likely cause an increase in this market segment over the next five years. This segment also includes e-commerce and the popularity of just-in-time inventory management techniques, which increase demand for time-critical deliveries. Household activities such as grocery and restaurant delivery are also included in this segment. Households are the main users of grocery and restaurant delivery services. Industry operators in this segment are independent contractors not affiliated with the products being sold. Furthermore, they are small operators or non-employers catering to a very small geography or region. In addition to restaurant and food delivery services, households rely on industry participants to ship packages or documents to businesses, family members, and friends. Other Other users include service companies such as logistics and supply chain management, which includes financial services. This segment grew strongly in the past five years following the increase in third-party logistics providers.
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The Market Demand Determinants The industry provides delivery services for companies in a variety of sectors: retail, wholesale, healthcare, public administration, government, and finance and insurance. Demand is therefore affected by the level of activity in these sectors, which is in turn affected by a wide range of factors. For example, demand for wholesale and retail trade sectors is influenced by variables such as household disposable incomes, interest rates and general economic conditions, as these variables influence consumer spending habits. Demand from the healthcare sector is affected by factors such as general population health and the aging of the population. The level of outsourcing by these sectors also helps determine demand for this industry. An increase in businesses outsourcing delivery activities increases demand for local messenger and delivery companies. The number of businesses within the UAE economy also impacts demand for industry services. An increased number of businesses leads to greater demand for delivery services.
Likewise, the industry has benefited from an increase in e-commerce since these services have eliminated some of the layers between consumers, wholesalers, and manufacturers. As a result, delivery volumes have increased as shipments between manufacturers and consumers are often smaller in size, but higher in frequency.
One factor contracting demand for delivery services is an advance in technology and alongside increased competition. For example, alternative forms of communication including fax and e-mail have reduced demand for document delivery services. At the same time, the internet has increased demand for delivery services through e-commerce and increased the speed of business transactions. Corporate profit also impacts industry demand. Businesses account for a significant amount of industry revenue since companies are dependent on couriers to deliver goods to corporate partners and customers. The corporate sector is one of the largest markets for messenger services because companies use industry enterprises to deliver timesensitive materials to local clients and other affiliates.
Similarly, the number of households can also lead to subsequent growth in demand for services, as it increases the number of delivery points. Source: www.technavio.com
10
The Market Key External Drivers Number of businesses Demand for delivery services depends heavily on the number of businesses in the economy since businesses use courier and local delivery services for business-to-business correspondence and transactions.
E-commerce sales E-Commerce sales represent the portion of consumer retail purchases that are made online. E-commerce sales have expanded as usage of interactive content (e.g. social media), wide-range of product offerings, and ease of conducting purchases and services online have lured in more consumers. Total online expenditure Increasing internet sales creates increased demand for package delivery services as, naturally, purchased products must be dispatched and delivered to their purchasers. Data from the Office for National Statistics (ONS) indicates that online sales have risen rapidly over the past five years. In 2016-17, total online expenditure is expected to continue growing, providing an opportunity for industry operators. Corporate Profit Businesses account for a large portion of industry revenue because companies rely on couriers to deliver goods to customers and other corporate partners. The corporate sector is also the largest user of messenger services since companies use operators to deliver time-sensitive materials.
Consumer spending Industry revenue generally fluctuates with consumer spending, which dictates demand for goods that are transported by industry operators. As a result, industry revenue increases in line with greater consumer spending, as more items will need to be delivered using industry services. Consumer spending is expected to increase in 2016. Real household disposable income Higher household disposable income leads to higher demand for goods at the retail level. This can also stimulate higher demand for parcel delivery services, particularly when e-commerce sales increase. Real household disposable income is expected to grow slightly during 2016-17. Business confidence index A large share of demand for courier activities stems from the business-to-business market. The level of business confidence and production activity boosts demand for courier services. A wide range of sectors, including health care, financial services, and retail, use couriers and postal services for business purposes. IBISWorld expects business confidence to contract over 2016-17.
Source: www.technavio.com
11
The Market UAE logistics market is estimated to be worth $15 bn The logistics market is expected to grow to $27 billion (Dh99 billion) in 2016 due to a surge in import and export trade volumes and upward trend of local manufacturing, according to a perspective by Frost & Sullivan. In 2013, the market was valued at $23.4 billion, which includes revenues from logistics services for domestic manufacturing, import-export trading, services, and agricultural sector. The logistics market accounted for 6% of the country’s gross domestic product (GDP) value in 2013. The UAE is pouring billions into its logistic sector with investments made in economic free zones, airports, and ports. Dubai is developing Dubai World Central, which is already home to future super hub airport Al Maktoum International and connects with DP World’s flagship port Jebel Ali. While Abu Dhabi is developing the Midfield Terminal Complex at Abu Dhabi International Airport and continues to invest in its new flagship industrial zone and port, Kizad and Khalifa Port. Dubai leads the Logistics industry in the UAE with around 45% share in 2015 followed by Abu Dhabi. The logistics industry constitutes more than 14% of Dubai’s GDP, the highest amongst all emirates. The strategic geographical position of Dubai and improved infrastructure facilitate a substantial share of international shipments directed to the UAE. Capacity expansion and infrastructure investment are expected to strengthen the competitiveness of Logistics Service Providers (LSPs); UAE logistics industry was expected to grow by 4% in 2016.
Source: http://www.sclgsummit.org/uploads/siteLogo/pdf/1479810441_pdf_October_2016.pdf
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The Market UAE logistics market trends The logistics market in the UAE has evolved swiftly since the global recession of 2008. Many factors including infrastructural development, growth in foreign trade, entry of new players in the market, and others have been responsible for the positive growth of the industry over the period 2009-2014. The market size of the UAE logistics market was evaluated at USD 6,350.0 million in 2009. The GCC Logistics market has seen phenomenal growth over the past five years owing to substantial investments in infrastructure and significant economic prosperity. Backed by these factors, the GCC has received significant attention from logistics players worldwide over the period 2009-2014. Furthermore, augmentation in revenues of UAE and Saudi Arabia’s logistics market has considerably contributed to the growth of GCC’s logistics market over the period 2009-2014. The UAE logistics market can be segmented on the basis of services offered as part of the total logistics industry. There are 3 broad services conducted under the entire logistics package: transportation, freight forwarding, and warehousing and value added services (VALS) including 3PL. Each of the services conducted in the logistics industry, from sourcing of goods to final delivery come under these three broad services. The UAE logistics market can be further segmented by Normal Logistics and Express Logistics. Normal logistics accrued the dominant share of the overall market revenues during 2014. Revenues of UAE logistics market can be split on the basis of revenue contributions by various industrial segments.
Manufacturing has been one of the most significant growth drivers of the UAE’s economy over the period 2009-2014. The government has invested heavily in construction of various industrial hubs around the city including Dubai Industrial City, Abu Dhabi Industrial City, and many others. The freight forwarding market in the UAE has been segmented on the basis of international freight forwarding and domestic freight forwarding. International logistics has been the chief focus of the UAE’s Government over the period 2009-2014. Free Trade Agreements between the UAE and other nations over the period 2009-2014 have provided a significant boost to international freight forwarding sector during this period. The government has implemented several initiatives to promote the growth of ecommerce in the country. It is expected that the ecommerce industry in the country will gather momentum by the end of 2016. Owing to this, the industry is projected to witness significant growth in 2017. Third party logistics providers are independent companies that provide logistics services to a purchasing company. Third party logistics providers are legally bound and responsible for performing the requested logistics activities for the purchasing company. These providers are typically specialized in integrated operations, warehousing, and transportation services that can be scaled and customized as per clients’ needs, market sentiments, demands, and delivery service requirements for their products and materials, which results in reduced time lag and low cost of operation to the manufacturing company.
Source: https://www.linkedin.com/pulse/revenues-uae-logistics-market-augment-cagr-88-from-2015-ankur-gupta
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The Market UAE logistics market trends Trying to establish a size for the Middle East e-commerce logistics market is difficult at best. Similar to other emerging markets, the e-commerce logistics market is faced with several: cross-border transportation, legal matters, payment, and logistics concerns. In addition, the majority of online sales remains service: airline tickets, hotel reservations, software, and online gaming. The limited availability of data is another obstacle in trying to size this market, as a result, an estimated range is offered for the current situation. The Middle East e-commerce logistics market values at approximately $100-$150 million. While this is just an estimation, it is based on the assumption that the Middle East ecommerce market is valued at $15 billion and that less than half of this estimate pertains to tangible goods. From this, an analysis of existing research as well as that of the availability of revenues of companies involved in the region’s e-commerce logistics space was performed. Much of this estimation can be attributed to transportation costs – in particular, inbound costs, as many online orders are still derived from websites outside of the region. While many logistics providers, including the major integrators, perform this inbound delivery, few providers provide the last mile delivery within the region.
The freight forwarding market has dominated the overall logistics market of the UAE over the past five years. It has accounted for a majority revenue share throughout the period 2009-2014. The freight forwarding industry has witnessed the surfacing of a number of players, both national as well as global, in the recent years. GAC has been the market’s leader and has accounted for a substantial share in the overall freight forwarding revenues during 2014. Other major players include Danzas AEI, Aramex, and Panalpina. The UAE freight forwarding market has grown at a CAGR of 9% over the period 2009-2014. Warehousing has occupied the second biggest segment in the services mix of UAE logistics market over the period 2009-2014. On the other hand, value added services such as packaging, sorting, and others have accounted for a minute share in the UAE logistics market in 2014. The small and low cost nature of these services has justified its minimal share in the overall logistics market over the period 2009-2014. Industrial/Retail has been the biggest contributor towards the warehousing industry of the revenue attributed towards it during 2014. In the short-term outlook (2015-2017), the warehousing market is projected to grow rapidly, partially due to investments from various global and domestic companies in Dubai Logistics City. Innovation in warehousing technology and entry of numerous new international and domestic players will drive down the utility cost of warehousing, which will further enhance the market revenues in the long term outlook.
Source: www.technavio.com Source: https://www.kenresearch.com/blog/2015/12/uae-logistics-expected-to-be-driven-by-freight-forwarding-and-warehousing-segments/
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The Market Competitors Fetchr Fetchr is an international express, mail delivery, and logistics services company, operating an app-based on-demand delivery service model based in Dubai. Fetchr enables both the community and businesses to send or receive anything, anywhere in the Middle East. It also allows individuals to set up a scheduled pick-up of an item they want to ship, through the Fetchr phone app. It uses a web interface for communication. Fetchr is completely integrated with Google maps to provide the most accurate location and estimated delivery times.
LoadMe Load-Me.com is an online marketplace for shipments and trucks, where logistics professionals contact one another in order to perform the freight exchange in real-time. Load-Me.com gives instant access to a large pool of live information about the available freight as well as trucks across the Middle East. The service thereby increases the efficiency of acquiring loads and sending trucks for transportation purposes. It is a real-time, 24/7 trucking community of freight industry professionals looking to ship freight from Dubai to all GCC destinations and beyond. It connects shipping companies from the entire Middle East with business owners in need of transportation for their cargo.
Parzel The services offered by Parzel include collection, delivery, cash on delivery, consignee delivery, Groupon vendor delivery, international delivery, etc. They also provide flexible monthly storage services along with shipment tracking options on their website. Parzel has tie ups with local companies who can take care of their end to end logistics needs.
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The Market Competitors FedEx FedEx Express invented express distribution and is the industry’s global leader, providing rapid, reliable, timedefinite delivery to more than 220 countries and territories, connecting markets that comprise more than 90 percent of the world’s gross domestic product within one to three business days. Unmatched air route authorities and transportation infrastructure, combined with leading-edge information technologies, make FedEx Express the world’s largest express transportation company, providing fast and reliable services for more than 3.6 million shipments each business day.
WING WING provides the most innovative mobile and web-based user-friendly delivery solution for businesses and individual consumers. It offers delivery for businesses throughout the UAE only, while the B2C is from the UAE to anywhere in the world. WING prioritizes a B2B model through which it plays a marketplace (platform) role between merchants and couriers, helping merchants who are looking for a more technologically robust delivery solution.
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â–¸ The Business Model
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The Business Model The Entity Company is a startup company based in Fujairah, that aims to launch a logistics aggregation app. The app will consolidate the demand and supply side of the delivery logistics market. The app will be launched on Android and iOS, and include a reporting mechanism and dashboard on the PC and Mac. The idea is the brain child of the Founder, who is the 100% owner, and CEO of the company.
Business Summary Name: Company Address: XXXX Geographical Focus: UAE
Management: the Founder
the Founder 100% Owner
Company
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The Business Model The App
↘ ↘ ↘
The app is an aggregator that unites the consumer, the shipment company, and the logistics partner. It will bring together the supply and demand side of logistics and delivery. It will provide a variety of services ranging from: o o o o o o o o
Pickup Shipment Tracking Payment Status update Customer ticketing Negotiation Messaging and Calling
Register
Choose
Book ‘n’ Pay
The users register on the app
The users choose the vendors and suppliers for various segments
The users book the services, and make the appropriate payments
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The Business Model The App
Payment protection
Provider reviews
Verified clients
Identity verification
Client reviews
Customer support
Supply Side
Service Providers
Demand Side
The App
Post services Offer services Get paid
Clients
Make bookings Book shipments Pay online Track status
Key Features Enables customers to book deliveries and pickups Enables management of the process – including scheduling, tracking, and payment One stop shop for all logistics and transport needs
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The Business Model The App
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The Business Model App Features
1
Hire logistics and delivery partners by the hour and provide payment protection The platform enables consumers to better manage deliveries by hiring delivery and logistics partners. The consumer and the partners are free to negotiate the exact amount, while the minimum amount for delivery can start as low as $15. As long as both the parties agree to the value, there is no fixed price for deliveries.
2
Escrow mechanism to ensure that payment is protected and that funds are safe The client puts money into an escrow account, in which it is held until the delivery and proof are submitted. Once a deliver partner fulfills a delivery that is approved by the client, the app releases the money to the partner on the client’s behalf. This grants peace of mind for the consumers and service providers.
3
Use The app as a directory for local and international deliveries There may be times when one wants to hire local delivery partners or experts from certain geographies. The app is the platform for both local and global delivery services. Service providers in one’s neighborhood will have profiles on the app. If one wants to post a pickup with a location preference, there are options available on the post for which to select a specific country, city, and even zip code.
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The Business Model Revenue and Pricing Model
Slab rates of commission – Depends on the terms, and volumes Commission will be charged on a per-transaction basis Commission
Commission rates will range from 10% to 20% depending on the service
Promotion to elite service providers levels for a fee – premium listing Third-party advertising Advertising
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The Business Model Critical Success Factors •
Prompt delivery to market The industry is highly competitive. The inability to deliver products on time may result in sales lost to a competitor.
•
Having a diverse range of clients Diversity of the client base is important because shippers frequently occupy a strong position relative to operators.
•
Market research and understanding Thorough knowledge of market segments and an ability to understand client needs is necessary to deliver appropriate customer service levels.
•
Ability to pass on cost increases Operating costs in this industry are high. Transferring cost increases to the client can help operators maintain profit margins.
•
Production of premium goods and services Successful operators have the ability to offer clients a cost or service advantage that will increase market share.
•
Access to the latest available and most efficient technology and techniques The use of up-to-date technology such as the internet and loading facilities will help improve efficiency in this industry.
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The Business Model Operational Flows
Platform Development and Maintenance Technology is the most critical aspect of this business since the major operations happen through the website and the app. Developing a user-friendly website that is easy to navigate is essential. Embedding important features (chats, calendars, booking, payment transactions, reviews, and testimonials) will be a priority.
`
Verification
One of the most critical value adds of the app will be the verification of service providers. In order to prevent fraudulent accounts, there will be a mechanism to verify the service providers, as well as in-built red-flagging for any unusual activity of the providers. This will enhance client and service provider confidence.
Marketing The platform will be aggressively marketed using online and offline marketing techniques. Online marketing will include SEO, AdWords, Facebook promotions, etc. The company will also do press releases every time the platform goes live in a new country.
Customer Support A platform of this size and spread is bound to have many customers and potential support issues. The company will use ticketing software such as ZenDesk to track and address customer support issues. There will be defined turnaround times, and escalation mechanisms will be put in place to handle customer issues.
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The Business Model Stakeholder Flows
Customer
Registers on the App
Escrow Funds Released to Partner
Partner delivers the packages
Choses the Delivery Partner
Escrows the Funds
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The Business Model Key Suppliers App Development Team The app development will require the use of external experts and suppliers for testing, development, documentation, pre-launch, and launch. The app development entails utilization of an agile development methodology.
Aggregators The app will aggregate the demand and supply side of delivery and logistics. The aggregation team will bring together various suppliers such as businesses, courier providers, shipment providers, logistics services, intermediate warehouses, cold storage, etc.
Marketing Consultants The company will hire marketing consultants who will handle outsourced functions of social media marketing, content publishing, Google AdWords, Facebook, Twitter accounts, etc.
Public Relations Team The public relations team will be hired on a need basis and will take care of press releases, communications, crises management, etc.
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The Business Model Organizational Structure
CEO
Web and App
Web and App Development Development Testing Backups Security UX and Design
Customer Support
Customer Support Customer enquiries Customer issue resolution Issue escalation Feedback Ticket solving
CEO Overall business development Business growth Monitoring of budgets and KPIs
Marketing Team
Marketing Team Lead generation Client acquisition Supplier negotiations Referrals and commissions
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The Business Model Staffing Plan Particulars Designation CEO App and Web Development Team Customer Support Marketing Total Salary per Annum CEO App and Web Development Team Customer Support Marketing Total
Year 1
Year 2
Year 3
Year 4
Year 5
1 2 2 1 6
1 2 3 2 8
1 3 4 3 11
1 3 4 3 11
1 4 5 4 14
80,000 50,000 15,000 28,000 238,000
84,000 52,500 15,750 29,400 295,050
88,200 55,125 16,538 30,870 412,335
92,610 57,881 17,364 32,414 432,952
97,241 60,775 18,233 34,034 567,641
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The Business Model App Development and Maintenance The initial app development of the product will be outsourced to expert developers. The primary launch will be on Android, which will then be followed by an iOS launch. • Phase 1 – MVP: The initial launch will be based on a Minimum Viable Product (MVP). It will have the minimum features required for the launch. This launch will be on the Android platform. • Phase 2 – Improvisations: More features and services will be added in this phase. As more tie ups with suppliers are finalized, the categories will be added. • Phase 3 – iOS Launch: iOS launch will happen six months after the Android launch. • Phase 4 – Ongoing Maintenance: After the launch phase, ongoing maintenance will be handled in-house by the app development team. (The team strength is discussed later in the staffing plan.)
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The Business Model App Development and Target Market The app work will utilize Google Cloud Firebase for eliminating bugs because it requires a real-time database and also has a function of voice and face recognition provided by Microsoft, which includes two time passcodes verifications. These codes only work in the specific time of delivery and selected area, which is as per google maps APIs. In the near future, these codes will work in areas of two meters with precise geofencing. This two meter geofencing is provided by a company in the US, but they are not yet dealing with start-ups. The app includes a function for monitoring real-time location in delivery period and after delivery period in the case that a carrier fails to deliver the shipment on time. Sender and receiver have the option to ask for the carriers deposited amount in case their shipment did not arrive, or was lost or damaged. After safe delivery, the deposited amount will be returned to the carrier with an included charge.
Target Market Individuals Individuals in need of logistics support services like pick-up and delivery of food, groceries, laundry, electronics, and other items from retailers and items from home to office or vice-versa, etc. Small businesses Small businesses like grocery shops, online start-ups, supermarkets and hyper markets, laundry businesses, restaurants and food outlets, etc. in need of regular delivery to customers. Corporates Big companies and business houses in need of logistics services for parcel delivery, or delivery of documents, etc. between branches/warehouses or other specified locations.
There will be carrier billing for those who do not use credit cards.
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The Business Model Strategic Objectives The overarching strategy is to deliver services on time and within budget to an exceptional standard. The exceptional finish and standard is what today’s most sought-after clients are willing to pay top dollar for.
Strategic • • • •
Build brand awareness Achieve a synergistic effect Be socially responsible and environmentally friendly Achieve a high degree of profitability
Managerial • Build relationships with partners and suppliers • Geographic development Tactical • Deal in only high-quality products • Provide excellent service • Enhance customer satisfaction levels
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The Business Model Business Strategies
Managerial
Strategic ▸ ▸ ▸ ▸ ▸
Become a market leader in this space Provide high-quality services with an extremely user-friendly and eye-catching website Provide excellent security features Exhibit low loading times Explore opportunities to branch out into other similar services in the near future
▸ ▸
▸
Establish operational procedures and robust processes Implement a strong verification system to ensure that only verified providers and clients are allowed to register on the platform Employ strong MIS systems in order to measure, monitor, and control variances from plans (both financial, and nonfinancial)
Operational ▸ ▸ ▸ ▸
Identify and recruit well-trained and qualified staff Have a clear software development lifecycle Have clear policies for payments, refunds, customer issues, and registration Maintain a secure platform that gives the utmost priority to user privacy and data security
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The Business Model First-Year Milestones
Months 1-3
Months 4-12
▸ ▸ ▸ ▸ ▸ ▸
▸ Compile database of ▸ Continued marketing service providers and ▸ Continued web incorporate them into the development and platform maintenance ▸ Acquire customers ▸ Expansion to other ▸ Initial marketing continents ▸ Web development and bug fixing ▸ Customer support
Complete business plan Set up business Establish website Complete development Press release Go live
Year 2
Year 3 ▸ Expansion into other services ▸ Achieve revenue targets ▸ Establish itself as a market leader in this industry
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The Business Model Roadmap and Milestones First-Year Milestones ▸ ▸ ▸ ▸ ▸ ▸
Business setup and staffing Implementation of marketing strategy Creating brand awareness Acquisition of first clients Establishing supplier relationships Launch Android and iOS apps
Future Roadmap ▸ ▸ ▸ ▸
Implementation of quality control mechanisms Strategic partnerships Expansion into other geographies Launch market research and white papers
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â–¸ Marketing Plan
36
Marketing Strategy Marketing Strategy Advertising
Partnerships
The company will advertise to create awareness about the services provided to ensure that people know of the brand and what it does. Advertising will include both online and offline campaigns, including print media.
The company will partner with restaurants, pharmacies, grocery stores, etc. and ensure that print marketing materials (like pamphlets) are available on their counter and that they also spread the word about the delivery service provided by Brohan Logistics. This will benefit both partners.
Online advertising will include writing blogs and their distribution through social media channels, placing advertisements on the websites of popular pharmacies and e-commerce websites where people are more likely to need a delivery service, and sending bulk SMS to customers of mobile operators.
Word-of-mouth
Print advertising will include advertising through pamphlets, brochures, magazines, journals and newspapers, etc. that will be distributed in big stores, pharmacies, and the like.
Search Engine Optimization (SEO)
Word-of-mouth is the most powerful source of marketing, and the company will ensure word is spread by initial customers to other prospective customers by engaging in conversation with them through social media and other channels.
Promotions and Offers The company will provide promotional and seasonal offers to encourage customers to use the service. Offers will include free trial opportunities for the first 100 customers, discount for referrals, free delivery of gifts and birthday or anniversary cakes for regular customers, free delivery of medicines, etc.
Through search engine optimization (SEO) the company will ensure its website is the landing page for all of those who make relevant searches on the internet. All the relevant keywords searched will be incorporated into the website and social media pages of the company so that it has maximum visibility online.
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Marketing Strategy Marketing Strategy Website
Blogs
The company will have a user-friendly and content rich website with a clear call to action. The website is the company’s window to the world, hence it will clearly describe what the company does, how to use the app, ongoing offers and discounts as well as contact details.
Along with online presence at the usual websites, the company will have relevant and up-to-date blogs. The company will post frequent articles with photographs in its blogs about unique deliveries, midnight cake and gift deliveries, last minute surprise deliveries etc. to keep the readers’ interest evoked and excited.
The website will contain up-to-date information to ensure clients know the latest developments and offers. The website will be search engine optimized to ensure all relevant searches for delivering packages in the region leads to a landing page on this website.
Social Media Marketing Social media is a powerful tool in this day and age. The company will be active on popular social media sites like Facebook, Twitter, Vimeo, Youtube, and Instagram in combination with search engine optimization (SEO) to reach out to as wide a spectrum of the market as possible. The company will post frequent blogs about the services, the offers, interesting trivia, and other pieces of information to keep those who follow the company’s social media pages interested.
Cross Promotion The company will cross promote with partners and suppliers that include caterers, cake retailers, gift shops, supermarkets, pharmacies, libraries, and other such service providers who may need an independent delivery provider to reach their customers.
Radio Advertising This is the best way to reach the target customers within the local community. Advertising on the right channel at the right time will capture the attention of those young and the old who listen to the radio. This will help the company become a recognized brand in the community.
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Marketing Strategy Marketing Strategy Product The company will offer an app which will act as an aggregating platform for logistics providers and delivery companies and customers (people in need of packages to be delivered). The company will offer the platform for vendors to provide delivery services and the general public to avail of such services.
Place The company will be located in United Arab Emirates.
Pricing The company will follow a competitive pricing policy.
Promotion The product will be promoted using print as well as digital advertising, promotional offers, SEO, word-ofmouth publicity, partnerships with local retailers, etc.
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â–¸ The Management
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The Management The Founder XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX
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â–¸ Sources and Uses of Funds
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Sources and Uses of Funds Sources and Uses of Funds Uses of Funds Website and App Development Marketing Costs Operational Expenses Total
Amount ($) $15,000 $42,500 $42,500 $100,000
Sources of Funds Equity Total
$100,000 $100,000
Uses of Funds
15%
Website and App Development
43%
Marketing Costs Operational Expenses
42%
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â–¸ Financial Plan
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Financial Plan Projected Income Statements Particulars Commission Ad Revenue Total Website Development & Maintenance Marketing Costs Rent & Utilities Professional & Legal Printing & Stationery Administration Expenses Manpower Costs Total Profits
Year 1 $400,000 $25,000 $425,000
Year 2 $500,000 $50,000 $550,000
Year 3 $675,000 $100,000 $775,000
Year 4 $843,750 $200,000 $1,043,750
Year 5 $1,054,688 $400,000 $1,454,688
$25,000 $42,500 $24,000 $15,000 $5,000 $21,250 $238,000
$37,500 $55,000 $25,200 $15,750 $5,250 $26,563 $295,050
$56,250 $77,500 $26,460 $16,538 $5,513 $33,203 $412,335
$84,375 $104,375 $27,783 $17,364 $5,788 $41,504 $432,952
$126,563 $145,469 $29,172 $18,233 $6,078 $51,880 $567,641
$370,750
$460,313
$627,798
$714,141
$945,035
$54,250
$89,688
$147,202
$329,609
$509,653
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Financial Plan Projected Cash Flows Particulars Revenue Equity Total
Year 1 $425,000 $100,000 $525,000
Year 2 $550,000 $100,000 $650,000
Year 3 $775,000 $$775,000
Year 4 $1,043,750 $$1,043,750
Year 5 $1,454,688 $$1,454,688
$25,000 $42,500 $24,000 $15,000 $238,000
$37,500 $55,000 $25,200 $15,750 $295,050
$56,250 $77,500 $26,460 $16,538 $412,335
$84,375 $104,375 $27,783 $17,364 $432,952
$126,563 $145,469 $29,172 $18,233 $567,641
Total
$344,500
$428,500
$589,083
$666,849
$887,077
Opening Balance Surplus/Deficit Closing Balance
$$180,500 $180,500
$180,500 $221,500 $402,000
$402,000 $185,918 $587,918
$587,918 $376,901 $964,818
$964,818 $567,610 $1,532,428
Website Development Marketing Costs Rent & Utilities Professional & Legal Manpower Costs
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Financial Plan Financial Charts
Financial Charts 1,800,000
Structure of Expenses 7%
1,600,000 1,400,000
11% 7% 4% 64%
1% 6%
1,200,000 1,000,000 800,000 600,000
Website Development & Maintenance Marketing Costs Rent & Utilities Professional & Legal
Printing & Stationery
400,000 200,000 0 Year 1
Year 2
Year 3
Year 4
Administration Expenses
Revenue
Net Profit
Manpower Costs
Cash Balance
Expon. (Revenue)
Year 5
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Financial Plan Key Performance Indicators Particulars Net Present Value (NPV) Internal Rate of Return (IRR) CAGR of Revenue CAGR of Profits CAGR of Cash Balance
Value $748,316 126% 38% 86% 56%
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