Master Thesis - BUSINESS PLAN - IS MUNI

Masaryk University Faculty of Economics and Administration Field of Study: Business management

BUSINESS PLAN

Master Thesis

Thesis Supervisor: Author:

Ing. Petr SMUTNÝ, Ph.D Elvin MANSIMOV, 424211

Brno2017

MASARYK UNIVERSITY

Faculty of Economics and Administration

MASTER’S THESIS DESCRIPTIONAcademic year: 2017/2018

Student: Elvin Mansimov

Field of Study: Business Management (Eng.)

Title of the thesis/dissertation: Business Plan (case study)

Title of the thesis in English: Business Plan (case study)

Thesis objective, procedure and methods used: Goal of the thesis is to create a business plan for a particular businessstart-up.The thesis will consist of two parts. Theoretical part will include re-view of possible methods and their evaluation with respect to toolsand techniques used during the analytical part and proposal part (me-thods used to create a business plan). Advantages and disadvantagesof these methods will be elaborated with the goal of choosing thebest set of tools and techniques to be used to create a viable businessplan.The second part will include analyses needed to gain enough relevantinformation to create a viable business plan for a particular start-upbusiness. The business plan will be created based on results of ana-lyses and will include all standard parts incl. financial and economicalassessment.Self-study and research of suggested as well as other relevant litera-ture and resources will be an integral part of the work process. Authoris expected to define the problem and identify methods to be used toreach the aim of the thesis.

Extent of graphics-related work: According to thesis supervisor’s instructions

Extent of thesis without supplements: 60 – 80 pages

Literature: PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guideto Building a Business and Securing Your Company’s Future. 7th ed.Tustin: Out Of Your Mind ...and into the Marketplace, 2008. 352 s.ISBN 978-0-944205-37-2.

GALAI, Dan, Lior HILLEL and Daphna WIENER. How to cre-ate a successful business plan : for entrepreneurs, scientists, ma-nagers, and students. New Jersey: World Scientific, 2016. xxi, 309.ISBN 9789814651516.

How to prepare a business plan. Edited by Edward Blackwell. Rev. 4thed. London: Kogan Page, 2004. vi, 184 p. ISBN 0749441917.

How to write a business plan. Edited by Brian Finch. 3rd ed. Philadel-phia: Kogan Page, 2010. vii, 173 p. ISBN 9780749458942.

FORD, Brian R., Jay BORNSTEIN and Patrick T. PRUITT. The Ernst& Young business plan guide. 3rd ed. Hoboken, N.J.: John Wiley &Sons, 2007. xix, 233. ISBN 9780470112694.

Thesis supervisor: Ing. Petr Smutný, Ph.D.Page 1 of 2

Thesis supervisor’s department: Department of Corporate Economy

Thesis assignment date: 2016/05/26

The deadline for the submission of Master’s thesis and uploading it into IS can be found in the academic year calendar.

In Brno, date: 2018/01/08

Page 2 of 2

STATEMENT OF AUTHORSHIP

I hereby declare that I prepared the Diploma work “Business plan” myself, under the supervision

of Ing. Petr Smutný, Ph.D. All literature resources and other sources are used according to

legislation, internal regulations of Masaryk University and internal management acts of Masaryk

University and the Faculty of Economics and Administration.

Elvin Mansimov

ACKNOWLEDGMENT

I would like to say thank you to my supervisor for the great support and close cooperation despite

the heavy workload and schedule. Also, would like to take this opportunity and thank to Jana

Nesvadbová for helping me to overcome all the obstacles during my entire studies. Finally,

thanks to my wife who supported me all the time when I was developing this diploma work.

ABSTRACT

This diploma thesis focuses on the business plan for the new established company called Growth

Laboratory. Company aims to develop its new product – a book summary videos and introduce it

to its target market. The business plan will verify the company’s plan and help to develop and

achieve its short-term and long-term goals. Theoretical part of the thesis describes the business

plan from the academic point of view by researching relevant sources and approaches. Results of

theoretical analysis is implemented in the practical part. The thesis will cover the theoretical as

well as practical knowledge of the business plan preparations for video content market in the

social media.

Keywords:

Business plan, social media, video content, minimum viable product, SWOT, YouTube, social

media platforms, product validation.

TABLE OF CONTENTS THEORETICAL PART ................................................................................................... 1

KEY CONSIDERATIONS PRIOR TO BUSINESS PLAN .......................................... 1

1. OPPORTUNITY ........................................................................................................... 4

1.1 Problem worth solving .................................................................................................. 4

1.2 Solution ......................................................................................................................... 5

1.3 Validation ...................................................................................................................... 8

2. ORGANIZATIONAL PLAN ....................................................................................... 9

2.1 Cover page .................................................................................................................... 9

2.2 Table of contents ......................................................................................................... 10

2.3 Executive summary ..................................................................................................... 11

2.4 Vision mission and goals ............................................................................................ 12

2.5 Product description ..................................................................................................... 13

2.6 Business model ........................................................................................................... 15

2.7 Management of the company and other key people ................................................... 16

3. MARKETING PLAN ................................................................................................. 17

3.1 Situational Analysis .................................................................................................... 18

3.2 Market analysis ........................................................................................................... 19

3.3 Competition analysis ................................................................................................... 21

3.4 PESTLE analysis......................................................................................................... 24

3.5 Company analysis - Internal environment .................................................................. 25

3.6 SWOT analysis ........................................................................................................... 25

3.7 Target market / Customer analyses ............................................................................. 27

3.8 Marketing strategy in the target market ...................................................................... 28

3.9 Differentiating and positioning ................................................................................... 28

3.10 Marketing objectives and goals ................................................................................. 29

3.11 Marketing tactics ....................................................................................................... 29

4. FINANCIAL PLAN .................................................................................................... 32

4.1 Sales/Revenue forecast ............................................................................................... 33

4.2 Start-up Expenses ........................................................................................................ 33

4.3 Projected Profit and loss ............................................................................................. 34

4.4 Projected cash flow ..................................................................................................... 34

4.5 Projected balance sheet ............................................................................................... 35

4.6 Break even analysis ..................................................................................................... 35

PRACTICAL PART ....................................................................................................... 36

EXECUTIVE SUMMARY ............................................................................................. 36

1. OPPORTUNITY ......................................................................................................... 38

1.1 Problem worth solving ................................................................................................ 38

1.2 Solution ....................................................................................................................... 40

1.3 Validation. ................................................................................................................... 40

2. ORGANIZATIONAL PLAN ..................................................................................... 42

2.2 Vision, mission, and goals .......................................................................................... 43

2.3 Product ........................................................................................................................ 43

2.4 Business model ........................................................................................................... 43

2.5 Management of the company and other key people ................................................... 44

3. MARKETING PLAN ................................................................................................ 45

3.1 Situational analysis ..................................................................................................... 45

3.2 Market Analysis .......................................................................................................... 45

3.3 Competition analysis ................................................................................................... 46

3.4 PESTLE analysis......................................................................................................... 53

3.5 Internal company environment – SWOT analysis ...................................................... 56

3.6 Target market / Customer analyses ............................................................................. 57

3.7 Marketing strategy in the target market ...................................................................... 58

3.8 Differentiating and positioning ................................................................................... 58

3.9 Marketing objectives and goals ................................................................................... 58

3.10 Marketing tactics - 4p of marketing .......................................................................... 59

4. FINANCIAL PLAN .................................................................................................... 60

4.1 Projected sales forecast ............................................................................................... 61

4.2 Projected startup expenses .......................................................................................... 61

4.3 Projected profit and loss statement ............................................................................. 61

4.4 Projected cash flow ..................................................................................................... 61

4.5 Projected Balance sheet .............................................................................................. 61

4.6 Break-even analysis .................................................................................................... 61

MILESTONES AND KEY METRICS ......................................................................... 63

SCENARIOS ................................................................................................................... 62

BIBLIOGRAPHY ........................................................................................................... 65

LIST OF FIGURES ........................................................................................................ 68

LIST OF PICTURES ...................................................................................................... 68

LIST OF TABLES .......................................................................................................... 68

APPENDICES ................................................................................................................. 69

1

THEORETICAL PART

Theoretical part is the knowledge framework related to the practical part of the business plan. It

covers the current literature reviews for the respective topics, provides comparisons and

assessment of the approaches from various authors.

KEY CONSIDERATIONS PRIOR TO BUSINESS PLAN

According to Galai1 business plan serves as an important document when analyzing the

business or planning strategic changes. Successful business plan must be a concise document

generally ranging from 20 to 50 pages. It is a dynamic document rather than static. Before writing

the business plan it is important to decide who is going to write it. Galai says that it is a mistake

to leave the writing to entrepreneur or the manager. He recommends cooperation from different

departments of the company, or hiring external expert. If hiring expert is the choice then it is very

important to provide the first draft to the expert so that he can build on it. The reason is that

expert is professional on writing the business plan but he might not have enough knowledge

about your business. Also he emphasize that business plan should be concise and focused. What

Galai is trying to mean by focus is that every business plan is created for some purpose such as,

for innovative product, to attract partner or technological breakthrough. For example, if it is a

technological product then you should focus on explaining how it will be beneficial compared to

other products, or if it is completely new product then focus on proof of your concept, etc. Finally

business plan must be clear and organized. This might seem very minor point, but when

reviewers are checking the plan minor errors, or empty left page might create impression that

your company is not serious or waste resources intentionally. Galai does not recommend any

fixed structure format for a business plan, however mentions the importance of putting some

topics first depending on the purpose of the plan. According to him if the plan is for new venture

then chapter one needs to focus on the problem, solution that the product brings and validation of

that solution. For example if the new innovative product is a medical device then the first chapter

will describe the relevant medical problems and the current devices addressing it.

1 GALAI, Dan, Lior HILLEL a Daphna WIENER. How to create a successful business plan: for entrepreneurs, scientists, managers, and students. New Jersey: World Scientific, 2016. I, 3 p. ISBN 978-981-4651-51-6

2

Richard2 also emphasizes the importance of keeping in mind why you write the plan. He

also recommends keeping the plan as short as much as possible. Compared to Galai he is

extremely flexible when it comes to organizing the structure of the plan. He provides seemingly

different point of view for creating business plan. He formulates 3 questions and mentions that

business plan needs to be built based on them. Questions he asks are: Where are you now? Where

you want to be? How are you going to get there? He especially emphasis the importance of

second question as a way of defining the roadmap for the future business plan. Finally Richard

recommends top-down and down-top communications while developing the plan

Pinson3 is one of the authors who has devoted quite extended portion of the book to the

questions that have to be considered before writing the business plan. According to Pinson there

are a few key questions that need to be answered before writing the plan, such as what is this

business plan for and why do you need it? If you don’t seek a financial support what should be

your approach? How do you develop an exit Strategy? Where do the numbers come from in your

financial plan at the end?

When I compare Pinson’s approach to previous 2 approaches (Richard and Galai) it

becomes clear that all three of them recommend defining the purpose of the business plan in the

first place (Why do you write it?). What Pinson does differently than previous 2 authors is that

she considers 3 key questions at the beginning while others do it at the end. These 3 questions

are: What is the source of finance, exit strategy, and financial assumptions. I am strongly

convinced that Pinson’s approach of considering these questions at the begging is much smarter.

The reason I think in this way is explained below in detail (see sections below). When I assess

above mentioned approaches I noticed that Galai is the only person who talks about analyzing

problem, solution, and validation for newly created products. According to him if the product is

new then there can exist suspicions regarding validity of problem and solution. That is why

analyzing problem, solution and providing proof for validation can remove all the suspicions. I

find this type of approach very adequate and the reason is that my product is quite new and

without proper approach its validity might be undermined.

Finally, this section will not be covered in the practical part since it is about the

considerations before writing business plan. However, points mentioned in this section will serve

as a guideline to develop the business plan in the right way.

Source of finance: Financing (source of capital) is important and it will directly influence your

choice of exit. Keep in mind, when considering financing options, not only the ease with which

2 STUTELY, Richard. The definitive business plan: the fast track to intelligent planning for executives and entrepreneurs. 3rd edition. Harlow,

England: Pearson, 2012. iii, 41 p. ISBN 978-0-273-76114-3.

3 PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and Securing Your Company's Future. 7th ed. Tustin: Out Of Your Mind ...and into the Marketplace, 2008. i, 7 p. ISBN 978-0-944205372

3

you can raise the funds you require to reach your goals, but the costs of each type of financing in

terms of both money and relationships. In the simplest sense, capital is available from four

sources: 1. yourself, 2. friends and family, 3. financial institutions, and 4. the public at large

(including Venture Capital and Private Equity).

Exit strategy: Pinson4 mentions that many people think exit strategy is a plan in case of failure,

but it is not true. It is a plan for success. Developing an exit strategy before you write your

business plan will enable you to make the best decisions for your business. Have you ever seen

runners line up for a race not knowing where the Finish Line is? This would never happen, right?

Whether you are starting a new business or expanding a current business, the implication is the

same. Before you begin the race you need to know where you expect to finish. Exit can be in one

of the forms mentioned below:

Selling all or a portion of the business.

Passing the business to a family member

Selling to an Employee Stock Ownership Plan

Taking the company public.

Liquidation

Financial assumptions: While writing the text portion of the business plan it should be

developed not only as a conceptual idea, but in terms of how it will generate revenues and/or

incur expenses. After certain amount of time, even the most astute business planner tends to get

confused about where some of the numbers came from. That is why following steps are

recommended.

As you develop each piece of your business plan, remember to develop it in terms of

revenues you expect to generate and expenses you expect to incur.

Keep a piece of paper at your side. As you determine the revenue and expense dollars

related to the task you are working on, jot down the assumptions that you have developed.

Be sure to include explanations of when revenues will be realized and when expenses will

be incurred.

When you are ready to develop your financial plan, gather your assumptions together in

one place and use them as the basis for the dollar amounts you input. Finally, append your

assumptions to your financial statements where they are needed for clarification.

4 PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and Securing Your Company's Future. 7th ed. Tustin: Out Of Your Mind and into the Marketplace, 2008. i, 8 p. ISBN 978-0-944205372

4

1. OPPORTUNITY

This section is going to cover current academic approaches of analyzing, validating problem,

developing a solution, and finally validating that solution.

1.1 Problem worth solving

According to Brian5, before starting to find a solution it is key to define the problem clearly

in writing. Writing is called a psychoneuromotor activity. By writing out your problem on a paper

or on a whiteboard or flipchart, you are forced to use your visual sense, your auditory sense and

your kinaesthetic sense. As a result, you activate your whole brain in the act of defining your

problem clearly in the first place. Brian says that, 50 % of the problems can be solved by the act

of defining them clearly in advance. In most cases where people have wrestled with a problem for

a long time, it is because they have not taken the time to clearly define the problem in the first

place. Fuzzy thinking is a major obstacle to success in life and in the world of business. Second

step in Brian’s approach is called problem validation. At this stage he recommends to read,

research, and gather as much information as possible about the problem. The more information

you gather, the more likely it is that the correct solution to your problem will emerge from the

data, like cream rising to the top of milk. At this stage be prepared to follow wherever the facts

may lead. Resist the temptation to fall in love with a solution early in the process and then to seek

only that information that will confirm your initial conclusion. Keep an open mind.

According to MacAdam6 many entrepreneurs have a tendency to spend huge amount of

time working on the solution before they fully understand the problem or explain it clearly as a

need. The need must be clearly and concisely identified before you start working on a solution. If

you do this then you will end up solving a wrong problem. That is why if problem has not been

clarified in the marketplace by now then you must go back to the prior section and explain the

customer problem before you continue doing anything. The solution is the easy part of building

the value proposition. With the problem in mind the next step should be articulating the

importance of the solution to the customer.

Galai7 also thinks that the first step is determining whether there is a compelling need for

your product or service. It is the entrepreneur’s task to make sure that the need is valid. Proving

the need for your product is very important especially in the case of new or innovative product. In

some cases there is a need or vacuum in a sector which generates the environment seeking a

5 Brian Tracy. Creativity & Problem Solving (The Brian Tracy Success Library). 1st ed. AMACOM, 2015. vii, 25 p.9780814433164

6 John McAdam. The One-Hour Business plan – The simplest and practical way to start anything new. 1st ed, John Wiley & Sons, incorporated,

2013. ii 30 p. ISBN 9781118726228

7 GALAI, Dan, Lior HILLEL a Daphna WIENER. How to create a successful business plan: for entrepreneurs, scientists, managers, and students. New Jersey: World Scientific, 2016. iii, 25 p. ISBN 978-981-4651-51-6

5

solution. The solution may be a completely new category of products or an improvement of

existing products and processes. Shortage of raw materials, cost efficiency and safety are all

examples of concerns which requires some type of solution. In most cases you will see that you

don’t have to start from the beginning.

Brian, MacAdam, and Galai provide strong reasons about the importance of defining

problem in the first place, I agree with all 3 of them. In essence all 3 approaches are very similar.

Especially, I believe that there is a huge amount of truth in Galai’s opinion when he says that in

most cases you don’t have to start from beginning which means most probably there was

someone before you who dealt with that problem and tried to find a solution. Researching

already existing approaches can be a game changer.

1.2 Solution

According to MacAdam8 a quality entrepreneurial solution begins objectively with

customer in mind. We are thinking about how our target customers interact and the problems they

encounter, which creates opportunities for solution. He mentions that solution our customers want

might not be the one that we have the most fun creating, or be the easiest, or the most cost-

effective for us to deliver. He mentions that we have to be very careful with our previous

experiences or knowledge when we develop a solution. The reason is that our knowledge pushes

us to look at the solution from our perspective, not through customer’s eyes. Just be mindful of

our human tendency to revert back to what we feel comfortable with and what we know and

understand. Our eyes must be on the big prize – the customer. Stand directly behind your

customers and don’t move to anywhere else.

In order to find a solution Brian9 recommends to follow the following steps described

below:

1. Don’t reinvent the wheel – Remember whatever problem you are dealing with has probably

been solved by someone else, somewhere, and often at a great expense. You don’t have to

reinvent the wheel. Ask questions of informed people and consult experts. Look for others who

had the same problem and find out how they dealt with it

2. Let your subconscious work – Once you have assembled the information and discussed it

thoroughly with the other people involved, first try to solve the problem consciously. Think of

everything you can come up with to solve the problem, if you are not happy with the solution you

have provided then simply leave it and set a schedule to come back at a later time to check it


2013. ii, 33 p. ISBN 9781118726228

9 Brian Tracy. Creativity & Problem Solving (The Brian Tracy Success Library). 1st ed. AMACOM, 2015. vii, 28 p.9780814433164

6

again. Brian says that when you switch the focus your subconscious and superconscious minds

begin working 24/7 like a super computer. Brian calls this process as turning over your problem

to a higher mental powers for solution.

3. Use your sleep – Review your problem before you go to sleep and ask your subconscious mind

for a solution. This tactic especially work well when you have a difficulty or dilemma that you

must deal with the following day. By requesting a solution, you will often wake up with a perfect

answer to your solution, it might happen that you will wake up in the middle of your sleep and

see that solution is right there just like a butterfly landing on your shoulder.

4. Write it down – Sometimes it is a good policy to have a notepad handy so that you can write

down these answers and ideas, rather than forgetting them which happens very often

5. Take action – Finally, whatever the idea it is, take action on it immediately. Don’t hesitate.

Sometimes ideas that come are time dated, if you take action wonderful things can happen. At the

end Brian strongly suggests to go through following 2 exercises:

1. Take any problem or goal you have and google it with key words and collect all the articles

and paper in order to review them. You may be astonished at what other people have already

found and what other people are already doing.

2. Ask around and try to find some people who have already solved the problem you are trying to

solve. You will be amazed how quickly you will find some people who has solved very exact

problem you are trying to find a solution.

According to Galai10 while developing a solution it is crucial to find an answer to the

following questions:

What kind of problem does it solve?

Would your potential customers agree that this is a pressing problem? How eager are they

for a solution?

Is there a price for not solving this problem?

Will your potential customers will understand how your product will solve their problem?

If your product does not clearly solve an existing problem, what is the justification for

your product?

Betty11 explains that a solution is valuable only if it is transparent, in another word if you can

explain why you are recommending it and that conclusions are going to be much more effective

10 GALAI, Dan, Lior HILLEL a Daphna WIENER. How to create a successful business plan: for entrepreneurs, scientists, managers, and students. New Jersey: World Scientific, 2016. iii, 28 p. ISBN 978-981-4651-51-6

7

and stronger if you can back them up with facts and numbers. The information on which belief or

judgment is based makes a big difference. If you describe to people why you reached your point

of view, they have the opportunity to decide whether they agree based on the logic you used.

Justification is a big part of action. Making your conclusion and solutions transparent – in other

words, showing your work is key to success. Betty summarizes above mentioned points in a

“logic diagram” which can be described as below:

Figure 1. Logic diagram

Source12

MacAdam provides information what solution is and what are the points to consider.

Compared to him Brian goes even further and provides steps for finding a solution. In another

word MacAdam tells what needs to be done, Brian tells how it can be done. First, Biran’s

approach is more practical, easy to apply and result oriented. Second, I have already read

Brian’s book long time ago and applied his recommendations when I was trying to find a solution

for another problem which yielded great results. As a conclusion point, Galai provides set of

questions to make sure that your solution is valid. Finally, Betty’s diagram can be very useful

11 Betty Vandenbosch. Designing Solutions for Your Business Problems: A Structured Process for Managers and Consultants. 1st ed. n/a. John

Wiley&Sons, Incorporated, 2003. vii, 107 p. ISBN: 9780787967659

12 Betty Vandenbosch. Designing Solutions for Your Business Problems: A Structured Process for Managers and Consultants. 1st ed. n/a. John Wiley&Sons, Incorporated, 2003. vii, 112 p. ISBN: 9780787967659

8

when it comes to summarizing data that leads to the final solution. I find all 4 approaches

adequate and believe that each can be useful at different phases of solution development.

1.3 Validation

Robert13 mentions that whether your organization is a multinational corporation or a small

company, validation is still a crucial component. The most important point that we are trying to

achieve by applying validation is to take a look from above and make sure that all information in

the plan has been confirmed, the plan has been fully rehearsed and all appropriate employees and

their nominated deputies have also involved in the exercise.

Stefan14 says that at the centre of every business is a product or service that needs to be sold

in order to generate income for the company. However, when you start from scratch, how do you

decide the features and characteristics of your product or service? Most probably you have done

some research until this point and know what kind of product you are going to create, but without

testing and validating the product you can’t build a profitable business. Shaping the initial

product or service is the most important and most crucial step of every business. You need to

decide which features and functions you see absolutely important for your customers, and test

them first. That is the point where one of the famous tactics comes to power. This tactic is called

MVP – Minimum Viable Product. MVP is an early stage prototype that allows potential

customers to experience the set of key features of your product and provide useful feedback.

Alexander15 also sees the MVP as one of the powerful tactics for validation and says that

main goal here is to get results as quickly, as cheaply, and efficiently as possible. Even in large

companies with big budgets you can start very cheaply. For example, use your smartphone to

make and test reactions to a video before you bring in a video crew to professionalize videos and

expand testing.

According to Lucy16 one of the main ways to test your business idea is to ask people if they

would use it. When you do that it is very important to make sure that market is big enough to

fulfil your expectations. If you took your friend Bob – a vegetarian insomniac – as your

inspiration to create new meat-free recipes, check whether anyone else in the world would log in

to your website to make purchase before plunging all your savings into the idea. It would not take

13 Robert Clark. Validating Your Business continuity plan.1st ed. n/a. IT governance publishing, 2013. i, 31 p. ISBN 9781849287746

14 Stefan Korn. Successful Online Start-Ups for Dummies. 1st ed. n/a. John Wiley&Sons, Incorporated, 2012. ii, 70 p. ISBN 9781118302699

15 Alexander Osterwalder, Yves Pigneur, Trish Papadakos. Value Proposition design – How to make stuff people want. 1st ed. n/a. John

Wiley&Sons, Incorporated, 2015. ii, 188 p. ISBN97818118968055

16 Lucy Tobin. Entrepreneur - How to start an online Business. 1st ed. n/a. John Wiley&Sons, Incorporated, 2012. ii, 115 p. ISBN 9780857082886

9

long time to realize that it was ridiculous, but even if your idea was absolutely sane you need to

make sure that there is a sufficient market to help you to become successful. During the testing

phase talk as many of your potential consumers as possible. Speak to people you know and more

that you don’t know because they are more likely to be brutally honest and critical.

When I summarize above mentioned points about validation it appears that majority of the

authors recommends creating a minimum viable product for validation (MVP). I also think that

this is one of the strongest validation models because it gives you a real feedback from a real

customer. Talking to someone might be sometimes misleading because people may not want to

hurt your feelings, but if they only see the product they are going to judge it brutally. Finally from

the above mentioned authors, Lucy was the only one who talked about the importance of

considering market size which I find a key factor to consider during validation.

2. ORGANIZATIONAL PLAN

This part is the entrance to the business plan which is mainly focused on topics that are related to

the business/company. Each topic is explained below in separate sections.

2.1 Cover page

Various authors presents different information that can be put on the front page, however

Pinson17 recommends that the company name, address, phone number, and web site address

should appear in the top one-third of the page. If you have a logo it will be an added enhancement

to the page, especially if it is printed in color. This is a great advantage, especially when seeking

an investor.

Company name

Company address

Company phone number (including area code)

Web address, if you have a web site

Logo, if you have one

Names, titles, addresses, and phone numbers of the owners or corporate officers

Month and year in which plan is issued

17 PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and Securing Your Company's Future. 7th ed. Tustin: Out Of Your Mind ...and into the Marketplace, 2008. ii, 30 p. ISBN 978-0-944205-37-2

10

Name of the preparer

Dethomas18 says that there is no prescribed form of the title page, but the general rule is that

page must be sufficiently attractive to readers and also reasonably preserve conservative style.

2.2 Table of contents

Brian and Patrick19 see table of content as a necessary component of the business plan and

think that it serves exactly the same purpose as the table of content of a book does. However, it

should not show the number of pages and subheadings because new sections, subsections or

subheadings can be added at any time and that would make the numbering very difficult. That is

why it should only show title of the section as indicated below.

I. Table of contents

II. Executive summary

III. General company description

IV. Product and services

V. Marketing plan

VI. Operational plan

VII. Management and organization

VIII. Structure and capitalization

IX. Financial plan

According to Pinson20 most small start-up businesses will need only one page table of

contents. Existing companies will have historical information and financial statements as well as

projections. Larger, more complex companies will most likely have more detailed headings,

especially if the company is going after venture capital. In all cases, business plan must have the

following major three levels of title. The subheadings are dependent on the creator.

18 Writing and convincing business plan . 3rd ed. Hauppauge, NY: Barron's Educational Series, c2008, p. 4. ISBN978-076-4139-345.

19 FORD, Brian R., Jay BORNSTEIN and Patrick T. PRUITT. The Ernst & Young business plan guide. 3rd ed. Hoboken, N.J.: John Wiley &

Sons, 2007. v, 72. ISBN 9780470112694


11

Part I: Organizational Plan

Part II: Marketing Plan

Part III: Financial plan

Edward21 approaches to table of content little bit differently compared to Pinson, Brian

and Patrick. First of all he calls it layout of the business plan and mentions that information you

give must follow a logical pattern. You could present your material in the sequence shown here,

using headings, so that the reader can survey your plan and navigate without difficulty.

1. A brief statement of your objectives.

2. Your assessment of the market you plan to enter.

3. The skill, experience and finance you will bring to it.

4. The particular benefits of the product or service to your customers.

5. How you will set up the business.

6. The longer-term view.

7. Your financial targets.

8. The money you are asking for and how it will be used.

9. Appendices to back up previous statements, including especially the cash flow and other

financial projections.

10. History of the business (where applicable).

Summarizing all approaches show that each authors provide an optional table of content

and leave it to the writer to adjust it according to needs. All 3 authors think that every business

plan at least has to have 3 main headings which are information about company, marketing plan

and financial plan.

2.3 Executive summary

According to Brian22 businesses usually succeed when they are able to convey the message

in the executive summary and then back it up with valid data in the body part. Pinson23 mentions

that Executive summary is the short statement of the business plan. It summarizes the content and

purpose of the finished plan, covering all of the key points. It specifies who you are, what your

company does, where your company is going, why it is going where it is going, and how it will

get there. Compared to other authors Pinson goes a step further and shows that executive

summary should be written differently depending on the purpose such as, if you are searching for

lender, venture capitalist, or if it is only for internal use and not going to seek funds.

21 How to prepare a business plan. Edited by Edward Blackwell. Rev. 4th ed. London: Kogan Page, 2004. vi, 184 p. ISBN 0749441917


Sons, 2007. v, 77. ISBN 9780470112694


12

Haag24 also states that the executive summary should be formed after processing the entire

business plan and should occupy about 2-3 pages. Abrams25 even recommends to have only one

page because readers must be able to understand the whole plan in a short time without detailed

investigation.

I think that each of the above authors bring very strong argument in developing the

executive summary, however Pinson’s approach is more complete and relevant because she

provides step by step explanation how to develop executive summary when it is being created for

internal purposes, for seeking investor, and for partnership. Since I will be building my business

plan for internal use I want to eliminate unnecessary work and only cover the points that are

needed for internal use

2.4 Vision mission and goals

According to Shamir26 and House vision, mission and goals can be described as one of the

cornerstones of a company. Everyone describe these 3 concepts slightly in a different way but

they all meet at 1 point which is basic company goals. Vision is a set of shared values company

seeks. It can also be defined as an ideal and unique plan of the future. In a simplest term vision is

what company wants to achieve and mission provides an answer how to achieve it. A mission

statement is a brief (one or two sentences) description of the company’s fundamental purpose

including, nature, values, and its work. It should clearly explain why the company exists and

what it plans to achieve in the future27. Based on the mission company directs its resources. Goals

are specific milestones which takes the company towards its mission. It is always aligned with its

vision and mission. According to Doran28 goals should follow the rule of SMART which stands

for:

Specific

Measurable

Achievable

Real

Time bounded

24 THE HAGUE, Annette B. Writing a successful business plan: An overview. Workplace Health & Safety, 2013 61.1: 19 to 29

25 The successful business plan: secrets. 4th ed. Palto Alto, Calif : Planning Shop, C2003, p 50. ISBN 09-669- 63563.

26 HOUSE, Robert J.; Shamir Boas. Toward the integration of transformational, charismatics and Visionary theories.1,993th

27 PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and Securing Your Company's Future. 7th ed.

Tustin: Out Of Your Mind ...and into the Marketplace, 2008. ii, 76 p. ISBN 978-0-944205-37-2

28 DORAN, George T. There's a way to write SMART management's goals and objectives. "And Miller. Arthur F. & Cunningham, James A" How to Avoid costly job mismatches "Management Review , 1981 70.11

13

2.5 Product description

Brian29 says that readers may not understand the special issues affecting your product that is

why you must explain the product briefly and clearly by keeping the following points in mind:

Don’t explain the technicalities here, simply explain how it does what it does. Where does it do

it? Is there anything unique about it? How is it supplied and distributed? According to Edward30

before describing the product it needs to be clarified to which category the product belongs. Is

product or service:

An entirely new idea?

An improved version of something that already exists?

Cheaper than the others?

More reliable as to delivery or after-sales service?

More readily available to local customers?

Once decided to which category the product belongs he recommends to clarify following

two points:

Describe the most important features. What is special about it?

Describe the benefits. What will the product do for the customer?

Note the difference between features and benefits, and think about them. For example, a house

that gives shelter and lasts a long time is made with certain materials and to a certain design;

those are its features. Its benefits include pride of ownership, financial security, providing for the

family, and inclusion in a neighborhood. You build features into your product so that you can sell

the benefits.

McAdam31 also comments on the differences between feature and benefit and says that

feature is tangible while benefit is intangible. A feature describes what the product does and

benefit portrays what the customer gets.

According to Ford32 prior to addressing in detail the company’s plans regarding areas such as

marketing and operations it would be useful to spend some time on describing company’s product

29 How to write a business plan. Edited by Brian Finch. 3rd ed. Philadelphia: Kogan Page, 2010. vii, 37 p. ISBN 9780749458942

30 How to prepare a business plan. Edited by Edward Blackwell. Rev. 4th ed. London: Kogan Page, 2004. vi, 11 p. ISBN 0749441917


2013. ii, 36 p. ISBN 9781118726228

32 FORD, Brian R., Jay BORNSTEIN and Patrick T. PRUITT. The Ernst & Young business plan guide. 3rd ed. Hoboken, N.J.: John Wiley & Sons, 2007. v, 82 p. ISBN 9780470112694

14

and service. Ford says that regardless of strategic considerations a business can’t succeed without

an appealing product or service. Entrepreneur is more likely to be familiar with his or her chosen

field compared to reviewer. It is very important that the characteristics and appeal of the product

is explained in a very clear and simple fashion. The following information is usually included in

this section:

Physical description – describing physical characteristics of the product

Use and appeal – This is the place and opportunity to illustrate the unique features of the

product.

Ford mentions that it would be even useful to show the prototype or sample of the product to the

viewer to increase the appreciation.

Compared to above mentioned authors Pinson33 takes much detailed approach when it

comes to explaining the product. According to Pinson product description section should be

formulated differently if you are manufacturer, distributor, or retailer.

Manufacturers should describe products and give a general description of their development from

raw materials to finished item. The development of a flow chart or time line can help to identify

the various stages of research and development (R&D) and production. A time line can also be

used to demonstrate when raw materials must be ordered, how much time is needed in the

production process, and how much time is involved in inventory storage and in shipping and

handling. It is also important to discuss the raw materials that are used and how much they will

cost. Who are your suppliers, where are they located, and why did you choose them? Although

you may order from one main supplier, include information on alternate suppliers. Address how

you could handle a sudden increase in orders or a loss of a major supplier. How will the work get

done and at what cost? Project peak production times and determine when money will be needed

for key purchases. Include also cost breakdowns in the supporting Documents section to back up

your statements. Describe your production equipment and other product assets in terms of what

you already own, what you plan to purchase, and how much it will cost. Again think in terms of

dollars. When you are projecting cash flow, this information will provide the source for your

financial assumptions regarding production equipment.

While assessing above mentioned approaches I see that each of them provides valuable

information regarding product description. Brian’s approach of keeping the product description

simple, Edward’s differentiation between feature and benefit are very important points to



15

consider while describing the product. Even though, Ford tries to explain product description

with different words but at the end he comes to the same conclusion as Brian. Compared to these

authors Pinson’s approach appears to be more complete and well thought. I noticed that Pinson

is the first author who separated the product description according to manufactured products,

distributed products, and retailed products.

2.6 Business model

According to Pinson34 a business model is the method of doing business by which a

company can generate revenue and sustain itself. Cheryl35 talks about different business models

and says that there are 7 types of business models in the digital business area which are:

1. The Freemium Model – This means providing free version and selling premium version.

Skype, MYSQL and GroupSpace all provide products or services entirely free of charge in order

to build huge audience. Another example can be Gillett which has based its model on Freemium

which means giving away free razors and selling very expensive razor blade heads.

2. The E-commerce Model – This means selling stuff or services as a merchant which can be in

different forms such as, selling straightforward product(guitar), virtual goods and digital

downloads (farm game), selling expertise, selling service, selling expertise, selling data, etc.

3. The Advertising Model – This means selling advertising space. Google and

TrustedReviews.com are examples of sites which provide advertisers with a targeted platform on

which to advertise. Many digital businesses use the advertising model as a secondary revenue

stream rather than the primary one: however many commentators see this tactic unwise because

well designed advertisement can take the customers away from your website. If you decide to

choose this form of advertising then make sure that you use several forms of ad sense programs

such as banner add, skippable ads, and google ads.

4. The Affiliate Model – Selling leads, products or services for which you earn a commission or

providing a commission to other parties.

5. The Revenue share Model – This means providing a share of revenue from products/services

that you sell, in exchange for something of benefits, such as exposure to a large targeted audience

6. The Subscription Model – This means selling subscriptions to content, such as news, or

service. Many websites combine subscription and advertising models. The monetization of

content by charging users a periodic fee (daily, monthly or annually) to subscribe works well

digitally because of the low-margin costs of information.



35 Cheryl Rickman. The Digital Business Start-Up Workbook: The Ultimate Step-by-step Guide to Succeeding Online from Start-Up to Exit. 1st ed. n/a. John Wiley&Sons, Incorporated, 2012. I, 25 p. ISBN 97808557083043

16

7. The App store Model – This means selling applications via smart phones, tablet and

computers.

Allan36 says that Business model is a framework or recipe for making money – for

creating and capturing value. When she talks about internet based business models she mentions

the following ones: blogging, micro-blogging, social bookmarking, content –sharing

communities, wiki sites, virtual worlds/gaming.

All 3 authors agrees what business model is, however when it comes to describing types of

business models Cheryl’s list of models appears to be covering every aspect of digital market

models. From the relevancy and completeness point of view her approach is superior.

2.7 Management of the company and other key people

According to Pinson37 this part also needs to be included to the business plan to understand

who are the people on the captain’s seat and what are their knowledge and skills. She also

recommends to add CV’s of the people who are in charge. Ford38 says that at this stage you

should not discuss the management team in exhaustive detail but at some level so that the

reviewer can assimilate the leadership team in place to execute on the business objective. Galai39

also think that this part needs to be relatively short which should outline the organizational

structure, including:

The key manager and decision makers. Provide some background on their experience and

qualifications

The main devisions and departments and heir fields of responsibility

Company directors and advisors

36 Allan Afuah. Business Model Innovation – Concepts, Analysis, and Cases. 2nd ed. n/a. Taylor and Francis, 2011. i, 4 p. ISBN 9781136656422


Tustin: Out Of Your Mind ...and into the Marketplace, 2008. iv, 39 p. ISBN 978-0-944205-37-2

38 FORD, Brian R, Jay BORNSTEIN and Patrick T. PRUITT. The Ernst & Young business plan guide. 3rd ed. Hoboken, N.J.: John Wiley &

Sons, 2007. v, 80 p. ISBN 9780470112694.

39 GALAI, Dan, Lior HILLEL a Daphna WIENER. How to create a successful business plan: for entrepreneurs, scientists, managers, and students. New Jersey: World Scientific, 2016. v, 209 p. ISBN 978-981-4651-51-6

17

3. MARKETING PLAN

Donald and Russel defines marketing plan40 as a written document containing the

guidelines for the business center’s marketing program and allocations over the planning period.

A major component of a good marketing planning system is its thoroughness. A marketing

planning system is considered through if it does the following:

1. Utilizes experience from several managerial levels rather than just from product managers

2. Employees both internal and external sources of information rather than relying on just internal

information

3. Extends over period of time sufficient to collect and analyze the data necessary for developing

the marketing strategies. According to them marketing plan can be briefly structured as

following:

Executive summary

Situation analysis (competitor analysis, category analysis, customer analysis, planning

assumptions

Objectives

Product strategy

Supporting marketing programs

Financial documents

Monitors ad controls

Contingency plans

According to Cohen marketing plan is a roadmap41 which assists in management control and

implementation of strategy, stimulate thinking of using limited resources effectively, helps to

become aware of problems, opportunities and threats in the future, assist in helping to obtain

resources for implementation. Cohen outlines the marketing plan structure as following

Introduction - Describe what is the product or service

Situational analysis - PESTLE analysis, competitor environments, company

environments, neutral environments analysis

Target market – conduct segmentation and define your target market

Problems and opportunities

40 Donald R, Russel S. Analysis for Marketing Planning. 7th ed. New-York: Mass McGraw-Hill Irwin, 2008. xii, 299 p. ISBN: 978-007-126363-4 41 COHEN, William A. The marketing plan. 5th ed. Hoboken: John Wiley, c2006. I,1 p. ISBN 0-471-75529-X

18

Marketing objectives and goals

Marketing strategy

Marketing tactics

Implementation and control

Summary

Both authors have very similar approach in defining what marketing plan is, but Cohen

provides more detailed and clear structure of marketing plan in general. It is much easier to

understand and follow his structure compared to Donald and Russel. However, Donald and

Russel provides deeper understanding when it comes to situational analysis, especially external

analysis. Finally, both authors recommends not to stick to their structure 100% and adjust it

according to needs. Malcolm and Hugh42 also provide very similar structure for marketing plan.

According to them an undiversified company generally uses less formalized procedures, since top

management tends to have greater functional knowledge and expertise than subordinates. In

contrast, in a diversified company it is usually not possible for top management to have greater

functional knowledge and expertise than subordinate. Plus planning tends to be more formalized

in order to provide a consistent discipline for those who has to make decision throughout the

organization

3.1 Situational Analysis

Situational analysis is very important because it is one of the concerning factors that

influence the company. Width and depth of the analysis carried out may vary. Porter43

proposes a minimum framework for analysis of external environment when preparing a

business plan. Framework is defined by the following areas:

Trend in the product area

Market growth trend

Trend in prices

Trend in demand

Difficulty in entering the market

Changes in the development of technologies

Changes and developments in market regulation

42 COHEN, William A. The marketing plan. 5th ed. Hoboken: John Wiley, c2006. I, 4 p. ISBN 0-471-75529-X

43 PORTER, Michael E. Competitive Strategy: Techniques for Analyzing Industries and COMPETITORS. New York: Free Press, c1980. vii, 197 p. ISBN 00-292-5360-8

19

According to Donald and Russel situational analysis should cover following areas44:

Aggregate market factors (category size, growth, seasonality, profits)

Category factors (threat of new entrants, bargaining power of buyers, bargaining

power of suppliers, pressure from substitutes, rivalry, category capacity)

Competitor analysis

Supplier analysis

Environmental factors (PESTLE)

Company environment – internal analysis

Target market/Customer analysis

Cohen mentions that situational analysis45 contains vast amount of information. Simply to

say situational analysis comes from taking a hard look back to your environment. Many

marketing experts also call this as environmental scanning. Cohen defines his own way and

divides it into following categories which can be summarized as:

Market analysis

Environmental analysis (PESTLE)

Neutral environment (financial, governmental, media, special interest environments)

Competitor analysis

Company environment – Internal analysis

When I summarize all 3 approaches I see that last two approaches from Cohen, Donald

and Russel are very similar and cover more areas compared to the first approach. However,

Cohen does not include customer analysis when he conducts situational analysis. Instead he

analysis customer separately. I find this approach relevant because customer analysis is

very complex and requires special attention in a different section.

3.2 Market analysis

According to Donald and Russel46 either for new products or existing ones it is critical to

ask whether the market is sufficiently attractive to warrant new or continued investment. In

order to find it out they recommend researching following areas

44 Donald R, Russel S. Analysis for Marketing Planning. 7th ed. New-York: Mass McGraw-Hill Irwin, 2008. xii, 198 p. ISBN: 978-007-126363-4

45 COHEN, William A. The marketing plan. 5th ed. Hoboken: John Wiley, c2006. I, 5 p. ISBN 0-471-75529-X

46 Donald R, Russel S. Analysis for Marketing Planning. 7th ed. New-York: Mass McGraw-Hill Irwin, 2008. xii, 178 p. ISBN: 978-007-126363-4

20

Size of the market – Larger markets are considerable attractive to both small and big

companies. However, larger markets tend to draw competitros with considerable

resources, thus making it hard for small firms to enter.

Market growth – Market growth is a key market factor advocated by many planning

models. It is important to consider current growth factors along with future growth

projections in order to stay competitive in the market. Fast growing markets are

universally attractive because high margin profits, but it is also important to keep in

mind that fast growth markets attract more competitors and market share can change

very quickly which can result in buncrupcy.

Stage in product life cycle – Market size and market growth are often portrayed

simultanesoulsy in the form of the product life cycle. It is usually in S-shaped and

breaks down product sales into four segments: Introduction, growth, maturity and

decline. In the introductory phase market growth and size of the market is low

making it unatractive for majority of prospects who choose to wait until market

enters its growth phase. Finally in the decline phase most of the competitors flee.

Sales cyclicity – Cyclicity of the sales are very important factor since it can leave the

companies under huge risk of not being able to sell anything. For example: some

businesses are depend on interest rates(real estate), or weather. Not being able to take

into consideration effects of cyclicity can leave the company with a big loss.

Seasonality – Seasonality in general is not viewed positively. It is key to understand

if the seasonality can effect the business in a negative way or not. Some products are

seasonal in nature. If this is the case then question is how company can capture

highest level of demand during the season

Cohen also adresses to market analysis47 topic and considers following questions crucial

while analysing attractiveness of the market

What are the demand and demand trends in the target market?

What is the forecast demand for the product – is it growing or declining?

Who is the decision maker – purchase agent or customer himself/herself directly?

Who, where, when, what, and why do customers buy

Above questions that Cohen asks to analyse the market are in some way similar to the

points mentioned by Donald and Russel. Donald and Russels’s approach covers

47 COHEN, William A. The marketing plan. 5th ed. Hoboken: John Wiley, c2006. ii, 10 p. ISBN 0-471-75529-X

21

comparingly more points, however some of the points they cover are not relevant for my

market. For example: Seasonality and sales cyclicity analysis would add no value because of

the characteristics of my market. I consider Cohen’s approach more relevant.

3.3 Competition analysis

According to Daye and Wensley48 company receives remuneration (meets its main

objectives), if it can satisfy customer needs better than competitors. Cohen49 sees

competitors as units fighting against you. They are important because they are the only units

that are going to fight against your interests intentionally. Cohen recommends to describe in

detail main competitors, the products they offer, their plans, experience, know-how,

financial, human and capital resources, and suppliers. Most importantly discuss their current

and future strategies. Describe what are the strength and weaknesses of the competitors,

what marketing channels they use.

Donald and Russel also ask the same questions as Cohen does, however they provide tools

and sources how to find answer to those questions. Simply to say Cohen tells what needs to be

done but he does not tell you HOW to do it, where Donald and Russel provides necessary tools,

sources, and methods to find answer. They also recommend not to stick to their method all the

time while trying to find answer to the above questions. According to them every marketing plan

is different and it might require different type of tool or approach to find an answer. Additional to

competitors, Millers50 talks about the importance of suppliers and says that it is very important to

pay close attention to them. He classifies supply strategy as a strategic management decision

which becomes even more valuable with regard to the use of the concept of TQM (Total Quality

Management). Also, Bankers and Khosla51 refer to the process of selecting suppliers as an

important decision-making in management control, which can provide a competitive advantage to

the company. Furthermore, Dikson defines twenty attributes that should be compared when

selecting suppliers. 52Among these twenty attributes 2 of them takes central place which are

quality and price.

When analyzing competition Porter suggests his “five forces model”53. He has identified

five competitive forces that shape every industry and every market. From strategic point of view,

this analysis technique is crucial to determine the positioning of a company in a market, but also

48 DAY, George S.; Wensley, Robin. Marketing theory with a strategic orientation. the Journal of Marketing, 1983, 79-89. 49 COHEN, William A. The marketing plan. 5th ed. Hoboken: John Wiley, c2006. I, 9 p. ISBN 0-471-75529-X

50 MILLER, Jeffrey G., et al. Production / Operations Management: An Agenda for the'80s. Decision Sciences, 1981, 04/12: 547-571.

51 Bankers Rajiv D .; Khosla, Inder S. Economics of Operations Management: A Research Perspective. Journal of Operations Management, 1995 12.3-4: 423-435.

52 Dickson, Gary W. An analysis of vendor selection systems and Decisions. 1996.

53 Anne-Christine Cadiat, Carly Robert. Porter’s Five Forces: Stay ahead of the competition. 1st ed. Primento Digital, 2015. ii, 9 p. ISBN 9782806268389

22

to fight against the competition. It is necessary to clearly identify company’s relationship with the

other industry players, including: Customers, suppliers, producers of substitute products, potential

new entrants, competitors. Based on this five forces model emerges in the following form:

Figure 2: Porter’s five forces model

Source54

Bargaining power of Customers. Customers can have very strong power especially in the

following cases:

There are only a few customers or they purchase large volumes

Products available on the market are standardized and differ very little from competing

products

The transfer cost from one supplier to another is low

They can directly integrate the supplier’s activities into their own production chain.

54 Anne-Christine Cadiat, Carly Robert. Porter’s Five Forces: Stay ahead of the competition. 1st ed. Primento Digital, 2015. ii, 5 p. ISBN 9782806268389

23

Bargaining power of Suppliers. Similarly, suppliers can have an impact on the profitability of a

company by imposing their own conditions in the same way as customers. The power of suppliers

is significant when:

They are particularly concentrated or in a monopoly situation

They have many customers from different industries

The transfer cost is high

They offer differentiated products and there are no substitute products for what they offer

They are able to incorporate more activities into their core business further down the

supply chain

Threat of substitute products. Substitute products offer alternatives to the existing offer in a

sector. They respond to similar needs in a different or innovative way. More generally substitute

products pose threat by gaining market share and putting pressure on prices. Substitutes products

become real threats when:

They offer a better quality

The cost of transferring to the substitute product is low

The price of the substitute product is lower

Threat of new entrants. New entrants shape up the market by reaching a previously unoccupied

position, by delivering greater value to new consumers. The threat of new entrants is stronger

when:

There is no patent to protect technologies, which allows easy access to them

Barriers to entry and the capital requirements are very low

Economies of scale are weak

There are few cultural barriers

Replacement costs for the customer are low

Companies are not necessarily loyal to the companies that supply to them

The likelihood of revenge from actors already established on the market is low

The government provides aid and subsidies for new entrants

24

Rivalry. At the heart of the model, the internal rivalry of the sector can be influenced and

evaluated by the other forces of the model. Competitors are constantly fighting within the sector

to increase or simply maintain their position in this field. Competition can take many forms and

result in actions such as:

Lower price

Introduction of new products

Advertising campaigns

Improvement of product ranges and services

The intensity of the competition depends on the number of companies active in the sector, their

respective size and the scale of their market share. It can increase if:

The sector is not concentrated. For example, when competitors are numerous and of

comparable size

The industry growth rate is weak

Barriers to entry are low and barriers to exit is high

The degree of product differentiation is low

Fixed costs are high

After analyzing all the approaches from above mentioned 7 authors I can strongly say that

Porter’s approach is more complete and relevant for competition analysis. Points mentioned by

other authors are true and I don’t have any objections against them, however they are not as

complete as Porter’s five forces model.

3.4 PESTLE analysis

PESTLE analysis is one of the most common analyzes used in analyzing external

environment in order to decide on the right strategy. All of the authors I have reviewed

strongly recommend it. Thompson and Martin states that PESTLE analysis is a framework

that classifies external factors such as political, economic, social, technological, legal and

environmental.55

55 THOMPSON, John L, MARTIN, Frank. Strategic Management: Awareness & change. Engage Learning EMEA, 2010.

25

Name PESTLE is an acronym which stands for:

Political factors - Various forms of government intervention and policy decision

implemented to run the economy

Economic factors - Macroeconomic conditions around the company, as well as seasonal

fluctuations in the economy

Social factors – Analysis of Social, cultural, and demographic factors

Technological factors – It includes technological changes that may affect the company.56

Legal factors – it covers analyzing legal aspects that might impact the company

Environmental factors – These are the factors related to climate, and weather.

3.5 Company analysis - Internal environment

Internal analysis cover 3 important areas within the company.57 These are:

Resources

Capabilities

Core competencies

According to William in order to analyze the company it is important to describe the

situation in your company and the resources you have. Also describe your current products,

experience, know-how, financial, capital, human, supplier and other important factors. As a

summarization method he recommends to cover all the details under SWOT analyses. This

part will be covered in more detail under SWOT analysis below.

3.6 SWOT analysis

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is

an in-depth examination of key factors that are internal (strengths and weaknesses) and external

(opportunities and threats) to a business. After researching several sources about SWOT analysis

found out that almost all of them come to the same point in explaining what SWOT analysis is.

For the purpose of this plan I will conduct SWOT analyses in the way that is described by

Pinson58. Compared to other authors she provides set of questions in each part as a roadmap.

56 HO, Joseph Kim-Keung. Formulation of a systemic PEST Analysis for strategic analysis. European academic research, 2014 2.5: 6478-6492.

57 Guide to business planning.2nd ed. London: The Ecomomist in association with Profile Books, 2009, p. 41. ISBN 9,781,846,681,226th

58 PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and Securing Your Company's Future. 7th

ed. Tustin: Out Of Your Mind ...and into the Marketplace, 2008. iv, 34 p. ISBN 978-0-944205-372

26

According to Pinson Conducting a SWOT analysis will enable a business to channel its focus into

those areas that present the greatest opportunities and those competencies in which it is strongest.

Concurrently, the business will look into ways to mitigate its weaknesses and develop plans and

strategies to overcome any threats that present themselves. When conducting a SWOT analysis, it

is important to be realistic about the strengths and weaknesses of your business. According to

Pinson in order to conduct a SWOT analysis, questions below needs to be answered.

Strengths

Do you have a proprietary product/technology?

Do you have a unique business model?

Do you have any value added services?

What advantage(s) do you have over your competitors?

What specialized areas do you have expertise in?

What recognition have you received?

Weaknesses

What aspects of the operations of the business can be improved upon?

What aspects of the product(s) and/or service(s) can be improved upon?

Is there a lack of expertise in any area?

Is the location of your business a problem?

Have you received any negative feedback?

Opportunities

Are there any markets that are not being served with your product(s) and/or service(s)?

Are there any emerging niche segments within your industry?

Are there any target market and/or industry trends that are of interest to you?

Are there any changes in technology that could be beneficial to you?

Is there an emerging/developing market within your industry?

Have some of your competitors left the marketplace?

Are there any companies that can be taken over?

Are there any companies with whom strategic alliances can be formed?

Are there any opportunities in international markets?

Threats

Are there any new competitors emerging?

Are existing competitors gaining strength?

Are the prices of your competitors going up or down?

Are competitors introducing new products and/or services to the

Market place?

Are there any challenges that are emerging within the industry?

Are there any new government regulations being enforced?

27

3.7 Target market / Customer analyses

Target market is a segment of customers who are most interested in the product you are

offering. These are the customers that marketing efforts should be focused on. According to

Kotler59 in order ot identify the best target market segmentation analysis should be conducted.

Segmentation is dividing a market into distinct groups of buyers with different needs,

characteristics or behavior, who might require separate products or marketing mixes. Kotler

offers criterias for segmentation which can be categorized as below.

Geograpchic characteristics

Demographic characteristic

Psychographic characteristics

Behavioral characteristics

After segmentation it is necessary to select those segments that are most appropriate for the

company and will bring the highest profit. According to Kotler it is important to consider certain

indicators while deciding which segment to target.60These indicators can be described as below

Segment size

Future potential for growth

Attractiveness of the segment

Considering if the segment will help to the company to meet it’s goals

Considering company resources

While doing literature review I noticed that Donald and Russel61 have exactly the same

approach as Kotler. They even cited Kotler at the end of the page. So if I have to describe their

approach it would be exact copy of Kotler’s approach except they did not talk about

indicators(future potential, size, etc) that needs to be considered when deciding on a final target

market which I find very crucial. Cohen62 also recommends the same type of segmentation as

Kotler did, and he mentions that there are other ways to define the target market but he does not

talk about any of them. My conclusion is that in order to define the target market

59 Kotler Philip. Principals of Marketing. First European edition. Prentice Hall, c1994. ISBN 01-372-2851-1 Cliffs, NJ: Prentice Hall, c1994. ix,

398 p. ISBN 01-372-2851-1 60 Kotler Philip. Principals of Marketing. First European edition. Prentice Hall, c1994. ISBN 01-372-2851-1 Cliffs, NJ: Prentice Hall, c1994. ix,

418 p. ISBN 01-372-2851-1

61 Donald R, Russel S. Analysis for Marketing Planning. 7th ed. New-York: Mass McGraw-Hill Irwin, 2008. iii, 129 p. ISBN: 978-007-126363-4

62 COHEN, William A. The marketing plan. 5th ed. Hoboken: John Wiley, c2006. v, 54 p. ISBN 0-471-75529-X

28

recommendations from Kotler would be satisfactory because he covers all the segmentations

criterias that can be used as a base.

3.8 Marketing strategy in the target market

After defining the target market Kotler63 suggests to choose one of the targeting strategies

listed below:

Undifferentiated marketing - A market-coverage strategy in which a firm decides to

ignore market segment differences and go after the whole market with one offer

Differentiated marketing - A market-coverage strategy in which a firm decides to target

several market segments and designs separate offers for each.

Concentrated marketing - A market-coverage strategy in which a firm goes after a large

share of one or a few submarkets.

Cohen also strongly recommends to choose one of the above targeting strategies. He mentions

that if you attempt to serve every single customer segment most probably you will not be able to

satisfy their need. For the purpose of this plan concentrated marketing strategy is the most

suitable one. According to Kotler this is one of the effective strategies for newly starting

companies so that they can direct their resources and efforts to a single point.

3.9 Differentiating and positioning

Differentiation and positioning follows the segmentation and targeting. According to

Kotler company or market offer can be differentiated and positioned along the lines of

product, services, personnel or image64. Positioning is the way that product is defined by

consumers on important attributes – the place the product occupies in consumers’ minds

relative to competing products.

Kotler offers three positioning alternative strategies:

1. Strengthen a brand’s current position in the mind of consumers

2. Search for a new unoccupied position that is valued by enough consumers and grab it.

3. Deposition or reposition the competition.

He also mentions that company can be differentiated in one aspect but positioned in another

aspect in the minds of the customers. In another word differentiation and positioning do not have

to go hand in hand.

63 Kotler Philip. Principals of Marketing. First European edition. Prentice Hall, c1994. ISBN 01-372-2851-1 Cliffs, NJ: Prentice Hall, c1994. ix,

417 p. ISBN 01-372-2851-1

64 Kotler Philip. Principals of Marketing. First European edition. Prentice Hall, c1994. ISBN 01-372-2851-1 Cliffs, NJ: Prentice Hall, c1994. ix, 421 p. ISBN 01-372-2851-1

29

According to Donald and Russel positioning is consist of 4 steps:

1. Identifying alternative positioning themes.

2. Screening the alternatives accordingly

3. Selecting the position that best satisfies the identified criteria

4. Implementing programs such as advertising

When I compare above mentioned points I see that Kotler’s approach is more clear and direct to

the point, whereas Donald and Russel lacks clarity.

3.10 Marketing objectives and goals

According to Pinson65 this section should clearly outline what you want to accomplish

through your marketing strategy. Your market research, advertising campaigns, sales incentives,

public relations efforts, and networking plans should all move your business in the direction of

achieving your marketing goals. Many companies hope to expand their customer base, increase

sales, achieve profitability, and promote new products and services, and other similar idealistic

objectives. Not every business owner, however, can articulate precisely what these goals mean

for his/her own company. The best marketing plans are results-oriented; they define specific,

realistic, measurable goals within time parameters. All sales, advertising, and public relations

efforts are then designed to work together to achieve these goals. Goals of your marketing

strategy, for example, could include creating a strong brand, building a strong customer base, and

increasing product/service sales. Each goal should be explained in specific terms.

Cohen66 also agrees with Pinson when it comes to defining what objectives and goals are.

He also differentiate objectives from goals. According to him an objective is an overall goal.

Objective is more general and may not be quantified. To establish a product in the market place,

become the market leader or become dominant in the market is an objective. Compared to

objectives goals are quantified. For example: To sell 10 000 units a year is a goal.

Both authors provides explicit explanation regarding goals and objectives, however they way

Cohen describes the differences between the objective and goal is very easy to understand and

apply during objective and goal setting

3.11 Marketing tactics

Cohen67 shows that marketing tactic can be chosen in terms of the product, price,

promotion, distribution and other tactical or environmental variables. As strategy tells what you

65 PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and Securing Your Company's Future. 7th ed. Tustin: Out Of Your Mind ...and into the Marketplace, 2008. v, 43 p. ISBN 978-0-944205-372

66 PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and Securing Your Company's Future. 7th

ed. Tustin: Out Of Your Mind ...and into the Marketplace, 2008. v, 44 p. ISBN 978-0-944205-372

67 COHEN, William A. The marketing plan. 5th ed. Hoboken: John Wiley, c2006. v, 54, p. ISBN 0-471-75529-X

30

need to do to reach your objectives, tactics tell you how you will carry out your strategy. These

tactical actions are described in terms of what is called the “marketing mix” or the “4Ps” of

marketing. According to Kotler marketing mix is the set of controllable tactical marketing tools

that the firm blends to produce the response it wants in the target market. The marketing mix

consists of everything the firm can do to influence the demand for its product.

Product means the totality of ‘goods and services’ that the company offers to the target market.

Price is what customers pay to get the product. Promotion is activities that communicate the

merits of the product and persuade target customers to buy it. Place includes company activities

that make the product available to target consumers. According to Pinson an effective marketing

program blends the marketing mix elements into a coordinated program designed to achieve the

company’s marketing objectives. The marketing mix. Constitutes the company’s tactical toolkit

for establishing strong positioning in target markets. Pinson mentions that in this section of your

marketing plan, the contents should shift from descriptive to extremely detailed68. For example,

when you describe your sales strategy, you will also elaborate on the materials you will produce

and the campaigns you will organize. When you define your advertising strategy, you will need

to identify how you will spend your money on each medium and in what markets. Web

advertising campaigns will be described in terms of specific portals, size of banner ads, frequency

of e-mail marketing, and more. Both authors agrees how marketing tactic should look like and

provide similar definition, however Pinson goes one step further and provides set of questions for

each “P” that serves as roadmap. From this perspective I consider Pinson’s approach to be

more complete.

68 Anatomy of a business plan: the step-by-step guide to building your business and Securing your company's future . 7th ed. Tustin, CA: Out of Your Mind..and IINT the Marketplace, c2008, 18 -19. ISBN 09-442-0537-2

31

Figure 3. The marketing tools under each P

Source69

69 PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and Securing Your Company's Future. 7th ed. Tustin: Out Of Your Mind ...and into the Marketplace, 2008. v, 50 p. ISBN 978-0-944205-372

32

4. FINANCIAL PLAN

Ignatius70 mentions that there are usually 2 most critical questions that you need to answer while

developing financial part. First, what are my business’s realistic financial needs? In another

words, what capital do I need to start my business. Second, how do I satisfy these needs? Usually,

a combination of various sources are being used to finance the business. Basically there are two

categories of financing:

1. Debt financing. This is the money borrowed from bank which will have to be repaid

eventually.

2. Equity financing. This is money put into business by the owner or shareholders through and

initial public offering (IPO) if it is public company. Equity financing for small business or start-

ups is usually mainly through personal investment by the founder or family. This is the most

common source of finance for small firms because of the essential conservatism of many business

owners towards both debt and external equity. Once the source of financing has been decided

they you can move to forecasting your expenses, cash flow, profit and loss, etc. According to

Ignatius this is one of the less flexible part of the business plan. Forecasting templates usually

stay the same for all business plans but numbers change according to business. Ignatius also

recommends conducting sensitivity analysis to identify how susceptible your business will be to

changes. He offers 2 optional scenarios – Optimistic and pessimistic.

Optimistic scenario - Sales and other income are increased by 10% - you will need to adjust

expenses to allow for this, including increased costs of materials, salary costs, etc.

Pessimistic scenario – Sales and other income decreases by 10% - you will equally need to

adjust to allow for this change

According to Ford71 in the case of new or infant company, it is crucial to put the nature of

the financial plan into proper perspective. Because for newly founded companies there is not

financial history on which one may base estimates. The obvious consequence is that projections

will be clouded with uncertainty. However, attention to detail can make this section far better

than guesswork. Ford thinks that it is widely accepted that projected financial analysis will be to

some extent uncertain, that is why it is often recommended to calculate more than one financial

scenario, such as optimistic and pessimistic scenarios.

Pinson72 mentions that if you are a new business and not going to seek a lender or

investor. You will not include the "Application of Loan Funds" and the "Loan Fund Dispersal

Statement". You will include all pro forma statements. The word "pro forma" in accounting

70 Ignatius Ekanem. Writing a Business Plan – A practical guide. n/a. Taylor and Francis. 2017. vii, 31 p. ISBN 9781315465807


Sons, 2007. xiv, 141 p. ISBN 9780470112694

72 PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and Securing Your Company's Future. 7th ed. Tustin: Out Of Your Mind ...and into the Marketplace, 2008. vi, 77 p. ISBN 978-0-944205-37-2

33

means "projected". These are the statements (cash flow, income projections, balance sheet, etc.)

that are used for you to predict the future profitability of your business. You will not be

performing magic and will never be 100% right. However, your projections should be based on

realistic research and reasonable assumptions. It is dangerous to overstate your revenues and

understate your expenses.

All three authors agree that financial projections are not going to be perfect, however it

can be improved by paying special attention to details. Ford and Ignatius both recommend to

develop different scenarios and define how you will react to future changes. Also, I noticed that

there is very small flexibility in the format of templates for developing financial forecasts. They

are the less flexible ones. After assessing recommended templates from 7 sources I have chosen

the most mentioned one from www.score.com. Every financial section described below has its

own template accordingly. Filled version of the templates will be attached to the appendices. See

appendices number 8-13

4.1 Sales/Revenue forecast

Forecasting sales of your product or service is the starting point for the financial

projections. The sales forecast is the key to the whole financial plan, so it is important to use

realistic estimates. Divide your projected monthly sales into "Categories", which are natural

divisions that make sense for your type of business. Typical categories might be: product lines,

departments, branch locations, customer groups, geographical territories, or contracts. Also don’t

forget to study your past sales records in detail. Note seasonal or other periodic fluctuations;

determine what caused them and when they are expected to recur. Be sure to build these

fluctuations into your projections for the coming year.

4.2 Start-up Expenses

Nearly everyone who has ever started a business has underestimated the costs, and then

faced the danger of running with inadequate capital reserves. The key to avoiding this pitfall is to

adopt a rigorous approach to your research and planning. EXPENSES - Begin by estimating

expenses. What will it cost you to get your business up and running? The key to accuracy here is

attention to detail. For each category of expense, draw up a list of everything you will need to

purchase. This will include both tangible assets (for example, equipment, inventory) and services

(for example, remodeling, insurance). Then determine where you might purchase these goods or

services. Research more than one vendor; i.e.: comparison shop. Do not look at price alone;

terms of payment, delivery, reliability, and service are also important.

CONTINGENCIES - Add a reserve for contingencies. Be sure to explain in your narrative how

you decided on the amount you are putting into this reserve. WORKING CAPITAL - You cannot

open with an empty bank account. You need a cash cushion to meet expenses while the business

gets going. Eventually you should do a 12-month cash flow projection. This is where you will

http://www.score.com/

34

work out your estimate of working capital needs. For now, either leave this line blank or put in

your best rough guess. After you have done your cash flow, you can come back and enter the

carefully researched figure. SOURCES - Now that you have estimated how much capital will be

needed to start, you should turn your attention to entering amounts; how much will be injected by

partners or investors, and how much will be supplied by borrowing.

COLLATERAL – If you are planning to get a loan from a bank then show what assets are offered

as collateral to secure the loan, and give your estimate of the value of these items. Be prepared to

offer some proof of your estimates of collateral values.

4.3 Projected Profit and loss

COST OF GOODS SOLD (COGS) are those expenses directly related to producing or

buying your products or services. For example, purchases of inventory or raw materials, as well

as the wages (and payroll taxes) of employees directly involved in producing your

products/services, are included in COGS These expenses usually go up and down along with the

volume of production or sales. Study your records to determine COGS for each sales category.

Control of COGS is the key to profitability for most businesses, so approach this part of your

forecast with great care. For each category of product/service, analyze the elements of COGS:

how much for labor, for materials, packing, for shipping, for sales commissions, etc. Compare the

Cost of Goods Sold and Gross Profit of your various sales categories. Which are most profitable,

and which are least - and why? Underestimating COGS can lead to under pricing, which can

destroy your ability to earn a profit. Research carefully and be realistic. Enter the COGS for each

category of sales for each month. In the "%" columns, the spreadsheet will show the COGS as a

% of sales dollars for that category. GROSS PROFIT is Total Sales minus Total COGS.

OPERATING EXPENSES (also called Overhead): These are necessary expenses which,

however, are not directly related to making or buying your products/services. Rent, utilities,

telephone, interest, and the salaries (and payroll taxes) of office and management employees are

examples. NET PROFIT is extracting total Operating expenses from gross profit to calculate net

Profit.

4.4 Projected cash flow

Refer back to your Profit & Loss Projection. Line-by-line ask yourself when you should

expect cash to come and go. You have already done a sales projection, now you must predict

when you will actually collect from customers. On the expense side, you have previously

projected expenses; now predict when you will actually have to write the check to pay those bills.

Most items will be the same as on the Profit & Loss Projection. Rent and utility bills, for

instance, are usually paid in the month they are incurred. Other items will differ from the Profit &

Loss view. Insurance and some types of taxes, for example, may actually be payable quarterly or

semiannually, even though you recognize them as monthly expenses. Just try to make the Cash

35

Flow as realistic as you can line by line. The payoff for you will be an ability to manage and

forecast working capital needs.

4.5 Projected balance sheet

Projecting your balance sheet can be quite a complex accounting problem, but that does not

mean you need to be a professional accountant to do it or to benefit from the exercise. The

desired result is not a perfect forecast, but rather a thoughtful plan detailing what additional

resources will be needed by the company, where they will be needed, and how they will be

financed. Using your last historical balance sheet as a starting point, project what your balance

sheet will look like at the end of the 12 month period covered in your Profit & Loss and Cash

Flow forecasts. How will the year's operations affect assets, debts, and owners' equity? For

example, let us say you are planning significant sales growth in the coming year. Go through the

balance sheet item by item, asking what the effects will likely be:

ASSETS: Inventory and Accounts Receivable will have to grow. New equipment may be needed

for increased production. You may draw down on cash to finance some of this. Now, since a

balance must balance, you need to consider the effects on the other half of the statement:

LIABILITIES & EQUITY: Some of the growth may be financed by profits retained in the

business as Retained Earnings. Your Profit & Loss Projection will tell you how much might be

available from that source. Funds may be contributed by the owners through contributions of

more Invested Capital or loans to the company (Notes Payable to Stockholders). Suppliers may

provide some of the financing via increased Accounts Payable. The rest will have to be financed

by borrowing, which can be: Short term loans (due within 12 months) such as a line of credit. Or

by Long Term Debt (maturity greater than 12 months).

4.6 Break even analysis

Using figures from your Profit and Loss Projection, enter expected annual fixed and

variable costs. Fixed costs are those that remain the same regardless of your sales volume. They

are expressed in dollars. Rent, insurance and real estate taxes, for example, are usually fixed.

Variable costs are those which change as your volume of business changes. They are expressed as

a percent of sales. Inventory, raw materials and direct production labor, for example, are usually

variable costs. Under the variable expenses column, use whole numbers as a percentage, not

decimal numbers. For example, use 45%, rather than .45%. For your business, each category of

expense may either be fixed or variable, but not both.

36

PRACTICAL PART

Practical part of the thesis is going to describe how reviewed frameworks and approaches will be

applied to creation of the final business plan. Each practical part is divided into two section:

analytical section and results section. The first (analytical) describes how I have applied the

theory and what tools I have used, and results illustrate what are the final outcomes.

EXECUTIVE SUMMARY

Growth Laboratory is a social media channel dedicated to growth and self-improvement

through summarizing and animating books in the areas of entrepreneurship, and self-

improvement. The business idea behind the creation of this channel is to increase interest in

books by summarizing them in a way that it is easy to understand, short, fun, accessible to social

media users and people who don’t have time to read or simply can’t learn by reading.

Our primary products are book summary videos which are 100% free to watch. Each

video is in HD quality and consist of a title, tags, background music, animation, script, voiceover,

and a thumbnail. Under the videos we provide affiliate links to books and animation software

where viewers can directly make a purchase from the provider.

Our viewers (customers) are English speaking young people from all over the world who

are active on social media. Age segment is between 18 to 30 years old students, graduates, and

fresh employees who are interested in self-improvement and entrepreneurship. Sex ratio is 65%

male and 35% female.

Our short term goal is to reach 139 K view on the channel by then end of 12 month. In the

long term we aim to position ourselves as one of the top 5 brands in the self-improvement and

entrepreneurship niche over the period of 5 years.

Currently we are competing against four competitors in the market. Among these

competitors one of them (main competitor) with a 76% market share has been inactive which

creates a gap on the supply side. There are two advantages that will help me to compete in the

market. First one is how I have positioned myself. Majority of the competitors are doing random

videos about different books, and topics, compared to them I plan to grab one of the untapped

niche (entrepreneurship and self-improvement) and focus my resources on that niche only.

Second, I have added a new feature to the videos which provides better visual experience

compared to my competitors.

I (Elvin Mansimov) am the founder and owner of the channel. Except me, there are two

suppliers who are providing voiceover and animation services. Voiceover supplier is one of the

bests in the market with 10 + years of experience.

37

For the purpose of financing I will use my own savings. Based on the calculations and

forecasts for 12 month, initial required capital is 2190 $. From this capital 881$ belongs to startup

expenses (including 170$ contingency reserve) and the rest 1309 $ will be used to cover the costs

until the 6th month of production where channel will start producing enough cash flow to cover

the entire costs. Break-even point is forecasted to be in the 10th month after producing 36 videos.

At the end of the 12 month period channel will generate 5065$ in net profit. Total assets for the

end of the year is forecasted to increase up to 7309$ compared to the beginning of the year, where

it is 3074$.

Based on the calculations we can clearly see that channel doubles its initial investment in

less than 12 month period. Market analysis shows that this growth rate is going to double year

after year as the number of social media users increase. Cisco estimates that online video will

account over 72% of all internet use by 2019. Every year only YouTube viewers grow by 100%.

YouTube reports that average total watch time for users is up by 60 % year after year. 81% of

millennials owns smartphone and 91% of them watch video on their smartphone every day. This

is 1950s all over again. Phone has already replaced TV and people are following social media.

Marketing is also shifting from TV and banners to social media influencers.

38

1. OPPORTUNITY

1.1 Problem worth solving

The conclusion of my literature review revealed that at this stage I have to analyze the problem

from the perspective of my customers. And the best-recommended way to do this is through

understanding customers by talking to them, or any other methods that would help to get closer. It

was also concluded that it is the best if the problem we are going to solve matches with our skills

and capabilities. The way how I have applied these principles and the results I got is described

below:

I wanted to create an online business and stop working for someone else 9 to 5. After

analyzing my capabilities and skills (see appendix #1) it appeared that I could create online

English language course for beginner level students. First, I identified ten most famous sources

that teach English language and read more than 15 000 comments, talked to more than 50 people

for two months just to understand problems of my target group. At the end of my research, I was

quite surprised because most common problems I discovered were not related to English

language learning. They were mainly behavioral problems as described in the figure below.

Picture 1. Most common problems mentioned during analysis. (Out of 2100 comments)

Source: Author

At this point, I was very desperate because I was not able to come up with a language course idea

that would solve some of these problems. Two weeks passed, and I was almost ready to give up,

but then I noticed that my judgment did not allow me to understand their problems. I was so

preoccupied to solve their problem with a language course idea, so I did not notice that they don’t

39

have any major complaints with the existing courses. As McAdam says “Just be mindful of our

human tendency to revert to what we feel comfortable with and what we know and understand.

Be open-minded. Our eyes must be on the big prize – the customer.”

That was the turning point for me because I realized that the product they need to solve

their problem is not going to be a new type of language course. Their problems were different,

and it required a different type of solution. Personally, I could understand their problems well

because I had the same which I solved through listening to AUDIO self-development books. But

until I discovered audio books and saw the potential benefit from them I had to pass three major

barriers. I knew that majority of those people were having at least one of those three barriers I

was having described below:

1. I am an audio, visual and kinesthetic learner. Reading a book is not my way of

learning. It always seemed like doing a boring chore. It is all black and white, and it makes me

fall asleep. According to Patrick73, it is very crucial to identify which learning type you have

before applying one. He primarily talks about the role of reptilian brain (oldest brain) in learning

and says that if a teacher or presenter can’t directly influence the reptilian brain then learning

curve will always be downward sloping. According to him, reptilian brain understands pictures,

not the text, can be influenced by emotions not logic, and finally, it is self-oriented which means

if the reptilian brain does not see an instant gain then it stops paying attention.

2. Sometimes I pushed myself to read a book, and I could understand what author is trying

to say, however, I wanted to see a real-life example from a person who is in my situation and who

implemented those tips and got results. I wanted to hear a sincere and resonating story, not just

set of tips and tricks

3. I spent majority of my time on social media, and there was nothing around me that

would trigger interest in books.

Results: I knew that those people I analyzed were having at least one of the problems which kept

them away from the source of solution - books. I wanted to find a solution which would cover all

three of problems and trigger interest in books. Even though, I started the analysis with a different

idea in mind (teaching English) I am firmly convinced that it is very natural to end up with a

different result. As McAdam says “Problem our customers have might not be the one that we

have the most fun solving, or be the easiest, or the most cost-effective for us to deliver.” So to

sum it up, I concluded that problem that I will be solve is going to be reducing the obstacles that

keep certain group of people from reading.

73 Patrick Renvoise, Christophe Morin. Neuromarketing: Understanding the buy buttons in your customer’s brain, 1st ed, SalesBrain LLC, 2005, viii, 243 p. ISBN 0974348228

40

1.2 Solution

In order to develop the solution I used following steps recommended by Brian. (See theoretical

part - solution section)

1. Took the final problem from the previous section and used different search engines (See

appendix # 2) to collect articles, papers, and websites in order to review them and see if there was

a solution developed already that would give me an idea how to develop my solution or make the

existing one better.

2. Asked people around me to find someone who have already solved the same problem that I am

trying to solve or know someone who have done it.

By following the steps described above I came up with four different solution ideas that I could

use, but quickly realized that I am not able to apply majority of them because I did not have

enough skills for them, such as speaking in front of a camera. After trying several solution ideas

and failing, I finally found one that would fit the best.

Results: Most suitable solution was animation videos where I wanted to summarize the books in

8-10 minutes with animation, voiceover and music. My goal was to design these videos in a way

that it is simple to understand, educative and contains resonating examples. The tool I used to

turn the solution idea into a final product is called videoscribe provided by sparkol.com who is

animation service provider for teachers and educators.

1.3 Validation.

To validate the solution I used the MVP (Minimum viable product) approach. I prepared the first

video and posted it into a book related Facebook page to see if people are interested or not. My

goal was to find out if people are getting engaged in my video, leave comment, like or share.

Results: Within the first 3 hours after posting the video 2000 people joined to my page, more

than 200 hundred people shared it on their pages, 30 people commented (positive), and hundreds

of people liked it. Even several people took the time and sent me “thank you” messages for

sharing such a video with them. This video was not even a high quality, but it was enough for me

to validate the problem and my solution.

41

Picture 2. Results of validation

Source: Author

42

2. ORGANIZATIONAL PLAN

2.1 Cover page

As I could see in the theoretical part there is no specific limitations and requirements about

creation of a cover page. I used one of the recommended template from Pinson and amended it

according to my needs.

Results:

Growth Laboratory

Josefa Kotase 1185/5,

70030 Ostrava

E-mail: [email protected]

Founder and President, Elvin Mansimov Vinarska 5a, 471

603 00 Brno, CZ

E-mail: [email protected]

Plan prepared November 1, 2017

By the president

mailto:[email protected]

43

2.2 Vision, mission, and goals

In order to define the vision, mission and goals I choose 3 different time slots and brainstormed

about each of the statement separately. The reason I chose three different time slots is because

majority of the time I write something and then when I come back and read it again it sounds

horrible. I can’t believe that I actually wrote it.

Results:

Vision statement: Our vision is to fight mediocracy and help growth through books.

Mission statement: Our mission is to become one of the top 4 social media channels in the self-

development and entrepreneurship niche within five years.

Goals:

Long-term.

1. Focus on building a passionate community, not just a channel by engaging with the viewers.

2. Produce a high-quality video per week and be consistent in that

3. Study viewer reactions (comments, likes, shares) constantly to see what they like the most to

provide more of it.

Short-term

1. Reach 139 K view, and 5043 $ revenue by the end of 4th quarter

2. Cooperate with a similar level channel for promotion after the 1st quarter

3. Cooperate with a much higher level channel for gaining new subscribers after the 2nd quarter

4. Activate monetization until the end of 1st quarter by reaching 10 K views

5. Reach 84 K view by the end of 3rd quarter.

2.3 Product

Our product is book summary videos. Each video is in HD quality consisting of a background

music, animation, script (summary of the book), voiceover, and a thumbnail. Main benefits are:

Makes learning easy and fun, saves time, it is free of charge, an explanation with real-life

examples, improves learning ability by applying different sensory functions (picture, voice,

reading, writing), and finally it triggers interest in books.

2.4 Business model

For this business plan, I have identified two models that fit the best. These models are:

Advertising model and affiliate model. The way how I identified these are the most suitable

models is through analyzing other channels in the social media platforms. First, I choose 10

social media influencers who take their channels seriously and approach it as a real business and

then watched their videos where they were explaining what kind of model they use in order to

generate profit.

44

Results: Advertising model – This model will allow me to sell advertising space to marketers

through ad sense programs such as banner add, skippable ads, and google ads.

Affiliate model – I will join to affiliate programs of Amazon.com and Scribe.com to sell their

products under my videos and earn a percentage (7-10%) on them. If viewers want to read the

entire book or use the same software I use, they can easily use the links provided to make a

purchase

2.5 Management of the company and other key people

Attaching CV’s to the attachment is one of the options so that reader can get the full picture if

he/she wants to understand who is in the captain seat.

Results: Elvin Mansimov is the only person in charge at the moment. Please see appendix#3 for

his CV to get the full picture of his skills and capabilities.

45

3. MARKETING PLAN

3.1 Situational analysis

I will implement situational analysis in four area. These areas are market analysis, environmental

analysis (PESTLE), competition analysis, and company environment analysis (Internal analysis).

In order to provide better view and clear analysis I will be covering each of these four topics in

separate sub-sections below.

3.2 Market Analysis

To analyze the market I will research three questions mainly (recommended by Cohen):

1. What is the demand and demand trends in the market?

2. What is the forecasted demand for the product?

3. Who is the decision maker (buyer)?

To provide an answer to the first question I will be analyzing trends in two markets

simultaneously because of interdependency in my market. First, trends in social media

advertisement market. Second, trends of video content viewers on the social media channels. The

tool I will be using is 2016-2021 visual networking forecasting index from cisco.com. And the

second tool is the yearly report from Youtube.com.

For the second question, I will be using socialblades.com and reading comments under my

competitor’s videos to understand the demand and trend for similar products. And finally, the

last question does not require any tool or research because decision makers in my niche are

viewers directly.

Results: Cisco estimates that online video will account over 72% of all internet use by 2019.

Every year video viewers just on YouTube grow by 100%. YouTube reports that average total

watch time for users is up by 60 % year after year. 81% of millennials own smartphone, and 91%

of them watch video on their smartphone every day. It is the 1950s all over again. Phone has

already replaced the TV and people are watching YouTube and Facebook instead of NBC, CBS.

Above mentioned trend is also pushing marketers to shift from TV and banners to social media

influencers. One of the main reason for this shift is related to high viewer engagement and

reliance on the influencers to provide the right information. Already people are not forced to

follow a specific channel. If an influencer can gather a particular group of people to his channel,

it means that people resonate with his content. And when he recommends a product most

probably viewers will not question it. That is the fact companies are realizing and moving toward

social media to advertise their products which creates excellent opportunities for social media

influencer marketing. According to Cisco, every year budget for marketing, especially for video

advertising, is increasing. By 2019 planned budget is 14.36 billion.

46

Figure 4: Growth trend of social media marketing

Source: Cisco.com - Forecast and Methodology. 2016–202174

Based on my research (reading and analyzing comments for four months) I can firmly tell that

current viewers love well-prepared book summary video contents and almost every fifth

comment repeats the same thing – Please upload more videos like this. Demand is already quite

high, and it will grow even higher as new viewers join social media channels. However, the

number of suppliers are only 4 and producing videos are very time consuming and costly which

creates a big gap between supply and demand. Plus, the main competitor of the market who has

76.3 % market share has been inactive (no video upload, no marketing) over the period of 13

months (Last upload-15.10.2016). Despite the fact that channel has been inactive it has been

growing over 100 000 subscribers. This shows how strong demand is and how trend is moving

upward even without any marketing and promotion activities.

3.3 Competition analysis

To analyze the competition in the market, I will use Porter’s five forces model. As already

described in the theoretical part there are certain vital questions need to be answered under each

“forces” in order to understand the threat.

I will build my analysis around these questions by researching and providing answers to each of

them. Below in the tables, left side (THREATS) represents the questions related to respective

74 Cisco Visual Networking Index: Forecast and Methodology-2016–2021. Cisco.com, CISCO, 15 Sept 2017

47

force, and right side describes the IMPACT on my business. Green colors are low impact, and red

colors are high impact zones.

Table 1. Bargaining power of customers

Source: Author

THREATS IMPACTS

There are only a few customers or they purchase

large volumes

Nature of my business allows me to open up to whole world

and have viewers all over the globe. That is why there are

many customers and they don’t have any bargaining power.

Products available on the market are standardized

and differ very little from competing product.

Based on the observations that I conducted in the market I

can strongly say that products are not standardized and they

differ a lot from each other.

The transfer cost from one supplier to another is

low

By analyzing how subscription works on social media I can

conclude that transferring to another supplier is just one

click away. Transfer cost is low and there is no barriers

stopping viewers to subscribe other channels.

They can directly integrate the supplier’s

activities into their own production chain

Integrating suppliers would have no effect on my business

because video production system is complex and it would

not be enough to integrate the suppliers.

Result: According to analysis low transfer cost can be a threat, however low barrier for

transferring to another channel does not necessarily mean losing the viewer altogether, because

the viewer can be subscribed to several channels simultaneously. In the short run low barrier of

transfer bears no threat in my market, however, in the long-run, it can have a substantial adverse

impact if I can’t compete with my competitors and start producing lower quality videos with low

value. To reduce the impact of losing viewers to other channels, I will continuously focus on

improvement, innovation, testing and add new features to bring extra value.

Table 2. Bargaining power of suppliers

Source: Author

THREATS IMPACTS

Suppliers particularly concentrated or in a

monopoly situation

After observations and comparisons that I did on fiverr.com

it became clear that number of suppliers are many and price

range differ a lot. This is the only analysis that I conducted

on a single source. There are also other websites who are

providing supplier services that I need, and taking them into

48

account would expand the supplier market even further.

That is why I can firmly say that market is very

competitive.

They have many customers from different industries Market trend forecasts from Cisco shows that number of

social media users and influencers increase every day and

based on that we can conclude that their services will be

required even more by time and it will push the price up in

the long run.

The transfer costs are very high Changing supplier can have very high costs because I am

outsourcing voiceovers and viewers get very agitated by

new voice. This actually happened with two of my

competitors and their viewers were quite upset with the new

voice. It wasn’t because of the quality, simply viewers were

used to the previous voice and could not get accustomed to

the new one. From this aspect I can say that transferring to

another supplier would make many of my viewers leave

and reduce my profit.

They offer differentiated products and there are no

substitute products for what they offer

I have identified four alternative sources where I can get the

same services from different suppliers. So there is very

small space for differentiation.

I have researched more than 50 voiceover actors and identified one at fiverr.com that meets the

majority of criteria, such as relevancy of the voice for narration, price, quality, and most

importantly long-term cooperation agreement. As it is described above in the supplier analysis, it

is very costly to transfer to another supplier that is why long-term cooperation is one of the

critical criteria that we have mainly emphasized and agreed upon to avoid the future drawbacks.

49

Picture 3. Voiceover supplier

Source: fiverr.com

Table 3. Bargaining power of substitute products

Source: Author

THREATS IMPACTS

They offer a better quality I have compared existing substitute channels to mine and

other direct competitors and they are not superior in any

aspect.

The cost of transferring to the substitute product

is low

There is no barrier to transfer to a substitute channel

because nature of social media and internet makes it

effortless.

The price of the substitute product is lower Price factor does not have high impact, because everyone

provides their product for free (business model requires it to

be free)

Above analysis of substitutes show that low barrier of transferring to the substitute channels is the

only threat. However, because of the nature of my market, low barrier of transfer does not mean

50

that if the viewer is going to subscribe to the substitute he/she is going to unsubscribe me. Plus,

the existence of substitutes do not necessarily bear a threat, it can be even opportunity for future

growth. For example: If a substitute channel prepares a video around a specific topic which is

also covered in one of my book summary videos we can direct viewers to each other. It is a win-

win situation for both of us because we gain extra subscribers, plus it is suitable for the viewers in

a way that they can get more information. Currently, there are four substitute channels. The total

size of the substitute channels is 1.641.394 subscribers.

Picture 4: List of substitute channels

Source: Author

Table 4. Threats of new entrants

Source: Author

THREATS IMPACTS

There is no patent to protect technologies, which

allows easy access to them

All the technologies are either open to everyone or could

be easily bought. There is no patent

Barriers to entry and the capital requirements are Based on the startup expense analysis (see appendix#9) I

51

very low can tell that capital requirements are not high.

Economies of scale are weak Economies of scale is strong because internet creates

opportunity to scale.

Replacement costs for the customer are low Since everything is on the internet and one click away

there is no barrier stopping viewers to transfer to new

entrants

Customers are not necessarily loyal to the

companies that supply to them

It is very difficult to measure the overall level of the

loyalty in the market because it changes from channel to

channel. Some has more loyalty compared to others and

the main factor for that is the engagement of channel

owner with viewers through comments.

The government provides aid and subsidies for

new entrants

Government does not provide any aid for new entrants

since it is a private sector and government does not have

any interest in that.

Table 5. Rivalry among competitors

Source: Author

THREATS IMPACTS

Introduction of new products I observe my customers every day, and based on this I can

tell that there is only one competitor at the moment who

provides new products

Advertising campaigns Currently two of my competitors are cooperating to

promote their channels.

Improvement of product ranges and services I have subscribed to all my competitors so that I can see

their movement and products constantly. Based on the 13

month observation I am able to say that out of four

competitors only one constantly improves.

The sector is not concentrated. For example, when

competitors are numerous and of comparable size

As it is described below (picture 5) competitors are in

different sizes

52

The industry growth rate is weak Based on the yearly report from YouTube.com I can say

that industry growth is doubled every year.

The degree of product differentiation is low There are many sources and alternatives that can be used

for differentiation. By observing current channels I can tell

that every channel has at least one thing that is different

from others. New technologies create many options for

differentiation.

Competitors bear the highest level of threat. To reduce this, I have decided to ally instead of

fighting against them (which is unrealistic for a beginner). Since I am a new channel, it would be

naive to believe that existing competitors will quickly agree to cooperate with me. Merely to say

cooperation with me is not going to be profitable for them. In this kind of situations, Robert

Cialdini talks about a powerful tactic in his book called “Science of Persuasion.” Robert says “

When you need support don’t look at to a group of people and think who can help me, instead

look for someone to whom you can help by solving his/her problem or making something a lot

easier.” This type of approach activates the principle of reciprocity, in another word when

someone does a favor, you feel obliged to do the same. Based on this tactic I will suggest the

following offer to my competitors:

I will send them several video suggestions and let them choose one, and I will take the full

responsibility for production, costs, offer it to them for free, let them upload it to their channel

and take the entire profit from the views. I will even prepare the description section and add all

the links, so that my competitors do not have to do anything except clicking a few buttons.

In return, I will be exposed to a broader audience and gain new subscribers. There is very high

chance that my competitors will accept it because they always need content for their channel and

it is not cheap and easy to produce it regularly. Offering them one video will give them rest time

for a week, bring extra profit without any expenses, and keep the viewers happy. Currently, there

are four competitors in the market holding 1.121.208 subscribers altogether.

53

Picture 5: List of competitors

Source: Author

After analyzing all 5 forces it becomes clear that I don’t have direct impact on any of the forces.

In this situation the best strategic movement is to form allies, extend the network and build

engaging relationship with the viewers in order to maintain the position and excel other players

in the long run.

3.4 PESTLE analysis

Political analysis – Coface.com is one of the global websites which allows investor and

entrepreneurs to assess the country and compare one to another. Based on my analysis and

readings on this website I can tell that Czech Republic is among the countries which bears low

(A2) level of political risk. Power of private sector is strong in Czech Republic which makes the

government to act carefully when it comes to changing laws and regulations impacting

businesses.

Overall, political risks have a shallow impact because of the nature of my business. It may have

only one substantial adverse impact if Czech Government bans social media channels within its

borders as Iran, and North Korea did. This option is very unlikely to happen. In worse scenario, I

can transfer the channel to another account in a different country and manage it from that

account.

54

Economic analysis – According to OECD.org recent economic growth in Czech Republic will

continue in 2018 and 2019 driven by robust private demand and a dynamic external sector.

Increasing wages will support household consumption and low interest rates will boost capital

investment. Labor shortages will weigh on growth. Also Czech koruna is expected to get even

stronger. US dollar is my main currency, however I will be investing my profit in the Czech

Republic, and in that sense, strong Czech currency can have a negative impact on my overall

wealth. If Czech currency gets even stronger then I have 3 alternative options:

1. Reinvest it in the company and release two videos a week instead of one

2. Invest the profit in a different country with a weaker currency (Azerbaijan).

3. Invest in long-term index-funds with USD

Social analysis – In order to understand the upcoming social changes I analyzed 5 research paper

results about the generations. According to research done by “Grail-Research” every generation is

much more digital than previous one. Consumers of future are called generation Z. Generation Z

is a common name for the most recent generation at the labor market. Members of generation Z,

born after 1990, are characterized as highly connected, active use of communications and media

technologies such as World Wide Web or YouTube. According to this research 31% of US

children, ages 6-12, wanted an iPad over any other electronic device for Christmas in 2010;

followed by a computer (29%) and an iPod touch (29%). The world for Gen Z is digital and the

accessibility of technology has made them overly dependent on it for many activities.

Technology has also impacted the way that Gen Z learns. According to a study by ‘Habbo Hotel’,

the world’s largest virtual community for teens, 43% prefer the digital approach and find it

easiest to learn from the Internet. 38% like combined learning from print and online and only

16% state books as their preferred way of learning. In a global survey, Gen Z rejected traditional

TV over streaming Video-on-Demand (VOD). In addition, PCs (51%) and mobile phones (43%)

were ranked more important devices than TVs (3%).

Based on this analysis it is not difficult to forecast that my channel has a chance of becoming a

next-generation library.

55

Picture 6. Generation Terminology by birth

Source: grailresearch.com

Technological analysis – By analyzing the trends in the market over the last 14 month I can tell

that changes in the technology is happening very fast. Because of this I have to stay alert and see

to which platforms or technologies people are migrating to. Currently changes on the existing

platforms do not bear threat. For example, YouTube is continually implementing changes, but

these changes are done to improve user and content creator experiences. Changes are fine as long

as I follow them and enforce the ones that would improve my business. However, not being able

to cope with the technology can kill the business in a short period of time. Today we have

Facebook and YouTube, but it is questionable if we are going to have them in the long run as

well. That is why in order to stay in the game for a long period of time following the

technological trend is a key factor.

Legal analysis – I identified three YouTube certified channels and checked their videos

regarding legal issues that content creators face. After analyzing all three of them it became clear

that copyright claims can have huge negative impact on my channel. Two copyright strike is

enough to lose the monetization completely on the channel. After third strike channel is shut

down completely. In order not to face any copyright strikes I will be using following options:

- YouTube Channel – I will use standard YouTube license (free) to create the channel

- Music – I will be paying yearly for a music of my own choice.

- Photos and videos – I will be using copyright free sources such as unsplash.com, canva.com

Environmental analysis – Only environmental factor impacting my business is harsh climate in

Czech Republic during winter seasons (compared to Azerbaijan). I come from a hot climate zone,

56

and I need more sunlight to avoid getting sick during colder seasons. I will be visiting hotter

countries during summer holidays to get enough “battery” for cold times (recommended by my

doctor) so that I can continue production non-stop.

3.5 Internal company environment – SWOT analysis

Strengths

Knowledge about free resources to avoid copy-right strikes. Majority of my competitors

have been stroked for copy-right claims. Compared to them I have identified reliable

sources to avoid strikes. (see legal environment analysis)

High quality voiceovers. No one in the market uses professional voiceover services,

compared to them I have experienced supplier with 10 + year of experience (see supplier

analysis).

Have a strong indication that product will be successful (see validation section).

Higher understanding of the market trends and customer needs (see market analysis).

No dependency from a financial institution for a loan (see startup expenses)

Has a proven psychological tactic to get cooperation approval from experienced

competitors (see competitor analysis)

Weaknesses

Have less experience and small subscriber base compared to my competitors (see picture

5)

Cane be affected negatively by strong Czech currency (see economical analysis)

Production can be stopped because of my repetitive sickness in regard to cold weather in

Czech Republic (see environmental analysis)

Dependency from the voiceover supplier. High costs of transitioning to another supplier

(see supplier analysis).

Opportunities

Social media marketing is in steep upward trend (see market analysis )

Main competitor with 76.3% market share has left the market (see market analysis)

There are opportunities to build strategic alliances with existing competitors for

promotion (see new entrants and competitor analysis)

Social media influencers are becoming dominant in marketing and their costs are

increasing constantly (see market analysis)

Big companies are moving to social media platforms to advertise their products (see

market analysis)

Video content is already on the way becoming main source of data and way of learning

new things (see social analysis)

57

Upcoming generation (generation Z) prefers learning from videos rather than books which

can create more demand for my channel ( see social analysis)

Threats

Low barriers to entry and emerging competitors (see new entrants analysis )

One of the competitors is gaining strength and spends time on improvement (see

competitor analysis)

Promotional alliances are being formulated among competitors (see competitors analysis)

Constant technological change (see technological analysis)

Low transition cost to another supplier (see bargaining power of customers)

3.6 Target market / Customer analyses

I have implemented segmentations based on 4 characteristics defined by Kotler. These are:

Geographic, demographic, psychographic, behavioral characteristics. Last two criterias are the

main ones for me. Once segmentation is done I will choose the most appropriate segment as a

target market. When I decide on the target segment I will also consider following criterias:

segment size, future potential for growth, attractiveness of the segment, considering if the

segment will help to the company to meet it’s goals, considering company resources.

Results: Based on the above mentioned points, and observations in the market I have identifed

two segmetnts described below. And out of these two segments first one is the most suitable one

meeting majority of criterias, such as segment size, future growth, attractiveness, etc.

- 19-29 years old Male and females

- Mainly students, graduates and fresh employees

- Speaks English

- Lives all over the world and has access to

internet

- Have a calm, and hardworking personality

- Has a busy lifestyle, but still concerned about

his/her personal growth

- Reads books, especially self-development books

- Enjoys spending time on the social media,

especially

on YouTube and Facebook

- Tends to favor quality over economy

- Has mainly audio, visual an kinesthetic learning

style

- Wants to feel fulfilled in his/her career and life.

- Values time with small group of friends

- Believes in himself/herself. Constantly tries to

improve

- 30-35 years old Male and females

- Speaks English

- Lives all over the world and has access to

internet

- Has a busy lifestyle, but still concerned about

his/her personal growth

- Reading books is just one of the hobby

- Spends some time on the social media, especially

on YouTube and Facebook

- Tends to favor quality over economy

- Has mainly audio, visual an kinesthetic learning

style

- Wants to feel fulfilled in his/her career and life.

- Values time with small group of friends

- Constantly tries to improve

58

3.7 Marketing strategy in the target market

Method of identifying which strategy is the best will be based on the characteristics provided by

Kotler. According to him mature and already established companies can easily choose

undifferentiated marketing, however newly established companies need to do opposite and chose

more concentrated approach in order to use its limited resources effectively

Results: Based on the above mentioned points I have identified that concentrated marketing

strategy will be the most appropriate one, because my channel is new and in order to establish

myself in the market I have to direct my limited resources and capabilities to a single point. This

strategy will allow me to understand the target market in a deeper level and establish strong

foundation.

3.8 Differentiating and positioning

In order to differentiate my product I have analyzed the videos of 15 channels from different

niches to see if there can be a specific feature that can be used also in my videos in order to add

more value compared to my competitors.

And for the method of positioning I have researched the videos of my competitors to find a

specific series of books that are not summarized broadly so that I can position there.

Results:

Differentiation - After researching videos in different markets, I found that b-roll videos are quite

famous. These are small videos specially prepared to be used in the background to give a visual

explanation to the viewer. To validate the idea of integrating animation with b-roll videos, I

found three channels who have already done it and analyzed the comments and feedbacks under

the viewers. As expected the majority of them liked it.

Positioning – Researching videos of my competitors revealed that almost all of them are doing

random videos about different books and topics. I found out that there is no competitor in the

market whose channel is solely dedicated to summarizing books about entrepreneurship. It is true

that some of them have done book summaries about entrepreneurship. However, it is not

consistent. My goal is to position myself as a channel for an entrepreneur. First of all, I have

particular passion and interest in entrepreneurship. Second, it is one of the niches that are being

underserved. Combination of these two reasons will make the entry process comfortable and help

to establish my channel as a brand in a short period.

3.9 Marketing objectives and goals

I will use Cohen’s approach to formulate marketing objectives and goals. He differentiate

objectives from goals and mentions that objectives should be set first and then based on them

59

different small goals can be formulated. That is the exact method I have used. Also during

objective formulation I have considered company objectives as a baseline.

Results:

Objectives Goals

3.10 Marketing tactics - 4p of marketing

Products - Our primary products are book summary videos. Each video is in HD quality

consisting of a background music, animation, script (summary of the book), voiceover, video b-

roll and a thumbnail. Main benefits are: Providing solutions to self-development problems

through books, makes learning easy and fun, saves time for people who can’t read entire book or

wants to know what is the book about before reading it, it is free of charge, explanation with real

life examples, improves learning ability by applying different sensory functions (picture, voice,

reading, writing, emotions), and finally it triggers interest in books. Our secondary products are

affiliate products from Amazon.com, and scribe.com. These products are books and animation

software sold through affiliate links.

Price – Our primary products (videos) are 100% free. We only make profit from the indirect sales

of secondary products (books and software programs) through affiliate links and views (ads). We

provide easy access to the products and give 5% discount. Cash payment is not valid, only digital

payments are accepted through credit/debit cards or PayPal.

Place – Our channel is going to be located on 2 platforms - YouTube and Facebook. On

Facebook we will have a community page, and on YouTube it will be educational channel under

standard YouTube license. Videos will be stored in the video sections of the channels and

respective affiliate links for the books and software will be placed under the videos in the

description section.

Promotion – We will be using promotional activities described below:

1. Build a brand not just a channel

2. Build a passionate and loyal

community

3. Enlarge the network in the market

1. Produce consistent videos about

entrepreneurship, and self-

development

2. Always respond to comments

under videos and engage with viewer

3. Produce at least 2 videos in

cooperation with existing players

within 12 month.

60

Cooperation with other channels - I will create 2 videos in cooperation with 2 different

channels and let the person share the video in his/her channel. This is one of the greatest

way to get exposed to a different audience for free and get huge amount of traffic at once.

This type of promotional alliance is the most effective one on social media and can be

repeated several times with the channels who has similar content.

Guest posting to promote the channel – There are many communities who are in need of

providing valuable content to the followers who welcomes guest posts with no problem

because it gives them something to share with the viewers.

Keyword Strategy - I have identified 8 proven key word strategies to use in order to get

more clicks to open my videos (see appendices).

Search engine optimization. I will use Tubebuddy plug in for choosing tags so that my

videos appears in the first pages.

Thumbnail strategy - Canva.com will be used to create mouthwatering and compelling

thumbnails to get viewer’s attention to open the video.

“4 P” sales strategy (Promise, picture, proof, pitch) – This strategy will make sure to grasp

viewer’s full attention in the first 5 seconds and maintain it until end.

Consistency strategy – YouTube prioritizes the channels and recommend it to viewers

who has a consistent upload system. I have studied and copied very strong planning

system from my competitor in order to maintain my uploading schedule.

Buying YouTube and Facebook views – 137$ from the total budget is considered for

buying views in order to promote the channel in the first three months.

Honest call to action for affiliate sales – My viewers are very sensitive to open sales

tactics. If they see that I am trying to sell a book or software at the end of each video it

will simply irritate them and make them think that whole idea was just to trick them to

make a purchase. That is one of the key lessons I learned from one of my competitors. His

call to action to buy the book turned against him. At the end of the video he gave a contact

number and email to order the books in case someone interested, however it backfired. In

the first glance it might seem normal call to action, but viewers got really irritated and

thought that they have been tricked into purchasing the book and simply ignored the

amount of value channel was giving for free. Another competitor of mine had a very

similar call to action, but with totally different effect. He said: “If you would like to buy

the book feel free to use the link below, please keep in mind that I get small profit if you

use this link. You don’t have to use my link, but doing so helps me to provide better

videos”. Simply adding small amount of honesty changed the game completely. This is

the technique I will apply to promote affiliate sales on my channel.

61

4. FINANCIAL PLAN

In this section I will be summarizing each financial statement briefly. In order to see the entire

calculations and more details check the appendix number 8-12. All calculations and forecasts are

done for 12 Month period.

4.1 Projected sales forecast

In order to forecast the future sales I choose one of my competitors to whom I expect to have

similar level of growth and used Socialblades.com to see his average revenues and forecasted

mine based on them. Also to make sure that numbers on Socialblades.com are precise I watched

video report from that competitor where he was explicitly announcing his revenues. By

comparing these two sources I forecasted (for 12 month) my sales as following:

Total revenue from books sales through Amazon affiliate link – 1750$

Total revenue from software sales through Sparkol affiliate link – 5906 $

Total revenue from views – 1505$

TOTAL revenue at the end of 12 month – 9161$

4.2 Projected startup expenses

To cover the startup expenses and production costs I will be using my own savings. Total amount

of investment is 2190 $ and from these amount 881$ is separated for startup expenses (including

170$ contingency reserve). The rest 1309 $ will be spent to cover the production costs until the

point (End of 5th month) where channel will generate enough capital to cover its costs.

4.3 Projected profit and loss statement

After deducting production costs, depreciation and taxes from the total income it is forecasted

that channel will generate 5065$ in net profit at the end of 12 month.

4.4 Projected cash flow

Until the end of 5th month I expect to have negative cash flow. Only after that cash flow will be

enough to cover the monthly costs. Monthly cash paid out is constant for each month (385 $),

however cash receipts change every month because of its dependency from the views.

4.5 Projected Balance sheet

Projected total assets at the beginning of the 12 month period is forecasted to be 3074$, compared

to that at the end of the year this number increases up to 7309$

4.6 Break-even analysis

Based on the literature review it was concluded that break-even point = Fixed costs / (selling

price – variable cost). However, we can not define a selling price for our products based on

variable and fixed costs. Main reason is that our product price is defined based on the views not

the costs we incur, which means as the channel grows and gets more popular the price of our

62

videos increases. Simply to say every unit produced is sold to a different price. However,

considering the fact that break-even point happens at which total costs and total revenue are equal

we can conclude that after producing 36 videos at the beginning of 10th month we reach to break-

even point.

MILESTONES AND KEY METRICS

Picture 7. Milestones for 12 month

Source: Author

Metrics

1. YouTube analytics program and socialblades.com will be used to measure number of views,

subscribers, as well as earnings from views.

2. Affiliate accounts from Amazon.com, and Sparkol.com will be used to measure changes in

book sales and software sales

3. Number of likes, shares and comments will be main metric to measure the viewer engagement

63

SCENARIOS

Authors that I reviewed recommends preparing at least 2 scenarios (pessimistic and optimistic),

however I am strongly convinced that more scenarios developed the better it is because majority

of the time it is not a single event or scenario that impacts the company. It is usually chain of

events and scenarios. That is why I have developed all the possible scenarios I can think of and

provided clear instructions describing how I will react in case of a particular scenario takes place.

Results:

Digital economies /Block-chain technology becomes commonly used – Application of block

chain technology to businesses is still in development phase. There are many global companies

who has already started to invest in it and even offer some services, such as Amazon AWS, IBM,

and Microsoft Azure. This is a type of technology that can be programmed to record not just

financial transactions, but virtually everything of value. In order to be able to react to the changes

in this technology I have already started to learn how it works and how I can be the early adopter.

Recently I completed a certification course called “Block-chain essentials” which was provided

by IBM. I plan to invest more time to this area and be ready in case it is fully adopted by

companies.

Increase in the use of Amazon’s Alexa (voice search engine) - According to many marketers

Alexa has a potential of becoming major competitor against Google. According to social media

marketers Gary Vaynerchuk75 and Scott Galloway Google’s major concern at the moment is

Alexa. If Alexa becomes prominent then I will hire a special contractor to educate me about

search engine optimization for Alexa. Also I have started to educate myself to be able to react to

changes as soon as possible.

Amazon starts selling video books – Amazon is one of the fastest growing companies in the

world and they have been inventing in new technologies and ideas constantly. Amazon has

already started to sell Audi book summaries, and it is expected that in the near future they might

consider providing video book summaries similar to my products. If this happens I will make

adjustments to my existing videos and adapt it to Amazon’s requirements in order to able to sell

on their platform. This option would open new opportunity for my business and scale it very fast.

75 Gary Vaynerchuk. Jab, Jab, Jab, right hook: How to tell your story in a noisy social world. 1st ed. HarperCollins. New York, vii, 234 p. ISBN 978006231671-4

64

Competitors and new entrants become stronger – Low barriers to entry increases the number

of new entrants with better idea and product. If this happens and market becomes saturated, then I

will move to a different market such as German, French, and Italian which are almost untapped.

YouTube and Facebook changes algorithm – YouTube and Facebook constantly change their

algorithm, recently algorithm changed from view counts to engagement level. And it is more

likely that more changes will come by the time. Changes in the platform is just inevitable and

content creators has no option except adopting it or leaving the platform completely. Even

though, these changes are done to increase the user and content creator experience, failing to react

to the change can be fatal. I have identified three channels who are certified by the platforms to

guide content creators in the application of changes and improvements. I will constantly follow

them to stay ahead of the game.

Current Animation software supplier increases the price – I have already identified another

alternative supplier which can be used in case of price increase.

Voiceover supplier increases the price – Since my current supplier knows that transferring to

another supplier is very costly he can use this against me to increase the price or set the

conditions that are not acceptable for me. In order to avoid this to happen I plan to sign a binding

contract with him. Moreover, I will constantly search for another alternative supplier for a worse-

case scenario.

65

BIBLIOGRAPHY

PINSON, L. Anatomy of a Business Plan: The Step-by-Step Guide to Building a Business and

Securing Your Company's Future. Tustin: Out Of Your Mind ...and into the Marketplace, 2008.

GALAI, Dan, Lior HILLEL and Daphna WIENER. How to create a successful business plan: for

entrepreneurs, scientists, managers, and students. New Jersey: World Scientific, 2016.

How to prepare a business plan. Edited by Edward Blackwell. London: Kogan Page, 2004.

How to write a business plan. Edited by Brian Finch. Philadelphia: Kogan Page, 2010

FORD, Brian R, Jay BORNSTEIN and Patrick T. PRUITT. The Ernst & Young business plan

guide. Hoboken, N.J.: John Wiley & Sons, 2007.

Robert Clark. Validating Your Business continuity plan. IT governance publishing, 2013.

Donald R, Russel S. Analysis for Marketing Planning. New-York: Mass McGraw-Hill Irwin,

2008.

COHEN, William A. The marketing plan. Hoboken: John Wiley, 2006.

MCDONALD, Malcolm a Hugh WILSON. Marketing plans: how to prepare them, how to use

them. Chichester: Wiley, 2011.

MALHOTRA, Naresh K. Marketing research: an applied orientation. Boston: Pearson, 2010.

Writing a convincing business plan. Hauppauge. Newyork: Barron’s Educational series, 2008.

Brian Tracy. Creativity & Problem Solving (The Brian Tracy Success Library). AMACOM,

2015.

Betty Vandenbosch. Designing Solutions for Your Business Problems. n/a: John Wiley&Sons,

Incorporated, 2003.

Stefan Korn. Successful Online Start-Ups for Dummies. n/a: John Wiley&Sons, Incorporated,

2012.

Alexander Osterwalder, Yves Pigneur, Trish Papadakos. Value Proposition design – How to

make stuff people want. n/a: John Wiley&Sons, Incorporated, 2015.

66

Lucy Tobin. Entrepreneur - How to start an online Business. n/a: John Wiley&Sons,

Incorporated, 2012.

Cheryl Rickman. The Digital Business Start-Up Workbook: The Ultimate Step-by-step Guide to

Succeeding Online from Start-Up to Exit. n/a: John Wiley&Sons, Incorporated, 2012.

Allan Afuah. Business Model Innovation – Concepts, Analysis, and Cases. n/a: Taylor and

Francis, 2011.

Gerry Johnson, Richard Whittington, Kevan Scholes. Fundamentals of Strategy. Harlow:

Pearson, 2012.

Ignatius Ekanem. Writing a Business Plan – A practical guide. n/a: Taylor and Francis, 2017.

Anne-Christine Cadiat, Carly Robert. Porter’s Five Forces: Stay ahead of the competition. n/a:

Primento Digital, 2015.

Cisco Visual Networking Index: Forecast and Methodology-2016–2021. Retrieved 15 Sept 2017

from Cisco.com:https://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-

networking-index-vni/complete-white-paper-c11-481360.html

Kotler Philip. Principals of Marketing. First European edition. Cliffs, NJ: Prentice Hall, c1994.

Gary Vaynerchuk. Jab, Jab, Jab, right hook: How to tell your story in a noisy social world. New

York: HarperCollins, 2013

THOMPSON, John L, MARTIN, Frank. Strategic Management: Awareness & change. Engage

Learning EMEA, 2010.

HO, Joseph Kim-Keung. Formulation of a systemic PEST Analysis for strategic analysis.

European academic research, 2014.

MILLER, Jeffrey G., et al. Production / Operations Management: An Agenda for the'80s.

Decision Sciences, 1981, 04/12: 547-571.

Bankers Rajiv D .; Khosla, Inder S. Economics of Operations Management: A Research

Perspective. Journal of Operations Management, 1995 12.3-4: 423-435.

Dickson, Gary W. An analysis of vendor selection systems and Decisions. 1996.

67

Anne-Christine Cadiat, Carly Robert. Porter’s Five Forces: Stay ahead of the competition. n/a:

Primento Digital, 2015.

PORTER, Michael E. Competitive Strategy: Techniques for Analyzing Industries and

COMPETITORS. New York: Free Press, 1980.

John McAdam. The One-Hour Business plan – The simplest and practical way to start anything

new. n/a: John Wiley & Sons, incorporated, 2013.

Peterson, H. Millenials are old news – Here’s everything you should know about Generation Z.

Business Insider. Retrieved from [Accessed 10 September 2017].

Reeves, T. C. Generational differences. Handbook of research on educational communications

and technology, 3, 295-303.

Roberts, J. A., Yaya, L. H. P., & Manolis, C., 2014. The invisible addiction: Cell-phone activities

and addiction among male and female college students. Journal of Behavioral Addictions, 3(4),

254-265.

Relander, B., 2014. How to market to Gen Z, the kids who already have $44 billion to spend.

Entrepreneur Media. Retrieved from [Accessed 10 October 2017].

Tabscott, J. Grown up digital: how the net generation is changing your world. New York,

McGraw-Hill Professional, 2009

68

LIST OF FIGURES

Figure 1. Logic diagram ..................................................................................................... 7

Figure 2: Porter’s five forces model ................................................................................. 22

Figure 3. The marketing tools under each P ................................................................... 31

Figure 4. Growth trend of social media marketing .......................................................... 46

LIST OF PICTURES

Picture 1. Most common problems/blockers recorded ..................................................... 38

Picture 2. Results of validation ......................................................................................... 41

Picture 3. Voiceover supplier............................................................................................ 49

Picture 4. List of substitute channels ................................................................................ 50

Picture 5. List of competitors ............................................................................................ 53

Picture 6. Generation terminology by birth ...................................................................... 50

Picture 7. Milestones for 12 month ................................................................................... 62

LIST OF TABLES

Table 1. Bargaining power of customers .......................................................................... 47

Table 2. Bargaining power of suppliers............................................................................ 47

Table 3. Bargaining power of substitute products ........................................................... 49

Table 4. Threats of new entrants ....................................................................................... 50

Table 5. Rivalry among competitors ................................................................................. 51

69

APPENDICES

APPENDIX # 1: IDEA MAPPING TO FIND OUT WHAT AM I GOOD AT.

72

APPENDIX # 2: TOOLS FOR FINDING SOLUTION.

73

APPENDIX # 3. CURRICULUM VITAE (CV)

75

APPENDIX # 4: CREATING THE COMPANY – SOLE PROPRIETORSHIP.

According to major three agencies I contacted and official report from Expats.cz76 in Czech

Republic one of the common routes to doing business is through a sole proprietorship, often

called a trade license. A sole proprietor (osoba samostatně výdělečně činná, or OSVČ) is a

physical person who has income from carrying out a business and/or self-employment (a

freelancer or entrepreneur). A sole proprietor may be registered with the Commercial Court

(Obchodní soud), or the trade license regulator (živnostenský úřad). The sole proprietor is liable

without limitation, and trades on his-her own full name – to which s/he might attach some

differentiating trade name. S/he must be 18 years of age, have a clean criminal record. The annual

accounting records of the company may be kept using either simple or accrual accounting. Sole

proprietors do not need to file accounts with the commercial court’s document repository (sbírka

listin), nor register for a databox (datová schránka) for e-communication with the government

unless they choose to do so.

Formation of sole proprietorship

Sole proprietorships can be formed in 1-5 days after filing papers with the trade license regulator.

You will need to file the application on a Monday or Wednesday, as other days are by

appointment only. Preparing forms in advance (downloadable from the internet) is also advised.

Applications can be processed while you wait, although generally staff will merely accept the

forms and check the documentation and provide you a registration within a few days.

Comprehensive services in this area are provided by accounting and business services firms, as

well as many legal offices, but with patience and determination you can do it on your own. Fees

for formation can vary depending on the level of hand-holding provided, 5,000–10,000 CZK

being representative. To form a sole proprietorship, the entrepreneur files with the trade license

regulator a registration form describing the full name and personal details, residential and legal

place of business (místo podnikání), and list of selected trades. The application must also contain

photo identification, proof of citizenship or legal residency (usually a long-stay or permanent

residence visa), a foreign criminal record extract or affidavit confirming you have no criminal

record, depending on your country of origin, a property deed (výpis z katastru nemovitosti) and

owner permission (souhlas vlastníka) for your place of business, trade license selection form, and

76 John Mohr. “Doing Business through a Sole-Proprietorship (Trade License)”. Expats. Expats.com, 17.04.2014,

http://firma.domytax.cz/en/blog/howto-register-sole-trader-zivno-czech-republic, 13.10.2017

http://firma.domytax.cz/en/blog/howto-register-sole-trader-zivno-czech-republic

76

a stamp tax of 1,000 CZK per trade license. Trades are divided into free (volné) and regulated

trades. Most trades fall under the free category, but others are regulated, like accountants,

interpreters and medical professionals may require proof of higher education, professional

certifications, etc. Professional liability assurance (bonding) can usually be obtained for these

regulated trades.The trade license regulator will obtain a criminal record extract on your behalf

from the Czech criminal register. Sole proprietors will need to obtain the same from their home

countries or any other country where they lived more than 3 years, or potentially an affidavit from

their embassy in Prague.

Taxes and regulations

A sole proprietorship is regulated by a great number of government entities; the most significant

are the trade license and finance and social insurance regulators, and a health insurance company.

Employees of a sole proprietor are taxed in the same way as employees of an s.r.o. – we will not

consider these regulations or taxes here (see section on s.r.o.s). Sole proprietors generally must

file an income tax return (daňové přiznání) each year by March 31, and health and social

insurance returns (Přehled o příjímech a výdajích OSVČ) by April 30. While sole proprietors

without permanent residence in the Czech Republic are not eligible to participate in the public

health insurance program, they are required to possess insurance of a type known as complex, or

komplexní. Most sole proprietors will be obligated to pay into the Czech social insurance system,

but others (like Americans) might be able to elect to pay elsewhere for a period of up to 5 years.

Foreigners are advised to obtain a certificate of social security coverage from the country into

whose system they are paying.Direct taxes are calculated from taxable income, which will be

either revenues less deductible expenses, or, under the percentage of revenue option, generally

40% of revenues. You can keep accrual or simple accounting books and still use the percentage

of revenue method. Health and social insurance, meal and entertainment expenses, or poorly-

documented expenses are not deductible. Both health and social insurance taxes max out at

1,809,864 CZK of taxable income.

Financial regulator

You will need to register with the financial regulator within 30 days for self-employed income

tax. You may also register for VAT if you want to be able to reclaim VAT on eligible business

expenses, or road tax if you will operate a car as part of the business. Income tax: 15% of the

taxable income.Sole proprietors must pay monthly advances on social insurance and health

insurance that are netted against the annual liability due in April. The regulator/health insurance

company provides a summary of advances received to the payer each February. In the first year

of business, the advance will be set to the minimum amount; in subsequent years, to the amount

of tax paid in the prior year. The amount of social insurance advances paid depends on whether

self-employment is your main or secondary source of earned income. (See health and social

insurance section).

77

Social insurance regulation

Most likely you will need to register for social insurance if you are self-employed. You might not

have to if you are not subject to the Trade License Act (e.g., a journalist) or if you are covered by

a certificate of coverage under a foreign program. For example, American citizens who are self-

employed are permitted to continue to pay into the US system, even if they work in the Czech

Republic, for up to 5 years. Most entrepreneurs will be considered to have self-employment as

the main source of income. If you are an employee or receive any number of government

entitlements, your self-employment may be considered a secondary source of income. This will

impact especially the amount of the advance that you need to pay. Social Insurance: 14.6% of the

taxable base. Minimum monthly advance payment is: 1,836 CZK (main); 735 CZK (secondary).

APPENDIX #5: CONTENT RESEARCHING AND PLANNING TECHNIGUE.

78

APPENDIX #6: VIDEO PRODUCTION PLANNING MODEL

APPENDIX # 7: LIST OF PLUG-INS

1. YouTube: YouTube's OWN search bar to generate ideas about what videos will work.

NOTE: Search using a Google Chrome Incognito browser so that your search history

doesn't affect the results.

2. TubeBuddy: A great plugin with a built-in keyword research tool you can use directly on

YouTube.

3. canava.com: Design mouthwatering thumbnails. Free images and free design tools

4. Social Blade: Social Blade is a great tool to get a developer understanding of user trends

and growth. This is a free website that allows you to track the backend data of channels.

5. Google Keyword Planner Tool: This is a much more advanced tool for keyword research.

Look for keywords with high search volume and low to medium competition. There is

79

LOTS of information on here and it is easy to get overwhelmed or waste time to look at

metrics that are irrelevant.

6. KeywordTool.io: A simple alternative to the Google Keyword Planner.

7. VideoIQ: This is a free google chrome plugin that provides information.

8. FameBit: FameBit is site used for influencer marketing, where they connect channels and

advertisers. This is an additional way to monetize the channel. Brand deals can range

anywhere from $100-5000.

9. 99designs.com: Tool for designing logos

10. upwork.com: The freelance site to get custom video intros/outros.

11. picmonkey.com: Free photo editing site. Pic Monkey is a great alternative to photoshop or

other paid editing tools.

12. rev.com: Video transcription service. Works great for generating closed captions and

transcribing your videos. They normally provide your video transcript within 24-hours

and cost around $1 per minute of video.

13. Aweber: The email service provider to collect and send emails. Building an email list is a

great way to promote your YouTube channel to your list.

80

APPENDIX #8: SALES/REVENUE FORECAST

81

APPENDIX #9: PROJECTED STARTUP EXPENSES.

83

APPENDIX # 10: PROJECTED CASH FLOW STATEMENT

85

APPENDIX #11: PROJECTED PROFIT AND LOSS STATEMENT.

87

APPENDIX #12: PROJECTED BALANCE SHEET.

Master Thesis - BUSINESS PLAN - IS MUNI

Documents

Transcript of Master Thesis - BUSINESS PLAN - IS MUNI