Flashback
ShareThis
Flashback Business Plan
Executive Summary
There’s nothing more heartbreaking than sitting down amidst your loved ones with the intention of watching home videos, then not being able to do so because the videos are outdated. Or sifting through boxes of old photos that are yellowing and have been damaged for whatever reason. With the analog-to-digital conversion and photo scanning services Flashback provides, those woes can disappear. Our company will provide an easy way to view those videos and photos at any time. We’ll do for you what you have no time to do yourself – switch your tapes and photos to DVDs and CDs. We saw the need for analog-to-digital conversion from our own families that weren’t able to watch home videos and had trouble keeping track of the boxes of pictures collecting dust in our garages. The rapid development of technology has left many families without the ability to relive their cherished memories by watching videos and looking at photos, and Flashback is here to fix that.
Flashback’s mission: we will strive to preserve priceless memories and documents in a friendly and welcoming way. Our target market is families in San Mateo County. 80,000 of those families include members above the age of 45, and 6,400 of those families are poverty stricken. This leaves 72,600 families in our market.
Our business will function as an LLC from a home office we will have up and running before the holidays, and we will have a website that highlights all of our services. Customers may call our business line to order a pick-up for the things they wish to have converted, we will then perform whatever service it is that they paid for, and deliver their finished product and original media to them when we’re done. Our initial funds will consist of $30,000 in start-up capital, which we expect to use as following (see FINANCIALS for more detail):
· Equipment - $5850
· Marketing (one year) - $1550
According to our estimations, our yearly revenue will be $140,000 (see MARKET ANALYSIS for details). Minus our varied costs, rent, and taxes, our profit per year will stand at about $124,780. We plan to move out of our home office and into a store location within the first year of business.
Competitors for the market are not plentiful, and there are low barriers to entry in the industry because of the lack of intense competition. Two specific competitors we identified include Timeless DVD and ScanMyPHotos International. Timeless DVD is based in Pennsylvania and works by a mail-in system. They focus on video conversion only and their main tool of differentiation is customizing the converted videos with scene selection and special cases. ScanMy Photos International is based in Irvine, California. Although they cater to a global market, their business (like Timeless DVD) also operates on a mail-in system, which could work to their disadvantage. It is most likely nerve-wracking to trust the mail to deliver precious photos and videos to a long-distance location, have numbers of people handle them during the conversion process, and then mail them back – all without a single sliver of damage done to the valuables. All of that being guaranteed is highly unlikely. That is why it would be more comforting to personally hand valuables over to a Flashback associate during a pick-up rather than have to pack everything up and send it into oblivion (mailing), only to be returned weeks later. Not only is our service superior and more personal than that of our competitors, our prices are as well:
· $10 per hour of video
· $1 per 10 photos
Other low-key competitors are Costco, CVS, and other chain stores that have photo centers in their store locations. These fail to provide the bulk service that we do; they only accommodate customers on a small scale and for high prices as well.
Our advantages in a nutshell:
· Convenience – Flashback is just a call away, and we will come pick up whatever needs conversion at a time of the customer’s choice and have the final products delivered immediately after completion, along with the carbon copies.
· Affordability – Our prices are extremely competitive and tailored so that families that receive anything from a low-middle class income and above will be able to use our services.
· Personable – Each customer is valued and treated with individual attention to ensure a quality job is done, and they are more comfortable than they would be if they were to mail their valuables.
· Free market – The lack of competitors in our target market will provide an opportunity for us to establish Flashback as the main provider of the conversion service. This will give us to local customer loyalty and benefit us when we expand to other locations.
Because our business has a life span (we assume that the need for analog-to-digital will not be eternal), we have an “exit strategy” that consists of future advancement with our services. When the need to cater to families is quenched, we plan on moving on to bigger entities such as libraries, law firms, other businesses – anyplace that has large amounts of documents (invoices, catalog records, etc.) that would be useful to have on DVD/CD instead of in piles of boxes. With the expansion of our services, we would also expand to other locations so as to have a larger market beyond San Mateo County. These locations would have employees that we have personally hired and trained.
MARKET ANALYSIS
Our target market is local – families in San Mateo County. Those families would ideally have members that are above 45 years of ages, because we find that they will most likely have analog media that requires conversion. The only families that would not be able to afford our services would be those that are poverty stricken, so all other social classes are in our market. The breakdown of our target market is as follows:
· 252,000 households in San Mateo County
· 32% with members over 45 years of age leaves 80,000 families
· Minus 8% are poverty stricken
· 72,600 families are in our target market
The profit we expect per year is $124,780. The breakdown of our anticipated revenue is as follows:
· 10 customers per day
· Each customer spends an average of $70
· Operate 20 days per month (140 days per year)
· Yearly revenue = $140,000
· Minus varied costs, rent, taxes ($15,220)
Competitors for the market are not plentiful, and there are low barriers to entry in the industry because of the lack of intense competition. Two specific competitors we identified include Timeless DVD and ScanMyPhotos International. Timeless DVD is based in Pennsylvania and works by a mail-in system. They focus on video conversion only and their main tool of differentiation is customizing the converted videos with scene selection and special cases. ScanMyPhotos Internatioanl is based in Irvine, California. Although they cater to a global market, their business (like Timeless DVD) also operates on a mail-in system, which could work to their disadvantage. It is most likely nerve-wracking to trust the mail to deliver precious photos and videos to a long-distance location, have numbers of people handle them during the conversion process, and then mail them back – all without a single sliver of damage done to the valuables. All of that being guaranteed is highly unlikely. That is why it would be more comforting to personally hand valuables over to a Flashback associate during a pick-up rather than have to pack everything up and send it into oblivion (mailing), only to be returned weeks later. Not only is our service superior and more personal than that of our competitors, our prices are as well:
· $10 per hour of video
· $1 per 10 photos
Other low-key competitors are Costco, CVS, and other chain stores that have photo centers in their store locations. These fail to provide the bulk service that we do; they only accommodate customers on a small scale and for high prices as well.
We anticipated possible risks that threaten our business:
· No more need for analog-to-digital conversion – execute exit strategy (see FUTURE PLANS)
· There is damage done to customer valuables – we will have a mandatory waiver that ensures a money-back guarantee with any damage in valuables and prevents legal action (suing)
· Competition – we have already evaluated the market and concluded that the competition is irrelevant from our local standpoint.
Our operating strategy includes:
· Distribution of business cards/word of mouth – Operating from a local market will most all deliveries
· Ad in the newspaper – The Daily Journal is the San Mateo County newspaper and will pinpoint our target market
· Website – We will have a web designed set up a site for us where customers can go to receive any information they may need to know about us, and possibly even put in orders through the web as our business grows
· Fliers – There will be a flier put in storefronts, recreation centers, parks, and other public places to maximize advertisement.
ORGANIZATION AND TEAM
Flashback was formed by a group of classmates that became acquainted through an entrepreneurship workshop. Each of the seven team members will all split the work equally and receive equal cuts of the profit. The key members and their positions are listed below:
Emily – President of the company, she conducts votes to make decisions. She does not participate in these votes unless there isn’t a majority decision, in which case she makes the final call. The home office that the company will use is in her home.
Kristen & Vincent – They are co-marketing managers and will handle everything to do with marketing.
Talia – She will primarily do pick-up and delivery.
Phillip & David – They will be in charge of our future expansion and take on the task of training new employees.
Gaby – She will handle all financials.
FINANCIALS
Our initial funds consist of $30,000 of start-up capital. Our fixed costs for the first year of operation are as follows:
· Equipment
o 5 ScanSnap S1500 ($2,500)
o 5 Thomson ADVC55 A-D Converter ($7,500)
o 2 Apple MacBook Pro ($2,400)
o 5 100 Pack DVD ($100)
o 5 100 Pack CD ($100)
Total - $5,850
· Marketing
o Web designer ($500)
o Newspaper ad in The Daily Journal ($1,000)
o Business Cards ($50)
o Fliers ($500)
Total - $1,550
· Rent - $100 per month
Total $1,200
Profit expected in the first year of business: $124,780
FUTURE PLANS
Because our business has a life span (we assume that the need for analog-to-digital will not be eternal), we have an “exit strategy” that consists of future advancement with our services. When the need to cater to families is quenched, we plan on moving on to bigger entities such as libraries, law firms, other businesses – anyplace that has large amounts of documents (invoices, catalog records, etc.) that would be useful to have on DVD/CD instead of in piles of boxes. With the expansion of our services, we would also expand to other locations so as to have a larger market beyond San Mateo County. These locations would have employees that we have personally hired and trained.
Tue, 2010-11-09 09:10
#1
Offline
There was a good use of visuals to instill the idea of the business in the audiences’ mind, and you did a good job of demonstrating a need for the business to the audience.
There was a good description of the business, the market, and prices. You had a good, modest growth plan that seemed realistic. I like that you didn’t “over-reach” by proposing spending a lot to set up a retail site right away, but instead planned to work out of the home initially.
I think there is potential in the business if you examined ways of making it more unique and creating a recurring revenue stream. As described, the business plan has some holes: If you pay yourself a market-rate wage for your work, I don’t know if this is going to be a very profitable business. I think there are many companies in this space, and it’s hard for me to see how you can offer greater personal attention (which will increase your labor costs) while simultaneously selling at a lower price than others. Scalability is an issue, since this will be a relatively labor-intensive business (as revenues increase, so do labor costs, so profit growth will be muted).
The business would be more interesting if you focused initially on larger-scale customers such as businesses or government agencies. Creating a way to aggregate the analog memories of extended families (i.e. bringing together all photos, digitalizing them, and then creating on-line scrapbooks or family albums that members would pay to have created and maintained) might also be a good consumer business.
