business plan: pet salon and day care in santa barbara county

Table of Contents Executive Summary……………………………………………………..…………. 1-2

1.0 Introduction……………………………………………………………….……. 3-7

1.1 Our Purpose 3 1.2 Chief Characteristics of Industry 3 1.3 Smartphone Application Industry Trend 4 1.4 The Product Description 4-5 1.5 The Product Pricing 5-6 1.6 Future Development Plan 6 1.7 Product Liabilities and Regularly Requirement 6-7 1.8 Conclusion 7 2.0 The Business/Management……………………………………………..…........ 8-13

2.1 Management Introduction 8 2.2 Board of Directors 8-9 2.3 Employees and Interns 9-11 2.4 Work Environment 11 2.5 Employee Guidelines 12 2.6 Salary and Benefits 12-13 2.7 Disciplinary Actions 13 2.8 Management Conclusion 13 3.0 The Market……………………………………………………………..……..... 14-19

3.1 Overview 14 3.2 Target Market 14-15 3.3 Demographics 15-16 3.4 Market Trends and Potential Growth 16-17 3.5 Market Share 18 3.6 Competitor Analysis 19 3.7 Conclusion 19 4.0 Marketing Strategy………………………………………………………...….. 20-25

4.1 Introduction 20 4.2 Target Market Audience 20-21 4.3 Competition 21 4.4 Location 21 4.5 Logo 22 4.6 Marketing Methods 22-24 4.7 Goals and Future Development 24-25 4.8 Exclusive Preview 25 4.9 Risk Assessment 25 4.10 Conclusion 25

5.0 Financials………………………………………………………………………. 26-32

5.1 Budget 27 5.2 Projections 27-28 5.3 Developmental Costs 28-29 5.4 Revenue 29-31 5.5 Advertisement Revenue 31-32 5.6 Conclusion 32

6.0 Conclusion…………………………………………………………………….... 33

Appendix……………………………………………………………………………. A-1

References

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Executive Summary

1.0 Introduction

The industry of smart phone is growing; the demand of mobile application is growing as well. Our purpose clearly states that we are going to propose a business plan of a smart phone application called $hopE-Z. Based on the research of the industry trend, it’s a good time for us to enter the market with a free version of application to build up our clientele base. The emphasis on convenience and innovative function of our app are going to give $hopE-Z an advantage in competing with other application developers. In the introduction, we explain how our unique function of $hopE-Z will lead to success in today’s technical society, how we are going develop our business in the future, and how can we protect our business against the possible liability.

2.0 Management

Management describes how and who our company is to be run. The board of directions consists of a chief executive, finance manager, marketing director, head of industry and a lead technician. The roles of each position are to be carried out efficiently and professionally in order to ensure the success of the company. Outlined in the management section are our company’s guidelines, sick days, vacations, salary, and other employee benefits. The mission of $hopE-Z is to encourage team building and an effective workplace.

3.0 Market Analysis

Our business is a mobile application business and highly depends on the market of smartphones and smartphone applications. Research shows that smartphone users doubled from 2010 to 2011 and the number of mobile apps downloaded has grown 4 times the number of 2009 downloads. The target market of our business is the United States. As the population has increased and is expected to increase, we believe there is a huge potential market. At this stage, we have two competitors: Vons and Albertson’s mobile applications. They both provide similar services as $hopE-Z. Our application intends to combine all grocery stores together, provide store locations, collect coupons and help users locate any given item in a grocery store. With successful marketing strategies, we expect to obtain 30% of the market share in the near future.

4.0 Marketing Strategy

The marketing strategy of the $hopE-Z application will use a variety of techniques including social media sites, its own webpage, a promotional booth and in-app and magazine advertisements. Through these marketing methods we will be able to reach our targeted audience of smartphone holders and grocery store shoppers. Available for Apple and Android operating systems, a wide base of customers will be able to download the app for the easiest shopping experience. Being the first of its kind which encompasses a GPS, shopping list and coupon feature, the success will be determined from the review of the 100 people that will get to exclusively preview the app before its release date.

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Customer feedback will allow us to improve the app and be among the top downloaded apps within its first year.

5.0 Financials

The financial section contains a comparison of the growing use of mobile applications over the use of website consumption. The comparison allows investors to see the potential of the $hopE-Z app. Also included in financials is a list of required expenses for getting the application off the ground. These expenses include developmental costs and start-up fees. A table displays the first three years of running and maintaining our app. All of these costs are explained in detail and how they are all equally important to the development of the app. The mobile application market is growing and to generate revenue we will utilize the market and its growing industry. We primarily anticipate generating income from advertising on the interface of the application.

6.0 Conclusion

As our business proposal has included all our major sections to explain how the business is going to work and penetrate the market using one free application for the first three years. Since the demand of smart phone application grows in a continuous rate even in recession, it’s the best time for us to enter the market. In spite of the challenge of requiring raising a substantial capital to cover the huge start up cost and make the plan work, we expect the business to be very successful.

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1.0 Introduction

1.1 Our Purpose

The use of smart phone has grown tremendously in the recent past. Increasing demand of smart phone has led to an increase in its applications globally. Application refers to software used by the subscribers to enhance communication over wireless networks (Harty, 2010)1. This has changed people’s purchasing behaviors and has made their lives easier. People can use smart phones to buy anything they want (for example, groceries and clothes) in a very limited time. The paper aims at discussing one of the smart phone applications known as $hopE-Z, which is available to everyone in the website. $hopE-Z is not restricted to anyone and can be downloaded easily from the website. It has a floor plan containing grocery stores and a GPS locator. This enables people to locate things they need easily while shopping.

For instance, consider a person shopping inside Ralphs and wants a can opener. All employees are very busy serving other customers. This application, through the GPS locator, can help him to locate the grocery store he is in, and direct him to the opener. Therefore, $hopE-Z application is convenient and saves time to its subscribers.

1.2 Chief Characteristics of Industry

Both the smart phone industry and its applications have grown correspondingly in the recent past. The study has shown that both, individuals and businesses use these smart phone applications frequently. Gone are the days when people used to think that the only channel that can link them to many businesses is the website. Today, mobile phone applications have been vital to many businesses, and equally important as the websites were previously.

The use of smart phone applications has been regarded as new ways through which businesses communicate to their customers. This has led to efficient and effective collaboration and engagement between businesses and customers. According to the research survey in 2010, the use of this application has increased greatly.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! "! Harty, J. A practical guide to testing wireless smartphone applications. San Rafael, CA: Morgan & Claypool. (2010). Retrieved May 7, 2012 !

Figure 1.1: use of applications in business Source: The Wall Street Journal (online) !

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1.3 Smartphone Application Industry Trend There is no indication, which show whether there is a transition of these applications towards large companies or not. Majority of these smart phone application companies start small that is, some applications can even be developed in home based offices. According to a study, it is estimated that by 2013, smart phone application market could reach $15 billion. It is expected that this growth will remain constant in the subsequent years. This will be the most suitable time to develop this $hopE-Z application. For instance, many users have not realized the strength and influence of these smart phone applications. They are not aware of the addiction that is behind these smart phone applications. 48.6% of over 100 million smart phone subscribers in the US have used applications on their mobile devices in the last 3 months (Keith, 2012). 2Therefore, study shows that many people will be using these applications in the future. Uncertainty in trends of demand may be the major problem, but volumes are expected to increase. Figure 1.2 shows projected trends of the volumes of smart phone applications download in years 2011 and 2012.

Figure 1.2 Projected Downloads of Smart Phone Apps Source: http://news.medill.northwestern.edu/chicago/news.aspx?id=203312 1.4 The Product Description

We will be specializing in the development of a smart phone application known as $hopE-Z. It will use the GPS locator, and a floor plan of a certain grocery store to guide customers while shopping along the aisle that has items they need. Today, people live in a competitive world with full of stressful lifestyle. Therefore, time is considered as the most precious commodity. With the development of this application ($hopE-Z), time saving will be easy hence a smooth life. Our team will ensure no problems exist among

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! #! Keith, K. Smartphone apps wield more power than you think. (2012). From http://news.medill.northwestern.edu/chicago/news.aspx?id=203312. Retrieved May 7,2012,

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the subscribers when using this application. Our goal is to see that the subscribers enjoy using this application, and ensure excellent experience among subscribers.

Figure 1.3 shows the addiction these applications bring to people’s lives. They can use the smart phones anywhere even when they are on the streets walking. Moreover, subscribers can use this application for their mobile banking and during shopping to save time. Figure 1.3 People often use Smartphone, even when they are on the street

Frequent updates will be made through our technical staff to enlighten the subscribers about the movements of the stocks in the aisle. Finally, the $hopE-Z application will enable subscribers to access the coupons, and ensure items needed are easily and quickly found. This is the ideal application people need when shopping to save time.

Figure 1.3 People often use Smartphone, even when they are on the street Source: http://news.medill.northwestern.edu/chicago/news.aspx?id=203312

1.5 The Product Pricing

Our objective is to develop both free tentative smart phone application and an upgraded version. The free application will be made available for everyone to download, and it will be accompanied by in advertisements to attract more subscribers. On the other hand, the upgraded one will be downloaded at a cost. It will have special features like, more access to locations, grocery stores, and coupons. The free application will enable us penetrate the market, and attract many subscribers. Many subscribers will inform their friends about it, and they will download this application from the stores without thinking because it is free. It is uncertain to estimate the profits that can be generated, and the number of subscribers of both the free and the updated version. In spite of all the uncertainties, profits will be generated through popularizing this application and attract many

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subscribers. Figure 1.4 shows the number of subscribers who download the paid and free applications. It is evident from this figure that there is a need for free application.

Figure 1.4 Application-Free V.S. Paid Data Chart Source: http://appsmarketing.mobi/free-paid-freemium-apps/

1.6 Future Development Plan

$hopE-Z will penetrate the market using one free application for the first three years. Profits will be generated through in app advertisement to counter other companies. This free version will be used by our subscribers to improve on clientele base. Frequent communication and engagement with our subscribers will help us improve on our product through their responses. Our executives will evaluate these feedbacks and the returns of the product to make a decision on whether to upgrade the paid version or not. This will aim at increasing profits. We also expect to increase the size of our company and, manufacture other types of applications. These applications will earn their market share when demand supersedes supply.

1.7 Product Liabilities and Regular Requirement Risks behind the in app advertisement are many, and this might create insecurity to the phone. Study shows “apps sometimes incorporate “in-app ad libraries,” permission for which was granted when the user downloaded the app, which can provide a backdoor for

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hackers into your phone” (Klima 2012). 3Therefore, we should take care and ensure the wellbeing of our subscribers. We will choose a company that will be reliable, and entitle it with the advertisement strategy in our application. We will make an agreement with the advertising company to ensure our security. The more people continue using this application, the more need for ads free version of the application. Therefore, another version of application has to be developed by our technical team to offset the risk of insecurity among subscribers. To develop ads free version, we will guarantee some level of security to our users, and allow them use this application without any anxiety. 1.8 Conclusion Our application ($hopE-Z) will have a competitive advantage over other applications, because we have stressed on innovative type of application, and convenience. Unlike other applications in the same industry like Vons and Albertsons, $hopE-Z will provide its users with item locator instead of store locator. This unique function that our application has will make it more attractive when we compare it with other applications in this industry. In spite of the challenge of finding floor plans from all grocery stores, we expect the business to be very successful.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! $!Klima, L. Are Free Apps Like ‘Angry Birds’ Giving Advertisers Access to Your Private Information? (2012). from http://www.theblaze.com/stories/are-free-apps-like-angry-birds-giving-advertisers-access-to- your-private-information/ Retrieved May 7, 2012.

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2.0 The Business/Management

2.1 Management Introduction

$hopE-Z, a GPS equipped smart phone application, is designed to assist grocery store customers to make their trip quick and a little less stressful. Our goals are to help navigate shoppers directly to their desired product while maturing as a small business through teamwork.

2.2 Board of Directors

There will be a board of directors that will start off the development of the $hopE-Z smart phone application. The president/chief executive of the company will fuel the growth of this application business. There will also be a finance manager, a marketing director, a head of industry, and a lead technician along with graphic designers. All board members are required to communicate with one another; to share ideas and further enhance team building and maximize company profits.

2.2.1 Chief Executive – Audrey Lau

The chief executive will oversee the board and the employees, making any necessary changes to better the company. Ms. Lau will make any required announcements to employees regarding company policy at the beginning of each shift. All company employees will report status updates or progress to the chief executive after their shift has ended. Everything that takes place regarding the employees and company information will also be reported to the chief executive.

2.2.2 The Finance Manager – Tommy Trauger

Mr. Trauger is responsible for managing company budget and making financial decisions. In regards to managing company budget, the finance manager works with the chief executive when the time comes to distribute employee paychecks. Also, Mr. Trauger decides whether the company needs and can afford to hire new employees. Any

Table 2.1 Overview of Company Employees

Interns

Employees

Board of Directors

Principal Executive Chief

The Finance Manager

Financial Analysts/

Accountant s

Financial Interns

The Marketing Director

Market Analysts

Market Interns

The Head of Industry

Industry Analysts

Industrial Interns

The Lead Technician

Technicians /Engineers

Engineering Interns

Web Designers

Designing Interns

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necessary expenses that will contribute to improving sales or improving the business are under the control of the finance manager. Qualities that this individual should possess are a responsive attitude and awareness to changes in company revenues. All profit and earnings growth witnessed by the finance manager should be reported to the chief executive as well as other final transactions.

2.2.3 The Marketing Director – Brittney Eugenio

The duty of Ms. Eugenio is to advertise the $hopE-Z application. In addition, the marketing director should be up to date with any developing competitors, while in partnership with the head of industry. The marketing director should also be aware of what customers look for in an application to make any changes necessary in advertising. Ms. Eugenio should be actively involved in social media and networking with other companies as well. Through networking, we aim to look for any partnerships that can be made to enhance company outcomes. The chief executive should approve all decisions made by Ms. Eugenio.

2.2.5 The Head of Industry – Yingmin Cai

Ms. Cai is in charge of observing the latest innovations to improve the product in any way. Working alongside the marketing director, the two teams work to examine existing and incoming competitors. The job of the head of industry is to discover innovative features that attract more consumers and hike up the sales of the product as well.

2.2.4 The Lead Technician – Weilu Yang

The duty of Ms. Yang as a lead technician is to make sure that $hopE-Z is using all up- to-date technology and that there are minimal flaws in the product. Also, the lead technician is responsible for overseeing customer inquiries about any faults in the application technology-wise. Any technological complaints made about the product should be dealt with professionally and fixed as quickly as possible.

2.3 Employees and Interns

Creating a team development atmosphere in a small, private business is one of the key qualities of a successful private enterprise. Therefore, each of our directors will be in charge of employees as well as department interns. The goal is to build a comfortable team-building atmosphere while bettering the company. Our goal is to familiarize them with the workplace through observation as well as hands-on practice.

As our full-time employees will be assistants to our board of directors, the interns of this company will follow the footsteps of our skilled employees under each specific department. Their particular area of study will be applied in the workplace through hands-on experiences. The company’s goal for these interns is to give them the necessary experience needed to further excel in their area of expertise. Those who intern for $hopE- Z will have the opportunity to apply and become full-time employees.

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2.3.1. Financial Analysts & Interns

Under the training of the finance manager, Mr. Trauger will be in charge of the finance analysts. These employees will follow a certain protocol so that the outcome of our company is efficient and precise. These analysts will be under the training of Mr. Trauger to assist the company financially in any way possible. We hope our employees will get as much out of their work as they can, as it will help them as individuals and the company as well.

Financial interns will observe the work of our financial analysts and learn the proper steps in keeping the company growing financially at an efficient speed. These interns will do sample spreadsheets and help gather financial information for our accountants as well.

2.3.2 Market Analysts & Interns

Ms. Eugenio will be the head of the company’s market analysts. These employees need to be alert for day-to-day updates on the application market. Our market analysts are great assets to our company as they are watchful eyes for any new participants in the application market. Required changes for application advertisements will be made under the market analysts’ judgment as well as the marketing director.

Market interns will examine the company’s market analysts. They will be trained to skillfully select advertising opportunities and also survey for competitors in conjunction with the industrial interns.

2.3.3 Industry Analysts & Interns

Our industry analysts will be trained under Ms. Cai. The job of the industry analysts will comprise of finding ways to utilize researched results in increasing sales and expanding company profits. These employees will use the application itself from time to time and inspect for any glitches or upgrades in features that can be made. Any problems found by our industry analysts will be reported to the appropriate department for modifications.

Our interns in the industry department will work alongside our industry analysts as well as the market interns to accomplish essential skills in maximizing company revenue and sales through advertisement.

2.3.4 Technicians/Graphic Designers & Interns

Under Ms. Yang, there will be a few computer technicians and web/graphic designers to handle the technical aspects of $hopE-Z. Our customer service is also backed up by our computer technicians along with the technician to ensure fast responses. The web/graphic designers’ jobs are to be constantly improving the appearance of our application icon to attract more customers. Rather than imitating other application designs, we train our employees to learn and pick up from the appearances of more popular applications out there in the market.

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$hopE-Z’s computer technicians will oversee the work of the engineering interns to make sure that the proper procedures are taken in when communicating with customers. Further into the internship, these interns will learn the appropriate steps in fixing common technical errors.

Our designing interns will assist our graphic/web designers in producing attractive digital exteriors that are appealing to the customers. These interns prior to hiring will need proficient skills in Adobe Photoshop and web design.

2.4 Work Environment

$hopE-Z strives to maintain a safe and comfortable work environment, where all employees and interns are able to express their feedback about the company’s well-being. The reason why we value the feedback of our employees is because exercising open communication helps to foster better relationships with one another professionally.%! We aim to provide the experience and assistance to employees in need.

2.4.1 Team Development

Our company is focused on team building and working together in being efficient to our fullest potential. According to Susan Heathfield on team building success, utilizing employee involvement and interaction emphasizes team building tremendously, which in turn helps each individual or group make better decisions.5 Every one of our employees has a professional yet collaborative personality, therefore each a great asset to our company.

2.4.2 Customer Service

To strive in a small business, it is important to present commitment to our customers. All of our employees work to please and satisfy the needs of our shoppers. From “7 Habits of Business Success,” Darrell Zahorsky supports that in order to understand what our consumers really need and want, our foundation for customer service needs to be firmly established.6 In the long run, not only will business be booming due to our dedication and promise to put our customers first, but also in turn, our customers will be loyal to us. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! % TinTin. http://www.buzzle.com/articles/team-building-in-the-workplace.html. Retrieved May 20, 2012 & Heathfield, Susan M. http://humanresources.about.com/od/involvementteams/a/team_one_stop.htm. Retrieved May 20, 2012. ' Zahorsky, Darrell. http://sbinformation.about.com/cs/development/a/032303.htm. Retrieved May 20, 2012.

Image 2.1 Team Building Source: Courtesy of Google images

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2.5 Employee Guidelines

2.5.1 Employee Rules and Regulations

1. Efficient performance of each employee is expected. 2. Professional etiquette is to be kept at all times. 3. Timely attendance and completion through time cards is required. 4. Proper care and usage of company equipment is expected. 5. There will be no sleeping on the job. 6. No illegal substances or weapons will be allowed inside the workplace.

*Violation of these rules will result in serious consequences.

2.5.2 Employee Duties

The job of each employee is to contribute their capability in improving the company proficiently. All changes and updates are to be reported to the chief executive.

All employees are required to attend a monthly meeting in the conference room to discuss any questions, concerns, or comments regarding our customers or any feature of the application.

2.5.3 Confidentiality Agreement

Upon hiring, all company employees will be required to sign a confidentiality agreement, which states that the employee will protect confidential company information from those outside of our company and workplace. Any information should only be distributed to personnel working for $hopE-Z inside the workplace.

2.5.4 Dress code

All employees should dress to work comfortably in the workplace whilst keeping a professional yet classy image. All shoes are to be close-toed and clothing should be kept appropriate. Our aim is business casual.

2.6 Salary and Benefits

2.6.1 Salary

The salary of every employee will vary according to his or her department and position. Details are kept with the chief executive.

Image 2.2 Dress Code – Business Casual Source: Courtesy of Google images

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2.6.2 Pay Procedures

All employees and interns will be paid on the fifteenth and the last day of every month through the employee’s preference, either through check or direct deposit.

If the payday falls on a weekend or holiday, the check will be delivered to the employee the business day following the day(s) off.

2.6.3 Vacation Benefits

Every full-time employee is offered a one-week vacation period with all transportation fees paid by the company from company budget after one year of employment with the company. Any collaboration benefits with out-of-state clients will be appropriately shared with company full-time employees.

2.7 Disciplinary Actions

2.7.1 Confidential Information

Depending on the severity of the information leaked, violation and distribution of confidential company information will either result in the employee being put on probation or losing his or her job.

2.7.2 Sick Days

Each employee is allowed up to fifteen sick days, and will not be paid during those days of absence. It is not recommended to take more than fifteen sick days, but if necessary, the company will surely oblige.

2.7.3 Vacations

All employees taking non-company related vacations should notify the chief executive two weeks in advance. Vacations are not to exceed 10 business days. The employee should have a sense of whether his or her absence will significantly affect the productivity of the company. If so, it is recommended that the employee not take leave.

2.8 Management Conclusion

$hopE-Z’s overall goal as a small, private company is to ensure a safe, comfortable yet professional workplace while constantly improving our product to satisfy our customers. Day to day, we strive to create a team-building environment so all our employees are at ease and feel free to express their opinions about our product and the workplace, creating open communication in making important decisions. All of our employees and interns are certified to take on critical tasks to keep our company moving forward. With a strong board of directors to guide our employees, $hopE-Z’s easy but efficient pace of collaborative work is sure to produce a successful outcome.

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3.0 Market Analysis

3.1 Overview

The future development of our smart phone grocery (GPS application) depends on the growth of the smart phone market. After the economy began to decline in 2008, the demand for goods also fell tremendously. However, due to the development of technology, both the smart phone and smart phone application markets kept on flourishing. In addition, the number of smart phone users in different ages doubled between 2010 and 2011. Research studies have shown that the number of smart phone users has been increasing yearly, with marketing companies making enormous sales. Today, the number of smart phone applications downloads has globally increased 4 times higher than in 2009.7

The grocery GPS application is an online technical business. Although we do not have a specific physical location, we plan to market our product throughout the whole country. There are numerous grocery stores and households, thus providing our business with an enormous market for our product. Since the grocery GPS application is still new in the market, our business does not have a lot of competitors. After conducting a research survey, statistics indicate that our business has enormous potential to succeed in the near future.

3.2 Target Market

The target market for our product will be citizens of the United States. Although there are numerous stores located countrywide, majority of the grocery stores have similar basic layouts. Since our mobile application will be different from the other grocery stores in the country, it will not pose a significant challenge to launch our product. On the contrary, the numerous grocery stores and households will provide an enormous potential market for our product, since our business is distinctive and unique (Price, 2011).

The expanding smart phone market will provide an ideal chance for our smart phone grocery application. The market of potential customers is wide and diverse, since our business will target people of all ages. As the graph below illustrates, the largest group of customers that use smart phone and smart phone applications is aged between 18 to 44 years. In addition, we expect that this group of users would be the most valuable part of our market share.8

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! (!Gary Price. "New Statistics: The Rise of Smart phones, Apps and the Mobile Web," Infodocket.com, (December 15th, 2011))!Retrieved May 10, 2012. 8 Gary Price. "New Statistics: The Rise of Smart phones, Apps and the Mobile Web," Infodocket.com, (December 15th, 2011))!Retrieved May 10, 2012.!

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Figure 3.1 Monthly Data Usage by Age Source: The Rise of Smart phones, Apps and the Mobile Web

3.3 Demographics

The demographics of the U.S. provide concrete evidence to show that our business has a favorable market for its product. The United States Census Bureau indicates that, in the year 2010 there were 308,455,134 residents in the U.S. In 1990, the population increased by 24.02% and 9.61% in the year 2000. In

addition, the total population is expected to increase by 4.52% in the next two years (US Census Bureau, 2010). These statistics are a clear indication that, the rapid increase

in population will provide a stable growth and potential market for our business. 9

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! *!United States Census Bureau, “Population Growth and Population Statistics,” US Census Bureau (2010). Retrieved May 10, 2012.!

Figure 3.2 Population Statistics Source: www.clrsearch.com!

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Furthermore, research studies also show that the majority of the population comprises of people between the ages of 18 to 64. From these statistics, our business will identify its target market of smart phone users. Therefore, the business will develop strategies of developing products that meet the demands of this age group to attract and satisfy its customers.

3.4 Market Trends and Potential Growth

3.4.1 Smartphone Market Analysis

The future development of our product, the smart phone grocery GPS application to a significant extent depends on the growth of smart phone market. In his article, “New Statistics: The Rise of Smart phones, Apps and the Mobile Web” Price (2011) explains "Majority of the population aged between 25-34 and 18-24 year old, own smart phones (64% and 53% respectively). On the other hand, majority of smart phone owners (62%) regularly download applications on their devices and games, as the top application category used in the past 30 days. In addition, the number of smart phone subscribers using the mobile Internet has grown by 45% since the year 2010.

Figure 3.3 Breakdown of U.S. Mobile Video Viewers Source: www.infodocket.com

The figure above provides a breakdown of mobile video viewers in the U.S. From the statistics, it is evident that, among all three ways to viewing mobile videos, the use of smart phone has the fastest pace and growth. For instance, in a span of only one year, the number of smart phone users increased from 16 million to 26 million, translating to 62.5% (www.infodocket.com). Since the use of smart phones is becoming a common phenomenon in our daily lives, the growth and development of our smart phone grocery GPS application is assured.10

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! "+!Gary Price. "New Statistics: The Rise of Smart phones, Apps and the Mobile Web," Infodocket.com, (December 15th, 2011). Retrieved May 10, 2012.!

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3.4.2 Smartphone Application Market

It is apparent that the growth of the smart phone grocery GPS application is highly influenced by the growth of the smart phone application in the market. This means that, with the rising number of consumers using the smart phone, consequently, the usage of smart phone applications is also expected to increase. According to Jahns and Mikalajunaite (2010) "the use of smart phone applications in the market, grew by more than $2.2 billion dollars within the first six months of the year 2010”. Mobile application download numbers reached a total of 3.8 billion in only 6 months, compared to 3.1 billion in 2009.11 As a result of the widespread use of advanced technology, and the increasing number of connected consumers means that, the market of smart phone applications has the potential to grow. In his article “Smart phone Application Market To Reach US$15.65 Billion In 2013” Jahns (2010) predicts that, this trend will continue and the number of global smart phone application users numbering 970 million by the end of 2013.12

Figure 3.4 Smart phone Application Users from 2009 to 2013 Source: www.research2guidance.com The figure above illustrates that the number of smart phone application users has been increasing sharply and steadily. Since 2010, the market of smart phone application users has almost been tripled. Since the numbers of smart phone users are still increasing, there is no doubt that the smart phone application market will continue increase. Therefore, this is a perfect time for us to enter the application market and popularize our grocery GPS application.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ""!Ralf-Gordon Jahns and Egle Mikalajunaite. "The Smart phone Application Market as Reached more than 2.2 Billlion Dollars in The First Half of 2010." Research2guidance.com. (August 19th, 2010). Retrieved May 10, 2012.! "#!Ralf-Gordon Jahns. "Smart phone Application Market To Reach US$15.65 Billion In 2013," Research2guidance.com. (March 4th, 2010). Retrieved May 10, 2012.!

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3.5 Market Share

Although there are many smart phone GPS applications in the market, the grocery GPS application is an undeveloped market. We intend to use coupons that will contain clear, understandable and direct information to help users locate our product in the grocery store through our application. Since our business does not require a large space and physical equipment to develop and organize our applications, we shall advertisement our product through internet, thereby reducing on costs and saving on time.

Since the grocery GPS application market is new and undeveloped, our business does not have many competitors. However, it is not prudent to assume that our business will not face any challenges and gain a large market share. The most significant challenges we shall face is that, our target consumers have no idea about our product since they have never heard of it. Therefore, we have to create an awareness program to convince our customers that we shall provide high quality and efficient services.

The use of an effective advertising campaign to market our product will be the key to success and growth. We have to convenience our customers that our product is unique and tailored to suit their tastes and preferences. In addition, we shall value the feedback from consumers by asking them to give suggestions on how to improve our products. Furthermore, we intend to develop a program of rewarding the most loyal consumers.

Our business hopes to attain a 30% market share in the near future. This will only be achieved by the use of effective and efficient marketing strategies to create awareness on consumers and the community. Since the smart phone application industry keeps growing and expanding by day, we expect that the number of customers purchasing our product will increase, thereby raising the profitability levels of the business.

Our business intends to engage in product differentiation to gain a competitive advantage. For example, we intend to offer our customers with free downloads of no-ads version. To increase our revenue earnings, we shall add advertisements of other applications in our application. However, we are anticipating a risk in this move. Since our product is new and many potential customers have never used this application, we intend to employ strategic marketing to create customer awareness. Besides, we have to convince different brands of grocery stores to believe that, by using our application they stand a better chance of increasing their profits margins. If we fail to achieve this, our business will face serious obstacles.

3.6 Competitor Analysis

After carrying out extensive market research, and explored every aspect of the market and in which our business will operate, we have understood the risks of starting up a new business. Besides, we have understood the primary competition in this industry and have developed strategies that will enable us to create our own market niche. The main competitors include: Vons Application that was developed by Safeway Inc. and updated on April 24th, 2012. The application provides weekly advertisements, different Vons store locations, shopping lists and coupons for its users. On the other hand, Albertsons application was designed by the Supervalu Inc. and most recently updated on May 3rd,

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2012. Just like Vons application, Albertsons application also provides weekly advertisements, maps for Albertsons store locator and coupons for its users. This application only works for the states of California, Idaho, Montana, Nevada, Oregon, Utah, Washington and Wyoming.

3.6.1 Competitor Comparison

Vons and Albertsons applications provide similar services. The only difference is that, Vons application operates in the whole of U.S. while Albertsons application is only valid for certain states in the U.S. Our application, $hop E-Z, works in the whole country and combines all the grocery stores together. As opposed to the services that Vons and Albertsons applications have already provided, our $hop E-Z provides an item locator, which could give understandable directions to help users find a specific the item they are searching for in a grocery store through our application. This could serve our customers better and make $hop E-Z more attractive than our competitors.

3.7 Conclusion

The current research statistics show that, the market of smart phone and use of smart phone application is rapidly expanding at an alarming rate. As a result, there are no signs of slowing down in the future since the mobile grocery application market is undeveloped. We intend to focus on the residents of the U.S. and provide them with the best service to achieve customer satisfaction. We believe that, by customizing our product to suit the needs of our customers, our business will be able to satisfy the demands of the growing market. Besides, our business will experience high rates of return on investment (ROI).

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4.0 Marketing Strategy

4.1 Introduction

$hopE-Z is a mobile application with the goal of making grocery shopping easier and faster. Stepping into the app industry with the right foot is crucial to the success of the business. This section will cover the target audience, competition, marketing strategies, goals now and in the future, risk assessment and an exclusive preview of the app to a handful of consumers.

4.2 Target Market Audience

There are two audiences the $hopE-Z app is targeted towards. Directing advertisements and promotions towards them will produce the greatest benefit for the $hopE-Z company. These two markets are smartphone holders and grocery store shoppers.

4.2.1 Smartphone Holders

Smartphone holders are the first target of this product because they are the ones that can download the application on their phones. Gartner research firm vice president said, “by 2015, applications targeting smartphones and tablets will outnumber PC projects by four to one. Smartphone and tablets will represent more than 90 percent of new growth in the world’s device sales113.” Increase in smartphone and tablets sales will promote growth within the app industry.

The app will start off by only being available for phones or tablets. Since it is a GPS incorporated app, it would not be beneficial to be downloaded on computers because people do not bring their laptops into grocery stores.

Figure 4.1 Smartphones

Source: Google Images, Jaxov

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! "$!Liang Fei, “Mobile app market set for increased growth: Gartner”, Global Times, January 18, 2012, http://www.globaltimes.cn/NEWS/tabid/99/ID/692610/Mobile-app-market-set-for-increased-growth- Gartner.aspx, accessed May 2012.!

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4.2.2 Grocery Store Shoppers

The second targeted audience is grocery shoppers. Being a specialized app, it will not be of advantage to every smartphone or tablet owner. Those who do the grocery shopping for their households will get the most use from the app.

4.3 Competition

This is among the first known app of this type. However, competition can still be found among other apps providing shopping lists and coupon finders. There is a VONS app featuring store specials, ads and coupons.

The main attraction of the $hopE-Z app that has not yet been developed by competitors is the GPS locator that helps shoppers find items they cannot locate on their own. $hopE-Z is branching into a new app industry where it will be one of the first of its kind and set the bar for competitors in the future.

4.4 Location

As a mobile app, there is no physical location. The app will be available to download through the app store for Apple and Android operating systems.

Figure 4.2 Apple and Android Operating Systems Source: Google Images

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4.5 Logo

$hopE-Z’s logo, shown in Figure 4.3 on the following page, is a simple shopping bag with a dollar sign to represent the customers shopping trip and potentially monetary savings. When creating a logo it is important to use visuals that stick to people’s memories. A dollar sign will always capture people’s attention and draw them in to see what it represents.

This will be the logo consumers will see in the app store when searching and downloading the $hopE-Z mobile app.

Figure 4.3 Shop E-Z Logo

4.6 Marketing Methods

A variety of methods will be used to market the $hopE-Z app. Spreading the word is a critical call to action for our business so that the app can grow and serve as many consumers as possible. $hopE-Z will be advertised through Facebook, Twitter, its own website, ads on various web pages, in technology magazines, and a promotional booth.

4.6.1 Facebook

Social media connects almost everyone nowadays. $hopE-Z will have its own app page on Facebook that allows Facebook users to “like” and post feedback about the app. Appendix A displays the potential app page on Facebook. Friends will be able to view this activity between consumers and $hopE-Z. The aim is the more likes it gets, the more downloads.

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4.6.2 Twitter

The twitter account for $hopE-Z will serve a similar purpose to the Facebook page. Twitter account holders will be able to follow the $hopE-Z app and tweet about its performance. In return, $hopE-Z will tweet to its followers about updates and special promotions that can be found within the app.

4.6.3 Online Ads

Online advertising will also play a huge role in the success of $hopE-Z. The purpose of online advertising is to capture the attention of consumers while they are surfing the web. According to a source from the New York Times the type of ad that “allow[s] users to click within the ad to see a brand’s Twitter messages or Facebook wall posts in real time, or to watch a brand’s video content from YouTube—all without leaving the Web page where the ad appears14” receives more customer interaction than an ad that takes you away from the website you are on.

4.6.4 Technology Magazines

$hopE-Z will have a small advertisement to send out to various technology magazines. Over the first year it will be the most important to get the $hopE-Z ads in these types of magazines so that a solid group of consumers download the app, have the chance to use it and also provide any suggestions.

4.6.5 Website

A website for $hopE-Z will contain the basic information about the app, its purpose and usefulness. It will include news about updates, where the app is available for download and most importantly a place to review the app and give suggestions for improvement.

Figure 4.4 illustrates some of the key strategies that will go into making a successful website for $hopE-Z.

The $hopE-Z team will select a handful of customers to download the app before it is made available to the public, as a pre-launch strategy.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! "%!Andrew Newman, “Brands Now Direct Their Followers to Social Media”, August 3, 2011, http://www.nytimes.com/2011/08/04/business/media/promoting-products-using-social-media- advertising.html, accessed June 2012.!

Figure 4.4 Mobile App Marketing Strategy Source: Brandignity.com (2011) !

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$hopE-Z will also reach out to bloggers to write about the app after experiencing first hand the usefulness of the app. The links to the blogs will be put on the $hopE-Z website for easy access.

As mentioned above, social media such as Facebook and Twitter, will be an active part in advertising the app. Business Communication Quarterly quoted in a recent article that “approximately 80% of American adults use the Internet and approximately have of them have at least one social networking site15.” A Facebook app page and Twitter account will expose the $hopE-Z to these social networking users.

Lastly, it will be important to increase all chances of the app being found in the app store. Through popularity and good reviews, the app needs to be easily found when terms like “shop”, “grocery”, and “coupons” are searched.

4.6.6 Promotional Booth

Even though most of people’s time is spent online, The Wall Street Journal article written by Ed Keller and Brad Fay emphasize the importance of offline marketing. Face-to-face conversation is a successful marketing strategy because it “puts people—rather than technology—at the center of products116.” A promotional booth with sample phones to demonstrate how the app works will be useful for $hopE-Z in spreading the word outside the online world. It will give customers a chance to meet the people behind the app instead of a mysterious cyber world salesman.

4.7 Goals and Future Development Plans

The goal of $hopE-Z is to provide consumers with an app that makes a trip to the grocery store easy, fast and inexpensive. With the GPS function, $hopE-Z wants to ensure that if no workers are around, the shopper will be able to use their smartphone or tablet to find what he or she is looking for. A shopping list feature will also provide further convenience for shoppers instead of having to bring five different papers with lists of what they need. By entering their zip code and selecting their choice of store, consumers will be able to gather coupons, if available, for the items on their shopping list.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! "&!Tena B. Crews and Wanda L. Stitt-Gohdes, “Incorporating Facebook and Twitter in a Service-Learning Project in a Business Communication Course,” Business Communication Quarterly, March 2012, from Business Source Complete, accessed May 2012.! "'!Ed Keller and Brad Fay, “Why Successful Branding Still Happens Online”, May 14, 2012, http://blogs.wsj.com/speakeasy/2012/05/14/why-most-successful-branding-and-sales-talk-happens- offline/?KEYWORDS=marketing+strategy, accessed May 2012.!

Figure 4.5 Coupons Source: Google Images !

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As stated in an article on the Forbes website, mobile applications aren’t just a trend, they are customer service17. The grocery store industry can only benefit by investing in our $hopE-Z app and provide their shoppers with the customer service they deserve.

In the future, $hopE-Z hopes to create a paid app with more features for the shopper and grocery store. For the first three years we will catalog three local stores each year, a total of nine in three years. Once the grocery store aspect is perfected, $hopE-Z will look into expanding to cataloging stores like Home Depot, Lowe’s, Target and Walmart.

4.8 Exclusive Preview

To help spread the word and also receive feedback before the app is released, a selected group of 100 people will be able to preview the app. The preview will allow consumers to download the app before it is available to the public and test it out. They will then be asked to fill out an online questionnaire about the app, what can be improved and how it worked for them.

4.9 Risk Assessment

While the mobile app industry is growing, there are risks for the $hopE-Z app because it is one of the first of its kind. There are GPS incorporated apps out there as well as grocery store shopping lists apps but together in one app is a new project.

Other risks lay with cataloging the grocery stores. All stores have different layouts which will require extra work for the $hopE-Z team.

Customers may also be hesitant to download the app thinking that if they couldn’t find something they can just ask someone. It is anticipated that shoppers will take the chance with this app and see that it is faster than finding an employee, which can often be difficult to do.

4.10 Conclusion

Many smartphone and tablet owners are always looking for the next useful app to download. $hopE-Z is that next app. Through media such as Facebook, Twitter and the Internet, all that can be accessed on a smartphone, $hopE-Z will be promoted. Being the first of its kind, $hopE-Z will depend on the reviews and suggestions of its consumers to grow and improve over time as a top successful mobile application in the industry.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! "(!Gene Marks, “Your Business Checklist: A Website, A Phone Number, A Mobile App”, May 7, 2012, http://www.forbes.com/sites/quickerbettertech/2012/05/07/your-business-checklist-a-website-a-phone- number-a-mobile-app/, accessed May 2012.!

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5.0 Financials

With the combination of smart phones and mobile applications of today’s developing tech industry we believe that $hopE-Z will create a new avenue for the mobile application market. A recent study conducted by Flurry, a mobile application analytics website, found that “consumers spent 81 minutes per day using mobile apps, compared to 74 minutes web surfing” (Wasserman, 2012)118. These numbers are expected to grow at an exponential rate over the coming years. We believe that with the growing application industry $hopE-Z will soon become an integral part of mobile users daily lives.

Figure 5.1 Title: Consumers Now Spending More Time On Mobile Apps Source: http://mashable.com/2011/06/20/app-use-overtakes-web-use/! This financial section will encompass all of the related costs beginning from the development of the application to the hosting fees and other related costs for the first three years.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ",!Wasserman, Todd. "Featured in Social Media." Mashable. 20 June 2011. Web. 31 May 2012. <http://mashable.com/2011/06/20/app-use-overtakes-web-use/>.

!

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5.1 Budget

Due to the fact that this venture is a mobile application, the majority of our budget will require costs that are related to developing a fundamental platform for both the Apple and Android market place.

Two Platforms (Apple, Android)

Estimated/development start up costs from (swebapps.com) 19

-$2,399 one-time development fee

-$39/month hosting fee (capable of updating content and design anytime)

-$20/hour/person (Indexing stores to pinpoint specific items and their location.)

-$2000 Server Cost per three stores (Data storage for maintaining all indexed locations within the store)

-$90/year (Joining the Apple App Store)

Initial Required Expenses $2,399 One time developmental cost

Swebapps.com developing both Apple and Android Platforms

$39 Per month hosting fee cost

Hosting through Swebapps.com

$20 Per person to index the stores $2000 Server cost per store $90 Per year joining Apple Mobile Market

5.2 Projections

These projections are fairly similar to the industry norms although a large portion of the start up cost will be due to the indexing costs that are going to be vital to the proper functionality of the application. Indexing is required in order to locate specific items within approximately one foot from its location in the store. These assumptions are based

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! "*!"IPhone Apps Development by SwebApps:." IPhone App Development Cost. Web. 31 May 2012. <http://www.swebapps.com/iphone-app-development-cost.php>.!

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on the industry average development costs when developing a mobile application for both the Apple and Android platforms. Both the application development fee and the indexing expenses are the most significant costs related to $hopE-Z’s success.

In addition to indexing the entire store, we will need to store all of the data and maintain it properly in order run the application with ease. Many users of the application market may not know this however, “Storage is the key bottleneck for mobile devices”, said a NEC electronics manufacturer (Nitin Agrawal, 2012)20. As our database for indexed stores begins to grow, we will need more capacity for data storing all of the indexed locations.

To begin development of $hopE-Z, here is a table of required Developmental Costs:

Table 5.2 Developmental Costs for first three years Beginning Expenses

Year 1 Year 2 Year 3

Development Fee $2,399 0 0 Hosting Fee $468 $468 $468 Indexing per store $720 $1,440 $2,160 Server Cost $2000 $4000 $6000 Joining App Store $90 $90 $90 Android Market Fee $30 $30 $30 Total $5,647 $5,948 $8,748

5.3 Developmental Costs

These operating costs encompass all of the required costs for getting the application up and running within the first three years of production. Developing the application is a one-time fee for creating the platform for both the Apple and Android market place.

5.3.1 Hosting Fees

The hosting fee is a required fee to have the application live 24 hours a day, 7 days a week and 365 days a year. This is a $39 per month fee also allows us to update the platform or any application content.

5.3.2 Indexing Costs

The indexing costs are required in order to offer the user a direct location to the item or items in the store. This is a variable cost therefore this cost can fluctuate from year to year depending on the number of stores that decide on using the $hopE-Z application. At !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! #+!Simonite, Tom. "How Data Storage Cripples Mobile Apps - Technology Review." Technology Review. 20 Feb. 2012. Web. 31 May 2012. <http://www.technologyreview.com/computing/39764/>.

!

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$20 an hour and 12 isles per store, we estimate approximately $240 per store. In year one we anticipate beginning with three local stores costing us $720, and branching our application service three stores a year for the following two years.

5.3.4 Sever Cost

In order to maintain the all of the recorded data from indexing the grocery stores, we are going to need a server to keep the data saved. As we increase the number of stores that the $hopE-Z application is offered, we are going to need more server space to maintain a successful growth rate. We estimate that our server expenses will double in the first three years due to the application’s popularity.

5.3.5 Apple Market Fee

To properly advertise the application’s launch, we figured the best way to boost the number of downloads would to offer the app though Apple’s application market. At $90 a year, we believe placing the application on the Apple platform will be a very lucrative decision.

5.3.6 Android Market Fee

To further promote the app, there is an annual fee of $30 per year in order to have $hopE-Z available to Android users. 5.3.7 Bottom Line Start-up cost

Getting $hopE-Z off the ground we expect roughly $5,600 in developmental fees, hosting fees, indexing, server and deploying the app to the market place. We anticipate roughly three stores a year bringing our total expenditure to $20,343 within the initial years.

5.4 Revenue

As far as building up equity into $hopE-Z, we believe that advertising is a good starting point in order to get the application off the ground. The app will be offered as a free download within the first three years to help build a large user database. After the first three years, depending on the number of downloads and growth within the application, at that point we may consider charging a fee. Recent research has found that, “ad revenue is not as profitable as selling applications” (Heinen, 2012)21 although, we figured allowing the users to experience the application for free would make them more prone to trying the app out. Ultimately, based on the growth rates of the mobile application market in the next year illustrated in the figure below we think $hopE-Z’s user-friendly interface will attract a large shop happy crowd.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! #"!Heinen, Chris. "Heinen Creative." / How To Profit From Mobile Apps. 27 Apr. 2010. Web. 31 May 2012. http://heinencreative.com/articles/how-to-profit-from-mobile-apps!

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! Figure 5.2 Title: Smartphone Application Market to Reach US$15,65 Billion in 2013 Source: www.research2guidance.com/smatphone-application-market-to-reach-us15-65-billion-./-#+"$!

Ralf-Gordon Jahns has estimated that, “in the worldwide smart phone application market, [we] expect growth from $1.94 billion in 2009 to $15.65 billion by 2013.”(Jahns 2010)22 With the researched backed analysis from a number of professionally accredited companies, we feel that $hopE-Z’s innovative concept will prosper in this exponentially growing industry. In addition, as Wauters stated in his article, “The big surge in applications will be driven by a fast-growing number of smartphone users, which the research company estimates will increase from about 100 million last year [2009] to nearly 1 billion by 2013.”

Figure 5.3 Costs as percentage of Total Expenses

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ##!Jahns, Ralf-Gordon. "Subscribe to Our Newsletter and Get:." SMARTPHONE APPLICATION MARKET TO REACH US$15.65 BILLION IN 2013. 4 Mar. 2010. Web. 31 May 2012. <http://www.research2guidance.com/smartphone-application-market-to-reach-us15-65-billion-in-2013/>.

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We believe that this figure properly displays to the investor that the one time developmental fee does in fact take up a large portion of the initial costs. After the first year production of the application, the upkeep on the overall application will decrease. Following the production of the app, the primary costs then depend on the growing popularity and the demand for greater store indexing as well as data storage.

5.5 Advertisement Revenue Table 5.3 Advertising Revenue Advertisement Revenue

Year 1 Year 2 Year 3

Projected CPP Revenue

$7,560 $15,120 $22,680

5.5.1 Advertisement Break Down

After tracing the industry norms the average amount of revenue per click of an advertisement would be .05 cents. Considering that the average American visits the grocery store 50 times per year, we made a safe assumption stating that 35 of those visit would be either an Albertsons or a Vons. Further research stated that at any given time there are approximately 35 people shopping at any of the store’s operating hours. We estimated that of those 35 people, 25 smart phone holders would be utilizing the functions of $hopE-Z. This would give us a total of about 120 uses per day in each of the three initial stores. Totaling to 360 app uses multiplied by 35 uses a year, gives us 12,600 advertisement opportunities. Lastly, at .05 cents a click and at 12 ads an hour, that leaves us with .60 cents per visit. So putting it all together leaves us with 12,600*.60, which gives us our first year’s advertisement income of $7,560. (Goodman, 2008)23

5.5.2 Three Year Revenue Forecast

Table 5.4 Three Year Forecast Revenue Forecast

Year 1 Year 2 Year 3

Advertisement Revenue

$7,560 $15,120 $22,680

Less Expenses

($5,674) ($5,948) ($8,748)

Expected Advertisement Revenue

$1,886 $9,172 $13,932

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! #$!Goodman, Jack. “Grocery Shopping: Who, When and Where”, “Who Does the Grocery Shopping and When Do They Do It?” The Time Use Institute. October 2008.!

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As the typical venture capitalist or investor can envision, this monopolizing application combined with the growing nature of the mobile app market can make for a very lucrative investment.

With the remaining funds, we plan on spending a great deal of time researching on how to expand our exposure to the application market. In addition, we plan on taking the necessary steps to begin charging users for $hopE-Z in the longer term.

5.6 Conclusion

“It is estimated that by 2015 the mobile web will have more subscribers than the desktop web. This mass exodus to mobile means we need to modify the way we conduct business on the Internet”(Heinen, 2010)24. At the rate that the global smartphone industrty is growing, we believe $hopE-Z will not need much exposure other than the small fee to have app available in the Apple and Android market place. With the number of smartphone users growing at an exponential rate for the coming years, by default our application will prosper in the new niche we at $hopE-Z plan on creating.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! #%!Heinen, Chris. "Heinen Creative." / How To Profit From Mobile Apps. 27 Apr. 2010. Web. 31 May 2012. http://heinencreative.com/articles/how-to-profit-from-mobile-apps!

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6.0 Conclusion The Board of Executives of $hopE-Z have created a business proposal that will make our mobile application business a successful idea. We have included the Industry, the Market Analysis, Marketing Strategy, Business Management, and the Financials in our proposal. These five sections demonstrate and explain how our product is going to enter the market, how we are going to earn profit, and what opportunities we see based on the potential industry and market trends of smart phone applications. $hopE-Z will enter the market with one free version of application for the first three years. Our company will start out having subscribers to try our free version in order to build a clientele base. Then we will regularly ask our customer for feedbacks, which allows us to check our mission achievement of expanding our business, and whether or not to introduce the paid ads free version or other products. $hopE-Z can be a very successful business based on not only the emphasis convenience, but also as the demand of smart phone application grows in a rapid rate even in economy recession. Like other companies, our business requires to raise a substantial capital to make the plan work due to the huge startup cost. With the capital that we need, based on the utilization of $hopE-Z, our business will be able to compete with other application developers through our unique function of the application.

A-1

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Keith, K. Smartphone apps wield more power than you think. (2012). From http://news.medill.northwestern.edu/chicago/news.aspx?id=203312. Retrieved May 7,2012 Klima, L. Are Free Apps Like ‘Angry Birds’ Giving Advertisers Access to Your Private Information? (2012, March 20th).. from http://www.theblaze.com/stories/are-free-apps-like-angry-birds-giving-advertisers-acc ess-to-your-private-information/ Retrieved May 7, 2012. Marks, Gene. “Your Business Checklist: A Website, A Phone Number, A Mobile App.” Forbes (May 7, 2012) from http://www.forbes.com/sites/quickerbettertech/2012/05/07/your-business-checklist-a- website-a-phone-number-a-mobile-app/. Retrieved May 2012. Newman, Andrew. “Brands Now Direct Their Followers to Social Media.” New York Times (August 3, 2011) from http://www.nytimes.com/2011/08/04/business/media/promoting-products-using-social -media-advertising.html. Retrieved June 2012. Price, G (December 15th, 2011). New Statistics: The Rise of Smart phones, Apps and the Mobile Web. www.infodocket.com. Retrieved May 10, 2012. Simonite, Tom. "How Data Storage Cripples Mobile Apps - Technology Review." Technology Review. 20 Feb. 2012. http://www.technologyreview.com/computing/39764/. Retrieved May 31, 2012. Tin, Tin. Team Building In The Workplace. http://www.buzzle.com/articles/team-building-in-the-workplace.html. Retrieved May 20, 2012 United States Census Bureau (2010). Population Growth and Population Statistics. U.S. Census Bureau. Retrieved May 10, 2012. Wasserman, Todd. "Featured in Social Media." Mashable. 20 June 2011. http://mashable.com/2011/06/20/app-use-overtakes-web-use/. Retrieved May 31, 2012. Wauters, Robin. "Global Smartphone App Download Market Could Reach $15 Billion By 2013:Â Report." TechCrunch. 5 Mar. 2010. http://techcrunch.com/2010/03/05/global-smartphone-app-download-market-could-re ach-15-billion-by-2013-report/. Retrieved May 31, 2012. Zahorsky, Darrell. http://sbinformation.about.com/cs/development/a/032303.htm. Retrieved May 20, 2012.