| Children's Website Business Plan |
| | >>Note: InteliChild.com offers bright children an entertaining place to interact with each other, the Web, educators, and the world in general. It generates traffic first, valuation for investors, and eventually commerce and profits. It is a healthy place for kids to play, for parents and schools to buy, and a creative and fair work environment for employees. |
| | >>Note: The present InteliChild.com is a start-up company with four full-time employees. The company was incorporated early in 2006 as a California C corporation owned by its principal founders, at 25% ownership each. Late in 2006 (Name Omitted) Capital partners acquired 50% of the company for $500,000. The company has a single office in Bend, Oregon. The initial website is at www.coolcoolkids.com. |
| | >>Note: Carefully selected toys and games that appeal to the target market, the parents of the target market, and educators. |
| | >>Note: There should be a selection of books that appeal specifically to the parents and educators of the target market, so that these interested adults can go to this site and order books about their children. In addition, of course there is also a selection of books to be ordered by and for the kids to read. |
| | >>Note: Carefully selected software to appeal to the target market and target parents and educators. |
| | Educational institutions for children of the upper class. |
| | >>Note: As measured in unique user sessions. 100,000 unique user sessions in June, 2000; 450,000 in December, 2008; 3.5 million in 2009; and 5 million in 2010. |
| | >>Note: As measured in dollar sales per unique visit. A high of $0.58 per unique visit in December of 2008; increasing to $0.83 in 2009; and $0.92 in 2010. |
| | >>Note: As measured in ability to bring in additional investment at economically feasible valuations. We need to attract $750 thousand this year, and an additional $2 million in 2001, with valuation performance that yields attractive internal rate of return (IRR) to investors. The financial section indicates IRR of more than 100% for all investors, with larger IRR for seed, declining slightly for first round and then second round. |
| | Acquisition or Initial public offering (IPO) |
| | >>Note: In 2011, with a valuation of more than $20 million. This assumes of course the market valuations based on sales and earnings, which are relatively high as this plan is written. |
| | >>Note: InteliChild.com offers bright children an entertaining place to interact with each other, the Web, educators, and the world in general. It generates traffic first, valuation for investors, and eventually commerce and profits. It is a healthy place for kids to play, for parents and schools to buy, and a creative and fair work environment for employees. |
| | We must retain the customers. |
| | >>Note: The website has to be easy to use and quickly viewable. User satisfaction is an ultimate priority. |
| | Capitalize on the traffic. |
| | >>Note: The project will succeed if it can capitalize on the traffic that InteliChild.com produces, and turn the user sessions into dollars through the commerce site. |
| | >>Note: The sales process must be easy to administer and flexible enough to accommodate the needs of InteliChild, which is not ready to take on more employees to do so. |
| | Being a technology leader. |
| | >>Note: The e-commerce project should further establish InteliChild.com presence as a technology leader, not only returning traffic but actually bringing in new traffic. |
| | >>Note: The present InteliChild.com is a start-up company with four full time employees. We are a high-powered team of creative individuals. The company creates an Internet environment attractive to bright kids, and is planning to sell toys, books, and software to those kids, their parents, and schools. Our products will be the best reviewed in our niche. |
| | >>Note: The company was incorporated early in 2006 as a California C corporation owned by its principal founders, at 25% ownership each. Late in 2006 Name Omitted Capital partners acquired 50% of the company for $500,000. |
| | Company Locations and Facilities |
| | >>Note: The company has a single office in Bend, Oregon. Its important website and Internet infrastructure situation is explained in detail in Chapter 5. The initial website is at www.coolcoolkids.com. |
| | >>Note: In the original plan this is a detailed description of the specific toys and games, books, and software that are included on the website. This level of detail was considered proprietary and was removed from the plan for purposes of illustration. If you are using this sample plan as an example, then insert here a detailed list of your own products for your own plan. |
| | >>Note: In the original plan this is a detailed description of and analysis of other channels and sources from which the target market and parents and educators can purchase toys, games, books, and software. It describes in general some kinds of toy shops, and then specifically some catalog and web businesses that appeal to this audience. |
| | >>Note: Our answer to sales literature is the web. Within six months we should also have a printed catalog that we can send to people to go along with the web purchasing process, because some buyers will want to refer to a hard-copy catalog. |
| | >>Note: In the real plan this section referred in detail to distributors and products they carried. This detail was considered proprietary and strategic, and was omitted from the sample plan for purposes of illustration. If you are using this plan as an example, then in this section you should have detailed discussion of how the products to be sold can be purchased from manufacturers and distributors. |
| | >>Note: The InteliChild.com e-commerce site will be built on a three-tier structure. Driven by SQLTM servers and an IISTM Web server backed with bandwidth, the site will be coded mostly in ColdFusionTM and ASPTM. We will be taking our registration databases live to be able to email updates on products and the website to customers. We will offer customers the option to take themselves out of the list. |
| | The information architecture will be based on four fundamental arenas - the free valuable information arena, the product detail arena, the final purchasing arena, and the purchase administration area. |
| | The purchase arena will require a VerisignTM certificate and a CybercashTM connection. That will begin immediately because dealing with CybercashTM can sometimes be a lengthy process. |
| | The administrative arena will be hosted on mirror servers that query to the live databases for migration into local databases. This server is hidden from Internet traffic and kept under high security even within the company. |
| | The entire set-up will be somewhat costly. We will need five servers, two for in-house reasons, and three for Web hosting reasons. Two of the Web host servers will be serving traffic through ColdFusionTM and ASPTM in cluster, and the third will be a dedicated SQLTM server. |
| | >>Note: The Internet reinvents itself every three months, or even faster. Our strategy for future development is to remain positioned with enough flexibility to adapt new technologies, and adapt to changes quickly. |
| | >>Note: The InteliChild.com market has been expanding exponentially with the advances of technology in the teaching sectors and the acceptance of technology as a teaching aid. The critical component to our entrance into the market will be approval and support from the school communities - including teachers, the PTA, and special education programs. |
| | >>Note: We include ages 5-9 and ages 10-14 in our market statistics because these are the breakdowns available at www.census.gov, and we include only 10% of the total in each category. |
| | >>Note: We include 10% of the parents, assuming that leads to an average combined income above $100,000. Most of these people live in suburban areas, but the urban upper class is also a major component. [Editor note: details for this sample plan are not necessarily correct.] |
| | Educational institutions for the children of the upper class |
| | >>Note: This includes day care and private schools. Penetrating this market is excellent because it generates leads to our other targets. We include 107,000 schools in the U.S. in our table. |
| | >>Note: There is an excellent group of established customers who teach their children from home. The site will benefit greatly from the time available from this target group. |
| | >>Note: While we have plans to expand into international territory, our initial launch will target our most important market - the American upper class. We know that most of our clients drive BMW's and have very good taste - they spend money on their children because they can appreciate the technology that we have created. They also generally have high bandwidth connections, and are impressed by first-class design. |
| | Competition and Buying Patterns |
| | >>Note: The primary InteliChild.com strategy is to build an impressive destination website. The marketing of the site will be built around the core value that the site will offer. Although our competition has built a simple store for ordering the product, the InteliChild.com site will be reviewed by Web award companies as a great destination. We will build our revenue and market share around this traffic. |
| | >>Note: Our business model is based on the sales of our products over the website. Because the site is also intended to increase brand equity and awareness, we are building for high traffic. Our model requires giving users an excellent free experience and to develop trust to increase sell-through. We plan to lose money for at least three years while we build traffic and develop our position for the long-term future. |
| | Website Marketing Strategy |
| | >>Note: Our first class design and product quality are critical to our positioning as a dot-com company - we should be the best reviewed website in our category, and that will become the key to future sales. In the past, our design work and marketing has not matched our better-funded competitor. However, the core experience for the children has always been better, and with a new design team and a round of financing, the InteliChild.com company is ready to grow with the market. InteliChild.com will distinguish itself from its competitor as a full learning center, rather than just a store front. |
| | >>Note: Because InteliChild.com's target customers are all affluent, we have the luxury of using the latest technologies to impress the visitors with excellent design and animation. We plan to release the site entirely in Shockwave™ format as almost 90% of our visitors will already have it installed. |
| | We will carry on the colorful and extremely well branded design of our company literature and logo - the decisions on basic aesthetics will not get in the way. The site will have a colorful and intelligent design, taking the ad campaign and product art into an interactive medium on the Web. |
| | >>Note: The InteliChild.com e-commerce site will be built on a three-tier structure. Driven by SQLTM servers and an IISTM Web server backed with bandwidth, the site will be coded mostly in ColdFusionTM and ASPTM. We will be taking our registration databases live to be able to email updates on products and the website to customers. We will offer customers the option to take themselves out of the list. |
| | >>Note: The traffic forecast is based on increasing sessions, increasing page views per session, and increasing orders per session. The bottom line called "sell-through" is the overall dollars in order per user session, an important indicator that should be increasing over time. |
| | Strategy and Implementation Summary |
| | >>Note: Our producer, Sonny XXXX, will head the InteliChild.com project. This full-time position will oversee all activities for the project. Sonny interfaces with each partner and staff member. This places Sonny in the role of administrator and coordinator of development and marketing activities, but also requires him to implement training and individual development activities for each partner. We all recognize the challenge Sonny faces as an employee, coach, and supervisor. |
| | >>Note: We need an agile organizational structure that recognizes the need for a smooth flow of ideas and implementation between sales, marketing, and website development. We can't allow the team to think as if these were separate functions. |
| | On the surface, however, we have the president dealing with three direct reports: admin/finance, sales/marketing, and web development. In fact we are not going to manage with a strict hierarchy, because we need to emphasize the team. Still, particularly as we grow in size, structure is necessary. We will want to preserve decision-making power, and the ability to act, rather than trying to do everything by consensus. |
| | >>Note: We agree that the most obvious weakness at this point is the lack of seasoned professional management with experience. This is what the investors call the "gray haired factor." We will be looking to add more experience to the team as we build our administrative and financial capabilities. |
| | >>Note: This is an Internet venture that, of course, depends on the developing financial prospects of the growing Internet world. To make it work financially, we need to increase valuation on schedule to bring in substantial additional capital. |
| | Continued growth of Internet usage. |
| | >>Note: We accept published forecasts that say 4% of the world's population presently uses the Internet, and that will grow to 11% by 2008. That's strong growth. |
| | No e-commerce disaster scenarios. |
| | Continued support of financial markets. |
| | Exit Strategy and Financing |
| | Projected Profit and Loss |
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