Business Start - Up Plan Ahmed Hatem And Rayaan khan ST. FRANCIS XAVIER CATHOLIC SECONDARY SCHOOL 1145 BRONTE ST S MILTON, ONTARIO L9T 8B4 November 25, 2020 November 25, 2020 November 25, 2020 Relpo Page 1 Table of Contents Executive S ummary ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 2 Problem ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. 3 So lution ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. 3 unique Value Proposition............................................................................................................ .................4 Competitive Advantage ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 5 Customer Segments ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 5 Channels ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 6 Revenue Stream s ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 6 Cost Structure ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 7 Key Metrics ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 9 Conclusion ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 1 0 Bibliography ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 1 9 Page 2 Executive Summar y Replo is a phone case company that aims to clean up the planet through using reusable plastic products. Single - use plastics cause major pollution and cause major health impacts within our ecosystems and bodies. Plas tics can carry diseases which infect our waterways and marine life. When we ingest water and fish from these regions, the effects of plastic pollution are transferred to us. This results in health implications that plague us for years. A large contributor of this issue is single - use plastics. Common products infest the ecosystems and leech into the environment. A common plastic product that does this is phone cases. These cheaply made cases are broken and discarded every day. This is why we are manufactur ing a phone case made from 100% eco - friendly materials that solves both problems. Our case is made through a manufacturing process that ensures quality and impeccable design. We use specialized materials which reduce the impact of plastic on the environmen t and protect the phone from all angles. Our company uses recycled plastic in the making of our phone cases. Materials such as D30 and marbled plastic are used to create a seal of protection around the phone as well as a beautiful look and feel to the p roduct. We also use a unique buy - back program which strengthens customer relations and increases the rate of returning customers. We integrate the community in our work by organizing clean up events. These clean up events improve brand recognition, reput ation, and allow us to gather materials for a very low cost. In addition to this, we are also donating $2 per case sold to waterdog , an organization that aims to provide clean water to everyone around the globe. This also helps us get to the root of our pr oblem by tackling world issues as a united team. The customers we are targeting are those in Canada and have similar interests to the company. This means we are looking for a consumer who is interested in the environment. This is mostly found in millenni als. Our ideal income range is from $30,000 to $100,000. We can target people from any race since we are an inclusive company that services all people in Canada. We will take advantage of social media to advertise spending $560/month additionally it will cost $5.00 per order to distribute to the customer, regarding human resources it will only be the two of us in the beginning, we will also be investing funds into equipment to manufacture the case, as well as maintain the website. Our key metrics consider various operational statistics, as well as product measures. Our operational metrics include Customer Acquisition Cost, Post engagement rate as well as Gross Margin. For our product metrics we analyze important feedback fr om customers regarding Durability and Design and make the appropriate changes to our product to provide the best version possible to our consum e r. Page 3 Problem P lastic pollution is an issue that comes from the overproduction of plastics and lack of management of its waste. Single - use plastics and its unrecyclable products get discarded in the environment and break down to become microplastics, which are pieces of plastic smaller than f ive millimeters in length ( NOAA, 2020). These microplastics can be found in nearly everything from water bottles to food packaging. They are extremely dangerous as they have immense health impacts due to their ability to carry microbes, which infects our w ater systems and marine lif e. This directly harms us when we consume the water and fish found in these systems. This results in them negatively affecting our endocrine system, which controls our metabolism, heart rate, digestion, temperature, general mood, ability to sleep well, sex ual function, fertility and reproduction, tissue development and function (Greentumble, 2018). The biggest factor that contributes to this issue is the lack of waste management systems that allows plastics to be dumped and never used again. In the p ast few decades, we have created a major issue known as the Great Pacific Garbage Patch, a 1.6 million Km2 ocean region riddled with plastics. This is leading to a devastating effect on the local marine life, which consumes the p lastics due to them confusi ng it for food. The impact on this marine system makes its way back to us when we utilize the resources from these regions. The problem has grown to the extent that these microplastics are now ending up in delicate environments u ntouched by humans. The pla stic crisis has integrated itself into the ecosystem and is slowly reeking havoc across our planet. It is a dire problem that we have failed to take seriously and will cause irreversible damage to the Earth unless we act quickly. A major contributor to the plastic waste problem is cheaply made plastic products such as phone cases. The average consumer uses a phone for just over two years and replaces their phone case two to three times within the lifespan of that phone. These cas es cannot be effectively recycled, causing them to be discarded into landfills. This happens because the cases used are of low quality. They are made to withstand only a few drops. The cases are made from poor materials, so when it meets an opposing force, t he shock applied is not absorbed by the case but instead passed onto the phone, which can damage the internals quite badly depending on the force applied. Solution The most engaging solution currently available to consumers worldwide is using environmen tally conscious alternatives. 100% of the plastic used in our case is recycled. The case itself is made from 98% recycled plastic and 2% D30, a material that strengthe ns the durability of the product. This production method contributes greatly to efforts d irected at cleaning up the environment. Page 4 Each case is made from 40 - 50 plastic bags depending on the size of the case. This allows for an incredibly dense structure. This adds to the credibility of the product and contributes to the proper recycling of wast e plastics. In the first year alone, we w ill save an incredible 43 Kg of plastic. By the end of the fifth year, we project to successfully divert over 275 Kg of harmful plastic. Since our five - year plan involves product diversification, we will even be abl e to save thousands of kilograms of plast ics. We will be introducing a buy - back program called “Replo Repurposed” which increases the impact of our eco - friendly efforts. This ensures that our cases can be recycled as opposed to being thrown out like any r egular phone case. Furthermore, we will begin b y making cases f or all iPhone starting from the iPhone 8 and up, and for all Samsung phones starting from the Samsung Galaxy s10 U nique Value Proposition The unique value p roposition is based within the environmental impact of the phone case as well as its superior durability. The Replo case is not like any other phone case on the market. It is produced from fu lly recycled plastic acquired from the environment through collec tion efforts in several neighbourhoods. The pattern that heat treated plastic produces is one of a kind; it inspires creativity in its smooth yet elegant curves as it unlocks the imagination and interpretation of each beholding individual. The images on th e right display the characteristics of our recycled plastic. Since we plan to use recycled materials, we will look to involve local communities around the country in cleanup initiatives of be aches and parks. This will be done in collaboration with local mu nicipalities to promote recycling as well as the business. We will analyse the plastics and collect viable one to be used as production materials. The other unique value proposition is longe vity, both in our products and customers. We aim to achieve a hi gh percentage of returning customers through the “Replo Repurposed” program, which allows past customers to upgrade to a new phone case at a discount of 40% when they purchase from us again. T his occurs when the customer sends us their old case, and we use it as one of our materials. Depending on the specifications of the new case ordered by the customer, we may need to add more recycled plastic, which helps the environment and the customer. We will use these materials through the heating process and insert them into the mold where the new case will solidify. Once this is finished, we will ship the final product back to the customer. Page 5 C ompetitive Advantage The Relpo phone case has key features that give it a clear advantage over all other competitors. Firstly, our case uses recycled materials in the production process, which aligns with our vision of eco friendliness and making environmentally conscious alter natives to single use plastics. These materials help provide a cleaner environment and a much more durable product. Additionally, our manufacturing process uses extensive methods such as employing a range of machinery including but not limited to: a hydrau lic press, heating systems, and CNC molds. This process is fine tuned to allow a yearly amount of over eight metric tons of plastic to be made compatible with the repurposing and designing plans. Material Advantages: 1. The case is 1mm thicker than the phone, with an extended lip over the front and around the camera to shield it from drops. 2. The corners of the case are reinforced with a material known as D30 (Polyborodimethylsiloxane), which is a non - Newtonian fluid, meaning it can shift between solid and liqui d states of matter. It solidifies at any time of impact, allowing it to absorb and disperse the energy transmitted into it more effectively than other materials. We conducted a drop test which consisted of dropping a phone equipped with a Replo case from v arying heights, the highest of which was 2.5 metres. After 50 drops, we concluded that the phone was not in any way harmed since it had the Replo case on it. Furthermore, the case was not even scratched. This makes our case very useful since the average pe rson drops their phone 4 times in a week according to a new study of 2,000 participants (SWNS, 2019). C ustomer Segments Our typical customer is Anita. Anita is a Caucasian female in her mid - 20’s. She resides and works in the GTA region of Ontario. She is a secondary school teacher and earns a yearly salary of $62,895.00. She is an amateur environmentalist and participates in initiatives such as carpooling and using reusable bags. She also loves to spend time outdoors with her friends and her dog, Clover. A nita has a passion for social justice and tries to incorporate this passion into all aspects of her life. This is why she takes steps to reduce her waste contributions. A more responsible alternative to using single - use plastics is by substituting them wi th multi - use plastics products. She has shown interest in purchasing recycled and reusable accessories for everyday objects such as her phone case. She is our ideal customer because she has the same interests and goals that we do. Because of this, we are a ble to reduce our customer acquisition cost when marketing to customers that have a mission similar to ours. Our marketing algorithms and strategies allow us to target customers like Anita so that they are able to be informed about our products and choose us over competitors. The broader range of customers are those who use technology most often. From the survey that we conducted, the most likely customers are millennials. Our target market lives in Canada. In our future steps, our target market will incr ease to locations that involve North America as a whole and Western Europe; they earn an annual income of $30,000 to $100,000 CAD. Our customer gender outreach is split into 60% female and 40% male. Page 6 Channels We will interact with our customers through a variety of mediums based on our goal. For sales purposes, we will use e - commerce channels such as our website coupled with Facebook Marketplace. As the business grows, we anticipat e to partner with Amazon to sell the case on their website as well as ours to increase outreach. We will use distribution channels such as Post Ca nada to ship the product to customers. In future years, we will take advantage of company growth by selling in other countries in North America and Western Europe as we can ship to them through UPS, FedEx, or DHL. For communication purposes, we will use social media platforms such as Facebook, Instagram, Twitter, and Pinterest for promoting products and intera cting with customers to facilitate their experience with these products. We will also use social media in accordance with email to respond to any c ustomer inquiries about the product and purchasing/shipping procedures Revenue Streams The Relpo company will follow a transaction - based revenue model in which the customer performs a one - time payment for our product through our company’s website. The price per unit for our phone case is $26.99 CAD. This price was determined from an independ ent survey that revealed 73% of consumers were willing to spend $20.00 - $29.99 for a phone case while 22% were willing to spend $10.00 - $19.99 for a phone case. Customer Lifetime Value: A customer lifetime value is the value of a customer through the m eans of financial contribution to our company over the period of their lifetime. The average customer lifetime value for Replo is $91.77 if a customer opts to use the discounted buy - back program. F irst year Revenue Over view Months Jan Feb. Mar. Apr. May June Revenue $ 5 39 .80 $809.70 $ 1 ,214.55 $1,75 4 .35 $ 2 ,429.10 $ 3 ,238.80 Months July Aug. Sept. Oct. Nov. Dec. Revenue $ 4 ,183. 45 $ 5 , 26 3. 05 $ 6 , 747.50 $ 8,636.80 $ 10,796 $ 1 3,495 Gross Margin – First Year Revenue (12) Months 59,108.10 Cost of Goods Sold ( $ 8 ) $17,52 0 Gross Margin $41,588.10 Page 7 Cost Structure Social Media Advertisin g Social media adverti sing is crucial to our campaign as it gives us access to a database of customers. Data collected from a Facebook test campaign which ran at $5/day showed that we have an estimated reach of ±60 people per day who have similar interests as the company. The goal of advertising through social media is to allow the various platform algorithms to collect data, which allows us to identify the types of users that would be interested in the Relpo phone case. Once it has enough information, it will be able to genera te a custom audience for us to advertise to. Product Review s 0 2000 4000 6000 8000 10000 12000 14000 16000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec REVENUE (CAD) MONTHS Revenue Per Month (First Year) Revenue Profit 0.00 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 120,000.00 140,000.00 160,000.00 180,000.00 2021 2022 2023 2024 2025 YEARS Predicted Revenue Per Year Page 8 Product reviews are a great marketing tool. We do not intend to use it directly for the purpose of sales, but rather as a form of credibility and promotion. It will also provide us with essentia l marketing material as popular influencers endorse our product, we can gain customer exposure and assurance Google Search Optimizatio n This form of advertising places our website and social media link at the top of search engine pages that relate to our product and mission. This allows us to gain insight for click rates and promotes our product as the best one to consumers 5 - year pla n Over the next five years, we will continue to re - invest our profits back into the business. After the first two years, we will be able to grasp a solid understanding of how our product is best manufactured, sold, and distributed. We will look to purchase higher - end equipment and a larger workspace to improve product quality and manufacturing efficiency. We will also be able to adjust the sale price while retaining customers and reduce cost of goods sold in order to maximize profit P art A) M onth ly Customer Acquisition Cos t Breakdown Platforms Costs Run time Customers Acquired Total Expenses Facebook Advertising $5 per day 1 month 10 $150 Pinterest Advertising $5 per day 1 month 10 $150 Product reviews by: a) G ittemary Johansen b) Samantha Nicole $200 $50 (once) (once) 25 5 $150 $50 Google Search $1 (per click) $2 max per day for 1 month 10 $60 CAC = $560/60 CAC = $9.33 Part B) Di stribution Cost P er Unit Shipping via Canada Post $ 4 .50 Custom Branded Eco - Friendly Packaging $0.50/box Labels (free through UPS) $0.00 Total $ 5 .00 Part C) Human Resources Throughout the first year of bu siness, there will be no payments made under the labor fee In the second year , Relpo will begin to pay two emplo yees $1 6 .99 /hour , which is the livable wage in Ontario . Salaries will be revaluated every fiscal year Part D) Additional Expenses Sho pify Website Plan $79/month Page 9 Industrial Heating System $1000 10 Phone Case CNC Molds ($150 each) $ 1 , 500 Hydraulic Press $1,899.99 Direct Thermal Label Printer $ 199 .99 Electronic Price Computing Scale $45.20 Product Advertisements $ 299/month Total $ 3944.18 + $ 378 /month K ey Metrics Operations Metric s • Customer Acquisition Cost s o CAC is an important fiscal measurement that can convey how effective our ads are performing. The lower our CAC, the better we are performing in terms of marketing. If the CAC is increasing, we can alter our marketing strategy through changing the wording, graphics, and layouts until we get a consistent and realistic result. We can measure CAC alongside the customer lifetime value, this data will be used to determine where it would be best to prioritize our marketing budget • Post Engagement Rate (Social medi a ads) o PER is the percentage rate of how many customers are engaging with our ads. It is calculated through dividing the number of engagements by the number of impressions. This number can provide us with insight on whether users of social media fi nd our ads interesting, allowing us to determine next steps for marketing • Gross Margi n o Continually tracking gross margin will help to ensure that we are running at a sustainable and profitable rate Product Metric s • Durabilit y o The Relpo case is designed w ith durability being the top priority. Through our trials, we have found our product to have excellent durability as it shielded a phone from 50 consecutive drops at varying altitudes. This will determine our company reputation and the desirability of our product. As we expand, we will be conducting more tests and improving current products to ensure that our company is dynamic and well reputable • Desig n o The look and feel of the case are especially important since the consumer will be in contact with it every time they use their phone. During our first phase of sales, we will conduct a sample group and determine how satisfied they are with the look and feel of the case. We will implement this feedback about the look to make the product desirable for a majority of customers Page 10 Conclusion Replo aims to combat the ever - growing problem of plastic waste and its impacts on our health and environment. We do this through employing a revolution ary production method that allows us to reuse plastics as opposed to throwing them away. This promotes the use of environmentally conscious alternatives while allowing for a reliable product to be used by many customers. Our company is unique in its mis sion to make products that give back to the environment. We offer an exclusive buy - back program called “Replo Repurposed” that retains customers for years. We use 100% environmentally friendly materials that act to give the case a reinforced structure idea l for phones. Our interests align with those of millennials and environmentalists. This allows us to target a larger market of people and increase product exposure. We will be using a variety of channels to interact with our audience through sales, commu nication, and shipping. Our estimated income within the first year is $59,108.10; We will continue to have a gradual growth over a five - year plan. Our cost structure involves spending just above $4,000 in our first year. The Relpo company is seeking a lo an of $5,000 at an interest rate of 2.99 % to be paid back over a 24 - month period. The funding will be used to buy equipment for production, packaging, marketing, shipping, as well as any overhead fees. The costs are broken down in the charts, for the rela ted stuff. Additionally, the funds will be used to run our marketing campaigns for the first 3 months, allowing us to collect necessary consumer info. Page 11 B ibliography Parker, Laura, and Illustrations by Jason Treat. “Fast Facts about Plastic Pollution.” National Geographic , 20 Dec. 2018, www.nationalgeographic.com/news/2018/05/plastics - facts - infographics - ocean - pollution/. Swns, SWNS. “Americans Drop Their Phones at Le ast Four Times a Week.” New York Post , New York Post, 15 Nov. 2019, nypost.com/2019/11/15/americans - drop - their - phones - at - least - four - times - a - week/. www.ecoenclose.com/shop/boxes/corrugated - boxes/ Parker, Laura. “A Whopping 91% of Plastic Isn't Recycled.” National Geographic , 20 Dec. 2018, www.nationalg eographic.com/news/2017/07/plastic - produced - recycling - waste - ocean - trash - debris - environment/. k, Cammarota. “Plastic Pollution and How It Affects Countries.” BORGEN , 12 Dec. 2018, www.borgenmagazine.com/plastic - pollution - and - how - it - affects - countries/. US Department of Commerce, National Oceanic and Atmospheric Administration. “What Are Microplastics?” N OAA's National Ocean Service , 13 Apr. 2016, oceanservice.noaa.gov/facts/microplastics.html. https://www.gomi.design/portablecharger/p/gomi Karlson, Karola. “12 Business Metrics That Every Company Should Know.” Scoro , 14 Nov. 2019, www.scoro.com/blog/12 - business - metrics/ Greentumble. “Serious Effects of Plastic Pollution on Our Health.” Greentumble , 29 Aug. 2019, greentumble.com/serious - effects - of - plastic - pollution - on - human - health/.