I need these parts for a business plan assignment. about the one-page explanation for Revenue model and pricing strategies (10%) • Describe your revenue model (with convincing arguments to justify yo

Business Plan - Final

Executive Summary(2 page, double spaced): Robin/Julien/Jessica

Problem/need solution: Robin/Jessica/Julien

Competitor Analysis and Differentiation: Julien

Customer profile/market size: Jessica

Revenue model and pricing strategies: Syed

Basic Financials: Syed

Final Project: Short Business Plan

The Shovel-lite

ENTR 2020 / 2030 D01

Group 10

Julien Dupas - 7841383

Syed Irtaza - 7833389

Jessica Tsai - 7884583

Vishavbir Singh - 7861399

April 23rd, 2021

Executive Summary

-major actions to test business idea (interview, survey, prototype)

Some of the actions that we have taken to test our business idea included surveying potential customers, OTHER IDEAS??

-describe future milestones by using time frame (action plans)

- Partner with local snow shovelling businesses, create prototype booths for customers to try it hands on and get a better feel for the shovel design. OTHER IDEAS??

-final decision: go or no go or need further test → Would need further testing to determine a final decision as there are already many many competitors in the market. Therefore, further testing would allow us to determine whether or not our company could be profitable and survive long-term.

The Shovel-Lite is a snow shovel manufacturing company that will be operating in Winnipeg, Manitoba. In a single winter, shoveling a typical driveway can involve moving more than 25 tons of snow. (https://en.wikipedia.org/wiki/Snow_shovel

) A major problem that the market is facing is the difficulty finding the right shovel to accommodate all their needs. When trying to find a good, strong shovel, certain factors such as price point, quality, weight and size play a large factor in the final decision making process. To provide customers with cheaper and better quality snow shovels is the motto of our company.

Some major actions need to be taken before launching our product in the market. Before designing the product, online surveys and interviews will be held, to understand the needs of our target customers. This will help our company authentically connect with our customers. We understand launching a new product is not easy. So, one thing we do beforehand is product testing, testing if the shovel breaks and improving the product is our strategy. Collecting feedback and insights will help us get closer to delivering the expectation we intended. Taking a long time to perfect our product before releasing the product in the market can sometimes lead to failure. To avoid that situation, we will release the product on a small scale or release a prototype and start working on the improved version. Keeping a wide eye on feedback from customers will help our company gain customer loyalty and trust.

Part of growing our small business is to find new customers. During the initial stages, we might not have quick success. It can make our job harder. To get around, Developing relationships with other small businesses is a great way to expand our business model. It will boost our brand recognition value. And, we can leverage their already existing business relationships to build trust in our brand and attract new customers along the way.( https://www.freshbooks.com/blog/business-relationships-partners

) Advertisement costs will decrease and help our product to develop significantly with their experience. Better deals and offers will be provided to our partners to enhance our relationship.

The Problem/Need and Solution

Snow shoveling is a strenuous activity that can lead to many injuries, specifically back injuries. In a study conducted by the American Journal of Emergency Medicine on injuries caused by snow shoveling, it is estimated that more than 11 000 Americans are treated annually for snow shoveling injuries, and of the injuries studied, 54.7% were soft tissue injuries, and lower back injuries accounted for 34.3% of cases studied (Watson, et al., 2010). Unfortunately, snow shoveling is not an activity that can be avoided by people who live in snowy climates. One of the main causes of injury from snow shovelling is poor posture as back pain is often onset by users having a rounded back when lifting heavy amounts of snow (Stock, 2018). For people at a higher risk of back pain, this problem is even more pertinent. The current solutions on the market are not providing a proper solution for people at a higher risk of back pain. An activity as necessary as snow shoveling should be safer for everyone who takes part, and our product aims to satisfactorily address this issue.

Our solution is to launch a new snow shovel design, which emphasizes proper posture in its users and offers better back support. Our shovel will be made out of carbon fibre, which has multiple benefits to it. Carbon fibre is a light weight material which reduces the amount of extra weight that users must lug around. Additionally, carbon fibre is very durable with high structural integrity. To further offer better support for users’ backs, our shovel will be made with different shaft lengths, with one version of the shovel having an adjustable shaft length. Using a shovel that is the correct length promotes proper posture, and reduces the risk of back injuries.

Competitor Analysis and Differentiation

When looking to create a new product or service, an important step is to have a look at who might be some of your competition in the market. Based on the research that we have done, we have found 3 potential competitors that could have an influence on our business. The first being The Sunkorto Rolling Snow Shovel. This shovel is made using composite material, with the addition of 2 wheels. The idea here is that the wheels would help remove the strain of the shovel from the back. However, upon reading reviews of this shovel, many have stated that the wheels do not work very well and that their backs end up in more pain than originally. The next potential competitor would be the Snow Joe Shovelution. This shovel is made using aluminum and is designed with the addition of a second handle that sits at the bottom of the shaft. The issue here is that with the handle being closer to the bottom, the user is forced to bend down further than when using a regular shovel. This means that when using this shovel, the strain on your back increases and reviews have also stated that the handle puts lots of strain on their arms. Finally, our third potential competitor in this market would be the True Temper Snow Boss. This shovel is also made of aluminum and includes multiple grips for the user. However, similarly to the Snow Joe Shovelution, this shovel tends to also add lots of strain to the users back and arms as the added grips sit further down the shaft of the shovel.

As there are many reported cases each year of back related injuries, an estimated 11 000 cases in America (Watson, et al., 2010), the need for a new shovel is quite high. What we are doing to solve these issues is creating a new design for the snow shovel. As compared to our competitors, this design would be made to accommodate individuals who suffer from back pain and would include different sizes to accommodate all heights, as well as an adjustable version for those who prefer having options. We are going to create a shovel that has a strong handle with good grip and put in lots of time into research & development of a stronger and lighter shaft, using carbon fiber, that is designed to help avoid back pain. We chose carbon fiber as the material because we wanted to keep the shovel light. “Carbon fiber is much lighter than steel and considerably lighter than aluminum so it’s a great choice if you are manufacturing something and want to keep the weight down.” (MB, 2014) Also, we want to make sure that the blade of the shovel is well designed using materials that will last, as many of our competitors use materials such as cheap plastics that tend to break easily or metals that can be too heavy for some users. Some of the benefits and advantages of our product compared to our competitors would include better support for the user’s back and lighter materials, reducing the risk of injury. In addition, the strong materials used to make the shovel, combined with the option for different sizes will be a strong advantage as compared to other companies. Lastly, compared to other shovels in the market, our product is lighter, more durable and it helps the user move easily while shoveling.

Customer Profile and Market Size

Our product is designed specifically for people at a higher risk of back injuries and back problems. Factors that increase the risk of back pain include getting older, having a family history of back pain, sitting for long periods, and lifting or pulling heavy objects (Healthwise Staff, 2019). Seeing as snow shoveling involves lifting and pulling heavy amounts of snow, it becomes even more vital that we address the other factors. Because of this, our target customer base of people with a higher risk of back injuries specifically includes elderly people, people with less overall strength, people who live sedentary lifestyles, and taller people.

Based on the Saskatchewan Health and Back Pain Survey, it is estimated that 11% of the adult population was disabled by lower back pain within a 6 month period (Cassidy, 1998). We can see that back pain is already a very common problem without the added stresses of shoveling snow. So evidently there is a large market of people who would benefit from a snow shovel that is designed to prevent back pain. To get a better sense of the exact market size, we will look specifically at those who fit the more precise characteristics in our customer profile, and not the larger population of people who experience back pain. Looking at Canada specifically, with a population of about 37 million people, we can break our customer profile into different segments to have a better estimate of market size. One segment of our market includes elderly people, which accounts for approximately 6.8 million Canadians (Statistics Canada, 2020). Another segment would be taller people. For a shovel to be a proper length, the handle should reach the user’s chest (Back Clinics of Canada, 2017), and with the average shovel being about 57 inches, this best accommodates people who are 67 inches tall. However, the average height of men 20 years or older is 69 inches (Langtree, 2019). Therefore, our shovel would be marketed towards the entire male population that is taller than 67 inches. In these two segments alone, there are millions of Canadians that would evidently benefit from our design of snow shovel.

Revenue Model and Pricing Strategies

The company aims at making its revenue from the sales of its products. It implies that the major source of revenue will be generated through he sales of the products that the company will be producing. Besides, it is projected that with the advertisement strategy, the company is likely to make a sale of upto $ 18 thousand in a month. It is something that is believed to be possible being during the peak season when the snows are being experienced.

Alternatively, the company will be seeking to raise revenue through its partnering up with local shoveling companies where tools can be hired out to do advertisements and road shows. The main idea is to make good use of the property to generate more revenue for the company, helping attract more investors and donors who can help the company raise more funds that of course can be used to expand the company being that it is projected to be a multinational company. Again, the company is looking for potential and persistent donors who can donate and keep the company running.

Moreover, the issue of snow being a national disaster, the company wishes to get some support from the head of states as grants to help proceed with its activities. Other state organizations and firms can also give their grants to the firm based on the community-based programs that the company will be giving to the members of the society. Grants and donations raised by the company are to be used for expansion and diversification of its activities to help it continue to touch more lives in the future.

Pricing

The products are to subsidized and being that the company is within the community, those purchasing from the company directly will get a discount of 30% while those purchasing from retail outlets opened within the community will be given a discount of 18%. The prices on promotion will be much cheaper and the promotional sessions will be done on a quarterly basis. The prices of shovel from the company therefore will be $ 30. Other products produced will also range within the same range with the most expensive product being sold at $ 50.

The price strategy that the company will be using is to counter the competitors. It thus implies that the company will have its prices subsidized and lowered. In the markets the price of a shovel goes at $ 50-75 and this is just a simple shovel. The company intends to take advantage of this by giving the clients a price subsidy as described above. It is this that will make it gain a good entry in the market and win the trust of most clients. Besides, the products being produced are better and of high quality than those of the other competitors or those found in the markets.

The company shall also have promotions and exciting offers to the clients like buy two get one free. It is a strategy that will help the company have increased sales and develop a standard pricing for the products.

Basic Financials

The company is expected to begin with at least 25 workers which will be increased periodically as the company continues to grow. The workers to be employed will have different capabilities and specializations hence their salaries will differ based on the various roles and qualifications costing $3,000 . Machineries, land and electricity will cost $7,000, the raw materials $5,000 and advertisement costs $ 5,000 . Therefore, based on this the startup cost for the company is projected to be $ 20,000.

Key drivers of revenue and expenses

The key drivers of revenue for the company will be the company’s trademark which is something that will be built periodically as the company continues to transact business by delivering quality products at an affordable price. Products is one key driver of revenue to the company that will be used to generate income once sold and the sales increase significantly. Profit is also another key driver of revenue, profit is the difference between the revenue and expenses. The company is envisioned to reduce expenses as it grows and diversifies its operations. Another vital driver of revenue in the company is its assets. Assets are all that the firm possess. The assets whether tangible or intangible can be used by the company to generate revenue. People are also key in generating income and expenses to the company. The workers and the consumers play an important role in the company’s life since they are the people who produce, market and at times consume the products.

References (APA 7th edition)

Back Clinics of Canada. (2017, November 9). Snow Shoveling and Back Pain. Retrieved From: https://www.backclinicsofcanada.ca/article/snow-shoveling-back-pain/

Cassidy, D. J. (1998, September 1). The Saskatchewan Health and Back Pain Survey: The. . . : Spine. LWW. Retrieved from: https://journals.lww.com/spinejournal/Abstract/1998/09010/The_Saskatchewan_Health_and_Back_Pain_Survey__The.12.aspx

Farkas, J. Q. (2021, February 5). The Best Ergonomic Snow Shovel for a Bad Back. Backyard Boss. Retrieved from: https://www.backyardboss.net/best-ergonomic-snow-shovel-for-a-bad-back-reviews/

Healthwise Staff. (2019, June 26). Back Problems and Injuries. HealthLink BC. Retrieved from: https://www.healthlinkbc.ca/health-topics/bacpn

Langtree, I. (2019, November 29). Height Chart of Men and Women in Different Countries. Disabled World. Retrieved from: https://www.disabled-world.com/calculators-charts/height-chart.php

MB, A. (2014, February 17). The benefits of carbon fibre. MB Fibreglass. Retrieved from: https://www.mbfg.co.uk/blog/carbon_fibre.html

Statistics Canada. (2020, July 1). Seniors and aging statistics. Statistics Canada. Retrieved from: https://www.statcan.gc.ca/eng/subjects-start/seniors_and_aging

Stock, Abigail. (2018). Back Problems Associated with Snow Shovelling. HeatTrak. Retrieved from: https://heattrak.com/blogs/homeowner/back-problems-associated-with-shoveling-snow

Watson, D., Shields, B., Smith, G. (2010, March 26) Snow Shovel Related Injuries and Medical Emergencies. The American Journal of Emergency Medicine. Retrieved form: https://www.ajemjournal.com/article/S0735-6757(09)00371-4/fulltext

Appendix