Entrepreneurship (Business Plan)

“COSY: Create your Own Style by Yourself” Funeral intermediary business in Japan

The Opportunity

The Opportunity

Demand in the consumer market is growing.

Most of the operators are small.

Consumer demands are getting diversified.

Internet is penetrating into seniors.

Funeral consumer market （ Japan)

4

Total sales of 2,190 operators

-> 1,304 billion yen -> 0.9% up vs. 2008

2007 2008 20091240

1250

1260

1270

1280

1290

1300

1310

Sales of Funeral Industry

(Source: TEIKOKU Data Bank)

(Billion yen)

(Stable demand in the market)

2007 2008 20091000

1020

1040

1060

1080

1100

1120

1140

1160

Going up to 1.66 million

in 2060 (Expected)

(1,000 people)

Number of Death

Funeral operators(1/2)

5

Chart Title

1 - 9

10 - 49

50 - 99

100 - 299

300 -

Number of Employees

59.7% of operators are small companies

which hasless than 10 employees

(Most of the operators are small ) The share of 16 large companies is only 0.7%

32.6 %

59.7 %

Funeral operators(2/2)

6

(2 major groups & new operators) Operators dealing with funeral onlyPrice is high

New operators offering the package pricePrice is low

Operators dealing with both wedding and funeralPrice is high

Consumer needs segmentation / target

7

Leave all to you

Make it simple

Express myself in my own funeral

Don’t want to bother

families

I don’t prepare

Prepare by myself

StandardCustomized

Our Target!

Target of “Specialist Operator & Ceremony

Organizer”

Target of “New Operator”

Target of “Specialist Operator & Ceremony

Organizer”

Internet Use among Seniors (Japan)

8

Demographics: 8,393 aged over sixties

Demographics: 1,064 aged over sixties

Demographics: 1,064 aged over sixties

Source: http://whatjapanthinks.com/tag/seniors/

Our Products / Services

Strategy

Business Model

Our Products / Services Offering online one-stop-shop services & contents as a free SNS

platform supplier Can provide integrated services by connecting and collaborating with

small funeral operators Can get revenue from funeral operators and advertisement as a margin

10

SNS platform

Aged Japanese and their families

Small funeral operators

Advertisement suppliers

simplified funeral

Customize as we like

Integrated!

Inbound marketing!

SWOT analysis

11

1. First mover

2. Platform business

3. Low cost operator

1. Aging society

2. Diversified customer needs

3. Penetration of SNS

4. Increase of small funeral operators

share

1. Still no customers

2. No much knowledge on funeral

business

3. Small capital

1. Easier launch for popular SNSs to this

market

2. Low IT literacy of small funeral

operators

Strengths Opportunities

Weaknesses Threats

Strategy

12

ConceptLow cost first mover SNS with rapid growth

Product Price

Place Promotion

SNS platformFree for end users

Cost advertisers and funeral operators

On the internet so that we can connect with the other

SNS platforms

Viral marketing through SNS communities

COSY

Family bulletinboard

Memory board

Evaluation offuneral operators

Customized planningservice

Business Model

13

CustomersCustomer Relationships

Channels

ValuePropositions

Key Activities

Key Resources

Key Partners

Cost Structure Revenue Streams

• Aged Japanese preparing for end-of-life event

• Offers online One-Stop-Shop services & contents

• Facilitates referral process between users & operators

• Funeral operators & suppliers

• Advertisers

• Provides online advertising space

• Funeral operators & suppliers

• Nursing/ aged homes, hospices & day-care

• Community centers, Ward offices & NGOs

• The Internet• Step-down care centers

• Ward offices

• Self-service

• Single/ multiple transactions

• Platform

• Site’s manager & staff

• Acquire new customers• Maintain site & develop contents

• Staff salaries

• System maintenance & software depreciation

• Advertising & promotions

• Referral fees

• Advertising fees

• Office & infrastructure lease; legal & professional fees

Management Team

Management Team

15

Shigeyuki Matsuo, Business Operations Before joining COSY, Matsuo was the Head of Project Management Office in Fuji Fire & Marine, a member company of AIG and led several strategic projects, including flagship product developments and distribution channel transformation. Before he joined AIG, he has more than 10 years experience in operational improvement and project management in consulting firms. He is currently pursuing MBA in the University of Tsukuba, Japan and holds a bachelor’s degree in Economics from the University of Tokyo.

Jun Iwata, AdvisorJun is currently the Training Manager of Swarovski. His specialty is in customer service, store operations, and staff development with over 18 years of experience in the retail business. Jun started his career as Assistant Buyer at the Isetan Department Store and as Store Manager at Uniqlo Japan. He then served as Operations Manager at Uniqlo UK and USA.  He majored in International Law at the Sophia University in Tokyo, Japan, as well as Political Science at the Santa Clara University in CA, USA. He is currently a candidate for the degree of MBA at the University of Tsukuba, Japan.

Management Team

16

Pauline Tan, Business & Marketing Pauline’s major flair is in her good eye for details, people management abilities and excellent execution of strategic plans. She has business experience as the Head of Programmes - a business unit of an established international NGO and social enterprise, and Operations Manager of a mid-sized franchising enterprise. A Singaporean native, she is currently pursuing MBA in the University of Tsukuba, Japan and holds a bachelor’s degree in Social Work from the Singapore Institute of Management, as well as an Engineering Diploma from the Ngee Ann Polytechnic.

Goshi Fujimoto, Technology & Product Development Goshi’s major is in marketing research and software programming for the prediction of customer growth and the optimization for system development. He started his business experience as a researcher in a energy supply company. He has been a member of several taskforces for government project as a representative of marketing research. He is currently pursuing MBA in the University of Tsukuba, Japan and holds a master’s degree in Science from the Hokkaido University.

Marketing plan

Operating plan

Schedule

Financial plan

Marketing Plan

18

Objective Increase Online Presence

Generate Leads Establish Brand Establish Network

Goal

Build strong internet presence

(No. of unique visits, page views)

Focus on generating leads(Online lead forms, sign-ups for e-mail

promotions & enquiries)

Win new visitors & establish

reputation (Awareness,

content co-creation)

Focus on establishing partnerships

(Service providers, advertising

subscribers)

KPI

Build strong source of unique

visitors

Track and generate traffic through SEO (unique visitors per day, average site

time per use)

Identify & expand source of

generating leads

Content Marketing through Blogging,

Social Media

Conversion rate: 1% of traffic

(leads to sales)

Build awareness of potential

visitors & online community

A channel for expertise insights

through content co-creation on health/ wealth/ end-of life (online campaigns

& webinars)

Build strong network of service providers & source

of advertising subscribers

Recruit participating funeral operators;

advertisers; supporting

community partners(face-to-face)

Target100 visits per day

(up to first 6 months)

90-100 leads in a month

(after first 6 months)

Quarterly events10% new leads

per quarter

5-10 operator-partners

(takes 6-8 months)

Inbound Marketing on Web 2.0

Operating Plan■Contents Development enhanced by “Feedback Loop”

■System Development / Maintenance is outsourced to India.

COSY

Characteristic Funeral Operators/ Funeral Goods Providers

Site Visitors

Interview

ExamplesProvide characteristic contents

User’s real feelingConsult aboutnew funerals

Schedule

20

2013 2014 2015

1st 2nd 1st 2nd 1st 2nd

Site Development

Contents Development

Hiring

Advertising

Partnering nursing home

Sales to funeral operators

Launch

Financial Plan(1/3) –Non financial Revenue Driver-

Unique Users Page Views

2013 2014 2015 2016 20170

100

200

300

400

500

600

50 89

160

287

513

Thousand

21

2013 2014 2015 2016 20170

1000

2000

3000

4000

5000

6000

500 895

1602

2866

5130

Thousand

Financial Plan(2/3) – Revenue, Margin-

Revenue by segment Revenue / Margin

22

2013 2014 2015 2016 20170

50,000

100,000

150,000

200,000

250,000

300,000

5,000 8,949

40,039

143,318

256,500

15,000 26,846

48,047

85,991

153,900

Ad revenue Referal revenueMil

2013 2014 2015 2016 2017-50,000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

20,000 35,795

88,086

229,309

410,400

-12,600

2,595

-16,814

116,609

185,700

Revenue Margin

Mil

Financial Plan(3/3) – Free Cash Flow-

23

Free Cash Flow

2013 2014 2015 2016 2017

-100000

-50000

0

50000

100000

150000

-16000

5557

-60000

91885

133340

Mil

APPENDICIES

Population Growth (Japan)

25

Consumption of Seniors (Japan)

26

Medical and health relatedTraveling

Children and grandchildrenHousing related

Ceremonial functions

Entertainment expenses, such as friendConsumer elec & Elec appliance

Automotive related

Self Enlightenment and Study

ClothesFurniture

Telecommunication and internet

Others

Pro Forma Profit and Loss

27

[thousand JPY]

2013 2014 2015 2016 2017

Revenues:

Advertising 5,000 8,949 40,039 143,318 256,500

Referral 15,000 26,846 48,047 85,991 153,900

Total Revenue 20,000 35,795 88,086 229,309 410,400

Expenses:

Personnel 16,000 16,000 64,000 64,000 160,000

Advertising 600 1,200 4,200 12,000 24,000

System maintenance 1,000 1,000 2,000 2,000 2,000

Software depreciation 2,000 2,000 4,000 4,000 4,000

Office & infrastructure lease 1,500 1,500 4,000 4,000 8,000

legal & professional fees 500 500 1,500 1,500 1,500

Interest 3,200 3,200 3,200

Total Expense 21,600 22,200 82,900 90,700 202,700

Margin -1,600 13,595 5,186 138,609 207,700

Assumptions of financial plans

28

The Baby Boom Generation will continue the trend of demanding more personalized funerals, and the target is 10% of the internet users of the generation.

The possible competitors such as SNS player and existing funeral operators will offer similar SNS platform as they see our success, but by then we will have positioned ourselves as the market leader and our market share in year 5 will be 30% of the targeted users.

In year 3, we will expand our operation. We will invest 80 mil yen in system expansion backed by commercial bank loan, and increase the number of personnel to 8, 8, 20 in year 3, 4, 5, respectively.