India’s first of its kind Educational

website for Kids (3-17 yrs)…

Chintan Desai

PGCM -4

1408

IAE –Business plan

Table of Contents

1. Executive Summary

2. Company Vision, Mission, Values & Goals

3. Value statement

4. Product & Services

5. Market trends

6. PESTEL Analysis

7. Market Analysis Summary: SEGMENTATION

Targeting & Positioning

8. SWOT Analysis

9. Marketing Mix: Product

Place

Price

Promotion

10. Financial consideration : Start-up cost

11. Objectives

12. Industry Analysis

13. Web Plan summary

14. Sales Forecasting

Executive Summary:

Introduction

egghead.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 gain knowledge (e-learning) & play games, for parents and

schools to buy, and a creative and fair work environment for employees.

The egghead.com is also an e-commerce project which is natural evolution for

the egghead.com Internet presence. The site will market and sell selected toys,

books, and games products which helps in developing knowledge. It will also

produce Web products and Web applications that will increase market share,

promote name recognition, and maximize efficiency.

About company:

Founded in 2015, egghead creates animated, curricular content that engages

students, supports educators, and bolsters achievement. Our online educational

resources include egghead Jr. (K-3), egghead POP and, for English language

learners, BrainPOP ESL. BrainPOP is also home to GameUp, an educational

games portal for the classroom.

From its humble beginnings as an elementary school teacher's classroom

website, on through the present, the Egghead Network has always had one goal,

and that is to make learning free. Founded in 2015 in order to provide students

with a fun and educational way to spend their free time, a teacher's classroom

project has grown into a worldwide platform attracting several million visitors

every single month. Even it will sell the educational products like Toys,

games, books, etc, through its website. The egghead.com e-commerce project is

the natural evolution for the InteliChild.com Internet presence. The site will

market and sell selected toys, books, and games.

Mission & Vision

Our mission is to provide children around the world with an absolutely free

educational resource. A way to learn, while also having fun. We believe that the

best resources should not be reserved for those who can afford them, but should

be made available to everyone, everywhere, without cost. Using the power of

the Internet, this goal is possible.

Our mission is to create fun and interactive learning modules that can be

utilized by teachers, parents, and home schoolers to enhance their learning

environments, and increase the interest and attentiveness of their learners.

Thus our mission is to reach every child, in every corner of the globe, and

provide them with free educational resources.

Value Statement:

“We are committed to empowering kids by continuously investing in

technology to improve the

user experience and providing timely and high quality educational content

with all sort of creativity & innovation in it.”

Product & Services:

Spreading out the knowledge & making an kid to learn through our best inputs

& also through the reputed educational institutes learning material with all sort

of creativity in it.

To give The Highest Quality Educational Activities, Products, Movies, Music,

Games, Articles, Text Books, Learning Programs, Lesson Plans, Worksheets,

And Distribute them to our premium users.

Toys and Games: carefully selected toys and games that appeal to the target

market, the parents of the target market, and educators.

Books: 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.

Market Trends:

The egghead.com market will be 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.

The Indian website (online) market depends on the web internet penetration in

India. India has the thirdlargest internet population in the world after China and

the US (Comscore Inc., 2013). Internet users in India are expected to grow by

42% from 245 million in June 2014 to 320 million in June 2015.

As here we can see this no. keeps on rising there is the great potential for our

educational website in a country like India which is at its growing stage.

Out of this many no. of websites, educational website not even compromises of

0.5%. out of these 0.5% there is not even a single website designed for the kids

in a way which we are going to do.

SOCIAL FACTORS:

According to the survey, in just five years, media use has increased from 6 ½ to

nearly 7 ½ hours a day in children between the ages of 8 and 17. Even more

alarming - children have become master multitaskers, often using two or more

media devices at the same time. Counting each device separately, these kids

have found a way to cram in a total of 10 hours and 45 minutes of media

content into those 7 ½ hours.

Average no. of time spend by kids on internet (7 to 17 yrs)

Competition :

egghead.com has no domestic competition though we have an foreign

competitors like kidsknowit.com, funbrain.com, learn4learn.com, etc

Here in India, egghead.com have an competitive advantage of being an first one

start this kind of educational website totally focusing on kids only.

PESTEL Analysis :

A PESTEL analysis tool is applied on the product to give a complete view of

how the different factors would accept the new idea.

P- egghead.com is an educational website particularly focusing on kids,

therefore there would be very little political issues against the firm.

E- No matter of the economic changes, KIDS will always have to be provided

with highly learning material, therefore economic factors would not be affecting

much in providing complete solution on our educational website

S- egghead.com is creating an another way were kids can develop their

knowledge through learning online so the society would accept this new way of

developing knowledge so I feel there will be no social issues.

T- Technological advances in this industry would always require our website to

upgrade it with changing trends in it, thus this factor has a major impact.

E- Straight away as its an educational website, there is no point of

environmental issues.

L- As its an educational website there would lot of legal obligations as here we

would be merging with an educational institutes, publication houses, toy

manufacturer, etc This is looked at in greater detail later in the plan.

Market Analysis Summary:

Segmentation :

Our primary target markets include these four areas:

1. The kids themselves. We include ages 3-9 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.

2. Parents. 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.

3. Educational institutions for the children of the upper class. This includes

day care and private schools. Penetrating this market is excellent because

it generates leads to our other targets. We include 107 schools in the India

in our table.

4. Self-teaching families. 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.

Target audience:

So in this diagram it clearly shows which is our target audience & we are

particularly carter to very niche market i.e kids, parents & educational

institutes.

SWOT Analysis:

Kids 4-9

Kids 9-18

Parents

School

Home school families

NRI parents & kids

Marketing Mix:

Product : Its an website, name- egghead.com, which is an complete

educational, learning & knowledge base solution for the kids, parents &

educational institute through its all sort of material made available on

website with the help of all creativity aspect to it. Even it sells the product

like Toys, Games & Books which again would help to develop

knowledge.

Place: Its an website so it would be made available throughout India. An

all over India there would be 3 corporate office in Mumbai(head office),

Delhi & Banglore.

Price: Basically for an e-learning program, 2 version are made available

to our users 1 is totally free whereas another 1 is paid in which N no. of

additional benefits are made available to our users.

Subscription rates

Monthly $5

Quarterly $10

Half yearly $20

Yearly $40

And rest all depends on products which we are going to sell (profit

margin would 27% on cost price)

Promotion:

As its an start-up we would just focus on Advertising ONLY print media

& outdoor advertising as well as Direct Marketing for now.

• Threats• Opportunity

• Weak• Strength

e-learning

creativity

fun activities

no 1 on 1 contact

expensive in maintainance

only for high end users

foreign compititors

it takes time to shift form

traditionally way of learning to e-

learning

growing market

monopoly in India

Direct Marketing:

Merging with an top educational institute, conducting seminars with

parents & teachers.

Distributing free gifts to the kids where on that gift our brand name

would be mentioned on it.

Organising an small events for the kids in malls where we can convey

about website to parents while their kids are enjoying in our event.

Financial Considerations:

Our start-up costs comes to $33,750, which are high because of our

commitment to dominate the Internet market place.

The Break-even Analysis is a good financial indicator. We show break-even

with a sales level of about $265K per month, even assuming a fixed cost of

$169 per month, which is high. Given those assumptions, we reach steady-state

break-even in December of this first year.

The sales forecast is based on increasing website traffic and increasing sales per

unique user session. Sales are projected to rise from $569 thousand in 2000 to

$6 million in 2001 and $25.8 million in 2002. The forecast obviously depends

on traffic increase. We plan to lose money for at least three years while we build

traffic and develop our position for the long-term future.

Objectives

1. Traffic, as measured in unique user sessions: 100,000 unique user

sessions in Jan, 20; 450,000 in December, 2015; 3.5 million in 2016; and

5 million in 2017.

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2015 2016 2017

2. Sell-through, as measured in dollar sales per unique visit: a high of $0.58

per unique visit in December of 2015; increasing to $0.83 in 2016; and

$0.92 in 2017.

3. Valuation, 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 2016, 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.

4. Acquisition or Initial public offering (IPO) in 2018, 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.

Start up cost (Resource requirement):

Our start-up costs come to $33,750, because of our commitment to dominate

the Internet market place.

Our development costs are high, but because we are located in Mumbai

(India) , our human resources costs are not as high as they might be -

particularly for the talented programmers that we need. Marketing expenses

are also high, but spending on the costly development of this site without

promoting it appropriately would make it difficult to gather together the

traffic necessary to make this a success.

Our location leverages our partner potential, even though we are paying a

premium for space and for talent due to development costs. Even our

egghead.com business model is based totally on maintaining our website.

Therefore the company will not own any major assets. Even the office that it

will operate from will be rented. This strategy shall be adopted to minimize

risk, as the firm is a start- up and will be launching an absolutely new service

which carters to kids, parents & teachers.

Start-up expenses (in $)

Legal 1000

Software 2500

Design work 5000

Programming 15000

Insurance 250

Rent 500

R & D 1000

Hosting setup 3500

Others 5000

Total Expense 33,750

Start-up plan break-up

Industry Analysis

The website industry is exploding. Growth is absurd, amazing. We don't

have business reasons to detail this situation in this plan, our readers are

aware of it.

Industry Participants

This is sample text describing the different companies addressing the same

target market. The real plan includes details on which companies sell

products (toys, books, or games) into this market & making learning material

available for the kids in most creative manner. It includes who owns them,

how much market share they get (according to available information

sources), and what we know about their assorted business models.

Distribution Patterns

This is sample text describing the different websites addressing the same

target market. The real plan included details identifying these websites, who

owns them, how much traffic they get (according to available information

sources), and their assorted business models.

Competition and Buying Patterns

This is sample text describing factors in competition for website use by

bright children ages 8-14, for sales to their parents and schools. It details

information available about the importance of factors such as pricing,

shipment, quality, presentation, etc.

Web Plan Summary

The primary egghead.co 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 egghead.com site will be reviewed by Web award companies as a

great destination. We will build our revenue and market share around this

traffic.

Business Model

Our business model is based on the no. of the subscribers for our paid learning

program & also 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

Our first class design, service we provide & 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, design

work and marketing has not matched by 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 egghead.com company is ready

to grow with the market. egghead.com will distinguish itself from its competitor

as a full learning center, rather than just a store front.

Sales strategy: Sales Forecast

The sales forecast in the following table and charts is based on increasing

website traffic and increasing sales per unique user session. Sales are projected

to rise from $569 thousand in 2000 to $6 million in 2001 and $25.8 million in

2002. The forecast obviously depends on traffic increase.

Sales Forecast:

Unit Sales 2015 2016 2017

Books 3604 7208 5000

Toys & games 4,618 17,500 50,000

Subscribers 17622 61250 112500

Total Unit Sales 25,845 85,758 167,500

Unit Prices 2015 2016 2017

Toys and Games $30.00 $30.00 $30.00

Books $20.00 $20.00 $20.00

Subscribers $40.00 $40.00 $40.00

Total Sales Yr 1 Yr 2 YR 3

Subscribers $528,672 $1,837,500 $3,375,000

Games & toys $92,368 $350,000 $1,000,000

Books $144,148 $700,000 $200,000

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. The

following table defines the investment offering for investors. Specifically:

1. The exit strategy is acquisition in 2003, valuing the company at more

than $20 million.

2. Equity plan and valuations at time of exit are detailed in the section that

follows, "Exit Strategy." The plan assumes an ending valuation of $20

million based on market trends, with IRR of more than 100% for all

investors.

Important Assumptions

The general assumptions are listed, Obviously these are detailed financial

assumptions, trivial compared to the underlying critical assumptions, which

include:

1. Continued growth of Internet usage. We accept published forecasts that

say 42.3% of the world's population presently uses the Internet, and that

will grow to 19% by 2018. That's strong growth.

2. No e-commerce disaster scenarios. We'll have no huge problems with

credit card authorization, shipping, etc.

3. Continued support of financial markets, which means continued rise in

valuations of Internet companies, even Internet companies losing money.

The increase in valuation is critical to our financial strategy.