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Feasibility Business Plan

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Sarah Benson

on 9 March 2014

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Transcript of Feasibility Business Plan

Business Plan

My Business Idea
Augmented Reality
...a new form of digital marketing

What is Augmented Reality?
...A new technology that
allows a digitally enhanced
view of print

Target market...
The UK film industry
Business start-up and financial projections
Similar to QR codes
Tag inserted in images
App needed
Interactive content
...How does it work?
Augmented reality...
Bringing print to life
Innovation in print
Connects online and offline world
Enrich print with digital experience
Extremely high click through rate
On a turnover of £3.5 billion, the UK film industry contributed around £1.6 billion to the UK GDP in 2011
UK box office receipts on UK­made films reached a record high at £410 million
Measured spend on advertising was equal to 14% of box office receipts, approx £57 million
Which industry...
SWOT analysis
: The UK's only AR solutions agency, targeted specifically at UK film distributors.

: Unknown - need to establish a strong, recognisible brand for the target market. Gain contacts in the film industry e.g networking. Low industry knowledge.

: Move into international markets - US has the largest filmed entertainment market in the world. Develop product further with advancements in technology.

: With fast paced technology, there is a risk that it AR may become obsolete if something more advanced comes along.

What will we do...
AR consultancy - work with individual film distributors and advise how best to use the technology
Design tags to insert into images, text and print which creates AR
Create bespoke apps for AR giving control over design, and branding

PEST analysis of the film industry...
In 2006 new enhanced tax relief for film production was introduced.
Growing market - over 172 million cinema tickets were sold in 2012 up 3 million since 2010, in 2012 UK had the 3rd largest filmed entertainment market in the world.
'Country of origin'

effect in demand, independent films making a cultural impact e.g The King's Speech.
Advancements in technology such as 3D, online streaming of films become readily available.

Clients include Time Out, Vanity Fair, Elle, Clinique and Maybelline

Clients include Vogue, Tatler, Tag Heuer, Hugo Boss and Dunhill London

Worked with Disney on Wreck It Ralph and with Warner Brothers on The Dark Knight Rises

Porters five forces
Threat of new entrants:
With AR becoming increasingly popular, there is a potential threat of new entrants could be high, however long term contracts mean new entrants survival is uncertain.
Threat of substitute products:
Constant evolution in technology means the threat of substitute products will always be high.
Bargaining power of suppliers:
Working with agencies that provide proprietary apps. They are industry independent which gives them bargaining power over pricing.
Bargaining power of buyers:
Identity of buyer would add prestige and credibility to the business, giving the buyer higher bargaining power. Long term relationships with film distributors creates static price structures.
Competitive rivalry:
Market based on long term relationships with increase competition for high profile clients.
Goals and objectives
'To become the leading provider of Augmented Reality solutions in the UK film industry'

Short-term objectives:
Provide and develop flexible solutions to a range of clients
Become recognised and established in the industry
Long-term objectives:
Stay up to date with technological innovation
Diversify product range
Achieve long term financial targets
British Film Institute (2013) ‘Statistical Yearbook 2013’
O’Reilly, D and Kerrigan, F. (2011) ‘A View to a Brand: Introducing the Film Brandscape’
European Journal of Marketing
47:5 pp 769-789
Osterwalder, A and Pigneur, Y. (2010) Business Model Generation. Wiley, New Jersey
Oxford Economics (September 2012)’ The Economic Impact of the UK Film Industry’
British Film Institute
Robertson, D. (2003) ‘Advertising Effectiveness in UK Film Distribution’
UK Film Council
Steele, D. (2004) ‘Developing the Evidence Base for UK Film Strategy: The Research Process at the UK Film Council’
Cultural Trends
13:52 pp 5-21

Strategic analysis
Identify internal strengths and weaknesses and external opportunities and threats using SWOT analysis
Identify competitors, analyse the intensity of the competition and how attractive the market is using Porter's Five Forces model
Initial start-up costs
Total start-up cost: £13,805
Financing business start-up
Start-up costs will be financed by a business loan.

If eligible, Santander would lend £15,000 over a 5 year period with repayments of £303.35 a month.

Interest on loan = £3,374

Forecast income statement for year ending 31st December 2015
Marketing strategy
Packages can be put together to suit the need of each client.
Contracts drawn up for a minimum of 2 years.

Basic pricing:-
Bespoke app design £15,000 -
will take approx 2 months each for Android and IOS
Price per tag £500 -
tag design will take approx 1 month
Potential for growth
As brand is established and more work comes in, potential to employ more people and grow as a business
Develop other products, advance with technology and remain innovative
Expansion into large international markets such as the US and China
Set up subsidiaries focusing on other markets such as high end publications, fashion industry etc
In practice...
Provide the technology to film distributors
Used in their advertising campaign
Posters, billboards, buses, cinema...
Public can use app to view the trailer from the advert
Click through to partnered cinema website
GPS technology to nearest cinema
Business model
Key Partners
Agencies such as Layar or Klipar providing proprietary apps.
Can use proprietary apps if customer doesn't want bespoke - cheaper and faster.
The agencies provide the rights to allow our tag design to be compatible with their apps.
Value Propositions
AR is innovative and interactive, giving more value to watching a film trailer.
The business will focus solely on the film industry providing more expertise and knowledge than other companies.
Customer Segments

Value is created for the general public as a whole as well as film production companies and distributors. Mass market - anyone who visits the cinema or watches films.
Customer Relationships
Service will be tailored specifically for each distributor and even each film.
Strong customer relationships need to be developed to deliver this type of service.

Cost Structure
The business will be value driven, focusing on creating value rather than low price value.
The creation of the apps and tags is very costly so its extremely important to create added value for the customer.
This will be done by creating packages that are tailored to suit each individual client.
Key Activities
Knowledge of the film industry and its needs - which will develop over time.
Consultancy and problem solving
Bespoke app and tag design.

Key Resources
Two main resources needed for this business type are human and intellectual.
Software, app developers and graphic designers.
Break even analysis
FC = £6,300 + £3763 = £10,063
VC = £65,000 + £3,000 + £750 = £68,750
Total = £78,813
£78,813/£15,500 = 5.08

To break even, the business would need to have 5 contracts with distributors over a 1 year period.

With the current staff levels and time frames of development, the business could support up to 9 full time contracts.
Key success factors
The only AR solutions agency that focuses solely on the UK film industry
Initial routes to market
Trade shows, film festivals and exhibitions:
BVE Excel London
Edinburgh International Film Festival
London Film Festival
BFI Network
Created by SmartBear Creative
Include solutions and portfolio
Social media:
Facebook, Twitter, Vimeo, Vine, YouTube
Direct email marketing:
Growing database of industry
PR and advertising
Press releases, advertising and editorial:
The Drum
Screen Daily
Universal Film Magazine
Staffing and management
The business will begin operating with 3 members of staff; an IOS app developer, and android app developer and a graphic designer.
I will carry out the role of contract and bid manager as well undertaking any admin functions.
All other functions, such as HR and accounting will be outsourced.
Staffing costs will amount to £65,000 a year.
Provide bespoke AR solutions to film distributors
Design tags and bespoke apps
Physical resources:
Office, software and website
Film distributors - independent and international
Full transcript