Garbles Cellular Phones
Executive Summary
Opportunity
Important advisory
[This sample business plan is based on one from several years ago, valid then, and still useful as an illustration of what a business plan contains and what issues it covers. It is not valid for information purposes today.]
Problem
In the world today everyone has a cell phone. Cell phones are expected. They are needed for work and for socializing. They are so expected, people think there is something wrong or untrustworthy with someone who does not have one. In truth, those without one can’t afford it.
Solution
Garbles Cellular’s mission is to offer its customers the highest quality cell phone products and services. Its owner focuses on personalized service to his customers by offering convenience and rapid service. Additionally, Garbles Cellular has the technological expertise to assist customers in picking the product and service that best meets their needs. Finally, our staff will have strong vendor relationships with the product suppliers and will be able to meet customers’ demand for the newest innovation in cellular phone technology.
Market
The market potential is huge for our products, evidenced by what appears to be the unstoppable growth of the telecom industry. Currently, the telecom industry is among the strongest growth industries and is responsible for huge gains in the capital markets. The proliferation of cellular phones is increasing at rates which at one time were unimaginable. One illustrative example is that it is forecasted that within two years over 65% of children from age of 10-15 will have cell phones.
Future growth of the market/products is projected in the following areas:
Text messages between friends (in Japan this big). Users can send regular Short-Message Service (SMS) or email on their phones. Email is of course limited to small file sizes, but many of the phones allow for English characters to be sent. Each provider also allows special characters to be sent, such as an array of happy and sad faces, small animated images, animals, people, hearts, etc. When special characters are not available, people often use a specialized set of faces to show emotion. Email can also be sent between different provider phones, but many of the special characters are lost, hence users may try to keep a circle of friends on the same provider to receive the special characters. Email, of course, may be sent from computers as well, but files are often stripped of headers and attachments when received on cell phones.
Most North American phones come with a few games to keep people entertained for a limited duration. Japanese phones come with two different types of games: built-in ones and Java application ones. The built-in ones are simple, but again the graphics are very important to the game value. Java application games are delivered via the network to the customer’s phone and there is a charge for this service. These games are much more complex and require streaming data to access. New games come out monthly. You can even buy joysticks and navigation consoles that plug into your phone.
One of the recent popular additions to many of the Japanese and Korean phone models is a CCD Camera that is mounted either on the outside of the clamshell or on the clamshell hinge. The camera lens is slightly smaller than a dime and takes 4×4 cm pictures to display on the phone’s screen or to send to others. Not only can users take pictures, they can take video clips as well. Most phones take between 5-15 seconds of footage due to memory limitations, but they can send streaming video. Many of the advertisements for camera phones show people taking to each other and watching each other on the screen (both holding the phone and camera at arm’s length and using a hands-free microphone and earpiece). The camera also has a couple of neat accessories including an external flash that pops into an accessory port and a miniature printer that will print out pictures.
Our company will try to take advantage of these developments and serve its customers in all these new trends and developments.
Competition
[Note: this is included here for illustration purposes only. This information is seriously out of date. Not reusable.]
The U.S. market is dominated today by three large companies:
T-Mobile Wireless – owned by a subsidiary of Deutsche Telekom since May 31, 2001.
- Revenues:Exceeding $13.6 billion in 2001.
- Wireless Phone Service Subscribers: Cellular voice, messaging and high-speed wireless data services to more than 8 million customers.
- Cellular Phone Service and Technology: T-Mobile Wireless operates the largest all digital, wireless network based exclusively on GSM (Global System for Mobile Communications) technology. GSM is the most widely used digital standard worldwide, accounting for more than 70 percent of the total digital wireless market.
Cingular Wireless is the second largest wireless company in the U.S. A leader in mobile voice and data communications, Cingular is a wireless company determined to promote the individual to a new level.
- Ownership: Cingular Wireless is a joint venture between the domestic wireless divisions of SBC (NYSE:SBC) and BellSouth (NYSE: BLS). Headquarters in Atlanta, Georgia. SBC owns 60 percent of the company and BellSouth owns 40 percent, based on the value of the assets both contributed to the venture.
- Revenue on the cellular service in Year 2002 was more than $14.7 billion.
- Cellular Phone Service Subscribers: more than 22 million voice and data customers across the U.S.A.
- Cellular Phone Service and Technology: A leader in mobile voice and data communications, Cingular is the only U.S. wireless carrier to offer Rollover, the wireless plan that lets customers keep their unused monthly minutes. Cingular provides cellular/PCS service in 43 of the top 50 markets nationwide, and provides corporate e-mail and other advanced data services through its GPRS and Mobitex packet data networks
Nextel Communications, based in Reston, VA, is a leading provider of fully integrated, wireless communications services on the largest guaranteed, all-digital, wireless network in the country.
- Ownership: Nextel Wireless is traded on the NASDAQ National Market under the symbol NXTL. Nextel Partners is a separate company traded on the NASDAQ National Market.
- Revenue on the cellular service $8.7 billion (2002).
- Cellular Phone Service Subscribers: 10.61 million (Q4 2002).
- Cellular Phone Service and Technology: Nextel uses a packet-based platform, the integrated Digital Enhanced Network (iDEN™) technology, developed by Motorola. The Nextel 4-in-1 service—Nextel Digital Cellular, Direct ConnectSM, Nextel Mobile Messaging, and Nextel Online®—covers thousands of communities across the United States. Nextel and Nextel Partners, Inc., currently serve 197 of the top 200 U.S. markets.
Garbles Cellular Phones is aiming to gather a share of the market from these three.
Why Us?
We believe that, with our long and thorough experience in the EAIA, our store will be in the perfect location to start our operations in the U.S.A., and will start operating in the right time. Garbles Cellular Phones will provide its customers support and convenience second to none.
Expectations
Forecast
We intend to iron out kinks in our start-up and get things off the ground in year 1. We will make a minor profit in year 2. By the third year, we will be able to hire more store attendants and admin assistants
Financial Highlights by Year
Financing Needed
We will be getting $96,000 to start up . Mr. Seramed Garbles will invest $43,000 in Garbles Cellular Phones, Inc. to cover start-up costs. He will also invest an additional $53,000 when operation takes off
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