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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

Chart visualizing the data for 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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Opportunity

Problem & Solution

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.]

Our Solution

Garbles Cellular Phones, Inc. is taking advantage of an opportunity to become a highly distinguished and recognized leader in the cellular communications industry. It is the goal of our company to become established as the leading distributor of wireless communications services in the metro Niceburg area.

Target Market

Market Size & Segments

Market Segmentation

Garbles Cellular Phones, Inc. will focus on five customer groups, bearing in mind that it is quite customary today to have more than one cell phone per family:

  • Children in the age group of 10-17 years old
  • Students
  • General public
  • Professionals
  • Service organizations and companies that need to be in constant communication with their employees.

The market for cellular phones and their accessories is very fragmented, crowded and competitive. Among these, there are only a few large local firms that serve the entire city of Niceburg and its surroundings. The remainder are small firms that sell from kiosks in the surrounding malls. Garbles Cellular Phones current niche in its location, variety of products and expertise in serving the public will assure the projected sales.

We expect to take full advantage of the trends described in the Market Analysis above, and try to penetrate the market with new innovations and gadgets — mainly with the younger generation, using advertisements and demonstrations. We shall also try to lure independent small sellers to join our effort.

Competition

Current Alternatives

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.

Our Advantages

Brand names are of little, if any, importance. The key to the buying decision on the part of the consumer is the salesman and the cell phone being in front of them. As has been pointed out in the Competitive Analysis section there are other sellers with similar brand names as those supplied by Garbles Cellular Phones, Inc. which may even be less expensive. It is essential that the salesman point out the salient features and selling points favoring our products. Most importantly, our products must be available in the retail outlet, since whatever products our store carries are the ones that are going to be sold.

The need to attract, acquire, leverage, and retain customers remains a primary concern to business. Revenue growth through customer acquisition and retention is as important a requirement in e-commerce as it is in other businesses. Customers, especially in the Western business culture, count speed of service as a key reason why they do business with a company. They resent delays and hate waiting for service. In the United States, almost 80% of the gross domestic product (GDP) is generated through different kinds of services, and speed of service no longer distinguishes an enterprise as providing superior value. Customers generally are not thrilled if they receive good service, but they are highly dissatisfied if they do not. Garbles Cellular will provide the necessary framework to cope with these demands by cutting the waiting time for a service.

Customers also want consistent, reliable, and easy-to-use service. As the speed of service increases, customer expectations grow, making friendly, easy, and solution-oriented customer service an important business trend.

Reflective shoppers get some support from e-commerce as well. They like to investigate products precisely and consciously. However, when browsing costs a lot because of on-line charges, they do less of it. Consequently, they do not get a holistic view of the available options, and their expectations often are not met. Reference-spending customers do not let themselves be hurried or forced. They use alternative offline sources to get information. They refuse aggressive marketing, which is accepted in Western e-commerce.

Soon, shoppers will simply wave their cell phone over the item they want and the charge will automatically appear on their cell phone bill. It’s happening in some cities overseas already. And right now, MasterCard and Motorola are testing out a similar program here in the States. Retailers have registers that will take the signal from the cell phone, and the purchase is automatically converted to a MasterCard charge. Buyers don’t have to sign anything. The scary part is what could happen when people lose their cell phones or have them stolen. There are lots of technical and legal issues to work out here, but paying wirelessly is going to gain momentum quickly.

Garbles Cellular is planning to take advantage of these trends of buying patterns. We shall also be very quick in establishing our own website to take advantage of E-trade.

Keys to Success

Keys to Success

Our company keys to success will include:

  1. Provide excellent customer service
  2. Grow and maintain a referral network of customers
  3. Focus expertise in GSM cellular phones and GSM cellular phone programs
  4. Respond rapidly to customer problems with product or plan
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Execution

Marketing & Sales

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.]

Marketing Plan

Short-term marketing strategies are those that bring will bring us a temporary boost in traffic. Although these techniques are very important to our over-all plan, they are only a temporary traffic source and must not be solely relied upon. Short-term marketing strategies include:

  • Purchasing Advertising
  • Bulletin Boards
  • Search Engines

Long-term marketing strategies are those that will bring us a steady stream of targeted traffic over time. These strategies will continue to produce results even years down the road. Long-term marketing strategies include:

  • Opt-in Lists
  • Freebies
  • Content

By creating and implementing a balanced marketing strategy, using both short-term and long-term strategies, Garbles Cellular will drive a steady stream of targeted traffic to our website.

Using this simple formula when creating our Internet marketing strategy and excelling at all three, we hope to guarantee our success.

Our short-term marketing strategy will focus heavily on sales promotion, niche positioning in the market and customer service with loyalty and retention in sales.

Our promotions will always stay in tune with our company objectives and mission statement.

Sales Plan

When we Sales Strategy we shall follow the following steps:

Sales Success Requires Planning – we shall formulate our sales strategy and tactics to achieve our sales success.

Analyze Our Potential – we shall step through a structured process that will prepare us for the development of our sales strategy.

Strategize Around Strengths – the description of our sales activity will be analyzed producing a report that reveals factors impacting our sales potential.

Develop Our Tactics – we shall receive guidance to develop a comprehensive tactical plan to achieve our success.

Measure Our Success – we shall constantly develop key measurements that mark the progress of financial estimates that guide our growth.

Employ An Action Plan for Success – we shall provide our sales force a clear tactical plan that is also aligned with management’s strategic objectives.

The sales strategy of Garbles Cellular Phones is simple. The key to customer satisfaction is having the product and services that meet the customer’s needs. A crucial part of that is to also have knowledgeable employees to help customers quickly find what they want.

Operations

Locations & Facilities

The Garbles Cellular Phones’ store will operate virtually 24 hours a day 7 days a week. Although the store opening hours will be officially 10:00 a.m. to 6:00 p.m., it is clear that due to our Internet operation the customer support will be a non-stop one. The personnel plan, as detailed in the following table, has been developed to support these hours.

Milestones & Metrics

Milestones Table

Milestone Due Date
Q1 Review
Mar 09, 2020
Q2 Review
June 07, 2020
Q3 Review
Sept 07, 2020
Q4 Review
Dec 07, 2020

Key Metrics

Our Key Metrics:

  1. # of customer’s who tweet and retweet about our service. our customers will want to talk to us, we want to listen 
  2. # of facebook page views and likes.
  3. We will run specials on our website as well as Facebook. We will provide codes that link directly to the promotions so we can tell if they are working or not 
  4. Our Website. Everything is easy to find and terms are easy to understand. We will also have a chatbox to help customers with questions. 
  5. Instagram – Have a picture scavenger hunt which ends in the ability to win a accessory or in rare cases a phone. 
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Company

Overview

Ownership & Structure

Garbles Cellular Phones is wholly owned by Mr. Seramed Garbles, who is a citizen of the East Atlantic Island Archipelago and the owner of Garbles Cellular Phones Ltd in that country.

Team

Management Team

The management of Garbles Cellular Phones, Inc. is made up of the owner, a Marketing manager (Mr. Nomassu Perozia) and three other members who will be hired locally and will be added: a Programmer, and two store attendants with one serving at the beginning as secretary. 

Personnel Table

2020 2021 2022
CEO $48,000 $48,960 $49,939
Marketing Manager $45,600 $46,512 $47,442
Office Admin $42,000 $42,840 $43,697
Store Attendants (2) $72,000 $73,440 $74,908
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Financial Plan

Forecast

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.]

Key Assumptions

It is assumed that the owner’s private resources will be sufficient to finance any monthly cash-flow shortage. However, it would be advisable to establish a bank relationship as soon as possible. Sales could very well increase at a much sharper rate than assumed in these conservative projections. Sharper sales will result in a greater need for funds in support of inventory and receivables. An over-draft line of credit with the bank will be an excellent cushion to fall back on.

This is considered a very good time to start a new business. The economy is beginning its trek up, and consumer spending is up. The Commerce Department reported, "Consumers had increased their spending, the largest advance in nine months."

A shorter learning curve will be brought to the business by the owner due to his extensive background and in-depth market knowledge. He has a clear understanding of the need to manage costs and forecast future needs so that the business is not "broadsided" by the unexpected.

One other component on which the financial plan is based is wise purchases. Finding the right product, at the right price will enable the business to meet planned margins and maintain inventory at an attractive level with a high turn rate.

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of Funds

Our Start-up expenses are:

Legal $5,000

Insurance $1,000

Rent $2,000

Equipment $2,000

Other $1,000

TOTAL START-UP EXPENSES$11,000

 

In addition we will have the following Start-up Assets:

Cash Required $2,000

Start-up Inventory $30,000

TOTAL ASSETS$32,000

 

This brings our total required to $43,000

Sources of Funds

Mr. Seramed Garbles will invest $43,000 in Garbles Cellular Phones, Inc. to cover start-up costs. He will also invest an additional $50,000 when operation takes off for a total of $93,000

Statements

Projected Profit & Loss

2020 2021 2022
Gross Margin $224,865 $346,560 $493,050
Operating Expenses
Salaries & Wages $207,600 $211,752 $215,986
Employee Related Expenses $41,520 $42,350 $43,198
Rent $24,000 $24,000 $24,000
Insurance $12,000 $12,000 $12,000
Utilities $3,600 $3,600 $3,600
Marketing / Promo $7,200 $7,200 $7,200
Interest Incurred
Depreciation and Amortization
Gain or Loss from Sale of Assets
Income Taxes $0 $0 $0
Total Expenses $465,555 $562,342 $677,934
Net Profit ($71,055) $45,658 $187,066

Projected Balance Sheet

Starting Balances 2020 2021 2022
Cash $2,000 $101 $49,195 $242,961
Accounts Receivable $4,100 $5,067 $7,208
Inventory $30,000 $30,000 $30,000 $30,000
Other Current Assets
Total Current Assets $32,000 $34,201 $84,262 $280,169
Long-Term Assets
Accumulated Depreciation
Total Long-Term Assets
Accounts Payable $20,256 $24,659 $33,500
Income Taxes Payable $0 $0 $0
Sales Taxes Payable $0 $0 $0
Short-Term Debt
Prepaid Revenue
Total Current Liabilities $20,256 $24,659 $33,500
Long-Term Debt
Long-Term Liabilities
Paid-In Capital $43,000 $96,000 $96,000 $96,000
Retained Earnings ($11,000) ($11,000) ($82,055) ($36,397)
Earnings ($71,055) $45,658 $187,067

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit ($71,055) $45,658 $187,066
Depreciation & Amortization
Change in Accounts Receivable ($4,100) ($967) ($2,142)
Change in Inventory $0 $0 $0
Change in Accounts Payable $20,256 $4,403 $8,841
Change in Income Tax Payable $0 $0 $0
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received $53,000
Dividends & Distributions
Change in Short-Term Debt
Change in Long-Term Debt
Cash at Beginning of Period $2,000 $101 $49,195
Net Change in Cash ($1,899) $49,094 $193,766
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