In this model we are not dealing with product and as such we do not have to consider the supply chain as much as other business models.
The only supply that we have to manage effectivly is in relation to our marketing. We need a constant supply of Investors to help grow our site and add more value to the business. We also need a constant supply of new small business owners to build revenue. With out an adaquate supply of both, the business will lack the revenue that it will need to survive.
It is in the investor's best interest to post their profiles on our site becuase it is free to list and it brings them business. That being said, investors still need to be made aware of the service so they can sign up. To make them aware we will be doing the following:
- Extensive PPC advertising
- Industry specific media (newspapers, magazine and website) advertising
- Make use of viral marketing by creating ways for investors to spread the word themselves
- Partner up as affiliates with various Investment groups such as BC's Angel Forum
- Using a large list of personal contacts in the VC world to get it start.
All of these supply management operations will be cash flow funded after the initial few startup months.
Thursday, February 28, 2008
E-Commerce
The next question is how would this business make money?
Small Businesses would come to the site and be able to view a list of Investors to submit their business ideas to. If the small businesses were interested in submitting business plans to the potential investors they would have to pay to do so.
To process this payment we will be using two different things. The first piece to the puzzle is our shopping cart software which will be setup either by using open source software, building it from custom or even using something cost effective like a yahoo store (for $99 per month they can provide you with a shopping cart system, hosting and other services).
The second piece to the puzzle is a merchant account. We plan to use Moneris to process transactions because we can not use American merchant accounts (being a Canadian business), because they are one of the most reputable merchant account companies in the world and also because they accept all payment methods (visa, mc, amex, diners etc). Furthemore, we can negotiate lower rates becuase we are alraedy customers that do a lot of volume with them on our other businesses.
We will be using Moneris in conjuction with PayPay and their fund transfer systems.
Small Businesses would come to the site and be able to view a list of Investors to submit their business ideas to. If the small businesses were interested in submitting business plans to the potential investors they would have to pay to do so.
To process this payment we will be using two different things. The first piece to the puzzle is our shopping cart software which will be setup either by using open source software, building it from custom or even using something cost effective like a yahoo store (for $99 per month they can provide you with a shopping cart system, hosting and other services).
The second piece to the puzzle is a merchant account. We plan to use Moneris to process transactions because we can not use American merchant accounts (being a Canadian business), because they are one of the most reputable merchant account companies in the world and also because they accept all payment methods (visa, mc, amex, diners etc). Furthemore, we can negotiate lower rates becuase we are alraedy customers that do a lot of volume with them on our other businesses.
We will be using Moneris in conjuction with PayPay and their fund transfer systems.
Financing
To start the business some preliminary financing will be necessary.
Because of the busienss model (an internet network and listing service) costs will be minimal.
The first round of financing will come before startup to pay for the creation of the website, purchasing the domain name, the hosting for the site, setting up and testing the payment system (moneris, paypal and our shopping cart) the marketing to both the VC companies and the Small Businesses and the Incorperation of the company.
For the initial round we will be looking to friends and family for $10,000. We do not want to take on any debt financing until we have proven cash flow and monthy profits.
Future rounds will be considered to help expand the network on a more global scale after having success in Vancouver and the rest of Canada (to reach more investors and small business owners in other areas of the world). For this round we will consider both institutional and private investors as well as considering the possibily of institutional debt financing to keep as much of an ownership in the company as possible.
Because of the busienss model (an internet network and listing service) costs will be minimal.
The first round of financing will come before startup to pay for the creation of the website, purchasing the domain name, the hosting for the site, setting up and testing the payment system (moneris, paypal and our shopping cart) the marketing to both the VC companies and the Small Businesses and the Incorperation of the company.
For the initial round we will be looking to friends and family for $10,000. We do not want to take on any debt financing until we have proven cash flow and monthy profits.
Future rounds will be considered to help expand the network on a more global scale after having success in Vancouver and the rest of Canada (to reach more investors and small business owners in other areas of the world). For this round we will consider both institutional and private investors as well as considering the possibily of institutional debt financing to keep as much of an ownership in the company as possible.
StartupFunds.com - Your one stop shop for small business financing.
Every Nation in the world relies on small businesses. The lifeblood of any nation's economy is businesses that have less than 5 employees. According to Stats Canada, 98% of businesses in Canada consist of five employees or less and these businesses account for 24% of Canada's GDP. This means that there is a tremendous amount of 'mom and pop' shops and newly started businesses in Canada alone and the large majority of other nations are the same way.
These small businesses need investment. In order for these small companies to grow into large firms that power the global economy forward, they all have one thing in common: they need money! There isn't a single startup or small business in the world that needs funding; weather it be debt or equity financing.
The individuals and firms that provide financing to small businesses also need the same thing: qualified companies with potential to invest in. They need to see lots of business plans and meet lots of business owners to determine which company has the highest and quickest ROI and ultimatly which firm they will invest in.
Currently, small business owners have to approach investors individually. There are many Angel forums around the world but there is no one place that small business owners can go to reach a large number of investors at one time. These business owners are busy people and don't have the time to approach each firm especially if you want to approach firms in other countries.
As shown by the following graph (taken from http://www.cvca.ca/resources/statistics/), small businesses in Canada are getting more and more investment from abroad than ever.
What these business owners need is a network of VC companies and individual investors on a global scale to be able to sell their idea to; a one stop shop for financing.
This is exactly what StartupFunds.com does. We connect some of the biggest and most active VC companies and individual investors with small businesses on a global scale. Small businesses can send their business plans to a large group of international investors for a fee and they will immediatly get feedback and possibly investment for their companies.
The business model will be a network / listing service. There will be a large network of investors available for contact by the small businesses that will be drawn to the site through various advertising channels. Investors can list for free and businesses will have to pay to submit plans to individual firms or all firms in their industry.
The beauty of this business model is that costs are low and revenue potential is extremely high due to the sheer number of small businesses out there that are looking for financing. Companies such as "Angel Forum BC", which showcase small businesses to a select group of investors, charge small businesses just under $1000 CAD to get their idea in front of investors. We charge $499.95 per business plan submission (to all investors in the network) and expect to get 20 submissions per month first year equaling a total of $120,000 revenue for the year. We expect to get 50 submissions per month second year equaling a total of $300,000 revenue for the year. We expect to get 85 submissions per month third year equaling a total of $425,000 revenue for the year.
We believe that these expectations are modest because of the fact that there are 2.4million small businesses in Canada alone (according to Stats Canada).
StartupFunds.com - Your one stop shop for startup financing.
These small businesses need investment. In order for these small companies to grow into large firms that power the global economy forward, they all have one thing in common: they need money! There isn't a single startup or small business in the world that needs funding; weather it be debt or equity financing.
The individuals and firms that provide financing to small businesses also need the same thing: qualified companies with potential to invest in. They need to see lots of business plans and meet lots of business owners to determine which company has the highest and quickest ROI and ultimatly which firm they will invest in.
Currently, small business owners have to approach investors individually. There are many Angel forums around the world but there is no one place that small business owners can go to reach a large number of investors at one time. These business owners are busy people and don't have the time to approach each firm especially if you want to approach firms in other countries.
As shown by the following graph (taken from http://www.cvca.ca/resources/statistics/), small businesses in Canada are getting more and more investment from abroad than ever.
What these business owners need is a network of VC companies and individual investors on a global scale to be able to sell their idea to; a one stop shop for financing.
This is exactly what StartupFunds.com does. We connect some of the biggest and most active VC companies and individual investors with small businesses on a global scale. Small businesses can send their business plans to a large group of international investors for a fee and they will immediatly get feedback and possibly investment for their companies.
The business model will be a network / listing service. There will be a large network of investors available for contact by the small businesses that will be drawn to the site through various advertising channels. Investors can list for free and businesses will have to pay to submit plans to individual firms or all firms in their industry.
The beauty of this business model is that costs are low and revenue potential is extremely high due to the sheer number of small businesses out there that are looking for financing. Companies such as "Angel Forum BC", which showcase small businesses to a select group of investors, charge small businesses just under $1000 CAD to get their idea in front of investors. We charge $499.95 per business plan submission (to all investors in the network) and expect to get 20 submissions per month first year equaling a total of $120,000 revenue for the year. We expect to get 50 submissions per month second year equaling a total of $300,000 revenue for the year. We expect to get 85 submissions per month third year equaling a total of $425,000 revenue for the year.
We believe that these expectations are modest because of the fact that there are 2.4million small businesses in Canada alone (according to Stats Canada).
StartupFunds.com - Your one stop shop for startup financing.
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