Discuss about the Innovative Business Model Canvas System.
My team has planned to start a business, in which we will open an ad agency, named “Unique Advertisers” or unique idea is advertising on houses. It will give opportunity to the people to get their dream houses without even paying the full amount for the house. All they will be required to let us advertise on the entire house in return we will pay half of the price of the house. This unique idea has been designed for the business plan of the advertising agency situated in Melbourne Australia. Since the industry has filled with companies constantly coming up with new and innovative ideas, we have decided that with the help of this innovative and creative technique we will be market leaders, it would grab the attention of the people who would be visiting the house of the person who has given his house to the advertisers.
Many people cannot own their dream houses because they do not have enough money. Our mission is to fulfill the dreams of people who want to own a beautiful house. Our team wants to bring a new idea in the market that has not been used before.
Our vision is to grow the business by 35 percent for which we need to get big deals with the help of innovative ideas. In the coming years we want to be the market leaders and so we have proposed this particular plan. Our focus will be on sustainability and not short term profits. The mainstream methods of advertising will not be sufficient for sustainability in the market.
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Key partners The people who would offer their houses for advertisement IT infrastructure and cloud providers Creative IT communities |
Key activities Looking for people for prospects Advertisement design strategic planning Financing the house of the people |
Value Proposition Fulfilling the dreams of the people who want to buy their dream house Paying the partial price of the house |
Customer relationships Innovative ideas of advertising will help in gaining getting more business and the enterprises will |
Customer Segments Big and medium enterprise PR advertising agencies |
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Key Resources Houses House loans Funds Human resources |
Channels Offline word of mouth Online web social media |
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Cost Structure Staff salary Paying the bills of the houses IT infrastructure |
Revenue streaming Project fee retainer fee |
Key Partners- The key partners of the business would be people who would be offering their houses to advertising agencies. IT companies who would design the ads. Financing companies or financial institutions that provide housing loans
Key activities- Our advertising company will search the prospective people who want to buy houses and propose their plan to those people. For people who are going to buy houses we will pay 50 percent of of the price of the house. Those who already own a house will be paid a monthly amount that will be a part of the profits earned by the companies (Nykiel 2016).
Our company will create value by supporting people who want to buy houses but due to financial conditions, they are unable to buy a house of a dream. For those who already have bought houses will get paid for not doing anything just inviting as many people as possible. The owner of the house will have to organize parties more often and invite many people in to the house the ad agency will give a funds for the people for organizing parties two or three times in a month.
Cost structure- The cost will mainly be involved in providing finance for the house, paying salaries to the staffs, running campaigns, price paid for organizing parties. Cost involved in planning and designing the advertisements. Huge costs are involved in putting advertisements in houses.
Revenue generation- Revenue will be generated through the advertisements and the various projects of the company. The enterprises will pay retainers fee to the advertisement agency (Lovelock and Patterson 2015).
The customers will be small and medium enterprises who will hire the advertisement agencies. The other segment of the customer would be the PR agencies who would hire the advertising agency for promotional activities and press releases (Kotler et al 2014).
Our ad house, unique advertisers will be maintaining customer relationship by providing innovative ideas to our clients and winning their trust. We will create a good will in the market by providing houses to people those who cannot have one. This good will and brand image will help us to have good customer relationship. We will also focus on the CRM so that we can retain customers for long. Their main motive is sustainability and therefore they will focus much on the quality (Armstrong et al. 2015).
The two main channels of this business are offline word of mouth that will be done by the guests who would be visiting the house and the online social media, like facebook, instagram and twitter (Andrews and Shimp 2017).
The resources that would be required for this business will be mainly houses, used for advertisements, housing loans, funds, require for designing advertisements.
Many ad agencies are working presently to design and make advertisements of the business enterprises who hire them. The ad making industry y is a huge industry and the market share of this industry in Melbourne is 25 percent. Although no particular, company is the market leader because all the companies enjoy the same position in the market. Australian market achieved a strong growth rate of 7.4% in 2016 than it was expected and it was predicted that market has scope to expand by 6.3% in the 2017 (Jooste and Strydom 2014).
Presently the market is not in its full capacity as most of the companies in this industry follow the same methods of advertising and innovation is very little in this industry. The customers of the advertising market are the small and medium enterprises and the PR agencies. They hire the advertising house for having advertising their enterprises (Thorson and Moore 2013). The PR agencies take the help of the organization for promotion of companies that hire them. The customers now get the advertisement services from different advertising companies in Australia. The factors that can affect the business idea and hinder the business are, lack of financial resources, improper planning of the idea, and inadequate IT infrastructure for the business idea. The company might find it difficult to find the prospects. The business might be having difficulty in taking housing loans from the banks and financial institutions. Legal obligations required in housing loans and setting up a business. Unique advertisers are expecting to capture a market share of 15 percent (Hollensen 2015).
The option for development of the technology would be “Customer”. The services will be produced in house. The option used for sales and distribution would be In House. The advertising services are very old business where the advertising agencies are hired for raising advertisement campaigns. The Unique advertisers as their name suggests are unique because of the idea they have generated for their business. They have chosen to advertise on houses. The houses would be entirely new or it can be old, it would have advertisements of the various companies that have hired Unique Advertisers for raising advertisement campaigns.
The houses will also be used for carrying out the press releases and public events. This will be applicable for big houses. So press related media and IT set up will have to be arranged (Finch 2016).
The technology for advertising can be developed by using three-dimensional graphic designs are used in the advertisements on the wall. The advertising house will develop the technical skills of the employees. The main resource of the company is the houses of the people. The houses will be designed in a way that the advertisements can be displayed in the windowpanes. The windowpanes of selected houses of those prospects whose guests are affluent and doors will have LED screens (Eusebio 2017).
The laws related the businesses are Australian consumer law, fair trading laws and Australian policy and regulation for digital advertising. The owners will have to register their business. They should have the registration certification. Unique advertisers will save make sure that they would focus on conservation on energy resources. They will not any such colors or paints that might cause harm to the environment (Dudin et al. 2015).
The revenue for the first year would be $60, 000 the revenue for second year is $40, 000 and the projected revenue for third year $80, 000.
The projected volume in units sold is 30 units and the projected volume in dollars would be at at the rate of 1000 dollars per unit would be 30*2000= 60,000 dollars.
Projected volume in units sold in 20 units and projected volume in dollars at the rate of 2000 dollars per unit would be 20*$2000 = 40,000 dollars
Projected volume in units sold in the third year is 40 units and volume in dollars at the rate of 2000 dollars per unit would be 40*$2000= 80,000 dollars
The expected revenue would be 60,000 dollars. The selling price per advertisement is dollar 2000.
The expected revenue for the second year would be $40, 000. The selling for the second year also would be the same, $2000
The startup cost has been set up as $25,000
Profit and loss statement three-year summary
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Revenue |
Year 1 |
Year 2 |
Year 3 |
|
Gross sales |
$ 60,000 |
$ 40,000 |
$ 80,000 |
|
Less: Sales returns |
0.00 |
0.00 |
0.00 |
|
Net sales: |
$ 60,000 |
$ 40,000 |
$ 80,000 |
|
Cost of goods |
|||
|
Material cost |
$ 20, 000 |
$ 10, 000 |
$ 20,000 |
|
Variable labor |
0.00 |
0.00 |
0.00 |
|
Misc |
$ 5000 |
$ 5000 |
$ 10,000 |
|
Less: Ending inventory |
0.00 |
0.00 |
0.00 |
|
Total cost |
$ 25,000 |
$ 15,000 |
$ 30,000 |
|
Gross Profit/Loss |
$ 35,000 |
$ 25,000 |
$ 50,000 |
|
Controllable expenses |
|||
|
Advertising |
$1000 |
$5000 |
$5000 |
|
Wages |
$5000 |
$5000 |
$5000 |
|
Payroll taxes and benefits |
$300 |
$500 |
$300 |
|
Commissions |
$2000 |
$3000 |
$2000 |
|
Professional fees |
$500 |
$500 |
$300 |
|
Misc |
500 |
500 |
500 |
|
Fixed expenses |
|||
|
Permits and Licenses |
1000 |
2000 |
2000 |
|
Interest |
0.00 |
0.00 |
0.00 |
|
Depreciation |
0.00 |
0.00 |
0.00 |
|
Property taxes |
0.00 |
0.00 |
0.00 |
|
Rent |
400 |
400 |
400 |
|
Insurance |
200 |
200 |
200 |
|
Utilities |
300 |
300 |
300 |
|
Total expenses |
$ 11200 |
$ 17,400 |
$ 16,000 |
|
Net operating income |
23800 |
7600 |
34,000 |
|
Other gain |
0.00 |
0.00 |
0.00 |
|
Gain/loss on sale of Assets |
0.00 |
0.00 |
0.00 |
|
Interest Income |
0.00 |
0.00 |
0.00 |
|
Total other income |
0.00 |
0.00 |
0.00 |
|
Net income |
$ 23,800 |
$ 7600 |
$ 34,000 |
(Created by Author)
As per the profit and loss statement, in the first year the net income earned is dollar 23,800, in the second year the income earned is dollar 7,600 is very less and in the third year the income is 34,000 dollars.
The possible sources of finances could be bank loans, investors and creditors. The payback period has been estimated as 2 years. Gross Margin 20 – 30% plus
Employees will be hired who would be trained for making innovative advertisements with proper designs and messages that would be appropriate for advertisements in the houses. Technical experts will guide the employees so that they can design the most beautiful advertisements in the houses, which would be attractive for the guests who would be visiting the house. In the beginning, the business would require at least 100 employees who would be carrying out activities like, designing of the advertisements. In the second year of the business, the company would be increasing the number of employees to 200 so that the business can be expanded. In the third year of the business 50 employees will be hired so that as many houses can be targeted for putting advertisements. The owner is planning to capture the market share of 15 percent in the coming five years. The company is planning to grow its business by searching prospects who want to buy houses in the busy market areas or who already have owned houses in the busy market areas of the city (McKeever 2016).
Conclusion
Our team, Unique Advertisers has come up with a unique idea of advertisements in the houses. Our idea will help people to buy their dream houses but for the financial constraints, they cannot. This idea will give them opportunity to own a house of their choice but only at the half price of the house. The people who already own a house and want to a good deal of money can also join this plan all they will be required to do is just let Unique advertisers put advertisements in the walls, doors and window panes of the houses. They will have to organize parties and encourage more people to visit the house so that the objective of marketing communication is achieved. This idea will help the company gain many corporate clients, the customers will be the enterprises it can be small or medium and the PR agencies. The company expects to have a profit within a span of three years. This is a huge business and hence the cost estimated for the business is 50,000 dollars because unique advertisers in order to carry out this business needs to pay the partial price of the houses or people already having houses will have to be a part of the monthly profit as their salaries.
References
Andrews, J.C. and Shimp, T.A., 2017. Advertising, promotion, and other aspects of integrated marketing communications. Nelson Education.
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.
Dudin, M.N., Kucuri, G.N., Fedorova, I.J.E., Dzusova, S.S. and Namitulina, A.Z., 2015. The innovative business model canvas in the system of effective budgeting.
Eusebio, R., 2017. Marketing II. Marketing, p.2018.
Finch, B., 2016. How to write a business plan. Kogan Page Publishers.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Jooste, C. and Strydom, J.W., 2014. Marketing management.
Kotler, P., Keller, K.L., Brady, M., Goodman, M. and Hansen, T., 2016. Marketing management. Pearson Education Ltd..
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
McKeever, M., 2016. How to write a business plan. Nolo.
Nykiel, R.A., 2016. Marketing Your Business-A Guide to Developing a Strategic Marketing Plan.
Thorson, E. and Moore, J. eds., 2013. Integrated communication: Synergy of persuasive voices. Psychology Press.
Wood, M.B., 2014. The marketing plan handbook. Pearson.
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