Entrepreneurship: Analyzing the New Business Model

The main purpose of this report is to widely analyze entrepreneurship as the new business model. It covers factors like customer segments, value proposition, customer relationships, channels, key activities, key resources, key partners, cost and revenue structure, and market.

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ENTREPRENEURSHIP
Student’s name
Institutional affiliation
Course

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Abstract
The main purpose of this report is to widely analyze the entrepreneurship as the new
business model. Entrepreneurship is the basic foundation of any business due to that through
entrepreneurship various business ideas can be generated. It is the realization of this idea that
will translate into an operational business (Antikainen& Valkokari2016). The conception of an
idea by entrepreneurs revolves around the environment in which the business is or will be
stationed and involves carrying out an environmental screening. This is a tool that is applied in
visualizing the required building-blocks for coming up with a business (Dudin, Lyasnikov,
Leont'eva, Reshetov &Sidorenko, 2015). It covers several factors of the internal as well as the
external environment, for instance, the mode of segmenting the customers of the intended
product, the market route, and finance among other related components

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Table of Contents
Abstract......................................................................................................................................................2
Introduction...............................................................................................................................................4
Business Model Canvas.............................................................................................................................6
2.1 Customer Segments.........................................................................................................................6
2.2 Value Proposition.......................................................................................................................7
2.3 Customer Relationships............................................................................................................7
2.4 Channels...........................................................................................................................................8
2.5 Key Activities...................................................................................................................................9
2.5.1 Research and development.......................................................................................................9
2.5.2 Production.................................................................................................................................9
2.5.3 Marketing..................................................................................................................................9
2.5.4 Problem solving.......................................................................................................................10
Key Resources......................................................................................................................................10
2.6.1 Physical resources...................................................................................................................10
2.6.2 Intellectual resources..............................................................................................................10
2.7 Key Partners..................................................................................................................................10
2.8 Cost and Revenue Structure.........................................................................................................11
3. Market..................................................................................................................................................11
4. Operations and Technology................................................................................................................12
5. Human Resources................................................................................................................................13
6. Finance.................................................................................................................................................14
References................................................................................................................................................19

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Introduction
Entrepreneurship is the basic foundation of the business of any organization. This is
because through entrepreneurship an idea is generated. It is the realization of this idea that will
translate into an operational business (Antikainen& Valkokari2016). The conception of an idea
by entrepreneurs revolves around the environment in which the business is or will be stationed
and involves carrying out an environmental screening. The main factors which force the
organization to innovate include existing gaps in the market, desire to outcompete others among
others. Furthermore, due to environmental turbulence, there is a huge need for the organization
to diversify its products, its culture as well as improving the customer-relations in addition to its
ways of making sales (Caetano et al, 2017). This is driven by the fact that an organization strives
to be relevant and to remain in the market as well as it is trying to add value to its resources for
the purpose of offering better services to the customer.
Business model and the business plan help in providing the road map of the
organization’s business. Business model aids in outlining all the operations to be undertaken by
the business idea until it turns out to be a beneficial product to both the organization and its
clients (Dijkman, Sprenkels, Peeters &Janssen, 2015).
The figure below shows the various components of a basic business model (Lima, and
Baudier, 2017).

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This report is, therefore; set to introduce a new idea which is destined to improve the
general performance of Fountain Toy Company. This is an idea about having a Customer
Payment System (CPS) which has been the main desire of the stakeholders in ensuring that
customers spend a little amount of time when paying for both the services and the products. This
system will help the organization in realizing its dream of easing the bureaucratic stages in which
the customer has to undergo to get a service.
Customer Payment System will help the organization in cutting- of the huge costs
previously used to employ a high number of accountants to tackle the payments of other staffs as
well as enabling the customers to remotely make payments at their comforts. It has taken one full
financial year for this idea to be brought to limelight and its involved cost is much reasonable as
compared to the previous one which was very costly on the side of customers who had to travel
from their respective homes to the organization to make payments (Dudin, Kucuri, Fedorova,
Dzusova& Namitulina, 2015).

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Business Model Canvas
This is a tool that is applied in visualizing the required building-blocks for coming with a
business (Dudin, Lyasnikov, Leont'eva, Reshetov &Sidorenko, 2015). It covers several factors of
the internal as well as the external environment, for instance, the mode of segmenting the
customers of the intended product, the market route, and finance among other related
components. Therefore, the Business Model Canvas covers the following blocks, as seen in the
figure below, involved in the building of a new venture:
2.1 Customer Segments
Fountain Toy Company has its customers at its heart and therefore, this model has taken
that with a very concern. This is because for the organization to survive there must be beneficial
customers. Therefore, this system has employed all the required strategies to ensure that better
services are provided to customers by grouping them into distinctive groups as per their needs
(França, Broman, Robèrt, Basile & Trygg, 2017).
Various common needs, as well as the common behaviors, have been used to identify the
market segment to be served by this system. Such needs include the desire by the customers to
have a system which is efficient and which incorporates all the payment details, the desire of the
customers to be able to make payments for their goods while at their comforts without having to
necessarily travel to the organization.

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The segments of desire consist of all the customers within the country. This will enable
the organization to serve its customers via an appropriate distribution channel as well as building
a deep and strong relationship because the system will be integrated with the support system to
enable customers to launch complaints and also get responses for their queries.
2.2 Value Proposition
The reasons that make customers prefer Fountain Toy Company to the other companies
are handled in this section. It is the reason that the customers see as a solution to their issues or
their needs by satisfying them (Fritscher &Pigneur, 2016). Therefore, the CPS will provide a
solution to the various concerns that have been raised by the different stakeholders of the
company. This product is innovation-based and has been well tailored to be used even by those
who do not have any computer literacy and it is going to solve many problems.
This system will provide quality and permanent solutions by eliminating queuing by the
customers when making paying for their toys or services related to toys, it will aid in reducing
the time wastage by allowing the customer segment to pay for their merchandise without
necessarily having to queue as well as helping the customers to embrace the power of technology
(Jackson, Scott &Schwagler, 2015). Furthermore, the system being computerized will be
accurate in calculations as long as it is fed with relevant and accurate data and this will save the
customers from the burden of emotion-controlled human accountants.
2.3 Customer Relationships
The mode in which an organization relates with its customers is very paramount in that it
translates to how long the customer is going to be loyal to the business which translates to the
bigger picture of the relevance of CPS (Customer Payment System) in the market as far as the

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dynamic nature of the business environment is concerned (Joyce & Paquin, 2016). Therefore,
Fountain Toy Company through CPS is concerned with developing a very strong bond of a
corporate relationship with its customers.
The system has been developed to accommodate room for making inquiries relating to
the features of the various toys being sold by the organization. This is in addition to the fact that
the system itself is full of very interactive segments.
The main concern of this system is to retain its original customers by building a strong
bond as well as to attract new and potential customers by offering services which are not offered
by the competitors. Such a relationship will be integrated with the business model by using
customer feedback as the main source of facts to be added to the organization. Through this way,
the organization is likely to spend less money when dealing with the product's management
because customer's feedback is used as the basis of development (Ju, Kim & Ahn, 2016).
2.4 Channels
In order to pass important information to its customers and vice versa, an organization
must put in place a good communication strategy, the path of distribution as well as the channels
for sales (Keane, Cormican& Sheahan, 2018). The Customer Payment System is composed of
an online portal where the customer can interact with the support staffs of the organization. The
customers can make payments through an online portal which is very cost-effective. Therefore,
the main functions of this channel are given in the figure below:

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2.5 Key Activities
This part is designed to cover all the key activities to be undertaken concerning the
previous blocks and includes:
2.5.1 Research and development
The research department has liaised with other departments including marketing
department to conduct deep research on the new product concerning the expected design, the
cost for production as well as the expected time for a working system to be produced. The design
of the new product is customized to fit the requirements of the organization at an estimated cost
of 500 US dollars and it will take one financial year for it to be fully implemented (León et
al,2016).
2.5.2 Production
The system developers have taken the value proportion as its key ingredient in selecting
the right product to develop as far as its design is concerned. Fountain Company through its
system developers has chosen the waterfall model as its process of producing the product. Both
the quality production and cost control mechanisms have been factored in (Lima & Baudier,
2017).
2.5.3 Marketing
In order to serve the segment, the marketing department is tasked with the company's
growth through the dissemination of information. This constitutes conducting proper strategies,

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communications, providing sales support as well as organizing product launch (Lüdeke-Freund,
&Dembek, 2017).
2.5.4 Problem solving
Previous manual payments modes are less convenient as compared to CPS. CPS is
designed to offer customer-friendly services in the most efficient manner. It will eradicate the
need to make long queues while making payments as well as solving the challenges related to the
market competition (Ojasalo &Ojasalo, 2016).
Key Resources
Sustainability of the new system will greatly depend on an impact on the general
profitability according to the system. Therefore, key resources help in specifying the key
requirements and this block has been broken down into:
2.6.1 Physical resources
This part covers those tangible assets applied in creating a value proposition and includes
all the equipment which consist of 5 computers, 1 router and 3 switches, the building in which
the central servers will be located as well as the distribution channels which include the
company's portal.
2.6.2 Intellectual resources
These cover all the intangible resources which include IP configuration, the product’s
brand as well as the copyrights which protect the system. It might take much time and money to
have all these put in place but the good thing is that as at now the organization has solicited for
cheaper means to acquire them and within the time constraint (Onken &Campeau, 2016).
2.7 Key Partners
In order to reduce uncertainties, the organization is set to partner with other interested
parties to ensure that the produced product meets market demands. Therefore, all the required

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network technologies will be supplied by the Royal Technologies who will also take part in
configuring the required networks at no cost (Ovans, 2015).
2.8 Cost and Revenue Structure
The cost structure helps in defining most of the costs required to run this model. This
process will involve identifying the cost to be used in value creation, maintaining the various
kinds of relationship with the prospective customers as well as revenue generation –related costs.
The most costly resources are those related to hardware acquisition and other activities
which include the maintenance cost (Pedersen, Gwozdz & Hvass, 2018). On the side of revenue,
under the research that was done, customers are willing to contribute 5 US dollars as a
registration fee and this will facilitate the maintenance cost. As compared to the previous manual
method where the payment was made in a less efficient way, CPS has been designed to meet the
expectations of the customers.
3. Market
CPS is one of the modern systems which is designed to serve customers of the
organization and its databases are developed to store unlimited information pertaining to the
customers as well as their transactions. The system is designated to serve Australians first and at
a later date, it will be configured to include other external nations globally (Plenter, Fielt,
Hoffen, Chasin& Rosemann, 2017).
The growth rate of the business and the industry at large is very promising because, as
compared to the previous year's financial year, a positive growth of 15% is currently being
experienced. This has been due to the improved level of technology by the Fountain Company
which has enabled it to outshine other competitors. Some of the factors that block the entry of

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other competitors into the market include a deeply-rooted loyalty of customers, unique and
attractive brands and of course, this new idea will outshine them completely.
In addition, the major competitors rely on imported raw materials which are somehow
uneconomical since the market is very dynamic with quotas being imposed sometimes as well as
that the organization's well established and centrally placed within country. As shown in the
figure below (Lima, and Baudier, 2017.
4. Operations and Technology
This part covers all the operations as well as the various technologies to be used in the
implementation of the CPS in the organization. The system will be developed on a subcontract
basis and will locate in one of the company's buildings and the conditions will be taken into deep
considerations. Because of the dynamic nature in technologies, for instance, the trending 4G
network will be used to provide high bandwidth and the system is well configured to adopt
changes in technologies (Schaltegger, Hansen& Lüdeke-Freund, 2016).

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The customer’s privacy is the key driver in ensuring safe and a secured transaction by
using stronger biometric means to access one’s account. In addition to this, the system use is
subject to cybercrime related laws as well as the policies governing the third-party applications.
5. Human Resources
Developing the system requires personnel who are equipped with the general skills of
management and categorically equipped with programming skills. The technical skills required
are those surrounding the use of Java programming, HTML and some deep knowledge on the use
of PHP whereas the management skills the team is required to possess include the planning
skills, skills for system implementation, controlling resources as well as the skills for evaluation.
The company itself will be the sole owner of the system but it will partner with other
relevant bodies in coming up with the policies and for the purpose of marketing the products.
The system will be controlled by a central administrator and multi-directionally used by the
authorized and registered users as they make payments for their purchased products/ services
(Toro-Jarrín, Ponce-Jaramillo &Güemes-Castorena, 2016).
During the preliminary phases, 10 employees to carry out the specific tasks concerned
with each of those phases inclusive of the administrator who is present at all the stages. Once the
system has been fully implemented and start functioning, the number of employees will reduce
to 3 inclusive of the system maintainer. The employees to serve in this position will be
thoroughly vetted by the board to ensure that they meet the requirements and constant training
and motivation is provided to them so as to be able to adapt the market trends. They will be paid
for production as well as for knowledge.

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The system’s expansion will be used to gauge the general growth of the organization and
there is much expectation that the company will expand its wings of growth to feature other
countries in the next 4 years and thus this will change the organizational structure.
6. Finance
The projected revenues for this system come majorly from the membership and the
registration fees and mostly the development funds will be solicited from the bank loans for
startups. Each member is expected to contribute a membership fee of 10 dollars on an annual
basis (Umar, Sasongko & Aguzman, 2018). From the concluded market research the following
are the following:
 Share capital which is raised by the company’s stakeholders
 Retained profits. This is the reserved profit
 Loan capital from a bank
 Overdrafts to act as a short-term loan.
Start-up Costing for [ Fountain Toy Company] - [2018] ( Jackson, Scott, and
Schwagler, 2015).
START-UP COSTS
Co
st ($)
EQUIPMENT/
CAPITAL COSTS
C
ost ($)
Registrations 5
Business purchase
price
3
49
Licenses
5
Start-up capital
70
0

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Permits
3
Plant &
equipment
Domain names
4
Vehicles
3
40
Trade
marks/designs/patents 7
Computer
equipment
4
38
Vehicle registration
8
Computer software
5
40
Membership fees
5
Phones
2
50
Accountant fees
2
Fax machine
2
00
Rental lease cost (Rent
advance/deposit) 40
Office equipment
Utility connections &
bonds (Electricity, gas, water) 40
Furniture
440
Phone connection
45
Shop fit out
5
92
Internet connection 50
Computer software 10

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0
Training
20
0
Wages
30
0
Stock/raw materials
60
0
Insurance
12
0
Building & contents 23
Public liability 12
Product liability 50
Workers compensation
50
0
Business assets
50
0
Business revenue
10
00
Printing 50
Stationery & office 80

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supplies
Marketing & advertising
10
0
Total start-up costs
$38
49
Total
equipment/capital costs
$3
849
Assumptions:
All figures are GST
exclusive (Dijkman,Sprenkels,
Peeters, and Janssen, 2015).
Profit & Loss for [Business name] as at [2018]
PROFIT
& LOSS
Mo
nth 1
Mo
nth n
Yea
r 1
Yea
r 2
Year
3
Sales
20
00
20
00
20
00
20
00
2000
less cost of
goods sold
30
0
30
0
30
0
30
0
300
Gross
profit/net sales
$17
00
$17
00
$17
00
$17
00
$170
0

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Expenses
Accountant
fees 10 10 10 10
10
Advertising
& marketing 12 12 12 12
12
Bank fees
& charges 23 23 23 23
23
Bank
interest 12 12 12 12
12
Credit card
fees 4 4 4 4
4
Telephone [phone]
Lease/loan
payments
45
0
45
0 450 450
450
Rent &
rates 21 21 21 21
21
Motor
vehicle expenses 12 12 12 12
12
Repairs &
maintenance 12 12 12 12
12

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Insurance 12 12 12 12 12
Income tax 12 12 12 12 12
Wages
(including PAYG) 10 10 10 10
10
Total
expenses
$61
3
$61
3
$61
3
$61
3 $613
NET
PROFIT (Net
Income)
$10
87
$10
87
$10
87
$10
87
$108
7
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