1 Executive Summary The business environment is very dynamic in nature and with respect to this, the different firms as present in the business environment, would be required to ensure that they are successfully able to engage in activities which will be able to bring about long term success for the overall operations of the firm. Hence, with respect to this, the given business entrepreneurial project plan has been designed to ensure that the organization as a whole is able to engage in long term success and that a firm is able to engage in an opportunity which is not catered to by any other organization as present in the business environment. a.Entrepreneurial Project Objectives The entrepreneurial project objectives can be stated to be as follows: To present a viable business opportunity which can be exploited in order to ensure long term success and also to assure that the organization will be able to attain a considerable demand for the products being sold. To analyze the chosen Indian market which is at its all-time high in order to see to it that, the firm is able to attain success in the long run. To analyze the different strategies, pricing policies, market information and other data which is present with respect to the operations of the Box Knife Sharpening’s. To project the future income of the firm in the coming few years. To present the overall sales and other plans of the organization, with respect to which the firm will be able to attain success in the long run. b.Problem/Opportunities Statement The Box Knife Sharpening’s aims to function in India and with respect to this, it can be mentioned that the primary problem which the firm aims to solve an undertake can be
2 stated to be the issue of the food poisoning which may be caused due to the use of the rusted knives which are generally used in most of the kitchens as present in India. Hence, the firm has observed this as a viable opportunity and aimed to provide the other retailers with a similar opportunity with respect to the fact that, they will be able to provide, HSS knives to the different Indian restaurants as present. The Box Knife Sharpening’s will provide these products as well as the services with the help of their online website with respect to which the expenditure shall be minimum and the reach out to the different customers shall be the maximum. Along with conducting the Business to Business opportunity, the Box Knife sharpening also aims to conduct Business to customer segment in the future which shall allow them to become a common household name for the kitchen appliances and the different tools in the future. In addition to this, the given idea has been chosen for the purpose of India as India is one of the leading companies around the globe with considerable growth opportunities. Moreover, the problem of food poisoning has been observed only in India because, the different restaurants often tend to avoid the safety and hygiene measures and with respect to this, as the restaurant business in India has been growing considerable, this has bought about a change in the mindset of the individuals and as these individuals have been engaging themselves in the eating out culture, the Indian market serves as the right opportunity for itself and allows the company to engage in long term growth. c.Market/ Industry Summary The Indian market as stated earlier, is a considerably growing market and with respect to this, it can be mentioned that as the different individuals have been becoming more open to the idea of eating out, the restaurant business is at its all-time high and with respect to
3 this, the idea can be stated to be an appropriate one as it solves a major issue as present in the particular market. Moreover, as Indians have become more open to the idea of eating out, it becomes considerably important for the restaurants to look after the safety and hygiene and to ensure that there takes place no harm to the different guests as present in the restaurant.Moreover, although there are a large number of utensil and other kitchen appliance, there does not exist any online portal which will cater to the needs of these restaurants specifically. Moreover, as the number of restaurants in the country has been increasing considerably and hence, the size of the market is quite substantial for Box Knife sharpening.As more small firms in the restaurant industry have been growing it becomes considerably attractive for the firm to expand its operations in India. d.Competitor Summary The different competitors of the firm can be divided into two aspects. These can be stated to be the direct competitors or the indirect competitors. The direct competitors of the brand can be stated to be those websites as present in India who sell products directly to the customers and these different websites can be stated to be the websites like Flipkart, Snap deal, Amazon and Shop clues which will allow the users to take the avail of the different offers as present in the particular website. Moreover, in such a scenario the secondary competitors can be stated to be the different physical retailers who are present and tend to offer the similar services which Box Knife Sharpening’s will be offering to the different customers and hence very often these local retailers also offer great discounts to lure the different customers into purchasing their products.Some of these retailers who provide a fierce competition to the Box Knife Sharpening’s can be stated to
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4 be the Hariom Equipment’s, Akhand Jyoti Engineers, JR Equipment’s, Veera Kitchen Point and Fore Tech Kitchen Equipment’s. e.Funding and Financial projection Summary The funding has been aimed to be done with the help of venture capitalist and crowd funding. There are a large number of venture capitalists as available in India and the business owners should take advantage of this and gain access to the required funds which they require for their business. Certain financial projections are as follows: Total liabilities including equity of owners in the first year:$4,210,000 Total assets of the company in the first year:$4,670,111 Break even sales:$1,805,889.00 Cumulative income for the first year:$24,460,060
5 Table of Contents Description of entrepreneurial research activities...........................................................................7 a.Problem and Opportunity Landscape........................................................................................7 b.Problem that the venture seeks to solve....................................................................................8 c.Existing landscape of solutions.................................................................................................9 d.Stakeholder mapping..............................................................................................................10 Solution..........................................................................................................................................12 a. Idea for technology proposed.................................................................................................12 The knife sharpening procedure................................................................................................13 b.Business model for product/ service delivery.........................................................................15 c. Market analysis and Segment structure (Analysis of one, three and five year customer base) Prospect Feedback.....................................................................................................................16 d.Pricing model..........................................................................................................................19 e.Competitor analysis................................................................................................................20 f.Portfolio analysis.....................................................................................................................21 g. Funding..................................................................................................................................22 h.Financial analysis....................................................................................................................24 Assumptions..............................................................................................................................24 Startup and Initial Funding........................................................................................................25 Cash flow...................................................................................................................................27
6 Profit and Loss...........................................................................................................................28 Schedule for investor returns.....................................................................................................30 Conclusions....................................................................................................................................32 Recommendations..........................................................................................................................38 References......................................................................................................................................43 Appendix........................................................................................................................................45
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7 Description of entrepreneurial research activities a.Problem and Opportunity Landscape The given business opportunity aims to function in India. The idea is centered on ensuring that like other key products which are largely available online, Box Knife Sharpening aims to provide a similar opportunity to the different users to purchase the items as present in the kitchen online. The website will be selling all the essentials which are usually required in a kitchen and aims to see to it that, the customers are easily able to avail all the necessary products from a spoon to an entire kitchen renovation. The Box Knife sharpening aims to provide the different customers an opportunity to make the use of the best equipment’s in the kitchen by ordering them on an online domain at low prices. Moreover, the selected business idea has only been selected for the Indian market because India serves as a prime location for the investment opportunities as present around the world. According to Thehindubusinessline.com (2018), the confidence of the CEO in the global economic growth has dipped, however, the country of India has emerged as a rising star in the particular domain and has successfully surpassed UK to become the fourth best country in which one can invest in. This result is based on the survey which was conducted for more than 1300 CEOs with respect to 91 countries reflected that the popularity of India has been falling marginally however, as compared to the other countries, the opportunity has been increasing. This is then followed by the growth of China in the similar domain, however, it needs to be noted that, India has been viewed as one of the most attractive and a buoyant territory in terms of the business growth and popularity. Hence, the business has made a decision to invest in India
8 and take advantage of the growing digitalization as present in the country so as to gain a larger market and a large revenue base as well. b.Problem that the venture seeks to solve Hence, as stated earlier, to seek the advantage of the growing business landscape in India and to solve the problem of the lack of an online domain for kitchenware, the Box Knife Sharpening’s has been developed. Moreover, according to a study conducted, a major share of the restaurants as present in the country make use of knives which are rusted and may lead to the poisoning of the people who generally eat the food as served by the restaurant (Miller 1983). Many such reports have been registered where the restaurants have reflected utmost carelessness in the given scenario and have come up with excuses such as a lack of budget and constraints with respect to which they are not being able to maintain the different knives as available in the kitchen of the particular restaurant. Hence, in order to ensure that these different restaurants are able maintain their particular knives and ensure that the highest standards of hygiene are maintained within the realm of the firm, the company will be providing them with HSS knives. The HSS knives also known as the High Speed Steel knives aremade by using the traditional means of grinding and steelingand are maintained in a similar manner. The company will also ensure that it is successfully able to maintain the knife for the restaurants once in every two weeks so as to ensure that they do not become rusted and that, they are able to provide the best service to their customers. Along with this, the restaurants are also in need of the other products of the kitchen which then go a long way in assisting them to carry out their daily operations and to see to it that they are never in dearth of the goods.The Box Knife Sharpening’s will also provide the
9 customers with rental, selling, repair, maintenance and service products which belong to a high quality and also provide the different restaurants with an optimum food processing services. In order to ensure that, the customers which are the different restaurants are attracted to the particular offer of the specific goods, the customers will be given the different knives for free at the first trial. In this manner, they will be easily able to experience the difference in the products and also ensure that they are able to get additional orders in the future (Aldrich and Waldinger 1990). In the future, the website aims to provide modern kitchen furnishings as well. The main key aspect of the services being provided by the company is that they do not make use of the knives and other such resources for the development of the knives but instead they make use of the traditional machine which makes use of the manual sharpening manner. c.Existing landscape of solutions For the particular problem which exists which is the rusted knives being used at the Indian restaurants, which causes the problem of food poisoning is that many restaurants have come up with an internal auditing mechanism with respect to which the senior management as present in the particular restaurant tends to come up with ideas on how to monitor the particular tools being used in the kitchens and the manner in which these can be maintained in their best condition so as to ensure that, they are successfully able to ensure that hygiene is maintained in the particular organization and in the kitchen of the firm. However, there does exist various issues to the particular approach and the solution as present (Burns 2016). The primary problem which is existent towards the particular approach can be stated to be that, these auditing sessions are not that common in nature and very often the management misses out on the opportunity to
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10 carry out the particular analysis and tends to indulge in the biasness which then prevents them to take care of the rusted tools being used. In addition to this, in India there are a large number of organizations as present which tend to carry out an inspection of the different kitchens, however, it needs to be noted that, these organizations do not conduct the inspections quite regularly and in addition to this, they often engage in corruption and provide a certification to the restaurant irrespective of their cleanliness or hygiene level (Aldrich and Waldinger 1990). Hence, the given solutions are not appropriate one. In addition to this, with respect to the other kitchen tools and appliances being offered to the different household customers, it can be stated that there are several solutions for the same whereby these customers can either make the purchases from the convenience at the stores or easily be able to purchase the goods at various online stores like Amazon, Snap deal and Flipkart in the online domain, however, the quality of the product cannot be guaranteed. Hence, although there are certain options available in the form of the different solutions, it needs to be understood that these options, are not viable in nature and that the Box Knifings solution will be the best alternative for any household or the restaurants with respect to their kitchen solutions. d.Stakeholder mapping The stakeholder mapping can be rightfully defined as the collaborative procedure of research, discussion, debate which are drawn from various sources and aims to present a list of stakeholders in the entire business spectrum. The mapping of an organization can be broken down into the different phases. These four phases can be taken to be as follows: Identifying: This refers to the stage with respect to which the different groups, organizations and other relevant people as present in the domain are identified. In this stage, the Box Knife will be
11 required to ensure that, they are successfully able to identify the different stakeholders as present in the firm. Analyzing: In the analyzing stage, the stakeholder’s interest as well as the perspective are largely understood in order to ensure the success of the mapping, in this procedure, the different stakeholders will be analyzed and then they will be grouped for the analysis. Mapping: In the mapping procedure the different stakeholders are mapped as per their relationship in the organization and the other stakeholders as present. Box knife would be required to map the particular stakeholders in a grid. Prioritizing: The different stakeholders are ranked as per their priority as present in the organization at large. In this manner, the Box Knife can easily prioritize the different stakeholders with respect to the importance. Figure 1: The Stakeholder Mapping
12 Inthis,thecustomersandthedifferentrestaurantswillbethemostimportant stakeholders for the business and after this the government and other business partners along with the other retailers from where the company will be sourcing its products can be stated another set of crucial stakeholders for the business. Solution a. Idea for technology proposed The ideology which has been proposed for the particular business plan works on an ecommerce website. Hence, Box Knife would be required to propose an e-commerce technology with respect to which it would be required to develop an e-commerce website which will have a live customers service system which will engage in the collection of the different orders from the side of the different restaurants who want to associate their operations with that of the operations of the online domain. Moreover, through this online domain, the business will also be able to cater to the needs of the different customers who are present in other parts of the country and would prefer to fulfill their daily needs through the online domain. The functioning mechanism based on which the particular website will function can be stated to be as follows: 1.A particular shopper will visit the website and the website will be presented in a categorized manner with respect to which it becomes easier for the viewer to view the products. 2.The customer will be able to add the products in the cart and then create an account. In this manner, all the customer data is saved in the database. 3.Once the checkout has been done, the website then becomes a lock symbol making use of an SSL certificate.
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13 4.When the checkout will be done then, the Box Knife Company will contact the third party software, to get the shipping rates as available and the different products will be shipped accordingly. 5.The customer would be required to make payment to the website using either credit cards, net banking, debit cards or the method of cash on delivery. 6.In this manner, the company will be able to complete the order of the customer. 7.For the purpose of the maintenance of the different tools as purchased by the different restaurants, a different portal will be present which will then be connected to the e- commerce website. The knife sharpening procedure The Box Knife Sharpening’s aims to carry out the traditional procedure of knife sharpening in order to ensure that it is successfully able to help the different Indian Restaurants in meeting their needs and thereby ensuring that the maintenance cost of the different restaurants is relatively low in nature. The traditional knife sharpening procedure is carried out in various steps in order to deal with the knives of various types starting from thee coarsest knife which is the most destructive one in nature to the most delicate one. In addition to this, the different stages which may or may not be followed by all the knife sharpening procedures may be stated to be as follows:
14 Figure 2 and 3: The traditional knife sharpening process (Source: Sharpeningsupplies.com 2018) The first step comprises of the sharpening process whereby the metal is removed in order to form a new edge of the knife. In this manner, the process of rough sharpening or making use of the water stones, medium grits as well as the sandpaper method may be followed adequately. The second method in the above method is the fine sharpening with respect to which the same tools as mentioned earlier may be used but the grit of the tool is finer in nature. In addition to this, another traditional method which is adopted for the sharpening of the knife may comprise of the straightening of the particular metal on the blade and removing any excess quantities of metal on the knife. The last step is the process of polishing with respect to which the knife is given a mirror finish. Hence, the three main stages can be stated to be as follows: Figure 3: The knife sharpening procedure GrindingSteelingStropping
15 The finest level of sharpening is done with respect to the use of the kitchen knives. It is done more progressively but different methods by making use of blades and applications is done. Usually, the knives are sharpened a few times in a year and then grounded on a rough stone after many years of use. The kitchen knives are steeled before and sometimes after each use due to the heavy use and are sharpened a few times in a year. Hence, in a similar manner, even Box Knife Sharpening’s makes use of this traditional procedure of knife sharpening and grinding procedure in order to ensure that the knives of the Indian Restaurants are processed and presented to the customers in the best manner. b.Business model for product/ service delivery The business model is considered to be an essential part of any business and thereby assists in the understanding of the overall functioning of the organization and the manner in which the firm aims to earn the revenue from the operations. The Box Knife Sharpening’s will be required to operate on a business model which will comprise of various moving parts. The different moving parts of the business model can be stated to be that the company will engage in the direct selling of the goods (Aldrich and Waldinger 1990). In this manner, the company will be able to retain all the profits of the company for itself and be able to ensure that the organization will find success in the long run. Moreover, the inventory of the goods will be maintained by the firm itself. It will also be employing a group of employees for the services relating to the overall maintenance of the knives and will be hiring a third party for the different delivery executives who will be delivering the different goods of the firm. In this manner, the different customers who will be going online to purchase the product will be able to do so and readily avail them for the purpose.
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16 Along with this mechanism of direct selling, the organization will be also providing an opportunity to the other retailers and local sellers to buy their products. These partners will engage in the sales of the products which are less common in nature and tend to provide a unique credibility to the Box Knife firm. A portion of the sales being made by these different retailers will be taken up by the Box Knives in the form of a commission.In addition to this, the maintenance aspect of the firm which aimed to provide adequate service to the different restaurants in order to maintain their tools and their knives on a weekly basis, it could be understood that Box Knife will also be required to maintain a subscription based business model in a premium account through which the different restaurant owners will be required to pay a nominal fees with respect to which the kitchen tools will be maintained accordingly. In this manner, the organization will not only earn its revenue through the sales of the HSS knives but will also earn a considerable amount through the maintenance account. c. Market analysis and Segment structure (Analysis of one, three and five year customer base) Prospect Feedback The market analysis forms an integral aspect of any business plan and hence, it needs to be understood that, in the given section the chosen market of the Indian restaurants shall be analyzed. According to Thehindubusinessline.com (2018), the Indians have now become quite open to the idea of eating out at the restaurants and with respect to this, it can be understood that as the wages of the different individuals have been increasing and hence, not just on special occasions, but these individuals like to eat out on normal days as well. The urbanization has also lead to considerable change in the mindset of the different individuals and hence, it can be mentioned that the consumption habits of the different individuals have also undergone a
17 considerable change. The annual food services sales in the United States has been increasing at a rate of 10% annually which can be considered to be almost the double of the growth rate of the American market. Moreover, in the year 2021, this number will then increase and become double of what it is at present.For the different private firms has well as the global restaurant brands , the Indian market forms a huge potential with respect to which their organization will be successfully able to attain saturation levels in the years to come up. Hence, the competition between the international brands as well as the home grown Indian operators will also increase considerably. Figure: The growing market of Indian Food service business (Source: Thehindubusinessline.com 2018)
18 According to Thehindubusinessline.com (2018), in India the full service restaurants have the largest market share and comprise of around 57% of the total sales of the particular organization. In addition to this, it also needs to be understood that as the country is a vast one, thecountryisagiantpatchworkofculturesaswellasthecuisines,therearevarious organizations in the form of the restaurants which are small and independent in nature. It can be understood that, around only 2% of the total inventory of the restaurants will be branded and other restaurants tend to use generic products. However, it can be stated that the momentum of the restaurants has been increasing and social media has been influencing the sales which takes place in these restaurants at large. One year customer base In the first year, the Box Knife firm aims to target all the large restaurants as present. In this manner, the company will be able to ensure that, these restaurants subscribe to the maintenance service of the HSS service knives which will be made available to the different restaurants (Miller 1983). Moreover, it will also aim at targeting the middle sized restaurant during this period so as to ensure that they are successfully able to engage in with the different operations of the firm at large. In this manner, the organization will be successfully able to get into an engagement with the different restaurants as present. Three year customer base In the three year time frame, the firm aims to target the general households as well. As the firm aims to ensure that it is able to expand its operations successfully and cater to the needs of the different individuals as well, the company will be successfully able to engage in becoming
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19 a regular e-commerce website and solve the problems as well as the issues of the general audience as well. Five year customer base In the time period of five years, Box knife sharpening has an aim to get into the business of modifying the different kitchens as well. As the company aims to become relatively popular in India in a period of five years, it has planned for itself to get into the domain of the modifying kitchens and making use of other modified techniques to make the ultimate brand name for itself. d.Pricing model Box Knife Sharpening’s can be stated to be an e-commerce website and according to Kuratko (2016), there are endless ways to configure the pricing for the online business , however, these revenue strategies often leave less revenue on the table and can have a strong impact on the brand image of the organization as well. Hence, if with respect to this, in case the pricing of the firm is not done in a right manner then, the business shall result in considerable losses for itself. Hence, the pricing model of the Box Knife sharpening need to be such that, it results in a considerable retail mark up and the firm is able to find success in the long run (Miller 1983). The Value based pricing strategy can be referred to as one such pricing strategy, which is required to be adopted by the firm in order to ensure that the organization is able to build long term relationships with the different customers and at the same time, earn a considerable share of revenue for itself. The value based pricing model is a wholesome pricing model which tends to ensure that a company is successfully able to appeal to its customers and at the same time, it does not lose out
20 on the money which is a share of the revenue of the firm. The value based pricing assists the firm in making them feel happy and prevents the, from changing their decisions in case they feel that, they are not being cheated and the e-commerce portal is being able to meet their expectations. The value based pricing will assist in building the brand name of the firm, build stronger customer relationships and assist in improving the bottom line operations. Theprocedureofavaluebasedpricingstrategyisasfollows: e.Competitor analysis Direct/ Indirect The competitor analysis can be described as one of the most crucial type of an analysis that may be undertaken by an organization to understand the overall expectations which a particular firm is expected to abide by.The digitalization of various business organizations has led to an increase in the competition facet and made the different customer purchase quite easy in nature. Different business enterprises have developed their online domain and provide the clientele with a wide variety of goods (Aldrich and Waldinger 1990). For the Box Knife organizations, the different types of competition which the company will be faced by can be stated to be the popular e-commerce websites as well as the retailers will prove to be a strong competition for the Box Knife sharpening.
21 Firstly in India, the largest e-commerce website is the Flipkart which was established back in 2007 and has its headquarters in in Bangalore. The company began as the store for retail books but at present it is the largest portal and sells a wide range of kitchen items to sell in the country. The portal approximately makes a sale of 20 per minute. The next competitor present in the particular domain can be stated to be the Amazon. Amazon is a global retailer which sells a wide variety of goods which comprises of kitchen ware as well and with respect to this, the organization will prove to be a considerable competition for the firm. Other portals like the Snap deal and Shop clues also sell goods of the kitchenware and with respect to this, the firm is successfully able to provide adequate competition to the firms like Box Knife Sharpening’s. Lastly, the organization also faces adequate competition from the other competitors present which are in form of the physical retailers.These retailers are present in every street and often tend to offer considerable discounts to the customers. Some of these retailers who provide a fierce competition to the Box Knife Sharpening’s can be stated to be the Hariom Equipment’s, AkhandJyotiEngineers,JREquipment’s,VeeraKitchenPointandForeTechKitchen Equipment’s. These are the local retailers and provide considerable competition to the online domain of Box Knife Sharpening’s. Shifts in power and position Although the Box Knife can be stated to be providing premium service and specialized services as well, however, there exists considerable shift in the power and position of the different competitors as present (Aldrich and Waldinger 1990). With respect to this, it can be understood that, the position and the power of the different competitors keeps shifting and the Box Knife can be stated to be in a quite doubtful position because the other competitors as present like Flipkart, Amazon, Snap deal and Shop clues often conduct sales in the firm and with
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22 respect to this, they are easily able to provide adequate competition to the different customers in order to ensure long term success with respect to the same. However, in the beginning of the operations, Box Knife will not be able to provide such offers and can suffer adequate loss with respect to this. f.Portfolio analysis 1.IP/patents In order to carry out any business successfully, it can be taken to be critical for a business to have the right amount of patents as well as the intellectual property rights which then allow them to operate well and to be successful in their overall operations of the firm. This Box Knife startup will find it crucial to apply for a large number of patents so as to ensure that the business is able to find success and easily survive for a long period of time. As the Box Knife is engaging itself in the development of a communication platform on the basis of a fiber architecture, it will be required to simultaneously secure the different patents in order to ensure their worth. However, it needs to be noted that as the Box Knife business is engaging in the business method whereby it is not indulging in any new scientific developments (Baumol 1968). Hence, with respect to this, the organization, is a strong believer in this philosophy and for this reason in India, they may not be required to undertake a patent protection for the particular business kind. With respect to the intellectual property, it can be stated that, India has a good set of regulations as well as rules which allows the different businesses to regulate and carry out the different operations soundly. In addition to this, it is also considered to be relevant for the different e- commerce websites in India to get license which will allow the different businesses to perform well. For instance, the different startup companies like Veveo has filed more than 75 patents so as to ensure that it faces no issues in the future of the business.
23 g. Funding Funding is often taken up as an essential part of the startup and any startup as present in the business environment will be requiring considerable funds which will allow them to carry out their different operations (Cunningham and Lischeron 1991). In this manner, they will be able to pay adequately for their initial capital requirements and also be able to keep a share of the money for the different working capital which will be required in the daily course of business. Hence, with respect to this, it can be rightfully understood that, any organization would be required to gain considerable funds and with respect to this, the Box Knife has made a selection of two different sources of funds which have been explained as follows: a.Crowd funding The crowd funding can be described as the practice of funding a particular project or a venture by raising small amount of funds from various people the medium through which the funds are raised can be stated to be the internet medium. The crowd funding is a form of crowd sourcing which helps in ensuring long term success. For instance, in 2015, US$ 24 billion was raised worldwide though the medium of crowd funding.Not only through the medium of internet,butthemediumofmailordersubscriptions,benefiteventsandothersuch considerations are also taken to associate with crowd funding. According toKuratko (2016), the medium of crowd funding can also be used to fund for a large number of events which may be categorized as the entrepreneurial ventures, medical ventures, community oriented ventures, cancer treatments and other such noble causes. The reason why the crowd funding is taken as a considerable procedure is because, of the crowd trigger as present in the process and the influence of the value of the offering out of the entire procedure. In the particular procedure, each individual acts as an agent of the offering,
24 selecting as well as in promoting the projects which make it bigger in size and in spirit. The reason why the different consumers are willing to be a part of the venture is because the different consumers, tend to feel associated with the cause and want to take up a social initiative which allows them to attain success in the long run and provides them with a sense of satisfaction as well. Various websites in India tend to offer crowd funding facilities (Parker 2018). These websites can be stated to be the websites like Rang de, Fair cent, Ketto, Wish berry and Impact guru. These crowd funding software’s have provided adequate support to the organization who want to perform well in the long run and hence, Box Knife will be successfully be able to make use of any one of these venture programs and access the adequate capital which it is required to. b.Venture capital Venture capital can be rightfully described as the financing which is provided by the different investors to the startup company which has a long term potential. The well off investors often take up the role of the venture capitalists and tend to provide resources to the firm not only in the form of a technical service but also a managerial expertise (Evans and Leighton 1989). The investors can also take up the form of a financial institution. However, it needs to be noted that it may often be considered to be quite risky for these investors, in case the firm does not perform well, but they are also required to see to it that, they only invest in firms which have a good potential. Hence, the Box Knife sharpening can look out for the adequate investments in order to ensure success with the finances. h.Financial analysis Assumptions Year 1 model inputs
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25 Use this area to capture key components of the Profit and Loss Statement and the Balance Sheet for the first year only. 1. Year-one revenue expectancy <Product 1> <Product 2> <Product 3> <Product 4> Number of units sold annually100,000150,000200,00050,000 Average sales price per unit$20.00$20.00$30.00$500.00 Annual revenue per product$2,000,000 $3,000,00 0 $6,000,00 0 $25,000,00 0 Total year 1 revenue $36,000,00 0 2. Year 1 cost of goods sold <Product 1> <Product 2> <Product 3> <Product 4> Expected gross margin per product10.00% Annual cost of goods sold per product$200,000$0$0$0 Total year 1 cost of goods sold$200,000 3. Annual maintenance, repair, and overhaul Factor (%) on capital equipment10% 4. Number of years for straight-line depreciation5 5. Annual tax rate30% 6.Iflong-termdebtisbeingusedtofinance operations, enter the total loan value. 2,000,0 00 7. Account receivable and payable %5%
26 Startup and Initial Funding Sources of CapitalStartup Expenses Owners' Investment (name & % ownership)Buildings/Real Estate Your name & % ownership$ 1,000,000 Purchase$ 12,000 Other Investor200,0 00 Construction30,0 00 Other Investor1,000,00 0 Remodeling2,0 00 Other Investor - Other12,0 00 Total Investment$ 2,200,000 Total Buildings and R / E $ 56,000 Bank LoansLeasehold Improvements Bank 1Item 1$ 120,000 Bank 2 - Item 2 - Bank 3 - Item 3 - Bank 4 - Item 4 - Total Bank Loans$ - TotalL/H Improvements $ 120,000 Other LoansCapitalEquipment List Source 1$ 2,000,000 Furniture$ 30,000 Source 2 - Equipment120,00 0 Total Other Loans$ 2,000,000 Fixtures30,0 00 Machinery120,00 0 Other - Summary StatementTotalCapital Equipment $ 300,000 Sources of CapitalLocation and Admin Expenses Owners' and Other Investments$ 2,200,000 Rental$ 300,000
29 Ending cash balance$16,061,4 34 $29,964,6 86 $44,392,2 13 $59,658,6 04 $76,341,3 74 Profit and Loss Profit and loss projections Year-by-year profit and loss assumptions Year 1Year 2Year 3Year 4Year 5 Annualcumulativeprice(revenue) increase -2.00%4.00%6.00%8.00% Annualcumulativeinflation(expense) increase -2.00%4.00%6.00%8.00% Interestrateonendingcash balance 0.50%0.50%0.50%0.50%0.50% Year 1Year 2Year 3Year 4Year 5 Revenue Gross revenue$36,000,0 00 $36,720,0 00 $38,188,8 00 $40,480,1 28 $43,718,538 Cost of goods sold$200,000$204,000$212,160$224,890$242,881 Gross margin$35,800,0 00 $36,516,0 00 $37,976,6 40 $40,255,2 38 $43,475,657 Other revenue [source]$0$0$0$0$0 Interest income$0$0$0$0$0 Total revenue$35,800,0 00 $36,516,0 00 $37,976,6 40 $40,255,2 38 $43,475,657 Operating expenses Sales and marketing$179,889$183,487$190,826$202,276$218,458 Payroll and payroll taxes$480,000$489,600$509,184$539,735$582,914 Depreciation$95,200$97,104$99,008$100,912$102,816 Maintenance,repair,and overhaul $30,000$30,600$31,200$31,800$32,400 Total operating expenses$785,089$800,791$830,218$874,723$936,588 Operating income$35,014,9 11 $35,715,2 09 $37,146,4 22 $39,380,5 16 $42,539,070 Interestexpenseonlong-term debt $71,968$57,198$41,837$25,862$9,247 Operatingincomebeforeother items $34,942,9 43 $35,658,0 11 $37,104,5 85 $39,354,6 54 $42,529,823 Loss (gain) on sale of assets$0$0$0$0$0
30 Other unusual expenses (income)$0$0$0$0$0 Earnings before taxes$34,942,9 43 $35,658,0 11 $37,104,5 85 $39,354,6 54 $42,529,823 Taxes on income30%$10,482,8 83 $10,697,4 03 $11,131,3 75 $11,806,3 96 $12,758,947 Net income (loss)$24,460,0 60 $24,960,6 08 $25,973,2 09 $27,548,2 58 $29,770,876 Cumulative income$24,460,0 60 $49,420,6 68 $75,393,8 77 $102,942, 135 $132,713,01 1 Schedule for investor returns yearInvestmentsReturnsroi% 1$4,590,978$24,460,0604.33 2$ 1,004,791.00$49,420,66848.19 3$ 1,042,378.00$75,393,87771.33 4$ 1,099,613.00$102,942,13592.62 5$ 1,179,469.00$132,713,011111.52 h.Skill requirements Conducting the different operations of a business cannot be considered to be an easy task and with respect to this, many companies, will be adequately required to engage in the right kind of managerial as well as the functional skill so as to ensure that, the business is able to gain success in the long run (Timmons and Spinelli 1994). Hence, given below are the functional skills as well as the management skills which the business, Box Knife Sharpening’s would be required to have in the long run of the business. Functional skills
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31 Financial management: Financial management tends to form a crucial part of the business environment and with respect to this it becomes considerably important for a firm to ensure that it is able to engage itself into the correct management of the different financial instruments and be able to derive the overall profitability of the business at large. In this procedure, the business will be able to ensure success and will be able to engage in competition as well. Marketing, sales and customer service: The marketing and sales can be considered to be an essential part of the organization and with respect to this, it needs to be understood that the different managers as present in the organization will be able to engage in a good marketing networking, incur sales with respect to the same and also be able to provide adequate customer service so as to see to it that the organization will be able to gain success in the long run (Kirzner 2015). Networking : Lastly, at Box Knife Sharpening’s, the different people working for the firm would also be required to have adequate Networking skills which will allow them to successfully engage in the communication and be able to expand their businesses adequately. Management skills The management is considered to be a crucial part of the organization and in order to ensure that a firm is able to attain success in the long run, the different executives as well as the management at the firm would be required to have the following skills: a.Planning: All the managers as present in the Box Knife Sharpening’s would be required to ensure that they are able to engage themselves in adequate planning activities and tasks
32 so as to ensure that they successfully able to carry out the different activities as involved in the firm (Eckhardt and Shane 2003). b.Communication:Themanagerswillalsoberequiredtoengageinrelevant communication with one another in order to build the networking between the different companies and to ensure that the overall popularity of the firm also increases. c.Decisionmaking:Thedecisionmakingatthefirmalsocomprisesasacrucial management skills with respect to which the business will be required make choices and ensure that the right choice is taken up as a decision. d.Delegation: The delegation also forms an important part of the organization. The differentmanagerswillberequiredtodelegatetheirdutiesandresponsibilities adequately so as to ensure success (Kirzner 2015). e.Problem solving: The managers also need to comprise of adequate problem solving skills so as to ensure that when the organization will be faced by any scenario then they will be able to solve it properly. f.Motivation: The motivation also needs to be carried out by the different managers in order to ensure that the different employees are motivated to perform well. Conclusions Hence, from the given project it can be rightfully understood that the Indian market where the Box Knife Sharpening’s is planning to invest in can be stated to be a considerably good idea. As understood from the previous analysis, India can be taken to be an emerging country where every organization around the company plans to invest in and with respect to this, the choice of Box Knife Sharpening’s has to be appreciated.The business idea which has been presented in the given case study can be stated to be that of developing an organization which
33 caters to the needs of the different individuals who are regular guests at the different restaurants and like to eat out. However, they find it quite difficult when the restaurants are unable to maintain the overall safety standards and make use of the different rusted knives which then tends to cause food poisoning to the different guests at the restaurants. In order to avoid this, the Box Knife Company has planned to come up with a business idea which shall provide adequate support to the different restaurants and ensure that they are successfully being able to change and maintain their knives and other kitchen tools as well as the appliances regularly. This will be done by the company on a weekly basis. In regard to this, the company will also be ensuring that, they maintain this system on a minimal monetary basis so as to ensure that the different restaurants are willing to associate themselves with the company and are able to engage in long term success. Along with a considerable business idea, this can also be considered to be a social idea which will then ensure that the business is not only keeping the health of the customers as a priority but is also taking considerable measures to see to it that the different firms tend to become regular with respect to the safety and cleanliness aspect of the firm and also keep the consumer priority at the top. Along with the HSS knife provision, the company Box Knife provisions aims to provide other related goods as well such as other kitchen appliances, food processing machineries, electronics and all other such tools and appliances which would make the overall service to the different customers quite easy. The project above plans to be present first in all the Metropolitan cities of the country which will then be followed by the other second tired cities and then the different towns. Hence, the particular project proposal aimed to cover all the crucial ideas about the project.
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34 The problem which was successfully identified with respect to the idea could be stated to be the one related to the fact that the different Indian restaurants often make use of the rusted knife which tends to cause harm to the food which is prepared and served by them and with respect to this, the organization aimed to convert this problem being faced by the guests at the restaurant and convert it to a viable opportunity which would thenhelp these companies to ensure that they do not make use of the rusted knives and ensure that the different kitchen tools which are being used by them tend to be safe to use and hygienic in nature which would then allow the firm as a whole to attain its overall objectives at large. Starting with the knives, the company also aims to provide other kitchen appliances to the restaurants and in the future aims to get into the kitchen modernization segment. This will then be followed by an initiative which will have to be taken up by the firm in order to cater to the needs of growing businesses and the increasing needs of the customers as well. In this scenario, the different customers will be allowed to make direct purchases from company and in this way, the business will not just fulfill the Business to business needs but will also be able to fulfill the Business to customer needs easily and this ill then allow the firm to attain a larger audience and ensure that the organization is able to attain popularity in the different spheres of the business operations. It was discussed that although there are several ideas as well as the opportunities available for the different Restaurants to maintain the hygiene levels of the different restaurants and to ensure that, it is successfully able to attain success in the long run, these solutions can be stated to be quite temporary in nature owing to the fact that, the inspection and other initiatives which are taken up by the restaurants are often biased in nature and may or may not result in the overall welfare of the organization. Hence, with respect to this, it can be rightly understood that, at present there are certain solutions present to maintain the hygienic level at the Indian
35 restaurant kitchens, however, these ways cannot be taken to be permanent in nature and for this reason, the idea which Box Knife Sharpening’s has come up with is a permanent solution to the problems as faced by the different restaurants as present. The stakeholders of the company were mapped accordingly which presented an overall idea about the performance of the firm in the long run. This means that, the company made the plan to identify the most important stakeholders for the firm which were the different customers, the restaurants, the government and the other members of the society and thereby decided to map them according to their position in the map of the company. The medium of technology which the company intends to take up can be stated to be the online e-commerce portal. He e-commerce portal will serve as the best technology which the company can take up for itself is due to the fact that, it requires minimuminvestment from the side of the firm but is known to have the maximum reach in terms of the target audiences. The company aims to form a website and form a team on the basis of which the company will be contacting the different restaurants. This will be followed by a visit to the restaurant by the different team members and these team members will then take an initiative to build a strong relationship with the different members of the restaurants and try to form a contract with them which then allow the different restaurants to get their knives checked and assessed regularly. The customer or the restaurant who will be the customers of the firm would be required to visit the website, make the adequate purchase, pay for the purchase and then see to it that, they are successfully able to get the products delivered at their place or be able to engage in a successful relationship with the firm. The business has aimed to deal with a comprehensive business model whereby the firm will be selling the different products directly to the consumers and in the later stage of the business, the organization will be engaging in involving other
36 retailers as well who will then sell the products to the different customers but instead will be required to pay a certain percentage of their income to the company in the form of a commission. In this manner, the Box Knife sharpening’s will be able to increase its consumer base and the geographical presence as well. With respect to this, the organization had conducted a thorough market analysis through which it has aimed to engage in the long term success of the firm. The pricing policy which the company has aimed to adopt can be stated to be related to the value based pricing with respect to which the firm would be required to set the pricing based on a considerable share of the different costs but also on the basis of the value of the goods as perceived by the different customers. The Box Knife Sharpening’s can be stated to have a considerable vision, with respect to the fact that, it has a vision for itself for the next five years and has decided to expand its operations in a manner which that it will successfully be able to ensure that the business gains success in the long run. Upon undertaking the competitor analysis, it could be understood that if the firm wants to attain success in the future it would be required to come up with attractive offers. This the global giant Amazon, Snap deal and others as present in India which is why the firm would be required to engage in considerable strategies. The different sources of capital which the firm aims to undertake can be stated to be the medium of either crowd funding which are available in abundance in India or the Venture capitalists. The business idea is quite viable in nature which would help the firm in attaining success. In the last section of the report, the different skills which would be crucial to manage the particular business have been discussed and in lieu of this if the management team at Box Knife sharpening’s is successfully able to carry out the given operations, then it will be able to ensure long term success and long term sustainability with respect to the same. Project Viability
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37 In order to ensure the project viability, the breakeven analysis of the firm will be undertaken which would go a long way in assisting the firm to understand whether he particular project it aims to undertake is viable in nature or not and whether it will be able to attain the profits regularly or not. Break even Fixed Expenses Fixed Expenses Bldgs / Real Estate$ 56,000 Leasehold Improvements 120,000 Capital Equipment 300,000 Location/Admin Expenses398,000 Opening Inventory 272,000 Advertising/Promo Expenses179,889 Other Expenses 480,000 Total Fixed Expenses$ 1,805,889 Variable Expenses Inventory or Materials Directlabor(includes payroll taxes) Other expenses Other expenses Salaries (includes payroll taxes) Supplies Total Variable Expenses0% Breakeven Sales level=$1,805,889 .00 Year 1Year 2Year 3Year 4Year 5 Net income (loss)####### ###### $24,460, 059.96 $24,960, 607.83 $25,973, 209.28 $27,548,2 57.72 $29,770,8 75.77 Cumulative income$22,654, 170.96 $47,614, 778.79 $73,587, 988.07 $101,136, 245.79 $130,907, 121.56 Positive Cash Flow?TRUETRUETRUETRUETRUE
38 Undiscountedbreakeven year 1years Actual break even period0.07years From the given table, it can be seen that, in the first year of operation itself, the firm will be able to attain success and that, this can be used as a substantial proof in order to understand whether the company will be successful. The prospects can be stated to be very high and it can be understood that the firm would be successful in attaining success in the long run. The business runs on a low cost model with respect to which it can be considered to be comparatively easier for the firm to engage in larger sized operations in the coming years and ensure that it is successfully able to gain success in the long run. Recommendations 1.Future actions for potential investors Hence, from the given project it could be understood that the basic idea behind the entire venture was to ensure successfully ensure that the restaurants in India become more hygienic in nature and make use of the best tools in order to see to it that they are successfully able to engage into the trust of the different customers and hence, with respect to this, it will be able to engage in sales which are higher than earlier (Drucker 2014). However, certain recommendations have been provided for the different potential investors in order to ensure that the business is able to become more successful and the organization will be able to provide higher returns to the different investors as present. 1.Analyzing the financial statements and making use of considerable financial instruments
39 The investors can be recommended to undertake a regular analysis of the different financial statements as present. The financial statements serve as a considerable source of information for the different organizations and goes a long way in ensuring that the organization has been going on the right track. Hence, with respect to this, the different investors would be advised to maintain a considerable flow of information through these financial statements (Kirzner2015).Theyarealsorecommendedtomaketheuseofthedifferentfinancial instruments as well which will then go a long way in assisting them to understand the use of their funds being made. 2.Maintaining Due diligence The different investors are also recommended and expected to maintain the due diligence. This means that when they make considerable investments in the firm they are expected to ensure that they are able to understand the manner in which the company has been functioning and also ensure that, the organization would be able to gain their trust in the long run (Bygrave and Hofer 1992). They need to become accustomed to the ways in which the organization has been functioning and in a similar manner, they are required to understand how the firm will reach its overall objectives. 3.Long term relationship The Long term relationships with the investors forms a crucial base for the overall bond which is required to be formed with the organization. Hence, with respect to this, it needs to be understood by the different investors that they would be required to get into an engaging relationships with the different members of the firm and the overall organization in order to
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40 ensure that they are able to gain maximum returns for the different activities which need to be made by them. 4.Information flow In addition to this, the different investors are also recommended to maintain a constant flow of information with the firm (Hodgetts and Kuratko 2001). This is because, the company has placed a large amount of trust on the investors and allowed them to engage in the different operations of the firm, with respect to which they will be required to share a considerable flow of information with the organization and allow them to gain a substantial idea about their moves and intentions pertaining to the investments as made in the firm. 5.Asking for advice The advice which can be provided to the investors, needs to be asked for. Hence, with respect to this, the different investors as present in the organization are advised to see to it that in case they plan to disinvest in the firm or they would like to understand about the working of the firm and other such minute details, then they are expected to approach the firm easily, in order to ensure that they gain the right kind of information which can be processed for the overall goal achievement of the organization (Hodgetts and Kuratko 2001). In addition to the different recommendations having been provided to the investors, the following information will be passed on to the different investors which will assist them in understanding the overall ordeals of the firm. 6.Box knifings will hire right people It can be made known to the different investors of the Box Knife sharpening’s that, the company will be hiring capable employees for the execution of the different operations in order
41 to ensure that the firm is able to gain success in the long run and that the different funds as being invested by the organization can be stated to be in safe hands. 7.It will expand into all cities in the country The Box Knife Sharpening’s at first aims to expand its operations into the different metropolitan cities which shall then be followed by the expansions into the different second tired cities in India (King and Levine 1993). In this manner, the organization would be successfully able to attain long term success and ensure that it is being able to gain the maximum target audience for itself which shall then assist the firm in improving its brand image. 8.Keep an eye on the market The firm would be quite active in nature and would be keeping a continuous eye on the market in order to ensure that it can avail considerable new opportunities for the wellbeing of the firm and that it will successfully be able to engage in new business trends as well. In this manner, Box Knife Sharpening’s will be successfully able to ensure that it overall operations are able to expand and that the firm will be able to attain long term profitability and growth. 9.Increase the value of the firm The investors also need to be provided with adequate information on the fact that the firm has been taking in considerable measures so as to ensure that it is successfully able to improve and increase the overall value of the firm and ensure a higher price in the market along with a well improved brand name for itself. Further research required However, further research is required for the firm in terms of the aspects like the follows
42 On demographics: The firm is required to be quite sure of its demographics and ensure that, it is successfully able to engage in profitable operations. In this manner, the company will be successfully able to become aware of the different demographics and also search for new as well more successfully target markets which the firm can serve (Baumol 1996). On the different e-commerce trends: The firm also requires to research upon the different e-commerce trends which are present in the market. With this, it will be successfully able to ensure that, it is updated with the latest trends and that, and it is able to improve its overall operations with respect to the same. Growth scenarios, three years, five years. Hence, in the coming years, Box Knife Sharpening’s aims to see itself as a considerable growing organization, which will be able to increase its brand image and serve the Indian market successfully (Shapero and Sokol 1982). At present, it will be catering to the needs of the different restaurants and ensure that their knives and other equipment’s are changed considerable with the help of which they will be able to ensure hygiene. In the future, the firm aims to get into the modernization of the different kitchens and also see to it that the firm is able to become a Business to Customer oriented business.
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43 References Aldrich, H.E. and Waldinger, R., 1990. Ethnicity and entrepreneurship.Annual review of sociology,16(1), pp.111-135. Baumol, W.J., 1968. Entrepreneurship in economic theory.The American economic review, pp.64-71. Baumol, W.J., 1996. Entrepreneurship: Productive, unproductive, and destructive.Journal of business venturing,11(1), pp.3-22. Burns, P., 2016.Entrepreneurship and small business. Palgrave Macmillan Limited. Bygrave, W.D. and Hofer, C.W., 1992. Theorizing about entrepreneurship.Entrepreneurship theory and Practice,16(2), pp.13-22. Cunningham, J.B. and Lischeron, J., 1991. Defining entrepreneurship.Journal of small business management,29(1), pp.45-61. Drucker, P., 2014.Innovation and entrepreneurship. Routledge. Eckhardt,J.T.andShane,S.A.,2003.Opportunitiesandentrepreneurship.Journalof management,29(3), pp.333-349. Evans,D.S.andLeighton,L.S.,1989.Someempiricalaspectsofentrepreneurship.The American Economic Review,79(3), pp.519-535. Hodgetts, R.M. and Kuratko, D.F., 2001.Entrepreneurship: A contemporary approach. South- Western/Thomson Learning.
44 King, R.G. and Levine, R., 1993. Finance, entrepreneurship and growth.Journal of Monetary economics,32(3), pp.513-542. Kirzner, I.M., 2015.Competition and entrepreneurship. University of Chicago press. Kuratko, D.F., 2016.Entrepreneurship: Theory, process, and practice. Cengage Learning. Miller, D., 1983. The correlates of entrepreneurship in three types of firms.Management science,29(7), pp.770-791. Parker, S.C., 2018.The economics of entrepreneurship. Cambridge University Press. Shapero, A. and Sokol, L., 1982. The social dimensions of entrepreneurship. Thehindubusinessline.com2018.Indiaasaninvestmentmarket[online].Availableat: https://www.thehindubusinessline.com/economy/india-4th-most-attractive-investment-market- pwc-survey/article26058293.ece(Accessed on: 31 Jan. 2019). Timmons, J.A. and Spinelli, S., 1994.New venture creation: Entrepreneurship for the 21st century(Vol. 4). Burr Ridge, IL: Irwin. Sharpeningsupplies.com2018.StepbyStepKnifeSharpening[online].Availableat: https://www.sharpeningsupplies.com/Step-by-Step-Knife-Sharpening-W41.aspx(Accessedon: 06 Feb. 2019).
45 Appendix Balance sheet Balance sheet projections AssetsInitial balance Year 1Year 2Year 3Year 4Year 5 Cashandshort-term investments $2,394,11 1 $16,06 1,434 $29,96 4,686 $44,39 2,213 $59,65 8,604 $76,34 1,374 Accounts receivable$1,800,00 0 $1,836, 000 $1,909, 440 $2,024, 006 $2,185, 927 $2,185, 927 Total inventory$0.00$0.00$0.00$0.00$0.00$0 Prepaid expenses00000$0 Deferred income tax00000$0 Other current assets00000$0 Total current assets$4,194,11 1 $17,89 7,434 $31,87 4,126 $46,41 6,219 $61,84 4,531 $78,52 7,301 Buildings$56,000$56,00 0 $56,00 0 $56,00 0 $56,00 0 $56,00 0 Land000000 Capital improvements$120,00120,00120,00120,00120,00
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