Business Plan

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Nov 24, 2024

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Surname 1 Name Professor Institution Course Date Title; Business Plan

Surname 2 TABLE OF CONTENTS 1.0 Introduction………….………………………………………………….……….……………3 1.1 The executive summary…………………………………………… ..... ………………….3 1.2 Vision…………………………………………………………………….………………3 1.3 Mission………………………………………………………………….………………..4 1.4 Qualifications .............................................................................................................. …...4 2.0 Industry overview…………………………………………………………………………….4 3.0 Competitive position……………………………………………………….…………………5 4.0 Major risk factors and the available solutions…………………………..…………………….6 5.0 The marketing plan………………………………………………………..………….……….7 5.1The service……………………………………………………………………...…………7 6.0 Industry analysis/ demand for products and services………………….……………………..8 7.0 Target market analysis…………………………………………………...……………………8 8.0 Competitive analysis……………………………………………………….…………………9 9.0 Business position of strength……………………………………………….………………..10 9.1 Marketing and sales……………………………………………………………………..10 9.1.0 Advertising……………………………………………………………………………10 9.1.1 Pricing…………………………………………………………………………………11 9.1.2 Sales tactics……………………………………………………………...…………….11 10.0 The operations plan……………………………………………………...………………….11 10.1 Day to day management………………………………………………………………..11 10.2 Equipment…………………………………………………………..….……………….12 10.3 Research and development……………………………………………………………..13 11.0 The Financial Management Plan……………………………………..…………………….13 11.1 Estimated startup costs……………………………………….…….…………………..13 12.0 Projected monthly operating expenses …………………………………………………….14 12.0.0 Projected monthly cash flow………………………………………….……….…………15

Surname 3 1.0 Introduction 1.1 The executive summary The name of the company will be ExtreMedia Studios. This name will be given to it because it will deal with wide variety of sophisticated, intelligent and interactive Virtual Reality entertainment services and products. The business shall be established as a Limited Liability Company integrated under the state laws of California, and the property manager shall be the executive manager. It will be located in Los Angeles in California on February 2017. The management team of ExtreMedia studio consists of highly specialized persons with training in both the Virtual Reality and computer-aided design technologies (Pugnetti et al 217) . The General Manager will facilitate the company and its resources, implement market evaluation and sales, and carry out research and design development on V.R and interactive software. The Technical Operations officer will help in research, design/developments, and production control. The Senior Engineer will make purchase recommendations and maintain and upgrade the computing equipment, as well as assist in the design and production of company plans. The Administrative Assistants will come up with database programs for sales and accounting as well as keep consumer relations. 1.2 Vision The vision of this company will be to capture a wide interactive media in the future while increasing the value of intellectual ownership and the best technology. The company will be negotiating to offer a license to other companies that will be willing or seek to duplicate the company’s methods of Virtual Reality and all its related properties. We will prepare for the future by coming up with new forms of media that have not yet been invented.

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Surname 4 1.3 Mission The mission of ExtreMedia Studio Company will be to establish high-value Virtual Reality productions and maintain a significant relationship with the consumers and clients by offering efficient and quality 3D graphics. 1.4 Qualifications Adequate working personnel and experience in Virtual Reality technology. Successful completion of Degree in Information Communication Technology (ICT), Virtual Reality, and Computer Engineering. 2.0 Industry overview The industry will be based in the telecommunication and entertainment industry and will provide information and communication services to its customers. The business in the industry having a maximum of 15 customers at a time hence small business it will expand at time goes by so it can earn more profit and be able to cater for more customers (Biocca et al 88) . The technology used is this industry is capital intensive since most of the infrastructure used will require more money to be invested in it. It will need several employees to operate the business hence no labor intensity associated. The level of technology used in this industry will be modern technology whereby computers, mobile phones, scanners, printers and many other modern devices will be used in the business (Van et al 238) . The VR industry is the most trending industry in the modern world, virtual reality has been figured as a major promising growth and development fields. Investors are giving funds inputs at a group of committed companies targeting a greater cash flow back on the virtual reality

Surname 5 industry, with financing hitting $2.8 billion this year and amounting to $8.8 billion from 2012. However, the industry is seen not ready to maintain or sustain this size of producers, causing the occurrence of something corresponding to the video gaming market collapse in 1983, 3.0 Competitive position Our strategic plans for controlling the competition is through the use of progressed creation and development of V.R products and interface software services, each as more entertaining and advanced in technologically as the previous systems. Future V.R products and interface software services will be strategically designed and offered to chart a growing course for the market, and then follow up with V.R interactive software that will gain the interest of the company’s customer repetitively, building brand awareness and encouraging repeat customers. Demand is controlled by consumer tastes and preferences and health impact considerations. The production and profitability of various rely on productive company activities, effective marketing, and reliable strong sales force. Major companies have value in buying raw materials, manufacturing coherence, marketing, and distribution budgeting. It is found that small operations can offer competition effectively through self-distributing goods and services and online sales. The business being located at the town center of the Los Angeles city where there is the availability of Virtual Reality products and services customers. The company will capitalize on offering better services and with comprehensively standard charges with extensive advertising. Advertising is not mainly done by competitors within and Virtual Reality dealer who are renowned V.R services and products dealers. Better services will be offered in order to attract more clients in the company for there shall be less extra cost. The existing competitors are believed to offer less capacity of V.R services and products compared with ExtreMedia

Surname 6 Company’s targeted volumes. The business will mainly focus on offering V.R products and services in the entire state of California. The company assets are not much compared to several of the other competitors but the strategic location of the business is of great advantage. The company may require few employees due to the few operations needed in the management, sales, procurement and, training departments. Monitoring the suitability of the V.R is easy because of the few companies compared to interactive software consumer (Vora et al 566) . The company will capitalize on proper management and improve the access channels due to high quality and professionalism. The ability to come up with award-winning interactive movies, CD-ROMs, gaming and, films are the company’s target to outdo the competition from the ground up is unique to ExtreMedia. We believe that the company’s consumers will expect to discern, absorbing entertainment and leading-edge V.R technology when they reach for the company’s products. Since the ExtreMedia products will take a completely divergent approach of the traditional computer game, this is because the company will find a niche other companies having not yet been able to figure out. 4.0 Major risk factors and the available solutions Some of the projected risks are the financial risks which will be believed to occur due to low contribution by the company owners as compared to the proposed startup capital and funds to be achieved through borrowing. However, the company owners will be advised to retain 60% of the achieved profits back into the company.

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Surname 7 5.0 The marketing plan 5.1The service ExtreMedia will be a Virtual Reality production studio dealing with the film and video game production, coming up with artificial interactive software on scenes and imaging services, video and film development, the companies services provided will range from film directing and producing intelligent Virtual Reality displays that can be used in events, music video, advertising, filming, experience concept, post-production and, TV production. There will be computers to ease the production of these services. The products will include film cassettes, music video CDs, 2D and 3D graphic games applications and entertainment systems. These V.R interactive software services and products will be made available to the market efficiently and affordably. The products will come in different colors, sizes, and qualities from the ExtreMedia studios and will use the company’s brand in packaging and will be of high quality in terms of offering services. Customers purchasing and using the company’s product and services will enjoy the convenience and at lesser prices. The products will be durable and flexible and will come with a warrant while the services will be of high quality. The servicing will be done by the company’s technician, and that will be free of charge hence customers to ExtreMedia will also save on V.R live streaming on music, film and video production costs.

Surname 8 6.0 Industry analysis/ demand for products and services Looking at the last few years, this industry has been steered towards children, and the general sales of computer games and equipment have gone high in a stable manner (Biocca 49) . Unexpectedly, parents have seen it much more difficult and unable to find the computer and interactive software that will challenge and entertain too. The V.R trend will continue will grow as the entertainment generation grows in number; one need and development will only take a glimpse at all of the computers being used in classrooms around the state to indicate the potential adult market. ExtreMedia Studios believes that adults are in need for intelligent, interactive entertainment that considers the advantage of the computer and video games. The start of the large installed base and production of CD-ROM devices and drives combined with the increased development of computer technology has now ensured the offering of this type of material content possible. According to a recent study carried by Simba Information, Inc., the target market for consumer-based CD-ROM titles in film and video music industry is expected to double with time, creating over $300 million. Looking at the increased distribution and demand for CD-ROM drives leaving consumers looking for more diverse materials sources, audiences and consumers will be clearly ready for the titles that ExtreMedia comes up with as the company will look basically at the current demand. 7.0 Target market analysis ExtreMedia Studios' target market will comprise of educated adults aging from 18 to 45 years who have the experience in the current computer technology available in their schools, homes, and a considerable disposable income. This brings together the present market of "prior

Surname 9 adopters" with females’ average of 21-40 years and college-educated homes with growing children. ExtreMedia market will be classified according to demographic or geographic factors whereby the most expected population, in this case, will be the adults in gaming, movie and film fans from different institutions like schools and for domestic purpose. The company will also create different contents based on different lifestyle hence ensuring that a wider consumption is achieved. Market size will also be aimed to growth; this will be increased by promotion activities. The company will also look at online selling classifying another segment of online market (Deutsch et al 376). Due to the lack of effective and reliable data on this fast growing market, the goal of market segmentation is majorly to offer a general overview of market changes and trends for Virtual Reality and to evaluate important ideas regarding how the industry could evolve in the future, therefore informing the ExtreMedia studio company partners of potential risks and opportunities. Future studies may provide a more concise analysis, but only with the availability of relevant data. 8.0 Competitive analysis The company will have potential competitors who are already stable in the market. These competitors who deal with V.R and Interactive software are Survivors which is a gaming studio located in Los Angeles under the funding of $4 million, another studio is Wevr.com located at Venice under the funding of $41 million, Vertebrae, Inc. located in Santa Monica, Magnopus.com

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Surname 10 The location of the competitors will be advantageous to the company’s studio because their customer will get to know about ExtreMedia studios and will inform other clients about the existence of ExtreMedia due to its access from other competitors. They will also provide price comparison and standardization. This will also enable product and services to be made available to the consumers that the competitors will not be offering (Jayaram et al 579) . This will be a disadvantage on the ExtreMedia side because the competitors are already stable in the market and will be hard to beat them with the shortest periods. They also have experience in production and hence will be hard to beat them. The competitors are medium sized and ExtreMedia studio will be highly rated compared to them. ExtreMedia studio will strategize to grow faster and acquire wider market share to get stability and entry into the world market so as to catch-up with the competitors. The ExtreMedia studio will be small with an investment of $500,000. This will enable an easy start of the business and management principle exploited as to gain market entry easily. 9.0 Business position of strength 9.1 Marketing and sales 9.1.0 Advertising Advertising shall be done through the internet which shall have contents being put at a strategic website by the use of the colored photographic material. Local billboards shall also be directed in order to advertise the company further. The company name shall also be put across billboards on the streets to display a clear sign of quality V.R services and products being offered. The number of colored photographic material will be as many as possible in order to

Surname 11 market the business effectively within the business and also in different places there will be billboards indicating the location of the company, V.R products, and services offered, distance to the company site (URANO et al 811). 9.1.1 Pricing The charges of V.R interactive services shall depend on the cost price and any other incurred costs before the production and creation process in studio premises .It shall also depend on the price tag on the completion and also the government control pricing e.g. goods through which value added tax will be paid or not. Different products and V.R services will be attached with different prices I.e. depending on the quality, type of make, value and .The discounts shall also be used where applicable. This will draw many consumers to buy from ExtreMedia thus higher sales volume and high-profit margin. 9.1.2 Sales tactics ExtreMedia studio shall offer its services and products directly to the consumers. The company’s sales personnel will be required to transport the V.R products but packaging and branding activities shall take place in the studio premises if V.R products are to be in the large sales transaction and prior purchasing should be done the day before the delivery period. Discounts offered will be expected to increase sales research hence increase profits. 10.0 The operations plan 10.1 Day to day management ExtreMedia will be established as a limited liability company. The following staffs according to their titles

Surname 12 • General Manager • Administration assistant • Technical operations manager • Senior engineer ExtreMedia initial year will comprise of organizing and developing practices since the company will be giving office equipment, this will minimize some major operations in the company that will lead to lagging in the development (Lengenfelder et al 30) . After getting the startup capital, the strategized efforts in the beginning period will be spearheaded into the following significant areas. • Legal organization and management • The profusion of design, information and training management libraries. • Provision and installation of office equipment. • Marketing and sales operations. The startup sales from the ExtreMedia studio company will comprise of exhibition tapes and formally designed home. The sales obtained here will be able to generate an effective cash flow thus having a strong base for establishing ExtreMedia Company in the marketplace. 10.2 Equipment • Computer equipment • Software equipment

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Surname 13 • Music and sound equipment • Filming equipment • Interactive controller wand The maintenance in the studio will include archiving, data backups and cataloging as well as considering the systems and software updating. The data administration network control and license management operations also involve all maintenance services (Saladin et al 17) . 10.3 Research and development The technology category assists in choices on acquiring hardware by offering pricing and technical information, although it is not self-reliant responsible for all studio assets purchase recommendations. The company team jointly will have to decide and agree on strategic plans (Mosaker 18) . 11.0 The Financial Management Plan The initial or the startup capital will be contributed by the owners, and loans (Harrison et al 603) . The owners are the shareholders of the ExtreMedia studio will contribute an amount of $300,000 11.1 Estimated startup costs ExtreMedia will be expected to purchase the computing and software equipment, music and sound equipment, and filming equipment hence the estimated amount for this will add up to $200,000. Again considering the employee salary of directors and producers will add up to $1,000,000.

Surname 14 fig . 11.1.0 pre-operational costs ITEMS Amount ($) Machinery and equipment Operating cost Consultancy & research Salaries 200,000 500,000 200,000 1,000,000 Total 1,900,000 12.0 Projected monthly operating expenses and income opportunities for the first year of operation The company’s operating expenses comprise of employee salaries, selling, advertisement depreciation and the other expenses. The projected monthly expenses are totaling to about $135600, the accounting fee as per the projected data will be $2,217,400 per year

Surname 15 12.0.0 Projected monthly cash flow ITEM Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov TOTAL $ $ $ $ $ $ $ $ $ $ $ $ $ Cash sales 320000 360000 322000 348000 360000 320000 280000 400000 340000 320000 340000 320000 4,000,000 Collection from debtors 40000 50000 40000 60000 55000 60000 55000 45000 55000 50000 40000 50000 600,000 Total cash in flow 360000 410000 372000 408000 415000 380000 335000 445000 395000 330000 380000 370000 4,600,000 Cash out flow Cash purchases 100000 100000 100000 100000 100000 100000 600,000 Payment to creditors 5000 7000 7000 2000 35000 45000 7000 80000 90000 278,000 Rent 8500 8500 8500 8500 8500 8500 8500 8500 8500 8500 8500 8500 102,000 Salaries and wages 109700 109780 108700 108650 109000 109350 109500 109320 107100 105000 106500 108000 1,300,600 Telephone 200 100 1500 2000 2300 2400 2600 2700 2800 3000 3000 35000 26100 Miscellan eous 1000 2800 2600 10000 10000 10000 10000 2500 5000 10000 2000 10000 75900 Total cash outflow 224400 228180 128300 231150 129800 265250 123100 270520 135400 206500 310000 130000 2,282,600 Net cash balance C/D 135600 181820 243700 176850 285200 114750 211900 174480 259600 123500 70000 240000 2,217,400 Accumula tion 135600 317420 561120 737970 1023170 1137920 1349800 1524300 1783900 1907400 1977400 2,217,400 Fig. 12.0.1 ExtreMedia studio cash flow

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Surname 16 ITEMS AMOUNT($) Sales 4,000,000 Cost Of Goods Sold ( 600,000 ) Gross Profit 3,400,000 Less Expenses Rent 102,000 Telephone 26100 Miscellaneous 75900 Salaries 1,300,600 Advertisement 20000 Other expenses 150000 Total Expenses (1,674,600) Net Profit Before Tax 1,725,400 Provision For Tax (30%) (517,620) Net Profit After Tax 1,207,780 Fig12.0.2 Performa Income Statement for year ending 2017

Surname 17 Fig.12.0.3 Breakeven level a. Total contribution margin = Sale - Total variable Variable cost (item) Amount ($) Cash purchases 600000 Salaries and wages 1300600 Telephone 26100 Miscellaneous 75900 Total 2,440,600 b. Calculate the contribution margin percentage Contribution margin/sales x 100 =300000/ 4000000 x 100=7.5% c. Fixed cost Fixed cost (items) Amount in ($) Advertising Rent Transport 20000 102000 20000 a. Calculate break-even level of sales in dollars. =Total fixed assets/ Contribution margin X 100% =620,000X100% 300,000 = 20.66%

Surname 18 13.0 References Pugnetti, Luigi, et al. "Evaluation and retraining of adults' cognitive impairments: Which role for virtual reality technology?." Computers in Biology and Medicine 25.2 (2515): 213-227. Biocca, Frank, and Ben Delaney. "Immersive virtual reality technology." Communication in the age of virtual reality (2015): 57-124. Van Veen, Hendrik AHC, et al. "Navigating through a virtual city: Using virtual reality technology to study human action and perception." Future Generation Computer Systems 14.3 (2011): 231-242. Vora, Jeenal, et al. "Using virtual reality technology for aircraft visual inspection training: presence and comparison studies." Applied Ergonomics 33.6 (2012): 559-570. Biocca, Frank. "Virtual reality technology: A tutorial." Journal of Communication 42.4 (2013): 23-72. Deutsch, Judith E., et al. "Development and application of virtual reality technology to improve hand use and gait of individuals post-stroke." Restorative neurology and neuroscience 22.3-5 (2014): 371-386. Jayaram, Sankar, Hugh I. Connacher, and Kevin W. Lyons. "Virtual assembly using virtual reality techniques." Computer-Aided Design 29.8 (2010): 575-584. URANO, Akihiro, et al. "Virtualized Endoscope System--An Application of Virtual Reality Technology to Diagnostic Aid--." IEICE TRANSACTIONS on Information and Systems 79.6 (2016): 809-819.

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Surname 19 Lengenfelder, Jean, et al. "Divided attention and driving: a pilot study using virtual reality technology." The Journal of head trauma rehabilitation 17.1 (2012): 26-37. Saladin, Michael E., et al. "A preliminary report on the use of virtual reality technology to elicit craving and cue reactivity in cocaine dependent individuals." Addictive behaviors 31.10 (2016): 1881-1894. Mosaker, Lidunn. "Visalising historical knowledge using virtual reality technology." Digital Creativity 12.1 (2011): 15-25. Harrison, A., et al. "The role of virtual reality technology in the assessment and training of inexperienced powered wheelchair users." Disability and Rehabilitation 24.11-12 (2022): 599- 606.

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