ENES210 - PDF

Preview

Summary

lecture notes
...

Description

What is a value proposition? A value proposition is a promise of value to be delivered It’s the primary reason a potential customer should buy your product or service “A problem well stated, is a problem half solved” Measure potential customer using the gain/pain ratio - think beyond the features of your product or service Build the value proposition The startup analysis canvas project

8. The Sales Process? ● What is our sale process? Our sales process is one that will effectively have the customers identifying with our product and recognizing how our product will enhance their work. When prospecting, our employees will visit hospitals and surgical centers to explain our product and its benefits to the potential buyers. Before each visit, research will be done about each specific potential buyer and the sales pitch will be tailored to their needs. The pitches should be personalized so that connections can be formed between the buyer and seller. In the process of closing the sales, prices will be mentioned and a meeting will take place to complete the sale and give a final recap of the product and how it works.

9. The Revenues and Costs ● What are our itemized estimated costs in year one and year two? First, we would need a mechanical/electrical engineer who could design barcode so that it works effectively, and we would pay this employee $40 an hour. This skilled worker would be able to design the barcodes and sensory system in a month, which would cost around $10,000. His expertise will ensure that the products and system runs smoothly, and will be called in to help on occasion when we run into a glitch. In years one and two, we would begin by testing out our barcodes on surgical instruments the hospital already owns and by purchasing well-made instruments and putting our barcode on. Each instrument we purchase to place the barcodes could range from $20-$900, and the engravement of each barcode would be done by a machine,

which could cost around $30,000. Paying employees would cost around $1M for the first year, which includes 6 sales representatives, 30 workers in the factory, 2 computer programmers, 3 advertisement/marketers who would all be payed $15 an hour.

https://boltontool.com/20-x-60-cnc-metal-lathe-machine-with-six-poisition-toolpost-cbt2060?sea rch=CBT2060&gclid=Cj0KCQiA_4jgBRDhARIsADezXcgGYWCgupL_6QWd8qoAxBkRgjM 8AI_a2a8BkPigTbMqDPwoDi-MtuoaAlv_EALw_wcB

● What are your costs to create, develop, and deliver the product or service? Please respond in approximately 100 words. Creating and developing the product is going to be the easiest part since we simply need tags on the equipment that contain electronic barcodes in order for the equipment to have a unique marker. Since no one in our team is a mechanical/electrical engineer, we would need to hire a professional worker who is skilled in this field. We would probably have to pay this person by the hour and the average salary for a mechanical engineer is 40 USD an hour. It would most likely take the engineer 1 month of full time work in order to create and develop our product which is a cost of around 10,000$ ● What are pricing strategies of your direct and indirect competitors? Please respond in approximately 100 words. Companies in the medical devices industry usually try to intact competitive pricing strategies by matching competitors price while at the same time offering more benefits. What this does is it makes customers wonder why they’re paying for something when they can pay the same price for something else and get the same benefits and even more. Companies in the medical devices industry also do bundle pricing. Since not a lot of hospitals will buy only one equipment it is is necessary to bundle price. ● What is your pricing strategy for your product or service? Explain why this is the best strategy in approximately 100 words. Our teams pricing strategy is going to be to do premium pricing where we're going to price our product higher than our competitors in order to make it seem more luxurious that it actually is. This will especially work for our team due to our technology being on that has never been used before or even exists in the current market. It offers such a hugh benefit that no other product on the market does and so due to this premium pricing will work for us since our target customer is going to be willing to spend a lot of money for something like our product.

● What types of revenue streams are used by competitors? Competing companies that produce surgical instrument barcodes, such as Synergy Trak, CensiTrac, and SurgiCare Medical Inventor all use the recurring revenue system for their revenue streams. This method is very “safe” because it ensures that their companies will continually have a flow of customers and people who will come back to them. The catch is that each company needs to consistently improve their equipment and systems so that clients don’t switch to working with their competitors. Recurring Revenue: The recurring revenues are earned from consistent ongoing payments rendered to the company for either the delivery of the value proposition or after sales care for the customer.

● What types of revenue streams will we use? Because our solution of barcode and sensor systems to track surgical instruments has high value, I would expect a significant revenue stream. We will use both transaction revenue and recurring revenue, focusing on recurring. Transaction revenue will be used for one-time purchases with organizations such as surgical mission trips that do not need their surgical instruments to be replaced. The sensor system that recognizes the barcodes would be a transaction revenue because the item only needs to be purchased once. Hospitals and surgical centers, which are constantly needing more equipment and the latest technology, would be our recurring revenue because they would be consistently purchasing new surgical instruments that need barcodes engraved on them. The sales will be asset sales because the ownership of the system will be in the hands of the customer once the sale has been closed.

Transaction Revenue: These revenues are earned from the customer making a one-time payment for the product or the rendering of a service. Recurring Revenue: The recurring revenues are earned from consistent ongoing payments rendered to the company for either the delivery of the value proposition or after sales care for the customer.

Choose -- Asset sale

● What are our estimated revenues in year one and year two?

10. The Funding Plan ● What are our funding requirements?

● Who are our candidate sources of funding?

“”””Accredited Investors. Accredited investors are people who either have $1 million in liquid assets or make $200,000 annually. They are the “sophisticated investors,” that is people who the government thinks are smart enough to decide whether to invest in a high-risk investment like a startup. What if you don’t know anyone with $1 million? You are in luck, because there is an exception that allows startups to raise funding from people who are not accredited investors. These are friends and family. Friends and Family. Even if your friends and family are not as rich as an accredited investor, you can still accept their money in exchange for equity in your startup. That is what you decide to do, since your co-founder’s aunt is interested. You give her five percent of your startup in exchange for $15,000. Now you can afford to build your prototype. Registering the Company. To give the aunt the five percent you registered the company, either through an online service like LegalZoom or through a lawyer. You issued common stock, gave five percent to the aunt, and set aside twenty percent for your future employees as the “option pool.”

Accelerators and Incubators. These programs often provide money, office space, and advisors. A typical level of funding is $25,000 for six percent of the startup. Angel Investors. An average angel round may be $100,000 to $500,000. Angels may focus on startups that they value at $2.5 million or more. Now you have to ask if you are worth $2.5 million today. How do you know? It’s a negotiation with the angel investors. Let’s say it is still early days for you, and your working prototype is not that far along. You find an angel who looks at what you have and thinks that it is worth $1 million. They may agree to invest $200,000....