Business

Plan for the Lean Entrepreneurship Project

Professor Jos Vasconcelos

Professor Antnio Lucena de Faria

Adriana Jernimo n 152114210

Cyril Dujardin n 159114517
Joo Canedo
n 152114042

Mafalda Alves n 152114221

INDEX

Executive Summary ............................................................................................................. 3

MyCit Team ......................................................................................................................... 4
Business Model ................................................................................................................... 6
Financial Part ....................................................................................................................... 8
External Conditions ........................................................................................................... 10
Implementation Program .................................................................................................. 11
Risk Analysis ...................................................................................................................... 13
Conclusion ......................................................................................................................... 14
Appendixes ........................................................................................................................ 15

EXECUTIVE SUMMARY
The idea that solving problems with technology is a hard and unreachable, that
only brilliant minds can create it, is becoming old-fashion. According to the co-
founders of MyCit App, our team, the customers waiting time in stores shouldnt
be as frustrating, demoralizing and such an annoying experience as it is nowadays.
The truth? It is that the waiting-line experience in a service facility significantly
affects the consumers overall perception of the quality of service provided.
MyCit App Project is based on the development of a new smartphone application
that allows everyone to improve their time management while waiting in queues.
For almost every consumers services stores in Portugal, MyCit allows people to
know, on their phones which was the last number called, how many people they
have ahead them and the time prediction for how long they have to wait until
their turn comes. MyCit also provides a Premium Version with more features such
as time customization and the chance to get and save the ticket through the
application.
How are we different from our competitors? How to explain the success of our
future perspectives for MyCit App? In this business plan, we will try to reach an
answer for these questions, using a set of frameworks to analyze both the
company and its industry.

MYCIT TEAM

We grew up in a generation that is continuously changing, where younger people
are multitasking and where many people search for more opportunities to face
their fears. Nowadays many people believe that its impossible to live without
technologies like for example their phones, computers, tablets and other
technological devices.
Based on the arguments stated above, as a team, we developed a service based
on this new generation and this new way of living and thinking that can make
people save time in their lives.

4 members compose our team:
ADRIANA JERNIMO has done her bachelor in management at the Nova School of
Business and Economics in Lisbon. Currently she is doing her Master in
Management and her major is in Strategy. Adriana is our Human Resources (HR)
manager and she plays an important role on the coordination of the Marketing
department inside the company. She is responsible for a wide variety of roles
MyCit such as planning, organizing, and directing the operations of the entire HR
department and Marketing department. She is Mycit CHRO.
CYRIL DUJARDIN has done his bachelor in Corporate Finance at the ESCP Europe.
Currently he is doing his Master in Finance. Based on his master, Cyril was selected
to be the person who coordinates our outsourced parts mainly because of his
knowledge which provides him more tools to connect directly with the Financial
Outsourced Company. He is our CFO.
MAFALDA ALVES has done her bachelor in Management and Industrial
Engineering at ISCTE. Currently she is doing her master in Management and her
major is in Management and minor in Marketing. Mafalda is in charge of some
important decisions. She is our decision maker and her responsibilities are based

on the management of the reports of our company and to maximize the profits of
our entity. She is our CEO.
JOO CANEDO has done his bachelor in Economics at ISEG. Now he is doing his
master in Management and his major is in Strategy. Joo leads the business part.
He is responsible for the daily operation of the company, and routinely reports to
the highest-ranking executive. He is responsible for ensuring that business
operations are efficient and effective and that the proper management of
resources, distribution of goods and services to customers and analysis of queue
systems is conducted. He is our COO.

BUSINESS MODEL

Vision: To create value and make a difference. MyCit App aims to create a better
everyday life for customers.
Mission: Our project ensures everyone to improve their time management while
waiting in queues by developing a software to face real world challenges that has
to be is easy to access and use.
Values and one-year objectives: Mycit benefits from two sources of revenues,
the ads from the free version app and the payments from the Premium Version of
the app. In the first year, we pretend to adopt our app by both chain stores and
mass customers, and we want to achieve the 36,000 downloads regarding our free
version. According with this expectations we expect an EBT of only 1,338 after
one year.
Value Proposition: Our team wants to ensure the improvement of customers
time management and quality of life by solving their needs and desires while
improving the productivity of public institutions and private companies.
Target Markets: Our Serviceable Obtainable Market (SOM) would be the portion
of Serviceable Available Market (SAM) that we can currently realistically serve: the
customers that are able to download our application and recognize its features as
well as its benefits. Here, we have to utilize our organizational segmentation
criteria relative to behavioral (technological use), psychological (lifestyle, motives
and benefits sought) and profile characteristics (age and occupation). So according
our criteria, only 30% of the SAM analysis will download our application and
probably apply to a better and payable version of MyCit App - 1,240 millions of
people.
Marketing Plan: The best strategy to get MyCit noticed by customers will be
through advertising in stores (partners that want to get our service connected
with their actual ticket system), our Facebook in order to create the buzz on social
media and by using Facebook Ads.

Key resources and key activities: MyCit App resources comprise the intelligent
platform, the software, the qualified team and the outsourcing. We added the
outsourcing of our IT Development in order to design an efficient, ergonomic and
user-friendly interface suitable with the existing ticket systems solutions.
Additionally, we value the creation of a win to win situation with our partner
companies since they get the possibility of advertising their brand through our
App and even more important they value a lot the fact we have all services in one
single App.

FINANCIAL PART

I. Revenues & Costs

Mycit benefits from two sources of revenues: ads from the free version app and
payments from the premium version of the app.

Regarding the free version, downloads of the app should increase from 36,000
downloads (<100/day) the first year, to 96,000 the third year (260/day). This
increase is due to the adoption to our app by both chain stores and mass
customers. This trend is supported by our increasing marketing investments and
the early success of our solution among a few well-known brands (MEO for
instance). Our revenue from the free version is depending on the average daily
user sessions, the average minutes per session, the ad impressions per minute,
the ad network fill rate and the eCPM. Consequently, we estimate this revenue at
0,95 per download (see details in the appendixes).

Regarding the premium version, the sales are expected to begin the second year
(development and implementation during the first year) with 36,000 downloads
(<100/day) and then drastically increase the third year to 144,000 (390/day). This
trend is due to the subsequent advantages for the customers to have the
premium version rather than the free one. The price of the premium version will
be fixed at 2.69. Apple and Android take on average 30% commissions on the
sales. As a result, we estimate this revenue at 1.9 per download.

Over three years, the number of downloads of our application may achieve
366,000. This is in line with the top 25 applications in Portugal. Over the 3 years,
around 500,000 of revenues are expected to be generated.

Costs come essentially from personnel the two first year (67% and 47% of total
costs) and also from marketing expenses, especially the third year (still 40% for
personnel and 36% for marketing).
As a result, our business model is sustainable over the 3 years. We predict an
operational margin of 164,600 the third year (45% of sales).
Sales
COGS

FY01
34 200
0

FY02
119 700
0

FY03
364 800
0

Gross Margin

34 200

119 700

364 800

350000

Personnel
Soc Security
Marketing
Administration
R&D
Others
Bad debt provision
Depreciation

20 000
4 750
1 710
1 026
684
1 000
0
667

40 000
9 500
23 940
3 591
2 394
4 000
0
2 000

80 000
19 000
72 960
10 944
7 296
8 000
0
2 000

300000

EBIT

4 363

34 275

164 600

50000

Interest

3 025

2 610

1 890

EBT

1 338

31 665

162 710

400000

250000
Sales

200000

EBIT

150000
100000

0
1

II. Funding requirement

The funds will cover the first year expenses. Indeed, the first 6 years are dedicated
to the development of the free app and the last 6 months will be focused on its
launch on the market and the development of the premium version. These
projects will require funds. After the first year, we consider that our business will
be sustainable enough, i.e. sales will cover future costs. The total amount of
needed funds reaches 29,170. Since as co-founders we decide to invest 10,000,
our required investment from investors reaches 19,170.

Required Startup Funds

Amount

Expenses 12 months
Personnel

20 000

Soc Security

4 750

Marketing

1 710

Administration

1 026

R&D
Others

684
1 000

Total funds needed

29 170

Founder's investment

10 000

Required investment

19 170

EXTERNAL CONDITIONS

The Economic Environment Even if the Portuguese economy is not so good at
the time, people still give a lot of importance to the phone they carry and most of
citizens have smartphones. Still because of the current economic situation we are
dealing with, people tend to have less and less patient for public services, for
example, and are willing to waste as less time as possible to solve their problems.
The Competitors We consider as our main competitors the already existent
applications that have the same features as ours however it is important to
mention that each service that has this type of software has their own application
and our aim is to combine all services in one single App.
The Project Competitive Advantage Consumers nowadays use their phones to
do everything and both sharing and been online have been a trend in the past
years. By providing all services online through a smartphone can be considered
also trendy which motivates people to want to have it. On the other hand, people
over evaluate their time so any solution that turns possible a better management
and more control of it will be more than welcome to everyones lives.

IMPLEMENTATION PROGRAM

First of all its important to show our road map:

Second we will state our short-term specific projects.
- Develop our Prototype (we already made our prototype but we need to test it in
the market to get some feedback from customers, for that we thought about
creating a BETA Version)






- Create a BETA version for starting the analyze of the market in the reality (as we
all know its easy to say we will use this app for sure but when we talk about
money the situation change a little bit. Basically this BETA version will be our first
future step).
Our studies were focused in business so we are not the best experts to make our
app. In order to develop our prototype, develop our BETA version and final

software we thought about contracting a business process to another party.

Basically we thought about hiring someone to help us with this part of the project.
In the first year we pretend to create a database where we can establish our
partnerships, schedule meetings to search for new investors, create a space where
we can manage our financial plan and finally create a section to analyze who will
be our advertisers. Inside this database we will have a place to analyze the needs
of our customers that bought the Premium Version and we will try to develop the
app to satisfy their needs.
Our objective is to gain revenues through advertisement and selling our Premium
Version that will be really useful for our customers. This Premium Version will
allow people to take their own ticket in any place through their phone, so they will
give more value for their time.
Our objective to the future is to reach a goal of 306,000 downloads over three
years and cut in several costs and equipments (for example just hire 2 employees
in the 3 year).

RISK ANALYSIS

Limit Factors and Obstacles First of all not everyone carries a smartphone and
from the ones who do, they are not all interested on having this type of App in
their phones. This is not a daily basis kind of App which means that we do not use
it every day so its utility might be not as valuable as so many others in the market.
Critical Success Factors The main factor it will bring our success is the act we
combine all services in one single application. Nevertheless is important to
highlight the fact that we need both a really good software development and a
very good relationship with our partners (since without them we are not able to
build and provide MyCit).
Special Risks and Countermeasures Our system has to be always functional and
cant break down one single time. Customers satisfaction is our first priority and
their trust is based on how satisfied and how helpful is our software to them. If
your App fails one time or if its not working (which can happen quite often in this
sort of services/software/information providers) that can cost us huge losses such
as losing customers and a bad worth of mouth. We are also highly dependent on
our partners.

CONCLUSION

We have to assume that our expectations are high. Maybe because of the amazing
feedback we have been receiving from our potential consumers, people who ask
us where are you launching it? The emails we keep receiving from companies we
have contacted asking to meet us because they want to know more about MyCit
and tell us their insights and finally what they are looking for as part of this
project. We also recognise there is still a lot of issues we still have to work on and
more marketing research has to be done however, for a pointing start we believe
that we are in a good track (and this report can be the proof of it).
MyCit dreams and ambitions are high but so are consumers needs and because of
it we have a huge path that will allows to grow!

APPENDIXES

I. Calculation of Mycit mobile advertising revenue?

Source: http://www.placeplay.com/estimate-mobile-advertising-revenue/
Main assumptions:
! Average Daily User Sessions: 10% of owners of the app (1st year)
! Average Minutes Per Session: 5 (230 for receiving the ticket of the
dedicated shop and 230 for receiving the correlated notification when turn
comes)
! Ad Impressions Per Minute: 4
! Ad Network Fill Rate: 80%
! eCPM: $2
The daily revenue is $115.20. The yearly revenue is 115.20 x 365 = $42,048.
The revenue per download is 42,048/36,000 = $1.17.
The current conversion rate from USD to is 0.812648054.
The revenue per download in is 1,17 x 0.812648054 = 0,95.