Entrepreneur project final

Waqas Nayyer AbbasiSP09-MBA-197

ENTREPRENEURSHIP

05/01/2011

SMART HOMES HOME AUTOMATION SERVICES

TABLE OF CONTENTS

1. INTRODUCTRY PAGE ……………………………………………………..04

1.1. NATURE OF BUSINESS………………………………………………..04

1.2. MISSION STATEMENT ………………………………………………..05

1.3. SLOGAN ………………………………………………………………...05

1.4. PROJECT MILESTONES ……………………………………………….05

2. EXECUTIVE SUMMARY ……………………………………………….......07

3. INDUSTRY ANALYSIS ……………………………………………………..08

4. DESCRIPTION OF THE PROJECT …………………………………………09

5. ORGANIZATIONAL PLAN …………………………………………………10

5.1. FORM OF BUSINESS ……………………………………………….......10

5.2. CHART ……………………………………………………………….......10

6. MARKETING PLAN ………………………………………………………….11

6.1. SERVICES ………………………………………………………………..11

6.2. MARKETING OBJECTIVES …………………………………………….11

6.3. TARGET MARKET ………………………………………………………12

6.4. PRICING ………………………………………………………………….12

6.5. PROMOTION STRATEGY ………………………………………………12

7. STRATEGIC FOCUS AND PLAN …………………………………………...13

7.1. OBJECTIVES …………………………………………………………….13

7.2. COMPETITIVE ENVIRONMENT ………………………………………13

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7.3. PESTEL ANALYSIS ……………………………………………………..13

7.3.1. POLITICAL ………………………………………………………..14

7.3.2. ECONOMICAL ……………………………………………………14

7.3.3. SOCIAL ……………………………………………………………14

7.3.4. TECHNOLOGICAL …………………………………………….....15

7.3.5. ENVIRONMENTAL ……………………………………………….15

7.3.6. LEGAL ……………………………………………………………..15

8. ASSESSMENT OF RISK ……………………………………………………..17

8.1. PARTICULAR COMPANY ……………………………………………...17

8.2. COMPETITIVE ENVIRONMENT ………………………………………17

8.3. ASSESSING THE RISK ……………………………………………….....18

9. FINANCIAL PLAN …………………………………………………………...19

9.1. FINANCING NEEDED ………………………………………………......19

9.2. FINANCIAL FEASIBILITY ……………………………………………..19

9.3. FORECASTED COST ……………………………………………………20

9.4. PRICE LIST ………………………………………………………………21

9.5. OPERATING EXPENSES ………………………………………………..22

11. SWOT ANALYSIS …………………………………………………………..24

12. OPERATIONAL PLAN ……………………………………………………...26

13. HR PLAN …………………………………………………………………….29

14. BIBLIOGRAPHY ……………………………………………………………35

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INTRODUCTORY PAGE

Nature of business:

Smart homes is a home automation company. Smart home systems would provide the means to

easily use and manage the complex electronic systems found in the modern home. A well

designed and implemented smart home system would provide the customers quick and easy

access to all electronic home systems including lighting, heating, alarm systems, security

cameras, access, music, HD television, DVD libraries, computers, irrigation and much more.

Control of the house would be accomplished in several different ways. In the home, these would

include in-wall touch screens, hand held remote controls, and wireless tablets. It would also

provide voice activation. From outside the home, the customer can control all aspects of his

house via a web browser or mobile smart phone (i.e. iphone, blackberry etc).

Smart home systems can be described as the glue that binds all of the other systems in the house

together so that they can interact with and react to one another. For example, when a motion

sensor - which is part of the alarm system - detects motion in the living room, the home

automation system could instruct the lighting system to turn on several smart light switches in

that room.

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Mission Statement:

We plan to provide Pakistan with the state-of-the-the-art technology and services. Provide security, luxury and mobility, and help you take a step into the future. Our mission is to worry about your problems and give you the best solutions customized to your liking and advantage.

Slogan:

“Carry your home with you…”

“…anywhere!”

PROJECT Milestones:

Setting up a team

Arranging a workplace

Doing initial study

Research on implementation idea

Ensuring that team is achieving the goals of project

Research on efficiency and cost effectiveness of the system

Implementing the best design

Testing

Further improvements

Marketing the idea

Production

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Executive Summary

Smart Homes is a home automation company that aims to offer complete home automation to home owners by giving them complete control of their homes while at or away from them.

Imagine being able to listen to your music collection wherever you are in your home without having to hunt for the CD.

Imagine having lighting systems with pre-set scenes to suit different moods and occasions, and imagine linking this into your own home cinema setup.

Imagine being able to monitor and control your heating, lighting and security even when you’re away. Just SMS or email your house a simple command to set your home environment to exactly how you’d like it.

Imagine a system where any alarm event (smoke, water, motion sensor, humidity) will trigger a text message to your cell phone or send you an email.

And imagine being able to do this through familiar tools like your cell phone, PDA or web browser or beautiful LCD touch panels installed in key areas of the home.

This is all possible through home automation provided by Smart Homes.

Since this concept is new in Pakistan we intend to patent this technology, so as to not only standardize the level of services provided to home owners but to also monopolize the target market for some time.

We intend to own the largest shares in the market by the end of a one year period.

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INDUSTRY ANALYSIS

At the current time there is just one possible competitor to our business and that is Synergy operating in Gulberg Lahore yet even they do not classify as our perfect competition since they provide audio and video automation systems and not the full range of home automation in the true sense of the word as we plan to do.

Hence the industry would welcome us with open arms and our venture has great potential in the Pakistani market and especially the twin cities . Growing security concerns due to thefts and break-ins has made the people even more inclined to look towards technology for help and this is just what our company aims to do.

And yet the real benefit doesn’t only lie in the security side of our venture but also the comfort and the luxury of the whole thing. Controlling heating and having pre-set lightening scenes according to the moods of the customer is the luxury side of our whole venture.

Another possible competition for the Smart Homes might be the security system providers in the houses and yet still that would not be a threat for we are having value addition. While the security systems only offer security that can be monitored in the home and while someone is in the home, the solution we are providing would enable the customers to monitor their homes while away and receive a text message warning if the security system detects any threat.

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DESCRIPTION OF THE VENTURE

Our business would lie in the services sector and concerns home automation which is a relatively new concept in Pakistan.

Home automation enables you to control all the different systems of your home. You can control the lighting, climate, security and surveillance, doors, window shades and much, much more in your home or office with a single remote, touchpad, cell phone, or even via the internet! Set the lights to the desired setting before your arrive home or set the thermostat to the desired temperature or even check on the security settings while you’re out of town.

Our business would be small scale in the beginning undertaking one project at a time and having our office in one location only that is Blue Area Islamabad.

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ORGANIZATIONAL PLAN

Form of Ownership:

The form of ownership is going to be Partnership amongst the two entrepreneurs but to fulfill the need of business functionality we hire some more staff and design organizational structure would be as follows:

CHART:

CEO

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CEOCEO

MANAGER FINANCE

MANAGER FINANCE

MANAGER MARKETING

MANAGER MARKETING

MANAGER HR

MANAGER HR

MANAGER STRATEGY

MANAGER STRATEGY

MANAGER OPERATIONS

MANAGER OPERATIONS

MARKETING PLAN

The company, Smart Homes, is a completely novel venture for providing home automation

services both on site and remote, to the people living in Pakistan the Company will be focused on

providing the home owners the sense of control and luxury that they want and the system will be

tailored to meet the needs of every individual. The satisfaction and happiness of the client will be

our top most priority and we guarantee our high standards of quality.

Services:

Smart Homes intends to offer home automation services to eager home owners. The term home automation is a generalized expression. The services that we offer are listed as below:

1. Voice activation on all home appliances and equipment

2. Web access for mobile homeowners so that they can lock and/or control their home appliances from a remote location.

Marketing Objectives:

The objective of our company is to dominate the market and provide the people with a service

that will help them easily control their house and to remain at ease and closely monitor their

homes when they are away.

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Target Market:

The target market for home automation services will be the elites and the upper class society at

first. However when our venture makes headway we will be sure to provide cheaper systems for

middle class societies as well.

Pricing:

Since home automation is a luxury product and targeting the elite class our price would be high

in the start also we are the first movers in the market in Islamabad so we can get the customers

for the relatively high prices we would charge.

Promotion Strategy:

We will be promoting our business through online and on-paper advertisements. Radio and

television will also be used to make people aware of our service. Clear and to the point

advertisements will be our priority so that our customers can clearly see what we are offering.

We shall be using the following mediums for promoting our services:

Internet

Personal selling (B2B, homes)

Advertisements on cable networks of targeted market

SMS

Billboards

Business magazines, magazines

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Seminars/presentation

STRATEGIC FOCUS & PLAN

Objectives:

Smart Home wants to become the best home automation service provider in Pakistan. The very

first objective after starting the operation is to obtain excellence within the elites and the posh.

This will be our initial target market since they want to make their home even more luxurious

and home automation offers that luxury to them.

Competitive Environment

The competitive environment is very advantageous to our business as there are no direct

competitors for this target market.

PESTAL ANALYSIS:

Before making investment, PESTAL analysis has been performed to check out the feasibility of

making investment and doing the successful business. Following situations were checked:

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POLITICAL:

We are making investment in Pakistan and now-a-days there is a democratic government in the

country which is encouraging investment and the political instability is getting away slowly.

Second Tax policy of the government is not so good but this create a least impact to our

business.

ECONOMICAL:

The economical conditions of Pakistan are still better as compare to international economy

which is facing recession now-a-days. Our target market is Islamabad where mostly elites live

their financial position is better than the people living in other parts of the country. The growth

rate of Pakistan economy is also favorable for doing business. Inflation rate is a bit on the higher

side.

SOCIAL:

The society of Pakistan is also very good. Our target market is the elite of Islamabad which are

very social and they want to adopt more and more luxuries to look richer and want to create a

cooler image of them in the society.

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TECHNOLOGICAL:

People of Pakistan are technology lover. The people who have money are always going to buy it.

In Pakistan this type of technology is going to be launched for the first time with all the features

before this some features containing technology is present in the Lahore but in Islamabad it is the

first time. So the chances of success are great.

ENVIRONMENTAL:

The nature of our work is not related to any imposing any bad impact on the environment. Our

work is to provide products which are imported from another country and there is not going to be

any bad impacts on the environment by the usage of our product. Its use is environment friendly.

LEGAL:

There are no as such legal restrictions on starting the business. Our business is small and there

are few legal requirements to start the business and continue its operations.

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ILLUSTRATION OF HOME AUTOMATION DESIGN:

An illustration of the home automation services provided by Smart homes.

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ASSESSMENT OF RISK

This venture of Smart Homes is faced with some hazards or risks. We are prepared to deal with

these risks as they come.

These risks can be defined in two areas:

PARTICULAR INDUSTRY:

The most important hazard in this industry would be losing credibility. If our customers do not

trust us in any one of services we are providing, we might not get to our target customers.

COMPETITIVE ENVIRONMENT:

Since the technology we are offering is comparatively new there aren’t many companies in

Pakistan offering these services. We have the advantage of being the first comers in the market

giving us a competitive edge. Home automation is new concept that would be a welcome change

in Pakistan.

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ASSESSING THE RISK:

These risks can affect our business in negative way. These risks if not avoided, can be minimized

if they are managed or “assessed” properly. An entrepreneur can assess risks by taking following

steps:

First, we must indicate the "potential risks” associated with the new venture, they might be

competitors strategy, the target market of our competitors, the non effectiveness of our marketing

or promotional campaign or negligence of employees is using appropriate technology

Second, if any of these risks do become reality, they are going to extremely affect our business.

The market share will be lost and new customers will become reluctant to use our services.

Finally we must have a strategy to minimize, prevent or respond to the risks. For example an

entrepreneur may prepare a contingency plan if any medium of marketing fails or he might

rethink the way marketing medium is used.

We must identify the risks and hazards make alternative strategies to counter them or to use them

in his own favor and thus meet the business plan goals and objectives.

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FINANCIAL PLAN

Financing needed:

We would finance our venture through debt and equity financing. We plan to take loan from

bank plus ask an investor to invest in our venture. Also personal funds of the entrepreneurs in

this venture would also serve for our initial investment. Each entrepreneur aims to invest Rs.

600,000 in the venture. Hence our financing would be as follows:

Personal loans: Rs. 300,000 x 2 = 600,000

Debt (from bank); straight commercial loans: Rs. 300,000

:

Total Financing Amount: Rs. 900,000

Financial Feasibility:

The venture will require a heavy initial investment since development of the hardware and the network is a pre requisite to the business. The wages of the people employed in the company will be paid by us, the owners however as the business picks up the money will start rotating from the customers to the company and the employee. Although initially the company will not be expected to make profit and would barely be breaking even. However within a year we expect to be making substantial profits.

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FORECASTED COST:

Start-Up Expenses: All the costs of getting business up and running go into the start up expenses category. These expenses include:

Start-Up Expenses: Rs.(000)

Business Licensing and permits 1,00

Rent Deposits 1,80

Web-Site development Cost 20

Furniture Cost 100

Utility set-up fees 100

Hardware Expenses 100

Storage Expense 100

Total Start-up Expense 500

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Price list:

As our target customers are upper class that’s why our prices will be high for first few years we

are assuming that every home already has a computer so prices will be:-

One time charges: - installation and first time charges = Rs 45000/=

Monthly Charges = Rs. 8000/= per home

From table we can see that total required to start up the business is round about Rs. 7 million.

Our target is to capture almost 200+ customers and we expecting almost 40-50 customers per

year that will help us in attaining break even which is our target for first year and we hope to

make profit after first year.

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Operating Expenses:

Operating expenses are the costs of keeping business running. Think of these as the things you're

going to have to pay each month. List of our operating expenses include:

First Year Expenses: Rs.(000)

Salaries (Management) 7,0

Rent on mortgage payment 50

Utilities Expense 70

Marketing Expense 15,0

Office supplies 50

Total First Year Expense 390000

This table shows our business operating expenses and we are expecting that once our sales start building we will conduct these expenses through our generated revenue.

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Our company expects the following pictured profit growth in the coming years.

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SWOT ANALYSIS

Strength:

New technology: This is the most important strength that we have on our side. People are always looking for novel technology and gadgetry. This will be our primary target market.

No competition: Another advantage we have to our side is that we would have practically no competition for our target market. Since the idea is practically novel not many entrepreneurs have ventured into this field giving us a comparative edge.

User friendly and easy to access irrespective of the geographic limitations: This is our primary selling point. We provide home security and control on the go. Mobility along with the complete sense of control is what sets us apart.

Weakness:

Budget Constraints: One major shortcoming on our part in this venture would be the budget constraint. The limited funding would surely dampen some of the decisions and might affect our venture

Change not welcomed: Pakistan is a country where people enjoy the monotony of their lives. Introducing a new technology might not be taken to as expected.

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No prior expertise/ experience: Since we are the first comers in the business we lack the experience needed for our field and the necessary knowledge of our target market. Also since this a completely new venture people with the necessary expertise are not available. These will make us prone to some mistakes which might affect the venture.

Limited target market: In a country like Pakistan the service of home automation may only be taken to by the elite and the upper class society. A small percentage of the middle class might turn to avail these services also. This greatly limits our target market.

Opportunities:

Monopoly: Since we are the first comers for this target market we have a huge opportunity to monopolize the market. If we offer quality services and the sense of control that our target market hopes to receive we will have no problem in being the largest share holders of this target market.

Threats:

Unstable economy

Government regulations and policies

Government instability

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OPERATION PLAN

The operational plan is an essential component to your business plan and it tells the reviewer how you are going to get your product/service out to market. That is, how are you going to get your product out of the production stage to the doorstep of you target customer.

MAIN PARTS OF OPERATIONAL PLAN:

It will outline some very important answers to such fundamental questions such as:

Who is doing what? What are the day to day activities?

How will the suppliers and vendors be used?

Who are the suppliers?

What are the labor requirements?

1. Who is doing what ?

Sardar shahid Abbasi act as CEO has an overall look on all business affairs.

Our GM operation (Waqas Nayyer Abbasi) is responsible for operational activities.

Our GM Strategy and Planning(Sardar shahid Abbasi) will also take responsibility of making the strategies.

Awais Nayyer Abbasi performs duties of manager design and installation and Human Resource.

Umair Ahmed work as a manager sales and responsible for affair related to sales.

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2. Day to Day Activities

It will be compulsory for all the management of business to present at their office to perform their duties.

CEO will take a look on all business affairs and ask for report from all departments to check and verify their work.

Our all head of department are responsible for management of their respective activities of business and he will take a look on all these activities daily and report to CEO.

3. How will the suppliers and vendors be used?

We will a strong relationship with vendors which are located in California (USA). We show our sincerity for the by establishing a comfortable relationship with them which leads us to be successful partners and help our business to grow by providing us with training of these technology.

4. Who are the suppliers?

Our suppliers are SMART HOMES Corporation located in California USA. They are working in this industry since 1992 and consider pioneer of their industry and has biggest share in USA market.

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5. What are the labor requirements?

Initially we will hire 20 employees who are posted in following way.

5 Salesmen

5 Installation engineer

5 Designers

3 Watchmen

2 Office boys

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HR PLAN

The organization setup of the firm is consist of 1 CEO, 5 Managers, and 25 Management teams members

CEO:

CEO will be the final and supreme authority will over look all the operations and planning and will approve it.

Manager Marketing:

Authority

Manager marketing will be directly under the CEO, and will report to CEO. Manager Marketing will be in charge and responsible of the management teams’s task

regarding marketing. He can assign tasks approved by CEO to different marketing employees and will be able

to change their tasks and duties.

Job Description

Manager Marketing will be responsible for the promotion of the brand, creating the brand image of the firm’s product. The Manager Marketing will also be supposed to increase and maintain the sales by

Applying proper strategies and co-ordination of all other managers.

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Manager Finance:

Authority

Manager Finance will report to CEO, and will have the 2nd supreme authority related to finance activity. The finance Manager can Approve projects up 100,000 Rs without the first making it

approve from CEO. For projects involving money higher than 600,000 Rs, the Manager will be requires to get

approval from CEO.

Job Description

Manager Finance will be responsible for managing the finance activities of the firm, And to predict the future and present financial needs of the firm, The Finance Manager will also required to make the firm cost efficient by Applying

proper strategies and co-ordination of all other managers

Manager HR:

Authority

Manager HR will also report directly to the CEO, Manager HR can hire work force up to managerial level. For hiring a staff lower then managerial level the HR manager can make decision on its

own, For hiring a staff for managerial post the HR manager will be required to get approval

from CEO

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Job Description

The HR manager will be required to assess the human requirements of the firm. The HR Manager will also require addressing the human requirements of the firm by

hiring suitable and productive employees. The HR Manager will also be responsible for making rules and and regulation for the

staff HR manager will also make the job description and authority plan for the staff under

managerial position For managerial position HR manager will prepare the job description and Authority paln

but CEO will approve it. Manager HR will also responsible for making compensation plans Manager HR will also make the Hiring criteria HR Manager will suggest the wages plan to CEO

Manager Operation:

Authority

Manager Operation will report to CEO Manager Operation will lead the operation teams Manager Operation can request directly to CEO for changing any current Plan,

Job description

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Manager operation will be responsible for daily operations The plans for daily operations Creation of co-operation between all managers To make sure that the operations are going in proper way

Manager Strategy & Planning:

Authority & J.D

Manager S&P will Report directly to CEO Will set the goals and long term targets Will provide plans and strategy to achieve these plans Will make mission statement of the firm

Management teams:

Data storage team:

Total member = 5

1 Head engineers

2 in charge engineer

2 assistant engineers

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This team will look after the data base of the firms client. And will stay at head quarter. In this team there will be 3 engineers and 2 assistants. 1 will be the HEAD ENGINEER who will lead and look after this team and will report to manager operation and Manager HR.

2 in charge engineers will look after the systems, maintain them, and secure them with help of 2 assistants.

Installation team

Total member = 5

2 design engineers

3 assistants

This team will install the system at clients place, this teams will consist of 2 engineers who will design and plan the installation after visiting the place accordingly. And will make maps, and plans. And then guide the 3 assistants to install the setup and will check that whether they are doing it right or not. This team will report to HEAD ENGINEER.

Marketing Team

Total member = 5

1 Marketing Supervisor

4 Assistants

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This team will consist of 1 Marketing Supervisor and 4 assistants. Marketing Supervisor will directly take orders from MARKEING MANAGER and will report him back. This team will be responsible for advertising and marketing of type, personal and media.

Office Team

Total members = 5

1 Receptionist

1 phone operator

2 office boy

1 security guard

This team will serve daily office work.

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BIBLIOGRAPHY

1. Source: http://www.synergyav.com/profile.html

Accessed on: 26th March 2010

2. Source: http://hiddenwires.co.uk/resourcescasestudies/casestudies20090902-01.html

Accessed on: 23rd March 2010

3. Source: http://www.home-automation-montreal.ca/


4. Source: http://www.haywoodelectric.net/home-automation.html


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http://www.haywoodelectric.net/home-automation.html

http://www.home-automation-montreal.ca/

http://hiddenwires.co.uk/resourcescasestudies/casestudies20090902-01.html

http://www.synergyav.com/profile.html

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