A PROJECT REPORT ON BUSINESS PLAN WEBFORYOU.

COM

Submitted to Mr. GOVIND DAVE

INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT (I2IM) M.B.A PROGRAMME Constituent of Charotar University of Science and Technology (CHARUSAT)

Prepared by TAPAN D. KHAMAR M.B.A Semester III Roll. No- 09MBA13

ACKNOWLEDGEMENT

First and foremost, I would like to thank to the Director, G.K.Krishnamurti of I 2IM for giving me an opportunity to work on such a broad and interesting topic and help me gaining the maximum out of this whole process. I have got all sort of support from his side whenever required. I express my sincere thanks to Prof. Govind Dave who guided me throughout the project and gave me valuable suggestions and encouragement. His support throughout the period enabled me to explore the area of my business plan. I am also indebted to all the people who helped me by giving me valuable information during my project.

Thanking you, TAPAN KHAMAR.

EXECUTIVE SUMMARY

Webforyou.com is an easy access for groceries, general merchandise including home furnishings, utensils, crockery, cutlery, sports goods and much more. Our mission is to provide the above given products to the customers at an affordable price and within a given period of 72 hours. The main attraction is process of payment through a pre-paid system. The customers especially in India are very skeptical of buying goods online. This is because the online payment involves the payment through credit card. And there is a fear of the credit card number being hacked. The way out to this problem is our prepay.com website. The customer will have to take a recharge coupon from the vendor and recharge the amount needed to buy the goods he/she wants to. Then he/she visits webforyou.com and selects the goods needed. Further he/she goes to prepay.com for the payment and enters a 16 digit code attached in the recharge coupon and validates the payment of the selected goods. Thus, the transaction is made without the fear of leaking the credit card number. Our aim is to provide the customers with their goods within a period of 72 hours. This can be achieved with either a good inventory level or with a good distribution system. But having a good inventory level for an online hypermarket cannot be predicted easily. Thus, we aim to have a just in time inventory. This can be achieved by good relations with the suppliers. And to supply the goods to the customers we need a good transportation system. To achieve aim of delivering the goods within 72 hours we are just planning to operate in 10 cities for now i.e. Ahmedabad, Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Pune, Coimbatore and Baroda. The target customers of the online hypermarket will be those section of women who are working or do not have the time to personally go and buy the goods from the retail stores. And additional to this they have an easy access to the website. Thus, they would ultimately be the people living in urban areas.

WEBFORYOU.COM IdeaWebforyou.com would be an online hypermarket which would enable the web users to place their order for goods and get it delivered at home for a lesser price. It would deal in all grocery products and general merchandise including home furnishings, utensils, crockery, cutlery, sports goods and much more at prices which will be much lower than other hypermarkets. Webforyou.com would design a website which would enable the user to sign in and select from the large variety of goods. We would not buy and stock those goods in large volumes with us. We would tie up with the local distributors and place the orders when we receive order from the customers. Now the distributors would not sell us goods in less volume but the orders will be placed through the internet so the number of buyers would be more and so the orders would be huge. So when we receive the order from our customers, we would place the order to our suppliers. We would try and deliver the goods to the customers as soon as possible (within 72-96 hours) depending on the terms decided with our suppliers. However we would make them prepaid members and collect the cash well in advance. This would help us to buy the goods from our suppliers in cash. This would further decrease our cost of goods. Once the website is popular, we would approach the companies of various products we deal and ask them to pay for their advertisements. We would also charge them for keeping their product above other competitive products (i.e. when someone searches for toothpaste, if close-up wants its name to be displayed first we would charge them). We would have to invest in a small land for warehouse for keeping the goods for a couple of days and also invest in transportation cost. We would have to install mini ERP software to manage our inventory which would be connected to our suppliers. The ERP would place the order automatically once it receives the order from the customer. Moreover the system would also keep track of the customer behavior and their buying trends. The software can store the data of each and every customer and help the customer in making the buying decision based on early purchases.

MARKET FEASIBILITY Industry AnalysisWe are in the business of online hypermarket. So the industry we deal in is online service industry along with retail industry. In an online service industry, the player who remains innovative wins. However the website may not prove to be helpful to the people outside India as the area of operations are limited to India. The online transactions are very less as compared to other western countries like USA and Canada. The Indian online industry may reach the inflection point in the next 18-24 months when the country is expected to have 80 million internet users. It will be the time when most of the internet companies will start making profit. Availability of local language content could play a major role in increasing the internet penetration in India. But thats easy said than done. Comparing the internet scenario in China with that of India, in China there is one local language. But in India, there can be no single language. And though English is the major language used in Indian websites, that language cannot be sufficient to bring a vast majority of the countrys citizens to internet.

Shopping in India has witnessed a revolution with the change in the consumer buying behavior and the whole format of shopping also altering. Industry of retail in India which has become modern can be seen from the fact that there are multi- stored malls, huge shopping centers, and sprawling complexes which offer food, shopping, and entertainment all under the same roof. India retail industry is expanding itself most aggressively; as a result a great demand for real estate is being created. In the Indian retailing industry, food is the most dominating sector and is growing at a rate of 9% annually. The branded food industry is trying to enter the India retail industry and convert Indian consumers to branded food. Since at present 60% of the Indian grocery basket consists of non- branded items.

Critical Success FactorWebforyou.com is an online hypermarket. India is a developing country. People are getting used to buying goods online. Moreover the goods will be delivered at their doorstep and that too at a cheaper rate. The customers may be afraid of using their credit cards or debit cards for small transactions, so we have brought in the system of prepaid cards which would enable the users to make their transactions safely and easily. Transportation also plays an important role for the success of the organization. We will divide the areas of the city and allot the areas to the transporters. They would be paid on contract basis. They would collect the goods from the main warehouse where the goods will be supplied by the suppliers and then deliver the goods to the customers. This would reduce the load of transporting for the company.

Core CompetencyWebforyou.com is an online hypermarket. The main aim is to keep the cost lower than other hypermarkets. We will not be storing the inventory and selling to the goods to the final customer. The website seems to be an online retail but in reality we would behave as online trading website. This would reduce the cost of goods and would enable us to sell the goods at a lower price.

Major Customer GroupsThe main customers of Webforyou.com would be the final customers. However Webforyou.com would also provide goods to the business clients like the hotels, caterers and restaurants. They can buy our products in bulk and can procure the goods at a lower cost.

Target Market-

The website would target the housewives as well as the working women who do not want to spend much time on visiting the grocery store and want to make things easy. The website would also target the hotels, restaurants and caterers who want to buy the goods in bulk at a cheap rate. The target market would be mainly the urban population above the age of 19 years who have the knowledge of internet. The website would target the urban population of 10 cities namely Ahmedabad, Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Pune, Coimbatore and Baroda. In case of household users the women would mainly act as a purchasing decision makers and men may act as the influencers in the purchase decision making process.

Primary Market sizeWe have made 3 different divisions of the purchase size. The first division A comprises of all the transactions below Rs.750. The second division B comprises of all the transactions between Rs.750 and Rs.2500. The third division C comprises of all the transactions having value more than Rs.2500. The average transaction is Rs.1612.5. According to the market research an average of 12.15% people use internet. So the total number of internet users are around six million. We have assumed that 10% of the internet users make online transactions. i.e. six thousand people buy our products every month. The grocery is usually bought once in every month. So the total number of customers in a year would be around seventy two thousand.

CompetitionThere is no other website providing grocery online in India. So we will have the advantage of the first movers. So we will be able to grab the major market share. However with the success of the business venture, competitors are bound to enter this business. As the entry barriers are low in this industry, it will be very easy for new competitors to enter. New competitors would enter the market in the next 6-9 months. We will be facing a direct competition from the online retailers and there will be always an indirect competition from the local grocery stores and the hypermarkets.

STRENGTHS

New conceptThe concept of an online hypermarket in India is relatively new.

Zero InventoryWe are in the business of online hypermarket. We will tie up with the suppliers to deliver the goods after we receive the orders from the online customers. This would help us in storing zero inventory which would help us in reducing our administrative expenses. As it is an online hypermarket, we do not have huge administrative expenses like salaries, electricity, rent etc.

Prepaid CardsThe customers will have to purchase the cards from the vendors and recharge their accounts with that balance. This will give us the advantage of purchasing for cash which would decrease the cost of goods. Moreover the customers also feel it safe unlike other online transactions like credit cards or debit cards.

TransportationThe transportation plays a crucial role in the success of the organization. As the Indian market is massive, we may not be able to deliver the goods on our own. We may appoint regional transporters for the logistics function. This would reduce the burden of transporting the goods to all the customers and enable the company to focus on other managerial functions.

WEAKNESS

Difficult use of Prepaid cards:The website will be designed in such a manner that a layman can also purchase the goods from the website. But the transaction done in the prepaid card is difficult. One may face some problems and might face some difficulties in recharging the balance.

Barriers to enter the Market:The barrier to enter this industry is relatively low. The reason for the low entry barriers are: Less Investment Less time required Technology easily available

Less burden of trademarks and patents

STRAREGIES Marketing Penetration StrategyWe will be giving our advertisements on various websites. We can search for websites which are visited by working women, housewives and men living alone. We can give the advertisements on such sites which would help us in targeting our customers. We will also announce various promotional schemes in the initial 2 months in order to increase the customer base.

Growth StrategyWe can also start taking bulk orders from various restaurants, hotels and caterers. This would be beneficial for both of us. We would be able to increase our sales and the relationship would be long term, while they would be able to procure the goods at a cheaper rate and it will be delivered at their door step.

Distribution Channel-

We will be appointing marketers who would be good in negotiation skills. They would approach the wholesalers and distributors of different products in different cities. We would fix a deal about supplying the goods at a fixed rate. The quantity of our ordering would be high so we can ask them for low price. Moreover the transactions will be on cash basis so we can avail the benefits of discount. We will sell the goods at a lower margin of 10-15%. The website acts as an intermediary between the customer and the wholesaler.

OPERATIONS Production and service delivery procedures-

Flowchart of the Business processes followed by the Website Prepay cards Recharge Process Shopping Process Payment Process Processing Order Transportation Process

INTERNAL PROCESSES

Recharge Balance-

Visit Website

Register Id

Recharges Balance

After buying the prepay cards from the vendor, the customer visits the website www.prepay.com and registers the Id. If he is an existing user, he may log in his username and password and enter his account. Then he will scratch the prepay cards and enter the two hidden 16 digit numbers. This would increase the balance of the customer by the value of the prepay cards.

Shopping processVisit Website Find Goods Select Goods Final Amount

After recharging the balance in the account, the customer visits the website www.webforyou.com. He views the goods and various schemes offered by the website and select the goods required by him. He is given the final amount of payment to be made.

Payment Process

Prepay.com

Enter amount

16 digit numbers

Enter the numbers

Verify

After getting the final amount, the customer visits the www.prepay.com and enters the amount to be paid. He gets two 16 digit numbers and these numbers are to be filled in the www.webforyou.com. The website would check the balance with the customer and if everything is satisfactory, it would accept the order.

Processing of Order-

Transfer to HQ

Transfer to city

Place order with supplier

Supplier delivers

Packaging

After receiving the order, the website would transfer the order to the Ahmedabad Headquarters. The headquarters would then forward these orders to the respective cities. The city office will place the order with their distributors two time everyday at 12 pm and 6 pm. The distributors will then deliver the goods at the local warehouse by next day till 12 pm. The 2nd day will be utilized in packing the various goods for the customers.

EXTERNAL PROCESSES Prepay Card Process-

Printing

Distributors

Vendors

Customers

This process starts with the printing of Prepay cards. The prepay cards will be printed of different denominations like Rs.10, Rs.50, Rs.100, Rs.500, Rs.1000.The prepay cards will be distributed to the vendors through the various distributors. The vendors would stock the prepay cards of various denominations according to their requirement. The customers can visit our vendors and buy the prepay cards according to their shopping requirement.

Transportation-

Ready packages

Transporter collect

Deliver

The packages of different customers will be prepared on the 2nd day. The goods will be ready to dispatch on the 3rd day. The respective transporter would then collect the goods from the warehouse and deliver the goods in their allocated areas.

MANAGEMENT FEASIBILITY

Organization Chart-

ExplanationThere will be 3 divisions under the proprietor namely:1. Marketing Division 2. Website Designing Division 3. Warehouse Division

Marketing Division
It would look at all the marketing functions in the organization. The company will have to negotiate the price and time of delivery of goods with the local distributors. So we will have the hire a marketing team who are good at negotiation. We will also appoint marketers who roam in the market and search for new products. They would also conduct the market surveys when required.

Website Division

We will hire the web designers who have an experience in this field. The website should be designed in such a way that even a layman can operate it and can make the transaction on our website. Moreover the website division should update the various schemes and promotions on the website.

Warehouse Division
The warehouse division has a tedious job of packing the goods for the customers. The customer would have ordered goods of different companies in different denominations. So the job of the warehouse people is to bring all the goods together and pack them as per the order of the customer. The warehouse staff should also ensure that the goods are dispatched in time and should be in constant touch with the transporters.

KEY PERSONNEL REQUIRED

Web DesignerWebforyou.com is an online hypermarket. We need people to design the website and also for its regular maintenance. The designers should be expert in their field and should have the experience in this business. They should build the website in such a way that it has a user friendly interface. The website should be attractive and built in such a way that it loads faster. They also need to have the knowledge of market so that they can add new features to the website and make it more competitive. We are into the business of online retail grocery. The entry barriers are very few and competitors are bound to follow soon after success of the website. So we have to remain competitive to sustain in the market. Moreover we also need creative people who would suggest new ideas and help the website to remain innovative.

Transporters-

Webforyou.com will deliver the goods at the place of the customers within 72-96 hours. The orders taken from the customers will have to processed faster and we will have to procure the goods from the suppliers. Moreover the goods will have to be dispatched quickly in order to meet the time standards. So we will need punctual people who could enable the company to deliver the goods in time. Moreover they also should have the knowledge of IT as we will be implementing various software which would help us in order management and its transportation.

Marketing teamWebforyou.com is an online hypermarket. The concept of an online hypermarket is relatively new for the people of Ahmedabad. So we will have to create an awareness for the website. We need the marketing team to help us in making the website popular and installing the habit of buying grocery online. Moreover they should also take care of various new products introduced in the market. They should also try knowing the tastes and preferences of customers for various products.

Purchase DepartmentFinance is the lifeblood of any business. We will have to take great care of the finance in the organization. We are selling the goods at a lower rate than other hypermarkets. So we will have to work on small margins. We have brought in the concept of prepaid cards for the reason of getting advance cash from the customers and buying the goods for cash. However we will have to take care that the goods are available at a cheaper rate and the suppliers are paid on time. However the quantity would be huge so that would help us in earning more. So the primary aim would be to procure the goods for a price as low as possible. This would be a tedious job. So we need people who have good negotiation power. They would negotiate with the suppliers and procure the goods at a lower price.

FUNDS REQUIRED AND THEIR USES

Current Funding RequirementThe company will develop the website, software and warehouses for its operation. The total fund required in the initial period to start the business is Rs.6030000. The fund would be required in the beginning itself as the fund will be required to develop the software and website. Moreover the warehouses would include computers, air conditions, refrigerators and furniture. The website would also require funds for initial marketing. 10% of the total project cost would be kept aside as miscellaneous and over that 5% would be kept aside as contingency. The total fixed assets with the company include computer, furniture, refrigerator, and air conditions worth Rs.2700000. So the bank may give the debt of Rs.2400000 at the rate of 14%. The remaining Rs.3630000 would be equity capital.

Use of FundsCapital Expenditure

The company would invest Rs.4020000 for capital expenditure like domain name, computers, furniture, website development, software package, refrigerators, air conditions and deposits of rent.

Working Capital
The company has the strategy of buying the goods on cash. So the working capital would be required for the day to day operational expenses only. So the requirement of working capital would be low. However the company will use Rs.802000 as working capital for the day to day operational expenses.

Debt Retirement
The company will borrow the debt of Rs.2700000 from the bank @ 14%. The company plans to repay the debt within the next 5 years.

ASSUMED BALANCE SHEET FOR 5 YEARS

Balance Sheet for Webforyou.com as on 1-04-11 Liabilities Capital Loan Rs. Assets Rs. 20000 300000 300000 600000 900000 1500000 250000 150000 2010000 6030000

3630000 Domain Name Air Conditions 2400000 Refrigerators Computers Rent Deposits Furniture Website Software Cash/Bank Balance 6030000

Balance Sheet for Webforyou.com as on 31-3-12 Liabilities Capital (+/-) profit Loan (-)Repayment 3630000 -1185098 2400000 480000 Rs. Assets Rs. 20000 300000 300000 600000 120000 0 400000 150000 0 300000

Domain name 2444902 Air Conditions Refrigerators Computers 1920000 (-)Depre Rent Deposits Furniture (-)Depre Website Software Cash/Bank Balance 4364902

800000 900000

1200000 250000 150000 1044902 4364902

Balance Sheet for Webforyou.com as on 31-3-13 Liabilities Capital (+/-) profit Loan (-)Repayment 2444902 1800044 1920000 480000 Rs. Assets Rs. 20000

Domain name 4244946 Air Conditions Refrigerators Computers 1440000 (-)Depre Rent Deposits Furniture (-)Depre Website Software Cash/Bank Balance 5684946

800000 400000 120000 0 300000

400000 900000

900000 250000 150000 3064946 5684946

Balance Sheet for Webforyou.com as on 31-3-14 Liabilities Capital (+/-) profit Loan (-)Repayment 4244946 4509605 1440000 480000 Rs. Assets Rs. 20000

Domain name 8754551 Air Conditions Refrigerators Computers 960000 (-)Depre Rent Deposits Furniture (-)Depre Website Software Cash/Bank Balance 9714551

400000 400000 900000 300000

0 900000 600000 250000 150000 7794551 9714551

Balance Sheet for Webforyou.com as on 31-3-15 Liabilities Capital (+/-) profit Loan (-)Repayment 8754551 8149595 960000 480000 Rs. Assets Rs. 20000

Domain name 16904146 Air Conditions Refrigerators Computers 480000 (-)Depre 0 Rent Deposits Furniture (-)Depre Website Software Cash/Bank Balance 17384146

0 0 900000 600000 300000 300000 250000 150000 15764146 17384146

Balance Sheet for Webforyou.com as on 31-3-16 Liabilities Capital (+/-) profit Loan (-)Repayment 16904146 12358162 480000 480000 Rs. Assets Rs. 20000

Domain name 29262308 Air Conditions Refrigerators Computers 0 (-)Depre 0 Rent Deposits Furniture (-)Depre Website Software Cash/Bank Balance 29262308

0 0 900000 300000 300000 0 250000 150000 27942308 29262308