Business Plan

Boody the Bear Playing to learn

Prepared for:
Dr. Craig Wishart

Prepared By:
Islam S. Issa
Amro A. Ali

May 18, 2014
Boody The Bear - Business Plan 1



Table of Contents
1 Executive Summary ....................................................................................................................... 3
1.1 Business Opportunity ................................................................................................................ 3
1.2 Current Business Position ......................................................................................................... 3
1.3 Product/Service Description ...................................................................................................... 3
1.4 Financial Potential ..................................................................................................................... 4
1.5 The Request .............................................................................................................................. 4
2 Company Background ................................................................................................................... 5
2.1 Business Description ................................................................................................................. 5
2.2 Company History ....................................................................................................................... 5
2.3 Current Position and Business Objectives ................................................................................ 6
2.4 Ownership ................................................................................................................................. 6
3 Products .......................................................................................................................................... 7
3.1 Product Overview ...................................................................................................................... 7
3.1.1 Boody ................................................................................................................................... 7
3.2 Competitive Analysis ................................................................................................................. 8
3.3 Suppliers and Inventory ............................................................................................................. 8
3.4 Research and Development ...................................................................................................... 9
3.4.1 Boody 2.0 ............................................................................................................................. 9
4 The Industry, Competition and Market ....................................................................................... 10
4.1 Industry Definition .................................................................................................................... 10
2.4 Primary Competitors ................................................................................................................ 11
4.3 Market Size .............................................................................................................................. 11
4.4 Market Growth ......................................................................................................................... 12
4.5 Customer Profile ...................................................................................................................... 12
5 Marketing Plan .............................................................................................................................. 13
5.1 Competitive Advantage ........................................................................................................... 13
5.2 Pricing ...................................................................................................................................... 13
5.3 Distribution Channels .............................................................................................................. 13
5.4 Promotional Plan ..................................................................................................................... 14
5.5 Feedback ................................................................................................................................. 14
6 Operating Plan .............................................................................................................................. 15
6.1 Location ................................................................................................................................... 15
6.2 Facility ..................................................................................................................................... 15
6.3 Operating Equipment .............................................................................................................. 15
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6.4 Suppliers and Vendors ............................................................................................................ 15
6.5 Personnel Plan ........................................................................................................................ 15
6.6 General Operations ................................................................................................................. 15
7 Management, Organization and Ownership .............................................................................. 16
7.1 Management/Principals ........................................................................................................... 16
7.2 Organizational Structure .......................................................................................................... 16
7.3 Professional Consultants ......................................................................................................... 16
8 Goals and Strategies .................................................................................................................... 17
8.1 Business Goals........................................................................................................................ 17
8.1.1 Establish solid business in Egypt ....................................................................................... 17
8.2 Keys to Success ...................................................................................................................... 17
8.2.1 The need to develop creative, educational and engaging toys ......................................... 17
8.2.2 Adopt strict financial controls ............................................................................................. 17
8.2.3 The need to listen to customers, effectively creating feedback mechanism for product
improvement ................................................................................................................................... 17
8.3 Future Plans ............................................................................................................................ 17
9 Financial Assumptions ................................................................................................................ 18
9.1 Profit and Loss......................................................................................................................... 18


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1 EXECUTIVE SUMMARY
1.1 Business Opportunity
Boody the bear is a unique concept ready to invade the MENA markets. Boody the bear is
an innovative experiential learning toy that perfectly suits knowledge-conscious customers.
The partners, who bring talent, enthusiasm and two entrepreneurial awards to the venture,
are seeking to raise a capital of $100,000 to facilitate the opening and operation of
EduTks.
1.2 Current Business Position
The market for experiential learning products has been building strongly through the recent
years and now appears ready to enter a new, accelerated period of growth. Boody the
bear is the flagship product of EduTks an entrepreneurial venture that is considered
pioneer for experiential learning products in the MENA region.
EduTKs has been operating for almost a year, mainly from Mansoura, and have
successfully produced 2000 units of their flagship product Boody. The companys
ambition to become a valuable market leader in experiential learning toys and spread up to
date education technologies within the MENA region is reflected in their vision:
We will lead the educational toys industry in the MENA region, translating the latest
education technologies into value to our customer
The businesss mission statement is as follows:
EduTKss mission is to spread the culture of learning by fun practicing. The more children
that learn basic functions from our toys, the more successful we are.
1.3 Product/Service Description
Boody is battery powered (using 3 AA batteries) with the ability to deliver 6 different
lessons to kids in both Arabic and English that fits both boys and girls. Lessons include:
The alphabet song (Arabic and English)
If youre happy and Old McDonalds songs
Two Arabic bed time stories
The teddy bear mimics realistic mouth movement that is synchronized with the words in
the songs and stories which engages children and encourages speech comprehension.
Boody the bear is also capable of dancing when music is played.
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EduTKs is conscious on child safety and designed their polypropylene cotton with
embossed plush toy to be child safe and with an on/off switch feature. Currently, the teddy
bear only comes in Orange and ships with an educational CD
1.4 Financial Potential
Revenues of EGP 440,000 are expected in the first of year of operations, with 400%
forecasted revenues increase in the second year of operations to reach a value of EGP
1,760,000. With increased efficiency, learning curve and market share, a revenue of EGP
3,520,000 is expected in the third year that represents almost 800% growth from the first
year of operations.
The following graph illustrates the profit and loss projections for EduTks through the first 3
years of operations.


1.5 The Request
EduTks is seeking to raise a capital of $100,000 to cover start-up costs, purchase needed
equipment, and provide working capital until the business can support itself financially. In
return concerned investors will have 30% equity shares in the start-up venture.

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2 COMPANY BACKGROUND
Educational Toys & Kits (EduTKs) is a fresh start up company founded in 2013 by four
engineering fresh graduates. The quartet from Mansoura University recognized an
opportunity to introduce smart and interactive toys to the Egyptian market with the aim to
provide education, entertainment, fun and creative spark in their products. As the sole
producer of experiential learning gizmos to the Egyptian market and MENA region,
EduTKs has firm belief that their business will thrive and succeed.
2.1 Business Description
EduTKs operates mainly in Cairo, selling their kick starter toy Boody- a teddy bear
capable of communicating in two languages: Arabic and English. The 100% cotton teddy
bear is geared with mechatronics that move the toys head and lips to mimic realistic
speaking lip motion patterns.
Sales of the company products are conducted online and in selective specialty
educational toys stores in the Egyptian capital. The target market for the company is
families with toddlers who are in in their inquisitive and learning phase. Boody, the
companys launch product, is aimed at children older than one year who are in their
language development phase.
EduTKs bases operations in Egypt and cater to Middle-East and North Africa- leveraging
the Arabic language that the product offered supports.
2.2 Company History
The four founders of EduTKs first came
together in their graduation project team.
Ayman Younis, Maram Gamal, Zainab Eid
and Samir Hussein stood out in leadership
and innovation amidst their 10 member team
while working on a smart robotic arm with
industrial applications. The group, named
inspire team, implemented the robotic arm
to follow an image processing algorithm that
identifies the optimal motion path to apply
paint to an object. The project was awarded
a couple of recognition and entrepreneurial awards: the Young Innovator award from

The Inspire team in INJAZ Egypts Young
Entrepreneurs competition
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Nahdet El Mahrousa Association (with a prize of 6000 EGP) and the 6th annual Egypts
Young Entrepreneurs INJAZ competition award. The team received a seed fund from
ExxonMobil Egypt worth 60,000 EGP and 6 months incubation.
Attempting to market the robotic arm to the Egyptian Industrial plants was not fruitful, as
factories targeted by the team either displayed no need of a robotic arm or were satisfied
with operating manufacturing activities with a human task force. The lack of final customer
has evolved the thinking of the four budding entrepreneurs to utilize robotics in providing
educational products that are educational and promotes a culture of playing to learn.
2.3 Current Position and Business Objectives
EduTKs has been operating for almost a year, mainly from Mansoura, and have
successfully produced 2000 units of their flagship product Boody. The companys
ambition to become a valuable market leader in experiential learning toys and spread up to
date education technologies within the MENA region is reflected in their vision:
We will lead the educational toys industry in the MENA region, translating the latest
education technologies into value to our customer
The businesss mission statement is as follows:
EduTKss mission is to spread the culture of learning by fun practicing. The more children
that learn basic functions from our toys, the more successful we are.
2.4 Ownership
The company is owned by the founders, with each carrying out a different role:
Ayman Younis is an embedded software engineer and is the CEO of EduTKs.
Maram Gamal holds the position of Vice CEO of EduTKs and is a teaching and
research assistant in the faculty of engineering at Mansoura University
Zainab Eid is a computer engineer who works as the designer for EduTKs
products
Samir Hussein is responsible for Sales at EduTKs and is also a computer
engineer.

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3 PRODUCTS
Boody is a unique product in the MENA region that aims to grab market share of the
estimated $69 million USD educational toy market (Source BI-ME, 2011).
3.1 Product Overview
3.1.1 Boody

The companys flagship and launch product is unique in design and the bears lovable
shape make Boody irresistible to kids. Boody is battery powered (using 3 AA batteries)
with the ability to deliver 6 different lessons to kids in both Arabic and English that fits both
boys and girls. Lessons include:
The alphabet song (Arabic and English)
If youre happy and Old McDonalds songs
Two Arabic bed time stories
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The teddy bear mimics realistic mouth movement that is synchronized with the words in
the songs and stories which engages children and encourages speech comprehension.
Boody the bear is also capable of dancing when music is played.
EduTKs is conscious on child safety and designed their polypropylene cotton with
embossed plush toy to be child safe and with an on/off switch feature. Currently, the teddy
bear only comes in Orange and ships with an educational CD. EduTKs highly
recommends the use of rechargeable batteries, as expected run time with normal batteries
is up to 3 hours.
3.2 Competitive Analysis
Currently, there are no other businesses that offer Arabic enabled educational toys with
the features EduTKs offer. EduTKs has the competitive edge to raise awareness and
create brand loyalty within the MENA area and erect significant barriers to entry for
potential competitors.
On the international level, other products similar to Boody provide a threat if they decide to
offer their toys in Arabic. In particular, Furby poses a significant threat as it topped sales
in Europe in 2013 as an improved emoto-tronic toy. The domestically-aimed robot was
first introduced in the late 1990s and reintroduced in 2012 with apparent intelligence and
capability to develop language. Furby can also interact with each other and grow their
vocabulary of English over time. Furby is owned by Hasbro, a large toy company with
good financial back bone to compete in new markets.
3.3 Suppliers and Inventory

EduTKs rely on an overseas supplier in
China. EduTKs provided design and
specifications with the Chinese
counterpart and produced 2000 unit of
Boody the bear in 2013.
Packaging for the teddy bear is
manufactured locally in Egypt, along with
the educational CD accompanying the toy.
Currently, EduTKs holds their inventory at

Shipment of Boody teddy bears ready for
shipment from the Chinese supplier
Shipment
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two locations: at a warehouse in Mansoura and in a Cairo located rental. The bulk of
inventory is held in Mansoura, while the Cairo located warehouse enables quick delivery to
distribution channels and customers in Egypts capital.
3.4 Research and Development
3.4.1 Boody 2.0
EduTKs plan to launch an improved product to market once they have sufficient capital.
Dubbed Boody V2, the teddy bear will include new features that will enhance the
products capabilities including:
Different personalities, colours, languages and sizes. EduTKs aims to support more
languages in their product and offer a more engaging experience to children.
More content. Through downloads, customers will have the capability to access
6000+ songs and stories
Charging capability. The original product had operation time of up to 3 hours using
normal batteries. The improved product supports a socket for charging.
Record and playback for up to 30 seconds can help parents add personal
messages to Boody.
Output to speakers. Now audio is not limited to the toys speaker only, as the toy
can be plugged to external speakers.
Arabic Voice Recognition will enable children to have simple conversations with
Boody the bear, delivering fun and a unique experience that no other toy offers
An interactive pop-up book as an accessory to Boody.

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4 THE INDUSTRY, COMPETITION AND MARKET
EduTKs will take advantage of the rapidly growing experiential learning market niche. The
market for these products has been building strongly through the recent years and
expected to continue growing at exponential rates, appealing mainly to education-
conscious consumers of all age groups. While the MENA region contains one of the
highest demographic target markets for these products, the region currently has minimal
access to experiential learning products and services. The following sections discuss the
opportunities for EduTKs in the MENA region.
4.1 Industry Definition
Experiential learning is the process of making meaning from direct experience, i.e.,
"learning from experience." Experiential learning focuses on the learning process for the
individual. It is often used synonymously with the phrase experiential education; however,
while experiential learning considers the individual learning process, experiential education
should be considered a broader philosophy of education. As such, it is concerned with
issues such as the relationship of teacher and student, as well as broader issues of
educational structure and objectives. An example of experiential learning is going to the
zoo and learning through observation and interaction with the zoo environment, as
opposed to reading about animals from a book. Thus, one makes discoveries and
experiments with knowledge firsthand, instead of hearing or reading about others'
experiences. Experiential learning can exist without a teacher and relates solely to the
meaning making process of the individual's direct experience
Experiential learning can be defined as kids (and adults!) learning through exploring,
experiencing, creating, discovering, relating to and interacting with the world around them.
This form of learning is unstructured, without rules or time limits, and involves little adult
guidance. Kids are allowed to learn naturally, on their own terms. Experiential learning can
occur via activities such as playing outdoors, imaginative or pretend play, creative
expression through art, music and dance, exploration of nature and the childs surrounding
environment. Experiencing the world independently helps kids think for themselves. By
doing so, they gain a sense of achievement and improved confidence that can help
deepen the parent-child bond as families share in the pride of reaching important
milestones.
Experiential learning happens beyond the structure of a classroom curriculum and is
available to every child at home, at playtime, on holiday or at weekends. Today, many kids
partake in fewer unstructured experiences than their parents did as children. This is a
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result of many factors, from advanced technology (toys, TV, video games, internet and
social networking) to parental fears over safety, hygiene and a lack of quality play spaces.
4.2 Primary Competitors
While there are a plenty of educational toys in the Egyptian and MENA markets, we are
not aware of any similar experiential learning toys that provide this type of unparalleled
experience like this provided by EduTKs. EduTKs is an innovative blend of education and
leisure that provides a unique experience of joy to our children while helping them
developing their knowledge in the meantime.
No other business in MENA region focuses on this niche market. This will provide
considerable flexibility in pricing and allow for the creation of a great deal of customer
awareness and brand loyalty, erecting significant barriers to entry for potential competitors.
While no businesses currently devoted exclusively to experiential learning solutions similar
to EduTKs in the MENA market, not very close educational toys are sold at traditional toys
retailers like ToysRUS and BabyShop.
4.3 Market Size
As per the MENA education report prepared by Al Masah Capital Management Limited
(AMCML) The MENA region is expected to absorb approximately 300,000 new pupils per
year during 20102015, which is a key demand driver for the regions education sector.
Data from the World Bank suggests the total school-age population in MENA is likely to
grow to 53.6 million pupils in 2015 from 51.8 million in 2010. The primary and secondary
school-age population is expected to expand at a CAGR of 1.2% to 4.5 million pupils and
1.1% to 24.2 million, respectively, over 201015. Among GCC countries, the UAE is
expected to experience the strongest growth in the total school-age population, which is
projected to increase at a CAGR of 2.7% to 108,000 pupils during 201015. However, in
absolute terms, Saudi Arabia leads with a projected growth of 361,000 in the school-age
population over the same period. In MENA (excluding GCC), Libya is estimated to
experience growth in the school-age population, which is likely to expand at a CAGR of
2.0% during 201015. However, Egypt is expected to grow the most in absolute terms,
with a 1.0 million rise in the school-age population over the same period.
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4.4 Market Growth
Using the above data with the assumption that there would not be any change in the gross
enrolment ratio, Egypt would experience maximum growth in the student population,
followed by Saudi Arabia, Algeria and the likes as seen in the exhibit below.

4.5 Customer Profile
The main target customers are the parents of the young children in the early years of school and
preschool years. More specifically, young educated millennials families with an appetite to
experiment new experiential educational methods with their children.
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5 MARKETING PLAN
EduTKs overall marketing strategy will be to educate customers about the benefits of
experiential learning, and to promote the availability through the different selected retail
channels. Customers will be reached through online advertisements, special event
promotions, and word of mouth spread.

EduTKs will target education-conscious, progressive, and generally well-educated and
affluent customers who are interested in trying new products and experiences and are
dissatisfied with the limited selection found in the traditional education industry.
5.1 Competitive Advantage
No other business in the MENA region focuses primarily on either the experiential learning
toys or the Arabic language content. This will provide considerable flexibility in pricing and
allow for the creation of a great deal of customer awareness and brand loyalty, erecting
significant barriers to entry for potential competitors
Boody the bear will reach target customers mainly through online retail channels and
online advertisement campaigns. These marketing methods are considered very
convenient for young educated millennials that prefer digital methods for everything
including online shopping for such products.
5.2 Pricing
Research in the Egyptian market indicated that educational toys range in prices from as
low as EGP 50 to as high as EGP 700. In that regard, Market penetration strategies are
considered the easiest way to grow in an expanding market. However, this becomes more
difficult as the market matures and competition increases.
The main tactic that can be employed here is to offer very competitive pricing at the early
years aiming at increasing the product awareness and winning large initial market share.
Boody the bear is going to be offered at an aggressive discounted price initially of EGP
250. In subsequent phases, this price can be increased to EGP 400.
5.3 Distribution Channels
The primary distribution channels shall be the online retailers like Souq.com, Nefsak.com
and Jumia.com.eg. In addition to selective traditional toys retailers.
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In subsequent phases, additional distributional channels can be added like the online app
stores for getting on demand content for Boody the bear like different educational content
or different language packs.
5.4 Promotional Plan
EduTKs is primarily reaching customers through channels; accordingly the appropriate
promotional strategy will be a pull strategy through investing in online advertisement and
special marketing events in order to build the brand awareness and properly position
Boody the bear value in the minds of end consumers.
Concerning the communication message, EduTKs will focus on its unique selling
proposition which is the high quality experiential learning product that delivers a joyful
learning experience to our children.
5.5 Feedback
Among the important aspects of the marketing strategies, is to listen to the consumers and
channels feedback. End consumers feedback is very important in order to measure the
positioning of EduTKs products and the effectiveness of the employed marketing
programs.
Channel feedback is also very valuable in knowing the insights of the market and
consumers trends. Feedbacks will be collected through distribution channels and through
surveying EduTKs customers directly.
EduTKs will also invest in an interactive online channel on the Facebook through which
EduTKs can better interact with the consumers and collect feedbacks.
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6 OPERATING PLAN
EduTKs is located in Mansoura, Dakahlia in Egypt and is the main location for operations.
EduTKs operates from another office in Cairo concurrently. Equipment needed is minimal
and the companys products is repackaged locally and delivered to customers and
vendors. The following sections elaborate EduTKs operations.
6.1 Location
Located in the Helm or dream workspace, EduTKs operates on the 6th floor of el-Bahiyy
building on 19 Teraa Street (Mansoura University district). Concurrently, EduTKs works
from Venture labs at the American University in Cairo New campus in New Cairo- Each
location
6.2 Facility
The current facilities are not company owned, but provide workspace, internet connection
and capability to meet people and potential investors.
6.3 Operating Equipment
The co-founders operate on a mobile office basis, using collaboration tools and electronic
communications hosted on their own laptops. The company has invested in design tools
that help in research and design operations.
6.4 Suppliers and Vendors
Currently, specialty stores like Edu-Fun, Premaman & Marisco, Top Toys, Tweety, Kams,
Our babies and Pen & Paper are a few vendors that sell EduTKs experiential learning toy
6.5 Personnel Plan
Besides the current roles fulfilled by the cofounders, EduTKs has currently acquired the
services of a part-time sales person that scouts toy shops and corporations that may be
interested in purchasing and selling the company products.
The company plans to expand in future and increase staffing to incorporate their growth
strategy and projected operations when Boody V2 is manufactured and distributed.
6.6 General Operations
EduTKs operates its main office 5 days a week from Sunday to Thursday from 9 am to 9
pm. V-lab office is available to EduTKs from Saturday to Thursday during the University
work hours.
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7 MANAGEMENT, ORGANIZATION AND OWNERSHIP
The co-founders are experienced in the design and implementation of mechatronics and
intelligent systems. The technical expertise, aligned with EduTKss partners leadership
skills provide roots for robust management. The following sections discuss the principals of
EduTKs and who they aim to consult with.
7.1 Management/Principals
The four engineering founders of the company have gained extensive exposure to
management operations during their start-up phase. Budgetary control, supplier
contracting, distribution, risk identification and mitigation as well as setting up contingency
for projected plans are but a few of the skills the team gained during their first year of
operation.
7.2 Organizational Structure
The business is structured as an equal partnership with Ayman Younis holding the title of
CEO, Maram Gamal vice CEO. Zeinab Eid and Samir Hussein operate as designer and
sales manager respectively. Due to the small size the partners also execute technical roles
to develop and research their products. The company has recently hired a part time sales
person that reports to Samir Hussein.
7.3 Professional Consultants
The toy company would benefit from acquiring the professional services of a marketing
consultant. Marketing will assist the company establish a stable foothold in Egypt.

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8 GOALS AND STRATEGIES
As a pioneer, EduTKs aims to establish and attain major market share within the region.
8.1 Business Goals
8.1.1 Establish solid business in Egypt
EduTKs is intensifying all efforts to stabilize business start-up and nurture business
activities. Egypt is the home country of EduTKs giving the company cultural edge and
market awareness for penetration and distributing their products.
8.2 Keys to Success
EduTKs will focus on three instrumental keys to succeed:
8.2.1 The need to develop creative, educational and engaging toys
The innovation and Arabic support is what segregates EduTKs product from other
experiential learning toys in the marketing. By combining technology and media with high
interactivity, EduTKs provides a one of a kind experience in their toys that is
unprecedented in the MENA market.
8.2.2 Adopt strict financial controls
Finance impacts everything the business does and is essential to be addressed by
management to secure necessary funds for operations and expansion. With poor financial
control the company will manage cost poorly and reduce availability of necessary cash.
8.2.3 The need to listen to customers, effectively creating feedback
mechanism for product improvement
Continuous improvement of products and addressing customer concerns and suggestions
forms a sturdy relationship that encourages loyalty, repeat sales and enhances customer
satisfaction.
8.3 Future Plans
Market expansion in the MENA region
Diversify current products portfolio
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9 FINANCIAL ASSUMPTIONS
This section of the business plan summarizes the financial assumptions used in creating
the projected financial statements.
9.1 Profit and Loss

2014 2015 2016
Revenues (EGP) 440,000 1,760,000 3,520,000
Other Revenues 0 0 0
Total Revenues 440,000 1,760,000 3,520,000
Cost of Revenues 170,000 600,000 1,196,800
GP 270,000 1,160,000 2,323,200
OPEX 223,000 352,340 489,798
EBT 47,000 807,660 1,833,402
Tax (20%) 0 161,532 366,680
Net Income 47,000 646,128 1,466,722

Follows is a summary of the assumptions used to forecast the next three years of EduTKs
planned operations Profit & Loss

Sales - Assumptions are based on anticipated sales for EduTKs, until December,
2016
Cost of Sales Assumptions are based on the anticipated cost of revenue as a
percentage of the anticipated sales at approximately 34%
Operational Expenses The following table summarizes the forecasted OPEX for
the coming three years:

Operational Expenses (EGP)
Salaries 86,400 112320 146,016
Utilities 4,200 4620 5,082
Depreciation 0 0 0
Office Supplies 2,400 2,400 2,400
Office Rental 24,000 26,400 29,040
Transportation 6,000 6,600 7,260
Marketing 100,000 200,000 300000
Total Expenses 223,000 352,340 489,798

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Follows is a plotting of the different profit & loss forecasted values.