BABYPAL

14/08/2019

This start-up will help unborn child to learn and develop

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Is the market you want to get into a

promising one?
In this section, we will analyze the opportunities the market has to offer to
your project. Is your timing right? Can you count on a strong demand in the
years to come? Would you be able to take your company outside its present
geographic zone? A healthy market demand is absolutly necessary to ensure
your company's growth over time.

There is a real demand for your products.

You are getting into a market where products like yours are greatly in demand.
This is an excellent situation because it is difficult for a start-up to create a
market. That takes time and considerable financial resources. These two aspects
are often lacking at the start of a new activity.

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You are in a position to impose your conditions on

the client.
You are in a market in which demand is greater than supply. In this situation,
the buyer is in a position to impose his conditions on the seller. You can
develop selling conditions that are very favorable for you. Do not hesitate to take
advantage of the situation by adopting an aggressive pricing policy that will
allow you to cover your growth investments out of the income from current
business operations. A young business must try to become profitable right from
the start. Marketing, recruiting new team members and setting up production
procedures are costly in the beginning. It is clearly better that these costs are
covered by the profits from the daily operations rather than by funds from an
investor, both due to the time that seeking an investor requires and the dilution
in capital that investors represent.

One last piece of advice: we have noted that your profitability is not too good.
Given that you are in a strong position vis a vis your client, would it not be a
good idea to increase your prices, request start-up fees, or create accessory
services to increase your profits? If you have a long sales cycle, you can ask for
down payments or payment on order. This will increase the amount of your
working capital and give you more money to use for development.

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Your product has considerable potential for long-

term growth.
Bravo! Your product can grow rapidly beyond its present borders. You will
quickly be able to launch your business in other countries or develop offshoot
services to what you are currently offering. This is really a great opportunity.
during your discussions with investors, don't hesitate to stress this aspect
because it can help justify even greater valorization But be carefuyl, your
competitoin is also stronger. It can show up from any country in the world. In
this type of market, critical mass is the keyword; you have to grow fast. If you are
not seeking to grow to an international size, maybe you will have a chance to sell
your company before it is outdistanced by a stronger competitor.

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There are a considerable number of opportunities

in the market you are targeting.
Finally, the market you want to launch your project in has some magnificent
perspectives, in terms of consumer needs, your negotiating position, and your
future growth prospects. You can move froward with confidence. Moreover, the
market will most likely continue to grow in the coming years. However, be sure
 to keep an eye on your competitors because if you find the market attractive, so
will others. Focus on growth and on reinforcing your position. You will be in a
very enviable position if you manage to take over a strong position.

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Can you establish yourself in your

target market?
Competition plays a very important role in every start-up's chances for
success. To estimate these chances correctly, you not only have to take the
competitors in the literal sense, which means the businesses that offer a
comparable product to the same client segment, but you also must take into
account the "substitutes" that offer a different product which still meets the
same client needs. We should add that, in the euphoria of the start-up period,
entrepreneurs usually tend to underestimate their clients' sluggish buying
habits. Even if the product you put on the market is superior to anything that
exists, most of your prospects will take their time about adopting it. Be
patient and stay watchful...

Your product has a definite competitive advantage.

The offer you are putting on the market is better than that of your competition.
A startup rarely has this kind of advantage right from the time it launches its
product. Usually, several months or even years are necessary to build up this
sort of power. To be able to take advantage of this situation, your idea must not
be copied during the first 12 months after you launch it. If this is your case, you
should use all the marketing means at your disposal to promote this advantage
with your prospective customers. If they are impressed by your advantage, they
will adopt your product rather quickly.
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The sector you are getting into is not a very

competitive one.
We prefer a market with little competition rather than no competition at all. The
presence of other companies in the same sector proves that the sector exists
and that there is a demand. Many sectors offer bonuses for dominant positions.
Focus on growth so you will move to the top of the playing field. Your margins
will be better in the end and you will have more critical mass to cover the costs
of developing new products. If your organic growth is not sufficient, maybe you
could think about making allies or buying out smaller competitors to
consolidate your position.

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Your are relatively forcused on the development of

your business
Focus is the main point in launching a young business. Your resources are
limited in terms of both capital and time. You seem to be conscious of that. You
follow a main road and you have some ideas to test side offers. You are right, as
an entrepreneur you should be opportunist. The best ideas to develop your
business will come from your clients. Therefore, it's not bad to try new ideas but
don't disperse yourself. All is a question of balance.
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Is your idea worth developing?

The market and the sector we have just analyzed make up the external
elements of your business model. You don't really have any impact on them. A
start-up usually does not have enough money to create a market and you
cannot control the competition that pops up around you either. You can only
fit into the trend of the given moment. The timing of your market entry is
crucial. If you start too soon, you will use up all your resources and if you start
too late you will not break through. The ideal window of opportunity for your
product launch is when the market is at the growth stage or just as it arrives at
maturity.

You are starting out in a market that is in the growth

phase.
Your timing is perfect. This is the market phase in which you have the most
chances for success. Your customer demand is in full swing and competition is
not yet very strong. The "early adopters" will alrerady have tested your offer and
now it's time for the rest of the customers to want your product. Be dynamic
with your marketing because now is the time to conquer market share at a
reasonable cost.
 Innovation Growth Maturity Decline

Market maturity

Duration

Which development strategy should

you favour?
You have to adopt different development strategies for each phase of the
market you are in. We have organized these on two axes. The first one
confronts the market development with the product development strategy.
The second axis is based on whether to keep a policy of high margins rather
than one of drastic cost control.

You should adopt a high-margin and product

development strategy.
In the growth phase, the keyword is to have an excellent product and to turn
enough profit to finance your growth. You will have to focus on two operational
strategies at the same time. On the one hand, you will have to continue to
improve your offer because the customers' needs will become more
sophisticated and you have to keep up with them. On the other hand, you will
have to carry out an agressive pricing policy to be able - even while sales
volumes are still rather low - to make the most of the income from this growing
market. At this point, consolidating your working capital with operating profit
will let you be better prepared to face the intense competition that will take
place in the coming mature market phase.
 Development
of the product

Growth Innovation

Margins Control
high of the costs

Maturity Decline

retention
of the market

Do you have the financial wherewithal

to carry out this idea?
It is essential to have a overall view of the financial side of your project. First,
you have to have enough funds to start it off and afterwards your business has
to be, within a reasonable time, sufficiently profitable to carry on on the long
term. To get a clear idea of this, you will have to have answered, even
schematically, a few elementary questions: How much starting capital do I
need? What will my cost and turnover policies be? Which investments will I
have to make during the growth period? Let's analyze your situation as far as
these different elements are concerned.

You have enough initial funding, provided

everything goes well.
You have the funds needed not only to get your project started but also to
ensure it attains it's cruising speed. If all goes well, that is. Be careful not to make
mistakes due to excessive optimism. When developing a project, a
businessperson often has to deal with the unexpected. You might want to
downsize your costs or slow your growth a little so you can have enough
financial leeway to be able to handle unplanned situations. Try to pursue your
adventure without having to call on outside investors. You will save a lot of time
and you won't dilute your capital.

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Your margins are stressed and your clients are

hesitant to make long-term commitments
You are in a difficult market. The customers are discussing your prices and are
not disposed to make long-term commitments to buying. It's not easy to launch
a startup in this context. You have to make huge efforts to build your reputation
and you are not making enough profit to cover your marketing and prospection
costs. You will probably undergo slow growth. If you believe that the market is
going to evolve and become more profitable, it's probably better to tighten your
belt and wait. But if the prospects don't get brighter, you would be better off
changing your customer segment or your offer because otherwise you may run
out of funds and energy.

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Your growth rate doesn't require a large amount of

investment and any investment will be covered by
the profits you will make.
You have to have money if you want to expand internationally. You will have to
finance investments, working capital, and marketing costs. In your case, the
markets that you have already covered will let you finance the new markets you
 open. Your expansion costs do not seem to be very high and they should be
covered by your profit margins.

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Do you have the team you need to

succeed with this business plan?
The fourth quadrant of the Pimento Map analyzes the most important
dimension of a business plan: the team. They are the onesthat help you find
the best market opportunities, build competitive advantages, and convince
investors. Your team is your project's driving force. It is not just a question of
the competence they have but it capacity to build credibility that will help
find interesting partnerships. Ideally, the team should also bring with it a
wide professionnal network to help you quickly get in touch with the good
people. Let's see what your team situation is today.

You still need some crucial competence to

consolidate your team.
In the present state of things, your team has part of the competences you need
but not all. Though this might not prevent your project from moving ahead, you
still should take the time you need to fill this gap. Here there are two possible
situations. Either the competence you need is critical, not only to the startup of
the company, but also throughout its entire lifetime, in which case you must
find a partenr who will fill that need. Or the missing competence is important
but not a major key to the future of the company, and in this case you can turn
to a freelancer, a supplier or an employee who can provide the competence but
who will not be a capital investor.
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The partnerships you have established add to your

offer and give you a competitive advantage.
A business does not live on its own. You have understood this well and have
developed a business model that is open to the other actors in your field. This is
a very positive point because it allows a young business to take advantage of the
credibility of its partners. Whether they are suppliers, distribute your products
or in the marketing sector, if you can arrange partnerships - ideally, exclusive
ones - with the best of them, you will be closing the door on your competitors.
Be aware, however, that you mustn't make too many because for partnerships to
have any real sense, they must be maintainted and that takes time.

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You are entering a market sector that is new to you.

You are not very familiar with the sector and its players do not know you either.
It's important that you get to know them quickly so you can establish your
notoriety. Trade fairs and shows, conferences and specialized publications, are
all showcase platforms that you should use without hesitation. Before
concluding a transaction with your and your company, customers, suppliers,
investors and possible partners will often do Internet research to validate your
credibility. Make sure the results they find are significant. You should also
remember to develop your image on social networks. All of these methods are
relatively inexpensive and can offer unexpected opportunities.
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How do your short-term prospects for

success look?
This index shows your present possibilities to launch your company and
survive, either in the short term or over a 12 to 24-months period. This is
usually considered as the "start-up phase."

Your chances of short-term survival are good.

You are in an excellent position for short-term development. It's a comfortable
one and you should take advantage of it. The Customer Pain and Funding axis
indicates that you have the means to meet your ambitions and the Competitive
Advantage and Competences axis shows you have the means to take advantage
of this opportunity. Even if at first you have to concentrate on daily
management, use the means you have available to prepare for the future.
Improve your activities' returns and develop solid partnerships; they will come
in handy when times get tough.

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 What challenges will you have to face
once you have set up your idea?
Some start-ups do not have the potential to grow beyond a dozen employees.
This index measures your possibilities of surpassing this stage and analyzes
your chances of having several dozen employees. The index is calculated on
the fourth circle, meaning on the Power balance, Intense competition,
Profitability & recurrence and Partnership sections.

You stand a good chance of moving from the startup

phase to the SME phase
Your project has true potential for the mid-term. In a few years, if you manage to
get past the critical beginning phase, you will reap the benefits of your work. You
will be able to finance your company's growth with the profits you bring in and
your competitive edge should be an enviable one. Don't hesitate, even now, to
point to the promises in your business model in order to justify a strong
valorization of your project when presenting it to possible investors. Stay
reasonable, though; you still have a long way to go...

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What is your business plan's long-term

potential?
The long-term opportunity index analyzes your project's potential for playing
a major international role. Obviously, this will not happen right away, but it is
good to know if the hopes you have placed in your project can one day, if all
goes well, meet your expectations. This index is calculated on the fifth circle,
which includes the Scalability, Business Focus, Cashflow requirements and
Network.sections.

Your project has real long-term potential

Your project has the potential for international development. If you pay it right,
you can grow quickly and cover a large amount of territory without requiring too
much investment. But don't forget that if you expand internationally the
competitors from other countries will also be able to play on your field. The
strategy that you adopt will be decisive to your success. Fortunately, you have
still got a few phases to get trhough before these issues become a reality.

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What are your business plan's

strengths?
In this section of the report, we will bring out your plan's strenghts. We can
identify them by comparing the opposing sections of each circle. When there
are two green sections facing each other or, to a lesser degree, a green one and
and yellow one, you are looking at one of your plan's strenghts.

There is a real market demand and you have some of

the funds you need to respond
One of your business plan's strong points is a good market demand and part of
the money you need to respond to it. The demand will allow you to carry out an
aggressive pricing policy and have a good sales turnover. The funds at your
disposal will allow you to invest in your product development or in reinforcing
your sales team. Since there is a strong demand, try to ask for advantageous
terms of payment (payment in advance, down payment...). This will give you the
extra money to finance your growth. One last bit of advice, pay attention not to
grow too fast because your financial base is still fragile and you might not be
able to finance your needs in terms of working capital.

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Your competition is not too strong and you have

established strong partnerships
The strong partnerships you have made give you an advantage with respect to
your competitors. Your partners will have allowed you to take the lead on the
current market players and made it difficult for new ones to enter. Keep your
partnerships active by initiating joint sales actions and try to make them
permanent by establishing long-term contracts. This will shelter you from the
possiblity of seeing your partners back out.

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Your business has a lot of potential for growth and it

will not be impossible to find the funds needed.
Your business plan will allow you to develop at an international level without
much difficulty. The capital you will need for your international growth can be
generated either from your own daily operations or provided by an outside
investor. If you choose to handle your own financing, you will probably have to
 slow your growth a little while you are waiting for enough cash flow to come in
to support it. If you do this, you won't have to look for outside capital and you
will be the captain of your own ship. If you prefer faster growth, you will have to
call on a third party's financial power. It's up to you to make the right choice.

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In your business plan, certain

weaknesses will be compensated by your
strenghts.
The Pimento Map does not only allow you to analyze your business plan's
weak and strong points, but it also allows you to get a look into how some
weaknesses can be compensated by corresponding strong points. Thus, when
a green section opposes a red or orange one in the same circle, the weak
points of the one are compensated by the strong points of the other. Let's see
what is your situation.

The competitive advantage you enjoy lets you

compensate for your team's relative weakness.
You have a strong competitive advantage. If your customers feel this as well,
they could decide to work with you despite your team's weak points. You will
save time and be able to use it to complete your team with the talents that you
still need. Don't hurry with recruiting; take the time to choose the right
candidates and they will turn out to be the keys to your succes in the long run.
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Your strong negotiating position can compensate

for your limited profitablity
You are in a strong postion to negotiate with your clients, and you should take
advantage of that. It looks like your company's profitability is rather low. There
could be two reasons for this: either your pricing policy is not agressive enough
and, given your position, you might think about strengthening it, or your sales
volume does not allow you to cover your overhead costs. In that case you need
to think about limiting your costs while you wait for your sales to increase.

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