J-COMPONENT FINAL REPORT

MGT1022: LEAN STARTUP

MANAGEMENT

FALL SEMESTER 2020-21

GEOFENCING FOR PETS

SLOT:TE1

Submitted by- Kartik Vashist (18BEC0748)

Submitted to- Prof. Naga Venkata Raghuram J.

 EXECUTIVE SUMMARY

Geofencing is a concept in which GPS coordinates are used to create a virtual fence.
Although this fence does not create any physical barriers, it creates a virtual barrier
which is useful in many ways. Using the GPS coordinates of the fence and the target
object, we can implement an “alarm system” which will be triggered when the
target object crosses the fence. Using this we can create a similar alarm system
which will trigger an alarm when a dog crosses the geofence and then escapes the
house or when a wild animal wanders into a zone designated as a residential zone
for human beings.
The device is a GPS sensor which will be attached to the pet animals or cattle and
also to wild animals. On domestic animals, they can be attached onto collars or any
other item that is usually used for identification of the animals themselves. We can
attach the system to an app which receives a notification in case the animal escapes
from the house and has wandered away. For wild animals, a central alert station
can be established which can be used to monitor any animals crossing the geofence.
These alert stations will be responsible for sounding alarms in the respective
villages and other regions where the possibility of man-animal interaction is high.
 INTRODUCTION

Animals are very important part of our nature. They help nature in many ways,
mainly by helping in maintaining the carbon cycle. While wild animals can be
dangerous and must be kept away from human beings, domestic animals like dogs,
cats, cows etc. actually help us humans in a direct way. Cattle and poultry give us
food and milk, other pets like cats and dogs are raised in homes and are loved as
much as any other family member. A big worry for pet owners is the possibility of
the animals running away. The fear of wild animals is always there in remote
villages where there are possibilities of animals straying into villages and attacking
the inhabitants. In response, the animals may be hunted down by the people
themselves as a pre-emptive measure. Whatever the case, there is a need to protect
these domestic animals, or in the case of wild animals, protect humans from them.
The best way to do this is by keeping a control over their lives and movements
without actually inhibiting their freedom. One of the best ways to do this is using
the concept of Geofencing.

The type of business of our start-up will be a manufacturing business. In a

manufacturing business, we buy different products with the intentions of using
them as raw materials to make a new product. Thus, there will be a transformation
of the products purchased. In our start-up model, Geofencing for pets, we will buy
different products such as a GPS module, an Arduino board, a wi-fi module and
connect them accordingly to make a geofencing device. Hence, we will purchase
different products with the view of connecting them to form a new product. This
type of a model comes under manufacturing business. Using these ready-made
units, we will manufacture the device itself and distribute it to the consumers.
 Company Logo, Name of the Business, and
Slogan/Catchphrase of your Business

COMPANY NAME: FENCBITE-THE GEOFENCING GENERALS

I chose this name since my company is based on geo fencing. I took “fenc” from
fencing and decided to go with “bite” since pets tend to bite sometimes when they
are being playful or when they get angry.

CATCHPHRASE: DEVOTED TO NAUGHTY PETS

I decided to go with this catchphrase because naughty pets usually try exploring
new things and places and tend to wander easily and get lost. So, we as a
geofencing company are devoted in making a device to make sure that these
naughty pets do not get lost.

COMPANY LOGO:

In this logo, the fencbite dome signifies the protection offered to the pets. It gives
the owners a sense of security that their pets are safe. The happy puppy in our logo
signifies that now pets will be always safe and happy as now they have fencbite to
protect them. We also decided to have a puppy in our logo as it directly appeals to
our main target audience, suburban pet owners.
Management and employees

The company requires the employment of both skilled and unskilled workers for
the manufacturing of the final product. The unskilled workers will be employed to
assemble the final product from the various parts as well as performing other tasks
such as keeping the environment clean and safe. The skilled workers that we need
are mainly engineers, quality control specialists, management and economics
specialists as well as lawyers split up into the various departments that are legal,
human resources, research and development, marketing and quality control
departments. The engineers that will be required will be of the branches of
electronics and communication, computer sciences, instrumentation who will be
working on the design part of the product along with scientists who will be
working on improving the existing technologies and experimenting on new
technologies that can be implemented for the product. For the management part of
the company, we will recruit people who have attained a minimum of an MBA
degree. They will be responsible for the management of the various teams of
people that will work in the company. The legal department will consist of lawyers
who have attained at least an LLB degree. They will be responsible for providing
legal advice to the company members as well as deal with legal issues of the
company. The employees in the human resources department will be selected from
any department provided they have the skills to effectively manage the manpower
of the company and provide any employee with the required help. The quality
control department is a very important department which will deal with monitoring
the quality of the products that the factories produce and will also be responsible
for collecting feedback from customers in order to improve the product’s
standards.
 PRODUCT DETAILS AND WORKING OF THE
PRODUCT

The product uses the concept of geofencing where the GPS coordinates of the
device will be used to create a virtual fence. If the pet/ wild animal crosses the
“fence”, the device gets triggered and an alert is sent to a phone via an online
applet service. The main components in the device are a microcontroller, an
internet connection, and a GPS module. The microcontroller does the main task of
processing all the information and the calculations. It is responsible for
continuously registering the current GPS coordinates of the device and then
checking whether the device has crossed the fence or not. The microcontroller is
the brain of the device and hence is the most important part of the device. A GPS
module is a device which reads the GPS coordinates of the device. It reads the
GPS coordinates from the GPS satellites that orbit the earth and returns the
position of the device. These coordinates are used to compare the location of the
device with the fence coordinates. Using ready-made devices, we can provide a
localized internet connection for the device which can be used to send an alert to
the user’s mobile device. The internet connection device is used to connect to an
online applet service. When the microcontroller detects that the device has crossed
the virtual fence, the online applet service is triggered via the internet connection
(using a direct satellite connection) and the applet device sends a trigger to the
Android/iOS app which then displays the alert on your phone screen.
 Minimum viable product (MVP)
MVP is used to launch a product quickly, based on your idea, with a small budget.
This approach allows you to collect users’ feedback for the primary product and
include it in future iterations. With the help of an MVP, one can find the right
audience, pull the ideas based on experience, and save time.
A product can be called “minimally viable” if it has some features to be validated
within the market and brings the core value for early adopters. MVP may be
treated as a pioneer product version with raw functionality and features.
Goal: To help start-ups validate their opportunity hypothesis and get the green
light for developing a full-fledged product.

Our Basic product

The basic prototype we have developed consists of a device, which is a Gps
sensor which will be attached to the pet animals or cattle and also to wild animals.
There will be a virtual fence set up according to the requirement of the customer.
Once the pet/cattle cross this virtual fence it will trigger an alert, which will alert
the owner of the pet/cattle.
Customer targets:
1)Pet owners
2)Farmers
3)Zoo
Services Available at the beginning:
1)A basic website of our start-up
2)A basic android/iOS mobile app for the alert trigger.
 We first will design a basic online website for our start-up product
which will consist the information regarding our basic prototype, a
“Click to purchase” box, payment options, final “buy”box, and finally a
product review and suggestion box.
 For those people who don’t have access to internet, we will set up a
customer care number from which the customer can contact us and buy
the product as well submit a suggestion or a review.
 Since our product is just a basic prototype right now, we will be open to
all the suggestion and complaints in order to keep up with the needs of
our customer.
Now if we get a great response:
 If our website gets a great response, that is customers are purchasing our
product from our website in great numbers, we will bring major updates
to our product and our website.
 If customers are buying our product from the number, we have provided
for purchasing, we will bring major improvement in our customer care
help and facilities.
 Once we get the required suggestions and complaints through customer
care and website, we will incorporate these suggestions to our product
and make sure that the complaints regarding the basic prototype will be
sorted out in this new product we have developed.
 MARTKETING STRATEGIES

Any company or a start-up, in general, needs a Market to thrive upon and expand
its growth. This “Market”, which we are talking about is basically our consumers
who buy our product in order to fulfil their needs, that arise with times. For any
company, convincing common people (lay- man) to make them buy our product
is not at all easy. Furthermore, today’s neck-to-neck competition has made this
task more daunting for any company, especially for a budding start-up like ours.
So, for attracting the consumers towards our product, we’ll have to make them
believe that the product we create is much better and efficient than that of our
competitors. For the publicity and proper advertisement of our product, we
would be inculcating the following measures:

1) Have a great website:

On the off chance that one thing will put customer’s off our, it's having a
poorly structured website. To avoid this, we have to design and interesting
and user-friendly website. This includes easy navigation within the website,
the ease to access the product required and its information and the ease to
purchase the product required. By keeping this in mind if we design a
website, it will attract customers to our website and help them to easily
purchase the product online.

2) Search Engine Optimization (SEO)

Search engine optimization, or SEO, is one of the most important marketing
strategies for start-ups. SEO is the process of optimizing our site structure and
content to make it easier for search engines to read. By making small changes
to our site and developing content that focuses on relevant keywords, we can
work to rank higher on the search engine results page. The higher we rank on
Google, the more opportunities we will have to drive new customers to our
site. SEO is especially important for small businesses because consumers who
are searching for brands to buy from locally often use their mobile device to
find nearby locations. By optimizing our site and content for local SEO, we
can increase our chances of appearing in these local mobile search results. As
an added note, it’s also important that our site is mobile responsive, which
means that it can easily be accessed and navigated through on a mobile
device.
3) PPC Advertising
PPC, or pay-per-click, advertising is a type of online ad model that allows
small businesses like ours to display their ads to people searching online for
relevant products and services. Pay-per-click works just like, we pay each
time a consumer clicks on our ad content. Though Facebook and other ad
platforms use the pay-per-click model, we are going to focus on PPC ads that
are displayed on Google and other search engines.

4) Facebook Advertising
According to Facebook, there are 2 million small to medium sized businesses
advertising on this social media platform. And that should come as no
surprise given that Facebook ads are one of the most effective and least
expensive ways to advertise your products to nearly any niche audience.

5)Create ads that appeal to people's emotions

A number of studies have revealed that emotional advertisement outsells
logic. Emotions factor heavily into buying decisions for consumers, not just
facts and information.

6)To build a referral network

Word-of-mouth advertising is one of the most powerful forms of
advertisements, especially for small businesses. Since people make purchases
based on trust and credibility, we can take advantage of their network and get
a referral. And getting a referral involves a two-step process. First, we must
deliver top-quality results to clients. In addition to offering a stellar product or
service, we need to communicate openly and often with customers throughout
the course of the transaction. Secondly, we need to ask for feedback.
Transparency is a very important quality, especially for start-ups – even if
something goes wrong. Asking for feedback is a great way to learn the
personalities of our clients, how satisfied they were, so that we can build on
this for the future.
7)CULTIVATE RELATIONSHIPS WITH INFLUENCERS
Influencers are just as important as our customers. They are the people our
target audience listens to on a daily basis. Influencers could include hosts of
YouTube channels or radio and TV personalities. We need to Call potential
influencers, send emails, offer free products or services. One mention from
these high-profile individuals can propel our business start-up from literally
nothing to a credible and legitimate force

8) EMAIL CUSTOMERS AND POTENTIAL CUSTOMERS

There are many advantages of using email as a marketing strategy. It is easy
to do, can be automated, provides instantaneous communication, costs very
little and can reach a large number of potential customers. Once email
addresses are added to an email list, it is important that we provide
interesting, valuable and relevant content to their list so the emails get opened
and not just merely diverted to spam mail.
 OPERATING PLAN

Goals and Objectives

The key to an operations plan is having a clear objective and goal everyone is focused
on completing. In this section of our plan, we'll clearly state what our company's
operational objective is.

 Strategic objective: To deliver solutions all over Eastern India, where we’re based.
 Technology department operational objective: To create a mobile app by
December 2020 to offer a better user experience.
 Marketing department operational objective: To increase website visitors by 50%
by January 2021 by advertising on radio, top local advertising websites, and print
ads, like in newspapers.
 Sales department operational objective: To increase delivery sales by 30%, by
targeting 3 of Maharashtra’s largest cities. (Mumbai, Pune and Nagpur).

Production Process

After we create our objectives, we have to think strategically on how we're going to
meet them. In order to do this, each department (or team) needs to have all the
necessary resources for the production process.

Resources you should think about include the following:

 Suppliers – we’ll have a supplier (or more) to help us produce our product.
 Equipment & Technology – each department has the necessary equipment,
technology and software to meet objectives. For instance, in keeping with our
business objective above, necessary tools might include:
o Technology team: app developing software

o Marketing team: software licenses for website analytical tools

o Sales team: headsets, phone systems or virtual phone system technology

 Timeline

Creating a timeline with milestones is important for our new business. It keeps
everyone focused and is a good tracking method for efficiency. For instance, if
milestones aren’t being met, we'll know that it's time to re-evaluate our production
process or consider new hires.

Production Milestones
Production milestones are going to keep our start-up on track. These milestones are
going to act as "checkpoints" for our overall department objectives. For instance, if
we want to create a new app by the end of the year, product milestones we outline
might include a beta roll out, testing, and various version releases.

Other product milestones which we’ll keep in mind:

 Design phase: Very essential as it is going to decide the attractiveness of our

products.

 Product prototype phase: A usable prototype which could ensure that it may be
further worked upon.

 Testing: Most important phase as testing is what ensures performance.

 Product launch: A launching ceremony in order to make an official announcement

of our product.

 Version release: Any further improvements to be incorporated, based on the

feedback we receive from our consumers.
Financial Milestones
Financial milestones are very important for tracking our business performance. It's
likely that a board of directors or investors will work with us on creating financial
milestones. In addition, in start-ups, it's common that financial milestones are
calculated for 12 months.
 Typical financial milestones include:

 Funding events

 Revenue and profit goals

 Transaction goals

TARGETED CUSTOMERS

Our start-ups main target initially will be pet owners. We will try to focus on urban
sites where there are many pet owners. In these areas, people usually leave their
pets alone for long periods in the day to go for their jobs etc. So, with the use of
our geofencing device, they’ll always be aware of their pet’s location. It will
provide a sense of security to the pet owner as they know that their pet is safe.
With this app, if their pet escapes, they’ll instantly get a notification. This will help
them to take quick action. With the help of our app, they’ll be able to obtain the
exact location of their pet which they can use to rescue their pets. Our secondary
targets will be wildlife sanctuaries, national parks and other wildlife protection
areas. We will market our products there as safety devices, which will alert the
authorities about any animals escaping from these protected areas. This will help
them immediately identify the issue and act on it, as they will have the location of
the escaped animal. This will help to prevent wild animals entering human
settlements.

Now, to be able to raise awareness about our product to these audiences, we will
have to use specific marketing strategies.
 Financial Planning

The financial planning of our start-up will be done in the following steps-
1)Initial Investment
2)Operating Investment
3)Balance Sheet
4)Income Statement

1)Initial Investment-
Initial investment is the investment needed to start a business. It may include the
owner’s own money, money borrowed from different sources or money raised from
investors.
From our estimates, we conclude that the cost of obtaining the raw materials and
assembling the product will be Rs. 300.
The break-up of this will be-
1)Microprocessor- Rs. 50
2)Wi-Fi Module- Rs. 30
3)GPS Module- Rs. 120
4)Miscellaneous (Wires, L.E.D, Straps etc)- Rs.80

According to our cost estimates and other factors, we have decided that our target
within the first year will be to manufacture and sell 60000 devices (5000 per
month).
From our estimates, we have decided to hire 10 workers, who will have to assemble
2 devices per day, to construct 60000 devices for one year. These 10 workers will
be unskilled. They will be monitored by two skilled workers.
The unskilled workers will be paid 6000 per month (200 per day) and the skilled
workers will be paid 20000 per month.
So, this will bring our total cost for labour as Rs. 13,20,000 per year.
Now, assuming that the factory rent will be 1,50,000 p/m for a 10,000 sq. feet
factory and the cost of devices and maintenance to be 3,00,000 for year, the total
initial investment needed will be Rs. 2,14,20,000.
We plan on obtaining this investment from pitching to investors and venture
capitalists (VCs) and crowdfunding campaigns. Also, we will initially acquire a
sum of 15,00,000 to kickstart the company through loans.
2)Operational Investment-
Operational Investing is an investment strategy which aims to generate
investment return in the form of increased value by improving operational
performance.
After researching about this, we find that operating investments is equal to-
Current Assets- Operating Liabilities+ Non- Current Assets
As listed below in the balance sheets and the income statements, we take =
Current Assets
Current Assets are assets which can be liquidized within a period of one year. In
our start-up company, current assets are made up by all the accounts receivable,
cash and its equivalents, and the inventory (calculates using cost price.)
So, we find the total current assets held by our start up to be-
1,35,00,000 (Accounts Receivable) + 15,00,000 (Cash and Cash Equivalents) +
1,80,00,000 (Inventory) = Rs. 3,30,00,000
Operating Liabilities
Operating liabilities are short-term liabilities resulting from the primary business
operations of a firm. They are non-interest bearing and comprise of accounts
payable(wages), accrued expenses (rent and utilities), debt and tax payable.
So, we find the operating liabilities for our start-up to be-
13,20,000 (Wages Payable) + 21,00,000 (Rent and utilities) + 15,00,000(Debt) +
79,20,000 (Taxes) = Rs. 1,09,50,000
Non-Current Assets-
Non-Current assets are assets which cannot be liquidated within a year. These
include land costs, intangible assets such as patents etc. Our start-up does not hold
any non-current assets.
So, by substituting all the components found, we find the operational investment as
=
Operational Investment = Rs. 3,30,00,000 – Rs. 1,09,50,000
= Rs. 2,20,50,000
Hence, we find the total operational investment to be Rs. 2,20,50,000
3)Balance Sheet
Balance Sheet is a statement of the firm’s financial position at a specific point of
time. The balance sheet of our start-up will consist of all our assets on the left-hand
side, and all the liabilities and equity on the right-hand side.

Assets Value (for the Liabilities and Value (For the

year) (in Rupees) Assets year) (in rupees)
Accounts 1,35,00,000 Wages Payable 13,20,000
Receivable
Cash and Cash 15,00,000 Rent and Utilities 21,00,000
Equivalents
Inventory 1,80,00,000 Taxes (24%) 79,20,000
(18% GST and
6% others)
Debt (including 15,00,000
the interest
payable)
Total Debt 1,23,40,000

Preferred Stock 25,00,000

(50,000 shares)
Common Stock 1,75,00,000
(3,50,000 shares)
Retained earnings 6,60,000

Total Equity 2,06,60,000

Total Assets 3,30,00,000 Total Liabilities 3,30,00,000

and Equity

From the balance sheet, we can observe that the value of the total assets and the
value of the total liabilities and equity are equal.
(Please note that all the values taken in the above balance sheet are calculated
estimates based on our assumptions, as we haven’t started any production. The
values may differ in real life scenarios.)
(We also note that according to rules and regulations announced by the government,
we will be eligible for 100% tax rebates after 3 years, as our start up doesn’t not
exceed the given 25 crore profit mark. But since the balance sheet is made by
keeping only 1 year in mind, we have included the taxes.)

4)Income Statement
Income statement summarizes a company’s revenues and expenses, generated over
a period of time (usually quarterly or annually).
We have constructed the following income statement for our start up based on our
calculated estimates.

Net Sales 3,30,00,000

Operating costs excluding depreciation 1,80,00,000
and amortization
EBITDA (Earnings before interests, taxes, 1,50,00,000
depreciation and amortization)
Depreciation 34,20,000
Amortization 0

Depreciation and amortization 34,20,000

EBIT (Earnings before interest and taxes) 1,15,80,000
Taxes 79,20,000
Net Income before preferred dividends 36,60,000
Preferred dividends 4,57,500
Net Income 32,02,500
Common Dividends 12,81,000
Addition to Retained Earnings 19,21,500

Here, depreciation is charge to reflect the cost of assets used in the production
process.
Amortization is the charges to write off the use of all intangible assets. As our start-
up does not include any intangible assets as of now, the amortization cost is zero.
Also,,/
Common Stock Price = Rs. 50
Earnings Per share (EPS) = Net Income/Common Shares Outstanding =
Rs. 32,02,500/350,000 = Rs. 9.15
Dividends per share (DPS) = Dividends paid to common stockholders/Common
shares Outstanding =
Rs. 12,81,000/350,000 = Rs. 3.66

Book Value Per Share (BVPS) = Total Common Equity/Common Shares

Outstanding =
Rs. 2,06,60,000/350,000 = Rs. 59.028
Cash flow per share (CFPS) = Net Income + Depreciation + Amortization/
Common Shares Outstanding =
(Rs. 32,02,000 + Rs. 34,20,000) / 350,000 = Rs. 18.92
Break-Even Analysis

The red line is the revenue line. It represents the revenue generated by selling the
corresponding number of units in thousands.
The blue line represents the total cost or expenditure in manufacturing the
products. Taxes have been included as well. It will represent the total amount of
money spent by the company.
At the point, marked in the graph, the expenditure by the company equals the
revenue generated and hence represents the break-even point. So, in order to
break even, the company needs to sell at least 29000 units of the device.
 BUSINESS PLAN
Business plan is the section which outlines our overall game plan for finding
clients and customers for our business. Sometimes business plan is confused with
a marketing plan, but they are different.

 Business Plan focuses on what we want to achieve for our business and
marketing efforts.
 Marketing plan details how we'll achieve those goals.

A good business plan incorporates what we know about how our business fits into
the market and the 5 Ps of marketing to develop the tactics and actions that will
achieve our objectives.

Product: Our product description is simple. We’re providing real-life, automated,

easy solutions for pet- lovers or people who doesn’t want their business affected
by savage animals; be it agricultural or anything.

Price: We’ll keep in mind that our solutions are affordable by simultaneously
staying in the right position in the competitive market. We need to look after the
trends in market too.

Place: Our products and services will be available for purchase on e-commercial
websites like Flipkart, Amazon, Snapdeal etc. This is beyond having a home
office, and instead are the places where consumers are able to buy. We’ll ensure
that the transactions take place genuinely and hassle-free. We will be providing a
proper, systematic refund/return policy. In this way we’re actually ensuring that
no consumer has a negative feedback on our product.

Promotion: We have mentioned earlier that digital marketing will be our main
key to success. Promoting our product online on different web sites is surely
going to be a miracle. Our social media presence (Facebook, YouTube, Twitter
etc.) is going to attract consumers from many areas. We’re also going to provide
incentives or coupons which we’ll use to attract our business.

People: Our target audience have always been the ones who are pet and animal
lovers. They are people who have the same feelings and kindness and respect for
animals. Nowadays people like these are much more in the highly competitive
market. Hence this has been a boon for our start-up, as these people can go up to
any extent for their pets. This gradually brings them to the solutions which we
offer to provide.
 FUTURE PLANS

Expansion-
Although the company’s initial production and supply will be in the domestic pet
market, if the profit is high enough, it is possible to expand this business into the
low profit markets as well to the cattle markets. Since the geofencing device can be
used for monitoring the location of the animal which wears the device, it can be
used by farmers to locate their cattle when they are left out to graze on their own.
This market will not be as profitable as the domestic pet market since the devices
will have to be sold at lower prices to make it affordable for the farmers.
Based on the expansion in the marketing spheres, manufacturing and other aspects
of the business will also expand to various other areas. There will be a need to create
a centralized system where there is a central office and many sub offices in different
areas depending on which regions see a better market. These will require more
employees and higher utilization of resources and hence expansion must be done
into places where we can achieve an optimization in our expenditures based on the
abundance of resources and areas where the demographics allow for a relatively
low expenditure in the form of salaries and training charges.

Introducing new products and services-

Geo fencing is a revolutionary concept that has many useful applications in many
different scenarios. Introducing new products and features will have to be done
according to the demand of the time. For example, if the device is successful, the
company can be expanded to work with vehicle manufacturers to install geofencing
devices to prevent vehicle thefts as vehicle thefts are a major issue in many
countries including India. Geofencing tags can be attached to jewellery pieces to
prevent theft and if in case it happens, they can be easily tracked down.
Geofencing features can be added to any personal or public asset that is valuable
and has a high tendency to be stolen. However, it must be done carefully, fully
taking into consideration the requirements of the market and the demands of
society. If this factor is not taken into consideration, there will be unnecessary
losses and the credibility of the company can take a considerable hit.