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Children's Website Business Plan

InteliChild Business Plan

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Executive Summary

1.0 Executive Summary

Introduction
InteliChild.com offers bright children an entertaining place to interact with each other, the Web, educators, and the world in general. It generates traffic first, valuation for investors, and eventually commerce and profits. It is a healthy place for kids to play, for parents and schools to buy, and a creative and fair work environment for employees.

The InteliChild.com e-commerce project is the natural evolution for the InteliChild.com Internet presence. The site will market and sell selected toys, books, and software products. It will also produce Web products and Web applications that will increase market share, promote name recognition, and maximise efficiency.

The Company
The present InteliChild.com is a start-up company with four full-time employees. The company was incorporated early in 1999 as a California C corporation owned by its principal founders, at 25% ownership each. Late in 1999 (Name Omitted) Capital partners acquired 50% of the company for £500,000. The company has a single office in Bend, Oregon. The initial website is at www.citruscoolkids.com.

Our key competitive advantage is the in-house knowledge base we have developed. Our competitor spends five to 10 times the amount of money we do outsourcing to expensive companies for services we perform in-house. The same will take place with the InteliChild.com website. We already have the SQL^TM server and ColdFusion^TM programming expertise, and we will be adding the Flash^TM integration of these skills.

Products and Services
InteliChild will be offering a steadily increasing mix of three lines of products:

• Toys and Games: carefully selected toys and games that appeal to the target market, the parents of the target market, and educators.
• Books: there should be a selection of books that appeal specifically to the parents and educators of the target market, so that these interested adults can go to this site and order books about their children. In addition, of course there is also a selection of books to be ordered by and for the kids to read.
• Software: carefully selected software to appeal to the target market and target parents and educators.

The Internet reinvents itself every three months, or even faster. Therefore, our strategy for future development is to remain positioned with enough flexibility to adapt new technologies, and adapt to changes quickly.

The Market
The InteliChild.com market has been expanding exponentially with the advances of technology in the teaching sectors and the acceptance of technology as a teaching aid. The critical component to our entrance into the market will be approval and support from the school communities - including teachers, the PTA, and special education programmes.

Our primary target markets include these four areas:

1. The kids themselves.
2. Parents.
3. Educational institutions for children of the upper class.
4. Self-teaching families.

While we have plans to expand into international territory, our initial launch will target our most important market - the American upper class. We know that most of our clients drive BMW's and have very good taste - they spend money on their children because they can appreciate the technology that we have created. They also generally have high bandwidth connections, and are impressed by first-class design.

Financial Considerations
Our start-up costs come to £33,750, which are high because of our commitment to dominate the Internet market place.

The Break-even Analysis is a good financial indicator. We show break-even with a sales level of about £265K per month, even assuming a fixed cost of £169 per month, which is high. Given those assumptions, we reach steady-state break-even in December of this first year.

The sales forecast is based on increasing website traffic and increasing sales per unique user session. Sales are projected to rise from £569 thousand in 2000 to £6 million in 2001 and £25.8 million in 2002. The forecast obviously depends on traffic increase. We plan to lose money for at least three years while we build traffic and develop our position for the long-term future.

Highlights



1.1 Objectives

• Traffic, as measured in unique user sessions: 100,000 unique user sessions in June, 2000; 450,000 in December, 2000; 3.5 million in 2001; and 5 million in 2002.

• Sell-through, as measured in pound sales per unique visit: a high of £0.58 per unique visit in December of 2000; increasing to £0.83 in 2001; and £0.92 in 2002.

• Valuation, as measured in ability to bring in additional investment at economically feasible valuations. We need to attract £750 thousand this year, and an additional £2 million in 2001, with valuation performance that yields attractive internal rate of return (IRR) to investors. The financial section indicates IRR of more than 100% for all investors, with larger IRR for seed, declining slightly for first round and then second round.

• Acquisition or Initial public offering (IPO) in 2003, with a valuation of more than £20 million. This assumes of course the market valuations based on sales and earnings, which are relatively high as this plan is written.

1.2 Mission
InteliChild.com offers bright children an entertaining place to interact with each other, the Web, educators, and the world in general. It generates traffic first, valuation for investors, and eventually commerce and profits. It is a healthy place for kids to play, for parents and schools to buy, and a creative and fair work environment for employees.
1.3 Keys to Success

1. We must retain the customers. The website has to be easy to use and quickly viewable. User satisfaction is an ultimate priority.
2. The project will succeed if it can capitalise on the traffic that InteliChild.com produces, and turn the user sessions into pounds through the commerce site.
3. The sales process must be easy to administer and flexible enough to accommodate the needs of InteliChild, which is not ready to take on more employees to do so.
4. The e-commerce project should further establish InteliChild.com presence as a technology leader, not only returning traffic but actually bringing in new traffic.