Business Idea and Market Perspectives for a Computer Game Shop - Example

Business Proposal Business Proposal Outline EXECUTIVE SUMMARY……………………………………………………………………….3 BUSINESS IDEA…………………………………………………………………………………3 THE MARKET……………………………………………………………………………………4 Customers…………………………………………………………………………………………4 Competitors………………………………………………………………………………………..6 Communication (marketing)……………………………………………………………………....8 FINANCIAL ISSUES……………………………………………………………………………..9 OPERATIONS AND REGULATIONS…………………………………………………………10 References………………………………………………………………………………………..11 Appendix…………………………………………………………………………………………12 EXECUTIVE SUMMARY PC-game is a computer game shop that will be located in Riyadh City, Saudi Arabia. It is a new shop that will be operated as a single business unit. The shop is based on the idea that there is need to reward customers. PC-game will be able to meet such a need by organizing contests on a monthly basis and rewarding winners. Major customers include individual in the age bracket of 16 to 30. The business will majorly rely on external funding especially the family and its main marketing tool will be the social media (Debelak, 2000, p. 178). BUSINESS IDEA Research studies indicate that the market for computer games has been growing steadily and has attracted a number of entrepreneurs as well as investors. My business idea is to start a personal computer game shop under the name pc-game. The business idea revolves around creating a network of computers with games where customers can have fun playing a number of games. Each computer will contain five games depending on customer needs (Debelak, 2000, p. 112). The business is to be located in Riyadh, Saudi Arabia. The shop for computer games will contain 25 computers that will divided into two teams with one computer acting as a server. Each team Customers will be required to form teams consisting of 12 players who will be engaging in a contest every month at a prize. This is a unique business idea because it enables fans of personal computer games have adequate time to play their favorite games and engage in a contest. The shop will be offering ten riyal per hour for when each computer user to plays their favorite games. Every month, pc-games will be holding contests where two teams will be competing with each other for a prize of 3000 Saudi riyal. No one has ever developed such a concept hence this is a very new concept in Riyadh. The business requires excellent skills in computer and the operation of personal computer games (Debelak, 2000, p. 200). It will be necessary that the business secures copyrights from the relevant authorities so as to secure the original business idea and protect it from duplication. I am confident that the business idea will grow to establish a bigger pc-game business that will double in size in five years. The business will ensure that customers get new computer games hence to ensure that the business is growing. An encouraging factor in the growth of the business is the increase in the number of personal computer games. This is an opportunity for the business to increase levels of customer satisfaction hence attracting more customers (Debelak, 2000, p. 100). THE MARKET Customers The main target market for pc-games is the young generation aged between 16 and 30 years. The young generation is considered to be the main consumers of sporting activities especially video games. The youth who are in their early ages have a liking for computer games and in most cases they like playing games in groups as opposed to playing individually. They like visiting fun sites where they engage in a number of sporting activities including playing computer games. In most cases, they like to engage in competitive sporting activities and they can be spotted competing with each other when having fun. PC-games will explore such an opportunity by providing contests every month and offering a prize of 3000 Saudi riyal to winners. This will attract more customers to the business due to the competitive nature of the young generation. Despite the fact that most of the youth in the age of 16 to 30 years like competing with each other, most of the personal computer games have missed on the opportunity to provide such services. Most of the existing businesses focus on offering personal computer games on individual customers as opposed to a group of customers. This can be explained by the fact that most of the shops have little capacity for their customers (Debelak, 2000, p. 215). The market for personal computer games has also developed the need to spend more time playing a number of games. Most of the consumers feel that they are provided with little time to play games hence they leave unsatisfied. PC-games will be able to offer adequate sessions by charging low prices of ten riyal an hour for its customers. This is a favorable price level that will ensure customers can take more sessions hence play a number of games. The target market include a number of groups of consumers such as students and working individuals who have a steady income from their jobs. Students spend most of their time at home during holidays and they like spending most of their time relaxing in computer game shops. This is a significant potential market for the business not only during holidays but also when schools are in session. Most of the college students are free to leave campus premises and most of them find themselves in personal computer game shops. Employed individuals spend most of their time working all day. They always have a busy schedule and need something to relax their mind. Computer games are appropriate in ensuring that their mind is relaxed. PC-games will create an environment where they not only relax but also socialize. The formation of teams will enhance socialization among customers because they will be able to form a large team consisting of 12 members. Riyadh city is the capital city of Saudi Arabia and has a population in excess of 4.26 million persons as illustrated in figure 1 in the appendix section. The population growth is very tremendous and is considered to be among the highest in the world. The average age of the population in the city of Riyadh is 22 years and research studies indicate that 50 percent of the population is under the age of 20 years. These are favorable statistics for the business because half of the population is aged less than 22 years. This means that the target market for pc-games consists of approximately of the population. This is a big market for pc-games to attract and serve. Competitors There are a couple of competitors in Riyadh city in the market for personal computer games. These include shops with an established business experience in the market and strong product brand. PC-game is a start-up business and has little experience in the market. This will result in the business facing stiff competition from established business since they have been able to attract a significant number of customers who have eventually become loyal (Debelak, 2000, p. 287). The other main competitors include retail shops dealing with the sale of computer games. Riyadh is the capital city of Saudi Arabia and most of the families living in the city are able to afford computer games for home use. This means that a good number of customers will be able to play personal computer games rather than visit our premises to play games. There is the emergence of low quality/counterfeit products which are lowly priced. This will make it affordable for consumers to purchase large volumes of games from bogus retailers and suppliers hence making pc-game lose a significant share of potential customers. Despite the competition from different angles, pc-game will be able to create a competitive advantage by organizing contests every month and offering a prize of 3000 riyal to winners. This is a new idea and the business will be rewarding its customers which will make them feel appreciated. The effect is that there will be large numbers of customer returns. Communication (marketing) The social media is the major tool of marketing the business to customers. Social sites such as Facebook and Twitter have a large number of registered users especially the youth and teenagers. These groups spend a lot of time on social networking sites socializing and this is a great opportunity for pc-games to place advertisements and attract a significant number of customers. PC-games will create a Facebook fan page and a Twitter account where it will be able to connect with its customers. Apart from using the social media, pc-games will also place advertisements on Alriyadh, which is the best selling newspaper in Riyadh. This will ensure that the company advertises its services to a wider market of potential customers. The advertisement will last for three days and this is an adequate time period for the company to create a presence in the market (Debelak, 2000, p. 300). The other advertising strategy will include offering a one week free play for one hour to customers. Other important tools of marketing/communication for pc-game will include posters and calendars. Posters will perhaps be the best way to announce the launch of pc-game in Riyadh. This is because posters reach a significant number of potential customers in the market. It is natural that video games are impressive in terms of graphics, so pc-game will print some of the games that it will be offering so as to awe potential customers. Calendars are an appropriate marketing/communication tool that will boost the communication of the business idea to potential customers. PC-game is a new business idea and this makes it a bit difficult to penetrate the market for personal computer games. However, pc-game will make it easier to penetrate the market by showcasing its services via printed calendars. The fact that people love free calendars will make it easy for the business to market its ideas for 365 days a year. FINANCIAL ISSUES The execution of the business idea requires a total of 165,750 riyal. The money will be used in the purchase of equipment, rent payment, salaries, advertisements, maintenance and organizing contests as illustrated in figure 2 noted in the appendix. It is anticipated that the business will incur high costs of operations in the first year period of operation and this may result in a negative cash flow balance. PC-game is also anticipated to record losses in the first year of operation because of low revenues and high costs of operation. This is illustrated in figure 3 in the appendix section. There are three possible sources of capital for the pc-game. The first source is personal savings and this will form the bulk of capital for the business. However, the risk associated with personal savings is that they may not be adequate by the time of business execution and this may affect business financing. The other option is contribution from family members which has the disadvantage of having family members interfering with the running of the business. The last option is borrowing from financial institutions. This has the risk of paying very high rates of interest. The family is the best source of capital because it involves a large number of people who will be able to raise adequate money at a little or no cost. OPERATIONS AND REGULATIONS This is a sole proprietorship business that will be operated by one member of staff. I will manage the business by myself so as to give my customers a personal touch. The business will be situated in the center of Riyadh city because of the large number of potential customers for the business. A central location will also ensure that the business has access to a steady supply of electricity. Business equipment will include computers and stationeries (Debelak, 2000, p. 305). PC-game will secure a single business license for its operations and will ensure that the license fee is paid one year in advance. References Debelak, D, Streetwise Marketing Plan: Winning Strategies for Every Small Business, New York: Adams Media, 2000. Appendix Figure 1: Retrieved from http://xlcgozo.com/SOLAR-ENERGY/company/riyadh-population Figure 2: Expense Table Item Cost (riyal) Computer games 18000 Shop rent 40,000 Decoration 10,000 Computers 87,500 Computer Maintenance 500 Salary Expense 3,000 Advertisements 3,000 Prizes 3,000 Figure 3: Cash Flow Table Year 1 (24 customer) 2 (30 customer) 3 (34 customer) purchases -15,500 - - salary -12000 -12000 -12000 Rent & bills -10,000 -10,000 -10,000 sales 17,280 21,600 24,480 Read More