BUSINESS PLAN PART 3
BUSINESS PLAN PART 3
The development of an online solution for "Your House, Your Design" requires that experienced professionals of the E-commerce work on it. Today the company does not have extensive experience in the electronic commerce; today only have a one-page website with information about the products and contacts to the company. The online store requires an online catalog linked in real time with the inventory, graphical representation of the entire product and a secure payment platform for the client and the company. With the previous considerations and the required learning curve of the hosting platforms, the company needs to outsource the online store to a third company with experience in online stores. Amazon and EBay offer solutions to manufacturers and distributors to create a website linked to their index website using their payment platform with a cost model that includes a fixed fee and a percentage of sales. Amazon (Amazon, 2016) offers the use of the same payment system of the company externalizing the risk to Amazon and the storage of all the data of the clients. EBay, with its related company PayPal, offers to the clients the possibility to manage all the payments of the company with a fixed fee plus percentage of sales. The use of other providers offers the same benefits but without the same coverage of the two previous examples (Paypal, 2016). The risk of the use of a third party provider to develop the store is that the solution provider is responsible for "Your House, Your Design" company and not with the clients. The average cost of a third party provider is an interval from 4% to 9% of gross sales of the store.
Risks
There are several risks for an online store in both scenarios, with internal or external development:
■ Partial or total shutdown of the website: It is possible that the website suffers hacker or cracker attacks that will affect the access to the website in a time interval or a total shutdown. The potential shutdown of the company affects the sales of the company including the online and offline sales. The constant online presence helps the company to support the offline sales. The company, using a third party provider needs require to the provider the restitution of the service. In the case the website "Your House, Your Design" has an internal development, the company needs to have personnel 24 hours monitoring the website for a failure or attack.
■ Payment or transaction failure: It is possible that the transaction has a partial or total failure that difficult the transaction between the client and the company. Failure in the connection with the bank, a debit to the client without credit to the company is the potential problems the clients or the company may face using a sale online platform. The use of robust and proven sale platforms with local banks or global payment systems as PayPal or Alipay gives confidence to the client and the company to execute the transactions successfully.
■ The risk to be copied by the third party provider: It is possible that the third party provider learns from the experience of the company "Your House, Your Design" and designs a new business proposal that competes with the company in the future. That risk is possible when the developer is external.
Financial statements
The balance sheet of the company is in Table 1, with a ratio of liabilities to assets of 46% for the first year, 40% for the second year and 25% for the third year. The liabilities reduction strategy is to reduce the liability risk of the company to have the ability to obtain cheap financing in the future.
The income and expense statement shows a planned growth of 25% from year to year thanks to the use of the online solution (Table 2).
Timeline
The project will have duration of 61 working days, according to Table 3. There are ten tasks, all in a series configuration.
Reference List
Amazon. (2016). Marketing & Commerce Partner Solutions. Retrieved from Amazon: https://aws.amazon.com/es/digital-marketing/partner-solutions/
Paypal. (2016). PayPal Partner Solutions. Retrieved from Paypal: https://www.paypal-partners.com/directory
