A trial version of the application will initially be released and it will be free. This trial version will have full functionality like the full version. The trial version will allow users to download and try our product before they choose to purchase the product. The best way to attract customers is to offer them free products so this strategy is a good one. The cost of the full version of the software is set at $20. This is good and fair price for users in the Android market. Although most applications on the Android market are free of charge, a certain charge is paid for full versions of these applications. The difference between the trial version and the full version is that the trial version will only work for seven days. After 7 days, the user will have to purchase the full version and will have a license for that product. The license lasts for a lifetime.
The download charges will be collected with a Google Checkout Account. The Google Market does not charge any commission on the amount of applications sold, we can maximize the profits. The only charge which is paid is a transaction fee for the use Google Checkout system However, this would not significantly reduce the profits. It will only be a small part of our costs of goods sold.
Another cost is incurred in the process of development. A beta version of SpendSafe will initially be released. This is to be able to detect bugs in the application and fix. We will rely on feedback from our customers on this. Therefore, there will be updates at intervals to further improve the application. The cost of updates would vary from $100 to $2000, depending on the size of the update.
The growth and earning potential of the mobile payment market is substantially high. It continues to grow every day. The reason for this is the growth rate of smart phones. Every year, the Smartphone market continues to grow at a fast pace. Since mobile phones sales are on the rise, this will also concomitantly increase the risk of cyber-attacks. Also, many people are beginning to report loss of personal information on their mobile phones. This can be attributed to the lack of identity management options for mobile phones.
A look at the antivirus market in computers shows that there has been a 29% growth over the past few years. With this statistic, we can conclude that SpendSafe will be a success in growth because it will appeal to consumers who want to manage their spending habits, protect their identity, and protect their financial information.
At the moment, we have no competitors in the mobile phone payment market. However, this technology is growing rapidly and eventually there will be competitors. This is one of the reasons that we must try and release our product as fast as we can. LEDT technology has been growing over the past year in the Asian and European markets. The advantage we have is that the technology will be introduced to the American market. Despite the recession, the United States still has the highest spending power. This makes it a great market to launch our product.
Mint.com is very similar to our business. The purpose of their business is to get users to sign up for their database and then add existing financial information. The purpose of this is so that they can categorize their spending into different components.
The way Mint.com makes money is through advertising. They generate offers from other websites to help with an individual’s current financial situation. For instance if they had a college student as their user, they would target him with advertising about student loans.
The way SpendSafe will conduct business will be as a corporation. The company will be incorporated in the state of Maryland with the name “SpendSafe Inc”.
There are many benefits to opening up the business as a corporation. Since a corporation exists as a separate legal entity from all the owners, debts and lawsuits will be incurred by the company and not by the individual owners. The second benefit is the concept of taxation. Corporations have a lower tax rate. The next benefit is raising capital. Once the SpendSafe is a successful product, we can go public and start issuing shares and bonds to raise capital. Another benefit is the issue of buying and selling parts of the company. Transfer of ownership will be relatively easy for investors who want a larger portion of the company’s ownership
Next thing we need to do is build teams for different departments. Since we already have a development team, we do not need to worry about that. The part of the company that we need to establish is the upper management sector. Upper management will be in charge of looking after every department and all of the company’s operations. For every other department, we can use outsourcing. India is famous for their involvement in the role of outsourcing, so a lot of positions will be outsourced in Indian companies. We can outsource our accounting, customer service, and manufacturing departments. This way we can pay the different department’s lower wages and maintain a higher profit margin.
With reports of identity theft rising every year, the thought of someone taking your identity is a terrifying one. With the danger of cyber-attacks on the rise, consumers need to be protecting their financial and personal information. With a product like SpendSafe being released into the market shortly, consumers can now be fully protected from identity theft. Apart from having safe and secure transactions, SpendSafe will also help consumers monitor their spending habits. If incidences of identity theft and data breaches were to become sufficiently common, the result could be a loss of this public good—that is, a loss of confidence not only in the directly affected parties, but in credit-based payment more generally (Braun et al., 2008). In the long run, SpendSafe will help consumers increase their credit score and help boost the US economy.
The developers and creators of SpendSafe Inc. are seeking funds to start up in the market of mobile payments. The funds we are seeking are for the purpose of creating the infrastructure of the company to be the first company in the market with such a revolutionary product.
After developing the costs and time for the materials and personnel required for the startup, we came up with an estimate. SpendSafe is looking to raise at least $3 million from venture capital. The estimate includes the cost of office space and computer products such as servers, cables, and monitors. Also included in the estimate is the cost research and development to create updates after the release of the first beta version on the Android platform.
