1.0 Description of the Business and the Business Model
The parking lot spot finder will be in the form of an app. It will coordinate with a camera that is installed on a traffic light or pole near the parking lot. Upon accessing the app, a motorist will be able to search a location either by name or by address. Based on this search, the app will bring up a visual of the parking lot(s) associated with the location. As soon as the motorist determines which parking lot they would like to park in, they will be able to touch it on the visual and then the app will show the availability of spots within that parking lot. If a spot is empty according to the visual, then that spot is available. If a parking spot is occupied by another car according to the visual, then the app will show that the spot is unavailable.
As soon as you find the most ideal spot, the motorist will be able to touch it on the visual and then the app will show them the best way to get there. The Parking Lost Spot Finder this will solve multiple issues. Firstly, the motorist will no longer have to ride around aimlessly looking for a spot. More importantly, the app will allow the motorist to not only to see the availability of spots, but also find the most ideal spot based on where they need to be. This concept can be expanded to locations that have underground parking garages and even locations that have street parking. Users will be able to download the app free but will be required to pay a monthly subscription fee of $0.99. The business will earn additional revenue from advertisements published in the app.
2.0 The commercialization process
The App is estimated to cost $10,000. I will provide $4,000 and raise the remainder $6,000 from angel investors. Angel investors tend to invest in the early stages of a start-up in exchange for equity (Harroch). Angel investors are keen on obtaining value for their money and therefore carefully consider the amount of money they have to give up versus what proportion of equity they obtain. I would be willing to give up 50% ownership in order to obtain the $6,000 funding which would make the company to be valued at $12,000. Apart from the funding the angel investor will provide critical mentorship and provide me with an access to a great network. The mentorship and the network will be critical for the rapid growth of the business.
The development of the core software system and the app will be outsourced. Outsourcing will help keep the costs of the start-up low considering the tight start-up budget. Outsourcing will ensure that the work is only paid as per project basis hence pay for only services rendered. Through outsourcing, the company will take advantage of the quality and expertise of the software developers who have a record of accomplishment of other similar projects. This will improve the capabilities of my company without heavy investment of hiring new employees or experts entitled to salaries, benefits, and other related costs of employment
Once the app is developed, it will be marketed through a combination of marketing channels that will include: participating in various tech exhibitions, leveraging on social media to create buzz, using own mobile site to redirect visitors to the app, endorsements from major malls and parking lots, giving a free fourteen (14) days trial period, and getting users to rate the app in the app store (Leger).
The company will create a mobile site that will redirect visitors to a link to download the app once they visit the site. The company would put up a banner image to the mobile site with a link to download the app (Lerger). The company would endeavor to obtain endorsements from various malls and parking lots. For instance, if a mall or parking lot would tweet or share to its followers it would have a big impact in getting potential users to take note of the app.
The Company will also run a campaign giving a 14-day free trial period for the app to the target population. The trial period will serve to entice and arouse interest of the product to the potential customers. During the trial period, the users will be encouraged to give feedback on the quality of the app, suitability, ease of use and any areas of improvement. In addition, users will get to use the app for an extra seven day for every successful referral.
Users will be requested to rate the app in the app store, higher ratings would mean that users love the app and this would drive more people to download the app. The feedback users will provide will be taken into account so that the company can improve the app and obtain better ratings. Using multiple channels will increase the speed at which users learn about the app. The app will be available in the company’s website, Google Play Store and on Apple’s App store. Availing the app on multiple platforms will ensure that customers can be able to download it easily and at their convenience.
3.0 Projections
The business will incur preliminary costs of $10,000 with $6,000 being paid to app developers, $2,000 being initial marketing expenses, and office rent of $2,000. The business will become profitable in the third month. However, it will take the business 8 months to break even and post a cumulative profit of $3,170. By the end of the first twelve months, the business will make a cumulative profit of $31,940.
4.0 Intellectual property protection
Software developers have two main ways of protecting their intellectual property, filling for a copyright, or filling for a patent. Patents and copyrights give the owner legal protection against someone else infringing on their intellectual property (Varshneya). There are two types of patents relevant to software developers, design and utility patents. Software patents cover systems, processes, and features such as editing features or methods of translating language (Varshneya).
Patents take on average 2-5 years, and the government does not issue a patent unless the app has been in the market for at least one-year (Varshneya).The US Patent Trade Office (USPTO) has a strict criteria that specifies that a mobile app must have any method or process that produce a useful tangible output (Varshneya). If the mobile app is one in an already crowded field, there is no chance of getting a patent (Varshneya). My mobile app is to help motorists with identifying parking spots. There are a number of similar apps and thus the possibility of obtaining a patent are quiet slim.
The threshold for filling for a copyright is equally high. The US Copyright office will only grant copyright if the work is already in a tangible form that is predictable either, directly or with the intervention of a machine (Varshneya). Even with copyright, it is up to the holder of copyright to take infringers to court (Varshneya). In addition to the high thresholds set for patents and copyrights, the cost of obtaining patents or copyrights are quite high. Varshneya estimates the cost of applying for a patent to range between $8,000 and $10,000. Considering that I am a small start-up, I would rather focus on developing my app rather than get entangled in legal suits trying to protect my intellectual property.
Work cited
Harroch, Richard. "20 Things All Entrepreneurs Should Know About Angel Investors".
Forbes.com. N.p., 2015. Web. 15 Apr. 2016.
Leger, Bernd. "8 Ways To Market Your App". Info.localytics.com. N.p., 2016. Web. 15 Apr.
2016.
Varshneya, Rahul. "Does Your Mobile App Need A Patent?". The Next Web. N.p., 2015. Web.
15 Apr. 2016.
