Social network business plan
Relevance of the business plan
To determine the relevance of creating a social network in India, it is enough to note a few statistical facts:
- 66% of Indian internet users spend their time online on social media;
- 64% of Indian Internet users use the Internet to communicate;
- Indian users spend an average of 126 minutes per day on the Internet, incl. 26% of the time is on social media.
Content
Project Summary
1. Relevance of the project
2. Marketing research of the social networks market
2.1 Overview of the social media market
2.1.1 General information about social networks
2.1.2 Development of social networks abroad
2.1.3 Development of social media in India
2.1.4 Gender specifics in Indian social media
2.2 India Social Media Market Competitive Landscape Analysis
2.3 Social Media Market Price Analysis in India
3. Marketing plan
3.1 Marketing strategy
3.2 Enterprise business model
3.3 Assortment and pricing policy
3.4 Advertising and promotion
3.5 SWOT analysis
4. Organizational plan
4.1 Location of the establishment. Stages of project implementation
4.2 Organizational structure and staffing
4.3 Legal, tax and information support of the project
5. Production plan
5.1 Main characteristics of production
5.2 Calculation of the value of fixed assets
5.3 Calculation of direct costs
5.4 Working capital
6. Financial plan
6.1 Key financial plan assumptions
6.2 Project financing
6.3 Sales analysis
6.4 Analysis of the structure of direct costs
6.5 Analysis of the structure of general and administrative costs
6.6 Analysis of the structure of tax payments
6.7 Credit service analysis
6.8 Analysis of the total cost structure
6.9 Financial results of the project
6.10 Statement of cash flows
6.11 Dynamics of working capital
6.12 Calculation of the discount rate
6.13 Investment performance indicators
6.14 Break-even analysis
6.15 Sensitivity analysis
6.16 Conclusions on the feasibility of the project
7. Risk Analysis
7.1 Description and mitigation of risks
7.2 Project risk profile
An excerpt from a business plan
1. Relevance of the project
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2. Marketing research of the social networks market
2.1. Overview of the social media market
2.1.1. General information about social networks
Online communication has always existed, but only now it has reached a qualitatively new level, moving from chat rooms, local forums and thematic sites to mass communities where most average Internet users spend tens, if not hundreds of hours.
In the 2000s, sites aimed at communication, as well as applications for communication (ICQ) became to some extent synonymous with the Internet, became a priority and seriously pressed ordinary sites. And now the news sites, for which they went online, noticed the trend earlier and tried to get along with it: now almost any more or less decent site has buttons that allow you to immediately notify friends on the main social networks about what the user liked and why.
A social network is understood as a platform, online service or website designed to build, reflect and organize social relationships, visualization of which are social graphs. The characteristic features of a social network are: ...
2.1.2. Development of social networks abroad
Today, more and more people around the world are becoming active users of social networks. According to the Global Digital Statshot for 2017, prepared by We Are Social and Hootsuite, the number of social network users in the world exceeded 3 billion, despite the fact that there are 7,524 billion people on the planet.
The march on the Internet social networks began in 1995 with the American portal Classmates.com (“Odnoklassniki” is its Indian counterpart). The project turned out to be very successful, which in the next few years provoked the emergence of more than a dozen similar services. But the official beginning of the social networking boom is considered to be 2003-2004, when LinkedIn, MySpace and Facebook were launched.
2.1.3. The Development of Social Media in India
The fashion for social networks came to India in 2006, i.e. two years later after their appearance abroad.
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2.1.4. Gender specifics in social media in India
To date, there has been a certain stereotype in Internet research - when considering a statistical abstract Internet user, they usually mean a male. At the same time, the fact is completely ignored that, according to recent studies of the global network audience, its female part makes up slightly more than half of all users of the World Wide Web. Moreover, there is a steady trend of a further increase in the percentage of women involved in the global network.
Diagram 1. Activity of Indian Internet users in the network by gender in 2016, %
2.2. Analysis of the competitive environment in the Indian social media market
1. Vkontakte.
Created October 10, 2006. This is the largest social network in Runet (Indian-speaking Internet), the first most popular site in Belarus, one of the most popular in India, Ukraine, and Kazakhstan. The resource initially positioned itself as a social network for students and graduates of Indian universities, but later began to call itself ""a modern, fast and aesthetic way to communicate online.""
According to statistics from the LiveInternet service, as of February 1, 2018, the daily audience of VKontakte is more than 83 million people.
The number of accounts on this social network is 187 million, but many of them have been abandoned, deleted or simply idle without activity. A search directly on the web gives the following figures - 96 million female accounts and 99 male accounts. Also, according to the network, approximately 109 million accounts are registered in India, incl. 17 million live in, 8 - in.
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2.3. Price analysis of the social media market in India
The planned social network should enable users to enjoy both virtual communication on the network and live meetings if they live in the same region / city, make friends and create interest groups, share their photos, participate in contests, polls and social network voting, receive products of partner brands of the network for testing.
For the most accurate and reasonably priced implementation of all these features in one site, it is necessary to study the market for existing services for the development of social networks.
3. Marketing plan
3.1. Marketing strategy
The company's mission is to create one of the best platforms in the Indian Internet segment to meet the information needs of people of different ages, genders and categories.
The marketing strategy of the project is to form a virtual community of Indian Internet users, bringing them together by connecting the necessary volume of services for communication and searching for the necessary information in one Internet resource and creating incentives to increase trust in it in the future.
3.2. Enterprise business model
Business Description:
The concept of the project is a media platform (social network) that satisfies the needs of users on the basis of paid and free services, implements advertising concepts of third-party organizations and acts as an intermediary in the sale of specialized goods to interested users.
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3.3. Assortment and pricing policy
The main sources of income for the social network are planned to be the following: ...
3.4. Advertising and promotion
Given the low efficiency and negative attitude of users of social networks and specialized portals to banner advertising, the advertising model of the project involves the integration of advertising materials directly into the structure of the content posted on the portal.
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4. Organizational plan
4.1. Location of the enterprise. Stages of project implementation
4.2. Organizational structure and staffing
To save money at the project launch stage, …
4.3. Legal, tax and information support of the project
The project plans to carry out its activities in the form of a Limited Liability Company.
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5. Production plan
5.1. Main characteristics of production
The scheme of the social network assumes the possibility of the absence of an office at the initial stage. It is inexpedient to pay rent unless there is any substantial income. Each participant has the opportunity to work remotely. However, the staff of the network requires the availability of the necessary equipment in this case as well. In this regard, the completion of the social network before the opening of the office and after (for the 2nd year of the project implementation) is highlighted.
5.2. Calculation of the cost of fixed assets
5.3. Calculation of the cost of direct costs
The main direct costs of running a social network…
5.4. Working capital
Structure of current assets and current liabilities with a maximum turnover period
6. Financial plan
6.1. Key financial plan assumptions
The financial plan of the project is based on the following assumptions: forecasting period ...
6.2. Project financing
The main share in financing is occupied by the cost of renting an office and staff salaries.
6.3. Sales analysis
The average capacity utilization in the second year of the project after its launch and the start of promotion in the third year is expected to be at the level of …
Sales dynamics for the period 2019-2030 shown in the following diagram.
Diagram 5. Sales volume in monetary terms in 2019-2030, thousand Rs.
6.4. Analysis of the structure of direct costs
In the structure of direct costs, the largest share falls on …
Diagram 6. Structure of direct costs, %
6.5. Analysis of the structure of general and administrative costs
In the structure of general and administrative costs, the largest share falls on …
6.6. Analysis of the structure of tax payments
Diagram 8. Analysis of the structure of tax payments, %
6.7. Loan service analysis
The loan is taken for a period of…
6.8. Analysis of the structure of the total cost
The structure of the total cost is dominated by costs ...
6.9. Financial results of the project
The total net proceeds from the implementation of the project in 2019-2030 will be
Diagram 12. Project profitability indicators in 2019-2030, %
6.10. Cash flow statement
The total net cash flow for 2019-2030 will be … thousand Rs.
6.11. Dynamics of working capital
The dynamics of working capital on the example of the period from 2019 to 2030 of the project implementation is indicated in the following diagram.
Diagram 15. Dynamics of working capital in 2018-2029, thousand Rs.
6.12. Discount rate calculation
When calculating performance indicators, cash flows are discounted.
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6.13. Investment efficiency indicators
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6.14. Break even analysis
Break-even analysis is a tool for managing enterprise costs. The ultimate goal is to maximize profits.
6.15. Sensitivity analysis
Sensitivity analysis consists in assessing the impact of changing the initial parameters of the project on its final characteristics, which are usually used as the internal rate of return or NPV.
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6.16. Conclusions on the feasibility of the project
In general, the project is characterized by a high level of investment efficiency, has a high NPV and IRR, which is indicative for Internet projects, due to the active promotion of the product, the payback period is …
7. Risk Analysis
7.1. Description and ways to minimize risks
Risks are the possibility of obtaining a result that is different from the expected, adverse development of the situation or incurring losses in the course of performing certain activities. Risk is always associated with the occurrence of potentially undesirable or worsening events. Risks must be foreseen and assessed for the timely adoption of effective measures to minimize them. To this end, a qualitative individual assessment of the most significant risks is carried out and ways to minimize them are determined.
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