Smith Photo Incorporation’s Business Plan

Statement of Purpose and Mission

Purpose

Smith Photo Incorporation is a business that specializes in photography. The business idea is informed by the need to provide flexible and affordable digital photography services to clients. The proposed Smith Photo Incorporation is projected to be successful since there is no business at present in the targeted location that offers these services at a competitive price.

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Mission Statement

The mission of the Smith Photo Incorporation is to be the leading business in digital photography in the region of Fort Lauderdale, Florida.

Description of Business

Legal Structure

Smith Photo Incorporation will be a corporation owned and operated by a single owner at the time of inception after which its ownership will be opened to investors in the form of shares. The reason this structure was chosen is to ensure quick expansion and increase capital value. Moreover, this structure will enable the business to easily transfer ownership to any interested party without having to change its mode of operations (Kotler & Keller, 2016). In addition, the corporation structure guarantees a perpetual life for the Smith Photo Incorporation.

Products/Services

The proposed service charter of Smith Photo Incorporation is organized into basic and glamour packages. The basic package is tailored to provide photography services to children and regular in-house clients in need of basic digital photographs. This package is flexible and does not require special settings. Thus, it will be priced between $25 and $40 per service. In the event of many customers needing the basic package per setting, the business will offer competitive discounts. The glamour service package will comprise more advanced digital photography services that cover professional makeup, background editing, and choice of location and background. This package mainly targets clients who want professional photographs using the latest digital settings. Depending on the number of customers per photoshoot, this service package will be priced from $60 to $200. The potential customers for the basic packages are children and anyone in need of an ordinary in-house photograph. The glamour package will target high-value clients willing and able to pay for premium photography. The Smith Photo Incorporation’s product differentiation approach and competitive pricing make it possible to gain the confidence of these clients and establish customer loyalty (Kotler & Keller, 2016). For instance, the two packages will accommodate the low and high-paying clients who will be able to get services that meet their needs.

Location

Smith Photo Incorporation is located in Fort Lauderdale, Florida. The rationale for choosing this location was informed by its proximity to the main business center. Moreover, this location is accessible and visible to any passing customer.

Management

The owner will be solely responsible for the day-to-day running of the business. Other specific duties will include marketing, following up on clients, running the customer loyalty program, and creating the books of account. However, once the business picks up, the owner intends to recruit a marketing manager, an accountant, and a supervisor to keep track of the marketing needs, financial activities, and daily affairs of Smith Photo Incorporation, respectively.

Personnel

The business will employ three personnel at the beginning and expand on a need basis. The notable employees are a makeup artist, a photographer, and a digital editor. The makeup artist will be responsible for preparing a client, setting, and mood before a photoshoot session. The photographer will take photos and post them on the digital board. The digital editor will work on the background, color, editing, and modification of the posted photographs according to the needs of each client. Once the business expands, more employees will join this team on a need basis.

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Market Analysis

Target Market

The target market for Smith Photo Incorporation consists of clients in need of photography services. Specifically, the targeted market comprises social media users (Facebook, Instagram, and Snapchat), hospitals (labor and delivery section), and social events within Fort Lauderdale, Florida. The profile of customers is summarized in table 1 below.

Table 1. Demographic variables of the targeted clients. (Source: Self-generated).

Demographic Variable Description
Age The business does not discriminate based on age (everyone is a potential client).
Gender The business does not discriminate based on gender (everyone is a potential client).
Geographical location Customers in need of photography services in Fort Lauderdale, Florida.
Ethnicity The business does not discriminate based on ethnicity (everyone is a potential client).
Income Low, medium, and high-income clients spread evenly within the targeted market
Occupation The business does not discriminate based on occupation (everyone is a potential client).

Competition

Competitors to Smith Photo Incorporation are Shelly PhotoWorld located in Fort Lauderdale, Florida, and PhotoMasters also located in the same area. The strengths of Shelly PhotoWorld are a strong brand name, extensive market experience, and competitive pricing. The weaknesses of Shelly PhotoWorld are concentration on a single customer segment and inability to use the latest digital photography technology. The strengths of PhotoMasters are competitive pricing and product diversification. The weaknesses of PhotoMasters are high inventory and neglect of the low-income customer segment since its products only target middle and high-income clients. The competitive advantages of Smith Photo Incorporation over its competitors are the accommodation of all client segments’ use of the latest technology to guarantee the quality of its service charter.

Methods of Distribution

Smith Photo Incorporation will provide its services to its clients through our commercial location in the backyard of private residential property. Smith Photo Incorporation will also provide its services at the client’s location since it has a mobile studio.

Advertising

Smith Photo Incorporation will advertise through social media, print, and audio-visual media. The social media will include the creation of online pages on Facebook, Twitter, Snapchat, and Instagram. The print media will include postcards, flyers, and newspaper adverts. The audio-visual media will include television and radio.

Pricing

Products

  • Basic photographic package $25.00
  • Basic photographic package with extras (Framing) $40.00
  • Glamour photography package $100.00
  • Glamour photography package (Framing and digital backup) $150.00

Services

  • Basic makeup $15.00
  • Complete makeup $30.00
  • Background selection and editing $25.00

Research of Industry

The photography industry is estimated to be worth more than 10 billion dollars in the US alone. This value is projected to grow to $15 billion in the next 10 years as the industry embraces complete digitalization (IBIS World, 2018). In Florida, the industry is estimated to be worth more than 200 million dollars, and the value is equally expected to expand by the same margin as the national percentage (IBIS World, 2018).

Financial Documents

Uses of Funds Statement

Item Cost
Office renovation $200
Office equipment $1,000
Cameras $1,500
Digital editor $500
Digital board $100
Used track hire $200
Salary $300
Licensing $200
TOTAL $4,000

The office renovation will involve installing light sensors in the backyard of the private home. Office equipment includes a table, chair, and curtains. The cameras will be used for taking pictures. The digital editor will be used to edit the pictures before development. The digital board will host the raw pictures before editing. Used track hire will be used to transport the team to external job locations. The salaries will pay for the cameraman and editor. The licensing fees will take care of the process of registering the business.

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Income Statement

Smith Photo Incorporation

Income statement

As of 31 December 2019

Item Amount ($)
Net sales 8,400
Cost of sales 2,000
Gross profit 6,400
Net profit 4,400

Projected Cashflow

Total Revenue (P * Q) = Total Cost [Variable (C *Q) + fixed cost]

Average price per unit of service (P) = 100$

Units produced (Q) = to be approximated

Total fixed cost = $4,000

Forecast Monthly Cash Flow Budget Statement for the Year 2019 (3 Months)
Particulars Startup Feb March April
Estimated Sales Units 0 20 30 40
Sales Revenue 2,000 3,000 4,000
Cash Inflow
Accounts Receivable 2,000 5,000 9,000
Initial capital 4,000
Total (A) 4,000 2,000 5,000 9,000
Cash outflow
Accounts Payable 4,000 1,000 6,000
Worker wages 100 100 100
Admin expenses 100 100 100
Total (B) 4,000 6,500 8,000 12,000
Net cash (A) – (B) 4,000 -4,500 2,300 8,000
Opening balance 3,000 5,000 10,000
Closing Cash 4.500 6,000 8,100 12,000

References

IBIS World. (2018). Photography in the US industry market research. Web.

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Kotler, P., & Keller, K. (2016). Marketing management (15th ed.). New York, NY: Pearson Prentice Hall.

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StudyCorgi. (2021, June 30). Smith Photo Incorporation's Business Plan. Retrieved from https://studycorgi.com/smith-photo-incorporations-business-plan/

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"Smith Photo Incorporation's Business Plan." StudyCorgi, 30 June 2021, studycorgi.com/smith-photo-incorporations-business-plan/.

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StudyCorgi. 2021. "Smith Photo Incorporation's Business Plan." June 30, 2021. https://studycorgi.com/smith-photo-incorporations-business-plan/.

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StudyCorgi. (2021) 'Smith Photo Incorporation's Business Plan'. 30 June.

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