F-Smart Key

Introduction of F-Smart Key Idea

F-Smart Key will be a startup business targeting both local and international markets. The business will be dealing with a product line of key holders. F-Smart Key will be a limited company. The smart key holder is a compact and essential tool resembling the size of a Swiss army knife that will reduce the amount of space that keys occupy in an individual’s pocket. Instead of too much rattling and jingling in one’s pocket, the key holder will keep the keys composed and aligned. This, as a result, permits one to flip the key that is required for a particular door. Moreover, the tool has been designed in a way that it has other purposes, like bearing an opener that contains a loop on the other end for attaching thicker keys. Besides, the f-smart key also has an in-built tracker tile that can help one find his or her lost keys. Note that the tile contains a battery life of about five months. Thus, the device will automatically send a notification to an individual’s phone within a particular radius.

Unique Selling Point

There shall be two main categories of customer’s for the smart key. These are domestic, as well as institutional customers. Both of them shall use the device for their safety purpose. Through competition with other similar business, the company intends to attain a market share of 40 per cent. A much broader appeal exists during high school and university admissions when most students require the smart keys for security purposes as mentioned earlier. These are the occasions when great sales will be realized (Grönroos, 2012). Besides, new and existing organizations have shown a great interest in the product.

Marketing Mix

Products/ Services

After an intense investigation around the area, the company realized that the targeted customers would need an efficient smart key holder that will enable them to effectively organize their keys while in their pockets and also to minimize chances of keys getting lost. Hence, the company will majorly focus on the smart key holder, rather than dealing with a wide range of products. The device is fast selling given that it permits placing five keys on top of each stud. Moreover, the smart keys have varieties of spacers for holding keys of different sizes (Goi, 2009).


The company will ensure that the products are sold both online and offline. As such, it will reach a broad range of potential customers. These include both the local and international buyers. Moreover, the organization will use online distributors to facilitate faster strategic placement of the smart key (Brownlie & Saren, 2014). Most of the organizations in the industry have been reluctant to integrate online sales; hence, F-Smart Key intends to be unique.

Pricing Strategy

It shall be wise for the company not to set high or low prices for its clients. F-Smart Key Solutions will be keen to ensure that fellow retailers and wholesalers do not complain about offering prices much lower than the industry, given that the firm will be sourcing from the cheapest supplier. Therefore, the introductory prices will be slightly lower than the coverage market rate to popularize the business. This is one of the features of being customer oriented. Considering that the market is comprised of price-sensitive clients, charging them a slightly lower price below that of competitors will lead to increased market share for the company.


To create substantial market coverage awareness, F-Smart Key Solutions will initiate various promotional strategies. Such include online and offline advertisements, through social media, television, and newspapers, as well as direct marketing mailshots. The best time for the promotional activities will be during school and university admissions and the launch of new organizations, both at international and local levels. Various components of the smart key, like having a tile tracker built on it, should be made known to potential customers during a promotion.

Market Segmentation, Targeting, and Positioning


Through segmentation, the organization will be able to identify various market niches and conduct research on the specific needs of customers. The firm will have to serve customers from each segment differently, depending on their needs, financial status, as well as tastes and preferences. F-Smart Key Solution will carry out different segmentation strategies to fully satisfy its customers. One of the approaches is demographic segmentation. Further classifications will be based on values, beliefs, lifestyle, and behaviour (Chaston, 2014).


The company will need to evaluate the potentiality of each of the market segments. Factors to be considered will be such as the size of the market, or the level of income (Chaston, 2014). Moreover, anticipated profits must be more than the cost of production, as well as the expenses involved in reaching out to each segment.


F-Smart Key Solutions will need the incorporation of positioning maps to come up with the market overview (Chaston, 2014). The company can design big, small key holders, as well as those with and without tile trackers. Each design will have a unique price tag. This will enable the organization to reach all the potential clients, irrespective of their levels of income and tastes, among other factors.

SWOT Analysis


F-Smart Key Solution has the advantage of offering a unique product, which is much differentiated from other competitors. Besides, the smart key has many features that come with various benefits like trackers that will help in the location of the key in case it gets lost (Hill & Westbrook, 2014).


The organization has a weakness of budgetary limitation and how to attract skilled personnel. This is because it is a new venture.


The organization will be opportunistic to introduce an online selling platform that most similar organizations have been reluctant to launch. Besides, the organization has a chance of increasing its sales during high school and college admission.


The major threat is that there are already other players in the industry. This poses stiff competition in the market. However, through in-depth strategic planning, the organization is anticipating to control a significant market share.

Competitor Analysis

The company’s competitors are the existing businesses which comprise wholesalers, retailers, wayside shops, and supermarkets. Among them are those that have already been established in the industry, as well as those willing to join. The organization will overcome and outweigh its competitors through the use of Bowman’s strategic clock (Farquhar & Meidan, 2010). F-Smart Key Solution shall gain insight into how its smart keys should be positioned to give it the most competitive advantage in the market. Moreover, the organization will have a variety of alternatives, which will be based on two dimensions. These are the perceived value of the keys and the price (Burd & Cherington, 2010). To have a competitive positioning that outplays the competitors, the organization will need the differentiated strategy, which will offer the customers the highest level of perceived added value (Farquhar & Meidan, 2010).


Efficient financial analysis will enable the proprietor to know the effects of every transaction that will be taking place in the business. It will show the levels of profit, which is a determinant of a firm’s growth and survival in the competitive industry. The pre-operational cost will be calculated to show the initial costs that will be incurred before starting the business. A proforma income statement will be derived to be used as a budgeting tool. A proforma balance sheet will also be prepared to indicate how capital will be distributed among various assets. Additionally, a cash flow statement will be prepared.

Startup Cost

The planned business will be started with little capital from members’ contributions, as well as a loan from the bank. For the business to become popular in the market the firm. One of the strategies is the advertisement. This can be achieved through various radio stations, TV, newspapers, in addition to posters. This is to ensure that information reaches as many potential customers as possible. Sweet talking is another strategy. Marketing team shall be required to use a polite and convincing language when handling customers to make them buy the products/ services offered by the company. Another strategy is through sales promotion. This method provides users with experience of the products, thus, luring them to buy the products. Still, the firm shall be providing after-sales services. This is a unique strategy that will make the firm stand out among its competitors. Another way involves hanging banners on the premises where the business operates. This is aimed at catching the attention of potential customers.

Recruitment will be either internal or external, depending on the skills required. If a vacant position requires skills that are already within the organization, then there shall be no need for external recruitment. Training will not be necessary as the business will employ already qualified human resources to cut down operating expenses. However, in the event that there is a need for employee development, then this will be achieved through seminars and attending workshops.

Financial Forecast and Break-Even Analysis


( )

Land 1 acre 250,000 250,000
Premises   280,000 280,000
Website cost     63,000
Books of accounts     450
Pick-up 2 200,000 400,000
Counter/shelves     7,000
Personnel     4,000
Other expenses     4,000
Promotional costs     8,000
Adding machine 3 1,000 3,000
Labour     1,900
    TOTAL 1,021,350


The sources of money needed to purchase these facilities will be as follows.

Own advances:                        £850000

Bank loan:                               £1280000

Total:                                       £2,130,000

Comprehensive Financial Plan and Break-Even Analysis

Pre-Operational Costs

It refers to the money spent before the business becomes operational. These costs shall be split into particular units as shown in the table.

Items Costs in pounds
Licenses 40000
Adding and weighing machine 10000
Fittings 30400
Electricity installation and reinforcement 21700
Others cost 3000
Shelves 14000
Shopping 2000
Books of account 11000
Pick-up 400000
Receipt books 300
Rubber stamps 2000


Projected Cash flow


S Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec.
Loan 150000 10000 20000 16000 0
Credit sales 50000 25000 30000 420000 35000 26000 18000 22000 0
Other sales 65000 140000 30000 150000 42000 23000 19000 1000 20000 18000 14700
Cash sales 90600 10000 30000 200000 200000 20700 320000 200000 190000 925000 29000 12000
Total receipt 3555600 265000 360000 25700 252000 250000 374000 236000 208000 1505000 308010 267000
Cash outflow                        
Creditors 20000 33000 15000 30000 40000
Purchases 80000 85000 90000 85000 70000 65000 60000 45000 35000 50000 90000 85000
Maintenance 2000 3000 4000 6000 5000
Electricity 2500 3000 6000 4500 5500 3980 4560 2143 3546 4896 3120 5000
Water bills 40000 2890 3000 5423 4200 4000 3902 4300 4500 3900 3990 3400
Repair 8000 1400 399 2000 4000 5000 2800 200 2020
Transport 8000 4500 5000 3000 3800 4800 4000 6000 7000 5500 6000 5500
Loan paid 8800 8800 8800 8800 8800 8800 8800 8800        
Total outflow 117600 146000 258098 127123 105200 112980 85962 85313        
Surplus 238000 119000 101902 129877 146800 137020 29000 151687        

Estimation of Working Capital

Item Cost
Cash at bank 680000000
Cash at hand 20000000
Stock 2060000000
Work in progress 80000000
Total 2840000



  Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec.
Sales 100000 12000 130000 14000 150000 160000 17000 180000 190000 100000 200000 210000
Opening stock 100000 140000 160000 180000 200000 210000 220000 230000 250000 260000 270000 290000
Purchases 800000 85000 90000 85000 70000 65000 60000 50000 45000 35000 40000 90000
Goods available for sale 180000 225000 250000 265000 270000 27500 280000 280000 295000 310000 380880 380000
Closing stock 140000 160000 180000 200000 210000 220000 23000 250000 260000 270000 290000 31000
Cost of sales 40000 65001 70000 65000 60000 55000 30000 35000 20000 70000 75000 180000
Gross profit 60000 55000 60000 75000 900000 105000 120000 150000 150000 75000 75000 180000
Expenses 45000 35750 35400 35250 35180 35650 35000 35485 35150 34250 35000 35150
Net profit 14050 19250 24000 39750 54820 69350 84150 114515 119850 40150 145000 831285

 Proposed Income Statement (year 3)


  Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec.
Sales 1500000 155000 160000 170000 1750000 180000 188000 192000 197000 194000 195000 200000
Opening stock 1200000 1600000 180000 200000 220000 240000 260000 280000 30000 320000 380000 420000
Purchases 600000 550000 620000 640000 680000 700000 750000 80000 82000 85000 900000 900000
Goods available for sale 180000 215000 242000 264000 288000 310000 335000 36000 382000 405000 470000 510000
Closing stock 1600000 1800000 200000 220000 240000 2600000 280000 300000 320000 380000 420000 460000
Cost of sales 20000 350000 42000 44000 48000 48000 50000 60000 62000 25000 50000 50000
Gross profit 13000 12000 118000 126000 127000 13000 13000 128000 130000 169000 145000 150000
Expenses 44450 34650 34220 34930 3590 35600 35100 33180 34150 34830 34950 35650
Net profit 8550 85350 83780 91070 91100 94400 94900 94220 95850 134170 11080 114350

Proposed Proforma Income Statement




Desired Financing Amount 


Pre-operational cost:               £652100

Working capital:                     £2840000

Fixed assets:                            £212400

Total:                                       £820800


Proposed Capitalization

Capital:                                    £300000

Bank overdraft:                       £955060

Creditors:                                £955060

TOTAL:                                  £2210120



In conclusion, the smart key idea is no doubt a venture that will have lifeblood in the future. Through financial, breakeven, and SWOT analyses, the business idea should be integrated to enable the organization to serve the vast majority of customers at both local and international levels. Moreover, offering differentiated smart keys with various features will no doubt make the organization to thrive in the competitive market and to command a significant market share.




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