24: Venture Concept No. 1

Assignment 24: Venture Concept No. 1: Magic Ink & Sensors

• Opportunity:
• Shoplifting is an act that has caused more than $13 billion dollars of sales to be stolen from retailers every year.  More specifically, shoplifting has majorly affected small and medium-sized grocery stores who cannot afford the security measures of big chain retailers.  However, preventing shoplifting is extremely difficult for grocery stores and there are numerous factors that play into the problem.  
• The forces/changes in the environment that has created an opportunity to create a magnetic ink to prevent shoplifting are the economic standards which can leave people in difficult financial situations and government legislation which have not protected retail stores from theft. 
• The market would be defined geographically anywhere where there are grocery stores.  More specifically, I will start by targeting grocery stores in South Florida where there is a high concentration of small and medium sized grocery stores.  Demographically I would focus on targeting lower income level grocery stores who cannot afford expensive forms of security. 
• These grocery stores are currently attempting to limit shoplifting in their company by hiring more workers or managers to have an eye on the whole store.  However, it is impossible to be aware of EVERYTHING that is occurring in a grocery store.  Therefore, they would definitely be very willing to use my product if it is a small investment that will pay off in the future and long run which is why this opportunity is so big.  
• The window of opportunity will not be open for very long because with the drastically increasing rates of shoplifting over the past years, everyone is looking for better and more effective forms of security. 
• The potential customers would be the grocery stores who want to use this magnetic ink in their food labels to serve as detectors for theft.  Other potential customers would be labeling companies who would want to work in conjunction with our product to produce the food labels and packaging tape for grocery stores who buy from them. 
• Innovation:
• The product that I am offering my potential customers is a magnetic ink that will be printed onto food labels.  In addition to the ink, I will be offering a small undercover sensor (about the size of a chip) that will come with a purchase of the ink.  
• As this ink would need to be developed first to find the most effective metals to create it, I do not know exactly how much I would charge for the ink and the sensor. However, giving a very rough estimate, I would sell each cartridge of ink to grocery stores for about $48 and the sensors for a one time fee of about $550.  Although this may seem expensive at first glance, these sensors will only have to be bought once and will detect any shoplifting as customers leave through exit doors.  For labeling companies, I will sell the ink at a discounted price of $42 per cartridge because they will be buying larger amounts in bulk.  
• With my estimated expenses and productions costs, I expect my profit to be about $8.00 for each ink cartridge and about $115 for each sensor that is purchased.  There will also be initial startup costs to take into account; however, if my product sells well with potential customers buying the ink in bulk which will create an instant profit for my product. 
• Venture Concept:
• My potential customers such as grocery stores will buy my product if they are concerned about the safety of their stores and their own customers as well as if they want to find a way to protect their sales and profits.  
• The labeling companies will buy my product because they want to provide their customers with the option of the magnetic ink to print onto the food labels. 
• Grocery stores will pay money for my magnetic ink that acts as a sensor along with two small physical sensors because in the long run, it will save their sales and profits.  The costs of shoplifting have left grocery stores without the sales revenue that they work extremely hard for and deserve.  Additionally, grocery stores want to have a way to know when an item is being stolen and to hold shoplifters accountable for their actions.  
• The large majority of retail stores believe that if there is an opportunity to decrease the rate of theft, they should because every little bit of theft caught leads to a greater decrease in shoplifting as a whole and to a greater profit for these businesses. 
• Distribution:
• In order to make my product known to grocery stores and packaging/labeling companies I will at first go to these businesses and companies in person and act as a salesperson for my product in order to create awareness for my product.  
• Once companies know about my product and are buying my product, I will then distribute the ink directly to my customers' place of business.
• Location:
• The main source for my business will be online.  Customers can learn about my product and order their desired amount through our website.  
• We will also have a corporate office location so that once a grocery store orders the sensors, we will bring the product from our office location and deliver them directly to their store and insert the sensors.
• Employees:
• As it will be mainly an online company, the majority of our employees will be the people making the ink.  I estimate about twenty-five employees will be responsible for developing the ink.  I estimate five to ten employees who will be designated to delivering and implanting the sensors for the grocery stores.  And I estimate about five employees to handle the office work, paperwork, and bookkeeping.  Therefore I would estimate a total of forty to fifty employees needed to run a company for my product. 
• Unfair advantage:
• I believe that my most important resource would be my first-hand experience in handling shoplifting.  As I have caught people shoplifting in a grocery store, I have learned the numerous techniques that shoplifters use to get away with theft and I have also learned how to confront shoplifters in a way that will not create conflict.  This resource will provide me with the best ability to make my product wanted by customers.  
• What's Next for the Venture:
• With this product, I hope to make a dramatic dent in the rate at which shoplifting occurs in retail stores, but most specifically grocery stores.  I want my product to lead to the ending of shoplifting hurting grocery stores' sales and profits and make store owners and managers more comfortable with their store atmosphere.  
• What's Next for Me:
• Five years from now,  I hope that my product will be used by grocery stores all over the country and that with its success I can start moving into the entire retail business such as for clothing stores and super markets.  
• Additionally, I hope that in the future I will create products that can be used by the grocery store business to help increase their sales.