Feasibility Study - StudentBiz

7/27/2019 Feasibility Study - StudentBiz

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The What:

StudentBiz is a business concept for an online platform developed by myself, whichconnects businesses with students. Now instead of businesses receiving hundreds of CVs inreply to an advertisement, and having to have to sift through them for the ones that fit the

job, businesses can search a site which will cross-match all the requirements to the students

CV, and display the CVs of students based on a percentage match to the specifiedrequirements.

The Why:

In my career as both a student, a project manager within the industry and an assistant at theUniversity of Pretoria I have realised that businesses want to work with students or graduatesbut they struggle to reach the students that fit their specific needs. I have been called multipletimes by previous employers who are looking for students to help with a project or a tender andmost times, unfortunately, I dont know someone in the field or area they are searching for andIm forced to post the message on social networks they in turn get CVs from multiple peoplewho do not even fit the requirements.

On a larger scale, according to official statistics, South Africa has the highest long-term youthunemployment rate among medium-income nations, with those between the ages of 15 and 24accounting for 48.2% of those unemployed. The National Development Plan has warned thatthis could become a major problem, and government has in turn launched several initiatives toaddress this issue, initiatives that make it more profitable for businesses to use students.From my personal experience and the statistics we can gather that, 1students/graduates cantfind work, 2businesses want to use students 3but dont know where to find them, and that iswhere StudentBiz fits in. The online platform will serve as the mediator between businesses and

students/graduates.The How:

The site will therefore deal mainly in information services: offering student information in the formof online CVs to businesses, and also offering students guidance in terms of what it is that businessesexpect in a CV by indicating to students which fields are required and also giving business approvedexamples. We are also looking at additional services such as documentation on how to prepare foran interview and so forth which can be downloaded from the site.

We will also be offering a product, which is a downloadable pdf of student CVs for businesses, which

can then be used for interview and other administrative purposes. Please refer to Platform format

Feasibility Study: StudentBiz

1.

Introduction


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to view how this option will be incorporated. This means that the information that is available on thesite can also be available physically for businesses and students to use for whatever purposes.

The site will generate income by requiring subscriptions from businesses to access the informationdatabase, based on their specified geographical interests. A small business in Pretoria for example

will pay either R60 per month or R660 per year for all information pertaining to students fromPretoria. A large organisation such as a bank will pay R500 a month or R5500 per year for all theinformation on the site pertaining to all geographical areas.

The How Much:

We have determined an initial set up cost of R160 000.00 which will be allocated as follows:

Function Description Cost

WebDevelopment

This will be the largest of the initial cost of the business, as this function is the centralbuilding block on which the business will berun. Web developing agencies as well asfreelance web developers have beencontacted to determine what the web-system would cost.

R50 000.00 (Although this is higher thanthe quotations received, the entrepreneurbelieves that provision should be made forextra functions and so forth)

GraphicDesign

The look and feel of the website is also veryimportant as this has to combine both thewants of students and businesses. Theallocation to graphic design also includes

other advertising designs such as pamphletsetc. Graphic designers have also beencontacted to derive an estimation of thecost for the system.

R30 000.00 (Once again, quotations for theGraphic elements were below the statedamount, provision is made for changesetc.)

Marketing The initial idea for the marketing of thebusiness is based on an incentivisedapproach students can win IPods and soforth. The other options that we are lookingat are newspaper advertisements as well aspersonal advertisements to businesses.

R40 000.00 (Although the socialnetworking will not bear any cost to thebusiness, newspaper adverts andpamphlets as well as prizes for two monthshas been estimated at R35 000 as thebusiness partners will act as marketingagents which further reduces the cost)

RunningCosts

Even though the cost of running a website isminimal (R250 for the domain per year) theupdating of the site and management andmarketing of the business will require anoffice with internet access, a telephone andother utilities as well as the human capitalto run these functions.

R40 000.00 (The businesses aims to rent afully operational office at one of theshareholders offices, which acts as theircontribution to the business start-up cost,thus the money will be allocated to thepersons who will work there for 3 months,stationary, petrol etc.)

Furthermore we have estimated minimal profitability as follows; of the 3 500 000 businesses inSouth Africa (data acquired from StatsSA) if we only aim for % which is 3500 businesses in the first

year, and they all choose the low-priced option of R60 per month or R660 per year this relates tobetween R2 520 000 and R2 310 000 for one year.


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Description:

The StudentBiz is both a product and service orientated business. As mentioned it was envisioned asan online business where student and business information can be shared and acquired. The productcan be seen as a function of the service however, and therefore the service viability is the mainaspect of this study. The service works as follows:

Basically students/graduates can log in to the system for free; here they create an onlineportfolio based on certain required fields. This in turn creates an online CV that businesses whosubscribe to the site can view by searching their required fields. Businesses also createportfolios which students can view, students can follow a business this means that when abusiness searches the system for students/graduates the students that follow them will appearautomatically at the bottom of the screen under followers so as to show businesses whichapplicants have shown interest in their business.

This means that instead of students/graduates searching for jobs and bombarding businesseswith 1000s of e-mails and phone calls when they do not even meet the requirements specified,businesses and other institutions now have the power. They search the site based on a tick-the-box system e.g. we are looking for:

A student in the Engineering Industry With knowledge of Project Management Skilled in X Program With a code B drivers licence No experience needed For a part-time job

2. Product & Service Viability


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The system then conveys a search of all the student portfolios based on the specified criteriaand the top ten candidates are listed based on a percentage match:

Limitations:

StudentBiz does not take part in the recruitment process, only information is given,students must be contacted, recruited and interviewed by the businesses

The web-system can become unstable if it becomes very busy and could even crash if there are too many users on the system at the same time

The web-system could be hacked and student and business information could beunsecure which may pose a threat to the clients

Imitation of web-based service is easy and quick when a systems code is revealed orhacked, which means direct competition can emerge quickly

Because of the focus on online services, the business also runs the risk of losing touchwith their customers once site is active this means constant upgrading and so forth

The service is only available for students/graduates/young-adults between the ages of 18 and 28; this is hard to monitor however as identification information can be falsified.

High indirect competition such as LinkedIn, although the focus is much more onprofessionals seeking other professionals and the searches are from the job-searchers

side, the search function StudentBiz wants to use can be imitated or incorporated totheir current services

Concept & Usability Testing

The concept and usability testing for this service was done on the 2 nd of August by telephoneand on the University of Pretoria Main Campus. As both students and businesses are critical to

the success of the business both parties were contacted. The following table relays thequestions that were asked to both businesses and students and the findings:


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Question asked Respondents Options RespondentAnswers

Average

Businesses*: Would you pay R60 amonth to have access toinformation pertainingto students/graduates/youngprofessionals in yourarea for recruitmentpurposes?

1 Definitely would pay

2 Probably would pay

3 Might or might not pay

4 Probably would not pay

5 Definitely would not pay

1) 92) 8

3) 24) 15) 0

On average thebusinesses showed thatthey would definitely orprobably pay for thisservice.

When questioned on theusability if the business,businesses wereexplained exactly how

the site would work andasked to rate the site ona scale from 1 to 5 aswell as comment onfeatures they would liketo be added. Please seedocumentationPlatform format whichwas shown tobusinesses.

1 Very user friendly2 User friendly3 Mediocre usability4 Not user friendly

4 Very unfriendly to user

1) 162) 43) 04) 0

5) 0

The businesses were veryimpressed with theformat and structure of the proposed site and

scored the site as veryuser friendly or userfriendly. Two respondentscommented on the factthat an on-site messagingsystem might be useful.

Students:Would you use a sitewhere you can create anonline CV for free whichcan then be searched bybusinesses looking forstudents/ graduates/young professionals towork for them?

1 Definitely would use

2 Probably would use

3 Might or might not use

4 Probably would not use

5 Definitely would not use

1) 172) 03) 04) 25)1

The majority of thestudents asked said thatthey would definitely usethe service, the studentsthat chose option 4, whenasked, commented on thefact that they havebursaries/internships towork off after theirstudies and therefore

probably would not use itat the time, also onerespondent mentionedthat there are not manycompanies in his field of study so his options arelimited and he does notthink these companieswould use such a site.


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The physical premises of the business can be situated anywhere in South Africa (anywhere there isfast & reliable internet connection that is). The business is fortunate enough to already have apremise in Pretoria where there is a fast connection and also a generator if power is cut. Thebusiness is going to require system operators and marketers as well as administrative staff. TheSystem Controllers will be able to access the system from anywhere they have a reliable connectionto the internet, this will mainly be done from the office, but if a problem arises for example in themiddle of the night they can access the site from wherever they are with wireless or ADSL. Our teamof web-developers have indicated that this job will not be impossible for one person to manage.

The marketing personnel will use the office as their home-base; this is where documentation will bestored, phones are available to contact clients and so forth. They are however not restricted to theoffice as their job will need to go and present the business to larger clients, investors and otherinterested parties. Our thinking was that two marketing personnel, both of whom are shareholdersin the business, will be sufficient for initial marketing, but this number can grow to five.

The administrative personnel will also make use of the office, their job will be to handle all studentand business enquiries and also relay enquiries to the system controller if such problems arise. Theywill also be in charge of the subscription communications with businesses letting businesses knowvia email when their subscription is going to end and how to renew etc. on the site. The financeshowever will not be their responsibility; this function will be outsourced to an auditing firm, as this isnot the core business of StudentBiz.

Proposed Business Model:

Key ResourcesStudentBiz will be making use of a social network format that fit both the needs of thestudents/graduates and businesses. Negotiations have already started between StudentBiz anda well-known web systems developer as well as graphic designer that specialises in systems likethis one. These human and intellectual resources are critical for the businesses success. Thefinancial resources requires to develop, incubate, market and sustain this network is also crucial.

Key PartnershipsStudentBiz will firstly rely on partnerships with the Universities across South Africa. The businessis further associated with the Capital City Business Chambers, Junior Capital City BusinessChamber and their affiliates in the academic, governmental and business sectors.

Revenue StreamsStudentBiz will rely on subscriptions from businesses during the Start-up and Growth phase businesses pay either a monthly or yearly fee to access the student/graduate information.Online advertisements will later also be used as a revenue stream for the company.

4. Business Model Viability


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Cost StructureThe business is value driven: focussing on value creation for students aged 18-26 in the form of an online CV that is supported by the business sector, as well as the value of easy to accessrelevant information to the subscribed businesses. Initial Costs include the System Developmentand graphic designs as well as focussed marketing. Fixed Costs include the updating of the

website, online portal costs and online banking application costs. Variable Costs include cellularand internet accounts, any changes to the system after the launch and additional marketingcosts.

Customer Relationships:We strive to give our customers a customised self-service portal as well as personal assistance, if necessary, through providing the information that they acquire in a format they understand Instead of a business receiving irrelevant CVs they can now with the click of a button searchtheir specifications online, receive the best student applicants and then decide whom to makecontact with. Businesses get the information they want and not the information thestudents/graduates think they would like. By using required field the system also aims to teachstudents/graduates what it is that a business would like to see on a CV.

Customer Segments:StudentBiz is focussed on businesses who want to use students/graduates/young adults in their

businesses on a permanent, short term, part time or contractual basis as well as businesses andinstitutions such as schools that sponsor scholarships, graduate programs, internships and soforth.

Value Proposition:

The Student Hub aims to create value for both businesses and students across South Africa by

creating an online platform on which essential information pertaining to both parties can be

shared and acquired. Offering easy, accessible, convenient and relevant information is our aim.

Competitive Advantage:

StudentBiz is different firstly because we use a different approach to recruitment information wedo not advertise available opportunities, we provide businesses with the information to search forpeople with specific requirements that match their available openings.

Secondly we focus on young South Africans, eager to work and learn, and also not as expensive as anMBA with 10 years experience. This is also in line with proposed government policies to rewardbusinesses who make use of students because of the large unemployment percentage in this agegroup.

StudentBiz also has unique features such as the follow upload portfolio connect with (YouTube,Facebook, Twitter etc.) feature which makes it more attractive for young adults to use, which willmean more users on our site*.


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*Previous marketing research revealed students do not make use of sites such as linked-in because itis complicated, boring and unsociable.

The following diagram illustrated the Sustainable Competitive Advantage of StudentBiz:

Target Market:

Our target market is primarily businesses, as they are the subscribers to the site, more specificallybusinesses in industries that make use of students, graduates and young professionals in theirbusiness. Previous marketing research has shown that businesses in the financial industry such asauditing firms, banks and so forth makes use of students on a daily basis in their operations, alsofirms in the engineering industry such as civil engineering firms or construction based firms. Thesewill be the industries that we focus on at first.

Unique ServiceFeatures Adaptable profiles Putting business

back in control of recruitmentprocess

NotableProduct

Features Follow & other

social features Downloadable

information

Price/Value Price based on

geographicallocation makes itpossible for allbusinesses toafford the product

CustomerConvenience Information easy

to use, accessible,relevant toindividualrequirements

Customerexperience Saves time and

money Connecting

relevant users toeach other

Connecting Businesses with appropriatecandidates at the click of a button

5. Market & Marketing Viability


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Competition:

Direct Competition:

Firms that use the same approach to recruitment such as CV Warehouse are mainlyinternational and offer jobs overseas

Indirect Competition:

LinkedIn, Job Mail and other similar sites whom advertise jobs on their sites Recruitment agencies Graduate Placement Programs at universities Career Centres

Future Competitors Businesses in South Africa who imitate this search function

Marketing and Sales Strategy:

The StudentBiz aims to use an integrated marketing strategy to reach both businesses and students.

Student Marketing:

Incentive based marketing on social networks, Upload your CV and win an I Pod Pamphlets to be handed out with university newspapers such as Die Matie Arrangements are also underway to advertise on student radio stations such as tuksfm

Business Marketing

Advertisements in newspapers and books such as the Business Day Advertising through business chambers such as the CCBC who are affiliates of the business Direct Advertising setting up meetings with larger clients HR departments and pitching the

service to them at a lower cost for example, making use of our network (one partner workedpreviously in the auditing industry and the other in the banking industry)

Incentive based, such as the first 50 businesses to register get the first three months free

We therefore rely heavily on our marketing team and advertisements to invoke sales, theadvertisements therefore are also designed by the graphic designer who designed the web graphics.This creates some form of uniformity and branding, we have decided to use a concept that combinesthe old with the new as seen on the following page;


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These pictures were sourced from the graphics developed from the site. The same black and whiteold-style pictures with orange and turquoise will be used for pamphlets and newspaperadvertisements.


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Proposed Key Managers

Marketing & Sales Manager: Monita van Jaarsveld

o Responsibilities: In charge of business marketing team, responsible for direct

marketing to businesses & sales, relaying information to administrative and

system teams

o Relevant background: 25 years experience in management, sales, previous

experience as franchisee and also in banking industry as sales manager

o Skills: Management, sales, administration

System & Student Marketing Manager: Rianda Reyneke

o Responsibilities: In charge of Systems Control, including updating of system

information etc. as well as student marketing team, relaying information to

administrative and system teams, initially responsible for administrative team

o Relevant background: 3 years experience in business administration and project

management, previously worked in auditing and PM field, excellent knowledge

of web systems and web system administration

o Skills: Management, administration, web system skills Financial Manager: Alwyn van Jaarsveld

o Responsibilities: Deals with debtors and creditors of the business, as well as

liaison with auditing form in charge of subscription management

o Relevant Background: 27 years experience in electronic engineering,

management and project management

o Skills: Management, networking, financial management

Future personnel requirements

o Administrative personnel: StudentBiz will need someone to answer the phone,

respond to emails and queries and relay messages to the different teams.

o Marketing personnel: The student and business market cannot be saturated with

one person marketing the service and therefore two additional members to the

marketing teams will be required

*The StudentBiz will be making use of their web developer if any problems arise with the system

that the system controllers cant handle; this is done on a freelance basis, although a contract has

been set up to ensure involvement

6. Management Model Viability


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Economic Model

As previously shown in the how much section of the introduction, the following start up and

running costs were estimated for the first three months after the launch (this includes the web

system development) and running costs for the first year:

R50 000.00 WEB DEVELOPMENT

R30 000.00 GRAPHIC DESIGN

R40 000.00 MARKETING

R40 000.00 OPERATIONAL COSTS

+ R180 000.00 RUNNING COST FIRST YEAR ESTIMATION*

R340 000.00 TOTAL COST (Start-up and pre-start-up costs)

*This has been added to the initial costs as set out in the how much section for running the

business from the office

In Monetary terms therefore the economic model would be:

The number of units to be sold X by their selling price = Estimated 3500 units at R660 a year

3500 X 660 = R2 310 000

Break Even Analysis:

R340 000.00 = 516 units X R660 per year = R340560

ORR340 000.00 = 473 units X R60 per month = R340560

Financial Model:

Financial Projections:

As mentioned before the aim for the first year is to quire 3500 subscribers to the site, which

culminates to between R2 310 000 and R2 520 000. The aim for the second year is to acquire 1000more subscribers and upkeep the previous years suppliers, and also further developing the mobile

7. Economic and Financial Model


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UniBiz that connect businesses with Universitiesand their projects/tenders etc.

Other related products Business consulting and student consultingservices for example

Finding businesses through students Students could advise StudentBiz on which

businesses they would like to follow that is noton the site which the business can then source

In concluding this feasibility analysis it should be mentioned that this research and previous marketresearch has shown the viability of this service and the need in the market for such a service.Previous pitching sessions to businesses and business chambers has also received the StudentBizwell. A major challenge however would be the implementation of this idea into a service; moreattention should be given to the operational needs of the business. If this service idea isimplemented well and constantly developed for the needs of the specific market individuals thisservice is very much feasible and viable. Other services can also be developed form this service, forexample an online platform for persons other that students/graduates or young professionals, orplatforms that specifically relate to graduate programs and internships or even university tenders to

use students and graduates.

Continuing with the business plan:

We have already registered the business as a private company StudentBiz

We initially wanted The Student Hub as a company name but this was denied by Cipro, but we

are happy with the accepted name as this is a amalgamate of the two functions of the business

We have not yet registered any patents or trademarks, a meeting with Spoor & Fischer is

scheduled for the 3 rd of September

A bank account has been opened in the business name

Threats Minimize ThreatsEase of entry/ imitation Establish a solid brand and develop IP protectionBig online companies such as LinkedIn Communicate the working together, creating a

share your profile on LinkedIn for exampleInternet failure/ hosting failure/ hacking Use a reliable hosting company, establish

minimum service conditions, terms & conditionsof using the site and maximum security featuresupdated regularly

Online credit card theft Keep maximum site security currentPersonal information of customers theft Keep maximum site security current, relay terms

& conditions to users

9. Conclusion


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Accountants and attorneys are provided for thanks to shareholders Alwyn & Monita van

Jaarsveld whom already owns other companies and have these parties available at their request

We will be using our network with the business chambers, department of trade and industry as

well as Universities who support this initiative to further exploit the market

Documents

Feasibility Study - StudentBiz