Photo - F2HR
45302

F2HR

Social and Entrepreneurial Network

Kazakhstan, Almaty
Market: Logistics and warehouses, Services, Another, Blockchain, Crypto currency
Stage of the project: Idea or something is already done

Date of last change: 27.02.2020
Min investment
$  100.000
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Total required
$ 300.000
Rating
equalizer из 1000
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Idea

For consumers: goods and services of confirmed quality at an affordable price, obtaining passive income when participating in an affiliate program,
the ability to create their own business and invest in the network
For companies: a multiple increase in customer base, labor productivity and sales, reduction of costs for marketing, logistics, accounting, legal services,
automation of business processes, minimizing business risks

Current Status

Our project has been developed on the basis of our two businesses located in Almaty, the largest city of Kazakhstan - storage services (tire storage) and cleaning services (carpet washing).
Our customer database consists of approximately 2500 contact people and our company has a monthly revenue of about US$2000.
We have a cloud internet platform with CRM system, various tools, the ability to automate business processes, communications and information exchange between network participants.

Problem or Opportunity

The opportunity of increasing the share of SMEs in the economies of developing countries based on the network Internet platform due to an increase in the number of companies, labour productivity, a rational distribution of human resources and means of production, improving the quality of goods and services, reducing their cost as a result of cooperation, would open opportunities up for all parties - investors, consumers, and companies participating in the ecosystem. As a result, an increase in the number of jobs, an involvement of society in entrepreneurial activity, a growth of real income and possibility of investing in ecosystem infrastructure and generating additional income from investments and referral system.

Solution (product or service)

Our project, in accordance with applicable business practice, is divided into following stages: ensuring stable operation of the network prototype, creation of a referral system in order to involve consumers in promotion services and goods, and network development with a possibility of obtaining an additional income, attracting other companies to participate in our network with the prospect multiple increase in their customer database and turnover, rational use of human resources and equipment, saving money for new customers’ attraction, accounting, legal services and logistics.

Competitors

Currently, there are several platforms and mobile applications of the so-called marketplaces on the Kazakhstan market that offer consumers an information about goods and services, and a platform for companies to post information about their products and services. The most famous of them are Naimi.kz, Market.kz, Satu.kz and 5+ other companies. For instance, in 2019, the Naimi.kz platform offered services of 25 thousand contractors to more than 80 thousand customers in the amount of about US$ 2 million. But these Internet platforms do not guarantee the quality of goods and services and can not satisfy consumer needs in full.

Advantages or differentiators

The main advantages of our ecosystem for our potential customers are: comprehensive services with confirmed quality of goods and services and possibility of generating additional income through our referral system; for our potential companies-participants: a multiple increase of the customer database, huge capabilities of the Internet platform for automating business processes, reducing the cost of marketing, accounting, legal services, logistics, a rational use of human resources and means of production; for all project participants: an opportunity to increase revenues and invest part of them into the assets of participating companies and ecosystem development.

Finance

In order to attract customers to participate in the project, a 20% discount will be provided for all goods and services sold within the ecosystem, as well as the opportunity to participate in an affiliate program and receive additional income when recommending network products. 10% of the amount of each completed transaction will be directed to payment to network participants on the recommendation of which the transaction took place. In order to increase labour productivity and rational use of production means, we can provide with an opportunity of cooperation between companies participating in the ecosystem.
Royalty from companies which use ecosystem - 5% of their turnover
If within 4-5 years attracted 300+ partner companies with an annual revenue of US$20000-30000 and a double increase in partners' income when using the platform, the company's income will be US$ 900,000 per year.

Money will be spent on

The network organisation will require an investment of about US$ 300,000, 75% of which will be paid for the workshop, equipment, transport and software maintenance. In order to enter the market successfully, we plan to:
1. Establish an enterprise to create a working prototype of the platform with a capacity of at least US$ 8,500 per month.
2. Produce high-quality products with affordable prices for a wide range of people.
3. Gain a strong point in the Kazakhstan market, thanks to the best price-quality ratio and other competitive advantages.
4. Achieve a growth of ecosystem in Kazakhstan and other CIS countries.

Risks

Рolitical risks, unstable exchange rate. Small domestic market capacity. Opportunities to reduce risks: Cooperation of a large number of small businesses, the prospect of entering international markets.

Production risks - risks associated with the likelihood (possibility) of an enterprise not meeting
its obligations under a contract or agreement with a customer, risks of selling goods and services,
errors in pricing policies, bankruptcy risk. Risk reduction measures: More thorough price forecasting, high quality of services provided.

Marketing risks are associated with the possibility of loss due to a decrease in the competitiveness of the company's products as a whole, deterioration in pricing and assortment policy, etc. Risk mitigation measures: Using the principle of network marketing and direct sales. Continuous improvement of the quality of services.

Business risk is determined by such factors as the managerial and technical capacity of the enterprise, the efficiency of production and innovation, the stability of the financial situation, the effectiveness of the management system, the complexity of the products, etc. Measures to reduce risks: Improving the management processes, cooperation of companies. Example: usage of motor vehicles in 2 shifts for carpets and tires delivering. Automation of business processes, usage of new technologies. Designing and manufacturing the automatic storage lockers will simplify the logistics of products and services and significantly increase network turnover.
   
Industry risk is associated with the specifics of individual industries. Measures to reduce risks: Development of areas of activity in a crisis or significant economic changes. Combination of activities in the industry with activities in a related and more sustainable industry. So, for example, two businesses – cleaning services and storage facility having different peaks of seasonality can be managed to significantly reduce the risks of seasonal downturns.

In order to minimize risks, the project budget provides for insurance of real estate, equipment and vehicles purchased with investor funds.
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