BUSI3018

Entrepreneurship Management and Business Practices

PHASE 2-Feasibility Analysis

Prepared for:

Instructor: Neal Alleyne

Prepared by:

Jesurun Mohammed 68640

Glacier Ramkissoon 74665
Teshant Manoo 73621

Submitted on 5th March 2020

Industry or Market Feasibility

The market that this product falls within is commonly referred to as point-of-sale technology.
Our initial business would be small scale in nature, operating with the various retailers in
Princes Town and advertisers who are interested in promoting themselves in this area.
Competition from similar industries can be found locally by the cooperation between First
Citizens’ and Massy Technology who apply their retail technologies to Massy Stores. This
partnership suggests that Massy Stores would most likely not have as large a demand for
technological partnerships. There are 5 other smaller point-of-sale technology businesses,
however, their reach may not sufficiently tap into the Princes Town area giving this area
potential for our company.
The potential buyers (retailers) in the Princes Town area specifically are 13. The most
popular supermarkets in the area would be targeted initially since it has the highest number of
shoppers. The major supermarkets in the area of Princes Town are Harris Megastore, Family
Mart and Persad's food stores limited. The initial market size for the advertisers is expected to
be at least three (3) initially. We hope to cover three ubiquitous basic grocery item categories
with these advertisements: food, beverage, and household items.
This market has remained relatively untapped in the majority of Trinidad's supermarkets. An
exception to this is Massy stores which have a partnership with First Citizens' to innovate
their self-service technologies and this has helped First Citizen's profits grow according to
Regis K. (2020). Efficient self-service technology will become more and more imminent with
the development and spread of online shopping technologies constantly lowering the prices
and increasing convenience for online customers. Traditional supermarkets stand to lose if
they remain stagnated as shown by Walmart's projected loss to Amazon as the largest retailer
according to Redman R. (2019). Already, 40% of Americans state that online shopping is a
significant aspect of their retail experience according to McCoy F. (2019) due to these
innovations. Often successful technologies from the United States are implemented in
Trinidad given sufficient time. This gives supermarkets in Trinidad good reason to begin
implementing helpful shopping technologies to gain an early advantage over online shopping
which is already establishing itself as a competitor here.
Substitutes are a risk to our business since there are mobile apps available abroad. However,
in Trinidad, most people do not have sufficient memory on their phones to accommodate a
grocery app comfortably. We do plan in the future to incorporate a mobile app when phones
in Trinidad become more capable. The risk of new entries into this market can be relatively
high. We plan to continue innovating our technology to stay ahead of the game.
According to Monitor, G. M. (2019), the point of sale industry is expected to grow from
2018 to 2025, at a Compound Annual Growth Rate (CAGR) of 17.6% during the forecast
period. However, as a new business entering this industry, this is not a realistic growth rate to
consider. We estimate that our business will have a growth rate of half the forecasted value
which will be 8.8% of annual growth. This has also been a vision of Trinidad’s future goals
outlined in the National Development Strategy (NDS) 2016-2030 (Vision 2030).
Our initial expected market share for the Princes Town area is estimated at 25% based on the
size of the retailers that we intend to initially target assuming the other retailers in the area
accept technology from our competition. This can mean that our market share would be
potentially higher than 25% since the other retailers may not purchase any technology soon or
preferably invest in our technology further boosting our share.
Based on the above information this market is very attractive for our business despite its
various challenges.

Product/Service Feasibility
1. Discussion of survey results
The survey showed (refer to Appendix) in this report was distributed to members of the
Princes Town community. It asks specific questions relating to the attractiveness of the Smart
Shopping Device and the perceived benefit this product would provide for supermarkets and
advertisers. The survey suggests that there is a substantial need for the Smart Shopping
Device since more than 80% of respondents state that they would like to use the device
according to Question 3. This shows that the product is something desired by the community
which implies that the product would not be an unused innovation. Question number 4 adds
to this since it displays that 75% of the surveyed population agree that there is a need for this
product at the supermarkets they attend. An important question related to supermarket owners
is question 9 which displays that within the sample surveyed, approximately 70% agree that
this product would encourage them to shop more often. This is crucial to retailers since
increased sales would prove the benefit of this product for retailers. The survey results also
suggest that this product will benefit advertisers associated with it (particularly those which
display special offers) since according to question 7 over 60% of respondents agreed that they
would take advantage of relevant offers displayed to them. This would provide a return on
investments of advertisers on this product since they would gain an increased consumer reach
for their products which would increase their product sales.
A very beneficial aspect of this product shown in the survey in question 8 is that upwards of
80% of survey participants would like to spread the word of their product to their fellow
friends and family. This self-promoting aspect of this product serves to benefit retailers and
advertisers since the reach of this product will automatically spread encouraging more
persons to shop and take up special offers from advertisers. As explained above the
significant need for this product identified shows that there is a lack of this type of product
within the Princes Town district. This suggests that potential competition against our business
lacks reach within this area. This gives our company an upper hand within this region since
we can enjoy a monopoly for this technology here. Hence, we can have much more control
over the costs of our products and services (to install and maintain) allowing us to extend our
margin without losing sales. This would benefit us within our initial phase and give us a
springboard to more easily extend our investment into other areas after where competition
would be stiffer.
We would be seeking suppliers mainly from China. The main reason for this is that Chinese
manufacturers offer the cheapest wholesale prices for the components utilized in putting
together this device based on our research. The Chinese market also contains a lot of
alternatives providing a wider range of options for designing our device. The main
disadvantage of purchasing our items from China is the relatively larger shipping cost
associated with the distance that the product has to be shipped. However, this extra cost is
sufficiently offset by the cheaper product price and the relative minimal land travel that is
required.
All parts required for this product are widely available on the website Alibaba, 2020, under
various suppliers. The price ranges vary approximately up to 20% less than the prices used
for inventory calculations. We estimate approximately 100 units of the following parts
needed to start the business. The breakdown of the inventory can be seen in TABLE 1,
(Appendix).
Risks/challenges

1. Security issues- Given that it’s a self-checkout system, customers may perform thefts
of grocery items that were not priced for in the trolley’s point of sale system. This
depends on the barcodes of the items. A certain quantity of the same item may be
purchased but the barcodes may not be different. This can prompt users to not price
all items and lead to stolen goods.

2. System malfunctions- Grocery items, particularly those that are frozen, may release
condensate onto the system which can cause internal malfunctions to occur.
Additionally, it could be due to one or more components in the electrical circuit that
degraded in terms of its functionality with time.

3. Lack of education of customers- Some customers both the business owners and
shoppers aren’t as technologically savvy as others and may require a teaching session
on how to utilize this product effectively.

Financial Feasibility
1. Estimated capital cost- Assuming, that initially, for six (6) months there will be no
customers. The cost of capital represents a barrier that the company must overcome
before it can generate value. In our business, it would be advantageous since we don't
have any additional costs for the initial six months. Additionally, storage space will be
acquired at home therefore, there will be no incurred costs for renting. Therefore,
based on the aforementioned details, the capital cost for one month was calculated to
be $TT24,814.19 (Refer to TABLE 2)
2. Estimated earnings from the business (for 3 years)- The total employee salary was
calculated based on the assumption that; we obtain at least two jobs per month. Our
means of reoccurring revenue is to perform routine maintenance monthly which
includes testing systems parts, possible replacement or system's connection. In terms
of delivery, our means of transport is obtained from one of the owners, which has a
large vehicle which can transport the devices to the supermarkets. The cost of fuel
was incorporated into the installation cost. The number of earnings we gain over a
three (3) year period was calculated to be $TT370,944.00 Additionally, our margin
was $TT240,000.00 (Refer to TABLE 3&TABLE 4)
 REFERENCES
Regis K. (2020). First Citizens cautiously optimistic about T&T’s economic outlook.

Retrieved 23 February 2020, from https://www.guardian.co.tt/business/first-citizens-

cautiously-optimistic-about-tts-economic-outlook-6.2.1041400.fcad91a8b2

Redman R. (2019). Amazon predicted to pass Walmart as the largest retailer. Retrieved 23

February 2020, from https://www.supermarketnews.com/retail-financial/amazon-predicted-

pass-walmart-largest-retailer

McCoy F. (2019). Retail Technology is Transforming a $26 Trillion Industry Retrieved 23

February 2020, from https://www.jabil.com/blog/retail-technology-innovation.html

Monitor, G. M. (2019). Global Mobile Point Of Sale Market.

Diptee, M. R. (2019). Supermarket Association of Trinidad and Tobago's Conference.

Trinidad.

Couriers, T. E. (1998). Sky Box Calculator. Retrieved from Tropical Express:

https://shiptropical.com/calculators/sky-box

Alibaba. (1999). Retrieved from Alibaba.com: https://www.alibaba.com/

 APPENDIX

Figure 1: Market Survey Question 1

 Figure 2: Market Survey Question 2

Figure 3: Market Survey Question 3

 
 Figure 4: Market Survey Question 4

 
 

Figure 5: Market Survey Question 5

Figure 6: Market Survey Question 6

Figure 6: Market Survey Question 6

Figure 8: Market Survey Question 8

Figure 9: Market Survey Question 9

 Figure 10: Market Survey Question 10

TABLE 1: Inventory breakdown analysis

Inventory Size and Costs

Item or components of the system Cost of each component Supplier
($US)
Arduino Uno (microcontroller) Shenzhen Xini Industrial Co.,
4.80
Ltd.
RFID reader Chengdu MIND IOT
1.00 Technology Co., Ltd.

Piezo buzzer Shenzhen Winsun Technology

0.12
Co., Ltd.
LCD (Liquid Crystal Display) Shenzhen Sonoff Technologies
10.00
Co.
RTC (real-time clock) Shenzhen E-Link Technology
0.45
Co., Ltd.
XBee Shenzhen JRT Electronic
2.30
Technology Co., Ltd.
Plastic casing Shenzhen Xing Da Mold Shell
0.80
Co., Ltd.
Total cost ($USD) for one trolley 19.47 TT$131.81
cart
Total cost ($TT) (including shipping 116.33 (Couriers, 1998)
and tax)
Estimated inventory cost for one
trolley cart ($TT) 248.14
 TABLE 2:Capital Cost estimate based on inventory.

Inventory
Total cost for one system $131.81
Total estimated weight (lbs.) 1
Associated freight costs (based on estimated total weight and total cost in USD)
Fees Charge ($TT)
Customs Duty 42.66
V.A.T. 33.86
Online Purchase Tax 14.93
Shipping 19.25
Fuel Surcharge 2.89
Brokerage fee 2.74
Total freight charges ($TT) 116.33cost of one system
Total freight charge+Total
Overall costs
Overall costs for one system ($TT) 248.14
Capital cost for 100 units of stock ($TT) 24,814.19

TABLE 3:Estimated employee wages.

Employee wages
Hours per Total ($TT) for Total ($TT) for
Employees Quantity Salary per hour
Job one job two jobs
Electrical Technician 1 52 8 416 832
Software Technician 1 49 8 392 784

TABLE 4:Estimated earnings over a three (3) year period.

Estimated earnings
Number of months in 3 years 72 Total cost for one month ($TT) $44,814.19
Total employee salary ($TT) 116352 Total cost for one year ($TT) 537,770.28
Cost of items ($TT) $248.14 Revenue for one year
Installation cost ($TT) 100 Capital cost for one year ($TT) 297,770.28
Delivery ($TT) 50 Margin ($TT) 240,000.00
Monthly maintenance ($TT) 50 Profit/Revenue for a year ($TT) 123,648.00
Total cost (one cart) ($TT) $448.14 Revenue for 3 years ($TT) 370,944.00