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We are proudly going to have a humble beginning for the new store named Sunshine supermarket in Sydney, Australia. Sunshine supermarket is on a mission to develop a company into e-commerce grocery wholesaler by providing online facility to its customers. The service products and service proposed by the firm is a business-to-consumer solution that will be offered to the consumers through the online channel using a mobile app.
There will be in total 6 people offering around 500 products to its customers to revolutionize the grocery shopping experience. The mission of the company is to offer world-class customer satisfaction and to leading value and quality in the market by incessantly optimizing as well as innovating our efficient activities which are driven by people and technology. The vision of the company is to improve the lives of the customers with the provision of quality products and services at a market principal value while guaranteeing that the customer satisfaction is the major and central thing among everything we perform.
The company is based on targeting customers that are price-sensitive and have restricted budget. Low pricing strategy will be used by the company for attracting the customers for the success of the business that can lead to destroying various retailers in the market. Moreover, the company is focused on diversifying its offerings that mainly include all the essential items such as small appliances, kitchen gadget, dairy products, food products, fruits, vegetables, home décor, power tools, gardening tools and many more. The total market share of the company will be around 4.6%.
There are a number of startups that struggle to get funding for the business right out of the gate. Funding can either make or break the e-commerce start-up and for this, we believe that bootstrapping is one of the ways for the success of a startup. In order to get started, it is quite difficult to present any hard figure for the e-commerce business and hence in such case bootstrapping can be considered to be the most suitable option. It is a method of pulling oneself without taking help from others using own current earnings as well as assets (Ye, 2017). Funding through friends and family if they are willing to invest in one of the methods that can be used initially. Crowding funding is another strategy when it is about raising fund for the e-commerce startup while establishing brand awareness subsequently (Neubert, 2019). This strategy can be helpful in raising sufficient capital to move in the appropriate direction. Crowding funding is helpful in providing more financial freedom.
The total amount required at this stage would be $5000 and the potential source would be family and friends and personal savings. The money would be used in the development of skeleton website, hiring a professional developer for the website of the company along with the business planning. The ownership of the founder would be complete 100%.
Seed capital is the stage of initial funding in which the money is raised for the development of an idea related to the new business (Cohen & Hochberg, 2014). Grants is one of the alternatives for business loans and are quite free money but have a few caveats such as it demands to utilize the fund concerning a specific expense. Moreover, incubator/accelerator can be helpful in providing eCommerce start-ups with an affordable workspace, networking and mentoring opportunities. They assist with fine-tuning plans for the business, prepare fundraising presentations and build an association with the potential investors. Angel investors are another form of capital raising strategies that provide seed money via a loan or in return for equity for the startups. Out of all the strategies, the angel investor is the one having ample of investible capital for putting into an e-commerce start-up (Rose, 2014). Moreover, crowdfunding can be used to raise money by posting details of the related project on the crowdfunding website. Reward-based crowdfunding can be used which can be described as giving money in return for a reward as associated with the company.
The amount required in the seed funding would be $10000 for crowd-funding which would be needed for developing prototype and pre-sales. The ownership would be 100%. For accelerator being the potential source, the amount required would be $50,000 which would be utilized for mentoring. 5% of it would be the ownership required to give up in the round and the remaining 95% would be the founder's ownership. For angel investors, the amount required would be $100,000 which would be for full functioning operations and hiring potential personnel. 15% out of the total include ownership willing to give up round and 80% would be the founder’s ownership.
Once the track record of the business of achieved, series A funding can be opted for further optimizing its user base as well as product offerings (Reiff, 2020). It is the first venture capital funding to begin a start-up
Venture capitalists are one who usually invests in the new start-up anticipating viewing profit. The investments from this capitalist can prove to be appropriate for the e-commerce business as the investors tend to have extra equity for investing. The venture capitalists are expected to invest more in comparison to angel investors. Furthermore, crowd-funding can also be useful for the business as it can entice value proposition and raising brand awareness. Angel investors involve partial ownership of the business.
Series A is the expansion stage that would require $500,000 and the potential source would-be angel investors needed for overseas expansion. 60% would be the founder’s ownership and the remaining percentage would imply to the ownership ready to give up round.
Cohen, S., & Hochberg, Y. V. (2014). Accelerating startups: The seed accelerator phenomenon.
Neubert, M. (2019). Funding innovations for sustainable growth in emerging markets. International Journal of Economics and Finance, 11(4).
Reiff, N., 2020. Series A, B, C Funding: How it works. Retrieved at www.investopedia.com/
Rose, D. S. (2014). Angel investing: The gust guide to making money and having fun investing in startups. John Wiley & Sons.
Ye, Q. (2017). Bootstrapping and new-born startups performance: The role of founding team human capital. Global Journal of Entrepreneurship Volume, 1(2).
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