The Critical Moment

Part Five

 

Business Plan for Digital Signage

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Executive Summary

• • The Premise

    • This is your one page overview

    • List the project in a nut shell

    • What are your intentions

    • A quick over view of the benefits

    • Your team and why are you the best

  • The Product

    • Go into more detail on your product

    • What do you intend to offer

  • The Inventory

    • Explain what is your inventory

    • Give a view to the potential

    • No detail at this point

 

Company Description

• • Describe your company and its objectives

  • Describe Digital Signage

  • Give some brief facts as to the growth of Digital Signage

  • Your three or four main objectives

 

Product Description

• • Go into more detail now about your product

  • How long are your advertisements

  • What design program or programs do you intend to use

  • How many exposures per hour is your client entry level

    • Per day

    • Per week

    • Per Month

  • If you design your own content what do you charge?

  • What do you intend to charge for your services?

 

Market Research

• • This is where the beef is, prove your case, this is why my Digital Signage company will succeed.

  • Research and copy studies and overviews. (make sure to list credits)

  • Prove the need.

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Secondary Study

• • Have you tested this?

  • List studies to prove your case.

  • Good and bad what information did you gain from a Beta test?

 

Information about Digital Signage

• • Bring in outside articles about Digital Signage

  • List your conclusions based on existing data

  • You don’t have to use the whole article but critical points expressed.

 

What obstacles do you face?

• • Cost of borrowing?

  • Consumer reluctance to take on new ideas

  • Remember be true to yourself, make your mistakes here and fix them here. If you don’t face any cold realities here you will have to later when it costs real money.

  • Is there competition in your particular market?

  • Costs associated to production.

  • How little is your Video Billboard software going to cost, (shameless plug)

 

Our strengths

• • This is the time for your pitch

  • List the benefits to your product and for Digital Signage.

  • It is a green medium, you are not cutting down trees to feed the paper machine.

  • Flexible

  • Impact-full

  • Affordable

  • Updates in real time
     

​Customers

• • Take a closer look at your customers

  • Why will they choose Digital Signage over their current advertising choices, give this serious thought, this is a big one we faced and continue to face.

 

​How do we compare

• • This is part of the homework section.

  • You want to know exactly how you compare in the face of your competitors

  • Don't say you don't have competitors just because there is no Digital Signage companies out there. You and print and radio etc are all feeding off the same animal so prove why your better. Hints: value, delivery, impact-full, timely, simple.

  • Your customer is not necessarily going to believe this as strongly as you do in the beginning so you must be prepared for a fight in the beginning.

  • Research the local companies that are competing for the advertiser’s dollar in your market.

  • Don’t under estimate loyalty, initially you are the new guy and will be for some time. You have to give the customers a chance to warm up to this new idea. We had someone tell us they are not into gimmicks. Boy that was a conversation stopper.

  • Do your research; this is part of setting a proper price for your product, there is no other media you can draw a direct comparison from so you can’t price yourself accordingly, you will end up comparing apples and oranges. Which is in effect what you have to do? You must boil down each competitor to cost per thousand viewer exposures.

  • We will take a closer look at pricing your product later in the “Formatting an Industry” chapter.

 

Operational Plan

• • What are the details of you plan of operation

  • What are your locations

  • What type of display equipment will you use and why

  • How many continuous hours can you get from each screen?

  • How will you get information to your displays?

  • Is it in real time with high speed internet or will you update cyclically with DVDs or pen drive?

  • Will you purchase a media suite to develop and upload your play lists? Answer, yes with Video Billboard software (shameless plug)

  • Will you use existing software or design your own? If you answered yes to design your own, turn off your computer and go read a book?

  • Business licenses

 

Your staff

• • List your key players with their backgrounds with respect to this industry. This is where the pitch begins.

 

Phase expansion

• • This is where you break down your system roll out.

  • Project based

    • You can break it down by project objectives. When we hit a certain number of displays we will initiate the next phase.

  • Sales based

    • When we hit predetermined sales objectives we will continue to the next phase.

  • Time based

    • In that we will operate this system as is until the one year mark, then proceed to the next phase.

 

Startup costs

• • This is where you better sharpen your pencil, it is critical you get this right.

  • You will have two categories of cost initial (one time) and ongoing or monthly.

 

Fixed costs:

• • Telephone, printing, fuel, everything it takes to make you business run

  • Hardware costs

    • Flat screens

    • Wall hangers

    • Cables

    • Computers/DVDs

    • Wireless

    • Internet modem and service

    • Manpower costs associated with installation

    • Digital Signage software, you will require the initial Media suite cost and any per player cost to be put in here. With signage software there is usually a cost for the suite itself then you can apportion the player cost over time. Except for VB software, the Media suite is free you just lease the players monthly freeing up all the cash.

 

Monthly costs:

 

• • Personnel, we need a complete breakdown of employees, job descriptions and cost.

    • This is another pit fall to watch out for do you really need everyone at this point. Can jobs be done on a per service fee as in design work and technical services. Is it better hire out the network portion of your business until you company gets larger? The benefit to less monthly expenses is that it tends to increase your long term viability by being very thrifty in the beginning.

    • Do as much as you can initially, your not an advertising mogul yet.

  • Technical services.

    • In the start up phase you are best to hire on a contract basis, you will pay more for each call but a full time IT guy will be very expensive and could erode your investment capital needlessly.

  • How many times do you expect to have to service a display during normal operation, then multiply that by the number of systems?

  • Any per player cost should be put in here. You can amortize this cost over a three year period which seems to be the effective life of equipment as well.

  • Make sure you build in the replacement of equipment based on a three year amortization. If you bank this money and include it as a monthly cost you won’t have to secure financing for the inevitable replacement.

 

Costs associated to production

These costs are borne as part of the ad development process and are only incurred as part of an advertisers order.

• • What does it cost to design advertising?

  • Perhaps you can use Digital Signage templates,

 

These will cost less money for production, you can tailor them easily to your client then you take the money for production.

• • These can be one time fees billed directly to the client that you mark up.

  • These cost will show again on the revenue side of your business plan but will be offset by revenue

  • As part of your revenue analysis you should include the profit dollars from ad design.

  • The average time to design an ad.

  • The cost per hour for a designer.

  • As a conclusion is drawn from assessing your costs of production you can now determine the price you will charge the client for design work.

 

Project Analysis

This is where the nuts and bolts are. You must cost every nut and bolt literally. Make sure every aspect of equipment purchase is listed and the labour it takes to do the installs, if you are doing it, list a cost associated to it because some day you won’t be doing it and will have to pay at that time.

• • Capital Costs

    • Flat screen

    • Computer DVD

    • Cables

    • Internet modem

      • Always try to piggy back of the venue’s internet, they are usually happy to let you.

  • Installation

  • Ad revenue

    • List all your sources of revenue

      • Ad sales

      • Production profit

      • Networking fees for other systems

      • Internet advertising if applicable

  • Break even analysis

    • This is where your final totals are revealed, you should project your findings. Project 10 systems 30, 50 and on. Make sure you look at an adjustment to the figures on larger deployments; they can reflect discounts for bulk buys and maybe even your own installer.

  • Operational costs

    • This is where you list the expenses for you office staff. I strongly suggest you keep a virtual office. There is no reason really to have a store front. I think you will find your designers are just as happy to work from home anyway. In any business start up, you want to keep your monthly costs low. Please assume your inventory is not going to go like hot cakes and you may have to weather the storm for a while. My experience tells me this is where most start ups die is when you just can’t hold out any longer, waiting for sales you know will come. I mentioned this before it will take time for advertisers to divert their trusted advertising dollars to this new media. Be patient but plan for it.

      • Full time staff

      • Commissioned sales

      • Design fees

 

You have the frame work for your business plan. Make sure you go through every point and please ad your own, you must make this your document. I can’t over state the fact that you must be true to the facts, don’t change number to make them better. If it doesn’t work on paper it won’t work in real life.

 

Plan the work. Work the plan. 

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