Cultural Enterpreneurship

  Table of Contents 

  Statement of the Idea 

  The on-line service provided by the company ‘SUPPORTingYou.com’ in Latvia.

  Our company aims to realise a long-term development strategy directed to development and implementation of the complex solutions in the field of consulting services in the Internet space.

  In particular on-line consultations provided by the future experts and today’s students for the youth, pupils, students and general public in interactive mode.  Areas covered by our consultants include:

• Medicine (general health questions, Psychology:  Family and relationship, Stomatology, Dermatology and special section for questions related to intimate life: gynecology and venerology ).
• Beauty: Stylist, Visagist, Hairdresser.
• Education and Work: Business and Finance Management advisory, Law, Professional Orientation.
• Predictions: Astrologist, Dreams Interpretations.

  This online service is specially designed for youth versatile development, popularisation of education, raise of family significance and increasing attention towards problems that are common in everyday life of each one: stress problems at work or in educational institutions, incomprehension in family or between friends, lack of support and disposition as a result.

  Nowadays the life rhythm is very fast and there is no wonder that many people try not to notice any problems that appear around but wait until they accumulate into a huge issue that is usually unsolvable in a short period of time.  
Our service provides accessible help everyday and there is no need to wait weeks to attend a doctor or spend your days in painful contemplation about your health problems and dead end situation in your relationship with somebody- you can send a question and first help is on the way to you!

  From the point of a job-seeker in student society it is a great opportunity to fast track his career simultaneously with his degree, get valuable experience, notability and good salary.  

  Philosophy  

  Our objective is to improve the quality of life and make people feel more confident and positive about present and future. Each one is worth of attention and support in building his or her unique life.

  ‘Support you believe in!’

  Keys to Success:

• Clients can access the website and send their question at any time of the day of even night.
• They get the answer in 24-hours after receipt of payment or immediately in previously stated time.
• The fee for a consultation is only 0.75-0.95LS that is 10 times cheaper than any consultation in medical centre.
• Total confidentiality of a client.

  The Opportunity Analysis Plan 

  Implementation Plan 

  SWOT Analysis

  PESTE Analysis 

  Socio-cultural Factors

  Statistical Information:

  Educational Institutions

  EDUCATION INSTITUTIONS AND ENROLMENT

  Number of general schools: 982 (08/09) and 877 (09/10);

  Enrolment at general schools: 249 446 (08/09) and 239 845 (09/10);

  Number of higher education institutions and colleges: 60 (08/09) and 61 (09/10);

  Enrolled in higher education institutions and colleges: 41 577 (08/09) and 31 529 (09/10);

  One of the main targets of each country’s government is high level of education of the population. Enrolment to higher educational institutions as well as to general schools has decreased in years 2009-2010 because of the inability of parent to afford higher education cost for their children, some families had to withdraw their children from the 1^st form and wait the next year in case the economical situation in country refines after crisis.  That is why our project can be of a special interest to governmental structures as well as the country’s educational institutions because it offers growth of knowledge and skills for higher education institutions’ attendees.

  The use of two languages in our service can possibly reduce the level of hostility between two main nations in Latvia by the visible content of the site stressing that all people can meet difficulties in their lives and all are worth of help.

  Technological Factors

  Last researches showed that the number of people using internet is growing all the time:

  66, 4% of inhabitants have ever used internet and 57% did that regularly (at least once a week) in 2009 compared to 68, 5% and 50, 9% accordingly in year 2010.

  Regularly access Internet individuals from the corresponding groups with the highest usage percent:

  16-24 years old: 93, 9 %( 2008) and 95, 8% (2009);

  25-34 years old: 80, 4% (2008) 85, 3% (2009); 

  People having secondary education: 52, 3% (2008) and 55, 5% (2009);

  People having higher education: 82.6% (2008) and 84.0% (2009);

  Pupils and students: 97.7% (2008) and 95.7% (2009)

  Employed: 66, 8% (2008)   73, 0% (2009);

  The slight decrease in percentage of students and pupils in year 2009 and increase in percentage of employed people in 2009 can be the consequences of the massive need of students and pupils of higher forms to start working in place of further study because of the unemployment of their parents. Therefore students can be directly interested in working for our company because it has a number of great advantages:

• Job can be combined with studies;
• It offers a salary that is fully based on your work volume as commission money is dependent on the number of the clients your served. Even if there are no clients the consultant gets a basic salary.

  The main reasons for people of accessing the internet in 2010 are as follows:

1. Reading or downloading online news / newspapers / news magazines:  46,3% (Of total population)   and   72,2% (Of Internet users);
2. Looking for a job or sending a job application 24,5% (Of total population)  and 38,2% (Of Internet users );
3. Seeking health related information 28, 7% (Of total population) and 44, 8% (Of Internet users).
4. Looking for information about education, training or course offers 22,9% (Of total population) and   35,7% (Of Internet users );
5. Doing an online course (in any subject) 6,5% (Of total population) and  10,1% (Of Internet users );
6. Consulting the Internet with the purpose of learning 34,1% (Of total population)  and 53,2% (Of Internet users );

  Our company can satisfy 5 from 6 points from the above reasons (points 2, 3, 4, 5, 6) with more convenience for the customer. 

  Economic factors

  Statistical Information: 

  Unemployment levels in Latvia

  Rate of unemployment in the active population:

  2008 year- 7, 8%

  2009 year- 17.3%

  2010 year – 20, 2% (where 39, 4% of 15-24 aged). 

  Netto Salary

  Employees by monthly net (after taxes) wages and salaries, per cent

  The high rate of unemployment and very small salary for more than 44,4% of the Employees gives an opportunity to get potential employees attracted by the salary and work conditions offered by our company. 

  Politico-legal factors

  Governmental Legislation in case of Cyberspace business offers the same limitations and rules as to the ‘usual’ business. The same taxation level and registration of the business applies to our business as well.

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  Business Goals

• Become well-known among cultural and governmental institutions as well as among youth aged 15-24 in particular students and pupils by year 4.
• Win the trust of public as the organization that offers valuable services and get according feedback in Media.
• Get considerable interest on advertising provided by our website from Institutions connected with Education and Culture by 3^rd year.
• Popularize our services by the end of year 2 and open new direction of services (Tutors in Natural Sciences; Dating Service and expand already existing service section by the number of new consultants: 2 of 3 more for each section dependant on the profit from year 2).
• Reduce the fees (up to 100% dependant on the situation) for the consultancy services by the year 5.
• Get profit of no less than 80,000LS by the end of year 4 with the major part earned by advertising services.

  Business Strategy:

• Inform the society about the new company creation with the help of media: newspaper articles and publications on websites that allow advertising activity on forums (6 month prior to company opening).
• Define the target consumer group and start active advertising company among this group (6 months prior to company opening).
• Find and Identify potential employees: programmers, consultants, accountant, inform them about the new opportunity and get them involved into our business and sigh the contract with them for at least 9 months (2 month prior to company opening).
• Create the website layout, content; develop the program for the website (CMS), buy a domain and registrate the company SIA (2 weeks before company’s start activities).
• Make advertising on Culture and Education related websites. (1 week before company’s start activities).
• Get PayPal and SMS billing services connected to your business website and set prices for the service (1 week before company’s start activities).
• Fully open the service to customers.

  Resources needed for company opening: 

  Human Resources:  

• 11 consultants;
• 2 programmers;
• 1 accountant;
• 1 manager (owner);

  Web-site building and company registration: 

• Web-site design;
• Content Management System;
• Domain registration;
• Hosting;
• SEO content;
• Registration of SIA (Society of limited reliability);

                 Equipment:

• Personal Computer;
• Stationary;

  Analysis

  Financial Statement

  1^st Year – 12 months Cash flow.

  Income from Sales:

  Clients will be using PayPal (0.75LS per consultation) and SMS billing services (0,95LS for the consultation) to pay for our services.

  PayPal commission for transaction is: 3.4% + €0.35 EUR for monthly sales up to €2,500 EUR and 2.9% + €0.35 EUR for monthly sales from €2,500.01 to €10,000.00 EUR.

  SMS billing service ‘ESTERIA’ offers approx. 43% of income from the fees paid by our clients via SMS.

  We predict that 20% of clients will be using PayPal and 80%- SMS (one.lv statistics).

  First 3 month service is free and the approximate number of consultation for month 4 is 110 that will grow in next 2 month as well and decrease in month 7 because of the off season (student and pupil holidays) and rising again by the end on year 1 (month 12 is December and the time of exams as well as the period of the most severe frost that causes heath problems).

  Income from Other:

  Includes income from advertising provided by the web-site that only appears in month 4 when the web-site has a number of regular visitors that continues to grow.

  Invested Capital:

  Total Budget that is assumed to support the implementation of the business strategy.

  Start Up Costs include web-site development, SIA registration and PC purchase.

  Direct Wages include basic salary of 30LS for 11 Consultants.

  Commissions: 10% of Sales income paid to Consultants (there is no profit tax for year 1 because the NET cash flow is negative).

  Utilities: price for 1 PC electricity usage.

  Advertising: price of the 1^st Advertising company before actual start of the Business and in the first year by months.

  Stationary expenses include basic cost of objects needed for documentation fill-in.

  Hire of Equipments includes 7LS per month hosting and server rental feel that has to be paid 6 month in advance for the 6 months at once.

  Professional Fees include  150LS monthly salary for 2 Programmers’ service (one starts working from the project beginning and another after 6 month of the project beginning) and cheque paid to Accountant for monthly reports- 50LS per months.

  Payroll Expenses cover income tax (26%) and NI (9%) that are paid once a year. Professional staff pays taxes themselves. 

  Income and Expense Statement: 

  Year 2:

  We assumed that in year 2 income from profit will rise in twice and reach 6235LS as well as advertising will rise by 80% at reach 8100LS.

  Product development fee includes further web site elaboration (design, graphics etc.).

  Direct wages will rise by 20% and Professional fees by 10%.

  There is still no rent fee because everybody works from home.

  There is slight rise of utilities price because of the inflation on electricity rate- 5%.

  Hire of equipment includes Hosting and Server fee that will rise dependant on web-site size that is kept on server.

  Commissions  change accordingly to sales income and Payroll expenses change accordingly to direct wages.

  There is the corporate tax sum of 95 LVL (15%) of the gross profit.  

  Year 3:

  Sales rise by 350% comparing to the year 2.

  Advertising income rise by 300% because a new facility is added to the web-site (Tutors in Natural Sciences; Dating Service and expand of already existing service sections by the number of new consultants);

  800LS is spent on new facility installation.

  Direct Wages sum rises because of the new consultants involved.

  Rent: we start renting an office (200 LVL per month) therefore we have the rise in utilities fees stationary and telephone with faster internet.

  There is the depreciation of 600 LVL by the end of the year 3 of the PC bought for 800 LVL in year 1 that is rated for 4 years of exploitation with the coefficient of depreciation 0.25.

  There is no hire of equipment any more except 7 LVL per month for domain.

  Professional fees rise by approx. 36% due to new staff employment.

  By the end of the Year 3 Net Profit sum is 16,197 LVL. 

  Legal Issues Addressed to Company 

  Registration of SIA:

  Ltd - Legal person, which authorized capital, consists of the sum of nominal size of shares. Ltd for the obligations is liable by all its property. Shareholders of company are not responsible for obligations of company (one or more shareholders may be responsible for obligations of company if shareholders are concluded such agreement).

  WE must register it in governmental register (register of enterprises).

  As we are employing some employees only one time per month (accountant and programmers), we must submit report regarding employees.

  We must submit VAT report (period of submission is 1-6 months).

   We have rights to do all economic activities according to legal norms.

  Payments necessary for registration: State duty 50 LVL because the member of board of directors is also a founder of company and payment for publication 24 LVL.

  Equity capital and shares: equity capital must be not less than 2000 Latvian LVL (~ EUR 2800). Before application for registration it is necessary to pay a minimum 50 % from the authorized capital.

  Name of a company: Only letters of Latvian and Latin alphabet are allowed. Should not be identical or confusingly similar on already existing ones. http://abways.lv/en/latvia-company-formation/registration-of-limited-liability-company.php http://www.company-taxes.info/ 

  Employment and Taxation, Health and Safety:

  The Labour Law of Latvia was adopted in 2001. 

  The Labour Dispute Law (adopted on 26 September 2002) has to ensure fair and rapid settlement of labour disputes, determine labour dispute settlement bodies and the procedures for settlement of labour disputes.  

  The Law on Work Safety (adopted on 20 June 2001, came into force of 1 January 2002) sets the work safety requirements. Article 5 of the Law on the Protection of Labour states that the employer's duty is to ensure the safety of the system in the enterprise. The rules define the types of commercial activity in which to create and maintain a system of labour protection to attract a competent institution for its inspection. 
Competent institution - institution, which is authorized for internal supervision of working environment at the enterprise and competence of occupational safety issues assessed in accordance with the procedure established by the Cabinet of Ministers of the Republic of Latvia. http://www.darbadrosiba.lv/paligmateriali/tiesibasunpienakumi.html