Company Name: SpotLight
Product: Lockerniser
School: The Lord Grey School
Link Teacher: Angela Murphy
Business Advisor: James Reynolds
Interim Accounts
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Contents
Sub-section
Overview of SpotLight
Company Fund-Raising
Personal Roles
Product Development
Problems Faced
Environmental Considerations
Lessons Learnt
Skills Gained
Executive Overview
Interim Financial Accounts
Page Number
2
3
3-4
5
5-6
6-7
7-8
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9
Mission Statement
To create order from chaos in your school locker.
Why SpotLight?
We decided upon the name ‘SpotLight’ as we wanted to create a company name
that is simple, effective and easy to remember. Spotlights are often used to
illuminate an area of darkness. Similarly, our company is one that has been
exploring markets that thus far not been ventured into. Spotlights are also a symbol
of highlighting something important where details must be prevalent, much like we
believe that larger companies have overlooked ways of managing locker
organisation.
Product summary
At SpotLight we have focused our efforts on the creation and production of The
‘Lockerniser’. It is a simple, effective means of organising your locker no matter the
scale of the task. Essentially the Lockerniser is a shelving unit made to measure for
any one locker made of high quality MDF. The product fits snugly into the locker
making it self supporting, we feel that this was essential as schools insist that lockers
are returned at the end of the year in the same state that were allocated to students,
by having no permanent fittings, we are ensuring no students will be penalised for
damaging their locker through the use of our product.
The design of the Lockerniser permitted that an A4 book would easily fit in the locker
even with the unit inside, we thought this was necessary for schools as the majority
of textbooks are this size. Therefore we ensured that one would fit whether it is
above or below the shelf. Smaller items can be slid under on top of the shelf in the
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smaller compartment; this will provide easy access for items such as lunch box or
pencil case. We also left enough room in front of the unit so that water bottles and
other similar items can be placed there for the user’s convenience. We decided upon
the colour black for the Lockerniser because it is a non-offensive and smart colour
that blends easily into the locker environment.
Company Fund-Raising
Along with selling shares to various parties; SpotLight ran a series of fund-raising
activities in order to gather enough capital to start up and begin the development and
production of the Lockerniser.
Ryan recalls: “I helped run our ‘Estimate how many Jelly Beans there are in the Jar’
fundraiser on Children In Need day to raise funds so that we could afford the
materials for our prototype Lockerniser, I also wrote and sent out emails to 10
different businesses around our local area in hope that they would offer
complementary goods to help Spotlight. From these emails I received a few replies
including one from Tenpin, who offered us 6 free tickets for bowling which we used
as a prize for a raffle, which raised over £35. We sent an email of thanks to Ten Pin
for their contribution.”
Financial Director
The product that we have developed, the Lockerniser has such great potential in a
niche market that we decided to aim at the school. It costs around £3 to produce the
shelving unit and an additional 89p for a whiteboard. We decided on a price of £6 for
the shelving unit and an additional £2 for the whiteboard, which we
considered being reasonable and it corresponded well with the
market researched. With these selling prices we noticed that
200% gross profit could be made on each unit with a possible
205.66% gross profit on the whiteboard. Although these profit
margins seem large, we recognised that in order to survive, as a
small business was need to ensure these remain as high as
possible due to potentially low volume of sales.
IT manager
Over the past few months I have played part as a team in creating and producing the
Lockerniser. During this period of time various tasks were assigned to me and also
there were problems we as a group had to overcome.
Due to the fact that I take subjects such as Media Studies and English Literature I
was given many of the creative/advertising tasks such as logo design, posters,
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leaflets and many other things. I used the skills I have acquired from these subjects
to produce the best possible end product I could and assist in the overall marketing
of the product. Although ideas and suggestions were taken from co-workers in order
to create the best outcome we could.
I also acted as one of the marketers at the MK trade fair. In this role I pitched our
product idea and the process we performed to produce the final product to judges
and also the M.P of Milton Keynes. I feel this was my most difficult challenge to
overcome, as typically I’m not someone who would pitch ideas to people at points of
pressure. I feel I handled this task well.
Marketing director
Our main target market is our school so we felt that we should focus our marketing
primarily around school. We did this by creating an advertisement video on YouTube
which proved to be a create hit reaching over 160 online views. We showed this in a
final assembly which is shown to the whole school, with our MD making a speech.
This was the school’s first insight to our product, which resulted in positive feedback
from teachers and students and lots of interest. To follow that we held a raffle in
forms that has also spread the word that they are now on sale. Furthermore posters
were put up with the Head Teacher’s permission , which have been placed in the
most popular areas were people are likely to see them. As our products are aimed
at the age range of 12-17, we have made the posters eye catching with little
information- to affectively cater for all ages.
We were aware that the marketing mix consists of price, place, promotion and
product. Our pricing strategy used was a form of psychological pricing, as the price
was decided at £5.99. This price was devised so we made 100% profit but still
making sure that it was affordable for our target audience of school children. The
place of sale as we mentioned is within our school, however we did branch out to the
trade fair. Even though we were not fortunate enough to make any sales at the trade
fair we were not down heartened as our prime market is schools and we were aware
that we were unlikely to sell at this event as the Lockerniser does
not lend itself to impulse sales. As a company we knew that we
had to do something that would differentiate us from the other
trade stands at the fair, we did this via the sales of our raffle
tickets and by giving out balloons with our company name on it to
small children as they walked by. We thought this would help to
spread the brand awareness of SpotLight.
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Product development & Production Manager
I joined the SpotLight team fairly late on in the grand scheme of things. My limited
knowledge of business know how, complemented the teams lack of manufacturing
knowledge very nicely, so when I was approached by the Managing Director with the
opportunity of becoming part of the team, I took it. This was a chance to increase my
own knowledge and understanding of the ‘how’ and ‘why’ of the business world,
whilst helping others in their business endeavours.
The design of the Lockerniser had already been started, however when joined I was
able to inform the team on aspects that were unfortunately not possible to carry out,
and some alterative options to this. I too encouraged the design to be as simple as
possible, with the mentality that the less there is, the fewer things to going wrong. It
was imperative that the Lockerniser was a self-contained self-supporting structure.
The design that this all boiled down to was simply two MDF boards, to go at the left
and right side walls of the locker and a smaller MDF board that was wedged
between the other two boards giving structural support and a shelf at the same time.
This design utilized the height of the locker that without a Lockerniser was wasted.
The designing, as with many things is easier than the practicality of making any
product. We wanted the product to be strong and to be able to withstand strain.
Some plastics would have been perfect for this job, however due to time and limited
resources this was not possible, we decided that it had to be a wood or a similar
material. Medium Density Fibreboard sprang to mind, it is relatively cheap, user and
environmentally friendly as well as being flat and smooth this helps when we came to
paint the product. MDF is also not prone to damage due to the lack of grain; this
allows it to be cut, shaped, and drilled relatively easy.
Problems Faced
During the early stages of the competition, we found it very difficult to find a product
that we felt would appeal to consumers; we had several idea generation activities
with many great product ideas being put forward. However for several weeks we
lacked an idea that we all thought would be worth pursuing further. This was getting
to become a worry for us all as we knew that in order to ensure we get a product up
and running we had to start its development as soon as possible. However one lunch
time before our weekly board meeting, our marketing director couldn’t find a book
she needed in her locker, she expressed her need for an organisation method. The
Lockerniser was born.
A large issue that as a group we had to overcome was our specific target market for
our product. Due to the product only being useable in lockers, we had to tailor our
marketing to appeal to a market that was relatively niche. After discussions we
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concluded that we would use our marketing to target the younger audience as they
were more likely to purchase such a product and it is easier to reach them seeing as
we are in a school environment.
Production of the product was perhaps the most obvisous and hardest hurdle to
jump, we had to find a way that was safe, efficient but fast. For our prototype, the
schools DT technician was kind enough to give up some of his time after school and
stay behind along with the Production Manager and the Managing Director to
product the first mock up of the Lockerniser, we were extremely grateful for this but
appreciated that it would be wrong of us to expect him to give up any more time. We
therefore had to find away of cutting the large MDF boards into pieces small enough
to become Lockernisers, this was a precise size. We enrolled the help of one of the
teams fathers, who was skilled and had the adequit experience to cut them for us
using a table saw. After this stage of the production was done, the rest was simple.
We set up a production line with each member of the team having a specific role for
example, drilling holes or painting.
Up until this day the sales of the Lockerniser have been difficult to generate. We feel
we have done a great deal with our marketing campaign and that our target
audience are fully aware of our presence and how to purchase the Lockerniser.
Before Christmas, we played our advert to the entire school in our final assembly.
This was the first time the consumers were introduced to SpotLight and the
Lockerniser. We have recently relaunched our advertising campaign with posters,
adverts in assemblies and demonstrations of the Lockerniser in use in the hope and
expectation that it will boost sales and interest in the Lockerniser.
Environmental considerations
At SpotLight we thought it extremely important to take into account the effect our
actions as a business would have on the environment, we therefore ensured we
were as environmentally friendly during our activities as possible.
The production of our product and our environmental policy during this stage is
something that we are extremely proud of and we are able to ensure our customers
and shareholders that SpotLight are an eco-friendly company. By using materials
such as MDF means that we are causing less damage to the planets tree supply
then we would be if we used wood for example. Of course when cutting MDF we
were fully aware of the dangers that it poses to human beings such as it being
cancerous if inhaled. We ensured that the room was well ventilated and that face
masks were worn by those in close quarters to this cutting process, thus maximising
safety for ourselves and still being aware of the environmental impacts of our
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actions. Another planet preserving method we used was non-toxic paint, by
purchasing this type of paint to decorate our product we ensured that any waste that
would be thrown away either at the factory where it was produced or by any of our
team would not cause any harm to the water system or local area.
As well as production, SpotLight took our environmental policy to the retail aspect of
business. We initially considered using paper bags to package our products as we
recognised there was no need to use eye-catching, colourful packaging as our
product would not be in stores competing for consumer interest. Any customers that
came to us would be expressing an interest in our product alone, thus eliminating the
need for attractive bags. Using recycled paper bags would mean that when they
were disposed of, it would take them a lot less time to bio-degrade then a plastic bag
would, therefore we are minimising the impact it had on our planet.
Unfortunately we could not find paper bags that fulfilled the necessary height
requirements for the Lockerniser, this effectively ruled out that idea. However a
member of the team suggested we ask a well known retailer if they would be
prepared to give us some bags to put our product in, this would not only save us
money but would mean customers would be seen with their stores bags in their
hands. We decided to approach John Lewis and ask for a donation of bags, they
happily complied.
Lessons Learnt
Over the last five months SpotLight as a company and as individual members have
learnt many valuable lessons and ones that will be of great importance to us all in
later life and in situations that we may find ourselves in. Running our own company
has given us all an appreciation of the strains and stresses it can put on professional
as well as personal relationships with colleagues, however it has also shown us how
rewarding even the smallest of successes can be. Even something as simple as
creating what we thought to be a very professional and effective advertising video
filled the team with a tremendous sense of accomplishment and boosted moral
considerably.
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The financial side of business management has possibly provided us with the
biggest lesson of all. We have learnt how important it is to distribute our scarce
resources in an effective way and how to keep all stakeholders as informed and as
happy as possible. It has been imperative that we were as efficient as possible and
that we wasted no materials or time in unnecessary procedures or experiments. At
the start of the year we were arguably not aware of the importance of these things
but over time we have begun to find ways of reducing costs and therefore increasing
efficiency. Our productivity has also increased considerably from the start of the
year, with us being able to get through topics of discussions at meetings at a much
faster and in depth rate. In terms of production, being able to increase how many
units we can produce in as little time as possible without compromising on quality
has illustrated our superior efficiency.
Sometimes, it is the little things in a business that helps to maintain a steady and
smooth work environment. We have found that the need for agendas and minutes for
our weekly meetings have been pivotal in our day to day operations. They have
allowed us to easily review what we discussed in previous meetings as well as give
us a platform for discussion at future ones so that we are not sat around wasting
time.
The sales of Lockernisers are yet to take off. We feel this may be due to the fact that
being so late in the academic year, students are just not willing or do not see the
need for a device to organise their locker. At this time they may already have a
system that works for them. However we feel that if we were to re-launch this
product in the early weeks of next September, the number of units sold would be
much more impressive. We believe this so strongly that as a group of students we
are considering setting up SpotLight Ltd as a company outside of the Young
Enterprise programme.
Skills gained
Below is a list that as a team, SpotLight has sat down and composed stating just a
few of the skills we have learnt or developed over the past five months:
Teamwork
Dedication
Responsibility
Public speaking
Delegation of the work load
Commitment to the team
Time management
Efficiency
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Executive Overview
SpotLight is a company that I am proud to call myself Managing Director of. The
levels of commitment from my team have been second to none and the belief in our
product is genuine. Over the past few months, we have been on a journey, to come
up with, design, manufacture, market and sell a product. All of this on top of the fact
we had to fund ourselves i feel is a mammoth challenge. However as a fairly small
team we have pulled together and done just that.
We have faced some challenges along that way, some mistakes have been made
but we have learned some valuable lessons from these. I feel that our biggest
downfall was the fact that we did not start trading until quite late on in the
competition, not allowing us enough time for the brand and product knowledge to
spread and for the sales to start picking up pace.
Naturally, the measure of success of any business will initially be how much profit
was made over a certain period of trading. As was said earlier we at SpotLight have
not had staggering numbers of units sold. But we have laid the foundations for what
we believe to be a company with great potential to succeed; I believe we have found
a niche market that we plan to exploit to the very best of our ability. We have recently
had interest from a local primary school who expressed a possible need for 250 units
of our product. As of yet that has not been confirmed but we have been in contact
and it is a possible contract for us. Of course if this does happen, we will need to find
ways to manufacture the Lockerniser at a much larger scale i.e. employing skilled
tradesmen to do the cutting of the MDF due to the simple fact that as students will do
not have to resources nor the time to fulfil such an order.
Overall I feel that the Young Enterprise experience has been an invaluable one that I
will have gained skills from that I may need in future, real life
situations. I have enjoyed having the responsibility of an entire
team under me. At SpotLight we have always and will always be
a team, we have made mistakes together but ultimately I feel we
will succeed together.
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Balance sheet
As as: 15-Mar-2012
Current Assets
£
£ 6.26
£
£
£ 90.00
£ 37.00
£ 133.26
Stock
Debtors
YE VAT owed
Cash at bank
Cash in hand
TOTAL A
Less:
Current Liabilities
Loans
Creditors
YE Corporation Tax (at 10%)
YE VAT due (at 20%)
Total B
Balance ©
Represented By:
Issue share capital
90 shares at £1
Profit and loss account
Shareholders fund
£
£
£
£
£
£
10.20
22.27
32.47
£ 100.79
£ 90.00
£ 10.79
£ 100.79
Profit and Loss Account
For the period ended 15-Mar-2012
Current rate of Corporation Tax
10%
£
A
B
C
D
E
F
G
H
I
J
F
Sales
Purchases
Production wages
Closing stock
Cost of sales (B+c-D)
(A-E)
£
£17.97
£12.86
£0.00
£6.26
£6.60
£11.37
Gross Profit
Salaries, commision and Bonuses
Stationery
Rent & Hire
Miscellaneous Expenditure
Registration Fee
Total expenses (F+G+H+I+J)
£0.00
£0.00
£0.00
£9.38
£40.00
49.38
Gross profit less expenses
Operating profit (or Loss)
Miscellaneous income
Net profit (or Loss)
Net profit brought down
LESS corporation tax payable to Young Enterprise
Profit after tax
-38.01
50.00
11.99
£
11.99
1.20
10.79
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