1. THE PITCH

We provide a tendering platform for smart technology. Based on tenders data we provide mediation and consultancy services. We developed unique design brand for immediate recognition from others. Our values are low-cost pre-sale services and cost-effective services for tender application bureaucracy. We provide business opportunity tool with business mediation services for smart technology buyers and sellers.

A world-wide governments and private industrial companies are forced to improve their productivity. The main focus of their activities are effectivity, lowering costs and ecological impact of technologies and automations. A common city infrastructure is often 50+ years old and insufficient to cover city needs. Populations are expanding, cities are becoming full and need to grow to the demand. To grow, these cities services must be effective, safe, clean and productive.  Past years trend is to use various types of Smart Technologies.

MARKET SIZE

THE PROBLEM

THE SOLUTION

MARKET VERTICAL

STARTING MARKET

MARKET SHARE

ACQUISITION STRATEGY

UNIQUE DESIGN BRAND

ENCYCLOPAEDIA

VENTURE FINANCIALS

HYBRID FINANCE MODEL

CRYPTO FINANCIALS

This project is about the speed of cities, countries and industrial infrastructure development. A complex sales network that covers following parts of business interest:

Project serves innovative approach to cities and industrial infrastructure development projects processing. Project provides expertized mediation service between smart technology buyers & sellers. Project supports Ecology, Green and Effective products. Platform uses blockchain technology for parts of the business eco-system. Blockchain gives a transparence to tendering of smart products and eliminates level of corruption. 

2. THE BIG PROBLEM

A problem well stated is a problem half-solved (Charles Kettering). The problem is the online mess of data. Select/find a solution for project is just matter of luck. Buyers are lost in the mess of suppliers by practice "better marketing = better solution. Sellers are lost in the mess of competition. market is completely stolen by big players. Smaller, but often better players are lost in the mess.

2.1 PROBLEM STATEMENT

The current market of smart technologies is presented in chaos. Customers of smart technologies don't have the possibility to choose optimal solution. A thousands of smart solutions are available, but messed up in online information mess. There is missing competent aggregation and filtering catalogue. As the effect, almost 60% of city and industrial development projects are selected by lobby or found by a kind of luck.

2.2 PROBLEM ANALYSIS

2.3 CURRENT SOLUTIONS

3. THE UNIQUE SOLUTION

The solution describes our product and service and the resulting benefits. It specifying tangible value to the customer, like lowering costs and increasing effectiveness. The second part provides an examples of how customers utilise the solution and related consultancy services.

 

A unique design sales, marketing, and consultation network about Smart Technologies. Tender data aggregation portal collects tender's data from all other tendering platforms. We will scan these requirements by our business logic, and compare them with supplier's solutions. When we will find a tender-solution match, we will prepare our consultancy product.

Product promotion will be processed through digital marketing. Sales processes based of modern performance tools with gamification elements. We will be specialised to Smart technologies only, up-to the expert level. We will automate routine analytical and back-end work processes, so it will be faster and cheaper than our client’s internal resources.

To differentiate us from other integration consultancy companies, we are building a Brand. A unique visual experience to present smart technology usability. Through an animated explanation of "City of the Future" by using fascinating drawings. We are calling this branding process “Design Story”. It is a story of twelve pictures, like on the top of this presentation. Each drawing covers one of the 12 industrial segments. These drawings will be further processed to graphics elements of the encyclopaedia. Part of the brand is animated person - Smarty the Robot. He will acts in many roles. Smarty as a web-site guide, Business man, Encyclopaedia guide, or Products promoter.

3.1 SMART CITY ADVISOR

Tender data aggregation portal with background software robots that collects data about tenders from other available tendering portals. Data selection is based of business logic and only project that may be solved by Smart technology will be transferred to our portal. Part of processes that needs transparent history use blockchain functionality.

 

3.2 SMART TECHNOLOGY LIFEBAR

Smart Technology LifeBar is a scoring system that allow technology parameters rating and assign effectivity level score. Parameters for scoring are: Security, Effectivity, Environmental impact, Green support impact, Water saving and Cost per Value. Sum score brief the client about Value of the Smart Product.

 

3.3 SMART CITY ENCYCLOPAEDIA

Smart Technology Encyclopaedia is the branding tool. It serves by innovative approach information about usability of Smart Technologies. Encyclopaedia's architecture is designed by a special logic to serve valuable content to different types of audience. More you can read bellow in topic Customers.

 

3.4 MY CITY - EDITORIAL BOARD

MyCity - Redaction system is the main promotion tool. It's a newspaper type of portal with integration to social networks and automation digital content distribution systems. Portal will serves content from Tendering, Encyclopaedia platforms and as well its own, autonomous content.

4. MARKET OVERVIEW

Market Opportunity for this type of solution is world-wide. On the beginning we would like to target our focus to Asia countries, who are fighting with population growth. The starting market we selected India due to high population on relative small territory and their positive policy and government support of Smart Cities development. 

4.1 MARKET SEGMENT

A Smart City is an urban area that uses different types of electronic data collection sensors to supply information which is used to manage assets and resources efficiently. This includes data collected from citizens, devices and assets that is processed and analyzed to monitor and manage traffic and transportation systems, power plants, water supply networks, waste management, law enforcement, information systems, schools, libraries, hospitals, and other community services.

Smart City infrastructure is directly connected with the industrial and commercial business and use similar smart technologies to cover their process effectivity. These sectors are included as a part of the global smart technology eco-system.

4.2 MARKET OPPORTUNITY

A world-wide government and industrial sectors are forced to improve their productivity. The main focus areas of their activities are effectivity, cost per value and ecological impact of the implementing solutions. There is a market gap caused by extreme granularity of technologies producers. There is missing platform for developers that aggregates business information and now is the right time to fill the gap by our platform. 

Following needs giving to Smart City Enterprise project business opportunity:

  • Common city infrastructure is often 50+ years old and insufficient to cover city needs. Population expands, cities are becoming full and need to grow to the demand. To grow, these cities services must be effective, safe, clean and productive.
  • Smart technologies are booming, everyone is talking about smart things, smart technologies, clean energy, robotics and so on...
  • All types of audience are involved:
    • Governments talk about security.
    • Commercial sector talk about effective logistics.
    • People talk about their comfort.
  • Today, just about 45 of thousands world cities are technologically at the highest intellectual competence to manage smart city infrastructure. Hundreds of cities need immediate renewal. Almost all of cities talk about to implement a variety of experimental technologies.
  • Macro-economic predictions in areas of Internet of Things, Energy, Transportation and Infrastructure development are showing bulling trends.
  • Government financial institutions invest 4% of the world GDP into the infrastructure development. Governments support a variety of missions for Smart Cities. In the next 5-10 years predictions show Trillions of US$ will be invested across all industrial and commercial sectors pertaining to smart technologies.
  • We are likely on the border of a digital revolution with all blockchains and crypto-things, digital identification possibilities or even by the internet penetration. This all around will completely change the digital market. I want be involved and I want to participate.

4.3 MARKET SIZE

Smart technologies and IoT usability is flexible across all industries connected to country infrastructure. Almost all existing processes on technological and operational level will be modernised during the next years. From e-government and connected services, through the logistics and infrastructure effectivity, to energy distribution and consumption effectivity. Government as well as enterprise and retail business.

4.4 TARGET SEGMENT

Based of Goldman Sachs segmentation, there exist five areas of smart technology applications. First three categories presented in chart are covered by retail business sectors and commercial sphere is covered in sufficient level by common retails stores and online shops. The rest, industrial part of smart categories are covered by big business players like HP, IBM and other big players.

As for the Connected Cities - communication, electricity, logistics systems and management of city services are sectors in which Lanast Co. is going to enter. Sectors, for which Lanast Co. will build tender platforms for solutions that need to be implemented and match them with the solutions of our customers-suppliers of smart technologies.

As for the Industrial Internet - industrial smart direction. This is the case with the standard set that we use in our encyclopaedia and tendering platform segmentations. Transportation, buildings, commercial business, energy, public services, infrastructure, media, data, technology, education, healthcare are our industrial segment. Smart City Enterprise is going to cover this area with smart technologies of our customers, our suppliers.

4.5 MARKET TRENDS

The main driver of Smart Cities development is sensors production. Every smart solution is supplied by kind of sensor for measurement different kind of activity or parameters. These sensors are producing data for business logic. Another driver is Internet of Things.

4.6 DRIVERS & BARRIERS

According to focus groups of people participating as decision makers for the different commercial market areas, the main driver for smart technologies implementation is increment of operational efficiency and cost reduction. The main obstacles and development blocking part is the cost of hi-tech solutions.

4.7 INVESTMENTS BY INDUSTRY

As more IoT devices are shipped and installed to facilitate city functioning, Lanast Co. projecting that the installed base of IoT devices in connected and Smart Cities will grow from 1 billion this year to 6.2 billion in 2019. Lanast Co.'s estimates are built off of our previous forecasts for government spending and adoption of IoT devices. Lanast Co. evaluated government spending on the IoT and determined that it would be heavily weighted toward city upgrades going forward, with the remainder going to military applications, like drones and robots, and deployments in rural areas. Lanast Co. then created a future-looking forecast by taking into account city population growth and other industry trends.

The IoT will be by far the largest device market in the world. Lanast Co. estimate by 2019 there will be 23.3 billion active IoT devices connected to the internet, with the installed base growing by a five-year compound annual growth rate (CAGR) of 57% from 2014 through the end of the forecast period.

4.8 INVESTMENT FACTORS

According to previous years market results, the leader industry of smart technologies and IoT implementation is the manufacture and the main driver was the speed, production and logistics. The traditional data storage models and internal business intelligence systems becoming to the new trend of cloud solutions and infrastructure.

4.9 STARTING MARKET - INDIA

A city which is two steps ahead of its citizen's needs is a Smart City, said Prime Minister Narendra Modi at the launch of the 100 Smart Cities Mission. "As the world looks to India, we have to work towards reaching the world standard. We can't feel disheartened that the world has progressed and we missed the bus," Modi said. He also launched the Housing for All by 2022 and Atal Mission for Rejuvenation and Urban Transformation (AMRUT).

PPP model

The country will now look to public private partnership model and innovative ways of financing to make these schemes successful, he said. The Cabinet had in April approved about 1 lakh crore investment (1 crore = 100.000) on urban development under Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation of 500 cities (AMRUT) with outlays of Rs 48,000 crore and Rs 50,000 crore, respectively.

City Challenge Competition

Each Smart City, selected through a 'City Challenge Competition', would get a Central assistance of Rs 100 crore per year for five years. Each state will shortlist a certain number of Smart City aspirants and they will prepare Smart City proposals for further evaluation for extending central support, a statement from the Ministry of Urban Development had said. It will be followed by a city challenge. The project intends to promote adoption of smart solutions to enhance the quality of urban life and provide a clean and sustainable environment.

Area based approach

It will be implemented through 'area based' approach consisting of retrofitting, redevelopment, pan-city initiatives and development of new cities. Under retrofitting, deficiencies in an identified area will be addressed through necessary interventions, the statement added. Pan-city components could be interventions like Intelligent Transport Solutions that benefits all residents by reducing the commuting time. The focus will be on core infrastructure services such as adequate and clean water supply, sanitation and solid waste management, efficient urban mobility and public transportation, affordable housing for poor, power supply, robust IT connectivity, governance, especially e-governance and citizen participation, safety and security of citizens, health and education and sustainable urban environment. Under Housing for All, the Government aims to build 2 crore houses by 2022. AMRUT targets upgrading urban infrastructure across 500 towns and cities.

5. CUSTOMERS

A company wouldn’t exist without customers so it is essential to have a clear understanding of who they are and what they want. We summarised the segments of customers to target and what characteristics that we will use to identify each segment. 

5.1 CUSTOMER OVERVIEW

Project has identified two types of clients:

  • Business Oriented - Buyers and Sellers of Smart technology. The people from government and industrial business sectors.
  • Interest Oriented - Business and common people interested of Smart Technologies. They may be future business impactors.

Segment of our clients are sorted into categories based of product type consumption and content interest:

  • Government - customer is a person employed in government structures in any area of development services. The main target areas on upper structure is the Ministry of Transportations and Ministry of Infrastructure development. The middle and lower structure interest is in regional politics who has a mandate, but don't have a qualification to action.
  • Companies - customer is a person employed in industrial companies. The most cases it is a Project Office, Business Development Department and Procurement Department.

5.2 CUSTOMER PER PRODUCT TYPE

 

5.3 CUSTOMER SEGMENTATION - TENDER PLATFORM

SMART CITY ADVISOR - is tendering platform with analytics, statistics and sales portal. Customers of this portal are sorted into three groups.

 

5.4 CUSTOMER SEGMENTATION - SMART TECHNOLOGY ENCYCLOPAEDIA

SMART CITY BUILD - is encyclopaedia. There is a huge diversity of the content recipients of this site. Site content is categorised to different types from the easiest text kind, to deep technical specification level. Let's understand how web site content is categorised and and why it's useful.

For us, this part of site is lead-founder tool and if someone click to this section that means that he is interested in buying/selling solutions, Project grabs him by web site monitoring and try to convert into the SmartCityAdvisor.com client.

 

6. COMPETITORS

Unless we’re creating part of a new market, we’re bound to have competitors. This is healthy and a sign of market viability. Knowing those competitors will help us make more strategic decisions, anticipate competitor moves and their relationships to customers and partners.

6.1 COMPETITIVE LANDSCAPE

Project has identified three competition areas that will be further taken under ongoing control. The first one is related to business part - tendering platform and consultancy services. The platform functionality compete to other tendering portals. The second is the promotion part that's direct competition are technical and future technologies related newspapers and social network profiles. Third, an encyclopaedia part of the brand is a unique solution with indirect competition only.

6.2 BUSINESS COMPETITION

On market exists multiple tendering platforms. The most solutions suffer on lack of functionalities and very problematic search. On starting - target market (India) exist only two tendering solutions that provide high-quality service supported by high-quality data.  These portals serve service for all tender types. Non of platform provides expertise services. As the major competitor was identified provider http://tender247.com/ that provides the best data and service quality. This portal serves service on international level. The rest of portals has been categorised by following analysis rating results.

6.3 PROMOTION COMPETITION

Business platform is supported by unique promotion strategy. It is not common for this type of business. Part of the project is our redaction portal integrated with social networks. Analysis shows the complete competition volumes split into the web content as well as social content services.

6.4 ENCYCLOPAEDIA COMPETITION

This is the unique part of the project with no direct competition. Indirect competition we take Wikipedia with their data quality and review mechanism. Wikipedia is indirect competition due to their different focus audience and focus to cover all content type and without specific design elements, so every article looks different.

6.5 COMPETITIVE ADVANTAGES

 

7. TRACTION

Most investors want to see some traction before they invest. We are on very early stage to show valuable business or financial traction, but we are able to show small success even on this early stage.

8. RISK

A key risk is one that has a likelihood of occurring with significant ramifications to the company. These risks may stem from the market, competitors, technology, finances, operations, people or legal impediments. The actions to mitigate, monitor and react to each of the key risks.

8.1 KEY RISKS

Project has identified a major risk factors that may impact the business contingency and quality of services.

 

8.2 CRITICAL SUCCESS FACTORS

Critical Success Factors (CSFs) are the areas that are identified as being essential to getting right for our business’s success. These are the essentials that the company must perform with maximum effort in order to build a competitive advantage. 

Critical success factors should not be confused with success criteria. The latter are outcomes of a project or achievements of an organization necessary to consider the project a success or the organisation successful. Success criteria are defined with the objectives and may be quantified by key performance indicators (KPIs).

 

9. TEAM

I (CEO) have spent almost 15 years on different international projects and met many interesting people. I have selected the most valuable people that I've met and created type of Dream Team. The team will be extended with much more experts after the funding stage.

Laco Vencel


Founder & CEO

Laco is the power, ideologist and motivation engine of the project. He made a professional career as a executive project manager and CIO in international high-cap level companies (telco and finance). In 2018 he decided to leave corporate live and go by his own way and support his idea of the Smart City Enterprise.


Alex Gorbunov


Chief Operations Officer

Alex has an precise knowledge of business process management, contracting and overall departments operations. In Smart City Enterprise Alex covers whole company processes and operations tools management e.g. JIRA, Workplace, Sales Force, etc.


Andrey Sokolov


Chief Technology Officer

Andrey is a programming multi-linguist with an excellent knowledge and flexibility of APP, DB and MW architecture. In Smart City Enterprise project Andrey covers the architecture, development and business intelligence.


Helen Motorova


Chief Sales Officer

Helen is the PMP certified Project manager and expert for a strategic projects implementation across an Africa, Asia and Russian federation markets. In Smart City Enterprise project Helen covers the Sales and Acquisition part of business strategy.



Roman Slavik


Infrastructure Techie

Romas is experienced specialist in systems administration and information security. In Smart City Enterprise project Roman covers administration, our domain network and webs management.


Aiman Shulenbayeva


Chancellor

Responsible, diligent, accurate and motivated individual with good organizational and analytical skills. Aiman covers on the project the organisation part and media network management.


Nick Hebert


Advisor

Nick is a 10+ years experienced data analyst with a very deep senses for a proper business intelligence setup and operations. Nick support our project in areas od social network and data mining robots architecture and configuration.


Martin Husak


Advisor

Martin is an 8+ years experienced crypto analyst who supports us through a consultancies about the market behaviour and common practices.



SolnceRa


3rd Party, but still a part of the Team

SolnceRa is the design studio with powerful ideas to delight even the most demanding clients, like our CEO who strictly declines lowering the quality levels. Artur, Alexey, Sasha - the heart of the SolnceRa


Lanast Co.


Our colleagues

The non-executive part of the Smart City Enterprise project is covered by our colleagues employed in the Lanast Co., s.r.o, Czech Republic.


10. STRATEGY

The strategy of Smart City Enterprise project is to create sustainable brand that covers all the usual information channels related to Smart Technology. Around the brand we develop a network of sales and information portals. Following sections briefs you about the project strategical goals and plans.

10.1 VISION

This vision depict an ideal state of our company plans. Every goal, strategy and tactic in the plan align with this vision.

The vision of the Smart City project is to create global information, education and sales network for Smart Technologies. Create branded encyclopaedia that will serve valuable information in form accessible from amateur to professional audience by its unique content. Create cheat-free blockchain based tendering platform with LifeBar technology rating that become an analytical tool for further Smart City effectivity research. Support these solutions by mass marketing across all communication channels and social networks. The vision of the project is to become valuable player on Smart Cities implementation and development and one of the main project mediation service.

 

10.2 GOALS

Goals are the crucial results that we need to reach in order to achieve our vision. Begin by describing the long-term goals that are aligned with CEO's personal goals. Secondly, we list the short-term goals that we need to achieve in order to reach the longer term goals.

10.3 POSITIONING

The position we aim for is formed by external factors such as market trends, competitor positioning and internal factors like the strengths and weaknesses of our organisation. Strategy determines how our marketing is conducted to know and appreciate our unique brand position.

The project fills the gap on the market caused by the information mess. Market has missing a conceptual aggregator of projects focused to Smart Technologies. We will serve our business consultation products in the mood of lucrative offer and we will act in ecology goodwill.

The initial focus will be based of brand awareness. Brand will creates information noise by mass marketing and based of noise will be further sold out professional main tender products, or secondary marketing products. 

The brand is the key to differentiate ourselves from other consultancy companies. For example: if we come to the client that we are Smart City Advisor, we will be one of thousands other integration companies. If we come that we are that owner of the biggest online encyclopaedia of Smart technologies, we will take client's focus and continue with our integration consultancy services.

 

10.4 OFFERINGS

Our offering encompasses the entire package that surrounds our product and services to create value.

 

TENDERING PLATFORM - Blockchain based Tendering platform for Smart Technologies. Back-end run as Sales performance tool with CRM on front-end. This platform connect clients, process their project bureaucracy and contract. Clients may be both tender participates - buyer and seller, I act as a mediation node.

TENDER PRODUCTS - Tender Products is set of services that mediate and help to client apply his solution in tender. Product mix offers mix of professional services from the simple handing the bueraucracy part of tender, through proactive pre-sale services of clients solution, up to the deepest services that include the creation of necessary product documentation. (for example RFP - request for purchase). Our clients may be both tender participants.

BASIC TENDER PRODUCT - Basic tender product will be a tender application guide/advisor. This product I will use as the main Lead generation tool. Client is a small to mid-size company - supplier or producer of smart technology.

COMPLEX TENDER PRODUCTS - Complex tender products portfolio cover business development services like - Marketing & Promotion, Sales, Legal, Project and IT. Clients may be both tender participates - buyer and seller, I act as a mediation node.

REPORTING PRODUCT - Report product portfolio covers market research and business opportunity reporting. Similar to Deloitte, KPMG, or IDC, but strongly targeted to smart technologies only. target client is a small to mid-size company - supplier of smart technologies.

 

11. SALES STRATEGY

Establishing a sales strategy is typically a continuous cycle of experimentations, learning and fine-tuning. We’re a B2B facing brand. The main objective of a sales strategy is to efficiently qualify and convert leads into revenue. 

The sales strategy directly depends on the brand. We would like to take an attention to get noted by client by design first and keep his interest read more. On the beginning we would like to focus to Russian suppliers who are able to cover all needs of Smart Solutions, often for much lower price than western companies. As of now we catalogue 280+ companies on the market that we would like to work with on the beginning.

Sales model is set on direct and indirect. Indirect is client's self-operations on the tendering platform for fee to access needed data. Direct is selling our products through digital marketing. We generate a tender product and focus to generate leads based of this product. When we will note some action from client side, we will use common sales procedures.

As the main motivation for sales performance we will use gamification process implemented in Sales Force tool along with the communication tool based of Facebook Workplace tool (Facebook for business). The whole sales operations process is cloud based.

 

11.1 REVENUE MODEL

The framework of steps that will convert our company’s assets into sources of revenue in a sustainable and profitable manner. The sources of revenue and the key steps involved in the entire customer transaction, along with any associated suppliers, partners and intermediaries.

 

11.2 PRICING STRATEGY

Pricing strategy of our products is based of market factors. Prices are calculated based on usual pricing of similar services made by companies in-house. Our main advantage of setting lower price is direct focus to concrete technologies. We focus to mass of similar products that allow us not starting from beginning on every contract.

We calculate the time that is necessary to spend by standard - middle quality class employee for particular job. For example, following calculation show the calculation of activities that needs to be done by employee to make our the basic product. 

 

12. MARKETING STRATEGY

While options abound, the decisions of strategy and tactics for reaching our target market align with the company’s short and long-term goals – determined by what drives the highest returns most efficiently. Following methods that we will employ to grow awareness, drive traffic, and motivate the buying funnel.

Project has identified the unique type of promotion based of Encyclopaedia. We created a unique design based of psychological aspect of brain. After first touch with our design elements, our audience will remember the style and later will easily/immediately recognise the brand.

As the main promotion tool we will use digital marketing. We split our the business audience into two main segments. Buyers and Sellers of Smart Technologies. We will use different campaigns types to reach an important volume of audience to impact the market.

 

12.1 TARGETING TO BUYERS

Buyers, or tender creators needs to be reached through a social networks and e-commerce. We split target audience into these categories:

 

12.2 TARGETING TO SELLERS

Sellers of Smart Technology should be reached directly by e-commerce only. The probability that they will react by social network advertisement is very low. That's why we decided to apply proactive campaign. We collected a catalogue of smart technology suppliers that we will manually link to tenders. We will prepare customised product exactly for the particular supplier and contact them case-by-case, one-by-one.

 

12.3 GENERAL CAMPAIGNS STRATEGY

Marketing campaigns will be indirect. We will not acquire through the direct attention to our services or tendering platform. The campaign will go through the Encyclopaedia promotion that will route the client to the correct part of business direction. Campaign are planned per following plan:

 

12.4 LOYALTY STRATEGY

Those with strong bargaining power (i.e. low competition) may not to have to worry much about customer loyalty, but the majority of companies will want to keep a close eye on their loyalty rates in order to grow profitably.

Typical objectives for a loyalty strategy is retaining more customers, increasing customer lifetime value and increasing repeat purchases. Strategies may include improving perceived customer value, satisfaction and trust. Marketing programs such as loyalty rewards are typically used as part of a loyalty strategy, but the most critical factor is high customer satisfaction. Satisfaction is also relative to customer expectations while interacting with your brand. 

Project plans to support the loyalty program by various options. As the first will be routine process of NPS measurement. We will control on routine basis customer satisfaction with services and ongoing improvement. As the second, we plan to make discount system for subscription prolongation or repeating consultancy service usage.

The last part of the loyalty system depends on usage of blockchain token for buying our services. This is an open point and will be further evaluated. The main risk of the program is technology regulation that's direction is unclear now.

13. MILESTONES

14. FINANCIALS

Financial projections are at best well-informed guesses. The plan will be continuously measured against actual results and adjusted as reality crystalizes. Section describes projections created and the key assumptions made along with their data sources explanation.

14.1 ASSUMPTIONS

The financial plan covers 6 years of business development and 3 years of business operations. The break-even point is scheduled to April, 2022 - the 41st month of project duration. Project forecasts ROI 33,2% with a Net Profit of €11 987 179 at the end of 6 years of project duration. After the stabilisation of development and moving project to operation stage project forecasts 30% of Revenue growth with a 3% of Cost of investments increment for annual period.

Project funding will be covered by hybrid currency model. 20% of the project - the core business processes will be covered by fiat currency investors in amount of €2.190.512. Project forecasts 6,3% of Investment return for annual period. After break-even, the shareholders will be paid by dividend 12% of net profit share for 5 years period after break-even point. The total dividend amount for 9 years of project duration forecasted to Profit - €11 410 548. The limitation of investment is set to 2 ventures or single investors.

A continuous financial support of the project will be covered by crypto currency investors by CITY token smart contract. Project distributes to crowdsale 1.643.609.281 of CITY tokens with a power of 51% of the Net profit share. The minimal amount of investment is a crypto currency equivalent of €2 006 per 1 investment position. The equivalent price is dynamic based on crypto-currency market movement. Project forecasts an long term investment return in amount of 298% per 1 investment position. The limitation for crypto investors is 4369 investment positions. Exit strategy for CITY token is in conversion by authority to legal company share.

 

14.2 REVENUE PROJECTIONS

Monthly revenue and gross profit projections for the first year of the plan.

The sales kick-off to full operations of Smart City Advisor is planned to March 2020, although the first significant revenue is forecasted earlier, on February 2020 due to off-line sales activity planned during the process configuration. The Net Profit is projected after the Break-even point planned to April, 2022.

 

14.3 INCOME STATEMENT (P/L)

The Income, or Profit & Loss (P&L) Statement, provides insight into the company's sustainability. Information is provided for revenue, expenses and costs to determine profitability and return on investment.

 

Long term projection is forecasted based of 30% revenue growth with the stabilised operations processes. 

 

14.4 CASH FLOW STATEMENT

The purpose of the Cash Flow Chart is to provide management with a closer view of the source of cash inflows and how cash is being used regarding operating, investing and financing activities.

Financial plan is set based on average prices for the particular budget segment. Following chart describes the total budget allocation to the main Smart City Enterprise project. Project optimally keeps a balance of proportions between operating and personal expenses with the rest of operations, promotion and services cost on 3/3 level.

Further focus is on the deeper budget allocation in time for a budget areas. As an any mature project, Smart City Enterprise's project has kind of story behind that relates to the particular project phase and budget parts. Following management details to usage of all parts of the budget. 

 

14.5 PERSONAL EXPENSES

Personal expenses have on the first two years almost exponential trend due to the massive hiring of content operations staff. Later, after four years of project operations, about 85% of technical, operations and managerial resources should be on-board. After the 5th year project operations the growing trend will stabilise. The company plans the growth of personal expenses up to 2,2% per annual period. 

 

14.6 MARKETING EXPENSES

The company expects for the first 4 years exponential growth of marketing and promotion expenses which will peak during the first 2 years of sales operations. Then project plans to stabilise the situation with marketing expenses and the company will operate in boarders of 950 000 EUR per year as a maximum value planning to invest to promotion and marketing related services.

 

14.7 INFORMATION TECHNOLOGY

In area of Information Technology the company is quite stable from the beginning by using a cloud services. Project forecasts to not use own physical infrastructure for at least 5 years of operations. After that period the company is expecting massive growth by including new products to our catalogues and plans higher activities with blockchain tendering platforms. The company expects that the databases volumes growing twice of IT expenses after the 5th year of the operations.

 

14.8 TELECOMMUNICATION & POSTAGE

Project expects minimise telecommunications which is connected to personal expenses. Along with recruitment operations project will keep on minimum level of the  telecommunication and data consumption expenses by usage digital and cloud services and platforms. Another aspect of expenses that we would like to keep down are expenses for printing services by usage of digital certificates and paper-less processes. After stabilisation project plans cost increment up to 3% per year after 6 years of operations.

 

14.9 OCCUPANCY

Project plans a 3 waves of planned office reconstructions during the 6 years of operations. Project plans twice moving to the new office and its reconstruction. The company also calculated the version that will rent sufficient office size in the beginning, but this approach become 29% more expensive than version with moving office. Reconstruction driver: 11 euro per square feet for the reconstruction costs.

 

14.10 PROFESSIONAL SERVICES

Project is quite comfortable during the 5 years of operations. After kick-off of mass sales services project forecasts a huge increment of the services, especially due to audit expenses. The third part of auditing services or driver for the rate will took from 0,7% to 1,2% from the profit which is the matured cost driver. The company took in average 1% of the profit for the budgeting auditing services. This trend should slow down by payment setup for auditing services not based on profitability level but based on fixed-fee, with commitment for 3 years fixed price for the audit services.

 

14.11 DEPRECIATION & AMORTISATION

The depreciation and amortization project keeps on very low level due to running most of the operations and infrastructure on cloud services. As a company assets project  counts common employees tools and office stuff. The intellectual property is not calculated in assets due to impossibility to estimate the price yet.

 

14.12 TRAVEL EXPENSES

Travel expenses growing exponentially with development and growth of the sales network during the first 5 years. Project forecasts the higher traveling cost on the beginning, during the making the contacts and promoting services across India. Business trips volume is calculated by cost drive based on sales and executive staff count.

 

14.13 OTHER OPERATING EXPENSES & TAXES

The operations expenses are on very low level by the beginning project's operations by freelancers not physically presented in the office. The 3rd year of project operations, with office open and hiring the sales and product management staff, the operational cost will grow up. After the break-even point costs grow up significantly due to the income taxes grow up in line with the employees volume and sales volumes. The tax part is a flexible value. Project does not have sufficiently experience resource to effectively manage international tax flow.

 

15. FUNDING

For those seeking funding, list all past, present and future funding rounds. What are the requirements for entering and how will the funds be used. It is important that the founders and stakeholders be aligned with their long-term goals for the company. This chapter describes the future exit strategy, whether it is to be acquired by potential buyers, debt repayment, or staying private for the long-haul.

15.1 FUNDING PLAN

Project plan covers the core part of the project funding by fiat currency in yearly funding rounds and operational continuous project funding by crypto currency. We expect the maximal amount of two fiat currency investors and opening 4369 investment positions for crypto currency investors.

* The interest rate, debts and income relates to Fiat currency investment only. Crypto currency return is only in form of the Dividend described in the chapter Exit Strategy.

 

15.2 BREAK EVEN POINT

Following chart describes the planned investment and revenue represented in time. The first regular revenue we forecast on April, 2020 and project break even is forecasted to April, 2022. Smart City Enterprise will operate with a different financial strategies with the focus to maximally sustainable business model.

 

15.3 EXIT STRATEGY

Venture capital investment will be returned by scheme with 6,3% of interest rate. After the Break-even point investors has get rights to profit share in average amount of 12,0% of Net profit Share, starting on 21% of the first year and ends on 3% the 9th year of project duration. The total return of investment is € 11 410 548.

Crypto currency investments will be returned in form of Dividends after conversion of CITY token to company share by legal share certification authority. The first dividend will be paid after break-even point, planned on April, 2022. Project forecasts an long term investment return in amount of 539% on 9th year of operations.

We plan to setup 50/50 strategy of the funds management and plans to develop a hybrid-currency money management model. We have developed a secured scheme to transfer part of the crypto-currency to fiat currency that will be used for development of the Smart City Enterprise Project and setup the proper company operations.

To safe our investors and decrease the regulatory risks of financial crime by transferring amount from non-regulated to regulated market, we have developed a special process. This process will save the project and company from the legal issues in case of government regulation of crypto currencies exchange or any other crypto-market related regulation.

We will create a secure fiat account where will be stored reserve in value of 30% of the transferred money. This amount is a security reserve in order to be ready for regulation. The company understands that no one should give you taxes after the fact, but we are in a current world legal principles - anything can happen.

On the day of project will receive the funds to the company account, company shareholders will sign a certified document from the lawyer, in which we will explain how the company received the funding, what was the process behind and include the valid business case of the project that will coincide with the financial part. Document also explains the fact that the government at the moment does not understand crypto currency and does not regulate crypto transactions and does not know how to regulate it, is not a problem of the company.

Reserve these 30% of the money on the account linked to the document will assure, that Lanast Co. accepted to pay this tax (signed on the date of money received), but government and financial institutions are not ready to accept it from process perspective. This will be an afterthought, notarially completed, and defending company from the fact of the tax authority issue.