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Dream Business: Umbrella Everywhere
Although there is various weather forecasts nowadays, they are sometimes not so precise. The weather is still like a baby - sometimes likes to cry and sometimes is placid. It is so hard to predict accidental rains and how long they are going to rain. People often forget to bring umbrellas with them on some sudden rainy days. If they always carry an umbrella in bags, it will be very heavy and room-taking. It is a problem of inconvenience of basic utilities on regular days. Furthermore, since some people actually have excessive umbrellas at home but just do not bring them, it is really wasteful and superfluous to buy new ones.
As a student in high school, a lot of my classmates are also facing this problem. Some of them often discover that it is raining just before exit the subway; others are trapped by the rain in the classroom building to have a meal. What’s more, after umbrellas are used, they are so wet that they must be open to become dry. Open-umbrellas in the hallway are not delightful which are hindrances of walking. Many umbrellas there are also mistaken or got lost. Therefore, umbrella problems widely exist on rainy days.
In response to these problems, a probable solution is to set automatic machines with umbrellas beside bus stations, the subway exits, building gates or other places in need, especially transitional places from indoors to outdoors. In this way, if people suddenly discover that they forget to bring an umbrella or they merely do not want to bring one, they can quickly borrow one in the machines. Since those machines have QR codes which allow people to use phones to scan and pay, it is really convenient and accessible. When the borrowed umbrella is replaced back to any of these machines, the payment will be automatically deducted. The more time an umbrella is borrowed, the more money it will be. After the wet umbrellas are returned, the water will flow down to the bottom of the machine and then the umbrellas will become dry again which can be borrowed again. Therefore, this solution can effectively solve the problem of not bringing umbrellas as well as the inconvenience of wet umbrellas to carry. Our umbrella service is called Umbrella Everywhere. Because we provide umbrellas in many places including subway exits and building gates, it’s like umbrellas are be with you everywhere and anytime. Our aim is to pass warm and convenience which makes umbrellas accessible and everywhere.
There are two real companies that closely relate to our service.The first company is rent the runway, a clothing renting company especially for women. We visited this company’s official website and found that this company provides various kinds of apparels for different occasions. People do not have to buy those expensive clothing but only need to rent them for special days. Our umbrella company’s general idea is similar to rent the runway, which is to make it more convenient for people that can prevent them from buying superfluous umbrellas just as people don’t have to buy unnecessary clothing which only are needed to wear on several days. The second company we researched is ofo, a bicycle sharing company. We also visited its official website. It spreads all over China, and people can register as users which allows them to borrow bicycles when it is needed. There are intelligent hardware installed on the bicycles that ensures the safety. Our umbrella company is similar to ofo because we also installed simple GPS system on umbrellas. The whole borrow-and-return process is similar, too.
There are many costs to consider. The first type is the natural resources: the land of umbrella factories and machine factories(fixed cost, about 10000RMB per year); plastic, steels and other minerals to produce umbrellas(variable costs, about 40000 RMB); electricity(variable costs, about 1000 RMB per day). The second type is labor: umbrella-making-labors, who can be adjusted because sometimes umbrellas are enough, but sometimes some umbrellas are broken, so new ones are needed to produced(quantity about 20 people, 4000 RMB per month); machine-repairing-labors (quantity about 10 people, 3000 RMB per month). The third type is capital: umbrella-storing-machines (variable costs, 1000 RMB per machine); umbrellas (variable costs, 20 RMB per umbrella); offices (fixed costs, rent 5000 RMB per month); and factories (fixed costs, about 200000 RMB). The forth type is entrepreneurship: the ability to Asking for sponsor support(variable costs, about 2000 RMB); the opportunity cost of doing other business(variable costs, cannot be determined). To sum up, value of Total Fixed Costs is about 500000 RMB; value of Total Variable Costs is about 300000 RMB; and value of Total Costs is about 800000 RMB.
The market price of normal umbrellas is about 20RMB. However, we don’t sell umbrellas, but lend umbrellas to others. So the price for lending once cannot be too much. Our main customers are people who have daily routine to travel such as workers and students. Since they often take bus or subway for transportation, we consider that base on their psychological feelings, the price to lend an umbrella once would better be similar to the amount of their transportation. In this way, the price is reasonable and affordable. We charge 20 RMB initially, but return 19 RMB to the lender when the umbrella is returned. We use this price because the market price of per umbrella is approximately 20 RMB. Lending an umbrella, people do not want to pay very much since they only use once. Therefore, 1 RMB is not too much which is quite near to the money to take subway once.
Our company is a non-profit organization which aims to offer commonweal to the public. The government will support us with a certain amount of fund to maintain our business. What’s more, we also need to find sponsors for further money to develop. Possible sponsors are companies which need to advertise their products. They support us with a portion of money and then we print some advertisement on umbrellas to help them advertise.
Our production process is more modern because on our umbrellas, we install GPS system to determine where is the nearest station of umbrella machine in order to let consumers more convenient to return. Traditionally, umbrellas do not have GPA system. Our production is a new breakthrough. We will operate on the regional level. Firstly, the range is too broad if we operate on higher level, and it will have too much trouble to transport the umbrella machine to farther places. Regional level is easy to operate and control. If some of the machines have some problems, the repairing workers can easily get to those places in a short time. If some places have few people wanting to lend, it is easy to move machines to other places where umbrellas are needed.
From the psychographic prospective, we mainly focus on people who have daily routines to go to work in the morning and go back home in the evening such as students and office workers. Those are people mostly likely to pay to borrow the umbrellas because they have to travel a lot on weekdays between workplace and home, which increase the opportunity to expose to rainy days. They certainly do not want to carry umbrellas all the time which add burden to their bag. They may leave their umbrellas at home, at school or at workplace. Lending an umbrella is the best option because it can also save the trouble to dry the umbrellas.
Our company is a nonprofit type of firm.Here are the main reason we chose to pursue this type of business. A nonprofit is started to “serve a worthwhile cause” (Legalzoom) .The “Umbrella Everywhere” project seek to provide convenient umbrella services to Guangzhou citizens, which free citizens who forget to take an umbrella from waiting anxiously on a rainy day. Such a program can make people’s lives more convenient, improve citizen’s sense of happiness and well-being, and contribute to outlook of Guangzhou as a civilized city.
The advantages of our Umbrella Everywhere business are definitely obvious. Firstly, a nonprofit business can get grants from government agencies. “Grants in the form of cash are given by the grantor (a foundation or government agency) to the grantee (the non-profit) to be used for specific programs or in some cases, for unrestricted use (Bostwick).” Specifically, grants are “used to fund cultural or recreational programs for city or state residents (Bostwick)”. Our “Umbrella Everywhere” project promotes the Guangzhou city and improve citizens’ well-being; therefore, it can get official grants and donations from government agencies if it is a nonprofit business. Secondly, a nonprofit business program is eligible for state, federal and certain other income tax exemptions (Legalzoom). Therefore, a nonprofit business can operate at a lower cost.
However, disadvantages also exist in this type of business. Firstly, a nonprofit business need to disclose a very clear check of records. The government agencies or donators would want to see how the money is used as well as the results of those money being used. Therefore, a nonprofit business needs to be always ready to make its financial records public. (Fritz) Secondly, a nonprofit needs to operate based on certain restrictions and standards. For example, it must meet IRS requirements to be a 501c3 organization to apply for government grants and tax exemptions (Legalzoom).
What’s more, if we weren’t this type of business, our second type would be a cooperation. The reason is that a cooperation is regarded by law as a single entity separated from its owners. It can raise funds in the form of stocks, and it can also sell the rights of ownership in the form of stocks.
In conclusion, our business is a project that aims to offer welfare to working people as well as any pedestrians. People only need to spend little money to get convenience on rainy days. We hope that no one will ever suffer from the pain of the restriction of rain.