Caladrius Entrepreneur

The Magazine by Professional Entrepreneurs for Professional Entrepreneurs

Feasibility Study

Dr DM Phofa

March 2020

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Table of Contents
1. Introduction 3

2. Product Viability 4

3. Technical Viability 6

4. Business Model Viability 8

5. Market and Marketing Viability 9

6. Management Model Viability 11

7. Economic and Financial Model Viability 13

8. Business Analysis Techniques 15

9. Conclusion 16

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Introduction
1. The Genesis of the Idea
In the recent months a group of professionals predominantly from the medical and health
environment came together with the aim of creating syndicated economic vehicles for creation
of wealth. These individuals, majority of which come from economically disadvantaged
background decided to pool their financial resources together and invest as a unit called
Caladrius Holding Investments (CHI). Some of these individuals are already in businesses and
there is a need to expose and showcase them not only among the group but also to the external
markets.

Furthermore, there is also a great need to communicate what happens within the group, either
from its management to entire membership or among the membership itself. This
communication may be in the form of information dissemination, announcements, educative
material or advertisements

It is also our belief that the electronic magazine will serve to earn additional revenue for the
group.

2. The Product
The Caladrius Entrepreneur (CE) is an online magazine produced periodically. The theme and
content represent the vision and mission of CHI. It is wholly owned by CHI and will remain
intellectual property of CHI

3. Target Market
Our target market is any person, especially professionals who have interest in advancement of
economic wellbeing of particularly previously disadvantaged individuals, that shares successes,
ideas and information that seek to advance wealth creation and economic emancipation of the
previously disadvantaged groupings. These markets may take shape of academics, stokvels,
companies, religious groupings, government departments and state enterprises and any setup
where individuals aspire to improve their economic status and that of the country

4. Location
This is an online magazine and there is no need for physical office. It is web based with content
management system login keys held by the editor Dr Phofa, CHI marketing officer Dr
Mutshekwane and Sales Manager Dr Pallo Marumo.

5. Set-up Cost
To produce a prototype magazine, it will cost R2000. The first real-time issue is estimated to cost
R20 000.

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 6. Running Supplies
Much of the articles/magazine content is generated by membership and freely supplied to the
editor’s desk at no cost. There are technical design, layout and editorial on-line programs that
we will require to ensure best quality and maximal market penetration. These are programs like
Publitas, QuarkExpress, etc and we will need to acquire them as and when we proceed

7. Cash flows
We anticipate that CHI will fund publication of the first two issues. Subsequent issues will be
self-funded through revenues accruing from subscriptions and advertisements

8. Profitability
We are convinced that the magazine will break even in the sixth month of publication and
expect huge profits from subscriptions and advertisements

Product Viability
1. Description of the product
CE is an online magazine owned and produced by CHI to showcase and enhance exposure of
member businesses. It is a tool for CHI management to communicate their programs and
progress to their membership, inform and educate members on various business and
investment alternatives and generally as a medium for members to communicate with each
other. It is also an instrument to facilitate professional entrepreneurs when making decisions to
invest.

2. Limitations of our product

This is a technology-based product which requires expertise in programming. Furthermore, in
order to maximise on revenue collection, extensive marketing and marketing know-how are
important requirements. These skills are very scarce among group members who are moreover
already burdened with their normal daily economic activities for subsistence.

The magazine can only be distributed via electronic channels and therefore only accessible to
those with smart phones or computers which need data to connect.

3. Concept Testing
We intend to produce a prototype issue, which will be distributed to CHI Executive, CE staff and
CHI membership for critique. We will subsequently produce the first real time issue which will
contain real articles and advertisement. This will be our main marketing tool to reach out
broader market via social media, emails and blogging

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4. Usability Testing
The first issue will flight advertisements from group members’ businesses for free. These
advertisements will take various forms like links, native advertising and video advertising. This
issue will be distributed using emails and social media with links. It will also contain real time
advertisements. It will also have other useful and revenue generating features including Blog,
Instagram feed, subscription functionality, currency switcher, the chat box, online booking
features, and real online store. All these will help us test the usability as early as possible with
fewer traffic and ready us for big things to come

5. How our Customers will use our Product

There will be a link through which our customers access our magazine. Here access will be
limited to only headlines and very few articles. The client will have to subscribe (minimum 6
months) to gain login details to the full magazine. The password for full access will be provided
to customer’s email address or cell phone once payment has been verified. Instagram, blogging
and chat box will be accessed without full subscription

In the immediate future, we will develop a cell phone application to allow subscribers to access
our magazine on their mobile devices

6. Supply Sources
Articles will be solicited mainly from CHI members. Other educative and informative articles will
be sourced from market experts from time to time. This will be in exchange of advertising space
or limited free subscription or access to archived issues

7. Range of Services/Products
CE will offer a wide range of services that include regular features (Editorial, Chairman’s Desk,
Investment and Finance, Tax Issues, Travel and Leisure, Property Investment, Farming News,
ABC of Stock Market, Law and Business, Exports and Imports, Health and Fitness Issues,
Technology and Innovation, How to Articles, Black Luminary Profiles, CSI Projects, Current
Affairs, Professionals Social Space, Transport and Logistics, Franchise Business and Humour).

We will also incorporate advertisements in different forms (Videos, streaming, links, native
advertising)

We will have blogging and all social media handles

A facility for mass emailing will be developed

An automated chat box will be incorporated

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We will develop an on-line store to sell physical and electronic merchandise to raise more
revenue for CHI

A feature for selling tickets online will be incorporated

We will use trusted payment mechanisms like Paypal or Patreon

A feedback feature will be installed for customers to comment, critique and commend our
services

8. Patent and Protection of Intellectual Property

CE is the intellectual property of CHI. CHI will within a reasonable time take steps to register
copyrights and patent the CE brand in its name. This is expected to happen as soon as CHI has
assumed a corporate image as a trading vehicle and is itself properly registered with relevant
authorities.

9. Building Brand Identity

This is the outward expression of a brand that includes its trademark, its name, communications,
and visual appearance. It is our colour palette, our logo and infographic style, and our ethos. It
talks to our strategy, our core values as CHI. Our tagline is “a magazine by professional
entrepreneurs for professional entrepreneurs”. These entrepreneurs have unity in purpose,
solidarity, social economic emancipation, ubuntu, transparency and honesty as underpinning
values. The magazine will reflect all that both through its content, communication, theme and
tone

10. Value Proposition

Professionals are the intellectual fountain for every society. They create knowledge, they turn
information into a tangible useful product or service. They drive all sectors of the economy. It is
important to put a tab into this think-tank and harness their ideas into useful solutions to daily
challenges confronting our economy and other societal problems.

This magazine is a conduit between this think tank and the broader society, it is a link between
the state and the poor masses, and it sets the pace for social economic emancipation and wealth
creation for the historically downtrodden. It is a pacifier towards unity of the economically
marginalised in a quest to create lasting solutions to generational poverty

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Technical Viability
1. Technical Imperatives Needed to Operate
We have a choice of finding a programmer with relevant expertise and resources to design and
produce the magazine on our behalf. Such person will create all features we suggested above
while we as CE managers can create and edit content.

Typically, an online magazine requires certain programs for editing, typesetting, and layout.
These programs are available for sale on-line but still require requisite skills to operationalise
into a professional product. A lot of training is required to obtain those skills

We have a working agreement with TAC Studios who will provide us with a prototype magazine
and do our first publication. Should the CHI executive agree with their terms and conditions we
will have an extended contractual agreement with them for at least one year until we have our
fully trained and competent in-house staff

2. Prototype
TAC Studios will produce the first prototype by Thursday 26 th March. This will be circulated
among the leadership of the CE and CHI and its membership for critique and input. From here all
comments and inputs will be used to develop first real time issue of CE magazine

3. Product Testing
The first real time issue of CE will be circulated for free among the entire membership of CHI,
other fraternal magazines as well as over 1000 potential advertisers and solicit their comment
and criticism. It will also contain the “Write to Us” section and a critique portal for potential
subscribers and advertisers to leave their comments and criticism.

We will harness and use all this vital information to prepare the second issue, which will go
commercial.

4. Upgrade Plans
Although we will aim for the best that can ever be achieved from the onset, keeping pulse on
new innovations and adopting new methods of market penetration will always guide us to
maintain the highest quality possible

5. Ongoing Technological Research

Technology evolves every minute and new innovative ideas crop up all the time. We will always
put our ear on the ground to look for better and efficient ways of doing things. To this end, we
shall endeavour to subscribe to other magazines with similar business strategy, blogs that talk
about latest technological innovation as well as new programs and applications.

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6. Operational Premises
The magazine is virtual, and each staff member will work from the comfort of his/her home. All
meetings will be held virtually. Only when there is a compelling reason for physical interaction,
affected team members will use CHI headquarters as a meeting place

7. Infrastructure/Resources
 Location
As previously mentioned, CE is a wholly online business and does not require
physical space to operate. The intellectual property of CE is held by CHI and its
members and any benefit that accrue from its existence belong to CHI and its
members
 Staff
Certain expertise is required to produce a magazine with quality content and
professional layout. Some of the expertise required include:
 The Editor
 Writes (Two)
 Sales Manager
 Marketing Manager
 Publication Manager
 Programmer or IT Specialist
 Training and Development
CE will ascertain that all staff members have at least a basic skill in programming. To
this end, CE will be making a request to CHI leadership for funding to undergo on-
line programming course with University of Cape Town. For the future, a
qualification in programming will serve as one of the conditions to serve as one of
the staff members of CE
 Systems Control
The magazine editor, Dr Mutshekwane and Dr Pallo will hold log in keys to content
management system. These keys are the sole property of CHI and CHI reserves the
right to grant or withhold permission to anyone to use the keys
 SOPs
To make sure there is smooth and seamless processes of magazine production, a
standard operation procedure that outlines procedure to be followed to produce
each issue will be developed and be availed to all staff members. Some of the SOP
will cover:
 Code of ? among Staff members

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  Reporting
 Dispute resolutions
 Etiquette
 Command

Business Model Viability

1. Description of Proposed Model/Revenue Generation
Several revenue streams are envisaged and will be implemented as per feasibility and good
business sense. These include:

 Subscription, which we expect to peak at 50 000 in three years

 Advertising, including self-sourced advertisers and Google Adsense advertisers
 Linkages
 Ticket sales
 On-line bookings
 On-line store

2. Value Proposition
The end user (subscribers) and Advertisers will benefit immensely from this magazine

a. Subscribers
Through its content that informs, educates and entertains, subscribers will benefit from
gaining knowledge that is well researched and credible. They will also benefit from articles
that teach people on a wide variety of economic decisions like how to invest in stock market,
how to choose from a wide range of franchise businesses, how to draw a will, how to keep
fit and healthy, how to plan affordable and most memorable holiday, etc. There will be light
and humorous sections to entertain and destress professionals
b. Advertisers
Advertisers will get access to a relatively homogenous group of professionals. This is a
captive market that is difficult to access at one go and those businesses wishing to expose
their products and services to this sector of the market will benefit tremendously. Examples
of advertisers to benefit the most are banks, investment houses, stock market, state
enterprises, government departments, pharmaceutical industry, medical aid industry,
import and export industry, agriculture, construction and retail markets

3. Sustainable Competitive Advantage

 Product Differentiation
CE occupies a niche that is not easily accessible by any market. It is a product of
professionals in business for professionals in business. It enjoys a unique audience of

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 professionals who have already organised themselves into a homogenous group of
investors, tied by a common vision of wealth creation and braking frontiers of
generational poverty among the previously disadvantaged society. For this reason, CE
has already received unwitting reception from this unique, yet highly influential group of
society
 Sustainable Competitive Attributes

Market and Marketing Viability

 Our Target Market
Our target market is anyone or entity that has interest in business, particularly those
who want to advance programs geared towards uplifting and creating wealth for the
previously disadvantaged societies. We therefore identify corporate executives, small to
the largest sized enterprises, leaders in state enterprises, local, provincial and national
government and departments, all professionals aspiring to create businesses and wealth
as well as academics as a core of our market
This market is largely untapped and has vast growth potential.
 The Industry
With the rapid technological advancement and innovation, the fourth industrial
revolution, robotics internet of things and programming, it will be futile to stick to old
methods of information dissemination like print media. Electronic communication is an
imperative requirement, able to reach all corners of the world in an instant. This is an
industry with infinite expansion and opportunities.
 Competition
The worst competitor in this business is us. Failure to create a quality product with
market relevant features as well as failure to reach all crevices of the market will
determine our failure. The market is vast and unlimited and only us are to blame for not
reaching it. There are a few magazines with the same target market, but most are on
print and are imposed rather than owned by the market
Although costs to initiate a project like online magazine are not so prohibitive,
technological know-how, access to market and economies of experience may constitute
formidable barriers to market entry
 Marketing and Sales Strategy
 Presentation
We will ensure that we deliver a magazine that is both elegant and professional,
always harnessing all available technological advances to create a product that is

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 hard to ignore. We will create state of art advertisements with 3-D pictures,
videos and animations. Our articles will be indexed and permit access through
indexed link
All our content will be thoroughly researched and authenticated
We shall adhere to all ethical publishing standards and obligation
 Delivery
Our magazine is wholly electronic, delivered to all its online destinations
electronically. The costs for such distribution are infinitesimal
 Distribution channels
CE will be distributed through all social media platforms; the Instagram,
Facebook, Whatsapp, Twitter and Linked-In. We will also reach our customers
through mass emails and blogging
We envisage to create a cell phone application as soon as our first issue is in
circulation
 Retention Marketing
CE will be featured with a chat box for our clients to access us in person. We will
also have a “write to us” feature where clients can send their critiques or
whatever information they want to communicate with us.
We will employ various strategies to offset customer attrition.
 Pricing strategy
After careful consideration of all elements that impact on production cost like
salaries, cost of compiling articles, design, typesetting and layout as well as
distribution costs, CE will consider a mixed approach in terms of pricing strategy.
This will take shape of initial penetration, probably for the first year. This will be
characterised by several price concessions in terms of subscription fee and
hugely discounted advertisement charges.
This will be applied concurrently with application of status quo pricing strategy,
whereby greater caution is taken not to arouse the lions (Competitors) by way of
benchmarking and keeping our prices as close as possible to the market trend

Management Model Viability

1. Key Functions of the Business and Responsibilities
At bare minimum, we propose that the company will have the following key Managers:

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 Writers
We estimate that we will require 2 or three writers at the beginning. These
individuals will write articles for the magazine. They will also do interviews and
act as photographers. To save costs, CE will ask for volunteers from the general
CHI membership to write and submit articles to the editor. Topics to be covered
will go along with the chosen theme for the publication but there will be about
20 regular features in the magazine
Moreover, experts in certain fields will be asked to contribute their wisdom and
knowledge in certain regular features like how to invest in stock market,
franchising, farming tips, estate planning, traveling and leisure as well as health
and fitness
 The Editor
The editor will be acting on voluntary basis and will be paid stipend just to cover
for his/her costs on data and telephone and travelling where necessary. The
editor will check all articles with the purpose of maintaining quality and
consistency. He will moderate on the tone, grammar, mechanics, reach and
scope of each article
 Sales Manager
The Sales Manager will serve as point of contact for the magazine, particularly
for advertisers. He/she will solicit advertisement from all sectors of target and
make sure subscribers and clients are happy and well informed about each
development in the magazine. We need to hire a full-time professional sales
manager for this job either on full salary or on commission basis
 Marketing Manager
This person’s job is to make sure that our magazine is known by all and sundry.
He/she is like our PRO, creating search engine ads and penetrating all social
media. She will decide which distributors are best suited for our magazine. She
will also create promotional content materials. This position is best afforded to a
free-lancer and a stipend may suffice to cover for her basics
 Publication Manager
She will get down to the nitty-gritty of the publication, crossing the t’s and
dotting the I’s. She will decide how colours look and make sure there are no
errors in the final product. At the initial stage, the Editor may usurp this
function, but a full-time paid manager is needed soon.

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  Technician
As a person with technical skills, this individual will be responsible for the design,
typesetting and layout of the magazine. He will create all technical
functionalities including the website, advertisement, blogging etc.
At the beginning, we will use TAC Studios who will bill us on an ongoing basis
until we train/hire our own technical staff

2. Future Personnel Requirements

Over and above the personnel cited above, CE will need efficient administrative staff that
will make sure all labour related matters are well addressed. We also need internal financial
officer as well as external auditors

Operationally, a few extra writers, well trained, must be sourced

3. Continuous Improvements
Continuous staff training is an imperative. All staff will be compelled to undergo technical
training in programming in the next six months. We will also start creating benchmarks and
partnerships with other similar ventures. An attempt to visit Cremer Media was only
interrupted by the corona virus lockdown and this effort will be reviewed once the situation
improves

Economic and Financial Model Viability

1. Break-even Analysis
The break-even point shows us the minimum quantity the enterprise must sell to avoid
showing a loss. In our situation it is the rand amount the magazine must generate in
revenues for it to start making profit. For us to determine this figure in CE, we need to
recognise our main revenue stream and what potentially these revenues will generate per
every issue published.

Breakeven point is calculated as:

Our Main revenue generators are:

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 a. Subscriptions
b. Solicited Advertisements
c. Google Adsense

For us to determine our breakeven point we make the following assumptions:

Fixed Costs Amount (R) Variable Costs Amount (R)

Writers x 2 40000 Telephone & 5000
Data
Editor 20000 Travelling 10000
Technician 15000
Marketing 20000
Sales 20000
Total 115000 15000

We also make assumption that our magazine will cost R15 pm, or 180 pa, and that we will
subscribe 50 000 issues monthly. Therefore, variable cost per unit:

Variable costs/number of units = R1500/50000 which is R0.3

Thus our BEP per unit will be 115000/(1500 - .3) which is 7823.13

We therefore must subscribe 7824 publications per month at R15.00 per publication for us
to start making profits

Or

We must generate R117 360.00 pm for the magazine to start making profit

Implications of this BEP

 Magazine will generate profit with only 7824 subscriptions (or R117 360)
 We estimate that solicited advertisements will generate R250 000 pm on average in a
period of 12 months
 Google Adsense estimated revenue are at R114 000.00 pm
 Therefore, estimated total revenues per month in 12 months are R481 360pm or R5 776
320 per year

2. Financial Projections
See Annexure 1 (Waiting for lock out)

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 3. Capital Requirement
The minimum requirements for the magazine to kick-start are technician’s costs, telephone
and data costs, travel costs and promotional costs for the next three months:

Item Cost (R) x 3 months

Technician 15000
Telephone and Data 5000
Travelling 10000
Promotion 20000
Total 50000 or 150 000 in three months

Business Analysis
1. The SWOT Analysis
 Strengths
 CE is owned by and targets a captive market, with great deal of homogeneity
 Owners are all professionals and are all making a decent living (LSM 7 - 10
category) with household income of more than R50 000 per month. This will
make funding easy
 No need for physical office space, therefore no rental costs
 Less barriers to access to distribution channels
 Very minor barriers of market entry
 Weaknesses
 Almost all staff members do have technical know-how and experience in the
online magazine business
 We depend on the technical skills of a single individual for layout, design and
typesetting as well as for adding features
 All staff members work on voluntary non-paid basis, therefore no incentives for
performance
 Business depends on word of mouth and social media, therefore our exposure
my be limited to crevices of the cyberspace
 Opportunities
 Vast and unlimited market

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  Google Adsense provides effort-less advertising opportunity with huge returns
 Threats
 Covid 19 and its negative consequences on the economy
 Our country is currently in a recession
 Backlash from competition
 Cost of programs

2. Critical Risk Factors

 Current Pitfalls
 Lack of skills and experience
 No budget approved for the venture
 Unknown territory
 Future Pitfalls
 Change in technology
 Distribution channels may become obsolete
 Information is fast becoming free and there may be no clients in future

Conclusion
 Recommendations
 From the overall assessment of product, technical, business model, market and
marketing, management model, economic as well as opportunities and threats
perspective, the concept of online magazine is viable and potentially profitable
 Not much inputs are required, only promotion and distribution efforts are the
determinants of the success of this magazine
 We estimate that in a period of 1 year the magazine will generate pre-tax
revenue of R5.7 million. This is doable

 Success Prospects
This project is destined for huge success. With the support of CHI leadership and cooperation
from the entire membership, the sky is the limit.

 Important Milestones
 Registration
 Name of Magazine
 Branding
 Bank Account

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 Accountant and Attorney and Tax Registration
 Networking

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