Bahrain Polytechnic

Bachelor of Web Media

WM8006 — eCommerce and Entrepreneurship

ASSESSMENT 4

Darwaza App
Business Plan & Model

201701716 Ahmed Hazeem

201701994 Zain Ali
201601131 Maram Engineer
201400750 Hashem Abdulla

1
Table of Contents

1 Executive Summary ……………………………………………………………………………………………………………………… 3

2 Feasibility Analysis ……………………………………………………………………………………………………………………….. 5
3 Value Chain ……………………………………………………………………………………………………………………………………. 7
4 Industry Analysis ………………………………………………………………………………………………………………………… 10
5 Marketing Plan …………………………………………………………………………………………………………………………….. 14
6 Ethical and Legal Considerations ………………………………………………………………………………………….. 19
7 Financial Overview …………………………………………………………………………………………………………………….. 23
8 References …………………………………………………………………………………………………………………………………… 26

2
1 Executive Summary

With the halt in the unparalleled progression of technology nowhere to be seen anytime
soon, the latest advancements in the realm of digitalisation have rewritten every way in
which consumers carry out everyday commercial transactions. From innovative and
transformative business models to industry domination, the online commercial market
has catalysed the penetration of even smaller businesses into the digital market
economy and redefined the scope of possibilities for the future of industries.

As convenience is placed at the forefront of consumer needs, with that comes the rise of
digital marketplaces that have a sole dependence on communities in order to operate.
Businesses that are running under such structures which offer on-demand convenience
services are continuously proving to be marketable, a classic and eminent example being
no other than Airbnb; who has soared its way up throning the hospitality industry
without owning a single accommodation establishment. Instead, it offers an open
technological platform which allows homeowners and locals to be able to earn
supplementary income through hosting their own spaces, with the company’s revenue
model being characterised by its simplicity and effectiveness. Indomitable giants like
Fiverr and Upwork are an accurate representation of the countless benefits of this
economy, which foster value by their provision of a convenient, friendly and safe platform
through which consumers are able to find on-demand, curated professional and personal
services for hire at their fingertips (Miller, 2019).

This phenomena, referred to as the “sharing economy,” is evolving to become the most
desirable and impactful trend in today’s industries, which is exactly where our business
idea ‘Darwaza’ fits into. Disrupting conventional business models, the combined benefit
of the absence of inventory and being collectivist in nature enables businesses under
this umbrella term to run uninterrupted. This publicisation of platforms not only increase
variety and availability of differentiated products, but also add to the affordability of the
sharing-based brands that offer said platforms—which happens to be the main values
that our business idea constantly ensures to embrace and carry out.

3
Concept Statement
Darwaza, which is traditional Arabic for door, is a mobile application that seeks to offer an
intuitive digital marketplace platform allowing for the purchase and selling of superior
secondhand furniture and accessories. The brand’s identity and app have a modern,
fresh, young and friendly feel which are suitable for the target market, which does
include individuals and businesses seeking high quality furnishing at discounted,
reasonably priced rates.

4
2 Feasibility Analysis

Product/Service Feasibility
When it comes to deliberating on the conceivability of our business idea, the mobile
application is certainly desirable to its prospective target audience in terms of its
functionality and purpose. Since it is mainly centred around providing quality furniture
with an affordable price tag, consumers would actually gravitate more towards this
concept as it would be perceived as a bargain to find the same piece of the usually-
costly item from its original store, on the condition that the piece is preowned. The
appeal of a digital marketplace service also exists due to ongoing recent trends in online
shopping as discussed beforehand. Although the rising concern for purchasing
secondhand furniture is eminent; this is alleviated through the quality assurance checks
performed by our company itself, which would be implemented consistently on the basis
of the latest health and safety standards and regulations, as well as providing accurate
information on the condition of the item built into the furniture information screen in the
app itself.

Industry/Target Market Feasibility

Consumers would absolutely be enticed for this business idea since the MENA region
does currently lack a full fledged, community-based digital marketplace application that
particularly specialises in furniture, as the trust for current competitors’ services is
relatively low which is chiefly a result of their unreliability. The Middle-Eastern audience
is also known for its peremptory and decisive attitude when it comes to decking out their
living spaces, where despite their lack of expertise in the area, most if not all their houses
are self-directed projects. On the other hand, the furnishing industry is currently seeing a
conspicuous surge in the popularity and favourability of eCommerce, especially with the
entrance of millennials to the market, where all consumers in the market whether they
are existing or new are becoming highly aware in the digital age, as they recognise the
benefits and convenience of being able to purchase their furniture and appliances from
the comfort of their home (Linchpin, 2019). Investments in this market to succeed with
our business idea is a presupposition surely not far from reality and is distinctly possible
with an outcome of loyal, satisfied customers.

5
Organisational Feasibility
The organisational prerequisites for our aforementioned business idea are frankly rather
slim, where the team would mainly require no more than management, marketing,
accounting and maintenance expertise to successfully run our business. Being a startup,
the team would consist of four to six competent employees at a maximum with their
resources to carry out the necessary tasks and responsibilities for the company. The
manager would uphold all related managerial and human resource duties, whereas the
marketeer is specialised in proficiently introducing the product to the market and be
able to make a name for our service. On the other hand, our accountant would collect
and organise the commission fees generated from the app’s sellers, in conjunction with
taking care of all other fixed and variable monetary obligations and costs related to
running the business—including the logistical necessities of the delivery service, given
that Bahrain is a small country and is practically easy to operate in. As far as getting the
application up and running, the employment of an outsourced UI/UX designer and
mobile developer would be necessary for the app to be functional. The app then shall be
maintained by an IT expert, who should be taking care of all network, database, security
and other related issues whilst keeping in touch with the designer and developer for
future software updates, possible bug fixes for the app, and should any other technical
issues be encountered as well.

Financial Feasibility
Assessing the financial viability of our business is on the basis of strategically matching
the characteristics of our idea with the most suitable form of funding and all its
calculated risks—which are discussed further later in the document. As a startup that
mainly carries out its operations digitally with virtually no products, costs can be
relatively lower than of existing similarly structured eCommerce businesses. These costs
include the design, development and maintenance of the mobile application, as well as a
marketing and advertisement budget to increase our app’s reach. The budget should
also cover office space rental with all its related equipment and running costs, including
monthly employee salaries, transport and logistics, which are all within the bounds of
being realistically attainable.

6
3 Value Chain

The value chain is essential to distinguish an effective and high-quality service or a

product. There are different procedures in the value chain, with the primary stages being
the product or service’s physical creation, marketing and sales, and the provided support
or maintenance (Porter, 1985). It has to be taken into consideration that the Porter value
chain model best fits brick and mortar firms that involve the production of tangible
products. Thus an online platform service like Darwaza does not conform fully to the
traditional way of viewing the process through which a firm produces value.

Inbound Logistics
As our business model consists of being a platform for mostly C2C transactions, the
inbound logistics will incorporate creating publicity for the application as a platform for
people to sell their furniture, as well as the actual process where the seller logs in all the
details and specifications of the furniture piece they are willing to sell. The value created
at this stage is derived from the intuitive design and analytical tools built in with the
application, which allow the average person of most age categories and expertise levels
to be able to use the application easily and list the products they desire to sell in a
simple, fast way. Meanwhile, the app collects certain queues, analyses them and
generates accurate detailed information about the product to ensure the products are of
right value, high quality and are tagged with the right categories and keywords after
which each potential product is scanned and checked by our employees to certify the
quality of our service and prevent a lemon market from forming on the platform. The
value created in this stage is captured through publicising these unique features of our
application that make selling products on it both swift and seamless.

Operations
In the operations stage, Darwaza has to make sure it connects the right buyer with the
right seller—in accordance with its business objective as a marketplace platform, in order
to maximise transactions and thus profit. This is achieved by creating and updating
algorithms that customise the products displayed and recommended for each buying
customer in order to decrease the time each customer spends searching for a certain

7
products before making a purchase, which can therefore provide a higher satisfaction
rate from performing transactions on our application. In parallel with the main operation
objectives are supporting operations, such as processing of product sales applications as
fast as possible to ensure the richness and diversity in the products offered, in addition
to technical operations that insure the server is running as intended and eliminating and
fixing any bugs and security gaps that are encountered. This is done in combination with
concurrently and efficiently managing the optional delivery service in a timely manner,
whilst we properly manage and carry out the various payment methods that we offer
such as Cash on Delivery, Benefit Pay, Credit and Debit cards, etc.

Outbound Logistics
As our main “product’’ being a digital marketplace service, our outbound logistics would
be to reach with our mobile application to the right customers who are willing to buy the
products that are displayed on our application and to make sure they get the product
they intended to buy. This is achieved by reaching out through various means to this
potential customer base and targeted market, and to verify the delivery of the product
whether it was through our optional delivery service or if it was dropped off or picked up
by the seller or buyer. Through the provision of updates on the location of the product
and the expected time of arrival as well as notifying the customers upon the arrival of the
products in addition to providing reception verification service through the application, it
is important that we make sure the right products are delivered to the right customers,
thus ultimately assuring that our service has delivered to our customers the satisfaction
they had sought for from performing their commercial transactions on our platform.

Marketing and Sales

As Darwaza is an online service, a strong marketing campaign is essential to the success
of the business as, the bigger the reach of the app, the more potential buyers and sellers
to join and expand the platform. Marketing and sales shall exist alongside every other
procedure in order to maintain the customer base and that the user understands the
functionality, perks and advantages of our application even before using it. An effective
marketing mix that combines traditional marketing and social media marketing will be
used to achieve different objectives such as introducing the app to the public, explaining

8
the utility of the app, providing incentives for new users to join and try the app for the
first time and setting a certain positioning for the app by forming partnerships thought
affiliate marketing with celebrities. This is discussed heavily though the marketing plan
section later below.

Service
In regards to the methodologies after delivering our objectives, and to insure a high level
of satisfaction with the platform and content displayed on it, a rating system is set up for
sellers and for products as well as their overall experience on the app. The customer
service team will also periodically check reviews in a timely manner and personally
address any dissatisfaction or misunderstandings between the parties. A customer
service instant messaging and hotline service will also be provided and accessed directly
from within our platform in order to address any doubts or questions customers may
have regarding selling or buying products, which is paramount to achieve a high sense of
trust and security between all the parties that are involved on the Darwaza marketplace.

9
4 Industry Analysis

The furniture industry revolves around companies and activities implicated in household
equipment through the distribution, manufacturing, design and sale of decorative and
practical objects. With the distinctive aspects of modernly produced furniture, it is
unquestionably a major mass-production industry in the United States and Europe
amongst other evolved regions (Hayward, 1999). As reported, it shows that the global
furniture market is estimated to grow by US$192 Billion, carried by an increased growth of
4.8%.

According to Mitchell (2017), Porter’s Five Forces model is an independent tool that helps
industries identify and analyse forces that lead to competition, and the intensity of each
threat linked to the business management in the industry environment. The Porter’s Five
Forces analysis of our business venture, Darwaza, will cover the impact of rivalry among
existing firms, the bargaining power of buyers or customers, the bargaining power of
suppliers, the threat of substitutes, and the threat of new entrants or entry.

Rivalry Among Existing Firms

This aspect of the analysis model evaluates the possible competition and how profitable
it is, which is determined by the existing competitors as well as the measured threat they
have on the industry. In Darwaza’s case, these firms can affect the company’s growth.
The following external factors are the lead contributors to the strong intensity of
competition against Darwaza:
• Large population of firms (Moderate force)
• Low differentiation in quality (Strong force)
Darwaza’s current main competitors could be Facebook marketplace and eBay. The large
population of firms is a moderate force as both competitors are fierce. However, Darwaza
is capable of competing against those firms, having countless features to run a
successful furniture app platform. The low differentiation in quality is a strong force, as
our main goal is to have consistently high standard products that are not easy to reach,
which would ultimately allow us to have a unique differentiation in quality.

10
Bargaining Power of Buyers
This force exists due to the customers’ ability to negotiate and bargain for lower prices,
as the entire concept of the application revolves around being a marketplace. Users
would be expecting lower prices and, if their expectations are not met, will most probably
be dissatisfied. Any customer is able to negotiate prices through sending a message to
the seller feature provided within the application itself.

Bargaining Power of Suppliers

In this aspect of the analysis, bargaining power of suppliers in our case would refer to the
application designers and developers, as they have the capability in deciding their prices
which would ultimately affect our costs for starting up the app. They have a strong force
due to possessing the upper hand in calculating the value for their work, which could
eventually lead to making or breaking our decision of entering the market.

Threat of Substitutes
The threat of substitutes in Darwaza’s case is moderate. According to Woodburn (2019),
Facebook marketplace is known as “scammers’ paradise,” considering the ongoing
history of scams on Facebook. Those scam scenarios can include fake products, where a
seller would often sell products for a cheaper price, only to receive a counterfeit. Another
scam can be done through celebrity scam, as when a celebrity posts a picture with a
huge amount of cash or luxurious items, promising a chance to win in exchange of
revealing personal information and/or paying an entry fee (Woodburn, 2019). Ebay on the
other hand, despite its popularity in other regions of the world, is not as popular nor
commonly used in the MENA region.

Threat of New Entrants

This last aspect of the analysis model examines how easily any firm can penetrate the
market and enter an industry. The threat of new entrants to the market is moderate
considering the abundance of companies that already exist in the market which already
act as a barrier for newer firms to enter. Technological advancements and innovation are
also another huge factor which could contribute into new firms entering the attractive
industry, as they can be a motive in drawing new business opportunities and ventures.

11
Summary
The end results of this Porter’s Five Forces model analysis of our business venture
evidently indicate that the bargaining power of buyers or customers, and the bargaining
power of suppliers are the most considerable factors in the furniture digital marketplace
industry. Although the other forces have a moderate threat to our app, they can still be
considered as major external factors that should strategically be taken into
consideration. Darwaza is proving to be capable of being a strong competitor in today’s
market. It is crucial for Darwaza to address those external factors that obtain the Porter’s
Five forces’ intensive competition. This analysis reveals the impact of each force on
Darwaza in the furnishing industry:
1. Rivalry Among Existing Firms – Moderate force
2. Bargaining Power of Buyers or Customers – Strong force
3. Bargaining Power of Suppliers – Strong force
4. Threat of Substitutes or Substitution – Moderate force
5. Threat of New Entrants or New Entry – Moderate force

Recommendations
After carrying out an analysis of the competitive nature of the industry, a
recommendation is for us to develop a competitive asset through technological
innovation. Innovation is a strong suit which ensures companies are part of the industry’s
strongest competitors. With valuable innovation, our services will improve significantly,
placing our rank higher in the industry, with our market shares projected to be flourishing
and the company’s mission and vision statements will be fulfilled. For instance, an
increased innovation rate can help the online marketplace to play more effectively.
Another recommendation is to be reliable in order to stand out from current competitors
in the market. Reliability is a main attribute that is tied to our brand, and will thus put our
company at an advantage as our biggest competitors—Facebook Marketplace and eBay
—have issues yet again relating to maintaining their reputation and consumer trust,
making it one of their current weak points. In addition to this, Darwaza should maintain a
strong base of sellers with high standards for furniture listings through ensuring robust
quality assurance standards. This will reflect onto the company’s reputation as it will be
known and differentiated from other digital marketplace apps, specialising in carrying

12
and selling only superior products of higher quality. It should make it difficult for
potential market entrants to get ahold of the standards of our company’s product
listings. Yet another recommendation which was previously discussed further is to enact
a high standard of customer service, which is highly important in any business as it
contributes to the company’s reputation and ensures customer loyalty in the long term
and maintaining the customer base.

13
5 Marketing Plan

Target Market
Our new company’s target customer is an individual or business from an age range of 18
to 45, who seeks to have high-quality furniture at an affordable rate that fits within the
bounds of their budget. We are also targeting citizens of lower and average incomes that
are in need of extra cash to earn from listing their secondhand products for sale onto the
platform, in addition to businesses that wish to clear their inventory. Buyers can be part
of a moving family, or a mom with a newborn, millennials, college students residing in
dorms or other residencies, local residents or expats, as well as workers in small
businesses or home offices. They all share a mutual need that is the appreciation for the
quality of furniture pieces that are practical and last in the long-term, lacking of price
constraints, which our application aims to serve.

Positioning
Darwaza will be positioning in advertisements to differentiate itself from rivals. Our
tagline, “It feels brand new”, reinforces our position in the market as an unconventional
marketplace application and a provider of high quality furniture pieces and accessories.
The phrase expresses that any furniture bought from our application is of discernible
quality which reassures the buyer of its reliability and getting their money’s worth. The
benefits of this positioning helps in boosting our brands' visibility in the market as we are
able to stand out, expanding our customer base and allowing us to overshadow
competitors.

There are several common mobile application marketing challenges that Darwaza, a new
business, can face in the industry. First, a constantly rising competition makes app store
discovery difficult for both iOS and Android. To put things into perspective, there are
approximately 4 million apps total in both stores, with over four thousand being released
daily (Sheil, 2017). It will pose a veritable challenge for our app marketers to guarantee
that their app is ranked high and able to be discovered through a crowded market.
Despite developing an innovative app being a challenge in itself, retaining the users and
the conservation of the customer base can possibly the most difficult. With many apps

14
getting launched every day and mobile phones having limited spaces, apps that do not
provide any value or constant benefit to the users will surely lead to abandonment.
According to Ganguly (2019), 90% of the people who download an app are gone within 6
months. On the other hand, a lack of marketing strategy can lead to losing users rapidly,
and thus the team has to ensure proper scheming of plans and organisation of resources,
and recommendations are discussed later below. Designing an effective marketing
strategy can be strenuous and many companies jump into swiftly executing marketing
tactics and skip developing long term, effective strategies which can turn out to be
detrimental to these companies at a later stage—especially when it comes to a fast
paced digital age. Solution for these challenges are further discussed in the promotion
section of the marketing mix below.

Marketing Mix
Assessing the ways in which we market our idea includes taking an overview of the
marketing mix, which outlines the set of marketing tools that any company utilises and
employs in order to achieve its marketing objectives in the target market. It includes four
general stages executed through the four P’s of marketing which are product, price,
place, and promotion.

Product
This aspect of the marketing mix refers to the product that is offered by the
company, being either a tangible or intangible good or service which should meet
the consumers’ needs or wants. Darwaza is digital marketplace platform service
which is presented as a mobile application that the user is able to download.
Marketplace services specialised in high quality furniture are the core of this
business, as they allow both buyers and vendors to exchange deals over the
internet. The product mix of Darwaza has a variety to suit everyone's wants and
needs who live in the Middle East. The services that Darwaza shall offer are
primarily to help users save money, as well as earn extra income, whilst making it
convenient for users to purchase furniture without having to visit a physical store
where products are usually expensive. The application will also offer localised
pages for the different countries it shall operate in. 

15
Price
This element of the marketing mix focuses on Darwaza's price points and pricing
strategies for its services, as this aspect is also linked to the company’s profit
margins. Having a low commission fee attracts sellers and, consequently, attracts
more customers to the mobile app. The pricing strategy for Darwaza is  market-
oriented and dynamic, thereby the strategy would be setting prices based on the
current market prices. Darwaza’s commission fee will be similar, if not lower than
competitors in the industry. The advantage of keeping price competition low could
damage a business that sets their prices high, which can prevent Darwaza from
losing market share to our competitors (Lake, 2019). This dynamic pricing strategy
allows for flexibility in setting the prices, which means rather than having fixed fees
per good sold, a percentage is set on the final sale amount which can change
based on the market’s conditions. Sellers will be able to choose amongst different
selling formats and corresponding fees. Moreover, implementing this pricing
strategy allows our business to keep on track with competitors. Research by
Forrester proposes using price optimisation software, which can greatly improve
gross margins by up to 10% (Black, 2020). On the other end of the spectrum,
Darwaza will be free of charge for users allowing everyone with a smartphone
device to freely download the app.

Place
This component identifies venues that Darwaza will use to reach its target
customers. Being fundamentally an online business company, Darwaza uses a
mobile application as its platform and primary place to conduct commercial
transactions with its eCommerce customer. The Darwaza marketplace app will be
available for sellers and buyers on iOS’ app store and Android’s Google Play store.
The benefits of having a native application include offering optimum performance
utilising the full power of the operating system, thus allowing the app to be highly
responsive. Another advantage of having a native app is an intuitive user
experience which lowers the learning curve, as users are grasp the concept of the
app easily thus increasing customer satisfaction (Roy, 2019). Darwaza will initially
operate in Bahrain, and shortly expand to the gulf countries—Saudi Arabia, Bahrain,

16
Kuwait, UAE, Qatar, and Oman—eventually aiming to reach the entire Middle
Eastern region. The delivery service, DarwazaGO, will be exclusive to Bahrain as
well, whilst however eventually expanding to overseas shipping to the rest of GCC
and MENA countries.

Promotion
This area of the marketing mix focuses on how we plan to promote Darwaza and its
services to the target audience. Darwaza aims to attract consumers through several
methodologies that are known and proven to be effective in increasing conversion
rates and awareness of our service; social media marketing, affiliate marketing, as
well as app store optimisation are the focal strategies and tactics that we are going
to pursue.

Social media marketing is known to be an effective strategy for businesses to reach

their customers as well as establish a social presence, especially at this
technological age with millennials being part of our primary target audience.
Research suggests that, 96% of marketers participate in social media marketing
because of its immense effectiveness in contributing to exposure for their
businesses (“Blue Fountain Media”, 2015). Darwaza will be having social media
channels on Instagram, Twitter, Facebook and YouTube in order to showcase the
brand’s attributes and its products in addition to posting relevant information and
eye-catching visuals which persuade customers to take action. Step by step video
tutorials on how the mobile application operates shall be available on the
company’s official YouTube channel, as using YouTube would support and exposes
our business and expand our reach to a larger audience.

Darwaza shall also fully utilise influencer affiliate marketing as a means to generate
revenue, as it has been continuously proven to be an increasingly popular and
profitable marketing device. Thus, collaborating with popular influencers known
across the MENA region to increase visibility which will unquestionably boost app
conversion rates. Influencers and online creators can be able to give out discount
codes and affiliate links to their audience which they are able to receive a

17
commission of sales from. Additionally, Darwaza shall offer a digital loyalty card
program which will allow users to interact with our business. Through the program,
they will receive a reward point to collect with every purchase and be able to use
those points to redeem rewards and perks such as special offers, as well as free
items. The benefits of a digital loyalty card include offering the users a personalised
and unique experience, which can undoubtedly contribute to retaining our
customer base and increasing brand loyalty. Another benefit of such program is
that it is convenient and easy to use being a tap of the fingertip away. A survey
(2019) conducted of approximately 440 millennials belonging to loyalty programs
from several brands found that 97% agree to actively engage with loyalty programs
if they are able to access their rewards information through their smartphones.

App store optimisation (ASO) is a crucial marketing scheme for the Darwaza app.
Approximately 63% of apps are discovered through the app store, thus utilising
frequently used keywords such as “thrift”, “furniture”, “online” and “shop” would
increase the app’s discoverability and ranking up to 10.3% (Ganguly, 2019). Being
that Darwaza is a new mobile app coming to the app store, ASO should help in
bringing relevant users more organically with the latest development in algorithm
technologies, which often consist of large databases that utilise and track users’
behaviour to curate recommendations that suit their interests.

18
6 Ethical and Legal Considerations

Moral philosophy can be practiced in any theory or system of moral principles, and
especially in businesses (Singer, 2019). According to Twin (2019), business ethics is a form
of professional business tactics regarding arguably disputed subjects that emerge in a
business environment. Business ethics are generally set by the law, managing to provide
a basic guide that allow businesses to follow and gain approval from the public (Twin,
2019).

Establishing a Strong Ethical Culture

Practicing business ethically and safely is formed by having a good relationship between
the employees and customers. To Lead by Example is one of the most crucial factors that
any entrepreneur, or group of entrepreneurs, can do to construct a powerful ethical
culture in their ownership. Any individual in a leadership position should be aware of the
responsibility they have to their team. For guidance and strength, they turn to you.
Therefore, responsibility is carried through guiding your team in your own set of rules
and actions (Martinuzzi, 2019). Establishing a Code of Conduct is also vital, which refers
to the written collection of significant values and beliefs that are shared between us.
Code of conduct is beneficial for the company's employees, as it aids in understanding
and sustaining ethical practices within the company which ultimately serve its longevity
and success. It is also beneficial in terms of ensuring that future employees within the
company shall always understand and align with our ethics and rules.

Drafting a Founder’s Agreement

A written document that is created to take care of issues such as relative split of equity
amongst shareholders in the firm, and who will have power on taking on considerations is
known as a founder’s agreement. This agreement is used to get compensation to the
founders who have put in their cash or "sweat equity" into the firm. It also states the time
each founder will have to remain within the firm for their shares to vest. Some of the
items to include in a founder’s agreement are the nature of the prospective business, the
identity and proposed titles of the founders, a legal form of business ownership, the
ownership share of each founder, identification of the initial capital, and a buyback

19
clause. There are many reasons to why we should draft a founder’s agreement. During
the decision-making process, a founder’s agreement would be beneficial in outlining the
members’ responsibilities. For example, who will be in charge of advertising/marketing or
who will be responsible for the operations. Each responsibility can be divided based on
its strengths and weaknesses. It also helps with carrying out transactions in the future,
which affects the business significantly. Code of conducts most importantly contribute in
coming up with the right strategy, in case a member is likely to quit from the start-up and
build something personally (2017).

Avoid Legal Disputes

There are countless ways to avoid legal disputes in case they start appearing in Darwaza.
One possibility could be through confirming all details in writings, due to disputes usually
occurring when the procedure, contract, or agreement is unclear for parties to get back
to. This can be prevented by having everything written in a form of agreement or
contract before supplying goods or services. Another way is to always read the contracts
before signing them. When a contract is signed, you are compelled to a number of terms
and conditions. Reading and understanding the contracts before signing them plays a
major part in keep disputes away. It is also beneficial to keep a good relationship
between the customers and suppliers. Communication in this matter helps them become
aware of the ability to give feedback and file complaints when needed. The staff also play
a big role in ways to avoid legal disputes. Training the staff by giving them instructions
and rules on how to deal with certain issues such as complaints or negative feedback
can build a professional business environment, which contributes effectively when
avoiding disputes (2019).

When collection agencies and credit complete their functions, they are often caught
with ethical and legal issues. Any matter of credit extended to a customer, the credit
professional should follow all laws using ethical ways whilst making credit considerations.
The same way should the debt collection process be handled when credit departments
try to collect debt from customers (2019). In Darwaza, payments will be handled in such
ethical ways. Any personal information is released into the application will be secured
and stored undergoing long policies to ensure the customer’s privacy and safety. After

20
following the instructions, the customer’s private information will be maintained and
protected.

Online shopping for furniture or any item in general is fun yet full of potential risks.
Darwaza will provide countless features to satisfy customers’ needs. When a customer is
interested in purchasing a specific item, there would be questions and thoughts to
consider before purchasing the item. Therefore, Darwaza will offer options to talk to the
sellers online as well as meet up with them in person by agreeing to a specific place and
time. In some cases, when customers meet up with the sellers, problems arise often since
they could be scammers or cause danger to the customers, this could also happen in
conversations online. In our furniture application, Darwaza, we want to prevent this
problem. According to Dunham (2018), there are ways to stay safe whilst buying and
selling items online. One of the most important ways is to protect your personal details.
When the seller or buyer frequently asks personal unrelated questions, those questions
are usually asked to gain vulnerability. Another way that could raise a red flag is not
being aware of the buyer’s or seller’s identification details. It is crucial to gather a
physical description of the buyer or seller before committing to a transaction (Dunham,
2018). To ensure that our sellers are reliable, the sellers have to be verified to be able to
sell items. This helps establish trust between the customers and the sellers, which is our
end goal.

The application will also provide an optional specialised delivery service, DarwazaGO, for
customers upon request. This said delivery service will operate in Bahrain and in the
future shall expand across other countries in the GCC. To incorporate a successful
delivery service as an effective feature within the app, it is prudent to encompass unique
and fast services. Those services will have the items delivered to your doorstep either by
the seller or by our company itself. Our own delivery fleet service comes with live
tracking and faster delivery. The live tracking feature will allow the customer to receive
updates on the purchased item, receiving a hyperlink containing information from a
tracking number to a digital receipt, as well as a live location map to track the
whereabouts of the seller when the purchased furniture item is currently under the
process of being delivered from its previous owner to its customer.

21
Legal Requirements
Intellectual property (IP) refers to intangible inventions; designs, symbols, names used in
e-commerce of human intellect that can be protected under the law by copyright,
trademark, service mark, patent, etc. IP rights give businesses an advantage to exclude
competitors from the market as well as aid in preventing counterfeit knockoffs (Juetten,
2017). Our company, Darwaza ,will require a service mark for operating and offering
marketplace services.

To obtain a trademark for Darwaza, the company will undergo a process; the first step of
obtaining a trademark being to select an appropriate trademark which has been done,
the term “Darwaza” will need a service mark. Service mark is a form of IP used to identify
a service rather than a product. The second step is to perform a service mark search,
using a database such as trademark electronic search system (TESS) to check for similar
existing service marks. Once that is complete and cleared, the final step is to create
rights for the service mark. We will have to fill in an online application to register and pay
for the registration fee. The advantages of having a service mark are countless, as it
prevents another business from having a similar name within the same market, as well as
it clears our business identity and reputation of our services with customers.

22
7 Financial Overview

Financial Objectives
Moving towards an aim for long term success, an abstract of the firm’s financial
objectives is carried out which includes the four core objectives of any business;
profitability, liquidity, efficiency and stability. Referring to the brand’s ability to earn
profit, Darwaza will be using commission as our revenue model which allows us to earn
profit through charging a commission after each transaction. The platform will charge a
percentage every time a customer completes a purchase and pays the provider. The
benefit of this commission model is that the seller will not be charged with anything until
they get some value return from the marketplace. The challenge with the commission
model, however, is the pricing and how much percentage to charge the seller, which
again should mainly depend on the current market’s state as well as the usual supply
and demand factors.

In terms of liquidity, or better known as the company’s capacity to meet its daily
expenses and able to liquify its assets, we will be collecting the commission percentage
from the sellers for the items sold on a monthly basis. In addition to that, Darwaza will be
increasing its sales through the different modes of marketing as previously discussed.
The company should also be efficient in its mechanism through utilising it assets to
generate maximum revenue at a minimum cost via the employment risk minimising
strategies. Darwaza is a platform that will allow individuals to sell signature, branded
furniture pieces they no longer need for others in the community to gain at a lower price
point. Maintaining the firm’s stability and strength of our financial posture can ultimately
lead to sustainment in the market place for a longer period of time.

23
Financial Forecast

Pro-Forma Income Statement

Darwaza Inc.

2020 2021 2022

Income

Product Sales 70,000 BD 290,000 BD 530,000 BD

Total Commissions Collected (10%) 7,000 BD 29,000 BD 53,000 BD

Cost of Goods Sold

Purchases 0 BD 0 BD 0 BD

iOS Apple Store Fee 37 BD 37 BD 37 BD

Android Google Play Store Fee 9 BD 0 BD 0 BD

Total Cost of Goods Sold 46 BD 37 BD 37 BD

Expenses

Marketing and Advertisement 9,000 BD 12,000 BD 15,000 BD

Office Space Rent 8,400 BD 8,600 BD 8,900 BD

Electricity, Water, Food and Maintenance 2,000 BD 2,000 BD 2,000 BD

Utilities 1,800 BD 1,800 BD 1,800 BD

App Development and Maintenance 1,500 BD 500 BD 300 BD

App Design 700 BD 200 BD 100 BD

Employee Salaries 6,000 BD 7,000 BD 9,000 BD

Transport and Logistics 1,000 BD 3,000 BD 3,500 BD

Total Expenses 30,446 BD 35,137 BD 40,637 BD

Net Profit (−23,446) BD (−6,137) BD 12,363 BD

24
Funding Proposal
There exists a few different methodologies that could be proposed in order to seek
appropriate funding for our business. This should be done with reference to our business
idea’s characteristics being of minimum risk and having a more predictable return, and
thus the proposed mode of financing chiefly being debt financing through obtaining
loans.

There are two main sources of debt financing available which we shall undertake;
commercial bank loans, and through government grants. There are various banks that
support new ideas and entrepreneurs in Bahrain where the firm would headquarter in,
which is why they are to be taken into consideration. The Edbaa Bank along with Bahrain
Development Bank both offer a range of financial and holistic entrepreneurial services,
which are beneficial as they are created specifically for businesses and startups seeking
loans for growth. On the other bank, governmental grants are also available, such as
through Tamkeen, which does offer support programs through which entrepreneurs are
able to seek funding from in addition to consultation services as well. These are effective
ways of obtaining funding as they would act as a launching pad for turning our business
idea into reality (“Tamkeen”, 2019).

25
8 References

Black, J. (2020, January 10). Dynamic Pricing: Advantages&Disadvantages And

The Technology Behind. Retrieved from https://prisync.com/blog/dynamic-pricing-
advantages-vs-disadvantages/

“Blue Fountain Media”. (2015, July 2). Ten Advantages of Social Media Marketing
for Your Business. Retrieved from https://www.bluefountainmedia.com/blog/advantages-
of-social-media-marketing.

Ganguly, R. (2019, February 15). App Store Optimization – A Crucial Piece of the
Mobile App Marketing Puzzle. Retrieved from https://neilpatel.com/blog/app-store-
optimization/

Juetten, M. (2017, May 12). Intellectual Property 101. Retrieved from https://
articles.bplans.com/intellectual-property−101/

Lake, L. (2019, September 19). The Pros and Cons of Competition-Oriented Pricing.
Retrieved from https://www.thebalancesmb.com/what-is-competition-oriented-
pricing−2295452

Linchpin, T. (2019, December 26). Trends That Will Transform The  Home Goods
Industry Outlook In 2020. Retrieved from https://linchpinseo.com/trends-in-the-
furniture-industry/#marketing-to-millennials

Miller, D. (2019, June 25). The Sharing Economy and How it Is Changing Industries.
Retrieved from https://www.thebalancesmb.com/the-sharing-economy-and-how-it-
changes-industries−4172234

Roy, R. I. (2019, May 23). 5 Top advantages of Native Mobile App Development.
Retrieved from https://yourstory.com/mystory/5−top-advantages-of-native-mobile-app-
development?utm_pageloadtype=scroll

26
 Sheil, R. (2017, January 24). What are the challenges with mobile app marketing in
2017? Retrieved from https://medium.com/@rossysheil/what-are-the-challenges-with-
mobile-app-marketing-in−2017−ea810060b415

“Stamp Me”. (2019, December 22). What Are The Benefits of a Digital Loyalty
Program? - Digital Loyalty Program Benefits. Retrieved from https://stampme.com/what-
are-the-benefits-of-a-digital-loyalty-program/

“Tamkeen”. (2019). Pre-start-up. https://www.tamkeen.bh/pre-start-up

Singer, P. (2019, December 26). Ethics. Retrieved from https://www.britannica.com/

topic/ethics-philosophy.

Twin, A. (2019, December 3). Business Ethics: Fair Business Policies Within
Controversial Subjects. Retrieved from https://www.investopedia.com/terms/b/business-
ethics.asp

Racklies, D. (2001). The Value Chain. Retrieved from http://www.fao.org/fileadmin/

user_upload/fisheries/docs/ValueChain.pdf

Martinuzzi, B. (n.d.). Leading by Example: How to Lead a Team Honestly and

Authentically. Retrieved from https://www.mindtools.com/pages/article/newLDR_60.htm

Hayward, C. H. (1999, July 26). Furniture industry. Retrieved from https://

www.britannica.com/topic/furniture-industry

Mitchell, C. (2017, December 1). eBay Inc. Five Forces Analysis (Porter's Model) &
Recommendations. Retrieved from http://panmore.com/ebay-inc-five-forces-analysis-
porters-recommendations

27
 Founder's Agreement - Importance and How to Make. (2017, July 29). Retrieved
from https://www.businessalligators.com/founders-agreement-importance-template/

Global Furniture Industry. (2019, October 15). Retrieved from https://

www.prnewswire.com/news-releases/global-furniture-industry−300938824.html

Collection Agencies and Credit Ethics. (2019). Retrieved from https://

www.kaplancollectionagency.com/resource-center/advice-for-in-house-debt-collection/
collection-agencies-and-credit-ethics/

Dunham, N. (2018). 7 Ways to Stay Safe When Using Facebook Marketplace.

Retrieved from https://www.rd.com/advice/saving-money/facebook-marketplace-safety/

How to avoid disputes. (n.d.). Retrieved from https://www.smallbusiness.wa.gov.au/

business-advice/avoiding-and-managing-disputes/how-to-avoid-disputes

Woodburn, B. (2019, February 8). Facebook Marketplace scams: an overview.

Retrieved from https://blog.redpoints.com/en/facebook-marketplace-scams-an-overview

28