Jack Peterson and Sarah Jones are planning to start a business. Their plan is to locate and operate 10 kiosks in malls and other high-traffic areas to sell accessories for Apple iPhones, iPads, and iPods. To complement their accessory sales, the two have created a series of short videos that help users learn how to make better use of their iPhones, iPads, and iPods. The videos will be available on Jack and Sarah’s Web site for a onetime fee of $10.99 or on an app they are developing for a $10.99 one-time download fee. Both the Web site and the mobile app will include promotions to buy additional iPhone, iPad, and iPod accessories via Jack and Sarah’s kiosks or by mail.
iUser Accessories is the tentative name for the business. Jack and Sarah like to use the word tentative because they aren’t completely sold on the name. The Internet domain name, www.iuseraccessories.com, was available, so they registered it on GoDaddy.com. Part of their start-up funding will be used to hire a trademark attorney to do a formal trademark search before they use the name or do any advertising.
Jack and Sarah met in an introduction to entrepreneurship course at their local university. They hit it off while working on the initial business plan for iUser Accessories, which they completed as an assignment for the class. Their senior year, they refined the plan by working on it during a business planning class. They took first place in a university-wide business plan competition just before graduation. The win netted them $10,000 in cash and $10,000 in “in-kind” services for the business.
Their plan was to use the money to establish a relationship with an accountant affiliated with the university.

Feasibility Analysis and Business Plan
As part of their business plan, Jack and Sarah completed a product feasibility analysis for iUser Accessories. They first developed a concept statement and distributed it to a total of 16 people, including professors, electronic store owners, iPhone, iPad and iPod users, and the parents of young iPhone, iPad and iPod users. The responses were both positive and instructive. The idea to distribute videos dealing with how to better use your iPhone, iPad, and iPod via streaming video over the Internet or via the mobile app came directly from one of the conceptstatement participants. Jack and Sarah’s original idea was to distribute this material in a more conventional manner.
The person who came up with the idea wrote on the bottom of the concept statement, “Not only will this approach save you money (by not having to distribute actual videos) but it will drive traffic to your Web site and your app and provide you with additional e-commerce opportunities.”
Following the concept statement, Jack and Sarah surveyed 410 people in their target market, which is 15- to 35-year-olds. They did this by approaching people wherever they could and politely asking them to complete the survey. They persuaded one of their marketing professors to help them with the survey’s design, to make sure it generalized to a larger population. They learned that 58 percent of the people in their target market own an iPod or iPhone or plan to get one soon. The survey also listed a total of 36 iPhone, iPad and iPod accessories, which are available through vendors that Jack and Sarah have access to.
The results affirmed Jack and Sarah’s notion that the vast majority of people in their target market don’t realize the number of iPhone, iPad and iPod accessories that exist, let alone know where to get them. They also were pleased with the high degree of interest expressed by the survey participants in learning more about many of the accessories.

Start-Up Capital
As part of their business plan, Jack and Sarah completed one- and three-year pro forma financial statements, which demonstrate the potential viability of their business. They have commitments for $66,000 of funding from friends and family. According to their projections, they should be cash-flow positive within four months and will not need any additional infusions of cash, unless they expand the business beyond the scope of their original business plan. The projections include salaries of $32,000 per year for both Jack and Sarah, who will both work more than 40 hours a week manning the kiosks and running the business.
Jack and Sarah are fortunate in that they are able to each contribute $3,000 to the business personally and were able to gain commitments of $30,000 each from their respective groups of friends and family. A year or so ago they participated in a class offered by their local Small Business Development Center (SBDC) about how to start a business and remembered an attorney saying that’s it all right to talk to people about funding prior to talking to an attorney but don’t actually accept any money until you have your legal ducks in order. As a result, other than their own money, Jack and Sarah didn’t actually have the $66,000 yet. They can accumulate it within 30 days once they are confident that the business is a go.

Preparing for the Meeting with the Attorney
Jack and Sarah plan to launch their business on September 15, just two months prior to the start of the busy Christmas season. They spent some time asking around the business school and the technology incubator attached to their university to identify the name of a good small-business attorney. They identified an attorney and made the appointment. The appointment was scheduled for 2:15 P.M. on July 16 at the attorney’s office.
Another take-away that Jack and Sarah gleaned from the SBDC class was to plan carefully the time you spend with an attorney, to make best use of your time and minimize expenses. As a result, prior to the meeting, Jack and Sarah planned to spend several evenings at a local Borders bookstore, looking at books that deal with forms of business ownership and other legal issues and making a concise list of issues to discuss with the attorney. They had also gone over this material in preparing their business plan. In the meeting with the attorney, they want to be as well informed as possible and actually lead the discussion and make recommendations. Sarah’s dad is a real estate agent and had dealt with many attorneys during his career.
One thing he told her, in helping her prepare for this meeting, is that attorneys are helpful and necessary but shouldn’t make your decisions for you. Sarah shared this insight with Jack, and they were both determined to follow that advice in their upcoming meeting.

Jack and Sarah’s Recommendations
To put their list on paper and get started, Jack created the document at the top of the next column.
Jack and Sarah spent the next several evenings completing this list and talking about their business.
When they made the call to set up the meeting with the attorney, the attorney told them that she wasn’t an intellectual property lawyer, and if it looked like the business was a go after their meeting, she could arrange for them to talk to one of her partners who specialized in patent and trademark law. As a result, Jack and Sarah knew that this meeting would focus more on forms of business ownership and general legal issues, and they would address their intellectual property questions at another meeting.

Discussion Questions
1. Complete Jack and Sarah’s list for them, including the issues you think they will place on the list along with their recommendations. Which of the issues do you think will stimulate the most discussion with the attorney, and which issues do you think will stimulate the least?
2. Make a list of the things you think Jack and Sarah did right in preparing for their meeting with the attorney.
3. Comment on the product feasibility analysis that Jack and Sarah completed. Do you think the way Jack and Sarah approached this task was appropriate and sufficient?
4. What advantages do Jack and Sarah have starting iUser Accessories together, rather than one of them starting it as a sole entrepreneur? What challenges do you think Jack and Sarah will have keeping their partnership together?

Application Questions
1. Suggest an alternative to iUser Accessories for the name of Jack and Sarah’s firm. Check to see if the “.com” version of the Internet domain name is available.
If it isn’t, select another name and continue selecting names until you can match a name with an available domain name.
2. Do you think it is too early for Jack and Sarah to start laying an ethical foundation for their firm? What steps can they take now to lay a solid ethical foundation for their firm?