Water Corporation

John and Mary have been working with Water Corporation for two years. In that time they have developed an app that uses inputs from devices (IoT internet of things) installed in pools to identify chemicals needed for the pools. The app can trigger messages about chemicals needed to ensure pool acidity and cleanliness. The app also handles appointments and scheduling for delivery and for repairs and manages inventory and ordering. The app allows the individually managed Water Corporate franchise stores to differentiate themselves from the competition.

At this stage John and Marys contract is almost up and at the Head office the son (Jerry) of the owner has been looking at the innovation developed by John and Mary. John and Mary each make $200,000 per year as computer developers. Jerry was thinking of white labeling the app to sell to other pool companies.

Jerry knows you took a Finance for Entrepreneurs subject and has come to you to ask you for some help.

Part One and Two relate to Water Corporation

Part One White labelling (10%)

Identify the pros and cons of white labeling the app for competitors. If the potential market for white labeling pool competitors is 500 locations each paying $100 per month, is this sufficient for a new business? What costs do you need to consider in determining if the new business is viable? Prepare a draft yearly budget and identify how much financing you need for the new business (if any). Please be clear with your assumptions.