Business Plan Template for Software Development Company - Research Proposal Example

X IT solutions is in the process of being founded as a sole proprietorship owned and operated by X person. This plan, which is written as a guide forstarting and managing this new business, will also serve as the basis for a separate, detailed marketing plan. The salient features of this plan are summarised as follows: The objectives of X Company are to generate profit and to grow at a challenging, yet manageable rate. The mission of the company is to develop software for small- and medium-sized businesses, apart from offering reliable and fast technical assistance to customers. Appropriate marketing and networking, ensuring high responsiveness and quality, and generating repeat customers are the keys to success for the said company. The primary service that will initially be offered by the company is bespoken software development for businesses to fulfil their requirements and their customers’ needs, although retainer contracts and projects will be also be considered upon further growth. The local market is wide open for new and expanding software development firms, presenting an excellent opportunity for this business, which may however face competition from other similar firms. A financial analysis of the viability of this venture promises outstanding performance and results. Several sources note that the software development business is easy to start, requires little up-front capital, and has the potential to be quite lucrative in todays high-tech world. 1.1 Objectives The objectives of this business plan are: 1. To provide a written guide for starting and managing this Software development business and to present a strategic framework for developing a comprehensive and tactical marketing plan. 2. The intended audience is the owner of this business only. This plan does not intend to obtain any financing from outside sources. 3. The scope of this plan is to provide detailed monthly projections for the current plan year and yearly summaries for the following two years. The objectives of Calico Computer Consulting are: 1. Profit - To generate sufficient profit for financing future growth and to provide the resources needed to achieve the objectives of the company and its owner. 2. Growth - To grow the business at a rate that is both challenging and manageable, making it a market leader through innovation and adaptability. 3. Service - To be an intellectual and social asset to the community and environment. 1.2 Mission X Companys mission is simple and straightforward: Purpose - X Company exists to develop software for small and medium-sized businesses so they can fulfil their requirements and also provide fast and reliable technical assistance to their customers. X company sells solutions & results! Vision - By providing fast response, informed expertise, and consistently high quality solutions, the company generates enough satisfied repeat customers, thereby establishing a stable retainer base. This generates sufficient profit to provide a comfortable living for the owner. Mission - The short term objective is to start this company quickly and inexpensively, with a minimal debt. The long term objective is to grow the company into a stable and profitable entity that the owner can easily and comfortably manage. Marketing Slogan will be - "." 1.3 Keys to Success The keys to success for X Company are: Marketing and Networking (getting the name out there). Responsiveness (fast response time). Quality (getting the job done right the first time, offering 100% guarantee). Relationships (developing loyal repeat customers - retainers). Efficient use of social media (for marketing and strengthening relationship with customers). Company Summary X Company will be a start-up venture with the following characteristics: X will initially be a sole proprietorship. The goal will be to start the venture as inexpensively as possible, with no debt financing. The company will be a home office start-up, utilizing one studio room in the owners home. 2.1 Start-up Summary In keeping with the company philosophy of avoiding debt, the goal is to begin as inexpensively as possible. This is in line with industry figures that show that computer consulting start-ups are ideal entrepreneurial opportunities with very low start-up costs. The total start-up expenses for X company come to Y-pounds, all of which will be financed through owner investment. Most expenses are typical start-up paperwork fees (legal, accounting, etc.). Cash requirements consist of one months rent as a reserve. Z pounds for expensed equipment will be used to purchase -------- ------- (a new All-In-One printer, fax, answering machine to replace an aging inkjet printer, table). 2.2 Company Locations and Facilities This is a home office venture, located in one studio room of the owners home. Computer facilities will initially consist of the owners existing system. Telephone - one line currently serves the location. A second line for data use would be added soon. Utilities are already provided, included in the space rent of T-pounds. 2.3 Company Ownership X Company will be created initially as a sole proprietorship, owned and operated by X-person. Incorporation, probably as a LLC, will be explored as a later option. Services X Company will offer small office/home office business owners a quick-response, and will prove to be a reliable source of technical help for their computers. The company will offer three main services- System analysis & tailored development, retainer contracts for specific systems, and temporary technical aid. The company will start with some basic sales literature, including logo and stationary, a brochure, and a basic web page. These will be self-designed and computer generated. Fulfilment of the services will be done exclusively by the companys owner. Technology is obviously a critical component of this business. It will be important to stay up to date on both equipment and knowledge to remain competitive in the future. These features are described in detail as follows: 3.1 Service Description X Company will offer three main services, corresponding to what industry experts have identified as the primary opportunities in computer consulting: 1. System Analysis & Tailored Development - This will include such things as analysing the business needs and ensuring that the bespoken software addresses all the needs of the customers. If necessary, consulting would be provided on major purchases, system/network installation, testing, and recovery. 2. Retainer – This will be related to “after sale” services, including regular system maintenance, software and hardware upgrades, and network administration. The owners particular area of expertise is in management consulting with regard to MIS. 3. Temporary Technical Aid – This concerns the less traditional type of short-term assignments that involve helping a company solve software or hardware related problems. It includes both emergency and non-emergency technical assistance. 3.2 Sales Literature Calico Computer Consulting will start with some basic self-generated literature to establish its initial positioning: Logo and theme - A national catalog sales paper goods company has a wonderful line of blank papers with a computer theme that will serve as the "look" for X company. A graphic artist friend of the owner has already commenced work on a matching logo. Stationery - The theme paper is available in various formats for use as company stationery. Brochure - Likewise, pre-printed paper is available, along with software templates for generating brochures Web presence – Eventually, a website will be developed as an "electronic brochure" as well as a resource site for the owners established client base. Response templates - As common problems/solutions are encountered and solved, a set of standardized templates for initial responses will be developed. This will shorten the response time and eliminate confusion in providing quick solutions to routine issues. 3.3 Fulfilment The fulfilment of services for X is provided by the owner. The ultimate deliverable is the owners expertise and problem solving ability, coupled with an open mind and ease of communication that will result in the customers complete confidence in the company’s ability to provide immediate and lasting results. 3.5 Technology Technology is, of course, vital to the success of X. It is imperative that the owner stay up-to-date on the latest technological developments in the computer industry. In addition, it will be important to devote a reasonable portion of each years revenues towards upgrading the equipment and software used by X in its normal operations. Market Analysis Summary X Company will adopt a fairly focused market strategy. Based on a logical segmentation, the market will be broken down into the following: Home Office Businesses, Small Businesses, Medium Businesses and Large Businesses. Their descriptions are provided below. The largest and most logical target markets for X Company are the Home Office and Small Businesses. These businesses mostly have a need for cost-effective customized software and temporary technical aid. Some opportunities also exist for retainer and/or specific project contracts. While there are a fair number of competitors in the local area, they seem to be widely specialized and widely sized, providing ample opportunity for X Company to create and expand a niche in the chosen market segments. 4.1 Market Segmentation The following chart and table reflect the market segmentation for this business. The size and growth numbers are based on US Census data for the local region. Home Office Businesses – This is the largest and fastest growing segment, comprising of small businesses that are based primarily out of the owners home. Small Businesses – These are defined by the government as businesses with 1 to 99 employees. Medium Businesses – These are businesses with 100 to 499 employees. As is obvious from the pie chart, the first two segments comprise the bulk of opportunity for X Company. 4.2 Target Market Segment Strategy The following six market segments will be taken as a starting point: Businesses in search of custom software development services Businesses not using computers Small entrepreneurial businesses using one or more computers Small to medium sized corporations using computers on networks Medium sized companies seeking problem-solving assistance (trouble-shooting) with specific projects Other organizations in search of computer assistance X Company will focus on the top market segments only - an intently focused marketing strategy. 4.2.1 Market Trends The following three primary market trends seem to be the most important in this industry: Rapid growth in technology, need for continuous upgrades in both hardware and software. Predicted continued growth in software development sector - companies unwilling to pay fixed costs, choosing instead to treat computer upgrades and repair as variable costs. Rapid growth in the ratio of small size (home office) businesses to traditional medium sized businesses. These trends are predicted by industry experts to continue well into the next century. Read More