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Nerd Patrol - Business Plan Example

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Summary
The paper "Introduction and a Brief Description of the Nerd Patrol" state that Nerd Patrol will provide extensive computer and networking services, such as hardware and software upgrades, hardware repairs, debugging, and will fix software problems and network problems to home PC users…
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Extract of sample "Nerd Patrol"

Nerd Patrol Business Plan Introduction and a brief of the venture This plan is written as a guide to the proposed establishing of NerdPatrol, a home based computer services firm. Nerd Patrol will provide extensive computer and networking services, such as hardware and software upgrades, hardware repairs, debugging, and will fix software problems, and network problems, to home PC users and small offices that are located in Virginia. The company will concentrate on marketing and promotion, quality service, and building a solid customer base. Nerd Patrol is a small computer services firm that will initially be established as a sole proprietorship that will have its office at the residence of its proprietor, John Robbins. After a period of six months, hopefully Nerd Patrol will transfer to a leased office space and expand with the help of its partners Mary Singh and Nabil Quresh. Nerd Patrol is a phone call away to fixing the simple and not so simple computer problems. Nerd Patrol aims to build a solid customer base upon the first year of operations through serious marketing effort and quality service to maintain an income that will be adequate for future expansion and hiring of additional personnel. Subsequently, Nerd Patrol with its solid customer base will earn a reputation as an excellent computer services provider expanding its range of services from simple computer repair services to large-scale local tech support services. 2. Organization of the business and key players Nerd Patrol will be formed through sole proprietorship with John Robbins as its proprietor, but will later on be restructured to form a partnership with partners Mary Singh and Nabil Quresh. During the initial start up of the business, John Robbins, who earned his degree in computer science, will be the only full time employee of Nerd Patrol. In the meantime, he will handle all transactions with customers, and be the one to do the home services. In the course of time, as the business slowly establishes an identity in the market, Mary Singh and Nabil Kuresh will join the business, for it to begin with the next step, and that is the creation of more services apart from computer related repair services. As the business progresses, John Robbins, Mary Singh, and Nabil Quresh will become partners, with the three of them working together to fulfill management tasks. Nabil will handle marketing and accounts since he has a background in business administration (marketing accounts manager). Since John founded the business, he will serve as the general manager, and Mary will be the assistant manager. Mary and John will, as well, look upon the improvement of the business’ technical and service aspect since they are both computer science graduates. They will be on call seven days a week during office hours from 8 am to 7 pm, but services can be rendered immediately when technicians are available, and are usually on a first come first serve basis. Appointments can be made through Nerd Patrol’s website, where customers may send their queries regarding the service and payment matters. Responses to queries will be sent through emails or answered through phone during office hours. Figure 1 - Nerd Patrol Organizational Chart after A Period of Six Months The business anticipates expanding in six months period and from a sole proprietorship Nerd Patrol will become a company restructured to form a partnership among the three individuals, namely John Robbins, the general manager, Nabil Quresh, marketing and accounts manager, and Mary Singh, assistant manager. The formation of the partnership is expected to increase business capital that will lead to the recruitment of more personnel, the expansion of company services, and transfer of office location from a home office start up to a rented office space. 3. Financials Because the business has just started and is fresh to the industry, the aim is to begin with the operations without having to spend a huge amount of capital. The owner believes that a computer repair service business does not need huge investments, and can be made operational through low start-up costs. All start up expenses will be financed by the owner, with its total amount of $2,750. a. Anticipated operating costs of the new business Table 1 - start-up requirements Start-up Requirements Monthly Expenses start up expenses Maintenance and Repairs $300 Advertising $200 Office Supplies $300 Vehicle $500 Telephone and Internet $150 Insurance $150 Legal $250 Accountant $100 Expensed equipment $500 Total Monthly Expense / Start-up Expense $2,450 Start-up Assets Cash Required $0 Other Current Assets $0 Long-term Assets $0 Total Assets $0 Total Requirements $2,450 b. Anticipated investment requirements to launch the new venture Table 2 - Start up Funding Start-up Funding Start-up expense to fund $2,450 Start-up assets to fund $0 Total Funding Required $2,450 Assets Non-cash assets from start-up $0 Cash requirements from start-up $0 Additional cash raised $300 Cash balance on starting date $300 Total Assets $300 Liabilities and capital Liabilities Current Borrowing $0 Long-term Liabilities $0 Accounts Payable $0 Other Current Liabilities $0 Total Liabilities $0 Capital Planned Investment Owner Investment $2,750 Other $0 Additional Investment Required $0 Total Planned Investment $2,750 Loss at Start-up (Start up Expenses) ($2,450) Total Capital $425 Total Capital and Liabilities $425 Total Funding $2,750 c. Anticipated Revenue Table 3 - Anticipated Revenue Service Fees / Month Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Total Home Service $1,200 $1,300 $1,500 $1,800 $1,500 $1,400 $8,700 Business Establishments $2,000 $2,200 $2,500 $2,500 $2,200 $2,300 $13,700 Income from Investment $0 $0 $0 $0 $0 $0 $0 Total Revenue $3,200 $3,500 $4,000 $4,300 $3,700 $3,700 $22,400 Service Fees / Month Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total Home service $1,200 $1,500 $1,900 $2,000 $1,700 $2,300 $10,600 Business establishments $1,800 $2,100 $2,300 $2,500 $1,700 $2,400 $12,800 Income from investment $2,000 $0 $0 $0 $0 $0 $2,000 Total Revenue $5,000 $3,600 $4,200 $4,500 $3,400 $4,700 $25,400 Total Revenue $47,800 d. Pro-forma cash flow projection for the first year of operation Table 4 - Pro-forma cash flow projection REVENUES Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Home Service $1,200 $1,300 $1,500 $1,800 $1,500 $1,400 $1,200 $1,500 $1,900 $2,000 $1,700 $2,300 Small Business Services $2,000 $2,200 $2,500 $2,500 $2,200 $2,300 $1,800 $2,100 $2,300 $2,500 $1,700 $2,400 Investment Income $0 $0 $0 $0 $0 $0 $2,000 $0 $0 $0 $0 $0 Total Rev. $3,200 $3,500 $4,000 $4,300 $3,700 $3,700 $5,000 $3,600 $4,200 $4,500 $3,400 $4,700 Annual Total Rev. $47,800 Expenses / Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Maintenance and Repairs $300 $200 $150 $280 $300 $120 $320 $200 $250 $280 $220 180 Advertising $200 $0 $0 150 $0 $0 $200 $0 $0 $100 $0 $0 Office Supplies $300 $70 $0 $300 $0 $0 $300 200 $0 $300 $0 100 Vehicle $500 $595 $600 $650 $500 $500 $670 $450 $500 $520 $495 $600 Telephone and Internet $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 Insurance $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 Legal $250 $0 $0 $0 $0 $0 $150 $0 $0 $0 $0 $0 Accountant $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Expensed equipment $500 $0 $0 $0 $0 $0 $500 $0 $0 $0 $0 $0 Total Cost $2,450 $1,265 $1,150 $1,780 $1,200 $1,020 $2,540 $1,250 $1,150 $1,600 $1,115 $1,280 Annual Total Cost $17,800 Net Cash Flow $750 $2,235 $2,850 $2,520 $2,500 $2,680 $2,460 $2,350 $3,050 $2,900 $2,285 $3,420 Annual Total Net Cash Flow $30,000 e. Payback point The estimated payback point for this proposed business venture is based on the annual net income of Nerd Patrol. For instance, if John Robbins, Nabil Quresh, and Mary Singh invested a total of 80,000 for the first year of its operations, payback point is computed as follows: Table 5 - Payback point Net Income Collected Payback Year 1: $30,000 $30,000 Year 2: $20,000 $50,000 Year 3: $30,000 $80,000 Payback Point Year 4: $25,000 $105,000 Year 5: $35,000 $140,000 Hence, the number of years that it will take for them to obtain back their investment is for a period of three years. f. Anticipated return on investment from the perspective of three years into the venture Table 6 - Anticipated ROI Nerd Patrol Investment Now Year 1 Year 2 Year 3 Total Cash Inflows 0 47,800 100,000 80,000 227,800 Cash Outflows 100,000 17,800 20,000 10,000 147,800 Net Cash Flow -100,000 30,000 80,000 70,000 80,000 Cumulative Cash Flow -100,000 -70,000 10,000 80,000 Simple ROI -100.0% -59.4% 7.3% 54.1% ROI for Investment of Nerd Patrol at the end of year 3 4. Marketing / Sales a. Summary of marketing / sales strategy In this day and age, businesses are at the crucial point of making or breaking it on the industry through the help of effective marketing / sales strategies. Although there is a huge market for computer service companies, there are also many competitors, from the small time to the big time computer services company that will make it hard for Nerd Patrol to have a smooth sailing entry into the industry. Thus, prior to applying the marketing / sales strategy, it is necessary to have a competitive mindset and optimism to take the company to greater heights. Nerd Patrol will make it a point to utilize effective and up to date marketing strategies so that it will quickly capture the attention of its target audience. b. Marketing / sales requirements for the business ⅰ) Price of services Proper pricing is vital to a business that is yet to obtain a customer base. With Nerd Patrol’s position in the market, competing through price could be means to outplay its competitors. Rates of the repair services vary from top competitors like Geek Squad. For instance, for simple services like PC tune-up, Nerd Patrol will offer it at $60, which is $40 lower than Geek Squad’s $100. For virus removal, service rate would be $100, which is $80 lower than Geek Squad’s $180. ⅱ) Product As mentioned earlier, Nerd Patrol will offer extensive computer and networking services, such as hardware and software upgrades, hardware repairs, debugging, and will fix software and network problems. Nerd Patrol offers home services and does not require customers to visit its office as appointments can be made via phone call or email. Technicians do not ask for fees for the basic PC diagnosis. Most importantly, Nerd Patrol does not offer any monthly service plan with hidden monthly charges, and does not oblige customers to become a member of the site to avail of its services. Nerd Patrol also offers a discounted year round package for the maintenance of PCs in business establishments. ⅲ) Promotion First on the list of Nerd Patrol’s marketing strategy is social media marketing. New web technologies enable firms to disseminate information (Zarrella, 2010, p. 2), without even spending a single penny. Nerd Patrol can have its own blog, a facebook or twitter account, or a youtube video that a huge audience may access. Customers may send queries and get immediate responses through these media platforms. Nerd Patrol will also publish advertisements on newspapers and flyers to disseminate information on a wider group of the target audience. ⅳ) Place The initial setup of Nerd Patrol is a home based computer service company. Customers will not have a problem with accessibility because the company does not require them to do store visits. The technician will be the one to visit the customer’s homes or offices for their own convenience. Nonetheless, as the business progresses, Nerd Patrol will set up an office that will be located in an accessible area, in Arlington Virginia, for the walk in customers. c. Competition Computer service is included in the list of the top business services in the country (Roberts, 2003, p. 128). For this reason, firms offering computer services are in demand in the market. When there is high demand, competition among firms offering the same type of services is set to heighten with the pioneering firms gaining an advantage over those newly established firms. Nerd Patrol, being a new firm in this sector, will focus on handling competition without jeopardizing profitability and reputation. This goal will be realized by focusing on the quality of the services provided, on the effective management of customer service, and on the monitoring of the service rates offered to the customers. 5. Operations a. Location of the business Nerd Patrol will be launched as a home based computer service company. It will be located at the residence of John Robbins, in Arlington, Virginia. b. How the business will be operated Initially, the decision to launch Nerd Patrol as a home based computer service company is part of the plan to have a low startup cost for the business. Although risk is considered in creating this establishment, might as well create it with a low startup cost to avoid huge losses in the event that Nerd Patrol will encounter problems. Diversely, Nerd Patrol will be run like the typical home service businesses, where customers inquire services through a phone call or an email, and the repairs will be done at the place of the customers because Nerd Patrol believes that the convenience of the customers has to be prioritized. 6. Legal and sundry issues a. Legal and related issues that need to be addressed Nerd Patrol is likely to encounter legal and related issues because it is a new venture. Things such as the business name, structure, and operations have to be documented before the business can operate (Fields, 2013). The business has to register its business name and apply for business licenses and permits to avoid legal impediments (U.S. Small Business Administration, n.d.). Nerd Patrol has to register itself as a sole proprietorship and obtain a business license in accordance with the U. S. business law and regulations. b. How legal issues will be handled The proprietor will undertake the submission of the necessary legal requirements to prevent delays in the filling and processing of documents. Nerd Patrol does not require the assistance of an outsider to file for the registration of the business and the application of the business license or permit. 7. Major Challenges a. Realistic assessment of challenges facing the new venture The challenges that Nerd Patrol may encounter as it enters the business services sector are threefold. One is in the aspect of “starting the business for the wrong reason,” two is not setting a clear vision or plan of what will happen to achieve success (Aubrey, 2011), and third is the possibility of business’ failure. The first challenge has something to the with the owner’s intention in establishing a business like Nerd Patrol. At first, the usual reason for entering a business is to earn a profit, but this reason may not be enough to deliver quality service to people. Interest in profit might lead to cutting costs or to increasing prices for the business to become profitable. Since Nerd Patrol is at the stage of firming its position, it would be better not to let the idea of earning a lot of money becomes the center of everything. Profit Making is not one bad reason to enter into a new venture, but it may trigger the business to go into the wrong direction and end up being unsuccessful. The business plan serves as a guide for the business to follow. It is a blueprint of what the business wants to achieve for some period. Since another challenge for the new venture is in regard to the setting of an unclear vision, Nerd Patrol has to formulate a clear set of vision for a short period and eventually modify this vision to have a fresh set of goals that will inspire the business to strive harder. Striving harder to put into reality the vision of Nerd Patrol is a tough challenge for a new company that has not yet proven anything in the business services industry. When starting up a business, failure is often not taken into consideration. An individual would want to think positively and dream of the business going into the mainstream. However, business failure is inevitable if there is lack of effort in dealing with business issues that may hinder the business to progressing. Nerd Patrol may become vulnerable to failure in the absence of planning, and proper management strategies. Nonetheless, Nerd Patrol will strive hard to earn its reputation and obtain the trust of customers, who are the key to its success because Nerd Patrol is a just a call away to fixing the simple and not simple PC problems. References Aubrey, K. (2011). The 2 most difficult challenges facing any new business venture. Retrieved from http://ezinearticles.com/ ?The-2-Most-Difficult-Challenges-Facing-Any-New-Business-Venture&id=6004216 Fields, R. (2013). Legal issues to consider when starting your business. Retrieved from http://www.alllaw.com/articles/legal/article15.asp Roberts, J. (2003). Competition in the business services sector: Implications for the competitiveness of the European economy. Competition and Change, 7 (2), 127-146. U.S. Small Business Administration (n.d.). Starting a business. Retrieved from http://www.sba.gov/category/navigation-structure/ starting-managing-business/starting-business Zarrella, D. (2010). The social media marketing book. Sebastopol, CA: OReilly Media. 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