Transcript Software Export Business Plan

1
Business Plan for a New
Software Development Company
28 May 2000
The information provided in this business plan is confidential.
Please do not disclose it without checking with me first. Thanks.
Personal Goal
 To build an effective and lasting
software development organization
 The foundation of this organization will
be formed on a set of professional and
social values
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Values
 Make and meet commitments
 Recognize accomplishment
 Teach and learn from each
other
 Keep a balance in your life
 Require quality beyond
customer expectations
 Act with a sense of urgency
 Improve continuously
 Communicate without fear of
retribution
 Play to win-win
 Think and act like an owner
 Go the extra mile to take care
of the customer
 Have fun
 Give back to the community
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Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
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Innofy: Innovative eBiz Solutions
 A developer of custom software
 Focused on eBiz enablement
 An international organization,
having offices in Washington,
Chicago, Singapore, Dubai,
Islamabad, Karachi, and Lahore
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Mission (1)
Planned and sustained growth in:
 Number of professionals
 Revenue per professional
 Profits per professional
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Mission (2)
Build lasting relationships with our clients
by consistently exceeding their expectations
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Key Objectives
1st Year
No. of Professionals
50
Revenue
US$420,000
5th Year
800
US$45,900,000
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Strategy
Sales
Domain
Design
Development
HR Retention
HR Growth
Partnerships with established players
Focus on up to two business domains
Innovative solutions
Speed; Craftsmanship
Focus on prof. growth; Profit sharing
Own training institute; Dubai office
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Main Risks
Short Term
Long Term
Sales
Growth in the number of professionals
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Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
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Functional Structure
Corporate
Lahore
Singapore
Dubai
Institute
Washington
Chicago
Islamabad
Karachi
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Growth in the No. of Professionals
Design &
Development
Sales &
Support
Sales &
Support
Design &
Development
Sales &
Support
Design &
Development
Design &
Development
Corporate
Lahore
Singapore
Washington
Dubai
Chicago
Islamabad
Karachi
Total
Institute
1st Year
3
2nd Year
4
3rd Year
6
4th Year
8
5th Year
10
42
2
3
96
3
10
169
4
20
317
5
30
490
5
40
-
15
2
-
35
3
25
45
4
60
50
5
100
50
5
130
8
262
11
45
513
14
100
800
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Legal Structure
 The Innofy family will consist of five
sister companies: Two registered in
Pakistan; One each in Singapore, the
United States, and Dubai
 Initially, all five will have the same
Board of Directors
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Start-Up Expenses
Total start-up expenses (for the Corporate, Lahore,
Singapore, and Washington offices) for the 1st year,
including:
 Short-term assets (computers, UPSes, generators,
furniture, etc.)
 Cash required to handle the operations
US$1,044,000
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Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
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Service Description
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We will develop custom software
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Our key strength will be in business-tobusiness eBiz enablement
(contd.)
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Service Description (contd.)
1. To start with, we will sit down with our client
and will carefully review the business process
that she will be wanting to put on the Web
2. Based on our experience, we will suggest a
minimal number of necessary modifications
that will be required for an effective ePresence
(contd.)
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Service Description (contd.)
3.
After compiling the requirements and
specifications, we will help the client in
devising a deployment plan and an effective
training, operation, and maintenance strategy
4.
We will develop the software and deliver it
to the client after ensuring its quality
according to the specifications
(contd.)
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Service Description (contd.)
4. We will help the client train her staff and
will provide assistance during
deployment
5. We will offer post-deployment support
in maintaining as well as enhancing the
software
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Competitive Comparison (1)
The competition comes in several forms:
 No competition at all:
–
–
–
–
In-house development
Most significant
Disadvantages: Inefficiency; High employee turn-over
Our advantages: Speed; Cost; Long-term support
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Competitive Comparison (2)
 Big-time management consultants:
– Disadvantages: Generalists; They drive their clients;
Cost; Lack of innovation
– Our advantages: Specialists; Innovative solutions;
Speed; Fixed-cost
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Competitive Comparison (3)
 Specialist eBiz consultants:
– Focused
– Fast
– Disadvantages: None, but they are turning down work
due to the lack of human resources
– Our advantages: None, but demand exceeds the supply
by quite a distance
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Competitive Comparison (4)
 Off-shore Software Houses:
– Not many
– Low cost
– Disadvantages: Inefficient; Unfocused; Lack of domain
knowledge; Weak marketing
– Our advantages: Focused on eBiz; Professional
service; On-site presence; Methodology fine-tuned for
speed; Partnerships with established players
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Sales Supplements
The business will begin with a
corporate Website establishing
the positioning, followed by a
multimedia CD-ROM and a
printed brochure
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Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
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Summary
 We will be focusing on small to medium sized
businesses wanting to sell into businesses in the US
 We will be targeting businesses who are in a hurry (2-5
months turnaround time) to get on to the Web
 Initially we will be flexible about the business-domain
that we are going to work in. After the first 2-3
projects, we will be focusing on 1-2 domains only.
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Market Segmentation
Medium-Sized Cos.
Established players,
who want to take their
existing business
process on to the Web
Standard Rates
Small Companies
Startups, bringing
innovative and fresh
business models
to the Web
Subsidized Rates + Equity
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Distributing Our Service
 Consulting is sold and purchased mainly on a wordof-mouth basis, with relationships and previous
experience being, by far, the most important factor
 The key to the purchase decisions made by our initial
clients and partners will be the trust in the academic
qualifications, international experience, and
professional reputation of our top management
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Overview
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

Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
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Strategy & Implementation
 Innofy will start its sales effort first in Singapore,
then, two months later, in Washington
 The focus in Singapore will be on getting eBiz
enablement projects through established
international players. The emphasis in the US will
be on leveraging those initial partnerships.
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Pricing Strategy
 One of the advantages of working in partnership
with established players is that our rates will be
the same as those
Targets for Annual Revenue per
for their in-house
Pakistan-Based Developer (Thousand US$)
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consultants
 The goal is to
gradually increase
the overall per
developer revenue
50
40
30
20
10
0
1
2
3
4
Year of Operation
5
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Sales Forecast
50
Million US$
40
Details, along with assumptions, in a few minutes
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20
10
0
1
2
3
4
Year of Operation
5
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Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
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Organizational Structure
The company will start with 3 key executives:
 CEO
 VP Sales
 VP Engineering
All three will have a high level of international
experience and expertise in the development of
cutting-edge software
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Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
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23.575
9.910
0.333
0.420
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12.975
3.575
(0.959)
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(1.656)
Details, along with assumptions, in a minute!
(1.044)
Sales & Profits (Million US$)
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45.900
Sales & Profits Forecasts
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5
(5)
1
2
3
Year of Operation
4
5
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Investments
1st Year
US$1,044,000
2nd Year
US$1,656,000
3rd Year
US$959,000
Returns Over Five Years
NPV @ a discount rate of 17%
IRR
US$5,125,000
68%
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Financial Worksheet
All currency figures are in thousands of US Dollars
1st Year
2nd Year
3rd Year
Billing Schedule
Lahore
20x42x0.5 420 30x96
2,880 40x169
6,760
Dubai
60x15x0.5
450 70x35
2,450
Islamabad
40x25x0.5
700
Karachi
Total
420
3,330
9,910
Costs for the Development Workforce
Lahore
15x42x0.8 504 17x96
1,632 20x169
3,380
Dubai
48x15x0.8
576 57x35
1,995
Islamabad
20x35x0.8
560
Karachi
Total
504
2,208
5,935
Costs for the Sales and Support Workforce
Singapore 120x2
240 110x3
390 110x4
440
Washington 200x3
600 180x10
1,800 180x20
3,600
Chicago
210x2
420 200x3
630
Total
840
2,610
4,670
Costs for the Corporate Office
Corporate
40x3
120 42x4
168 44x6
264
Total
120
168
264
Profit
(1,044)
(1,656)
(959)
P/S
-249%
-50%
-10%
NPV Discount Rate
NPV @ that Discount Rate
IRR
4th Year
5th Year
50x317
80x45
50x60
50x45x0.5
15,850
3,600
3,000
1,125
23,575
60x490
90x50
60x100
60x100
29,400
4,500
6,000
6,000
45,900
24x315
66x45
24x60
24x45x0.8
7,608
2,970
1,440
864
12,882
28x490
78x50
28x100
28x100
13,720
3,900
2,800
2,800
23,220
110x5
180x30
200x4
550 125x5
625
5,400 190x40
7,600
800 200x5
1,000
6,750
9,225
46x8
368 48x10
480
368
480
3,575
12,975
15%
28%
17%
5,125
68%
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Appendix: The Institute
 A for-profit organization, registered as a separate
private limited company
 Requires an initial investment of PKR20,000,000
 Instructors hired on the basis of profit/equity sharing
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Institute's Output
Programs
Short Courses
(1-10 days)
BCS (30 mo)
Post-BSEE
Diploma (6 mo)
MSCS (12 mo)
1st Year
2nd Year
3rd Year
4th Year
5th Year
100
200
400
700
1000
-
10+10
50+50
25+25
25+25
25+25
25+25
25+25
25
25
25
25
25
100+100 100+100
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