Computer Support Business Plan

7/30/2019 Computer Support Business Plan

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Cover Page

This sample business plan has been made available to users ofBusiness Plan Pro, business

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Legal Page

Confidentiality Agreement

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This is a business plan. It does not imply an offering of securities.


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Table of Contents

1.0 Executive Summary...............................................................................................................................1

Chart: Highlights..................................................................................................................................2

1.1 Objectives..........................................................................................................................................21.2 Keys to Success..................................................................................................................................3

1.3 Mission...............................................................................................................................................3

2.0 Company Summary...............................................................................................................................42.1 Company Ownership.........................................................................................................................4

2.2 Start-up Summary..............................................................................................................................4

Chart: Start-up......................................................................................................................................5Table: Start-up.....................................................................................................................................5

Table: Start-up Funding.......................................................................................................................6

3.0 Products and Services....................................................................................................................6

3.1 Product and Service Description........................................................................................................7

3.2 Technology........................................................................................................................................73.3 Macro-environment............................................................................................................................7

3.4 Future Products and Services.............................................................................................................7

4.0 Market Analysis Summary....................................................................................................................84.1 Market Segmentation.........................................................................................................................8

Chart: Market Analysis (Pie)...............................................................................................................9

Table: Market Analysis........................................................................................................................9

4.2 Target Market Segment Strategy.......................................................................................................9

4.2.1 Market Needs............................................................................................................................10

4.2.2 Market Trends...........................................................................................................................104.3 Service Business Analysis...............................................................................................................10

4.3.1 Business Participants................................................................................................................10

4.3.2 Competition and Buying Patterns.............................................................................................11


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Table of Contents

6.0 Management Summary........................................................................................................................17

6.1 Organizational Structure..................................................................................................................17

6.2 Management Team...........................................................................................................................176.3 Personnel Plan..................................................................................................................................18

Table: Personnel.................................................................................................................................18

6.4 Training............................................................................................................................................18

6.5 Feedback and Control......................................................................................................................18

7.0 Financial Plan.......................................................................................................................................197.1 Break-even Analysis........................................................................................................................20

Chart: Break-even Analysis...............................................................................................................20Table: Break-even Analysis...............................................................................................................20

Table: General Assumptions..............................................................................................................21

................................................................................................................................................................21

7.3 Key Financial Indicators..................................................................................................................22Chart: Benchmarks.............................................................................................................................22

7.4 Projected Profit and Loss.................................................................................................................23

Table: Profit and Loss........................................................................................................................23Chart: Gross Margin Monthly............................................................................................................24

Chart: Gross Margin Yearly...............................................................................................................24

Chart: Profit Monthly.........................................................................................................................25Chart: Profit Yearly............................................................................................................................25

7.5 Projected Cash Flow........................................................................................................................26

Chart: Cash.........................................................................................................................................26

Table: Cash Flow...............................................................................................................................27

................................................................................................................................................................27

7.6 Projected Balance Sheet...................................................................................................................28


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Table of Contents

Table: Cash Flow.........................................................................................................................................5

Table: Balance Sheet....................................................................................................................................6


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I Tech Solutions

1.0 Executive Summary

I Tech Solutions is a consulting-oriented company, intending to fill in the market need for a

professional, customer-focused computer company. The company emphasizes service andsupport to differentiate itself from more price-oriented computer companies. We are on the

brink of penetrating a lucrative market in a rapidly growing industry. The current trend towardsan increase in the number of entrepreneurs and competition amongst existing companies

presents an opportunity for I Tech Solutions to penetrate this market.

Located at (discussion omitted), we realize that, for us to prosper, we need to be flexible and

responsive, to delight clients by providing them with what they want, when they want it, andbefore the competition can offer it. The company intends to achieve this through a solutions

approach that is customer-centric, and in which the customer's business objectives enjoy toppriority.

Once the needs and processes are understood and described, leading edge products and best-of-industry skills will be applied to design and develop a fitting solution to enable the client's

business in the most cost effective way.

Our marketing strategy will be based mainly on ensuring that clients know what need the

service(s) is able to fulfill, and making the right service and information available to the righttarget client. We intend to implement a market penetration strategy that will ensure that our

services are well known and respected in our respective industry. Our strategy will convey asense of quality and satisfaction in every picture, every promotion, and every publication. Our

promotional strategy will involve traditional advertising, Internet marketing, personal selling,public relations, and direct marketing, details of which are provided in the marketing section of

this plan.

It is important to recognize that make our intangible resources, such as our ability to relate to

customers regarding their needs and wants, management style, corporate culture and

commitment. These elements will differentiate us from our competitors and contribute towardsth d l t f t i bl titi d t


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I Tech Solutions

Chart: Highlights

1.1 Objectives

Our business strategy will revolve around the need to provide quality products and services toour various target customers. This shall be undertaken through the establishment of a

professional team and the provision of quality, custom-designed services, catering to the

client's particular needs.

We intend to attain the following objectives:

1 Develop a follow-up strategy to gauge performance with all our clients


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1.2 Keys to Success

The keys to the projects' success will undoubtedly be effective market segmentation through

identification of several niche markets and implementation strategies. The key success factorswill include the following:

1. Excellence in fulfilling the promise: completely confidential, reliable, trustworthy expertise,and service(s) through the provision of an uncompromising service. This dictates that we

have the latest technology, hardware, software, and well-trained personnel so as to deliverthis promise.

2. Timeous response to clients' orders: we cannot afford to delay our clients for whatever

reason, as this will have a negative bearing on our image, reputation, and future business.We need to be continually communicating with the client, ensuring we provide needs-based

solutions.

3. Skill and depth of knowledge: Considering the nature of our services and their relative

infancy on the market, the skill and depth of knowledge of our personnel is of utmost

importance in determining the provision of the service(s) to the end-users.

4. Clear product and marketing positioning: Not wanting to be associated with the numerousvendors on the market, we intend to aggressively market our business and the services we

provide in order to be at the top of our clients' minds.

5. Leveraging from a large pool of expertise: The company's various alliances withtechnological and training partners shall prove invaluable. The skills and intellectual capacity

these partners will have in the fields of product support, design and system integration,implementation and execution, lifecycle support and understanding, training, and in the

application of new technology are intangible benefits to I Tech Solutions.

1.3 Mission


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Through implementation of the company values, we believe that we will be able to attain ourgoals and objectives for the benefit of all concerned, in particular, the communities in which we

will operate.

I Tech Solutions is built on the assumption that the management of information technology forbusiness is like legal advice or accounting, in that it is not inherently a do-it-yourself prospect,

and requires outside expertise to install and implement it. Smart business people need to find

quality vendors of reliable hardware, software, service, and support. They need to use thesequality vendors as they use their other professional service suppliers: as trusted allies.

I Tech Solutions intends to be such a solution provider. We will serve our clients as trusted

allies, providing them with the loyalty of a business partner and the economics of an outsidevendor. We want to make sure that our clients have what they need to run their businesses aswell as possible, with maximum efficiency and reliability. Many of our information applications

will be mission critical, so we will give our clients the assurance that we will be there when theyneed us. The above is well summarized in our mission statement which is as follows:

"The company is dedicated to leveraging emerging technologies to provide the highest level ofquality products and services, customer service, and security."

2.0 Company Summary

I Tech Solutions was founded in November 2000 as a private limited company. For most of its

initial existence, the company intends to establish close relationships with its various clients,with the intention of expanding in the near future.

2.1 Company Ownership

I Tech Solutions is a company incorporated at the Registrar of Companies by Mr. T, Mr. S, andMr. P. Though relatively new, the directors realize their company's vast potential market andopportunity for growth if given the necessary funding.


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I Tech Solutions

Chart: Start-up

Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal P1,400Stationery etc. P2,000Brochures P5 000


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I Tech Solutions

3.1 Product and Service Description

I Tech Solutions intends to provide the following services:

1. Financial Solutions (discussion omitted in this sample plan)

2. Network Solutions (discussion omitted)

3. Data Backup Solutions and Services (discussion omitted)

4. E-commerce Solutions (discussion omitted)

5. Hardware Supply and Technical Support (discussion omitted)

6. Paperless Office Automation Solutions (discussion omitted)

7. Training (discussion omitted)

3.2 Technology

I Tech Solutions will strive to maintain the latest hardware and software capabilities so as toensure we are continuously at the forefront in our market arena. The one certainty in our

industry is that technology will continue to evolve and develop, changing what we market, aswell as how we market it. Our aim is to be aware of the implications of this new technology,

and utilize it in our existing framework where possible. Complete presentation facilities forpreparation and delivery of multimedia presentations on Macintosh or Windows machines, in

formats that include on-disk presentation or video presentation are also possibilities.

3.3 Macro-environment

Our macro-environment is exciting. We are in the middle of an unprecedented boom in


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I Tech Solutions

In putting the company together, we have attempted to offer enough services to allow us toalways be in demand by our clients. However, technological developments have provided us

with a new era of opportunities for the various organizations in which we can only guess at theneeds. For example, current rapid innovations/development of Wireless Application Protocol

(WAP) technology presents an opportunity to be realized, particularly focusing on WAP-enabledcell phones that allow individuals to access or send email messages on a cell phone. However,

the most important factor in developing future services will be market need. Our understanding

of the needs of our target market segments will be one of our competitive advantages.

4.0 Market Analysis Summary

The current drive and emphasis by the government on diversification of the industrial baseaway from the minerals sector presents an opportunity for I Tech Solutions to make a valuablecontribution towards achieving this goal. This will result in the implementation of modern

Information Technology (IT) services and techniques, transfer of knowledge, and availability ofquality brands.

4.1 Market Segmentation

We will be focusing on proactive, market seeking organizations that want to ensure an efficientand effective IT system that will assist in the realization of their business objectives.

Our target companies are large enough to require the high-quality IT management we offer,

but too small to have a separate computer management staff. However, our most importantgroup of potential customers will be business executives in large, medium, and small

corporations. These are marketing managers, general managers, sales managers, and otherdecision makers who often need to access company data and information in their various

business decisions. They will not waste their time or money looking for bargain information,

questionable expertise, or cheap computers and accessories. Our potential clients will include:(discussion omitted).

Another intention will be to offer an attractive development alternative to the company that is


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I Tech Solutions

Chart: Market Analysis (Pie)

Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

SOHO Executives 3% 100 103 106 109 112 2.87%Government Institutions 12% 800 896 1,004 1,124 1,259 12.00%Financial Institutions 17% 50 59 69 81 95 17.41%Corporations 22% 3,000 3,660 4,465 5,447 6,645 22.00%Professional Firms 3% 400 412 424 437 450 2.99%Oth 4% 200 208 216 225 234 4 00%


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I Tech Solutions

4.3.2 Competition and Buying Patterns

The vast majority of proactive, market-oriented businesses understand the value of having anefficient computer system, as well as the concept of service and support. They are much more

likely to pay for them when the offering and benefits are clearly stated.

There is no doubt that we will compete more against the box pushers than other serviceproviders. We need to effectively compete against the idea that once a computer is out-dated

businesses should buy new ones, when with ongoing service and support, they can beupgraded.

The most important element of general competition, by far, is what it takes to keep clients forrepeat business. It is worth making huge concessions in any single service to maintain a client

relationship that brings the client back for future services.

5.0 Strategy and Implementation Summary

I Tech Solutions intends to win and maintain customers by providing products and services that

add value, safety, and are supported by a well-trained professional team with commercial

expertise. This is important to the successful implementation of our overall strategy and theneed to ensure that all divisions and functions in the organization are working harmoniously

towards attainment of the goals and objectives.

Our marketing strategy emphasizes focus. The target customers will include key decision-

makers in business, who often order or recommend on behalf of the whole organization, theaim being to obtain an initial order and fully satisfy the customer from then on.

We intend to initially build image and awareness through consistency and distinctiveness in

our product and service provision.

We intend to focus on delivering quality products and services that produce good referrals,

which can then generate revenue. We intend to have a heavy personal selling component,


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I Tech Solutions

5.1 SWOT Analysis

The SWOT Analysis is a necessity to any start-up, it is an in-depth look at your Strengths,

Weaknesses, Opportunities, and Threats. We are in a highly lucrative market in a growingeconomy. We foresee our strengths as the ability to respond to the market and to provide

custom designed technological services. Our key personnel will have a wide and thoroughknowledge of the technological services we intend to provide, which will go a long way towards

penetrating the market. Below is a summary of the SWOT Analysis.

5.1.1 Weaknesses

The introduction of new organizational practices and personnel who have not previously

worked together presents a challenge to the organization.

A limited financial base compared to the current major players in the IT industry.

5.1.2 Opportunities

The Internet. The increasing opportunities of the Internet offer us another area of strength

in comparison to the box-on-the-shelf major stores. Our potential customers want morehelp with the Internet, and we intend to be in a better position to give it to them.

Service. As our target market needs more service, our competitors are less likely than ever

to provide it. Their business model doesn't include service, just selling the computers.

Emerging Technologies. The rate of new product introduction in IT presents an opportunity

to be explored.

5.1.3 Threats

Innovation shortens life cycles and hence the need to act timeously on the market. This will

recoup new service introductions in a shorter time frame.

Concerns of decision-makers over ease of access and overall security of electronic

transactions may need to be addressed The recent glitch of the Barclays electronic system


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I Tech Solutions

5.2 Competitive Edge

Our competitive edge is our positioning as a strategic ally with our clients, who are clients morethan customers. By building a business based on long-standing relationships with satisfied

clients, we will simultaneously build defenses against competition. The longer the relationshipstands, the more we help our clients understand what we offer them and why they need it. The

delivery of whole, end-to-end solutions will have a significant impact on gaining commitment

from the market at all levels. The company believes in partnering with its customers so as toprovide customized solutions that are needs-based.

5.3 Marketing Strategy

One core element of our marketing strategy will be that of differentiation from our competitors.

In terms of promotion, we intend to sell our company as a strategic ally, not just our products.We intend to offer extremely reasonable prices in comparison to competition, and we need to

be able to sustain that. Market penetration through lower prices shall be undertaken whereneed be, while premium pricing in the case of the upper-end of the market.

We have developed two strategy foci, each based on one main fundamental strategy. The first

strategy is about (discussion omitted).

Our second strategic focus, that of (discussion omitted).

5.3.1 Distribution Strategy

Service provision and consulting will be sold and purchased mainly on a word-of-mouth basis,with relationships and previous experience being, by far, the most important factor. In this

regard we intend to provide a service that exceeds customer expectations so as to ensure they

refer us to potential clients through word-of-mouth. New business shall be developed throughindustry associations, business associations, and, in some cases, social associations, such ascountry clubs.


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I Tech Solutions

its flexibility will enable us to match the customer's needs to specific attributes of our services,as well as giving concise details of what we are able to offer.

Public Relations

Recognizing that we are relatively new on the market, there will be a need to organize an event

introducing ourselves onto the market. To this we will invite potential customers, seniorofficials, possibly including a government minister and other stakeholders, so as to penetrate

the market. In collaboration with this we, also intend to place news stories and features inmagazines and newspapers to keep stakeholders updated on the latest developments and to

increase awareness.

Events

The number of IT companies on the market dictates that the organization needs to promoteitself through participation in trade shows and expositions. Not only will these increase

awareness of our products and services, but if a particular product or service were to gainrecognition, for example through being chosen No. 1 in innovativeness, the organization will be

able to take advantage of this in all its promotional campaigns, adding leverage to its

reputation and corporate image. An example of a trade show we intend to participate at isBITEC. These expositions will also be a good opportunity for us to network with various

organizations and individuals.

Internet Marketing

The company will sell its services over the Internet as it is cost effective to reach a large

number of potential clients, regionally and internationally. We also realize that customer/clientresearch is needed before building an effective website, something which is rarely done by

existing companies, in order to find out how customers will want to access information andjourney through the site.

5.3.3 Positioning Statement


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5.3.5 Promotion Strategy

Our promotion strategy will be based primarily on informing potential customers of ourexistence and making the right information available to our target customer. I Tech Solutions

intends to utilize an aggressive promotional campaign to introduce its products and services tothe market. The intention will be to take advantage of several media sources in announcing the

products and services and in the process enforcing awareness of our existence.

5.4 Sales Strategy

I Tech Solutions will receive its revenue streams from a combination of licensing agreements,

sales commissions, monthly subscriptions, registration fees, network access charges, servicefees, transaction charges, training, promotional incentive programs, and sales of hardware and

software. The derived value of I Tech Solutions will come from the key partnerships establishedand developed in order to deliver a product and service provision of transactionally-based

activities, providing opportunity to build brand and loyalty, around which relationship marketingwill play a key role.

The sales forecast monthly summary is included in the appendix. The annual sales projections

are provided in a table below. It should be noted that as we become established and known onthe market we project sales to increase at a faster rate than the initial year.

Note: All currency values in the charts and tables are expressed in the Botswana Pula (P).

Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3

Sales

Products/Services P1,422,225 P2,528,400 P3,034,080Other P0 P0 P0Total Sales P1 422 225 P2 528 400 P3 034 080


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Chart: Sales Monthly

Chart: Sales by Year


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I Tech Solutions

5.5 Strategic Alliances

I Tech Solutions intends to go into strategic alliances with several organizations. This will also

reassure our customers that they are investing in "winning" products, technology, and servicethat are maintainable, flexible, and scalable enough to meet future demands.

At this writing, strategic alliances with several companies are possibilities, including X, giventhe content of existing interest and discussions. By going into strategic partnerships with

suitable organizations, we will benefit from being able to concentrate on our core activities inthe delivery of our products and services to the end-user, while ensuring that we do not have to

compromise on quality of execution or the number of products and services we are able todeliver.

6.0 Management Summary

The human resources element shall be an essential component in the delivery of the total

service. By having enthusiastic, capable, and empowered people interacting with our clients, weintend to build the competitive advantage of being able to comprehensively meet our clients'

needs. We also intend to give our teams enough leverage in decision-making to ensure that

clients are handled promptly and to reduce lead-time in actual delivery of the service. It will benecessary to evaluate jobs and remuneration packages against market benchmarks toemployees for their tasks to ensure they are competitive.

6.1 Organizational Structure

Our management philosophy is based on responsibility and mutual respect. We recognize the

need to be constantly changing so as to adapt to the prevailing environment. We will have a

flexible structure allowing for the above to be undertaken swiftly and smoothly. Please findbelow the job titles and descriptions we intend to have in place for the key personnel. (table

omitted)


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6.3 Personnel Plan

The detailed monthly personnel plan for the first three years is included in the appendix. The

annual personnel estimates are included here. We believe this plan is a fair compromisebetween fairness and expedience, and meets the commitments of our mission statement. We

want the company to stay lean and flexible so that we can respond to our markets' needsquickly. As we expand and increase in size we do expect to increase our personnel.

We will compensate our personnel well, so as to retain their invaluable expertise and ensure jobsatisfaction and enrichment through delegation of authority. Our compensation will include

health care, generous profit sharing, and a minimum of 3 weeks vacation.


Table: Personnel

Personnel Plan


Directors P135,000 P180,000 P216,000Personal Assistant P10,800 P13,200 P14,520Cleaner P3,600 P6,000 P7,200Total People 5 5 5

Total Payroll P149,400 P199,200 P237,720

6.4 Training

In-house training shall be continuous with regular external training being undertaken,particularly following any new developments in the market. This is to ensure that we are

continuously able to anticipate our markets needs--a proactive approach, which is so essentialif i d i i i i d E l i i ill l b d d


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I Tech Solutions

7.0 Financial Plan

We want to finance growth mainly through cash flow and equity. We recognize that this means

we will have to grow more slowly than we might like. The most important factor in our case iscollection days. We can't push our clients hard on collection days, because they are in larger

companies and will normally have marketing authority, not financial authority. Therefore weneed to develop a permanent system of receivables financing, using one of the established

accounting systems. In turn we intend to ensure that our investors are compatible with ourgrowth plan, management style, and vision. Compatibility in this regard means:

1. A fundamental respect for giving our customers value, and for maintaining a healthy andcongenial workplace

2. Respect for realistic forecasts, conservative cash flow, and financial management3. Cash flow as first priority, growth second, profits third

4. Willingness to follow the project objectives and contribute valuable input to strategy and

implementation decisions.

Of these, only the last 2 are flexible.


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I Tech Solutions

7.1 Break-even Analysis

The following table and chart summarizes our Break-even Analysis. We don't really expect to

reach break-even until several months into the business operation, as illustrated in thefinancials.


Chart: Break-even Analysis


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7.2 Important Assumptions

The financial plan depends on important assumptions. From the beginning, we recognize that

collection days are critical, but not a factor we can influence easily. Interest rates, tax rates,and personnel burden are based on conservative assumptions.

Some of the more important underlying assumptions are:

We assume a strong economy, without major recession.

We assume that there are no unforeseen changes in economic policy to make our products

and service immediately obsolete.

Others include 30-day average collection days, sales entirely on invoice basis, including afavorable deposit policy, expenses mainly on a net 30-day basis, 30 days on average for

payment of invoices, and present-day interest rates.

Table: General Assumptions

General Assumptions


Plan Month 1 2 3Current Interest Rate 17.00% 17.00% 17.00%Long-term Interest Rate 17.00% 17.00% 17.00%Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0


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7.3 Key Financial Indicators

We foresee major growth in sales and operating expenses, and a bump in our collection days as

we spread the business during expansion.

Collection days are very important. We do not want to let our average collection days get above

30 under any circumstances. This could cause a serious problem with cash flow, because ourworking capital situation is chronically tight. However, we recognize that we cannot control this

factor easily, because of the relationship with our clients.

Chart: Benchmarks


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I Tech Solutions

7.4 Projected Profit and Loss

Initial marketing and training expenses will be relatively high as we seek to become known on

the market and staff get trained in provision of our services. This will be brought about by thedevelopment of sales literature, advertising expenses, and function expenses. As our market

share increases and capital is generated, further marketing programs and the expansion ofthose in existence at the time will be undertaken, to ensure market development. However,

with time, these programs will start generating revenue for the business, which we shallreinvest.

Our projected Profit and Loss is shown in the appendix, with sales increasing steadily from thefirst year through the second, and into the third year. We do expect to more than break-even in

the first year of operation. Our cost of sales should be much lower, and gross margin higher,than in this projection.


Table: Profit and Loss

Pro Forma Profit and Loss


Sales P1,422,225 P2,528,400 P3,034,080

Direct Cost of Sales P711,114 P1,264,200 P1,517,040Other P0 P0 P0Total Cost of Sales P711,114 P1,264,200 P1,517,040

Gross Margin P711,111 P1,264,200 P1,517,040Gross Margin % 50.00% 50.00% 50.00%


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Chart: Gross Margin Monthly

Chart: Gross Margin Yearly


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Chart: Profit Monthly

Chart: Profit Yearly


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7.5 Projected Cash Flow

The chart and table below present the cash flow projections for I Tech Solutions.


Chart: Cash


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Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales P426,668 P758,520 P910,224Cash from Receivables P763,507 P1,589,396 P2,041,349

Subtotal Cash from Operations P1,190,174 P2,347,916 P2,951,573

Additional Cash Received

Sales Tax, VAT, HST/GST Received P0 P0 P0New Current Borrowing P0 P0 P0New Other Liabilities (interest-free) P0 P0 P0New Long-term Liabilities P0 P0 P0Sales of Other Current Assets P0 P0 P0Sales of Long-term Assets P0 P0 P0New Investment Received P0 P0 P0

Subtotal Cash Received P1,190,174 P2,347,916 P2,951,573

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending P149,400 P199,200 P237,720Bill Payments P1,002,379 P1,810,874 P2,005,210Subtotal Spent on Operations P1,151,779 P2,010,074 P2,242,930

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out P0 P0 P0Principal Repayment of Current Borrowing P0 P0 P0Other Liabilities Principal Repayment P0 P0 P0

Long-term Liabilities Principal Repayment P103,200 P103,200 P103,200Purchase Other Current Assets P141,200 P0 P0Purchase Long-term Assets P240,000 P0 P0Dividends P0 P0 P0Subtotal Cash Spent P1,636,179 P2,113,274 P2,346,130


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7.6 Projected Balance Sheet

The balance sheet shows healthy growth of net worth, and strong financial position. The three-

year estimates are included in the appendix.


Table: Balance Sheet

Pro Forma Balance Sheet


Assets

Current Assets

Cash P46,246 P280,888 P886,331Accounts Receivable P232,051 P412,535 P495,042Inventory P92,708 P206,017 P166,874Other Current Assets P141,200 P141,200 P141,200Total Current Assets P512,205 P1,040,641 P1,689,448

Long-term Assets

Long-term Assets P240,000 P240,000 P240,000Accumulated Depreciation P0 P0 P0Total Long-term Assets P240,000 P240,000 P240,000Total Assets P752,205 P1,280,641 P1,929,448

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable P113,124 P152,037 P165,956

Current Borrowing P0 P0 P0Other Current Liabilities P0 P0 P0Subtotal Current Liabilities P113,124 P152,037 P165,956

Long term Liabilities P496 800 P393 600 P290 400


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Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth n.a. 77.78% 20.00% 7.20%

Percent of Total Assets

Accounts Receivable 30.85% 32.21% 25.66% 21.70%Inventory 12.32% 16.09% 8.65% 3.50%Other Current Assets 18.77% 11.03% 7.32% 46.70%Total Current Assets 68.09% 81.26% 87.56% 71.90%

Long-term Assets 31.91% 18.74% 12.44% 28.10%Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 15.04% 11.87% 8.60% 51.40%Long-term Liabilities 66.05% 30.73% 15.05% 19.10%Total Liabilities 81.08% 42.61% 23.65% 70.50%

Net Worth 18.92% 57.39% 76.35% 29.50%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%Gross Margin 50.00% 50.00% 50.00% 0.00%

Selling, General & Administrative Expenses 32.96% 27.34% 26.62% 80.70%Advertising Expenses 0.97% 0.42% 0.38% 1.20%Profit Before Interest and Taxes 29.89% 34.25% 34.53% 1.70%

Main Ratios

Current 4.53 6.84 10.18 1.27Quick 3.71 5.49 9.17 1.01Total Debt to Total Assets 81.08% 42.61% 23.65% 70.50%Pre-tax Return on Net Worth 233.79% 107.52% 67.18% 3.50%Pre-tax Return on Assets 44.22% 61.71% 51.29% 11.80%

Additional Ratios Year 1 Year 2 Year 3Net Profit Margin 17.58% 23.44% 24.33% n.aReturn on Equity 175.73% 80.64% 50.10% n.a

Activity Ratios


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I Tech Solutions

8.0 Contingency Planning

1. We intend to watch our results very carefully. We may need to concentrate less on certain

products and services than others, if we intend to get the margin up or clients becomedifficult to attract. We might be able to avoid straight competition with the major IT

companies by focusing more on our prime services.

2. Another possibility is the introduction of a company or several companies in our niche. The

need to undertake aggressive marketing, networking, and delivering a value-added servicein our organization is a fundamental one.

A di


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Appendix

Table: Sales Forecast

Sales Forecast

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Sales

Products/Services 0% P31,605 P31,605 P31,605 P105,350 P105,350 P105,350 P168,560 P168, 560 P168,560 P168,560 P168,560 P168,560Other 0% P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0Total Sales P31,605 P31,605 P31,605 P105,350 P105,350 P105,350 P168,560 P168,560 P168,560 P168,560 P168,560 P168,560

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Products/Services P15,803 P15,803 P15,803 P52,675 P52,675 P52,675 P84,280 P84,280 P84,280 P84,280 P84,280 P84,280

Other P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Subtotal Direct Cost of Sales P15,803 P15,803 P15,803 P52,675 P52,675 P52,675 P84,280 P84,280 P84,280 P84,280 P84,280 P84,280

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Appendix

Table: Personnel

Personnel Plan


Directors 0% P7,500 P7,500 P7,500 P7,500 P7,500 P7,500 P15,000 P15,000 P15,000 P15,000 P15,000 P15,000Personal Assistant 0% P900 P900 P900 P900 P900 P900 P900 P900 P900 P900 P900 P900

Cleaner 0% P300 P300 P300 P300 P300 P300 P300 P300 P300 P300 P300 P300Total People 5 5 5 5 5 5 5 5 5 5 5 5

Total Payroll P8,700 P8,700 P8,700 P8,700 P8,700 P8,700 P16,200 P16,200 P16,200 P16,200 P16,200 P16,200

Page 2

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Appendix

Table: General Assumptions

General Assumptions


Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rat e 17.00% 17.00% 17.00% 17.00% 17.00% 17.00% 17. 00% 17.00% 17.00% 17.00% 17.00% 17.00%

Lon g- ter m I nt erest Rat e 17 .00% 17. 00% 17. 00% 1 7. 00% 1 7. 00% 17 .00% 17. 00% 17. 00% 17. 00 % 17. 00 % 17. 00% 1 7. 00%

Tax Rate 30.00% 25.00% 25.00% 2 5.00% 2 5.00% 2 5.00% 2 5.00% 2 5.00% 2 5.00% 2 5.00% 2 5.00% 2 5.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0

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Appendix


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Appendix

Table: Profit and Loss

Pro Forma Profit and Loss


Sales P31,605 P31,605 P31,605 P105,350 P105,350 P105,350 P168,560 P168,560 P168,560 P168,560 P168,560 P168,560

Di rect Cost of Sales P15,803 P15,803 P15,803 P52,675 P52,675 P52,675 P84,280 P84,280 P84,280 P84,280 P84,280 P84,280

Other P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Total Cost of Sal es P15,803 P15,803 P15,803 P52,675 P52,675 P52,675 P84,280 P84,280 P84,280 P84,280 P84,280 P84,280

Gross Margin P15,802 P 15,802 P 15,802 P52,675 P 52,675 P 52,675 P 84,280 P84,280 P 84,280 P 84,280 P 84,280 P84,280

Gross Margin % 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%

Expenses

Payroll P8,700 P8,700 P8,700 P8,700 P8,700 P8,700 P16,200 P16,200 P16,200 P16,200 P16,200 P16,200

Sales and Marketing and OtherExpenses

P6,300 P2,100 P2,100 P7,368 P7,368 P7,368 P10,528 P10,528 P10,528 P10,528 P10,528 P10,528

Depreciation P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Utilities P300 P300 P300 P300 P300 P300 P300 P300 P300 P300 P300 P300

Telephone P500 P500 P500 P500 P500 P500 P500 P500 P500 P500 P500 P500

Insurance P1,200 P1,200 P1,200 P1,200 P1,200 P1,200 P1,200 P1,200 P1,200 P1,200 P1,200 P1,200

Rent P1,400 P1,400 P1,400 P1,400 P1,400 P1,400 P1,400 P1,400 P1,400 P1,400 P1,400 P1,400

Insurance P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Payroll Taxes 0% P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0Other P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Total Opera ting Expenses P18 ,400 P14 ,200 P14 ,200 P19 ,468 P19 ,468 P19 ,468 P30 ,128 P30 ,128 P30 ,128 P30 ,128 P30 ,128 P30 ,128

P rof it B ef or e I nt er est and Taxes ( P2 ,598) P1 ,602 P 1, 602 P3 3, 207 P 33, 20 7 P 33, 20 7 P54 ,152 P5 4, 152 P 54, 15 2 P 54, 15 2 P54 ,152 P54 ,152

EBITDA (P2,598) P1,602 P1,602 P33,207 P33,207 P33,207 P54,152 P54,152 P54,152 P54,152 P54,152 P54,152Interest Expense P8,378 P 8,256 P 8,135 P8,013 P 7,891 P 7,769 P 7,647 P7,525 P 7,404 P 7,282 P 7,160 P7,038

Taxes Incurred (P3,293) (P1,664) (P1,633) P6,299 P6,329 P6,360 P11,626 P11,657 P11,687 P11,718 P11,748 P11,779

Net Profit (P7,683) (P4,991) (P4,899) P18,896 P18,987 P19,079 P34,879 P34,970 P35,061 P35,153 P35,244 P35,336

Net Profit/Sales -24.31% -15.79% -15.50% 17.94% 18.02% 18.11% 20. 69% 20.75% 20. 80% 20.85% 20.91% 20.96%

Page 4

Appendix


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Appendix

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales P9,482 P9,482 P9,482 P31,605 P31,605 P31,605 P50,568 P50,568 P50,568 P50,568 P50,568 P50,568

Cash from Receivables P0 P737 P22,124 P22,124 P23,844 P73,745 P73,745 P75,220 P117,992 P117,992 P117,992 P117,992

S ubt ot al Ca sh f rom Oper at ions P 9, 482 P 10, 219 P 31, 605 P 53, 729 P55, 449 P1 05, 350 P 124, 313 P 125 ,788 P 168, 56 0 P 168 ,560 P 168, 56 0 P 168 ,560

Additional Cash Received

S ales Tax , VA T, HS T/ GST Rec ei ve d 0. 00% P 0 P 0 P 0 P 0 P0 P 0 P0 P0 P 0 P0 P 0 P0New Current Borrowing P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

New Other Liabilities (interest-free) P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

New Long-term Liabilities P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Sales of Other Current Assets P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Sales of Long-term Assets P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0New Investment Received P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Subtotal Cash Received P9,482 P10,219 P31,605 P53, 729 P55, 449 P 105,350 P 124, 313 P 125,788 P 168,560 P 168,560 P 168,560 P 168,560

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations

Cash Spending P8,700 P8,700 P8,700 P8,700 P8,700 P8,700 P16,200 P16,200 P16,200 P16,200 P16,200 P16,200

Bill Payments P1,599 P47,302 P27,893 P30,821 P116,958 P77,660 P80,061 P151,085 P117,387 P117,296 P117,204 P117,113

S ubt ot al S pent o n Oper at ions P 10, 299 P 56, 002 P 36, 593 P 39, 521 P 125, 658 P 86, 360 P96 ,261 P 167 ,285 P 133, 58 7 P 133 ,496 P 133, 40 4 P 133 ,313

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Principal Repayment of Current Borrowing P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Other Liabilities Principal Repayment P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Long- te rm L iabi li ties Princ ipal Repayment P8,600 P8,600 P8,600 P8,600 P8,600 P8,600 P8,600 P8,600 P8,600 P8,600 P8,600 P8,600

Purchase Other Current Assets P0 P0 P141,200 P0 P0 P0 P0 P0 P0 P0 P0 P0

Purchase Long- term Asset s P20,000 P20,000 P20,000 P20, 000 P20, 000 P20,000 P20,000 P20,000 P20,000 P20,000 P20,000 P20,000

Dividends P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Subtotal Cash Spent P38,899 P84,602 P206,393 P68,121 P154,258 P114,960 P124,861 P195,885 P162,187 P162,096 P162,004 P161,913

Net Cash Flow (P29,418) (P74,383) (P174,788) (P14,393) (P98,809) (P9,610) (P548) (P70,097) P6,373 P6,464 P6,556 P6,647

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Appendix

Cash Balance P462,833 P388,450 P213,662 P199,269 P100,460 P90,850 P90,303 P20,206 P26,579 P33,043 P39,599 P46,246

Table: Balance Sheet

Pro Forma Balance Sheet

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Assets Starting Balances

Current Assets

Cash P492,251 P462,833 P388,450 P213,662 P199,269 P100,460 P 90,850 P 90,303 P 20,206 P 26,579 P 33,043 P 39,599 P 46,246A cc ount s Rec ei vab le P 0 P 22, 124 P 43, 510 P 43, 510 P9 5, 131 P14 5, 032 P 145, 032 P189, 27 9 P23 2, 051 P232 ,051 P 232, 05 1 P 232, 05 1 P 232 ,051Inventory P0 P17,383 P17,383 P17,383 P57,943 P57,943 P57,943 P92,708 P92,708 P92,708 P92,708 P92,708 P92,708O ther Cu rr ent As set s P 0 P 0 P 0 P 141, 200 P14 1, 200 P14 1, 200 P141, 200 P141, 20 0 P14 1, 200 P141 ,200 P141, 20 0 P 141, 20 0 P 141 ,200Total Cur rent Assets P492,251 P502,340 P449,343 P415,755 P493,543 P444,635 P435,025 P513,490 P486,165 P492,538 P499,002 P505,558 P512,205

Long-term Assets

Lon g- ter m A ss ets P 0 P 20, 000 P 40, 000 P 60, 000 P8 0, 000 P10 0, 000 P120, 000 P 140, 00 0 P16 0, 000 P 180 ,000 P200, 00 0 P 220, 00 0 P 240 ,000Accumulated Depreciation P0 P 0 P0 P0 P0 P0 P 0 P0 P0 P0 P 0 P0 P0Total Long- te rm Assets P0 P20 ,000 P40 ,000 P60 ,000 P80 ,000 P100,000 P120,000 P140 ,000 P160,000 P180 ,000 P200 ,000 P220,000 P240,000Tot al A sse ts P 492, 251 P 52 2, 340 P 489, 343 P 475, 755 P 57 3, 543 P 54 4, 635 P 555, 025 P 653, 49 0 P64 6, 165 P 672 ,538 P 699, 00 2 P725, 55 8 P752 ,205

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities

A cc ount s Pay able P 0 P 46, 373 P 26, 966 P 26, 878 P11 4, 370 P7 5, 074 P 74, 986 P 147, 17 2 P11 3, 477 P 113 ,389 P 113, 30 0 P 113, 21 2 P 113 ,124Current Borrowing P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0Other Current Liabilities P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0Sub to ta l Cur rent L iabi li ties P0 P46 ,373 P26 ,966 P26 ,878 P114,370 P75 ,074 P74 ,986 P147,172 P113,477 P113,389 P113,300 P113,212 P113,124

Long- te rm L iabi li ties P600,000 P591,400 P582 ,800 P574,200 P565,600 P557,000 P548 ,400 P539,800 P531 ,200 P522,600 P514 ,000 P505,400 P496 ,800Total L iabi li ties P600,000 P637 ,773 P609,766 P601 ,078 P679,970 P632 ,074 P623,386 P686 ,972 P644,677 P635 ,989 P627,300 P618 ,612 P609,924

Paid- in Cap ital P100,000 P100 ,000 P100,000 P100 ,000 P100,000 P100 ,000 P100,000 P100 ,000 P100,000 P100 ,000 P100,000 P100 ,000 P100,000Retained Earnings (P207,749) (P207,749) (P207,749) (P207,749) (P207,749) (P207,749) (P207,749) (P207,749) (P207,749) (P207,749) (P207,749) (P207,749) (P207,749)

Earnings P0 (P7,683) (P12,674) (P17,573) P1,322 P20,309 P39,388 P74,267 P109,237 P144,298 P179,451 P214,695 P250,030Total Capital (P107,749) (P115,432) (P120,423) (P125,322) (P106,427) (P87,440) (P68,361) (P33,482) P1,488 P36,549 P71,702 P106,946 P142,281Total L iabil it ies and Capital P492,251 P522,340 P489,343 P475,755 P573,543 P544,635 P555,025 P653,490 P646,165 P672,538 P699,002 P725,558 P752,205

Net Worth (P107,749) (P115,432) (P120,423) (P125,322) (P106,427) (P87,440) (P68,361) (P33,482) P1,488 P36,549 P71,702 P106,946 P142,281

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Computer Support Business Plan